Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 25, 2020 | Jun. 28, 2019 | |
Cover page. | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Transition Report | false | ||
Entity File Number | 000-50058 | ||
Entity Registrant Name | PRA Group, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 75-3078675 | ||
Entity Address, Address Line One | 120 Corporate Boulevard | ||
Entity Address, City or Town | Norfolk | ||
Entity Address, State or Province | VA | ||
Entity Address, Postal Zip Code | 23502 | ||
City Area Code | 888 | ||
Local Phone Number | 772-7326 | ||
Title of 12(b) Security | Common Stock, $0.01 par value per share | ||
Trading Symbol | PRAA | ||
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 | $ 1,255,667,779 | ||
Entity Common Stock, Shares Outstanding | 45,416,258 | ||
Documents Incorporated by Reference | Portions of the Registrant's definitive Proxy Statement for its 2020 Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10-K. | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001185348 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Cash and cash equivalents | $ 119,774 | $ 98,695 |
Investments | 56,176 | 45,173 |
Finance receivables, net | 3,514,165 | 3,084,777 |
Other receivables, net | 10,606 | 46,157 |
Income taxes receivable | 17,918 | 16,809 |
Deferred tax asset, net | 63,225 | 61,453 |
Operating lease, right-of-use asset | 68,972 | |
Property and equipment, net | 56,501 | 54,136 |
Goodwill | 480,794 | 464,116 |
Intangible assets, net | 4,497 | 5,522 |
Other assets | 31,263 | 32,721 |
Total assets | 4,423,891 | 3,909,559 |
Liabilities: | ||
Accounts payable | 4,258 | 6,110 |
Accrued expenses | 88,925 | 79,396 |
Income taxes payable | 4,046 | 15,080 |
Deferred tax liability, net | 85,390 | 114,979 |
Operating lease, liability | 73,377 | |
Interest-bearing deposits | 106,246 | 82,666 |
Borrowings | 2,808,425 | 2,473,656 |
Other liabilities | 26,211 | 7,370 |
Total liabilities | 3,196,878 | 2,779,257 |
Redeemable noncontrolling interest | 0 | 6,333 |
Equity: | ||
Preferred stock, $0.01 par value, 2,000 shares authorized, no shares issued and outstanding | 0 | 0 |
Common stock, $0.01 par value, 100,000 shares authorized, 45,416 shares issued and outstanding at December 31, 2019; 100,000 shares authorized, 45,304 shares issued and outstanding at December 31, 2018 | 454 | 453 |
Additional paid-in capital | 67,321 | 60,303 |
Retained earnings | 1,362,631 | 1,276,473 |
Accumulated other comprehensive loss | (261,018) | (242,109) |
Total stockholders' equity - PRA Group, Inc. | 1,169,388 | 1,095,120 |
Noncontrolling interests | 57,625 | 28,849 |
Total equity | 1,227,013 | 1,123,969 |
Total liabilities and equity | $ 4,423,891 | $ 3,909,559 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 45,416,000 | 45,304,000 |
Common stock, shares outstanding | 45,416,000 | 45,304,000 |
Consolidated Income Statements
Consolidated Income Statements - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues: | |||
Income recognized on finance receivables | $ 998,361 | $ 891,899 | $ 795,435 |
Fee income | 15,769 | 14,916 | 24,916 |
Other revenue | 2,951 | 1,441 | 7,855 |
Total revenues | 1,017,081 | 908,256 | 828,206 |
Net allowance charges | (24,025) | (33,425) | (11,898) |
Operating expenses: | |||
Compensation and employee services | 310,441 | 319,400 | 273,033 |
Legal collection fees | 55,261 | 42,941 | 43,351 |
Legal collection costs | 134,156 | 104,988 | 76,047 |
Agency fees | 55,812 | 33,854 | 35,530 |
Outside fees and services | 63,513 | 61,492 | 62,792 |
Communication | 44,057 | 43,224 | 33,132 |
Rent and occupancy | 17,854 | 16,906 | 14,823 |
Depreciation and amortization | 17,464 | 19,322 | 19,763 |
Other operating expenses | 46,811 | 47,444 | 44,103 |
Total operating expenses | 745,369 | 689,571 | 602,574 |
Income from operations | 247,687 | 185,260 | 213,734 |
Other income and (expense): | |||
Gain on sale of subsidiaries | 0 | 26,575 | 48,474 |
Interest expense, net | (141,918) | (121,078) | (98,041) |
Foreign exchange gain/(loss) | 11,954 | (944) | (1,104) |
Other | (364) | (316) | (2,790) |
Income before income taxes | 117,359 | 89,497 | 160,273 |
Income tax expense/(benefit) | 19,680 | 13,763 | (10,852) |
Net income | 97,679 | 75,734 | 171,125 |
Adjustment for net income attributable to noncontrolling interests | 11,521 | 10,171 | 6,810 |
Net income attributable to PRA Group, Inc. | $ 86,158 | $ 65,563 | $ 164,315 |
Net income per share attributable to PRA Group, Inc.: | |||
Basic (USD per share) | $ 1.90 | $ 1.45 | $ 3.60 |
Diluted (USD per share) | $ 1.89 | $ 1.44 | $ 3.59 |
Weighted average number of shares outstanding: | |||
Basic (shares) | 45,387 | 45,280 | 45,671 |
Diluted (shares) | 45,577 | 45,413 | 45,823 |
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 | $ 97,679 | $ 75,734 | $ 171,125 |
Currency translation adjustments | (6,359) | (63,505) | 67,858 |
Cash flow hedges | (13,132) | 44 | 0 |
Debt securities available-for-sale | 39 | (83) | 0 |
Other comprehensive (loss)/income | (19,452) | (63,544) | 67,858 |
Total comprehensive income | 78,227 | 12,190 | 238,983 |
Less comprehensive income attributable to noncontrolling interests | 10,978 | 10,129 | 1,332 |
Comprehensive income attributable to PRA Group, Inc. | $ 67,249 | $ 2,061 | $ 237,651 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) | Noncontrolling Interests | |
Beginning Balance, shares at Dec. 31, 2016 | 46,356,000 | ||||||
Beginning balance at Dec. 31, 2016 | $ 918,321 | $ 464 | $ 66,414 | $ 1,050,525 | $ (251,944) | $ 52,862 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 170,902 | 164,315 | 6,587 | ||||
Currency translation adjustment | 66,135 | 73,337 | (7,202) | ||||
Cash flow hedges | 0 | ||||||
Debt securities available-for-sale | 0 | ||||||
Distributions to noncontrolling interest | (2,085) | (2,085) | |||||
Vesting of nonvested shares, shares | 145,000 | ||||||
Vesting of restricted stock | $ 1 | (1) | |||||
Repurchase and cancellation of common stock, shares | (1,312,000) | ||||||
Repurchase and cancellation of common stock | (44,909) | $ (13) | (44,896) | 0 | |||
Share-based compensation expense | 8,678 | 8,678 | |||||
Tax (deficiency)/benefit from share-based compensation | (3,022) | (3,022) | |||||
Employee stock relinquished for payment of taxes | 44,910 | 44,910 | |||||
Component of convertible debt | (18,213) | (18,213) | |||||
Ending Balance, shares at Dec. 31, 2017 | 45,189,000 | ||||||
Ending balance at Dec. 31, 2017 | 1,140,717 | $ 452 | 53,870 | 1,214,840 | (178,607) | 50,162 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Cumulative effect of change in accounting principle - equity securities | [1] | (3,930) | (3,930) | ||||
Balance, adjusted | 1,136,787 | $ 452 | 53,870 | 1,210,910 | (178,607) | 50,162 | |
Net income | 75,734 | 65,563 | 10,171 | ||||
Currency translation adjustment | (63,505) | (63,463) | (42) | ||||
Cash flow hedges | 44 | 44 | |||||
Debt securities available-for-sale | (83) | (83) | |||||
Distributions to noncontrolling interest | (33,271) | (33,271) | |||||
Vesting of nonvested shares, shares | 115,000 | ||||||
Vesting of restricted stock | $ 1 | (1) | |||||
Share-based compensation expense | 8,521 | 8,521 | |||||
Employee stock relinquished for payment of taxes | (2,087) | (2,087) | |||||
Purchase of noncontrolling interest | $ 1,829 | 0 | 1,829 | ||||
Ending Balance, shares at Dec. 31, 2018 | 45,304,000 | 45,304,000 | |||||
Ending balance at Dec. 31, 2018 | $ 1,123,969 | $ 453 | 60,303 | 1,276,473 | (242,109) | 28,849 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 97,679 | 86,158 | 11,521 | ||||
Currency translation adjustment | (6,359) | (5,816) | (543) | ||||
Cash flow hedges | (13,132) | (13,132) | |||||
Debt securities available-for-sale | 39 | 39 | |||||
Distributions to noncontrolling interest | (6,877) | (6,877) | |||||
Contributions from noncontrolling interest | 24,675 | 24,675 | |||||
Vesting of nonvested shares, shares | 112,000 | ||||||
Vesting of restricted stock | $ 1 | (1) | |||||
Share-based compensation expense | 10,717 | 10,717 | |||||
Employee stock relinquished for payment of taxes | (1,609) | (1,609) | |||||
Other | $ (2,089) | (2,089) | |||||
Ending Balance, shares at Dec. 31, 2019 | 45,416,000 | 45,416,000 | |||||
Ending balance at Dec. 31, 2019 | $ 1,227,013 | $ 454 | $ 67,321 | $ 1,362,631 | $ (261,018) | $ 57,625 | |
[1] | (1) Refer to Note 3 for further detail. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | |||
Net income | $ 97,679 | $ 75,734 | $ 171,125 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Share-based compensation expense | 10,717 | 8,521 | 8,678 |
Depreciation and amortization | 17,464 | 19,322 | 19,763 |
Gain on sale of subsidiaries | 0 | (26,575) | (48,474) |
Amortization of debt discount and issuance costs | 22,987 | 22,057 | 18,152 |
Impairment of investments | 0 | 0 | 1,745 |
Deferred tax benefit | (37,561) | (56,208) | (130,138) |
Net unrealized foreign currency transactions | (4,543) | 5,730 | (1,098) |
Fair value in earnings for equity securities | (5,826) | (3,502) | 0 |
Net allowance charges | 24,025 | 33,425 | 11,898 |
Other operating activities | (234) | 0 | (4,033) |
Changes in operating assets and liabilities: | |||
Other assets | 3,313 | (2,180) | (460) |
Other receivables, net | 6,300 | (4,269) | (3,461) |
Accounts payable | (2,070) | 1,321 | 2,743 |
Income taxes (payable)/receivable, net | (12,375) | 9,390 | (22,715) |
Accrued expenses | 11,632 | (1,334) | (5,752) |
Other liabilities | 1,149 | (566) | (2,498) |
Right of use asset/lease liability | 731 | 0 | 0 |
Net cash provided by operating activities | 133,388 | 80,866 | 15,475 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (18,033) | (20,521) | (22,840) |
Acquisition of finance receivables | (1,231,351) | (1,105,759) | (1,086,029) |
Collections applied to principal on finance receivables | 842,910 | 733,306 | 717,170 |
Business acquisition, net of cash acquired | (57,610) | 0 | |
Cash received upon consolidation of Polish investment fund | 0 | 17,531 | 0 |
Proceeds from sale of subsidiaries, net | 31,177 | 4,905 | 93,304 |
Purchase of investments | (83,291) | (42,622) | (6,688) |
Proceeds from sales and maturities of investments | 75,008 | 25,909 | 10,123 |
Net cash used in investing activities | (441,190) | (387,251) | (294,960) |
Cash flows from financing activities: | |||
Proceeds from lines of credit | 1,340,700 | 737,464 | 1,260,161 |
Principal payments on lines of credit | (728,282) | (403,348) | (1,549,833) |
Principal payments on notes payable and long-term debt | (313,165) | (10,000) | (15,021) |
Proceeds from long-term debt | 0 | 0 | 310,000 |
Proceeds from convertible debt | 0 | 0 | 345,000 |
Repurchases of common stock | 0 | 0 | (44,909) |
Tax withholdings related to share-based payments | (1,609) | (2,087) | (3,022) |
Payments of origination costs and fees | 0 | (2,260) | (18,240) |
Cash paid for purchase of portion of noncontrolling interest | 1,255 | 1,664 | 0 |
Distributions paid to noncontrolling interest | (6,877) | (14,486) | (1,429) |
Contributions from noncontrolling interest | 24,675 | 0 | 0 |
Net increase/(decrease) in interest-bearing deposits | 27,427 | (8,693) | 12,991 |
Other financing activities | (2,091) | 0 | 0 |
Net cash provided by financing activities | 339,523 | 294,926 | 295,698 |
Effect of exchange rate on cash | (6,609) | (10,362) | 10,016 |
Net increase/(decrease) in cash and cash equivalents | 25,112 | (21,821) | 26,229 |
Cash and cash equivalents, beginning of year | 98,695 | 120,516 | 94,287 |
Cash and cash equivalents, end of year | 123,807 | 98,695 | 120,516 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 119,424 | 97,475 | 79,825 |
Cash paid for income taxes | 68,979 | 73,483 | 144,341 |
Total cash, cash equivalents and restricted cash | $ 98,695 | $ 98,695 | $ 120,516 |
General and Summary of Signific
General and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
General and Summary of Significant Accounting Policies | General and Summary of Significant Accounting Policies : Nature of operations: As used herein, the terms "PRA Group," the "Company," or similar terms refer to PRA Group, Inc. and its subsidiaries. PRA Group, Inc., a Delaware corporation, is a global financial and business services company with operations in the Americas, Europe, and Australia. The Company's primary business is the purchase, collection and management of portfolios of nonperforming loans. The Company also provides fee-based services on class action claims recoveries and by servicing of consumer bankruptcy accounts in the United States ("U.S."). Basis of presentation: The consolidated financial statements of the Company are prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and include the accounts of all of its subsidiaries. All significant intercompany accounts and transactions have been eliminated. The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures. Realized results could differ from those estimates and assumptions. Reclassification of prior year presentation: Certain prior year amounts have been reclassified for consistency with the current year presentation. Foreign currency: Assets and liabilities have been translated to the reporting currency using the exchange rates in effect on the consolidated balance sheet dates. 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. Revenue and expense accounts are translated using the weighted average exchange rate during the period. The cumulative translation adjustments associated with the net assets of international subsidiaries are recorded in accumulated other comprehensive income (loss ) in the accompanying consolidated statements of changes in equity. Segments: Under the guidance of the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") ASC Topic 280 "Segment Reporting" ("ASC 280"), the Company has determined that it has several operating segments that meet the aggregation criteria of ASC 280, and, therefore, it has one reportable segment, accounts receivable management. This conclusion is based on similarities among the operating units, including economic characteristics, the nature of the products and services, the nature of the production processes, the types or class of customer for their products and services, the methods used to distribute their products, and services and the nature of the regulatory environment. Revenues and long-lived assets by geographical location: Revenue for the years ended December 31, 2019 , 2018 and 2017 , and long-lived assets held at December 31, 2019 and 2018 , both for the U.S., the Company's country of domicile, and outside of the U.S. were (amounts in thousands): Years Ended December 31, As of December 31, 2019 2018 2017 2019 2018 Revenues Long-Lived Assets (2) United States $ 673,264 $ 619,172 $ 560,278 $ 112,233 $ 48,581 United Kingdom 120,377 99,817 81,322 3,553 1,543 Others (1) 223,440 189,267 186,606 9,687 4,012 Total $ 1,017,081 $ 908,256 $ 828,206 $ 125,473 $ 54,136 (1) None of the countries included in "Others" comprise greater than 10% of the Company's consolidated revenues or long-lived assets. (2) 2019 includes right-of-use assets from the adoption of ASU 2016-02 on January 1, 2019. Refer to Note 4. Revenues are attributed to countries based on the location of the related operations. Long-lived assets consist of net property and equipment and right-of-use-assets. The Company reports revenues earned from nonperforming loan acquisitions and collection activities, fee-based services and investments. For additional information on the Company's investments, see Note 3. It is impracticable for the Company to report further breakdowns of revenues from external customers by product or service. Cash and cash equivalents: The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Concentrations of credit risk: Financial instruments, which potentially expose the Company to concentrations of credit risk, consist primarily of cash, investments and finance receivables. Accumulated other comprehensive loss: The Company records unrealized gains and losses on certain available-for-sale investments and foreign currency translation adjustments in other comprehensive income. Unrealized gains and losses on available for sale investments are reclassified to earnings as the gains or losses are realized upon sale of the securities. Translation gains or losses on foreign currency translation adjustments are reclassified to earnings upon the substantial sale or liquidation of investments in international operations. For the Company’s financial derivative instruments that are designated as hedging instruments, the change in fair value of the derivative is recorded in other comprehensive income. Investments: Debt Securities. The Company accounts for its investments in debt securities under the guidance of ASC Topic 320, "Investments-Debt Securities" ("ASC 320"). The Company determines the appropriate classification of its investments in debt securities at the time of purchase and reevaluates such determinations at each balance sheet date. Debt securities are classified as held to maturity when the Company has the positive intent and ability to hold the securities to maturity. Debt securities for which the Company does not have the intent or ability to hold to maturity are classified as available for sale. Held-to-maturity securities are carried at amortized cost. Available for sale securities are carried at fair market value. Fair value is determined using quoted market prices. Unrealized gains and losses are included in comprehensive income and reported in stockholders' equity. If the fair value of the investment falls below its carrying amount and the decline is deemed to be other than temporary, the investment is written down, with a corresponding charge to earnings. Equity Securities . The Company accounts for its investments in equity securities in accordance with ASC Topic 321, “Investments-Equity Securities” (“ASC 321”), which requires that investments in equity securities be measured at fair value with changes in unrealized gains and losses reported in earnings. The Company's investment in equity securities have historically been carried at cost with income recognized in Other Revenue in the consolidated income statements when distributions, up to reported income, were received from the partnerships. As of first quarter of 2018, "Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities" ("ASU 2016-01"), requires that investments in equity securities be measured at fair value with changes in unrealized gains and losses reported in earnings. See Note 3 for additional information. Equity Method Investments. Equity method investments that are not consolidated, but over which the Company exercises significant influence, are accounted for under the equity method of accounting. Whether or not the Company exercises significant influence with respect to an investee company depends on an evaluation of several factors including, among others, representation on the investee company’s board of directors and ownership level, which is generally a 20% to 50% interest in the voting securities of the investee company. Under the equity method of accounting, an investee company’s accounts are not reflected within the Company’s consolidated balance sheets and income statements; however, the Company’s share of the earnings or losses of the investee company is reflected in the caption ‘‘Other revenue’’ in the consolidated income statements. The Company’s carrying value in an equity method investee company is reflected in the caption ‘‘Investments’’ in the Company’s consolidated balance sheets. When the Company’s carrying value in an equity method investee company is reduced to zero, no further losses are recorded in the Company’s consolidated financial statements unless the Company guaranteed obligations of the investee company or has committed additional funding. When the investee company subsequently reports income, the Company will not record its share of such income until it equals the amount of its share of losses not previously recognized. Finance receivables and income recognition: The Company accounts for its investment in finance receivables under the guidance of ASC Topic 310-30, "Loans and Debt Securities Acquired with Deteriorated Credit Quality" ("ASC 310-30"). The Company acquires portfolios of accounts that have experienced deterioration of credit quality between origination and the Company's acquisition of the accounts. The amount paid for a portfolio reflects the Company's determination that it is probable the Company will be unable to collect all amounts due according to an account's contractual terms. At acquisition, the Company reviews the accounts to determine whether there is evidence of deterioration of credit quality since origination, and if it is probable that the Company will be unable to collect all amounts due according to the loan's contractual terms. If both conditions exist, the Company then determines whether each such account is to be accounted for individually or whether such accounts will be assembled into pools based on common risk characteristics. The Company considers expected prepayments and estimates the amount and timing of undiscounted expected principal, interest and other cash flows (expected at acquisition) for each acquired portfolio based on the Company's proprietary models, and the Company subsequently aggregates portfolios of accounts into quarterly pools. The Company determines the excess of the pool's scheduled contractual principal and contractual interest payments over all cash flows expected at acquisition as an amount that should not be accreted (nonaccretable difference). The remaining amount, representing the excess of the pool's cash flows expected to be collected over the amount paid, is accreted into income recognized on finance receivables over the remaining estimated life of the pool (accretable yield). ASC 310-30 requires that the excess of the contractual cash flows over expected cash flows, based on the Company's estimates derived from proprietary collection models, not be recognized as an adjustment of revenue or expense or on the balance sheet. Each pool is recorded at cost and is accounted for as a single unit for the recognition of income, payments applied to principal and loss provision. Once a pool is established for a calendar quarter, individual receivable accounts are not added to the pool (unless replaced by the seller) or removed from the pool (unless sold or returned to the seller). The yield is estimated and periodically recalculated based on the timing and amount of anticipated cash flows. Income on finance receivables is accrued quarterly based on each pool's effective yield. Significant increases in expected future cash flows may be recognized prospectively, through an upward adjustment of the yield, over a pool's remaining life. Under ASC 310-30, rather than lowering the estimated yield if the collection estimates are below previous expectations, the carrying value of a pool would be written down to maintain the then current yield and is shown as an allowance charge in the consolidated income statements with a corresponding valuation allowance offsetting finance receivables on the consolidated balance sheets. Cash flows greater than the interest accrual will reduce the carrying value of the pool. This reduction in carrying value is defined as payments applied to principal (also referred to as principal amortization). Likewise, cash flows that are less than the interest accrual will accrete the carrying balance. Generally, the Company does not record accretion in the first six to twelve months of the estimated life of the pool; accordingly, the Company utilizes either the cost recovery method or cash method when necessary to prevent accretion as permitted by ASC 310-30. Under the cash method, revenue is recognized as it would be under the interest method up to the amount of cash collections. Under the cost recovery method, no revenue is recognized until the Company has fully collected the cost of the pool, or until such time that the Company considers the collections to be probable and estimable and begins to recognize income based on the interest method as described above. The Company also uses the cost recovery method when collections on a particular pool of accounts cannot be reasonably estimated. A pool can become fully amortized (zero carrying balance on the balance sheet) while still generating cash collections. In this case, all subsequent cash collections are recognized as revenue when received. The Company records a valuation allowance when significant decreases in expected cash flows are identified or there are changes in the timing of expected cash flows that would otherwise require a reduction in the stated yield on a pool of accounts. Factors that may contribute to the recording of valuation allowances include both external and internal factors. External factors that may have an impact on the collectability, and subsequently on the overall profitability of acquired pools of nonperforming loans, would include new laws or regulations relating to collections, new interpretations of existing laws or regulations, and the overall condition of the economy. Internal factors that may have an impact on the collectability, and subsequently the overall profitability of acquired pools of nonperforming loans, would include necessary revisions to initial and post-acquisition scoring and modeling estimates, non-optimal operational activities, and decreases in productivity related to turnover and tenure of the Company's collection staff. The Company capitalizes certain fees paid to third parties related to the direct acquisition of a portfolio of accounts. These fees are added to the acquisition cost of the portfolio and accordingly are amortized over the life of the portfolio using the interest method. The agreements to purchase the aforementioned nonperforming loans include general representations and warranties from the sellers covering account holder death or insolvency and accounts settled or disputed prior to sale. The representation and warranty period permitting the return of these accounts from the Company to the seller is typically 90 to 180 days. Any funds received from the seller as a return of purchase price are referred to as buybacks. Buyback funds are applied against the finance receivable balance received and are not included in the Company's cash collections from operations. In some cases, the seller will replace the returned accounts with new accounts in lieu of returning the purchase price. In that case, the old account is removed from the pool and the new account is added. Fee income recognition: The Company recognizes revenue from its class action claims recovery services when there is persuasive evidence that an arrangement exists, delivery has occurred or services have been rendered, the amount is fixed or determinable, and collectability is reasonably assured. Property and equipment: Property and equipment, including improvements that significantly add to the productive capacity or extend useful life, are recorded at cost. Maintenance and repairs are expensed as incurred. Property and equipment are depreciated over their useful lives using the straight-line method of depreciation. Software and computer equipment are amortized or depreciated over three to five years . Furniture and fixtures are depreciated over five to ten years . Equipment is depreciated over five to seven years . Leasehold improvements are depreciated over the lesser of the useful life, which ranges from three to ten years , or the remaining term of the lease. Building improvements are depreciated straight-line over ten to thirty-nine years . When property is sold or retired, the cost and related accumulated depreciation are removed from the balance sheet and any gain or loss is included in the income statement. Business combinations: The Company accounts for business combinations under the acquisition method in accordance with ASC 805, "Business Combinations" ("ASC 805"). The cost of an acquired company is assigned to the tangible and intangible assets acquired and the liabilities assumed on the basis of their fair values at the date of acquisition. The determination of fair values of assets acquired and liabilities assumed requires management to make estimates and use valuation techniques when market values are not readily available. Any excess of purchase price over the fair value of net tangible and intangible assets acquired is allocated to goodwill. Transaction costs associated with business combinations are expensed as incurred. Goodwill and intangible assets: Goodwill, in accordance with ASC Topic 350, "Intangibles-Goodwill and Other" ("ASC 350"), is not amortized but rather is reviewed for impairment annually or more frequently if indicators of potential impairment exist. The Company performs its annual assessment as of October 1. The Company may first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If management concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, management conducts a two-step quantitative goodwill impairment test. The first step of the impairment test involves comparing the fair value of the applicable reporting unit with its carrying value. The Company estimates the fair values of its reporting units using a combination of the income approach, which uses present value techniques, and the market approach, which uses market multiples from comparable transactions where the acquisition target has similar operating and investment characteristics to the reporting unit. If the carrying amount of a reporting unit exceeds the reporting unit's fair value, management performs the second step of the goodwill impairment test. The second step of the goodwill impairment test involves comparing the implied fair value of the affected reporting unit's goodwill with the carrying value of that goodwill. The amount by which the carrying value of the goodwill exceeds its implied fair value, if any, is recognized as an impairment loss . See Note 5 for additional information. Convertible senior notes: The Company accounts for its 3.00% Convertible Senior Notes due 2020 (the "2020 Notes") and its 3.50% Convertible Notes due 2023 (the "2023 Notes" and, together with the 2020 Notes, the "Notes") in accordance with ASC 470-20, "Debt with Conversion and Other Options" ("ASC 470-20"). ASC 470-20 requires that, for convertible debt instruments that must be settled fully or partially in cash upon conversion, issuers must separately account for the liability and equity components in a manner that will reflect the entity's nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. The excess of the principal amount of the liability component over its carrying amount is amortized to interest expense over the expected life of a similar liability that does not have an associated equity component, using the effective interest method. The equity component is not remeasured as long as it continues to meet the conditions for equity classification under ASC 815-40, "Derivatives and Hedging - Contracts in an Entity's Own Equity." Transaction costs incurred with third parties are allocated to the liability and equity components in proportion to the allocation of proceeds and accounted for as debt issuance costs and equity issuance costs, respectively. For diluted earnings per share purposes, based upon the Company's intent and ability to settle conversions of the Notes through a combination of cash and shares, only the conversion spread is included in the diluted earnings per share calculation, if dilutive. Under such method, the settlement of the conversion spread has a dilutive effect when the average share price of the Company's common stock during any quarter exceeds $65.72 for the 2020 Notes or $46.24 for the 2023 Notes, neither of which occurred during the respective periods from when the Notes were issued through December 31, 2019. Income taxes: The Company follows the guidance of ASC Topic 740 "Income Taxes" ("ASC 740") as it relates to the provision for income taxes and uncertainty in income taxes. Accordingly, the Company records a tax provision for the anticipated tax consequences of the reported results of operations. The provision for income taxes is estimated using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, and for operating losses and tax credit carry-forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets are expected to be realized or settled. The evaluation of a tax position in accordance with the guidance is a two-step process. The first step is recognition: the enterprise determines whether it is more-likely-than-not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. In evaluating whether a tax position has met the more-likely-than-not recognition threshold, the enterprise should presume that the position will be examined by the appropriate taxing authority that would have full knowledge of all relevant information. The second step is measurement: a tax position that meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met. The Company records interest and penalties related to unrecognized tax benefits as a component of income tax expense when positions are not met. In the event that all or part of the deferred tax assets are determined not to be realizable in the future, a valuation allowance would be established and charged to earnings in the period such determination is made. If the Company subsequently realizes deferred tax assets that were previously determined to be unrealizable, the respective valuation allowance would be reversed, resulting in a positive adjustment to earnings. The estimate of income tax expense involves significant judgment in evaluating the impact of uncertainties in the application of complex tax laws. Resolution of these uncertainties in a manner inconsistent with our expectations could have a material impact on our results of operations and financial position. Beginning with the 2017 tax year, the Company utilizes a new tax accounting method to recognize net finance receivables income. Under the new method, a portion of the annual collections amortize principal and the remaining portion is taxable income. The deferred tax liability related to the difference in timing between the new method and the cost recovery method will be incorporated evenly into the Company’s tax filings over four years. For additional information, see Note 13. Advertising costs: Advertising costs are expensed when incurred. Leases: The Company accounts for leases in accordance with the provisions of FASB issued ASU 2016-02, "Leases (Topic 842) Section A - Leases: Amendments to the FASB Account Standards Codification" ("ASU 2016-02"). ASU 2016-02 requires that a lessee should recognize a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term on the balance sheet. The Company adopted ASC 842 on January 1, 2019 using the alternative method which resulted in the recording of operating lease right-of-use ("ROU") assets and lease liabilities of $72.1 million and $75.8 million , respectively. The Company's balance sheets for reporting periods beginning on or after January 1, 2019 are presented under the new guidance, while prior periods amounts are not adjusted and continue to be reported in accordance with previous guidance. The Company elected to apply the package of practical expedients permitted within the new standard, which among other things, allows it to carry forward the historical lease classification. In addition, the Company elected the practical expedient to exclude short-term leases (lease terms of less than one year) from its ROU assets and lease liabilities. The Company's operating lease portfolio primarily includes corporate offices and call centers. The majority of its leases have remaining lease terms of one year to twenty years, some of which include options to extend the leases for five years, and others include options to terminate the leases within one year. Exercises of lease renewal options are typically at the Company's sole discretion and are included in its ROU assets and lease liabilities based upon whether the Company is reasonably certain of exercising the renewal options. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. As most of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments. The Company used its incremental borrowing rate as of January 1, 2019 to calculate the present value of the lease payments of its existing leases at adoption. Share-based compensation: The Company accounts for share-based compensation in accordance with the provisions of ASC Topic 718 "Compensation-Stock Compensation" ("ASC 718"). ASC 718 requires that compensation expense associated with share equity awards be recognized in the income statement. 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. The Company estimates a forfeiture rate for most equity share grants based on historical experience. Time-based equity share awards generally vest between one and three years from the grant date and are expensed on a straight-line basis over the vesting period. Equity share awards that contain a performance metric, are expensed over the requisite service period, generally three years , in accordance with the performance level achieved at each reporting period. See Note 11 for additional information. Derivatives: The Company periodically enters into derivative financial instruments, typically interest rate swap agreements, interest rate caps, and foreign currency contracts to reduce its exposure to fluctuations in interest rates on variable-rate debt and foreign currency exchange rates. The Company does not utilize derivative financial instruments with a level of complexity or with a risk greater than the exposure to be managed nor does it enter into or hold derivatives for trading or speculative purposes. The Company follows the guidance of ASC Topic 815 "Derivatives and Hedging" ("ASC 815") to account for its derivatives. All of the Company's outstanding derivative financial instruments are recognized in the balance sheet at their fair values. The effect on earnings from recognizing the fair values of these derivative financial instruments depends on their intended use, their hedge designation, and their effectiveness in offsetting changes in the fair values of the exposures they are hedging. Changes in the fair values of instruments designated to reduce or eliminate adverse fluctuations in the fair values of recognized assets and liabilities and unrecognized firm commitments are reported currently in earnings along with changes in the fair values of the hedged items. Changes in the effective portions of the fair values of instruments used to reduce or eliminate adverse fluctuations in cash flows of anticipated or forecasted transactions are reported in equity as a component of accumulated other comprehensive income. Amounts in accumulated other comprehensive income are reclassified to earnings when the related hedged items affect earnings or the anticipated transactions are no longer probable. Changes in the fair values of derivative instruments that are not designated as hedges or do not qualify for hedge accounting treatment are reported currently in earnings. The Company realizes gains and losses from derivative instruments in the same financial statement line item as the hedged item/forecasted transaction. Changes in unrealized gains and losses for derivatives not designated in a hedge accounting relationship are recorded directly in earnings each period and are also recorded in the same financial statement line item as the hedged item/forecasted transaction. Cash flows from the settlement of derivatives, including both economic hedges and those designated in hedge accounting relationships, appear in the consolidated statements of cash flows in the same categories as the cash flows of the hedged item. For derivative financial instruments accounted for as hedging instruments, the Company formally designates and documents, at inception, the financial instrument as a hedge of a specific underlying exposure, the risk management objective, and the manner in which effectiveness of the hedge will be assessed. The Company formally assesses, both at inception and at each reporting period thereafter, whether the derivative financial instruments used in hedging transactions are effective in offsetting changes in fair value or cash flows of the related underlying exposures. Any ineffective portion of the change in fair value of the instruments is recognized immediately in earnings. The Company discontinues the use of hedge accounting prospectively when (1) the derivative instrument is no longer effective in offsetting changes in fair value or cash flows of the underlying hedged item; (2) the derivative instrument expires, is sold, terminated, or exercised; or (3) designating the derivative instrument as a hedge is no longer appropriate. See Note 9 for additional information. Use of estimates: The preparation of the consolidated financial statements in conformity with U.S. 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates have been made by management with respect to the timing and amount of future cash collections of the Company's finance receivables portfolios. Actual results could differ from these estimates making it reasonably possible that a change in these estimates could occur within one year . Commitments and contingencies: The Company is subject to various claims and contingencies related to lawsuits, certain taxes, and commitments under contractual and other obligations. The Company recognizes liabilities for contingencies and commitments when a loss is probable and estimable. The Company expenses related legal costs as incurred. For additional i |
Finance Receivables, net
Finance Receivables, net | 12 Months Ended |
Dec. 31, 2019 | |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities [Abstract] | |
Finance Receivables, net | Finance Receivables, net: Changes in finance receivables, net, for the years ended December 31, 2019 and 2018 , were as follows (amounts in thousands): 2019 2018 Balance at beginning of year $ 3,084,777 $ 2,776,199 Acquisitions of finance receivables (1) 1,274,317 1,105,423 Addition relating to consolidation of Polish investment fund — 34,871 Foreign currency translation adjustment 22,006 (64,985 ) Cash collections (1,841,271 ) (1,625,205 ) Income recognized on finance receivables 998,361 891,899 Net allowance charges (24,025 ) (33,425 ) Balance at end of year $ 3,514,165 $ 3,084,777 (1) Includes portfolio purchases adjusted for buybacks and acquisition related costs and portfolios from the acquisition of a business in Canada made during the first quarter of 2019. During the year ended December 31, 2019 , the Company acquired finance receivable portfolios with a face value of $11.7 billion for $1.3 billion as compared to the same period last year with a face value of $9.2 billion for $1.1 billion . At December 31, 2019 , the estimated remaining collections ("ERC") on the receivables acquired during the years ended December 31, 2019 and 2018 were $2.0 billion and $1.4 billion , respectively. At December 31, 2019 and 2018 , ERC was $6.8 billion and $6.1 billion , respectively. At the time of acquisition and each quarter thereafter, the life of each pool is estimated based on projected amounts and timing of future cash collections using the proprietary models of the Company. Based upon current projections, estimated cash collections expected to be applied to principal are as follows for the twelve-month periods ending December 31, (amounts in thousands): 2020 $ 831,769 2021 672,699 2022 500,597 2023 368,332 2024 263,785 2025 193,831 2026 156,456 2027 135,238 2028 125,673 2029 116,008 Thereafter 149,777 Total ERC expected to be applied to principal $ 3,514,165 At December 31, 2019 and 2018 , the Company had aggregate net finance receivables balances in pools accounted for under the cost recovery method of $33.7 million and $48.0 million , respectively. Accretable yield represents the amount of income on finance receivables the Company can expect to recognize over the remaining life of its existing portfolios based on estimated future cash flows as of the balance sheet date. Additions represent the original expected accretable yield, on portfolios acquired during the period. Net reclassifications from nonaccretable difference to accretable yield primarily result from the increase in the Company's estimate of future cash flows. When applicable, net reclassifications to nonaccretable difference from accretable yield result from the decrease in the Company's estimates of future cash flows and allowance charges that together exceed the increase in the Company's estimate of future cash flows. Changes in accretable yield for the years ended December 31, 2019 and 2018 were as follows (amounts in thousands): 2019 2018 Balance at beginning of year $ 3,058,445 $ 2,927,866 Income recognized on finance receivables (998,361 ) (891,899 ) Net allowance charges 24,025 33,425 Additions from portfolio acquisitions 943,887 876,112 Reclassifications from nonaccretable difference 205,464 194,992 Foreign currency translation adjustment 6,671 (82,051 ) Balance at end of year $ 3,240,131 $ 3,058,445 The following is a summary of activity within the Company's valuation allowance account, all of which relates to loans acquired with deteriorated credit quality, for the years ended December 31, 2019 , 2018 and 2017 (amounts in thousands): 2019 2018 2017 Beginning balance $ 257,148 $ 225,555 $ 211,465 Allowance charges 38,662 48,856 13,826 Reversal of previous recorded allowance charges (14,637 ) (15,431 ) (1,928 ) Net allowance charges 24,025 33,425 11,898 Foreign currency translation adjustment 122 (1,832 ) 2,192 Ending balance $ 281,295 $ 257,148 $ 225,555 |
Investments
Investments | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments: Investments consisted of the following at December 31, 2019 and 2018 (amounts in thousands): 2019 2018 Debt securities Available-for-sale $ 5,052 $ 5,077 Equity securities Private equity funds 7,218 7,973 Mutual funds 33,677 21,753 Equity method investments 10,229 10,370 Total investments $ 56,176 $ 45,173 Debt Securities Available-for-Sale Government bonds : The Company's investments in government bonds are classified as available-for-sale and are stated at fair value. The amortized cost and estimated fair value of investments in debt securities at December 31, 2019 and 2018 were as follows (amounts in thousands): December 31, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value Available-for-sale Government bonds $ 5,095 $ — $ 43 $ 5,052 December 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value Available-for-sale Government bonds $ 5,160 $ — $ 83 $ 5,077 Equity Securities Investments in private equity funds : Investments in private equity funds represent limited partnerships in which the Company has less than a 3% interest. In the first quarter of 2018, the Company adopted ASU 2016-01. Upon adoption of ASU 2016-01, the investments are carried at the fair value reported by the fund manager. The Company recorded a cumulative effect adjustment of $3.9 million , net of tax, to beginning retained earnings for the unrealized loss on the investment. Mutual funds: The Company invests certain excess funds held in Brazil in a Brazilian real denominated mutual fund benchmarked to the U.S. dollar that invests principally in Brazilian fixed income securities. The investments are carried at fair value based on quoted market prices. Gains and losses from this investment are included as a foreign exchange component of other income and (expense) in the Company's consolidated income statements. Unrealized gains and losses: Net unrealized gains on equity securities were $5.8 million and $3.5 million for the twelve months ended December 31, 2019 and December 31, 2018, respectively on the Company's equity securities. Equity Method Investments Effective December 20, 2018, the Company has an 11.7% interest in RCB Investimentos S.A. ("RCB"), a servicing platform for nonperforming loans in Brazil, which is accounted for on the equity method because the Company exercises significant influence over RCB’s operating and financial activities. Accordingly, the Company’s investment in RCB is adjusted for the Company’s proportionate share of RCB’s earnings or losses. Refer to Note 17 for additional information. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | Leases: The components of lease expense for the year ended December 31, 2019 was as follows (amounts in thousands): December 31, 2019 Operating lease cost $ 12,008 Short-term lease cost 2,973 Total lease cost $ 14,981 Supplemental cash flow information and non-cash activity related to leases for the year ended December 31, 2019 were as follows (amounts in thousands): December 31, 2019 Cash paid for amounts included in the measurement of operating lease liabilities $ 11,438 ROU assets obtained in exchange for operating lease obligations $ 80,725 Lease term and discount rate information related to operating leases were as follows as of the date indicated: December 31, 2019 Weighted-average remaining lease terms (years) 10.7 Weighted-average discount rate 4.9 % The Company leases office space and equipment under operating leases. Lease expense was $15.0 million , $13.6 million and $11.8 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. Maturities of lease liabilities at December 31, 2019 , are as follows for the years ending December 31, (amounts in thousands): Operating Leases 2020 $ 11,846 2021 11,378 2022 9,324 2023 7,132 2024 6,279 Thereafter 49,414 Total lease payments $ 95,373 Less imputed interest (21,996 ) Total $ 73,377 As previously disclosed in the Company's Form 10-K for the year ended December 31, 2018 and under the previous lease accounting standard (which excludes the impact of the Company's intent to exercise renewal options as required by ASU 2016-02), future minimum lease payments for operating leases at December 31, 2018, were as follows for the years ending December 31, (amounts in thousands): 2019 $ 11,470 2020 11,451 2021 10,809 2022 7,287 2023 6,189 Thereafter 7,866 Total future minimum lease payments $ 55,072 |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, net | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, net | Goodwill and Intangible Assets, net: In connection with the Company's business acquisitions, the Company acquired certain tangible and intangible assets. Intangible assets resulting from these acquisitions include client and customer relationships, non-compete agreements, trademarks and technology. The Company performs an annual review of goodwill as of October 1 or more frequently if indicators of impairment exist. The Company performed an annual review of goodwill as of October 1, 2019 and concluded that no goodwill impairment was necessary. The following table represents the changes in goodwill for the years ended December 31, 2019 and 2018 (amounts in thousands): 2019 2018 Goodwill: Balance at beginning of period $ 464,116 $ 526,513 Changes: Acquisition 18,831 — Sale of subsidiary — (36,053 ) Foreign currency translation adjustment (2,153 ) (26,344 ) Net change in goodwill 16,678 (62,397 ) Balance at end of period $ 480,794 $ 464,116 The $18.8 million addition to goodwill during the year ended December 31, 2019, is related to the acquisition of a business in Canada during the first quarter. The $36.1 million decrease in goodwill during the year ended December 31, 2018, is a result of the sale of a portion of RCB's servicing platform in December of 2018. Intangible assets, excluding goodwill, consisted of the following at December 31, 2019 and 2018 (amounts in thousands): 2019 2018 Gross Accumulated Gross Accumulated Client and customer relationships $ 12,072 $ 8,242 $ 11,806 $ 6,993 Non-compete agreements 439 183 — — Trademarks 400 362 400 345 Technology 1,679 1,306 1,548 894 Total $ 14,590 $ 10,093 $ 13,754 $ 8,232 The Company amortizes the intangible assets over their estimated useful lives. Total amortization expense for the years ended December 31, 2019 , 2018 and 2017 was $1.6 million , $4.3 million and $4.3 million , respectively. The Company reviews intangible assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable and the carrying amount exceeds its fair value. The future amortization of intangible assets is estimated to be as follows for the years ending December 31, (amounts in thousands): 2020 $ 1,402 2021 880 2022 750 2023 707 2024 758 Thereafter — Total $ 4,497 |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings: The Company's borrowings consisted of the following as of the dates indicated (amounts in thousands): December 31, December 31, Americas revolving credit $ 772,037 $ 598,279 Europe revolving credit 1,017,465 561,882 Term loans 425,000 740,551 Convertible senior notes 632,500 632,500 2,847,002 2,533,212 Less: Debt discount and issuance costs (38,577 ) (59,556 ) Total $ 2,808,425 $ 2,473,656 The following principal payments are due on the Company's borrowings at December 31, 2019 for the years ending December 31, (amounts in thousands): 2020 $ 298,603 2021 1,028,568 2022 1,174,831 2023 345,000 2024 and thereafter — Total $ 2,847,002 The Company believes it was in compliance with the covenants of its financing arrangements as of December 31, 2019 . North American Revolving Credit and Term Loan On May 5, 2017, the Company amended and restated its existing credit agreement (as amended, and modified from time to time, the “North American Credit Agreement”) with Bank of America, N.A., as administrative agent, Bank of America, National Association, acting through its Canada branch, as the Canadian administrative agent, and a syndicate of lenders named therein. In the fourth quarter of 2018, the Company entered into a First Amendment (the "First Amendment") to the North American Credit Agreement which, among other things, increased the domestic revolving credit facility by $363.0 million and expanded the accordion feature to allow the Company to increase the original principal amount of the commitments under the North American Credit Agreement by an additional $500.0 million , subject to certain terms and conditions. The total credit facility under the North American Credit Agreement includes an aggregate principal amount of $ 1,543.0 million (subject to compliance with a borrowing base and applicable debt covenants), which consists of (i) a fully-funded $425.0 million term loan, (ii) a $1,068.0 million domestic revolving credit facility and (iii) a $50.0 million Canadian revolving credit facility. The facility includes an accordion feature for up to $500.0 million in additional commitments (at the option of the lender) and also provides for up to $25.0 million of letters of credit and a $25.0 million swingline loan sublimit that would reduce amounts available for borrowing. The term and revolving loans accrue interest, at the option of the Company, at either the base rate or the Eurodollar rate (as defined in the North American Credit Agreement) for the applicable term plus 2.50% per annum in the case of the Eurodollar rate loans and 1.50% in the case of the base rate loans. The base rate is the highest of (a) the Federal Funds Rate (as defined in the North American Credit Agreement) plus 0.50% , (b) Bank of America's prime rate or (c) the one-month Eurodollar rate plus 1.00% . Canadian Prime Rate Loans bear interest at a rate per annum equal to the Canadian Prime Rate plus 1.50% . The revolving credit facilities also bear an unused line fee of 0.375% per annum, payable quarterly in arrears. The loans under the North American Credit Agreement mature May 5, 2022. As of December 31, 2019 , the unused portion of the North American Credit Agreement was $349.2 million . Considering borrowing base restrictions as of December 31, 2019 , the amount available to be drawn was $146.5 million . The North American Credit Agreement is secured by a first priority lien on substantially all of the Company's North American assets. The North American Credit Agreement contains restrictive covenants and events of default including the following: • borrowings under each of the domestic revolving loan facility and the Canadian revolving loan facility are subject to separate borrowing base calculations and may not exceed 35% of the ERC of all domestic or Canadian, as applicable, core eligible asset pools, plus 55% of the ERC of domestic or Canadian, as applicable, insolvency eligible asset pools, plus 75% of domestic or Canadian, as applicable, eligible accounts receivable; • the consolidated total leverage ratio cannot exceed 2.75 to 1.0 as of the end of any fiscal quarter; • the consolidated senior secured leverage ratio cannot exceed 2.25 to 1.0 as of the end of any fiscal quarter; • subject to no default or event of default, cash dividends and distributions during any fiscal year cannot exceed $20.0 million ; • subject to no default or event of default, stock repurchases during any fiscal year cannot exceed $100.0 million plus 50% of the prior year's consolidated net income; • permitted acquisitions during any fiscal year cannot exceed $250.0 million (with a $50.0 million per year sublimit for permitted acquisitions by non-loan parties); • indebtedness in the form of senior, unsecured convertible notes or other unsecured financings cannot exceed $750.0 million in the aggregate (without respect to the 2020 Notes); • the Company must maintain positive consolidated income from operations during any fiscal quarter; and • restrictions on changes in control. The outstanding balances and weighted average interest rates by type of borrowing under the credit facility as of the dates indicated are as follows (dollar amounts in thousands): December 31, 2019 December 31, 2018 Amount Outstanding Weighted Average Interest Rate Amount Outstanding Weighted Average Interest Rate Term loan $ 425,000 4.30 % $ 435,000 5.02 % Revolving credit facilities 768,800 4.31 % 598,279 4.97 % European Revolving Credit Facility On October 23, 2014, European subsidiaries of the Company ("PRA Europe") entered into a credit agreement with DNB Bank ASA for a Multicurrency Revolving Credit Facility (such agreement as later amended or modified, the "European Credit Agreement"). In the first quarter of 2019, the Company entered into the Fifth Amendment and Restatement Agreement to its European Credit Agreement which, among other things, merged the term loan facility with the revolving credit facility and increased all applicable margins for the interest payable under the multicurrency revolving credit facility by 5 basis points. Under the terms of the European Credit Agreement, the credit facility includes an aggregate amount of approximately $1.1 billion (subject to the borrowing base), accrues interest at the Interbank Offered Rate ("IBOR") plus 2.70% - 3.80% (as determined by the LTV Ratio as defined in the European Credit Agreement), bears an unused line fee, currently 1.23% per annum, of 35% of the margin, is payable monthly in arrears, and matures February 19, 2021. The European Credit Agreement also includes an overdraft facility in the aggregate amount of $40.0 million (subject to the borrowing base), which accrues interest (per currency) at the daily rates as published by the facility agent, bears a facility line fee of 0.125% per quarter, payable quarterly in arrears, and matures February 19, 2021. As of December 31, 2019 , the unused portion of the European Credit Agreement (including the overdraft facility) was $122.5 million . Considering borrowing base restrictions and other covenants as of December 31, 2019 , the amount available to be drawn under the European Credit Agreement (including the overdraft facility) was $121.8 million . The European Credit Agreement is secured by the shares of most of the Company's European subsidiaries and all intercompany loans receivable in Europe. The European Credit Agreement contains restrictive covenants and events of default including the following: • the LTV Ratio cannot exceed 75% ; • the gross interest-bearing debt ratio in Europe cannot exceed 3.25 to 1.0 as of the end of any fiscal quarter; • interest bearing deposits in AK Nordic AB cannot exceed SEK 1.2 billion; and • PRA Europe's cash collections must meet certain thresholds, measured on a quarterly basis. The outstanding balances and weighted average interest rates by type of borrowing under the European Credit Agreement as the dates indicated are as follows (dollar amounts in thousands): December 31, 2019 December 31, 2018 Amount Outstanding Weighted Average Interest Rate Amount Outstanding Weighted Average Interest Rate Term loan $ — — % $ 305,551 3.75 % Revolving credit facility 1,017,465 4.31 % 561,882 4.10 % Colombian Revolving Credit Facility On September 17, 2019, PRA Group Colombia Holding SAS ("PRA Colombia"), entered into a credit agreement with Bancolombia in an aggregate amount of approximately $6.0 million . As of December 31, 2019, the outstanding balance under the credit agreement was approximately $3.2 million , with a weighted average interest rate of 7.13% . The outstanding balance accrues interest at the Indicador Bancario de Referencia rate ("IBR") plus a weighted average spread of 2.74% , is payable quarterly in arrears, amortizes quarterly, and matures on October 17, 2022 (per the credit agreement, maturity represents three years from the last draw). This credit facility is fully collateralized using time deposits with Bancolombia which are subject to certain limitations regarding withdrawal and usage and are included within other assets on the consolidated balance sheet. As of December 31, 2019 , the unused portion of the Colombia Credit Agreement was $2.8 million . Convertible Senior Notes due 2020 On August 13, 2013, the Company completed the private offering of $287.5 million in aggregate principal amount of its 3.00% Convertible Senior Notes due August 1, 2020 (the "2020 Notes"). The 2020 Notes were issued pursuant to an Indenture, dated August 13, 2013 (the "2013 Indenture"), between the Company and Regions Bank, as successor trustee. The 2013 Indenture contains customary terms and covenants, including certain events of default after which the 2020 Notes may be due and payable immediately. The 2020 Notes are senior unsecured obligations of the Company. Interest on the 2020 Notes is payable semi-annually, in arrears, on February 1 and August 1 of each year, beginning on February 1, 2014. Prior to February 1, 2020, the 2020 Notes will be convertible only upon the occurrence of specified events. As of December 31, 2019 , the the Company did not have the right to redeem the 2020 Notes and the Company did not believe that any of the conditions allowing holders of the 2020 Notes to convert their notes had occurred. All conversions occurring on or after February 1, 2020, shall be settled using the Settlement Method as defined in the indenture. The conversion rate for the 2020 Notes is initially 15.2172 shares per $1,000 principal amount of 2020 Notes, which is equivalent to an initial conversion price of approximately $65.72 per share of the Company's common stock and is subject to adjustment in certain circumstances pursuant to the 2013 Indenture. Upon conversion, holders of the 2020 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 intent is to settle conversions through combination settlement (i.e ., the 2020 Notes would be converted 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, for the remainder). As a result, and in accordance with authoritative guidance related to derivatives and hedging and earnings per share, only the conversion spread is included in the diluted earnings per share calculation, if dilutive. Under such method, the settlement of the conversion spread has a dilutive effect when the average share price of the Company's common stock during any quarter exceeds $65.72 . The Company determined that the fair value of the 2020 Notes at the date of issuance was approximately $255.3 million and designated the residual value of approximately $32.2 million as the equity component. Additionally, the Company allocated approximately $7.3 million of the $8.2 million issuance cost as debt issuance cost and the remaining $0.9 million as equity issuance cost. Convertible Senior Notes due 2023 On May 26, 2017, the Company completed the private offering of $345.0 million in aggregate principal amount of its 3.50% Convertible Senior Notes due June 1, 2023 (the "2023 Notes" and, together with the 2020 Notes, the "Notes"). The 2023 Notes were issued pursuant to an Indenture, dated May 26, 2017 (the "2017 Indenture"), between the Company and Regions Bank, as trustee. The 2017 Indenture contains customary terms and covenants, including certain events of default after which the 2023 Notes may be due and payable immediately. The 2023 Notes are senior unsecured obligations of the Company. Interest on the 2023 Notes is payable semi-annually, in arrears, on June 1 and December 1 of each year, beginning on December 1, 2017. Prior to March 1, 2023, the 2023 Notes will be convertible only upon the occurrence of specified events. On or after March 1, 2023, the 2023 Notes will be convertible at any time. The Company has the right, at its election, to redeem all or any part of the outstanding 2023 Notes at any time on or after June 1, 2021 for cash, but only if the last reported sale price (as defined in the 2017 Indenture) exceeds 130% of the conversion price on each of at least 20 trading days during the 30 consecutive trading days ending on and including the trading day immediately before the date the Company sends the related redemption notice. As of December 31, 2019 , the Company does not believe that any of the conditions allowing holders of the 2023 Notes to convert their notes had occurred. The conversion rate for the 2023 Notes is initially 21.6275 shares per $1,000 principal amount of 2023 Notes, which is equivalent to an initial conversion price of approximately $46.24 per share of the Company's common stock and is subject to adjustment in certain circumstances pursuant to the 2017 Indenture. Upon conversion, holders of the 2023 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 intent is to settle conversions through combination settlement (i.e ., the 2023 Notes would be converted 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, for the remainder). As a result, and in accordance with authoritative guidance related to derivatives and hedging and earnings per share, only the conversion spread is included in the diluted earnings per share calculation, if dilutive. Under such method, the settlement of the conversion spread has a dilutive effect when the average share price of the Company's common stock during any quarter exceeds $46.24 . The Company determined that the fair value of the 2023 Notes at the date of issuance was approximately $298.8 million and designated the residual value of approximately $46.2 million as the equity component. Additionally, the Company allocated approximately $8.3 million of the $9.6 million issuance cost as debt issuance cost and the remaining $1.3 million as equity issuance cost. The balances of the liability and equity components of the Notes outstanding were as follows as of the dates indicated (amounts in thousands): December 31, December 31, Liability component - principal amount $ 632,500 $ 632,500 Unamortized debt discount (31,414 ) (43,812 ) Liability component - net carrying amount $ 601,086 $ 588,688 Equity component $ 76,216 $ 76,216 The debt discount is being amortized into interest expense over the remaining life of the 2020 Notes and the 2023 Notes using the effective interest rate, which is 4.92% and 6.20% , respectively. Interest expense related to the Notes was as follows for the years ended December 31, 2019 , 2018 and 2017 (amounts in thousands): 2019 2018 2017 Interest expense - stated coupon rate $ 20,700 $ 20,700 $ 15,870 Interest expense - amortization of debt discount 12,398 11,725 8,583 Total interest expense - convertible senior notes $ 33,098 $ 32,425 $ 24,453 Interest Expense, Net The Company incurs interest expense on its borrowings, interest-bearing deposits, and interest rate derivative agreements. The Company earns interest income on certain of its cash and cash equivalents and its interest rate derivative agreements. Interest expense, net, was as follows for the years ended December 31, 2019 , 2018 and 2017 (amounts in thousands): 2019 2018 2017 Interest expense $ 144,165 $ 124,208 $ 103,653 Interest (income) (2,247 ) (3,130 ) (5,612 ) Interest expense, net $ 141,918 $ 121,078 $ 98,041 |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment, Net [Abstract] | |
Property and Equipment, net | Property and Equipment, net: Property and equipment, at cost, consisted of the following as of December 31, 2019 and 2018 (amounts in thousands): 2019 2018 Software $ 62,758 $ 64,670 Computer equipment 20,847 22,153 Furniture and fixtures 16,324 16,061 Equipment 13,869 12,390 Leasehold improvements 16,709 16,556 Building and improvements 7,900 7,431 Land 1,296 1,296 Accumulated depreciation and amortization (93,207 ) (92,877 ) Assets in process 10,005 6,456 Property and equipment, net $ 56,501 $ 54,136 Depreciation and amortization expense relating to property and equipment for the years ended December 31, 2019 , 2018 and 2017 was $15.9 million , $15.1 million and $15.4 million , respectively. |
Fair Value
Fair Value | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value: As defined by ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also requires the consideration of differing levels of inputs in the determination of fair values. Those levels of input are summarized as follows: • Level 1: Quoted prices in active markets for identical assets and liabilities. • Level 2: Observable inputs other than Level 1 quoted prices, such as quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. • Level 3: Unobservable inputs that are supported by little or no market activity. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques as well as instruments for which the determination of fair value requires significant management judgment or estimation. The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Financial Instruments Not Required To Be Carried at Fair Value In accordance with the disclosure requirements of ASC Topic 825, "Financial Instruments" ("ASC 825"), 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 table are recorded in the consolidated balance sheets at December 31, 2019 and December 31, 2018 (amounts in thousands): December 31, 2019 December 31, 2018 Carrying Estimated Carrying Estimated Financial assets: Cash and cash equivalents 119,774 119,774 $ 98,695 $ 98,695 Finance receivables, net 3,514,165 3,645,610 3,084,777 3,410,475 Financial liabilities: Interest-bearing deposits 106,246 106,246 82,666 82,666 Revolving lines of credit 1,789,502 1,789,502 1,160,161 1,160,161 Term loans 425,000 425,000 740,551 740,551 Convertible senior notes 601,086 648,968 588,688 557,122 Disclosure of the estimated fair values of financial instruments often requires the use of estimates. The carrying amount and estimates of the fair value of the Company's debt obligations outlined above do not include any related debt issuance costs associated with the debt obligations. The Company uses the following methods and assumptions to estimate the fair value of financial instruments: Cash and cash equivalents: The carrying amount approximates fair value and quoted prices for identical assets in active markets. Accordingly, the Company estimates the fair value of cash and cash equivalents using Level 1 inputs. Finance receivables, net: The Company estimates the fair value of these receivables using proprietary pricing models that the Company utilizes to make portfolio acquisition decisions. Accordingly, the Company's fair value estimates use Level 3 inputs as there is little observable market data available and management is required to use significant judgment in its estimates. Interest-bearing deposits: The carrying amount approximates fair value due to the short-term nature of the deposits and the observable quoted prices for similar instruments in active markets. Accordingly, the Company uses Level 2 inputs for its fair value estimates. Revolving lines of credit: The carrying amount approximates fair value due to the short-term nature of the interest rate periods and the observable quoted prices for similar instruments in active markets. Accordingly, the Company uses Level 2 inputs for its fair value estimates. Term loans: The carrying amount approximates fair value due to the short-term nature of the interest rate periods and the observable quoted prices for similar instruments in active markets. Accordingly, the Company uses Level 2 inputs for its fair value estimates. Convertible senior notes: The fair value estimates for the Notes incorporate quoted market prices which were obtained from secondary market broker quotes which were derived from a variety of inputs including client orders, information from their pricing vendors, modeling software, and actual trading prices when they occur. Accordingly, the Company uses Level 2 inputs for its fair value estimates. Furthermore, in the table above, carrying amount represents the portion of the Notes classified as debt, while estimated fair value pertains to the face amount of the Notes. Financial Instruments Required To Be Carried At Fair Value The carrying amounts in the following table are measured at fair value on a recurring basis in the accompanying consolidated balance sheets at December 31, 2019 and 2018 (amounts in thousands): Fair Value Measurements as of December 31, 2019 Level 1 Level 2 Level 3 Total Assets: Available-for-sale investments Government bonds $ 5,052 $ — $ — $ 5,052 Fair value through net income investments Mutual funds 33,677 — — 33,677 Derivative contracts (recorded in other assets) — 875 — 875 Liabilities: Derivative contracts (recorded in other liabilities) — 23,663 — 23,663 Fair Value Measurements as of December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Available-for-sale investments Government bonds $ 5,077 $ — $ — $ 5,077 Fair value through net income investments Mutual funds $ 21,753 $ — $ — $ 21,753 Derivative contracts (recorded in other assets) — 3,334 — 3,334 Available-for-sale investments Government bonds: Fair value of the Company's investment in government bonds is estimated using quoted market prices. Accordingly, the Company uses Level 1 inputs. Fair value through net income investments Mutual funds: Fair value of the Company's investment in mutual funds is estimated using quoted market prices. Accordingly, the Company uses Level 1 inputs. Derivative contracts: The estimated fair value of the derivative contracts is determined 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 and other factors. Accordingly, the Company uses Level 2 inputs for its fair value estimates. Effective in the second quarter of 2018, the Company began to apply hedge accounting to certain of its derivative contracts. By applying hedge accounting, changes in market value are reflected as adjustments in other comprehensive income. The hedges were evaluated and remained highly effective at December 31, 2019 and have initial terms of two to seven years. Investments measured using net asset value Private equity funds: This class of investments consists of private equity funds that invest primarily in loans and securities including single-family residential debt; corporate debt products; and financially-oriented, real estate-rich and other operating companies in the Americas, Western Europe, and Japan. These investments are subject to certain restrictions regarding transfers and withdrawals. The investments cannot be redeemed with the funds. Instead, the nature of the investments in this class is that distributions are received through the liquidation of the underlying assets of the fund. The investments are expected to be returned through distributions as a result of liquidations of the funds' underlying assets over one to six years . The fair value of these private equity funds following the application of the NAV practical expedient was $7.2 million and $8.0 million as of December 31, 2019 and December 31, 2018 , respectively. |
Derivatives
Derivatives | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives: The following table summarizes the fair value of derivative instruments in the consolidated balance sheets (amounts in thousands): December 31, 2019 December 31, 2018 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives designated as hedging instruments: Interest rate contracts Other assets $ 323 Other assets $ 44 Interest rate contracts Other liabilities 17,807 Other liabilities — Derivatives not designated as hedging instruments: Foreign currency contracts Other assets 552 Other assets 2,555 Foreign currency contracts Other liabilities 5,856 Other liabilities — Interest rate contracts Other assets — Other assets 735 Derivatives designated as hedging instruments: Changes in the fair value of derivative contracts designated as cash flow hedging instruments are recognized in other comprehensive income ("OCI"). As of December 31, 2019 and December 31, 2018 , the notional amount of interest rate contracts designated as cash flow hedging instruments was $959.0 million and $260.8 million , respectively. Derivatives designated as cash flow hedging instruments were evaluated and remained highly effective at December 31, 2019 and have initial terms of two to seven years. The Company estimates that approximately $3.4 million of net derivative loss included in OCI will be reclassified into earnings within the next 12 months. The following table summarizes the effects of derivatives designated as cash flow hedging instruments on the consolidated financial statements for the years ended December 31, 2019 , 2018 and 2017 (amounts in thousands): Gain or (loss) recognized in OCI, net of tax Derivatives designated as cash flow hedging instruments 2019 2018 2017 Interest rate contracts $ (14,311 ) $ 44 $ — Gain or (loss) reclassified from OCI into income Location of gain or (loss) reclassified from OCI into income 2019 2018 2017 Interest expense, net $ (1,457 ) $ — $ — Derivatives not designated as hedging instruments: Changes in fair value of derivative contracts not designated as hedging instruments are recognized in earnings. As of December 31, 2019 , the Company no longer had interest rate swap contracts not designated as hedging instruments. As of December 31, 2018 , the notional amount of interest rate contracts not designated as hedging instruments was $169.7 million . The Company also enters into foreign currency contracts to economically hedge the foreign currency re-measurement exposure related to certain balances that are denominated in currencies other than the functional currency of the entity. As of December 31, 2019 and December 31, 2018 , the notional amount of foreign currency contracts that are not designated as hedging instruments was $469.9 million and $144.7 million , respectively. The following table summarizes the effects of derivatives not designated as hedging instruments on the Company’s consolidated income statements for the years ended December 31, 2019 , 2018 and 2017 (amounts in thousands): Amount of gain or (loss) recognized in income Derivatives not designated as hedging instruments Location of gain or (loss) recognized in income 2019 2018 2017 Foreign currency contracts Foreign exchange gain/(loss) $ (7,008 ) $ 4,011 $ — Foreign currency contracts Interest expense, net (3,875 ) (549 ) — Interest rate contracts Interest expense, net (492 ) 2,082 — |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss: The following table provides details about the reclassifications out of accumulated other comprehensive loss for the year ended December 31, 2019 (amounts in thousands): Gains and losses on cash flow hedges 2019 Affected line in the consolidated income statement Interest rate swaps $ (1,457 ) Interest expense, net Income tax effect of item above 278 Income tax expense/(benefit) Total losses on cash flow hedges $ (1,179 ) Net of tax The following table represents the changes in accumulated other comprehensive loss by component after tax, for the years ended December 31, 2019, 2018 and 2017 (amounts in thousands): Debt Securities Currency Translation Accumulated Other Available-for-Sale Cash Flow Hedges Adjustments Comprehensive Loss (1) Ending balance December 31, 2016 $ — $ — $ (251,944 ) $ (251,944 ) Other comprehensive loss before reclassifications — — 73,337 73,337 Reclassifications, net — — — — Net current period other comprehensive loss — — 73,337 73,337 Ending balance December 31, 2017 $ — $ — $ (178,607 ) $ (178,607 ) Reclassification of unrealized loss on debt securities (22 ) — — (22 ) Other comprehensive loss before reclassifications (61 ) 44 (63,463 ) (63,480 ) Reclassifications, net — — — — Net current period other comprehensive loss (83 ) 44 (63,463 ) (63,502 ) Ending balance December 31, 2018 $ (83 ) $ 44 $ (242,070 ) $ (242,109 ) Other comprehensive loss before reclassifications 39 (14,311 ) (5,816 ) (20,088 ) Reclassifications, net — 1,179 — 1,179 Net current period other comprehensive loss 39 (13,132 ) (5,816 ) (18,909 ) Ending balance December 31, 2019 $ (44 ) $ (13,088 ) $ (247,886 ) $ (261,018 ) (1) Net of a $4.4 million deferred tax benefit for unrealized losses from cash flow hedges for the year ended December 31, 2019. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Compensation [Abstract] | |
Share-Based Compensation | Share-Based Compensation : The Company has an Omnibus Incentive Plan (the "Plan") that is intended to assist the Company in attracting and retaining selected individuals to serve as employees and directors, who are expected to contribute to the Company's success and to achieve long-term objectives that will benefit stockholders of the Company. The Plan enables the Company to award shares of the Company's common stock to select employees and directors, not to exceed 5,400,000 shares as authorized by the Plan. Total share-based compensation expense was $10.7 million , $8.5 million and $8.7 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. The Company recognizes all excess tax benefits and tax deficiencies in the income statement when the awards vest or are settled. The total tax benefit realized from share-based compensation was approximately $1.2 million , $1.7 million and $3.2 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. Nonvested Shares As of December 31, 2019 , total future compensation expense related to grants of nonvested share grants to employees and directors (not including nonvested shares granted under the Long-Term Incentive ("LTI") program), is estimated to be $8.6 million with a weighted average remaining life for all nonvested shares of 1.6 years . Grants made to key employees and directors of the Company were assumed to have no forfeiture rates associated with them due to the historically low turnover among this group. With the exception of the grants made pursuant to the LTI program and a few employee and director grants, the nonvested shares vest ratably generally over one to three years and are expensed over their vesting period. The following summarizes all nonvested share activity, excluding those related to the LTI program, from December 31, 2016 through December 31, 2019 (amounts in thousands, except per share amounts): Nonvested Shares Weighted-Average December 31, 2016 303 $ 38.19 Granted 195 33.70 Vested (173 ) 37.49 Canceled (27 ) 43.05 December 31, 2017 298 35.25 Granted 254 36.39 Vested (151 ) 35.13 Canceled (22 ) 35.02 December 31, 2018 379 34.85 Granted 329 28.47 Vested (167 ) 34.81 Canceled (9 ) 31.01 December 31, 2019 532 $ 30.97 The total grant date fair value of shares vested, excluding those granted under the LTI program, during the years ended December 31, 2019 , 2018 and 2017 , was $5.8 million , $5.3 million and $6.5 million , respectively. Long-Term Incentive Program Pursuant to the Plan, the Compensation Committee may grant time-vested and performance-based nonvested shares. All shares granted under the LTI program were granted to key employees of the Company. The following table summarizes all LTI share activity from December 31, 2016 through December 31, 2019 (amounts in thousands, except per share amounts): Nonvested LTI Shares Weighted-Average December 31, 2016 425 $ 39.57 Granted at target level 192 33.50 Adjustments for actual performance 5 60.00 Vested (51 ) 40.80 Canceled (99 ) 20.91 December 31, 2017 472 41.06 Granted at target level 121 39.40 Adjustments for actual performance (74 ) 52.47 Vested (19 ) 52.47 Canceled (46 ) 32.31 December 31, 2018 454 33.27 Granted at target level 168 28.28 Adjustments for actual performance (172 ) 28.98 Vested — — Canceled (3 ) 35.87 December 31, 2019 447 $ 33.03 The total grant date fair value of LTI shares vested during the years ended December 31, 2019 , 2018 and 2017 , was $0.0 million , $1.0 million and $2.1 million , respectively. At December 31, 2019 , total future compensation expense, assuming the current estimated performance levels are achieved, related to nonvested shares granted under the LTI program is estimated to be approximately $4.5 million . The Company assumed a 15.0% forfeiture rate for these grants and the remaining shares have a weighted average remaining life of 1.2 year s at December 31, 2019 . |
Earnings per Share
Earnings per Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share: Basic earnings per share ("EPS") are computed by dividing net income available to common stockholders of PRA Group, Inc. by weighted average common shares outstanding. Diluted EPS are computed using the same components as basic EPS with the denominator adjusted for the dilutive effect of the conversion spread of the Notes and nonvested share awards, if dilutive. There has been no dilutive effect of the Notes since issuance through December 31, 2019. Share-based awards that are contingent upon the attainment of performance goals are included in the computation of diluted EPS if the effect is dilutive. The dilutive effect of nonvested shares is computed using the treasury stock method, which assumes any proceeds that could be obtained upon the vesting of nonvested shares would be used to purchase common shares at the average market price for the period. The following table provides a reconciliation between the computation of basic EPS and diluted EPS for the years ended December 31, 2019 , 2018 and 2017 (amounts in thousands, except per share amounts): 2019 2018 2017 Net Income Attributable to PRA Group, Inc. Weighted Average Common Shares EPS Net Income Attributable to PRA Group, Inc. Weighted Average Common Shares EPS Net Income Attributable to PRA Group, Inc. Weighted Average Common Shares EPS Basic EPS $ 86,158 45,387 $ 1.90 $ 65,563 45,280 $ 1.45 $ 164,315 45,671 $ 3.60 Dilutive effect of nonvested share awards — 190 (0.01 ) — 133 (0.01 ) — 152 (0.01 ) Diluted EPS $ 86,158 45,577 $ 1.89 $ 65,563 45,413 $ 1.44 $ 164,315 45,823 $ 3.59 There were no antidilutive options outstanding as of December 31, 2019 , 2018 and 2017 . |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes: The income tax expense/(benefit) recognized for the years ended December 31, 2019 , 2018 and 2017 is comprised of the following (amounts in thousands): Federal State International Total For the year ended December 31, 2019: Current tax expense $ 41,391 $ 6,390 $ 9,460 $ 57,241 Deferred tax (benefit) (27,311 ) (6,030 ) (4,220 ) (37,561 ) Total income tax expense $ 14,080 $ 360 $ 5,240 $ 19,680 For the year ended December 31, 2018: Current tax expense $ 23,444 $ 9,026 $ 37,501 $ 69,971 Deferred tax (benefit) (19,527 ) (15,268 ) (21,413 ) (56,208 ) Total income tax expense/(benefit) $ 3,917 $ (6,242 ) $ 16,088 $ 13,763 For the year ended December 31, 2017: Current tax expense $ 77,656 $ 16,543 $ 25,087 $ 119,286 Deferred tax (benefit) (112,118 ) (2,051 ) (15,969 ) (130,138 ) Total income tax (benefit)/expense $ (34,462 ) $ 14,492 $ 9,118 $ (10,852 ) On December 22, 2017, the United States government enacted comprehensive tax legislation commonly referred to as the “Tax Act.” The main impact of the Tax Act was a reduction of the U.S. federal corporate tax rate from 35% to 21% and the current taxation of international entities. New legislation and authoritative guidance on the Tax Act is still being released that may impact tax amounts recorded in the financial statements. Under U.S. GAAP, the Company made an accounting policy election to treat taxes due related to GILTI as a current-period expense when incurred. A reconciliation of the Company's expected tax expense at the statutory federal tax rate to actual tax expense/(benefit) for the years ended December 31, 2019 , 2018 and 2017 is as follows (amounts in thousands): 2019 2018 2017 Income tax expense at statutory federal rates $ 24,645 $ 18,794 $ 56,095 State tax expense/(benefit), net of federal tax benefit 161 (5,098 ) 9,072 Tax impact on international earnings (7,326 ) 206 (4,953 ) Federal rate change — (719 ) (73,779 ) Other 2,200 580 2,713 Total income tax expense/(benefit) $ 19,680 $ 13,763 $ (10,852 ) The Company recognized a net deferred tax liability of $22.2 million and $53.5 million as of December 31, 2019 and 2018 , respectively. The components of the net deferred tax liability are as follows (amounts in thousands): As of December 31, 2019 2018 Deferred tax assets: Employee compensation $ 6,085 $ 4,670 Net operating loss carryforward 93,068 24,210 Accrued liabilities — 1,850 Interest 10,477 10,559 Finance receivable revenue recognition - international 21,343 37,005 Right of use asset 16,045 — Other 12,009 2,721 Valuation allowance (80,739 ) (14,512 ) Total deferred tax asset 78,288 66,503 Deferred tax liabilities: Property and Equipment (5,362 ) (5,556 ) Intangible assets and goodwill (2,999 ) (5,435 ) Lease liability (15,107 ) — Convertible debt (7,843 ) (10,998 ) Finance receivable revenue recognition - IRS settlement (36,959 ) (74,296 ) Finance receivable revenue recognition - domestic (32,183 ) (23,744 ) Total deferred tax liability (100,453 ) (120,029 ) Net deferred tax liability $ (22,165 ) $ (53,526 ) A valuation allowance for deferred tax assets is recognized and charged to earnings in the period such determination is made, if it is determined that it is more likely than not that the deferred tax asset will not be realized. If the Company subsequently realized deferred tax assets that were previously determined to be unrealizable, the respective valuation allowance would be reversed, resulting in a positive adjustment to earnings in the period such determination is made. The determination for a valuation allowance is made on a jurisdiction by jurisdiction basis. At December 31, 2019 and 2018 , the valuation allowance, relating mainly to net operating losses, capital losses and deferred interest expense in Norway, Poland, and Luxembourg, was $80.7 million and $14.5 million respectively. The increase in the valuation allowance is primarily due to recording net operating losses in Luxembourg that were interpreted to be restricted by law. The Company believes it is more likely than not that the results of future operations will generate sufficient taxable income to realize the remaining net deferred tax assets. On May 10, 2017, the Company reached a settlement with the Internal Revenue Service ("IRS") regarding the IRS assertion that tax revenue recognition using the cost recovery method did not clearly reflect taxable income. In accordance with the settlement, the Company changed its tax accounting method used to recognize finance receivables revenue effective with tax year 2017. Under the new method, a portion of the annual collections amortizes principal and the remaining portion is taxable income. The deferred tax liability related to the difference in timing between the new method and the cost recovery method will be incorporated evenly into the Company’s tax filings over four years effective with tax year 2017. The Company was not required to pay any interest or penalties in connection with the settlement. ASC 740 requires the recognition of interest if the tax law would require interest to be paid on the underpayment of taxes, and recognition of penalties if a tax position does not meet the minimum statutory threshold to avoid payment of penalties. The Company believes it has sufficient support for the technical merits of its positions and that it is more likely than not these positions will be sustained. Accordingly, the Company has not accrued for interest or penalties on any of its tax positions. At December 31, 2019 , the tax years subject to examination by the major federal, state and international taxing jurisdictions are 2014 and subsequent years. As of December 31, 2019 , the cumulative unremitted earnings of the Company's international subsidiaries were approximately $52.3 million . The Company intends for predominantly all international earnings to be indefinitely reinvested in its international operations and, therefore, the recording of deferred tax liabilities for such unremitted earnings is not required. It is impracticable to determine the total amount of unrecognized deferred taxes with respect to these indefinitely reinvested earnings. The Company's international subsidiaries had $401.5 million and $116.8 million of net operating loss carryforwards as of December 31, 2019 and 2018 , respectively. There are $283.7 million and $45.8 million of valuation allowances recorded to offset those losses as of December 31, 2019 and 2018, respectively. The net operating losses do not expire under most local laws and the remaining jurisdictions allow for a seven to twenty year carryforward period. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies : Employment Agreements: The Company has entered into employment agreements, most which expire on December 31, 2020, with all of its U.S. executive officers and with several members of its U.S. senior management group. Such agreements provide for base salary payments as well as potential discretionary bonuses that take into consideration the Company's overall performance against its short and long-term financial and strategic objectives. As of December 31, 2019 , estimated future compensation under these agreements was approximately $8.0 million . The agreements also contain confidentiality and non-compete provisions. Outside the U.S., employment agreements are in place with employees pursuant to local country regulations. Generally, these agreements do not have expiration dates and therefore it is impractical to estimate the amount of future compensation under these agreements. Accordingly, the future compensation under these agreements is not included in the $8.0 million total above. Leases: The Company is party to various operating leases with respect to its facilities and equipment. The future maturities of lease liabilities at December 31, 2019 totaled approximately $95.4 million . Forward Flow Agreements: The Company is party to several forward flow agreements that allow for the purchase of nonperforming loans at pre-established prices. The maximum remaining amount to be purchased under forward flow agreements at December 31, 2019 was approximately $506.9 million . Finance Receivables: Certain agreements for the purchase of finance receivables portfolios contain provisions that may, in limited circumstances, require the Company to refund a portion or all of the collections subsequently received by the Company on particular accounts. The potential refunds as of the balance sheet date are not considered to be significant. Litigation and Regulatory Matters : The Company and its subsidiaries are from time to time subject to a variety of routine legal and regulatory claims, inquiries and proceedings, most of which are incidental to the ordinary course of the Company's business. The Company initiates lawsuits against customers and is occasionally countersued by them in such actions. Also, customers, either individually, as members of a class action, or through a governmental entity on behalf of customers, may initiate litigation against the Company in which they allege that the Company has violated a state or federal law in the process of collecting on an account. From time to time, other types of lawsuits are brought against the Company. Additionally, the Company receives subpoenas and other requests or demands for information from regulators or governmental authorities who are investigating the Company's debt collection activities. The Company accrues for potential liability arising from legal proceedings and regulatory matters when it is probable that such liability has been incurred and the amount of the loss can be reasonably estimated. This determination is based upon currently available information for those proceedings in which the Company is involved, taking into account the Company's best estimate of such losses for those cases for which such estimates can be made. The Company's estimate involves significant judgment, given the varying stages of the proceedings (including the fact that many of them are currently in preliminary stages), the number of unresolved issues in many of the proceedings (including issues regarding class certification and the scope of many of the claims), and the related uncertainty of the potential outcomes of these proceedings. In making determinations of the likely outcome of pending litigation, the Company considers many factors, including, but not limited to, the nature of the claims, the Company's experience with similar types of claims, the jurisdiction in which the matter is filed, input from outside legal counsel, the likelihood of resolving the matter through alternative mechanisms, the matter's current status and the damages sought or demands made. Accordingly, the Company's estimate will change from time to time, and actual losses could be more than the current estimate. The Company believes that the estimate of the aggregate range of reasonably possible losses in excess of the amount accrued for its legal proceedings outstanding at December 31, 2019 , where the range of loss can be estimated, was not material. 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. Loss estimates and accruals for potential liability related to legal proceedings are typically exclusive of potential recoveries, if any, under the Company's insurance policies or third-party indemnities. During the year ended December 31, 2019, the Company recorded $1.0 million in potential recoveries under the Company's insurance policies or third-party indemnities which is included in other receivables, net at December 31, 2019. The matters described below fall outside of the normal parameters of the Company's routine legal proceedings. Multi-State Investigation On November 17, 2015, the Company received civil investigative demands from multiple state Attorney General offices ("AGOs") broadly relating to its U.S. debt collection practices. The Company believes that it has fully cooperated with the investigations and discussed potential resolution of the investigations with the AGOs. In these discussions, the AGOs have taken positions with which the Company disagrees, including positions related to penalties, restitution and/or the adoption of new practices and controls in the conduct of the Company's business. If the Company is unable to resolve its differences with the AGOs, it is possible that one or more individual state AGOs may file claims against the Company. As previously reported in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, the Company settled certain claims with the Massachusetts Office of the Attorney General on November 6, 2019. The range of loss with respect to the remaining investigations, if any, cannot be estimated at this time. Iris Pounds v. Portfolio Recovery Associates, LLC On November 21, 2016, Iris Pounds filed suit against the Company in Durham County, North Carolina alleging violations of the North Carolina Prohibited Practices by Collection Agencies Act. The purported class consists of all individuals against whom the Company had obtained a judgment by default in North Carolina on or after October 1, 2009. On December 9, 2016, the Company removed the matter to the United States District Court for the Middle District of North Carolina (the "District Court"). On March 28, 2018, the District Court entered an order remanding the matter to the North Carolina state court, which the Fourth Circuit Court of Appeals affirmed on May 17, 2018. On January 11, 2019, the Company filed motions to compel arbitration with the North Carolina state court, which was denied. The Company is seeking review of the North Carolinas state court's decision to deny the Company's motion to compel arbitration. The range of loss, if any, cannot be estimated at this time due to the uncertainty surrounding liability, class certification and the interpretation of statutory damages. Telephone Consumer Protection Act Litigation On January 25, 2017, the Company resolved the matter of In Re Portfolio Recovery Associates, LLC Telephone Consumer Protection Act Litigation |
Retirement Plans
Retirement Plans | 12 Months Ended |
Dec. 31, 2019 | |
Defined Contribution Plan [Abstract] | |
Retirement Plans | Retirement Plans: The Company sponsors defined contribution plans primarily in the U.S. and Europe. The U.S. plan is organized as a 401(k) plan under which all employees over eighteen years of age are eligible to make voluntary contributions to the plan up to 100% of their compensation, subject to IRS limitations, after completing six months of service, as defined in the plan. The Company makes matching contributions of up to 4% of an employee's salary. For the defined contribution plans in Europe, the Company pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. Total compensation expense related to the Company's contributions was $5.9 million , $6.3 million and $5.2 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interest | 12 Months Ended |
Dec. 31, 2019 | |
Noncontrolling Interest [Abstract] | |
Redeemable Noncontrolling Interest | Redeemable Noncontrolling Interest: With the acquisition of DTP S.A. in 2016, the Company acquired a 20% owned Polish securitization fund (the "Fund"). Under ASC 810-10, the Company had determined it had control over this Fund and as such consolidated the operations of the Fund. As of December 31, 2019, 100% |
Sale of Subsidiaries
Sale of Subsidiaries | 12 Months Ended |
Dec. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Sale of Subsidiaries | Sales of Subsidiaries: On December 20, 2018, the Company sold 79% of its interest in RCB, a servicing platform for nonperforming loans in Brazil for $40.0 million . The Company recognized a pre-tax gain of $26.6 million , which includes a gain of $5.4 million on its 11.7% retained interest. The Company received 25% of the proceeds in the fourth quarter of 2018 and the remaining 75% in the first quarter of 2019. The fair value of the retained interest was estimated based on the transaction price. The Company accounts for its remaining interest in RCB as an equity method investment. As part of the Company’s strategy to focus on its primary business, the purchase, collection and management of portfolios of nonperforming loans, the Company sold its government services businesses: PRA Government Services, LLC; MuniServices, LLC; and PRA Professional Services, LLC in the first quarter of 2017, for $91.5 million in cash plus additional consideration for certain balance sheet items. The pre-tax gain on sale was approximately $46.8 million . During the second quarter of 2017, the Company sold its vehicle location, skip tracing and collateral recovery business, PRA Location Services, LLC, for $4.5 million which resulted in a pre-tax gain on sale of approximately $1.6 million . |
General and Summary of Signif_2
General and Summary of Significant Accounting Policies (Policy) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation: The consolidated financial statements of the Company are prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and include the accounts of all of its subsidiaries. All significant intercompany accounts and transactions have been eliminated. The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures. Realized results could differ from those estimates and assumptions. |
Reclassification of prior year presentation and correction of immaterial errors | Reclassification of prior year presentation: Certain prior year amounts have been reclassified for consistency with the current year presentation. |
Foreign currency | Foreign currency: Assets and liabilities have been translated to the reporting currency using the exchange rates in effect on the consolidated balance sheet dates. 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. Revenue and expense accounts are translated using the weighted average exchange rate during the period. The cumulative translation adjustments associated with the net assets of international subsidiaries are recorded in accumulated other comprehensive income (loss ) in the accompanying consolidated statements of changes in equity. |
Segments | Segments: Under the guidance of the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") ASC Topic 280 "Segment Reporting" ("ASC 280"), the Company has determined that it has several operating segments that meet the aggregation criteria of ASC 280, and, therefore, it has one reportable segment, accounts receivable management. This conclusion is based on similarities among the operating units, including economic characteristics, the nature of the products and services, the nature of the production processes, the types or class of customer for their products and services, the methods used to distribute their products, and services and the nature of the regulatory environment. |
Cash and cash equivalents | Cash and cash equivalents: The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. |
Concentrations of credit risk | Concentrations of credit risk: Financial instruments, which potentially expose the Company to concentrations of credit risk, consist primarily of cash, investments and finance receivables. |
Accumulated other comprehensive income/(loss) | Accumulated other comprehensive loss: The Company records unrealized gains and losses on certain available-for-sale investments and foreign currency translation adjustments in other comprehensive income. Unrealized gains and losses on available for sale investments are reclassified to earnings as the gains or losses are realized upon sale of the securities. Translation gains or losses on foreign currency translation adjustments are reclassified to earnings upon the substantial sale or liquidation of investments in international operations. For the Company’s financial derivative instruments that are designated as hedging instruments, the change in fair value of the derivative is recorded in other comprehensive income. |
Investments | Investments: Debt Securities. The Company accounts for its investments in debt securities under the guidance of ASC Topic 320, "Investments-Debt Securities" ("ASC 320"). The Company determines the appropriate classification of its investments in debt securities at the time of purchase and reevaluates such determinations at each balance sheet date. Debt securities are classified as held to maturity when the Company has the positive intent and ability to hold the securities to maturity. Debt securities for which the Company does not have the intent or ability to hold to maturity are classified as available for sale. Held-to-maturity securities are carried at amortized cost. Available for sale securities are carried at fair market value. Fair value is determined using quoted market prices. Unrealized gains and losses are included in comprehensive income and reported in stockholders' equity. If the fair value of the investment falls below its carrying amount and the decline is deemed to be other than temporary, the investment is written down, with a corresponding charge to earnings. Equity Securities . The Company accounts for its investments in equity securities in accordance with ASC Topic 321, “Investments-Equity Securities” (“ASC 321”), which requires that investments in equity securities be measured at fair value with changes in unrealized gains and losses reported in earnings. The Company's investment in equity securities have historically been carried at cost with income recognized in Other Revenue in the consolidated income statements when distributions, up to reported income, were received from the partnerships. As of first quarter of 2018, "Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities" ("ASU 2016-01"), requires that investments in equity securities be measured at fair value with changes in unrealized gains and losses reported in earnings. See Note 3 for additional information. Equity Method Investments. Equity method investments that are not consolidated, but over which the Company exercises significant influence, are accounted for under the equity method of accounting. Whether or not the Company exercises significant influence with respect to an investee company depends on an evaluation of several factors including, among others, representation on the investee company’s board of directors and ownership level, which is generally a 20% to 50% interest in the voting securities of the investee company. Under the equity method of accounting, an investee company’s accounts are not reflected within the Company’s consolidated balance sheets and income statements; however, the Company’s share of the earnings or losses of the investee company is reflected in the caption ‘‘Other revenue’’ in the consolidated income statements. The Company’s carrying value in an equity method investee company is reflected in the caption ‘‘Investments’’ in the Company’s consolidated balance sheets. When the Company’s carrying value in an equity method investee company is reduced to zero, no further losses are recorded in the Company’s consolidated financial statements unless the Company guaranteed obligations of the investee company or has committed additional funding. When the investee company subsequently reports income, the Company will not record its share of such income until it equals the amount of its share of losses not previously recognized. |
Finance receivables and income recognition | Finance receivables and income recognition: The Company accounts for its investment in finance receivables under the guidance of ASC Topic 310-30, "Loans and Debt Securities Acquired with Deteriorated Credit Quality" ("ASC 310-30"). The Company acquires portfolios of accounts that have experienced deterioration of credit quality between origination and the Company's acquisition of the accounts. The amount paid for a portfolio reflects the Company's determination that it is probable the Company will be unable to collect all amounts due according to an account's contractual terms. At acquisition, the Company reviews the accounts to determine whether there is evidence of deterioration of credit quality since origination, and if it is probable that the Company will be unable to collect all amounts due according to the loan's contractual terms. If both conditions exist, the Company then determines whether each such account is to be accounted for individually or whether such accounts will be assembled into pools based on common risk characteristics. The Company considers expected prepayments and estimates the amount and timing of undiscounted expected principal, interest and other cash flows (expected at acquisition) for each acquired portfolio based on the Company's proprietary models, and the Company subsequently aggregates portfolios of accounts into quarterly pools. The Company determines the excess of the pool's scheduled contractual principal and contractual interest payments over all cash flows expected at acquisition as an amount that should not be accreted (nonaccretable difference). The remaining amount, representing the excess of the pool's cash flows expected to be collected over the amount paid, is accreted into income recognized on finance receivables over the remaining estimated life of the pool (accretable yield). ASC 310-30 requires that the excess of the contractual cash flows over expected cash flows, based on the Company's estimates derived from proprietary collection models, not be recognized as an adjustment of revenue or expense or on the balance sheet. Each pool is recorded at cost and is accounted for as a single unit for the recognition of income, payments applied to principal and loss provision. Once a pool is established for a calendar quarter, individual receivable accounts are not added to the pool (unless replaced by the seller) or removed from the pool (unless sold or returned to the seller). The yield is estimated and periodically recalculated based on the timing and amount of anticipated cash flows. Income on finance receivables is accrued quarterly based on each pool's effective yield. Significant increases in expected future cash flows may be recognized prospectively, through an upward adjustment of the yield, over a pool's remaining life. Under ASC 310-30, rather than lowering the estimated yield if the collection estimates are below previous expectations, the carrying value of a pool would be written down to maintain the then current yield and is shown as an allowance charge in the consolidated income statements with a corresponding valuation allowance offsetting finance receivables on the consolidated balance sheets. Cash flows greater than the interest accrual will reduce the carrying value of the pool. This reduction in carrying value is defined as payments applied to principal (also referred to as principal amortization). Likewise, cash flows that are less than the interest accrual will accrete the carrying balance. Generally, the Company does not record accretion in the first six to twelve months of the estimated life of the pool; accordingly, the Company utilizes either the cost recovery method or cash method when necessary to prevent accretion as permitted by ASC 310-30. Under the cash method, revenue is recognized as it would be under the interest method up to the amount of cash collections. Under the cost recovery method, no revenue is recognized until the Company has fully collected the cost of the pool, or until such time that the Company considers the collections to be probable and estimable and begins to recognize income based on the interest method as described above. The Company also uses the cost recovery method when collections on a particular pool of accounts cannot be reasonably estimated. A pool can become fully amortized (zero carrying balance on the balance sheet) while still generating cash collections. In this case, all subsequent cash collections are recognized as revenue when received. The Company records a valuation allowance when significant decreases in expected cash flows are identified or there are changes in the timing of expected cash flows that would otherwise require a reduction in the stated yield on a pool of accounts. Factors that may contribute to the recording of valuation allowances include both external and internal factors. External factors that may have an impact on the collectability, and subsequently on the overall profitability of acquired pools of nonperforming loans, would include new laws or regulations relating to collections, new interpretations of existing laws or regulations, and the overall condition of the economy. Internal factors that may have an impact on the collectability, and subsequently the overall profitability of acquired pools of nonperforming loans, would include necessary revisions to initial and post-acquisition scoring and modeling estimates, non-optimal operational activities, and decreases in productivity related to turnover and tenure of the Company's collection staff. The Company capitalizes certain fees paid to third parties related to the direct acquisition of a portfolio of accounts. These fees are added to the acquisition cost of the portfolio and accordingly are amortized over the life of the portfolio using the interest method. The agreements to purchase the aforementioned nonperforming loans include general representations and warranties from the sellers covering account holder death or insolvency and accounts settled or disputed prior to sale. The representation and warranty period permitting the return of these accounts from the Company to the seller is typically 90 to 180 days. Any funds received from the seller as a return of purchase price are referred to as buybacks. Buyback funds are applied against the finance receivable balance received and are not included in the Company's cash collections from operations. In some cases, the seller will replace the returned accounts with new accounts in lieu of returning the purchase price. In that case, the old account is removed from the pool and the new account is added. |
Fee income recognition | Fee income recognition: The Company recognizes revenue from its class action claims recovery services when there is persuasive evidence that an arrangement exists, delivery has occurred or services have been rendered, the amount is fixed or determinable, and collectability is reasonably assured. |
Property and equipment | Property and equipment: Property and equipment, including improvements that significantly add to the productive capacity or extend useful life, are recorded at cost. Maintenance and repairs are expensed as incurred. Property and equipment are depreciated over their useful lives using the straight-line method of depreciation. Software and computer equipment are amortized or depreciated over three to five years . Furniture and fixtures are depreciated over five to ten years . Equipment is depreciated over five to seven years . Leasehold improvements are depreciated over the lesser of the useful life, which ranges from three to ten years , or the remaining term of the lease. Building improvements are depreciated straight-line over ten to thirty-nine years . When property is sold or retired, the cost and related accumulated depreciation are removed from the balance sheet and any gain or loss is included in the income statement. |
Business combinations | Business combinations: The Company accounts for business combinations under the acquisition method in accordance with ASC 805, "Business Combinations" ("ASC 805"). The cost of an acquired company is assigned to the tangible and intangible assets acquired and the liabilities assumed on the basis of their fair values at the date of acquisition. The determination of fair values of assets acquired and liabilities assumed requires management to make estimates and use valuation techniques when market values are not readily available. Any excess of purchase price over the fair value of net tangible and intangible assets acquired is allocated to goodwill. Transaction costs associated with business combinations are expensed as incurred. |
Goodwill and intangible assets | Goodwill and intangible assets: Goodwill, in accordance with ASC Topic 350, "Intangibles-Goodwill and Other" ("ASC 350"), is not amortized but rather is reviewed for impairment annually or more frequently if indicators of potential impairment exist. The Company performs its annual assessment as of October 1. The Company may first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If management concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, management conducts a two-step quantitative goodwill impairment test. The first step of the impairment test involves comparing the fair value of the applicable reporting unit with its carrying value. The Company estimates the fair values of its reporting units using a combination of the income approach, which uses present value techniques, and the market approach, which uses market multiples from comparable transactions where the acquisition target has similar operating and investment characteristics to the reporting unit. If the carrying amount of a reporting unit exceeds the reporting unit's fair value, management performs the second step of the goodwill impairment test. The second step of the goodwill impairment test involves comparing the implied fair value of the affected reporting unit's goodwill with the carrying value of that goodwill. The amount by which the carrying value of the goodwill exceeds its implied fair value, if any, is recognized as an impairment loss . See Note 5 for additional information. |
Convertible senior notes | Convertible senior notes: The Company accounts for its 3.00% Convertible Senior Notes due 2020 (the "2020 Notes") and its 3.50% Convertible Notes due 2023 (the "2023 Notes" and, together with the 2020 Notes, the "Notes") in accordance with ASC 470-20, "Debt with Conversion and Other Options" ("ASC 470-20"). ASC 470-20 requires that, for convertible debt instruments that must be settled fully or partially in cash upon conversion, issuers must separately account for the liability and equity components in a manner that will reflect the entity's nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. The excess of the principal amount of the liability component over its carrying amount is amortized to interest expense over the expected life of a similar liability that does not have an associated equity component, using the effective interest method. The equity component is not remeasured as long as it continues to meet the conditions for equity classification under ASC 815-40, "Derivatives and Hedging - Contracts in an Entity's Own Equity." Transaction costs incurred with third parties are allocated to the liability and equity components in proportion to the allocation of proceeds and accounted for as debt issuance costs and equity issuance costs, respectively. For diluted earnings per share purposes, based upon the Company's intent and ability to settle conversions of the Notes through a combination of cash and shares, only the conversion spread is included in the diluted earnings per share calculation, if dilutive. Under such method, the settlement of the conversion spread has a dilutive effect when the average share price of the Company's common stock during any quarter exceeds $65.72 for the 2020 Notes or $46.24 for the 2023 Notes, neither of which occurred during the respective periods from when the Notes were issued through December 31, 2019. |
Income taxes | Income taxes: The Company follows the guidance of ASC Topic 740 "Income Taxes" ("ASC 740") as it relates to the provision for income taxes and uncertainty in income taxes. Accordingly, the Company records a tax provision for the anticipated tax consequences of the reported results of operations. The provision for income taxes is estimated using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, and for operating losses and tax credit carry-forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets are expected to be realized or settled. The evaluation of a tax position in accordance with the guidance is a two-step process. The first step is recognition: the enterprise determines whether it is more-likely-than-not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. In evaluating whether a tax position has met the more-likely-than-not recognition threshold, the enterprise should presume that the position will be examined by the appropriate taxing authority that would have full knowledge of all relevant information. The second step is measurement: a tax position that meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met. The Company records interest and penalties related to unrecognized tax benefits as a component of income tax expense when positions are not met. In the event that all or part of the deferred tax assets are determined not to be realizable in the future, a valuation allowance would be established and charged to earnings in the period such determination is made. If the Company subsequently realizes deferred tax assets that were previously determined to be unrealizable, the respective valuation allowance would be reversed, resulting in a positive adjustment to earnings. The estimate of income tax expense involves significant judgment in evaluating the impact of uncertainties in the application of complex tax laws. Resolution of these uncertainties in a manner inconsistent with our expectations could have a material impact on our results of operations and financial position. Beginning with the 2017 tax year, the Company utilizes a new tax accounting method to recognize net finance receivables income. Under the new method, a portion of the annual collections amortize principal and the remaining portion is taxable income. The deferred tax liability related to the difference in timing between the new method and the cost recovery method will be incorporated evenly into the Company’s tax filings over four years. For additional information, see Note 13. |
Advertising costs | Advertising costs: Advertising costs are expensed when incurred. |
Operating leases | Leases: The Company accounts for leases in accordance with the provisions of FASB issued ASU 2016-02, "Leases (Topic 842) Section A - Leases: Amendments to the FASB Account Standards Codification" ("ASU 2016-02"). ASU 2016-02 requires that a lessee should recognize a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term on the balance sheet. The Company adopted ASC 842 on January 1, 2019 using the alternative method which resulted in the recording of operating lease right-of-use ("ROU") assets and lease liabilities of $72.1 million and $75.8 million , respectively. The Company's balance sheets for reporting periods beginning on or after January 1, 2019 are presented under the new guidance, while prior periods amounts are not adjusted and continue to be reported in accordance with previous guidance. The Company elected to apply the package of practical expedients permitted within the new standard, which among other things, allows it to carry forward the historical lease classification. In addition, the Company elected the practical expedient to exclude short-term leases (lease terms of less than one year) from its ROU assets and lease liabilities. The Company's operating lease portfolio primarily includes corporate offices and call centers. The majority of its leases have remaining lease terms of one year to twenty years, some of which include options to extend the leases for five years, and others include options to terminate the leases within one year. Exercises of lease renewal options are typically at the Company's sole discretion and are included in its ROU assets and lease liabilities based upon whether the Company is reasonably certain of exercising the renewal options. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. As most of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments. The Company used its incremental borrowing rate as of January 1, 2019 to calculate the present value of the lease payments of its existing leases at adoption. |
Share-based compensation | Share-based compensation: The Company accounts for share-based compensation in accordance with the provisions of ASC Topic 718 "Compensation-Stock Compensation" ("ASC 718"). ASC 718 requires that compensation expense associated with share equity awards be recognized in the income statement. 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. The Company estimates a forfeiture rate for most equity share grants based on historical experience. Time-based equity share awards generally vest between one and three years from the grant date and are expensed on a straight-line basis over the vesting period. Equity share awards that contain a performance metric, are expensed over the requisite service period, generally three years , in accordance with the performance level achieved at each reporting period. See Note 11 for additional information. |
Derivatives | Derivatives: The Company periodically enters into derivative financial instruments, typically interest rate swap agreements, interest rate caps, and foreign currency contracts to reduce its exposure to fluctuations in interest rates on variable-rate debt and foreign currency exchange rates. The Company does not utilize derivative financial instruments with a level of complexity or with a risk greater than the exposure to be managed nor does it enter into or hold derivatives for trading or speculative purposes. The Company follows the guidance of ASC Topic 815 "Derivatives and Hedging" ("ASC 815") to account for its derivatives. All of the Company's outstanding derivative financial instruments are recognized in the balance sheet at their fair values. The effect on earnings from recognizing the fair values of these derivative financial instruments depends on their intended use, their hedge designation, and their effectiveness in offsetting changes in the fair values of the exposures they are hedging. Changes in the fair values of instruments designated to reduce or eliminate adverse fluctuations in the fair values of recognized assets and liabilities and unrecognized firm commitments are reported currently in earnings along with changes in the fair values of the hedged items. Changes in the effective portions of the fair values of instruments used to reduce or eliminate adverse fluctuations in cash flows of anticipated or forecasted transactions are reported in equity as a component of accumulated other comprehensive income. Amounts in accumulated other comprehensive income are reclassified to earnings when the related hedged items affect earnings or the anticipated transactions are no longer probable. Changes in the fair values of derivative instruments that are not designated as hedges or do not qualify for hedge accounting treatment are reported currently in earnings. The Company realizes gains and losses from derivative instruments in the same financial statement line item as the hedged item/forecasted transaction. Changes in unrealized gains and losses for derivatives not designated in a hedge accounting relationship are recorded directly in earnings each period and are also recorded in the same financial statement line item as the hedged item/forecasted transaction. Cash flows from the settlement of derivatives, including both economic hedges and those designated in hedge accounting relationships, appear in the consolidated statements of cash flows in the same categories as the cash flows of the hedged item. For derivative financial instruments accounted for as hedging instruments, the Company formally designates and documents, at inception, the financial instrument as a hedge of a specific underlying exposure, the risk management objective, and the manner in which effectiveness of the hedge will be assessed. The Company formally assesses, both at inception and at each reporting period thereafter, whether the derivative financial instruments used in hedging transactions are effective in offsetting changes in fair value or cash flows of the related underlying exposures. Any ineffective portion of the change in fair value of the instruments is recognized immediately in earnings. |
Use of estimates | Use of estimates: The preparation of the consolidated financial statements in conformity with U.S. 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates have been made by management with respect to the timing and amount of future cash collections of the Company's finance receivables portfolios. Actual results could differ from these estimates making it reasonably possible that a change in these estimates could occur within one year . |
Commitments and contingencies | Commitments and contingencies: The Company is subject to various claims and contingencies related to lawsuits, certain taxes, and commitments under contractual and other obligations. The Company recognizes liabilities for contingencies and commitments when a loss is probable and estimable. The Company expenses related legal costs as incurred. For additional information, see Note 14. |
Estimated fair value of financial instruments | Estimated fair value of financial instruments: The Company applies the provisions of ASC Topic 820 "Fair Value Measurements and Disclosures" ("ASC 820"). ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also requires the consideration of differing levels of inputs in the determination of fair values. Disclosure of the estimated fair values of financial instruments often requires the use of estimates. See Note 8 for additional information. |
Recent accounting pronouncements | Recent accounting pronouncements: Recently Issued Accounting Standards Adopted: Codification Improvements to Leases In February 2016, the FASB issued ASU 2016-02 which requires that a lessee should recognize a liability to make lease payments and a ROU representing its right to use the underlying asset for the lease term on the balance sheet. In July 2018, FASB issued ASU 2018-10, "Codification Improvements to Topic 842, Leases" and ASU 2018-11, "Leases (Topic 842) Targeted Improvements" which among other things, allowed for an alternative transition method which eliminated the requirement to restate the earliest prior period presented in an entity's financial statements. Entities that elected this transition option, including the Company, were required to adopt the new lease standard using the modified retrospective transition method required by the standard, but recognized a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption rather than in the earliest period presented. The Company adopted the new leasing standard on January 1, 2019 and as a result recorded operating lease ROU assets and lease liabilities of $72.1 million and $75.8 million, respectively. The adoption of the standard did not have any other material impact on the Company's consolidated financial statements. Statement of Cash Flows- Classification of Certain Cash Receipts and Cash Payments In August 2016, FASB issued ASU 2016-15, "Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments (Topic 230)" ("ASU 2016-15"). ASU 2016-15 reduces diversity in practice of how certain transactions are classified in the statement of cash flows. The new guidance clarifies the classification of cash activity related to debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate and bank-owned life insurance policies, distributions received from equity-method investments, and beneficial interests in securitization transactions. The guidance also describes a predominance principle in which cash flows with aspects of more than one class that cannot be separated should be classified based on the activity that is likely to be the predominant source or use of cash flow. ASU 2016-15 is effective for the Company for fiscal years beginning after December 15, 2018. The new standard must be adopted using a retrospective transition method. The Company adopted ASU 2016-15 in the first quarter of 2019 which had no material impact on its consolidated financial statements. Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income In February 2018, the FASB issued ASU 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" ("ASU 2018-02"). Under existing GAAP, the effects of changes in tax rates and laws on deferred tax balances are recorded as a component of income tax expense in the period in which the law was enacted. When deferred tax balances related to items originally recorded in accumulated other comprehensive income are adjusted, certain tax effects become stranded in accumulated other comprehensive income. The amendments in ASU 2018-02 allow a reclassification from accumulated other comprehensive income to retained earnings for stranded income tax effects resulting from the 2017 Tax Cuts and Jobs Act ("Tax Act"). The amendments in this ASU also require certain disclosures about stranded income tax effects. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company’s provisional adjustments recorded during the year ended December 31, 2017 to account for the impact of the Tax Act did not result in stranded tax effects. The Company adopted ASU 2018-02 in the first quarter of 2019 which had no material impact on its consolidated financial statements. Recently Issued Accounting Standards Not Yet Adopted: Financial Instruments - Credit Losses In June 2016, FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326)" ("ASU 2016-13"), which introduces a new methodology requiring the measurement of expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. ASU 2016-13 utilizes a lifetime “expected credit loss” measurement objective for the recognition of credit losses for loans, held-to-maturity debt securities and other receivables measured at amortized cost. The new methodology requires an entity to present on the balance sheet the net amount expected to be collected. This methodology replaces the multiple impairment methods under existing GAAP, including for purchased credit impaired ("PCI") assets, and introduces the concept of purchased credit deteriorated (“PCD”) financial assets. The Company's PCI assets currently accounted for under existing GAAP will be accounted for as PCD financial assets upon adoption of ASU 2016-13. ASU 2016-13 requires PCD assets to be recognized at their purchase price plus the allowance for credit losses expected at the time of acquisition. ASU 2016-13 also requires that financial assets should be written off when they are deemed uncollectible. In November 2019, FASB issued ASU 2019-11, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses” (“ASU 2019-11”), which amends the PCD financial asset guidance in ASU 2016-13 to clarify that expected recoveries of amounts previously written off and expected to be written off should be included in the valuation account and should not exceed the aggregate of amounts previously written off and expected to be written off by an entity. Further, ASU 2019-11 clarifies that a negative allowance is recognized when an entity determines, after a full or partial writeoff of the amortized cost basis, that it will recover all or a portion of the basis. Based on the guidance in ASU 2016-13 and 2019-11, substantially all the Company’s PCI assets will transition using the PCD guidance; the Company will gross up the amortized cost of the PCI assets by adding the allowance for credit losses estimated at transition. The Company will then immediately write off the amortized cost basis of individual accounts and establish a negative allowance for expected recoveries. The immediate writeoff and subsequent recognition of estimated recoveries are expected to have no impact on the Company’s statement of income, balance sheet or retained earnings at the date of adoption. The Company will estimate expected recoveries using a discounted cash flow approach and will recognize income over the estimated life of the pool at an effective interest rate. Subsequent changes (favorable and unfavorable) in expected cash flows will be recognized in current period earnings by adjusting the present value of the expected recoveries. Subsequent to adoption, ASU 2016-13 and ASU 2019-11 represent a significant change from existing GAAP and are expected to result in material changes to the Company’s accounting for its finance receivables, including recognizing revenue at a fixed rate and recognizing both positive and negative changes to the forecast as an adjustment to current period earnings. The guidance will be effective prospectively for the Company as of January 1, 2020. Implementation efforts, including model finalization and drafting of accounting and internal control policies and procedures are nearly complete. Intangibles - Goodwill and Other In January 2017, FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment" ("ASU 2017-04"). ASU 2017-04 eliminates Step 2 of the goodwill impairment test. Instead, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. ASU 2017-04 is effective for annual and interim periods beginning after December 15, 2019, and early adoption was permitted for interim or annual goodwill impairment tests performed after January 1, 2017. Based on the Company's most recent goodwill impairment assessment, there were no reporting units for which it was more-likely-than-not that the carrying amount of a reporting unit exceeded its respective fair value; therefore, the Company believes that ASU 2017-04 would not have an impact on its consolidated financial statements or related disclosures. If subsequent to adoption, the carrying amount of a reporting unit exceeds its respective fair value, the Company would be required to recognize an impairment charge. The Company will adopt this standard on January 1, 2020 and does not expect that the adoption of these amendments will have a material effect on its consolidated financial statements. Fair Value Measurement In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement” ("ASU 2018-13"). ASU 2018-13 eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of its disclosure framework project. The standard is effective for all entities for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. The Company will adopt this standard on January 1, 2020 and expects the adoption of ASU 2018-13 will result in additional and modified disclosures in its consolidated financial statements without any financial impact. Income Taxes I n December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which simplifies the accounting for income taxes. This standard is effective for annual and interim periods beginning af ter December 15, 2020 on a prospective basis, and early adoption is permitted. The Company is currently evaluating the impact of ASU 2019-12 on our consolidated financial statements and expects it to result in additional and modified disclosures. The Company does not expect that any other recently issued accounting pronouncements will have a material effect on its consolidated financial statements. |
General and Summary of Signif_3
General and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Revenues and Long-lived Assets by Geographical Location | Revenue for the years ended December 31, 2019 , 2018 and 2017 , and long-lived assets held at December 31, 2019 and 2018 , both for the U.S., the Company's country of domicile, and outside of the U.S. were (amounts in thousands): Years Ended December 31, As of December 31, 2019 2018 2017 2019 2018 Revenues Long-Lived Assets (2) United States $ 673,264 $ 619,172 $ 560,278 $ 112,233 $ 48,581 United Kingdom 120,377 99,817 81,322 3,553 1,543 Others (1) 223,440 189,267 186,606 9,687 4,012 Total $ 1,017,081 $ 908,256 $ 828,206 $ 125,473 $ 54,136 (1) None of the countries included in "Others" comprise greater than 10% of the Company's consolidated revenues or long-lived assets. (2) 2019 includes right-of-use assets from the adoption of ASU 2016-02 on January 1, 2019. Refer to Note 4. |
Finance Receivables, net (Table
Finance Receivables, net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities [Abstract] | |
Schedule of Changes in Finance Receivables | Changes in finance receivables, net, for the years ended December 31, 2019 and 2018 , were as follows (amounts in thousands): 2019 2018 Balance at beginning of year $ 3,084,777 $ 2,776,199 Acquisitions of finance receivables (1) 1,274,317 1,105,423 Addition relating to consolidation of Polish investment fund — 34,871 Foreign currency translation adjustment 22,006 (64,985 ) Cash collections (1,841,271 ) (1,625,205 ) Income recognized on finance receivables 998,361 891,899 Net allowance charges (24,025 ) (33,425 ) Balance at end of year $ 3,514,165 $ 3,084,777 |
Schedule of Cash Collections Applied to Principal | At the time of acquisition and each quarter thereafter, the life of each pool is estimated based on projected amounts and timing of future cash collections using the proprietary models of the Company. Based upon current projections, estimated cash collections expected to be applied to principal are as follows for the twelve-month periods ending December 31, (amounts in thousands): 2020 $ 831,769 2021 672,699 2022 500,597 2023 368,332 2024 263,785 2025 193,831 2026 156,456 2027 135,238 2028 125,673 2029 116,008 Thereafter 149,777 Total ERC expected to be applied to principal $ 3,514,165 |
Schedule of Changes in Accretable Yield | Changes in accretable yield for the years ended December 31, 2019 and 2018 were as follows (amounts in thousands): 2019 2018 Balance at beginning of year $ 3,058,445 $ 2,927,866 Income recognized on finance receivables (998,361 ) (891,899 ) Net allowance charges 24,025 33,425 Additions from portfolio acquisitions 943,887 876,112 Reclassifications from nonaccretable difference 205,464 194,992 Foreign currency translation adjustment 6,671 (82,051 ) Balance at end of year $ 3,240,131 $ 3,058,445 |
Schedule of Valuation Allowance Account | The following is a summary of activity within the Company's valuation allowance account, all of which relates to loans acquired with deteriorated credit quality, for the years ended December 31, 2019 , 2018 and 2017 (amounts in thousands): 2019 2018 2017 Beginning balance $ 257,148 $ 225,555 $ 211,465 Allowance charges 38,662 48,856 13,826 Reversal of previous recorded allowance charges (14,637 ) (15,431 ) (1,928 ) Net allowance charges 24,025 33,425 11,898 Foreign currency translation adjustment 122 (1,832 ) 2,192 Ending balance $ 281,295 $ 257,148 $ 225,555 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Investments | Investments consisted of the following at December 31, 2019 and 2018 (amounts in thousands): 2019 2018 Debt securities Available-for-sale $ 5,052 $ 5,077 Equity securities Private equity funds 7,218 7,973 Mutual funds 33,677 21,753 Equity method investments 10,229 10,370 Total investments $ 56,176 $ 45,173 |
Unrealized Gain (Loss) on Investments | The amortized cost and estimated fair value of investments in debt securities at December 31, 2019 and 2018 were as follows (amounts in thousands): December 31, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value Available-for-sale Government bonds $ 5,095 $ — $ 43 $ 5,052 December 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value Available-for-sale Government bonds $ 5,160 $ — $ 83 $ 5,077 |
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 was as follows (amounts in thousands): December 31, 2019 Operating lease cost $ 12,008 Short-term lease cost 2,973 Total lease cost $ 14,981 Supplemental cash flow information and non-cash activity related to leases for the year ended December 31, 2019 were as follows (amounts in thousands): December 31, 2019 Cash paid for amounts included in the measurement of operating lease liabilities $ 11,438 ROU assets obtained in exchange for operating lease obligations $ 80,725 Lease term and discount rate information related to operating leases were as follows as of the date indicated: December 31, 2019 Weighted-average remaining lease terms (years) 10.7 Weighted-average discount rate 4.9 % |
Lessee, Operating Lease, Liability, Maturity | Maturities of lease liabilities at December 31, 2019 , are as follows for the years ending December 31, (amounts in thousands): Operating Leases 2020 $ 11,846 2021 11,378 2022 9,324 2023 7,132 2024 6,279 Thereafter 49,414 Total lease payments $ 95,373 Less imputed interest (21,996 ) Total $ 73,377 |
Schedule of Future Minimum Rental Payments for Operating Leases | As previously disclosed in the Company's Form 10-K for the year ended December 31, 2018 and under the previous lease accounting standard (which excludes the impact of the Company's intent to exercise renewal options as required by ASU 2016-02), future minimum lease payments for operating leases at December 31, 2018, were as follows for the years ending December 31, (amounts in thousands): 2019 $ 11,470 2020 11,451 2021 10,809 2022 7,287 2023 6,189 Thereafter 7,866 Total future minimum lease payments $ 55,072 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Goodwill | The following table represents the changes in goodwill for the years ended December 31, 2019 and 2018 (amounts in thousands): 2019 2018 Goodwill: Balance at beginning of period $ 464,116 $ 526,513 Changes: Acquisition 18,831 — Sale of subsidiary — (36,053 ) Foreign currency translation adjustment (2,153 ) (26,344 ) Net change in goodwill 16,678 (62,397 ) Balance at end of period $ 480,794 $ 464,116 |
Schedule of Intangible Assets | Intangible assets, excluding goodwill, consisted of the following at December 31, 2019 and 2018 (amounts in thousands): 2019 2018 Gross Accumulated Gross Accumulated Client and customer relationships $ 12,072 $ 8,242 $ 11,806 $ 6,993 Non-compete agreements 439 183 — — Trademarks 400 362 400 345 Technology 1,679 1,306 1,548 894 Total $ 14,590 $ 10,093 $ 13,754 $ 8,232 |
Schedule of Estimated Future Amortization of Intangible Assets | The future amortization of intangible assets is estimated to be as follows for the years ending December 31, (amounts in thousands): 2020 $ 1,402 2021 880 2022 750 2023 707 2024 758 Thereafter — Total $ 4,497 |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The Company's borrowings consisted of the following as of the dates indicated (amounts in thousands): December 31, December 31, Americas revolving credit $ 772,037 $ 598,279 Europe revolving credit 1,017,465 561,882 Term loans 425,000 740,551 Convertible senior notes 632,500 632,500 2,847,002 2,533,212 Less: Debt discount and issuance costs (38,577 ) (59,556 ) Total $ 2,808,425 $ 2,473,656 |
Schedule of Maturities of Long-term Debt | The following principal payments are due on the Company's borrowings at December 31, 2019 for the years ending December 31, (amounts in thousands): 2020 $ 298,603 2021 1,028,568 2022 1,174,831 2023 345,000 2024 and thereafter — Total $ 2,847,002 |
Schedule of Line of Credit Facilities | The outstanding balances and weighted average interest rates by type of borrowing under the credit facility as of the dates indicated are as follows (dollar amounts in thousands): December 31, 2019 December 31, 2018 Amount Outstanding Weighted Average Interest Rate Amount Outstanding Weighted Average Interest Rate Term loan $ 425,000 4.30 % $ 435,000 5.02 % Revolving credit facilities 768,800 4.31 % 598,279 4.97 % The outstanding balances and weighted average interest rates by type of borrowing under the European Credit Agreement as the dates indicated are as follows (dollar amounts in thousands): December 31, 2019 December 31, 2018 Amount Outstanding Weighted Average Interest Rate Amount Outstanding Weighted Average Interest Rate Term loan $ — — % $ 305,551 3.75 % Revolving credit facility 1,017,465 4.31 % 561,882 4.10 % |
Schedule of Liability and Equity Components | The balances of the liability and equity components of the Notes outstanding were as follows as of the dates indicated (amounts in thousands): December 31, December 31, Liability component - principal amount $ 632,500 $ 632,500 Unamortized debt discount (31,414 ) (43,812 ) Liability component - net carrying amount $ 601,086 $ 588,688 Equity component $ 76,216 $ 76,216 |
Schedule of Debt Interest Expense | Interest expense related to the Notes was as follows for the years ended December 31, 2019 , 2018 and 2017 (amounts in thousands): 2019 2018 2017 Interest expense - stated coupon rate $ 20,700 $ 20,700 $ 15,870 Interest expense - amortization of debt discount 12,398 11,725 8,583 Total interest expense - convertible senior notes $ 33,098 $ 32,425 $ 24,453 |
Schedule of Interest Expense, Net | Interest expense, net, was as follows for the years ended December 31, 2019 , 2018 and 2017 (amounts in thousands): 2019 2018 2017 Interest expense $ 144,165 $ 124,208 $ 103,653 Interest (income) (2,247 ) (3,130 ) (5,612 ) Interest expense, net $ 141,918 $ 121,078 $ 98,041 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment, Net [Abstract] | |
Property and Equipment, at Cost | Property and equipment, at cost, consisted of the following as of December 31, 2019 and 2018 (amounts in thousands): 2019 2018 Software $ 62,758 $ 64,670 Computer equipment 20,847 22,153 Furniture and fixtures 16,324 16,061 Equipment 13,869 12,390 Leasehold improvements 16,709 16,556 Building and improvements 7,900 7,431 Land 1,296 1,296 Accumulated depreciation and amortization (93,207 ) (92,877 ) Assets in process 10,005 6,456 Property and equipment, net $ 56,501 $ 54,136 |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Carrying and Estimated Fair Value Recorded in the Consolidated Balance Sheet | The carrying amounts in the table are recorded in the consolidated balance sheets at December 31, 2019 and December 31, 2018 (amounts in thousands): December 31, 2019 December 31, 2018 Carrying Estimated Carrying Estimated Financial assets: Cash and cash equivalents 119,774 119,774 $ 98,695 $ 98,695 Finance receivables, net 3,514,165 3,645,610 3,084,777 3,410,475 Financial liabilities: Interest-bearing deposits 106,246 106,246 82,666 82,666 Revolving lines of credit 1,789,502 1,789,502 1,160,161 1,160,161 Term loans 425,000 425,000 740,551 740,551 Convertible senior notes 601,086 648,968 588,688 557,122 |
Summary of Fair Value Assets Measured on a Recurring Basis | The carrying amounts in the following table are measured at fair value on a recurring basis in the accompanying consolidated balance sheets at December 31, 2019 and 2018 (amounts in thousands): Fair Value Measurements as of December 31, 2019 Level 1 Level 2 Level 3 Total Assets: Available-for-sale investments Government bonds $ 5,052 $ — $ — $ 5,052 Fair value through net income investments Mutual funds 33,677 — — 33,677 Derivative contracts (recorded in other assets) — 875 — 875 Liabilities: Derivative contracts (recorded in other liabilities) — 23,663 — 23,663 Fair Value Measurements as of December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Available-for-sale investments Government bonds $ 5,077 $ — $ — $ 5,077 Fair value through net income investments Mutual funds $ 21,753 $ — $ — $ 21,753 Derivative contracts (recorded in other assets) — 3,334 — 3,334 |
Summary of Fair Value Liabilities Measured on a Recurring Basis | The carrying amounts in the following table are measured at fair value on a recurring basis in the accompanying consolidated balance sheets at December 31, 2019 and 2018 (amounts in thousands): Fair Value Measurements as of December 31, 2019 Level 1 Level 2 Level 3 Total Assets: Available-for-sale investments Government bonds $ 5,052 $ — $ — $ 5,052 Fair value through net income investments Mutual funds 33,677 — — 33,677 Derivative contracts (recorded in other assets) — 875 — 875 Liabilities: Derivative contracts (recorded in other liabilities) — 23,663 — 23,663 Fair Value Measurements as of December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Available-for-sale investments Government bonds $ 5,077 $ — $ — $ 5,077 Fair value through net income investments Mutual funds $ 21,753 $ — $ — $ 21,753 Derivative contracts (recorded in other assets) — 3,334 — 3,334 |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The following table summarizes the fair value of derivative instruments in the consolidated balance sheets (amounts in thousands): December 31, 2019 December 31, 2018 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives designated as hedging instruments: Interest rate contracts Other assets $ 323 Other assets $ 44 Interest rate contracts Other liabilities 17,807 Other liabilities — Derivatives not designated as hedging instruments: Foreign currency contracts Other assets 552 Other assets 2,555 Foreign currency contracts Other liabilities 5,856 Other liabilities — Interest rate contracts Other assets — Other assets 735 |
Schedule of Cash Flow Hedging Instruments, Statements of Financial Performance and Financial Position, Location | The following table summarizes the effects of derivatives designated as cash flow hedging instruments on the consolidated financial statements for the years ended December 31, 2019 , 2018 and 2017 (amounts in thousands): Gain or (loss) recognized in OCI, net of tax Derivatives designated as cash flow hedging instruments 2019 2018 2017 Interest rate contracts $ (14,311 ) $ 44 $ — Gain or (loss) reclassified from OCI into income Location of gain or (loss) reclassified from OCI into income 2019 2018 2017 Interest expense, net $ (1,457 ) $ — $ — |
Schedule of derivative instruments not designated as hedging instruments | The following table summarizes the effects of derivatives not designated as hedging instruments on the Company’s consolidated income statements for the years ended December 31, 2019 , 2018 and 2017 (amounts in thousands): Amount of gain or (loss) recognized in income Derivatives not designated as hedging instruments Location of gain or (loss) recognized in income 2019 2018 2017 Foreign currency contracts Foreign exchange gain/(loss) $ (7,008 ) $ 4,011 $ — Foreign currency contracts Interest expense, net (3,875 ) (549 ) — Interest rate contracts Interest expense, net (492 ) 2,082 — |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table provides details about the reclassifications out of accumulated other comprehensive loss for the year ended December 31, 2019 (amounts in thousands): Gains and losses on cash flow hedges 2019 Affected line in the consolidated income statement Interest rate swaps $ (1,457 ) Interest expense, net Income tax effect of item above 278 Income tax expense/(benefit) Total losses on cash flow hedges $ (1,179 ) Net of tax The following table represents the changes in accumulated other comprehensive loss by component after tax, for the years ended December 31, 2019, 2018 and 2017 (amounts in thousands): Debt Securities Currency Translation Accumulated Other Available-for-Sale Cash Flow Hedges Adjustments Comprehensive Loss (1) Ending balance December 31, 2016 $ — $ — $ (251,944 ) $ (251,944 ) Other comprehensive loss before reclassifications — — 73,337 73,337 Reclassifications, net — — — — Net current period other comprehensive loss — — 73,337 73,337 Ending balance December 31, 2017 $ — $ — $ (178,607 ) $ (178,607 ) Reclassification of unrealized loss on debt securities (22 ) — — (22 ) Other comprehensive loss before reclassifications (61 ) 44 (63,463 ) (63,480 ) Reclassifications, net — — — — Net current period other comprehensive loss (83 ) 44 (63,463 ) (63,502 ) Ending balance December 31, 2018 $ (83 ) $ 44 $ (242,070 ) $ (242,109 ) Other comprehensive loss before reclassifications 39 (14,311 ) (5,816 ) (20,088 ) Reclassifications, net — 1,179 — 1,179 Net current period other comprehensive loss 39 (13,132 ) (5,816 ) (18,909 ) Ending balance December 31, 2019 $ (44 ) $ (13,088 ) $ (247,886 ) $ (261,018 ) (1) Net of a $4.4 million deferred tax benefit for unrealized losses from cash flow hedges for the year ended December 31, 2019. |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Compensation [Abstract] | |
Nonvested Share Transactions | The following summarizes all nonvested share activity, excluding those related to the LTI program, from December 31, 2016 through December 31, 2019 (amounts in thousands, except per share amounts): Nonvested Shares Weighted-Average December 31, 2016 303 $ 38.19 Granted 195 33.70 Vested (173 ) 37.49 Canceled (27 ) 43.05 December 31, 2017 298 35.25 Granted 254 36.39 Vested (151 ) 35.13 Canceled (22 ) 35.02 December 31, 2018 379 34.85 Granted 329 28.47 Vested (167 ) 34.81 Canceled (9 ) 31.01 December 31, 2019 532 $ 30.97 |
Summarization of Option Related Transactions | The following table summarizes all LTI share activity from December 31, 2016 through December 31, 2019 (amounts in thousands, except per share amounts): Nonvested LTI Shares Weighted-Average December 31, 2016 425 $ 39.57 Granted at target level 192 33.50 Adjustments for actual performance 5 60.00 Vested (51 ) 40.80 Canceled (99 ) 20.91 December 31, 2017 472 41.06 Granted at target level 121 39.40 Adjustments for actual performance (74 ) 52.47 Vested (19 ) 52.47 Canceled (46 ) 32.31 December 31, 2018 454 33.27 Granted at target level 168 28.28 Adjustments for actual performance (172 ) 28.98 Vested — — Canceled (3 ) 35.87 December 31, 2019 447 $ 33.03 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Reconciliation Between the Computation of Basic EPS and Diluted EPS | The following table provides a reconciliation between the computation of basic EPS and diluted EPS for the years ended December 31, 2019 , 2018 and 2017 (amounts in thousands, except per share amounts): 2019 2018 2017 Net Income Attributable to PRA Group, Inc. Weighted Average Common Shares EPS Net Income Attributable to PRA Group, Inc. Weighted Average Common Shares EPS Net Income Attributable to PRA Group, Inc. Weighted Average Common Shares EPS Basic EPS $ 86,158 45,387 $ 1.90 $ 65,563 45,280 $ 1.45 $ 164,315 45,671 $ 3.60 Dilutive effect of nonvested share awards — 190 (0.01 ) — 133 (0.01 ) — 152 (0.01 ) Diluted EPS $ 86,158 45,577 $ 1.89 $ 65,563 45,413 $ 1.44 $ 164,315 45,823 $ 3.59 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Summary of Income Tax Expense Recognized | The income tax expense/(benefit) recognized for the years ended December 31, 2019 , 2018 and 2017 is comprised of the following (amounts in thousands): Federal State International Total For the year ended December 31, 2019: Current tax expense $ 41,391 $ 6,390 $ 9,460 $ 57,241 Deferred tax (benefit) (27,311 ) (6,030 ) (4,220 ) (37,561 ) Total income tax expense $ 14,080 $ 360 $ 5,240 $ 19,680 For the year ended December 31, 2018: Current tax expense $ 23,444 $ 9,026 $ 37,501 $ 69,971 Deferred tax (benefit) (19,527 ) (15,268 ) (21,413 ) (56,208 ) Total income tax expense/(benefit) $ 3,917 $ (6,242 ) $ 16,088 $ 13,763 For the year ended December 31, 2017: Current tax expense $ 77,656 $ 16,543 $ 25,087 $ 119,286 Deferred tax (benefit) (112,118 ) (2,051 ) (15,969 ) (130,138 ) Total income tax (benefit)/expense $ (34,462 ) $ 14,492 $ 9,118 $ (10,852 ) |
Schedule of Reconciliation of Expected Tax Expense at The Statutory Federal Tax Rate to Actual Tax Expense | A reconciliation of the Company's expected tax expense at the statutory federal tax rate to actual tax expense/(benefit) for the years ended December 31, 2019 , 2018 and 2017 is as follows (amounts in thousands): 2019 2018 2017 Income tax expense at statutory federal rates $ 24,645 $ 18,794 $ 56,095 State tax expense/(benefit), net of federal tax benefit 161 (5,098 ) 9,072 Tax impact on international earnings (7,326 ) 206 (4,953 ) Federal rate change — (719 ) (73,779 ) Other 2,200 580 2,713 Total income tax expense/(benefit) $ 19,680 $ 13,763 $ (10,852 ) |
Summary of Components of Net Deferred Tax Liability | 2019 2018 2017 Income tax expense at statutory federal rates $ 24,645 $ 18,794 $ 56,095 State tax expense/(benefit), net of federal tax benefit 161 (5,098 ) 9,072 Tax impact on international earnings (7,326 ) 206 (4,953 ) Federal rate change — (719 ) (73,779 ) Other 2,200 580 2,713 Total income tax expense/(benefit) $ 19,680 $ 13,763 $ (10,852 ) The Company recognized a net deferred tax liability of $22.2 million and $53.5 million as of December 31, 2019 and 2018 , respectively. The components of the net deferred tax liability are as follows (amounts in thousands): As of December 31, 2019 2018 Deferred tax assets: Employee compensation $ 6,085 $ 4,670 Net operating loss carryforward 93,068 24,210 Accrued liabilities — 1,850 Interest 10,477 10,559 Finance receivable revenue recognition - international 21,343 37,005 Right of use asset 16,045 — Other 12,009 2,721 Valuation allowance (80,739 ) (14,512 ) Total deferred tax asset 78,288 66,503 Deferred tax liabilities: Property and Equipment (5,362 ) (5,556 ) Intangible assets and goodwill (2,999 ) (5,435 ) Lease liability (15,107 ) — Convertible debt (7,843 ) (10,998 ) Finance receivable revenue recognition - IRS settlement (36,959 ) (74,296 ) Finance receivable revenue recognition - domestic (32,183 ) (23,744 ) Total deferred tax liability (100,453 ) (120,029 ) Net deferred tax liability $ (22,165 ) $ (53,526 ) |
General and Summary of Signif_4
General and Summary of Significant Accounting Policies (Narrative) (Details) $ / shares in Units, $ in Thousands | May 26, 2017$ / shares | Aug. 13, 2013$ / shares | Dec. 31, 2019USD ($)segment | Jan. 01, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Accounting Policies [Line Items] | |||||||
Number of reportable segments | segment | 1 | ||||||
Percentage of income tax positions likely to be realized | 50.00% | ||||||
Requisite service period | 3 years | ||||||
Possible change in estimates, in years | 1 year | ||||||
Change in accounting principle | [1] | $ (3,930) | |||||
Operating lease, right-of-use asset | $ 68,972 | ||||||
Operating lease, liability | $ 73,377 | ||||||
Minimum | |||||||
Accounting Policies [Line Items] | |||||||
Warranty period of permitting the return of accounts holder (in days) | 90 days | ||||||
Options and nonvested share awards vesting period, minimum, in years | 1 year | ||||||
Minimum | Software | |||||||
Accounting Policies [Line Items] | |||||||
Property and equipment, useful life, in years | 3 years | ||||||
Minimum | Computer Equipment | |||||||
Accounting Policies [Line Items] | |||||||
Property and equipment, useful life, in years | 3 years | ||||||
Minimum | Furniture and Fixtures | |||||||
Accounting Policies [Line Items] | |||||||
Property and equipment, useful life, in years | 5 years | ||||||
Minimum | Equipment | |||||||
Accounting Policies [Line Items] | |||||||
Property and equipment, useful life, in years | 5 years | ||||||
Minimum | Leasehold Improvements | |||||||
Accounting Policies [Line Items] | |||||||
Property and equipment, useful life, in years | 3 years | ||||||
Minimum | Building Improvements | |||||||
Accounting Policies [Line Items] | |||||||
Property and equipment, useful life, in years | 10 years | ||||||
Maximum | |||||||
Accounting Policies [Line Items] | |||||||
Warranty period of permitting the return of accounts holder (in days) | 180 days | ||||||
Options and nonvested share awards vesting period, minimum, in years | 3 years | ||||||
Maximum | Software | |||||||
Accounting Policies [Line Items] | |||||||
Property and equipment, useful life, in years | 5 years | ||||||
Maximum | Computer Equipment | |||||||
Accounting Policies [Line Items] | |||||||
Property and equipment, useful life, in years | 5 years | ||||||
Maximum | Furniture and Fixtures | |||||||
Accounting Policies [Line Items] | |||||||
Property and equipment, useful life, in years | 10 years | ||||||
Maximum | Equipment | |||||||
Accounting Policies [Line Items] | |||||||
Property and equipment, useful life, in years | 7 years | ||||||
Maximum | Leasehold Improvements | |||||||
Accounting Policies [Line Items] | |||||||
Property and equipment, useful life, in years | 10 years | ||||||
Maximum | Building Improvements | |||||||
Accounting Policies [Line Items] | |||||||
Property and equipment, useful life, in years | 39 years | ||||||
Note Due 2020 | Convertible Debt | |||||||
Accounting Policies [Line Items] | |||||||
Stated percentage | 3.00% | ||||||
Average share price of common stock (usd per share) | $ / shares | $ 65.72 | ||||||
Note Due 2023 | Convertible Debt | |||||||
Accounting Policies [Line Items] | |||||||
Stated percentage | 3.50% | ||||||
Average share price of common stock (usd per share) | $ / shares | $ 46.24 | ||||||
Accounting Standards Update 2016-02 | |||||||
Accounting Policies [Line Items] | |||||||
Operating lease, right-of-use asset | $ 72,100 | ||||||
Operating lease, liability | $ 75,800 | ||||||
Accounting Standards Update 2016-01 | |||||||
Accounting Policies [Line Items] | |||||||
Change in accounting principle | $ (3,900) | ||||||
[1] | (1) Refer to Note 3 for further detail. |
General and Summary of Signif_5
General and Summary of Significant Accounting Policies (Revenue and Long-lived Assets by Geographical Location) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | $ 1,017,081 | $ 908,256 | $ 828,206 |
Long-Lived Assets | 125,473 | 54,136 | |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 673,264 | 619,172 | 560,278 |
Long-Lived Assets | 112,233 | 48,581 | |
United Kingdom | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 120,377 | 99,817 | 81,322 |
Long-Lived Assets | 3,553 | 1,543 | |
Others | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 223,440 | 189,267 | $ 186,606 |
Long-Lived Assets | $ 9,687 | $ 4,012 |
Finance Receivables, net (Sched
Finance Receivables, net (Schedule of Changes In Finance Receivables) (Details) - 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, Carrying Amount [Roll Forward] | |||
Balance at beginning of year | $ 3,084,777 | $ 2,776,199 | |
Acquisitions of finance receivables | 1,274,317 | 1,105,423 | |
Addition relating to consolidation of Polish investment fund | 0 | 34,871 | |
Foreign currency translation adjustment | 22,006 | (64,985) | |
Cash collections | (1,841,271) | (1,625,205) | |
Income recognized on finance receivables | 998,361 | 891,899 | $ 795,435 |
Net allowance charges | (24,025) | (33,425) | (11,898) |
Balance at end of year | $ 3,514,165 | $ 3,084,777 | $ 2,776,199 |
Finance Receivables, net (Narra
Finance Receivables, net (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities [Abstract] | ||
Face value of receivable portfolios | $ 11,700 | $ 9,200 |
Payments to acquire finance receivables | 1,300 | 1,100 |
Estimated remaining collections on purchased receivables | 2,000 | 1,400 |
Total estimated remaining collections | 6,800 | 6,100 |
Aggregate net finance receivables in pools accounted for under the cost recovery method | $ 33.7 | $ 48 |
Finance Receivables, net (Sch_2
Finance Receivables, net (Schedule of Cash Collections Applied to Principal) (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities [Abstract] | |
2020 | $ 831,769 |
2021 | 672,699 |
2022 | 500,597 |
2023 | 368,332 |
2024 | 263,785 |
2025 | 193,831 |
2026 | 156,456 |
2027 | 135,238 |
2028 | 125,673 |
2029 | 116,008 |
Thereafter | 149,777 |
Total ERC expected to be applied to principal | $ 3,514,165 |
Finance Receivables, net (Sch_3
Finance Receivables, net (Schedule of Changes in Accretable Yield) (Details) - 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 Movement Schedule [Roll Forward] | |||
Balance at beginning of year | $ 3,058,445 | $ 2,927,866 | |
Income recognized on finance receivables | (998,361) | (891,899) | $ (795,435) |
Net allowance charges | 24,025 | 33,425 | 11,898 |
Additions from portfolio purchases | 943,887 | 876,112 | |
Reclassifications from nonaccretable difference | 205,464 | 194,992 | |
Foreign currency translation adjustment | 6,671 | (82,051) | |
Balance at end of year | $ 3,240,131 | $ 3,058,445 | $ 2,927,866 |
Finance Receivables, net (Sch_4
Finance Receivables, net (Schedule of Valuation Allowance Account) (Details) - 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, Allowance For Loan Losses [Roll Forward] | |||
Beginning balance | $ 257,148 | $ 225,555 | $ 211,465 |
Allowance charges | 38,662 | 48,856 | 13,826 |
Reversal of previous recorded allowance charges | (14,637) | (15,431) | (1,928) |
Net allowance charges | 24,025 | 33,425 | 11,898 |
Foreign currency translation adjustment | 122 | (1,832) | 2,192 |
Ending balance | $ 281,295 | $ 257,148 | $ 225,555 |
Investments (Summary of Investm
Investments (Summary of Investments) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Debt securities | ||
Available-for-sale | $ 5,052 | $ 5,077 |
Equity securities | ||
Equity method investments | 10,229 | 10,370 |
Investments | 56,176 | 45,173 |
Private equity funds | ||
Equity securities | ||
Mutual funds | 7,218 | 7,973 |
Mutual funds | ||
Equity securities | ||
Mutual funds | $ 33,677 | $ 21,753 |
Investments (Narrative) (Detail
Investments (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2019 | Dec. 31, 2017 | ||
Investment [Line Items] | |||||
Finance receivables, net | $ 3,514,165 | $ 3,084,777 | $ 2,776,199 | ||
Cash and cash equivalents per Consolidated Balance Sheets | 119,774 | 98,695 | 120,516 | ||
Other liabilities | $ 26,211 | 7,370 | |||
Cost-method investment, ownership percentage | 3.00% | ||||
Change in accounting principle | [1] | $ (3,930) | |||
Equity securities, unrealized gain | $ 5,800 | 3,500 | |||
RCB Investimentos S.A. | |||||
Investment [Line Items] | |||||
Ownership percentage | 11.70% | ||||
Accounting Standards Update 2016-01 | |||||
Investment [Line Items] | |||||
Change in accounting principle | $ (3,900) | ||||
[1] | (1) Refer to Note 3 for further detail. |
Investments (Amortized Cost) (D
Investments (Amortized Cost) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Available-for-sale | ||
Available-for-sale | $ 5,052 | $ 5,077 |
Government bonds | ||
Available-for-sale | ||
Amortized Cost | 5,095 | 5,160 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 43 | 83 |
Available-for-sale | $ 5,052 | $ 5,077 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Leases [Abstract] | |||
Rental expense | $ 14,981 | ||
Rental expense | $ 13,600 | $ 11,800 |
Leases - Lease Cost and Other I
Leases - Lease Cost and Other Information (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 12,008 |
Short-term lease cost | 2,973 |
Total lease cost | 14,981 |
Cash paid for amounts included in the measurement of operating lease liabilities | 11,438 |
Right-of-use assets obtained in exchange for operating lease obligations | $ 80,725 |
Weighted-average remaining lease term (years) | 10 years 8 months 12 days |
Weighted-average discount rate | 4.90% |
Leases - Schedule of Operating
Leases - Schedule of Operating Lease Liability Maturity (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 11,846 |
2021 | 11,378 |
2022 | 9,324 |
2023 | 7,132 |
2024 | 6,279 |
Thereafter | 49,414 |
Total lease payments | 95,373 |
Less imputed interest | (21,996) |
Total | $ 73,377 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Rental Payments for Operating Leases (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 11,470 |
2020 | 11,451 |
2021 | 10,809 |
2022 | 7,287 |
2023 | 6,189 |
Thereafter | 7,866 |
Total future minimum lease payments | $ 55,072 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, net (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Acquisition | $ 18,831 | $ 0 | |
Impairment of goodwill | 0 | ||
Sale of subsidiary | 0 | 36,053 | |
Amortization expense | $ 1,600 | $ 4,300 | $ 4,300 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, net (Schedule of Goodwill) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill [Roll Forward] | ||
Balance at beginning of period | $ 464,116 | $ 526,513 |
Acquisition | 18,831 | 0 |
Sale of subsidiary | 0 | (36,053) |
Foreign currency translation adjustment | (2,153) | (26,344) |
Net change in goodwill | 16,678 | (62,397) |
Balance at end of period | $ 480,794 | $ 464,116 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, net (Schedule of Intangible Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | $ 14,590 | $ 13,754 |
Accumulated Amortization | 10,093 | 8,232 |
Client and customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 12,072 | 11,806 |
Accumulated Amortization | 8,242 | 6,993 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 439 | 0 |
Accumulated Amortization | 183 | 0 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 400 | 400 |
Accumulated Amortization | 362 | 345 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 1,679 | 1,548 |
Accumulated Amortization | $ 1,306 | $ 894 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets, net (Schedule of Estimated Future Amortization of Intangible Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2020 | $ 1,402 | |
2021 | 880 | |
2022 | 750 | |
2023 | 707 | |
2024 | 758 | |
Thereafter | 0 | |
Total | $ 4,497 | $ 5,522 |
Borrowings (Details)
Borrowings (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Debt outstanding | $ 2,847,002 | $ 2,533,212 |
Less: Debt discount and issuance costs | (38,577) | (59,556) |
Total | 2,808,425 | 2,473,656 |
Line of Credit | Americas revolving credit | ||
Debt Instrument [Line Items] | ||
Debt outstanding | 772,037 | 598,279 |
Line of Credit | Europe revolving credit | ||
Debt Instrument [Line Items] | ||
Debt outstanding | 1,017,465 | 561,882 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Debt outstanding | 425,000 | 740,551 |
Convertible Debt | ||
Debt Instrument [Line Items] | ||
Debt outstanding | $ 632,500 | $ 632,500 |
Borrowings (Long term debt Matu
Borrowings (Long term debt Maturities) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | ||
2020 | $ 298,603 | |
2021 | 1,028,568 | |
2022 | 1,174,831 | |
2023 | 345,000 | |
2024 and thereafter | 0 | |
Total | $ 2,847,002 | $ 2,533,212 |
Borrowings (North American Revo
Borrowings (North American Revolving Credit and Term Loan) (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Oct. 04, 2018USD ($) | May 26, 2017 | |
Eurodollar Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread variable rate (as a percent) | 1.00% | |||
Federal Funds Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread variable rate (as a percent) | 0.50% | |||
Canadian Prime Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread variable rate (as a percent) | 1.50% | |||
North American Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Total credit facility available | $ 1,543,000 | |||
Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Credit agreement consolidated leverage ratio | 2.75 | |||
Debt instrument, covenant, maximum cash dividends | $ 20,000 | |||
Stock repurchases authorized amount, including 50% of prior year's net income | $ 100,000 | |||
Unused commitment fee under revolving credit | 0.375% | |||
Credit Agreement | Eurodollar Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread variable rate (as a percent) | 2.50% | |||
Credit Agreement | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread variable rate (as a percent) | 1.50% | |||
Secured Debt | Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Credit agreement consolidated leverage ratio | 2.25 | |||
Unsecured Debt | Senior Unsecured Debt other than Convertible Notes Due 2020 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, covenant, maximum allowable debt | $ 750,000 | |||
Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | 601,086 | $ 588,688 | ||
Convertible Debt | Note Due 2023 | ||||
Debt Instrument [Line Items] | ||||
Stated percentage | 3.50% | |||
Line of Credit | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | 425,000 | |||
Revolving Credit Facility | North American Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Additional borrowing capacity | $ 363,000 | |||
Increase to accordion feature | $ 500,000 | |||
Total credit facility available | 1,068,000 | |||
Optional increase in borrowing capacity | 500,000 | |||
Option for letters of credit | 25,000 | |||
Option to reduce borrowing capacity | 25,000 | |||
Unused portion | 349,200 | |||
Current borrowing capacity | 146,500 | |||
Canadian Revolving Credit Facility | North American Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Total credit facility available | 50,000 | |||
Acquisition Subsequent to 2014 | Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, covenant, maximum business combinations | 250,000 | |||
Covenant, maximum business combinations, non-loan | $ 50,000 | |||
Eligible Core Asset Pool | Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Percentage of maximum level of borrowings of ERC of eligible asset pools | 35.00% | |||
Eligible Insolvent Asset Pool | Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Covenant, maximum borrowing as a percentage of insolvent asset pools | 55.00% | |||
Eligible Accounts Receivable | Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Percentage of maximum level of borrowings of eligible accounts receivable | 75.00% |
Borrowings (Outstanding balance
Borrowings (Outstanding balances and weighted average interest rates) (Details) - Revolving Credit Facility - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Domestic Line of Credit [Member] | North American Credit Agreement | ||
Line of Credit Facility [Line Items] | ||
Amount Outstanding | $ 768,800 | $ 598,279 |
Weighted Average Interest Rate | 4.31% | 4.97% |
Foreign Line of Credit [Member] | European Revolving Facility and Term Loan | ||
Line of Credit Facility [Line Items] | ||
Amount Outstanding | $ 1,017,465 | $ 561,882 |
Weighted Average Interest Rate | 4.31% | 4.10% |
Loans Payable | European Revolving Facility and Term Loan | ||
Line of Credit Facility [Line Items] | ||
Amount Outstanding | $ 0 | $ 305,551 |
Weighted Average Interest Rate | 0.00% | 3.75% |
Loans Payable | North American Credit Agreement | ||
Line of Credit Facility [Line Items] | ||
Amount Outstanding | $ 425,000 | $ 435,000 |
Weighted Average Interest Rate | 4.30% | 5.02% |
Borrowings (European Revolving
Borrowings (European Revolving Credit Facility and Term Loan) (Details) - 12 months ended Dec. 31, 2019 - European Revolving Facility and Term Loan $ in Millions | SEK (kr) | USD ($) |
Line of Credit Facility [Line Items] | ||
Covenant, loan-to-value | 75.00% | |
Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Maximum interest bearing deposits | kr | kr 1,200,000,000 | |
Current borrowing capacity | $ 122.5 | |
Overdraft Facility | ||
Line of Credit Facility [Line Items] | ||
Total credit facility available | 40 | |
Commitment fee percentage | 0.125% | |
Line of Credit | Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Reduction in rate | 0.15% | |
Total credit facility available | 1,100 | |
Unused commitment fee under revolving credit | 1.23% | |
Commitment fee as a percentage of margin | 35.00% | |
Current borrowing capacity | $ 121.8 | |
Maximum GIBD ratio | 3.25 | |
Line of Credit | Term Loan Facility | ||
Line of Credit Facility [Line Items] | ||
Reduction in rate | 0.50% | |
Debt Instrument, Basis Spread On Variable Rate, Increase In Rate From Syndication Or Transfer | 0.50% | |
Line of Credit | Interbank Offered Rate (IBOR) | Minimum | Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Basis spread variable rate (as a percent) | 2.70% | |
Line of Credit | Interbank Offered Rate (IBOR) | Maximum | Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Basis spread variable rate (as a percent) | 3.80% |
Borrowings (Columbian Revolving
Borrowings (Columbian Revolving Credit Facility) (Details) - Revolving Credit Facility - Colombian Revolving Credit Facility - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Sep. 17, 2019 | |
Debt Instrument [Line Items] | ||
Total credit facility available | $ 6 | |
Revolving lines of credit, carrying amount | $ 3.2 | |
Weighted Average Interest Rate | 7.13% | |
Unused portion | $ 2.8 | |
Indicador Bancario De Referencia Rate (IBR) | ||
Debt Instrument [Line Items] | ||
Basis spread variable rate (as a percent) | 2.74% |
Borrowings (Convertible Debt an
Borrowings (Convertible Debt and Additional information) (Details) $ / shares in Units, $ in Thousands | May 26, 2017USD ($)day$ / shares | Aug. 13, 2013USD ($)$ / shares | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Debt Instrument [Line Items] | |||||
Repurchases of common stock | $ 0 | $ 0 | $ 44,909 | ||
Convertible Debt | |||||
Debt Instrument [Line Items] | |||||
Carrying amount of convertible debt | $ 76,216 | $ 76,216 | |||
Note Due 2020 | Convertible Debt | |||||
Debt Instrument [Line Items] | |||||
Face amount | $ 287,500 | ||||
Stated percentage | 3.00% | ||||
Conversion ratio | 15.2172 | ||||
Average share price of common stock (usd per share) | $ / shares | $ 65.72 | ||||
Convertible debt, estimated fair value | $ 255,300 | ||||
Carrying amount of convertible debt | 32,200 | ||||
Debt issuance costs, gross | 7,300 | ||||
Debt and equity issuance costs | 8,200 | ||||
Equity issuance costs | $ 900 | ||||
Effective interest rate (as a percent) | 4.92% | ||||
Note Due 2023 | Convertible Debt | |||||
Debt Instrument [Line Items] | |||||
Face amount | $ 345,000 | ||||
Stated percentage | 3.50% | ||||
Conversion ratio | 21.6275 | ||||
Average share price of common stock (usd per share) | $ / shares | $ 46.24 | ||||
Convertible debt, estimated fair value | $ 298,800 | ||||
Carrying amount of convertible debt | 46,200 | ||||
Debt issuance costs, gross | 8,300 | ||||
Debt and equity issuance costs | 9,600 | ||||
Equity issuance costs | $ 1,300 | ||||
Effective interest rate (as a percent) | 6.20% | ||||
Convertible, threshold percentage of stock price trigger | 130.00% | ||||
Convertible, threshold trading days | day | 20 | ||||
Convertible, threshold consecutive trading days | day | 30 |
Borrowings (Breakdown of Debt I
Borrowings (Breakdown of Debt Instrument) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Debt outstanding | $ 2,847,002 | $ 2,533,212 |
Convertible Debt | ||
Debt Instrument [Line Items] | ||
Debt outstanding | 632,500 | 632,500 |
Unamortized debt discount | (31,414) | (43,812) |
Liability component - net carrying amount | 601,086 | 588,688 |
Equity component | $ 76,216 | $ 76,216 |
Borrowings (Interest Expense) (
Borrowings (Interest Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | |||
Interest expense - amortization of debt discount and issuance costs | $ 22,987 | $ 22,057 | $ 18,152 |
Interest expense | 144,165 | 124,208 | 103,653 |
Interest (income) | (2,247) | (3,130) | (5,612) |
Interest expense, net | 141,918 | 121,078 | 98,041 |
Convertible Debt | |||
Debt Instrument [Line Items] | |||
Interest expense - stated coupon rate | 20,700 | 20,700 | 15,870 |
Interest expense - amortization of debt discount and issuance costs | 12,398 | 11,725 | 8,583 |
Total interest expense - convertible senior notes | $ 33,098 | $ 32,425 | $ 24,453 |
Property and Equipment, net (Pr
Property and Equipment, net (Property and Equipment, at Cost) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment, Net [Abstract] | ||
Software | $ 62,758 | $ 64,670 |
Computer equipment | 20,847 | 22,153 |
Furniture and fixtures | 16,324 | 16,061 |
Equipment | 13,869 | 12,390 |
Leasehold improvements | 16,709 | 16,556 |
Building and improvements | 7,900 | 7,431 |
Land | 1,296 | 1,296 |
Accumulated depreciation and amortization | (93,207) | (92,877) |
Assets in process | 10,005 | 6,456 |
Property and equipment, net | $ 56,501 | $ 54,136 |
Property and Equipment, net (Na
Property and Equipment, net (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization expense | $ 15.9 | $ 15.1 | $ 15.4 |
Fair Value (Carrying And Estima
Fair Value (Carrying And Estimated Fair Value Recorded In The Consolidated Balance Sheet) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Assets: | |||
Cash and cash equivalents per Consolidated Balance Sheets | $ 119,774 | $ 98,695 | $ 120,516 |
Finance receivables, net, carrying amount | 3,514,165 | 3,084,777 | $ 2,776,199 |
Financial liabilities: | |||
Interest-bearing deposits, carrying amount | 106,246 | 82,666 | |
Carrying Amount | |||
Assets: | |||
Cash and cash equivalents per Consolidated Balance Sheets | 119,774 | ||
Finance receivables, net, carrying amount | 3,514,165 | ||
Financial liabilities: | |||
Interest-bearing deposits, carrying amount | 106,246 | 82,666 | |
Revolving lines of credit, carrying amount | 1,789,502 | 1,160,161 | |
Term loans, carrying amount | 425,000 | 740,551 | |
Convertible notes, carrying amount | 601,086 | 588,688 | |
Estimated Fair Value | |||
Assets: | |||
Cash and cash equivalents, estimated fair value | 119,774 | 98,695 | |
Finance receivables, net, estimated fair value | 3,645,610 | 3,410,475 | |
Financial liabilities: | |||
Interest-bearing deposits, estimated fair value | 106,246 | 82,666 | |
Revolving lines of credit, estimated fair value | 1,789,502 | 1,160,161 | |
Term loans, estimated fair value | 425,000 | 740,551 | |
Convertible notes, estimated fair value | $ 648,968 | $ 557,122 |
Fair Value (Fair Value Assets a
Fair Value (Fair Value Assets and Liabilities Measured on a Recurring Basis) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Assets: | ||
Available-for-sale investments | $ 5,052 | $ 5,077 |
Derivative contracts (recorded in other assets) | 875 | |
Liabilities: | ||
Derivative contracts (recorded in other liabilities) | 23,663 | 3,334 |
Level 1 | ||
Assets: | ||
Available-for-sale investments | 5,052 | 5,077 |
Derivative contracts (recorded in other assets) | 0 | |
Liabilities: | ||
Derivative contracts (recorded in other liabilities) | 0 | 0 |
Level 2 | ||
Assets: | ||
Available-for-sale investments | 0 | 0 |
Derivative contracts (recorded in other assets) | 875 | |
Liabilities: | ||
Derivative contracts (recorded in other liabilities) | 23,663 | 3,334 |
Level 3 | ||
Assets: | ||
Available-for-sale investments | 0 | 0 |
Derivative contracts (recorded in other assets) | 0 | |
Liabilities: | ||
Derivative contracts (recorded in other liabilities) | 0 | 0 |
Mutual funds | ||
Assets: | ||
Mutual funds | 33,677 | 21,753 |
Mutual funds | Level 1 | ||
Assets: | ||
Mutual funds | 33,677 | 21,753 |
Mutual funds | Level 2 | ||
Assets: | ||
Mutual funds | 0 | 0 |
Mutual funds | Level 3 | ||
Assets: | ||
Mutual funds | $ 0 | $ 0 |
Fair Value (Narrative) (Details
Fair Value (Narrative) (Details) - Private equity funds - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Private equity funds | $ 7.2 | $ 8 |
Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Private equity funds, liquidating investment, period | 1 year | |
Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Private equity funds, liquidating investment, period | 6 years |
Derivatives (Schedule of Deriva
Derivatives (Schedule of Derivatives by Balance Sheet Location) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Derivatives, Fair Value [Line Items] | ||
Derivative contracts (recorded in other assets) | $ 875 | |
Derivative contracts (recorded in other liabilities) | 23,663 | $ 3,334 |
Interest rate contracts | Designated as Hedging Instrument | Other assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative contracts (recorded in other liabilities) | 17,807 | 0 |
Interest rate contracts | Designated as Hedging Instrument | Other assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative contracts (recorded in other assets) | 323 | 44 |
Interest rate contracts | Not Designated as Hedging Instrument | Other assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative contracts (recorded in other assets) | 0 | 735 |
Foreign currency contracts | Not Designated as Hedging Instrument | Other assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative contracts (recorded in other liabilities) | 5,856 | 0 |
Foreign currency contracts | Not Designated as Hedging Instrument | Other assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative contracts (recorded in other assets) | $ 552 | $ 2,555 |
Derivatives (Narrative) (Detail
Derivatives (Narrative) (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Designated as Hedging Instrument | Interest rate contracts | ||
Derivative [Line Items] | ||
Notional amount | $ 959 | $ 260.8 |
Net derivative gain (loss) included in OCI to be reclassified next 12 months | 3.4 | |
Not Designated as Hedging Instrument | Interest rate contracts | ||
Derivative [Line Items] | ||
Notional amount | 169.7 | |
Not Designated as Hedging Instrument | Foreign currency contracts | ||
Derivative [Line Items] | ||
Notional amount | $ 469.9 | $ 144.7 |
Derivatives (Schedule of Effect
Derivatives (Schedule of Effects of Derivatives Designated as Cash Flow Hedging Instruments) (Details) - Interest rate contracts - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain or (loss) recognized in OCI, net of tax | $ (14,311) | $ 44 | $ 0 |
Interest expense, net | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain or (loss) reclassified from OCI into income | $ (1,457) | $ 0 | $ 0 |
Derivatives (Schedule of Effe_2
Derivatives (Schedule of Effects of Derivatives Not Designated as Hedging Instruments) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Foreign currency contracts | Foreign exchange gain/(loss) | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of gain or (loss) recognized in income | $ (7,008) | $ 4,011 | $ 0 |
Foreign currency contracts | Interest expense, net | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of gain or (loss) recognized in income | (3,875) | (549) | 0 |
Interest rate contracts | Interest expense, net | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of gain or (loss) recognized in income | $ (492) | $ 2,082 | $ 0 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Reclassifications Out of AOCI) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Other | $ (364) | $ (316) | $ (2,790) |
Income tax expense/(benefit) | 19,680 | 13,763 | (10,852) |
Net income | 97,679 | $ 75,734 | $ 171,125 |
Cash Flow Hedges | Reclassification out of Accumulated Other Comprehensive Income | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Other | (1,457) | ||
Income tax expense/(benefit) | 278 | ||
Net income | $ (1,179) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Loss (Changes in Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | $ 1,123,969 | $ 1,140,717 | $ 918,321 |
Reclassification of unrealized loss on debt securities | (22) | ||
Other comprehensive (loss)/income before reclassifications, net | (20,088) | (63,480) | 73,337 |
Reclassifications, net | 1,179 | 0 | 0 |
Other comprehensive income/(loss) attributable to PRA Group, Inc. | (18,909) | (63,502) | 73,337 |
Ending balance | 1,227,013 | 1,123,969 | 1,140,717 |
Debt Securities Available-for-Sale | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | (83) | 0 | 0 |
Reclassification of unrealized loss on debt securities | (22) | ||
Other comprehensive (loss)/income before reclassifications, net | 39 | (61) | 0 |
Reclassifications, net | 0 | 0 | 0 |
Other comprehensive income/(loss) attributable to PRA Group, Inc. | 39 | (83) | 0 |
Ending balance | (44) | (83) | 0 |
Deferred taxes | 4,400 | ||
Cash Flow Hedges | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | 44 | 0 | 0 |
Reclassification of unrealized loss on debt securities | 0 | ||
Other comprehensive (loss)/income before reclassifications, net | (14,311) | 44 | 0 |
Reclassifications, net | 1,179 | 0 | 0 |
Other comprehensive income/(loss) attributable to PRA Group, Inc. | (13,132) | 44 | 0 |
Ending balance | (13,088) | 44 | 0 |
Currency Translation Adjustments | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | (242,070) | (178,607) | (251,944) |
Reclassification of unrealized loss on debt securities | 0 | ||
Other comprehensive (loss)/income before reclassifications, net | (5,816) | (63,463) | 73,337 |
Reclassifications, net | 0 | 0 | 0 |
Other comprehensive income/(loss) attributable to PRA Group, Inc. | (5,816) | (63,463) | 73,337 |
Ending balance | (247,886) | (242,070) | (178,607) |
Accumulated Other Comprehensive (Loss) | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | (242,109) | (178,607) | (251,944) |
Ending balance | $ (261,018) | $ (242,109) | $ (178,607) |
Share-Based Compensation (Narra
Share-Based Compensation (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum number of shares authorized | 5,400,000 | ||
Total share-based compensation expense | $ 10.7 | $ 8.5 | $ 8.7 |
Total tax benefit realized from share-based compensation | 1.2 | 1.7 | 3.2 |
Grant date fair value of shares vested | 5.8 | 5.3 | 6.5 |
Long-Term Incentive Programs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Future compensation cost related to stock option | $ 4.5 | ||
Weighted average remaining life of nonvested shares (in years) | 1 year 2 months 12 days | ||
Grant date fair value of shares vested | $ 0 | $ 1 | $ 2.1 |
Forfeiture rate for share awards granted under LTI Programs (as a percent) | 15.00% | ||
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options issued under the amended plan vesting period (in years) | 1 year | ||
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options issued under the amended plan vesting period (in years) | 3 years | ||
Nonvested Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Future compensation cost related to stock option | $ 8.6 | ||
Weighted average remaining life of nonvested shares (in years) | 1 year 7 months 6 days | ||
Nonvested Awards | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options issued under the amended plan vesting period (in years) | 1 year | ||
Nonvested Awards | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options issued under the amended plan vesting period (in years) | 3 years |
Share-Based Compensation (Nonve
Share-Based Compensation (Nonvested Share Transactions) (Details) - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Nonvested Shares Outstanding | |||
Beginning balance, shares | 379 | 298 | 303 |
Granted, shares | 329 | 254 | 195 |
Vested, shares | (167) | (151) | (173) |
Cancelled, shares | (9) | (22) | (27) |
Ending balance, shares | 532 | 379 | 298 |
Weighted-Average Price at Grant Date | |||
Beginning balance (usd per share) | $ 34.85 | $ 35.25 | $ 38.19 |
Granted (usd per share) | 28.47 | 36.39 | 33.70 |
Vested (usd per share) | 34.81 | 35.13 | 37.49 |
Cancelled (usd per share) | 31.01 | 35.02 | 43.05 |
Ending balance (usd per share) | $ 30.97 | $ 34.85 | $ 35.25 |
Long-Term Incentive Programs | |||
Nonvested Shares Outstanding | |||
Beginning balance, shares | 454 | 472 | 425 |
Granted, shares | 168 | 121 | 192 |
Adjustments for actual performance, shares | (172) | (74) | 5 |
Vested, shares | 0 | (19) | (51) |
Cancelled, shares | (3) | (46) | (99) |
Ending balance, shares | 447 | 454 | 472 |
Weighted-Average Price at Grant Date | |||
Beginning balance (usd per share) | $ 33.27 | $ 41.06 | $ 39.57 |
Granted (usd per share) | 28.28 | 39.40 | 33.50 |
Adjustments for actual performance (usd per share) | 28.98 | 52.47 | 60 |
Vested (usd per share) | 0 | 52.47 | 40.80 |
Cancelled (usd per share) | 35.87 | 32.31 | 20.91 |
Ending balance (usd per share) | $ 33.03 | $ 33.27 | $ 41.06 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |||
Net Income Attributable to PRA Group, Inc. | $ 86,158 | $ 65,563 | $ 164,315 |
Weighted Average Common Shares, Basic EPS | 45,387,000 | 45,280,000 | 45,671,000 |
Weighted Average Common Shares, Dilutive effect of nonvested share awards | 190,000 | 133,000 | 152,000 |
Weighted Average Common Shares, Diluted EPS | 45,577,000 | 45,413,000 | 45,823,000 |
Basic EPS (usd per share) | $ 1.90 | $ 1.45 | $ 3.60 |
Dilutive effect of nonvested share awards (usd per share) | (0.01) | (0.01) | (0.01) |
Diluted EPS (usd per share) | $ 1.89 | $ 1.44 | $ 3.59 |
Antidilutive options outstanding (in shares) | 0 | 0 | 0 |
Income Taxes (Summary of Income
Income Taxes (Summary of Income Tax Expense Recognized) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Current tax expense, Federal | $ 41,391 | $ 23,444 | $ 77,656 |
Current tax expense, State | 6,390 | 9,026 | 16,543 |
Current foreign tax expense | 9,460 | 37,501 | 25,087 |
Current tax expense, Total | 57,241 | 69,971 | 119,286 |
Deferred tax (benefit)/expense, Federal | (27,311) | (19,527) | (112,118) |
Deferred tax expense/(benefit), State | (6,030) | (15,268) | (2,051) |
Deferred Foreign Income Tax (benefit)/Expense | (4,220) | (21,413) | (15,969) |
Deferred tax (benefit)/expense, Total | (37,561) | (56,208) | (130,138) |
Total income tax expense, Federal | 14,080 | 3,917 | (34,462) |
Total income tax expense, State | 360 | (6,242) | 14,492 |
Foreign Income Tax Expense, Continuing Operations | 5,240 | 16,088 | 9,118 |
Total income tax expense/(benefit) | $ 19,680 | $ 13,763 | $ (10,852) |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes [Line Items] | |||
Federal corporate tax rate | 21.00% | 35.00% | |
Net deferred tax liability | $ 22,165 | $ 53,526 | |
Valuation allowance | 80,739 | 14,512 | |
Unremitted earnings of foreign subsidiaries | 52,300 | ||
Foreign Tax Authority | |||
Income Taxes [Line Items] | |||
Operating loss carryforward, foreign subsidiaries | 401,500 | 116,800 | |
Valuation allowance of operating loss carryforwards, foreign subsidiaries | $ 283,700 | $ 45,800 | |
Minimum | Foreign Tax Authority | |||
Income Taxes [Line Items] | |||
Operating loss carryforward, carryforward period | 7 years | ||
Maximum | Foreign Tax Authority | |||
Income Taxes [Line Items] | |||
Operating loss carryforward, carryforward period | 20 years |
Income Taxes (Schedule of Recon
Income Taxes (Schedule of Reconciliation of Expected Tax Expense At Statutory Tax Rates to Actual Tax Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Income tax expense at statutory federal rates | $ 24,645 | $ 18,794 | $ 56,095 |
State tax expense/(benefit), net of federal tax benefit | 161 | (5,098) | 9,072 |
Tax impact on international earnings | (7,326) | 206 | (4,953) |
Federal rate change | 0 | (719) | (73,779) |
Other | 2,200 | 580 | 2,713 |
Total income tax expense/(benefit) | $ 19,680 | $ 13,763 | $ (10,852) |
Income Taxes (Summary of Compon
Income Taxes (Summary of Components of Net Deferred Tax Liability) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Employee compensation | $ 6,085 | $ 4,670 |
Net operating loss carryforward | 93,068 | 24,210 |
Accrued liabilities | 0 | 1,850 |
Interest | 10,477 | 10,559 |
Finance receivable revenue recognition - international | 21,343 | 37,005 |
Right of use asset | 16,045 | |
Other | 12,009 | 2,721 |
Valuation allowance | (80,739) | (14,512) |
Total deferred tax asset | 78,288 | 66,503 |
Deferred tax liabilities: | ||
Property and Equipment | (5,362) | (5,556) |
Intangible assets and goodwill | (2,999) | (5,435) |
Lease liability | (15,107) | |
Convertible debt | (7,843) | (10,998) |
Finance receivable revenue recognition - IRS settlement | (36,959) | (74,296) |
Finance receivable revenue recognition - domestic | (32,183) | (23,744) |
Total deferred tax liability | (100,453) | (120,029) |
Total deferred tax liability | $ (22,165) | $ (53,526) |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Future compensation under employment agreements | $ 8,000 |
Total future minimum lease payments | 95,373 |
Amount to be purchased under forward flow agreements | 506,900 |
Potential recoveries | $ 1,000 |
Retirement Plans (Details)
Retirement Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Defined Contribution Plan [Abstract] | |||
Minimum eligible age to make voluntary contributions | 18 years | ||
Employee contribution, percentage of employee's compensation | 100.00% | ||
Employer contribution, percentage of employee's compensation | 4.00% | ||
Total compensation expense related to contribution plan | $ 5.9 | $ 6.3 | $ 5.2 |
Redeemable Noncontrolling Int_2
Redeemable Noncontrolling Interest (Details) - Polish Investment Fund | Dec. 31, 2019 | Dec. 31, 2017 |
Noncontrolling Interest [Line Items] | ||
Redeemable noncontrolling interest, percent redeemed | 100.00% | |
DTP S.A. | ||
Noncontrolling Interest [Line Items] | ||
Percentage of voting interests acquired | 20.00% |
Sale of Subsidiaries (Details)
Sale of Subsidiaries (Details) - USD ($) $ in Thousands | Dec. 20, 2018 | Mar. 31, 2019 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Gain on sale of subsidiaries | $ 0 | $ 26,575 | $ 48,474 | ||||
RCB Investimentos S.A. | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Ownership interest prior to disposal | 79.00% | ||||||
Proceeds from divestiture of businesses | $ 40,000 | ||||||
Gain on sale of subsidiaries | 26,600 | ||||||
Gain on retained interest | $ 5,400 | ||||||
Retained interest | 11.70% | ||||||
Percent of proceeds received | 25.00% | 75.00% | |||||
Government Services Businesses | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Proceeds from divestiture of businesses | $ 91,500 | ||||||
Gain on sale of subsidiaries | $ 46,800 | ||||||
PLS Business | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Proceeds from divestiture of businesses | $ 4,500 | ||||||
Gain on sale of subsidiaries | $ 1,600 |
Uncategorized Items - newpraa-2
Label | Element | Value |
Restricted Cash | us-gaap_RestrictedCash | $ 4,033,000 |
Restricted Cash | us-gaap_RestrictedCash | 0 |
Restricted Cash | us-gaap_RestrictedCash | $ 0 |