Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 31, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | ECPG | |
Entity Registrant Name | ENCORE CAPITAL GROUP INC | |
Entity Central Index Key | 1,084,961 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Emerging Growth Company | false | |
Small Business | false | |
Entity Common Stock, Shares Outstanding | 30,852,178 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Financial Condition - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and cash equivalents | $ 204,649 | $ 212,139 |
Investment in receivable portfolios, net | 3,109,116 | 2,890,613 |
Deferred court costs, net | 94,017 | 79,963 |
Property and equipment, net | 96,429 | 76,276 |
Other assets | 244,602 | 302,728 |
Goodwill | 898,591 | 928,993 |
Total assets | 4,647,404 | 4,490,712 |
Liabilities: | ||
Accounts payable and accrued liabilities | 274,213 | 284,774 |
Debt, net | 3,561,467 | 3,446,876 |
Other liabilities | 33,279 | 35,151 |
Total liabilities | 3,868,959 | 3,766,801 |
Commitments and contingencies | ||
Redeemable noncontrolling interest | 1,231 | 151,978 |
Equity: | ||
Convertible preferred stock, $.01 par value, 5,000 shares authorized, no shares issued and outstanding | 0 | 0 |
Common stock, $.01 par value, 50,000 shares authorized, 30,852 shares and 25,801 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively | 309 | 258 |
Additional paid-in capital | 207,985 | 42,646 |
Accumulated earnings | 673,153 | 616,314 |
Accumulated other comprehensive loss | (103,394) | (77,356) |
Total Encore Capital Group, Inc. stockholders’ equity | 778,053 | 581,862 |
Noncontrolling interest | (839) | (9,929) |
Total equity | 777,214 | 571,933 |
Total liabilities, redeemable equity and equity | 4,647,404 | 4,490,712 |
Variable Interest Entities | ||
Assets | ||
Cash and cash equivalents | 471 | 88,902 |
Investment in receivable portfolios, net | 444,503 | 1,342,300 |
Deferred court costs, net | 0 | 26,482 |
Property and equipment, net | 0 | 23,138 |
Other assets | 8,212 | 122,263 |
Goodwill | 0 | 724,054 |
Liabilities: | ||
Accounts payable and accrued liabilities | 3,514 | 151,208 |
Debt, net | 390,690 | 2,014,202 |
Other liabilities | $ 0 | $ 1,494 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Financial Condition (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Convertible preferred stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Convertible preferred stock authorized (shares) | 5,000,000 | 5,000,000 |
Convertible preferred stock issued (shares) | 0 | 0 |
Convertible preferred stock outstanding (shares) | 0 | 0 |
Common stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Common stock authorized (shares) | 50,000,000 | 50,000,000 |
Common stock issued (shares) | 30,852,000 | 25,801,000 |
Common stock outstanding (shares) | 30,852,000 | 25,801,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues | ||||
Revenue from receivable portfolios | $ 295,357 | $ 264,024 | $ 869,028 | $ 777,269 |
Other revenues | 37,388 | 23,111 | 112,809 | 61,763 |
Total revenues | 332,745 | 287,135 | 981,837 | 839,032 |
Allowance reversals on receivable portfolios, net | 4,029 | 19,564 | 31,472 | 30,525 |
Total revenues, adjusted by net allowances | 336,774 | 306,699 | 1,013,309 | 869,557 |
Operating expenses | ||||
Salaries and employee benefits | 95,634 | 77,232 | 275,853 | 221,296 |
Cost of legal collections | 50,473 | 48,094 | 155,583 | 149,460 |
Other operating expenses | 30,691 | 25,859 | 103,478 | 76,249 |
Collection agency commissions | 10,682 | 10,622 | 34,587 | 33,678 |
General and administrative expenses | 41,893 | 32,500 | 123,163 | 102,750 |
Depreciation and amortization | 9,873 | 8,522 | 31,232 | 25,819 |
Total operating expenses | 239,246 | 202,829 | 723,896 | 609,252 |
Income from operations | 97,528 | 103,870 | 289,413 | 260,305 |
Other (expense) income | ||||
Interest expense | (65,094) | (52,755) | (183,092) | (152,469) |
Other (expense) income | (2,539) | 8,873 | (4,961) | 12,004 |
Total other expense | (67,633) | (43,882) | (188,053) | (140,465) |
Income from continuing operations before income taxes | 29,895 | 59,988 | 101,360 | 119,840 |
Provision for income taxes | (16,879) | (17,844) | (37,657) | (43,442) |
Income from continuing operations | 13,016 | 42,144 | 63,703 | 76,398 |
Loss from discontinued operations, net of tax | 0 | 0 | 0 | (199) |
Net income | 13,016 | 42,144 | 63,703 | 76,199 |
Net loss (income) attributable to noncontrolling interest | 7,709 | (13,950) | 5,147 | (5,652) |
Net income | 20,725 | 28,194 | 68,850 | 70,547 |
Amounts attributable to Encore Capital Group, Inc.: | ||||
Income from continuing operations | 20,725 | 28,194 | 68,850 | 70,746 |
Loss from discontinued operations, net of tax | 0 | 0 | 0 | (199) |
Net income | $ 20,725 | $ 28,194 | $ 68,850 | $ 70,547 |
Basic earnings (loss) per share from: | ||||
Continuing operations (USD per share) | $ 0.69 | $ 1.08 | $ 2.52 | $ 2.73 |
Discontinued operations (USD per share) | 0 | 0 | 0 | (0.01) |
Net basic earnings per share (USD per share) | 0.69 | 1.08 | 2.52 | 2.72 |
Diluted earnings (loss) per share from: | ||||
Continuing operations (USD per share) | 0.69 | 1.05 | 2.49 | 2.68 |
Discontinued operations (USD per share) | 0 | 0 | 0 | (0.01) |
Net diluted earnings per share (USD per share) | $ 0.69 | $ 1.05 | $ 2.49 | $ 2.67 |
Weighted average shares outstanding: | ||||
Basic (shares) | 29,867 | 26,011 | 27,372 | 25,957 |
Diluted (shares) | 30,121 | 26,736 | 27,663 | 26,406 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 13,016 | $ 42,144 | $ 63,703 | $ 76,199 |
Change in unrealized gains/losses on derivative instruments: | ||||
Unrealized (loss) gain on derivative instruments | (1,152) | (264) | (3,306) | 1,170 |
Income tax effect | 284 | 103 | 823 | (409) |
Unrealized (loss) gain on derivative instruments, net of tax | (868) | (161) | (2,483) | 761 |
Change in foreign currency translation: | ||||
Unrealized (loss) gain on foreign currency translation | (6,919) | 9,712 | (23,436) | 32,000 |
Other comprehensive (loss) income, net of tax | (7,787) | 9,551 | (25,919) | 32,761 |
Comprehensive income | 5,229 | 51,695 | 37,784 | 108,960 |
Comprehensive (income) loss attributable to noncontrolling interest: | ||||
Net loss (income) | 7,709 | (13,950) | 5,147 | (5,652) |
Unrealized loss (gain) on foreign currency translation | 1,293 | (594) | (119) | (2,003) |
Comprehensive loss (income) attributable to noncontrolling interest | 9,002 | (14,544) | 5,028 | (7,655) |
Comprehensive income attributable to Encore Capital Group, Inc. stockholders | $ 14,231 | $ 37,151 | $ 42,812 | $ 101,305 |
Condensed Consolidated Statem_5
Condensed Consolidated Statement of Equity - 9 months ended Sep. 30, 2018 - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Earnings | Accumulated Other Comprehensive Loss | Noncontrolling Interest |
Balance at beginning of period (shares) at Dec. 31, 2017 | 25,801 | |||||
Balance at beginning of period at Dec. 31, 2017 | $ 571,933 | $ 258 | $ 42,646 | $ 616,314 | $ (77,356) | $ (9,929) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 67,881 | 68,850 | (969) | |||
Other comprehensive (loss) gain, net of tax | (25,605) | (26,038) | 433 | |||
Change in fair value of redeemable noncontrolling interest | 7,419 | 19,430 | (12,011) | |||
Purchase of noncontrolling interest | 9,626 | 9,626 | ||||
Exercise of stock options and issuance of share-based awards, net of shares withheld for employee taxes (shares) | 132 | |||||
Exercise of stock options and issuance of share-based awards, net of shares withheld for employee taxes | (1,932) | $ 2 | (1,934) | |||
Issuance of common stock (shares) | 4,920 | |||||
Issuance of common stock | 181,187 | $ 49 | 181,138 | |||
Stock-based compensation | 10,452 | 10,452 | ||||
Issuance of exchangeable notes | 14,009 | 14,009 | ||||
Exchangeable notes hedge transactions | (17,785) | (17,785) | ||||
Net equity adjustment on Cabot Transaction | (43,097) | (43,097) | ||||
Other | 3,126 | 3,126 | ||||
Balance at end of period (shares) at Sep. 30, 2018 | 30,853 | |||||
Balance at end of period at Sep. 30, 2018 | $ 777,214 | $ 309 | $ 207,985 | $ 673,153 | $ (103,394) | $ (839) |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Operating activities: | ||
Net income | $ 63,703 | $ 76,199 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Loss from discontinued operations, net of income taxes | 0 | 199 |
Depreciation and amortization | 31,232 | 25,819 |
Other non-cash expense, net | 30,453 | 24,768 |
Stock-based compensation expense | 10,452 | 7,041 |
Loss (gain) on derivative instruments, net | 10,648 | (2,714) |
Deferred income taxes | 18,733 | (5,396) |
Allowance reversals on receivable portfolios, net | (31,472) | (30,525) |
Other, net | (9,690) | 330 |
Changes in operating assets and liabilities | ||
Deferred court costs and other assets | (19,537) | (20,094) |
Prepaid income tax and income taxes payable | 21,419 | 15,565 |
Accounts payable, accrued liabilities and other liabilities | (5,919) | (9,501) |
Net cash provided by operating activities | 120,022 | 81,691 |
Investing activities: | ||
Cash paid for acquisitions, net of cash acquired | 0 | (5,623) |
Purchases of receivable portfolios, net of put-backs | (881,789) | (739,478) |
Collections applied to investment in receivable portfolios, net | 615,010 | 549,544 |
Purchases of property and equipment | (37,436) | (20,518) |
(Payment) proceeds from derivative instruments, net | (28,656) | 6,140 |
Other, net | 6,800 | 2,155 |
Net cash used in investing activities | (326,071) | (207,780) |
Financing activities: | ||
Payment of loan costs | (6,440) | (19,910) |
Proceeds from credit facilities | 766,471 | 928,141 |
Repayment of credit facilities | (465,666) | (972,453) |
Proceeds from senior secured notes | 0 | 325,000 |
Repayment of senior secured notes | (1,029) | (203,212) |
Proceeds from issuance of convertible senior notes | 172,500 | 150,000 |
Repayment of convertible senior notes | 0 | (60,406) |
Proceeds from convertible hedge instruments | 0 | 5,580 |
Proceeds from other debt | 9,090 | 8,318 |
Repayment of other debt | (23,450) | (4,309) |
Payment for the purchase of PECs and noncontrolling interest | (234,101) | 0 |
Payment of direct and incremental costs relating to Cabot Transaction | (8,622) | 0 |
Other, net | (3,826) | (1,440) |
Net cash provided by financing activities | 204,927 | 155,309 |
Net (decrease) increase in cash and cash equivalents | (1,122) | 29,220 |
Effect of exchange rate changes on cash and cash equivalents | (6,368) | 9,261 |
Cash and cash equivalents, beginning of period | 212,139 | 149,765 |
Cash and cash equivalents, end of period | $ 204,649 | $ 188,246 |
Ownership, Description of Busin
Ownership, Description of Business, and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Ownership, Description of Business, and Summary of Significant Accounting Policies | Ownership, Description of Business, and Summary of Significant Accounting Policies Encore Capital Group, Inc. (“Encore”), through its subsidiaries (collectively with Encore, the “Company”), is an international specialty finance company providing debt recovery solutions and other related services for consumers across a broad range of financial assets. The Company purchases portfolios of defaulted consumer receivables at deep discounts to face value and manages them by working with individuals as they repay their obligations and work toward financial recovery. Defaulted receivables are consumers’ unpaid financial commitments to credit originators, including banks, credit unions, consumer finance companies, commercial retailers, and telecommunication companies. Defaulted receivables may also include receivables subject to bankruptcy proceedings. Encore’s subsidiary Midland Credit Management (together with its subsidiaries and domestic affiliates, “Midland”) is a market leader in portfolio purchasing and recovery in the United States, including Puerto Rico. Cabot Credit Management plc (together with its subsidiaries, “Cabot”), Encore’s largest international subsidiary, is one of the largest credit management services providers in Europe and is a market leader in the United Kingdom and Ireland. Previously, Encore controlled Cabot via its majority ownership interest in the indirect holding company of Cabot, Janus Holdings S.a r.l. (“Janus Holdings”). On July 24, 2018, the Company completed the purchase of all the outstanding interests of Cabot not owned by the Company. As a result, Cabot became a wholly owned subsidiary of Encore. These are the Company’s primary operations. Financial Statement Preparation and Presentation The accompanying interim condensed consolidated financial statements have been prepared by the Company, without audit, in accordance with the instructions to the Quarterly Report on Form 10-Q, and Rule 10-01 of Regulation S-X promulgated by the United States Securities and Exchange Commission (the “SEC”) and, therefore, do not include all information and footnotes necessary for a fair presentation of its consolidated financial position, results of operations and cash flows in accordance with accounting principles generally accepted in the United States (“GAAP”). In the opinion of management, the unaudited financial information for the interim periods presented reflects all adjustments, consisting of only normal and recurring adjustments, necessary for a fair presentation of the Company’s consolidated financial position, results of operations, and cash flows. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 . Operating results for interim periods are not necessarily indicative of operating results for an entire fiscal year. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in the Company’s financial statements and the accompanying notes. Actual results could materially differ from those estimates. Basis of Consolidation The condensed consolidated financial statements have been prepared in conformity with GAAP and reflect the accounts and operations of the Company and those of its subsidiaries in which the Company has a controlling financial interest. The Company also consolidates variable interest entities (“ VIE”s), for which it is the primary beneficiary. The primary beneficiary has both (a) the power to direct the activities of the VIE that most significantly affect the entity’s economic performance, and (b) either the obligation to absorb losses or the right to receive benefits. Refer to Note 10 , “Variable Interest Entities,” for further details. All intercompany transactions and balances have been eliminated in consolidation. Translation of Foreign Currencies The financial statements of certain of the Company’s foreign subsidiaries are measured using their local currency as the functional currency. Assets and liabilities of foreign operations are translated into U.S. dollars using period-end exchange rates, and revenues and expenses are translated into U.S. dollars using average exchange rates in effect during each period. The resulting translation adjustments are recorded as a component of other comprehensive income or loss. Equity accounts are translated at historical rates, except for the change in retained earnings during the year which is the result of the income statement translation process. Intercompany transaction gains or losses at each period end arising from subsequent measurement of balances for which settlement is not planned or anticipated in the foreseeable future are included as translation adjustments and recorded within other comprehensive income or loss. Translation gains or losses are the material components of accumulated other comprehensive income or loss. Transaction gains and losses are included in other income or expense. Reclassifications Certain immaterial reclassifications have been made to the condensed consolidated financial statements to conform to the current year’s presentation. Change in Accounting Principle In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (“Topic 606” or “ASU 2014-09”). The objective of ASU 2014-09 is to establish a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASU 2014-09 supersedes most of the existing revenue recognition guidance, including industry-specific guidance. The core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 applies to all contracts with customers except those that are within the scope of other topics in the FASB’s Accounting Standards Codification (“ASC”). Under the prior accounting standard, the Company recognized revenue when there was persuasive evidence of an arrangement, the sales price was fixed or determinable, the services had been performed and collectability was reasonably assured. The Company’s investment in receivable portfolios is outside of the scope of Topic 606 since it is accounted for in accordance with ASC 310-30. Certain of the Company’s international subsidiaries earn fee-based income by providing portfolio management services to credit originators for non-performing loans. Performance obligations for this revenue stream under the new standard primarily arise from debt collection and management activities. These performance obligations are typically satisfied when services are performed, or debt is collected. Consideration is typically variable based on indeterminate volumes or collection activity. Under the new accounting standard, revenue is recognized over time as a series of single performance obligations when the Company is entitled to a percentage of collections received, since the customer simultaneously receives and consumes the benefits provided by the Company’s performance of debt collection and management. The method for measuring progress towards satisfying a performance obligation is based on transaction volumes or debt collected, depending on whether the contract is based on services performed or based on commissions. Costs to fulfill a contract are expensed when incurred. The Company adopted the requirements of Topic 606 as of January 1, 2018, utilizing the modified retrospective method of transition and elected to apply the revenue standard only to contracts that were not completed as of the adoption date. Prior periods were not restated. The cumulative effect of adopting this new standard had no impact to retained earnings. The impact of adopting Topic 606 on the Company’s revenue is not material to any of the periods presented. Fee-based income is included in “Other Revenues” in the Company’s consolidated statements of operations. In August 2017, the FASB issued ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities — Derivatives and He dging (“Topic 815” or “ASU 2017-12”) which amends the hedge accounting recognition and presentation requirements in ASC 815. ASU 2017-12 improves Topic 815 by simplifying and expanding the eligible hedging strategies for financial and nonfinancial risks by more closely aligning hedge accounting with a company’s risk management activities, and also simplifies its application through targeted improvements in key practice areas. This includes expanding the list of items eligible to be hedged and amending the methods used to measure the effectiveness of hedging relationships. In addition, ASU 2017-12 prescribes how hedging results should be presented and requires incremental disclosures. These changes are intended to allow preparers more flexibility and to enhance the transparency of how hedging results are presented and disclosed. Further, the new standard provides partial relief on the timing of certain aspects of hedge documentation and eliminates the requirement to recognize hedge ineffectiveness separately in earnings in the current period. For public entities, ASU 2017-12 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted in any interim period or fiscal year. The Company early adopted ASU 2017-12 as of the second quarter of 2018 retroactive to January 1, 2018. The adoption of the new standard did not have a material effect on the Company’s financial position, results of operations, or required presentations. Recent Accounting Pronouncements Other than the adoption of the standards discussed above, there have been no new accounting pronouncements made effective during the three and nine months ended September 30, 2018 that have significance, or potential significance, to the Company’s consolidated financial statements. Recent Accounting Pronouncements Not Yet Effective In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350). The amendments in this update simplify the test for goodwill impairment by eliminating Step 2 from the impairment test, which required the entity to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities following the procedure that would be required in determining fair value of assets acquired and liabilities assumed in a business combination. The amendments in this update are effective for public companies for annual or any interim goodwill impairments tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company did not early adopt this guidance for its annual goodwill impairment testing and does not expect the adoption of ASU 2017-04 to have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 applies a current expected credit loss model which is a new impairment model based on expected losses rather than incurred losses. Under this model, an entity would recognize an impairment allowance equal to its current estimate of all contractual cash flows that the entity does not expect to collect from financial assets measured at amortized cost. The estimate of expected credit losses should consider historical information, current information, as well as reasonable and supportable forecasts, including estimates of prepayments. The expected credit losses, and subsequent adjustments to such losses, will be recorded through an allowance account that is deducted from the amortized cost basis of the financial asset, with the net carrying value of the financial asset presented on the consolidated balance sheet at the amount expected to be collected. ASU 2016-13 eliminates the current accounting model for loans and debt securities acquired with deteriorated credit quality under ASC 310-30, which provides authoritative guidance for the accounting of the Company’s investment in receivable portfolios. Under this new standard, entities will gross up the initial amortized cost for the purchased financial assets with credit deterioration (“PCD assets”), the initial amortized cost will be the sum of (1) the purchase price and (2) the estimate of credit losses as of the date of acquisition. After initial recognition of PCD assets and the related allowance, any change in estimated cash flows (favorable or unfavorable) will be immediately recognized in the income statement because the yield on PCD assets would be locked. ASU 2016-13 is effective for reporting periods beginning after December 15, 2019 with early adoption permitted for reporting periods beginning after December 15, 2018. The guidance will be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period in which ASU 2016-13 is adopted. However, the FASB has determined that financial assets for which the guidance in Subtopic 310-30, Receivables-Loans and Debt Securities Acquired with Deteriorated Credit Quality, has previously been applied should prospectively apply the guidance in ASU 2016-13 for PCD assets. A prospective transition approach should be used for PCD assets where upon adoption, the amortized cost basis should be adjusted to reflect the addition of the allowance for credit losses. This transition relief will avoid the need for a reporting entity to reassess its purchased financial assets that exist as of the date of adoption to determine whether they would have met at acquisition the new criteria of more-than insignificant credit deterioration since origination. The transition relief also will allow an entity to accrete the remaining noncredit discount (based on the revised amortized cost basis) into interest income at the effective interest rate at the adoption date of ASU 2016-13. The same transition requirements should be applied to beneficial interests that previously applied Subtopic 310-30 or have a significant difference between contractual cash flows and expected cash flows. The Company is in the process of determining the effects the adoption of ASU 2016-13 will have on its consolidated financial statements. The Company expects ASU 2016-13 could have a significant impact on how it measures and records income recognized on its receivable portfolios. The Company has established a project management team and is in the process of developing its accounting policy, evaluating the impact of this pronouncement and researching software resources that could assist with the implementation. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 changes accounting for leases and requires lessees to recognize the assets and liabilities arising from most leases, including those classified as operating leases under previous accounting guidance, on the balance sheet and requires disclosure of key information about leasing arrangements to increase transparency and comparability among organizations. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, which provides narrow amendments to clarify how to apply certain aspects of the new lease standard. In July 2018, ASU 2018-11, Leases: Targeted Improvements, was issued to provide relief to companies from restating comparative periods. Pursuant to ASU 2018-11, in the period of adoption, the Company will not restate comparative periods presented in its financial statements. The new guidance will be effective for the Company starting in the first quarter of fiscal year 2019. Early adoption is permitted; however, the Company does not intend to early adopt. The Company is developing an inventory of all leases, accumulating the lease data necessary to apply the amended guidance and is in the process of determining the effects the adoption will have on its consolidated financial statements, systems and processes. The Company has selected a software to assist with implementation to the standard. With the exception of the updated standards discussed above, there have been no new accounting pronouncements not yet effective that have significance, or potential significance, to the Company’s consolidated financial statements. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings or loss per share is calculated by dividing net earnings or loss attributable to Encore by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is calculated based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding stock options, restricted stock, and the dilutive effect of the convertible senior notes, if applicable. A reconciliation of shares used in calculating earnings per basic and diluted shares follows (in thousands) : Three Months Ended Nine Months Ended 2018 2017 2018 2017 Weighted average common shares outstanding—basic 29,867 26,011 27,372 25,957 Dilutive effect of stock-based awards 254 271 291 214 Dilutive effect of convertible senior notes — 454 — 235 Weighted average common shares outstanding—diluted 30,121 26,736 27,663 26,406 Anti-dilutive employee stock options outstanding were approximately 13,000 during each of the three and nine months ended September 30, 2018 . Anti-dilutive employee stock options outstanding were approximately 13,000 and 138,000 during the three and nine months ended September 30, 2017 , respectively. |
Cabot Transaction
Cabot Transaction | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Cabot Transaction | Cabot Transaction On July 24, 2018, the Company completed the purchase of all the outstanding interests of Cabot not owned by the Company (the “Cabot Transaction”). As a result, Cabot became a wholly owned subsidiary of Encore. The acquisition of the remaining interest was accounted for as an equity transaction and no gain or loss was recognized in the Company’s consolidated statements of operations but was reflected as a component of additional paid-in capital in the consolidated statement of equity. Additionally, in accordance with authoritative guidance and the Company’s policy, the direct and incremental costs associated with the Cabot Transaction were accounted for as part of the equity transaction. Total consideration transferred was approximately $414.7 million, which consisted of cash of $234.1 million and the equivalent of $180.6 million of Encore common stock based on the last reported sale price of Encore common stock per share of $36.80 on July 24, 2018. (in thousands) Cash consideration $ 234,101 Stock consideration 180,559 Total consideration transferred 414,660 Less: Preferred equity certificates acquired (262,512 ) Consideration transferred to acquire remaining equity interest 152,148 Less: Carrying value of redeemable noncontrolling interest (127,299 ) Less: Carrying value of noncontrolling interest 9,626 Net loss directly recorded in equity 34,475 Direct and incremental transaction costs 8,622 Total reduction in additional paid-in capital $ 43,097 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The authoritative guidance for fair value measurements defines fair value as the price that would be received upon sale of an asset or the price paid to transfer a liability, in an orderly transaction between market participants at the measurement date ( i.e., the “exit price”). The guidance utilizes a fair value hierarchy that prioritizes the inputs used in valuation techniques to measure fair value into three broad levels. The following is a brief description of each level: • Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. • Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. • Level 3: Unobservable inputs, including inputs that reflect the reporting entity’s own assumptions. Financial Instruments Required To Be Carried At Fair Value Financial assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands) : Fair Value Measurements as of Level 1 Level 2 Level 3 Total Assets Interest rate swap agreements $ — $ 5 $ — $ 5 Interest rate cap contracts — 2,445 — 2,445 Liabilities Foreign currency exchange contracts — (1,408 ) — (1,408 ) Contingent consideration — — (7,417 ) (7,417 ) Temporary Equity Redeemable noncontrolling interest — — (1,231 ) (1,231 ) Fair Value Measurements as of Level 1 Level 2 Level 3 Total Assets Foreign currency exchange contracts $ — $ 1,912 $ — $ 1,912 Interest rate cap contracts — 3,922 — 3,922 Liabilities Foreign currency exchange contracts — (1,110 ) — (1,110 ) Interest rate swap agreements — (7 ) — (7 ) Contingent consideration — — (10,612 ) (10,612 ) Temporary Equity Redeemable noncontrolling interest — — (151,978 ) (151,978 ) Derivative Contracts: The Company uses derivative instruments to manage its exposure to fluctuations in interest rates and foreign currency exchange rates. Fair values of these derivative instruments are estimated using industry standard valuation models. These models project future cash flows and discount the future amounts to a present value using market-based observable inputs, including interest rate curves, foreign currency exchange rates, and forward and spot prices for currencies. Contingent Consideration: The Company carries certain contingent liabilities resulting from its mergers and acquisition activities. Certain sellers of the Company’s acquired entities could earn additional earn-out payments in cash based on the entities’ subsequent operating performance. The Company recorded the acquisition date fair values of these contingent liabilities, based on the likelihood of contingent earn-out payments, as part of the consideration transferred. The earn-out payments are subsequently remeasured to fair value at each reporting date. The Company reviewed the earn-out analysis during the three and nine months ended September 30, 2018 and determined that, based on actual and forecasted operating performance, the expected future earn-out payments would remain the same and be reduced by approximately $4.7 million , respectively. As of September 30, 2018 , the aggregated fair value of the contingent consideration was approximately $7.4 million . The following table provides a roll forward of the fair value of contingent consideration for the periods ended September 30, 2018 and December 31, 2017 (in thousands) : Amount Balance at December 31, 2016 $ 2,531 Issuance of contingent consideration in connection with acquisition 10,808 Change in fair value of contingent consideration (2,465 ) Payment of contingent consideration (781 ) Effect of foreign currency translation 519 Balance at December 31, 2017 10,612 Issuance of contingent consideration in connection with acquisition 1,728 Change in fair value of contingent consideration (4,652 ) Payment of contingent consideration (232 ) Effect of foreign currency translation (39 ) Balance at September 30, 2018 $ 7,417 Redeemable Noncontrolling Interest: Some minority shareholders in certain subsidiaries of the Company have the right, at certain times, to require the Company to acquire their ownership interest in those entities at fair value and, in some cases, to force a sale of the subsidiary if the Company chooses not to purchase their interests at fair value. The noncontrolling interest subject to this arrangement is included in temporary equity as redeemable noncontrolling interest and is adjusted to its estimated redemption amount each reporting period. Future reductions in the carrying amount are subject to a “floor” amount that is equal to the fair value of the redeemable noncontrolling interest at the time it was originally recorded. The recorded value of the redeemable noncontrolling interest cannot go below the floor level. Adjustments to the carrying amount of redeemable noncontrolling interest are charged to retained earnings (or to additional paid-in capital if there are no retained earnings) and do not affect net income or comprehensive income in the consolidated financial statements. On July 24, 2018, in connection with the Cabot Transaction, the Company purchased the outstanding redeemable noncontrolling interest held by Cabot’s previous minority shareholders for approximately $127.3 million . The components of the change in the redeemable noncontrolling interest for the periods ended September 30, 2018 and December 31, 2017 are presented in the following table (in thousands) : Amount Balance at December 31, 2016 $ 45,755 Addition to redeemable noncontrolling interest 277 Net loss attributable to redeemable noncontrolling interest (4,905 ) Adjustment of the redeemable noncontrolling interest to fair value 108,296 Effect of foreign currency translation attributable to redeemable noncontrolling interest 2,555 Balance at December 31, 2017 151,978 Redemption of redeemable noncontrolling interest (138,835 ) Net loss attributable to redeemable noncontrolling interest (4,178 ) Adjustment of the redeemable noncontrolling interest to fair value (7,419 ) Effect of foreign currency translation attributable to redeemable noncontrolling interest (315 ) Balance at September 30, 2018 $ 1,231 Non-Recurring Fair Value Measurement: Certain assets are measured at fair value on a nonrecurring basis. These assets include real estate-owned assets classified as held for sale at the lower of their carrying value or fair value less cost to sell. The fair value of the assets held for sale and estimated selling expenses were determined using Level 2 measurements. The fair value estimate of the assets held for sale was approximately $26.2 million and $18.7 million as of September 30, 2018 and December 31, 2017 , respectively. Financial Instruments Not Required To Be Carried At Fair Value Investment in Receivable Portfolios: The Company records its investment in receivable portfolios at cost, which represents a significant discount from the contractual receivable balances due. The Company computes the fair value of its investment in receivable portfolios using Level 3 inputs by discounting the estimated future cash flows generated by its proprietary forecasting models. The key inputs include the estimated future gross cash flow, average cost to collect, and discount rate. In accordance with authoritative guidance related to fair value measurements, the Company estimates the average cost to collect and discount rates based on its estimate of what a market participant might use in valuing these portfolios. The determination of such inputs requires significant judgment, including assessing the assumed market participant’s cost structure, its determination of whether to include fixed costs in its valuation, its collection strategies, and determining the appropriate weighted average cost of capital. The Company evaluates the use of these key inputs on an ongoing basis and refines the data as it continues to obtain better information from market participants in the debt recovery and purchasing business. In the Company’s current analysis, the fair value of investment in receivable portfolios was approximately $3,041.9 million and $3,415.3 million as of September 30, 2018 and December 31, 2017 , respectively, as compared to the carrying value of $3,109.1 million and $2,890.6 million as of September 30, 2018 and December 31, 2017 , respectively. A 100 basis point increase in the cost to collect and discount rate used would result in a decrease in the fair value of U.S. and European portfolios by approximately $56.5 million and $76.5 million , respectively, as of September 30, 2018 . This fair value calculation does not represent, and should not be construed to represent, the underlying value of the Company or the amount which could be realized if its investment in receivable portfolios were sold. Deferred Court Costs: The Company capitalizes deferred court costs and provides a reserve for those costs that it believes will ultimately be uncollectible. The carrying value of net deferred court costs approximates fair value. Debt: The majority of the Company’s borrowings are carried at historical amounts, adjusted for additional borrowings less principal repayments, which approximate fair value. These borrowings include Encore’s senior secured notes and borrowings under its revolving credit and term loan facilities, and Cabot’s borrowings under its revolving credit facility. Encore’s convertible notes and exchangeable notes are carried at historical cost, adjusted for the debt discount. The carrying value of the convertible notes and exchangeable notes was $616.6 million and $450.8 million , net of the debt discount of $39.4 million and $32.7 million as of September 30, 2018 and December 31, 2017 , respectively. The fair value estimate for these convertible notes and exchangeable notes, which incorporates quoted market prices using Level 2 inputs, was approximately $650.4 million and $520.9 million as of September 30, 2018 and December 31, 2017 , respectively. Cabot’s senior secured notes are carried at historical cost, adjusted for the debt discount and debt premium. The carrying value of Cabot’s senior secured notes was $1,218.8 million and $1,214.6 million , net of the debt discount of $1.7 million and $1.9 million as of September 30, 2018 and December 31, 2017 , respectively. The fair value estimate for these senior notes, which incorporates quoted market prices using Level 2 inputs, was $1,207.1 million and $1,258.9 million as of September 30, 2018 and December 31, 2017 , respectively. |
Derivatives and Hedging Instrum
Derivatives and Hedging Instruments | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Instruments | Derivatives and Hedging Instruments The Company may periodically enter into derivative financial instruments to manage risks related to interest rates and foreign currency. Certain of the Company’s derivative financial instruments qualify for hedge accounting treatment under the authoritative guidance for derivatives and hedging. During the second quarter of 2018, the Company early adopted ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities retroactive to January 1, 2018 with no material impact to its financial statements. Periods prior to January 1, 2018 have not been restated. The Company applies hedge accounting when derivatives are designated, qualified and highly effective as hedges. Effectiveness is formally assessed and documented at inception and each period throughout the life of a hedge using various qualitative or quantitative methods appropriate for each hedge. Under hedge accounting, the changes in fair value of the derivative and the hedged risk are generally recognized together and offset each other when reported in shareholders’ net income. Changes in the fair value of a derivative instrument may not always equal changes in the fair value of the hedged item. This is referred to as “hedge ineffectiveness” and, with the adoption of ASU 2017-12, is no longer measured and reported separately from the effective portion of the hedge. The Company excludes certain components of derivative instruments’ changes in fair value from the assessment of hedge effectiveness. With the adoption of ASU 2017-12, those excluded components are initially recorded in other comprehensive income and recognized in shareholders’ net income over the life of the derivative instrument. The Company did not record a cumulative-effect adjustment on January 1, 2018 (that would have impacted retained earnings and accumulated other comprehensive income by the same amount upon adoption) because there was no ineffectiveness recognized for hedges existing at that date. The following table summarizes the fair value of derivative instruments as recorded in the Company’s condensed consolidated statements of financial condition (in thousands) : September 30, 2018 December 31, 2017 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives designated as hedging instruments: Foreign currency exchange contracts Other assets $ — Other assets $ 1,912 Foreign currency exchange contracts Other liabilities (1,408 ) Other liabilities — Interest rate swap agreements Other assets 5 Other liabilities (7 ) Derivatives not designated as hedging instruments: Foreign currency exchange contracts Other liabilities — Other liabilities (1,110 ) Interest rate cap contracts Other assets 2,445 Other assets 3,922 Derivatives Designated as Hedging Instruments The Company has operations in foreign countries, which expose the Company to foreign currency exchange rate fluctuations due to transactions denominated in foreign currencies. To mitigate a portion of this risk, the Company enters into derivative financial instruments, principally foreign currency forward contracts with financial counterparties. The Company adjusts the level and use of derivatives as soon as practicable after learning that an exposure has changed and reviews all exposures and derivative positions on an ongoing basis. Certain of the foreign currency forward contracts are designated as cash flow hedging instruments and qualify for hedge accounting treatment. Gains and losses arising from such contracts are recorded as a component of accumulated other comprehensive income (“OCI”) as gains and losses on derivative instruments, net of income taxes. The hedging gains and losses in OCI are subsequently reclassified into earnings in the same period in which the underlying transactions affect the Company’s earnings. If all or a portion of the forecasted transaction is cancelled, the Company would reclassify the hedge into earnings. As of September 30, 2018 , the total notional amount of the forward contracts that are designated as cash flow hedging instruments was $19.2 million . All of these outstanding contracts qualified for hedge accounting treatment. The Company estimates that approximately $1.4 million of net derivative loss included in OCI will be reclassified into earnings within the next 12 months. No gains or losses were reclassified from OCI into earnings as a result of forecasted transactions that failed to occur during the nine months ended September 30, 2018 and 2017 . The Company may periodically enter into interest rate swap agreements to reduce its exposure to fluctuations in interest rates on variable interest rate debt and their impact on earnings and cash flows. As of September 30, 2018 , there were two interest rate swap agreements outstanding with a total notional amount of $30.0 million Australian dollars (approximately $21.7 million U.S. dollars). The interest rate swap agreements are designated as cash flow hedges and accounted for using hedge accounting. The following table summarizes the effects of derivatives in cash flow hedging relationships designated as hedging instruments on the Company’s condensed consolidated statements of operations for the three and nine months ended September 30, 2018 and 2017 (in thousands) : Derivatives Designated as Hedging Instruments Gain or (Loss) Location of Gain Gain or (Loss) Three Months Ended Three Months Ended September 30, 2018 2017 2018 2017 Foreign currency exchange contracts $ (916 ) $ (27 ) Salaries and employee benefits $ 95 $ 286 Foreign currency exchange contracts (130 ) 70 General and administrative expenses 11 35 Interest rate swap agreements 3 10 Interest expense 4 — Derivatives Designated as Hedging Instruments Gain or (Loss) Location of Gain Gain or (Loss) Nine Months Ended Nine Months Ended 2018 2017 2018 2017 Foreign currency exchange contracts $ (1,990 ) $ 1,708 Salaries and employee benefits $ 1,078 $ 758 Foreign currency exchange contracts (206 ) 310 General and administrative expenses 46 76 Interest rate swap agreements (9 ) 29 Interest expense 29 110 In October 2018, the Company entered into four separate interest rate swap agreements in an aggregated notional amount of $349.5 million to hedge the exposure to fluctuations in interest rates on its variable interest rate debt. Under the swap agreements, the Company receives floating interest rate payments and makes interest payments based on fixed interest rates. In accordance with authoritative guidance relating to derivatives and hedging transactions, the Company designates its interest rate swap instruments as cash flow hedges. In October 2018, the Company, through its wholly owned subsidiary Cabot, entered into an interest rate cap contract (the “2018 Cap”) with a notional amount of £300.0 million (approximately $390.6 million ) that is used to manage its risk related to interest rate fluctuations on Cabot’s variable interest rate bearing debt. The 2018 Cap matures in September 2021 and is structured as a series of European call options (“Caplets”) such that if exercised, Cabot will receive a payment equal to 3-months GBP-LIBOR on a notional amount equal to the hedged notional amount net of a fixed strike price. Each interest rate reset date, Cabot will elect to exercise the Caplet or let it expire. The potential cash flows from each Caplet are expected to offset any variability in the cash flows of the interest payments to the extent GBP-LIBOR exceeds the strike price of the Caplets. The Company expects the hedge relationship to be highly effective and designates the 2018 Cap as a cash flow hedge instrument. Derivatives Not Designated as Hedging Instruments On May 8, 2018, in anticipation of the completion of the Cabot Transaction, Encore entered into a foreign exchange forward contract with a notional amount of £176.0 million , which was approximately the amount of cash consideration for the Cabot Transaction. The forward contract settled on August 3, 2018 at a total loss of $9.3 million . This loss was substantially offset by a decrease in the final purchase price in U.S. dollars for the Cabot Transaction. The Company enters into currency exchange forward contracts to reduce the effects of currency exchange rate fluctuations between the British Pound and Euro. These derivative contracts generally mature within one to three months and are not designated as hedge instruments for accounting purposes. The Company continues to monitor the level of exposure of the foreign currency exchange risk and may enter into additional short-term forward contracts on an ongoing basis. The gains or losses on these derivative contracts are recognized in other income or expense based on the changes in fair value. As of September 30, 2018, the Company, through its wholly owned subsidiary Cabot, also held two interest rate cap contracts with an aggregate notional amount of £300.0 million (approximately $390.7 million ) that were used to manage its risk related to interest rate fluctuations. The Company did not apply hedge accounting on these interest rate cap contracts. In October 2018, Cabot terminated these interest rate cap contracts and entered into a new 2018 Cap as discussed above. The following table summarizes the effects of derivatives in cash flow hedging relationships not designated as hedging instruments on the Company’s condensed consolidated statements of operations for the three and nine months ended September 30, 2018 and 2017 (in thousands) : Derivatives Not Designated as Hedging Instruments Location of Gain or (Loss) Recognized in Income on Derivative Amount of Gain or (Loss) Recognized in Income on Derivative Three Months Ended Nine Months Ended 2018 2017 2018 2017 Foreign currency exchange contracts Other (expense) income $ (2,281 ) $ (833 ) $ (9,221 ) $ 1,790 Interest rate cap contracts Interest income (expense) 289 919 (1,427 ) 919 Interest rate swap agreements Interest expense — — — 110 |
Investment in Receivable Portfo
Investment in Receivable Portfolios, Net | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Investment in Receivable Portfolios, Net | Investment in Receivable Portfolios, Net In accordance with the authoritative guidance for loans and debt securities acquired with deteriorated credit quality, discrete receivable portfolio purchases during the same fiscal quarter are aggregated into pools based on common risk characteristics. Common risk characteristics include risk ratings (e.g. FICO or similar scores), financial asset type, collateral type, size, interest rate, date of origination, term, and geographic location. The Company’s static pools are typically grouped into credit card, purchased consumer bankruptcy, and mortgage portfolios. The Company further groups these static pools by geographic region or location. Portfolios acquired in business combinations are also grouped into these pools. During any fiscal quarter in which the Company has an acquisition of an entity that has portfolio, the entire historical portfolio of the acquired company is aggregated into the pool groups for that quarter, based on common characteristics, resulting in pools for that quarter that may consist of several different vintages of portfolio. Once a static pool is established, the portfolios are permanently assigned to the pool. The discount ( i.e. , the difference between the cost of each static pool and the related aggregate contractual receivable balance) is not recorded because the Company expects to collect a relatively small percentage of each static pool’s contractual receivable balance. As a result, receivable portfolios are recorded at cost at the time of acquisition. The purchase cost of the portfolios includes certain fees paid to third parties incurred in connection with the direct acquisition of the receivable portfolios. In compliance with the authoritative guidance, the Company accounts for its investments in receivable portfolios using either the interest method or the cost recovery method. The interest method applies an internal rate of return (“IRR”) to the cost basis of the pool, which remains unchanged throughout the life of the pool, unless there is an increase in subsequent expected cash flows. Subsequent increases in expected cash flows are recognized prospectively through an upward adjustment of the pool’s IRR over its remaining life. Subsequent decreases in expected cash flows do not change the IRR but are recognized as an allowance to the cost basis of the pool, and are reflected in the consolidated statements of operations as a reduction in revenue, with a corresponding valuation allowance, offsetting the investment in receivable portfolios in the consolidated statements of financial condition. With gross collections being discounted at monthly IRRs, when collections are lower in the near term, even if substantially higher collections are expected later in the collection curve, an allowance charge could result. The Company accounts for each static pool as a unit for the economic life of the pool (similar to one loan) for recognition of revenue from receivable portfolios, for collections applied to the cost basis of receivable portfolios and for provision for loss or allowance. Revenue from receivable portfolios is accrued based on each pool’s IRR applied to each pool’s adjusted cost basis. The cost basis of each pool is increased by revenue earned and portfolio allowance reversals and decreased by gross collections and portfolio allowances. If the amount and timing of future cash collections on a pool of receivables are not reasonably estimable, the Company accounts for such portfolios on the cost recovery method as Cost Recovery Portfolios. The accounts in these portfolios have different risk characteristics than those included in other portfolios acquired during the same quarter, or the necessary information was not available to estimate future cash flows and, accordingly, they were not aggregated with other portfolios. Under the cost recovery method of accounting, no revenue is recognized until the carrying value of a Cost Recovery Portfolio has been fully recovered. Accretable yield represents the amount of revenue the Company expects to generate over the remaining life of its existing investment in receivable portfolios based on estimated future cash flows. Total accretable yield is the difference between future estimated collections and the current carrying value of a portfolio. All estimated cash flows on portfolios where the cost basis has been fully recovered are classified as zero basis cash flows. The following table summarizes the Company’s accretable yield and an estimate of zero basis future cash flows at the beginning and end of the period presented (in thousands) : Accretable Yield Estimate of Zero Basis Cash Flows Total Balance at December 31, 2017 $ 3,695,069 $ 369,632 $ 4,064,701 Revenue from receivable portfolios (249,821 ) (31,188 ) (281,009 ) Allowance reversals on receivable portfolios, net (8,082 ) (1,729 ) (9,811 ) Reductions on existing portfolios, net (24,945 ) (39,529 ) (64,474 ) Additions for current purchases 285,172 — 285,172 Effect of foreign currency translation 57,577 643 58,220 Balance at March 31, 2018 3,754,970 297,829 4,052,799 Revenue from receivable portfolios (258,698 ) (33,964 ) (292,662 ) Allowance reversals on receivable portfolios, net (15,411 ) (2,221 ) (17,632 ) Additions on existing portfolios, net 136,267 5,824 142,091 Additions for current purchases 345,006 — 345,006 Effect of foreign currency translation (97,448 ) (597 ) (98,045 ) Balance at June 30, 2018 3,864,686 266,871 4,131,557 Revenue from receivable portfolios (263,109 ) (32,248 ) (295,357 ) Allowance reversals on receivable portfolios, net (1,196 ) (2,833 ) (4,029 ) Additions on existing portfolios, net 23,241 14,481 37,722 Additions for current purchases 262,751 — 262,751 Effect of foreign currency translation (20,483 ) (136 ) (20,619 ) Balance at September 30, 2018 $ 3,865,890 $ 246,135 $ 4,112,025 Accretable Yield Estimate of Zero Basis Cash Flows Total Balance at December 31, 2016 $ 3,092,004 $ 365,504 $ 3,457,508 Revenue from receivable portfolios (211,105 ) (38,733 ) (249,838 ) Allowance reversals on receivable portfolios, net (613 ) (1,519 ) (2,132 ) (Reductions) additions on existing portfolios, net (90,138 ) 57,446 (32,692 ) Additions for current purchases 200,728 — 200,728 Effect of foreign currency translation 38,712 467 39,179 Balance at March 31, 2017 3,029,588 383,165 3,412,753 Revenue from receivable portfolios (224,310 ) (39,097 ) (263,407 ) Allowance reversals on receivable portfolios, net (7,121 ) (1,708 ) (8,829 ) Additions on existing portfolios, net 225,021 9,888 234,909 Additions for current purchases 258,687 — 258,687 Effect of foreign currency translation 66,927 (753 ) 66,174 Balance at June 30, 2017 3,348,792 351,495 3,700,287 Revenue from receivable portfolios (230,403 ) (33,621 ) (264,024 ) Allowance reversals on receivable portfolios, net (17,817 ) (1,747 ) (19,564 ) Additions on existing portfolios, net 27,162 1,539 28,701 Additions for current purchases 336,725 — 336,725 Effect of foreign currency translation 56,971 375 57,346 Balance at September 30, 2017 $ 3,521,430 $ 318,041 $ 3,839,471 During the three months ended September 30, 2018 , the Company purchased receivable portfolios with a face value of $1.6 billion for $248.7 million , or a purchase cost of 15.9% of face value. The estimated future collections at acquisition for all portfolios purchased during the three months ended September 30, 2018 amounted to $512.3 million . During the three months ended September 30, 2017 , the Company purchased receivable portfolios with a face value of $3.0 billion for $292.3 million , or a purchase cost of 9.7% of face value. The estimated future collections at acquisition for all portfolios purchased during the three months ended September 30, 2017 amounted to $630.6 million . During the nine months ended September 30, 2018 , the Company purchased receivable portfolios with a face value of $6.2 billion for $885.0 million , or a purchase cost of 14.2% of face value. The estimated future collections at acquisition for all portfolios purchased during the nine months ended September 30, 2018 amounted to $1,772.9 million . During the nine months ended September 30, 2017 , the Company purchased receivable portfolios with a face value of $7.1 billion for $757.5 million , or a purchase cost of 10.6% of face value. The estimated future collections at acquisition for all portfolios purchased during the nine months ended September 30, 2017 amounted to $1,555.0 million . All collections realized after the net book value of a portfolio has been fully recovered (“Zero Basis Portfolios”) are recorded as revenue (“Zero Basis Revenue”). During the three months ended September 30, 2018 and 2017 , Zero Basis Revenue was approximately $32.2 million and $33.6 million , respectively. During the three months ended September 30, 2018 and 2017 , allowance reversals on Zero Basis Portfolios were $2.8 million and $1.7 million , respectively. During the nine months ended September 30, 2018 and 2017 , Zero Basis Revenue was approximately $97.4 million and $111.5 million , respectively. During the nine months ended September 30, 2018 and 2017 , allowance reversals on Zero Basis Portfolios were $6.8 million and $5.0 million , respectively. The following tables summarize the changes in the balance of the investment in receivable portfolios during the following periods ( in thousands, except percentages ): Three Months Ended September 30, 2018 Accrual Basis Portfolios Cost Recovery Portfolios Zero Basis Portfolios Total Balance, beginning of period $ 3,074,292 $ 10,329 $ — $ 3,084,621 Purchases of receivable portfolios 248,691 — — 248,691 Disposals or transfers to assets held for sale (4,253 ) (1,111 ) — (5,364 ) Gross collections (1) (463,474 ) (306 ) (35,063 ) (498,843 ) Put-Backs and Recalls (2) (2,056 ) — (18 ) (2,074 ) Foreign currency adjustments (17,208 ) (93 ) — (17,301 ) Revenue recognized 263,109 — 32,248 295,357 Portfolio allowance reversals, net 1,196 — 2,833 4,029 Balance, end of period $ 3,100,297 $ 8,819 $ — $ 3,109,116 Revenue as a percentage of collections (3) 56.8 % — % 92.0 % 59.2 % Three Months Ended September 30, 2017 Accrual Basis Portfolios Cost Recovery Portfolios Zero Basis Portfolios Total Balance, beginning of period $ 2,541,590 $ 14,335 $ — $ 2,555,925 Purchases of receivable portfolios 292,332 — — 292,332 Disposals or transfers to assets held for sale (3,536 ) (265 ) — (3,801 ) Gross collections (1) (407,435 ) (435 ) (35,126 ) (442,996 ) Put-Backs and Recalls (2) (407 ) — (242 ) (649 ) Foreign currency adjustments 44,366 46 — 44,412 Revenue recognized 230,403 — 33,621 264,024 Portfolio allowance reversals, net 17,817 — 1,747 19,564 Balance, end of period $ 2,715,130 $ 13,681 $ — $ 2,728,811 Revenue as a percentage of collections (3) 56.5 % — % 95.7 % 59.6 % ________________________ (1) Does not include amounts collected on behalf of others. (2) Put-backs represent accounts that are returned to the seller in accordance with the respective purchase agreement (“Put-Backs”). Recalls represent accounts that are recalled by the seller in accordance with the respective purchase agreement (“Recalls”). (3) Revenue as a percentage of collections excludes the effects of net portfolio allowances or net portfolio allowance reversals. Nine Months Ended September 30, 2018 Accrual Basis Portfolios Cost Recovery Portfolios Zero Basis Portfolios Total Balance, beginning of period $ 2,879,170 $ 11,443 $ — $ 2,890,613 Purchases of receivable portfolios 885,033 — — 885,033 Disposals or transfers to assets held for sale (9,358 ) (1,373 ) — (10,731 ) Gross collections (1) (1,379,095 ) (1,729 ) (103,214 ) (1,484,038 ) Put-Backs and Recalls (2) (14,231 ) — (171 ) (14,402 ) Foreign currency adjustments (57,539 ) (320 ) — (57,859 ) Revenue recognized 771,628 — 97,400 869,028 Reclassification adjustments (3) — 798 (798 ) — Portfolio allowance reversals, net 24,689 — 6,783 31,472 Balance, end of period $ 3,100,297 $ 8,819 $ — $ 3,109,116 Revenue as a percentage of collections (4) 56.0 % — % 94.4 % 58.6 % Nine Months Ended September 30, 2017 Accrual Basis Portfolios Cost Recovery Portfolios Zero Basis Portfolios Total Balance, beginning of period $ 2,368,366 $ 14,443 $ — $ 2,382,809 Purchases of receivable portfolios 756,305 1,169 — 757,474 Disposals or transfers to assets held for sale (11,004 ) (265 ) — (11,269 ) Gross collections (1) (1,212,357 ) (1,534 ) (116,150 ) (1,330,041 ) Put-Backs and Recalls (2) (5,401 ) — (275 ) (5,676 ) Foreign currency adjustments 127,852 (132 ) — 127,720 Revenue recognized 665,818 — 111,451 777,269 Portfolio allowance reversals, net 25,551 — 4,974 30,525 Balance, end of period $ 2,715,130 $ 13,681 $ — $ 2,728,811 Revenue as a percentage of collections (4) 54.9 % — % 96.0 % 58.4 % ________________________ (1) Does not include amounts collected on behalf of others. (2) Put-Backs represent accounts that are returned to the seller in accordance with the respective purchase agreement. Recalls represent accounts that are recalled by the seller in accordance with the respective purchase agreement. (3) Reclassification relating to certain Zero Basis Revenue that was classified as collections in cost recovery portfolios in prior periods. (4) Revenue as a percentage of collections excludes the effects of net portfolio allowances or net portfolio allowance reversals. The following table summarizes the change in the valuation allowance for investment in receivable portfolios during the periods presented (in thousands) : Valuation Allowance Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Balance at beginning of period $ 75,129 $ 130,675 $ 102,576 $ 137,037 Provision for portfolio allowances 6,156 10,181 8,816 10,863 Reversal of prior allowances (10,185 ) (29,745 ) (40,288 ) (41,388 ) Effect of foreign currency translation (365 ) 1,759 (369 ) 6,358 Balance at end of period $ 70,735 $ 112,870 $ 70,735 $ 112,870 |
Deferred Court Costs, Net
Deferred Court Costs, Net | 9 Months Ended |
Sep. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Deferred Court Costs, Net | Deferred Court Costs, Net The Company pursues legal collections using a network of attorneys that specialize in collection matters and through its internal legal channel. The Company generally pursues collections through legal means only when it believes a consumer has sufficient assets to repay their indebtedness but has, to date, been unwilling to pay. In order to pursue legal collections the Company is required to pay certain upfront costs to the applicable courts that are recoverable from the consumer (“Deferred Court Costs”). The Company capitalizes Deferred Court Costs in its consolidated financial statements and provides a reserve for those costs that it believes will ultimately be uncollectible. The Company determines the reserve based on an estimated court cost recovery rate established based on its analysis of historical court costs recovery data. The Company estimates deferral periods for Deferred Court Costs based on jurisdiction and nature of litigation and writes off any Deferred Court Costs not recovered within the respective deferral period. Collections received from debtors are first applied against related court costs with the balance applied to the debtors’ account balance. Deferred Court Costs for the deferral period consist of the following as of the dates presented (in thousands) : September 30, December 31, Court costs advanced $ 812,359 $ 743,584 Court costs recovered (328,715 ) (299,606 ) Court costs reserve (389,627 ) (364,015 ) Deferred court costs $ 94,017 $ 79,963 A roll forward of the Company’s court cost reserve is as follows (in thousands) : Court Cost Reserve Three Months Ended Nine Months Ended 2018 2017 2018 2017 Balance at beginning of period $ (381,125 ) $ (345,971 ) $ (364,015 ) $ (327,926 ) Provision for court costs (23,065 ) (19,767 ) (67,293 ) (60,031 ) Net down of reserve after deferral period 13,603 12,419 38,990 36,992 Effect of foreign currency translation 960 (1,491 ) 2,691 (3,845 ) Balance at end of period $ (389,627 ) $ (354,810 ) $ (389,627 ) $ (354,810 ) |
Other Assets
Other Assets | 9 Months Ended |
Sep. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | Other Assets Other assets consist of the following (in thousands) : September 30, December 31, Identifiable intangible assets, net $ 64,067 $ 75,736 Other financial receivables 41,003 37,861 Service fee receivables 31,782 25,609 Assets held for sale 26,241 18,741 Prepaid expenses 24,341 27,606 Deferred tax assets 14,376 18,773 Security deposits 2,947 3,451 Derivative instruments 2,450 5,834 Funds held in escrow — 28,199 Prepaid income taxes — 27,917 Other 37,395 33,001 Total $ 244,602 $ 302,728 |
Debt, Net
Debt, Net | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt, Net | Debt, Net The Company is in compliance with all covenants under its financing arrangements as of September 30, 2018 . The components of the Company’s consolidated debt and capital lease obligations were as follows (in thousands) : September 30, December 31, Encore revolving credit facility $ 447,000 $ 328,961 Encore term loan facility 197,927 181,687 Encore senior secured notes 325,000 326,029 Encore convertible notes and exchangeable notes 656,000 483,500 Less: debt discount (39,445 ) (32,720 ) Cabot senior secured notes 1,220,524 1,216,485 Less: debt discount (1,734 ) (1,927 ) Cabot senior revolving credit facility 283,678 179,008 Cabot securitisation senior facility 390,690 391,790 Preferred equity certificates — 253,324 Other credit facilities 57,980 68,001 Other 63,633 92,792 Capital lease obligations 8,005 6,069 3,609,258 3,492,999 Less: debt issuance costs, net of amortization (47,791 ) (46,123 ) Total $ 3,561,467 $ 3,446,876 Encore Revolving Credit Facility and Term Loan Facility The Company has a revolving credit facility and term loan facility pursuant to a Third Amended and Restated Credit Agreement dated December 20, 2016 (as amended, the “Restated Credit Agreement”). The Restated Credit Agreement includes a revolving credit facility of $894.4 million (the “Revolving Credit Facility”) and a term loan facility of $203.7 million (the “Term Loan Facility”, and together with the Revolving Credit Facility, the “Senior Secured Credit Facilities”). During the quarter, the Company (1) extended the maturity of approximately $107.4 million of Revolving Credit Facility commitments from February 2019 to December 2021 and (2) exercised the remaining $99.7 million remaining on the accordion feature. Provisions of the Restated Credit Agreement as of September 30, 2018 include, but are not limited to: • Revolving Credit Facility commitments of (1) $884.2 million that expire in December 2021 and (2) $10.2 million that expire in February 2019, in each case with interest at a floating rate equal to, at the Company’s option, either: (a) reserve adjusted London Interbank Offered Rate (“LIBOR”), plus a spread that ranges from 250 to 300 basis points depending on the cash flow leverage ratio of Encore and its restricted subsidiaries as defined in the Restated Credit Agreement; or (b) alternate base rate, plus a spread that ranges from 150 to 200 basis points, depending on the cash flow leverage ratio of Encore and its restricted subsidiaries. “Alternate base rate,” as defined in the Restated Credit Agreement, means the highest of (i) the per annum rate which the administrative agent publicly announces from time to time as its prime lending rate, (ii) the federal funds effective rate from time to time, plus 0.5% per annum, (iii) reserved adjusted LIBOR determined on a daily basis for a one month interest period, plus 1.0% per annum and (iv) zero; • A $194.6 million term loan maturing in December 2021, with interest at a floating rate equal to, at the Company’s option, either: (1) reserve adjusted LIBOR, plus a spread that ranges from 250 to 300 basis points, depending on the cash flow leverage ratio of Encore and its restricted subsidiaries; or (2) alternate base rate, plus a spread that ranges from 150 to 200 basis points, depending on the cash flow leverage ratio of Encore and its restricted subsidiaries. Principal amortizes $2.5 million in 2018 and $15.3 million in each of 2019 and 2020 with the remaining principal due in 2021; • A $9.1 million term loan maturing in February 2019, with interest at a floating rate equal to, at the Company’s option, either: (1) reserve adjusted LIBOR, plus a spread that ranges from 250 to 300 basis points, depending on the cash flow leverage ratio of Encore and its restricted subsidiaries; or (2) alternate base rate, plus a spread that ranges from 150 to 200 basis points, depending on the cash flow leverage ratio of Encore and its restricted subsidiaries. Principal amortizes $0.3 million in 2018 with the remaining principal due in 2019; • A borrowing base under the Revolving Credit Facility equal to 35% of all eligible non-bankruptcy estimated remaining collections plus 55% of eligible estimated remaining collections for consumer receivables subject to bankruptcy; • A maximum cash flow leverage ratio permitted of 3.00 :1.00; • A maximum cash flow first-lien leverage ratio of 2.00 :1.00; • A minimum interest coverage ratio of 1.75 :1.00; • The allowance of indebtedness in the form of senior secured notes not to exceed $350.0 million ; • The allowance of additional unsecured or subordinated indebtedness not to exceed $1.1 billion , including junior lien indebtedness not to exceed $400.0 million ; • Restrictions and covenants, which limit the payment of dividends and the incurrence of additional indebtedness and liens, among other limitations; • Repurchases of up to $150.0 million of Encore’s common stock after July 9, 2015, subject to compliance with certain covenants and available borrowing capacity; • A change of control definition, that excludes acquisitions of stock by Red Mountain Capital Partners LLC, JCF FPK I, LP and their respective affiliates of up to 50% of the outstanding shares of Encore’s voting stock; • Events of default which, upon occurrence, may permit the lenders to terminate the facility and declare all amounts outstanding to be immediately due and payable; • A pre-approved acquisition limit of $225.0 million per fiscal year; • A basket to allow for investments not to exceed the greater of (1) 200% of the consolidated net worth of Encore and its restricted subsidiaries; and (2) an unlimited amount such that after giving effect to the making of any investment, the cash flow leverage ratio is less than 1.25 :1:00; • A basket to allow for investments in persons organized under the laws of Canada in the amount of $50.0 million ; • A requirement that Encore and its restricted subsidiaries, for the four-month period ending February 2019, have sufficient cash or availability under the Revolving Credit Facility (excluding availability under revolving commitments expiring in February 2019) to satisfy any amounts due under the revolving commitments that expire in February 2019 and the sub-tranche of the Term Loan Facility that expires in February 2019; • Collateralization by all assets of the Company, other than the assets of certain foreign subsidiaries and all unrestricted subsidiaries as defined in the Restated Credit Agreement. At September 30, 2018 , the outstanding balance under the Revolving Credit Facility was $447.0 million , which bore a weighted average interest rate of 5.09% and 4.32% for the three months ended September 30, 2018 and 2017 , respectively, and 4.90% and 3.99% for the nine months ended September 30, 2018 and 2017 , respectively. Available capacity under the Revolving Credit Facility, after taking into account borrowing base and applicable debt covenants, was $178.1 million as of September 30, 2018 . At September 30, 2018 , the outstanding balance under the Term Loan Facility was $197.9 million . Encore Senior Secured Notes In August 2017, Encore entered into $325.0 million in senior secured notes with a group of insurance companies (the “Senior Secured Notes”). The Senior Secured Notes bear an annual interest rate of 5.625% , mature in 2024 and beginning in November 2019 will require quarterly principal payments of $16.3 million . As of September 30, 2018 , $325.0 million of the Senior Secured Notes remained outstanding. The Senior Secured Notes are guaranteed in full by certain of Encore’s subsidiaries. The Senior Secured Notes are pari passu with, and are collateralized by the same collateral as, the Senior Secured Credit Facilities. The Senior Secured Notes may be accelerated and become automatically and immediately due and payable upon certain events of default, including certain events related to insolvency, bankruptcy, or liquidation. Additionally, any series of the Senior Secured Notes may be accelerated at the election of the holder or holders of a majority in principal amount of such series of Senior Secured Notes upon certain events of default by Encore, including the breach of affirmative covenants regarding guarantors, collateral, minimum revolving credit facility commitment or the breach of any negative covenant. Encore may prepay the Senior Secured Notes at any time for any reason. If Encore prepays the Senior Secured Notes, payment will be at the higher of par or the present value of the remaining scheduled payments of principal and interest on the portion being prepaid. The discount rate used to determine the present value is 50 basis points over the then current Treasury Rate corresponding to the remaining average life of the Senior Secured Notes. The covenants and material terms in the purchase agreement for the Senior Secured Notes are substantially similar to those in the Restated Credit Agreement. The holders of the Senior Secured Notes and the administrative agent for the lenders of the Restated Credit Agreement have an intercreditor agreement related to their pro rata rights to the collateral, actionable default, powers and duties and remedies, among other topics. Encore Convertible Notes and Exchangeable Notes In June and July 2013, Encore issued $172.5 million aggregate principal amount of 3.000% 2020 Convertible Notes that mature on July 1, 2020 in private placement transactions (the “2020 Convertible Notes”). In March 2014, Encore issued $161.0 million aggregate principal amount of 2.875% 2021 Convertible Notes that mature on March 15, 2021 in private placement transactions (the “2021 Convertible Notes”). In March 2017, Encore issued $150.0 million aggregate principal amount of 3.250% 2022 Convertible Senior Notes that mature on March 15, 2022 in private placement transactions (the “2022 Convertible Notes” and together with the 2020 Convertible Notes and the 2021 Convertible Notes, the “Convertible Notes”). The interest on the Convertible Notes is payable semi-annually. In July 2018, Encore Capital Europe Finance Limited ( “Encore Finance” ) , a 100% owned finance subsidiary of Encore, issued $172.5 million aggregate principal amount of exchangeable senior notes due 2023 (the “Exchangeable Notes”). The Exchangeable Notes mature on September 1, 2023 and bear interest at a rate of 4.500% per year, payable semiannually in arrears on March 1 and September 1 of each year, beginning on March 1, 2019. Prior to the close of business on the business day immediately preceding their respective conversion or exchange date (listed below), holders may convert or exchange their Convertible Notes or Exchangeable Notes under certain circumstances set forth in the applicable indentures. On or after their respective conversion or exchange dates until the close of business on the scheduled trading day immediately preceding their respective maturity date, holders may convert or exchange their notes at any time. Certain key terms related to the convertible and exchangeable features as of September 30, 2018 are listed below. 2020 Convertible Notes 2021 Convertible Notes 2022 Convertible Notes 2023 Exchangeable Notes Initial conversion or exchange price $ 45.72 $ 59.39 $ 45.57 $ 44.62 Closing stock price at date of issuance $ 33.35 $ 47.51 $ 35.05 $ 36.45 Closing stock price date June 24, 2013 March 5, 2014 February 27, 2017 July 20, 2018 Conversion or exchange rate (shares per $1,000 principal amount) 21.8718 16.8386 21.9467 22.4090 Conversion or exchange date January 1, 2020 September 15, 2020 September 15, 2021 March 1, 2023 In the event of conversion or exchange, holders of the Company’s Convertible Notes or Exchangeable Notes will receive cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election. The Company’s current intent is to settle conversions and exchanges through combination settlement ( i.e., convertible or exchangeable into cash up to the aggregate principal amount, and shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election and subject to certain restrictions contained in each of the indentures governing the Convertible Notes and Exchangeable Notes, for the remainder). As a result, and in accordance with authoritative guidance related to derivatives and hedging and earnings per share, only the conversion or exchange spread is included in the diluted earnings per share calculation, if dilutive. Under such method, the settlement of the conversion or exchange spread has a dilutive effect when, during any quarter, the average share price of the Company’s common stock exceeds the initial conversion or exchange prices listed in the above table. Authoritative guidance requires that issuers of convertible or exchangeable debt instruments which, upon conversion or exchange, may be settled fully or partially in cash, must separately account for the liability and equity components in a manner that will reflect the entity’s nonconvertible or nonexchangeable debt borrowing rate when interest cost is recognized in subsequent periods. Additionally, debt issuance costs are required to be allocated in proportion to the allocation of the liability and equity components and accounted for as debt issuance costs and equity issuance costs, respectively. As discussed above, upon exchange of the Exchangeable Notes, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election. However, the Company was required to settle solely in cash all exchanges with an exchange date occurring before September 28, 2018, the “share reservation date.” As a result and in accordance with authoritative guidance, the exchange feature of the Exchangeable Notes did not qualify as an equity instrument and was bifurcated at the time of issuance. On September 28, 2018, the bifurcated derivative met the criteria for equity classification and was recorded in equity at fair value with no subsequent measurement. All issuance costs relating to the Exchangeable Notes were recorded as debt issuance costs. The debt and equity components, the issuance costs related to the equity component, the stated interest rate, and the effective interest rate for each of the Convertible Notes and Exchangeable Notes are listed below (in thousands, except percentages) : 2020 Convertible Notes 2021 Convertible Notes 2022 Convertible Notes 2023 Exchangeable Notes Debt component $ 140,247 $ 143,645 $ 137,266 $ 157,971 Equity component $ 32,253 $ 17,355 $ 12,734 $ 14,009 Equity issuance cost $ 1,106 $ 581 $ 398 $ — Stated interest rate 3.000 % 2.875 % 3.250 % 4.500 % Effective interest rate 6.350 % 4.700 % 5.200 % 6.500 % The balances of the liability and equity components of all the Convertible Notes and Exchangeable Notes outstanding were as follows (in thousands) : September 30, December 31, Liability component—principal amount $ 656,000 $ 483,500 Unamortized debt discount (39,445 ) (32,720 ) Liability component—net carrying amount $ 616,555 $ 450,780 Equity component $ 76,351 $ 62,696 The debt discount is being amortized into interest expense over the remaining life of the Convertible Notes and Exchangeable Notes using the effective interest rates. Interest expense related to the Convertible Notes and Exchangeable Notes was as follows (in thousands) : Three Months Ended Nine Months Ended 2018 2017 2018 2017 Interest expense—stated coupon rate $ 3,676 $ 4,117 $ 10,969 $ 11,705 Interest expense—amortization of debt discount 2,518 2,473 7,410 7,374 Total interest expense—Convertible Notes and Exchangeable Notes $ 6,194 $ 6,590 $ 18,379 $ 19,079 Hedge Transactions In order to reduce the risk related to the potential dilution and/or the potential cash payments the Company may be required to make in the event that the market price of the Company’s common stock becomes greater than the conversion or exchange prices of the Convertible Notes and the Exchangeable Notes, the Company maintains a hedge program that increases the effective conversion or exchange price for each of the 2020 Convertible Notes, 2021 Convertible Notes, and the Exchangeable Notes. The Company did not hedge the 2022 Convertible Notes. As of September 30, 2018, all the hedge instruments related to the Convertible Notes and Exchangeable Notes have been determined to be indexed to the Company’s own stock and meet the criteria for equity classification. In accordance with authoritative guidance, the Company recorded the cost of the hedge instruments as a reduction in additional paid-in capital and will not recognize subsequent changes in fair value of these financial instruments in its consolidated financial statements. The details of the hedge program for each of the Convertible Notes and Exchangeable Notes are listed below (in thousands, except conversion price) : 2020 Convertible Notes 2021 Convertible Notes 2023 Exchangeable Notes Cost of the hedge transaction(s) $ 18,113 $ 19,545 $ 17,785 Initial conversion or exchange price $ 45.72 $ 59.39 $ 44.62 Effective conversion or exchange price $ 61.55 $ 83.14 $ 62.48 Cabot Senior Secured Notes On August 2, 2013, Cabot Financial (Luxembourg) S.A. (“Cabot Financial”), an indirect subsidiary of Encore, issued £100.0 million (approximately $151.7 million ) in aggregate principal amount of 8.375% Senior Secured Notes due 2020 (the “Cabot 2020 Notes”). Interest on the Cabot 2020 Notes is payable semi-annually, in arrears, on February 1 and August 1 of each year. On July 18, 2018, Cabot Financial completed an exchange offer for a portion of these outstanding notes, as further discussed below. On March 27, 2014, Cabot Financial issued £175.0 million (approximately $291.8 million ) in aggregate principal amount of 6.500% Senior Secured Notes due 2021 (the “Cabot 2021 Notes”). Interest on the Cabot 2021 Notes is payable semi-annually, in arrears, on April 1 and October 1 of each year. On July 18, 2018, Cabot Financial completed an exchange offer for a portion of these outstanding notes, as further discussed below. On October 6, 2016, Cabot Financial issued £350.0 million (approximately $442.6 million ) in aggregate principal amount of 7.500% Senior Secured Notes due 2023 (the “Cabot 2023 Notes”). Interest on the Cabot 2023 Notes is payable semi-annually, in arrears, on April 1 and October 1 of each year. The Cabot 2023 Notes were issued at a price equal to 100% of their face value. On July 18, 2018, Cabot Financial completed an exchange offer whereby certain holders of the Cabot 2020 Notes and holders of the Cabot 2021 Notes exchanged their notes for additional Cabot 2023 Notes (the “Exchange Notes”). Pursuant to the exchange offer, Cabot Financial exchanged £32.2 million (approximately $42.4 million ) in aggregate principal amount of the Cabot 2020 Notes and £95.0 million (approximately $125.2 million ) in aggregate principal amount of the Cabot 2021 Notes, at a premium, for a total of £128.4 million (approximately $169.2 million ) aggregate principal amount of the Exchange Notes. On July 18, 2018, Cabot Financial also issued £34.5 million (approximately $45.5 million ) aggregate principal amount of 7.500% additional notes (the “Additional Notes”) at 99.0% plus accrued interest from and including April 1, 2018. Both the Exchange Notes and the Additional Notes were issued as additional notes under the indenture entered into by Cabot Financial, among others, dated October 6, 2016, governing the Cabot 2023 Notes and are part of the same series as the currently outstanding £350.0 million 7.500% Cabot 2023 Notes issued under that indenture. The fees relating to this refinancing transaction were approximately $6.6 million and were recorded as interest expense in the Company’s consolidated statements of operations during the three and nine months ended September 30, 2018. The Cabot 2020 Notes, Cabot 2021 Notes, and the Cabot 2023 Notes (together the “Cabot Notes”) are fully and unconditionally guaranteed on a senior secured basis by the following indirect subsidiaries of the Company: Cabot Credit Management Limited (“CCM”), Cabot Financial Limited, and all material subsidiaries of Cabot Financial Limited (other than Cabot Financial and Marlin Intermediate Holdings plc). The Cabot Notes are secured by a first ranking security interest in all the outstanding shares of Cabot Financial and the guarantors (other than CCM and Marlin Midway Limited) and substantially all the assets of Cabot Financial and the guarantors (other than CCM). Subject to the Intercreditor Agreement described below under “Cabot Senior Revolving Credit Facility”, the guarantees provided in respect of the Cabot Notes are pari passu with each such guarantee given in respect of the Cabot Floating Rate Notes, Marlin Bonds and the Cabot Credit Facility described below. On November 11, 2015, Cabot Financial (Luxembourg) II S.A. (“Cabot Financial II”), an indirect subsidiary of Encore, issued €310.0 million (approximately $332.2 million ) in aggregate principal amount of Senior Secured Floating Rate Notes due 2021 (the “Cabot Floating Rate Notes”). The Cabot Floating Rate Notes were issued at a 1% , or €3.1 million (approximately $3.4 million ), original issue discount, which is being amortized over the life of the notes and included as interest expense in the Company’s consolidated statements of operations. The Cabot Floating Rate Notes bear interest at a rate equal to three-month EURIBOR plus 5.875% per annum, reset quarterly. Interest on the Cabot Floating Rate Notes is payable quarterly in arrears on February 15, May 15, August 15 and November 15 of each year, beginning on February 15, 2016. The Cabot Floating Rate Notes will mature on November 15, 2021. The Cabot Floating Rate Notes are fully and unconditionally guaranteed on a senior secured basis by the following indirect subsidiaries of the Company: CCM, Cabot Financial Limited and all material subsidiaries of Cabot Financial Limited (other than Cabot Financial II and Marlin Intermediate Holdings plc). The Cabot Floating Rate Notes are secured by a first-ranking security interest in all the outstanding shares of Cabot Financial II and the guarantors (other than CCM and Marlin Midway Limited) and substantially all the assets of Cabot Financial II and the guarantors (other than CCM). Interest expense related to the Cabot senior secured notes was as follows (in thousands) : Three Months Ended Nine Months Ended 2018 2017 2018 2017 Interest expense—stated coupon rate $ 21,411 $ 24,285 $ 64,250 $ 73,278 Interest income—accretion of debt premium — (758 ) — (2,855 ) Interest expense—amortization of debt discount 117 119 120 345 Total interest expense—Cabot senior secured notes $ 21,528 $ 23,646 $ 64,370 $ 70,768 At September 30, 2018 , the outstanding balance of the Cabot senior secured notes was $1.2 billion . Cabot Senior Revolving Credit Facility On December 12, 2017, Cabot Financial (UK) Limited (“Cabot Financial UK”) entered into an amended and restated senior secured revolving credit facility agreement, which provides for a total committed facility of £295.0 million (as amended and restated, the “Cabot Credit Facility”). As of September 30, 2018, the Cabot Credit Facility consisted of a £245.0 million tranche that would expire in September 2021 and a £50.0 million tranche that would expire in March 2022, and included the following key provisions: • Interest at LIBOR (or EURIBOR for any loan drawn in euro) plus 3.25% per annum, which may decrease to 2.75% upon certain specified conditions; • A restrictive covenant that limits the loan to value ratio to 0.75 in the event that the Cabot Credit Facility is more than 20% utilized; • A restrictive covenant that limits the super senior loan (i.e. the Cabot Credit Facility and any super priority hedging liabilities) to value ratio to 0.275 in the event that the Cabot Credit Facility is more than 20% utilized; • Additional restrictions and covenants which limit, among other things, the payment of dividends and the incurrence of additional indebtedness and liens; and • Events of default which, upon occurrence, may permit the lenders to terminate the Cabot Credit Facility and declare all amounts outstanding to be immediately due and payable. The Cabot Credit Facility is unconditionally guaranteed by the following indirect subsidiaries of the Company: CCM, Cabot Financial Limited, and all material subsidiaries of Cabot Financial Limited. The Cabot Credit Facility is secured by first ranking security interests in all the outstanding shares of Cabot Financial UK and the guarantors (other than CCM) and substantially all the assets of Cabot Financial UK and the guarantors (other than CCM). Pursuant to the terms of intercreditor agreements entered into with respect to the relative positions of the Cabot Notes, the Cabot Floating Rate Notes and the Cabot Credit Facility, any liabilities in respect of obligations under the Cabot Credit Facility that are secured by assets that also secure the Cabot Notes and the Cabot Floating Rate Notes will receive priority with respect to any proceeds received upon any enforcement action over any such assets. At September 30, 2018 , the outstanding borrowings under the Cabot Credit Facility were approximately $283.7 million . The weighted average interest rate was 3.86% and 3.50% for the three months ended September 30, 2018 and 2017 , respectively, and 3.78% and 3.51% for the nine months ended September 30, 2018 and 2017 , respectively. Available capacity under the Cabot Credit Facility, after taking into account borrowing base and applicable debt covenants, was £77.2 million (approximately $100.5 million ) as of September 30, 2018 . On November 5, 2018, Cabot Financial UK amended the Cabot Credit Facility to, among other things, increase the size of the facility by £90.0 million to £385.0 million , extend the maturity date to September 2022 (except for a £10.0 million tranche that expires in September 2021) and reduce the interest rate on the tranches that expire in September 2022 from LIBOR (or EURIBOR for any loan drawn in euro) plus 3.25% per annum to LIBOR (or EURIBOR for any loan drawn in euro) plus 3.00% per annum. Cabot Securitisation Senior Facility Cabot’s wholly owned subsidiary Cabot Securitisation UK Ltd (“Cabot Securitisation”) entered into a senior facility agreement (the “Senior Facility Agreement”) for a committed amount of £300.0 million , of which £300.0 million was drawn as of September 30, 2018 . The Senior Facility Agreement had an initial availability period ending in September 2020 and an initial repayment date in September 2022. On October 4, 2018, the Senior Facility Agreement was amended to mature in September 2023. The obligations of Cabot Securitisation under the Senior Facility Agreement are secured by first ranking security interests over all of Cabot Securitisation’s property, assets and rights (including receivables purchased from Cabot Financial UK from time to time), the book value of which was approximately £329.6 million (approximately $429.2 million ) as of September 30, 2018 . Funds drawn under the Senior Facility Agreement will bear interest at a rate per annum equal to LIBOR plus a margin of 2.85% . At September 30, 2018 , the outstanding borrowings under the Cabot Securitisation Senior Facility were approximately $390.7 million . The weighted average interest rate was 3.56% and 3.10% for the three months ended September 30, 2018 and 2017 , respectively, and 3.42% and 3.10% for the nine months ended September 30, 2018 and 2017 , respectively. On November 1, 2018, Cabot’s wholly owned subsidiary Cabot Securitisation UK II Ltd (“Cabot Securitisation II”) entered into a new non-recourse asset backed senior facility of £50.0 million , with a maturity date in September 2023. The facility is secured by first ranking security interests over all of Cabot Securitisation II’s property, assets and rights. Funds drawn under this facility will bear interest at a rate per annum equal to LIBOR plus a margin of 4.075% . Cabot Securitisation and Cabot Securitisation II are securitized financing vehicles and are VIEs for consolidation purposes. Refer to Note 10 , “Variable Interest Entities,” for further details. Preferred Equity Certificates The Company previously held preferred equity certificates (“PECs”) as a result of its initial acquisition of Cabot in July 2013. The PECs were legal debt obligations to the noncontrolling shareholders of Cabot and they were carried at face amount, plus any accrued interest. The PECs accrued interest at 12% per annum. On July 24, 2018, in connection with the Cabot Transaction, the Company acquired all outstanding PECs including accrued interest not owned by the Company of approximately $262.5 million . As of September 30, 2018, the Company no longer carried any PECs. The accrued interest expense on the PECs was approximately $2.0 million and $6.6 million during the three months ended September 30, 2018 and 2017, respectively, and $17.3 million and $19.2 million during the nine months ended September 30, 2018 and 2017, respectively. Capital Lease Obligations The Company has capital lease obligations primarily for computer equipment. As of September 30, 2018 , the Company’s capital lease obligations were approximately $8.0 million . These capital lease obligations require monthly, quarterly or annual payments through 2023 and have implicit interest rates that range from zero to approximately 5.5% . |
Variable Interest Entities
Variable Interest Entities | 9 Months Ended |
Sep. 30, 2018 | |
Variable Interest Entity, Measure of Activity [Abstract] | |
Variable Interest Entities | Variable Interest Entities A VIE is defined as a legal entity whose equity owners do not have sufficient equity at risk, or, as a group, the holders of the equity investment at risk lack any of the following three characteristics: decision-making rights, the obligation to absorb expected losses, or the right to receive expected residual returns of the entity. The primary beneficiary is identified as the variable interest holder that has both the power to direct the activities of the VIE that most significantly affect the entity’s economic performance and the obligation to absorb expected losses or the right to receive benefits from the entity that could potentially be significant to the VIE. The Company evaluates its relationships with its VIEs on an ongoing basis to ensure that it continues to be the primary beneficiary. A reconsideration event is significant if it changes the design of the entity or the entity’s equity investment at risk. Upon completion of the Cabot Transaction on July 24, 2018 and the subsequent change in organizational structure, Janus Holdings no longer qualified as a VIE and is now consolidated via the voting interest model. As of September 30, 2018, the Company’s VIEs include certain securitized financing vehicles and other immaterial special purpose entities that were created to purchase receivable portfolios in certain geographies. Most assets recognized as a result of consolidating these VIEs do not represent additional assets that could be used to satisfy claims against the Company’s general assets. Conversely, liabilities recognized as a result of consolidating these VIEs do not represent additional claims on the Company’s general assets; rather, they represent claims against the specific assets of the VIE. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax expense on income from continuing operations was $16.9 million and $17.8 million during the three months ended September 30, 2018 and 2017 , respectively, and $37.7 million and $43.4 million during the nine months ended September 30, 2018 and 2017 , respectively. The decreases in income tax expense for the three and nine months ended September 30, 2018 as compared to the corresponding periods in 2017 were primarily due to lower pretax income and the reduction of the U.S. corporate tax rate as prescribed by the U.S. Tax Cuts and Jobs Act (the “Tax Reform Act”). The decreases were partially offset by increased tax expense in the Company’s international subsidiaries due to the recording of various discrete items and certain Cabot Transaction related expenses not deductible for tax purposes. On December 22, 2017, the Tax Reform Act was signed into law. The Tax Reform Act significantly revised the U.S. corporate income tax regime by, among other things, lowering the U.S. corporate tax rate from a top rate of 35% to a flat rate of 21% effective January 1, 2018, while also implementing elements of a territorial tax system and imposing a repatriation tax on deemed repatriated earnings of foreign subsidiaries. Due to the complexities involved in accounting for the Tax Reform Act, Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”) allowed the Company to record provisional amounts in earnings for the year ended December 31, 2017. SAB 118 provides that where reasonable estimates can be made, the provisional accounting should be based on such estimates. During the three and nine months ended September 30, 2018 , there were no changes made to the provisional amounts recognized in 2017. The Company will continue to analyze the effects of the Tax Reform Act, and additional impacts, if any. The impact of the Tax Reform Act may differ from the Company’s estimates, possibly materially, during the one-year measurement period due to, among other things, further refinement of the Company’s calculations, changes in interpretations and assumptions the Company has made, guidance that may be issued and actions the Company may take as a result of the Tax Reform Act. The effective tax rates for the respective periods are shown below: Three Months Ended Nine Months Ended 2018 2017 2018 2017 Federal provision 21.0 % 35.0 % 21.0 % 35.0 % State provision 1.7 % 3.3 % 1.5 % 3.3 % International provision (benefit) (1) 31.1 % (7.9 )% 14.7 % (2.2 )% Other 2.7 % (0.7 )% (0.1 )% 0.2 % Effective rate 56.5 % 29.7 % 37.1 % 36.3 % ________________________ (1) During the three months ended September 30, 2018, the Company recorded certain discrete tax charges of approximately $5.0 million relating to previously established deferred tax assets in certain foreign subsidiaries in Latin America from which the Company no longer believes it will receive any benefit. In addition, the international provision increased due to nondeductible costs related to the Cabot Transaction. As a result, the effective international tax rates during the three and nine months ended September 30, 2018 have substantially increased as compared to the corresponding periods in 2017. In accordance with the authoritative guidance for income taxes, each interim period is considered an integral part of the annual period and tax expense or benefit is measured using an estimated annual effective income tax rate. The estimated annual effective tax rate for the full year is applied to the respective interim period, taking into account year-to-date amounts and projected amounts for the year. Since the Company operates in foreign countries with varying tax rates, the magnitude of the impact of the results the international operations has on the Company’s quarterly effective tax rate is dependent on the level of income or loss from the international operations in the period. The Company’s subsidiary in Costa Rica is operating under a 100% tax holiday through December 31, 2026 and a 50% tax holiday for the subsequent four years. The impact of the tax holiday in Costa Rica for the three and nine months ended September 30, 2018 and 2017 , was immaterial. The Company had gross unrecognized tax benefits, inclusive of penalties and interest, of $21.6 million at September 30, 2018 . These unrecognized tax benefits, if recognized, would result in a net tax benefit of $9.7 million as of September 30, 2018 . The gross unrecognized tax benefits did not materially change from December 31, 2017 . Of the $204.6 million of cash and cash equivalents as of September 30, 2018 , $171.9 million was held outside of the United States. Following the enactment of the Tax Reform Act and the associated transition tax, in general, repatriation of cash to the United States can be completed with no incremental U.S. tax. However, repatriation of cash could subject the Company to non-U.S. jurisdictional taxes on distributions. The Company maintains non-U.S. funds in its foreign operations to (i) provide adequate working capital, (ii) satisfy various regulatory requirements, and (iii) take advantage of business expansion opportunities as they arise. The non-U.S. jurisdictional taxes applicable to foreign earnings are not readily determinable or practicable. The Company continues to evaluate the impact of the Tax Reform Act on its election to indefinitely reinvest certain of its non-U.S. earnings. As of September 30, 2018 , management believes that it has sufficient liquidity to satisfy its cash needs, including its cash needs in the United States. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation and Regulatory The Company is involved in disputes, legal actions, regulatory investigations, inquiries, and other actions from time to time in the ordinary course of business. The Company, along with others in its industry, is routinely subject to legal actions based on the Fair Debt Collection Practices Act (“FDCPA”), comparable state statutes, the Telephone Consumer Protection Act (“TCPA”), state and federal unfair competition statutes, and common law causes of action. The violations of law investigated or alleged in these actions often include claims that the Company lacks specified licenses to conduct its business, attempts to collect debts on which the statute of limitations has run, has made inaccurate or unsupported assertions of fact in support of its collection actions and/or has acted improperly in connection with its efforts to contact consumers. Such litigation and regulatory actions could involve potential compensatory or punitive damage claims, fines, sanctions, injunctive relief, or changes in business practices. Many continue on for some length of time and involve substantial investigation, litigation, negotiation, and other expense and effort before a result is achieved, and during the process the Company often cannot determine the substance or timing of any eventual outcome. At September 30, 2018 , there were no material developments in any of the legal proceedings disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 . 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. In accordance with authoritative guidance, the Company records loss contingencies in its financial statements only for matters in which losses are probable and can be reasonably estimated. Where a range of loss can be reasonably estimated with no best estimate in the range, the Company records the minimum estimated liability. The Company continuously assesses the potential liability related to its pending litigation and regulatory matters and revises its estimates when additional information becomes available. As of September 30, 2018 , other than the reserves related to the Consumer Finance Protection Bureau (“CFPB”) Consent Order and ancillary state regulatory matters, the Company has no material reserves for legal matters. Additionally, based on the current status of litigation and regulatory matters, either the estimate of exposure is immaterial to the Company’s financial statements or an estimate cannot yet be determined. The Company’s legal costs are recorded to expense as incurred. Purchase Commitments In the normal course of business, the Company enters into forward flow purchase agreements and other purchase commitment agreements. As of September 30, 2018 , the Company has entered into agreements to purchase receivable portfolios with a face value of approximately $2.5 billion for a purchase price of approximately $392.9 million . Most purchase commitments do not extend past one year. |
Segment and Geographic Informat
Segment and Geographic Information | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | Segment and Geographic Information The Company conducts business through several operating segments that have similar economic and other qualitative characteristics and have been aggregated in accordance with authoritative guidance into one reportable segment, portfolio purchasing and recovery. Since the Company operates in one reportable segment, all required segment information can be found in the consolidated financial statements. The Company has operations in the United States, Europe and other foreign countries. The following table presents the Company’s total revenues, adjusted by net allowances by geographic areas in which the Company operates (in thousands) : Three Months Ended Nine Months Ended 2018 2017 2018 2017 Revenues, adjusted by net allowances (1) : United States $ 178,892 $ 154,815 $ 530,679 $ 498,744 International Europe (2) 137,331 127,687 412,407 300,379 Other geographies 20,551 24,197 70,223 70,434 157,882 151,884 482,630 370,813 Total $ 336,774 $ 306,699 $ 1,013,309 $ 869,557 ________________________ (1) Revenues, adjusted by net allowances, are attributed to countries based on location of customer. Revenues primarily include portfolio revenues and fee-based income earned on accounts collected on behalf of others. (2) Based on the financial information that is used to produce the general-purpose financial statements, providing further geographic information is impracticable. |
Goodwill and Identifiable Intan
Goodwill and Identifiable Intangible Assets | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Identifiable Intangible Assets | Goodwill and Identifiable Intangible Assets In accordance with authoritative guidance, goodwill is tested for impairment at the reporting unit level annually and in interim periods if certain events occur that indicate that the fair value of a reporting unit may be below its carrying value. Determining the number of reporting units and the fair value of a reporting unit requires the Company to make judgments and involves the use of significant estimates and assumptions. The annual goodwill testing date for the reporting units that are included in the portfolio purchasing and recovery reportable segment is October 1st. There have been no events or circumstances during the nine months ended September 30, 2018 that have required the Company to perform an interim assessment of goodwill carried at these reporting units. Management continues to evaluate and monitor all key factors impacting the carrying value of the Company’s recorded goodwill and long-lived assets. Adverse changes in the Company’s actual or expected operating results, market capitalization, business climate, economic factors or other negative events that may be outside the control of management could result in a material non-cash impairment charge in the future. The Company’s goodwill is attributable to reporting units included in its portfolio purchasing and recovery segment. The following table summarizes the activity in the Company’s goodwill balance (in thousands): Total Balance, December 31, 2017 $ 928,993 Goodwill adjustments (2,212 ) Effect of foreign currency translation (28,190 ) Balance, September 30, 2018 $ 898,591 The Company’s acquired intangible assets are summarized as follows (in thousands) : As of September 30, 2018 As of December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships $ 71,895 $ (11,796 ) $ 60,099 $ 73,875 $ (6,800 ) $ 67,075 Developed technologies 5,710 (5,247 ) 463 6,683 (5,411 ) 1,272 Trade name and other 9,500 (5,995 ) 3,505 14,413 (7,024 ) 7,389 Total intangible assets $ 87,105 $ (23,038 ) $ 64,067 $ 94,971 $ (19,235 ) $ 75,736 |
Guarantee of Subsidiary Debt
Guarantee of Subsidiary Debt | 9 Months Ended |
Sep. 30, 2018 | |
Guarantees and Product Warranties [Abstract] | |
Guarantee of Subsidiary Debt | Guarantee of Subsidiary Debt Unless otherwise indicated in connection with a particular offering of debt securities, Encore will fully and unconditionally guarantee any debt securities issued by Encore Finance, a 100% owned finance subsidiary of Encore. Amounts related to Encore Finance are included in the consolidated financial statements of Encore subsequent to April 30, 2018 , the date of the incorporation of Encore Finance. On July 20, 2018, Encore Finance issued $172.5 million aggregate principal amount of the Exchangeable Notes which are fully and unconditionally guaranteed by Encore. Refer to Note 9, “Debt, Net,” for further details of the Exchangeable Notes. |
Ownership, Description of Bus_2
Ownership, Description of Business, and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying interim condensed consolidated financial statements have been prepared by the Company, without audit, in accordance with the instructions to the Quarterly Report on Form 10-Q, and Rule 10-01 of Regulation S-X promulgated by the United States Securities and Exchange Commission (the “SEC”) and, therefore, do not include all information and footnotes necessary for a fair presentation of its consolidated financial position, results of operations and cash flows in accordance with accounting principles generally accepted in the United States (“GAAP”). In the opinion of management, the unaudited financial information for the interim periods presented reflects all adjustments, consisting of only normal and recurring adjustments, necessary for a fair presentation of the Company’s consolidated financial position, results of operations, and cash flows. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 . Operating results for interim periods are not necessarily indicative of operating results for an entire fiscal year. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in the Company’s financial statements and the accompanying notes. Actual results could materially differ from those estimates. |
Basis of Consolidation | The condensed consolidated financial statements have been prepared in conformity with GAAP and reflect the accounts and operations of the Company and those of its subsidiaries in which the Company has a controlling financial interest. The Company also consolidates variable interest entities (“ VIE”s), for which it is the primary beneficiary. The primary beneficiary has both (a) the power to direct the activities of the VIE that most significantly affect the entity’s economic performance, and (b) either the obligation to absorb losses or the right to receive benefits. Refer to Note 10 , “Variable Interest Entities,” for further details. All intercompany transactions and balances have been eliminated in consolidation. |
Translation of Foreign Currencies | The financial statements of certain of the Company’s foreign subsidiaries are measured using their local currency as the functional currency. Assets and liabilities of foreign operations are translated into U.S. dollars using period-end exchange rates, and revenues and expenses are translated into U.S. dollars using average exchange rates in effect during each period. The resulting translation adjustments are recorded as a component of other comprehensive income or loss. Equity accounts are translated at historical rates, except for the change in retained earnings during the year which is the result of the income statement translation process. Intercompany transaction gains or losses at each period end arising from subsequent measurement of balances for which settlement is not planned or anticipated in the foreseeable future are included as translation adjustments and recorded within other comprehensive income or loss. Translation gains or losses are the material components of accumulated other comprehensive income or loss. Transaction gains and losses are included in other income or expense. |
Reclassifications | Certain immaterial reclassifications have been made to the condensed consolidated financial statements to conform to the current year’s presentation. |
Change in Accounting Principle and Recent Accounting Pronouncements | In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (“Topic 606” or “ASU 2014-09”). The objective of ASU 2014-09 is to establish a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASU 2014-09 supersedes most of the existing revenue recognition guidance, including industry-specific guidance. The core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 applies to all contracts with customers except those that are within the scope of other topics in the FASB’s Accounting Standards Codification (“ASC”). Under the prior accounting standard, the Company recognized revenue when there was persuasive evidence of an arrangement, the sales price was fixed or determinable, the services had been performed and collectability was reasonably assured. The Company’s investment in receivable portfolios is outside of the scope of Topic 606 since it is accounted for in accordance with ASC 310-30. Certain of the Company’s international subsidiaries earn fee-based income by providing portfolio management services to credit originators for non-performing loans. Performance obligations for this revenue stream under the new standard primarily arise from debt collection and management activities. These performance obligations are typically satisfied when services are performed, or debt is collected. Consideration is typically variable based on indeterminate volumes or collection activity. Under the new accounting standard, revenue is recognized over time as a series of single performance obligations when the Company is entitled to a percentage of collections received, since the customer simultaneously receives and consumes the benefits provided by the Company’s performance of debt collection and management. The method for measuring progress towards satisfying a performance obligation is based on transaction volumes or debt collected, depending on whether the contract is based on services performed or based on commissions. Costs to fulfill a contract are expensed when incurred. The Company adopted the requirements of Topic 606 as of January 1, 2018, utilizing the modified retrospective method of transition and elected to apply the revenue standard only to contracts that were not completed as of the adoption date. Prior periods were not restated. The cumulative effect of adopting this new standard had no impact to retained earnings. The impact of adopting Topic 606 on the Company’s revenue is not material to any of the periods presented. Fee-based income is included in “Other Revenues” in the Company’s consolidated statements of operations. In August 2017, the FASB issued ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities — Derivatives and He dging (“Topic 815” or “ASU 2017-12”) which amends the hedge accounting recognition and presentation requirements in ASC 815. ASU 2017-12 improves Topic 815 by simplifying and expanding the eligible hedging strategies for financial and nonfinancial risks by more closely aligning hedge accounting with a company’s risk management activities, and also simplifies its application through targeted improvements in key practice areas. This includes expanding the list of items eligible to be hedged and amending the methods used to measure the effectiveness of hedging relationships. In addition, ASU 2017-12 prescribes how hedging results should be presented and requires incremental disclosures. These changes are intended to allow preparers more flexibility and to enhance the transparency of how hedging results are presented and disclosed. Further, the new standard provides partial relief on the timing of certain aspects of hedge documentation and eliminates the requirement to recognize hedge ineffectiveness separately in earnings in the current period. For public entities, ASU 2017-12 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted in any interim period or fiscal year. The Company early adopted ASU 2017-12 as of the second quarter of 2018 retroactive to January 1, 2018. The adoption of the new standard did not have a material effect on the Company’s financial position, results of operations, or required presentations. Recent Accounting Pronouncements Other than the adoption of the standards discussed above, there have been no new accounting pronouncements made effective during the three and nine months ended September 30, 2018 that have significance, or potential significance, to the Company’s consolidated financial statements. Recent Accounting Pronouncements Not Yet Effective In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350). The amendments in this update simplify the test for goodwill impairment by eliminating Step 2 from the impairment test, which required the entity to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities following the procedure that would be required in determining fair value of assets acquired and liabilities assumed in a business combination. The amendments in this update are effective for public companies for annual or any interim goodwill impairments tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company did not early adopt this guidance for its annual goodwill impairment testing and does not expect the adoption of ASU 2017-04 to have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 applies a current expected credit loss model which is a new impairment model based on expected losses rather than incurred losses. Under this model, an entity would recognize an impairment allowance equal to its current estimate of all contractual cash flows that the entity does not expect to collect from financial assets measured at amortized cost. The estimate of expected credit losses should consider historical information, current information, as well as reasonable and supportable forecasts, including estimates of prepayments. The expected credit losses, and subsequent adjustments to such losses, will be recorded through an allowance account that is deducted from the amortized cost basis of the financial asset, with the net carrying value of the financial asset presented on the consolidated balance sheet at the amount expected to be collected. ASU 2016-13 eliminates the current accounting model for loans and debt securities acquired with deteriorated credit quality under ASC 310-30, which provides authoritative guidance for the accounting of the Company’s investment in receivable portfolios. Under this new standard, entities will gross up the initial amortized cost for the purchased financial assets with credit deterioration (“PCD assets”), the initial amortized cost will be the sum of (1) the purchase price and (2) the estimate of credit losses as of the date of acquisition. After initial recognition of PCD assets and the related allowance, any change in estimated cash flows (favorable or unfavorable) will be immediately recognized in the income statement because the yield on PCD assets would be locked. ASU 2016-13 is effective for reporting periods beginning after December 15, 2019 with early adoption permitted for reporting periods beginning after December 15, 2018. The guidance will be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period in which ASU 2016-13 is adopted. However, the FASB has determined that financial assets for which the guidance in Subtopic 310-30, Receivables-Loans and Debt Securities Acquired with Deteriorated Credit Quality, has previously been applied should prospectively apply the guidance in ASU 2016-13 for PCD assets. A prospective transition approach should be used for PCD assets where upon adoption, the amortized cost basis should be adjusted to reflect the addition of the allowance for credit losses. This transition relief will avoid the need for a reporting entity to reassess its purchased financial assets that exist as of the date of adoption to determine whether they would have met at acquisition the new criteria of more-than insignificant credit deterioration since origination. The transition relief also will allow an entity to accrete the remaining noncredit discount (based on the revised amortized cost basis) into interest income at the effective interest rate at the adoption date of ASU 2016-13. The same transition requirements should be applied to beneficial interests that previously applied Subtopic 310-30 or have a significant difference between contractual cash flows and expected cash flows. The Company is in the process of determining the effects the adoption of ASU 2016-13 will have on its consolidated financial statements. The Company expects ASU 2016-13 could have a significant impact on how it measures and records income recognized on its receivable portfolios. The Company has established a project management team and is in the process of developing its accounting policy, evaluating the impact of this pronouncement and researching software resources that could assist with the implementation. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 changes accounting for leases and requires lessees to recognize the assets and liabilities arising from most leases, including those classified as operating leases under previous accounting guidance, on the balance sheet and requires disclosure of key information about leasing arrangements to increase transparency and comparability among organizations. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, which provides narrow amendments to clarify how to apply certain aspects of the new lease standard. In July 2018, ASU 2018-11, Leases: Targeted Improvements, was issued to provide relief to companies from restating comparative periods. Pursuant to ASU 2018-11, in the period of adoption, the Company will not restate comparative periods presented in its financial statements. The new guidance will be effective for the Company starting in the first quarter of fiscal year 2019. Early adoption is permitted; however, the Company does not intend to early adopt. The Company is developing an inventory of all leases, accumulating the lease data necessary to apply the amended guidance and is in the process of determining the effects the adoption will have on its consolidated financial statements, systems and processes. The Company has selected a software to assist with implementation to the standard. With the exception of the updated standards discussed above, there have been no new accounting pronouncements not yet effective that have significance, or potential significance, to the Company’s consolidated financial statements. |
Earnings Per Share | Basic earnings or loss per share is calculated by dividing net earnings or loss attributable to Encore by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is calculated based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding stock options, restricted stock, and the dilutive effect of the convertible senior notes, if applicable. |
Fair Value Measurements | The authoritative guidance for fair value measurements defines fair value as the price that would be received upon sale of an asset or the price paid to transfer a liability, in an orderly transaction between market participants at the measurement date ( i.e., the “exit price”). The guidance utilizes a fair value hierarchy that prioritizes the inputs used in valuation techniques to measure fair value into three broad levels. The following is a brief description of each level: • Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. • Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. • Level 3: Unobservable inputs, including inputs that reflect the reporting entity’s own assumptions. |
Derivatives | The Company has operations in foreign countries, which expose the Company to foreign currency exchange rate fluctuations due to transactions denominated in foreign currencies. To mitigate a portion of this risk, the Company enters into derivative financial instruments, principally foreign currency forward contracts with financial counterparties. The Company adjusts the level and use of derivatives as soon as practicable after learning that an exposure has changed and reviews all exposures and derivative positions on an ongoing basis. Certain of the foreign currency forward contracts are designated as cash flow hedging instruments and qualify for hedge accounting treatment. Gains and losses arising from such contracts are recorded as a component of accumulated other comprehensive income (“OCI”) as gains and losses on derivative instruments, net of income taxes. The hedging gains and losses in OCI are subsequently reclassified into earnings in the same period in which the underlying transactions affect the Company’s earnings. If all or a portion of the forecasted transaction is cancelled, the Company would reclassify the hedge into earnings. The Company may periodically enter into derivative financial instruments to manage risks related to interest rates and foreign currency. Certain of the Company’s derivative financial instruments qualify for hedge accounting treatment under the authoritative guidance for derivatives and hedging. |
Segment Reporting | The Company conducts business through several operating segments that have similar economic and other qualitative characteristics and have been aggregated in accordance with authoritative guidance into one reportable segment, portfolio purchasing and recovery. Since the Company operates in one reportable segment, all required segment information can be found in the consolidated financial statements. |
Goodwill | In accordance with authoritative guidance, goodwill is tested for impairment at the reporting unit level annually and in interim periods if certain events occur that indicate that the fair value of a reporting unit may be below its carrying value. Determining the number of reporting units and the fair value of a reporting unit requires the Company to make judgments and involves the use of significant estimates and assumptions. The annual goodwill testing date for the reporting units that are included in the portfolio purchasing and recovery reportable segment is October 1st. There have been no events or circumstances during the nine months ended September 30, 2018 that have required the Company to perform an interim assessment of goodwill carried at these reporting units. Management continues to evaluate and monitor all key factors impacting the carrying value of the Company’s recorded goodwill and long-lived assets. Adverse changes in the Company’s actual or expected operating results, market capitalization, business climate, economic factors or other negative events that may be outside the control of management could result in a material non-cash impairment charge in the future. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Shares Used in Calculating Earnings Per Basic and Diluted Shares | A reconciliation of shares used in calculating earnings per basic and diluted shares follows (in thousands) : Three Months Ended Nine Months Ended 2018 2017 2018 2017 Weighted average common shares outstanding—basic 29,867 26,011 27,372 25,957 Dilutive effect of stock-based awards 254 271 291 214 Dilutive effect of convertible senior notes — 454 — 235 Weighted average common shares outstanding—diluted 30,121 26,736 27,663 26,406 |
Cabot Transaction (Tables)
Cabot Transaction (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Schedule of the Cabot Transaction | (in thousands) Cash consideration $ 234,101 Stock consideration 180,559 Total consideration transferred 414,660 Less: Preferred equity certificates acquired (262,512 ) Consideration transferred to acquire remaining equity interest 152,148 Less: Carrying value of redeemable noncontrolling interest (127,299 ) Less: Carrying value of noncontrolling interest 9,626 Net loss directly recorded in equity 34,475 Direct and incremental transaction costs 8,622 Total reduction in additional paid-in capital $ 43,097 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | Financial assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands) : Fair Value Measurements as of Level 1 Level 2 Level 3 Total Assets Interest rate swap agreements $ — $ 5 $ — $ 5 Interest rate cap contracts — 2,445 — 2,445 Liabilities Foreign currency exchange contracts — (1,408 ) — (1,408 ) Contingent consideration — — (7,417 ) (7,417 ) Temporary Equity Redeemable noncontrolling interest — — (1,231 ) (1,231 ) Fair Value Measurements as of Level 1 Level 2 Level 3 Total Assets Foreign currency exchange contracts $ — $ 1,912 $ — $ 1,912 Interest rate cap contracts — 3,922 — 3,922 Liabilities Foreign currency exchange contracts — (1,110 ) — (1,110 ) Interest rate swap agreements — (7 ) — (7 ) Contingent consideration — — (10,612 ) (10,612 ) Temporary Equity Redeemable noncontrolling interest — — (151,978 ) (151,978 ) |
Schedule of Roll forward of the Fair Value of Contingent Consideration | The following table provides a roll forward of the fair value of contingent consideration for the periods ended September 30, 2018 and December 31, 2017 (in thousands) : Amount Balance at December 31, 2016 $ 2,531 Issuance of contingent consideration in connection with acquisition 10,808 Change in fair value of contingent consideration (2,465 ) Payment of contingent consideration (781 ) Effect of foreign currency translation 519 Balance at December 31, 2017 10,612 Issuance of contingent consideration in connection with acquisition 1,728 Change in fair value of contingent consideration (4,652 ) Payment of contingent consideration (232 ) Effect of foreign currency translation (39 ) Balance at September 30, 2018 $ 7,417 |
Schedule of Components of the Change in the Redeemable Non-controlling Interest | The components of the change in the redeemable noncontrolling interest for the periods ended September 30, 2018 and December 31, 2017 are presented in the following table (in thousands) : Amount Balance at December 31, 2016 $ 45,755 Addition to redeemable noncontrolling interest 277 Net loss attributable to redeemable noncontrolling interest (4,905 ) Adjustment of the redeemable noncontrolling interest to fair value 108,296 Effect of foreign currency translation attributable to redeemable noncontrolling interest 2,555 Balance at December 31, 2017 151,978 Redemption of redeemable noncontrolling interest (138,835 ) Net loss attributable to redeemable noncontrolling interest (4,178 ) Adjustment of the redeemable noncontrolling interest to fair value (7,419 ) Effect of foreign currency translation attributable to redeemable noncontrolling interest (315 ) Balance at September 30, 2018 $ 1,231 |
Derivatives and Hedging Instr_2
Derivatives and Hedging Instruments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Value of Derivative Instruments | The following table summarizes the fair value of derivative instruments as recorded in the Company’s condensed consolidated statements of financial condition (in thousands) : September 30, 2018 December 31, 2017 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives designated as hedging instruments: Foreign currency exchange contracts Other assets $ — Other assets $ 1,912 Foreign currency exchange contracts Other liabilities (1,408 ) Other liabilities — Interest rate swap agreements Other assets 5 Other liabilities (7 ) Derivatives not designated as hedging instruments: Foreign currency exchange contracts Other liabilities — Other liabilities (1,110 ) Interest rate cap contracts Other assets 2,445 Other assets 3,922 |
Schedule of Effects of Derivatives in Cash Flow Hedging | The following table summarizes the effects of derivatives in cash flow hedging relationships designated as hedging instruments on the Company’s condensed consolidated statements of operations for the three and nine months ended September 30, 2018 and 2017 (in thousands) : Derivatives Designated as Hedging Instruments Gain or (Loss) Location of Gain Gain or (Loss) Three Months Ended Three Months Ended September 30, 2018 2017 2018 2017 Foreign currency exchange contracts $ (916 ) $ (27 ) Salaries and employee benefits $ 95 $ 286 Foreign currency exchange contracts (130 ) 70 General and administrative expenses 11 35 Interest rate swap agreements 3 10 Interest expense 4 — Derivatives Designated as Hedging Instruments Gain or (Loss) Location of Gain Gain or (Loss) Nine Months Ended Nine Months Ended 2018 2017 2018 2017 Foreign currency exchange contracts $ (1,990 ) $ 1,708 Salaries and employee benefits $ 1,078 $ 758 Foreign currency exchange contracts (206 ) 310 General and administrative expenses 46 76 Interest rate swap agreements (9 ) 29 Interest expense 29 110 The following table summarizes the effects of derivatives in cash flow hedging relationships not designated as hedging instruments on the Company’s condensed consolidated statements of operations for the three and nine months ended September 30, 2018 and 2017 (in thousands) : Derivatives Not Designated as Hedging Instruments Location of Gain or (Loss) Recognized in Income on Derivative Amount of Gain or (Loss) Recognized in Income on Derivative Three Months Ended Nine Months Ended 2018 2017 2018 2017 Foreign currency exchange contracts Other (expense) income $ (2,281 ) $ (833 ) $ (9,221 ) $ 1,790 Interest rate cap contracts Interest income (expense) 289 919 (1,427 ) 919 Interest rate swap agreements Interest expense — — — 110 |
Investment in Receivable Port_2
Investment in Receivable Portfolios, Net (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Schedule of Accretable Yield and an Estimate of Zero Basis Future Cash Flows | The following table summarizes the Company’s accretable yield and an estimate of zero basis future cash flows at the beginning and end of the period presented (in thousands) : Accretable Yield Estimate of Zero Basis Cash Flows Total Balance at December 31, 2017 $ 3,695,069 $ 369,632 $ 4,064,701 Revenue from receivable portfolios (249,821 ) (31,188 ) (281,009 ) Allowance reversals on receivable portfolios, net (8,082 ) (1,729 ) (9,811 ) Reductions on existing portfolios, net (24,945 ) (39,529 ) (64,474 ) Additions for current purchases 285,172 — 285,172 Effect of foreign currency translation 57,577 643 58,220 Balance at March 31, 2018 3,754,970 297,829 4,052,799 Revenue from receivable portfolios (258,698 ) (33,964 ) (292,662 ) Allowance reversals on receivable portfolios, net (15,411 ) (2,221 ) (17,632 ) Additions on existing portfolios, net 136,267 5,824 142,091 Additions for current purchases 345,006 — 345,006 Effect of foreign currency translation (97,448 ) (597 ) (98,045 ) Balance at June 30, 2018 3,864,686 266,871 4,131,557 Revenue from receivable portfolios (263,109 ) (32,248 ) (295,357 ) Allowance reversals on receivable portfolios, net (1,196 ) (2,833 ) (4,029 ) Additions on existing portfolios, net 23,241 14,481 37,722 Additions for current purchases 262,751 — 262,751 Effect of foreign currency translation (20,483 ) (136 ) (20,619 ) Balance at September 30, 2018 $ 3,865,890 $ 246,135 $ 4,112,025 Accretable Yield Estimate of Zero Basis Cash Flows Total Balance at December 31, 2016 $ 3,092,004 $ 365,504 $ 3,457,508 Revenue from receivable portfolios (211,105 ) (38,733 ) (249,838 ) Allowance reversals on receivable portfolios, net (613 ) (1,519 ) (2,132 ) (Reductions) additions on existing portfolios, net (90,138 ) 57,446 (32,692 ) Additions for current purchases 200,728 — 200,728 Effect of foreign currency translation 38,712 467 39,179 Balance at March 31, 2017 3,029,588 383,165 3,412,753 Revenue from receivable portfolios (224,310 ) (39,097 ) (263,407 ) Allowance reversals on receivable portfolios, net (7,121 ) (1,708 ) (8,829 ) Additions on existing portfolios, net 225,021 9,888 234,909 Additions for current purchases 258,687 — 258,687 Effect of foreign currency translation 66,927 (753 ) 66,174 Balance at June 30, 2017 3,348,792 351,495 3,700,287 Revenue from receivable portfolios (230,403 ) (33,621 ) (264,024 ) Allowance reversals on receivable portfolios, net (17,817 ) (1,747 ) (19,564 ) Additions on existing portfolios, net 27,162 1,539 28,701 Additions for current purchases 336,725 — 336,725 Effect of foreign currency translation 56,971 375 57,346 Balance at September 30, 2017 $ 3,521,430 $ 318,041 $ 3,839,471 |
Schedule of Investment in Receivable Portfolios | The following tables summarize the changes in the balance of the investment in receivable portfolios during the following periods ( in thousands, except percentages ): Three Months Ended September 30, 2018 Accrual Basis Portfolios Cost Recovery Portfolios Zero Basis Portfolios Total Balance, beginning of period $ 3,074,292 $ 10,329 $ — $ 3,084,621 Purchases of receivable portfolios 248,691 — — 248,691 Disposals or transfers to assets held for sale (4,253 ) (1,111 ) — (5,364 ) Gross collections (1) (463,474 ) (306 ) (35,063 ) (498,843 ) Put-Backs and Recalls (2) (2,056 ) — (18 ) (2,074 ) Foreign currency adjustments (17,208 ) (93 ) — (17,301 ) Revenue recognized 263,109 — 32,248 295,357 Portfolio allowance reversals, net 1,196 — 2,833 4,029 Balance, end of period $ 3,100,297 $ 8,819 $ — $ 3,109,116 Revenue as a percentage of collections (3) 56.8 % — % 92.0 % 59.2 % Three Months Ended September 30, 2017 Accrual Basis Portfolios Cost Recovery Portfolios Zero Basis Portfolios Total Balance, beginning of period $ 2,541,590 $ 14,335 $ — $ 2,555,925 Purchases of receivable portfolios 292,332 — — 292,332 Disposals or transfers to assets held for sale (3,536 ) (265 ) — (3,801 ) Gross collections (1) (407,435 ) (435 ) (35,126 ) (442,996 ) Put-Backs and Recalls (2) (407 ) — (242 ) (649 ) Foreign currency adjustments 44,366 46 — 44,412 Revenue recognized 230,403 — 33,621 264,024 Portfolio allowance reversals, net 17,817 — 1,747 19,564 Balance, end of period $ 2,715,130 $ 13,681 $ — $ 2,728,811 Revenue as a percentage of collections (3) 56.5 % — % 95.7 % 59.6 % ________________________ (1) Does not include amounts collected on behalf of others. (2) Put-backs represent accounts that are returned to the seller in accordance with the respective purchase agreement (“Put-Backs”). Recalls represent accounts that are recalled by the seller in accordance with the respective purchase agreement (“Recalls”). (3) Revenue as a percentage of collections excludes the effects of net portfolio allowances or net portfolio allowance reversals. Nine Months Ended September 30, 2018 Accrual Basis Portfolios Cost Recovery Portfolios Zero Basis Portfolios Total Balance, beginning of period $ 2,879,170 $ 11,443 $ — $ 2,890,613 Purchases of receivable portfolios 885,033 — — 885,033 Disposals or transfers to assets held for sale (9,358 ) (1,373 ) — (10,731 ) Gross collections (1) (1,379,095 ) (1,729 ) (103,214 ) (1,484,038 ) Put-Backs and Recalls (2) (14,231 ) — (171 ) (14,402 ) Foreign currency adjustments (57,539 ) (320 ) — (57,859 ) Revenue recognized 771,628 — 97,400 869,028 Reclassification adjustments (3) — 798 (798 ) — Portfolio allowance reversals, net 24,689 — 6,783 31,472 Balance, end of period $ 3,100,297 $ 8,819 $ — $ 3,109,116 Revenue as a percentage of collections (4) 56.0 % — % 94.4 % 58.6 % Nine Months Ended September 30, 2017 Accrual Basis Portfolios Cost Recovery Portfolios Zero Basis Portfolios Total Balance, beginning of period $ 2,368,366 $ 14,443 $ — $ 2,382,809 Purchases of receivable portfolios 756,305 1,169 — 757,474 Disposals or transfers to assets held for sale (11,004 ) (265 ) — (11,269 ) Gross collections (1) (1,212,357 ) (1,534 ) (116,150 ) (1,330,041 ) Put-Backs and Recalls (2) (5,401 ) — (275 ) (5,676 ) Foreign currency adjustments 127,852 (132 ) — 127,720 Revenue recognized 665,818 — 111,451 777,269 Portfolio allowance reversals, net 25,551 — 4,974 30,525 Balance, end of period $ 2,715,130 $ 13,681 $ — $ 2,728,811 Revenue as a percentage of collections (4) 54.9 % — % 96.0 % 58.4 % ________________________ (1) Does not include amounts collected on behalf of others. (2) Put-Backs represent accounts that are returned to the seller in accordance with the respective purchase agreement. Recalls represent accounts that are recalled by the seller in accordance with the respective purchase agreement. (3) Reclassification relating to certain Zero Basis Revenue that was classified as collections in cost recovery portfolios in prior periods. (4) Revenue as a percentage of collections excludes the effects of net portfolio allowances or net portfolio allowance reversals. |
Schedule of Valuation Allowance for Investment in Receivable Portfolios | The following table summarizes the change in the valuation allowance for investment in receivable portfolios during the periods presented (in thousands) : Valuation Allowance Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Balance at beginning of period $ 75,129 $ 130,675 $ 102,576 $ 137,037 Provision for portfolio allowances 6,156 10,181 8,816 10,863 Reversal of prior allowances (10,185 ) (29,745 ) (40,288 ) (41,388 ) Effect of foreign currency translation (365 ) 1,759 (369 ) 6,358 Balance at end of period $ 70,735 $ 112,870 $ 70,735 $ 112,870 |
Deferred Court Costs, Net (Tabl
Deferred Court Costs, Net (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Deferred Court Costs | Deferred Court Costs for the deferral period consist of the following as of the dates presented (in thousands) : September 30, December 31, Court costs advanced $ 812,359 $ 743,584 Court costs recovered (328,715 ) (299,606 ) Court costs reserve (389,627 ) (364,015 ) Deferred court costs $ 94,017 $ 79,963 |
Schedule of Court Cost Reserve | A roll forward of the Company’s court cost reserve is as follows (in thousands) : Court Cost Reserve Three Months Ended Nine Months Ended 2018 2017 2018 2017 Balance at beginning of period $ (381,125 ) $ (345,971 ) $ (364,015 ) $ (327,926 ) Provision for court costs (23,065 ) (19,767 ) (67,293 ) (60,031 ) Net down of reserve after deferral period 13,603 12,419 38,990 36,992 Effect of foreign currency translation 960 (1,491 ) 2,691 (3,845 ) Balance at end of period $ (389,627 ) $ (354,810 ) $ (389,627 ) $ (354,810 ) |
Other Assets (Tables)
Other Assets (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Components of Other Assets | Other assets consist of the following (in thousands) : September 30, December 31, Identifiable intangible assets, net $ 64,067 $ 75,736 Other financial receivables 41,003 37,861 Service fee receivables 31,782 25,609 Assets held for sale 26,241 18,741 Prepaid expenses 24,341 27,606 Deferred tax assets 14,376 18,773 Security deposits 2,947 3,451 Derivative instruments 2,450 5,834 Funds held in escrow — 28,199 Prepaid income taxes — 27,917 Other 37,395 33,001 Total $ 244,602 $ 302,728 |
Debt, Net (Tables)
Debt, Net (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Consolidated Debt and Capital Lease Obligations | The Company is in compliance with all covenants under its financing arrangements as of September 30, 2018 . The components of the Company’s consolidated debt and capital lease obligations were as follows (in thousands) : September 30, December 31, Encore revolving credit facility $ 447,000 $ 328,961 Encore term loan facility 197,927 181,687 Encore senior secured notes 325,000 326,029 Encore convertible notes and exchangeable notes 656,000 483,500 Less: debt discount (39,445 ) (32,720 ) Cabot senior secured notes 1,220,524 1,216,485 Less: debt discount (1,734 ) (1,927 ) Cabot senior revolving credit facility 283,678 179,008 Cabot securitisation senior facility 390,690 391,790 Preferred equity certificates — 253,324 Other credit facilities 57,980 68,001 Other 63,633 92,792 Capital lease obligations 8,005 6,069 3,609,258 3,492,999 Less: debt issuance costs, net of amortization (47,791 ) (46,123 ) Total $ 3,561,467 $ 3,446,876 |
Schedule of Hedge Program for Convertible Notes | Certain key terms related to the convertible and exchangeable features as of September 30, 2018 are listed below. 2020 Convertible Notes 2021 Convertible Notes 2022 Convertible Notes 2023 Exchangeable Notes Initial conversion or exchange price $ 45.72 $ 59.39 $ 45.57 $ 44.62 Closing stock price at date of issuance $ 33.35 $ 47.51 $ 35.05 $ 36.45 Closing stock price date June 24, 2013 March 5, 2014 February 27, 2017 July 20, 2018 Conversion or exchange rate (shares per $1,000 principal amount) 21.8718 16.8386 21.9467 22.4090 Conversion or exchange date January 1, 2020 September 15, 2020 September 15, 2021 March 1, 2023 The details of the hedge program for each of the Convertible Notes and Exchangeable Notes are listed below (in thousands, except conversion price) : 2020 Convertible Notes 2021 Convertible Notes 2023 Exchangeable Notes Cost of the hedge transaction(s) $ 18,113 $ 19,545 $ 17,785 Initial conversion or exchange price $ 45.72 $ 59.39 $ 44.62 Effective conversion or exchange price $ 61.55 $ 83.14 $ 62.48 |
Schedule of Balances of the Liability and Equity Components | The debt and equity components, the issuance costs related to the equity component, the stated interest rate, and the effective interest rate for each of the Convertible Notes and Exchangeable Notes are listed below (in thousands, except percentages) : 2020 Convertible Notes 2021 Convertible Notes 2022 Convertible Notes 2023 Exchangeable Notes Debt component $ 140,247 $ 143,645 $ 137,266 $ 157,971 Equity component $ 32,253 $ 17,355 $ 12,734 $ 14,009 Equity issuance cost $ 1,106 $ 581 $ 398 $ — Stated interest rate 3.000 % 2.875 % 3.250 % 4.500 % Effective interest rate 6.350 % 4.700 % 5.200 % 6.500 % The balances of the liability and equity components of all the Convertible Notes and Exchangeable Notes outstanding were as follows (in thousands) : September 30, December 31, Liability component—principal amount $ 656,000 $ 483,500 Unamortized debt discount (39,445 ) (32,720 ) Liability component—net carrying amount $ 616,555 $ 450,780 Equity component $ 76,351 $ 62,696 |
Schedule of Interest Expense | Interest expense related to the Cabot senior secured notes was as follows (in thousands) : Three Months Ended Nine Months Ended 2018 2017 2018 2017 Interest expense—stated coupon rate $ 21,411 $ 24,285 $ 64,250 $ 73,278 Interest income—accretion of debt premium — (758 ) — (2,855 ) Interest expense—amortization of debt discount 117 119 120 345 Total interest expense—Cabot senior secured notes $ 21,528 $ 23,646 $ 64,370 $ 70,768 The debt discount is being amortized into interest expense over the remaining life of the Convertible Notes and Exchangeable Notes using the effective interest rates. Interest expense related to the Convertible Notes and Exchangeable Notes was as follows (in thousands) : Three Months Ended Nine Months Ended 2018 2017 2018 2017 Interest expense—stated coupon rate $ 3,676 $ 4,117 $ 10,969 $ 11,705 Interest expense—amortization of debt discount 2,518 2,473 7,410 7,374 Total interest expense—Convertible Notes and Exchangeable Notes $ 6,194 $ 6,590 $ 18,379 $ 19,079 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Tax Rates | The effective tax rates for the respective periods are shown below: Three Months Ended Nine Months Ended 2018 2017 2018 2017 Federal provision 21.0 % 35.0 % 21.0 % 35.0 % State provision 1.7 % 3.3 % 1.5 % 3.3 % International provision (benefit) (1) 31.1 % (7.9 )% 14.7 % (2.2 )% Other 2.7 % (0.7 )% (0.1 )% 0.2 % Effective rate 56.5 % 29.7 % 37.1 % 36.3 % ________________________ (1) During the three months ended September 30, 2018, the Company recorded certain discrete tax charges of approximately $5.0 million relating to previously established deferred tax assets in certain foreign subsidiaries in Latin America from which the Company no longer believes it will receive any benefit. In addition, the international provision increased due to nondeductible costs related to the Cabot Transaction. As a result, the effective international tax rates during the three and nine months ended September 30, 2018 have substantially increased as compared to the corresponding periods in 2017. |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Geographical Areas of Operations | The Company has operations in the United States, Europe and other foreign countries. The following table presents the Company’s total revenues, adjusted by net allowances by geographic areas in which the Company operates (in thousands) : Three Months Ended Nine Months Ended 2018 2017 2018 2017 Revenues, adjusted by net allowances (1) : United States $ 178,892 $ 154,815 $ 530,679 $ 498,744 International Europe (2) 137,331 127,687 412,407 300,379 Other geographies 20,551 24,197 70,223 70,434 157,882 151,884 482,630 370,813 Total $ 336,774 $ 306,699 $ 1,013,309 $ 869,557 ________________________ (1) Revenues, adjusted by net allowances, are attributed to countries based on location of customer. Revenues primarily include portfolio revenues and fee-based income earned on accounts collected on behalf of others. (2) Based on the financial information that is used to produce the general-purpose financial statements, providing further geographic information is impracticable. |
Goodwill and Identifiable Int_2
Goodwill and Identifiable Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Activity in the Goodwill Balance | The Company’s goodwill is attributable to reporting units included in its portfolio purchasing and recovery segment. The following table summarizes the activity in the Company’s goodwill balance (in thousands): Total Balance, December 31, 2017 $ 928,993 Goodwill adjustments (2,212 ) Effect of foreign currency translation (28,190 ) Balance, September 30, 2018 $ 898,591 |
Schedule of Acquired Intangible Assets | The Company’s acquired intangible assets are summarized as follows (in thousands) : As of September 30, 2018 As of December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships $ 71,895 $ (11,796 ) $ 60,099 $ 73,875 $ (6,800 ) $ 67,075 Developed technologies 5,710 (5,247 ) 463 6,683 (5,411 ) 1,272 Trade name and other 9,500 (5,995 ) 3,505 14,413 (7,024 ) 7,389 Total intangible assets $ 87,105 $ (23,038 ) $ 64,067 $ 94,971 $ (19,235 ) $ 75,736 |
Earnings Per Share - Summary (D
Earnings Per Share - Summary (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Earnings Per Share [Abstract] | ||||
Weighted average common shares outstanding—basic (shares) | 29,867 | 26,011 | 27,372 | 25,957 |
Dilutive effect of stock-based awards (shares) | 254 | 271 | 291 | 214 |
Dilutive effect of convertible senior notes (shares) | 0 | 454 | 0 | 235 |
Weighted average common shares outstanding—diluted (shares) | 30,121 | 26,736 | 27,663 | 26,406 |
Antidilutive securities excluded from computation of earnings per share (shares) | 13 | 13 | 13 | 138 |
Cabot Transaction - Narrative (
Cabot Transaction - Narrative (Details) - Cabot Holdings | Jul. 24, 2018USD ($)$ / shares |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Change Due to Net Income Attributable to Parent and Effects of Changes, Net [Abstract] | |
Gain (loss) recognized on transaction | $ 0 |
Total consideration transferred | 414,660,000 |
Cash consideration | 234,101,000 |
Stock consideration | $ 180,559,000 |
Stock price at date of transaction (USD per share) | $ / shares | $ 36.80 |
Cabot Transaction - Summary (De
Cabot Transaction - Summary (Details) - USD ($) $ in Thousands | Jul. 24, 2018 | Sep. 30, 2018 |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Change Due to Net Income Attributable to Parent and Effects of Changes, Net [Abstract] | ||
Total reduction in additional paid-in capital | $ 43,097 | |
Cabot Holdings | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Change Due to Net Income Attributable to Parent and Effects of Changes, Net [Abstract] | ||
Cash consideration | $ 234,101 | |
Stock consideration | 180,559 | |
Total consideration transferred | 414,660 | |
Less: Preferred equity certificates acquired | (262,512) | |
Consideration transferred to acquire remaining equity interest | 152,148 | |
Less: Carrying value of redeemable noncontrolling interest | (127,299) | |
Less: Carrying value of noncontrolling interest | 9,626 | |
Net loss directly recorded in equity | (34,475) | |
Direct and incremental transaction costs | 8,622 | |
Total reduction in additional paid-in capital | $ 43,097 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2018 | Jul. 24, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Increase (decrease) in future earn-out payments | $ 4,700 | |||
Redeemable noncontrolling interest | 1,231 | $ 151,978 | $ 45,755 | |
Assets held for sale | $ 26,241 | 18,741 | ||
Fair value inputs, fluctuation in cost to collect and discount rate | 100.00% | |||
Convertible senior notes, carrying value | $ 656,000 | 483,500 | ||
Debt discount | (39,445) | (32,720) | ||
Senior secured notes, carrying value | 325,000 | 326,029 | ||
Term Loan Facility | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Convertible senior notes, carrying value | 616,600 | 450,800 | ||
Debt discount | (39,445) | (32,720) | ||
Term Loan Facility | Level 2 | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Fair value estimate of convertible senior notes incorporates quoted market prices | 650,400 | 520,900 | ||
Cabot Senior Secured Notes | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt discount | (1,700) | (1,900) | ||
Senior secured notes, carrying value | 1,218,800 | 1,214,600 | ||
Cabot Senior Secured Notes | Level 2 | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Fair value of senior notes | 1,207,100 | 1,258,900 | ||
United States | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Increase or decrease of the fair value (100 basis points) | 56,500 | |||
Europe | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Increase or decrease of the fair value (100 basis points) | 76,500 | |||
Fair Value | Certain Loans Acquired in Transfer Not Accounted for as Debt Securities | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Fair value of investment receivable portfolios | 3,041,900 | 3,415,300 | ||
Carrying Value | Certain Loans Acquired in Transfer Not Accounted for as Debt Securities | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Fair value of investment receivable portfolios | 3,109,100 | 2,890,600 | ||
Contingent Consideration | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Contingent consideration | $ 7,417 | $ 10,612 | $ 2,531 | |
Cabot Holdings | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Redeemable noncontrolling interest | $ 127,300 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Liabilities | ||
Contingent consideration | $ (7,417) | $ (10,612) |
Temporary Equity | ||
Redeemable noncontrolling interest | (1,231) | (151,978) |
Foreign currency exchange contracts | ||
Assets | ||
Foreign currency exchange contracts | 1,912 | |
Liabilities | ||
Foreign currency exchange contracts | (1,408) | (1,110) |
Interest rate swap agreements | ||
Assets | ||
Interest rate derivatives - assets | 5 | |
Liabilities | ||
Interest rate swap agreements | (7) | |
Interest rate cap contracts | ||
Assets | ||
Interest rate derivatives - assets | 2,445 | 3,922 |
Level 1 | ||
Liabilities | ||
Contingent consideration | 0 | 0 |
Temporary Equity | ||
Redeemable noncontrolling interest | 0 | 0 |
Level 1 | Foreign currency exchange contracts | ||
Assets | ||
Foreign currency exchange contracts | 0 | |
Liabilities | ||
Foreign currency exchange contracts | 0 | 0 |
Level 1 | Interest rate swap agreements | ||
Assets | ||
Interest rate derivatives - assets | 0 | |
Liabilities | ||
Interest rate swap agreements | 0 | |
Level 1 | Interest rate cap contracts | ||
Assets | ||
Interest rate derivatives - assets | 0 | 0 |
Level 2 | ||
Liabilities | ||
Contingent consideration | 0 | 0 |
Temporary Equity | ||
Redeemable noncontrolling interest | 0 | 0 |
Level 2 | Foreign currency exchange contracts | ||
Assets | ||
Foreign currency exchange contracts | 1,912 | |
Liabilities | ||
Foreign currency exchange contracts | (1,408) | (1,110) |
Level 2 | Interest rate swap agreements | ||
Assets | ||
Interest rate derivatives - assets | 5 | |
Liabilities | ||
Interest rate swap agreements | (7) | |
Level 2 | Interest rate cap contracts | ||
Assets | ||
Interest rate derivatives - assets | 2,445 | 3,922 |
Level 3 | ||
Liabilities | ||
Contingent consideration | (7,417) | (10,612) |
Temporary Equity | ||
Redeemable noncontrolling interest | (1,231) | (151,978) |
Level 3 | Foreign currency exchange contracts | ||
Assets | ||
Foreign currency exchange contracts | 0 | |
Liabilities | ||
Foreign currency exchange contracts | 0 | 0 |
Level 3 | Interest rate swap agreements | ||
Assets | ||
Interest rate derivatives - assets | 0 | |
Liabilities | ||
Interest rate swap agreements | 0 | |
Level 3 | Interest rate cap contracts | ||
Assets | ||
Interest rate derivatives - assets | $ 0 | $ 0 |
- Contingent Consideration Roll
- Contingent Consideration Roll Forward (Details) - Contingent Consideration - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at beginning of period | $ 10,612 | $ 2,531 |
Issuance of contingent consideration in connection with acquisition | 1,728 | 10,808 |
Change in fair value of contingent consideration | (4,652) | (2,465) |
Payment of contingent consideration | 232 | 781 |
Effect of foreign currency translation | (39) | 519 |
Balance at end of period | $ 7,417 | $ 10,612 |
Fair Value Measurements - Chang
Fair Value Measurements - Change in Redeemable Noncontrolling Interests (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Redeemable Noncontrolling Interests [Roll Forward] | ||
Balance at beginning of period | $ 151,978 | $ 45,755 |
Addition to redeemable noncontrolling interest | 277 | |
Redemption of redeemable noncontrolling interest | (138,835) | |
Net loss attributable to redeemable noncontrolling interest | (4,178) | (4,905) |
Adjustment of the redeemable noncontrolling interest to fair value | (7,419) | 108,296 |
Effect of foreign currency translation attributable to redeemable noncontrolling interest | (315) | 2,555 |
Balance at end of period | $ 1,231 | $ 151,978 |
Derivatives and Hedging Instr_3
Derivatives and Hedging Instruments - Narrative (Details) £ in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Oct. 24, 2018AUD ($) | Oct. 18, 2018USD ($) | Oct. 18, 2018GBP (£) | Sep. 30, 2018AUD ($)agreement | Sep. 30, 2018USD ($)agreement | Sep. 30, 2018GBP (£)agreement | May 08, 2018GBP (£) | |
Cash Flow Hedging | |||||||||
Derivative [Line Items] | |||||||||
Number of instruments held | agreement | 2 | 2 | 2 | ||||||
Forward contracts | |||||||||
Derivative [Line Items] | |||||||||
Net derivative gain (loss) included in OCI expected to be reclassified into earnings | $ (1,400,000) | ||||||||
Gains or losses were reclassified from OCI into earnings | $ 0 | 0 | |||||||
Forward contracts | Derivatives Designated as Hedging Instruments | |||||||||
Derivative [Line Items] | |||||||||
Derivative instrument, notional amount | $ 19,200,000 | ||||||||
Forward contracts | Derivatives Not Designated as Hedging Instruments | |||||||||
Derivative [Line Items] | |||||||||
Derivative instrument, notional amount | £ | £ 176 | ||||||||
Loss on foreign exchange forward contract | $ 9,300,000 | ||||||||
Interest rate swap agreements | Cash Flow Hedging | |||||||||
Derivative [Line Items] | |||||||||
Derivative instrument, notional amount | $ 30 | 21,700,000 | |||||||
Interest rate cap contracts | |||||||||
Derivative [Line Items] | |||||||||
Derivative instrument, notional amount | $ 390,700,000 | £ 300 | |||||||
Minimum | Derivatives Not Designated as Hedging Instruments | Cash Flow Hedging | |||||||||
Derivative [Line Items] | |||||||||
Term of contract | 1 year | ||||||||
Maximum | Derivatives Not Designated as Hedging Instruments | Cash Flow Hedging | |||||||||
Derivative [Line Items] | |||||||||
Term of contract | 3 years | ||||||||
Subsequent Event | Interest rate swap agreements | Cash Flow Hedging | |||||||||
Derivative [Line Items] | |||||||||
Derivative instrument, notional amount | $ 349.5 | ||||||||
Subsequent Event | Interest rate cap contracts | |||||||||
Derivative [Line Items] | |||||||||
Derivative instrument, notional amount | $ 390,600,000 | £ 300 |
Derivatives and Hedging Instr_4
Derivatives and Hedging Instruments - Fair Value of Derivative Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Foreign currency exchange contracts | ||
Derivative [Line Items] | ||
Foreign currency exchange contracts - assets | $ 1,912 | |
Foreign currency exchange contracts - liabilities | $ (1,408) | (1,110) |
Interest rate swap agreements | ||
Derivative [Line Items] | ||
Interest rate derivatives - assets | 5 | |
Interest rate derivative - liabilities | (7) | |
Interest rate cap contracts | ||
Derivative [Line Items] | ||
Interest rate derivatives - assets | 2,445 | 3,922 |
Derivatives Designated as Hedging Instruments | Foreign currency exchange contracts | Other assets | ||
Derivative [Line Items] | ||
Foreign currency exchange contracts - assets | 0 | 1,912 |
Derivatives Designated as Hedging Instruments | Foreign currency exchange contracts | Other liabilities | ||
Derivative [Line Items] | ||
Foreign currency exchange contracts - liabilities | (1,408) | 0 |
Derivatives Designated as Hedging Instruments | Interest rate swap agreements | Other assets | ||
Derivative [Line Items] | ||
Interest rate derivatives - assets | 5 | |
Derivatives Designated as Hedging Instruments | Interest rate swap agreements | Other liabilities | ||
Derivative [Line Items] | ||
Interest rate derivative - liabilities | (7) | |
Derivatives Not Designated as Hedging Instruments | Foreign currency exchange contracts | Other liabilities | ||
Derivative [Line Items] | ||
Foreign currency exchange contracts - liabilities | 0 | (1,110) |
Derivatives Not Designated as Hedging Instruments | Interest rate cap contracts | Other assets | ||
Derivative [Line Items] | ||
Interest rate derivatives - assets | $ 2,445 | $ 3,922 |
Derivatives and Hedging Instr_5
Derivatives and Hedging Instruments - Effects of Derivatives Designated as Hedging Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Derivative [Line Items] | ||||
Gain or (Loss) Recognized in OCI | $ (868) | $ (161) | $ (2,483) | $ 761 |
Foreign currency exchange contracts | Cash Flow Hedging | Salaries and employee benefits | ||||
Derivative [Line Items] | ||||
Gain or (Loss) Recognized in OCI | (916) | (27) | (1,990) | 1,708 |
Gain or (Loss) Reclassified from OCI into Income - Effective Portion | 95 | 286 | 1,078 | 758 |
Foreign currency exchange contracts | Cash Flow Hedging | General and administrative expenses | ||||
Derivative [Line Items] | ||||
Gain or (Loss) Recognized in OCI | (130) | 70 | (206) | 310 |
Gain or (Loss) Reclassified from OCI into Income - Effective Portion | 11 | 35 | 46 | 76 |
Interest rate swap agreements | Cash Flow Hedging | Interest expense | ||||
Derivative [Line Items] | ||||
Gain or (Loss) Recognized in OCI | 3 | 10 | (9) | 29 |
Gain or (Loss) Reclassified from OCI into Income - Effective Portion | $ 4 | $ 0 | $ 29 | $ 110 |
Derivatives and Hedging Instr_6
Derivatives and Hedging Instruments - Effects of Derivatives Not Designated as Hedging Instruments (Details) - Derivatives Not Designated as Hedging Instruments - Cash Flow Hedging - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Foreign currency exchange contracts | Other (expense) income | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain or (Loss) Recognized in Income on Derivative | $ (2,281) | $ (833) | $ (9,221) | $ 1,790 |
Interest rate cap contracts | Interest income (expense) | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain or (Loss) Recognized in Income on Derivative | 289 | 919 | (1,427) | 919 |
Interest rate swap agreements | Interest income (expense) | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain or (Loss) Recognized in Income on Derivative | $ 0 | $ 0 | $ 0 | $ 110 |
Investment in Receivable Port_3
Investment in Receivable Portfolios, Net - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items] | ||||||||
Face value of receivable portfolios | $ 1,559,241,000 | $ 3,018,072,000 | $ 6,229,501,000 | $ 7,117,374,000 | ||||
Purchases of receivable portfolios | $ 248,691,000 | $ 292,332,000 | $ 885,033,000 | $ 757,474,000 | ||||
Face value on purchase cost (as a percent) | 15.90% | 9.70% | 14.20% | 10.60% | ||||
Estimated future collections at acquisition for receivable portfolios | $ 512,300,000 | $ 630,600,000 | $ 1,772,900,000 | $ 1,555,000,000 | ||||
Revenue recognized | 295,357,000 | $ 292,662,000 | $ 281,009,000 | 264,024,000 | $ 263,407,000 | $ 249,838,000 | 869,028,000 | 777,269,000 |
Allowance reversals on receivable portfolios, net | 4,029,000 | 17,632,000 | 9,811,000 | 19,564,000 | 8,829,000 | 2,132,000 | 31,472,000 | 30,525,000 |
Estimate of Zero Basis Cash Flows | ||||||||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items] | ||||||||
Revenue recognized | 32,248,000 | 33,964,000 | 31,188,000 | 33,621,000 | 39,097,000 | 38,733,000 | ||
Allowance reversals on receivable portfolios, net | 2,833,000 | $ 2,221,000 | $ 1,729,000 | 1,747,000 | $ 1,708,000 | $ 1,519,000 | ||
Zero Basis Portfolios | ||||||||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items] | ||||||||
Purchases of receivable portfolios | 0 | 0 | 0 | 0 | ||||
Revenue recognized | 32,248,000 | 33,621,000 | 97,400,000 | 111,451,000 | ||||
Allowance reversals on receivable portfolios, net | $ 2,833,000 | $ 1,747,000 | $ 6,783,000 | $ 4,974,000 |
Investment in Receivable Port_4
Investment in Receivable Portfolios, Net - Accretable Yield and an Estimate of Zero Basis Future Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Investment in Receivables Portfolio [Roll Forward] | ||||||||
Balance at beginning of period | $ 4,131,557 | $ 4,052,799 | $ 4,064,701 | $ 3,700,287 | $ 3,412,753 | $ 3,457,508 | $ 4,064,701 | $ 3,457,508 |
Revenue from receivable portfolios | (295,357) | (292,662) | (281,009) | (264,024) | (263,407) | (249,838) | (869,028) | (777,269) |
Allowance reversals on receivable portfolios, net | (4,029) | (17,632) | (9,811) | (19,564) | (8,829) | (2,132) | (31,472) | (30,525) |
Reductions on existing portfolios, net | (64,474) | (32,692) | ||||||
Additions on existing portfolios, net | 37,722 | 142,091 | 28,701 | 234,909 | ||||
Additions for current purchases | 262,751 | 345,006 | 285,172 | 336,725 | 258,687 | 200,728 | ||
Effect of foreign currency translation | (20,619) | (98,045) | 58,220 | 57,346 | 66,174 | 39,179 | ||
Balance at end of period | 4,112,025 | 4,131,557 | 4,052,799 | 3,839,471 | 3,700,287 | 3,412,753 | 4,112,025 | 3,839,471 |
Accretable Yield | ||||||||
Investment in Receivables Portfolio [Roll Forward] | ||||||||
Balance at beginning of period | 3,864,686 | 3,754,970 | 3,695,069 | 3,348,792 | 3,029,588 | 3,092,004 | 3,695,069 | 3,092,004 |
Revenue from receivable portfolios | (263,109) | (258,698) | (249,821) | (230,403) | (224,310) | (211,105) | ||
Allowance reversals on receivable portfolios, net | (1,196) | (15,411) | (8,082) | (17,817) | (7,121) | (613) | ||
Reductions on existing portfolios, net | (24,945) | (90,138) | ||||||
Additions on existing portfolios, net | 23,241 | 136,267 | 27,162 | 225,021 | ||||
Additions for current purchases | 262,751 | 345,006 | 285,172 | 336,725 | 258,687 | 200,728 | ||
Effect of foreign currency translation | (20,483) | (97,448) | 57,577 | 56,971 | 66,927 | 38,712 | ||
Balance at end of period | 3,865,890 | 3,864,686 | 3,754,970 | 3,521,430 | 3,348,792 | 3,029,588 | 3,865,890 | 3,521,430 |
Estimate of Zero Basis Cash Flows | ||||||||
Investment in Receivables Portfolio [Roll Forward] | ||||||||
Balance at beginning of period | 266,871 | 297,829 | 369,632 | 351,495 | 383,165 | 365,504 | 369,632 | 365,504 |
Revenue from receivable portfolios | (32,248) | (33,964) | (31,188) | (33,621) | (39,097) | (38,733) | ||
Allowance reversals on receivable portfolios, net | (2,833) | (2,221) | (1,729) | (1,747) | (1,708) | (1,519) | ||
Reductions on existing portfolios, net | (39,529) | |||||||
Additions on existing portfolios, net | 14,481 | 5,824 | 1,539 | 9,888 | 57,446 | |||
Additions for current purchases | 0 | 0 | 0 | 0 | 0 | 0 | ||
Effect of foreign currency translation | (136) | (597) | 643 | 375 | (753) | 467 | ||
Balance at end of period | $ 246,135 | $ 266,871 | $ 297,829 | $ 318,041 | $ 351,495 | $ 383,165 | $ 246,135 | $ 318,041 |
Investment in Receivable Port_5
Investment in Receivable Portfolios, Net - Investment in Receivable Portfolios (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Investment in Receivables Portfolio [Roll Forward] | ||||||||
Balance, beginning of period | $ 3,084,621 | $ 2,890,613 | $ 2,555,925 | $ 2,382,809 | $ 2,890,613 | $ 2,382,809 | ||
Purchases of receivable portfolios | 248,691 | 292,332 | 885,033 | 757,474 | ||||
Disposals or transfers to assets held for sale | (5,364) | (3,801) | (10,731) | (11,269) | ||||
Gross collections | (498,843) | (442,996) | (1,484,038) | (1,330,041) | ||||
Put-Backs and Recalls | (2,074) | (649) | (14,402) | (5,676) | ||||
Foreign currency adjustments | (17,301) | 44,412 | (57,859) | 127,720 | ||||
Revenue recognized | 295,357 | $ 292,662 | 281,009 | 264,024 | $ 263,407 | 249,838 | 869,028 | 777,269 |
Reclassification adjustments | 0 | |||||||
Portfolio allowance reversals, net | 4,029 | 17,632 | 9,811 | 19,564 | 8,829 | 2,132 | 31,472 | 30,525 |
Balance, end of period | $ 3,109,116 | 3,084,621 | $ 2,728,811 | 2,555,925 | $ 3,109,116 | $ 2,728,811 | ||
Revenue as a percentage of collections | 59.20% | 59.60% | 58.60% | 58.40% | ||||
Accrual Basis Portfolios | ||||||||
Investment in Receivables Portfolio [Roll Forward] | ||||||||
Balance, beginning of period | $ 3,074,292 | 2,879,170 | $ 2,541,590 | 2,368,366 | $ 2,879,170 | $ 2,368,366 | ||
Purchases of receivable portfolios | 248,691 | 292,332 | 885,033 | 756,305 | ||||
Disposals or transfers to assets held for sale | (4,253) | (3,536) | (9,358) | (11,004) | ||||
Gross collections | (463,474) | (407,435) | (1,379,095) | (1,212,357) | ||||
Put-Backs and Recalls | (2,056) | (407) | (14,231) | (5,401) | ||||
Foreign currency adjustments | (17,208) | 44,366 | (57,539) | 127,852 | ||||
Revenue recognized | 263,109 | 230,403 | 771,628 | 665,818 | ||||
Reclassification adjustments | 0 | |||||||
Portfolio allowance reversals, net | 1,196 | 17,817 | 24,689 | 25,551 | ||||
Balance, end of period | $ 3,100,297 | 3,074,292 | $ 2,715,130 | 2,541,590 | $ 3,100,297 | $ 2,715,130 | ||
Revenue as a percentage of collections | 56.80% | 56.50% | 56.00% | 54.90% | ||||
Cost Recovery Portfolios | ||||||||
Investment in Receivables Portfolio [Roll Forward] | ||||||||
Balance, beginning of period | $ 10,329 | 11,443 | $ 14,335 | 14,443 | $ 11,443 | $ 14,443 | ||
Purchases of receivable portfolios | 0 | 0 | 0 | 1,169 | ||||
Disposals or transfers to assets held for sale | (1,111) | (265) | (1,373) | (265) | ||||
Gross collections | (306) | (435) | (1,729) | (1,534) | ||||
Put-Backs and Recalls | 0 | 0 | 0 | 0 | ||||
Foreign currency adjustments | (93) | 46 | (320) | (132) | ||||
Revenue recognized | 0 | 0 | 0 | 0 | ||||
Reclassification adjustments | 798 | |||||||
Portfolio allowance reversals, net | 0 | 0 | 0 | 0 | ||||
Balance, end of period | $ 8,819 | 10,329 | $ 13,681 | 14,335 | $ 8,819 | $ 13,681 | ||
Revenue as a percentage of collections | 0.00% | 0.00% | 0.00% | 0.00% | ||||
Zero Basis Portfolios | ||||||||
Investment in Receivables Portfolio [Roll Forward] | ||||||||
Balance, beginning of period | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | ||
Purchases of receivable portfolios | 0 | 0 | 0 | 0 | ||||
Disposals or transfers to assets held for sale | 0 | 0 | 0 | 0 | ||||
Gross collections | (35,063) | (35,126) | (103,214) | (116,150) | ||||
Put-Backs and Recalls | (18) | (242) | (171) | (275) | ||||
Foreign currency adjustments | 0 | 0 | 0 | 0 | ||||
Revenue recognized | 32,248 | 33,621 | 97,400 | 111,451 | ||||
Reclassification adjustments | (798) | |||||||
Portfolio allowance reversals, net | 2,833 | 1,747 | 6,783 | 4,974 | ||||
Balance, end of period | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | ||
Revenue as a percentage of collections | 92.00% | 95.70% | 94.40% | 96.00% |
- Valuation Allowance for Inves
- Valuation Allowance for Investment in Receivable Portfolios (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Valuation Allowance | ||||
Balance at beginning of period | $ 75,129 | $ 130,675 | $ 102,576 | $ 137,037 |
Provision for portfolio allowances | 6,156 | 10,181 | 8,816 | 10,863 |
Reversal of prior allowances | (10,185) | (29,745) | (40,288) | (41,388) |
Effect of foreign currency translation | (365) | 1,759 | (369) | 6,358 |
Balance at end of period | $ 70,735 | $ 112,870 | $ 70,735 | $ 112,870 |
Deferred Court Costs, Net - Sum
Deferred Court Costs, Net - Summary (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||||||
Court costs advanced | $ 812,359 | $ 743,584 | ||||
Court costs recovered | (328,715) | (299,606) | ||||
Court costs reserve | (389,627) | $ (381,125) | (364,015) | $ (354,810) | $ (345,971) | $ (327,926) |
Deferred court costs | $ 94,017 | $ 79,963 |
Deferred Court Costs, Net - Cou
Deferred Court Costs, Net - Court Cost Reserve (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets [Roll Forward] | ||||
Balance at beginning of period | $ (381,125) | $ (345,971) | $ (364,015) | $ (327,926) |
Provision for court costs | (23,065) | (19,767) | (67,293) | (60,031) |
Net down of reserve after deferral period | 13,603 | 12,419 | 38,990 | 36,992 |
Effect of foreign currency translation | 960 | (1,491) | 2,691 | (3,845) |
Balance at end of period | $ (389,627) | $ (354,810) | $ (389,627) | $ (354,810) |
Other Assets - Summary (Details
Other Assets - Summary (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Identifiable intangible assets, net | $ 64,067 | $ 75,736 |
Other financial receivables | 41,003 | 37,861 |
Service fee receivables | 31,782 | 25,609 |
Assets held for sale | 26,241 | 18,741 |
Prepaid expenses | 24,341 | 27,606 |
Deferred tax assets | 14,376 | 18,773 |
Security deposits | 2,947 | 3,451 |
Derivative instruments | 2,450 | 5,834 |
Funds held in escrow | 0 | 28,199 |
Prepaid income taxes | 0 | 27,917 |
Other | 37,395 | 33,001 |
Total | $ 244,602 | $ 302,728 |
Debt, Net - Consolidated Debt a
Debt, Net - Consolidated Debt and Capital Lease Obligations (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Mar. 29, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | |||
Senior secured notes | $ 325,000 | $ 326,029 | |
Encore convertible notes and exchangeable notes | 656,000 | 483,500 | |
Less: debt discount | (39,445) | (32,720) | |
Preferred equity certificates | 0 | 253,324 | |
Capital lease obligations | 8,005 | 6,069 | |
Debt and capital lease obligations, gross | 3,609,258 | 3,492,999 | |
Less: debt issuance costs, net of amortization | (47,791) | (46,123) | |
Total | 3,561,467 | 3,446,876 | |
Other | |||
Debt Instrument [Line Items] | |||
Other | 63,633 | 92,792 | |
Cabot securitisation senior facility | |||
Debt Instrument [Line Items] | |||
Revolving credit facility | 390,690 | 391,790 | |
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Revolving credit facility | 447,000 | 328,961 | |
Cabot credit facility | |||
Debt Instrument [Line Items] | |||
Revolving credit facility | 283,678 | 179,008 | |
Other Credit Facility | |||
Debt Instrument [Line Items] | |||
Revolving credit facility | 57,980 | 68,001 | |
Term Loan | |||
Debt Instrument [Line Items] | |||
Encore term loan facility | 197,927 | $ 203,700 | 181,687 |
Term Loan Facility | |||
Debt Instrument [Line Items] | |||
Encore convertible notes and exchangeable notes | 616,600 | 450,800 | |
Less: debt discount | (39,445) | (32,720) | |
Term Loan Facility | Cabot senior secured notes | |||
Debt Instrument [Line Items] | |||
Senior secured notes | 1,220,524 | 1,216,485 | |
Less: debt discount | $ (1,734) | $ (1,927) |
Debt, Net - Encore Revolving Cr
Debt, Net - Encore Revolving Credit Facility and Term Loan Facility - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Mar. 29, 2018 | Dec. 31, 2017 | Dec. 20, 2016 | |
Debt Instrument [Line Items] | |||||||
Percentage to be added to base rate for alternate base rate (as a percent) | 0.50% | ||||||
Percentage to be added to adjusted base rate for alternate base rate (as a percent) | 1.00% | ||||||
Borrowing base as percentage of eligible estimated collection range end (as a percent) | 35.00% | ||||||
Eligible estimated remaining collections for consumer receivables (as a percent) | 55.00% | ||||||
Maximum cash flow leverage ratio | 300.00% | ||||||
Maximum cash flow secured leverage ratio | 200.00% | ||||||
Minimum interest coverage ratio | 175.00% | ||||||
Maximum senior secured notes | $ 350,000,000 | $ 350,000,000 | |||||
Allowance of additional unsecured indebtedness (not to exceed) | 1,100,000,000 | 1,100,000,000 | |||||
Company's repurchases, common stock (up to) | $ 150,000,000 | ||||||
Maximum acquisitions excluded (as a percent) | 50.00% | ||||||
Acquisition limit | 225,000,000 | $ 225,000,000 | |||||
Credit facility, provision, investments not to exceed maximum percentage of consolidated net worth (as a percent) | 200.00% | ||||||
Basket allowed for investments under laws of Canada | 50,000,000 | $ 50,000,000 | |||||
Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Maximum cash flow leverage ratio | 125.00% | ||||||
Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Term loan facility | 197,927,000 | $ 197,927,000 | $ 203,700,000 | $ 181,687,000 | |||
Term Loan One | |||||||
Debt Instrument [Line Items] | |||||||
Term loan facility | 194,600,000 | 194,600,000 | |||||
Principal amount amortized, 2018 | 2,500,000 | 2,500,000 | |||||
Principal amount amortized, 2019 | 15,300,000 | 15,300,000 | |||||
Term Loan Subtranche One | |||||||
Debt Instrument [Line Items] | |||||||
Term loan facility | 9,100,000 | 9,100,000 | |||||
Principal amount amortized, 2018 | 300,000 | 300,000 | |||||
Junior Lien Portion | |||||||
Debt Instrument [Line Items] | |||||||
Allowance of additional unsecured indebtedness (not to exceed) | 400,000,000 | 400,000,000 | |||||
Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Revolving credit facility | $ 894,400,000 | ||||||
Revolving credit facility | $ 447,000,000 | $ 447,000,000 | $ 328,961,000 | ||||
Weighted average interest rate (as a percent) | 5.09% | 4.32% | 4.90% | 3.99% | |||
Revolving Credit Facility | Restated Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Current borrowing capacity | $ 178,100,000 | $ 178,100,000 | |||||
Revolving Credit Facility One | |||||||
Debt Instrument [Line Items] | |||||||
Revolving credit facility | 884,200,000 | 884,200,000 | |||||
Commitments under credit facility with extended maturity date | 107,400,000 | 107,400,000 | |||||
Accordian feature exercised under credit facility | 99,700,000 | 99,700,000 | |||||
Revolving Credit Facility Two | |||||||
Debt Instrument [Line Items] | |||||||
Revolving credit facility | $ 10,200,000 | $ 10,200,000 | |||||
LIBOR | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 300.00% | ||||||
LIBOR | Term Loan One | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 250.00% | ||||||
LIBOR | Term Loan One | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 300.00% | ||||||
LIBOR | Term Loan Subtranche One | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 250.00% | ||||||
LIBOR | Term Loan Subtranche One | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 300.00% | ||||||
LIBOR | Revolving Credit Facility | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 250.00% | ||||||
Base Rate | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 150.00% | ||||||
Base Rate | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 200.00% | ||||||
Base Rate | Term Loan One | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 150.00% | ||||||
Base Rate | Term Loan One | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 200.00% | ||||||
Base Rate | Term Loan Subtranche One | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 150.00% | ||||||
Base Rate | Term Loan Subtranche One | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 200.00% |
Debt, Net - Encore Senior Secur
Debt, Net - Encore Senior Secured Notes - Narrative (Details) - Term Loan Facility - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Aug. 31, 2017 | |
Debt Instrument [Line Items] | ||
Basis spread over the current Treasury Rate (as a percent) | 50.00% | |
2017 Senior Secured Notes | ||
Debt Instrument [Line Items] | ||
Debt issued | $ 325,000,000 | $ 325,000,000 |
Stated interest rate (as a percent) | 5.625% | |
Senior secured notes, periodic principal repayment | $ 16,300,000 |
Debt, Net - Convertible Notes (
Debt, Net - Convertible Notes (Details) | 9 Months Ended | ||||
Sep. 30, 2018$ / shares | Jul. 20, 2018USD ($) | Sep. 30, 2017USD ($) | Mar. 31, 2014USD ($) | Jul. 31, 2013USD ($) | |
Convertible Notes | 2020 Convertible Notes | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate (as a percent) | 3.00% | 3.00% | |||
Initial conversion price (USD per share) | $ 45.72 | ||||
Closing stock price at date of issuance (in dollars per share) | $ 33.35 | ||||
Conversion rate (shares per $1,000 principal amount) | 21.8718 | ||||
Convertible Notes | 2021 Convertible Notes | |||||
Debt Instrument [Line Items] | |||||
Debt issued | $ | $ 161,000,000 | ||||
Stated interest rate (as a percent) | 2.875% | 2.875% | |||
Initial conversion price (USD per share) | $ 59.39 | ||||
Closing stock price at date of issuance (in dollars per share) | $ 47.51 | ||||
Conversion rate (shares per $1,000 principal amount) | 16.8386 | ||||
Convertible Notes | 2022 Convertible Notes | |||||
Debt Instrument [Line Items] | |||||
Debt issued | $ | $ 150,000,000 | ||||
Stated interest rate (as a percent) | 3.25% | 3.25% | |||
Initial conversion price (USD per share) | $ 45.57 | ||||
Closing stock price at date of issuance (in dollars per share) | $ 35.05 | ||||
Conversion rate (shares per $1,000 principal amount) | 21.9467 | ||||
Convertible Notes | 2023 Exchangeable Notes | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate (as a percent) | 4.50% | ||||
Initial conversion price (USD per share) | $ 44.62 | ||||
Closing stock price at date of issuance (in dollars per share) | $ 36.45 | ||||
Conversion rate (shares per $1,000 principal amount) | 22.4090 | ||||
Encore Finance | Convertible Notes | 2020 Convertible Notes | |||||
Debt Instrument [Line Items] | |||||
Debt issued | $ | $ 172,500,000 | ||||
Encore Finance | Term Loan Facility | 2023 Exchangeable Notes | |||||
Debt Instrument [Line Items] | |||||
Debt issued | $ | $ 172,500,000 | ||||
Stated interest rate (as a percent) | 4.50% | ||||
Subsidiaries | Encore Finance | |||||
Debt Instrument [Line Items] | |||||
Ownership interest (as a percent) | 100.00% |
Debt, Net - Debt and Equity Com
Debt, Net - Debt and Equity Components and Issuance Costs of Convertible Notes (Details) - USD ($) $ in Thousands | 9 Months Ended | ||||
Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Mar. 31, 2014 | Jul. 31, 2013 | |
Debt Instrument [Line Items] | |||||
Equity component | $ 76,351 | $ 62,696 | |||
2020 Convertible Notes | Convertible Notes | |||||
Debt Instrument [Line Items] | |||||
Debt component | 140,247 | ||||
Equity component | 32,253 | ||||
Equity issuance cost | $ 1,106 | ||||
Stated interest rate (as a percent) | 3.00% | 3.00% | |||
Effective interest rate (as a percent) | 6.35% | ||||
2021 Convertible Notes | Convertible Notes | |||||
Debt Instrument [Line Items] | |||||
Debt component | $ 143,645 | ||||
Equity component | 17,355 | ||||
Equity issuance cost | $ 581 | ||||
Stated interest rate (as a percent) | 2.875% | 2.875% | |||
Effective interest rate (as a percent) | 4.70% | ||||
2022 Convertible Notes | Convertible Notes | |||||
Debt Instrument [Line Items] | |||||
Debt component | $ 137,266 | ||||
Equity component | 12,734 | ||||
Equity issuance cost | $ 398 | ||||
Stated interest rate (as a percent) | 3.25% | 3.25% | |||
Effective interest rate (as a percent) | 5.20% | ||||
2023 Exchangeable Notes | Convertible Notes | |||||
Debt Instrument [Line Items] | |||||
Debt component | $ 157,971 | ||||
Equity component | 14,009 | ||||
Equity issuance cost | $ 0 | ||||
Stated interest rate (as a percent) | 4.50% | ||||
Effective interest rate (as a percent) | 6.50% |
Debt, Net - Balances of Liabili
Debt, Net - Balances of Liability and Equity Components (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
Liability component—principal amount | $ 656,000 | $ 483,500 |
Unamortized debt discount | (39,445) | (32,720) |
Liability component—net carrying amount | 616,555 | 450,780 |
Equity component | $ 76,351 | $ 62,696 |
Debt, Net - Interest Expense (D
Debt, Net - Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Convertible Notes | ||||
Debt Instrument [Line Items] | ||||
Interest expense—stated coupon rate | $ 3,676 | $ 4,117 | $ 10,969 | $ 11,705 |
Interest expense—amortization of debt discount | 2,518 | 2,473 | 7,410 | 7,374 |
Total interest expense—Convertible Notes and Exchangeable Notes | 6,194 | 6,590 | 18,379 | 19,079 |
Cabot Senior Secured Notes | Term Loan Facility | ||||
Debt Instrument [Line Items] | ||||
Total interest expense—Convertible Notes and Exchangeable Notes | 21,528 | 23,646 | 64,370 | 70,768 |
Interest Expense | Cabot Senior Secured Notes | Term Loan Facility | ||||
Debt Instrument [Line Items] | ||||
Interest expense—stated coupon rate | 21,411 | 24,285 | 64,250 | 73,278 |
Interest expense—amortization of debt discount | 117 | 119 | 120 | 345 |
Interest Income | Cabot Senior Secured Notes | Term Loan Facility | ||||
Debt Instrument [Line Items] | ||||
Interest expense—amortization of debt discount | $ 0 | $ (758) | $ 0 | $ (2,855) |
Debt, Net - Conversion and EPS
Debt, Net - Conversion and EPS Impact of Convertible Notes Hedging Transactions (Details) - Convertible Notes $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($)$ / shares | |
2020 Convertible Notes | |
Debt Instrument [Line Items] | |
Cost of the hedge transaction(s) | $ | $ 18,113 |
Conversion price (USD per share) | $ 45.72 |
2020 Convertible Notes | Hedging of Convertible Debt Instrument | |
Debt Instrument [Line Items] | |
Conversion price (USD per share) | $ 61.55 |
2021 Convertible Notes | |
Debt Instrument [Line Items] | |
Cost of the hedge transaction(s) | $ | $ 19,545 |
Conversion price (USD per share) | $ 59.39 |
2021 Convertible Notes | Hedging of Convertible Debt Instrument | |
Debt Instrument [Line Items] | |
Conversion price (USD per share) | $ 83.14 |
2023 Exchangeable Notes | |
Debt Instrument [Line Items] | |
Cost of the hedge transaction(s) | $ | $ 17,785 |
Conversion price (USD per share) | $ 44.62 |
2023 Exchangeable Notes | Hedging of Convertible Debt Instrument | |
Debt Instrument [Line Items] | |
Conversion price (USD per share) | $ 62.48 |
Debt, Net - Cabot Senior Secure
Debt, Net - Cabot Senior Secured Notes - Narrative (Details) $ in Thousands | Jul. 18, 2018USD ($) | Jul. 18, 2018GBP (£) | Oct. 06, 2016USD ($) | Nov. 11, 2015USD ($) | Sep. 30, 2018GBP (£) | Sep. 30, 2018USD ($) | Jul. 18, 2018GBP (£) | Dec. 31, 2017USD ($) | Oct. 06, 2016GBP (£) | Nov. 11, 2015EUR (€) | Mar. 27, 2014USD ($) | Mar. 27, 2014GBP (£) | Aug. 02, 2013USD ($) | Aug. 02, 2013GBP (£) |
Debt Instrument [Line Items] | ||||||||||||||
Senior secured notes | $ 325,000 | $ 326,029 | ||||||||||||
Unamortized discount | 39,445 | 32,720 | ||||||||||||
Term Loan Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Unamortized discount | $ 39,445 | $ 32,720 | ||||||||||||
Cabot 2020 Notes | Term Loan Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Senior secured notes | $ 151,700 | £ 100,000,000 | ||||||||||||
Stated interest rate (as a percent) | 8.375% | 8.375% | ||||||||||||
Extinguishment of debt | $ 42,400 | £ 32,200,000 | ||||||||||||
Existing Cabot 2021 Notes | Term Loan Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Senior secured notes | $ 291,800 | £ 175,000,000 | ||||||||||||
Stated interest rate (as a percent) | 6.50% | 6.50% | ||||||||||||
Extinguishment of debt | 125,200 | 95,000,000 | ||||||||||||
Cabot 2023 Notes | Term Loan Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Stated interest rate (as a percent) | 7.50% | 7.50% | ||||||||||||
Debt issued | $ 442,600 | £ 350,000,000 | ||||||||||||
Face value issued (as a percent) | 100.00% | |||||||||||||
Senior Secured Cabot Floating Rate Notes | Secured Debt | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Senior secured notes | $ 332,200 | € 310,000,000 | ||||||||||||
Discount rate (as a percent) | 1.00% | |||||||||||||
Unamortized discount | $ 3,400 | € 3,100,000 | ||||||||||||
Senior Secured Cabot Floating Rate Notes | Secured Debt | Three-Month EURIBOR | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Basis spread on variable rate (as a percent) | 5.875% | |||||||||||||
Exchange Notes | Term Loan Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
If-converted value in excess of principal | 169,200 | £ 128,400,000 | ||||||||||||
Interest expense | £ | £ 6,600,000 | |||||||||||||
Additional Notes | Term Loan Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt issued | $ 45,500 | £ 34,500,000 | ||||||||||||
Face value issued (as a percent) | 99.00% | 99.00% | ||||||||||||
Encore Finance | Additional Notes | Term Loan Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Stated interest rate (as a percent) | 7.50% | 7.50% |
Debt, Net - Cabot Senior Revolv
Debt, Net - Cabot Senior Revolving Credit Facility - Narrative (Details) - Cabot credit facility $ in Thousands | Nov. 05, 2018GBP (£) | Sep. 30, 2018USD ($) | Sep. 30, 2017 | Sep. 30, 2018USD ($) | Sep. 30, 2017 | Sep. 30, 2018GBP (£) | Dec. 31, 2017USD ($) | Dec. 12, 2017GBP (£) |
Debt Instrument [Line Items] | ||||||||
Revolving credit facility | £ 295,000,000 | |||||||
Maximum loan to value ratio | 75.00% | |||||||
Credit facility, outstanding amount | $ | $ 283,678 | $ 283,678 | $ 179,008 | |||||
Weighted average interest rate (as a percent) | 3.86% | 3.50% | 3.78% | 3.51% | ||||
Remaining borrowing capacity | $ 100,500 | $ 100,500 | £ 77,200,000 | |||||
Secured Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Loan-to-value credit facility utilization trigger (more than) | 20.00% | |||||||
Secured Debt | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (as a percent) | 3.25% | |||||||
Debt Instrument, Basis Spread On Variable Rate Upon Meeting Specified Conditions | 2.75% | |||||||
Secured Debt | Tranche with Expiration in September 2021 | ||||||||
Debt Instrument [Line Items] | ||||||||
Revolving credit facility | 245,000,000 | |||||||
Secured Debt | Tranche with Expiration in March 2022 | ||||||||
Debt Instrument [Line Items] | ||||||||
Revolving credit facility | £ 50,000,000 | |||||||
Senior Loans | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum loan to value ratio | 27.50% | |||||||
Loan-to-value credit facility utilization trigger (more than) | 20.00% | |||||||
Subsequent Event | Secured Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Revolving credit facility | £ 385,000,000 | |||||||
Additional borrowing capacity | £ 90,000,000 | |||||||
Subsequent Event | Secured Debt | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (as a percent) | 3.00% | |||||||
Subsequent Event | Secured Debt | Tranche with Expiration in September 2021 | ||||||||
Debt Instrument [Line Items] | ||||||||
Revolving credit facility | £ 10,000,000 |
Debt, Net - Cabot Securitisatio
Debt, Net - Cabot Securitisation Senior Facility (Details) $ in Thousands | Nov. 01, 2018GBP (£) | Sep. 30, 2018USD ($) | Sep. 30, 2017 | Sep. 30, 2018USD ($) | Sep. 30, 2017 | Sep. 30, 2018GBP (£) | Dec. 31, 2017USD ($) |
Debt Instrument [Line Items] | |||||||
Book value | $ | $ 4,647,404 | $ 4,647,404 | $ 4,490,712 | ||||
Cabot securitisation senior facility | |||||||
Debt Instrument [Line Items] | |||||||
Facility agreement, borrowing capacity | £ 300,000,000 | ||||||
Current borrowing capacity | 300,000,000 | ||||||
Book value | 429,200 | 429,200 | £ 329,600,000 | ||||
Credit facility, outstanding amount | $ | $ 390,690 | $ 390,690 | $ 391,790 | ||||
Weighted average interest rate (as a percent) | 3.56% | 3.10% | 3.42% | 3.10% | |||
Cabot securitisation senior facility | LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 2.85% | ||||||
Subsequent Event | Cabot Securitisation Non-Recourse Asset-Backed Senior Facility | |||||||
Debt Instrument [Line Items] | |||||||
Facility agreement, borrowing capacity | £ 50,000,000 | ||||||
Subsequent Event | Cabot Securitisation Non-Recourse Asset-Backed Senior Facility | LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 4.075% |
Debt, Net - Preferred Equity Ce
Debt, Net - Preferred Equity Certificates and Capital Lease Obligations - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jul. 24, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||||||
Preferred equity certificates | $ 0 | $ 0 | $ 253,324 | |||
Capital lease obligations | $ 8,005 | $ 8,005 | $ 6,069 | |||
Preferred Equity Certificate | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate (as a percent) | 12.00% | 12.00% | ||||
Interest accrued during the period | $ 2,000 | $ 6,600 | $ 17,300 | $ 19,200 | ||
Cabot Acquisition | ||||||
Debt Instrument [Line Items] | ||||||
Preferred equity certificates | $ 262,500 | |||||
Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate (as a percent) | 0.00% | 0.00% | ||||
Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate (as a percent) | 5.50% | 5.50% |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Income Tax Contingency [Line Items] | |||||
Income tax expense (benefit) for income from continuing operations | $ 16,879 | $ 17,844 | $ 37,657 | $ 43,442 | |
Unrecognized tax benefit | 21,600 | 21,600 | |||
Net tax benefit from unrecognized tax benefits, if recognized | 9,700 | 9,700 | |||
Cash and cash equivalents | 204,649 | $ 204,649 | $ 212,139 | ||
Costa Rica | Tax holiday through December 31, 2018 | |||||
Income Tax Contingency [Line Items] | |||||
Holiday tax rate | 100.00% | ||||
Costa Rica | Tax holiday for the subsequent 4 years | |||||
Income Tax Contingency [Line Items] | |||||
Holiday tax rate | 50.00% | ||||
Income tax holiday, term | 4 years | ||||
International | |||||
Income Tax Contingency [Line Items] | |||||
Cash and cash equivalents | $ 171,900 | $ 171,900 |
Income Taxes - Effective Tax Ra
Income Taxes - Effective Tax Rates (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Federal provision (as a percent) | 21.00% | 35.00% | 21.00% | 35.00% |
State provision (as a percent) | 1.70% | 3.30% | 1.50% | 3.30% |
International provision (benefit) (as a percent) | 31.10% | (7.90%) | 14.70% | (2.20%) |
Other (as a percent) | 2.70% | (0.70%) | (0.10%) | 0.20% |
Effective rate (as a percent) | 56.50% | 29.70% | 37.10% | 36.30% |
Discrete tax charge related to unforeseeable benefits from previously established deferred tax assets in certain foreign subsidiaries | $ 5 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Loss Contingencies [Line Items] | |
Purchase price of receivable portfolios | $ 2,500,000,000 |
Purchase price | 392,900,000 |
TCPA Settlement Fund | |
Loss Contingencies [Line Items] | |
Material reserves for litigation | $ 0 |
Segment and Geographic Inform_3
Segment and Geographic Information - Summary (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)Segment | Sep. 30, 2017USD ($) | |
Segment Reporting [Abstract] | ||||
Number of reportable segments | Segment | 1 | |||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 336,774 | $ 306,699 | $ 1,013,309 | $ 869,557 |
United States | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 178,892 | 154,815 | 530,679 | 498,744 |
International | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 157,882 | 151,884 | 482,630 | 370,813 |
Europe | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 137,331 | 127,687 | 412,407 | 300,379 |
Other geographies | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 20,551 | $ 24,197 | $ 70,223 | $ 70,434 |
Goodwill and Identifiable Int_3
Goodwill and Identifiable Intangible Assets - Activity in Goodwill Balance (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Goodwill [Roll Forward] | |
Balance at beginning of period | $ 928,993 |
Goodwill adjustments | (2,212) |
Effect of foreign currency translation | (28,190) |
Balance at end of period | $ 898,591 |
Goodwill and Identifiable Int_4
Goodwill and Identifiable Intangible Assets - Acquired Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 87,105 | $ 94,971 |
Accumulated Amortization | (23,038) | (19,235) |
Net Carrying Amount | 64,067 | 75,736 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 71,895 | 73,875 |
Accumulated Amortization | (11,796) | (6,800) |
Net Carrying Amount | 60,099 | 67,075 |
Developed technologies | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 5,710 | 6,683 |
Accumulated Amortization | (5,247) | (5,411) |
Net Carrying Amount | 463 | 1,272 |
Trade name and other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 9,500 | 14,413 |
Accumulated Amortization | (5,995) | (7,024) |
Net Carrying Amount | $ 3,505 | $ 7,389 |
Guarantee of Subsidiary Debt -
Guarantee of Subsidiary Debt - Narrative (Details) $ in Millions | Jul. 20, 2018USD ($) |
Encore Finance | 2023 Exchangeable Notes | Term Loan Facility | |
Guarantor Obligations [Line Items] | |
Debt issued | $ 172.5 |