Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 24, 2017 | Jun. 30, 2016 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | PRA GROUP INC | ||
Entity Central Index Key | 1,185,348 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 46,409,330 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 1,103,694,825 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Assets | ||
Cash and cash equivalents | $ 94,287 | $ 71,372 |
Investments | 68,543 | 73,799 |
Finance receivables, net | 2,307,969 | 2,202,113 |
Other receivables, net | 11,650 | 30,771 |
Income taxes receivable | 9,427 | 1,717 |
Net deferred tax asset | 28,482 | 13,068 |
Property and equipment, net | 38,744 | 45,394 |
Goodwill | 499,911 | 495,156 |
Intangible assets, net | 27,935 | 23,788 |
Other assets | 33,808 | 33,389 |
Assets held for sale | 43,243 | 0 |
Total assets | 3,163,999 | 2,990,567 |
Liabilities: | ||
Accounts payable | 2,459 | 4,190 |
Accrued expenses | 82,699 | 95,380 |
Income taxes payable | 19,631 | 21,236 |
Net deferred tax liability | 258,344 | 261,498 |
Interest-bearing deposits | 76,113 | 46,991 |
Borrowings | 1,784,101 | 1,717,129 |
Other liabilities | 10,821 | 4,396 |
Liabilities held for sale | 4,220 | 0 |
Total liabilities | 2,238,388 | 2,150,820 |
Redeemable noncontrolling interest | 8,448 | 0 |
Equity: | ||
Preferred stock, par value $0.01, authorized shares, 2,000, issued and outstanding shares, 0 | 0 | 0 |
Common stock, par value $0.01, authorized shares, 100,000, issued and outstanding shares, 46,356 at December 31, 2016; 100,000 authorized shares, 46,173 issued and outstanding shares at December 31, 2015 | 464 | 462 |
Additional paid-in capital | 66,414 | 64,622 |
Retained earnings | 1,049,367 | 964,270 |
Accumulated other comprehensive loss | (251,944) | (228,861) |
Total stockholders' equity - PRA Group, Inc. | 864,301 | 800,493 |
Noncontrolling interest | 52,862 | 39,254 |
Total equity | 917,163 | 839,747 |
Total liabilities and equity | $ 3,163,999 | $ 2,990,567 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 46,356,000 | 46,173,000 |
Common stock, shares outstanding | 46,356,000 | 46,173,000 |
Consolidated Income Statements
Consolidated Income Statements - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues: | |||
Income recognized on finance receivables, net | $ 745,119 | $ 865,122 | $ 807,474 |
Fee income | 77,381 | 64,383 | 65,675 |
Other revenue | 8,080 | 12,513 | 7,820 |
Total revenues | 830,580 | 942,018 | 880,969 |
Operating expenses: | |||
Compensation and employee services | 258,846 | 268,345 | 234,531 |
Legal collection expenses | 132,202 | 129,456 | 139,161 |
Agency fees | 44,922 | 32,188 | 16,399 |
Outside fees and services | 63,098 | 65,155 | 55,821 |
Communication | 33,771 | 33,113 | 33,085 |
Rent and occupancy | 15,710 | 14,714 | 11,509 |
Depreciation and amortization | 24,359 | 19,874 | 18,414 |
Other operating expenses | 39,466 | 68,829 | 29,981 |
Total operating expenses | 612,374 | 631,674 | 538,901 |
Income from operations | 218,206 | 310,344 | 342,068 |
Other income and (expense): | |||
Interest expense | (80,864) | (60,336) | (35,226) |
Impairment of investments | (5,823) | 0 | 0 |
Foreign exchange gain/(loss) | 2,564 | 7,514 | (5,829) |
Income before income taxes | 134,083 | 257,522 | 301,013 |
Provision for income taxes | 43,191 | 89,391 | 124,508 |
Net income | 90,892 | 168,131 | 176,505 |
Adjustment for net income attributable to noncontrolling interests | 5,795 | 205 | 0 |
Net income attributable to PRA Group, Inc. | $ 85,097 | $ 167,926 | $ 176,505 |
Net income per common share attributable to PRA Group, Inc.: | |||
Basic (USD per share) | $ 1.84 | $ 3.49 | $ 3.53 |
Diluted (USD per share) | $ 1.83 | $ 3.47 | $ 3.50 |
Weighted average number of shares outstanding: | |||
Basic (shares) | 46,316 | 48,128 | 49,990 |
Diluted (shares) | 46,388 | 48,405 | 50,421 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 90,892 | $ 168,131 | $ 176,505 |
Change in foreign currency translation | (14,559) | (119,043) | (119,982) |
Total comprehensive income | 76,333 | 49,088 | 56,523 |
Adjustment for net income attributable to noncontrolling interests | 5,795 | 205 | 0 |
Change in foreign currency translation | 8,490 | (6,132) | 0 |
Comprehensive income/(loss) attributable to noncontrolling interest | 14,285 | (5,927) | 0 |
Comprehensive income attributable to PRA Group, Inc. | $ 62,048 | $ 55,015 | $ 56,523 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income/(Loss) | Noncontrolling Interest |
Beginning Balance, shares at Dec. 31, 2013 | 49,840,000 | |||||
Beginning Balance at Dec. 31, 2013 | $ 869,476 | $ 498 | $ 135,441 | $ 729,505 | $ 4,032 | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 176,505 | 176,505 | ||||
Foreign currency translation adjustment | (119,982) | (119,982) | ||||
Vesting of nonvested shares, shares | 311,000 | |||||
Vesting of nonvested shares | $ 4 | (4) | ||||
Repurchase and cancellation of common stock, shares | (574,000) | |||||
Repurchase and cancellation of common stock | (33,164) | $ (6) | (33,158) | |||
Amortization of share-based compensation | 14,968 | 14,968 | ||||
Excess income tax benefit from share-based compensation | 5,558 | 5,558 | ||||
Employee stock relinquished for payment of taxes | (11,146) | (11,146) | ||||
Ending Balance, shares at Dec. 31, 2014 | 49,577,000 | |||||
Ending Balance at Dec. 31, 2014 | $ 496 | 111,659 | 906,010 | (115,950) | 0 | |
Ending Balance at Dec. 31, 2014 | 902,215 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 168,131 | 167,926 | 205 | |||
Foreign currency translation adjustment | (119,043) | (112,911) | (6,132) | |||
Initial noncontrolling interest related to business acquisition | 45,181 | 45,181 | ||||
Vesting of nonvested shares, shares | 279,000 | |||||
Vesting of nonvested shares | $ 3 | (3) | ||||
Repurchase and cancellation of common stock, shares | (3,683,000) | |||||
Repurchase and cancellation of common stock | (165,501) | $ (37) | (55,798) | (109,666) | ||
Amortization of share-based compensation | 16,325 | 16,325 | ||||
Excess income tax benefit from share-based compensation | 4,386 | 4,386 | ||||
Employee stock relinquished for payment of taxes | $ (11,947) | (11,947) | ||||
Ending Balance, shares at Dec. 31, 2015 | 46,173,000 | 46,173,000 | ||||
Ending Balance at Dec. 31, 2015 | $ 800,493 | $ 462 | 64,622 | 964,270 | (228,861) | 39,254 |
Ending Balance at Dec. 31, 2015 | 839,747 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 91,115 | 85,097 | 6,018 | |||
Foreign currency translation adjustment | (14,559) | (23,083) | 8,524 | |||
Distributions paid to noncontrolling interest | (934) | (934) | ||||
Vesting of nonvested shares, shares | 183,000 | |||||
Vesting of nonvested shares | $ 2 | (2) | ||||
Amortization of share-based compensation | 6,138 | 6,138 | ||||
Excess income tax benefit from share-based compensation | (1,494) | (1,494) | ||||
Employee stock relinquished for payment of taxes | $ (2,850) | (2,850) | ||||
Ending Balance, shares at Dec. 31, 2016 | 46,356,000 | 46,356,000 | ||||
Ending Balance at Dec. 31, 2016 | $ 864,301 | $ 464 | $ 66,414 | $ 1,049,367 | $ (251,944) | $ 52,862 |
Ending Balance at Dec. 31, 2016 | $ 917,163 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | |||
Net income | $ 90,892 | $ 168,131 | $ 176,505 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Amortization of share-based compensation | 6,138 | 16,325 | 14,968 |
Depreciation and amortization | 24,359 | 19,874 | 18,414 |
Amortization of debt discount and issuance costs | 10,276 | 4,260 | 4,058 |
Amortization of debt fair value | 0 | 0 | (4,827) |
Impairment of investments | 5,823 | 0 | 0 |
Deferred tax (benefit)/expense | (21,700) | (8,569) | 52,978 |
Net foreign currency transaction (gain)/loss | (2,364) | (7,514) | 5,829 |
Changes in operating assets and liabilities: | |||
Other assets | 1,861 | 2,015 | (1,794) |
Other receivables, net | 10,016 | (18,124) | 9,435 |
Accounts payable | (2,087) | 786 | (20,265) |
Income taxes payable/receivable, net | (13,663) | 5,735 | 16,862 |
Accrued expenses | (12,574) | 5,299 | 9,746 |
Other liabilities | 6,053 | (1,553) | (14,007) |
Net cash provided by operating activities | 103,030 | 186,665 | 267,902 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (14,160) | (14,454) | (24,385) |
Acquisition of finance receivables, net of buybacks | (890,803) | (954,954) | (682,441) |
Collections applied to principal on finance receivables | 746,867 | 674,373 | 571,338 |
Business acquisitions, net of cash acquired | (60,241) | (1,423) | (851,183) |
Purchase of investments | (6,052) | (48,085) | (69,862) |
Proceeds from sales and maturities of investments | 6,898 | 62,217 | 25,821 |
Net cash used in investing activities | (217,491) | (282,326) | (1,030,712) |
Cash flows from financing activities: | |||
Tax benefit from share-based compensation | 0 | 4,386 | 5,558 |
Proceeds from lines of credit | 985,751 | 790,967 | 543,000 |
Principal payments on lines of credit | (1,007,234) | (463,733) | (134,000) |
Repurchases of common stock | 0 | (165,501) | (33,164) |
Payments of line of credit origination costs and fees | (17,539) | (5,000) | 0 |
Distributions paid to noncontrolling interest | (934) | 0 | 0 |
Proceeds from long-term debt | 297,893 | 0 | 623,354 |
Principal payments on notes payable and long-term debt | (193,580) | (47,374) | (359,281) |
Net increase in interest-bearing deposits | 32,905 | 22,721 | 2,492 |
Net cash provided by financing activities | 97,262 | 136,466 | 647,959 |
Effect of exchange rate on cash | 40,114 | (9,094) | (7,492) |
Net increase/(decrease) in cash and cash equivalents | 22,915 | 31,711 | (122,343) |
Cash and cash equivalents, beginning of year | 71,372 | 39,661 | 162,004 |
Cash and cash equivalents, end of year | 94,287 | 71,372 | 39,661 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 67,987 | 49,777 | 31,831 |
Cash paid for income taxes | $ 78,754 | $ 86,255 | $ 47,947 |
General and Summary of Signific
General and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
General and Summary of Significant Accounting Policies | General and Summary of Significant Accounting Policies : Nature of operations: Throughout this report, the terms "PRA Group," "the Company," or similar terms refer to PRA Group, Inc. and its subsidiaries. PRA Group, Inc., a Delaware corporation, and its subsidiaries, is a global financial and business services company with operations in the Americas and Europe. The Company's primary business is the purchase, collection and management of portfolios of nonperforming loans. The Company provides the following fee-based services: vehicle location, skip tracing and collateral recovery for auto lenders, government entities and law enforcement; revenue administration, audit and revenue discovery/recovery services for local government entities; class action claims recovery services and purchases; servicing of consumer bankruptcy accounts in the U.S.; and, to a lesser extent, contingent collections of nonperforming loans in Europe and South America. As discussed in Note 17, the Company sold its revenue administration, audit and revenue discovery/recovery business in January 2017. Recent acquisitions: On April 26, 2016, the Company completed its public tender offer to purchase 100% of the shares of DTP S.A . ("DTP"), a Polish-based debt collection company, for approximately $44.9 million . The Company's consolidated income statements and statements of comprehensive income, equity and cash flows include the results of operations of DTP for the period from April 26, 2016 through December 31, 2016. On August 3, 2015, the Company acquired 55% of the equity interest in RCB Investimentos S.A. ("RCB"). The remaining 45% of the equity interest in RCB is owned by the executive team and previous owners of RCB. RCB is a leading master servicing platform for nonperforming loans in Brazil. The Company's investment for the 55% ownership of RCB was approximately $55.2 million . As part of the investment and call option agreements, the Company has the right to purchase the remaining 45% of RCB at certain multiples of earnings before interest, taxes, depreciation and amortization ("EBITDA"), beginning on August 3, 2019 and lasting for two years. In accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 810, "Consolidation," the Company has consolidated all financial statement accounts of RCB in its consolidated balance sheets and its consolidated income statements. The consolidated income statements for the years ended December 31, 2016 and 2015, include the results of operations of RCB from August 3, 2015 through December 31, 2016. The noncontrolling interest amount is included as a separate component of equity and represents the 45% interest not controlled by the Company. In addition, net income attributable to the noncontrolling interest is stated separately in the consolidated income statements for the years ended December 31, 2016 and 2015. On July 16, 2014, the Company completed the acquisition of Aktiv Kapital AS ("Aktiv"), a Norway-based company specializing in the acquisition and servicing of nonperforming loans throughout Europe and in Canada, for a purchase price of approximately $861.3 million , and assumed approximately $433.7 million of Aktiv's corporate debt, resulting in an acquisition of estimated total enterprise value of $1.3 billion . The Company's consolidated income statements and statements of comprehensive income, equity and cash flows include the results of operations of Aktiv for the period from July 16, 2014 through December 31, 2016. Basis of presentation: The consolidated financial statements of the Company are prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and include the accounts of all of its subsidiaries. All significant intercompany accounts and transactions have been eliminated. The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures. Realized results could differ from those estimates and assumptions. Certain prior year amounts have been reclassified for consistency with the current year presentation. Segments: Under the guidance of ASC Topic 280 "Segment Reporting" ("ASC 280"), the Company has determined that it has several operating segments that meet the aggregation criteria of ASC 280, and, therefore, it has one reportable segment, accounts receivable management, based on similarities among the operating units including economic characteristics, the nature of the products and services, the nature of the production processes, the types or class of customer for their products and services, the methods used to distribute their products and services and the nature of the regulatory environment. Foreign currency: Assets and liabilities have been translated to the reporting currency using the exchange rates in effect on the consolidated balance sheet dates. Equity accounts are translated at historical rates, except for the change in retained earnings during the year which is the result of the income statement translation process. Revenue and expense accounts are translated using the weighted average exchange rate during the period. The cumulative translation adjustments associated with the net assets of foreign subsidiaries are recorded in accumulated other comprehensive income/(loss ) in the accompanying consolidated statements of stockholders’ equity. Revenues and long-lived assets by geographical location: Revenue for the years ended December 31, 2016 , 2015 and 2014 , and long-lived assets held at December 31, 2016 and 2015 , by geographical location (amounts in thousands) were: Years Ended December 31, As of December 31, 2016 2015 2014 2016 2015 Revenues Long-Lived Assets United States $ 584,816 $ 722,393 $ 766,262 $ 29,598 $ 36,075 Outside the United States 245,764 219,625 114,707 9,146 9,319 Total $ 830,580 $ 942,018 $ 880,969 $ 38,744 $ 45,394 Revenues are attributed to countries based on the location of the related operations. Long-lived assets consist of net property and equipment. The Company reports revenues earned from its debt purchasing and collection activities and its fee-based services. It is impracticable for the Company to report further breakdowns of revenues from external customers by product or service. Cash and cash equivalents: The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Included in cash and cash equivalents are funds held on the behalf of others arising from the collection of accounts placed with the Company. The balance of the funds held on behalf of others was $3.8 million and $3.9 million at December 31, 2016 and 2015 , respectively; there is an offsetting liability that is included in "Other liabilities" on the accompanying consolidated balance sheets. Concentrations of credit risk: Financial instruments, which potentially expose the Company to concentrations of credit risk, consist primarily of cash, investments and finance receivables. Accumulated other comprehensive income/(loss): The Company records unrealized gains and losses on certain available-for-sale investments and foreign currency translation adjustments in other comprehensive income. Unrealized gains and losses on available for sale investments are reclassified to earnings as the gains or losses are realized upon sale of the securities. Translation gains or losses on foreign currency translation adjustments are reclassified to earnings upon the substantial sale or liquidation of investments in foreign operations. Investments: The Company accounts for its investments under the guidance of ASC Topic 320-10, "Investments-Debt and Equity Securities" ("ASC 320-10"). The Company determines the appropriate classification of its investments in debt and equity securities at the time of purchase and reevaluates such determinations at each balance sheet date. Debt securities are classified as held to maturity when the Company has the positive intent and ability to hold the securities to maturity. Debt securities for which the Company does not have the intent or ability to hold to maturity are classified as available for sale. Held-to-maturity securities are stated at amortized cost. Available for sale securities are carried at fair market value, with the unrealized gains and losses, net of tax, included in the determination of comprehensive income and reported in stockholders' equity. If the fair value of the investment falls below its carrying amount and the decline is deemed to be other than temporary, the investment is written down, with a corresponding charge to earnings. Finance receivables and income recognition: The Company accounts for its investment in finance receivables under the guidance of ASC Topic 310-30, "Loans and Debt Securities Acquired with Deteriorated Credit Quality" ("ASC 310-30"). The Company acquires portfolios of accounts that have experienced deterioration of credit quality between origination and the Company's acquisition of the accounts. The amount paid for a portfolio reflects the Company's determination that it is probable the Company will be unable to collect all amounts due according to an account's contractual terms. At acquisition, the Company reviews the accounts to determine whether there is evidence of deterioration of credit quality since origination, and if it is probable that the Company will be unable to collect all amounts due according to the loan's contractual terms. If both conditions exist, the Company then determines whether each such account is to be accounted for individually or whether such accounts will be assembled into pools based on common risk characteristics. The Company considers expected prepayments and estimates the amount and timing of undiscounted expected principal, interest and other cash flows (expected at acquisition) for each acquired portfolio based on the Company's proprietary models, and the Company subsequently aggregates portfolios of accounts into pools. The Company determines the excess of the pool's scheduled contractual principal and contractual interest payments over all cash flows expected at acquisition as an amount that should not be accreted (nonaccretable difference). The remaining amount, representing the excess of the pool's cash flows expected to be collected over the amount paid, is accreted into income recognized on finance receivables over the remaining estimated life of the pool (accretable yield). ASC 310-30 requires that the excess of the contractual cash flows over expected cash flows, based on the Company's estimates derived from proprietary collection models, not be recognized as an adjustment of revenue or expense or on the balance sheet. Each pool is recorded at cost and is accounted for as a single unit for the recognition of income, payments applied to principal and loss provision. Once a pool is established for a calendar quarter, individual receivable accounts are not added to the pool (unless replaced by the seller) or removed from the pool (unless sold or returned to the seller). The yield is estimated and periodically recalculated based on the timing and amount of anticipated cash flows. Income on finance receivables is accrued quarterly based on each pool's effective yield. Significant increases in expected future cash flows may be recognized prospectively, through an upward adjustment of the yield, over a pool's remaining life. Under ASC 310-30, rather than lowering the estimated yield if the collection estimates are below previous expectations, the carrying value of a pool would be written down to maintain the then current yield and is shown as a reduction in revenue in the consolidated income statements with a corresponding valuation allowance offsetting finance receivables, net, on the consolidated balance sheets. Cash flows greater than the interest accrual will reduce the carrying value of the pool. This reduction in carrying value is defined as payments applied to principal (also referred to as principal amortization). Likewise, cash flows that are less than the interest accrual will accrete the carrying balance. Generally, the Company does not record accretion in the first six to twelve months of the estimated life of the pool; accordingly, the Company utilizes either the cost recovery method or cash method when necessary to prevent accretion as permitted by ASC 310-30. Under the cash method, revenue is recognized as it would be under the interest method up to the amount of cash collections. Under the cost recovery method, no revenue is recognized until the Company has fully collected the cost of the pool, or until such time that the Company considers the collections to be probable and estimable and begins to recognize income based on the interest method as described above. The Company also uses the cost recovery method when collections on a particular pool of accounts cannot be reasonably estimated. A pool can become fully amortized (zero carrying balance on the balance sheet) while still generating cash collections. In this case, all subsequent cash collections are recognized as revenue when received. The Company records a valuation allowance when significant decreases in expected cash flows are identified or there are changes in the timing of expected cash flows that would otherwise require a reduction in the stated yield on a pool of accounts. Factors that may contribute to the recording of valuation allowances include both external and internal factors. External factors that may have an impact on the collectability, and subsequently on the overall profitability of purchased pools of nonperforming loans, would include: new laws or regulations relating to collections, new interpretations of existing laws or regulations, and the overall condition of the economy. Internal factors that may have an impact on the collectability, and subsequently the overall profitability of purchased pools of nonperforming loans, would include: necessary revisions to initial and post-acquisition scoring and modeling estimates, non-optimal operational activities (which relate to the collection and movement of accounts on both the collection floor of the Company and external channels), and decreases in productivity related to turnover and tenure of the Company's collection staff. The Company capitalizes certain fees paid to third parties related to the direct acquisition of a portfolio of accounts. These fees are added to the acquisition cost of the portfolio and accordingly are amortized over the life of the portfolio using the interest method. The agreements to purchase the aforementioned receivables include general representations and warranties from the sellers covering account holder death or bankruptcy and accounts settled or disputed prior to sale. The representation and warranty period permitting the return of these accounts from the Company to the seller is typically 90 to 180 days. Any funds received from the seller of finance receivables as a return of purchase price are referred to as buybacks. Buyback funds are applied against the finance receivable balance received and are not included in the Company's cash collections from operations. In some cases, the seller will replace the returned accounts with new accounts in lieu of returning the purchase price. In that case, the old account is removed from the pool and the new account is added. Fee income recognition: The Company utilizes the provisions of ASC Topic 605-45, "Principal Agent Considerations" ("ASC 605-45"), to account for fee income revenue from certain of its fee-for-service subsidiaries. ASC 605-45 requires an analysis to be completed to determine if certain revenues should be reported gross or reported net of their related operating expense. This analysis includes an assessment of who retains credit risk, controls vendor selection, establishes pricing and remains the primary obligor on the transaction. Each of these factors was considered to determine the correct method of recognizing revenue from these fee-based subsidiaries. Property and equipment: Property and equipment, including improvements that significantly add to the productive capacity or extend useful life, are recorded at cost. Maintenance and repairs are expensed currently. Property and equipment are depreciated over their useful lives using the straight-line method of depreciation. Software and computer equipment are amortized or depreciated over three to five years. Furniture and fixtures are depreciated over five to ten years. Equipment is depreciated over five to seven years. Leasehold improvements are depreciated over the lesser of the useful life, which ranges from three to ten years, or the remaining term of the lease. Building improvements are depreciated straight-line over ten to thirty-nine years. When property is sold or retired, the cost and related accumulated depreciation are removed from the balance sheet and any gain or loss is included in the income statement. Business combinations: The Company accounts for business combinations under the acquisition method. The cost of an acquired company is assigned to the tangible and intangible assets acquired and the liabilities assumed on the basis of their fair values at the date of acquisition. The determination of fair values of assets acquired and liabilities assumed requires management to make estimates and use valuation techniques when market values are not readily available. Any excess of purchase price over the fair value of net tangible and intangible assets acquired is allocated to goodwill. Transaction costs associated with business combinations are expensed as incurred. Goodwill and intangible assets: Goodwill, in accordance with ASC Topic 350, "Intangibles-Goodwill and Other" ("ASC 350"), is not amortized but rather is reviewed for impairment annually or more frequently if indicators of potential impairment exist. The Company performs its annual assessment as of October 1. The Company may first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If management concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, management conducts a two-step quantitative goodwill impairment test. The first step of the impairment test involves comparing the fair value of the applicable reporting unit with its carrying value. The Company estimates the fair values of its reporting units using a combination of the income approach, which uses present value techniques, and the market approach, which uses market multiples from comparable transactions where the acquisition target has similar operating and investment characteristics to the reporting unit. If the carrying amount of a reporting unit exceeds the reporting unit's fair value, management performs the second step of the goodwill impairment test. The second step of the goodwill impairment test involves comparing the implied fair value of the affected reporting unit's goodwill with the carrying value of that goodwill. The amount, by which the carrying value of the goodwill exceeds its implied fair value, if any, is recognized as an impairment loss . See Note 5 for additional information. Convertible senior notes: The Company accounts for its 3.00% Convertible Senior Notes due 2020 (the "Notes") in accordance with ASC 470-20, "Debt with Conversion and Other Options" ("ASC 470-20"). ASC 470-20 requires that, for convertible debt instruments that must be settled fully or partially in cash upon conversion, issuers must separately account for the liability and equity components in a manner that will reflect the entity's nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. The excess of the principal amount of the liability component over its carrying amount is amortized to interest expense over the expected life of a similar liability that does not have an associated equity component, using the effective interest method. The equity component is not remeasured as long as it continues to meet the conditions for equity classification under ASC 815-40, "Derivatives and Hedging - Contracts in Entity's Own Equity." Transaction costs incurred with third parties are allocated to the liability and equity components in proportion to the allocation of proceeds and accounted for as debt issuance costs and equity issuance costs, respectively. For diluted earnings per share purposes, based upon the Company's intent and ability to settle conversions of the Notes through a combination of cash and shares, only the conversion spread is included in the diluted earnings per share calculation, if dilutive. Under such method, the settlement of the conversion spread has a dilutive effect when the average share price of the Company's common stock during any quarter exceeds $65.72 . Income taxes: The Company follows the guidance of ASC Topic 740 "Income Taxes" ("ASC 740") as it relates to the provision for income taxes and uncertainty in income taxes. Accordingly, the Company records a tax provision for the anticipated tax consequences of the reported results of operations. The provision for income taxes is estimated using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, and for operating losses and tax credit carry-forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets are expected to be realized or settled. The evaluation of a tax position in accordance with the guidance is a two-step process. The first step is recognition: the enterprise determines whether it is more-likely-than-not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. In evaluating whether a tax position has met the more-likely-than-not recognition threshold, the enterprise should presume that the position will be examined by the appropriate taxing authority that would have full knowledge of all relevant information. The second step is measurement: a tax position that meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met. The Company records interest and penalties related to unrecognized tax benefits as a component of income tax expense when positions are not met. In the event that all or part of the deferred tax assets are determined not to be realizable in the future, a valuation allowance would be established and charged to earnings in the period such determination is made. If the Company subsequently realizes deferred tax assets that were previously determined to be unrealizable, the respective valuation allowance would be reversed, resulting in a positive adjustment to earnings. The estimate of income tax expense involves significant judgment in evaluating the impact of uncertainties in the application of complex tax laws. Resolution of these uncertainties in a manner inconsistent with our expectations could have a material impact on our results of operations and financial position. For domestic income tax purposes, the Company recognizes revenue using the cost recovery method with respect to the Company's nonperforming loan purchasing business. The Company believes cost recovery to be an acceptable method for purchasers of nonperforming loans. Under the cost recovery method, collections on finance receivables are applied first to principal to reduce the finance receivables to zero before any income is recognized. Advertising costs: Advertising costs are expensed when incurred. Operating leases: General abatements or prepaid leasing costs are recognized on a straight-line basis over the life of the lease. Future minimum lease payments (including the impact of rent escalations) are expensed on a straight-line basis over the life of the lease. Material leasehold improvements are capitalized and amortized over the remaining life of the lease. Share-based compensation: The Company accounts for share-based compensation in accordance with the provisions of ASC Topic 718 "Compensation-Stock Compensation" ("ASC 718"). ASC 718 requires that compensation expense associated with share equity awards be recognized in the income statement. Based on historical experience, the Company estimates a forfeiture rate for most equity share grants. Time-based equity share awards generally vest between three and five years from the grant date and are expensed on a straight-line basis over the vesting period. Equity share awards that contain a performance metric, are expensed over the requisite service period, generally three years, in accordance with the performance level achieved at each reporting period. See Note 9 for additional information. Use of estimates: The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates have been made by management with respect to the timing and amount of future cash collections of the Company's finance receivables portfolios. Actual results could differ from these estimates making it reasonably possible that a change in these estimates could occur within one year. Commitments and contingencies: We are subject to various claims and contingencies related to lawsuits, certain taxes, and commitments under contractual and other obligations. We recognize liabilities for contingencies and commitments when a loss is probable and estimable. We expense related legal costs as incurred. For additional information, see Note 14. Estimated fair value of financial instruments: The Company applies the provision of ASC Topic 820 "Fair Value Measurements and Disclosures" ("ASC 820"). ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also requires the consideration of differing levels of inputs in the determination of fair values. Disclosure of the estimated fair values of financial instruments often requires the use of estimates. See Note 8 for additional information. Reclassification of prior year presentation: Certain prior year amounts have been reclassified for consistency with the current year presentation. Recent accounting pronouncements: In May 2014, FASB issued Accounting Standards Update ("ASU") 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09") that updates the principles for recognizing revenue. The core principle of the guidance 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 also amends the required disclosures of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and can be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption, with early application not permitted. The Company believes that the revenue it classifies as Fee Income is within the scope of this standard. The Company's fee income consists of revenue generated by its Claims Compensation Bureau, LLC ("CCB"), PRA Location Services, LLC ("PLS"), and PRA Government Services, LLC ("PGS") subsidiaries. Based on the Company's evaluation, the Company does not believe the new standard will impact the accounting for its CCB and PLS revenue. The Company sold its PGS business in January 2017. In June 2014, FASB issued ASU 2014-12, "Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period" ("ASU 2014-12"). ASU 2014-12 requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. ASU 2014-12 is effective for annual reporting periods beginning after December 15, 2015, with early adoption permitted. The Company adopted ASU 2014-12 in the first quarter of 2016 which had no material impact on its Consolidated Financial Statements. In August 2014, FASB issued ASU 2014-15, "Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern" ("ASU 2014-15"). ASU 2014-15 requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued and provides guidance on determining when and how to disclose going concern uncertainties in the financial statements. Certain disclosures will be required if conditions give rise to substantial doubt about an entity’s ability to continue as a going concern. ASU 2014-15 applies to all entities and is effective for annual and interim reporting periods ending after December 15, 2016, with early adoption permitted. The Company adopted ASU 2014-15 during the fourth quarter of 2016 which did not have an impact on its Consolidated Financial Statements. In February 2015, FASB issued ASU 2015-02, "Consolidation (Topic 810), Amendments to the Consolidation Analysis" ("ASU 2015-02"). The amendments under the new guidance modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities ("VIEs") or voting interest entities and eliminate the presumption that a general partner should consolidate a limited partnership. ASU 2015-02 is effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. The Company adopted ASU 2015-02 in the first quarter of 2016 which had no material impact on its Consolidated Financial Statements. In April 2015, FASB issued ASU 2015-03, "Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs" ("ASU 2015-03"). ASU 2015-03 requires an entity to present debt issuance costs related to a recognized debt liability in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this update. For public business entities, this update is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. An entity should apply the new guidance on a retrospective basis. The Company adopted ASU 2015-03 in the first quarter of 2016. Upon adoption, the Company reclassified its debt issuance costs from "Other assets" to "Borrowings" in its Consolidated Balance Sheets, which did not have a material impact on its Consolidated Financial Statements. In April 2015, FASB issued ASU 2015-05, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement" ("ASU 2015-05"). ASU 2015-05 provides explicit guidance to |
Finance Receivables, net
Finance Receivables, net | 12 Months Ended |
Dec. 31, 2016 | |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities [Abstract] | |
Finance Receivables, net | Finance Receivables, net: Changes in finance receivables, net, for the years ended December 31, 2016 and 2015 , were as follows (amounts in thousands): 2016 2015 Balance at beginning of year $ 2,202,113 $ 2,001,790 Acquisitions of finance receivables (1) 938,273 954,954 Cash collections applied to principal (746,867 ) (674,373 ) Foreign currency translation adjustment (85,550 ) (80,258 ) Balance at end of year $ 2,307,969 $ 2,202,113 (1) Acquisitions of finance receivables are net of buybacks and include certain capitalized acquisition related costs. They also includes the acquisition date finance receivable portfolios that are acquired in connection with certain business acquisitions. During the year ended December 31, 2016 , the Company purchased finance receivable portfolios with a face value of $10.5 billion for $0.9 billion . During the year ended December 31, 2015 , the Company purchased finance receivable portfolios with a face value of $6.9 billion for $1.0 billion . At December 31, 2016 , the estimated remaining collections ("ERC") on the receivables purchased during the years ended December 31, 2016 and 2015 were $1.4 billion and $1.2 billion , respectively. At December 31, 2016 and 2015, the total ERC was $5.05 billion and $5.01 billion , respectively. At the time of acquisition and each quarter thereafter, the life of each pool is estimated based on projected amounts and timing of future cash collections using the proprietary models of the Company. Based upon current projections, cash collections expected to be applied to principal are estimated to be as follows for the years ending December 31, (amounts in thousands): 2017 $ 633,565 2018 541,874 2019 419,322 2020 308,356 2021 211,759 2022 93,723 2023 46,230 Thereafter 53,140 Total ERC expected to be applied to principal $ 2,307,969 At December 31, 2016 and 2015 , the Company had aggregate net finance receivables balances in pools accounted for under the cost recovery method of $105.5 million and $21.0 million , respectively. Accretable yield represents the amount of income recognized on finance receivables the Company can expect to generate over the remaining life of its existing portfolios based on estimated future cash flows as of the balance sheet date. Additions represent the original expected accretable yield, on portfolios purchased during the period, to be earned by the Company based on its proprietary buying models. Net reclassifications from nonaccretable difference to accretable yield primarily result from the increase in the Company's estimate of future cash flows. When applicable, net reclassifications to nonaccretable difference from accretable yield result from the decrease in the Company's estimates of future cash flows and allowance charges that together exceed the increase in the Company's estimate of future cash flows. Changes in accretable yield for the years ended December 31, 2016 and 2015 were as follows (amounts in thousands): 2016 2015 Balance at beginning of year $ 2,727,204 $ 2,513,185 Income recognized on finance receivables, net (745,119 ) (865,122 ) Additions from portfolio purchases 720,638 756,628 Reclassifications from nonaccretable difference 41,056 502,665 Foreign currency translation adjustment (3,773 ) (180,152 ) Balance at end of year $ 2,740,006 $ 2,727,204 The following is a summary of activity within the Company's valuation allowance account, all of which relates to loans acquired with deteriorated credit quality, for the years ended December 31, 2016 , 2015 and 2014 (amounts in thousands): 2016 2015 2014 Beginning balance $ 114,861 $ 86,166 $ 91,101 Allowance charges 100,202 31,974 8,010 Reversal of previous recorded allowance charges (1,723 ) (2,605 ) (12,945 ) Net allowance charges/(reversals) 98,479 29,369 (4,935 ) Foreign currency translation adjustment (1,875 ) (674 ) — Ending balance $ 211,465 $ 114,861 $ 86,166 |
Investments
Investments | 12 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments: Investments consisted of the following at December 31, 2016 and 2015 (amounts in thousands): 2016 2015 Available-for-sale Securitized assets $ — $ 4,649 Government bonds and fixed income funds 2,138 3,405 Held-to-maturity Securitized assets 51,407 50,247 Other investments Private equity funds 14,998 15,498 Total investments $ 68,543 $ 73,799 Available-for-Sale Investments in securitized assets : The Company holds a majority interest in a closed-end Polish investment fund. The fund was formed in December 2014 to acquire portfolios of nonperforming consumer loans in Poland. The Company's investment consists of a 100% interest of the Series B certificates and a 20% interest of the Series C certificates. Each certificate comes with one vote and is governed by a co-investment agreement. Series C certificates, which share equally in the residual profit of the fund, are accounted for as debt securities classified as available-for-sale and are stated at fair value. There was no revenue recorded in 2016 or 2015 from the Series C investment. During 2016, the net portfolio collections on the Company's investments in the closed-end Polish investment fund significantly underperformed expectations. As a result, in 2016 the Company recorded an other-than-temporary impairment charge of $5.8 million . Government bonds and fixed income funds: The Company's investments in government bonds and fixed income funds are classified as available-for-sale and are stated at fair value. Fair value is estimated using the quoted price of the investment. Unrealized gains and losses are included in other comprehensive income and reported in equity. Held-to-Maturity Investments in securitized assets : The Company holds a majority interest in a closed-end Polish investment fund. The Company's 100% interest in the Fund's Series B certificates, which provide a preferred return based on the expected net income of the portfolios, are accounted for as a beneficial interest in securitized financial assets and stated at amortized cost. The Company has determined it has the ability and intent to hold these certificates until maturity, which occurs when the fund terminates or liquidates its assets. The preferred return is not a guaranteed return. Income is recognized under FASB ASC Topic 325-40, "Beneficial Interest in Securitized Financial Assets" ("ASC 325-40"). Income is recognized using the effective yield method. The Company adjusts the yield for changes in estimated cash flows prospectively through earnings. The underlying securities have both known principal repayment terms as well as unknown principal repayments due to potential borrower pre-payments. Accordingly, it is difficult to accurately predict the final maturity date of these investments. Revenues recognized on these investments are recorded in the Other Revenue line item in the income statement and were $6.1 million for the year ended December 31, 2016 compared to $6.4 million for the year ended December 31, 2015 . Other Investments Investments in private equity funds : Investments in private equity funds represent limited partnerships in which the Company has less than a 3% interest and are carried at cost. Distributions received from the partnerships are included in other revenue. Distributions received in excess of the Company's proportionate share of accumulated earnings are applied as a reduction of the cost of the investment. Distributions received from investments carried at cost were $2.7 million and $7.8 million for 2016 and 2015 , respectively. The amortized cost and estimated fair value of available-for sale and held-to-maturity investments at December 31, 2016 and 2015 were as follows (amounts in thousands): December 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value Available-for-sale Government bonds and fixed income funds $ 2,161 $ — $ 23 $ 2,138 Held-to-maturity Securitized assets 51,407 4,147 — 55,554 December 31, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value Available-for-sale Securitized assets $ 5,855 $ — $ 1,206 $ 4,649 Government bonds and fixed income funds 3,405 — — 3,405 Held-to-maturity Securitized assets 50,247 5,366 — 55,613 |
Operating Leases
Operating Leases | 12 Months Ended |
Dec. 31, 2016 | |
Leases, Operating [Abstract] | |
Operating Leases | Operating Leases: The Company leases office space and equipment under operating leases. Rental expense was $12.3 million , $11.3 million and $8.7 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. Future minimum lease payments for operating leases at December 31, 2016 , are as follows for the years ending December 31, (amounts in thousands): 2017 $ 10,965 2018 9,086 2019 7,428 2020 5,868 2021 4,282 Thereafter 10,789 Total future minimum lease payments $ 48,418 |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, net | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, net | Goodwill and Intangible Assets, net: In connection with the Company's previous business acquisitions, the Company acquired certain tangible and intangible assets. Intangible assets resulting from these acquisitions include client and customer relationships, non-compete agreements, trademarks and technology. The Company performs an annual review of goodwill as of October 1 or more frequently if indicators of impairment exist. The Company performed an annual review of goodwill as of October 1, 2016, and concluded that no goodwill impairment was necessary. The following table represents the changes in goodwill for the years ended December 31, 2016 and 2015 (amounts in thousands): 2016 2015 Balance at beginning of period: Goodwill $ 501,553 $ 533,842 Accumulated impairment loss (6,397 ) (6,397 ) 495,156 527,445 Changes: Acquisitions 28,792 38,489 Foreign currency translation adjustment 5,646 (70,778 ) Reclassifications to assets held for sale (29,683 ) — Net change in goodwill 4,755 (32,289 ) Balance at end of period: Goodwill 506,308 501,553 Accumulated impairment loss (6,397 ) (6,397 ) $ 499,911 $ 495,156 The $28.8 million addition to goodwill due to business acquisitions in 2016 was mainly attributable to the acquisition of DTP during the second quarter of 2016 and the acquisition of Recovery Management Systems Corporation ("RMSC") in the first quarter of 2016. The goodwill recognized from the DTP acquisition is not expected to be deductible for U.S. income tax purposes while the goodwill recognized from the RMSC acquisition is expected to be deductible for U.S. income tax purposes. The $38.5 million addition to goodwill due to business acquisitions in 2015 was mainly attributable to the acquisition of RCB. The acquired goodwill is not deductible for U.S. income tax purposes. Intangible assets, excluding goodwill, consisted of the following at December 31, 2016 and 2015 (amounts in thousands): 2016 2015 Gross Accumulated Gross Accumulated Client and customer relationships $ 35,936 $ 13,455 $ 47,674 $ 28,064 Non-compete agreements 1,412 667 858 119 Trademarks 3,315 988 4,367 2,038 Technology 3,102 720 1,211 101 Total $ 43,765 $ 15,830 $ 54,110 $ 30,322 The Company amortizes the intangible assets over the estimated useful lives. Total amortization expense for the years ended December 31, 2016 , 2015 and 2014 was $6.2 million , $3.7 million and $4.8 million , respectively. The Company reviews these intangible assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable and the carrying amount exceeds its fair value. The future amortization of these intangible assets is estimated to be as follows as of December 31, 2016 for the following years ending December 31, (amounts in thousands): 2017 $ 4,793 2018 4,390 2019 4,143 2020 3,635 2021 2,666 Thereafter 8,308 Total $ 27,935 |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings: The Company's borrowings consisted of the following as of the dates indicated (amounts in thousands): December 31, December 31, North American revolving credit $ 695,088 $ 541,799 Term loans 430,764 170,000 Note payable — 169,938 European revolving credit 401,780 576,433 Convertible senior notes 287,500 287,500 Less: Debt discount and issuance costs (31,031 ) (28,541 ) Total $ 1,784,101 $ 1,717,129 The following principal payments are due on the Company's borrowings at December 31, 2016 for the years ending December 31, (amounts in thousands): 2017 $ 217,285 2018 10,000 2019 10,000 2020 895,303 2021 682,544 Thereafter — Total $ 1,815,132 The Company believes it was in compliance with the covenants of its financing arrangements as of December 31, 2016 and 2015 . North American Revolving Credit and Term Loan On December 19, 2012, the Company entered into a credit facility with Bank of America, N.A., as administrative agent, and a syndicate of lenders named therein (such agreement as later amended or modified, the "North American Credit Agreement"). The total credit facility under the North American Credit Agreement includes an aggregate principal amount of $948.0 million (subject to compliance with a borrowing base and applicable debt covenants), which consists of (i) a fully-funded $150.0 million term loan, (ii) a $748 million domestic revolving credit facility, and (iii) a $50 million Canadian revolving credit facility. The facility includes an optional increase in commitments for a $125.0 million accordion feature (at the option of the lenders) and also provides for up to $20 million of letters of credit that would reduce amounts available for borrowing. The term and revolving loans accrue interest, at the option of the Company, at either the base rate or the Eurodollar rate (as defined in the North American Credit Agreement) for the applicable term plus 2.50% per annum in the case of the Eurodollar rate loans and 1.50% in the case of the base rate loans. The base rate is the highest of (a) the Federal Funds Rate (as defined in the Credit Agreement) plus 0.50% , (b) Bank of America's prime rate, or (c) the Eurodollar rate plus 1.00% . Of the $948.0 million total principal amount of the credit facility, $216.3 million matures on December 19, 2017, and the remainder matures on the earlier of December 21, 2020 or 91 days prior to the maturity of the Notes. As of December 31, 2016, the unused portion of the North American Credit Agreement was $102.9 million . Considering borrowing base restrictions, as of December 31, 2016, the amount available to be drawn was $78.0 million . The North American Credit Agreement is secured by a first priority lien on substantially all of the Company's domestic and Canadian assets. The North American Credit Agreement, as amended and modified, contains restrictive covenants and events of default including the following: • borrowings may not exceed 35% of the ERC of all eligible asset pools plus 75% of eligible accounts receivable; • the consolidated leverage ratio (as defined in the Credit Agreement) cannot exceed 2.25 to 1.0 as of the end of any fiscal quarter; • cash dividends and distributions during any fiscal year cannot exceed $20 million ; • stock repurchases during any fiscal year cannot exceed $100 million plus 50% of the prior year's net income; • permitted acquisitions (as defined in the Credit Agreement) during any fiscal year cannot exceed $250 million ; • indebtedness in the form of senior, unsecured convertible notes or other unsecured financings cannot exceed $500 million in the aggregate (without respect to the Company's 3.00% Convertible Senior Notes due 2020); • the Company must maintain positive consolidated income from operations (as defined in the North American Credit Agreement) during any fiscal quarter; and • restrictions on changes in control. The revolving credit facility also bears an unused line fee of 0.375% per annum, payable quarterly in arrears. Information on the outstanding balances and weighted average interest rates by type of borrowing under the credit facility as of December 31, 2016 and 2015 is as follows (dollar amounts in thousands): 2016 2015 Amount Outstanding Weighted Average Interest Rate Amount Outstanding Weighted Average Interest Rate Term loan $ 150,000 3.27 % $ 170,000 2.92 % Revolving facility $ 695,088 3.28 % $ 541,799 2.89 % Note Payable In conjunction with the closing of the Aktiv business acquisition on July 16, 2014, the Company entered into a $169.9 million promissory note with an affiliate of the seller. The promissory note bore interest at the three-month London Interbank Offered Rate ("LIBOR") plus 3.75% . On July 18, 2016, the Company paid the entire outstanding principal balance due of $169.9 million plus accrued interest. European Revolving Credit Facility and Term Loan On October 23, 2014, the Company entered into a credit agreement with DNB Bank ASA for a Multicurrency Revolving Credit Facility (such agreement as later amended or modified, "the European Credit Agreement"). Under the terms of the European Revolving Credit Agreement, the credit facility includes an aggregate amount of $1.2 billion (subject to the borrowing base), of which approximately $300 million is a term loan, accrues interest at the Interbank Offered Rate ("IBOR") plus 2.80% - 3.90% under the revolving facility and 4.25% - 4.50% under the term loan facility (as determined by the loan-to-value ratio ("LTV Ratio") as defined in the European Credit Agreement), bears an unused line fee, currently 1.26% per annum, of 35% of the margin, payable monthly in arrears, and matures on February 19, 2021. The European Credit Agreement also includes an Overdraft Facility in the aggregate amount of $40 million (subject to the borrowing base), which accrues interest (per currency) at the daily rates as published by the facility agent, bears a facility line fee of 0.125% per annum, payable quarterly in arrears, and also matures February 19, 2021. As of December 31, 2016 , the unused portion of the European Credit Agreement (including the Overdraft Facility) was $538.2 million . Considering borrowing base restrictions and other covenants, as of December 31, 2016 , the amount available to be drawn under the European Credit Agreement (including the Overdraft Facility) was $126.0 million . The European Credit Agreement is secured by the shares of most of the Company's European subsidiaries and by all intercompany loan receivables in Europe. The European Credit Agreement contains restrictive covenants and events of default including the following: • the LTV Ratio (as defined in the European Credit Agreement) cannot exceed 75% ; • the GIBD Ratio (as defined in the European Credit Agreement) cannot exceed 3.5 to 1.0 as of the end of any fiscal quarter until March 31, 2017 and 3.25 to 1.0 thereafter; • interest bearing deposits in AK Nordic AB cannot exceed SEK 1,500,000,000 ; • PRA Europe's cash collections must exceed 95% of PRA Europe's ERC for the same set of portfolios, measured on a quarterly basis. Information on the outstanding balances and weighted average interest rates by type of borrowing under the credit facility as of December 31, 2016 and 2015 is as follows (dollar amounts in thousands): 2016 2015 Amount Outstanding Weighted Average Interest Rate Amount Outstanding Weighted Average Interest Rate Term loan $ 280,764 4.25 % $ — — % Revolving facility $ 401,780 4.06 % $ 576,433 3.64 % Convertible Senior Notes On August 13, 2013, the Company completed the private offering of $287.5 million in aggregate principal amount of the Notes. The Notes were issued pursuant to an Indenture, dated August 13, 2013 (the "Indenture") between the Company and Wells Fargo Bank, National Association, as trustee. The Indenture contains customary terms and covenants, including certain events of default after which the Notes may be due and payable immediately. The Notes are senior unsecured obligations of the Company. Interest on the Notes is payable semi-annually, in arrears, on February 1 and August 1 of each year, beginning on February 1, 2014. Prior to February 1, 2020, the Notes will be convertible only upon the occurrence of specified events. On or after February 1, 2020, the Notes will be convertible at any time. The Company does not have the right to redeem the Notes prior to maturity. As of December 31, 2016 and 2015, none of the conditions allowing holders of the Notes to convert their Notes had occurred. The Company determined that the fair value of the Notes at the date of issuance was approximately $255.3 million , and designated the residual value of approximately $32.2 million as the equity component. Additionally, the Company allocated approximately $7.3 million of the $8.2 million original Notes issuance cost as debt issuance cost and the remaining $0.9 million as equity issuance cost. The conversion rate for the Notes is initially 15.2172 shares per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $65.72 per share of the Company's common stock, and is subject to adjustment in certain circumstances pursuant to the Indenture. Upon conversion, holders of the 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 through combination settlement (i.e ., the Notes would be converted into cash up to the aggregate principal amount, and shares of the Company's common stock or a combination of cash and shares of the Company's common stock, at the Company's election, for the remainder). As a result and in accordance with authoritative guidance related to derivatives and hedging and earnings per share, only the conversion spread is included in the diluted earnings per share calculation, if dilutive. Under such method, the settlement of the conversion spread has a dilutive effect when the average share price of the Company's common stock during any quarter exceeds $65.72 . The balances of the liability and equity components of the Notes outstanding were as follows as of the dates indicated (amounts in thousands): December 31, December 31, Liability component - principal amount $ 287,500 $ 287,500 Unamortized debt discount (17,930 ) (22,402 ) Liability component - net carrying amount $ 269,570 $ 265,098 Equity component $ 31,306 $ 31,306 The debt discount is amortized into interest expense over the remaining life of the Notes using the effective interest rate, which is 4.92% . Interest expense related to the Notes was as follows for the years ended December 31, 2016 and 2015 (amounts in thousands): 2016 2015 2014 Interest expense - stated coupon rate $ 8,625 $ 8,625 $ 8,625 Interest expense - amortization of debt discount 4,472 4,260 4,058 Total interest expense - convertible senior notes $ 13,097 $ 12,885 $ 12,683 |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment, Net [Abstract] | |
Property and Equipment, net | Property and Equipment, net: Property and equipment, at cost, consisted of the following as of December 31, 2016 and 2015 (amounts in thousands): 2016 2015 Software $ 53,793 $ 62,198 Computer equipment 19,594 21,109 Furniture and fixtures 13,607 11,888 Equipment 12,065 12,874 Leasehold improvements 13,644 15,112 Building and improvements 7,323 7,235 Land 1,296 1,296 Accumulated depreciation and amortization (82,578 ) (86,318 ) Property and equipment, net $ 38,744 $ 45,394 Depreciation and amortization expense relating to property and equipment for the years ended December 31, 2016 , 2015 and 2014 was $18.2 million , $16.2 million and $13.6 million , respectively. |
Fair Value Measurements And Dis
Fair Value Measurements And Disclosures | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value: As defined by ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also requires the consideration of differing levels of inputs in the determination of fair values. Those levels of input are summarized as follows: • Level 1: Quoted prices in active markets for identical assets and liabilities. • Level 2: Observable inputs other than Level 1 quoted prices, such as quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. • Level 3: Unobservable inputs that are supported by little or no market activity. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques as well as instruments for which the determination of fair value requires significant management judgment or estimation. The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Financial Instruments Not Required To Be Carried at Fair Value In accordance with the disclosure requirements of ASC Topic 825, "Financial Instruments" ("ASC 825"), the table below summarizes fair value estimates for the Company's financial instruments that are not required to be carried at fair value. The total of the fair value calculations presented does not represent, and should not be construed to represent, the underlying value of the Company. The carrying amounts in the table are recorded in the consolidated balance sheets at December 31, 2016 and December 31, 2015 (amounts in thousands): December 31, 2016 December 31, 2015 Carrying Estimated Carrying Estimated Financial assets: Cash and cash equivalents $ 94,287 $ 94,287 $ 71,372 $ 71,372 Held-to-maturity investments 51,407 55,554 50,247 55,613 Other investments 14,998 12,573 15,498 16,803 Finance receivables, net 2,307,969 2,708,582 2,202,113 2,704,432 Financial liabilities: Interest-bearing deposits 76,113 76,113 46,991 46,991 Revolving lines of credit 1,096,868 1,096,868 1,118,232 1,118,232 Term loans 430,764 430,764 170,000 170,000 Note payable — — 169,938 169,938 Convertible senior notes 269,570 270,825 265,098 241,126 Disclosure of the estimated fair values of financial instruments often requires the use of estimates. The Company uses the following methods and assumptions to estimate the fair value of financial instruments: Cash and cash equivalents: The carrying amount approximates fair value and quoted prices for identical assets can be found in active markets. Accordingly, the Company estimates the fair value of cash and cash equivalents using Level 1 inputs. Held-to-maturity investments: Fair value of the Company's investment in Series B certificates of a closed-end Polish investment fund is estimated using proprietary pricing models that the Company utilizes to make portfolio purchase decisions. Accordingly, the Company estimates the fair value of its held-to-maturity investments using Level 3 inputs as there is little observable market data available and management is required to use significant judgment in its estimates. Other investments: This class of investments consists of private equity funds that invest primarily in loans and securities including single-family residential debt; corporate debt products; and financially-oriented, real-estate-rich and other operating companies in the Americas, Western Europe, and Japan. These investments are subject to certain restrictions regarding transfers and withdrawals. The investments can never be redeemed with the funds. Instead, the nature of the investments in this class is that distributions are received through the liquidation of the underlying assets of the fund. The fair value of the Company's interest is calculated by the fund managers; accordingly, the Company estimates the fair value of these investments using Level 3 inputs. The investments are expected to be returned through distributions as a result of liquidations of the funds' underlying assets over 1 to 4 years. Finance receivables, net: The Company computed the estimated fair value of these receivables using proprietary pricing models that the Company utilizes to make portfolio purchase decisions. Accordingly, the Company's fair value estimates use Level 3 inputs as there is little observable market data available and management is required to use significant judgment in its estimates. Interest-bearing deposits: The carrying amount approximates fair value due to the short-term nature of the deposits and the observable quoted prices for similar instruments in active markets. Accordingly, the Company uses Level 2 inputs for its fair value estimates. Revolving lines of credit: The carrying amount approximates fair value due to the short-term nature of the interest rate periods and the observable quoted prices for similar instruments in active markets. Accordingly, the Company uses Level 2 inputs for its fair value estimates. Term loans: The carrying amount approximates fair value due to the short-term nature of the interest rate periods and the observable quoted prices for similar instruments in active markets. Accordingly, the Company uses Level 2 inputs for its fair value estimates. Note payable: The carrying amount approximates fair value due to the short-term nature of the loan terms and the observable quoted prices for similar instruments in active markets. Accordingly, the Company uses Level 2 inputs for its fair value estimates. Convertible Senior Notes: The Notes are carried at historical cost, adjusted for the debt discount. The fair value estimates for these Notes incorporates quoted market prices which were obtained from secondary market broker quotes which were derived from a variety of inputs including client orders, information from their pricing vendors, modeling software, and actual trading prices when they occur. Accordingly, the Company uses Level 2 inputs for its fair value estimates. Financial Instruments Required To Be Carried At Fair Value The carrying amounts in the following table are measured at fair value on a recurring basis in the accompanying consolidated balance sheets at December 31, 2016 and 2015 (amounts in thousands): Fair Value Measurements as of December 31, 2016 Level 1 Level 2 Level 3 Total Assets: Available-for-sale investments $ 2,138 $ — $ — $ 2,138 Liabilities: Interest rate swap contracts (recorded in accrued expenses) — 2,825 — 2,825 Fair Value Measurements as of December 31, 2015 Level 1 Level 2 Level 3 Total Assets: Available-for-sale investments $ 3,405 $ — $ 4,649 $ 8,054 Liabilities: Interest rate swap contracts (recorded in accrued expenses) — 1,602 — 1,602 Available-for-sale investments: Fair value of the Company's investment in government bonds and fixed income funds is estimated using quoted market prices. Accordingly, the Company uses Level 1 inputs. Fair value as of December 31, 2015 of the Company's investment in Series C certificates of a closed-end Polish investment fund is estimated using proprietary pricing models that the Company utilizes to make portfolio purchase decisions. Accordingly, the Company estimates the fair value of these available-for-sale investments using Level 3 inputs as there is little observable market data available and management is required to use significant judgment in its estimates. At December 31, 2016 and 2015 unrealized losses in other comprehensive income were $0.0 million and $1.2 million respectively. Interest rate swap contracts: The estimated fair value of the interest rate swap contracts is determined by using industry standard valuation models. These models project future cash flows and discount the future amounts to a present value using market-based observable inputs, including interest rate curves and other factors. Accordingly, the Company uses Level 2 inputs for its fair value estimates. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Share-based Compensation [Abstract] | |
Share-Based Compensation | Share-Based Compensation : The Company has an Omnibus Incentive Plan (the "Plan") that is intended to assist the Company in attracting and retaining selected individuals to serve as employees and directors, who are expected to contribute to the Company's success and to achieve long-term objectives that will benefit stockholders of the Company. The Plan enables the Company to award shares of the Company's common stock to select employees and directors, as described in the Plan, not to exceed 5,400,000 shares as authorized by the Plan. Total share-based compensation expense was $6.1 million , $16.3 million and $15.0 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. Tax benefits resulting from tax deductions in excess of share-based compensation expense (windfall tax benefits) recognized under the provisions of ASC 718 are credited to additional paid-in capital. Realized tax shortfalls, if any, are first offset against the cumulative balance of windfall tax benefits, if any, and then charged directly to income tax expense. The total tax benefit realized from share-based compensation was approximately $2.7 million , $8.9 million and $10.8 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. Nonvested Shares As of December 31, 2016 , total future compensation costs related to nonvested awards of nonvested shares (not including nonvested shares granted under the Long-Term Incentive Program ("LTI")), is estimated to be $5.2 million with a weighted average remaining life for all nonvested shares of 1.4 years . Grants made to key employees and directors of the Company were assumed to have no forfeiture rates associated with them due to the historically low turnover among this group. With the exception of the awards made pursuant to the LTI program and a few employee and director grants, the nonvested shares vest ratably generally over three to five years and are expensed over their vesting period. The following summarizes all nonvested share transactions, excluding those related to the LTI program, from December 31, 2013 through December 31, 2016 (amounts in thousands, except per share amounts): Nonvested Shares Weighted-Average December 31, 2013 226 $ 29.58 Granted 272 56.69 Vested (155 ) 37.34 Canceled (4 ) 50.41 December 31, 2014 339 47.34 Granted 100 53.29 Vested (151 ) 42.15 Canceled (4 ) 47.49 December 31, 2015 284 52.20 Granted 196 28.43 Vested (117 ) 48.78 Canceled (60 ) 51.71 December 31, 2016 303 $ 38.19 The total grant date fair value of shares vested, excluding those granted under the LTI program, during the years ended December 31, 2016 , 2015 and 2014 , was $5.7 million , $6.4 million and $5.8 million , respectively. Long-Term Incentive Program Pursuant to the Plan, the Compensation Committee may grant time-vested and performance based nonvested shares. All shares granted under the LTI program were granted to key employees of the Company. The following table summarizes all LTI share transactions from December 31, 2013 through December 31, 2016 (amounts in thousands, except per share amounts): Nonvested LTI Shares Weighted-Average December 31, 2013 434 $ 25.79 Granted at target level 111 49.60 Adjustments for actual performance 222 22.32 Vested (279 ) 24.21 December 31, 2014 488 30.52 Granted at target level 132 52.47 Adjustments for actual performance 122 34.59 Vested (252 ) 20.21 Canceled (7 ) 40.05 December 31, 2015 483 42.80 Granted at target level 240 28.98 Adjustments for actual performance (67 ) 34.59 Vested (176 ) 34.59 Canceled (55 ) 43.68 December 31, 2016 425 $ 39.57 The total grant date fair value of LTI shares vested during the years ended December 31, 2016 , 2015 and 2014 , was $6.1 million , $5.1 million and $6.8 million , respectively. At December 31, 2016 , total future compensation costs, assuming the current estimated performance levels are achieved, related to nonvested share awards granted under the LTI program are estimated to be approximately $2.8 million . The Company assumed a 15.0% forfeiture rate for these grants and the remaining shares have a weighted average life of 1.1 years at December 31, 2016 . |
Earnings per Share
Earnings per Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share: Basic earnings per share ("EPS") are computed by dividing net income available to common stockholders of PRA Group, Inc. by weighted average shares of the Company's common stock outstanding. Diluted EPS are computed using the same components as basic EPS with the denominator adjusted for the dilutive effect of the Notes and nonvested share awards, if dilutive. For the Notes, only the conversion spread is included in the diluted earnings per share calculation, if dilutive. Under such method, the settlement of the conversion spread has a dilutive effect when the average share price of the Company's common stock during any quarter exceeds $65.72 , which did not occur during the period from which the Notes were issued on August 13, 2013 through December 31, 2016 . Share-based awards that are contingent upon the attainment of performance goals are not included in the computation of diluted EPS until the performance goals have been attained. The dilutive effect of nonvested shares is computed using the treasury stock method, which assumes any proceeds that could be obtained upon the vesting of nonvested shares would be used to purchase common shares at the average market price for the period. The assumed proceeds include the windfall tax benefit that would be received upon assumed exercise. The following table provides a reconciliation between the computation of basic EPS and diluted EPS for the years ended December 31, 2016 , 2015 and 2014 (amounts in thousands, except per share amounts): 2016 2015 2014 Net income attributable to PRA Group, Inc. Weighted average common shares EPS Net income attributable to PRA Group, Inc. Weighted average common shares EPS Net income attributable to PRA Group, Inc. Weighted average common shares EPS Basic EPS $ 85,097 46,316 $ 1.84 $ 167,926 48,128 $ 3.49 $ 176,505 49,990 $ 3.53 Dilutive effect of nonvested share awards 72 (0.01 ) 277 (0.02 ) 431 (0.03 ) Diluted EPS $ 85,097 46,388 $ 1.83 $ 167,926 48,405 $ 3.47 $ 176,505 50,421 $ 3.50 There were no antidilutive options outstanding as of December 31, 2016 , 2015 and 2014 . |
Derivatives
Derivatives | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives: The Company's activities are subject to various financial risks including market risk, currency and interest rate risk, credit risk, liquidity risk and cash flow risk. The Company's overall financial risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Company's financial performance. The Company may periodically enter into derivative financial instruments, typically interest rate swap agreements, to reduce its exposure to fluctuations in interest rates on variable-rate debt and their impact on earnings and cash flows. The Company does not utilize derivative financial instruments with a level of complexity or with a risk greater than the exposure to be managed nor does it enter into or hold derivatives for trading or speculative purposes. The Company periodically reviews the creditworthiness of the swap counterparty to assess the counterparty's ability to honor its obligation. Counterparty default would expose the Company to fluctuations in variable interest rates. Based on the guidance of ASC Topic 815 "Derivatives and Hedging" ("ASC 815"), the Company records derivative financial instruments at fair value in accrued expenses on the consolidated balance sheets. The financing of portfolio investments is generally drawn in the same currencies as the underlying expected future cash flow from the portfolios. The interest rate risk related to the loans is reduced through the use of a combination of interest rate swaps in the euro, Great British pound, Norwegian kroner, Swedish kroner, and Polish zloty. At December 31, 2016 and 2015 , approximately 57% and 42% , respectively, of the net borrowings of PRA Europe was hedged, reducing the related interest rate risk. The Company's financial derivative instruments are not designated as hedging instruments under ASC 815 and therefore the gain or loss on such hedge and the change in fair value of the derivative is recorded as "interest expense" in the Company's consolidated financial statements. During the years ended December 31, 2016 , 2015 and 2014, the Company recorded $2.8 million , $4.9 million and $1.8 million respectively, in interest expense related to its interest rate swaps in its consolidated income statements. The following table sets forth the fair value amounts of the derivative instruments not designated as hedging instruments as of December 31, 2016 and 2015 (amounts in thousands): 2016 2015 Asset Derivatives Liability Derivatives Asset Derivatives Liability Derivatives Interest rate swap contracts $ — $ 2,825 $ — $ 1,602 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders' Equity: On December 10, 2014, the Company's board of directors authorized a share repurchase program to purchase up to $100.0 million of the Company's outstanding shares of common stock. During the year ended December 31, 2015, the Company purchased 1,610,182 shares of its common stock under the plan at an average price of $53.10 per share, which represented the remaining shares allowed under the plan. On October 22, 2015 , the Company's board of directors authorized a new share repurchase program to purchase up to $125.0 million of the Company's outstanding shares of common stock. During the year ended December 31, 2015, the Company purchased 2,072,721 shares of its common stock under the new plan at an average price of $38.60 per share. No shares were purchased during the year ended December 31, 2016. At December 31, 2016 , the maximum remaining purchase price for share repurchases under the plan was approximately $45.0 million . |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes: The income tax expense/(benefit) recognized for the years ended December 31, 2016 , 2015 and 2014 is comprised of the following (amounts in thousands): Federal State Foreign Total For the year ended December 31, 2016: Current tax expense $ 38,986 $ 5,037 $ 20,868 $ 64,891 Deferred tax expense/(benefit) (7,350 ) 575 (14,925 ) (21,700 ) Total income tax expense $ 31,636 $ 5,612 $ 5,943 $ 43,191 For the year ended December 31, 2015: Current tax expense $ 62,869 $ 9,399 $ 25,692 $ 97,960 Deferred tax expense/(benefit) 2,887 (600 ) (10,856 ) (8,569 ) Total income tax expense $ 65,756 $ 8,799 $ 14,836 $ 89,391 For the year ended December 31, 2014: Current tax expense $ 57,336 $ 8,823 $ 5,342 $ 71,501 Deferred tax expense 30,319 4,717 17,971 53,007 Total income tax expense $ 87,655 $ 13,540 $ 23,313 $ 124,508 A reconciliation of the Company's expected tax expense at the statutory federal tax rate to actual tax expense for the years ended December 31, 2016 , 2015 and 2014 is as follows (amounts in thousands): 2016 2015 2014 Income tax expense at statutory federal rates $ 46,929 $ 90,133 $ 105,355 State tax expense, net of federal tax benefit 3,696 5,719 8,565 Foreign taxable translation (67 ) (708 ) 8,199 Foreign rate difference (7,772 ) (8,787 ) 90 Penalties 163 2,819 — Acquisition expenses 31 234 2,169 Other 211 (19 ) 130 Total income tax expense $ 43,191 $ 89,391 $ 124,508 The Company recognized a net deferred tax liability of $229.9 million and $248.4 million as of December 31, 2016 and 2015 , respectively. The components of the net deferred tax liability are as follows (amounts in thousands): 2016 2015 Deferred tax assets: Employee compensation $ 9,120 $ 13,845 Net operating loss carryforward 48,298 39,080 Accrued liabilities 5,136 8,429 Interest 10,596 10,664 Finance receivable revenue recognition - international 8,274 — Other 6,154 3,843 Total deferred tax asset 87,578 75,861 Deferred tax liabilities: Depreciation expense 7,610 5,276 Intangible assets and goodwill 10,625 7,039 Convertible debt 6,955 8,653 Finance receivable revenue recognition - international — 2,063 Finance receivable revenue recognition - domestic 239,337 251,733 Other 893 4,204 Total deferred tax liability 265,420 278,968 Net deferred tax liability before valuation allowance 177,842 203,107 Valuation allowance 52,021 45,323 Net deferred tax liability $ 229,863 $ 248,430 A valuation allowance for deferred tax assets is recognized and charged to earnings in the period such determination is made, if it is determined that it is more likely than not that the deferred tax asset will not be realized. If the Company subsequently realized deferred tax assets that were previously determined to be unrealizable, the respective valuation allowance would be reversed, resulting in a positive adjustment to earnings in the period such determination is made. The determination for a valuation allowance is made on a jurisdiction by jurisdiction basis. At December 31, 2016 and 2015 , the valuation allowance, relating mainly to net operating losses, capital losses and deferred interest expense in Norway, Brazil, UK, and Luxembourg, was $52.0 million and $45.3 million , respectively. The Company believes it is more likely than not that the results of future operations will generate sufficient taxable income to realize the net deferred tax assets. For tax purposes, the Company utilizes the cost recovery method of accounting. Under the cost recovery method, collections on finance receivables are applied first to principal to reduce the finance receivables to zero before taxable income is recognized. The Internal Revenue Service ("IRS") examined the Company's 2005 through 2012 tax returns and has asserted that tax revenue recognition using the cost recovery method does not clearly reflect taxable income. The Company believes it has sufficient support for the technical merits of its position, and believes cost recovery to be an acceptable tax revenue recognition method for the Company's industry. The Company has received Notices of Deficiency for tax years ended December 31, 2005 through 2012. The proposed deficiencies relate to the cost recovery method of tax accounting. In response to the notices, the Company filed petitions in the U.S. Tax Court (the "Tax Court") challenging the deficiencies. On July 10, 2015 and July 21, 2015, the IRS filed Motions for Summary Judgment for tax years 2008 through 2012 and 2005 through 2007, respectively. On November 12, 2015 the Tax Court denied the IRS's Motions for Summary Judgment and set this matter for trial to begin on September 19, 2016. On July 5, 2016, the Tax Court granted the IRS’s Motion for Continuance filed on June 28, 2016. On July 14, 2016, the Tax Court set the trial to begin on May 15, 2017. If the Company is unsuccessful in the Tax Court and any potential appeals, it may be required to pay the related deferred taxes, and possibly interest and penalties. At December 31, 2016 and 2015 deferred tax liabilities related to this item were $239.3 million and $251.7 million , respectively. Any adverse determination on this matter could result in the Company amending state tax returns for prior years, increasing its taxable income in those states. The Company files tax returns in multiple state jurisdictions; therefore, any underpayment of state tax will accrue interest in accordance with the respective state statute. At December 31, 2016 and 2015 the Company's estimate of the potential federal and state interest was $112.0 million and $91.0 million , respectively. ASC 740 requires the recognition of interest if the tax law would require interest to be paid on the underpayment of taxes, and recognition of penalties if a tax position does not meet the minimum statutory threshold to avoid payment of penalties. The Company believes it has sufficient support for the technical merits of its position and that it is more likely than not this position will be sustained. Accordingly, the Company has not accrued for interest or penalties on any of its tax positions, including the cost recovery matter. At December 31, 2016 , the tax years subject to examination by the major federal, state and international taxing jurisdictions are 2003, 2005 and subsequent years. The 2003 tax year remains open to examination because of a net operating loss that originated in that year but was not fully utilized until the 2005 tax year. The examination periods for the 2005 through 2012 tax years are suspended until a decision of the Tax Court becomes final. As of December 31, 2016 , the cumulative unremitted earnings of the Company's foreign subsidiaries are approximately $3.2 million . The Company intends for predominantly all foreign earnings to be indefinitely reinvested in its foreign operations and, therefore, the recording of deferred tax liabilities for such unremitted earnings is not required. It is impracticable to determine the total amount of unrecognized deferred taxes with respect to these indefinitely reinvested earnings. The Company's foreign subsidiaries had $3.7 million and $1.7 million of net operating loss carryforwards net of valuation allowances as of December 31, 2016 and 2015 , respectively. Most of the net operating losses do not expire under local law and the remaining jurisdictions allow for a 7 to 20 year carryforward period. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies : Employment Agreements: The Company has employment agreements, most of which expire on December 31, 2017 , with all of its U.S. executive officers and with several members of its U.S. senior management group. Such agreements provide for base salary payments as well as bonuses which are based on the attainment of specific management goals. As of December 31, 2016 , estimated future compensation under these agreements was approximately $12.9 million . The agreements also contain confidentiality and non-compete provisions. Outside the United States, employment agreements are in place with employees pursuant to local country regulations. Generally, these agreements do not have expiration dates and therefore it is impractical to estimate the amount of future compensation under these agreements. Accordingly, the future compensation under these agreements is not included in the $12.9 million total above. Leases: The Company is party to various operating leases with respect to its facilities and equipment. The future minimum lease payments at December 31, 2016 totaled approximately $48.4 million . Forward Flow Agreements: The Company is party to several forward flow agreements that allow for the purchase of nonperforming loans at pre-established prices. The maximum remaining amount to be purchased under forward flow agreements at December 31, 2016 was approximately $302.6 million . Finance Receivables: Certain agreements for the purchase of finance receivables portfolios contain provisions that may, in limited circumstances, require the Company to refund a portion or all of the collections subsequently received by the Company on particular accounts. The potential refunds as of the balance sheet date are not considered to be significant. Litigation and Regulatory Matters : The Company is from time to time subject to routine legal claims, proceedings and regulatory matters, most of which are incidental to the ordinary course of its business. The Company initiates lawsuits against customers and is occasionally countersued by them in such actions. Also, customers, either individually, as members of a class action, or through a governmental entity on behalf of customers, may initiate litigation against the Company in which they allege that the Company has violated a state or federal law in the process of collecting on an account. From time to time, other types of lawsuits are brought against the Company. Additionally, the Company receives subpoenas and other requests or demands for information from regulators or governmental authorities who are investigating the Company's debt collection activities. The Company evaluates and responds appropriately to such requests. The Company accrues for potential liability arising from legal proceedings and regulatory matters when it is probable that such liability has been incurred and the amount of the loss can be reasonably estimated. This determination, along with the estimate of the aggregate range of reasonably possible losses in excess of the amount accrued, is based upon currently available information for those proceedings in which the Company is involved, taking into account the Company's best estimate of such losses for those cases for which such estimates can be made. The Company's estimate involves significant judgment, given the varying stages of the proceedings (including the fact that many of them are currently in preliminary stages), the number of unresolved issues in many of the proceedings (including issues regarding class certification and the scope of many of the claims), and the related uncertainty of the potential outcomes of these proceedings. In making determinations of the likely outcome of pending litigation, the Company considers many factors, including, but not limited to, the nature of the claims, the Company's experience with similar types of claims, the jurisdiction in which the matter is filed, input from outside legal counsel, the likelihood of resolving the matter through alternative mechanisms, the matter's current status and the damages sought or demands made. Accordingly, the Company's estimate will change from time to time, and actual losses could be more than the current estimate. For certain matters, the Company does not believe that an estimate can currently be made. The Company believes that the estimate of the aggregate range of reasonably possible losses in excess of the amount accrued for its legal proceedings outstanding at December 31, 2016, excluding the potential interest associated with the IRS matter described below, is not material. In certain legal proceedings, the Company may have recourse to insurance or third-party contractual indemnities to cover all or portions of its litigation expenses, judgments, or settlements. Loss estimates and accruals for potential liability related to legal proceedings are typically exclusive of potential recoveries, if any, under the Company's insurance policies or third-party indemnities. The Company has not recorded any potential recoveries under the Company's insurance policies or third-party indemnities as of December 31, 2016. The matters described below fall outside of the normal parameters of the Company's routine legal proceedings. Telephone Consumer Protection Act Litigation The Company has been named as defendant in a number of putative class action cases, each alleging that the Company violated the Telephone Consumer Protection Act ("TCPA") by calling consumers' cellular telephones without their prior express consent. On December 21, 2011, the U.S. Judicial Panel on Multi-District Litigation entered an order transferring these matters into one consolidated proceeding in the U.S. District Court for the Southern District of California (the "Court"). On November 14, 2012, the putative class plaintiffs filed their amended consolidated complaint in the matter, now styled as In re Portfolio Recovery Associates, LLC Telephone Consumer Protection Act Litigation, case No. 11-md-02295 (the "MDL action"). Following the ruling of the U.S. Federal Communications Commission on June 10, 2015 on various petitions concerning the TCPA, the Court lifted the stay of these matters that had been in place since May 20, 2014. In January 2016, the parties reached a settlement agreement in principle ("the Settlement Agreement") under which the parties agreed to seek court approval of class certification and the proposed settlement. As required by the Settlement Agreement, which remains subject to final court approval, the parties sought preliminary Court approval of the Settlement Agreement, and the Company paid $18 million to resolve the MDL action during the second quarter of 2016. The Company had fully accrued for the settlement amount as of December 31, 2015. Internal Revenue Service Audit The IRS examined the Company's 2005 through 2012 tax returns and has asserted that tax revenue recognition using the cost recovery method does not clearly reflect taxable income. The Company believes it has sufficient support for the technical merits of its position, and believes cost recovery to be an acceptable tax revenue recognition method for the Company's industry. The Company has received Notices of Deficiency for tax years ended December 31, 2005 through 2012. The proposed deficiencies relate to the cost recovery method of tax accounting for finance receivables. In response to the notices, the Company filed petitions in the Tax Court challenging the deficiencies. On July 10, 2015 and July 21, 2015, the IRS filed Motions for Summary Judgment for tax years 2008 through 2012 and 2005 through 2007, respectively. On November 12, 2015, the Tax Court denied the IRS's Motions for Summary Judgment and set this matter for trial to begin on September 19, 2016. On July 5, 2016, the Tax Court granted the IRS’s Motion for Continuance filed on June 28, 2016. On July 14, 2016, the Tax Court set the trial to begin on May 15, 2017. If the Company is unsuccessful in the Tax Court and any potential appeals, it may ultimately be required to pay the related deferred taxes, and possibly interest and penalties. Deferred tax liabilities related to this item were $239.3 million at December 31, 2016 . Any adverse determination on this matter could result in the Company amending state tax returns for prior years, increasing its taxable income in those states. The Company files tax returns in multiple state jurisdictions; therefore, any underpayment of state tax will accrue interest in accordance with the respective state statute. The Company's estimate of the potential federal and state interest was $112.0 million as of December 31, 2016 , which has not been accrued. Portfolio Recovery Associates, LLC v. Guadalupe Mejia On May 11, 2015, an unfavorable jury verdict was delivered against the Company in a matter pending in Jackson County, Missouri. The jury awarded Guadalupe Mejia $251,000 in compensatory damages and $82,009,549 in punitive damages for her counter-claim against the Company, alleging malicious prosecution and impermissible collection practices. The Company believed that the verdict and magnitude of the award were erroneous and appealed the award. In February 2017, the parties reached a settlement in principle to resolve the matter. The Company had fully accrued for the settlement amount as of December 31, 2016. |
Retirement Plans
Retirement Plans | 12 Months Ended |
Dec. 31, 2016 | |
Defined Contribution Pension and Other Postretirement Plans Disclosure [Abstract] | |
Retirement Plans | Retirement Plans: The Company sponsors defined contribution plans both in the United States and Europe. The U.S. plan is organized as a 401(k) plan under which all employees over eighteen years of age are eligible to make voluntary contributions to the plan up to 100% of their compensation, subject to IRS limitations, after completing six months of service, as defined in the plan. The Company makes matching contributions of up to 4% of an employee's salary. For the defined contribution plans in Europe, the Company pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. Total compensation expense related to the Company's contributions was $3.8 million , $4.3 million , and $2.8 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interest | 12 Months Ended |
Dec. 31, 2016 | |
Noncontrolling Interest [Abstract] | |
Redeemable Noncontrolling Interest | Redeemable Noncontrolling Interest: With the acquisition of DTP in 2016, the Company acquired a 20% owned Polish securitization fund (the "Fund"). Under ASC 810-10, the Company has determined that it has control over this Fund and as such has fully consolidated the financial statements of the Fund. The redeemable noncontrolling interest amount is separately stated on the consolidated balance sheets and represents the 80% interest not owned by the Company. In addition, net income attributable to the redeemable noncontrolling interest is stated separately in the consolidated income statements for 2016. The noncontrolling shareholders of the Fund have the right, at certain times, to require the Company to redeem their ownership interest in those entities at a multiple of EBITDA. The noncontrolling interests subject to these arrangements are included in temporary equity as redeemable noncontrolling interests, and are adjusted to their estimated redemption amounts each reporting period with a corresponding adjustment to additional paid-in capital. Future reductions in the carrying amounts are subject to a "floor" amount that is equal to the fair value of the redeemable noncontrolling interests at the time they were originally recorded. The recorded value of the redeemable noncontrolling interests cannot go below the floor level. These adjustments do not affect the calculation of earnings per share. |
Held for Sale Assets and Liabil
Held for Sale Assets and Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Held for Sale Assets and Liabilities | Assets and Liabilities Held for Sale: As part of the Company’s strategy to focus on businesses with greater global growth potential, the Company decided in the fourth quarter of 2016 to sell its government services businesses: PRA Government Services, LLC; MuniServices, LLC; and PRA Professional Services, LLC. The assets and liabilities of the businesses that will be sold were reflected as assets and liabilities held for sale and consist of the following at December 31, 2016 (amounts in thousands): December 31, 2016 Other receivables, net $ 8,133 Property and equipment, net 3,227 Goodwill 29,683 Intangible assets, net 1,776 Other assets 424 Assets held for sale $ 43,243 Accrued expenses $ 4,220 Liabilities held for sale $ 4,220 On January 24, 2017, the Company completed the sale of its government services businesses for $91.5 million in cash plus additional consideration for certain balance sheet items. The impact of the transaction will be included in the financial results for the first quarter of 2017. The gain on sale before income taxes is expected to be approximately $47.0 million . |
General and Summary of Signif25
General and Summary of Significant Accounting Policies (Policy) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Nature of operations and Recent acquisitions | Nature of operations: Throughout this report, the terms "PRA Group," "the Company," or similar terms refer to PRA Group, Inc. and its subsidiaries. PRA Group, Inc., a Delaware corporation, and its subsidiaries, is a global financial and business services company with operations in the Americas and Europe. The Company's primary business is the purchase, collection and management of portfolios of nonperforming loans. The Company provides the following fee-based services: vehicle location, skip tracing and collateral recovery for auto lenders, government entities and law enforcement; revenue administration, audit and revenue discovery/recovery services for local government entities; class action claims recovery services and purchases; servicing of consumer bankruptcy accounts in the U.S.; and, to a lesser extent, contingent collections of nonperforming loans in Europe and South America. As discussed in Note 17, the Company sold its revenue administration, audit and revenue discovery/recovery business in January 2017. Recent acquisitions: On April 26, 2016, the Company completed its public tender offer to purchase 100% of the shares of DTP S.A . ("DTP"), a Polish-based debt collection company, for approximately $44.9 million . The Company's consolidated income statements and statements of comprehensive income, equity and cash flows include the results of operations of DTP for the period from April 26, 2016 through December 31, 2016. On August 3, 2015, the Company acquired 55% of the equity interest in RCB Investimentos S.A. ("RCB"). The remaining 45% of the equity interest in RCB is owned by the executive team and previous owners of RCB. RCB is a leading master servicing platform for nonperforming loans in Brazil. The Company's investment for the 55% ownership of RCB was approximately $55.2 million . As part of the investment and call option agreements, the Company has the right to purchase the remaining 45% of RCB at certain multiples of earnings before interest, taxes, depreciation and amortization ("EBITDA"), beginning on August 3, 2019 and lasting for two years. In accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 810, "Consolidation," the Company has consolidated all financial statement accounts of RCB in its consolidated balance sheets and its consolidated income statements. The consolidated income statements for the years ended December 31, 2016 and 2015, include the results of operations of RCB from August 3, 2015 through December 31, 2016. The noncontrolling interest amount is included as a separate component of equity and represents the 45% interest not controlled by the Company. In addition, net income attributable to the noncontrolling interest is stated separately in the consolidated income statements for the years ended December 31, 2016 and 2015. On July 16, 2014, the Company completed the acquisition of Aktiv Kapital AS ("Aktiv"), a Norway-based company specializing in the acquisition and servicing of nonperforming loans throughout Europe and in Canada, for a purchase price of approximately $861.3 million , and assumed approximately $433.7 million of Aktiv's corporate debt, resulting in an acquisition of estimated total enterprise value of $1.3 billion . The Company's consolidated income statements and statements of comprehensive income, equity and cash flows include the results of operations of Aktiv for the period from July 16, 2014 through December 31, 2016. |
Basis of presentation and Segments | Basis of presentation: The consolidated financial statements of the Company are prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and include the accounts of all of its subsidiaries. All significant intercompany accounts and transactions have been eliminated. The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures. Realized results could differ from those estimates and assumptions. Certain prior year amounts have been reclassified for consistency with the current year presentation. Segments: Under the guidance of ASC Topic 280 "Segment Reporting" ("ASC 280"), the Company has determined that it has several operating segments that meet the aggregation criteria of ASC 280, and, therefore, it has one reportable segment, accounts receivable management, based on similarities among the operating units including economic characteristics, the nature of the products and services, the nature of the production processes, the types or class of customer for their products and services, the methods used to distribute their products and services and the nature of the regulatory environment. |
Translation of foreign currencies | Foreign currency: Assets and liabilities have been translated to the reporting currency using the exchange rates in effect on the consolidated balance sheet dates. Equity accounts are translated at historical rates, except for the change in retained earnings during the year which is the result of the income statement translation process. Revenue and expense accounts are translated using the weighted average exchange rate during the period. The cumulative translation adjustments associated with the net assets of foreign subsidiaries are recorded in accumulated other comprehensive income/(loss ) in the accompanying consolidated statements of stockholders’ equity. |
Cash and cash equivalents | Cash and cash equivalents: The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Included in cash and cash equivalents are funds held on the behalf of others arising from the collection of accounts placed with the Company. The balance of the funds held on behalf of others was $3.8 million and $3.9 million at December 31, 2016 and 2015 , respectively; there is an offsetting liability that is included in "Other liabilities" on the accompanying consolidated balance sheets. |
Concentrations of credit risk | Concentrations of credit risk: Financial instruments, which potentially expose the Company to concentrations of credit risk, consist primarily of cash, investments and finance receivables. |
Accumulated other comprehensive income/(loss) | Accumulated other comprehensive income/(loss): The Company records unrealized gains and losses on certain available-for-sale investments and foreign currency translation adjustments in other comprehensive income. Unrealized gains and losses on available for sale investments are reclassified to earnings as the gains or losses are realized upon sale of the securities. Translation gains or losses on foreign currency translation adjustments are reclassified to earnings upon the substantial sale or liquidation of investments in foreign operations. |
Investments | Investments: The Company accounts for its investments under the guidance of ASC Topic 320-10, "Investments-Debt and Equity Securities" ("ASC 320-10"). The Company determines the appropriate classification of its investments in debt and equity securities at the time of purchase and reevaluates such determinations at each balance sheet date. Debt securities are classified as held to maturity when the Company has the positive intent and ability to hold the securities to maturity. Debt securities for which the Company does not have the intent or ability to hold to maturity are classified as available for sale. Held-to-maturity securities are stated at amortized cost. Available for sale securities are carried at fair market value, with the unrealized gains and losses, net of tax, included in the determination of comprehensive income and reported in stockholders' equity. If the fair value of the investment falls below its carrying amount and the decline is deemed to be other than temporary, the investment is written down, with a corresponding charge to earnings. |
Finance receivables and income recognition | Finance receivables and income recognition: The Company accounts for its investment in finance receivables under the guidance of ASC Topic 310-30, "Loans and Debt Securities Acquired with Deteriorated Credit Quality" ("ASC 310-30"). The Company acquires portfolios of accounts that have experienced deterioration of credit quality between origination and the Company's acquisition of the accounts. The amount paid for a portfolio reflects the Company's determination that it is probable the Company will be unable to collect all amounts due according to an account's contractual terms. At acquisition, the Company reviews the accounts to determine whether there is evidence of deterioration of credit quality since origination, and if it is probable that the Company will be unable to collect all amounts due according to the loan's contractual terms. If both conditions exist, the Company then determines whether each such account is to be accounted for individually or whether such accounts will be assembled into pools based on common risk characteristics. The Company considers expected prepayments and estimates the amount and timing of undiscounted expected principal, interest and other cash flows (expected at acquisition) for each acquired portfolio based on the Company's proprietary models, and the Company subsequently aggregates portfolios of accounts into pools. The Company determines the excess of the pool's scheduled contractual principal and contractual interest payments over all cash flows expected at acquisition as an amount that should not be accreted (nonaccretable difference). The remaining amount, representing the excess of the pool's cash flows expected to be collected over the amount paid, is accreted into income recognized on finance receivables over the remaining estimated life of the pool (accretable yield). ASC 310-30 requires that the excess of the contractual cash flows over expected cash flows, based on the Company's estimates derived from proprietary collection models, not be recognized as an adjustment of revenue or expense or on the balance sheet. Each pool is recorded at cost and is accounted for as a single unit for the recognition of income, payments applied to principal and loss provision. Once a pool is established for a calendar quarter, individual receivable accounts are not added to the pool (unless replaced by the seller) or removed from the pool (unless sold or returned to the seller). The yield is estimated and periodically recalculated based on the timing and amount of anticipated cash flows. Income on finance receivables is accrued quarterly based on each pool's effective yield. Significant increases in expected future cash flows may be recognized prospectively, through an upward adjustment of the yield, over a pool's remaining life. Under ASC 310-30, rather than lowering the estimated yield if the collection estimates are below previous expectations, the carrying value of a pool would be written down to maintain the then current yield and is shown as a reduction in revenue in the consolidated income statements with a corresponding valuation allowance offsetting finance receivables, net, on the consolidated balance sheets. Cash flows greater than the interest accrual will reduce the carrying value of the pool. This reduction in carrying value is defined as payments applied to principal (also referred to as principal amortization). Likewise, cash flows that are less than the interest accrual will accrete the carrying balance. Generally, the Company does not record accretion in the first six to twelve months of the estimated life of the pool; accordingly, the Company utilizes either the cost recovery method or cash method when necessary to prevent accretion as permitted by ASC 310-30. Under the cash method, revenue is recognized as it would be under the interest method up to the amount of cash collections. Under the cost recovery method, no revenue is recognized until the Company has fully collected the cost of the pool, or until such time that the Company considers the collections to be probable and estimable and begins to recognize income based on the interest method as described above. The Company also uses the cost recovery method when collections on a particular pool of accounts cannot be reasonably estimated. A pool can become fully amortized (zero carrying balance on the balance sheet) while still generating cash collections. In this case, all subsequent cash collections are recognized as revenue when received. The Company records a valuation allowance when significant decreases in expected cash flows are identified or there are changes in the timing of expected cash flows that would otherwise require a reduction in the stated yield on a pool of accounts. Factors that may contribute to the recording of valuation allowances include both external and internal factors. External factors that may have an impact on the collectability, and subsequently on the overall profitability of purchased pools of nonperforming loans, would include: new laws or regulations relating to collections, new interpretations of existing laws or regulations, and the overall condition of the economy. Internal factors that may have an impact on the collectability, and subsequently the overall profitability of purchased pools of nonperforming loans, would include: necessary revisions to initial and post-acquisition scoring and modeling estimates, non-optimal operational activities (which relate to the collection and movement of accounts on both the collection floor of the Company and external channels), and decreases in productivity related to turnover and tenure of the Company's collection staff. The Company capitalizes certain fees paid to third parties related to the direct acquisition of a portfolio of accounts. These fees are added to the acquisition cost of the portfolio and accordingly are amortized over the life of the portfolio using the interest method. The agreements to purchase the aforementioned receivables include general representations and warranties from the sellers covering account holder death or bankruptcy and accounts settled or disputed prior to sale. The representation and warranty period permitting the return of these accounts from the Company to the seller is typically 90 to 180 days. Any funds received from the seller of finance receivables as a return of purchase price are referred to as buybacks. Buyback funds are applied against the finance receivable balance received and are not included in the Company's cash collections from operations. In some cases, the seller will replace the returned accounts with new accounts in lieu of returning the purchase price. In that case, the old account is removed from the pool and the new account is added. |
Fee income recognition | Fee income recognition: The Company utilizes the provisions of ASC Topic 605-45, "Principal Agent Considerations" ("ASC 605-45"), to account for fee income revenue from certain of its fee-for-service subsidiaries. ASC 605-45 requires an analysis to be completed to determine if certain revenues should be reported gross or reported net of their related operating expense. This analysis includes an assessment of who retains credit risk, controls vendor selection, establishes pricing and remains the primary obligor on the transaction. Each of these factors was considered to determine the correct method of recognizing revenue from these fee-based subsidiaries. |
Property and equipment | Property and equipment: Property and equipment, including improvements that significantly add to the productive capacity or extend useful life, are recorded at cost. Maintenance and repairs are expensed currently. Property and equipment are depreciated over their useful lives using the straight-line method of depreciation. Software and computer equipment are amortized or depreciated over three to five years. Furniture and fixtures are depreciated over five to ten years. Equipment is depreciated over five to seven years. Leasehold improvements are depreciated over the lesser of the useful life, which ranges from three to ten years, or the remaining term of the lease. Building improvements are depreciated straight-line over ten to thirty-nine years. When property is sold or retired, the cost and related accumulated depreciation are removed from the balance sheet and any gain or loss is included in the income statement. |
Business combinations | Business combinations: The Company accounts for business combinations under the acquisition method. The cost of an acquired company is assigned to the tangible and intangible assets acquired and the liabilities assumed on the basis of their fair values at the date of acquisition. The determination of fair values of assets acquired and liabilities assumed requires management to make estimates and use valuation techniques when market values are not readily available. Any excess of purchase price over the fair value of net tangible and intangible assets acquired is allocated to goodwill. Transaction costs associated with business combinations are expensed as incurred. |
Goodwill and intangible assets | Goodwill and intangible assets: Goodwill, in accordance with ASC Topic 350, "Intangibles-Goodwill and Other" ("ASC 350"), is not amortized but rather is reviewed for impairment annually or more frequently if indicators of potential impairment exist. The Company performs its annual assessment as of October 1. The Company may first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If management concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, management conducts a two-step quantitative goodwill impairment test. The first step of the impairment test involves comparing the fair value of the applicable reporting unit with its carrying value. The Company estimates the fair values of its reporting units using a combination of the income approach, which uses present value techniques, and the market approach, which uses market multiples from comparable transactions where the acquisition target has similar operating and investment characteristics to the reporting unit. If the carrying amount of a reporting unit exceeds the reporting unit's fair value, management performs the second step of the goodwill impairment test. The second step of the goodwill impairment test involves comparing the implied fair value of the affected reporting unit's goodwill with the carrying value of that goodwill. The amount, by which the carrying value of the goodwill exceeds its implied fair value, if any, is recognized as an impairment loss . See Note 5 for additional information. |
Convertible senior notes | Convertible senior notes: The Company accounts for its 3.00% Convertible Senior Notes due 2020 (the "Notes") in accordance with ASC 470-20, "Debt with Conversion and Other Options" ("ASC 470-20"). ASC 470-20 requires that, for convertible debt instruments that must be settled fully or partially in cash upon conversion, issuers must separately account for the liability and equity components in a manner that will reflect the entity's nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. The excess of the principal amount of the liability component over its carrying amount is amortized to interest expense over the expected life of a similar liability that does not have an associated equity component, using the effective interest method. The equity component is not remeasured as long as it continues to meet the conditions for equity classification under ASC 815-40, "Derivatives and Hedging - Contracts in Entity's Own Equity." Transaction costs incurred with third parties are allocated to the liability and equity components in proportion to the allocation of proceeds and accounted for as debt issuance costs and equity issuance costs, respectively. For diluted earnings per share purposes, based upon the Company's intent and ability to settle conversions of the Notes through a combination of cash and shares, only the conversion spread is included in the diluted earnings per share calculation, if dilutive. Under such method, the settlement of the conversion spread has a dilutive effect when the average share price of the Company's common stock during any quarter exceeds $65.72 . |
Income taxes | Income taxes: The Company follows the guidance of ASC Topic 740 "Income Taxes" ("ASC 740") as it relates to the provision for income taxes and uncertainty in income taxes. Accordingly, the Company records a tax provision for the anticipated tax consequences of the reported results of operations. The provision for income taxes is estimated using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, and for operating losses and tax credit carry-forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets are expected to be realized or settled. The evaluation of a tax position in accordance with the guidance is a two-step process. The first step is recognition: the enterprise determines whether it is more-likely-than-not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. In evaluating whether a tax position has met the more-likely-than-not recognition threshold, the enterprise should presume that the position will be examined by the appropriate taxing authority that would have full knowledge of all relevant information. The second step is measurement: a tax position that meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met. The Company records interest and penalties related to unrecognized tax benefits as a component of income tax expense when positions are not met. In the event that all or part of the deferred tax assets are determined not to be realizable in the future, a valuation allowance would be established and charged to earnings in the period such determination is made. If the Company subsequently realizes deferred tax assets that were previously determined to be unrealizable, the respective valuation allowance would be reversed, resulting in a positive adjustment to earnings. The estimate of income tax expense involves significant judgment in evaluating the impact of uncertainties in the application of complex tax laws. Resolution of these uncertainties in a manner inconsistent with our expectations could have a material impact on our results of operations and financial position. For domestic income tax purposes, the Company recognizes revenue using the cost recovery method with respect to the Company's nonperforming loan purchasing business. The Company believes cost recovery to be an acceptable method for purchasers of nonperforming loans. Under the cost recovery method, collections on finance receivables are applied first to principal to reduce the finance receivables to zero before any income is recognized. |
Advertising costs | Advertising costs: Advertising costs are expensed when incurred. |
Operating leases | Operating leases: General abatements or prepaid leasing costs are recognized on a straight-line basis over the life of the lease. Future minimum lease payments (including the impact of rent escalations) are expensed on a straight-line basis over the life of the lease. Material leasehold improvements are capitalized and amortized over the remaining life of the lease. |
Share-based compensation | Share-based compensation: The Company accounts for share-based compensation in accordance with the provisions of ASC Topic 718 "Compensation-Stock Compensation" ("ASC 718"). ASC 718 requires that compensation expense associated with share equity awards be recognized in the income statement. Based on historical experience, the Company estimates a forfeiture rate for most equity share grants. Time-based equity share awards generally vest between three and five years from the grant date and are expensed on a straight-line basis over the vesting period. Equity share awards that contain a performance metric, are expensed over the requisite service period, generally three years, in accordance with the performance level achieved at each reporting period. See Note 9 for additional information. |
Use of estimates | Use of estimates: The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates have been made by management with respect to the timing and amount of future cash collections of the Company's finance receivables portfolios. Actual results could differ from these estimates making it reasonably possible that a change in these estimates could occur within one year. |
Commitments and contingencies | Commitments and contingencies: We are subject to various claims and contingencies related to lawsuits, certain taxes, and commitments under contractual and other obligations. We recognize liabilities for contingencies and commitments when a loss is probable and estimable. We expense related legal costs as incurred. For additional information, see Note 14. |
Estimated fair value of financial instruments | Estimated fair value of financial instruments: The Company applies the provision of ASC Topic 820 "Fair Value Measurements and Disclosures" ("ASC 820"). ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also requires the consideration of differing levels of inputs in the determination of fair values. Disclosure of the estimated fair values of financial instruments often requires the use of estimates. See Note 8 for additional information. |
Reclassification of prior year presentation | Reclassification of prior year presentation: Certain prior year amounts have been reclassified for consistency with the current year presentation. |
Recent accounting pronouncements | Recent accounting pronouncements: In May 2014, FASB issued Accounting Standards Update ("ASU") 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09") that updates the principles for recognizing revenue. The core principle of the guidance 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 also amends the required disclosures of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and can be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption, with early application not permitted. The Company believes that the revenue it classifies as Fee Income is within the scope of this standard. The Company's fee income consists of revenue generated by its Claims Compensation Bureau, LLC ("CCB"), PRA Location Services, LLC ("PLS"), and PRA Government Services, LLC ("PGS") subsidiaries. Based on the Company's evaluation, the Company does not believe the new standard will impact the accounting for its CCB and PLS revenue. The Company sold its PGS business in January 2017. In June 2014, FASB issued ASU 2014-12, "Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period" ("ASU 2014-12"). ASU 2014-12 requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. ASU 2014-12 is effective for annual reporting periods beginning after December 15, 2015, with early adoption permitted. The Company adopted ASU 2014-12 in the first quarter of 2016 which had no material impact on its Consolidated Financial Statements. In August 2014, FASB issued ASU 2014-15, "Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern" ("ASU 2014-15"). ASU 2014-15 requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued and provides guidance on determining when and how to disclose going concern uncertainties in the financial statements. Certain disclosures will be required if conditions give rise to substantial doubt about an entity’s ability to continue as a going concern. ASU 2014-15 applies to all entities and is effective for annual and interim reporting periods ending after December 15, 2016, with early adoption permitted. The Company adopted ASU 2014-15 during the fourth quarter of 2016 which did not have an impact on its Consolidated Financial Statements. In February 2015, FASB issued ASU 2015-02, "Consolidation (Topic 810), Amendments to the Consolidation Analysis" ("ASU 2015-02"). The amendments under the new guidance modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities ("VIEs") or voting interest entities and eliminate the presumption that a general partner should consolidate a limited partnership. ASU 2015-02 is effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. The Company adopted ASU 2015-02 in the first quarter of 2016 which had no material impact on its Consolidated Financial Statements. In April 2015, FASB issued ASU 2015-03, "Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs" ("ASU 2015-03"). ASU 2015-03 requires an entity to present debt issuance costs related to a recognized debt liability in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this update. For public business entities, this update is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. An entity should apply the new guidance on a retrospective basis. The Company adopted ASU 2015-03 in the first quarter of 2016. Upon adoption, the Company reclassified its debt issuance costs from "Other assets" to "Borrowings" in its Consolidated Balance Sheets, which did not have a material impact on its Consolidated Financial Statements. In April 2015, FASB issued ASU 2015-05, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement" ("ASU 2015-05"). ASU 2015-05 provides explicit guidance to help companies evaluate the accounting for fees paid by a customer in a cloud computing arrangement. The new guidance clarifies that if a cloud computing arrangement includes a software license, the customer should account for the license consistent with its accounting for other software licenses. If the arrangement does not include a software license, the customer should account for the arrangement as a service contract. For public business entities, this update is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The Company prospectively adopted ASU 2015-05 in the first quarter of 2016, which had no material impact on its Consolidated Financial Statements. In January 2016, FASB issued ASU 2016-01, "Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities" ("ASU 2016-01"), which provides new guidance on the recognition, measurement, presentation, and disclosure of financial assets and liabilities. The standard is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted only for certain provisions. The Company is currently in the process of evaluating the impact of adoption of the ASU on its Consolidated Financial Statements. In February 2016, FASB issued ASU 2016-02, "Leases (Topic 842) Section A - Leases: Amendments to the FASB Account Standards Codification" ("ASU 2016-02"). ASU 2016-02 requires that a lessee should recognize a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term on the balance sheet. It is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, using a modified retrospective approach and early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption of the ASU on its Consolidated Financial Statements. The Company currently discloses approximately $48.4 million in operating lease obligations in its lease commitments footnote (Note 4) and will evaluate those contracts as well as other existing arrangements to determine if they qualify for lease accounting under the new standard. The Company does not plan to adopt the standard early. In March 2016, FASB issued ASU 2016-06, "Derivatives and Hedging (Topic 815) , Contingent Put and Call Options in Debt Instruments" ("ASU 2016-06"). Topic 815 requires that embedded derivatives be separated from the host contract and accounted for separately as derivatives if certain criteria are met, including the "clearly and closely related" criterion. ASU 2016-06 clarifies the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. An entity performing the assessment under the amendments is required to assess the embedded call (put) options solely in accordance with the four-step decision sequence. The amendments in ASU 2016-06 apply to all entities that are issuers of or investors in debt instruments (or hybrid financial instruments that are determined to have a debt host) with embedded call (put) options. For public entities, this update is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The Company is currently in the process of evaluating the impact of adoption of the ASU on its Consolidated Financial Statements. In March 2016, FASB issued ASU 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" ("ASU 2016-09"). The guidance eliminates additional paid in capital ("APIC") pools and requires companies to recognize all excess tax benefits and tax deficiencies in the income statement when the awards vest or are settled. It also addresses the presentation of excess tax benefits and employee taxes paid on the statement of cash flows. Further, the new guidance eliminates the requirement to estimate forfeitures during the vesting period. Instead, companies can elect to account for actual forfeitures as they occur and record any previously unrecognized compensation expense for estimated forfeitures up to the period of adoption as a retrospective adjustment to beginning retained earnings. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years and early adoption is permitted. The Company will adopt ASU 2016-09 in the first quarter of 2017 and does not expect the adoption will have a material impact on its Consolidated Financial Statements. In June 2016, FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326)" ("ASU 2016-13"). ASU 2016-13 requires the measurement of expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable forecasts. The main objective of this ASU is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years and allows for early adoption as of the beginning of an interim or annual reporting period beginning after December 15, 2018. This ASU supersedes ASC Topic 310-30, which the Company currently follows to account for revenue on its finance receivables. This ASU could have a significant impact on how the Company measures and records revenue on its finance receivables. The Company is currently in the process of evaluating the impact of adoption of the ASU on its Consolidated Financial Statements. In August 2016, FASB issued ASU 2016-15, "Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments (Topic 230)" ("ASU 2016-15"). ASU 2016-15 reduces diversity in practice of how certain transactions are classified in the statement of cash flows. The new guidance clarifies the classification of cash activity related to debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate and bank-owned life insurance policies, distributions received from equity-method investments, and beneficial interests in securitization transactions. The guidance also describes a predominance principle in which cash flows with aspects of more than one class that cannot be separated should be classified based on the activity that is likely to be the predominant source or use of cash flow. ASU 2016-15 is effective for the Company for fiscal years beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period, but requires all elements of the amendments to be adopted at once rather than individually. The new standard must be adopted using a retrospective transition method. The Company is currently in the process of evaluating the impact of adoption of the ASU on its Consolidated Financial Statements. In October 2016, the FASB issued ASU 2016-16, "Income Taxes - Intra-Entity Transfers of Assets Other Than Inventory" ("ASU 2016-16"), which requires entities to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The standard is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted as of the beginning of a fiscal year. The new standard must be adopted using a modified retrospective transition method which is a cumulative-effect adjustment to retained earnings as of the beginning of the first effective reporting period. The Company is currently in the process of evaluating the impact of adoption of the ASU on its Consolidated Financial Statements In January 2017, FASB issued "Business Combinations - Clarifying the Definition of a Business (Topic 805)" ("ASU 2017-01"). ASU 2017-01 clarifies the definition of a business with the objective of adding guidance to assist companies with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The new guidance is expected to reduce the number of transactions that need to be further evaluated as businesses. The guidance is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted for certain types of transactions. The Company is currently in the process of evaluating the impact of adoption of the ASU on its Consolidated Financial Statements. The Company does not expect that any other recently issued accounting pronouncements will have a material effect on its Consolidated Financial Statements. |
General and Summary of Signif26
General and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Revenues and Long-lived Assets by Geographical Location | Revenues and long-lived assets by geographical location: Revenue for the years ended December 31, 2016 , 2015 and 2014 , and long-lived assets held at December 31, 2016 and 2015 , by geographical location (amounts in thousands) were: Years Ended December 31, As of December 31, 2016 2015 2014 2016 2015 Revenues Long-Lived Assets United States $ 584,816 $ 722,393 $ 766,262 $ 29,598 $ 36,075 Outside the United States 245,764 219,625 114,707 9,146 9,319 Total $ 830,580 $ 942,018 $ 880,969 $ 38,744 $ 45,394 Revenues are attributed to countries based on the location of the related operations. Long-lived assets consist of net property and equipment. The Company reports revenues earned from its debt purchasing and collection activities and its fee-based services. It is impracticable for the Company to report further breakdowns of revenues from external customers by product or service. |
Finance Receivables, net (Table
Finance Receivables, net (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities [Abstract] | |
Schedule of Changes in Finance Receivables | Changes in finance receivables, net, for the years ended December 31, 2016 and 2015 , were as follows (amounts in thousands): 2016 2015 Balance at beginning of year $ 2,202,113 $ 2,001,790 Acquisitions of finance receivables (1) 938,273 954,954 Cash collections applied to principal (746,867 ) (674,373 ) Foreign currency translation adjustment (85,550 ) (80,258 ) Balance at end of year $ 2,307,969 $ 2,202,113 |
Schedule of Cash Collections Applied to Principal | Based upon current projections, cash collections expected to be applied to principal are estimated to be as follows for the years ending December 31, (amounts in thousands): 2017 $ 633,565 2018 541,874 2019 419,322 2020 308,356 2021 211,759 2022 93,723 2023 46,230 Thereafter 53,140 Total ERC expected to be applied to principal $ 2,307,969 |
Schedule of Changes in Accretable Yield | Changes in accretable yield for the years ended December 31, 2016 and 2015 were as follows (amounts in thousands): 2016 2015 Balance at beginning of year $ 2,727,204 $ 2,513,185 Income recognized on finance receivables, net (745,119 ) (865,122 ) Additions from portfolio purchases 720,638 756,628 Reclassifications from nonaccretable difference 41,056 502,665 Foreign currency translation adjustment (3,773 ) (180,152 ) Balance at end of year $ 2,740,006 $ 2,727,204 |
Schedule of Valuation Allowance Account | The following is a summary of activity within the Company's valuation allowance account, all of which relates to loans acquired with deteriorated credit quality, for the years ended December 31, 2016 , 2015 and 2014 (amounts in thousands): 2016 2015 2014 Beginning balance $ 114,861 $ 86,166 $ 91,101 Allowance charges 100,202 31,974 8,010 Reversal of previous recorded allowance charges (1,723 ) (2,605 ) (12,945 ) Net allowance charges/(reversals) 98,479 29,369 (4,935 ) Foreign currency translation adjustment (1,875 ) (674 ) — Ending balance $ 211,465 $ 114,861 $ 86,166 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Investments | Investments consisted of the following at December 31, 2016 and 2015 (amounts in thousands): 2016 2015 Available-for-sale Securitized assets $ — $ 4,649 Government bonds and fixed income funds 2,138 3,405 Held-to-maturity Securitized assets 51,407 50,247 Other investments Private equity funds 14,998 15,498 Total investments $ 68,543 $ 73,799 |
Summary of Held-to-maturity Securities | The amortized cost and estimated fair value of available-for sale and held-to-maturity investments at December 31, 2016 and 2015 were as follows (amounts in thousands): December 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value Available-for-sale Government bonds and fixed income funds $ 2,161 $ — $ 23 $ 2,138 Held-to-maturity Securitized assets 51,407 4,147 — 55,554 December 31, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value Available-for-sale Securitized assets $ 5,855 $ — $ 1,206 $ 4,649 Government bonds and fixed income funds 3,405 — — 3,405 Held-to-maturity Securitized assets 50,247 5,366 — 55,613 |
Summary of Available-for-sale Securities | The amortized cost and estimated fair value of available-for sale and held-to-maturity investments at December 31, 2016 and 2015 were as follows (amounts in thousands): December 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value Available-for-sale Government bonds and fixed income funds $ 2,161 $ — $ 23 $ 2,138 Held-to-maturity Securitized assets 51,407 4,147 — 55,554 December 31, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value Available-for-sale Securitized assets $ 5,855 $ — $ 1,206 $ 4,649 Government bonds and fixed income funds 3,405 — — 3,405 Held-to-maturity Securitized assets 50,247 5,366 — 55,613 |
Operating Leases (Tables)
Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Leases, Operating [Abstract] | |
Schedule of Future Minimum Lease Payments for Operating Leases | Future minimum lease payments for operating leases at December 31, 2016 , are as follows for the years ending December 31, (amounts in thousands): 2017 $ 10,965 2018 9,086 2019 7,428 2020 5,868 2021 4,282 Thereafter 10,789 Total future minimum lease payments $ 48,418 |
Goodwill and Intangible Asset30
Goodwill and Intangible Assets, net (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Goodwill | The following table represents the changes in goodwill for the years ended December 31, 2016 and 2015 (amounts in thousands): 2016 2015 Balance at beginning of period: Goodwill $ 501,553 $ 533,842 Accumulated impairment loss (6,397 ) (6,397 ) 495,156 527,445 Changes: Acquisitions 28,792 38,489 Foreign currency translation adjustment 5,646 (70,778 ) Reclassifications to assets held for sale (29,683 ) — Net change in goodwill 4,755 (32,289 ) Balance at end of period: Goodwill 506,308 501,553 Accumulated impairment loss (6,397 ) (6,397 ) $ 499,911 $ 495,156 |
Schedule of Intangible Assets | Intangible assets, excluding goodwill, consisted of the following at December 31, 2016 and 2015 (amounts in thousands): 2016 2015 Gross Accumulated Gross Accumulated Client and customer relationships $ 35,936 $ 13,455 $ 47,674 $ 28,064 Non-compete agreements 1,412 667 858 119 Trademarks 3,315 988 4,367 2,038 Technology 3,102 720 1,211 101 Total $ 43,765 $ 15,830 $ 54,110 $ 30,322 |
Schedule of Estimated Future Amortization of Intangible Assets | The future amortization of these intangible assets is estimated to be as follows as of December 31, 2016 for the following years ending December 31, (amounts in thousands): 2017 $ 4,793 2018 4,390 2019 4,143 2020 3,635 2021 2,666 Thereafter 8,308 Total $ 27,935 |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The Company's borrowings consisted of the following as of the dates indicated (amounts in thousands): December 31, December 31, North American revolving credit $ 695,088 $ 541,799 Term loans 430,764 170,000 Note payable — 169,938 European revolving credit 401,780 576,433 Convertible senior notes 287,500 287,500 Less: Debt discount and issuance costs (31,031 ) (28,541 ) Total $ 1,784,101 $ 1,717,129 |
Schedule of Principal Payments Due on Long-term Debt | The following principal payments are due on the Company's borrowings at December 31, 2016 for the years ending December 31, (amounts in thousands): 2017 $ 217,285 2018 10,000 2019 10,000 2020 895,303 2021 682,544 Thereafter — Total $ 1,815,132 |
Schedule of Line of Credit Facilities | Information on the outstanding balances and weighted average interest rates by type of borrowing under the credit facility as of December 31, 2016 and 2015 is as follows (dollar amounts in thousands): 2016 2015 Amount Outstanding Weighted Average Interest Rate Amount Outstanding Weighted Average Interest Rate Term loan $ 150,000 3.27 % $ 170,000 2.92 % Revolving facility $ 695,088 3.28 % $ 541,799 2.89 % Information on the outstanding balances and weighted average interest rates by type of borrowing under the credit facility as of December 31, 2016 and 2015 is as follows (dollar amounts in thousands): 2016 2015 Amount Outstanding Weighted Average Interest Rate Amount Outstanding Weighted Average Interest Rate Term loan $ 280,764 4.25 % $ — — % Revolving facility $ 401,780 4.06 % $ 576,433 3.64 % |
Schedule of Liability and Equity Components | The balances of the liability and equity components of the Notes outstanding were as follows as of the dates indicated (amounts in thousands): December 31, December 31, Liability component - principal amount $ 287,500 $ 287,500 Unamortized debt discount (17,930 ) (22,402 ) Liability component - net carrying amount $ 269,570 $ 265,098 Equity component $ 31,306 $ 31,306 |
Schedule of Debt Interest Expense | Interest expense related to the Notes was as follows for the years ended December 31, 2016 and 2015 (amounts in thousands): 2016 2015 2014 Interest expense - stated coupon rate $ 8,625 $ 8,625 $ 8,625 Interest expense - amortization of debt discount 4,472 4,260 4,058 Total interest expense - convertible senior notes $ 13,097 $ 12,885 $ 12,683 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment, Net [Abstract] | |
Property and Equipment, at Cost | Property and equipment, at cost, consisted of the following as of December 31, 2016 and 2015 (amounts in thousands): 2016 2015 Software $ 53,793 $ 62,198 Computer equipment 19,594 21,109 Furniture and fixtures 13,607 11,888 Equipment 12,065 12,874 Leasehold improvements 13,644 15,112 Building and improvements 7,323 7,235 Land 1,296 1,296 Accumulated depreciation and amortization (82,578 ) (86,318 ) Property and equipment, net $ 38,744 $ 45,394 |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Carrying and Estimated Fair Value Recorded in the Consolidated Balance Sheet | The carrying amounts in the table are recorded in the consolidated balance sheets at December 31, 2016 and December 31, 2015 (amounts in thousands): December 31, 2016 December 31, 2015 Carrying Estimated Carrying Estimated Financial assets: Cash and cash equivalents $ 94,287 $ 94,287 $ 71,372 $ 71,372 Held-to-maturity investments 51,407 55,554 50,247 55,613 Other investments 14,998 12,573 15,498 16,803 Finance receivables, net 2,307,969 2,708,582 2,202,113 2,704,432 Financial liabilities: Interest-bearing deposits 76,113 76,113 46,991 46,991 Revolving lines of credit 1,096,868 1,096,868 1,118,232 1,118,232 Term loans 430,764 430,764 170,000 170,000 Note payable — — 169,938 169,938 Convertible senior notes 269,570 270,825 265,098 241,126 |
Summary of Fair Value Assets Measured on a Recurring Basis | The carrying amounts in the following table are measured at fair value on a recurring basis in the accompanying consolidated balance sheets at December 31, 2016 and 2015 (amounts in thousands): Fair Value Measurements as of December 31, 2016 Level 1 Level 2 Level 3 Total Assets: Available-for-sale investments $ 2,138 $ — $ — $ 2,138 Liabilities: Interest rate swap contracts (recorded in accrued expenses) — 2,825 — 2,825 Fair Value Measurements as of December 31, 2015 Level 1 Level 2 Level 3 Total Assets: Available-for-sale investments $ 3,405 $ — $ 4,649 $ 8,054 Liabilities: Interest rate swap contracts (recorded in accrued expenses) — 1,602 — 1,602 |
Summary of Fair Value Liabilities Measured on a Recurring Basis | The carrying amounts in the following table are measured at fair value on a recurring basis in the accompanying consolidated balance sheets at December 31, 2016 and 2015 (amounts in thousands): Fair Value Measurements as of December 31, 2016 Level 1 Level 2 Level 3 Total Assets: Available-for-sale investments $ 2,138 $ — $ — $ 2,138 Liabilities: Interest rate swap contracts (recorded in accrued expenses) — 2,825 — 2,825 Fair Value Measurements as of December 31, 2015 Level 1 Level 2 Level 3 Total Assets: Available-for-sale investments $ 3,405 $ — $ 4,649 $ 8,054 Liabilities: Interest rate swap contracts (recorded in accrued expenses) — 1,602 — 1,602 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Share-based Compensation [Abstract] | |
Nonvested Share Transactions | The following summarizes all nonvested share transactions, excluding those related to the LTI program, from December 31, 2013 through December 31, 2016 (amounts in thousands, except per share amounts): Nonvested Shares Weighted-Average December 31, 2013 226 $ 29.58 Granted 272 56.69 Vested (155 ) 37.34 Canceled (4 ) 50.41 December 31, 2014 339 47.34 Granted 100 53.29 Vested (151 ) 42.15 Canceled (4 ) 47.49 December 31, 2015 284 52.20 Granted 196 28.43 Vested (117 ) 48.78 Canceled (60 ) 51.71 December 31, 2016 303 $ 38.19 |
Summarization of Option Related Transactions | The following table summarizes all LTI share transactions from December 31, 2013 through December 31, 2016 (amounts in thousands, except per share amounts): Nonvested LTI Shares Weighted-Average December 31, 2013 434 $ 25.79 Granted at target level 111 49.60 Adjustments for actual performance 222 22.32 Vested (279 ) 24.21 December 31, 2014 488 30.52 Granted at target level 132 52.47 Adjustments for actual performance 122 34.59 Vested (252 ) 20.21 Canceled (7 ) 40.05 December 31, 2015 483 42.80 Granted at target level 240 28.98 Adjustments for actual performance (67 ) 34.59 Vested (176 ) 34.59 Canceled (55 ) 43.68 December 31, 2016 425 $ 39.57 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Reconciliation Between the Computation of Basic EPS and Diluted EPS | The following table provides a reconciliation between the computation of basic EPS and diluted EPS for the years ended December 31, 2016 , 2015 and 2014 (amounts in thousands, except per share amounts): 2016 2015 2014 Net income attributable to PRA Group, Inc. Weighted average common shares EPS Net income attributable to PRA Group, Inc. Weighted average common shares EPS Net income attributable to PRA Group, Inc. Weighted average common shares EPS Basic EPS $ 85,097 46,316 $ 1.84 $ 167,926 48,128 $ 3.49 $ 176,505 49,990 $ 3.53 Dilutive effect of nonvested share awards 72 (0.01 ) 277 (0.02 ) 431 (0.03 ) Diluted EPS $ 85,097 46,388 $ 1.83 $ 167,926 48,405 $ 3.47 $ 176,505 50,421 $ 3.50 |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments Not Designated as Hedging Instruments | The following table sets forth the fair value amounts of the derivative instruments not designated as hedging instruments as of December 31, 2016 and 2015 (amounts in thousands): 2016 2015 Asset Derivatives Liability Derivatives Asset Derivatives Liability Derivatives Interest rate swap contracts $ — $ 2,825 $ — $ 1,602 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Summary of Income Tax Expense Recognized | The income tax expense/(benefit) recognized for the years ended December 31, 2016 , 2015 and 2014 is comprised of the following (amounts in thousands): Federal State Foreign Total For the year ended December 31, 2016: Current tax expense $ 38,986 $ 5,037 $ 20,868 $ 64,891 Deferred tax expense/(benefit) (7,350 ) 575 (14,925 ) (21,700 ) Total income tax expense $ 31,636 $ 5,612 $ 5,943 $ 43,191 For the year ended December 31, 2015: Current tax expense $ 62,869 $ 9,399 $ 25,692 $ 97,960 Deferred tax expense/(benefit) 2,887 (600 ) (10,856 ) (8,569 ) Total income tax expense $ 65,756 $ 8,799 $ 14,836 $ 89,391 For the year ended December 31, 2014: Current tax expense $ 57,336 $ 8,823 $ 5,342 $ 71,501 Deferred tax expense 30,319 4,717 17,971 53,007 Total income tax expense $ 87,655 $ 13,540 $ 23,313 $ 124,508 |
Schedule of Reconciliation of Expected Tax Expense at The Statutory Federal Tax Rate to Actual Tax Expense | A reconciliation of the Company's expected tax expense at the statutory federal tax rate to actual tax expense for the years ended December 31, 2016 , 2015 and 2014 is as follows (amounts in thousands): 2016 2015 2014 Income tax expense at statutory federal rates $ 46,929 $ 90,133 $ 105,355 State tax expense, net of federal tax benefit 3,696 5,719 8,565 Foreign taxable translation (67 ) (708 ) 8,199 Foreign rate difference (7,772 ) (8,787 ) 90 Penalties 163 2,819 — Acquisition expenses 31 234 2,169 Other 211 (19 ) 130 Total income tax expense $ 43,191 $ 89,391 $ 124,508 |
Summary of Components of Net Deferred Tax Liability | The Company recognized a net deferred tax liability of $229.9 million and $248.4 million as of December 31, 2016 and 2015 , respectively. The components of the net deferred tax liability are as follows (amounts in thousands): 2016 2015 Deferred tax assets: Employee compensation $ 9,120 $ 13,845 Net operating loss carryforward 48,298 39,080 Accrued liabilities 5,136 8,429 Interest 10,596 10,664 Finance receivable revenue recognition - international 8,274 — Other 6,154 3,843 Total deferred tax asset 87,578 75,861 Deferred tax liabilities: Depreciation expense 7,610 5,276 Intangible assets and goodwill 10,625 7,039 Convertible debt 6,955 8,653 Finance receivable revenue recognition - international — 2,063 Finance receivable revenue recognition - domestic 239,337 251,733 Other 893 4,204 Total deferred tax liability 265,420 278,968 Net deferred tax liability before valuation allowance 177,842 203,107 Valuation allowance 52,021 45,323 Net deferred tax liability $ 229,863 $ 248,430 |
Held for Sale Assets and Liab38
Held for Sale Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations | The assets and liabilities of the businesses that will be sold were reflected as assets and liabilities held for sale and consist of the following at December 31, 2016 (amounts in thousands): December 31, 2016 Other receivables, net $ 8,133 Property and equipment, net 3,227 Goodwill 29,683 Intangible assets, net 1,776 Other assets 424 Assets held for sale $ 43,243 Accrued expenses $ 4,220 Liabilities held for sale $ 4,220 |
General and Summary of Signif39
General and Summary of Significant Accounting Policies (Narrative) (Details) $ / shares in Units, $ in Thousands | Apr. 26, 2016USD ($) | Aug. 03, 2015USD ($) | Jul. 16, 2014USD ($) | Dec. 31, 2016USD ($)segment$ / shares | Dec. 31, 2015USD ($)$ / shares | Aug. 13, 2013 |
Accounting Policies [Line Items] | ||||||
Number of reportable segments | segment | 1 | |||||
Common stock, par value (usd per share) | $ / shares | $ 0.01 | $ 0.01 | ||||
Funds held on behalf of others | $ 3,800 | $ 3,900 | ||||
Percentage of income tax positions likely to be realized | 50.00% | |||||
Possible change in estimates, in years | 1 year | |||||
Total future minimum lease payments | $ 48,418 | |||||
Convertible Debt | ||||||
Accounting Policies [Line Items] | ||||||
Stated percentage | 3.00% | 3.00% | ||||
Average share price of common stock (usd per share) | $ / shares | $ 65.72 | |||||
Minimum | ||||||
Accounting Policies [Line Items] | ||||||
Warranty period of permitting the return of accounts holder (in days) | 90 days | |||||
Options and nonvested share awards vesting period, minimum, in years | 3 years | |||||
Minimum | Software | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 3 years | |||||
Minimum | Computer Equipment | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 3 years | |||||
Minimum | Furniture and Fixtures | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 5 years | |||||
Minimum | Equipment | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 5 years | |||||
Minimum | Leasehold Improvements | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 3 years | |||||
Minimum | Building Improvements | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 10 years | |||||
Maximum | ||||||
Accounting Policies [Line Items] | ||||||
Warranty period of permitting the return of accounts holder (in days) | 180 days | |||||
Options and nonvested share awards vesting period, minimum, in years | 5 years | |||||
Maximum | Software | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 5 years | |||||
Maximum | Computer Equipment | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 5 years | |||||
Maximum | Furniture and Fixtures | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 10 years | |||||
Maximum | Equipment | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 7 years | |||||
Maximum | Leasehold Improvements | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 10 years | |||||
Maximum | Building Improvements | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 39 years | |||||
DTP S.A. | ||||||
Accounting Policies [Line Items] | ||||||
Percentage of voting interests acquired | 100.00% | |||||
Purchase price | $ 44,900 | |||||
RCB Investimentos S.A. | ||||||
Accounting Policies [Line Items] | ||||||
Right to purchase remaining equity, term (in years) | 2 years | |||||
Aktiv Kapital AS | ||||||
Accounting Policies [Line Items] | ||||||
Purchase price | $ 861,300 | |||||
Liabilities assumed | 433,700 | |||||
Estimated total enterprise value | $ 1,300,000 | |||||
RCB Investimentos S.A. | ||||||
Accounting Policies [Line Items] | ||||||
Purchase price | $ 55,200 | |||||
Acquired equity interest (as a percent) | 55.00% | |||||
Remaining equity interest owned by executive team and previous owners (as a percent) | 45.00% |
General and Summary of Signif40
General and Summary of Significant Accounting Policies (Revenue and Long-lived Assets by Geographical Location) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | $ 830,580 | $ 942,018 | $ 880,969 |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 584,816 | 722,393 | 766,262 |
Long-Lived Assets | 29,598 | 36,075 | |
Outside the United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 245,764 | 219,625 | $ 114,707 |
Long-Lived Assets | $ 9,146 | $ 9,319 |
Finance Receivables, net (Sched
Finance Receivables, net (Schedule of Changes In Finance Receivables) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount [Roll Forward] | |||
Balance at beginning of year | $ 2,202,113 | $ 2,001,790 | |
Acquisitions of finance receivables | 938,273 | 954,954 | |
Cash collections applied to principal | (746,867) | (674,373) | $ (571,338) |
Foreign currency translation adjustment | (85,550) | (80,258) | |
Balance at end of year | $ 2,307,969 | $ 2,202,113 | $ 2,001,790 |
Finance Receivables, net (Sch42
Finance Receivables, net (Schedule of Cash Collections Applied to Principal) (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities [Abstract] | |
2,017 | $ 633,565 |
2,018 | 541,874 |
2,019 | 419,322 |
2,020 | 308,356 |
2,021 | 211,759 |
2,022 | 93,723 |
2,023 | 46,230 |
Thereafter | 53,140 |
Total ERC expected to be applied to principal | $ 2,307,969 |
Finance Receivables, net (Narra
Finance Receivables, net (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities [Abstract] | |||
Face Value Of Receivable Portfolios | $ 10,500,000 | $ 6,900,000 | |
Payments to acquire finance receivables | 890,803 | 954,954 | $ 682,441 |
Estimated remaining collections on purchased receivables | 1,400,000 | 1,200,000 | |
Total estimated remaining collections | 5,050,000 | 5,010,000 | |
Aggregate net finance receivables in pools accounted for under the cost recovery method | $ 105,500 | $ 21,000 |
Finance Receivables, net (Sch44
Finance Receivables, net (Schedule of Changes in Accretable Yield) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward] | |||
Balance at beginning of year | $ 2,727,204 | $ 2,513,185 | |
Income recognized on finance receivables, net | (745,119) | (865,122) | $ (807,474) |
Additions | 720,638 | 756,628 | |
Reclassifications from nonaccretable difference | 41,056 | 502,665 | |
Foreign currency translation adjustment | (3,773) | (180,152) | |
Balance at end of year | $ 2,740,006 | $ 2,727,204 | $ 2,513,185 |
Finance Receivables, net (Sch45
Finance Receivables, net (Schedule of Valuation Allowance Account) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Allowance For Loan Losses [Roll Forward] | |||
Beginning balance | $ 114,861 | $ 86,166 | $ 91,101 |
Allowance charges | 100,202 | 31,974 | 8,010 |
Reversal of previous recorded allowance charges | (1,723) | (2,605) | (12,945) |
Net allowance (reversal)/charge | 98,479 | 29,369 | (4,935) |
Foreign currency translation adjustment | (1,875) | (674) | 0 |
Ending balance | $ 211,465 | $ 114,861 | $ 86,166 |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Available-for-sale | ||
Available-for-sale | $ 2,138 | $ 8,054 |
Other investments | ||
Private equity funds | 14,998 | 15,498 |
Investments | 68,543 | 73,799 |
Securitized assets | ||
Available-for-sale | ||
Available-for-sale | 0 | 4,649 |
Held-to-maturity | ||
Securitized assets | 51,407 | 50,247 |
Government bonds and fixed income funds | ||
Available-for-sale | ||
Available-for-sale | $ 2,138 | $ 3,405 |
Investments (Narrative) (Detail
Investments (Narrative) (Details) | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2016USD ($)vote | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Schedule of Equity Method Investments [Line Items] | ||||
Number of votes per certificate | vote | 1 | |||
Impairment of investments | $ 5,823,000 | $ 0 | $ 0 | |
Cost-method investment, ownership percentage | 3.00% | |||
Cost-method investments, distributions received | $ 2,700,000 | 7,800,000 | ||
Series B Certificates | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Investment in securitized assets, ownership percentage | 100.00% | |||
Investment income, net | 6,100,000 | 6,400,000 | ||
Series C Certificates | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Investment in securitized assets, ownership percentage | 20.00% | |||
Investment income, net | $ 0 | $ 0 |
Investments (Amortized Cost) (D
Investments (Amortized Cost) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Available-for-sale | ||
Aggregate Fair Value | $ 2,138 | $ 8,054 |
Securitized assets | ||
Available-for-sale | ||
Amortized Cost | 5,855 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 1,206 | |
Aggregate Fair Value | 0 | 4,649 |
Held-to-maturity | ||
Amortized Cost | 51,407 | 50,247 |
Gross Unrealized Gains | 4,147 | 5,366 |
Gross Unrealized Losses | 0 | 0 |
Aggregate Fair Value | 55,554 | 55,613 |
Government bonds and fixed income funds | ||
Available-for-sale | ||
Amortized Cost | 2,161 | 3,405 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 23 | 0 |
Aggregate Fair Value | $ 2,138 | $ 3,405 |
Operating Leases (Narrative) (D
Operating Leases (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Leases, Operating [Abstract] | |||
Rental expense for office space and equipment under operating lease | $ 12.3 | $ 11.3 | $ 8.7 |
Operating Leases (Schedule Of F
Operating Leases (Schedule Of Future Minimum Lease Payments For Operating Leases) (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Leases, Operating [Abstract] | |
2,017 | $ 10,965 |
2,018 | 9,086 |
2,019 | 7,428 |
2,020 | 5,868 |
2,021 | 4,282 |
Thereafter | 10,789 |
Total future minimum lease payments | $ 48,418 |
Goodwill and Intangible Asset51
Goodwill and Intangible Assets, net (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Impairment of goodwill | $ 0 | ||
Acquired goodwill | 28,792 | $ 38,489 | |
Amortization expense | $ 6,200 | $ 3,700 | $ 4,800 |
Goodwill and Intangible Asset52
Goodwill and Intangible Assets, net (Schedule of Goodwill) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill [Roll Forward] | |||||
Goodwill, Balance at beginning of period | $ 501,553 | $ 533,842 | |||
Accumulated impairment loss, Balance at beginning of period | (6,397) | (6,397) | |||
Goodwill, Net, Balance at beginning of period | 499,911 | 495,156 | $ 499,911 | $ 495,156 | $ 527,445 |
Acquisitions | 28,792 | 38,489 | |||
Foreign currency translation adjustment | 5,646 | (70,778) | |||
Reclassifications to assets held for sale | (29,683) | 0 | |||
Net change in goodwill | 4,755 | (32,289) | |||
Goodwill, Balance at end of period | 506,308 | 501,553 | |||
Accumulated impairment loss, Balance at end of period | (6,397) | (6,397) | $ (6,397) | $ (6,397) | $ (6,397) |
Goodwill, Net, Balance at end of period | $ 499,911 | $ 495,156 |
Goodwill and Intangible Asset53
Goodwill and Intangible Assets, net (Schedule of Intangible Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | $ 43,765 | $ 54,110 |
Accumulated Amortization | 15,830 | 30,322 |
Client and customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 35,936 | 47,674 |
Accumulated Amortization | 13,455 | 28,064 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 1,412 | 858 |
Accumulated Amortization | 667 | 119 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 3,315 | 4,367 |
Accumulated Amortization | 988 | 2,038 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 3,102 | 1,211 |
Accumulated Amortization | $ 720 | $ 101 |
Goodwill and Intangible Asset54
Goodwill and Intangible Assets, net (Schedule of Estimated Future Amortization of Intangible Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,017 | $ 4,793 | |
2,018 | 4,390 | |
2,019 | 4,143 | |
2,020 | 3,635 | |
2,021 | 2,666 | |
Thereafter | 8,308 | |
Total | $ 27,935 | $ 23,788 |
Borrowings (Details)
Borrowings (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Jul. 16, 2014 | Aug. 13, 2013 |
Debt Instrument [Line Items] | ||||
Less: Debt discount and issuance costs | $ (31,031) | $ (28,541) | ||
Total | 1,784,101 | 1,717,129 | ||
Medium-term Notes | ||||
Debt Instrument [Line Items] | ||||
North American revolving credit | 695,088 | 541,799 | ||
Term loans | 430,764 | 170,000 | ||
Line of Credit | European Revolving Facility and Term Loan | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | 401,780 | 576,433 | ||
Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Face amount | 287,500 | 287,500 | $ 287,500 | |
Notes Payable | ||||
Debt Instrument [Line Items] | ||||
Note payable | $ 0 | $ 169,938 | ||
Face amount | $ 169,900 |
Borrowings (Long term debt Matu
Borrowings (Long term debt Maturities) (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Debt Disclosure [Abstract] | |
2,017 | $ 217,285 |
2,018 | 10,000 |
2,019 | 10,000 |
2,020 | 895,303 |
2,021 | 682,544 |
Thereafter | 0 |
Total | $ 1,815,132 |
Borrowings Borrowings (North Am
Borrowings Borrowings (North American Revolving Credit and Term Loan) (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Aug. 13, 2013 | |
Debt Instrument [Line Items] | |||
Long-term debt | $ 1,815,132 | ||
Eurodollar Rate | |||
Debt Instrument [Line Items] | |||
Basis spread variable rate (as a percent) | 1.00% | ||
Federal Funds Rate | |||
Debt Instrument [Line Items] | |||
Basis spread variable rate (as a percent) | 0.50% | ||
North American Credit Agreement | |||
Debt Instrument [Line Items] | |||
Total credit facility available | $ 948,000 | ||
Portion of line of credit facility that matures in the next 12 months | 216,300 | ||
Current borrowing capacity | $ 102,900 | ||
Credit Agreement | |||
Debt Instrument [Line Items] | |||
Percentage of maximum level of borrowings of ERC of eligible asset pools | 35.00% | ||
Percentage of maximum level of borrowings of eligible accounts receivable | 75.00% | ||
Credit agreement consolidated leverage ratio | 2.25 | ||
Debt instrument, covenant, maximum cash dividends | $ 20,000 | ||
Stock repurchases authorized amount | $ 100,000 | ||
Stock repurchases during fiscal period, percentage of prior year's net income limitation | 50.00% | ||
Credit Agreement | Eurodollar Rate | |||
Debt Instrument [Line Items] | |||
Basis spread variable rate (as a percent) | 2.50% | ||
Credit Agreement | Base Rate | |||
Debt Instrument [Line Items] | |||
Basis spread variable rate (as a percent) | 1.50% | ||
Unsecured Debt | Senior Unsecured Debt other than Convertible Notes Due 2020 | |||
Debt Instrument [Line Items] | |||
Debt instrument, covenant, maximum allowable debt | $ 500,000 | ||
Convertible Debt | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 269,570 | $ 265,098 | |
Stated percentage | 3.00% | 3.00% | |
Line of Credit | Line of Credit | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 150,000 | ||
Revolving Credit Facility | North American Credit Agreement | |||
Debt Instrument [Line Items] | |||
Total credit facility available | 748,000 | ||
Optional increase in borrowing capacity | 125,000 | ||
Option to reduce borrowing capacity | 20,000 | ||
Current borrowing capacity | $ 78,000 | ||
Unused commitment fee under revolving credit | 0.375% | ||
Canadian Revolving Credit Facility | North American Credit Agreement | |||
Debt Instrument [Line Items] | |||
Total credit facility available | $ 50,000 | ||
Acquisition Subsequent to 2014 | Credit Agreement | |||
Debt Instrument [Line Items] | |||
Debt instrument, covenant, maximum business combinations | $ 250,000 |
Borrowings (Outstanding balance
Borrowings (Outstanding balances and weighted average interest rates) (Details) - Revolving Credit Facility - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Domestic Corporate Debt Securities | Term loan | ||
Line of Credit Facility [Line Items] | ||
Amount Outstanding | $ 150,000 | $ 170,000 |
Weighted Average Interest Rate | 3.27% | 2.92% |
Domestic Corporate Debt Securities | Revolving facility | ||
Line of Credit Facility [Line Items] | ||
Amount Outstanding | $ 695,088 | $ 541,799 |
Weighted Average Interest Rate | 3.28% | 2.89% |
Foreign Corporate Debt Securities | Term loan | ||
Line of Credit Facility [Line Items] | ||
Amount Outstanding | $ 280,764 | $ 0 |
Weighted Average Interest Rate | 4.25% | 0.00% |
Foreign Corporate Debt Securities | Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Amount Outstanding | $ 401,780 | $ 576,433 |
Weighted Average Interest Rate | 4.06% | 3.64% |
Borrowings Borrowings (Note Pay
Borrowings Borrowings (Note Payable) (Details) - USD ($) $ in Millions | Jul. 18, 2016 | Jul. 16, 2014 |
Short-term Debt [Line Items] | ||
Repayments of debt | $ 169.9 | |
Notes Payable | ||
Short-term Debt [Line Items] | ||
Face amount | $ 169.9 | |
Notes Payable | LIBOR | ||
Short-term Debt [Line Items] | ||
Basis spread variable rate (as a percent) | 3.75% |
Borrowings (European Revolving
Borrowings (European Revolving Credit Facility and Term Loan) (Details) - 12 months ended Dec. 31, 2016 $ in Thousands, SEK in Billions | SEK | USD ($) |
Line of Credit Facility [Line Items] | ||
Long-term debt | $ 1,815,132 | |
Overdraft Facility | ||
Line of Credit Facility [Line Items] | ||
Total credit facility available | 40,000 | |
Commitment fee percentage | 0.125% | |
European Revolving Facility and Term Loan | Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Current borrowing capacity | 538,200 | |
Maximum interest bearing deposits | SEK | SEK 1.5 | |
Minimum cash collections (as a percent) | 95.00% | |
Line of Credit | European Revolving Facility and Term Loan | Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Total credit facility available | 1,200,000 | |
Long-term debt | 300,000 | |
Unused commitment fee under revolving credit | 1.26% | |
Commitment fee as a percentage of margin | 35.00% | |
Current borrowing capacity | $ 126,000 | |
Loan to value ratio | 0.75 | |
Maximum GIBD ratio | 3.5 | |
Maximum GIBD, thereafter | 3.25 | |
Line of Credit | European Revolving Facility and Term Loan | Interbank Offered Rate (IBOR) | Minimum | Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Basis spread variable rate (as a percent) | 2.80% | |
Line of Credit | European Revolving Facility and Term Loan | Interbank Offered Rate (IBOR) | Minimum | Term Loan Facility | ||
Line of Credit Facility [Line Items] | ||
Basis spread variable rate (as a percent) | 4.25% | |
Line of Credit | European Revolving Facility and Term Loan | Interbank Offered Rate (IBOR) | Maximum | Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Basis spread variable rate (as a percent) | 3.90% | |
Line of Credit | European Revolving Facility and Term Loan | Interbank Offered Rate (IBOR) | Maximum | Term Loan Facility | ||
Line of Credit Facility [Line Items] | ||
Basis spread variable rate (as a percent) | 4.50% |
Borrowings (Convertible Debt an
Borrowings (Convertible Debt and Additional information) (Details) $ / shares in Units, $ in Thousands | Aug. 13, 2013USD ($)$ / shares | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2016USD ($)$ / shares |
Debt Instrument [Line Items] | |||||
Conversion ratio | 15.2172 | ||||
Minimum average share price triggering dilutive effect (usd per share) | $ / shares | $ 65.72 | $ 65.72 | |||
Repurchases of common stock | $ 0 | $ 165,501 | $ 33,164 | ||
Effective interest rate (as a percent) | 4.92% | 4.92% | |||
Convertible Debt | |||||
Debt Instrument [Line Items] | |||||
Face amount | $ 287,500 | $ 287,500 | 287,500 | $ 287,500 | |
Stated percentage | 3.00% | 3.00% | 3.00% | ||
Convertible debt, estimated fair value | $ 255,300 | ||||
Carrying amount of convertible debt | 32,200 | $ 31,306 | $ 31,306 | $ 31,306 | |
Debt Issuance Costs, Net | 7,300 | ||||
Debt and Equity Issuance Costs | 8,200 | ||||
Equity Issuance Costs | $ 900 |
Borrowings (Breakdown of Debt I
Borrowings (Breakdown of Debt Instrument) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Aug. 13, 2013 |
Debt Instrument [Line Items] | |||
Liability component - net carrying amount | $ 1,815,132 | ||
Convertible Debt | |||
Debt Instrument [Line Items] | |||
Liability component - principal amount | 287,500 | $ 287,500 | $ 287,500 |
Unamortized debt discount | (17,930) | (22,402) | |
Liability component - net carrying amount | 269,570 | 265,098 | |
Equity component | $ 31,306 | $ 31,306 | $ 32,200 |
Borrowings (Interest Expense) (
Borrowings (Interest Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | |||
Interest expense - amortization of debt discount | $ 10,276 | $ 4,260 | $ 4,058 |
Convertible Debt | |||
Debt Instrument [Line Items] | |||
Interest expense - stated coupon rate | 8,625 | 8,625 | 8,625 |
Interest expense - amortization of debt discount | 4,472 | 4,260 | 4,058 |
Total interest expense - convertible senior notes | $ 13,097 | $ 12,885 | $ 12,683 |
Property and Equipment, net (Pr
Property and Equipment, net (Property and Equipment, at Cost) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment, Net [Abstract] | ||
Software | $ 53,793 | $ 62,198 |
Computer equipment | 19,594 | 21,109 |
Furniture and fixtures | 13,607 | 11,888 |
Equipment | 12,065 | 12,874 |
Leasehold improvements | 13,644 | 15,112 |
Building and improvements | 7,323 | 7,235 |
Land | 1,296 | 1,296 |
Accumulated depreciation and amortization | (82,578) | (86,318) |
Property and equipment, net | $ 38,744 | $ 45,394 |
Property and Equipment, net (Na
Property and Equipment, net (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization expense | $ 18.2 | $ 16.2 | $ 13.6 |
Fair Value (Carrying And Estima
Fair Value (Carrying And Estimated Fair Value Recorded In The Consolidated Balance Sheet) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Assets: | ||||
Cash and cash equivalents, carrying amount | $ 94,287 | $ 71,372 | $ 39,661 | $ 162,004 |
Finance receivables, net, carrying amount | 2,307,969 | 2,202,113 | $ 2,001,790 | |
Financial liabilities: | ||||
Interest-bearing deposits, carrying amount | 76,113 | 46,991 | ||
Carrying Amount | ||||
Assets: | ||||
Cash and cash equivalents, carrying amount | 94,287 | 71,372 | ||
Held-to-maturity investments, carrying amount | 51,407 | 50,247 | ||
Other investments | 14,998 | 15,498 | ||
Finance receivables, net, carrying amount | 2,307,969 | 2,202,113 | ||
Financial liabilities: | ||||
Interest-bearing deposits, carrying amount | 76,113 | 46,991 | ||
Revolving lines of credit, carrying amount | 1,096,868 | 1,118,232 | ||
Term loans, carrying amount | 430,764 | 170,000 | ||
Notes and loans payable, carrying amount | 0 | 169,938 | ||
Convertible notes, carrying amount | 269,570 | 265,098 | ||
Estimated Fair Value | ||||
Assets: | ||||
Cash and cash equivalents, estimated fair value | 94,287 | 71,372 | ||
Held-to-maturity investments, estimated fair value | 55,554 | 55,613 | ||
Other investments | 12,573 | 16,803 | ||
Finance receivables, net, estimated fair value | 2,708,582 | 2,704,432 | ||
Financial liabilities: | ||||
Interest-bearing deposits, estimated fair value | 76,113 | 46,991 | ||
Revolving lines of credit, estimated fair value | 1,096,868 | 1,118,232 | ||
Term loans, estimated fair value | 430,764 | 170,000 | ||
Notes and loans payable, estimated fair value | 0 | 169,938 | ||
Convertible notes, estimated fair value | $ 270,825 | $ 241,126 |
Fair Value (Narrative) (Details
Fair Value (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | ||
Cost method investments, expected liquidation period, minimum | 1 year | |
Cost method investments, expected liquidation period, maximum | 4 years | |
Unrealized gain (loss) in other comprehensive income | $ 0 | $ (1.2) |
Fair Value (Fair Value Assets a
Fair Value (Fair Value Assets and Liabilities Measured on a Recurring Basis) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Assets: | ||
Available-for-sale investments | $ 2,138 | $ 8,054 |
Liabilities: | ||
Interest rate swap contracts (recorded in accrued expenses) | 2,825 | 1,602 |
Level 1 | ||
Assets: | ||
Available-for-sale investments | 2,138 | 3,405 |
Liabilities: | ||
Interest rate swap contracts (recorded in accrued expenses) | 0 | 0 |
Level 2 | ||
Assets: | ||
Available-for-sale investments | 0 | 0 |
Liabilities: | ||
Interest rate swap contracts (recorded in accrued expenses) | 2,825 | 1,602 |
Level 3 | ||
Assets: | ||
Available-for-sale investments | 0 | 4,649 |
Liabilities: | ||
Interest rate swap contracts (recorded in accrued expenses) | $ 0 | $ 0 |
Share-Based Compensation (Narra
Share-Based Compensation (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum number of shares authorized | 5,400,000 | ||
Total share-based compensation expense | $ 6.1 | $ 16.3 | $ 15 |
Total tax benefit realized from share-based compensation | 2.7 | 8.9 | 10.8 |
Grant date fair value of shares vested | 5.7 | 6.4 | 5.8 |
Long-Term Incentive Programs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Future compensation cost related to stock option | $ 2.8 | ||
Weighted average remaining life of nonvested shares (in years) | 13 months | ||
Grant date fair value of shares vested | $ 6.1 | $ 5.1 | $ 6.8 |
Forfeiture rate for share awards granted under LTI Programs (as a percent) | 15.00% | ||
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options issued under the amended plan vesting period (in years) | 3 years | ||
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options issued under the amended plan vesting period (in years) | 5 years | ||
Nonvested Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Future compensation cost related to stock option | $ 5.2 | ||
Weighted average remaining life of nonvested shares (in years) | 1 year 5 months | ||
Nonvested Awards | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options issued under the amended plan vesting period (in years) | 3 years | ||
Nonvested Awards | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options issued under the amended plan vesting period (in years) | 5 years |
Share-Based Compensation (Nonve
Share-Based Compensation (Nonvested Share Transactions) (Details) - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Nonvested Shares Outstanding | |||
Beginning balance, shares | 284 | 339 | 226 |
Granted, shares | 196 | 100 | 272 |
Vested, shares | (117) | (151) | (155) |
Cancelled, shares | (60) | (4) | (4) |
Ending balance, shares | 303 | 284 | 339 |
Weighted-Average Price at Grant Date | |||
Beginning balance (usd per share) | $ 52.20 | $ 47.34 | $ 29.58 |
Granted (usd per share) | 28.43 | 53.29 | 56.69 |
Vested (usd per share) | 48.78 | 42.15 | 37.34 |
Cancelled (usd per share) | 51.71 | 47.49 | 50.41 |
Ending balance (usd per share) | $ 38.19 | $ 52.20 | $ 47.34 |
Long-Term Incentive Programs | |||
Nonvested Shares Outstanding | |||
Beginning balance, shares | 483 | 488 | 434 |
Granted, shares | 240 | 132 | 111 |
Adjustments for actual performance, shares | (67) | 122 | 222 |
Vested, shares | (176) | (252) | (279) |
Cancelled, shares | (55) | (7) | |
Ending balance, shares | 425 | 483 | 488 |
Weighted-Average Price at Grant Date | |||
Beginning balance (usd per share) | $ 42.80 | $ 30.52 | $ 25.79 |
Granted (usd per share) | 28.98 | 52.47 | 49.60 |
Adjustments for actual performance (usd per share) | 34.59 | 34.59 | 22.32 |
Vested (usd per share) | 34.59 | 20.21 | 24.21 |
Cancelled (usd per share) | 43.68 | 40.05 | |
Ending balance (usd per share) | $ 39.57 | $ 42.80 | $ 30.52 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 13, 2013 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 |
Earnings Per Share [Abstract] | |||||
Minimum average share price triggering dilutive effect (usd per share) | $ 65.72 | $ 65.72 | |||
Net income attributable to PRA Group, Inc. | $ 85,097 | $ 167,926 | $ 176,505 | ||
Weighted Average Common Shares, Basic EPS | 46,316,000 | 48,128,000 | 49,990,000 | ||
Weighted Average Common Shares, Dilutive effect of nonvested share awards | 72,000 | 277,000 | 431,000 | ||
Weighted Average Common Shares, Diluted EPS | 46,388,000 | 48,405,000 | 50,421,000 | ||
Basic EPS (usd per share) | $ 1.84 | $ 3.49 | $ 3.53 | ||
Dilutive effect of nonvested share awards (usd per share) | (0.01) | (0.02) | (0.03) | ||
Diluted EPS (usd per share) | $ 1.83 | $ 3.47 | $ 3.50 | ||
Antidilutive options outstanding (in shares) | 0 | 0 | 0 |
Derivatives (Details)
Derivatives (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Derivative [Line Items] | |||
Percent of borrowings hedged at foreign operations | 57.00% | 42.00% | |
Liability Derivatives | $ 2,825 | $ 1,602 | |
Interest rate swap contracts | |||
Derivative [Line Items] | |||
Asset Derivatives | 0 | 0 | |
Liability Derivatives | 2,825 | 1,602 | |
Derivatives Not Designated as Hedging Instruments | Interest Expense | Interest rate swap contracts | |||
Derivative [Line Items] | |||
Derivative, interest expense | $ 2,800 | $ 4,900 | $ 1,800 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Oct. 22, 2015 | Dec. 10, 2014 | |
2014 Share Repurchase Program | ||||
Shareholders Equity [Line Items] | ||||
Stock repurchases authorized amount | $ 100 | |||
Number of shares repurchased and retired | 1,610,182 | |||
Average price of shares repurchased and retired (usd per share) | $ 53.10 | |||
2015 Share Repurchase Program | ||||
Shareholders Equity [Line Items] | ||||
Stock repurchases authorized amount | $ 125 | |||
Number of shares repurchased and retired | 0 | 2,072,721 | ||
Average price of shares repurchased and retired (usd per share) | $ 38.60 | |||
Stock repurchase program, authorized yearly amount | $ 45 |
Income Taxes (Summary of Income
Income Taxes (Summary of Income Tax Expense Recognized) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Current tax expense, Federal | $ 38,986 | $ 62,869 | $ 57,336 |
Current tax expense, State | 5,037 | 9,399 | 8,823 |
Current foreign tax expense | 20,868 | 25,692 | 5,342 |
Current tax expense, Total | 64,891 | 97,960 | 71,501 |
Deferred tax (benefit)/expense, Federal | (7,350) | 2,887 | 30,319 |
Deferred tax expense/(benefit), State | 575 | (600) | 4,717 |
Deferred Foreign Income Tax (benefit)/Expense | (14,925) | (10,856) | 17,971 |
Deferred tax (benefit)/expense, Total | (21,700) | (8,569) | 53,007 |
Total income tax expense, Federal | 31,636 | 65,756 | 87,655 |
Total income tax expense, State | 5,612 | 8,799 | 13,540 |
Foreign Income Tax Expense, Continuing Operations | 5,943 | 14,836 | 23,313 |
Total income tax expense | $ 43,191 | $ 89,391 | $ 124,508 |
Income Taxes (Schedule of Recon
Income Taxes (Schedule of Reconciliation of Expected Tax Expense At Statutory Tax Rates to Actual Tax Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Expected tax expense at statutory federal rates | $ 46,929 | $ 90,133 | $ 105,355 |
State tax expense, net of federal tax benefit | 3,696 | 5,719 | 8,565 |
Foreign taxable translation | (67) | (708) | 8,199 |
Foreign rate difference | (7,772) | (8,787) | 90 |
Penalties | 163 | 2,819 | 0 |
Acquisition expenses | 31 | 234 | 2,169 |
Other | 211 | (19) | 130 |
Total income tax expense | $ 43,191 | $ 89,391 | $ 124,508 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Business Acquisition [Line Items] | ||
Net deferred tax liability | $ 229,863 | $ 248,430 |
Valuation allowance | 52,021 | 45,323 |
Finance receivable revenue recognition - domestic | 239,337 | 251,733 |
Estimate of potential federal and state interest | 112,000 | 91,000 |
Unremitted earnings of foreign subsidiaries | 3,200 | |
Foreign Tax Authority | ||
Business Acquisition [Line Items] | ||
Operating loss carryforward, foreign subsidiaries | $ 3,700 | $ 1,700 |
Foreign Tax Authority | Minimum | ||
Business Acquisition [Line Items] | ||
Operating loss carryforward, carryforward period | 7 years | |
Foreign Tax Authority | Maximum | ||
Business Acquisition [Line Items] | ||
Operating loss carryforward, carryforward period | 20 years |
Income Taxes (Summary of Compon
Income Taxes (Summary of Components of Net Deferred Tax Liability) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Employee compensation | $ 9,120 | $ 13,845 |
Net operating loss carryforward | 48,298 | 39,080 |
Other | 6,154 | 3,843 |
Accrued liabilities | 5,136 | 8,429 |
Interest | 10,596 | 10,664 |
Finance receivable revenue recognition - international | 8,274 | 0 |
Total deferred tax asset | 87,578 | 75,861 |
Deferred tax liabilities: | ||
Depreciation expense | 7,610 | 5,276 |
Intangible assets and goodwill | 10,625 | 7,039 |
Convertible debt | 6,955 | 8,653 |
Other | 893 | 4,204 |
Finance receivable revenue recognition - international | 0 | 2,063 |
Finance receivable revenue recognition - domestic | 239,337 | 251,733 |
Total deferred tax liability | 265,420 | 278,968 |
Net deferred tax liability before valuation allowance | 177,842 | 203,107 |
Valuation allowance | 52,021 | 45,323 |
Total deferred tax liability | $ 229,863 | $ 248,430 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | May 11, 2015 | Jun. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 |
Future compensation under employment agreements | $ 12,900,000 | |||
Total future minimum lease payments | 48,418,000 | |||
Amount to be purchased under forward flow agreements | 302,600,000 | |||
Finance receivable revenue recognition - domestic | 239,337,000 | $ 251,733,000 | ||
Estimate of potential federal and state interest | $ 112,000,000 | $ 91,000,000 | ||
Telephone Consumer Protection Act | ||||
Loss contingency accrual, payments | $ 18,000,000 | |||
Portfolio Recovery Associates, LLC v. Guadalupe Mejia | Judicial Ruling - Compensatory Damages | ||||
Amount of damages awarded | $ 251,000 | |||
Portfolio Recovery Associates, LLC v. Guadalupe Mejia | Judicial Ruling - Punitive Damages | ||||
Amount of damages awarded | $ 82,009,549 |
Retirement Plans (Details)
Retirement Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Contribution Pension and Other Postretirement Plans Disclosure [Abstract] | |||
Minimum eligible age to make voluntary contributions | 18 years | ||
Employee contribution, percentage of employee's compensation | 100.00% | ||
Employer contribution, percentage of employee's compensation | 4.00% | ||
Total compensation expense related to contribution plan | $ 3.8 | $ 4.3 | $ 2.8 |
Redeemable Noncontrolling Int80
Redeemable Noncontrolling Interest (Details) - DTP S.A. | Dec. 31, 2016 | Apr. 26, 2016 |
Noncontrolling Interest [Line Items] | ||
Percentage of voting interests acquired | 100.00% | |
Polish Securitization Fund | ||
Noncontrolling Interest [Line Items] | ||
Percentage of voting interests acquired | 20.00% | |
Ownership percentage by noncontrolling owners | 80.00% |
Held for Sale Assets and Liab81
Held for Sale Assets and Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2017 | Jan. 24, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Liabilities held for sale | $ 4,220 | $ 0 | ||
Government Services Businesses | Disposal Group, Held-for-sale, Not Discontinued Operations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Other receivables, net | 8,133 | |||
Property and equipment, net | 3,227 | |||
Goodwill | 29,683 | |||
Intangible assets, net | 1,776 | |||
Other assets | 424 | |||
Assets held for sale | 43,243 | |||
Accrued expenses | 4,220 | |||
Liabilities held for sale | $ 4,220 | |||
Subsequent Event | Government Services Businesses | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds from divestiture of businesses | $ 91,500 | |||
Scenario, Forecast [Member] | Government Services Businesses | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Expected gain | $ 47,000 |