Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 23, 2018 | Jun. 30, 2017 | |
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, 2017 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 45,225,425 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 1,657,180,835 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | ||
Cash and cash equivalents | $ 120,516 | $ 94,287 |
Investments | 78,290 | 68,543 |
Finance receivables, net | 2,771,921 | 2,307,969 |
Other receivables, net | 15,770 | 11,650 |
Income taxes receivable | 21,686 | 9,427 |
Net deferred tax asset | 57,529 | 28,482 |
Property and equipment, net | 49,311 | 38,744 |
Goodwill | 526,513 | 499,911 |
Intangible assets, net | 23,572 | 27,935 |
Other assets | 32,656 | 33,808 |
Assets held for sale | 0 | 43,243 |
Total assets | 3,697,764 | 3,163,999 |
Liabilities: | ||
Accounts payable | 4,992 | 2,459 |
Accrued expenses | 85,993 | 82,699 |
Income taxes payable | 10,771 | 19,631 |
Net deferred tax liability | 171,185 | 258,344 |
Interest-bearing deposits | 98,580 | 76,113 |
Borrowings | 2,170,182 | 1,784,101 |
Other liabilities | 9,018 | 10,821 |
Liabilities held for sale | 0 | 4,220 |
Total liabilities | 2,550,721 | 2,238,388 |
Redeemable noncontrolling interest | 9,534 | 8,448 |
Equity: | ||
Preferred stock, $0.01 par value, 2,000 shares authorized, no shares issued and outstanding | 0 | 0 |
Common stock, $0.01 par value, 100,000 shares authorized, 45,189 shares issued and outstanding at December 31, 2017; 100,000 shares authorized, 46,356 shares issued and outstanding at December 31, 2016 | 452 | 464 |
Additional paid-in capital | 53,870 | 66,414 |
Retained earnings | 1,211,632 | 1,049,367 |
Accumulated other comprehensive loss | (178,607) | (251,944) |
Total stockholders' equity - PRA Group, Inc. | 1,087,347 | 864,301 |
Noncontrolling interest | 50,162 | 52,862 |
Total equity | 1,137,509 | 917,163 |
Total liabilities and equity | $ 3,697,764 | $ 3,163,999 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 45,189,000 | 46,356,000 |
Common stock, shares outstanding | 45,189,000 | 46,356,000 |
Consolidated Income Statements
Consolidated Income Statements - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues: | |||
Income recognized on finance receivables, net | $ 780,803 | $ 745,119 | $ 865,122 |
Fee income | 24,916 | 77,381 | 64,383 |
Other revenue | 7,855 | 8,080 | 12,513 |
Total revenues | 813,574 | 830,580 | 942,018 |
Operating expenses: | |||
Compensation and employee services | 273,033 | 258,846 | 268,345 |
Legal collection expenses | 119,398 | 132,202 | 129,456 |
Agency fees | 35,530 | 44,922 | 32,188 |
Outside fees and services | 62,792 | 63,098 | 65,155 |
Communication | 33,132 | 33,771 | 33,113 |
Rent and occupancy | 14,823 | 15,710 | 14,714 |
Depreciation and amortization | 19,763 | 24,359 | 19,874 |
Other operating expenses | 44,103 | 39,466 | 68,829 |
Total operating expenses | 602,574 | 612,374 | 631,674 |
Income from operations | 211,000 | 218,206 | 310,344 |
Other income and (expense): | |||
Gain on sale of subsidiaries | 48,474 | 0 | 0 |
Interest expense, net | (98,041) | (80,864) | (60,336) |
Foreign exchange (loss)/gain | (1,104) | 2,564 | 7,514 |
Other | (2,790) | (5,823) | 0 |
Income before income taxes | 157,539 | 134,083 | 257,522 |
Income tax (benefit)/expense | (11,536) | 43,191 | 89,391 |
Net income | 169,075 | 90,892 | 168,131 |
Adjustment for net income attributable to noncontrolling interests | 6,810 | 5,795 | 205 |
Net income attributable to PRA Group, Inc. | $ 162,265 | $ 85,097 | $ 167,926 |
Net income per common share attributable to PRA Group, Inc.: | |||
Basic (USD per share) | $ 3.55 | $ 1.84 | $ 3.49 |
Diluted (USD per share) | $ 3.54 | $ 1.83 | $ 3.47 |
Weighted average number of shares outstanding: | |||
Basic (shares) | 45,671 | 46,316 | 48,128 |
Diluted (shares) | 45,823 | 46,388 | 48,405 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 169,075 | $ 90,892 | $ 168,131 |
Change in foreign currency translation | 67,858 | (14,559) | (119,043) |
Total comprehensive income | 236,933 | 76,333 | 49,088 |
Adjustment for net income attributable to noncontrolling interests | 6,810 | 5,795 | 205 |
Change in foreign currency translation | (5,478) | 8,490 | (6,132) |
Comprehensive income/(loss) attributable to noncontrolling interest | 1,332 | 14,285 | (5,927) |
Comprehensive income attributable to PRA Group, Inc. | $ 235,601 | $ 62,048 | $ 55,015 |
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, 2014 | 49,577,000 | |||||
Beginning Balance at Dec. 31, 2014 | $ 902,215 | $ 496 | $ 111,659 | $ 906,010 | $ (115,950) | $ 0 |
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 restricted stock | $ 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 | |||||
Ending Balance at Dec. 31, 2015 | 839,747 | $ 462 | 64,622 | 964,270 | (228,861) | 39,254 |
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 restricted stock | $ 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 | $ 917,163 | $ 464 | 66,414 | 1,049,367 | (251,944) | 52,862 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 168,852 | 162,265 | 6,587 | |||
Foreign currency translation adjustment | 66,135 | 73,337 | (7,202) | |||
Distributions paid to noncontrolling interest | (2,085) | (2,085) | ||||
Vesting of nonvested shares, shares | 145,000 | |||||
Vesting of restricted stock | $ 1 | (1) | ||||
Repurchase and cancellation of common stock, shares | (1,312,000) | |||||
Repurchase and cancellation of common stock | (44,909) | $ (13) | (44,896) | |||
Amortization of share-based compensation | 8,678 | 8,678 | ||||
Employee stock relinquished for payment of taxes | (3,022) | (3,022) | ||||
Component of convertible debt | 44,910 | 44,910 | ||||
Deferred taxes on component of convertible debt | $ (18,213) | (18,213) | ||||
Ending Balance, shares at Dec. 31, 2017 | 45,189,000 | 45,189,000 | ||||
Ending Balance at Dec. 31, 2017 | $ 1,137,509 | $ 452 | $ 53,870 | $ 1,211,632 | $ (178,607) | $ 50,162 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||
Net income | $ 169,075 | $ 90,892 | $ 168,131 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Amortization of share-based compensation | 8,678 | 6,138 | 16,325 |
Depreciation and amortization | 19,763 | 24,359 | 19,874 |
Gain on sale of subsidiaries | (48,474) | 0 | 0 |
Amortization of debt discount and issuance costs | 18,152 | 10,276 | 4,260 |
Impairment of investments | 1,745 | 5,823 | 0 |
Deferred tax benefit | (130,822) | (21,700) | (8,569) |
Net foreign currency transaction gain | (1,098) | (2,364) | (7,514) |
Other | (4,033) | 0 | 0 |
Changes in operating assets and liabilities: | |||
Other assets | (460) | 1,861 | 2,015 |
Other receivables, net | (3,461) | 10,016 | (18,124) |
Accounts payable | 2,743 | (2,087) | 786 |
Income taxes payable/receivable, net | (22,715) | (13,663) | 10,121 |
Accrued expenses | (5,752) | (9,724) | 17,246 |
Other liabilities | (2,498) | 6,053 | (1,553) |
Net cash provided by operating activities | 843 | 105,880 | 202,998 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (22,840) | (14,160) | (14,454) |
Acquisition of finance receivables, net of buybacks | (1,086,029) | (890,803) | (954,954) |
Collections applied to principal on finance receivables | 731,802 | 746,867 | 674,373 |
Business acquisitions, net of cash acquired | 0 | (60,241) | (1,423) |
Proceeds from sale of subsidiaries, net | 93,304 | 0 | 0 |
Purchase of investments | (6,688) | (6,052) | (48,085) |
Proceeds from sales and maturities of investments | 10,123 | 6,898 | 62,217 |
Net cash used in investing activities | (280,328) | (217,491) | (282,326) |
Cash flows from financing activities: | |||
Proceeds from lines of credit | 1,260,161 | 985,751 | 790,967 |
Principal payments on lines of credit | (1,549,833) | (1,007,234) | (463,733) |
Repurchases of common stock | (44,909) | 0 | (165,501) |
Tax withholdings related to share-based payments | (3,022) | (2,850) | (11,947) |
Payments of origination costs and fees | (18,240) | (17,539) | (5,000) |
Distributions paid to noncontrolling interest | (1,429) | (934) | 0 |
Proceeds from long-term debt | 310,000 | 297,893 | 0 |
Principal payments on notes payable and long-term debt | (15,021) | (193,580) | (47,374) |
Net increase in interest-bearing deposits | 12,991 | 32,905 | 22,721 |
Proceeds from convertible debt | 345,000 | 0 | 0 |
Net cash provided by financing activities | 295,698 | 94,412 | 120,133 |
Effect of exchange rate on cash | 10,016 | 40,114 | (9,094) |
Net increase in cash and cash equivalents | 26,229 | 22,915 | 31,711 |
Cash and cash equivalents, beginning of year | 94,287 | 71,372 | 39,661 |
Cash and cash equivalents, end of year | 120,516 | 94,287 | 71,372 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 79,825 | 67,987 | 49,777 |
Cash paid for income taxes | $ 144,341 | $ 78,754 | $ 86,255 |
General and Summary of Signific
General and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
General and Summary of Significant Accounting Policies | General and Summary of Significant Accounting Policies : Nature of operations: As used herein, the terms "PRA Group," the "Company," or similar terms refer to PRA Group, Inc. and its subsidiaries. PRA Group, Inc., a Delaware corporation, 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 also provides the following fee-based services: class action claims recovery services and purchases; servicing of consumer bankruptcy accounts in the United States ("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 government services businesses in January 2017 and its vehicle location, skip tracing and collateral recovery business in June 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, 2017. 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, 2017, 2016 and 2015, include the results of operations of RCB from August 3, 2015 through December 31, 2017. 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, 2017, 2016 and 2015. 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 changes in equity. Revenues and long-lived assets by geographical location: Revenue for the years ended December 31, 2017 , 2016 and 2015 , and long-lived assets held at December 31, 2017 and 2016 , by geographical location (amounts in thousands) were: Years Ended December 31, As of December 31, 2017 2016 2015 2017 2016 Revenues Long-Lived Assets United States $ 553,957 $ 584,816 $ 722,393 $ 41,850 $ 29,598 United Kingdom 81,598 76,301 73,669 2,445 3,417 Others (1) 178,019 169,463 145,956 5,016 5,729 Total $ 813,574 $ 830,580 $ 942,018 $ 49,311 $ 38,744 (1) None of the countries included in "Others" comprise greater than ten percent of the Company's consolidated revenues or long-lived assets. 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 $0.2 million and $3.8 million at December 31, 2017 and 2016 , 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 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 Topic 13A1 of Staff Accounting Bulletin ("SAB") No. 104, “Revenue Recognition” ("Topic 13A1") to account for fee income revenue from its class action claims recovery services. Topic 13A1 requires an analysis to be completed to determine if persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the seller’s price to the buyer is fixed or determinable, and collectability is reasonably assured. Property and equipment: Property and equipment, including improvements that significantly add to the productive capacity or extend useful life, are recorded at cost. Maintenance and repairs are expensed 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 "2020 Notes") and its 3.50% Converitible Notes due 2023 (the "2023 Notes" and, together with the 2020 Notes, the "Notes") in accordance with ASC 470-20, "Debt with Conversion and Other Options" ("ASC 470-20"). ASC 470-20 requires that, for convertible debt instruments that must be settled fully or partially in cash upon conversion, issuers must separately account for the liability and equity components in a manner that will reflect the entity's nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. The excess of the principal amount of the liability component over its carrying amount is amortized to interest expense over the expected life of a similar liability that does not have an associated equity component, using the effective interest method. The equity component is not remeasured as long as it continues to meet the conditions for equity classification under ASC 815-40, "Derivatives and Hedging - Contracts in Entity's Own Equity." Transaction costs incurred with third parties are allocated to the liability and equity components in proportion to the allocation of proceeds and accounted for as debt issuance costs and equity issuance costs, respectively. For diluted earnings per share purposes, based upon the Company's intent and ability to settle conversions of the Notes through a combination of cash and shares, only the conversion spread is included in the diluted earnings per share calculation, if dilutive. Under such method, the settlement of the conversion spread has a dilutive effect when the average share price of the Company's common stock during any quarter exceeds $65.72 for the 2020 Notes or $46.24 for the 2023 Notes, neither of which occurred during the respective periods from when the Notes were issued through December 31, 2017. 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 tax purposes, the Company utilized the cost recovery method of accounting for its finance receivable income through December 31, 2016. Under the cost recovery method, collections on finance receivables are applied first to principal to reduce the finance receivables balance to zero before taxable income is recognized. Beginning with the 2017 tax year, the Company utilizes a new tax accounting method to recognize net finance receivables income. Under the new method, a portion of the annual collections amortize principal and the remaining portion is taxable income. The deferred tax liability related to the difference in timing between the new method and the cost recovery method will be incorporated evenly into the Company’s tax filings over four years. For additional information, see Note 13. Advertising costs: Advertising costs are expensed when incurred. 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 one and three years from the grant date and are expensed on a straight-line basis over the vesting period. Equity share awards that contain a performance metric, are expensed over the requisite service period, generally three years , in accordance with the performance level achieved at each reporting period. See Note 9 for additional information. Derivatives: The Company follows the guidance of ASC Topic 815 "Derivatives and Hedging" ("ASC 815") to account for its derivatives and records derivative financial instruments at fair value on its consolidated balance sheets. The Company's derivative instruments are not designated as hedging instruments under ASC 815. Therefore, both the realized gain or loss and the change in fair value of the instrument are recorded as interest expense in the Company's consolidated financial statements. 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: The Company is subject to various claims and contingencies related to lawsuits, certain taxes, and commitments under contractual and other obligations. The Company recognizes liabilities for contingencies and commitments when a loss is probable and estimable. The Company expenses related legal costs as incurred. For additional information, see Note 14. Estimated fair value of financial instruments: The Company applies the provisions of ASC Topic 820 "Fair Value Measurements and Disclosures" ("ASC 820"). ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also requires the consideration of differing levels of inputs in the determination of fair values. Disclosure of the estimated fair values of financial instruments often requires the use of estimates. See Note 8 for additional information. 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. The guidance specifically excludes revenue received for servicing finance receivables. 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 generated by its subsidiary Claims Compensation Bureau, LLC ("CCB") is within the scope of this standard. Based on the Company's evaluation, the Company believes the new standard will not impact the accounting for revenue generated by CCB. 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 believes ASU 2016-01 will not have a material impact on its financial statements upon adoption in the first quarter of 2018. 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 $51.4 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 adopted ASU 2016-06 in the first quarter of 2017 which had no material impact 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. The standard also requires excess tax benefits to be presented as an operating activity on the statement of |
Finance Receivables, net
Finance Receivables, net | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 and 2016 , were as follows (amounts in thousands): 2017 2016 Balance at beginning of year $ 2,307,969 $ 2,202,113 Acquisitions of finance receivables (1) 1,084,418 938,273 Cash collections applied to principal and net allowance charges (731,802 ) (746,867 ) Foreign currency translation adjustment 111,336 (85,550 ) Balance at end of year $ 2,771,921 $ 2,307,969 (1) Acquisitions of finance receivables are net of buybacks and include certain capitalized acquisition related costs. They also include the acquisition date finance receivable portfolios that are acquired in connection with certain business acquisitions. During the year ended December 31, 2017 , the Company purchased finance receivable portfolios with a face value of $7.5 billion for $1.1 billion . 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 . At December 31, 2017 , the estimated remaining collections ("ERC") on the receivables purchased during the years ended December 31, 2017 and 2016 were $1.6 billion and $1.2 billion , respectively. At December 31, 2017 and 2016 , the total ERC was $5.70 billion and $5.05 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): 2018 $ 809,115 2019 623,030 2020 491,880 2021 388,344 2022 223,179 2023 114,431 2024 54,703 2025 31,287 2026 20,814 2027 11,799 Thereafter 3,339 Total ERC expected to be applied to principal $ 2,771,921 At December 31, 2017 and 2016 , the Company had aggregate net finance receivables balances in pools accounted for under the cost recovery method of $166.6 million and $105.5 million , respectively. Accretable yield represents the amount of income on finance receivables the Company can expect to recognize over the remaining life of its existing portfolios based on estimated future cash flows as of the balance sheet date. Additions represent the original expected accretable yield, on portfolios purchased during the period, to be earned by the Company based on its proprietary analytical 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, 2017 and 2016 were as follows (amounts in thousands): 2017 2016 Balance at beginning of year $ 2,740,006 $ 2,727,204 Income recognized on finance receivables, net (780,803 ) (745,119 ) Additions from portfolio purchases 702,914 720,638 Reclassifications from nonaccretable difference 149,512 41,056 Foreign currency translation adjustment 120,515 (3,773 ) Balance at end of year $ 2,932,144 $ 2,740,006 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, 2017 , 2016 and 2015 (amounts in thousands): 2017 2016 2015 Beginning balance $ 211,465 $ 114,861 $ 86,166 Allowance charges 13,826 100,202 31,974 Reversal of previous recorded allowance charges (1,928 ) (1,723 ) (2,605 ) Net allowance charges 11,898 98,479 29,369 Foreign currency translation adjustment 2,192 (1,875 ) (674 ) Ending balance $ 225,555 $ 211,465 $ 114,861 |
Investments
Investments | 12 Months Ended |
Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments: Investments consisted of the following at December 31, 2017 and 2016 (amounts in thousands): 2017 2016 Available-for-sale Government bonds and mutual funds $ 6,838 $ 2,138 Held-to-maturity Securitized assets 57,204 51,407 Other investments Private equity funds 14,248 14,998 Total investments $ 78,290 $ 68,543 Available-for-Sale Government bonds and mutual funds: The Company's investments in government bonds and mutual funds are classified as available-for-sale and are stated at fair value. Fair value is determined using quoted market prices. Unrealized gains and losses are included in 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 investment, which provides a preferred return based on the expected net income of the portfolios, is 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"). Prior to April 1, 2017, income was recognized using the effective yield method. Effective April 1, 2017, the Company determined that it could not reasonably forecast the timing of future cash flows and accordingly began using the cost recovery method to recognize income. The unrealized loss on this investment in securitized assets was caused by a change in the timing of the estimated cash flows. Total expected cash flows expected on this investment did not change. Therefore, the Company does not consider this investment to be other-than-temporarily impaired at December 31, 2017. 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 was $1.3 million for the year ended December 31, 2017 compared to $6.1 million for the year ended December 31, 2016 . 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. Income is recognized in Other Revenue in the consolidated income statements when distributions, up to reported income, are received from the partnerships. During the year ended December 31, 2017, one of the investments experienced an other-than-temporary impairment which resulted in an impairment charge of $1.7 million . T he aggregate carrying amount of cost-method investments for which cost exceeded fair value but for which an impairment loss was not recognized was $14.2 million and $15.0 million at December 31, 2017 and December 31, 2016 , respectively. The Company evaluates the investments based its our estimated allocable share of the expected remaining cash flows of the funds as reported by the investment manager. Distributions received from these investments were $5.2 million and $2.7 million for 2017 and 2016 , respectively. The amortized cost and estimated fair value of available-for sale and held-to-maturity investments at December 31, 2017 and 2016 were as follows (amounts in thousands): December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value Available-for-sale Government bonds and mutual funds $ 6,758 $ 102 $ 22 $ 6,838 Held-to-maturity Securitized assets 57,204 — 14,249 42,955 December 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value Available-for-sale Government bonds and mutual funds 2,161 — 23 2,138 Held-to-maturity Securitized assets 51,407 4,147 — 55,554 |
Operating Leases
Operating Leases | 12 Months Ended |
Dec. 31, 2017 | |
Leases, Operating [Abstract] | |
Operating Leases | Operating Leases: The Company leases office space and equipment under operating leases. Rental expense was $11.8 million , $12.3 million and $11.3 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. Future minimum lease payments for operating leases at December 31, 2017 , are as follows for the years ending December 31, (amounts in thousands): 2018 $ 11,837 2019 9,556 2020 8,316 2021 6,734 2022 5,418 Thereafter 9,580 Total future minimum lease payments $ 51,441 |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, net | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017, and concluded that no goodwill impairment was necessary. The following table represents the changes in goodwill for the years ended December 31, 2017 and 2016 (amounts in thousands): 2017 2016 Balance at beginning of period: Goodwill $ 506,308 $ 501,553 Accumulated impairment loss (6,397 ) (6,397 ) 499,911 495,156 Changes: Acquisitions — 28,792 Foreign currency translation adjustment 26,602 5,646 Reclassifications to assets held for sale — (29,683 ) Net change in goodwill 26,602 4,755 Balance at end of period: Goodwill 526,513 506,308 Accumulated impairment loss — (6,397 ) $ 526,513 $ 499,911 The change in accumulated impairment loss during the year ended December 31, 2017, was related to the June 2017 sale of PRA Location Services, LLC ("PLS"), the goodwill of which was fully impaired during 2013. The $28.8 million addition to goodwill during the year ended December 31, 2016, was mainly attributable to the acquisition of DTP S.A. ("DTP") and the acquisition of Recovery Management Systems Corporation ("RMSC"). The goodwill recognized from the DTP acquisition is not expected to be deductible for tax purposes, while the goodwill recognized from the RMSC acquisition is expected to be deductible for tax purposes. Intangible assets, excluding goodwill, consisted of the following at December 31, 2017 and 2016 (amounts in thousands): 2017 2016 Gross Accumulated Gross Accumulated Client and customer relationships $ 30,397 $ 10,752 $ 35,936 $ 13,455 Non-compete agreements 1,388 1,118 1,412 667 Trademarks 3,285 1,479 3,315 988 Technology 3,240 1,389 3,102 720 Total $ 38,310 $ 14,738 $ 43,765 $ 15,830 The Company amortizes the intangible assets over the estimated useful lives. Total amortization expense for the years ended December 31, 2017 , 2016 and 2015 was $4.3 million , $6.2 million and $3.7 million , respectively. The Company reviews intangible assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable and the carrying amount exceeds its fair value. The future amortization of intangible assets is estimated to be as follows as of December 31, 2017 for the following years ending December 31, (amounts in thousands): 2018 $ 4,599 2019 4,330 2020 3,661 2021 2,672 2022 2,075 Thereafter 6,235 Total $ 23,572 |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2017 | |
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 $ 373,206 $ 695,088 Term loans 764,830 430,764 European revolving credit 476,609 401,780 Convertible senior notes 632,500 287,500 2,247,145 1,815,132 Less: Debt discount and issuance costs (76,963 ) (31,031 ) Total $ 2,170,182 $ 1,784,101 The following principal payments are due on the Company's borrowings at December 31, 2017 for the years ending December 31, (amounts in thousands): 2018 $ 10,000 2019 10,000 2020 297,500 2021 806,439 2022 778,206 Thereafter 345,000 Total $ 2,247,145 Following the receipt of the covenant waiver during the fourth quarter of 2017 as discussed in the European Revolving Credit Facility and Term Loan section below, the Company believes it was in compliance with the covenants of its financing arrangements as of December 31, 2017 and 2016 . North American Revolving Credit and Term Loan On May 5, 2017, the Company amended and restated its existing credit agreement (as amended, and modified from time to time, the “North American Credit Agreement”) with Bank of America, N.A., as administrative agent, Bank of America, National Association, acting through its Canada branch, as the Canadian administrative agent, and a syndicate of lenders named therein. The total credit facility under the North American Credit Agreement includes an aggregate principal amount of $ 1.2 billion (subject to compliance with a borrowing base and applicable debt covenants), which consists of (i) a fully-funded $445.0 million term loan, (ii) a $705.0 million domestic revolving credit facility and (iii) a $50.0 million Canadian revolving credit facility. The facility includes an accordion feature for up to $45.0 million in additional commitments (at the option of the lender) and also provides for up to $25.0 million of letters of credit and a $25.0 million swingline loan sublimit that would reduce amounts available for borrowing. The term and revolving loans accrue interest, at the option of the Company, at either the base rate or the Eurodollar rate (as defined in the North American Credit Agreement) for the applicable term plus 2.50% per annum in the case of the Eurodollar rate loans and 1.50% in the case of the base rate loans. The base rate is the highest of (a) the Federal Funds Rate (as defined in the North American Credit Agreement) plus 0.50% , (b) Bank of America's prime rate or (c) the one month Eurodollar rate plus 1.00% . Canadian Prime Rate Loans bear interest at a rate per annum equal to the Canadian Prime Rate plus 1.50% . The loans under the North American Credit Agreement mature as of May 5, 2022. As of December 31, 2017 , the unused portion of the North American Credit Agreement was $381.8 million . Considering borrowing base restrictions, as of December 31, 2017 , the amount available to be drawn was $353.1 million . The North American Credit Agreement is secured by a first priority lien on substantially all of the Company's assets. The North American Credit Agreement contains restrictive covenants and events of default, which are defined in the agreement, including the following: • borrowings under each of the domestic revolving loan facility and the Canadian revolving loan facility are subject to separate borrowing base calculations and may not exceed 35% of the ERC of all domestic or Canadian, as applicable, core eligible asset pools, plus 55% of ERC of domestic or Canadian, as applicable, insolvency eligible asset pools, plus 75% of domestic or Canadian, as applicable, eligible accounts receivable; • the consolidated total leverage ratio cannot exceed 2.75 to 1.0 as of the end of any fiscal quarter; • the consolidated senior secured leverage ratio cannot exceed 2.25 to 1.0 as of the end of any fiscal quarter; • subject to no default or event of default, cash dividends and distributions during any fiscal year cannot exceed $20.0 million ; • subject to no default or event of default, stock repurchases during any fiscal year cannot exceed $100.0 million plus 50% of the prior year's net income; • permitted acquisitions during any fiscal year cannot exceed $250.0 million (with a $50.0 million per year sublimit for permitted acquisitions by non-loan parties); • indebtedness in the form of senior, unsecured convertible notes or other unsecured financings cannot exceed $750.0 million in the aggregate (without respect to the 2020 Notes); • the Company must maintain positive consolidated income from operations during any fiscal quarter; and • restrictions on changes in control. The 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 the dates indicated (dollar amounts in thousands): December 31, 2017 December 31, 2016 Amount Outstanding Weighted Average Interest Rate Amount Outstanding Weighted Average Interest Rate Term loan $ 445,000 4.07 % $ 150,000 3.27 % Revolving facility 373,206 4.05 695,088 3.28 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 Credit Agreement, the credit facility includes an aggregate amount of approximately $1.2 billion (subject to the borrowing base), of which 267.0 million EURO (approximately $319.8 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, is payable monthly in arrears, and matures on February 19, 2021. The European Credit Agreement includes an overdraft facility in the aggregate amount of $40.0 million (subject to the borrowing base), which accrues interest (per currency) at the daily rates as published by the facility agent, bears a facility line fee of 0.125% per quarter, payable quarterly in arrears, and also matures February 19, 2021. As of December 31, 2017 , the unused portion of the European Credit Agreement (including the overdraft facility) was $463.4 million . Considering borrowing base restrictions and other covenants, as of December 31, 2017 , the amount available to be drawn under the European Credit Agreement (including the overdraft facility) was $157.0 million . The European Credit Agreement is secured by the shares of most of the Company's European subsidiaries and all intercompany loan receivables in Europe. The European Credit Agreement also contains restrictive covenants and events of default, which are defined in the European Credit Agreement, including the following: • the LTV Ratio cannot exceed 75% ; • the GIBD Ratio in Europe cannot exceed 3.25 to 1.0 as of the end of any fiscal quarter; • interest bearing deposits in AK Nordic AB cannot exceed SEK 1,500,000,000 ; and • PRA Europe's cash collections must exceed 95% of Europe's ERC for the same set of portfolios, measured on a quarterly basis. During the fourth quarter of 2017, the Company was in a position to purchase a portfolio that would have violated the Approved Loan Portfolio covenant in its European Credit Agreement. Accordingly, the Company requested and was granted a waiver by the lenders prior to purchasing the portfolio. Subsequently, in the first quarter of 2018, the Company entered into the Fourth Amendment and Restatement Agreement (the "Fourth Amendment") to its European Credit Agreement which, among other things, expanded the scope of loan portfolios that constitute Approved Loan Portfolios (as defined in the Fourth Amendment). Additionally, other changes to the European Credit Agreement resulting from the Fourth Amendment include: reduced all applicable margins for the interest payable under the multicurrency revolving credit facility by 15 basis points; reduced all applicable margins for the interest payable under the term loan facility by 50 basis points, subject to the lenders’ right to increase the applicable margin by up to 50 basis points if one or more of the lenders elects to syndicate and/or transfer its commitment under the term loan in accordance with the terms of the Fourth Amendment; reduced the maximum permitted amount of interest bearing deposits in AK Nordic AB from SEK 1,500,000,000 to SEK 1,200,000,000 ; and revised the definitions of ERC and LTV Ratio. Information on the outstanding balances and weighted average interest rates by type of borrowing under the European Credit Agreement as the dates indicated (dollar amounts in thousands): December 31, 2017 December 31, 2016 Amount Outstanding Weighted Average Interest Rate Amount Outstanding Weighted Average Interest Rate Term loan $ 319,830 4.25 % $ 280,764 4.25 % Revolving facility 476,609 5.01 401,780 5.34 Convertible Senior Notes due 2020 On August 13, 2013, the Company completed the private offering of $287.5 million in aggregate principal amount of its 2020 Notes. The 2020 Notes were issued pursuant to an Indenture, dated August 13, 2013 (the "2013 Indenture"), between the Company and Regions Bank, as successor trustee. The 2013 Indenture contains customary terms and covenants, including certain events of default after which the 2020 Notes may be due and payable immediately. The 2020 Notes are senior unsecured obligations of the Company. Interest on the 2020 Notes is payable semi-annually, in arrears, on February 1 and August 1 of each year, beginning on February 1, 2014. Prior to February 1, 2020, the 2020 Notes will be convertible only upon the occurrence of specified events. On or after February 1, 2020, the 2020 Notes will be convertible at any time. The Company does not have the right to redeem the 2020 Notes prior to maturity. As of December 31, 2017 and December 31, 2016 , none of the conditions allowing holders of the 2020 Notes to convert their notes had occurred. The conversion rate for the 2020 Notes is initially 15.2172 shares per $1,000 principal amount of 2020 Notes, which is equivalent to an initial conversion price of approximately $65.72 per share of the Company's common stock, and is subject to adjustment in certain circumstances pursuant to the 2013 Indenture. Upon conversion, holders of the 2020 Notes will receive cash, shares of the Company's common stock or a combination of cash and shares of the Company's common stock, at the Company's election. The Company's current intent is to settle conversions through combination settlement (i.e ., the 2020 Notes would be converted into cash up to the aggregate principal amount, and shares of the Company's common stock or a combination of cash and shares of the Company's common stock, at the Company's election, for the remainder). As a result and in accordance with authoritative guidance related to derivatives and hedging and earnings per share, only the conversion spread is included in the diluted earnings per share calculation, if dilutive. Under such method, the settlement of the conversion spread has a dilutive effect when the average share price of the Company's common stock during any quarter exceeds $65.72 . The Company determined that the fair value of the 2020 Notes at the date of issuance was approximately $255.3 million , and designated the residual value of approximately $32.2 million as the equity component. Additionally, the Company allocated approximately $7.3 million of the $8.2 million 2020 Notes issuance cost as debt issuance cost and the remaining $0.9 million as equity issuance cost. Convertible Senior Notes due 2023 On May 26, 2017, the Company completed the private offering of $345.0 million in aggregate principal amount of its 2023 Notes. The 2023 Notes were issued pursuant to an Indenture, dated May 26, 2017 (the "2017 Indenture"), between the Company and Regions Bank, as trustee. The 2017 Indenture contains customary terms and covenants, including certain events of default after which the 2023 Notes may be due and payable immediately. The 2023 Notes are senior unsecured obligations of the Company. Interest on the 2023 Notes is payable semi-annually, in arrears, on June 1 and December 1 of each year, beginning on December 1, 2017. Prior to March 1, 2023, the 2023 Notes will be convertible only upon the occurrence of specified events. On or after March 1, 2023, the 2023 Notes will be convertible at any time. The Company has the right, at its election, to redeem all or any part of the outstanding notes at any time on or after June 1, 2021 for cash, but only if the last reported sale price (as defined in the 2017 Indenture) exceeds 130% of the conversion price on each of at least 20 trading days during the 30 consecutive trading days ending on and including the trading day immediately before the date the Company sends the related redemption notice. As of December 31, 2017 , none of the conditions allowing holders of the 2023 Notes to convert their notes had occurred. The conversion rate for the 2023 Notes is initially 21.6275 shares per $1,000 principal amount of 2023 Notes, which is equivalent to an initial conversion price of approximately $46.24 per share of the Company's common stock, and is subject to adjustment in certain circumstances pursuant to the 2017 Indenture. Upon conversion, holders of the 2023 Notes will receive cash, shares of the Company's common stock or a combination of cash and shares of the Company's common stock, at the Company's election. The Company's current intent is to settle conversions through combination settlement (i.e ., the 2023 Notes would be converted into cash up to the aggregate principal amount, and shares of the Company's common stock or a combination of cash and shares of the Company's common stock, at the Company's election, for the remainder). As a result and in accordance with authoritative guidance related to derivatives and hedging and earnings per share, only the conversion spread is included in the diluted earnings per share calculation, if dilutive. Under such method, the settlement of the conversion spread has a dilutive effect when the average share price of the Company's common stock during any quarter exceeds $46.24 . The Company determined that the fair value of the 2023 Notes at the date of issuance was approximately $298.8 million , and designated the residual value of approximately $46.2 million as the equity component. Additionally, the Company allocated approximately $8.3 million of the $9.6 million 2023 Notes issuance cost as debt issuance cost and the remaining $1.3 million as equity issuance cost. The balances of the liability and equity components of the Notes outstanding were as follows as of the dates indicated (amounts in thousands): December 31, December 31, Liability component - principal amount $ 632,500 $ 287,500 Unamortized debt discount (55,537 ) (17,930 ) Liability component - net carrying amount $ 576,963 $ 269,570 Equity component $ 76,216 $ 31,306 The debt discount is being amortized into interest expense over the remaining life of the 2020 Notes and the 2023 Notes using the effective interest rate, which is 4.92% and 6.20% , respectively. Interest expense related to the Notes was as follows for the years ended December 31, 2017 , 2016 and 2015 (amounts in thousands): 2017 2016 2015 Interest expense - stated coupon rate $ 15,870 $ 8,625 $ 8,625 Interest expense - amortization of debt discount 8,583 4,472 4,260 Total interest expense - convertible senior notes $ 24,453 $ 13,097 $ 12,885 Interest Expense, Net The Company incurs interest expense on its borrowings, interest-bearing deposits, and interest rate swap agreements. The Company earns interest income on certain of its cash and cash equivalents and its interest rate swap agreements. Interest expense, net, was as follows for the years ended December 31, 2017, 2016, and 2015 (amounts in thousands): 2017 2016 2015 Interest expense $ 103,653 $ 85,911 $ 62,411 Interest (income) (5,612 ) (5,047 ) (2,075 ) Interest expense, net $ 98,041 $ 80,864 $ 60,336 |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 and 2016 (amounts in thousands): 2017 2016 Software $ 51,065 $ 53,793 Computer equipment 19,260 19,594 Furniture and fixtures 15,560 13,607 Equipment 9,643 12,065 Leasehold improvements 14,778 13,644 Building and improvements 7,409 7,323 Land 1,296 1,296 Accumulated depreciation and amortization (80,967 ) (82,578 ) Assets in process 11,267 — Property and equipment, net $ 49,311 $ 38,744 Depreciation and amortization expense relating to property and equipment for the years ended December 31, 2017 , 2016 and 2015 was $15.4 million , $18.2 million and $16.2 million , respectively. |
Fair Value Measurements And Dis
Fair Value Measurements And Disclosures | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 and December 31, 2016 (amounts in thousands): December 31, 2017 December 31, 2016 Carrying Estimated Carrying Estimated Financial assets: Cash and cash equivalents $ 120,516 $ 120,516 $ 94,287 $ 94,287 Held-to-maturity investments 57,204 42,955 51,407 55,554 Other investments 14,248 8,820 14,998 12,573 Finance receivables, net 2,771,921 3,060,907 2,307,969 2,708,582 Financial liabilities: Interest-bearing deposits 98,580 98,580 76,113 76,113 Revolving lines of credit 849,815 849,815 1,096,868 1,096,868 Term loans 764,830 764,830 430,764 430,764 Convertible senior notes 576,963 620,079 269,570 270,825 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 the 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 cannot be redeemed with the funds. Instead, the nature of the investments in this class is that distributions are received through the liquidation of the underlying assets of the fund. The fair value of the Company's interest is valued 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 6 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. Convertible notes: The Notes are carried at historical cost, adjusted for the debt discount. The fair value estimates for the Notes incorporate quoted market prices which were obtained from secondary market broker quotes which were derived from a variety of inputs including client orders, information from their pricing vendors, modeling software, and actual trading prices when they occur. Accordingly, the Company uses Level 2 inputs for its fair value estimates. Furthermore, in the table above, carrying amount represents the portion of the Notes classified as debt, while estimated fair value pertains to the face amount of the Notes. Financial Instruments Required To Be Carried At Fair Value The carrying amounts in the following table are measured at fair value on a recurring basis in the accompanying consolidated balance sheets at December 31, 2017 and 2016 (amounts in thousands): Fair Value Measurements as of December 31, 2017 Level 1 Level 2 Level 3 Total Assets: Available-for-sale investments $ 6,838 $ — $ — $ 6,838 Liabilities: Interest rate swap contracts (recorded in accrued expenses) — 1,108 — 1,108 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 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. 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, 2017 | |
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 $8.7 million , $6.1 million and $16.3 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. With the adoption of ASU 2016-09 in the first quarter of 2017, the Company now recognizes all excess tax benefits and tax deficiencies in the income statement when the awards vest or are settled. Prior to 2017, tax benefits resulting from tax deductions in excess of share-based compensation expense (windfall tax benefits) recognized under the provisions of ASC 718 were credited to additional paid-in capital. Realized tax shortfalls, if any, were 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 $3.2 million , $2.7 million and $8.9 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. Nonvested Shares As of December 31, 2017 , total future compensation expense related to grants of nonvested share grants to employees and directors (not including nonvested shares granted under the Long-Term Incentive ("LTI") program), is estimated to be $5.4 million with a weighted average remaining life for all nonvested shares of 1.2 years . Grants made to key employees and directors of the Company were assumed to have no forfeiture rates associated with them due to the historically low turnover among this group. With the exception of the grants made pursuant to the LTI program and a few employee and director grants, the nonvested shares vest ratably generally over one to three years and are expensed over their vesting period. The following summarizes all nonvested share transactions, excluding those related to the LTI program, from December 31, 2014 through December 31, 2017 (amounts in thousands, except per share amounts): Nonvested Shares Weighted-Average 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 Granted 195 33.70 Vested (173 ) 37.49 Canceled (27 ) 43.05 December 31, 2017 298 $ 35.25 The total grant date fair value of shares vested, excluding those granted under the LTI program, during the years ended December 31, 2017 , 2016 and 2015 , was $6.5 million , $5.7 million and $6.4 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, 2014 through December 31, 2017 (amounts in thousands, except per share amounts): Nonvested LTI Shares Weighted-Average 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 Granted at target level 192 33.50 Adjustments for actual performance 5 60.00 Vested (51 ) 40.80 Canceled (99 ) 20.91 December 31, 2017 472 $ 41.06 The total grant date fair value of LTI shares vested during the years ended December 31, 2017 , 2016 and 2015 , was $2.1 million , $6.1 million and $5.1 million , respectively. At December 31, 2017 , total future compensation expense, assuming the current estimated performance levels are achieved, related to nonvested shares granted under the LTI program is estimated to be approximately $2.9 million . The Company assumed a 15.0% forfeiture rate for these grants and the remaining shares have a weighted average life of 1.4 years at December 31, 2017 . |
Earnings per Share
Earnings per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share: Basic earnings per share ("EPS") are computed by dividing net income available to common stockholders of PRA Group, Inc. by weighted average common shares outstanding. Diluted EPS are computed using the same components as basic EPS with the denominator adjusted for the dilutive effect of the Notes and nonvested share awards, if dilutive. For the Notes, only the conversion spread is included in the diluted EPS calculation, if dilutive. Under such method, the settlement of the conversion spread has a dilutive effect when the average share price of the Company's common stock during any quarter exceeds $65.72 for the 2020 Notes or $46.24 for the 2023 Notes, neither of which occurred during the respective periods from which the Notes were issued through December 31, 2017 . Share-based awards that are contingent upon the attainment of performance goals are included in the computation of diluted EPS if the effect is dilutive. The dilutive effect of nonvested shares is computed using the treasury stock method, which assumes any proceeds that could be obtained upon the vesting of nonvested shares would be used to purchase common shares at the average market price for the period. The following table provides a reconciliation between the computation of basic EPS and diluted EPS for the years ended December 31, 2017 , 2016 and 2015 (amounts in thousands, except per share amounts): 2017 2016 2015 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 $ 162,265 45,671 $ 3.55 $ 85,097 46,316 $ 1.84 $ 167,926 48,128 $ 3.49 Dilutive effect of nonvested share awards 152 (0.01 ) 72 (0.01 ) 277 (0.02 ) Diluted EPS $ 162,265 45,823 $ 3.54 $ 85,097 46,388 $ 1.83 $ 167,926 48,405 $ 3.47 There were no antidilutive options outstanding as of December 31, 2017 , 2016 and 2015 . |
Derivatives
Derivatives | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives: Based on the guidance of ASC Topic 815 "Derivatives and Hedging" ("ASC 815"), the Company records derivative financial instruments at fair value on its consolidated balance sheets. The Company's derivative instruments are not designated as hedging instruments under ASC 815. Therefore, both the realized gain or loss and the change in fair value of the instrument are recorded as interest expense in the Company's consolidated financial statements. During the years ended December 31, 2017 , 2016 and 2015 , the Company recorded $0.5 million , $2.8 million and $4.9 million respectively, in interest expense related to its interest rate swaps in its consolidated income statements. 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 European Union euro, Great British pound, Norwegian kroner, Swedish kroner, and Polish zloty. At December 31, 2017 and 2016 , approximately 48% and 57% , respectively, of the net borrowings of PRA Europe was hedged, reducing the related interest rate risk. The following table sets forth the fair value amounts of the derivative instruments not designated as hedging instruments as of December 31, 2017 and 2016 (amounts in thousands): 2017 2016 Asset Derivatives Liability Derivatives Asset Derivatives Liability Derivatives Interest rate swap contracts $ — $ 1,108 $ — $ 2,825 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders' Equity: On October 22, 2015 , the Company's board of directors authorized a 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, 2017, the Company purchased 1,311,200 shares of its common stock under the plan at an average price of $34.25 per share which concluded the plan. No shares were purchased during the year ended December 31, 2016. During the year ended December 31, 2015, the Company purchased 2,072,721 shares of its common stock under the plan at an average price of $38.60 per share. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes: The income tax expense/(benefit) recognized for the years ended December 31, 2017 , 2016 and 2015 is comprised of the following (amounts in thousands): Federal State Foreign Total For the year ended December 31, 2017: Current tax expense $ 77,656 $ 16,543 $ 25,087 $ 119,286 Deferred tax (benefit) (112,118 ) (2,051 ) (16,653 ) (130,822 ) Total income tax expense/(benefit) $ (34,462 ) $ 14,492 $ 8,434 $ (11,536 ) 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 On December 22, 2017, the United States government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code, including, but not limited to the following provisions which are most relevant the Company, (1) reducing the U.S. federal corporate tax rate from 35 percent to 21 percent; (2) requiring companies to pay a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries; (3) generally eliminating U.S. federal income taxes on dividends from foreign subsidiaries; (4) requiring a current inclusion in U.S. federal taxable income of certain earnings of controlled foreign corporations referred to as Global Intangible Low-Taxed Income (“GILTI”); (5) creating the base erosion anti-abuse tax, a new minimum tax; (6) creating a new limitation on deductible interest expense; and (7) increased limitations on the deductibility of executive compensation. The Company has not completed its accounting for the income tax effects of the Tax Act. Where the Company has been able to make reasonable estimates of the effects for which its analysis is not yet complete, the Company has recorded provisional amounts in accordance with SEC Staff Accounting Bulletin No. 118. Where the Company has not yet been able to make reasonable estimates of the impact of certain elements, the Company has not recorded any amounts related to those elements and has continued accounting for them in accordance with ASC 740 on the basis of the tax laws in effect immediately prior to the enactment of the Tax Act. The Company’s accounting for the following elements of the Tax Act is incomplete. However, the Company was able to make reasonable estimates of certain effects and, therefore, has recorded provisional amounts as follows: • Revaluation of deferred tax assets and liabilities: The Tax Act reduces the U.S. federal corporate tax rate from 35% to 21% for tax years beginning after December 31, 2017. In addition, the Tax Act makes certain changes to the depreciation rules and implements new limits on the deductibility of certain executive compensation. The Company has evaluated these changes and has recorded a provisional decrease to net deferred tax liabilities of $73.8 million with a corresponding increase to deferred tax benefit. The Company is still completing its calculation of the impact of these changes in its deferred tax balances. • Transition Tax on unrepatriated foreign earnings: The Transition Tax on unrepatriated foreign earnings is a tax on previously untaxed accumulated and current earnings and profits (“E&P”) of the Company’s foreign subsidiaries. To determine the amount of the Transition Tax, the Company must determine, among other factors, the amount of post-1986 E&P of its foreign subsidiaries, as well as the amount of non-U.S. income tax paid on such earnings. The Company was able to make a reasonable estimate of the Transition Tax and has provisionally recorded no Transition Tax expense. The Company is continuing to gather additional information to more precisely compute the amount of the Transition Tax to complete its calculation of E&P as well as the final determination of non-U.S. income taxes paid. The Company’s accounting for the following elements of the Tax Act is incomplete, and it has not yet been able to make reasonable estimates of certain effects of these items. Therefore, no provisional amounts were recorded. • GILTI: The Tax Act creates a new requirement that certain income (i.e., GILTI) earned by foreign subsidiaries must be included currently in the gross income of the U.S. shareholder. Due to the complexity of the new GILTI tax rules, the Company is continuing to evaluate the provision of the Tax Act and the application of ASC 740. Under U.S. GAAP, the Company is permitted to make an accounting policy election to either treat taxes due on future inclusions in U.S. taxable income related to GILTI as a current-period expense when incurred or to factor such amounts into the Company’s measurement of its deferred taxes. The Company has not yet completed its analysis of GILTI tax rules and is not yet able to reasonably estimate the effect of this provision of the Tax Act. Therefore, the Company has not recorded any amounts related to potential GILTI tax in its financial statements and has not yet made a policy decision regarding whether to record deferred taxes on GILTI. • Indefinite reinvestment assertion: Beginning in 2018, the Tax Act provides a 100% deduction for dividends received from ten percent owned foreign corporations by U.S. corporate shareholders, subject to a one-year holding period. Although dividend income will now be exempt from U.S. federal tax in the hands of U.S. corporate shareholders, companies must still apply the guidance of ASC 740-30-25-28 to account for the tax consequences of outside basis differences and other tax impacts of their investments in non-U.S. subsidiaries. While the Company has provisionally determined that it owes no Transition Tax on the untaxed E&P of the Company's foreign subsidiaries, the Company was unable to determine a reasonable estimate of the remaining tax liability, if any, under the Tax Act for its remaining outside basis differences or evaluate how the Tax Act will affect the Company’s existing accounting position to indefinitely reinvest unremitted foreign earnings. Therefore, the Company has not included a provisional amount for this item in its financial statements for 2017. The Company will record amounts as needed for this item beginning in the first reporting period during the measurement period in which the Company obtains necessary information and is able to prepare a reasonable estimate. A reconciliation of the Company's expected tax expense at the statutory federal tax rate to actual tax expense/(benefit) for the years ended December 31, 2017 , 2016 and 2015 is as follows (amounts in thousands): 2017 2016 2015 Income tax expense at statutory federal rates $ 55,139 $ 46,929 $ 90,133 State tax expense, net of federal tax benefit 9,072 3,696 5,719 Foreign rate difference (4,681 ) (7,839 ) (9,495 ) Federal rate change (73,779 ) — — Other 2,713 405 3,034 Total income tax (benefit)/expense $ (11,536 ) $ 43,191 $ 89,391 The Company recognized a net deferred tax liability of $113.7 million and $229.9 million as of December 31, 2017 and 2016 , respectively. The components of the net deferred tax liability are as follows (amounts in thousands): 2017 2016 Deferred tax assets: Employee compensation $ 5,190 $ 9,120 Net operating loss carryforward 42,332 48,298 Accrued liabilities 2,750 5,136 Interest 11,027 10,596 Finance receivable revenue recognition - international 27,835 8,274 Other 9,165 6,154 Total deferred tax asset 98,299 87,578 Deferred tax liabilities: Depreciation expense 15,417 7,610 Intangible assets and goodwill 8,856 10,625 Convertible debt 14,645 6,955 Finance receivable revenue recognition - IRS settlement 117,026 — Finance receivable revenue recognition - domestic 16,957 239,337 Other — 893 Total deferred tax liability 172,901 265,420 Net deferred tax liability before valuation allowance 74,602 177,842 Valuation allowance 39,054 52,021 Net deferred tax liability $ 113,656 $ 229,863 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, 2017 and 2016 , the valuation allowance, relating mainly to net operating losses, capital losses and deferred interest expense in Norway, Brazil, UK and Luxembourg, was $39.1 million and $52.0 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 utilized the cost recovery method of accounting for its finance receivable income through December 31, 2016. Under the cost recovery method, collections on finance receivables are applied first to principal to reduce the finance receivables balance to zero before taxable income is recognized. The Internal Revenue Service ("IRS") examined the Company's 2005 through 2012 tax returns and asserted that tax revenue recognition using the cost recovery method did not clearly reflect taxable income and therefore issued Notices of Deficiency to the Company for tax years ended December 31, 2005 through 2012 (the "Notices"). In response to the Notices, the Company filed petitions in the U.S. Tax Court (the “Tax Court”) challenging the deficiencies and the Tax Court set the trial to begin on May 15, 2017. On May 10, 2017, the Company reached a settlement with the IRS in regards to the Notices. Under the settlement, both parties agreed that no amounts were due for years 2005 through 2012 and the Tax Court entered decisions to that effect on June 22, 2017. Also, under the settlement, the Company will utilize a new tax accounting method to recognize net finance receivables revenue effective with tax year 2017. Under the new method, a portion of the annual collections amortize principal and the remaining portion is taxable income. The Company will not be required to pay any interest or penalties related to the prior periods. The deferred tax liability related to the difference in timing between the new method and the cost recovery method will be incorporated evenly into the Company’s tax filings over four years. ASC 740 requires the recognition of interest if the tax law would require interest to be paid on the underpayment of taxes, and recognition of penalties if a tax position does not meet the minimum statutory threshold to avoid payment of penalties. The Company believes it has sufficient support for the technical merits of its positions and that it is more likely than not these positions will be sustained. Accordingly, the Company has not accrued for interest or penalties on any of its tax positions. At December 31, 2017 , the tax years subject to examination by the major federal, state and international taxing jurisdictions are 2013 and subsequent years. As of December 31, 2017 , the cumulative unremitted earnings of the Company's foreign subsidiaries are approximately $23.8 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 $3.3 million and $3.7 million of net operating loss carryforwards net of valuation allowances as of December 31, 2017 and 2016 , 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, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies : Employment Agreements: The Company has entered into employment agreements with all of its U.S. executive officers and with several members of its U.S. senior management group. Such agreements provide for base salary payments as well as potential discretionary bonuses that are based on the attainment of a combination of financial and management goals. As of December 31, 2017 , estimated future compensation under these agreements was approximately $21.9 million . The agreements also contain confidentiality and non-compete provisions. Outside the U.S., employment agreements are in place with employees pursuant to local country regulations. Generally, these agreements do not have expiration dates and therefore it is impractical to estimate the amount of future compensation under these agreements. Accordingly, the future compensation under these agreements is not included in the $21.9 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, 2017 totaled approximately $51.4 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, 2017 was approximately $203.2 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 accrues for potential liability arising from legal proceedings and regulatory matters when it is probable that such liability has been incurred and the amount of the loss can be reasonably estimated. This determination is based upon currently available information for those proceedings in which the Company is involved, taking into account the Company's best estimate of such losses for those cases for which such estimates can be made. The Company's estimate involves significant judgment, given the varying stages of the proceedings (including the fact that many of them are currently in preliminary stages), the number of unresolved issues in many of the proceedings (including issues regarding class certification and the scope of many of the claims), and the related uncertainty of the potential outcomes of these proceedings. In making determinations of the likely outcome of pending litigation, the Company considers many factors, including, but not limited to, the nature of the claims, the Company's experience with similar types of claims, the jurisdiction in which the matter is filed, input from outside legal counsel, the likelihood of resolving the matter through alternative mechanisms, the matter's current status and the damages sought or demands made. Accordingly, the Company's estimate will change from time to time, and actual losses could be more than the current estimate. The Company believes that the estimate of the aggregate range of reasonably possible losses in excess of the amount accrued for its legal proceedings outstanding at December 31, 2017 , where the range of loss can be estimated, was not material. In certain legal proceedings, the Company may have recourse to insurance or third-party contractual indemnities to cover all or portions of its litigation expenses, judgments, or settlements. Loss estimates and accruals for potential liability related to legal proceedings are typically exclusive of potential recoveries, if any, under the Company's insurance policies or third-party indemnities. The Company recorded $4.0 million in potential recoveries under the Company's insurance policies or third-party indemnities as of December 31, 2017 . The matters described below fall outside of the normal parameters of the Company's routine legal proceedings. Multi-State Investigation The Company previously received Civil Investigative Demands from multiple state Attorneys General offices broadly relating to its debt collection practices in the U.S. The Company, which has fully cooperated with the investigation, has discussed potential resolution of the investigation with this coalition of Attorneys General, which could include penalties, restitution and/or the adoption of new practices and controls in the conduct of the Company's business. In these discussions, the state Attorneys General offices have taken positions with which the Company disagrees. If the Company is unable to resolve its differences with this multi-state coalition, it is possible that individual state Attorneys General offices may file claims against the Company. The range of loss, if any, cannot be estimated at this time. Internal Revenue Service Audit The IRS examined the Company's 2005 through 2012 tax returns and asserted that tax revenue recognition using the cost recovery method for its finance receivable income did not clearly reflect taxable income and therefore issued Notices to the Company for tax years ended December 31, 2005 through 2012. In response to the Notices, the Company filed petitions in the Tax Court challenging the deficiencies and the Tax Court set the trial to begin on May 15, 2017. On May 10, 2017, the Company reached a settlement with the IRS in regards to the Notices. Under the settlement, both parties agreed that no amounts were due for years 2005 through 2012 and the Tax Court entered decisions to that effect on June 22, 2017. Also, under the settlement, the Company agreed to utilize a new tax accounting method to recognize net finance receivables revenue effective with tax year 2017. Under the new method, a portion of the annual collections will amortize principal and the remaining portion will be considered taxable income. The Company will not be required to pay any interest or penalties related to the prior periods. The deferred tax liability related to the difference in timing between the new method and the prior method will be incorporated evenly into the Company’s tax filings over four years. Iris Pounds v. Portfolio Recovery Associates, LLC On November 21, 2016, Iris Pounds filed suit against the Company in Durham County, North Carolina alleging violations of the North Carolina Prohibited Practices by Collection Agencies Act. The purported class consists of all individuals against whom the Company had obtained a judgment by default in North Carolina on or after October 1, 2009. The Company removed the matter to the United States District Court for the Middle District of North Carolina, and has filed a motion to dismiss. The range of loss, if any, cannot be estimated at this time due to the uncertainty surrounding liability, class certification and the interpretation of statutory damages. |
Retirement Plans
Retirement Plans | 12 Months Ended |
Dec. 31, 2017 | |
Defined Contribution Plan [Abstract] | |
Retirement Plans | Retirement Plans: The Company sponsors defined contribution plans both in the U.S. and Europe. The U.S. plan is organized as a 401(k) plan under which all employees over eighteen years of age are eligible to make voluntary contributions to the plan up to 100% of their compensation, subject to IRS limitations, after completing six months of service, as defined in the plan. The Company makes matching contributions of up to 4% of an employee's salary. For the defined contribution plans in Europe, the Company pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. Total compensation expense related to the Company's contributions was $5.2 million , $5.1 million and $4.3 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interest | 12 Months Ended |
Dec. 31, 2017 | |
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 operations of the Fund. The noncontrolling shareholders have the right to redeem their ownership interests at the current net asset value subject to certain conditions. Redeemable noncontrolling interest presented in temporary equity on the consolidated balance sheets, represents the interest not owned by the Company and is stated at the greater of the original invested capital or redemption amount. Net income attributable to the redeemable noncontrolling interest is stated separately in the Company's consolidated income statements. |
Sale of Subsidiaries
Sale of Subsidiaries | 12 Months Ended |
Dec. 31, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Sale of Subsidiaries | Sale of Subsidiaries: As part of the Company’s strategy to focus on its primary business of the purchase, collection and management of portfolios of nonperforming loans, 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. 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 was reported in the first quarter of 2017. The gain on sale was approximately $46.8 million . On June 30, 2017, the Company sold its vehicle location, skip tracing and collateral recovery business, PLS, for $4.5 million which resulted in a gain on sale of approximately $1.6 million . The assets and liabilities of the businesses that were sold during the year ended December 31, 2017 consisted of the following (amounts in thousands): 2017 Other receivables, net $ 8,277 Property and equipment, net 4,559 Goodwill 29,683 Intangible assets, net 1,711 Other assets 772 Total assets $ 45,002 Accrued expenses $ 3,123 Total liabilities $ 3,123 |
General and Summary of Signif25
General and Summary of Significant Accounting Policies (Policy) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
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 changes in 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 $0.2 million and $3.8 million at December 31, 2017 and 2016 , 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 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 Topic 13A1 of Staff Accounting Bulletin ("SAB") No. 104, “Revenue Recognition” ("Topic 13A1") to account for fee income revenue from its class action claims recovery services. Topic 13A1 requires an analysis to be completed to determine if persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the seller’s price to the buyer is fixed or determinable, and collectability is reasonably assured. |
Property and equipment | Property and equipment: Property and equipment, including improvements that significantly add to the productive capacity or extend useful life, are recorded at cost. Maintenance and repairs are expensed 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 "2020 Notes") and its 3.50% Converitible Notes due 2023 (the "2023 Notes" and, together with the 2020 Notes, the "Notes") in accordance with ASC 470-20, "Debt with Conversion and Other Options" ("ASC 470-20"). ASC 470-20 requires that, for convertible debt instruments that must be settled fully or partially in cash upon conversion, issuers must separately account for the liability and equity components in a manner that will reflect the entity's nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. The excess of the principal amount of the liability component over its carrying amount is amortized to interest expense over the expected life of a similar liability that does not have an associated equity component, using the effective interest method. The equity component is not remeasured as long as it continues to meet the conditions for equity classification under ASC 815-40, "Derivatives and Hedging - Contracts in Entity's Own Equity." Transaction costs incurred with third parties are allocated to the liability and equity components in proportion to the allocation of proceeds and accounted for as debt issuance costs and equity issuance costs, respectively. For diluted earnings per share purposes, based upon the Company's intent and ability to settle conversions of the Notes through a combination of cash and shares, only the conversion spread is included in the diluted earnings per share calculation, if dilutive. Under such method, the settlement of the conversion spread has a dilutive effect when the average share price of the Company's common stock during any quarter exceeds $65.72 for the 2020 Notes or $46.24 for the 2023 Notes, neither of which occurred during the respective periods from when the Notes were issued through December 31, 2017. |
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 tax purposes, the Company utilized the cost recovery method of accounting for its finance receivable income through December 31, 2016. Under the cost recovery method, collections on finance receivables are applied first to principal to reduce the finance receivables balance to zero before taxable income is recognized. Beginning with the 2017 tax year, the Company utilizes a new tax accounting method to recognize net finance receivables income. Under the new method, a portion of the annual collections amortize principal and the remaining portion is taxable income. The deferred tax liability related to the difference in timing between the new method and the cost recovery method will be incorporated evenly into the Company’s tax filings over four years. For additional information, see Note 13. |
Advertising costs | Advertising costs: Advertising costs are expensed when incurred. |
Operating leases | 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 one and three years from the grant date and are expensed on a straight-line basis over the vesting period. Equity share awards that contain a performance metric, are expensed over the requisite service period, generally three years , in accordance with the performance level achieved at each reporting period. See Note 9 for additional information. |
Derivatives | Derivatives: The Company follows the guidance of ASC Topic 815 "Derivatives and Hedging" ("ASC 815") to account for its derivatives and records derivative financial instruments at fair value on its consolidated balance sheets. The Company's derivative instruments are not designated as hedging instruments under ASC 815. Therefore, both the realized gain or loss and the change in fair value of the instrument are recorded as interest expense in the Company's consolidated financial statements. |
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: The Company is subject to various claims and contingencies related to lawsuits, certain taxes, and commitments under contractual and other obligations. The Company recognizes liabilities for contingencies and commitments when a loss is probable and estimable. The Company expenses related legal costs as incurred. For additional information, see Note 14. |
Estimated fair value of financial instruments | Estimated fair value of financial instruments: The Company applies the provisions of ASC Topic 820 "Fair Value Measurements and Disclosures" ("ASC 820"). ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also requires the consideration of differing levels of inputs in the determination of fair values. Disclosure of the estimated fair values of financial instruments often requires the use of estimates. See Note 8 for additional information. |
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. The guidance specifically excludes revenue received for servicing finance receivables. 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 generated by its subsidiary Claims Compensation Bureau, LLC ("CCB") is within the scope of this standard. Based on the Company's evaluation, the Company believes the new standard will not impact the accounting for revenue generated by CCB. 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 believes ASU 2016-01 will not have a material impact on its financial statements upon adoption in the first quarter of 2018. 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 $51.4 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 adopted ASU 2016-06 in the first quarter of 2017 which had no material impact 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. The standard also requires excess tax benefits to be presented as an operating activity on the statement of cash flows rather than as a financing activity. An entity may elect to apply the change in presentation in the statement of cash flows either prospectively or retrospectively to all periods presented. The guidance also requires an employer to classify as a financing activity in its statement of cash flows the cash paid to a tax authority when shares are withheld to satisfy the employer’s statutory income tax withholding obligation using a retrospective approach. Further, the amendments allow an entity to make an accounting policy election to either estimate forfeitures or recognize forfeitures as they occur. If an election is made, the change to recognize forfeitures as they occur must be adopted using a modified retrospective approach with a cumulative effect adjustment recorded to opening 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 adopted ASU 2016-09 in the first quarter of 2017, which increased its provision for income taxes by $2.1 million during the year ended December 31, 2017, as a result of the recognition of all excess tax benefits and tax deficiencies in its income statement. The Company applied the change in presentation to the statement of cash flows retrospectively for all periods presented after adoption date. The Company also elected to use an estimated forfeiture rate, based on historical data, to record its share-based compensation expense, which is consistent with its previous accounting treatment with respect to forfeitures. None of the other provisions of ASU 2016-09 had 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 ASU 2016-13 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. ASU 2016-13 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. ASU 2016-13 supersedes ASC Topic 310-30, which the Company currently follows to account for revenue on its finance receivables. Topic 310-30 provides an integrated model for revenue recognition and impairment loss at an aggregated pool level. Under ASU 2016-13, changes in credit loss are required to be evaluated at a pool level by combining accounts of similar credit and risk characteristics. ASU 2016-13 does not permit pooling for income recognition for purchased credit deteriorated assets. In addition, ASU 2016-13 requires an allowance to be recorded upon acquisition of a purchased credit deteriorated ("PCD") asset. For PCD assets, the initial allowance for credit losses is added to the purchase price rather than being reported as a credit loss expense. Only subsequent changes in the allowance for credit losses are recorded as a credit loss expense for these assets. Accordingly, ASU 2016-13 could have a significant impact on how the Company measures and records net revenue on its finance receivables. The Company is currently in the process of evaluating the impact of adoption of ASU 2016-13 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 ASU 2016-15 on its consolidated financial statements. In October 2016, 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 has determined the adoption of this standard will not have a significant impact on its consolidated financial statements. In January 2017, FASB issued ASU-2017-01, "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 applies to transactions that occur on or after an entity’s adoption date, the earliest of which is January 1, 2017. The Company did not complete a business combination in 2017. In January 2017, FASB issued ASU No. 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment" ("ASU 2017-04"). ASU 2017-04 eliminates Step 2 of the goodwill impairment test. Instead, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. ASU 2017-04 is effective for annual and interim periods beginning after December 15, 2019, and early adoption is permitted for interim or annual goodwill impairment tests performed after January 1, 2017. The Company is currently in the process of evaluating the impact of adoption of ASU 2017-04 on its consolidated financial statements. In May 2017, FASB issued ASU No. 2017-09, “Compensation–Stock Compensation (Topic 718): Scope of Modification Accounting” (ASU 2017-09"). ASU 2017-09 clarifies when a change to the terms or conditions of a share-based payment award must be accounted for as a modification. The new guidance requires modification accounting if the fair value, vesting condition or the classification of the award is not the same immediately before and after a change to the terms and conditions of the award. The new guidance is effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted. This new guidance is not expected to have an impact on the Company's consolidated financial statements. In August 2017, FASB issued ASU No. 2017-12, "Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities" ("ASU 2017-12"). ASU 2017-12 modifies the presentation and disclosure of hedging results. Further, it provides partial relief on the timing of certain aspects of hedge documentation and eliminates the requirement to recognize hedge ineffectiveness separately in income. The amendments in ASU 2017-12 are effective for fiscal years beginning after December 15, 2018 and for interim periods therein. The Company is currently in the process of evaluating the impact of adoption of ASU 2017-12 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, 2017 | |
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, 2017 , 2016 and 2015 , and long-lived assets held at December 31, 2017 and 2016 , by geographical location (amounts in thousands) were: Years Ended December 31, As of December 31, 2017 2016 2015 2017 2016 Revenues Long-Lived Assets United States $ 553,957 $ 584,816 $ 722,393 $ 41,850 $ 29,598 United Kingdom 81,598 76,301 73,669 2,445 3,417 Others (1) 178,019 169,463 145,956 5,016 5,729 Total $ 813,574 $ 830,580 $ 942,018 $ 49,311 $ 38,744 (1) None of the countries included in "Others" comprise greater than ten percent of the Company's consolidated revenues or long-lived assets. 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, 2017 | |
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, 2017 and 2016 , were as follows (amounts in thousands): 2017 2016 Balance at beginning of year $ 2,307,969 $ 2,202,113 Acquisitions of finance receivables (1) 1,084,418 938,273 Cash collections applied to principal and net allowance charges (731,802 ) (746,867 ) Foreign currency translation adjustment 111,336 (85,550 ) Balance at end of year $ 2,771,921 $ 2,307,969 |
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): 2018 $ 809,115 2019 623,030 2020 491,880 2021 388,344 2022 223,179 2023 114,431 2024 54,703 2025 31,287 2026 20,814 2027 11,799 Thereafter 3,339 Total ERC expected to be applied to principal $ 2,771,921 |
Schedule of Changes in Accretable Yield | Changes in accretable yield for the years ended December 31, 2017 and 2016 were as follows (amounts in thousands): 2017 2016 Balance at beginning of year $ 2,740,006 $ 2,727,204 Income recognized on finance receivables, net (780,803 ) (745,119 ) Additions from portfolio purchases 702,914 720,638 Reclassifications from nonaccretable difference 149,512 41,056 Foreign currency translation adjustment 120,515 (3,773 ) Balance at end of year $ 2,932,144 $ 2,740,006 |
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, 2017 , 2016 and 2015 (amounts in thousands): 2017 2016 2015 Beginning balance $ 211,465 $ 114,861 $ 86,166 Allowance charges 13,826 100,202 31,974 Reversal of previous recorded allowance charges (1,928 ) (1,723 ) (2,605 ) Net allowance charges 11,898 98,479 29,369 Foreign currency translation adjustment 2,192 (1,875 ) (674 ) Ending balance $ 225,555 $ 211,465 $ 114,861 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Investments | Investments consisted of the following at December 31, 2017 and 2016 (amounts in thousands): 2017 2016 Available-for-sale Government bonds and mutual funds $ 6,838 $ 2,138 Held-to-maturity Securitized assets 57,204 51,407 Other investments Private equity funds 14,248 14,998 Total investments $ 78,290 $ 68,543 |
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, 2017 and 2016 were as follows (amounts in thousands): December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value Available-for-sale Government bonds and mutual funds $ 6,758 $ 102 $ 22 $ 6,838 Held-to-maturity Securitized assets 57,204 — 14,249 42,955 December 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value Available-for-sale Government bonds and mutual funds 2,161 — 23 2,138 Held-to-maturity Securitized assets 51,407 4,147 — 55,554 |
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, 2017 and 2016 were as follows (amounts in thousands): December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value Available-for-sale Government bonds and mutual funds $ 6,758 $ 102 $ 22 $ 6,838 Held-to-maturity Securitized assets 57,204 — 14,249 42,955 December 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value Available-for-sale Government bonds and mutual funds 2,161 — 23 2,138 Held-to-maturity Securitized assets 51,407 4,147 — 55,554 |
Operating Leases (Tables)
Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Leases, Operating [Abstract] | |
Schedule of Future Minimum Lease Payments for Operating Leases | Future minimum lease payments for operating leases at December 31, 2017 , are as follows for the years ending December 31, (amounts in thousands): 2018 $ 11,837 2019 9,556 2020 8,316 2021 6,734 2022 5,418 Thereafter 9,580 Total future minimum lease payments $ 51,441 |
Goodwill and Intangible Asset30
Goodwill and Intangible Assets, net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 and 2016 (amounts in thousands): 2017 2016 Balance at beginning of period: Goodwill $ 506,308 $ 501,553 Accumulated impairment loss (6,397 ) (6,397 ) 499,911 495,156 Changes: Acquisitions — 28,792 Foreign currency translation adjustment 26,602 5,646 Reclassifications to assets held for sale — (29,683 ) Net change in goodwill 26,602 4,755 Balance at end of period: Goodwill 526,513 506,308 Accumulated impairment loss — (6,397 ) $ 526,513 $ 499,911 |
Schedule of Intangible Assets | Intangible assets, excluding goodwill, consisted of the following at December 31, 2017 and 2016 (amounts in thousands): 2017 2016 Gross Accumulated Gross Accumulated Client and customer relationships $ 30,397 $ 10,752 $ 35,936 $ 13,455 Non-compete agreements 1,388 1,118 1,412 667 Trademarks 3,285 1,479 3,315 988 Technology 3,240 1,389 3,102 720 Total $ 38,310 $ 14,738 $ 43,765 $ 15,830 |
Schedule of Estimated Future Amortization of Intangible Assets | The future amortization of intangible assets is estimated to be as follows as of December 31, 2017 for the following years ending December 31, (amounts in thousands): 2018 $ 4,599 2019 4,330 2020 3,661 2021 2,672 2022 2,075 Thereafter 6,235 Total $ 23,572 |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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 $ 373,206 $ 695,088 Term loans 764,830 430,764 European revolving credit 476,609 401,780 Convertible senior notes 632,500 287,500 2,247,145 1,815,132 Less: Debt discount and issuance costs (76,963 ) (31,031 ) Total $ 2,170,182 $ 1,784,101 |
Schedule of Maturities of Long-term Debt | The following principal payments are due on the Company's borrowings at December 31, 2017 for the years ending December 31, (amounts in thousands): 2018 $ 10,000 2019 10,000 2020 297,500 2021 806,439 2022 778,206 Thereafter 345,000 Total $ 2,247,145 |
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 the dates indicated (dollar amounts in thousands): December 31, 2017 December 31, 2016 Amount Outstanding Weighted Average Interest Rate Amount Outstanding Weighted Average Interest Rate Term loan $ 445,000 4.07 % $ 150,000 3.27 % Revolving facility 373,206 4.05 695,088 3.28 Information on the outstanding balances and weighted average interest rates by type of borrowing under the European Credit Agreement as the dates indicated (dollar amounts in thousands): December 31, 2017 December 31, 2016 Amount Outstanding Weighted Average Interest Rate Amount Outstanding Weighted Average Interest Rate Term loan $ 319,830 4.25 % $ 280,764 4.25 % Revolving facility 476,609 5.01 401,780 5.34 |
Schedule of Liability and Equity Components | The balances of the liability and equity components of the Notes outstanding were as follows as of the dates indicated (amounts in thousands): December 31, December 31, Liability component - principal amount $ 632,500 $ 287,500 Unamortized debt discount (55,537 ) (17,930 ) Liability component - net carrying amount $ 576,963 $ 269,570 Equity component $ 76,216 $ 31,306 |
Schedule of Debt Interest Expense | Interest expense related to the Notes was as follows for the years ended December 31, 2017 , 2016 and 2015 (amounts in thousands): 2017 2016 2015 Interest expense - stated coupon rate $ 15,870 $ 8,625 $ 8,625 Interest expense - amortization of debt discount 8,583 4,472 4,260 Total interest expense - convertible senior notes $ 24,453 $ 13,097 $ 12,885 |
Schedule of Interest Expense, Net | Interest expense, net, was as follows for the years ended December 31, 2017, 2016, and 2015 (amounts in thousands): 2017 2016 2015 Interest expense $ 103,653 $ 85,911 $ 62,411 Interest (income) (5,612 ) (5,047 ) (2,075 ) Interest expense, net $ 98,041 $ 80,864 $ 60,336 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment, Net [Abstract] | |
Property and Equipment, at Cost | Property and equipment, at cost, consisted of the following as of December 31, 2017 and 2016 (amounts in thousands): 2017 2016 Software $ 51,065 $ 53,793 Computer equipment 19,260 19,594 Furniture and fixtures 15,560 13,607 Equipment 9,643 12,065 Leasehold improvements 14,778 13,644 Building and improvements 7,409 7,323 Land 1,296 1,296 Accumulated depreciation and amortization (80,967 ) (82,578 ) Assets in process 11,267 — Property and equipment, net $ 49,311 $ 38,744 |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 and December 31, 2016 (amounts in thousands): December 31, 2017 December 31, 2016 Carrying Estimated Carrying Estimated Financial assets: Cash and cash equivalents $ 120,516 $ 120,516 $ 94,287 $ 94,287 Held-to-maturity investments 57,204 42,955 51,407 55,554 Other investments 14,248 8,820 14,998 12,573 Finance receivables, net 2,771,921 3,060,907 2,307,969 2,708,582 Financial liabilities: Interest-bearing deposits 98,580 98,580 76,113 76,113 Revolving lines of credit 849,815 849,815 1,096,868 1,096,868 Term loans 764,830 764,830 430,764 430,764 Convertible senior notes 576,963 620,079 269,570 270,825 |
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, 2017 and 2016 (amounts in thousands): Fair Value Measurements as of December 31, 2017 Level 1 Level 2 Level 3 Total Assets: Available-for-sale investments $ 6,838 $ — $ — $ 6,838 Liabilities: Interest rate swap contracts (recorded in accrued expenses) — 1,108 — 1,108 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 |
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, 2017 and 2016 (amounts in thousands): Fair Value Measurements as of December 31, 2017 Level 1 Level 2 Level 3 Total Assets: Available-for-sale investments $ 6,838 $ — $ — $ 6,838 Liabilities: Interest rate swap contracts (recorded in accrued expenses) — 1,108 — 1,108 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 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Share-based Compensation [Abstract] | |
Nonvested Share Transactions | The following summarizes all nonvested share transactions, excluding those related to the LTI program, from December 31, 2014 through December 31, 2017 (amounts in thousands, except per share amounts): Nonvested Shares Weighted-Average 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 Granted 195 33.70 Vested (173 ) 37.49 Canceled (27 ) 43.05 December 31, 2017 298 $ 35.25 |
Summarization of Option Related Transactions | The following table summarizes all LTI share transactions from December 31, 2014 through December 31, 2017 (amounts in thousands, except per share amounts): Nonvested LTI Shares Weighted-Average 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 Granted at target level 192 33.50 Adjustments for actual performance 5 60.00 Vested (51 ) 40.80 Canceled (99 ) 20.91 December 31, 2017 472 $ 41.06 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 , 2016 and 2015 (amounts in thousands, except per share amounts): 2017 2016 2015 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 $ 162,265 45,671 $ 3.55 $ 85,097 46,316 $ 1.84 $ 167,926 48,128 $ 3.49 Dilutive effect of nonvested share awards 152 (0.01 ) 72 (0.01 ) 277 (0.02 ) Diluted EPS $ 162,265 45,823 $ 3.54 $ 85,097 46,388 $ 1.83 $ 167,926 48,405 $ 3.47 |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 and 2016 (amounts in thousands): 2017 2016 Asset Derivatives Liability Derivatives Asset Derivatives Liability Derivatives Interest rate swap contracts $ — $ 1,108 $ — $ 2,825 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Summary of Income Tax Expense Recognized | The income tax expense/(benefit) recognized for the years ended December 31, 2017 , 2016 and 2015 is comprised of the following (amounts in thousands): Federal State Foreign Total For the year ended December 31, 2017: Current tax expense $ 77,656 $ 16,543 $ 25,087 $ 119,286 Deferred tax (benefit) (112,118 ) (2,051 ) (16,653 ) (130,822 ) Total income tax expense/(benefit) $ (34,462 ) $ 14,492 $ 8,434 $ (11,536 ) 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 |
Schedule of Reconciliation of Expected Tax Expense at The Statutory Federal Tax Rate to Actual Tax Expense | A reconciliation of the Company's expected tax expense at the statutory federal tax rate to actual tax expense/(benefit) for the years ended December 31, 2017 , 2016 and 2015 is as follows (amounts in thousands): 2017 2016 2015 Income tax expense at statutory federal rates $ 55,139 $ 46,929 $ 90,133 State tax expense, net of federal tax benefit 9,072 3,696 5,719 Foreign rate difference (4,681 ) (7,839 ) (9,495 ) Federal rate change (73,779 ) — — Other 2,713 405 3,034 Total income tax (benefit)/expense $ (11,536 ) $ 43,191 $ 89,391 |
Summary of Components of Net Deferred Tax Liability | The Company recognized a net deferred tax liability of $113.7 million and $229.9 million as of December 31, 2017 and 2016 , respectively. The components of the net deferred tax liability are as follows (amounts in thousands): 2017 2016 Deferred tax assets: Employee compensation $ 5,190 $ 9,120 Net operating loss carryforward 42,332 48,298 Accrued liabilities 2,750 5,136 Interest 11,027 10,596 Finance receivable revenue recognition - international 27,835 8,274 Other 9,165 6,154 Total deferred tax asset 98,299 87,578 Deferred tax liabilities: Depreciation expense 15,417 7,610 Intangible assets and goodwill 8,856 10,625 Convertible debt 14,645 6,955 Finance receivable revenue recognition - IRS settlement 117,026 — Finance receivable revenue recognition - domestic 16,957 239,337 Other — 893 Total deferred tax liability 172,901 265,420 Net deferred tax liability before valuation allowance 74,602 177,842 Valuation allowance 39,054 52,021 Net deferred tax liability $ 113,656 $ 229,863 |
Sale of Subsidiaries (Tables)
Sale of Subsidiaries (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations | The assets and liabilities of the businesses that were sold during the year ended December 31, 2017 consisted of the following (amounts in thousands): 2017 Other receivables, net $ 8,277 Property and equipment, net 4,559 Goodwill 29,683 Intangible assets, net 1,711 Other assets 772 Total assets $ 45,002 Accrued expenses $ 3,123 Total liabilities $ 3,123 |
General and Summary of Signif39
General and Summary of Significant Accounting Policies (Narrative) (Details) $ / shares in Units, $ in Thousands | May 26, 2017$ / shares | Apr. 26, 2016USD ($) | Aug. 03, 2015USD ($) | Aug. 13, 2013$ / shares | Dec. 31, 2017USD ($)segment$ / shares | Dec. 31, 2016USD ($)$ / shares |
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 | $ 200 | $ 3,800 | ||||
Percentage of income tax positions likely to be realized | 50.00% | |||||
Requisite service period | 3 years | |||||
Possible change in estimates, in years | 1 year | |||||
Total future minimum lease payments | $ 51,441 | |||||
Increase of provision for income taxes | $ 2,100 | |||||
Minimum | ||||||
Accounting Policies [Line Items] | ||||||
Warranty period of permitting the return of accounts holder (in days) | 90 days | |||||
Options and nonvested share awards vesting period, minimum, in years | 1 year | |||||
Minimum | Software | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 3 years | |||||
Minimum | Computer Equipment | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 3 years | |||||
Minimum | Furniture and Fixtures | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 5 years | |||||
Minimum | Equipment | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 5 years | |||||
Minimum | Leasehold Improvements | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 3 years | |||||
Minimum | Building Improvements | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 10 years | |||||
Maximum | ||||||
Accounting Policies [Line Items] | ||||||
Warranty period of permitting the return of accounts holder (in days) | 180 days | |||||
Options and nonvested share awards vesting period, minimum, in years | 3 years | |||||
Maximum | Software | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 5 years | |||||
Maximum | Computer Equipment | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 5 years | |||||
Maximum | Furniture and Fixtures | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 10 years | |||||
Maximum | Equipment | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 7 years | |||||
Maximum | Leasehold Improvements | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 10 years | |||||
Maximum | Building Improvements | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 39 years | |||||
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 | |||||
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% | |||||
Note Due 2020 | Convertible Debt | ||||||
Accounting Policies [Line Items] | ||||||
Stated percentage | 3.00% | |||||
Average share price of common stock (usd per share) | $ / shares | $ 65.72 | |||||
Note Due 2023 | Convertible Debt | ||||||
Accounting Policies [Line Items] | ||||||
Stated percentage | 3.50% | |||||
Average share price of common stock (usd per share) | $ / shares | $ 46.24 |
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, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | $ 813,574 | $ 830,580 | $ 942,018 |
Long-Lived Assets | 49,311 | 38,744 | |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 553,957 | 584,816 | 722,393 |
Long-Lived Assets | 41,850 | 29,598 | |
United Kingdom | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 81,598 | 76,301 | 73,669 |
Long-Lived Assets | 2,445 | 3,417 | |
Others | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 178,019 | 169,463 | $ 145,956 |
Long-Lived Assets | $ 5,016 | $ 5,729 |
Finance Receivables, net (Sched
Finance Receivables, net (Schedule of Changes In Finance Receivables) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount [Roll Forward] | |||
Balance at beginning of year | $ 2,307,969 | $ 2,202,113 | |
Acquisitions of finance receivables | 1,084,418 | 938,273 | |
Cash collections applied to principal and net allowance charges | 731,802 | 746,867 | $ 674,373 |
Foreign currency translation adjustment | 111,336 | (85,550) | |
Balance at end of year | $ 2,771,921 | $ 2,307,969 | $ 2,202,113 |
Finance Receivables, net (Sch42
Finance Receivables, net (Schedule of Cash Collections Applied to Principal) (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities [Abstract] | |
2,018 | $ 809,115 |
2,019 | 623,030 |
2,020 | 491,880 |
2,021 | 388,344 |
2,022 | 223,179 |
2,023 | 114,431 |
2,024 | 54,703 |
2,025 | 31,287 |
2,026 | 20,814 |
2,027 | 11,799 |
Thereafter | 3,339 |
Total ERC expected to be applied to principal | $ 2,771,921 |
Finance Receivables, net (Narra
Finance Receivables, net (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities [Abstract] | |||
Face value of receivable portfolios | $ 7,500,000 | $ 10,500,000 | |
Payments to acquire finance receivables | 1,086,029 | 890,803 | $ 954,954 |
Estimated remaining collections on purchased receivables | 1,600,000 | 1,200,000 | |
Total estimated remaining collections | 5,700,000 | 5,050,000 | |
Aggregate net finance receivables in pools accounted for under the cost recovery method | $ 166,600 | $ 105,500 |
Finance Receivables, net (Sch44
Finance Receivables, net (Schedule of Changes in Accretable Yield) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward] | |||
Balance at beginning of year | $ 2,740,006 | $ 2,727,204 | |
Income recognized on finance receivables, net | (780,803) | (745,119) | $ (865,122) |
Additions | 702,914 | 720,638 | |
Reclassifications from nonaccretable difference | 149,512 | 41,056 | |
Foreign currency translation adjustment | 120,515 | (3,773) | |
Balance at end of year | $ 2,932,144 | $ 2,740,006 | $ 2,727,204 |
Finance Receivables, net (Sch45
Finance Receivables, net (Schedule of Valuation Allowance Account) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Allowance For Loan Losses [Roll Forward] | |||
Beginning balance | $ 211,465 | $ 114,861 | $ 86,166 |
Allowance charges | 13,826 | 100,202 | 31,974 |
Reversal of previous recorded allowance charges | (1,928) | (1,723) | (2,605) |
Net allowance (reversal)/charge | 11,898 | 98,479 | 29,369 |
Foreign currency translation adjustment | 2,192 | (1,875) | (674) |
Ending balance | $ 225,555 | $ 211,465 | $ 114,861 |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Available-for-sale | ||
Government bonds and mutual funds | $ 6,838 | $ 2,138 |
Held-to-maturity | ||
Securitized assets | 57,204 | 51,407 |
Other investments | ||
Private equity funds | 14,248 | 14,998 |
Investments | $ 78,290 | $ 68,543 |
Investments (Narrative) (Detail
Investments (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |||
Investment income, net | $ 1,300 | $ 6,100 | |
Impairment of investments | $ 1,745 | 5,823 | $ 0 |
Cost-method investment, ownership percentage | 3.00% | ||
Cost-method investments, other than temporary impairment charges | $ 1,700 | ||
Cost-method investment with no loss recognized | 14,200 | 15,000 | |
Cost-method investments, distributions received | $ 5,200 | $ 2,700 |
Investments (Amortized Cost) (D
Investments (Amortized Cost) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Available-for-sale | ||
Aggregate Fair Value | $ 6,838 | $ 2,138 |
Held-to-maturity | ||
Amortized Cost | 57,204 | 51,407 |
Securitized assets | ||
Held-to-maturity | ||
Gross Unrealized Gains | 0 | 4,147 |
Gross Unrealized Losses | 14,249 | 0 |
Aggregate Fair Value | 42,955 | 55,554 |
Government bonds and mutual funds | ||
Available-for-sale | ||
Amortized Cost | 6,758 | 2,161 |
Gross Unrealized Gains | 102 | 0 |
Gross Unrealized Losses | 22 | 23 |
Aggregate Fair Value | $ 6,838 | $ 2,138 |
Operating Leases (Narrative) (D
Operating Leases (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Leases, Operating [Abstract] | |||
Rental expense for office space and equipment under operating lease | $ 11.8 | $ 12.3 | $ 11.3 |
Operating Leases (Schedule Of F
Operating Leases (Schedule Of Future Minimum Lease Payments For Operating Leases) (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Leases, Operating [Abstract] | |
2,018 | $ 11,837 |
2,019 | 9,556 |
2,020 | 8,316 |
2,021 | 6,734 |
2,022 | 5,418 |
Thereafter | 9,580 |
Total future minimum lease payments | $ 51,441 |
Goodwill and Intangible Asset51
Goodwill and Intangible Assets, net (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Impairment of goodwill | $ 0 | ||
Acquired goodwill | 0 | $ 28,792 | |
Amortization expense | $ 4,300 | $ 6,200 | $ 3,700 |
Goodwill and Intangible Asset52
Goodwill and Intangible Assets, net (Schedule of Goodwill) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill [Roll Forward] | ||
Goodwill, Balance at beginning of period | $ 506,308 | $ 501,553 |
Accumulated impairment loss, Balance at beginning of period | (6,397) | (6,397) |
Acquisitions | 0 | 28,792 |
Foreign currency translation adjustment | 26,602 | 5,646 |
Reclassifications to assets held for sale | 0 | (29,683) |
Net change in goodwill | 26,602 | 4,755 |
Goodwill, Balance at end of period | 526,513 | 506,308 |
Accumulated impairment loss, Balance at end of period | 0 | (6,397) |
Goodwill, Net, Balance at end of period | $ 526,513 | $ 499,911 |
Goodwill and Intangible Asset53
Goodwill and Intangible Assets, net (Schedule of Intangible Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | $ 38,310 | $ 43,765 |
Accumulated Amortization | 14,738 | 15,830 |
Client and customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 30,397 | 35,936 |
Accumulated Amortization | 10,752 | 13,455 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 1,388 | 1,412 |
Accumulated Amortization | 1,118 | 667 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 3,285 | 3,315 |
Accumulated Amortization | 1,479 | 988 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 3,240 | 3,102 |
Accumulated Amortization | $ 1,389 | $ 720 |
Goodwill and Intangible Asset54
Goodwill and Intangible Assets, net (Schedule of Estimated Future Amortization of Intangible Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,018 | $ 4,599 | |
2,019 | 4,330 | |
2,020 | 3,661 | |
2,021 | 2,672 | |
2,022 | 2,075 | |
Thereafter | 6,235 | |
Total | $ 23,572 | $ 27,935 |
Borrowings (Details)
Borrowings (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Debt outstanding | $ 2,247,145 | $ 1,815,132 |
Less: Debt discount and issuance costs | (76,963) | (31,031) |
Total | 2,170,182 | 1,784,101 |
Line of Credit | North American Revolving Facility | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Debt outstanding | 373,206 | 695,088 |
Line of Credit | European Revolving Facility | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Debt outstanding | 476,609 | 401,780 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Debt outstanding | 764,830 | 430,764 |
Convertible Debt | ||
Debt Instrument [Line Items] | ||
Debt outstanding | $ 632,500 | $ 287,500 |
Borrowings (Long term debt Matu
Borrowings (Long term debt Maturities) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
2,018 | $ 10,000 | |
2,019 | 10,000 | |
2,020 | 297,500 | |
2,021 | 806,439 | |
2,022 | 778,206 | |
Thereafter | 345,000 | |
Total | $ 2,247,145 | $ 1,815,132 |
Borrowings (North American Revo
Borrowings (North American Revolving Credit and Term Loan) (Details) | 12 Months Ended | ||
Dec. 31, 2017USD ($) | May 26, 2017 | Dec. 31, 2016USD ($) | |
Eurodollar Rate | |||
Debt Instrument [Line Items] | |||
Basis spread variable rate (as a percent) | 1.00% | ||
Federal Funds Rate | |||
Debt Instrument [Line Items] | |||
Basis spread variable rate (as a percent) | 0.50% | ||
Canadian Prime Rate [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread variable rate (as a percent) | 1.50% | ||
North American Credit Agreement | |||
Debt Instrument [Line Items] | |||
Total credit facility available | $ 1,205,000,000 | ||
Credit Agreement | |||
Debt Instrument [Line Items] | |||
Credit agreement consolidated leverage ratio | 2.75 | ||
Debt instrument, covenant, maximum cash dividends | $ 20,000,000 | ||
Stock repurchases authorized amount, including 50% of prior year's net income | $ 100,000,000 | ||
Unused commitment fee under revolving credit | 0.375% | ||
Credit Agreement | Eurodollar Rate | |||
Debt Instrument [Line Items] | |||
Basis spread variable rate (as a percent) | 2.50% | ||
Credit Agreement | Base Rate | |||
Debt Instrument [Line Items] | |||
Basis spread variable rate (as a percent) | 1.50% | ||
Secured Debt [Member] | Credit Agreement | |||
Debt Instrument [Line Items] | |||
Credit agreement consolidated leverage ratio | 2.25 | ||
Unsecured Debt | Senior Unsecured Debt other than Convertible Notes Due 2020 | |||
Debt Instrument [Line Items] | |||
Debt instrument, covenant, maximum allowable debt | $ 750,000,000 | ||
Convertible Debt | |||
Debt Instrument [Line Items] | |||
Long-term debt | 576,963,000 | $ 269,570,000 | |
Convertible Debt | Note Due 2023 | |||
Debt Instrument [Line Items] | |||
Stated percentage | 3.50% | ||
Line of Credit | Line of Credit | |||
Debt Instrument [Line Items] | |||
Long-term debt | 445,000,000 | ||
Revolving Credit Facility | North American Credit Agreement | |||
Debt Instrument [Line Items] | |||
Total credit facility available | 705,000,000 | ||
Optional increase in borrowing capacity | 45,000,000 | ||
Option for letters of credit | 25,000,000 | ||
Option to reduce borrowing capacity | 25,000,000 | ||
Unused portion | 381,800,000 | ||
Current borrowing capacity | 353,100,000 | ||
Canadian Revolving Credit Facility | North American Credit Agreement | |||
Debt Instrument [Line Items] | |||
Total credit facility available | 50,000,000 | ||
Acquisition Subsequent to 2014 | Credit Agreement | |||
Debt Instrument [Line Items] | |||
Debt instrument, covenant, maximum business combinations | 250,000,000 | ||
Covenant, maximum business combinations, non-loan | $ 50,000,000 | ||
Eligible Core Asset Pool | Credit Agreement | |||
Debt Instrument [Line Items] | |||
Percentage of maximum level of borrowings of ERC of eligible asset pools | 35.00% | ||
Eligible Insolvent Asset Pool | Credit Agreement | |||
Debt Instrument [Line Items] | |||
Covenant, maximum borrowing as a percentage of insolvent asset pools | 55.00% | ||
Eligible Accounts Receivable | Credit Agreement | |||
Debt Instrument [Line Items] | |||
Percentage of maximum level of borrowings of eligible accounts receivable | 75.00% |
Borrowings (Outstanding balance
Borrowings (Outstanding balances and weighted average interest rates) (Details) - Revolving Credit Facility - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Domestic Line of Credit [Member] | North American Credit Agreement | ||
Line of Credit Facility [Line Items] | ||
Amount Outstanding | $ 373,206 | $ 695,088 |
Weighted Average Interest Rate | 4.05% | 3.28% |
Foreign Line of Credit [Member] | European Revolving Facility and Term Loan | ||
Line of Credit Facility [Line Items] | ||
Amount Outstanding | $ 476,609 | $ 401,780 |
Weighted Average Interest Rate | 5.01% | 5.34% |
Loans Payable [Member] | European Revolving Facility and Term Loan | ||
Line of Credit Facility [Line Items] | ||
Amount Outstanding | $ 319,830 | $ 280,764 |
Weighted Average Interest Rate | 4.25% | 4.25% |
Loans Payable [Member] | North American Credit Agreement | ||
Line of Credit Facility [Line Items] | ||
Amount Outstanding | $ 445,000 | $ 150,000 |
Weighted Average Interest Rate | 4.07% | 3.27% |
Borrowings (European Revolving
Borrowings (European Revolving Credit Facility and Term Loan) (Details) - European Revolving Facility and Term Loan € in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018SEK | Dec. 31, 2017SEK | Dec. 31, 2017USD ($) | Dec. 31, 2017EUR (€) | |
Line of Credit Facility [Line Items] | ||||
Covenant, loan-to-value | 75.00% | |||
Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Current borrowing capacity | $ 463.4 | |||
Maximum interest bearing deposits | SEK | SEK 1,500,000,000 | |||
Covenant, minimum cash collection exceeding ERC, percentage | 95.00% | |||
Overdraft Facility | ||||
Line of Credit Facility [Line Items] | ||||
Total credit facility available | 40 | |||
Commitment fee percentage | 0.125% | |||
Line of Credit | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Total credit facility available | 1,200 | |||
Long-term debt | 320 | € 267 | ||
Unused commitment fee under revolving credit | 1.26% | |||
Commitment fee as a percentage of margin | 35.00% | |||
Current borrowing capacity | $ 157 | |||
Maximum GIBD ratio | 3.25 | |||
Line of Credit | Interbank Offered Rate (IBOR) | Minimum | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread variable rate (as a percent) | 2.80% | |||
Line of Credit | 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 | 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 | Interbank Offered Rate (IBOR) | Maximum | Term Loan Facility | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread variable rate (as a percent) | 4.50% | |||
Subsequent Event | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Maximum interest bearing deposits | SEK | SEK 1,200,000,000 | |||
Subsequent Event | Line of Credit | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Reduction in rate | 0.15% | |||
Subsequent Event | Line of Credit | Term Loan Facility | ||||
Line of Credit Facility [Line Items] | ||||
Reduction in rate | 0.50% |
Borrowings (Convertible Debt an
Borrowings (Convertible Debt and Additional information) (Details) | May 26, 2017USD ($)day$ / shares | Aug. 13, 2013USD ($)$ / shares | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Debt Instrument [Line Items] | |||||
Repurchases of common stock | $ 44,909,000 | $ 0 | $ 165,501,000 | ||
Convertible Debt | |||||
Debt Instrument [Line Items] | |||||
Carrying amount of convertible debt | $ 76,216,000 | $ 31,306,000 | |||
Note Due 2020 | Convertible Debt | |||||
Debt Instrument [Line Items] | |||||
Face amount | $ 287,500,000 | ||||
Stated percentage | 3.00% | ||||
Conversion ratio | 15.2172 | ||||
Average share price of common stock (usd per share) | $ / shares | $ 65.72 | ||||
Convertible debt, estimated fair value | $ 255,300,000 | ||||
Carrying amount of convertible debt | 32,200,000 | ||||
Debt issuance costs, gross | 7,300,000 | ||||
Debt and equity issuance costs | 8,200,000 | ||||
Equity issuance costs | $ 900,000 | ||||
Effective interest rate (as a percent) | 4.92% | ||||
Note Due 2023 | Convertible Debt | |||||
Debt Instrument [Line Items] | |||||
Face amount | $ 345,000,000 | ||||
Stated percentage | 3.50% | ||||
Conversion ratio | 21.6275 | ||||
Average share price of common stock (usd per share) | $ / shares | $ 46.24 | ||||
Convertible debt, estimated fair value | $ 298,800,000 | ||||
Carrying amount of convertible debt | 46,200,000 | ||||
Debt issuance costs, gross | 8,300,000 | ||||
Debt and equity issuance costs | 9,600,000 | ||||
Equity issuance costs | $ 1,300,000 | ||||
Effective interest rate (as a percent) | 6.20% | ||||
Convertible, threshold percentage of stock price trigger | 130.00% | ||||
Convertible, threshold trading days | day | 20 | ||||
Convertible, threshold consecutive trading days | day | 30 |
Borrowings (Breakdown of Debt I
Borrowings (Breakdown of Debt Instrument) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Debt outstanding | $ 2,247,145 | $ 1,815,132 |
Convertible Debt | ||
Debt Instrument [Line Items] | ||
Debt outstanding | 632,500 | 287,500 |
Unamortized debt discount | (55,537) | (17,930) |
Liability component - net carrying amount | 576,963 | 269,570 |
Equity component | $ 76,216 | $ 31,306 |
Borrowings (Interest Expense) (
Borrowings (Interest Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | |||
Interest expense - amortization of debt discount | $ 18,152 | $ 10,276 | $ 4,260 |
Interest expense | 103,653 | 85,911 | 62,411 |
Interest (income) | (5,612) | (5,047) | (2,075) |
Interest expense, net | 98,041 | 80,864 | 60,336 |
Convertible Debt | |||
Debt Instrument [Line Items] | |||
Interest expense - stated coupon rate | 15,870 | 8,625 | 8,625 |
Interest expense - amortization of debt discount | 8,583 | 4,472 | 4,260 |
Total interest expense - convertible senior notes | $ 24,453 | $ 13,097 | $ 12,885 |
Property and Equipment, net (Pr
Property and Equipment, net (Property and Equipment, at Cost) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment, Net [Abstract] | ||
Software | $ 51,065 | $ 53,793 |
Computer equipment | 19,260 | 19,594 |
Furniture and fixtures | 15,560 | 13,607 |
Equipment | 9,643 | 12,065 |
Leasehold improvements | 14,778 | 13,644 |
Building and improvements | 7,409 | 7,323 |
Land | 1,296 | 1,296 |
Accumulated depreciation and amortization | (80,967) | (82,578) |
Assets in process | 11,267 | 0 |
Property and equipment, net | $ 49,311 | $ 38,744 |
Property and Equipment, net (Na
Property and Equipment, net (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization expense | $ 15.4 | $ 18.2 | $ 16.2 |
Fair Value (Carrying And Estima
Fair Value (Carrying And Estimated Fair Value Recorded In The Consolidated Balance Sheet) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Assets: | ||||
Cash and cash equivalents, carrying amount | $ 120,516 | $ 94,287 | $ 71,372 | $ 39,661 |
Held-to-maturity investments, carrying amount | 57,204 | 51,407 | ||
Finance receivables, net, carrying amount | 2,771,921 | 2,307,969 | $ 2,202,113 | |
Financial liabilities: | ||||
Interest-bearing deposits, carrying amount | 98,580 | 76,113 | ||
Carrying Amount | ||||
Assets: | ||||
Cash and cash equivalents, carrying amount | 120,516 | 94,287 | ||
Held-to-maturity investments, carrying amount | 57,204 | 51,407 | ||
Other investments | 14,248 | 14,998 | ||
Finance receivables, net, carrying amount | 2,771,921 | 2,307,969 | ||
Financial liabilities: | ||||
Interest-bearing deposits, carrying amount | 98,580 | 76,113 | ||
Revolving lines of credit, carrying amount | 849,815 | 1,096,868 | ||
Term loans, carrying amount | 764,830 | 430,764 | ||
Convertible notes, carrying amount | 576,963 | 269,570 | ||
Estimated Fair Value | ||||
Assets: | ||||
Cash and cash equivalents, estimated fair value | 120,516 | 94,287 | ||
Held-to-maturity investments, estimated fair value | 42,955 | 55,554 | ||
Other investments | 8,820 | 12,573 | ||
Finance receivables, net, estimated fair value | 3,060,907 | 2,708,582 | ||
Financial liabilities: | ||||
Interest-bearing deposits, estimated fair value | 98,580 | 76,113 | ||
Revolving lines of credit, estimated fair value | 849,815 | 1,096,868 | ||
Term loans, estimated fair value | 764,830 | 430,764 | ||
Convertible notes, estimated fair value | $ 620,079 | $ 270,825 |
Fair Value (Narrative) (Details
Fair Value (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Cost method investments, expected liquidation period, minimum | 1 year |
Cost method investments, expected liquidation period, maximum | 6 years |
Fair Value (Fair Value Assets a
Fair Value (Fair Value Assets and Liabilities Measured on a Recurring Basis) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Assets: | ||
Available-for-sale investments | $ 6,838 | $ 2,138 |
Liabilities: | ||
Interest rate swap contracts (recorded in accrued expenses) | 1,108 | 2,825 |
Level 1 | ||
Assets: | ||
Available-for-sale investments | 6,838 | 2,138 |
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) | 1,108 | 2,825 |
Level 3 | ||
Assets: | ||
Available-for-sale investments | 0 | 0 |
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, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum number of shares authorized | 5,400,000 | ||
Total share-based compensation expense | $ 8.7 | $ 6.1 | $ 16.3 |
Total tax benefit realized from share-based compensation | 3.2 | 2.7 | 8.9 |
Grant date fair value of shares vested | 6.5 | 5.7 | 6.4 |
Long-Term Incentive Programs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Future compensation cost related to stock option | $ 2.9 | ||
Weighted average remaining life of nonvested shares (in years) | 17 months | ||
Grant date fair value of shares vested | $ 2.1 | $ 6.1 | $ 5.1 |
Forfeiture rate for share awards granted under LTI Programs (as a percent) | 15.00% | ||
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options issued under the amended plan vesting period (in years) | 1 year | ||
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options issued under the amended plan vesting period (in years) | 3 years | ||
Nonvested Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Future compensation cost related to stock option | $ 5.4 | ||
Weighted average remaining life of nonvested shares (in years) | 1 year 2 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) | 1 year | ||
Nonvested Awards | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options issued under the amended plan vesting period (in years) | 3 years |
Share-Based Compensation (Nonve
Share-Based Compensation (Nonvested Share Transactions) (Details) - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Nonvested Shares Outstanding | |||
Beginning balance, shares | 303 | 284 | 339 |
Granted, shares | 195 | 196 | 100 |
Vested, shares | (173) | (117) | (151) |
Cancelled, shares | (27) | (60) | (4) |
Ending balance, shares | 298 | 303 | 284 |
Weighted-Average Price at Grant Date | |||
Beginning balance (usd per share) | $ 38.19 | $ 52.20 | $ 47.34 |
Granted (usd per share) | 33.70 | 28.43 | 53.29 |
Vested (usd per share) | 37.49 | 48.78 | 42.15 |
Cancelled (usd per share) | 43.05 | 51.71 | 47.49 |
Ending balance (usd per share) | $ 35.25 | $ 38.19 | $ 52.20 |
Long-Term Incentive Programs | |||
Nonvested Shares Outstanding | |||
Beginning balance, shares | 425 | 483 | 488 |
Granted, shares | 192 | 240 | 132 |
Adjustments for actual performance, shares | 5 | (67) | 122 |
Vested, shares | (51) | (176) | (252) |
Cancelled, shares | (99) | (55) | (7) |
Ending balance, shares | 472 | 425 | 483 |
Weighted-Average Price at Grant Date | |||
Beginning balance (usd per share) | $ 39.57 | $ 42.80 | $ 30.52 |
Granted (usd per share) | 33.50 | 28.98 | 52.47 |
Adjustments for actual performance (usd per share) | 60 | 34.59 | 34.59 |
Vested (usd per share) | 40.80 | 34.59 | 20.21 |
Cancelled (usd per share) | 20.91 | 43.68 | 40.05 |
Ending balance (usd per share) | $ 41.06 | $ 39.57 | $ 42.80 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | May 26, 2017 | Aug. 13, 2013 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Net Income Attributable to PRA Group, Inc. | $ 162,265 | $ 85,097 | $ 167,926 | ||
Weighted Average Common Shares, Basic EPS | 45,671,000 | 46,316,000 | 48,128,000 | ||
Weighted Average Common Shares, Dilutive effect of nonvested share awards | 152,000 | 72,000 | 277,000 | ||
Weighted Average Common Shares, Diluted EPS | 45,823,000 | 46,388,000 | 48,405,000 | ||
Basic EPS (usd per share) | $ 3.55 | $ 1.84 | $ 3.49 | ||
Dilutive effect of nonvested share awards (usd per share) | (0.01) | (0.01) | (0.02) | ||
Diluted EPS (usd per share) | $ 3.54 | $ 1.83 | $ 3.47 | ||
Antidilutive options outstanding (in shares) | 0 | 0 | 0 | ||
Note Due 2020 | Convertible Debt | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Average share price of common stock (usd per share) | $ 65.72 | ||||
Note Due 2023 | Convertible Debt | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Average share price of common stock (usd per share) | $ 46.24 |
Derivatives (Details)
Derivatives (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Derivative [Line Items] | |||
Percent of borrowings hedged at foreign operations | 48.00% | 57.00% | |
Liability Derivatives | $ 1,108 | $ 2,825 | |
Interest rate swap contracts | |||
Derivative [Line Items] | |||
Asset Derivatives | 0 | 0 | |
Liability Derivatives | 1,108 | 2,825 | |
Derivatives Not Designated as Hedging Instruments | Interest Expense | Interest rate swap contracts | |||
Derivative [Line Items] | |||
Derivative, interest expense | $ 500 | $ 2,800 | $ 4,900 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - 2015 Share Repurchase Program - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Oct. 22, 2015 | |
Shareholders Equity [Line Items] | ||||
Stock repurchases authorized amount | $ 125,000,000 | |||
Number of shares repurchased and retired | 1,311,200 | 0 | 2,072,721 | |
Average price of shares repurchased and retired (usd per share) | $ 34.25 | $ 38.60 |
Income Taxes (Summary of Income
Income Taxes (Summary of Income Tax Expense Recognized) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Current tax expense, Federal | $ 77,656 | $ 38,986 | $ 62,869 |
Current tax expense, State | 16,543 | 5,037 | 9,399 |
Current foreign tax expense | 25,087 | 20,868 | 25,692 |
Current tax expense, Total | 119,286 | 64,891 | 97,960 |
Deferred tax (benefit)/expense, Federal | (112,118) | (7,350) | 2,887 |
Deferred tax expense/(benefit), State | (2,051) | 575 | (600) |
Deferred Foreign Income Tax (benefit)/Expense | (16,653) | (14,925) | (10,856) |
Deferred tax (benefit)/expense, Total | (130,822) | (21,700) | (8,569) |
Total income tax expense, Federal | (34,462) | 31,636 | 65,756 |
Total income tax expense, State | 14,492 | 5,612 | 8,799 |
Foreign Income Tax Expense, Continuing Operations | 8,434 | 5,943 | 14,836 |
Total income tax (benefit)/expense | $ (11,536) | $ 43,191 | $ 89,391 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Taxes [Line Items] | ||
Tax reform, provisional impact | $ 73,800 | |
Net deferred tax liability | 113,656 | $ 229,863 |
Valuation allowance | 39,054 | 52,021 |
Unremitted earnings of foreign subsidiaries | 23,800 | |
Foreign Tax Authority | ||
Income Taxes [Line Items] | ||
Operating loss carryforward, foreign subsidiaries | $ 3,300 | $ 3,700 |
Minimum | Foreign Tax Authority | ||
Income Taxes [Line Items] | ||
Operating loss carryforward, carryforward period | 7 years | |
Maximum | Foreign Tax Authority | ||
Income Taxes [Line Items] | ||
Operating loss carryforward, carryforward period | 20 years |
Income Taxes (Schedule of Recon
Income Taxes (Schedule of Reconciliation of Expected Tax Expense At Statutory Tax Rates to Actual Tax Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Income tax expense at statutory federal rates | $ 55,139 | $ 46,929 | $ 90,133 |
State tax expense, net of federal tax benefit | 9,072 | 3,696 | 5,719 |
Foreign rate difference | (4,681) | (7,839) | (9,495) |
Federal rate change | (73,779) | 0 | 0 |
Other | 2,713 | 405 | 3,034 |
Total income tax (benefit)/expense | $ (11,536) | $ 43,191 | $ 89,391 |
Income Taxes (Summary of Compon
Income Taxes (Summary of Components of Net Deferred Tax Liability) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Employee compensation | $ 5,190 | $ 9,120 |
Net operating loss carryforward | 42,332 | 48,298 |
Accrued liabilities | 2,750 | 5,136 |
Interest | 11,027 | 10,596 |
Finance receivable revenue recognition - international | 27,835 | 8,274 |
Other | 9,165 | 6,154 |
Total deferred tax asset | 98,299 | 87,578 |
Deferred tax liabilities: | ||
Depreciation expense | 15,417 | 7,610 |
Intangible assets and goodwill | 8,856 | 10,625 |
Convertible debt | 14,645 | 6,955 |
Finance receivable revenue recognition - IRS settlement | 117,026 | 0 |
Finance receivable revenue recognition - domestic | 16,957 | 239,337 |
Other | 0 | 893 |
Total deferred tax liability | 172,901 | 265,420 |
Net deferred tax liability before valuation allowance | 74,602 | 177,842 |
Valuation allowance | 39,054 | 52,021 |
Total deferred tax liability | $ 113,656 | $ 229,863 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Future compensation under employment agreements | $ 21,900 |
Total future minimum lease payments | 51,441 |
Amount to be purchased under forward flow agreements | 203,200 |
Potential recoveries | $ 4,000 |
Retirement Plans (Details)
Retirement Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Contribution Plan [Abstract] | |||
Minimum eligible age to make voluntary contributions | 18 years | ||
Employee contribution, percentage of employee's compensation | 100.00% | ||
Employer contribution, percentage of employee's compensation | 4.00% | ||
Total compensation expense related to contribution plan | $ 5.2 | $ 5.1 | $ 4.3 |
Redeemable Noncontrolling Int79
Redeemable Noncontrolling Interest (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Apr. 26, 2016 |
Noncontrolling Interest [Line Items] | ||
Noncontrolling interest, return on investment guaranty, percent | 5.10% | |
Guaranty liabilities | $ 1 | |
DTP S.A. | ||
Noncontrolling Interest [Line Items] | ||
Percentage of voting interests acquired | 100.00% | |
Polish Securitization Fund | DTP S.A. | ||
Noncontrolling Interest [Line Items] | ||
Percentage of voting interests acquired | 20.00% |
Sale of Subsidiaries (Details)
Sale of Subsidiaries (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jan. 24, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Gain on sale of subsidiaries | $ 48,474 | $ 0 | $ 0 | |||
Total assets | 0 | 43,243 | ||||
Total liabilities | 0 | $ 4,220 | ||||
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 | 8,277 | |||||
Property and equipment, net | 4,559 | |||||
Goodwill | 29,683 | |||||
Intangible assets, net | 1,711 | |||||
Other assets | 772 | |||||
Total assets | 45,002 | |||||
Accrued expenses | 3,123 | |||||
Total liabilities | $ 3,123 | |||||
Government Services Businesses | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Proceeds from divestiture of businesses | $ 91,500 | |||||
Gain on sale of subsidiaries | $ 46,800 | |||||
PLS Business | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Proceeds from divestiture of businesses | $ 4,500 | |||||
Gain on sale of subsidiaries | $ 1,600 |