Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 06, 2019 | Jun. 30, 2018 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | PRA GROUP INC | ||
Entity Central Index Key | 0001185348 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Common Stock, Shares Outstanding | 45,325,738 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,705,630,140 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and cash equivalents | $ 98,695 | $ 120,516 |
Investments | 45,173 | 78,290 |
Finance receivables, net | 3,084,777 | 2,776,199 |
Other receivables, net | 46,157 | 15,770 |
Income taxes receivable | 16,809 | 21,686 |
Net deferred tax asset | 61,453 | 56,459 |
Property and equipment, net | 54,136 | 49,311 |
Goodwill | 464,116 | 526,513 |
Intangible assets, net | 5,522 | 23,572 |
Other assets | 32,721 | 32,656 |
Total assets | 3,909,559 | 3,700,972 |
Liabilities: | ||
Accounts payable | 6,110 | 4,992 |
Accrued expenses | 79,396 | 85,993 |
Income taxes payable | 15,080 | 10,771 |
Net deferred tax liability | 114,979 | 171,185 |
Interest-bearing deposits | 82,666 | 98,580 |
Borrowings | 2,473,656 | 2,170,182 |
Other liabilities | 7,370 | 9,018 |
Total liabilities | 2,779,257 | 2,550,721 |
Redeemable noncontrolling interest | 6,333 | 9,534 |
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, 45,304 shares issued and outstanding at December 31, 2018; 100,000 shares authorized, 45,189 shares issued and outstanding at December 31, 2017 | 453 | 452 |
Additional paid-in capital | 60,303 | 53,870 |
Retained earnings | 1,276,473 | 1,214,840 |
Accumulated other comprehensive loss | (242,109) | (178,607) |
Total stockholders' equity - PRA Group, Inc. | 1,095,120 | 1,090,555 |
Noncontrolling interests | 28,849 | 50,162 |
Total equity | 1,123,969 | 1,140,717 |
Total liabilities and equity | $ 3,909,559 | $ 3,700,972 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
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 | 45,304,000 | 45,189,000 |
Common stock, shares outstanding | 45,304,000 | 45,189,000 |
Consolidated Income Statements
Consolidated Income Statements - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues: | |||
Income recognized on finance receivables | $ 891,899 | $ 795,435 | $ 845,142 |
Fee income | 14,916 | 24,916 | 77,381 |
Other revenue | 1,441 | 7,855 | 8,080 |
Total revenues | 908,256 | 828,206 | 930,603 |
Net allowance charges | (33,425) | (11,898) | (98,479) |
Operating expenses: | |||
Compensation and employee services | 319,400 | 273,033 | 258,846 |
Legal collection fees | 42,941 | 43,351 | 47,717 |
Legal collection costs | 104,988 | 76,047 | 84,485 |
Agency fees | 33,854 | 35,530 | 44,922 |
Outside fees and services | 61,492 | 62,792 | 63,098 |
Communication | 43,224 | 33,132 | 33,771 |
Rent and occupancy | 16,906 | 14,823 | 15,710 |
Depreciation and amortization | 19,322 | 19,763 | 24,359 |
Other operating expenses | 47,444 | 44,103 | 39,466 |
Total operating expenses | 689,571 | 602,574 | 612,374 |
Income from operations | 185,260 | 213,734 | 219,750 |
Other income and (expense): | |||
Gain on sale of subsidiaries | 26,575 | 48,474 | 0 |
Interest expense, net | (121,078) | (98,041) | (80,864) |
Foreign exchange (loss)/gain | (944) | (1,104) | 2,564 |
Other | (316) | (2,790) | (5,823) |
Income before income taxes | 89,497 | 160,273 | 135,627 |
Income tax expense/(benefit) | 13,763 | (10,852) | 43,577 |
Net income | 75,734 | 171,125 | 92,050 |
Adjustment for net income attributable to noncontrolling interests | 10,171 | 6,810 | 5,795 |
Net income attributable to PRA Group, Inc. | $ 65,563 | $ 164,315 | $ 86,255 |
Net income per share attributable to PRA Group, Inc.: | |||
Basic (USD per share) | $ 1.45 | $ 3.60 | $ 1.86 |
Diluted (USD per share) | $ 1.44 | $ 3.59 | $ 1.86 |
Weighted average number of shares outstanding: | |||
Basic (shares) | 45,280 | 45,671 | 46,316 |
Diluted (shares) | 45,413 | 45,823 | 46,388 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 75,734 | $ 171,125 | $ 92,050 |
Change in foreign currency translation | (63,544) | 67,858 | (14,559) |
Total comprehensive income | 12,190 | 238,983 | 77,491 |
Adjustment for net income attributable to noncontrolling interests | 10,171 | 6,810 | 5,795 |
Change in foreign currency translation | (42) | (5,478) | 8,490 |
Comprehensive income attributable to noncontrolling interests | 10,129 | 1,332 | 14,285 |
Comprehensive income attributable to PRA Group, Inc. | $ 2,061 | $ 237,651 | $ 63,206 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) | Noncontrolling Interests | |
Beginning Balance, shares at Dec. 31, 2015 | 46,173,000 | ||||||
Beginning 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 | 92,273 | 86,255 | 6,018 | ||||
Foreign currency translation adjustment | (14,559) | (23,083) | 8,524 | ||||
Distributions to noncontrolling interest | (934) | (934) | |||||
Vesting of nonvested shares, shares | 183,000 | ||||||
Vesting of restricted stock | $ 2 | (2) | |||||
Share-based compensation expense | 6,138 | 6,138 | |||||
Tax (deficiency)/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 | ||||||
Ending Balance at Dec. 31, 2016 | 918,321 | $ 464 | 66,414 | 1,050,525 | (251,944) | 52,862 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 170,902 | 164,315 | 6,587 | ||||
Foreign currency translation adjustment | 66,135 | 73,337 | (7,202) | ||||
Distributions to noncontrolling interest | (2,085) | (2,085) | |||||
Vesting of nonvested shares, shares | 145,000 | ||||||
Vesting of restricted stock | $ 1 | (1) | |||||
Repurchase and cancellation of common stock, shares | (1,312,000) | ||||||
Repurchase and cancellation of common stock | (44,909) | $ (13) | (44,896) | ||||
Share-based compensation expense | 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 | $ 1,140,717 | $ 452 | 53,870 | 1,214,840 | (178,607) | 50,162 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Cumulative effect of change in accounting principle - equity securities | [1] | (3,930) | (3,930) | ||||
Balance, adjusted | 1,136,787 | $ 452 | 53,870 | 1,210,910 | (178,607) | 50,162 | |
Net income | 75,734 | 65,563 | 10,171 | ||||
Foreign currency translation adjustment | (63,544) | (63,502) | (42) | ||||
Distributions to noncontrolling interest | (33,271) | (33,271) | |||||
Purchase of noncontrolling interest | 1,829 | 1,829 | |||||
Vesting of nonvested shares, shares | 115,000 | ||||||
Vesting of restricted stock | $ 1 | (1) | |||||
Share-based compensation expense | 8,521 | 8,521 | |||||
Employee stock relinquished for payment of taxes | $ (2,087) | (2,087) | |||||
Ending Balance, shares at Dec. 31, 2018 | 45,304,000 | 45,304,000 | |||||
Ending Balance at Dec. 31, 2018 | $ 1,123,969 | $ 453 | $ 60,303 | $ 1,276,473 | $ (242,109) | $ 28,849 | |
[1] | (1) Relates to the adoption of ASU 2016-01, "Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities" ("ASU 2016-01"). Refer to Note 3 for further detail. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | |||
Net income | $ 75,734 | $ 171,125 | $ 92,050 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Share-based compensation expense | 8,521 | 8,678 | 6,138 |
Depreciation and amortization | 19,322 | 19,763 | 24,359 |
Gain on sale of subsidiaries | (26,575) | (48,474) | 0 |
Amortization of debt discount and issuance costs | 22,057 | 18,152 | 10,276 |
Impairment of investments | 0 | 1,745 | 5,823 |
Deferred tax benefit | (56,208) | (130,138) | (21,314) |
Net unrealized foreign currency transaction loss/(gain) | 5,730 | (1,098) | (2,364) |
Fair value in earnings for equity securities | (3,502) | 0 | 0 |
Net allowance charges | 33,425 | 11,898 | 98,479 |
Other | 0 | (4,033) | 0 |
Changes in operating assets and liabilities: | |||
Other assets | (2,180) | (460) | 1,861 |
Other receivables, net | (4,269) | (3,461) | 10,016 |
Accounts payable | 1,321 | 2,743 | (2,087) |
Income taxes receivable/(payable), net | 9,390 | (22,715) | (13,663) |
Accrued expenses | (1,334) | (5,752) | (9,724) |
Other liabilities | (566) | (2,498) | 6,053 |
Net cash provided by operating activities | 80,866 | 15,475 | 205,903 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (20,521) | (22,840) | (14,160) |
Acquisition of finance receivables | (1,105,759) | (1,086,029) | (890,803) |
Collections applied to principal on finance receivables | 733,306 | 717,170 | 646,844 |
Business acquisitions, net of cash acquired | 0 | 0 | (60,241) |
Cash received upon consolidation of Polish investment fund | 17,531 | 0 | 0 |
Proceeds from sale of subsidiaries, net | 4,905 | 93,304 | 0 |
Purchase of investments | (42,622) | (6,688) | (6,052) |
Proceeds from sales and maturities of investments | 25,909 | 10,123 | 6,898 |
Net cash used in investing activities | (387,251) | (294,960) | (317,514) |
Cash flows from financing activities: | |||
Proceeds from lines of credit | 737,464 | 1,260,161 | 985,751 |
Principal payments on lines of credit | (403,348) | (1,549,833) | (1,007,234) |
Repurchases of common stock | 0 | (44,909) | 0 |
Tax withholdings related to share-based payments | (2,087) | (3,022) | (2,850) |
Payments of origination costs and fees | (2,260) | (18,240) | (17,539) |
Cash paid for purchase of portion of noncontrolling interest | 1,664 | 0 | 0 |
Distributions paid to noncontrolling interest | (14,486) | (1,429) | (934) |
Proceeds from long-term debt | 0 | 310,000 | 297,893 |
Principal payments on notes payable and long-term debt | (10,000) | (15,021) | (193,580) |
Net (decrease)/increase in interest-bearing deposits | (8,693) | 12,991 | 32,905 |
Proceeds from convertible debt | 0 | 345,000 | 0 |
Net cash provided by financing activities | 294,926 | 295,698 | 94,412 |
Effect of exchange rate on cash | (10,362) | 10,016 | 40,114 |
Net (decrease)/increase in cash and cash equivalents | (21,821) | 26,229 | 22,915 |
Cash and cash equivalents, beginning of year | 120,516 | 94,287 | 71,372 |
Cash and cash equivalents, end of year | 98,695 | 120,516 | 94,287 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 97,475 | 79,825 | 67,987 |
Cash paid for income taxes | $ 73,483 | $ 144,341 | $ 78,754 |
General and Summary of Signific
General and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
General and Summary of Significant Accounting Policies | General and Summary of Significant Accounting Policies : Nature of operations: As used herein, the terms "PRA Group," the "Company," or similar terms refer to PRA Group, Inc. and its subsidiaries. PRA Group, Inc., a Delaware corporation, is a global financial and business services company with operations in the Americas and Europe. The Company's primary business is the purchase, collection and management of portfolios of nonperforming loans. The Company also provides fee-based services on class action claims recoveries and by servicing consumer bankruptcy accounts in the United States ("U.S."). Basis of presentation: The consolidated financial statements of the Company are prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and include the accounts of all of its subsidiaries. All significant intercompany accounts and transactions have been eliminated. The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures. Realized results could differ from those estimates and assumptions. Reclassification of prior year presentation and correction of immaterial errors: Certain prior year amounts have been reclassified for consistency with the current year presentation. In addition, certain prior year amounts have been revised to correct immaterial errors. For additional information on the correction of the immaterial errors see Note 17. The Company revised the presentation of its consolidated income statements for all reporting periods by reclassifying allowance adjustments to the valuation of its finance receivables as a line item separate from revenues. As a result, the Company no longer includes valuation allowances as part of "Income recognized on finance receivables, net" and reports income recognized on finance receivables gross of valuation allowances. This presentation change had no impact on "Net income per common share attributable to PRA Group, Inc." The Company also revised the presentation in its consolidated statement of cash flows for all reporting periods by reclassifying net allowance charges on its finance receivables from investing activities to operating activities. This presentation change had no other impact on the Company's consolidated financial statements. Segments: Under the guidance of the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") ASC Topic 280 "Segment Reporting" ("ASC 280"), the Company has determined that it has several operating segments that meet the aggregation criteria of ASC 280, and, therefore, it has one reportable segment, accounts receivable management, 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 (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, 2018 , 2017 and 2016 , and long-lived assets held at December 31, 2018 and 2017 , by geographical location (amounts in thousands) were: Years Ended December 31, As of December 31, 2018 2017 2016 2018 2017 Revenues Long-Lived Assets United States $ 619,172 $ 560,278 $ 673,881 $ 48,581 $ 41,850 United Kingdom 99,817 81,322 78,930 1,543 2,445 Others (1) 189,267 186,606 177,792 4,012 5,016 Total $ 908,256 $ 828,206 $ 930,603 $ 54,136 $ 49,311 (1) None of the countries included in "Others" comprise greater than 10% 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 nonperforming loan purchasing and collection activities, fee-based services and its investments. It is impracticable for the Company to report further breakdowns of revenues from external customers by product or service. Cash and cash equivalents: The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Concentrations of credit risk: Financial instruments, which potentially expose the Company to concentrations of credit risk, consist primarily of cash, investments and finance receivables. Accumulated other comprehensive 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. For the Company’s financial derivative instruments that are designated as hedging instruments, the change in fair value of the derivative is recorded in other comprehensive income. Investments: Debt Securities. The Company accounts for its investments in debt securities under the guidance of ASC Topic 320, "Investments-Debt Securities" ("ASC 320"). The Company determines the appropriate classification of its investments in debt securities at the time of purchase and reevaluates such determinations at each balance sheet date. Debt securities are classified as held to maturity when the Company has the positive intent and ability to hold the securities to maturity. Debt securities for which the Company does not have the intent or ability to hold to maturity are classified as available for sale. Held-to-maturity securities are carried at amortized cost. Available for sale securities are carried at fair market value, 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. Equity Securities . The Company accounts for its investments in equity securities in accordance with ASC Topic 321, “Investments-Equity Securities” (“ASC 321”), which requires that investments in equity securities be measured at fair value with changes in unrealized gains and losses reported in earnings. The Company's investment in equity securities have historically been carried at cost. In the first quarter of 2018, the Company adopted Accounting Standards Update ("ASU") 2016-01, which requires that investments in equity securities be measured at fair value with changes in unrealized gains and losses reported in earnings. See Note 3 for additional information. Equity Method Investments. Equity method investments that are not consolidated, but over which the Company exercises significant influence, are accounted for under the equity method of accounting. Whether or not the Company exercises significant influence with respect to an investee company depends on an evaluation of several factors including, among others, representation on the investee company’s board of directors and ownership level, which is generally a 20% to 50% interest in the voting securities of the investee company. Under the equity method of accounting, an investee company’s accounts are not reflected within the Company’s consolidated balance sheets and income statements; however, the Company’s share of the earnings or losses of the investee company is reflected in the caption ‘‘Other revenue’’ in the consolidated income statements. The Company’s carrying value in an equity method investee company is reflected in the caption ‘‘Investments’’ in the Company’s consolidated balance sheets. When the Company’s carrying value in an equity method investee company is reduced to zero, no further losses are recorded in the Company’s consolidated financial statements unless the Company guaranteed obligations of the investee company or has committed additional funding. When the investee company subsequently reports income, the Company will not record its share of such income until it equals the amount of its share of losses not previously recognized. Finance receivables and income recognition: The Company accounts for its investment in finance receivables under the guidance of ASC Topic 310-30, "Loans and Debt Securities Acquired with Deteriorated Credit Quality" ("ASC 310-30"). The Company acquires portfolios of accounts that have experienced deterioration of credit quality between origination and the Company's acquisition of the accounts. The amount paid for a portfolio reflects the Company's determination that it is probable the Company will be unable to collect all amounts due according to an account's contractual terms. At acquisition, the Company reviews the accounts to determine whether there is evidence of deterioration of credit quality since origination, and if it is probable that the Company will be unable to collect all amounts due according to the loan's contractual terms. If both conditions exist, the Company then determines whether each such account is to be accounted for individually or whether such accounts will be assembled into pools based on common risk characteristics. The Company considers expected prepayments and estimates the amount and timing of undiscounted expected principal, interest and other cash flows (expected at acquisition) for each acquired portfolio based on the Company's proprietary models, and the Company subsequently aggregates portfolios of accounts into quarterly pools. The Company determines the excess of the pool's scheduled contractual principal and contractual interest payments over all cash flows expected at acquisition as an amount that should not be accreted (nonaccretable difference). The remaining amount, representing the excess of the pool's cash flows expected to be collected over the amount paid, is accreted into income recognized on finance receivables over the remaining estimated life of the pool (accretable yield). ASC 310-30 requires that the excess of the contractual cash flows over expected cash flows, based on the Company's estimates derived from proprietary collection models, not be recognized as an adjustment of revenue or expense or on the balance sheet. Each pool is recorded at cost and is accounted for as a single unit for the recognition of income, payments applied to principal and loss provision. Once a pool is established for a calendar quarter, individual receivable accounts are not added to the pool (unless replaced by the seller) or removed from the pool (unless sold or returned to the seller). The yield is estimated and periodically recalculated based on the timing and amount of anticipated cash flows. Income on finance receivables is accrued quarterly based on each pool's effective yield. Significant increases in expected future cash flows may be recognized prospectively, through an upward adjustment of the yield, over a pool's remaining life. Under ASC 310-30, rather than lowering the estimated yield if the collection estimates are below previous expectations, the carrying value of a pool would be written down to maintain the then current yield and is shown as an allowance charge in the consolidated income statements with a corresponding valuation allowance offsetting finance receivables on the consolidated balance sheets. Cash flows greater than the interest accrual will reduce the carrying value of the pool. This reduction in carrying value is defined as payments applied to principal (also referred to as principal amortization). Likewise, cash flows that are less than the interest accrual will accrete the carrying balance. Generally, the Company does not record accretion in the first six to twelve months of the estimated life of the pool; accordingly, the Company utilizes either the cost recovery method or cash method when necessary to prevent accretion as permitted by ASC 310-30. Under the cash method, revenue is recognized as it would be under the interest method up to the amount of cash collections. Under the cost recovery method, no revenue is recognized until the Company has fully collected the cost of the pool, or until such time that the Company considers the collections to be probable and estimable and begins to recognize income based on the interest method as described above. The Company also uses the cost recovery method when collections on a particular pool of accounts cannot be reasonably estimated. A pool can become fully amortized (zero carrying balance on the balance sheet) while still generating cash collections. In this case, all subsequent cash collections are recognized as revenue when received. The Company records a valuation allowance when significant decreases in expected cash flows are identified or there are changes in the timing of expected cash flows that would otherwise require a reduction in the stated yield on a pool of accounts. Factors that may contribute to the recording of valuation allowances include both external and internal factors. External factors that may have an impact on the collectability, and subsequently on the overall profitability of 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 as incurred. Property and equipment are depreciated over their useful lives using the straight-line method of depreciation. Software and computer equipment are amortized or depreciated over three to five years. Furniture and fixtures are depreciated over five to ten years. Equipment is depreciated over five to seven years. Leasehold improvements are depreciated over the lesser of the useful life, which ranges from three to ten years, or the remaining term of the lease. Building improvements are depreciated straight-line over ten to thirty-nine years. When property is sold or retired, the cost and related accumulated depreciation are removed from the balance sheet and any gain or loss is included in the income statement. Business combinations: The Company accounts for business combinations under the acquisition method. The cost of an acquired company is assigned to the tangible and intangible assets acquired and the liabilities assumed on the basis of their fair values at the date of acquisition. The determination of fair values of assets acquired and liabilities assumed requires management to make estimates and use valuation techniques when market values are not readily available. Any excess of purchase price over the fair value of net tangible and intangible assets acquired is allocated to goodwill. Transaction costs associated with business combinations are expensed as incurred. Goodwill and intangible assets: Goodwill, in accordance with ASC Topic 350, "Intangibles-Goodwill and Other" ("ASC 350"), is not amortized but rather is reviewed for impairment annually or more frequently if indicators of potential impairment exist. The Company performs its annual assessment as of October 1. The Company may first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If management concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, management conducts a two-step quantitative goodwill impairment test. The first step of the impairment test involves comparing the fair value of the applicable reporting unit with its carrying value. The Company estimates the fair values of its reporting units using a combination of the income approach, which uses present value techniques, and the market approach, which uses market multiples from comparable transactions where the acquisition target has similar operating and investment characteristics to the reporting unit. If the carrying amount of a reporting unit exceeds the reporting unit's fair value, management performs the second step of the goodwill impairment test. The second step of the goodwill impairment test involves comparing the implied fair value of the affected reporting unit's goodwill with the carrying value of that goodwill. The amount by which the carrying value of the goodwill exceeds its implied fair value, if any, is recognized as an impairment loss . See Note 5 for additional information. Convertible senior notes: The Company accounts for its 3.00% Convertible Senior Notes due 2020 (the "2020 Notes") and its 3.50% Convertible Notes due 2023 (the "2023 Notes" and, together with the 2020 Notes, the "Notes") in accordance with ASC 470-20, "Debt with Conversion and Other Options" ("ASC 470-20"). ASC 470-20 requires that, for convertible debt instruments that must be settled fully or partially in cash upon conversion, issuers must separately account for the liability and equity components in a manner that will reflect the entity's nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. The excess of the principal amount of the liability component over its carrying amount is amortized to interest expense over the expected life of a similar liability that does not have an associated equity component, using the effective interest method. The equity component is not remeasured as long as it continues to meet the conditions for equity classification under ASC 815-40, "Derivatives and Hedging - Contracts in an Entity's Own Equity." Transaction costs incurred with third parties are allocated to the liability and equity components in proportion to the allocation of proceeds and accounted for as debt issuance costs and equity issuance costs, respectively. For diluted earnings per share purposes, based upon the Company's intent and ability to settle conversions of the Notes through a combination of cash and shares, only the conversion spread is included in the diluted earnings per share calculation, if dilutive. Under such method, the settlement of the conversion spread has a dilutive effect when the average share price of the Company's common stock during any quarter exceeds $65.72 for the 2020 Notes or $46.24 for the 2023 Notes, neither of which occurred during the respective periods from when the Notes were issued through December 31, 2018. 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 12. 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. The Company estimates a forfeiture rate for most equity share grants based on historical experience. Time-based equity share awards generally vest between one and three years from the grant date and are expensed on a straight-line basis over the vesting period. Equity share awards that contain a performance metric, are expensed over the requisite service period, generally three years , in accordance with the performance level achieved at each reporting period. See Note 9 for additional information. Derivatives: In the normal course of business, the Company is subject to risk from adverse fluctuations in foreign exchange and interest rates. The Company manages these risks through a program that includes the use of derivative financial instruments, primarily swaps and forwards. Counterparties to these contracts are major financial institutions. The Company is exposed to credit loss in the event of nonperformance by these counterparties. The Company does not use derivative instruments for trading or speculative purposes. The Company's objective in managing exposure to market risk is to limit the impact on earnings and cash flow. The extent to which the Company uses derivative financial instruments is dependent on its access to these contracts in the financial markets and its success using other methods, such as netting exposures in the same currencies to mitigate foreign exchange risk. The Company follows the guidance of ASC Topic 815 "Derivatives and Hedging" ("ASC 815") to account for its derivatives. All of the Company's outstanding derivative financial instruments are recognized in the balance sheet at their fair values. The effect on earnings from recognizing the fair values of these derivative financial instruments depends on their intended use, their hedge designation, and their effectiveness in offsetting changes in the fair values of the exposures they are hedging. Changes in the fair values of instruments designated to reduce or eliminate adverse fluctuations in the fair values of recognized assets and liabilities and unrecognized firm commitments are reported currently in earnings along with changes in the fair values of the hedged items. Changes in the effective portions of the fair values of instruments used to reduce or eliminate adverse fluctuations in cash flows of anticipated or forecasted transactions are reported in equity as a component of accumulated other comprehensive income. Amounts in accumulated other comprehensive income are reclassified to earnings when the related hedged items affect earnings or the anticipated transactions are no longer probable. Changes in the fair values of derivative instruments that are not designated as hedges or do not qualify for hedge accounting treatment are reported currently in earnings. The Company realizes gains and losses from derivative instruments in the same financial statement line item as the hedged item/forecasted transaction. Changes in unrealized gains and losses for derivatives not designated in a hedge accounting relationship are recorded directly in earnings each period and are also recorded in the same financial statement line item as the hedged item/forecasted transaction. Cash flows from the settlement of derivatives, including both economic hedges and those designated in hedge accounting relationships, appear in the consolidated statements of cash flows in the same categories as the cash flows of the hedged item. For derivative financial instruments accounted for as hedging instruments, the Company formally designates and documents, at inception, the financial instrument as a hedge of a specific underlying exposure, the risk management objective, and the manner in which effectiveness of the hedge will be assessed. The Company formally assesses, both at inception and at each reporting period thereafter, whether the derivative financial instruments used in hedging transactions are effective in offsetting changes in fair value or cash flows of the related underlying exposures. Any ineffective portion of the change in fair value of the instruments is recognized immediately in earnings. The Company discontinues the use of hedge accounting prospectively when (1) the derivative instrument is no longer effective in offsetting changes in fair value or cash flows of the underlying hedged item; (2) the derivative instrument expires, is sold, terminated, or exercised; or (3) designating the derivative instrument as a hedge is no longer appropriate. 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 13. Estimated fair value of financial instruments: The Company applies the provisions of ASC Topic 820 "Fair Value Measurements and Disclosures" ("ASC 820"). ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also requires the consideration of differing levels of inputs in the determination of fair values. Disclosure of the estimated fair values of financial instruments often requires the use of estimates. See Note 8 for additional information. Recent accounting pronouncements: Recently Issued Accounting Standards Adopted: In May 2014, FASB issued 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 |
Finance Receivables, net
Finance Receivables, net | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 and 2017 , were as follows (amounts in thousands): 2018 2017 Balance at beginning of year $ 2,776,199 $ 2,309,513 Acquisitions of finance receivables (1) 1,105,423 1,084,418 Addition relating to consolidation of Polish investment fund (See Note 3) 34,871 — Foreign currency translation adjustment (64,985 ) 111,336 Cash collections (1,625,205 ) (1,512,605 ) Income recognized on finance receivables 891,899 795,435 Net allowance charges (33,425 ) (11,898 ) Balance at end of year $ 3,084,777 $ 2,776,199 (1) Acquisitions of finance receivables are portfolio purchases that are net of buybacks and include certain capitalized acquisition related costs. The buybacks and capitalized acquisition costs are netted against the acquisition of finance receivables when paid and may relate to portfolios purchased in prior periods. During the year ended December 31, 2018 , the Company purchased finance receivable portfolios with a face value of $9.2 billion for $1.1 billion . 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 . At December 31, 2018 , the estimated remaining collections ("ERC") on the receivables purchased during the years ended December 31, 2018 and 2017 were $1.9 billion and $1.2 billion , respectively. At December 31, 2018 and 2017 , ERC was $6.1 billion and $5.7 billion , respectively. At the time of acquisition and each quarter thereafter, the life of each pool is estimated based on projected amounts and timing of future cash collections using the proprietary models of the Company. Based upon current projections, estimated cash collections expected to be applied to principal are as follows for the twelve-month periods ending December 31, (amounts in thousands): 2019 $ 816,918 2020 717,243 2021 566,986 2022 404,114 2023 228,229 2024 136,441 2025 70,304 2026 49,797 2027 38,124 2028 27,767 Thereafter 28,854 Total ERC expected to be applied to principal $ 3,084,777 At December 31, 2018 and 2017 , the Company had aggregate net finance receivables balances in pools accounted for under the cost recovery method of $48.0 million and $166.6 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, 2018 and 2017 were as follows (amounts in thousands): 2018 2017 Balance at beginning of year $ 2,927,866 $ 2,738,462 Income recognized on finance receivables (891,899 ) (795,435 ) Net allowance charges 33,425 11,898 Additions from portfolio purchases (1) 876,112 702,914 Reclassifications from nonaccretable difference 194,992 149,512 Foreign currency translation adjustment (82,051 ) 120,515 Balance at end of year $ 3,058,445 $ 2,927,866 (1) Also includes accretable yield additions resulting from the consolidation of a Polish investment fund. 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, 2018 , 2017 and 2016 (amounts in thousands): 2018 2017 2016 Beginning balance $ 225,555 $ 211,465 $ 114,861 Allowance charges 48,856 13,826 100,202 Reversal of previous recorded allowance charges (15,431 ) (1,928 ) (1,723 ) Net allowance charges 33,425 11,898 98,479 Foreign currency translation adjustment (1,832 ) 2,192 (1,875 ) Ending balance $ 257,148 $ 225,555 $ 211,465 |
Investments
Investments | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments: Investments consisted of the following at December 31, 2018 and 2017 (amounts in thousands): 2018 2017 Debt securities Available-for-sale $ 5,077 $ 5,429 Held-to-maturity — 57,204 Equity securities Private equity funds 7,973 14,248 Mutual funds 21,753 1,409 Equity method investments 10,370 — Total investments $ 45,173 $ 78,290 Debt Securities Available-for-Sale Government bonds : The Company's investments in government bonds are classified as available-for-sale and are stated at fair value. Fair value is determined using quoted market prices. Unrealized gains and losses are included in comprehensive income and reported in equity. Held-to-Maturity Investment in securitized assets : The Company holds a majority interest in a Polish investment fund. The investment provides a non-guaranteed preferred return based on the expected net income of the portfolios. Effective July 1, 2018, the Company became a servicer of the fund. In accordance with FASB ASC Topic 810, “Consolidation”, the Company determined that it had effective control of the fund. Accordingly, beginning July 1, 2018 the Company consolidated the fund at the carrying value of the investment, $50.6 million , of which $34.9 million was recorded as finance receivables, net, $17.5 million was recorded as cash and cash equivalents and $1.8 million was recorded as other liabilities on its consolidated balance sheets. No gain or loss was recognized upon consolidation. Prior to July 2018, the investment was accounted for as a beneficial interest in securitized financial assets and stated at amortized cost. Income was recognized under FASB ASC Topic 325-40, "Beneficial Interest in Securitized Financial Assets" ("ASC 325-40"). Revenues recognized on this investment were recorded in the Other Revenue line item in the Company's consolidated income statements. Prior to April 1, 2017, income was recognized using the effective yield method. The underlying securities had both known principal repayment terms as well as unknown principal repayments due to potential borrower pre-payments. Accordingly, it was difficult to accurately predict the final maturity date of this investment. Effective April 1, 2017, the Company determined that it could no longer reasonably forecast the timing of future cash flows and accordingly began using the cost recovery method to recognize income. No investment revenues were recognized on these investments during 2018 . Effective with the July 1, 2018 consolidation, the finance receivables are subject to the Company's finance receivables revenue recognition policy and income is recognized accordingly. During 2017, revenues recognized on these investments were $1.3 million . The unrealized loss on these investments in 2017 was caused by a change in the timing of the estimated cash flows. As total expected cash flows on these investments exceeded the carrying amount, the Company did not consider these investments to be other-than-temporarily impaired at December 31, 2017. The amortized cost and estimated fair value of investments in debt securities at December 31, 2018 and 2017 were as follows (amounts in thousands): December 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value Available-for-sale Government bonds $ 5,160 $ — $ 83 $ 5,077 December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value Available-for-sale Government bonds $ 5,452 $ — $ 23 $ 5,429 Held-to-maturity Securitized assets 57,204 — 14,249 42,955 Equity Securities Investments in private equity funds : Investments in private equity funds represent limited partnerships in which the Company has less than a 3% interest. In the first quarter of 2018, the Company adopted ASU 2016-01, which requires that investments in equity securities be measured at fair value with changes in unrealized gains and losses reported in earnings. Upon adoption of ASU 2016-01, the investments are carried at the fair value reported by the Fund manager. The Company recorded a cumulative effect adjustment of $3.9 million , net of tax, to beginning retained earnings for the unrealized loss on the investment. Prior to 2018, the investments were carried at cost with income recognized in Other Revenue in the consolidated income statements when distributions, up to reported income, were received from the partnerships. The 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 at December 31, 2017. Mutual funds: The Company invests certain excess funds held in Brazil in a Brazilian real denominated mutual fund that invests principally in Brazilian fixed income securities that hedge their currency exposure back into the U.S. dollar. The investments are carried at fair value based on quoted market prices. Unrealized gains and losses: Unrealized gains on equity securities were $3.5 million for the twelve months ended December 31, 2018 . Equity Method Investments Effective December 20, 2018, the Company has a 11.7% interest in RCB Investimentos S.A. ("RCB"), a servicing platform for nonperforming loans in Brazil, which is accounted for on the equity method because the Company exercises significant influence over RCB’s operating and financial activities. Therefore, the Company’s investment in RCB is adjusted for the Company’s proportionate share of RCB’s earnings or losses. Refer to Note 16 for additional information. |
Operating Leases
Operating Leases | 12 Months Ended |
Dec. 31, 2018 | |
Leases, Operating [Abstract] | |
Operating Leases | Operating Leases: The Company leases office space and equipment under operating leases. Rental expense was $13.6 million , $11.8 million and $12.3 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. Future minimum lease payments for operating leases at December 31, 2018 , are as follows for the years ending December 31, (amounts in thousands): 2019 $ 11,470 2020 11,451 2021 10,809 2022 7,287 2023 6,189 Thereafter 7,866 Total future minimum lease payments $ 55,072 |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, net | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, net | Goodwill and Intangible Assets, net: In connection with the Company's business acquisitions, the Company acquired certain tangible and intangible assets. Intangible assets resulting from these acquisitions include client and customer relationships, non-compete agreements, trademarks and technology. The Company performs an annual review of goodwill as of October 1 or more frequently if indicators of impairment exist. The Company performed an annual review of goodwill as of October 1, 2018 and concluded that no goodwill impairment was necessary. The following table represents the changes in goodwill for the years ended December 31, 2018 and 2017 (amounts in thousands): 2018 2017 Balance at beginning of period: Goodwill $ 526,513 $ 506,308 Accumulated impairment loss — (6,397 ) 526,513 499,911 Changes: Sale of subsidiary (36,053 ) — Foreign currency translation adjustment (26,344 ) 26,602 Net change in goodwill (62,397 ) 26,602 Goodwill 464,116 526,513 Accumulated impairment loss — — Balance at end of period: $ 464,116 $ 526,513 The $36.1 million decrease in goodwill during the year ended December 31, 2018, is a result of the sale of a portion of RCB's servicing platform in December of 2018. For additional information, see Note 16. 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. Intangible assets, excluding goodwill, consisted of the following at December 31, 2018 and 2017 (amounts in thousands): 2018 2017 Gross Accumulated Gross Accumulated Client and customer relationships $ 11,806 $ 6,993 $ 30,397 $ 10,752 Non-compete agreements — — 1,388 1,118 Trademarks 400 345 3,285 1,479 Technology 1,548 894 3,240 1,389 Total $ 13,754 $ 8,232 $ 38,310 $ 14,738 The Company amortizes the intangible assets over the estimated useful lives. Total amortization expense for the years ended December 31, 2018 , 2017 and 2016 was $4.3 million , $4.3 million and $6.2 million , respectively. The Company reviews intangible assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable and the carrying amount exceeds its fair value. The future amortization of intangible assets is estimated to be as follows for the years ending December 31, (amounts in thousands): 2019 $ 1,371 2020 1,150 2021 828 2022 739 2023 697 Thereafter 737 Total $ 5,522 |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2018 | |
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, Revolving credit facilities $ 1,160,161 $ 849,815 Term loans 740,551 764,830 Convertible senior notes 632,500 632,500 2,533,212 2,247,145 Less: Debt discount and issuance costs (59,556 ) (76,963 ) Total $ 2,473,656 $ 2,170,182 The following principal payments are due on the Company's borrowings at December 31, 2018 for the years ending December 31, (amounts in thousands): 2019 $ 10,000 2020 297,500 2021 877,433 2022 1,003,279 2023 345,000 Thereafter — Total $ 2,533,212 The Company believes it was in compliance with the covenants of its financing arrangements as of December 31, 2018 . North American Revolving Credit and Term Loan On May 5, 2017, the Company amended and restated its existing credit agreement (as amended, and modified from time to time, the “North American Credit Agreement”) with Bank of America, N.A., as administrative agent, Bank of America, National Association, acting through its Canada branch, as the Canadian administrative agent, and a syndicate of lenders named therein. In the fourth quarter of 2018, the Company entered into a First Amendment (the "First Amendment") to the North American Credit Agreement which, among other things, increased the domestic revolving credit facility by $363.0 million and expanded the accordion feature to allow the Company to increase the original principal amount of the commitments under the North American Credit Agreement by an additional $500.0 million , subject to certain terms and conditions. The total credit facility under the North American Credit Agreement includes an aggregate principal amount of $ 1.6 billion (subject to compliance with a borrowing base and applicable debt covenants), which consists of (i) a fully-funded $435.0 million term loan, (ii) a $1,068.0 million domestic revolving credit facility and (iii) a $50.0 million Canadian revolving credit facility. The facility includes an accordion feature for up to $500.0 million in additional commitments (at the option of the lender) and also provides for up to $25.0 million of letters of credit and a $25.0 million swingline loan sublimit that would reduce amounts available for borrowing. The term and revolving loans accrue interest, at the option of the Company, at either the base rate or the Eurodollar rate (as defined in the North American Credit Agreement) for the applicable term plus 2.50% per annum in the case of the Eurodollar rate loans and 1.50% in the case of the base rate loans. The base rate is the highest of (a) the Federal Funds Rate (as defined in the North American Credit Agreement) plus 0.50% , (b) Bank of America's prime rate or (c) the one-month Eurodollar rate plus 1.00% . Canadian Prime Rate Loans bear interest at a rate per annum equal to the Canadian Prime Rate plus 1.50% . The revolving credit facilities also bear an unused line fee of 0.375% per annum, payable quarterly in arrears. The loans under the North American Credit Agreement mature May 5, 2022. As of December 31, 2018 , the unused portion of the North American Credit Agreement was $519.7 million . Considering borrowing base restrictions as of December 31, 2018 , the amount available to be drawn was $290.3 million . The North American Credit Agreement is secured by a first priority lien on substantially all of the Company's North American assets. The North American Credit Agreement contains restrictive covenants and events of default including the following: • borrowings under each of the domestic revolving loan facility and the Canadian revolving loan facility are subject to separate borrowing base calculations and may not exceed 35% of the ERC of all domestic or Canadian, as applicable, core eligible asset pools, plus 55% of the ERC of domestic or Canadian, as applicable, insolvency eligible asset pools, plus 75% of domestic or Canadian, as applicable, eligible accounts receivable; • the consolidated total leverage ratio cannot exceed 2.75 to 1.0 as of the end of any fiscal quarter; • the consolidated senior secured leverage ratio cannot exceed 2.25 to 1.0 as of the end of any fiscal quarter; • subject to no default or event of default, cash dividends and distributions during any fiscal year cannot exceed $20.0 million ; • subject to no default or event of default, stock repurchases during any fiscal year cannot exceed $100.0 million plus 50% of the prior year's consolidated net income; • permitted acquisitions during any fiscal year cannot exceed $250.0 million (with a $50.0 million per year sublimit for permitted acquisitions by non-loan parties); • indebtedness in the form of senior, unsecured convertible notes or other unsecured financings cannot exceed $750.0 million in the aggregate (without respect to the 2020 Notes); • the Company must maintain positive consolidated income from operations during any fiscal quarter; and • restrictions on changes in control. The outstanding balances and weighted average interest rates by type of borrowing under the credit facility as of the dates indicated are as follows (dollar amounts in thousands): December 31, 2018 December 31, 2017 Amount Outstanding Weighted Average Interest Rate Amount Outstanding Weighted Average Interest Rate Term loan $ 435,000 5.02 % $ 445,000 4.07 % Revolving credit facility 598,279 4.97 373,206 4.05 European Revolving Credit Facility and Term Loan On October 23, 2014, European subsidiaries of the Company ("PRA Europe") entered into a credit agreement with DNB Bank ASA for a Multicurrency Revolving Credit Facility (such agreement as later amended or modified, the "European Credit Agreement"). In the first quarter of 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). Additional changes to the European Credit Agreement resulting from the Fourth Amendment included: the reduction of all applicable margins for the interest payable under the multicurrency revolving credit facility by 15 basis points; the reduction of 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; the reduction of the maximum permitted amount of interest bearing deposits in AK Nordic AB from SEK 1.5 billion to SEK 1.2 billion (approximately $134.3 million at December, 31, 2018); and revisions to the definitions of ERC and loan-to-value ratio ("LTV Ratio"). In the fourth quarter of 2018, the Company reduced the amount of its revolving credit facility by $100.0 million to $800.0 million as allowed under the European Credit Agreement. Under the terms of the European Credit Agreement, the credit facility includes an aggregate amount of approximately $1.1 billion (subject to the borrowing base), of which 267.0 million EUR (approximately $305.6 million at December 31, 2018) is a term loan, accrues interest at the Interbank Offered Rate ("IBOR") plus 2.65% - 3.75% under the revolving facility and 3.75% or 4.00% under the term loan facility (as determined by the LTV Ratio) as defined in the European Credit Agreement), bears an unused line fee, currently 1.21% per annum, of 35% of the margin, is payable monthly in arrears, and matures February 19, 2021. The European Credit Agreement also includes an overdraft facility in the aggregate amount of $40.0 million (subject to the borrowing base), which accrues interest (per currency) at the daily rates as published by the facility agent, bears a facility line fee of 0.125% per quarter, payable quarterly in arrears, and matures February 19, 2021. As of December 31, 2018 , the unused portion of the European Credit Agreement (including the overdraft facility) was $278.1 million . Considering borrowing base restrictions and other covenants as of December 31, 2018 , the amount available to be drawn under the European Credit Agreement (including the overdraft facility) was $166.0 million . The European Credit Agreement is secured by the shares of most of the Company's European subsidiaries and all intercompany loans receivable in Europe. The European Credit Agreement contains restrictive covenants and events of default including the following: • the LTV Ratio cannot exceed 75% ; • the gross interest-bearing debt ratio in Europe cannot exceed 3.25 to 1.0 as of the end of any fiscal quarter; • interest bearing deposits in AK Nordic AB cannot exceed SEK 1.2 billion; and • PRA Europe's cash collections must meet certain thresholds, measured on a quarterly basis. The outstanding balances and weighted average interest rates by type of borrowing under the European Credit Agreement as the dates indicated are as follows (dollar amounts in thousands): December 31, 2018 December 31, 2017 Amount Outstanding Weighted Average Interest Rate Amount Outstanding Weighted Average Interest Rate Term loan $ 305,551 3.75 % $ 319,830 4.25 % Revolving credit facility 561,882 4.10 476,609 5.01 Convertible Senior Notes due 2020 On August 13, 2013, the Company completed the private offering of $287.5 million in aggregate principal amount of its 3.00% Convertible Senior Notes due 2020 (the "2020 Notes"). The 2020 Notes were issued pursuant to an Indenture, dated August 13, 2013 (the "2013 Indenture"), between the Company and Regions Bank, as successor trustee. The 2013 Indenture contains customary terms and covenants, including certain events of default after which the 2020 Notes may be due and payable immediately. The 2020 Notes are senior unsecured obligations of the Company. Interest on the 2020 Notes is payable semi-annually, in arrears, on February 1 and August 1 of each year, beginning on February 1, 2014. Prior to February 1, 2020, the 2020 Notes will be convertible only upon the occurrence of specified events. 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, 2018 , the Company does not believe that any 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 intent is to settle conversions through combination settlement (i.e ., the 2020 Notes would be converted into cash up to the aggregate principal amount and shares of the Company's common stock or a combination of cash and shares of the Company's common stock, at the Company's election, for the remainder). As a result, and in accordance with authoritative guidance related to derivatives and hedging and earnings per share, only the conversion spread is included in the diluted earnings per share calculation, if dilutive. Under such method, the settlement of the conversion spread has a dilutive effect when the average share price of the Company's common stock during any quarter exceeds $65.72 . The Company determined that the fair value of the 2020 Notes at the date of issuance was approximately $255.3 million and designated the residual value of approximately $32.2 million as the equity component. Additionally, the Company allocated approximately $7.3 million of the $8.2 million issuance cost as debt issuance cost and the remaining $0.9 million as equity issuance cost. Convertible Senior Notes due 2023 On May 26, 2017, the Company completed the private offering of $345.0 million in aggregate principal amount of its 3.50% Convertible Senior Notes due 2023 (the "2023 Notes" and, together with the 2020 Notes, the "Notes"). The 2023 Notes were issued pursuant to an Indenture, dated May 26, 2017 (the "2017 Indenture"), between the Company and Regions Bank, as trustee. The 2017 Indenture contains customary terms and covenants, including certain events of default after which the 2023 Notes may be due and payable immediately. The 2023 Notes are senior unsecured obligations of the Company. Interest on the 2023 Notes is payable semi-annually, in arrears, on June 1 and December 1 of each year, beginning on December 1, 2017. Prior to March 1, 2023, the 2023 Notes will be convertible only upon the occurrence of specified events. On or after March 1, 2023, the 2023 Notes will be convertible at any time. The Company has the right, at its election, to redeem all or any part of the outstanding 2023 Notes at any time on or after June 1, 2021 for cash, but only if the last reported sale price (as defined in the 2017 Indenture) exceeds 130% of the conversion price on each of at least 20 trading days during the 30 consecutive trading days ending on and including the trading day immediately before the date the Company sends the related redemption notice. As of December 31, 2018 , the Company does not believe that any of the conditions allowing holders of the 2023 Notes to convert their notes had occurred. The conversion rate for the 2023 Notes is initially 21.6275 shares per $1,000 principal amount of 2023 Notes, which is equivalent to an initial conversion price of approximately $46.24 per share of the Company's common stock and is subject to adjustment in certain circumstances pursuant to the 2017 Indenture. Upon conversion, holders of the 2023 Notes will receive cash, shares of the Company's common stock or a combination of cash and shares of the Company's common stock, at the Company's election. The Company's intent is to settle conversions through combination settlement (i.e ., the 2023 Notes would be converted into cash up to the aggregate principal amount and shares of the Company's common stock or a combination of cash and shares of the Company's common stock, at the Company's election, for the remainder). As a result, and in accordance with authoritative guidance related to derivatives and hedging and earnings per share, only the conversion spread is included in the diluted earnings per share calculation, if dilutive. Under such method, the settlement of the conversion spread has a dilutive effect when the average share price of the Company's common stock during any quarter exceeds $46.24 . The Company determined that the fair value of the 2023 Notes at the date of issuance was approximately $298.8 million and designated the residual value of approximately $46.2 million as the equity component. Additionally, the Company allocated approximately $8.3 million of the $9.6 million issuance cost as debt issuance cost and the remaining $1.3 million as equity issuance cost. The balances of the liability and equity components of the Notes outstanding were as follows as of the dates indicated (amounts in thousands): December 31, December 31, Liability component - principal amount $ 632,500 $ 632,500 Unamortized debt discount (43,812 ) (55,537 ) Liability component - net carrying amount $ 588,688 $ 576,963 Equity component $ 76,216 $ 76,216 The debt discount is being amortized into interest expense over the remaining life of the 2020 Notes and the 2023 Notes using the effective interest rate, which is 4.92% and 6.20% , respectively. Interest expense related to the Notes was as follows for the years ended December 31, 2018 , 2017 and 2016 (amounts in thousands): 2018 2017 2016 Interest expense - stated coupon rate $ 20,700 $ 15,870 $ 8,625 Interest expense - amortization of debt discount 11,725 8,583 4,472 Total interest expense - convertible senior notes $ 32,425 $ 24,453 $ 13,097 Interest Expense, Net The Company incurs interest expense on its borrowings, interest-bearing deposits, and interest rate derivative agreements. The Company earns interest income on certain of its cash and cash equivalents and its interest rate derivative agreements. Interest expense, net, was as follows for the years ended December 31, 2018 , 2017 and 2016 (amounts in thousands): 2018 2017 2016 Interest expense $ 124,208 $ 103,653 $ 85,911 Interest (income) (3,130 ) (5,612 ) (5,047 ) Interest expense, net $ 121,078 $ 98,041 $ 80,864 |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 and 2017 (amounts in thousands): 2018 2017 Software $ 64,670 $ 51,065 Computer equipment 22,153 19,260 Furniture and fixtures 16,061 15,560 Equipment 12,390 9,643 Leasehold improvements 16,556 14,778 Building and improvements 7,431 7,409 Land 1,296 1,296 Accumulated depreciation and amortization (92,877 ) (80,967 ) Assets in process 6,456 11,267 Property and equipment, net $ 54,136 $ 49,311 Depreciation and amortization expense relating to property and equipment for the years ended December 31, 2018 , 2017 and 2016 was $15.1 million , $15.4 million and $18.2 million , respectively. |
Fair Value Measurements And Dis
Fair Value Measurements And Disclosures | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 and December 31, 2017 (amounts in thousands): December 31, 2018 December 31, 2017 Carrying Estimated Carrying Estimated Financial assets: Cash and cash equivalents $ 98,695 $ 98,695 $ 120,516 $ 120,516 Held-to-maturity investments — — 57,204 42,955 Finance receivables, net 3,084,777 3,410,475 2,776,199 3,060,907 Financial liabilities: Interest-bearing deposits 82,666 82,666 98,580 98,580 Revolving lines of credit 1,160,161 1,160,161 849,815 849,815 Term loans 740,551 740,551 764,830 764,830 Convertible senior notes 588,688 557,122 576,963 620,079 Disclosure of the estimated fair values of financial instruments often requires the use of estimates. The carrying amount and estimates of the fair value of the Company's debt obligations outlined above do not include any related debt issuance costs associated with the debt obligations. The Company uses the following methods and assumptions to estimate the fair value of financial instruments: Cash and cash equivalents: The carrying amount approximates fair value and quoted prices for identical assets in active markets. Accordingly, the Company estimates the fair value of cash and cash equivalents using Level 1 inputs. Held-to-maturity investments: Fair value of the Company's investment in the certificates of a 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. Finance receivables, net: The Company estimates the 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 senior notes: The fair value estimates for the Notes incorporate quoted market prices which were obtained from secondary market broker quotes which were derived from a variety of inputs including client orders, information from their pricing vendors, modeling software, and actual trading prices when they occur. Accordingly, the Company uses Level 2 inputs for its fair value estimates. Furthermore, in the table above, carrying amount represents the portion of the Notes classified as debt, while estimated fair value pertains to the face amount of the Notes. Financial Instruments Required To Be Carried At Fair Value The carrying amounts in the following table are measured at fair value on a recurring basis in the accompanying consolidated balance sheets at December 31, 2018 and 2017 (amounts in thousands): Fair Value Measurements as of December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Available-for-sale investments Government bonds $ 5,077 $ — $ — $ 5,077 Fair value through net income investments Mutual funds 21,753 — — 21,753 Derivative contracts (recorded in other assets) — 3,334 — 3,334 Fair Value Measurements as of December 31, 2017 Level 1 Level 2 Level 3 Total Assets: Available-for-sale investments Government bonds $ 5,429 $ — $ — $ 5,429 Liabilities: Derivative contracts (recorded in accrued expenses) — 1,108 — 1,108 Available-for-sale investments Government bonds: Fair value of the Company's investment in government bonds is estimated using quoted market prices. Accordingly, the Company uses Level 1 inputs. Fair value through net income investments Mutual funds: Fair value of the Company's investment in mutual funds is estimated using quoted market prices. Accordingly, the Company uses Level 1 inputs. Derivative contracts: The estimated fair value of the derivative contracts is determined using industry standard valuation models. These models project future cash flows and discount the future amounts to a present value using market-based observable inputs, including interest rate curves and other factors. Accordingly, the Company uses Level 2 inputs for its fair value estimates. Investments measured using net asset value Private equity funds: This class of investments consists of private equity funds that invest primarily in loans and securities including single-family residential debt; corporate debt products; and financially-oriented, real-estate-rich and other operating companies in the Americas, Western Europe, and Japan. These investments are subject to certain restrictions regarding transfers and withdrawals. The investments cannot be redeemed with the funds. Instead, distributions are received through the liquidation of the underlying assets of the fund. The investments are expected to be returned through distributions as a result of liquidations of the funds' underlying assets over 1 to 6 years. The fair value of these private equity funds following the application of the NAV practical expedient was $8.0 million and $8.8 million as of December 31, 2018 and December 31, 2017 , respectively. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
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 $8.5 million , $8.7 million and $6.1 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. With the adoption of ASU 2016-09 in the first quarter of 2017, the Company 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 $1.7 million , $3.2 million and $2.7 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. Nonvested Shares As of December 31, 2018 , 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 $7.7 million with a weighted average remaining life for all nonvested shares of 1.6 years . Grants made to key employees and directors of the Company were assumed to have no forfeiture rates associated with them due to the historically low turnover among this group. With the exception of the grants made pursuant to the LTI program and a few employee and director grants, the nonvested shares vest ratably generally over one to three years and are expensed over their vesting period. The following summarizes all nonvested share activity, excluding those related to the LTI program, from December 31, 2015 through December 31, 2018 (amounts in thousands, except per share amounts): Nonvested Shares Weighted-Average 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 Granted 254 36.39 Vested (151 ) 35.13 Canceled (22 ) 35.02 December 31, 2018 379 $ 34.85 The total grant date fair value of shares vested, excluding those granted under the LTI program, during the years ended December 31, 2018 , 2017 and 2016 , was $5.3 million , $6.5 million and $5.7 million , respectively. Long-Term Incentive Program Pursuant to the Plan, the Compensation Committee may grant time-vested and performance-based nonvested shares. All shares granted under the LTI program were granted to key employees of the Company. The following table summarizes all LTI share activity from December 31, 2015 through December 31, 2018 (amounts in thousands, except per share amounts): Nonvested LTI Shares Weighted-Average 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 Granted at target level 121 39.40 Adjustments for actual performance (74 ) 52.47 Vested (19 ) 52.47 Canceled (46 ) 32.31 December 31, 2018 454 $ 33.27 The total grant date fair value of LTI shares vested during the years ended December 31, 2018 , 2017 and 2016 , was $1.0 million , $2.1 million and $6.1 million , respectively. At December 31, 2018 , 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 $2.8 million . The Company assumed a 15.0% forfeiture rate for these grants and the remaining shares have a weighted average remaining life of 1.0 year at December 31, 2018 . |
Earnings per Share
Earnings per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share: Basic earnings per share ("EPS") are computed by dividing net income available to common stockholders of PRA Group, Inc. by weighted average common shares outstanding. Diluted EPS are computed using the same components as basic EPS with the denominator adjusted for the dilutive effect of the conversion spread of the Notes and nonvested share awards, if dilutive. There has been no dilutive effect of the Notes since issuance through December 31, 2018. 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, 2018 , 2017 and 2016 (amounts in thousands, except per share amounts): 2018 2017 2016 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 $ 65,563 45,280 $ 1.45 $ 164,315 45,671 $ 3.60 $ 86,255 46,316 $ 1.86 Dilutive effect of nonvested share awards 133 (0.01 ) 152 (0.01 ) 72 — Diluted EPS $ 65,563 45,413 $ 1.44 $ 164,315 45,823 $ 3.59 $ 86,255 46,388 $ 1.86 There were no antidilutive options outstanding as of December 31, 2018 , 2017 and 2016 . |
Derivatives
Derivatives | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives: The following table summarizes the fair value of derivative instruments as recorded in the Company’s consolidated statements of financial condition (in thousands): December 31, 2018 December 31, 2017 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives designated as hedging instruments: Interest rate swaps Other assets $ 19 $ — Interest rate cap contracts Other assets 25 — Derivatives not designated as hedging instruments: Foreign currency exchange contracts Other assets 2,555 — Interest rate swaps Other assets 735 Accrued expenses 1,108 As of December 31, 2018, the total notional amount of the interest rate derivative contracts that are designated as cash flow hedging instruments was $260.8 million . As of December 31, 2018, the total notional amount of the interest rate derivative contracts that are not designated as cash flow hedging instruments was $169.7 million . During the fourth quarter of 2018, the Company entered into foreign currency forward agreements with aggregate notional amounts of 413.0 million Swedish kroner, 638.9 million Norwegian kroner, and 22.0 million European Union euro to economically hedge the foreign currency exposure related to certain of the Company’s short-term borrowings denominated in currencies other than the functional entity's local currency, and other foreign exchanges exposures. These foreign currency forwards were not designated in hedge accounting relationships, and, accordingly, the mark-to-market fair value adjustments and resulting gains were recorded in the the Foreign Exchange (Loss)/Gain line item in the Company's consolidated income statements. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes: The income tax expense/(benefit) recognized for the years ended December 31, 2018 , 2017 and 2016 is comprised of the following (amounts in thousands): Federal State Foreign Total For the year ended December 31, 2018: Current tax expense $ 23,444 $ 9,026 $ 37,501 $ 69,971 Deferred tax (benefit) (19,527 ) (15,268 ) (21,413 ) (56,208 ) Total income tax expense/(benefit) $ 3,917 $ (6,242 ) $ 16,088 $ 13,763 For the year ended December 31, 2017: Current tax expense $ 77,656 $ 16,543 $ 25,087 $ 119,286 Deferred tax (benefit) (112,118 ) (2,051 ) (15,969 ) (130,138 ) Total income tax (benefit)/expense $ (34,462 ) $ 14,492 $ 9,118 $ (10,852 ) For the year ended December 31, 2016: Current tax expense $ 38,986 $ 5,037 $ 20,868 $ 64,891 Deferred tax (benefit)/expense (7,350 ) 575 (14,539 ) (21,314 ) Total income tax expense $ 31,636 $ 5,612 $ 6,329 $ 43,577 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 Company’s accounting for the following elements of the Tax Act is complete. The Company has recorded amounts as follows through 2018: • Revaluation of deferred tax assets and liabilities: The Tax Act reduced the U.S. federal corporate tax rate from 35% to 21% for tax years beginning after December 31, 2017. In addition, the Tax Act made certain changes to the depreciation rules and implemented new limits on the deductibility of certain executive compensation. The Company has evaluated these changes and has recorded a decrease to net deferred tax liabilities of $74.5 million with a corresponding increase to deferred tax benefit. • Transition Tax on unrepatriated foreign earnings ("Transition Tax"): 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, and the Company has recorded no Transition Tax expense. • Global Intangible Low-Taxed Income ("GILTI"): The Tax Act creates a new requirement that certain income, such as GILTI, earned by foreign subsidiaries must be included currently in the gross income of the U.S. shareholder. Under U.S. GAAP, the Company made an accounting policy election to treat taxes due on future inclusions in U.S. taxable income related to GILTI as a current-period expense when incurred. • Indefinite reinvestment assertion did not change due to the Transition Tax. 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, 2018 , 2017 and 2016 is as follows (amounts in thousands): 2018 2017 2016 Income tax expense at statutory federal rates $ 18,794 $ 56,095 $ 47,469 State tax (benefit)/expense, net of federal tax benefit (5,098 ) 9,072 3,696 Foreign rate difference 206 (4,953 ) (7,993 ) Federal rate change (719 ) (73,779 ) — Other 580 2,713 405 Total income tax expense/(benefit) $ 13,763 $ (10,852 ) $ 43,577 The Company recognized a net deferred tax liability of $53.5 million and $114.7 million as of December 31, 2018 and 2017 , respectively. The components of the net deferred tax liability are as follows (amounts in thousands): 2018 2017 Deferred tax assets: Employee compensation $ 4,670 $ 5,190 Net operating loss carryforward 24,210 42,332 Accrued liabilities 1,850 2,750 Interest 10,559 11,027 Finance receivable revenue recognition - international 37,005 26,765 Other 2,721 9,165 Total deferred tax asset 81,015 97,229 Deferred tax liabilities: Depreciation expense 5,556 15,417 Intangible assets and goodwill 5,435 8,856 Convertible debt 10,998 14,645 Finance receivable revenue recognition - IRS settlement 74,296 117,026 Finance receivable revenue recognition - domestic 23,744 16,957 Total deferred tax liability 120,029 172,901 Net deferred tax liability before valuation allowance 39,014 75,672 Valuation allowance 14,512 39,054 Net deferred tax liability $ 53,526 $ 114,726 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, 2018 and 2017 , the valuation allowance, relating mainly to net operating losses, capital losses and deferred interest expense in Norway, Brazil, UK and Luxembourg, was $14.5 million and $39.1 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. On May 10, 2017, the Company reached a settlement with the Internal Revenue Service ("IRS") in regards to the IRS assertion that tax revenue recognition using the cost recovery method did not clearly reflect taxable income. In accordance with the settlement, the Company changed its tax accounting method used to recognize finance receivables revenue effective with tax year 2017. Under the new method, a portion of the annual collections amortizes principal and the remaining portion is taxable income. The deferred tax liability related to the difference in timing between the new method and the cost recovery method will be incorporated evenly into the Company’s tax filings over four years effective with tax year 2017. The Company was not required to pay any interest or penalties in connection with the settlement. ASC 740 requires the recognition of interest if the tax law would require interest to be paid on the underpayment of taxes, and recognition of penalties if a tax position does not meet the minimum statutory threshold to avoid payment of penalties. The Company believes it has sufficient support for the technical merits of its positions and that it is more likely than not these positions will be sustained. Accordingly, the Company has not accrued for interest or penalties on any of its tax positions. At December 31, 2018 , the tax years subject to examination by the major federal, state and international taxing jurisdictions are 2013 and subsequent years. As of December 31, 2018 , the cumulative unremitted earnings of the Company's foreign subsidiaries are approximately $21.2 million . The Company intends for predominantly all foreign earnings to be indefinitely reinvested in its foreign operations and, therefore, the recording of deferred tax liabilities for such unremitted earnings is not required. It is impracticable to determine the total amount of unrecognized deferred taxes with respect to these indefinitely reinvested earnings. The Company's foreign subsidiaries had $71.0 million and $50.8 million of net operating loss carryforwards net of valuation allowances as of December 31, 2018 and 2017 , 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, 2018 | |
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, 2018 , estimated future compensation under these agreements was approximately $16.1 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 the non-U.S. agreements is not included in the $16.1 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, 2018 totaled approximately $55.1 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, 2018 was approximately $303.7 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, 2018 , where the range of loss can be estimated, was not material. In certain legal proceedings, the Company may have recourse to insurance or third-party contractual indemnities to cover all or portions of its litigation expenses, judgments, or settlements. Loss estimates and accruals for potential liability related to legal proceedings are typically exclusive of potential recoveries, if any, under the Company's insurance policies or third-party indemnities. During the year ended December 31, 2017, the Company recorded $4.0 million in potential recoveries under the Company's insurance policies or third-party indemnities which is included in other receivables, net at December 31, 2017. In the third quarter of 2018, the Company received the aforementioned recoveries. The matters described below fall outside of the normal parameters of the Company's routine legal proceedings. Multi-State Investigation On November 17, 2015, the Company received civil investigative demands from multiple state Attorney General offices ("AGOs") broadly relating to its debt collection practices in the U.S. The Company has fully cooperated with the investigations and discussed potential resolution of the investigations with the AGOs. In these discussions, the AGOs have taken positions with which the Company disagrees, including positions related to penalties, restitution and/or the adoption of new practices and controls in the conduct of the Company's business. If the Company is unable to resolve its differences with the AGOs, it is possible that one or more individual state AGOs may file claims against the Company. The range of loss, if any, cannot be estimated at this time. Iris Pounds v. Portfolio Recovery Associates, LLC On November 21, 2016, Iris Pounds filed suit against the Company in Durham County, North Carolina alleging violations of the North Carolina Prohibited Practices by Collection Agencies Act. The purported class consists of all individuals against whom the Company had obtained a judgment by default in North Carolina on or after October 1, 2009. On December 9, 2016, the Company removed the matter to the United States District Court for the Middle District of North Carolina (the "District Court") and filed a motion to dismiss. On March 28, 2018, the District Court entered an order remanding the matter to the North Carolina state court which the Fourth Circuit Court of Appeals affirmed on May 17, 2018. On January 11, 2019, the Company filed motions to dismiss and to compel arbitration with the North Carolina state court. The Company is seeking review of that decision before the United States Supreme Court. 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, 2018 | |
Defined Contribution Plan [Abstract] | |
Retirement Plans | Retirement Plans: The Company sponsors defined contribution plans primarily in the U.S. and Europe. The U.S. plan is organized as a 401(k) plan under which all employees over eighteen years of age are eligible to make voluntary contributions to the plan up to 100% of their compensation, subject to IRS limitations, after completing six months of service, as defined in the plan. The Company makes matching contributions of up to 4% of an employee's salary. For the defined contribution plans in Europe, the Company pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. Total compensation expense related to the Company's contributions was $6.3 million , $5.2 million and $5.1 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interest | 12 Months Ended |
Dec. 31, 2018 | |
Noncontrolling Interest [Abstract] | |
Redeemable Noncontrolling Interest | Redeemable Noncontrolling Interest: With the acquisition of DTP S.A. in 2016, the Company acquired a 20% owned Polish securitization fund (the "Fund"). Under ASC 810-10, the Company 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. As of December 31, 2018 and 2017, the Company owned 37.5% and 21.7% of the Fund, respectively. 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. Additionally, the Company has guaranteed the noncontrolling shareholders a 5.1% per annum return on their investment. Accordingly, for the years ended December 31, 2018 and 2017, the Company recorded a guaranty expense of $0.7 million and $1.0 million , respectively. |
Sale of Subsidiaries
Sale of Subsidiaries | 12 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Sale of Subsidiaries | Sales of Subsidiaries: On December 20, 2018, the Company sold 79% of its interest in its Brazilian subsidiary RCB's servicing platform for $40.0 million . The Company recognized a pre-tax gain of $26.6 million , which includes a gain of $5.4 million on its 11.7% retained interest. The Company received 25% of the proceeds in the fourth quarter of 2018 and the remaining 75% in the first quarter of 2019. The fair value of the retained interest was estimated based on the transaction price. The Company accounts for its remaining interest in RCB as an equity method investment. As part of the Company’s strategy to focus on its primary business, the purchase, collection and management of portfolios of nonperforming loans, the Company sold its government services businesses: PRA Government Services, LLC; MuniServices, LLC; and PRA Professional Services, LLC in the first quarter of 2017, for $91.5 million in cash plus additional consideration for certain balance sheet items. The pre-tax gain on sale was approximately $46.8 million and was recorded in the first quarter of 2017. During the second quarter of 2017, the Company sold its vehicle location, skip tracing and collateral recovery business, PLS, for $4.5 million which resulted in a pre-tax gain on sale of approximately $1.6 million . |
Correction of Immaterial Errors
Correction of Immaterial Errors | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Correction of Immaterial Errors | Immaterial Errors: The Company’s audited consolidated balance sheets as of December 31, 2018 and 2017, the related consolidated statements of income, comprehensive income, changes in equity and cash flows for the years ended December 31, 2018, 2017 and 2016, and the related notes, have been corrected for immaterial errors regarding the accounting for secured loans. Corrections In 2018, the Company identified and corrected immaterial errors related to the measurement of income on its beneficial rights to certain Austrian portfolios of nonperforming loans. The beneficial rights are accounted for as secured loans. Income recognized on these arrangements should be recorded in accordance with ASC Topic 310-20, "Receivables - Nonrefundable Fees and Other Costs", whereby changes in cash flow estimates should be recognized as retrospective adjustments to yield. Previously, the Company recognized income on the secured loans in accordance with ASC 310-30, which recognizes changes in cash flow estimates as prospective changes to yield. The Company evaluated the materiality of the errors described in the previous paragraph from a qualitative and quantitative perspective. Based on such evaluation, the Company concluded that they are not material to any individual prior period, nor did they have a material effect on the trend of financial results, taking into account the requirements of SAB No. 108, "Considering the Effect of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements" ("SAB 108"). Accordingly, the Company corrected these errors in every affected period in the 2018, 2017 and 2016 consolidated financial statements. The impact of the immaterial error corrections described above are presented on an as previously reported basis, and detailed below as corrections, and on an as corrected basis in the following summarized financial data for 2018, 2017 and 2016 (in thousands, except per share data): 2018 (1) Uncorrected Correction As Reported Income recognized on finance receivables $ 890,719 $ 1,180 $ 891,899 Income tax expense 13,468 295 13,763 Net income 74,849 885 75,734 Net income attributable to PRA Group, Inc. $ 64,678 $ 885 $ 65,563 Net income per share attributable to PRA Group, Inc.: Basic $ 1.43 $ 0.02 $ 1.45 Diluted $ 1.42 $ 0.02 $ 1.44 Finance receivables, net $ 3,079,319 5,458 $ 3,084,777 Net deferred tax asset 62,818 (1,365 ) 61,453 Net cash provided by operating activities 79,686 1,180 80,866 Net cash used in investing activities 386,071 1,180 387,251 (1) Included for comparability purposes only. The Company has not previously reported its fourth quarter 2018 results. 2017 As Previously Reported Correction As Corrected Income recognized on finance receivables $ 792,701 $ 2,734 $ 795,435 Income tax (benefit)/expense (11,536 ) 684 (10,852 ) Net income 169,075 2,050 171,125 Net income attributable to PRA Group, Inc. $ 162,265 $ 2,050 $ 164,315 Net income per share attributable to PRA Group, Inc.: Basic $ 3.55 $ 0.05 $ 3.60 Diluted $ 3.54 $ 0.05 $ 3.59 Finance receivables, net $ 2,771,921 $ 4,278 $ 2,776,199 Net deferred tax asset 57,529 (1,070 ) 56,459 Net cash provided by operating activities (2) 12,741 2,734 15,475 Net cash used in investing activities (2) 292,226 2,734 294,960 2016 As Previously Reported Correction As Corrected Income recognized on finance receivables $ 843,598 $ 1,544 $ 845,142 Income tax expense 43,191 386 43,577 Net income 90,892 1,158 92,050 Net income attributable to PRA Group, Inc. $ 85,097 $ 1,158 $ 86,255 Net income per share attributable to PRA Group, Inc.: Basic $ 1.84 $ 0.02 $ 1.86 Diluted $ 1.83 $ 0.03 $ 1.86 Finance receivables, net $ 2,307,969 $ 1,544 $ 2,309,513 Net deferred tax asset 28,482 (386 ) 28,096 Net cash provided by operating activities (2) 204,359 1,544 205,903 Net cash used in investing activities (2) 315,970 1,544 317,514 (2) The "As Previously Reported" totals have been adjusted for a reclassification. For additional information on the reclassification see Note 1. |
General and Summary of Signif_2
General and Summary of Significant Accounting Policies (Policy) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation: The consolidated financial statements of the Company are prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and include the accounts of all of its subsidiaries. All significant intercompany accounts and transactions have been eliminated. The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures. Realized results could differ from those estimates and assumptions. |
Reclassification of prior year presentation and correction of immaterial errors | Reclassification of prior year presentation and correction of immaterial errors: Certain prior year amounts have been reclassified for consistency with the current year presentation. In addition, certain prior year amounts have been revised to correct immaterial errors. For additional information on the correction of the immaterial errors see Note 17. The Company revised the presentation of its consolidated income statements for all reporting periods by reclassifying allowance adjustments to the valuation of its finance receivables as a line item separate from revenues. As a result, the Company no longer includes valuation allowances as part of "Income recognized on finance receivables, net" and reports income recognized on finance receivables gross of valuation allowances. This presentation change had no impact on "Net income per common share attributable to PRA Group, Inc." The Company also revised the presentation in its consolidated statement of cash flows for all reporting periods by reclassifying net allowance charges on its finance receivables from investing activities to operating activities. This presentation change had no other impact on the Company's consolidated financial statements. |
Segments | Segments: Under the guidance of the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") ASC Topic 280 "Segment Reporting" ("ASC 280"), the Company has determined that it has several operating segments that meet the aggregation criteria of ASC 280, and, therefore, it has one reportable segment, accounts receivable management, 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 (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. |
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. For the Company’s financial derivative instruments that are designated as hedging instruments, the change in fair value of the derivative is recorded in other comprehensive income. |
Investments | Investments: Debt Securities. The Company accounts for its investments in debt securities under the guidance of ASC Topic 320, "Investments-Debt Securities" ("ASC 320"). The Company determines the appropriate classification of its investments in debt securities at the time of purchase and reevaluates such determinations at each balance sheet date. Debt securities are classified as held to maturity when the Company has the positive intent and ability to hold the securities to maturity. Debt securities for which the Company does not have the intent or ability to hold to maturity are classified as available for sale. Held-to-maturity securities are carried at amortized cost. Available for sale securities are carried at fair market value, 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. Equity Securities . The Company accounts for its investments in equity securities in accordance with ASC Topic 321, “Investments-Equity Securities” (“ASC 321”), which requires that investments in equity securities be measured at fair value with changes in unrealized gains and losses reported in earnings. The Company's investment in equity securities have historically been carried at cost. In the first quarter of 2018, the Company adopted Accounting Standards Update ("ASU") 2016-01, which requires that investments in equity securities be measured at fair value with changes in unrealized gains and losses reported in earnings. See Note 3 for additional information. Equity Method Investments. Equity method investments that are not consolidated, but over which the Company exercises significant influence, are accounted for under the equity method of accounting. Whether or not the Company exercises significant influence with respect to an investee company depends on an evaluation of several factors including, among others, representation on the investee company’s board of directors and ownership level, which is generally a 20% to 50% interest in the voting securities of the investee company. Under the equity method of accounting, an investee company’s accounts are not reflected within the Company’s consolidated balance sheets and income statements; however, the Company’s share of the earnings or losses of the investee company is reflected in the caption ‘‘Other revenue’’ in the consolidated income statements. The Company’s carrying value in an equity method investee company is reflected in the caption ‘‘Investments’’ in the Company’s consolidated balance sheets. When the Company’s carrying value in an equity method investee company is reduced to zero, no further losses are recorded in the Company’s consolidated financial statements unless the Company guaranteed obligations of the investee company or has committed additional funding. When the investee company subsequently reports income, the Company will not record its share of such income until it equals the amount of its share of losses not previously recognized. |
Finance receivables and income recognition | Finance receivables and income recognition: The Company accounts for its investment in finance receivables under the guidance of ASC Topic 310-30, "Loans and Debt Securities Acquired with Deteriorated Credit Quality" ("ASC 310-30"). The Company acquires portfolios of accounts that have experienced deterioration of credit quality between origination and the Company's acquisition of the accounts. The amount paid for a portfolio reflects the Company's determination that it is probable the Company will be unable to collect all amounts due according to an account's contractual terms. At acquisition, the Company reviews the accounts to determine whether there is evidence of deterioration of credit quality since origination, and if it is probable that the Company will be unable to collect all amounts due according to the loan's contractual terms. If both conditions exist, the Company then determines whether each such account is to be accounted for individually or whether such accounts will be assembled into pools based on common risk characteristics. The Company considers expected prepayments and estimates the amount and timing of undiscounted expected principal, interest and other cash flows (expected at acquisition) for each acquired portfolio based on the Company's proprietary models, and the Company subsequently aggregates portfolios of accounts into quarterly pools. The Company determines the excess of the pool's scheduled contractual principal and contractual interest payments over all cash flows expected at acquisition as an amount that should not be accreted (nonaccretable difference). The remaining amount, representing the excess of the pool's cash flows expected to be collected over the amount paid, is accreted into income recognized on finance receivables over the remaining estimated life of the pool (accretable yield). ASC 310-30 requires that the excess of the contractual cash flows over expected cash flows, based on the Company's estimates derived from proprietary collection models, not be recognized as an adjustment of revenue or expense or on the balance sheet. Each pool is recorded at cost and is accounted for as a single unit for the recognition of income, payments applied to principal and loss provision. Once a pool is established for a calendar quarter, individual receivable accounts are not added to the pool (unless replaced by the seller) or removed from the pool (unless sold or returned to the seller). The yield is estimated and periodically recalculated based on the timing and amount of anticipated cash flows. Income on finance receivables is accrued quarterly based on each pool's effective yield. Significant increases in expected future cash flows may be recognized prospectively, through an upward adjustment of the yield, over a pool's remaining life. Under ASC 310-30, rather than lowering the estimated yield if the collection estimates are below previous expectations, the carrying value of a pool would be written down to maintain the then current yield and is shown as an allowance charge in the consolidated income statements with a corresponding valuation allowance offsetting finance receivables on the consolidated balance sheets. Cash flows greater than the interest accrual will reduce the carrying value of the pool. This reduction in carrying value is defined as payments applied to principal (also referred to as principal amortization). Likewise, cash flows that are less than the interest accrual will accrete the carrying balance. Generally, the Company does not record accretion in the first six to twelve months of the estimated life of the pool; accordingly, the Company utilizes either the cost recovery method or cash method when necessary to prevent accretion as permitted by ASC 310-30. Under the cash method, revenue is recognized as it would be under the interest method up to the amount of cash collections. Under the cost recovery method, no revenue is recognized until the Company has fully collected the cost of the pool, or until such time that the Company considers the collections to be probable and estimable and begins to recognize income based on the interest method as described above. The Company also uses the cost recovery method when collections on a particular pool of accounts cannot be reasonably estimated. A pool can become fully amortized (zero carrying balance on the balance sheet) while still generating cash collections. In this case, all subsequent cash collections are recognized as revenue when received. The Company records a valuation allowance when significant decreases in expected cash flows are identified or there are changes in the timing of expected cash flows that would otherwise require a reduction in the stated yield on a pool of accounts. Factors that may contribute to the recording of valuation allowances include both external and internal factors. External factors that may have an impact on the collectability, and subsequently on the overall profitability of 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 as incurred. Property and equipment are depreciated over their useful lives using the straight-line method of depreciation. Software and computer equipment are amortized or depreciated over three to five years. Furniture and fixtures are depreciated over five to ten years. Equipment is depreciated over five to seven years. Leasehold improvements are depreciated over the lesser of the useful life, which ranges from three to ten years, or the remaining term of the lease. Building improvements are depreciated straight-line over ten to thirty-nine years. When property is sold or retired, the cost and related accumulated depreciation are removed from the balance sheet and any gain or loss is included in the income statement. |
Business combinations | Business combinations: The Company accounts for business combinations under the acquisition method. The cost of an acquired company is assigned to the tangible and intangible assets acquired and the liabilities assumed on the basis of their fair values at the date of acquisition. The determination of fair values of assets acquired and liabilities assumed requires management to make estimates and use valuation techniques when market values are not readily available. Any excess of purchase price over the fair value of net tangible and intangible assets acquired is allocated to goodwill. Transaction costs associated with business combinations are expensed as incurred. |
Goodwill and intangible assets | Goodwill and intangible assets: Goodwill, in accordance with ASC Topic 350, "Intangibles-Goodwill and Other" ("ASC 350"), is not amortized but rather is reviewed for impairment annually or more frequently if indicators of potential impairment exist. The Company performs its annual assessment as of October 1. The Company may first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If management concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, management conducts a two-step quantitative goodwill impairment test. The first step of the impairment test involves comparing the fair value of the applicable reporting unit with its carrying value. The Company estimates the fair values of its reporting units using a combination of the income approach, which uses present value techniques, and the market approach, which uses market multiples from comparable transactions where the acquisition target has similar operating and investment characteristics to the reporting unit. If the carrying amount of a reporting unit exceeds the reporting unit's fair value, management performs the second step of the goodwill impairment test. The second step of the goodwill impairment test involves comparing the implied fair value of the affected reporting unit's goodwill with the carrying value of that goodwill. The amount by which the carrying value of the goodwill exceeds its implied fair value, if any, is recognized as an impairment loss . See Note 5 for additional information. |
Convertible senior notes | Convertible senior notes: The Company accounts for its 3.00% Convertible Senior Notes due 2020 (the "2020 Notes") and its 3.50% Convertible Notes due 2023 (the "2023 Notes" and, together with the 2020 Notes, the "Notes") in accordance with ASC 470-20, "Debt with Conversion and Other Options" ("ASC 470-20"). ASC 470-20 requires that, for convertible debt instruments that must be settled fully or partially in cash upon conversion, issuers must separately account for the liability and equity components in a manner that will reflect the entity's nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. The excess of the principal amount of the liability component over its carrying amount is amortized to interest expense over the expected life of a similar liability that does not have an associated equity component, using the effective interest method. The equity component is not remeasured as long as it continues to meet the conditions for equity classification under ASC 815-40, "Derivatives and Hedging - Contracts in an Entity's Own Equity." Transaction costs incurred with third parties are allocated to the liability and equity components in proportion to the allocation of proceeds and accounted for as debt issuance costs and equity issuance costs, respectively. For diluted earnings per share purposes, based upon the Company's intent and ability to settle conversions of the Notes through a combination of cash and shares, only the conversion spread is included in the diluted earnings per share calculation, if dilutive. Under such method, the settlement of the conversion spread has a dilutive effect when the average share price of the Company's common stock during any quarter exceeds $65.72 for the 2020 Notes or $46.24 for the 2023 Notes, neither of which occurred during the respective periods from when the Notes were issued through December 31, 2018. |
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 12. |
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. The Company estimates a forfeiture rate for most equity share grants based on historical experience. Time-based equity share awards generally vest between one and three years from the grant date and are expensed on a straight-line basis over the vesting period. Equity share awards that contain a performance metric, are expensed over the requisite service period, generally three years , in accordance with the performance level achieved at each reporting period. See Note 9 for additional information. |
Derivatives | Derivatives: In the normal course of business, the Company is subject to risk from adverse fluctuations in foreign exchange and interest rates. The Company manages these risks through a program that includes the use of derivative financial instruments, primarily swaps and forwards. Counterparties to these contracts are major financial institutions. The Company is exposed to credit loss in the event of nonperformance by these counterparties. The Company does not use derivative instruments for trading or speculative purposes. The Company's objective in managing exposure to market risk is to limit the impact on earnings and cash flow. The extent to which the Company uses derivative financial instruments is dependent on its access to these contracts in the financial markets and its success using other methods, such as netting exposures in the same currencies to mitigate foreign exchange risk. The Company follows the guidance of ASC Topic 815 "Derivatives and Hedging" ("ASC 815") to account for its derivatives. All of the Company's outstanding derivative financial instruments are recognized in the balance sheet at their fair values. The effect on earnings from recognizing the fair values of these derivative financial instruments depends on their intended use, their hedge designation, and their effectiveness in offsetting changes in the fair values of the exposures they are hedging. Changes in the fair values of instruments designated to reduce or eliminate adverse fluctuations in the fair values of recognized assets and liabilities and unrecognized firm commitments are reported currently in earnings along with changes in the fair values of the hedged items. Changes in the effective portions of the fair values of instruments used to reduce or eliminate adverse fluctuations in cash flows of anticipated or forecasted transactions are reported in equity as a component of accumulated other comprehensive income. Amounts in accumulated other comprehensive income are reclassified to earnings when the related hedged items affect earnings or the anticipated transactions are no longer probable. Changes in the fair values of derivative instruments that are not designated as hedges or do not qualify for hedge accounting treatment are reported currently in earnings. The Company realizes gains and losses from derivative instruments in the same financial statement line item as the hedged item/forecasted transaction. Changes in unrealized gains and losses for derivatives not designated in a hedge accounting relationship are recorded directly in earnings each period and are also recorded in the same financial statement line item as the hedged item/forecasted transaction. Cash flows from the settlement of derivatives, including both economic hedges and those designated in hedge accounting relationships, appear in the consolidated statements of cash flows in the same categories as the cash flows of the hedged item. For derivative financial instruments accounted for as hedging instruments, the Company formally designates and documents, at inception, the financial instrument as a hedge of a specific underlying exposure, the risk management objective, and the manner in which effectiveness of the hedge will be assessed. The Company formally assesses, both at inception and at each reporting period thereafter, whether the derivative financial instruments used in hedging transactions are effective in offsetting changes in fair value or cash flows of the related underlying exposures. Any ineffective portion of the change in fair value of the instruments is recognized immediately in earnings. The Company discontinues the use of hedge accounting prospectively when (1) the derivative instrument is no longer effective in offsetting changes in fair value or cash flows of the underlying hedged item; (2) the derivative instrument expires, is sold, terminated, or exercised; or (3) designating the derivative instrument as a hedge is no longer appropriate. |
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 13. |
Estimated fair value of financial instruments | Estimated fair value of financial instruments: The Company applies the provisions of ASC Topic 820 "Fair Value Measurements and Disclosures" ("ASC 820"). ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also requires the consideration of differing levels of inputs in the determination of fair values. Disclosure of the estimated fair values of financial instruments often requires the use of estimates. See Note 8 for additional information. |
Recent accounting pronouncements | Recent accounting pronouncements: Recently Issued Accounting Standards Adopted: In May 2014, FASB issued 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 determined that the revenue generated by its subsidiary Claims Compensation Bureau, LLC ("CCB") is within the scope of this standard. The Company adopted ASU 2014-09 in the first quarter of 2018 which had no material impact on its consolidated financial statements. In January 2016, FASB issued ASU 2016-01, as amended by ASU 2018-03, "Financial Instruments - Overall: Technical Corrections and Improvements", issued in February 2018 , which revises the classification and measurement of investments in equity securities. ASU 2016-01 requires that equity investments, except those accounted for under the equity method of accounting, be measured at fair value and changes in fair value be recognized in net income. However, for equity investments that do not have readily determinable fair values and do not qualify for the existing practical expedient to estimate fair value using the Net Asset Value ("NAV") per share (or its equivalent) of the investment, the guidance provides a new measurement alternative. Entities may choose to measure those investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The Company adopted ASU 2016-01 in the first quarter of 2018, which resulted in a cumulative effect adjustment of $3.9 million , net of tax, to retained earnings for the unrealized loss on its equity investments. 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. 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 adopted ASU 2016-16 in the first quarter of 2018 which had no material 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 adopted ASU 2017-01 in the first quarter of 2018 which had no material impact on its consolidated financial statements. In May 2017, FASB issued ASU 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. The Company adopted ASU 2017-09 in the first quarter of 2018 which had no material impact on its consolidated financial statements. In August 2017, FASB issued ASU 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 adopted ASU 2017-12 in the second quarter of 2018 which had no material impact on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, "Intangibles - Goodwill and Other-Internal-Use Software" ("ASU 2018-15") which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This guidance is effective for interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted, including adoption in any interim period. The Company adopted ASU 2018-15 in the third quarter of 2018 which had no material impact on its consolidated financial statements. Recently Issued Accounting Standards Not Yet Adopted: 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 both a liability for future 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. In July 2018, FASB issued ASU 2018-10, "Codification Improvements to Topic 842, Leases" and ASU 2018-11, "Leases (Topic 842) Targeted Improvements" which among other things, allows for a transition method which eliminates the requirement to restate the earliest prior period presented in an entity's financial statements. Entities that elect this transition option still adopt the new lease standard using the modified retrospective transition method required by the standard, but they recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption rather than in the earliest period presented. Entities that elect the alternative transition method will also be required to apply the legacy guidance in ASC Topic 840, "Leases", including its disclosure requirements, in the comparative periods presented in the year they adopt the new leases standard. The Company expects to adopt the standard in the first quarter of 2019 using this alternative transition method. The Company will elect to apply the transition package of practical expedients permitted within the new standard, which among other things, allows it to carryforward the historical lease classification. In addition, the Company will elect the hindsight practical expedient to determine the reasonably certain lease term for existing leases. While the Company is continuing to assess all potential impacts of the standard, it expects total assets and liabilities to increase by approximately $72.0 million as a result of adopting the new standard. The estimate could change due to operational changes in the lease portfolio, which could include lease volume, lease commencement dates, and renewal option and lease termination expectations. The Company does not believe the standard will have any other material effect on its consolidated financial statements. In June 2016, FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326) ("ASU 2016-13"), which requires the measurement of expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The main objective of ASU 2016-13 is to provide financial statement users with more decision-useful information about expected credit losses and recoveries on financial instruments measured at amortized cost held by a reporting entity at each reporting date. Under this model, an entity would recognize an allowance equal to its current estimate of all contractual cash flows that the entity does not expect to collect. The expected credit losses, and subsequent adjustments to such losses, will be recorded through an allowance account that is deducted from the amortized cost basis of the financial asset, with the net carrying value of the financial asset presented on the consolidated balance sheet at the amount expected to be collected. Revenue is recognized over the life of the portfolio at the initial effective interest rate. Subsequent changes in cash flow forecasts, on a present value basis, are adjusted through revenue. ASU 2016-13 supersedes ASC 310-30, which the Company currently follows to account for income recognized on its finance receivables. Financial assets accounted for under ASC 310-30 should use a prospective transition approach where upon adoption, the amortized cost basis should be adjusted to reflect the addition of the allowance for credit losses. 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. The Company expects ASU 2016-13, including the effect of ongoing developments and amendments to the guidance, will have a significant impact on how it measures and records income recognized on its finance receivables and its balance sheet presentation. The Company is in the process of evaluating the impact of adoption on its consolidated financial statements including accounting policy and operational implementation issues. 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 does not expect the adoption of ASU 2016-15 will have a material impact on its consolidated financial statements. In January 2017, FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment" ("ASU 2017-04"). ASU 2017-04 eliminates Step 2 of the goodwill impairment test. Instead, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. ASU 2017-04 is effective for annual and interim periods beginning after December 15, 2019, and early adoption is permitted for interim or annual goodwill impairment tests performed after January 1, 2017. The Company is in the process of evaluating the impact of adoption of ASU 2017-04 on its consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" ("ASU 2018-02"). Under existing GAAP, the effects of changes in tax rates and laws on deferred tax balances are recorded as a component of income tax expense in the period in which the law was enacted. When deferred tax balances related to items originally recorded in accumulated other comprehensive income are adjusted, certain tax effects become stranded in accumulated other comprehensive income. The amendments in ASU 2018-02 allow a reclassification from accumulated other comprehensive income to retained earnings for stranded income tax effects resulting from the 2017 Tax Cuts and Jobs Act (the "Tax Act"). The amendments in this ASU also require certain disclosures about stranded income tax effects. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption in any period is permitted. The Company’s provisional adjustments recorded during the year ended December 31, 2017 to account for the impact of the Tax Act did not result in stranded tax effects. The Company does not anticipate the adoption of this standard will have a material impact on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement” ("ASU 2018-13"). ASU 2018-13 eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of its disclosure framework project. The standard is effective for all entities for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption of ASU 2018-13 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 Signif_3
General and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 , 2017 and 2016 , and long-lived assets held at December 31, 2018 and 2017 , by geographical location (amounts in thousands) were: Years Ended December 31, As of December 31, 2018 2017 2016 2018 2017 Revenues Long-Lived Assets United States $ 619,172 $ 560,278 $ 673,881 $ 48,581 $ 41,850 United Kingdom 99,817 81,322 78,930 1,543 2,445 Others (1) 189,267 186,606 177,792 4,012 5,016 Total $ 908,256 $ 828,206 $ 930,603 $ 54,136 $ 49,311 (1) None of the countries included in "Others" comprise greater than 10% 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 nonperforming loan purchasing and collection activities, fee-based services and its investments. 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, 2018 | |
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, 2018 and 2017 , were as follows (amounts in thousands): 2018 2017 Balance at beginning of year $ 2,776,199 $ 2,309,513 Acquisitions of finance receivables (1) 1,105,423 1,084,418 Addition relating to consolidation of Polish investment fund (See Note 3) 34,871 — Foreign currency translation adjustment (64,985 ) 111,336 Cash collections (1,625,205 ) (1,512,605 ) Income recognized on finance receivables 891,899 795,435 Net allowance charges (33,425 ) (11,898 ) Balance at end of year $ 3,084,777 $ 2,776,199 (1) Acquisitions of finance receivables are portfolio purchases that are net of buybacks and include certain capitalized acquisition related costs. The buybacks and capitalized acquisition costs are netted against the acquisition of finance receivables when paid and may relate to portfolios purchased in prior periods. |
Schedule of Cash Collections Applied to Principal | At the time of acquisition and each quarter thereafter, the life of each pool is estimated based on projected amounts and timing of future cash collections using the proprietary models of the Company. Based upon current projections, estimated cash collections expected to be applied to principal are as follows for the twelve-month periods ending December 31, (amounts in thousands): 2019 $ 816,918 2020 717,243 2021 566,986 2022 404,114 2023 228,229 2024 136,441 2025 70,304 2026 49,797 2027 38,124 2028 27,767 Thereafter 28,854 Total ERC expected to be applied to principal $ 3,084,777 |
Schedule of Changes in Accretable Yield | Changes in accretable yield for the years ended December 31, 2018 and 2017 were as follows (amounts in thousands): 2018 2017 Balance at beginning of year $ 2,927,866 $ 2,738,462 Income recognized on finance receivables (891,899 ) (795,435 ) Net allowance charges 33,425 11,898 Additions from portfolio purchases (1) 876,112 702,914 Reclassifications from nonaccretable difference 194,992 149,512 Foreign currency translation adjustment (82,051 ) 120,515 Balance at end of year $ 3,058,445 $ 2,927,866 (1) Also includes accretable yield additions resulting from the consolidation of a Polish investment fund. |
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, 2018 , 2017 and 2016 (amounts in thousands): 2018 2017 2016 Beginning balance $ 225,555 $ 211,465 $ 114,861 Allowance charges 48,856 13,826 100,202 Reversal of previous recorded allowance charges (15,431 ) (1,928 ) (1,723 ) Net allowance charges 33,425 11,898 98,479 Foreign currency translation adjustment (1,832 ) 2,192 (1,875 ) Ending balance $ 257,148 $ 225,555 $ 211,465 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Investments | Investments consisted of the following at December 31, 2018 and 2017 (amounts in thousands): 2018 2017 Debt securities Available-for-sale $ 5,077 $ 5,429 Held-to-maturity — 57,204 Equity securities Private equity funds 7,973 14,248 Mutual funds 21,753 1,409 Equity method investments 10,370 — Total investments $ 45,173 $ 78,290 |
Unrealized Gain (Loss) on Investments | The amortized cost and estimated fair value of investments in debt securities at December 31, 2018 and 2017 were as follows (amounts in thousands): December 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value Available-for-sale Government bonds $ 5,160 $ — $ 83 $ 5,077 December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value Available-for-sale Government bonds $ 5,452 $ — $ 23 $ 5,429 Held-to-maturity Securitized assets 57,204 — 14,249 42,955 |
Operating Leases (Tables)
Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Leases, Operating [Abstract] | |
Schedule of Future Minimum Lease Payments for Operating Leases | Future minimum lease payments for operating leases at December 31, 2018 , are as follows for the years ending December 31, (amounts in thousands): 2019 $ 11,470 2020 11,451 2021 10,809 2022 7,287 2023 6,189 Thereafter 7,866 Total future minimum lease payments $ 55,072 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 and 2017 (amounts in thousands): 2018 2017 Balance at beginning of period: Goodwill $ 526,513 $ 506,308 Accumulated impairment loss — (6,397 ) 526,513 499,911 Changes: Sale of subsidiary (36,053 ) — Foreign currency translation adjustment (26,344 ) 26,602 Net change in goodwill (62,397 ) 26,602 Goodwill 464,116 526,513 Accumulated impairment loss — — Balance at end of period: $ 464,116 $ 526,513 |
Schedule of Intangible Assets | Intangible assets, excluding goodwill, consisted of the following at December 31, 2018 and 2017 (amounts in thousands): 2018 2017 Gross Accumulated Gross Accumulated Client and customer relationships $ 11,806 $ 6,993 $ 30,397 $ 10,752 Non-compete agreements — — 1,388 1,118 Trademarks 400 345 3,285 1,479 Technology 1,548 894 3,240 1,389 Total $ 13,754 $ 8,232 $ 38,310 $ 14,738 |
Schedule of Estimated Future Amortization of Intangible Assets | The future amortization of intangible assets is estimated to be as follows for the years ending December 31, (amounts in thousands): 2019 $ 1,371 2020 1,150 2021 828 2022 739 2023 697 Thereafter 737 Total $ 5,522 |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, Revolving credit facilities $ 1,160,161 $ 849,815 Term loans 740,551 764,830 Convertible senior notes 632,500 632,500 2,533,212 2,247,145 Less: Debt discount and issuance costs (59,556 ) (76,963 ) Total $ 2,473,656 $ 2,170,182 |
Schedule of Maturities of Long-term Debt | The following principal payments are due on the Company's borrowings at December 31, 2018 for the years ending December 31, (amounts in thousands): 2019 $ 10,000 2020 297,500 2021 877,433 2022 1,003,279 2023 345,000 Thereafter — Total $ 2,533,212 |
Schedule of Line of Credit Facilities | The outstanding balances and weighted average interest rates by type of borrowing under the credit facility as of the dates indicated are as follows (dollar amounts in thousands): December 31, 2018 December 31, 2017 Amount Outstanding Weighted Average Interest Rate Amount Outstanding Weighted Average Interest Rate Term loan $ 435,000 5.02 % $ 445,000 4.07 % Revolving credit facility 598,279 4.97 373,206 4.05 The outstanding balances and weighted average interest rates by type of borrowing under the European Credit Agreement as the dates indicated are as follows (dollar amounts in thousands): December 31, 2018 December 31, 2017 Amount Outstanding Weighted Average Interest Rate Amount Outstanding Weighted Average Interest Rate Term loan $ 305,551 3.75 % $ 319,830 4.25 % Revolving credit facility 561,882 4.10 476,609 5.01 |
Schedule of Liability and Equity Components | The balances of the liability and equity components of the Notes outstanding were as follows as of the dates indicated (amounts in thousands): December 31, December 31, Liability component - principal amount $ 632,500 $ 632,500 Unamortized debt discount (43,812 ) (55,537 ) Liability component - net carrying amount $ 588,688 $ 576,963 Equity component $ 76,216 $ 76,216 |
Schedule of Debt Interest Expense | Interest expense related to the Notes was as follows for the years ended December 31, 2018 , 2017 and 2016 (amounts in thousands): 2018 2017 2016 Interest expense - stated coupon rate $ 20,700 $ 15,870 $ 8,625 Interest expense - amortization of debt discount 11,725 8,583 4,472 Total interest expense - convertible senior notes $ 32,425 $ 24,453 $ 13,097 |
Schedule of Interest Expense, Net | Interest expense, net, was as follows for the years ended December 31, 2018 , 2017 and 2016 (amounts in thousands): 2018 2017 2016 Interest expense $ 124,208 $ 103,653 $ 85,911 Interest (income) (3,130 ) (5,612 ) (5,047 ) Interest expense, net $ 121,078 $ 98,041 $ 80,864 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment, Net [Abstract] | |
Property and Equipment, at Cost | Property and equipment, at cost, consisted of the following as of December 31, 2018 and 2017 (amounts in thousands): 2018 2017 Software $ 64,670 $ 51,065 Computer equipment 22,153 19,260 Furniture and fixtures 16,061 15,560 Equipment 12,390 9,643 Leasehold improvements 16,556 14,778 Building and improvements 7,431 7,409 Land 1,296 1,296 Accumulated depreciation and amortization (92,877 ) (80,967 ) Assets in process 6,456 11,267 Property and equipment, net $ 54,136 $ 49,311 |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 and December 31, 2017 (amounts in thousands): December 31, 2018 December 31, 2017 Carrying Estimated Carrying Estimated Financial assets: Cash and cash equivalents $ 98,695 $ 98,695 $ 120,516 $ 120,516 Held-to-maturity investments — — 57,204 42,955 Finance receivables, net 3,084,777 3,410,475 2,776,199 3,060,907 Financial liabilities: Interest-bearing deposits 82,666 82,666 98,580 98,580 Revolving lines of credit 1,160,161 1,160,161 849,815 849,815 Term loans 740,551 740,551 764,830 764,830 Convertible senior notes 588,688 557,122 576,963 620,079 |
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, 2018 and 2017 (amounts in thousands): Fair Value Measurements as of December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Available-for-sale investments Government bonds $ 5,077 $ — $ — $ 5,077 Fair value through net income investments Mutual funds 21,753 — — 21,753 Derivative contracts (recorded in other assets) — 3,334 — 3,334 Fair Value Measurements as of December 31, 2017 Level 1 Level 2 Level 3 Total Assets: Available-for-sale investments Government bonds $ 5,429 $ — $ — $ 5,429 Liabilities: Derivative contracts (recorded in accrued expenses) — 1,108 — 1,108 |
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, 2018 and 2017 (amounts in thousands): Fair Value Measurements as of December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Available-for-sale investments Government bonds $ 5,077 $ — $ — $ 5,077 Fair value through net income investments Mutual funds 21,753 — — 21,753 Derivative contracts (recorded in other assets) — 3,334 — 3,334 Fair Value Measurements as of December 31, 2017 Level 1 Level 2 Level 3 Total Assets: Available-for-sale investments Government bonds $ 5,429 $ — $ — $ 5,429 Liabilities: Derivative contracts (recorded in accrued expenses) — 1,108 — 1,108 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Share-based Compensation [Abstract] | |
Nonvested Share Transactions | The following summarizes all nonvested share activity, excluding those related to the LTI program, from December 31, 2015 through December 31, 2018 (amounts in thousands, except per share amounts): Nonvested Shares Weighted-Average 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 Granted 254 36.39 Vested (151 ) 35.13 Canceled (22 ) 35.02 December 31, 2018 379 $ 34.85 |
Summarization of Option Related Transactions | The following table summarizes all LTI share activity from December 31, 2015 through December 31, 2018 (amounts in thousands, except per share amounts): Nonvested LTI Shares Weighted-Average 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 Granted at target level 121 39.40 Adjustments for actual performance (74 ) 52.47 Vested (19 ) 52.47 Canceled (46 ) 32.31 December 31, 2018 454 $ 33.27 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 , 2017 and 2016 (amounts in thousands, except per share amounts): 2018 2017 2016 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 $ 65,563 45,280 $ 1.45 $ 164,315 45,671 $ 3.60 $ 86,255 46,316 $ 1.86 Dilutive effect of nonvested share awards 133 (0.01 ) 152 (0.01 ) 72 — Diluted EPS $ 65,563 45,413 $ 1.44 $ 164,315 45,823 $ 3.59 $ 86,255 46,388 $ 1.86 |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The following table summarizes the fair value of derivative instruments as recorded in the Company’s consolidated statements of financial condition (in thousands): December 31, 2018 December 31, 2017 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives designated as hedging instruments: Interest rate swaps Other assets $ 19 $ — Interest rate cap contracts Other assets 25 — Derivatives not designated as hedging instruments: Foreign currency exchange contracts Other assets 2,555 — Interest rate swaps Other assets 735 Accrued expenses 1,108 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Summary of Income Tax Expense Recognized | The income tax expense/(benefit) recognized for the years ended December 31, 2018 , 2017 and 2016 is comprised of the following (amounts in thousands): Federal State Foreign Total For the year ended December 31, 2018: Current tax expense $ 23,444 $ 9,026 $ 37,501 $ 69,971 Deferred tax (benefit) (19,527 ) (15,268 ) (21,413 ) (56,208 ) Total income tax expense/(benefit) $ 3,917 $ (6,242 ) $ 16,088 $ 13,763 For the year ended December 31, 2017: Current tax expense $ 77,656 $ 16,543 $ 25,087 $ 119,286 Deferred tax (benefit) (112,118 ) (2,051 ) (15,969 ) (130,138 ) Total income tax (benefit)/expense $ (34,462 ) $ 14,492 $ 9,118 $ (10,852 ) For the year ended December 31, 2016: Current tax expense $ 38,986 $ 5,037 $ 20,868 $ 64,891 Deferred tax (benefit)/expense (7,350 ) 575 (14,539 ) (21,314 ) Total income tax expense $ 31,636 $ 5,612 $ 6,329 $ 43,577 |
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, 2018 , 2017 and 2016 is as follows (amounts in thousands): 2018 2017 2016 Income tax expense at statutory federal rates $ 18,794 $ 56,095 $ 47,469 State tax (benefit)/expense, net of federal tax benefit (5,098 ) 9,072 3,696 Foreign rate difference 206 (4,953 ) (7,993 ) Federal rate change (719 ) (73,779 ) — Other 580 2,713 405 Total income tax expense/(benefit) $ 13,763 $ (10,852 ) $ 43,577 |
Summary of Components of Net Deferred Tax Liability | The Company recognized a net deferred tax liability of $53.5 million and $114.7 million as of December 31, 2018 and 2017 , respectively. The components of the net deferred tax liability are as follows (amounts in thousands): 2018 2017 Deferred tax assets: Employee compensation $ 4,670 $ 5,190 Net operating loss carryforward 24,210 42,332 Accrued liabilities 1,850 2,750 Interest 10,559 11,027 Finance receivable revenue recognition - international 37,005 26,765 Other 2,721 9,165 Total deferred tax asset 81,015 97,229 Deferred tax liabilities: Depreciation expense 5,556 15,417 Intangible assets and goodwill 5,435 8,856 Convertible debt 10,998 14,645 Finance receivable revenue recognition - IRS settlement 74,296 117,026 Finance receivable revenue recognition - domestic 23,744 16,957 Total deferred tax liability 120,029 172,901 Net deferred tax liability before valuation allowance 39,014 75,672 Valuation allowance 14,512 39,054 Net deferred tax liability $ 53,526 $ 114,726 |
Correction of Immaterial Erro_2
Correction of Immaterial Errors (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of Error Corrections and Prior Period Adjustments | The impact of the immaterial error corrections described above are presented on an as previously reported basis, and detailed below as corrections, and on an as corrected basis in the following summarized financial data for 2018, 2017 and 2016 (in thousands, except per share data): 2018 (1) Uncorrected Correction As Reported Income recognized on finance receivables $ 890,719 $ 1,180 $ 891,899 Income tax expense 13,468 295 13,763 Net income 74,849 885 75,734 Net income attributable to PRA Group, Inc. $ 64,678 $ 885 $ 65,563 Net income per share attributable to PRA Group, Inc.: Basic $ 1.43 $ 0.02 $ 1.45 Diluted $ 1.42 $ 0.02 $ 1.44 Finance receivables, net $ 3,079,319 5,458 $ 3,084,777 Net deferred tax asset 62,818 (1,365 ) 61,453 Net cash provided by operating activities 79,686 1,180 80,866 Net cash used in investing activities 386,071 1,180 387,251 (1) Included for comparability purposes only. The Company has not previously reported its fourth quarter 2018 results. 2017 As Previously Reported Correction As Corrected Income recognized on finance receivables $ 792,701 $ 2,734 $ 795,435 Income tax (benefit)/expense (11,536 ) 684 (10,852 ) Net income 169,075 2,050 171,125 Net income attributable to PRA Group, Inc. $ 162,265 $ 2,050 $ 164,315 Net income per share attributable to PRA Group, Inc.: Basic $ 3.55 $ 0.05 $ 3.60 Diluted $ 3.54 $ 0.05 $ 3.59 Finance receivables, net $ 2,771,921 $ 4,278 $ 2,776,199 Net deferred tax asset 57,529 (1,070 ) 56,459 Net cash provided by operating activities (2) 12,741 2,734 15,475 Net cash used in investing activities (2) 292,226 2,734 294,960 2016 As Previously Reported Correction As Corrected Income recognized on finance receivables $ 843,598 $ 1,544 $ 845,142 Income tax expense 43,191 386 43,577 Net income 90,892 1,158 92,050 Net income attributable to PRA Group, Inc. $ 85,097 $ 1,158 $ 86,255 Net income per share attributable to PRA Group, Inc.: Basic $ 1.84 $ 0.02 $ 1.86 Diluted $ 1.83 $ 0.03 $ 1.86 Finance receivables, net $ 2,307,969 $ 1,544 $ 2,309,513 Net deferred tax asset 28,482 (386 ) 28,096 Net cash provided by operating activities (2) 204,359 1,544 205,903 Net cash used in investing activities (2) 315,970 1,544 317,514 (2) The "As Previously Reported" totals have been adjusted for a reclassification. For additional information on the reclassification see Note 1. |
General and Summary of Signif_4
General and Summary of Significant Accounting Policies (Narrative) (Details) $ / shares in Units, $ in Thousands | May 26, 2017$ / shares | Aug. 13, 2013$ / shares | Dec. 31, 2018segment | Jan. 01, 2019USD ($) | Dec. 31, 2017USD ($) | |
Accounting Policies [Line Items] | ||||||
Number of reportable segments | segment | 1 | |||||
Percentage of income tax positions likely to be realized | 50.00% | |||||
Requisite service period | 3 years | |||||
Possible change in estimates, in years | 1 year | |||||
Change in accounting principle | [1] | $ (3,930) | ||||
Minimum | ||||||
Accounting Policies [Line Items] | ||||||
Warranty period of permitting the return of accounts holder (in days) | 90 days | |||||
Options and nonvested share awards vesting period, minimum, in years | 1 year | |||||
Minimum | Software | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 3 years | |||||
Minimum | Computer Equipment | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 3 years | |||||
Minimum | Furniture and Fixtures | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 5 years | |||||
Minimum | Equipment | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 5 years | |||||
Minimum | Leasehold Improvements | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 3 years | |||||
Minimum | Building Improvements | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 10 years | |||||
Maximum | ||||||
Accounting Policies [Line Items] | ||||||
Warranty period of permitting the return of accounts holder (in days) | 180 days | |||||
Options and nonvested share awards vesting period, minimum, in years | 3 years | |||||
Maximum | Software | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 5 years | |||||
Maximum | Computer Equipment | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 5 years | |||||
Maximum | Furniture and Fixtures | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 10 years | |||||
Maximum | Equipment | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 7 years | |||||
Maximum | Leasehold Improvements | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 10 years | |||||
Maximum | Building Improvements | ||||||
Accounting Policies [Line Items] | ||||||
Property and equipment, useful life, in years | 39 years | |||||
Note Due 2020 | Convertible Debt | ||||||
Accounting Policies [Line Items] | ||||||
Stated percentage | 3.00% | |||||
Average share price of common stock (usd per share) | $ / shares | $ 65.72 | |||||
Note Due 2023 | Convertible Debt | ||||||
Accounting Policies [Line Items] | ||||||
Stated percentage | 3.50% | |||||
Average share price of common stock (usd per share) | $ / shares | $ 46.24 | |||||
Accounting Standards Update 2016-01 | ||||||
Accounting Policies [Line Items] | ||||||
Change in accounting principle | $ (3,900) | |||||
Scenario, Forecast | Accounting Standards Update 2016-02 | ||||||
Accounting Policies [Line Items] | ||||||
Operating lease, right-of-use asset | $ 72,000 | |||||
Operating lease, liability | $ 72,000 | |||||
[1] | (1) Relates to the adoption of ASU 2016-01, "Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities" ("ASU 2016-01"). Refer to Note 3 for further detail. |
General and Summary of Signif_5
General and Summary of Significant Accounting Policies (Revenue and Long-lived Assets by Geographical Location) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | $ 908,256 | $ 828,206 | $ 930,603 |
Long-Lived Assets | 54,136 | 49,311 | |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 619,172 | 560,278 | 673,881 |
Long-Lived Assets | 48,581 | 41,850 | |
United Kingdom | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 99,817 | 81,322 | 78,930 |
Long-Lived Assets | 1,543 | 2,445 | |
Others | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 189,267 | 186,606 | $ 177,792 |
Long-Lived Assets | $ 4,012 | $ 5,016 |
Finance Receivables, net (Sched
Finance Receivables, net (Schedule of Changes In Finance Receivables) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount [Roll Forward] | |||
Balance at beginning of year | $ 2,776,199 | $ 2,309,513 | |
Acquisitions of finance receivables | 1,105,423 | 1,084,418 | |
Addition relating to consolidation of Polish investment fund (See Note 3) | 34,871 | 0 | |
Foreign currency translation adjustment | (64,985) | 111,336 | |
Cash collections | 1,625,205 | 1,512,605 | |
Income recognized on finance receivables | 891,899 | 795,435 | $ 845,142 |
Net allowance charges | 33,425 | 11,898 | 98,479 |
Balance at end of year | $ 3,084,777 | $ 2,776,199 | $ 2,309,513 |
Finance Receivables, net (Narra
Finance Receivables, net (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities [Abstract] | ||
Face value of receivable portfolios | $ 9,200 | $ 7,500 |
Payments to acquire finance receivables | 1,100 | 1,100 |
Estimated remaining collections on purchased receivables | 1,900 | 1,200 |
Total estimated remaining collections | 6,100 | 5,700 |
Aggregate net finance receivables in pools accounted for under the cost recovery method | $ 48 | $ 166.6 |
Finance Receivables, net (Sch_2
Finance Receivables, net (Schedule of Cash Collections Applied to Principal) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities [Abstract] | |
2019 | $ 816,918 |
2020 | 717,243 |
2021 | 566,986 |
2022 | 404,114 |
2023 | 228,229 |
2024 | 136,441 |
2025 | 70,304 |
2026 | 49,797 |
2027 | 38,124 |
2028 | 27,767 |
Thereafter | 28,854 |
Total ERC expected to be applied to principal | $ 3,084,777 |
Finance Receivables, net (Sch_3
Finance Receivables, net (Schedule of Changes in Accretable Yield) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward] | |||
Balance at beginning of year | $ 2,927,866 | $ 2,738,462 | |
Income recognized on finance receivables | (891,899) | (795,435) | $ (845,142) |
Net allowance charges | 33,425 | 11,898 | 98,479 |
Additions from portfolio purchases | 876,112 | 702,914 | |
Reclassifications from nonaccretable difference | 194,992 | 149,512 | |
Foreign currency translation adjustment | (82,051) | 120,515 | |
Balance at end of year | $ 3,058,445 | $ 2,927,866 | $ 2,738,462 |
Finance Receivables, net (Sch_4
Finance Receivables, net (Schedule of Valuation Allowance Account) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Allowance For Loan Losses [Roll Forward] | |||
Beginning balance | $ 225,555 | $ 211,465 | $ 114,861 |
Allowance charges | 48,856 | 13,826 | 100,202 |
Reversal of previous recorded allowance charges | (15,431) | (1,928) | (1,723) |
Net allowance charges | 33,425 | 11,898 | 98,479 |
Foreign currency translation adjustment | (1,832) | 2,192 | (1,875) |
Ending balance | $ 257,148 | $ 225,555 | $ 211,465 |
Investments (Summary of Investm
Investments (Summary of Investments) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Debt securities | ||
Available-for-sale | $ 5,077 | $ 5,429 |
Equity securities | ||
Mutual funds | 21,753 | |
Equity method investments | 10,370 | 0 |
Investments | 45,173 | 78,290 |
Foreign currency mutual funds | ||
Debt securities | ||
Available-for-sale | 5,077 | 5,429 |
Securitized assets | ||
Debt securities | ||
Held-to-maturity | 0 | 57,204 |
Private equity funds | ||
Equity securities | ||
Mutual funds | 7,973 | 14,248 |
Mutual funds | ||
Equity securities | ||
Mutual funds | $ 21,753 | $ 1,409 |
Investments (Narrative) (Detail
Investments (Narrative) (Details) - USD ($) $ in Thousands | Jul. 01, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Investment [Line Items] | ||||||
Finance receivables, net | $ 3,084,777 | $ 2,776,199 | $ 2,309,513 | |||
Cash and cash equivalents, carrying amount | 98,695 | 120,516 | $ 94,287 | $ 71,372 | ||
Other liabilities | 7,370 | 9,018 | ||||
Investment income, net | $ 0 | 1,300 | ||||
Cost-method investment, ownership percentage | 3.00% | |||||
Change in accounting principle | [1] | (3,930) | ||||
Cost-method investment with no loss recognized | 14,200 | |||||
Equity securities, unrealized gain | $ 3,500 | |||||
RCB Investimentos S.A. | ||||||
Investment [Line Items] | ||||||
Ownership percentage | 11.70% | |||||
Securitized assets | ||||||
Investment [Line Items] | ||||||
Held-to-maturity | $ 0 | 57,204 | ||||
Polish Investment Fund | ||||||
Investment [Line Items] | ||||||
Finance receivables, net | $ 34,900 | |||||
Cash and cash equivalents, carrying amount | 17,500 | |||||
Other liabilities | 1,800 | |||||
Gain (loss) on investments | 0 | |||||
Polish Investment Fund | Securitized assets | ||||||
Investment [Line Items] | ||||||
Held-to-maturity | $ 50,600 | |||||
Accounting Standards Update 2016-01 | ||||||
Investment [Line Items] | ||||||
Change in accounting principle | $ (3,900) | |||||
[1] | (1) Relates to the adoption of ASU 2016-01, "Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities" ("ASU 2016-01"). Refer to Note 3 for further detail. |
Investments (Amortized Cost) (D
Investments (Amortized Cost) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Available-for-sale | ||
Available-for-sale | $ 5,077 | $ 5,429 |
Securitized assets | ||
Held-to-maturity | ||
Amortized Cost | 0 | 57,204 |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 14,249 | |
Aggregate Fair Value | 42,955 | |
Foreign currency mutual funds | ||
Available-for-sale | ||
Amortized Cost | 5,160 | 5,452 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 83 | 23 |
Available-for-sale | $ 5,077 | $ 5,429 |
Operating Leases (Narrative) (D
Operating Leases (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Leases, Operating [Abstract] | |||
Rental expense for office space and equipment under operating lease | $ 13.6 | $ 11.8 | $ 12.3 |
Operating Leases (Schedule Of F
Operating Leases (Schedule Of Future Minimum Lease Payments For Operating Leases) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Leases, Operating [Abstract] | |
2019 | $ 11,470 |
2020 | 11,451 |
2021 | 10,809 |
2022 | 7,287 |
2023 | 6,189 |
Thereafter | 7,866 |
Total future minimum lease payments | $ 55,072 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, net (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Impairment of goodwill | $ 0 | ||
Sale of subsidiary | 36,053 | $ 0 | |
Amortization expense | $ 4,300 | $ 4,300 | $ 6,200 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, net (Schedule of Goodwill) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill [Roll Forward] | ||
Goodwill, Balance at beginning of period | $ 526,513 | $ 506,308 |
Accumulated impairment loss, Balance at beginning of period | 0 | (6,397) |
Goodwill, Net, Balance at beginning of period | 526,513 | 499,911 |
Sale of subsidiary | (36,053) | 0 |
Foreign currency translation adjustment | (26,344) | 26,602 |
Net change in goodwill | (62,397) | 26,602 |
Goodwill, Balance at end of period | 464,116 | 526,513 |
Accumulated impairment loss, Balance at end of period | 0 | 0 |
Goodwill, Net, Balance at end of period | $ 464,116 | $ 526,513 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, net (Schedule of Intangible Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | $ 13,754 | $ 38,310 |
Accumulated Amortization | 8,232 | 14,738 |
Client and customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 11,806 | 30,397 |
Accumulated Amortization | 6,993 | 10,752 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 0 | 1,388 |
Accumulated Amortization | 0 | 1,118 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 400 | 3,285 |
Accumulated Amortization | 345 | 1,479 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 1,548 | 3,240 |
Accumulated Amortization | $ 894 | $ 1,389 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets, net (Schedule of Estimated Future Amortization of Intangible Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2019 | $ 1,371 | |
2020 | 1,150 | |
2021 | 828 | |
2022 | 739 | |
2023 | 697 | |
Thereafter | 737 | |
Total | $ 5,522 | $ 23,572 |
Borrowings (Details)
Borrowings (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Debt outstanding | $ 2,533,212 | $ 2,247,145 |
Less: Debt discount and issuance costs | (59,556) | (76,963) |
Total | 2,473,656 | 2,170,182 |
Line of Credit | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Debt outstanding | 1,160,161 | 849,815 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Debt outstanding | 740,551 | 764,830 |
Convertible Debt | ||
Debt Instrument [Line Items] | ||
Debt outstanding | $ 632,500 | $ 632,500 |
Borrowings (Long term debt Matu
Borrowings (Long term debt Maturities) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
2019 | $ 10,000 | |
2020 | 297,500 | |
2021 | 877,433 | |
2022 | 1,003,279 | |
2023 | 345,000 | |
Thereafter | 0 | |
Total | $ 2,533,212 | $ 2,247,145 |
Borrowings (North American Revo
Borrowings (North American Revolving Credit and Term Loan) (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018USD ($) | Oct. 04, 2018USD ($) | Dec. 31, 2017USD ($) | May 26, 2017 | |
Eurodollar Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread variable rate (as a percent) | 1.00% | |||
Federal Funds Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread variable rate (as a percent) | 0.50% | |||
Canadian Prime Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread variable rate (as a percent) | 1.50% | |||
North American Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Total credit facility available | $ 1,600,000 | |||
Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Credit agreement consolidated leverage ratio | 2.75 | |||
Debt instrument, covenant, maximum cash dividends | $ 20,000 | |||
Stock repurchases authorized amount, including 50% of prior year's net income | $ 100,000 | |||
Unused commitment fee under revolving credit | 0.375% | |||
Credit Agreement | Eurodollar Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread variable rate (as a percent) | 2.50% | |||
Credit Agreement | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread variable rate (as a percent) | 1.50% | |||
Secured Debt | Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Credit agreement consolidated leverage ratio | 2.25 | |||
Unsecured Debt | Senior Unsecured Debt other than Convertible Notes Due 2020 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, covenant, maximum allowable debt | $ 750,000 | |||
Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | 588,688 | $ 576,963 | ||
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 | 435,000 | |||
Revolving Credit Facility | North American Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Additional borrowing capacity | $ 363,000 | |||
Increase to accordion feature | $ 500,000 | |||
Total credit facility available | 1,068,000 | |||
Optional increase in borrowing capacity | 500,000 | |||
Option for letters of credit | 25,000 | |||
Option to reduce borrowing capacity | 25,000 | |||
Unused portion | 519,700 | |||
Current borrowing capacity | 290,300 | |||
Canadian Revolving Credit Facility | North American Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Total credit facility available | 50,000 | |||
Acquisition Subsequent to 2014 | Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, covenant, maximum business combinations | 250,000 | |||
Covenant, maximum business combinations, non-loan | $ 50,000 | |||
Eligible Core Asset Pool | Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Percentage of maximum level of borrowings of ERC of eligible asset pools | 35.00% | |||
Eligible Insolvent Asset Pool | Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Covenant, maximum borrowing as a percentage of insolvent asset pools | 55.00% | |||
Eligible Accounts Receivable | Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Percentage of maximum level of borrowings of eligible accounts receivable | 75.00% |
Borrowings (Outstanding balance
Borrowings (Outstanding balances and weighted average interest rates) (Details) - Revolving Credit Facility - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Domestic Line of Credit [Member] | North American Credit Agreement | ||
Line of Credit Facility [Line Items] | ||
Amount Outstanding | $ 598,279 | $ 373,206 |
Weighted Average Interest Rate | 4.97% | 4.05% |
Foreign Line of Credit [Member] | European Revolving Facility and Term Loan | ||
Line of Credit Facility [Line Items] | ||
Amount Outstanding | $ 561,882 | $ 476,609 |
Weighted Average Interest Rate | 4.10% | 5.01% |
Loans Payable | European Revolving Facility and Term Loan | ||
Line of Credit Facility [Line Items] | ||
Amount Outstanding | $ 305,551 | $ 319,830 |
Weighted Average Interest Rate | 3.75% | 4.25% |
Loans Payable | North American Credit Agreement | ||
Line of Credit Facility [Line Items] | ||
Amount Outstanding | $ 435,000 | $ 445,000 |
Weighted Average Interest Rate | 5.02% | 4.07% |
Borrowings (European Revolving
Borrowings (European Revolving Credit Facility and Term Loan) (Details) - European Revolving Facility and Term Loan € in Millions, $ in Millions | 12 Months Ended | ||||
Dec. 31, 2018USD ($) | Dec. 31, 2018SEK (kr) | Dec. 31, 2017SEK (kr) | Dec. 31, 2018EUR (€) | Oct. 04, 2018USD ($) | |
Line of Credit Facility [Line Items] | |||||
Covenant, loan-to-value | 75.00% | 75.00% | |||
Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Maximum interest bearing deposits | $ 134.3 | kr 1,200,000,000 | kr 1,500,000,000 | ||
Reduction to borrowing capacity | 100 | ||||
Total credit facility available | $ 800 | ||||
Current borrowing capacity | 278.1 | ||||
Overdraft Facility | |||||
Line of Credit Facility [Line Items] | |||||
Total credit facility available | $ 40 | ||||
Commitment fee percentage | 0.125% | 0.125% | |||
Line of Credit | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Reduction in rate | 0.15% | 0.15% | |||
Total credit facility available | $ 1,100 | ||||
Long-term debt | $ 305.6 | € 267 | |||
Unused commitment fee under revolving credit | 1.21% | 1.21% | |||
Commitment fee as a percentage of margin | 35.00% | 35.00% | |||
Current borrowing capacity | $ 166 | ||||
Maximum GIBD ratio | 3.25 | 3.25 | |||
Line of Credit | Term Loan Facility | |||||
Line of Credit Facility [Line Items] | |||||
Reduction in rate | 0.50% | 0.50% | |||
Debt Instrument, Basis Spread On Variable Rate, Increase In Rate From Syndication Or Transfer | 0.50% | 0.50% | |||
Line of Credit | Interbank Offered Rate (IBOR) | Minimum | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread variable rate (as a percent) | 2.65% | 2.65% | |||
Line of Credit | Interbank Offered Rate (IBOR) | Minimum | Term Loan Facility | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread variable rate (as a percent) | 3.75% | 3.75% | |||
Line of Credit | Interbank Offered Rate (IBOR) | Maximum | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread variable rate (as a percent) | 3.75% | 3.75% | |||
Line of Credit | Interbank Offered Rate (IBOR) | Maximum | Term Loan Facility | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread variable rate (as a percent) | 4.00% | 4.00% |
Borrowings (Convertible Debt an
Borrowings (Convertible Debt and Additional information) (Details) $ / shares in Units, $ in Thousands | May 26, 2017USD ($)day$ / shares | Aug. 13, 2013USD ($)$ / shares | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Debt Instrument [Line Items] | |||||
Repurchases of common stock | $ 0 | $ 44,909 | $ 0 | ||
Convertible Debt | |||||
Debt Instrument [Line Items] | |||||
Carrying amount of convertible debt | $ 76,216 | $ 76,216 | |||
Note Due 2020 | Convertible Debt | |||||
Debt Instrument [Line Items] | |||||
Face amount | $ 287,500 | ||||
Stated percentage | 3.00% | ||||
Conversion ratio | 15.2172 | ||||
Average share price of common stock (usd per share) | $ / shares | $ 65.72 | ||||
Convertible debt, estimated fair value | $ 255,300 | ||||
Carrying amount of convertible debt | 32,200 | ||||
Debt issuance costs, gross | 7,300 | ||||
Debt and equity issuance costs | 8,200 | ||||
Equity issuance costs | $ 900 | ||||
Effective interest rate (as a percent) | 4.92% | ||||
Note Due 2023 | Convertible Debt | |||||
Debt Instrument [Line Items] | |||||
Face amount | $ 345,000 | ||||
Stated percentage | 3.50% | ||||
Conversion ratio | 21.6275 | ||||
Average share price of common stock (usd per share) | $ / shares | $ 46.24 | ||||
Convertible debt, estimated fair value | $ 298,800 | ||||
Carrying amount of convertible debt | 46,200 | ||||
Debt issuance costs, gross | 8,300 | ||||
Debt and equity issuance costs | 9,600 | ||||
Equity issuance costs | $ 1,300 | ||||
Effective interest rate (as a percent) | 6.20% | ||||
Convertible, threshold percentage of stock price trigger | 130.00% | ||||
Convertible, threshold trading days | day | 20 | ||||
Convertible, threshold consecutive trading days | day | 30 |
Borrowings (Breakdown of Debt I
Borrowings (Breakdown of Debt Instrument) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Debt outstanding | $ 2,533,212 | $ 2,247,145 |
Convertible Debt | ||
Debt Instrument [Line Items] | ||
Debt outstanding | 632,500 | 632,500 |
Unamortized debt discount | (43,812) | (55,537) |
Liability component - net carrying amount | 588,688 | 576,963 |
Equity component | $ 76,216 | $ 76,216 |
Borrowings (Interest Expense) (
Borrowings (Interest Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | |||
Interest expense - amortization of debt discount and issuance costs | $ 22,057 | $ 18,152 | $ 10,276 |
Interest expense | 124,208 | 103,653 | 85,911 |
Interest (income) | (3,130) | (5,612) | (5,047) |
Interest expense, net | 121,078 | 98,041 | 80,864 |
Convertible Debt | |||
Debt Instrument [Line Items] | |||
Interest expense - stated coupon rate | 20,700 | 15,870 | 8,625 |
Interest expense - amortization of debt discount and issuance costs | 11,725 | 8,583 | 4,472 |
Total interest expense - convertible senior notes | $ 32,425 | $ 24,453 | $ 13,097 |
Property and Equipment, net (Pr
Property and Equipment, net (Property and Equipment, at Cost) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment, Net [Abstract] | ||
Software | $ 64,670 | $ 51,065 |
Computer equipment | 22,153 | 19,260 |
Furniture and fixtures | 16,061 | 15,560 |
Equipment | 12,390 | 9,643 |
Leasehold improvements | 16,556 | 14,778 |
Building and improvements | 7,431 | 7,409 |
Land | 1,296 | 1,296 |
Accumulated depreciation and amortization | (92,877) | (80,967) |
Assets in process | 6,456 | 11,267 |
Property and equipment, net | $ 54,136 | $ 49,311 |
Property and Equipment, net (Na
Property and Equipment, net (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization expense | $ 15.1 | $ 15.4 | $ 18.2 |
Fair Value (Carrying And Estima
Fair Value (Carrying And Estimated Fair Value Recorded In The Consolidated Balance Sheet) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Assets: | ||||
Cash and cash equivalents, carrying amount | $ 98,695 | $ 120,516 | $ 94,287 | $ 71,372 |
Finance receivables, net, carrying amount | 3,084,777 | 2,776,199 | $ 2,309,513 | |
Financial liabilities: | ||||
Interest-bearing deposits, carrying amount | 82,666 | 98,580 | ||
Carrying Amount | ||||
Assets: | ||||
Cash and cash equivalents, carrying amount | 98,695 | 120,516 | ||
Held-to-maturity investments, carrying amount | 0 | 57,204 | ||
Finance receivables, net, carrying amount | 3,084,777 | 2,776,199 | ||
Financial liabilities: | ||||
Interest-bearing deposits, carrying amount | 82,666 | 98,580 | ||
Revolving lines of credit, carrying amount | 1,160,161 | 849,815 | ||
Term loans, carrying amount | 740,551 | 764,830 | ||
Convertible notes, carrying amount | 588,688 | 576,963 | ||
Estimated Fair Value | ||||
Assets: | ||||
Cash and cash equivalents, estimated fair value | 98,695 | 120,516 | ||
Held-to-maturity investments, estimated fair value | 0 | 42,955 | ||
Finance receivables, net, estimated fair value | 3,410,475 | 3,060,907 | ||
Financial liabilities: | ||||
Interest-bearing deposits, estimated fair value | 82,666 | 98,580 | ||
Revolving lines of credit, estimated fair value | 1,160,161 | 849,815 | ||
Term loans, estimated fair value | 740,551 | 764,830 | ||
Convertible notes, estimated fair value | $ 557,122 | $ 620,079 |
Fair Value (Fair Value Assets a
Fair Value (Fair Value Assets and Liabilities Measured on a Recurring Basis) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Assets: | ||
Available-for-sale investments | $ 5,077 | $ 5,429 |
Mutual funds | 21,753 | |
Derivative contracts (recorded in other assets) | 3,334 | |
Liabilities: | ||
Derivative contracts (recorded in accrued expenses) | 1,108 | |
Level 1 | ||
Assets: | ||
Available-for-sale investments | 5,077 | 5,429 |
Mutual funds | 21,753 | |
Derivative contracts (recorded in other assets) | 0 | |
Liabilities: | ||
Derivative contracts (recorded in accrued expenses) | 0 | |
Level 2 | ||
Assets: | ||
Available-for-sale investments | 0 | 0 |
Mutual funds | 0 | |
Derivative contracts (recorded in other assets) | 3,334 | |
Liabilities: | ||
Derivative contracts (recorded in accrued expenses) | 1,108 | |
Level 3 | ||
Assets: | ||
Available-for-sale investments | 0 | 0 |
Mutual funds | 0 | |
Derivative contracts (recorded in other assets) | $ 0 | |
Liabilities: | ||
Derivative contracts (recorded in accrued expenses) | $ 0 |
Fair Value (Narrative) (Details
Fair Value (Narrative) (Details) - Private equity funds - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Private equity funds | $ 8 | $ 8.8 |
Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Private equity funds, liquidating investment, period | 1 year | |
Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Private equity funds, liquidating investment, period | 6 years |
Share-Based Compensation (Narra
Share-Based Compensation (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum number of shares authorized | 5,400,000 | ||
Total share-based compensation expense | $ 8.5 | $ 8.7 | $ 6.1 |
Total tax benefit realized from share-based compensation | 1.7 | 3.2 | 2.7 |
Grant date fair value of shares vested | 5.3 | 6.5 | 5.7 |
Long-Term Incentive Programs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Future compensation cost related to stock option | $ 2.8 | ||
Weighted average remaining life of nonvested shares (in years) | 12 months | ||
Grant date fair value of shares vested | $ 1 | $ 2.1 | $ 6.1 |
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 | $ 7.7 | ||
Weighted average remaining life of nonvested shares (in years) | 1 year 7 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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Nonvested Shares Outstanding | |||
Beginning balance, shares | 298 | 303 | 284 |
Granted, shares | 254 | 195 | 196 |
Vested, shares | (151) | (173) | (117) |
Cancelled, shares | (22) | (27) | (60) |
Ending balance, shares | 379 | 298 | 303 |
Weighted-Average Price at Grant Date | |||
Beginning balance (usd per share) | $ 35.25 | $ 38.19 | $ 52.20 |
Granted (usd per share) | 36.39 | 33.70 | 28.43 |
Vested (usd per share) | 35.13 | 37.49 | 48.78 |
Cancelled (usd per share) | 35.02 | 43.05 | 51.71 |
Ending balance (usd per share) | $ 34.85 | $ 35.25 | $ 38.19 |
Long-Term Incentive Programs | |||
Nonvested Shares Outstanding | |||
Beginning balance, shares | 472 | 425 | 483 |
Granted, shares | 121 | 192 | 240 |
Adjustments for actual performance, shares | (74) | 5 | (67) |
Vested, shares | (19) | (51) | (176) |
Cancelled, shares | (46) | (99) | (55) |
Ending balance, shares | 454 | 472 | 425 |
Weighted-Average Price at Grant Date | |||
Beginning balance (usd per share) | $ 41.06 | $ 39.57 | $ 42.80 |
Granted (usd per share) | 39.40 | 33.50 | 28.98 |
Adjustments for actual performance (usd per share) | 52.47 | 60 | 34.59 |
Vested (usd per share) | 52.47 | 40.80 | 34.59 |
Cancelled (usd per share) | 32.31 | 20.91 | 43.68 |
Ending balance (usd per share) | $ 33.27 | $ 41.06 | $ 39.57 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |||
Net Income Attributable to PRA Group, Inc. | $ 65,563 | $ 164,315 | $ 86,255 |
Weighted Average Common Shares, Basic EPS | 45,280,000 | 45,671,000 | 46,316,000 |
Weighted Average Common Shares, Dilutive effect of nonvested share awards | 133,000 | 152,000 | 72,000 |
Weighted Average Common Shares, Diluted EPS | 45,413,000 | 45,823,000 | 46,388,000 |
Basic EPS (usd per share) | $ 1.45 | $ 3.60 | $ 1.86 |
Dilutive effect of nonvested share awards (usd per share) | (0.01) | (0.01) | 0 |
Diluted EPS (usd per share) | $ 1.44 | $ 3.59 | $ 1.86 |
Antidilutive options outstanding (in shares) | 0 | 0 | 0 |
Derivatives (Schedule of Deriva
Derivatives (Schedule of Derivatives) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accrued expenses | ||
Derivative [Line Items] | ||
Fair Value | $ 1,108 | |
Derivatives designated as hedging instruments | Other assets | Interest rate swaps | ||
Derivative [Line Items] | ||
Fair Value | $ 19 | |
Derivatives designated as hedging instruments | Other assets | Interest rate cap contracts | ||
Derivative [Line Items] | ||
Fair Value | 25 | |
Derivatives not designated as hedging instruments | Other assets | Interest rate swaps | ||
Derivative [Line Items] | ||
Fair Value | 735 | |
Derivatives not designated as hedging instruments | Other assets | Foreign currency exchange contracts | ||
Derivative [Line Items] | ||
Fair Value | $ 2,555 |
Derivatives (Narrative) (Detail
Derivatives (Narrative) (Details) - Dec. 31, 2018 € in Millions, kr in Millions, kr in Millions, $ in Millions | USD ($) | EUR (€) | SEK (kr) | NOK (kr) |
Derivatives designated as hedging instruments | Interest Rate Derivatives | ||||
Derivative [Line Items] | ||||
Derivative, notional amount | $ 260.8 | |||
Derivatives not designated as hedging instruments | Interest Rate Derivatives | ||||
Derivative [Line Items] | ||||
Derivative, notional amount | $ 169.7 | |||
Derivatives not designated as hedging instruments | Foreign currency exchange contracts | ||||
Derivative [Line Items] | ||||
Derivative, notional amount | € 22 | kr 413 | kr 638.9 |
Income Taxes (Summary of Income
Income Taxes (Summary of Income Tax Expense Recognized) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Current tax expense, Federal | $ 23,444 | $ 77,656 | $ 38,986 |
Current tax expense, State | 9,026 | 16,543 | 5,037 |
Current foreign tax expense | 37,501 | 25,087 | 20,868 |
Current tax expense, Total | 69,971 | 119,286 | 64,891 |
Deferred tax (benefit)/expense, Federal | (19,527) | (112,118) | (7,350) |
Deferred tax expense/(benefit), State | (15,268) | (2,051) | 575 |
Deferred Foreign Income Tax (benefit)/Expense | (21,413) | (15,969) | (14,539) |
Deferred tax (benefit)/expense, Total | (56,208) | (130,138) | (21,314) |
Total income tax expense, Federal | 3,917 | (34,462) | 31,636 |
Total income tax expense, State | (6,242) | 14,492 | 5,612 |
Foreign Income Tax Expense, Continuing Operations | 16,088 | 9,118 | 6,329 |
Total income tax expense/(benefit) | $ 13,763 | $ (10,852) | $ 43,577 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes [Line Items] | ||
Tax reform, provisional impact | $ 74,500 | |
Net deferred tax liability | 53,526 | $ 114,726 |
Valuation allowance | 14,512 | 39,054 |
Unremitted earnings of foreign subsidiaries | 21,200 | |
Foreign Tax Authority | ||
Income Taxes [Line Items] | ||
Operating loss carryforward, foreign subsidiaries | $ 71,000 | $ 50,800 |
Minimum | Foreign Tax Authority | ||
Income Taxes [Line Items] | ||
Operating loss carryforward, carryforward period | 7 years | |
Maximum | Foreign Tax Authority | ||
Income Taxes [Line Items] | ||
Operating loss carryforward, carryforward period | 20 years |
Income Taxes (Schedule of Recon
Income Taxes (Schedule of Reconciliation of Expected Tax Expense At Statutory Tax Rates to Actual Tax Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Income tax expense at statutory federal rates | $ 18,794 | $ 56,095 | $ 47,469 |
State tax (benefit)/expense, net of federal tax benefit | (5,098) | 9,072 | 3,696 |
Foreign rate difference | 206 | (4,953) | (7,993) |
Federal rate change | (719) | (73,779) | 0 |
Other | 580 | 2,713 | 405 |
Total income tax expense/(benefit) | $ 13,763 | $ (10,852) | $ 43,577 |
Income Taxes (Summary of Compon
Income Taxes (Summary of Components of Net Deferred Tax Liability) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Employee compensation | $ 4,670 | $ 5,190 |
Net operating loss carryforward | 24,210 | 42,332 |
Accrued liabilities | 1,850 | 2,750 |
Interest | 10,559 | 11,027 |
Finance receivable revenue recognition - international | 37,005 | 26,765 |
Other | 2,721 | 9,165 |
Total deferred tax asset | 81,015 | 97,229 |
Deferred tax liabilities: | ||
Depreciation expense | 5,556 | 15,417 |
Intangible assets and goodwill | 5,435 | 8,856 |
Convertible debt | 10,998 | 14,645 |
Finance receivable revenue recognition - IRS settlement | 74,296 | 117,026 |
Finance receivable revenue recognition - domestic | 23,744 | 16,957 |
Total deferred tax liability | 120,029 | 172,901 |
Net deferred tax (asset)/liability before valuation allowance | 39,014 | 75,672 |
Valuation allowance | 14,512 | 39,054 |
Total deferred tax liability | $ 53,526 | $ 114,726 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Future compensation under employment agreements | $ 16,100 |
Total future minimum lease payments | 55,072 |
Amount to be purchased under forward flow agreements | 303,700 |
Potential recoveries | $ 4,000 |
Retirement Plans (Details)
Retirement Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
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 | $ 6.3 | $ 5.2 | $ 5.1 |
Redeemable Noncontrolling Int_2
Redeemable Noncontrolling Interest (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Noncontrolling Interest [Line Items] | |||
Noncontrolling interest, return on investment guaranty, percent | 5.10% | ||
Guaranty liabilities | $ 0.7 | $ 1 | |
Polish Investment Fund | DTP S.A. | |||
Noncontrolling Interest [Line Items] | |||
Percentage of voting interests acquired | 37.50% | 21.70% | 20.00% |
Sale of Subsidiaries (Details)
Sale of Subsidiaries (Details) - USD ($) $ in Thousands | Feb. 28, 2019 | Dec. 20, 2018 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 24, 2017 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Gain on sale of subsidiaries | $ 26,575 | $ 48,474 | $ 0 | |||||
RCB Investimentos S.A. | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Ownership interest prior to disposal | 79.00% | |||||||
Proceeds from divestiture of businesses | $ 40,000 | |||||||
Gain on sale of subsidiaries | 26,600 | |||||||
Gain on retained interest | $ 5,400 | |||||||
Retained interest | 11.67% | |||||||
Percent of proceeds received | 25.00% | |||||||
Government Services Businesses | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Proceeds from divestiture of businesses | $ 91,500 | |||||||
Gain on sale of subsidiaries | $ 46,800 | |||||||
PLS Business | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Proceeds from divestiture of businesses | $ 4,500 | |||||||
Gain on sale of subsidiaries | $ 1,600 | |||||||
Subsequent Event | RCB Investimentos S.A. | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Percent of proceeds received | 75.00% |
Correction of Immaterial Erro_3
Correction of Immaterial Errors - Schedule of Correction of Immaterial Errors (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Income recognized on finance receivables | $ 891,899 | $ 795,435 | $ 845,142 |
Income tax expense/(benefit) | 13,763 | (10,852) | 43,577 |
Net income | 75,734 | 171,125 | 92,050 |
Net Income Attributable to PRA Group, Inc. | $ 65,563 | $ 164,315 | $ 86,255 |
Basic (USD per share) | $ 1.45 | $ 3.60 | $ 1.86 |
Diluted (USD per share) | $ 1.44 | $ 3.59 | $ 1.86 |
Finance receivables, net | $ 3,084,777 | $ 2,776,199 | $ 2,309,513 |
Net deferred tax asset | 61,453 | 56,459 | 28,096 |
Net cash provided by operating activities | 80,866 | 15,475 | 205,903 |
Net cash used in investing activities | 387,251 | 294,960 | 317,514 |
As Previously Reported (Uncorrected for 2018) | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Income recognized on finance receivables | 890,719 | 792,701 | 843,598 |
Income tax expense/(benefit) | 13,468 | (11,536) | 43,191 |
Net income | 74,849 | 169,075 | 90,892 |
Net Income Attributable to PRA Group, Inc. | $ 64,678 | $ 162,265 | $ 85,097 |
Basic (USD per share) | $ 1.43 | $ 3.55 | $ 1.84 |
Diluted (USD per share) | $ 1.42 | $ 3.54 | $ 1.83 |
Finance receivables, net | $ 3,079,319 | $ 2,771,921 | $ 2,307,969 |
Net deferred tax asset | 62,818 | 57,529 | 28,482 |
Net cash provided by operating activities | 79,686 | 12,741 | 204,359 |
Net cash used in investing activities | 386,071 | 292,226 | 315,970 |
Immaterial Error From Measurement Of Income, Beneficial Rights On Certain Austrian Portfolios Of Nonperforming Loans | Correction | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Income recognized on finance receivables | 1,180 | 2,734 | 1,544 |
Income tax expense/(benefit) | 295 | 684 | 386 |
Net income | 885 | 2,050 | 1,158 |
Net Income Attributable to PRA Group, Inc. | $ 885 | $ 2,050 | $ 1,158 |
Basic (USD per share) | $ 0.02 | $ 0.05 | $ 0.02 |
Diluted (USD per share) | $ 0.02 | $ 0.05 | $ 0.03 |
Finance receivables, net | $ 5,458 | $ 4,278 | $ 1,544 |
Net deferred tax asset | (1,365) | (1,070) | (386) |
Net cash provided by operating activities | 1,180 | 2,734 | 1,544 |
Net cash used in investing activities | $ 1,180 | $ 2,734 | $ 1,544 |