Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 03, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 000-50058 | |
Entity Registrant Name | PRA Group, Inc | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 75-3078675 | |
Entity Address, Address Line One | 120 Corporate Boulevard | |
Entity Address, City or Town | Norfolk | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 23502 | |
City Area Code | 888 | |
Local Phone Number | 772-7326 | |
Title of 12(b) Security | Common Stock, $0.01 par value per share | |
Trading Symbol | PRAA | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 45,579,983 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Central Index Key | 0001185348 |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Recently Issued Accounting Standards | Change in Accounting Principle: Financial Instruments - Credit Losses In June 2016, FASB issued ASU 2016-13, which introduced a new methodology requiring the measurement of expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. ASU 2016-13 utilizes a lifetime “expected credit loss” measurement objective for the recognition of credit losses for loans, held-to-maturity debt securities and other receivables measured at amortized cost. The new methodology requires an entity to present on the balance sheet the net amount expected to be collected. This methodology replaces the multiple impairment methods under prior GAAP, including for purchased credit impaired ("PCI") assets, and introduces the concept of PCD assets. The Company's PCI assets previously accounted for under ASC 310-30 are now accounted for as PCD assets upon adoption. ASU 2016-13 requires PCD assets to be recognized at their purchase price plus the allowance for credit losses expected at the time of acquisition. ASU 2016-13 also requires that financial assets should be written off when they are deemed uncollectible. In November 2019, FASB issued ASU 2019-11, which amended the PCD asset guidance in ASU 2016-13 to clarify that expected recoveries of amounts previously written off and expected to be written off should be included in the valuation account. Additionally, they should not exceed the aggregate of amounts previously written off and expected to be written off by an entity. Further, ASU 2019-11 clarifies that a negative allowance is recognized when an entity determines, after a full or partial write off of the amortized cost basis, that it will recover all or a portion of the basis. The Company adopted ASC 326 on January 1, 2020 on a prospective basis. In accordance with the guidance, substantially all the Company’s PCI assets were transitioned using the PCD guidance, with immediate write off of the amortized cost basis of individual accounts and establishment of a negative allowance for expected recoveries equal to the amortized cost basis written off. Accounts previously accounted for under ASC 310-30, were aggregated into annual pools based on similar risk characteristics and an effective interest rate was established based on the estimated remaining cash flows of the annual pool. The immediate write off and subsequent recognition of expected recoveries had no impact on the Company’s Consolidated Income Statements or the Consolidated Balance Sheets at the date of adoption. The Company develops its estimate of expected recoveries by applying discounted cash flow methodologies to its ERC and recognizes income over the estimated life of the pool at the constant effective interest rate of the pool. Changes (favorable and unfavorable) in expected cash flows are recognized in current period earnings by adjusting the present value of the changes in expected recoveries. Following the transition guidance for PCD assets, the Company grossed up the amortized cost of its net finance receivables at January 1, 2020 as shown below (amounts in thousands): Amortized cost $ 3,514,165 Allowance for credit losses 125,757,689 Noncredit discount 3,240,131 Face value $ 132,511,985 Allowance for credit losses $ 125,757,689 Writeoffs, net (125,757,689) Expected recoveries 3,514,165 Initial negative allowance for expected recoveries $ 3,514,165 Recently issued accounting standards adopted: Financial Instruments - Credit Losses Effective January 1, 2020, the Company adopted ASC 326 on a prospective basis. Prior to January 1, 2020, substantially all of the Company's investment in finance receivables were accounted for under ASC 310-30. Refer to Note 2 for comprehensive details. Intangibles - Goodwill and Other In January 2017, FASB issued ASU 2017-04 which eliminates Step 2 of the goodwill impairment test. Instead, an entity performs its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity recognizes 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. The Company adopted ASU 2017-04 on January 1, 2020 which had no impact on its consolidated financial statements. Fair Value Measurement In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement” ("ASU 2018-13"). ASU 2018-13 eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of its disclosure framework project. The Company adopted ASU 2018-13 on January 1, 2020 which had no impact to the Company's Notes to Consolidated Financial Statements. Recently issued accounting standards not yet adopted: Income Taxes In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 removes certain exceptions for recognizing deferred taxes for investments and calculating income taxes in interim periods. Additionally, it adds guidance to reduce complexity in certain areas, including recognizing taxes for tax goodwill and allocating taxes to members of a consolidated group. ASU 2019-12 is effective for annual and interim periods beginning after December 15, 2020 on a prospective basis, and early adoption is permitted. The Company is currently evaluating the impact of ASU 2019-12 on its consolidated financial statements and expects to adopt on January 1, 2021. The Company does not expect adoption to have a material impact on its consolidated financial statements. Investments-Equity Securities I n January 2020, the FASB issued ASU 2020-01 “Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)-Clarifying the Interactions between Topic 321, Topic 323, and Topic 815” (“ASU 2020-01”). ASU 2020-01 clarifies that a company should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323, Investments-Equity Method and Joint Ventures, for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. Additionally, it clarifies that, when determining the accounting for certain forward contracts and purchased options a company should not consider, whether upon settlement or exercise, if the underlying securities would be accounted for under the equity method or fair value option. This standard is effective for public entities for financial statements issued for fiscal years and interim periods beginning after December 15, 2020. The Company is evaluating the impact of ASU 2020-01 but does not expect adoption to have a material effect on its consolidated financial statements. Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). ASU 2020-04 provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference London Inter-bank Offered Rate ("LIBOR") or another reference rate expected to be discontinued. ASU 2020-04 is effective immediately for a limited time through December 31, 202 2. The Company is evaluating the impact of ASU 2020-04 but does not expect it to have a material impact on its financial statements. Accounting for Convertible Instruments In August 2020, the FASB issued ASU 2020-06, "Debt —Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging —Contracts in Entity 's Own Equity (Subtopic 815-40) —Accounting for Convertible Instruments and Contracts in an Entity 's Own Equity" ("ASU 2020-06"). ASU 2020-06 reduces the number of accounting models for convertible debt instruments and convertible preferred stock. Additionally, ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for public entities for financial statements issued for fiscal years and interim periods beginning after December 15, 2021 with early adoption permitted at the beginning of a fiscal year. The Company is currently evaluating the impact of ASU 2020-06 including the likelihood of early adoption. The Company does not expect that any other recently issued accounting pronouncements will have a material effect on its consolidated financial statements. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and cash equivalents | $ 92,779 | $ 119,774 |
Investments | 37,821 | 56,176 |
Finance receivables, net | 3,332,748 | 3,514,165 |
Other receivables, net | 12,575 | 10,606 |
Income taxes receivable | 27,554 | 17,918 |
Deferred tax assets, net | 79,121 | 63,225 |
Property and equipment, net | 57,826 | 56,501 |
Right-of-use assets | 51,606 | 68,972 |
Goodwill | 456,308 | 480,794 |
Intangible assets, net | 3,392 | 4,497 |
Other assets | 45,519 | 31,263 |
Total assets | 4,197,249 | 4,423,891 |
Liabilities: | ||
Accounts payable | 4,285 | 4,258 |
Accrued expenses | 81,913 | 88,925 |
Income taxes payable | 18,885 | 4,046 |
Deferred tax liabilities, net | 48,144 | 85,390 |
Interest-bearing deposits | 119,834 | 106,246 |
Borrowings | 2,524,429 | 2,808,425 |
Lease liabilities | 55,987 | 73,377 |
Other liabilities | 71,600 | 26,211 |
Total liabilities | 2,925,077 | 3,196,878 |
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, 45,579 shares issued and outstanding at September 30, 2020; 100,000 shares authorized, 45,416 shares issued and outstanding at December 31, 2019 | 456 | 454 |
Additional paid-in capital | 70,036 | 67,321 |
Retained earnings | 1,482,172 | 1,362,631 |
Accumulated other comprehensive loss | (313,560) | (261,018) |
Total stockholders' equity - PRA Group, Inc. | 1,239,104 | 1,169,388 |
Noncontrolling interest | 33,068 | 57,625 |
Total equity | 1,272,172 | 1,227,013 |
Total liabilities and equity | $ 4,197,249 | $ 4,423,891 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars 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 (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 45,579,000 | 45,416,000 |
Common stock, shares outstanding | 45,579,000 | 45,416,000 |
Consolidated Income Statements
Consolidated Income Statements - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenues: | ||||
Portfolio income | $ 240,250 | $ 0 | $ 750,556 | $ 0 |
Changes in expected recoveries | 25,403 | 0 | 32,388 | 0 |
Income recognized on finance receivables | 0 | 247,471 | 0 | 735,526 |
Fee income | 1,978 | 2,391 | 6,826 | 11,472 |
Other revenue | 233 | 152 | 1,788 | 950 |
Total revenues | 267,864 | 250,014 | 791,558 | 747,948 |
Net allowance charges | 0 | (4,136) | 0 | (11,427) |
Operating expenses: | ||||
Compensation and employee services | 71,974 | 75,317 | 217,617 | 234,770 |
Legal collection fees | 13,661 | 14,083 | 41,975 | 41,439 |
Legal collection costs | 26,043 | 31,395 | 79,997 | 99,745 |
Agency fees | 14,900 | 12,788 | 38,619 | 39,833 |
Outside fees and services | 22,719 | 16,733 | 60,796 | 48,274 |
Communication | 9,379 | 10,310 | 31,702 | 34,335 |
Rent and occupancy | 4,460 | 4,414 | 13,415 | 13,268 |
Depreciation and amortization | 4,301 | 4,046 | 12,494 | 13,341 |
Other operating expenses | 11,761 | 12,102 | 34,457 | 34,613 |
Total operating expenses | 179,198 | 181,188 | 531,072 | 559,618 |
Income from operations | 88,666 | 64,690 | 260,486 | 176,903 |
Other income and (expense): | ||||
Interest expense, net | (33,692) | (35,864) | (106,319) | (105,872) |
Foreign exchange gains | 61 | 5,406 | 3,027 | 11,359 |
Other | 291 | (19) | (1,367) | (123) |
Income before income taxes | 55,326 | 34,213 | 155,827 | 82,267 |
Income tax expense | 7,497 | 6,665 | 24,734 | 15,607 |
Net income | 47,829 | 27,548 | 131,093 | 66,660 |
Adjustment for net income attributable to noncontrolling interests | 5,337 | 2,577 | 11,552 | 7,843 |
Net income attributable to PRA Group, Inc. | $ 42,492 | $ 24,971 | $ 119,541 | $ 58,817 |
Net income per common share attributable to PRA Group, Inc.: | ||||
Basic (in dollars per share) | $ 0.93 | $ 0.55 | $ 2.63 | $ 1.30 |
Diluted (in dollars per share) | $ 0.92 | $ 0.55 | $ 2.60 | $ 1.29 |
Weighted average number of shares outstanding: | ||||
Basic (shares) | 45,579 | 45,410 | 45,526 | 45,378 |
Diluted (shares) | 46,140 | 45,645 | 45,971 | 45,520 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 47,829 | $ 27,548 | $ 131,093 | $ 66,660 |
Currency translation adjustments | 30,705 | (50,542) | (48,448) | (46,975) |
Cash flow hedges | 1,394 | (5,832) | (22,927) | (19,549) |
Debt securities available-for-sale | (30) | (1) | 191 | 81 |
Other comprehensive income/(loss) | 32,069 | (56,375) | (71,184) | (66,443) |
Total comprehensive income/(loss) | 79,898 | (28,827) | 59,909 | 217 |
Less comprehensive income/(loss) attributable to noncontrolling interests | 3,753 | 34 | (7,091) | 5,247 |
Comprehensive income/(loss) attributable to PRA Group, Inc. | $ 76,145 | $ (28,861) | $ 67,000 | $ (5,030) |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) | Noncontrolling Interest |
Beginning balance (in shares) at Dec. 31, 2018 | 45,304 | |||||
Beginning balance at Dec. 31, 2018 | $ 1,123,969 | $ 453 | $ 60,303 | $ 1,276,473 | $ (242,109) | $ 28,849 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 16,912 | 15,227 | 1,685 | |||
Currency translation adjustments | (1,173) | (742) | (431) | |||
Cash flow hedges | (5,715) | (5,715) | ||||
Debt securities available-for-sale | 45 | 45 | ||||
Distributions to noncontrolling interest | (6,877) | (6,877) | ||||
Contributions from noncontrolling interest | 89 | 89 | ||||
Vesting of restricted stock (in shares) | 80 | |||||
Vesting of restricted stock | 0 | $ 1 | (1) | |||
Share-based compensation expense | 2,314 | 2,314 | ||||
Employee stock relinquished for payment of taxes | (1,437) | (1,437) | ||||
Other | (2,088) | (2,088) | ||||
Ending balance (in shares) at Mar. 31, 2019 | 45,384 | |||||
Ending balance at Mar. 31, 2019 | 1,126,039 | $ 454 | 59,091 | 1,291,700 | (248,521) | 23,315 |
Beginning balance (in shares) at Dec. 31, 2018 | 45,304 | |||||
Beginning balance at Dec. 31, 2018 | 1,123,969 | $ 453 | 60,303 | 1,276,473 | (242,109) | 28,849 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cash flow hedges | (19,549) | |||||
Debt securities available-for-sale | 81 | |||||
Ending balance (in shares) at Sep. 30, 2019 | 45,411 | |||||
Ending balance at Sep. 30, 2019 | 1,146,313 | $ 454 | 64,631 | 1,335,290 | (305,956) | 51,894 |
Beginning balance (in shares) at Mar. 31, 2019 | 45,384 | |||||
Beginning balance at Mar. 31, 2019 | 1,126,039 | $ 454 | 59,091 | 1,291,700 | (248,521) | 23,315 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 22,200 | 18,619 | 3,581 | |||
Currency translation adjustments | 4,740 | 4,362 | 378 | |||
Cash flow hedges | (8,002) | (8,002) | ||||
Debt securities available-for-sale | 37 | 37 | ||||
Contributions from noncontrolling interest | 3,229 | 3,229 | ||||
Vesting of restricted stock (in shares) | 25 | |||||
Vesting of restricted stock | 0 | |||||
Share-based compensation expense | 2,620 | 2,620 | ||||
Employee stock relinquished for payment of taxes | (6) | (6) | ||||
Ending balance (in shares) at Jun. 30, 2019 | 45,409 | |||||
Ending balance at Jun. 30, 2019 | 1,150,857 | $ 454 | 61,705 | 1,310,319 | (252,124) | 30,503 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 27,548 | 24,971 | 2,577 | |||
Currency translation adjustments | (50,542) | (47,999) | (2,543) | |||
Cash flow hedges | (5,832) | (5,832) | ||||
Debt securities available-for-sale | (1) | (1) | ||||
Distributions to noncontrolling interest | 0 | |||||
Contributions from noncontrolling interest | 21,357 | 21,357 | ||||
Vesting of restricted stock (in shares) | 2 | |||||
Vesting of restricted stock | 0 | |||||
Share-based compensation expense | 2,974 | 2,974 | ||||
Employee stock relinquished for payment of taxes | (48) | (48) | ||||
Ending balance (in shares) at Sep. 30, 2019 | 45,411 | |||||
Ending balance at Sep. 30, 2019 | $ 1,146,313 | $ 454 | 64,631 | 1,335,290 | (305,956) | 51,894 |
Beginning balance (in shares) at Dec. 31, 2019 | 45,416 | 45,416 | ||||
Beginning balance at Dec. 31, 2019 | $ 1,227,013 | $ 454 | 67,321 | 1,362,631 | (261,018) | 57,625 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 22,436 | 19,135 | 3,301 | |||
Currency translation adjustments | (108,076) | (94,201) | (13,875) | |||
Cash flow hedges | (20,568) | (20,568) | ||||
Debt securities available-for-sale | 170 | 170 | ||||
Vesting of restricted stock (in shares) | 124 | |||||
Vesting of restricted stock | 1 | $ 1 | ||||
Share-based compensation expense | 2,857 | 2,857 | ||||
Employee stock relinquished for payment of taxes | (3,157) | (3,157) | ||||
Ending balance (in shares) at Mar. 31, 2020 | 45,540 | |||||
Ending balance at Mar. 31, 2020 | $ 1,120,676 | $ 455 | 67,021 | 1,381,766 | (375,617) | 47,051 |
Beginning balance (in shares) at Dec. 31, 2019 | 45,416 | 45,416 | ||||
Beginning balance at Dec. 31, 2019 | $ 1,227,013 | $ 454 | 67,321 | 1,362,631 | (261,018) | 57,625 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cash flow hedges | (22,927) | |||||
Debt securities available-for-sale | $ 191 | |||||
Ending balance (in shares) at Sep. 30, 2020 | 45,579 | 45,579 | ||||
Ending balance at Sep. 30, 2020 | $ 1,272,172 | $ 456 | 70,036 | 1,482,172 | (313,560) | 33,068 |
Beginning balance (in shares) at Mar. 31, 2020 | 45,540 | |||||
Beginning balance at Mar. 31, 2020 | 1,120,676 | $ 455 | 67,021 | 1,381,766 | (375,617) | 47,051 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 60,828 | 57,914 | 2,914 | |||
Currency translation adjustments | 28,923 | 32,107 | (3,184) | |||
Cash flow hedges | (3,753) | (3,753) | ||||
Debt securities available-for-sale | 51 | 51 | ||||
Distributions to noncontrolling interest | (14,908) | (14,908) | ||||
Vesting of restricted stock (in shares) | 39 | |||||
Vesting of restricted stock | 0 | $ 1 | (1) | |||
Share-based compensation expense | 3,063 | 3,063 | ||||
Employee stock relinquished for payment of taxes | (18) | (18) | ||||
Ending balance (in shares) at Jun. 30, 2020 | 45,579 | |||||
Ending balance at Jun. 30, 2020 | 1,194,862 | $ 456 | 70,065 | 1,439,680 | (347,212) | 31,873 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 47,829 | 42,492 | 5,337 | |||
Currency translation adjustments | 30,705 | 32,288 | (1,583) | |||
Cash flow hedges | 1,394 | 1,394 | ||||
Debt securities available-for-sale | (30) | (30) | ||||
Distributions to noncontrolling interest | (3,677) | (3,677) | ||||
Contributions from noncontrolling interest | 1,118 | 1,118 | ||||
Share-based compensation expense | 3,097 | 3,097 | ||||
Other | $ (3,126) | (3,126) | ||||
Ending balance (in shares) at Sep. 30, 2020 | 45,579 | 45,579 | ||||
Ending balance at Sep. 30, 2020 | $ 1,272,172 | $ 456 | $ 70,036 | $ 1,482,172 | $ (313,560) | $ 33,068 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 131,093 | $ 66,660 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Share-based compensation expense | 9,017 | 7,908 |
Depreciation and amortization | 12,494 | 13,341 |
Amortization of debt discount and issuance costs | 16,711 | 17,180 |
Changes in expected recoveries | (32,388) | 0 |
Deferred income taxes | (44,905) | (24,900) |
Net unrealized foreign currency transactions | 34,060 | (3,622) |
Fair value in earnings for equity securities | 1,159 | (6,921) |
Net allowance charges | 0 | 11,427 |
Other | (449) | 0 |
Changes in operating assets and liabilities: | ||
Other assets | 1,466 | 2,651 |
Other receivables, net | (1,686) | 1,019 |
Accounts payable | 45 | (2,888) |
Income taxes payable, net | 5,664 | (21,823) |
Accrued expenses | (5,315) | 13,888 |
Other liabilities | 4,408 | (3,484) |
Right of use asset/lease liability | (15) | 0 |
Other, net | 0 | 257 |
Net cash provided by operating activities | 131,359 | 70,693 |
Cash flows from investing activities: | ||
Net, purchases of property and equipment | (12,906) | (14,890) |
Purchases of finance receivables | (613,050) | (832,995) |
Recoveries applied to negative allowance | 784,056 | 0 |
Collections applied to principal on finance receivables | 0 | 649,136 |
Purchase of investments | (27,565) | (82,670) |
Proceeds from sales and maturities of investments | 41,932 | 74,771 |
Business acquisition, net of cash acquired | 0 | (57,610) |
Proceeds from sale of subsidiaries, net | 0 | 31,177 |
Net cash provided by/(used in) investing activities | 172,467 | (233,081) |
Cash flows from financing activities: | ||
Proceeds from lines of credit | 998,088 | 885,318 |
Principal payments on lines of credit | (1,331,303) | (458,566) |
Payments on convertible senior notes | (287,442) | 0 |
Proceeds from senior notes | 300,000 | 0 |
Proceeds from long-term debt | 55,000 | 0 |
Principal payments on long-term debt | (7,500) | (310,665) |
Payments of origination cost and fees | (16,998) | 0 |
Tax withholdings related to share-based payments | (3,176) | (1,492) |
Distributions paid to noncontrolling interest | (18,585) | (6,877) |
Contributions from noncontrolling interest | 1,118 | 24,675 |
Purchase of noncontrolling interest | 0 | (1,255) |
Net increase in interest-bearing deposits | 8,115 | 38,581 |
Other financing activities | (3,183) | (2,088) |
Net cash (used in)/provided by financing activities | (305,866) | 167,631 |
Effect of exchange rate on cash | (16,610) | (7,043) |
Net decrease in cash and cash equivalents | (18,650) | (1,800) |
Cash and cash equivalents, beginning of period | 123,807 | 98,695 |
Cash and cash equivalents, end of period | 105,157 | 96,895 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 88,003 | 89,100 |
Cash paid for income taxes | 64,719 | 61,942 |
Cash, cash equivalents and restricted cash reconciliation: | ||
Total cash, cash equivalents and restricted cash | $ 105,157 | $ 96,895 |
Organization and Business
Organization and Business | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | Organization and Business: As used herein, the terms "PRA Group," the "Company," or similar terms refer to PRA Group, Inc. and its subsidiaries. PRA Group, Inc., a Delaware corporation, is a global financial and business services company with operations in the Americas, Europe and Australia. The Company's primary business is the purchase, collection and management of portfolios of nonperforming loans. The Company also provides fee-based services on class action claims recoveries and by servicing consumer bankruptcy accounts in the United States ("U.S."). On March 11, 2020, due to the global outbreak of the novel coronavirus ("COVID-19"), the World Health Organization declared a global pandemic. Since the initial outbreak was reported, COVID-19 has continued to adversely impact all countries in which the Company operates. As a result, the Company continues to operate in business continuity mode globally. The Company's business continuity plans have allowed the Company to operate its business while minimizing disruption and complying with country-specific, federal, state and local laws, regulations and governmental actions related to the pandemic. Basis of presentation : The consolidated financial statements of the Company are prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). The accompanying interim financial statements have been prepared in accordance with the instructions for Quarterly Reports on Form 10-Q and, therefore, do not include all information and Notes to the Consolidated Financial Statements necessary for a complete presentation of financial position, results of operations, comprehensive income/(loss) and cash flows in conformity with GAAP. In the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair presentation of the Company's Consolidated Balance Sheets as of September 30, 2020, its Consolidated Income Statements, and its Consolidated Statements of Comprehensive Income/(Loss) for the three and nine months ended September 30, 2020 and 2019, and its Consolidated Statements of Changes in Equity and Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 and 2019, have been included. The Consolidated Income Statements of the Company for the three and nine months ended September 30, 2020 may not be indicative of future results. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 (the "2019 Form 10-K"). Consolidation : The consolidated financial statements include the accounts of PRA Group and other entities in which the Company has a controlling interest. All significant intercompany accounts and transactions have been eliminated. Entities in which the Company has a controlling financial interest, through ownership of the majority of the entities’ voting equity interests, or through other contractual rights that give the Company control, consist of entities which purchase and collect on portfolios of nonperforming loans. Investments in companies in which the Company has significant influence over operating and financing decisions, but does not own a majority of the voting equity interests, are accounted for in accordance with the equity method of accounting, which requires the Company to recognize its proportionate share of the entity’s net earnings. These investments are included in other assets, with income or loss included in other revenue. The Company performs on-going reassessments whether changes in the facts and circumstances regarding the Company’s involvement with an entity cause the Company’s consolidation conclusion to change. Restricted cash : Cash that is subject to legal restrictions or is unavailable for general operating purposes is classified as restricted cash and is included within other assets on the Company's Consolidated Balance Sheets. Segments : Under the guidance of the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") ASC Topic 280 "Segment Reporting" ("ASC 280"), the Company has determined that it has several operating segments that meet the aggregation criteria of ASC 280, and, therefore, it has one reportable segment, accounts receivable management. This conclusion is based on similarities among the operating units, including economic characteristics, the nature of the products and services, the nature of the production processes, the types or class of customer for their products and services, the methods used to distribute their products and services and the nature of the regulatory environment. The following table shows the amount of revenue generated for the three and nine months ended September 30, 2020 and 2019, and long-lived assets held at September 30, 2020 and 2019, both for the U.S., the Company's country of domicile, and outside of the U.S. (amounts in thousands): As of and for the As of and for the Three Months Ended September 30, 2020 Three Months Ended September 30, 2019 Revenues (2) Long-Lived Assets Revenues (2) Long-Lived Assets United States $ 172,286 $ 98,049 $ 166,284 $ 114,595 United Kingdom 34,387 2,578 28,446 3,586 Other (1) 61,191 8,805 55,284 9,389 Total $ 267,864 $ 109,432 $ 250,014 $ 127,570 As of and for the As of and for the Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2019 Revenues (2) Long-Lived Assets Revenues (2) Long-Lived Assets United States $ 517,914 $ 98,049 $ 501,783 $ 114,595 United Kingdom 98,768 2,578 86,494 3,586 Other (1) 174,876 8,805 159,671 9,389 Total $ 791,558 $ 109,432 $ 747,948 $ 127,570 (1) None of the countries included in "Other" comprise greater than 10% of the Company's consolidated revenues or long-lived assets. (2) Based on the Company’s financial statement information used to produce the Company's general-purpose financial statements, it is impracticable to report further breakdowns of revenues from external customers by product or service. Revenues are attributed to countries based on the location of the related operations. Long-lived assets consist of net property and equipment and right-of-use assets. The Company reports revenues earned from collection activities on nonperforming loans, fee-based services and investments. For additional information on the Company's investments, see Note 4. Beginning January 1, 2020, the Company implemented Accounting Standards Update ("ASU") ASU 2016-13, "Financial Instruments - Credit Losses" ("Topic 326") ("ASU 2016-13") and ASU 2019-11, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses” (“ASU 2019-11”), collectively referred to as "ASC 326", on a prospective basis. Prior to January 1, 2020, the vast majority of the Company's investment in finance receivables were accounted for under ASC 310-30 "Loans and Debt Securities Acquired with Deteriorated Credit Quality" ("ASC 310-30"). Refer to Note 2. Finance receivables and income recognition : The Company accounts for its investment in finance receivables at amortized cost under the guidance of ASC Topic 310 “Receivables” (“ASC 310”) and ASC Topic 326-20 “Financial Instruments - Credit Losses - Measured at Amortized Cost” (“ASC 326-20”). ASC 326-20 requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. Credit quality information : 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. The Company accounts for the portfolios in accordance with the guidance for purchased credit deteriorated ("PCD") assets. The initial allowance for credit losses is added to the purchase price rather than recorded as a credit loss expense. The Company has established a policy to write off the amortized cost of individual assets when it deems probable that it will not collect on an individual asset. Due to the deteriorated credit quality of the individual accounts, the Company may write off the unpaid principal balance of all accounts in a portfolio at the time of acquisition. However, when the Company has an expectation of collecting cash flows at the portfolio level, a negative allowance is established for expected recoveries at an amount not to exceed the amount paid for the financial portfolios. Portfolio segments : The Company develops systematic methodologies to determine its allowance for credit losses at the portfolio segment level. The Company’s nonperforming loan portfolio segments consist of two broad categories: Core and Insolvency. The Company’s Core portfolios contain loan accounts that are in default, which were purchased at a substantial discount to face value because either the credit grantor and/or other third-party collection agencies have been unsuccessful in collecting the full balance owed. The Company’s Insolvency portfolios contain loan accounts that are in default where the customer is involved in a bankruptcy or insolvency proceeding and were purchased at a substantial discount to face value. Each of the two broad portfolio segments of purchased nonperforming loan portfolios consist of large numbers of homogeneous receivables with similar risk characteristics. Effective interest rate and accounting pools : Within each portfolio segment, the Company pools accounts with similar risk characteristics that are acquired in the same year. Similar risk characteristics generally include portfolio segment and geographic region. The initial effective interest rate of the pool is established based on the purchase price and expected recoveries of each individual purchase at the purchase date. During the year of acquisition, the annual pool is aggregated, and the blended effective interest rate will change to reflect new acquisitions and new cash flow estimates until the end of the year. The effective interest rate for a pool is fixed for the remaining life of the pool once the year has ended. Methodology : The Company develops its estimates of expected recoveries in the Consolidated Balance Sheets by applying discounted cash flow methodologies to its estimated remaining collections (“ERC”) and recognizes income over the estimated life of the pool at the constant effective interest rate of the pool. Subsequent changes (favorable and unfavorable) in expected cash flows are recognized within changes in expected recoveries in the Consolidated Income Statements by adjusting the present value of increases or decreases in ERC at a constant effective interest rate. Amounts included in the estimate of recoveries do not exceed the aggregate amount of the amortized cost basis previously written off or expected to be written off. The measurement of expected recoveries is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Factors that may contribute to the changes in estimated cash flows include both external and internal factors. External factors that may have an impact on the collectability, and subsequently on the overall profitability of acquired pools of nonperforming loans, would include new laws or regulations relating to collections, new interpretations of existing laws or regulations, and the overall condition of the economy. Internal factors that may have an impact on the collectability, and subsequently the overall profitability of acquired pools of nonperforming loans, would include necessary revisions to initial and post-acquisition scoring and modeling estimates, operational activities, expected impact of operational strategies and changes in productivity related to turnover and tenure of the Company's collection staff. Portfolio income : The recognition of income on expected recoveries is based on the constant effective interest rate established for a pool. Changes in expected recoveries : The activity consists of differences between actual recoveries compared to expected recoveries for the reporting period, as well as the net present value of increases or decreases in ERC at the constant effective interest rate. Agreements to acquire the aforementioned receivables include general representations and warranties from the sellers covering matters such as account holder death or insolvency and accounts settled or disputed prior to sale. The representation and warranty period permitting the return of these accounts from the Company to the seller is typically 90 to 180 days, with certain international agreements extending as long as 24 months. Any funds received from the seller as a return of purchase price are referred to as buybacks. Buyback funds are included in changes in expected recoveries when received. Fees paid to third parties other than the seller related to the direct acquisition of a portfolio of accounts are expensed when incurred. |
Change in Accounting Principle
Change in Accounting Principle | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Change in Accounting Principle | Change in Accounting Principle: Financial Instruments - Credit Losses In June 2016, FASB issued ASU 2016-13, which introduced a new methodology requiring the measurement of expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. ASU 2016-13 utilizes a lifetime “expected credit loss” measurement objective for the recognition of credit losses for loans, held-to-maturity debt securities and other receivables measured at amortized cost. The new methodology requires an entity to present on the balance sheet the net amount expected to be collected. This methodology replaces the multiple impairment methods under prior GAAP, including for purchased credit impaired ("PCI") assets, and introduces the concept of PCD assets. The Company's PCI assets previously accounted for under ASC 310-30 are now accounted for as PCD assets upon adoption. ASU 2016-13 requires PCD assets to be recognized at their purchase price plus the allowance for credit losses expected at the time of acquisition. ASU 2016-13 also requires that financial assets should be written off when they are deemed uncollectible. In November 2019, FASB issued ASU 2019-11, which amended the PCD asset guidance in ASU 2016-13 to clarify that expected recoveries of amounts previously written off and expected to be written off should be included in the valuation account. Additionally, they should not exceed the aggregate of amounts previously written off and expected to be written off by an entity. Further, ASU 2019-11 clarifies that a negative allowance is recognized when an entity determines, after a full or partial write off of the amortized cost basis, that it will recover all or a portion of the basis. The Company adopted ASC 326 on January 1, 2020 on a prospective basis. In accordance with the guidance, substantially all the Company’s PCI assets were transitioned using the PCD guidance, with immediate write off of the amortized cost basis of individual accounts and establishment of a negative allowance for expected recoveries equal to the amortized cost basis written off. Accounts previously accounted for under ASC 310-30, were aggregated into annual pools based on similar risk characteristics and an effective interest rate was established based on the estimated remaining cash flows of the annual pool. The immediate write off and subsequent recognition of expected recoveries had no impact on the Company’s Consolidated Income Statements or the Consolidated Balance Sheets at the date of adoption. The Company develops its estimate of expected recoveries by applying discounted cash flow methodologies to its ERC and recognizes income over the estimated life of the pool at the constant effective interest rate of the pool. Changes (favorable and unfavorable) in expected cash flows are recognized in current period earnings by adjusting the present value of the changes in expected recoveries. Following the transition guidance for PCD assets, the Company grossed up the amortized cost of its net finance receivables at January 1, 2020 as shown below (amounts in thousands): Amortized cost $ 3,514,165 Allowance for credit losses 125,757,689 Noncredit discount 3,240,131 Face value $ 132,511,985 Allowance for credit losses $ 125,757,689 Writeoffs, net (125,757,689) Expected recoveries 3,514,165 Initial negative allowance for expected recoveries $ 3,514,165 Recently issued accounting standards adopted: Financial Instruments - Credit Losses Effective January 1, 2020, the Company adopted ASC 326 on a prospective basis. Prior to January 1, 2020, substantially all of the Company's investment in finance receivables were accounted for under ASC 310-30. Refer to Note 2 for comprehensive details. Intangibles - Goodwill and Other In January 2017, FASB issued ASU 2017-04 which eliminates Step 2 of the goodwill impairment test. Instead, an entity performs its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity recognizes 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. The Company adopted ASU 2017-04 on January 1, 2020 which had no impact on its consolidated financial statements. Fair Value Measurement In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement” ("ASU 2018-13"). ASU 2018-13 eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of its disclosure framework project. The Company adopted ASU 2018-13 on January 1, 2020 which had no impact to the Company's Notes to Consolidated Financial Statements. Recently issued accounting standards not yet adopted: Income Taxes In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 removes certain exceptions for recognizing deferred taxes for investments and calculating income taxes in interim periods. Additionally, it adds guidance to reduce complexity in certain areas, including recognizing taxes for tax goodwill and allocating taxes to members of a consolidated group. ASU 2019-12 is effective for annual and interim periods beginning after December 15, 2020 on a prospective basis, and early adoption is permitted. The Company is currently evaluating the impact of ASU 2019-12 on its consolidated financial statements and expects to adopt on January 1, 2021. The Company does not expect adoption to have a material impact on its consolidated financial statements. Investments-Equity Securities I n January 2020, the FASB issued ASU 2020-01 “Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)-Clarifying the Interactions between Topic 321, Topic 323, and Topic 815” (“ASU 2020-01”). ASU 2020-01 clarifies that a company should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323, Investments-Equity Method and Joint Ventures, for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. Additionally, it clarifies that, when determining the accounting for certain forward contracts and purchased options a company should not consider, whether upon settlement or exercise, if the underlying securities would be accounted for under the equity method or fair value option. This standard is effective for public entities for financial statements issued for fiscal years and interim periods beginning after December 15, 2020. The Company is evaluating the impact of ASU 2020-01 but does not expect adoption to have a material effect on its consolidated financial statements. Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). ASU 2020-04 provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference London Inter-bank Offered Rate ("LIBOR") or another reference rate expected to be discontinued. ASU 2020-04 is effective immediately for a limited time through December 31, 202 2. The Company is evaluating the impact of ASU 2020-04 but does not expect it to have a material impact on its financial statements. Accounting for Convertible Instruments In August 2020, the FASB issued ASU 2020-06, "Debt —Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging —Contracts in Entity 's Own Equity (Subtopic 815-40) —Accounting for Convertible Instruments and Contracts in an Entity 's Own Equity" ("ASU 2020-06"). ASU 2020-06 reduces the number of accounting models for convertible debt instruments and convertible preferred stock. Additionally, ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for public entities for financial statements issued for fiscal years and interim periods beginning after December 15, 2021 with early adoption permitted at the beginning of a fiscal year. The Company is currently evaluating the impact of ASU 2020-06 including the likelihood of early adoption. The Company does not expect that any other recently issued accounting pronouncements will have a material effect on its consolidated financial statements. |
Finance Receivables, net
Finance Receivables, net | 9 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
Finance Receivables, net | Finance Receivables, net: Finance Receivables, net after the adoption of ASC 326 (refer to Note 2) Finance receivables, net consisted of the following at September 30, 2020 (amounts in thousands): Amortized cost $ — Negative allowance for expected recoveries (1) 3,332,748 Balance at end of period $ 3,332,748 (1) The negative allowance balance includes certain portfolios of nonperforming loans for which the Company holds a beneficial interest representing approximately 1% of the balance. Three Months Ended September 30, 2020 Changes in the negative allowance for expected recoveries by portfolio segment for the three months ended September 30, 2020 were as follows (amounts in thousands): For the Three Months Ended September 30, 2020 Core Insolvency Total Balance at beginning of period $ 2,908,136 $ 443,396 $ 3,351,532 Initial negative allowance for expected recoveries - portfolio acquisitions (1) 159,069 18,531 177,600 Foreign currency translation adjustment 53,934 6,752 60,686 Recoveries applied to negative allowance (2) (246,738) (35,735) (282,473) Changes in expected recoveries (3) 23,744 1,659 25,403 Balance at end of period $ 2,898,145 $ 434,603 $ 3,332,748 (1) Initial negative allowance for expected recoveries - portfolio acquisitions Portfolio acquisitions for the three months ended September 30, 2020 were as follows (amounts in thousands): For the Three Months Ended September 30, 2020 Core Insolvency Total Face value $ 1,106,910 $ 91,793 $ 1,198,703 Noncredit discount (159,766) (8,522) (168,288) Allowance for credit losses at acquisition (788,075) (64,740) (852,815) Purchase price $ 159,069 $ 18,531 $ 177,600 The initial negative allowance recorded on portfolio acquisitions for the three months ended September 30, 2020 was as follows (amounts in thousands): For the Three Months Ended September 30, 2020 Core Insolvency Total Allowance for credit losses at acquisition $ (788,075) $ (64,740) $ (852,815) Writeoffs, net 788,075 64,740 852,815 Expected recoveries 159,069 18,531 177,600 Initial negative allowance for expected recoveries $ 159,069 $ 18,531 $ 177,600 (2) Recoveries applied to negative allowance Recoveries applied to the negative allowance for the three months ended September 30, 2020 were as follows (amounts in thousands): For the Three Months Ended September 30, 2020 Core Insolvency Total Recoveries (a) $ 470,056 $ 52,667 $ 522,723 Less - amounts reclassified to portfolio income (b) 223,318 16,932 240,250 Recoveries applied to negative allowance $ 246,738 $ 35,735 $ 282,473 (a) Recoveries includes cash collections, buybacks and other adjustments. (b) For more information, refer to the Company's discussion of portfolio income within finance receivables and income recognition in Note 1. (3) Changes in expected recoveries Changes in expected recoveries for the three months ended September 30, 2020 were as follows (amounts in thousands): For the Three Months Ended September 30, 2020 Core Insolvency Total Changes in expected future recoveries $ (62,999) $ (588) $ (63,587) Recoveries received in excess of forecast 86,743 2,247 88,990 Changes in expected recoveries $ 23,744 $ 1,659 $ 25,403 Nine Months Ended September 30, 2020 Changes in the negative allowance for expected recoveries by portfolio segment for the nine months ended September 30, 2020 were as follows (amounts in thousands): For the Nine Months Ended September 30, 2020 Core Insolvency Total Balance at beginning of period $ 3,051,426 $ 462,739 $ 3,514,165 Initial negative allowance for expected recoveries - portfolio acquisitions (1) 537,477 77,859 615,336 Foreign currency translation adjustment (42,065) (3,020) (45,085) Recoveries applied to negative allowance (2) (677,211) (106,845) (784,056) Changes in expected recoveries (3) 28,518 3,870 32,388 Balance at end of period $ 2,898,145 $ 434,603 $ 3,332,748 (1) Initial negative allowance for expected recoveries - portfolio acquisitions Portfolio acquisitions for the nine months ended September 30, 2020 were as follows (amounts in thousands): For the Nine Months Ended September 30, 2020 Core Insolvency Total Face value $ 4,286,296 $ 366,211 $ 4,652,507 Noncredit discount (533,465) (29,533) (562,998) Allowance for credit losses at acquisition (3,215,354) (258,819) (3,474,173) Purchase price $ 537,477 $ 77,859 $ 615,336 The initial negative allowance recorded on portfolio acquisitions for the nine months ended September 30, 2020 was as follows (amounts in thousands): For the Nine Months Ended September 30, 2020 Core Insolvency Total Allowance for credit losses at acquisition $ (3,215,354) $ (258,819) $ (3,474,173) Writeoffs, net 3,215,354 258,819 3,474,173 Expected recoveries 537,477 77,859 615,336 Initial negative allowance for expected recoveries $ 537,477 $ 77,859 $ 615,336 (2) Recoveries applied to negative allowance Recoveries applied to the negative allowance for the nine months ended September 30, 2020 were as follows (amounts in thousands): For the Nine Months Ended September 30, 2020 Core Insolvency Total Recoveries (a) $ 1,371,988 $ 162,624 $ 1,534,612 Less - amounts reclassified to portfolio income (b) 694,777 55,779 750,556 Recoveries applied to negative allowance $ 677,211 $ 106,845 $ 784,056 (a) Recoveries includes cash collections, buybacks and other adjustments. (b) For more information, refer to the Company's discussion of portfolio income within finance receivables and income recognition in Note 1. (3) Changes in expected recoveries Changes in expected recoveries for the nine months ended September 30, 2020 were as follows (amounts in thousands): For the Nine Months Ended September 30, 2020 Core Insolvency Total Changes in expected future recoveries $ (181,433) $ (2,478) $ (183,911) Recoveries received in excess of forecast 209,951 6,348 216,299 Changes in expected recoveries $ 28,518 $ 3,870 $ 32,388 In order to evaluate the impact of the COVID-19 pandemic on expectations of future cash collections, the Company considered historical performance, current economic forecasts regarding the duration of the impact to short-term and long-term growth in the various geographies in which the Company operates, and evolving information regarding its effect on economic activity and consumer habits as conditions related to the pandemic continue to evolve. The Company also considered current collection activity in its determination to adjust the estimated timing of near term ERC for certain pools. Based on these considerations, the Company’s estimates incorporate changes in both amounts and in the timing of expected cash collections over the forecast period. For the three months ended September 30, 2020, changes in expected recoveries were $25.4 million. This reflects $89.0 million in recoveries received during the quarter in excess of forecast, partially offset by a $63.6 million decrease to the present value of expected future recoveries. The majority of the decrease reflects the Company's assumption that the overperformance was acceleration in cash collections rather than an increase to total expected collections. Additionally, the Company made forecast adjustments deemed appropriate given the current environment in which the Company operates. For the nine months ended September 30, 2020, changes in expected recoveries were $32.4 million. This reflects $216.3 million in recoveries in excess of forecast, which was largely due to significant cash collections overperformance during the second and third quarters. This was mostly offset by a $183.9 million decrease in the present value of expected future recoveries. The decrease reflects the Company's assumption that the majority of the current year overperformance was primarily due to acceleration in the timing of cash collections rather than an increase to total expected collections. Additionally, the Company made forecast adjustments in all quarters deemed appropriate given the current environment in which the Company operates. Changes in the Company’s assumptions regarding the duration and impact of COVID-19 to cash collections could change significantly as conditions evolve. Finance Receivables, net prior to adoption of ASC 326 The following information reflects finance receivables, net as previously disclosed in the Company's Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2019 which was under previous revenue recognition accounting standard ASC 310-30. Changes in finance receivables, net for the three and nine months ended September 30, 2019 were as follows (amounts in thousands): Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Balance at beginning of period $ 3,230,949 $ 3,084,777 Acquisitions of finance receivables (1) 276,918 874,812 Foreign currency translation adjustment (59,172) (60,213) Cash collections (453,217) (1,384,662) Income recognized on finance receivables 247,471 735,526 Net allowance charges (4,136) (11,427) Balance at end of period $ 3,238,813 $ 3,238,813 (1) Includes portfolio purchases adjusted for buybacks and acquisition related costs, and portfolios from the acquisition of a business in Canada made during the first quarter of 2019. During the three months ended September 30, 2019, the Company acquired finance receivable portfolios with a face value of $2.4 billion for $279.0 million. During the nine months ended September 30, 2019, the Company acquired finance receivables portfolios with a face value of $8.9 billion for $887.0 million. At September 30, 2019, the ERC on the receivables acquired during the three and nine months ended September 30, 2019 were $494.8 million and $1.4 billion, respectively. At the time of acquisition and each quarter thereafter, the life of each quarterly accounting pool was estimated based on projected amounts and timing of future cash collections using the proprietary models of the Company. Based upon projections, cash collections expected to be applied to principal were estimated to be as follows for the twelve-month periods ending September 30, (amounts in thousands): 2020 $ 864,692 2021 692,946 2023 507,491 2024 378,679 2025 259,808 2026 171,873 2027 110,078 2028 84,212 2029 61,656 2030 47,347 Thereafter 60,031 Total ERC expected to be applied to principal $ 3,238,813 At September 30, 2019, the Company had aggregate net finance receivables balances in pools accounted for under the cost recovery method of $36.2 million. Accretable yield represented the amount of income on finance receivables the Company expected to recognize over the remaining life of its existing portfolios based on estimated future cash flows as of the balance sheet date. Additions represented the original expected accretable yield on portfolios acquired during the period. Net reclassifications from nonaccretable difference to accretable yield primarily resulted from the increase in the Company's estimate of future cash flows. When applicable, net reclassifications to nonaccretable difference from accretable yield resulted from the decrease in the Company's estimates of future cash flows and allowance charges that together exceeded the increase in the Company's estimate of future cash flows. Changes in accretable yield for the three and nine months ended September 30, 2019 were as follows (amounts in thousands): Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Balance at beginning of period $ 3,173,013 $ 3,058,445 Income recognized on finance receivables (247,471) (735,526) Net allowance charges 4,136 11,427 Additions from portfolio acquisitions 228,443 693,053 Reclassifications from nonaccretable difference 59,694 191,756 Foreign currency translation adjustment (60,944) (62,284) Balance at end of period $ 3,156,871 $ 3,156,871 The following is a summary of activity within the Company's valuation allowance account, all of which relates to acquired finance receivables, for the three and nine months ended September 30, 2019 (amounts in thousands): Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Beginning balance $ 264,591 $ 257,148 Allowance charges 8,087 21,596 Reversal of previously recorded allowance charges (3,951) (10,169) Net allowance charges 4,136 11,427 Foreign currency translation adjustment (1,192) (1,040) Ending balance $ 267,535 $ 267,535 |
Investments
Investments | 9 Months Ended |
Sep. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments: Investments consisted of the following at September 30, 2020 and December 31, 2019 (amounts in thousands): September 30, 2020 December 31, 2019 Debt securities Available-for-sale $ 4,890 $ 5,052 Equity securities Exchange traded funds 19,132 — Private equity funds 5,818 7,218 Mutual funds 639 33,677 Equity method investments 7,342 10,229 Total investments $ 37,821 $ 56,176 Debt Securities Available-for-sale Government bonds: The Company's investments in government bonds are classified as available-for-sale and are stated at fair value. The amortized cost and estimated fair value of investments in debt securities at September 30, 2020 and December 31, 2019 were as follows (amounts in thousands): September 30, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value Available-for-sale Government bonds $ 4,742 $ 148 $ — $ 4,890 December 31, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value Available-for-sale Government bonds $ 5,095 $ — $ 43 $ 5,052 Equity Securities Exchange traded funds: The Company invests in certain exchange traded funds, which are carried at fair value. Gains and losses from these investments are included within other income and (expense) in the Company's Consolidated Income Statements. Investments in private equity funds: Investments in private equity funds represent limited partnerships in which the Company has less than a 1% interest. Mutual funds: The Company invests certain excess funds held in Brazil in a Brazilian real denominated mutual fund benchmarked to the U.S. dollar that invests principally in Brazilian fixed income securities. The investments are carried at fair value based on quoted market prices. Gains and losses from this investment are included as a foreign exchange component of other income and (expense) in the Company's Consolidated Income Statements. Equity Method Investments The Company has an 11.7% interest in RCB Investimentos S.A. ("RCB"), a servicing platform for nonperforming loans in Brazil. This investment is accounted for on the equity method because the Company exercises significant influence over RCB’s operating and financial activities. Accordingly, the Company’s investment in RCB is adjusted for the Company’s proportionate share of RCB’s earnings or losses, capital contribution made and distributions received. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, net | 9 Months Ended |
Sep. 30, 2020 | |
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 of each year or more frequently if indicators of impairment exist. The Company performed its most recent annual review as of October 1, 2019 and concluded that no goodwill impairment was necessary. The Company performed its quarterly assessment by evaluating whether any triggering events had occurred as of September 30, 2020, which included considering current market conditions resulting from the global COVID-19 pandemic. The Company concluded that no triggering event had occurred as of September 30, 2020 and will continue to monitor the market for any adverse conditions. The following table represents the changes in goodwill for the three and nine months ended September 30, 2020 and 2019 (amounts in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Balance at beginning of period $ 444,507 $ 489,293 $ 480,794 $ 464,116 Changes: Acquisition (1) — 467 — 18,831 Foreign currency translation adjustment 11,801 (24,188) (24,486) (17,375) Net change in goodwill 11,801 (23,721) (24,486) 1,456 Balance at end of period $ 456,308 $ 465,572 $ 456,308 $ 465,572 (1) The $0.5 million and $18.8 million additions to goodwill during the three and nine months ended September 30, 2019 respectively, were related to the acquisition of a business in Canada. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Leases | Leases: The Company's operating lease portfolio primarily includes corporate offices and call centers. The majority of its leases have remaining lease terms of one year to 20 years, some of which include options to extend the leases for five years, and others include options to terminate the leases within one year. Exercises of lease renewal options are typically at the Company's sole discretion and are included in its right-of-use ("ROU") assets and lease liabilities based upon whether the Company is reasonably certain of exercising the renewal options. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. As most of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments. The components of lease expense for the three and nine months ended September 30, 2020 and 2019, were as follows (amounts in thousands): Three Months Ended September 30 Nine Months Ended September 30 2020 2019 2020 2019 Operating lease expense $ 3,035 $ 3,018 $ 9,072 $ 8,948 Short-term lease expense 661 657 2,030 2,219 Total lease expense $ 3,696 $ 3,675 $ 11,102 $ 11,167 Supplemental cash flow information and non-cash activity related to leases for the nine months ended September 30, 2020 and 2019 were as follows (amounts in thousands): Nine Months Ended September 30 2020 2019 Cash paid for amounts included in the measurement of operating lease liabilities $ 9,179 $ 8,597 ROU assets obtained in exchange for operating lease obligations (10,465) 80,581 Lease term and discount rate information related to operating leases were as follows as of the dates indicated: September 30, 2020 2019 Weighted-average remaining lease term (years) 9.5 11.0 Weighted-average discount rate 4.82 % 4.97 % Maturities of lease liabilities at September 30, 2020 are as follows for the following periods (amounts in thousands): Operating Leases For the three months ending December 31, 2020 $ 3,005 For the year ending December 31, 2021 11,011 For the year ending December 31, 2022 8,750 For the year ending December 31, 2023 6,520 For the year ending December 31, 2024 5,683 Thereafter 35,154 Total lease payments $ 70,123 Less imputed interest 14,136 Total $ 55,987 |
Borrowings
Borrowings | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings: The Company's borrowings consisted of the following as of the dates indicated (amounts in thousands): September 30, 2020 December 31, 2019 Americas revolving credit $ 414,803 $ 772,037 Europe revolving credit 1,025,948 1,017,465 Term loan 472,500 425,000 Senior notes 300,000 — Convertible senior notes 345,000 632,500 2,558,251 2,847,002 Less: Debt discount and issuance costs (33,822) (38,577) Total $ 2,524,429 $ 2,808,425 The following principal payments are due on the Company's borrowings as of September 30, 2020 for the 12-month periods ending September 30, (amounts in thousands): 2021 $ 10,937 2022 10,937 2023 1,381,120 2024 855,257 Thereafter 300,000 Total $ 2,558,251 The Company determined that it was in compliance with the covenants of its financing arrangements as of September 30, 2020. 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. On August 26, 2020, the Company entered into the Third Amendment to the North American Credit Agreement which, among other things, increased the term loan by $55.0 million, reduced the aggregate commitments under the domestic revolving credit facility by $68.0 million, increased the Canadian revolving credit facility by $25.0 million, and extended the maturity date by two years. The total credit facility under the North American Credit Agreement includes an aggregate principal amount of $1,547.5 million (subject to compliance with a borrowing base and applicable debt covenants), which consists of (i) a fully-funded $472.5 million term loan, (ii) a $1,000.0 million domestic revolving credit facility, and (iii) a $75.0 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 sub-limit 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 (unless the ERC Advance Rate Increase Period event, as defined in the North American Credit Agreement, triggers an additional 55 basis points that would be added to the margin). 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% (unless the ERC Advance Rate Increase Period event, as defined in the North American Credit Agreement, triggers an additional 55 basis points that would be added to the margin). The revolving loans within the credit facility are subject to a 0.75% floor. 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, 2024. As of September 30, 2020, the unused portion of the North American Credit Agreement was $662.2 million. Considering borrowing base restrictions, as of September 30, 2020, the amount available to be drawn was $353.7 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 borrowing base calculations and may not exceed 35% of the ERC on all eligible Core asset pools. After July 31, 2020, the ERC borrowing base limit on the domestic revolving loan facility can be increased to 40% until January 31, 2021. If the ERC advance rate is increased to 40% and then subsequently decreases back to 35% or below during this period, the ERC borrowing base will return to 35%; • 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 55% of the ERC of all 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 3.50 to 1.0; • investments by any loan party in any entity are permitted in an amount not to exceed 75% of the aggregate principal amount of any indebtedness in the form of additional convertible notes and/or certain unsecured financings incurred after August 1, 2020; • Subsidiary indebtedness, excluding PRA Europe (as defined below), are permitted in an amount not to exceed the greater of $200.0 million or 5% of consolidated total assets; • the consolidated senior secured leverage ratio cannot exceed 2.75 to 1.0 as of the end of any fiscal quarter until March 31, 2021. On March 31, 2021, the senior secured leverage ratio will decrease to 2.25 to 1.0 until maturity; • 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, equity interests and permitted convertible note 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); • the Company must maintain positive income from operations during any fiscal quarter; and • restrictions on changes in control. European Revolving Credit Facility On October 23, 2014, European subsidiaries of the Company ("PRA Europe") entered into a credit agreement with DNB Bank ASA for a Multicurrency Revolving Credit Facility (such agreement as later amended or modified, the "European Credit Agreement"). On March 27, 2020, the Company entered into the Sixth Amendment and Restatement Agreement to its European Credit Agreement which, among other things, increased the total commitments by $200.0 million, extended the majority of the facility by two years and includes an accordion feature of no less than $50.0 million not to exceed $500.0 million, to allow for future increases. Any new lender must participate with a commitment of at least $100.0 million. Under the terms of the European Credit Agreement, the credit facility includes an aggregate amount of $1,300.0 million (subject to the borrowing base), accrues interest at the Interbank Offered Rate ("IBOR") plus 2.70% - 3.80% (as determined by the estimated remaining collections ratio ("ERC Ratio") as defined in the European Credit Agreement), bears an unused line fee, currently 1.23% per annum, or 35% of the margin, is payable monthly in arrears, and matures February 19, 2023. 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, 2023. As of September 30, 2020, the unused portion of the European Credit Agreement (including the overdraft facility) was $314.1 million. Considering borrowing base restrictions and other covenants, as of September 30, 2020, the amount available to be drawn under the European Credit Agreement (including the overdraft facility) was $118.1 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 ERC Ratio cannot exceed 45%; • 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. Colombian Revolving Credit Facility PRA Group Colombia Holding SAS, a subsidiary of the Company in Colombia, has a credit agreement that provides for borrowings in an aggregate amount of approximately $5.1 million. As of September 30, 2020, the outstanding balance under the credit agreement was $2.0 million, with a weighted average interest rate of 7.13%. The outstanding balance accrues interest at the Indicador Bancario de Referencia rate ("IBR") plus a weighted average spread of 2.74%, is payable quarterly in arrears, amortizes quarterly, and matures on October 17, 2022 (per the credit agreement, maturity represents three years from the last draw). This credit facility is fully collateralized using time deposits with the lender. As of September 30, 2020, the unused portion of the Colombia Credit Agreement was approximately $3.1 million. Senior Notes due 2025 On August 27, 2020, the Company completed the private offering of $300.0 million in aggregate principal amount of its 7.375% Senior Notes due September 1, 2025 (the "2025 Notes" or "senior notes"). The 2025 Notes were issued pursuant to an Indenture dated August 27, 2020 (the "2020 Indenture"), between the Company and Regions Bank, as a trustee. The 2020 Indenture contains customary terms and covenants, including certain events of default after which the 2025 Notes may be due and payable immediately. The 2025 Notes are senior unsecured obligations of the Company. Interest on the 2025 Notes is payable semi-annually, in arrears, on September 1 and March 1 of each year, beginning March 1, 2021. On or after September 1, 2022, the 2025 Notes may be redeemed, in whole or in part, at a price equal to 103.688% of the aggregate principal amount of the 2025 Notes being redeemed. The applicable redemption price changes if redeemed during the 12-months beginning September 1 of each year to, 101.844% for 2023 and then 100% for 2024 and thereafter. In addition, on or before September 1, 2022, the Company may redeem up to 40% of the aggregate principal amount of the 2025 Notes at a redemption price of 107.375% plus accrued and unpaid interest subject to the rights of holders of the 2025 Notes with the net cash proceeds of a public offering of common stock of the Company provided, that at least 60% in aggregate principal amount of the 2025 Notes remains outstanding immediately after the occurrence of such redemption and that such redemption will occur within 90 days of the date of the closing of such public offering. In the event of a Change of Control (as defined in the 2020 Indenture), the Company must offer to repurchase all of the 2025 Notes (unless otherwise redeemed) at a price equal to 101% of their aggregate principal amount, plus accrued and unpaid interest. If the Company sells assets under certain circumstances and does not use the proceeds for specified purposes, the Company will be required to make an offer to repurchase the 2025 Notes at 100% of their principal amount, plus accrued and unpaid interest. Convertible Senior Notes due 2020 On August 13, 2013, the Company completed the private offering of $287.5 million in aggregate principal amount of its 3.00% Convertible Senior Notes due August 1, 2020 (the "2020 Notes"). In the third quarter of 2020, the Company repaid the 2020 Notes in full using borrowings under the domestic revolving loan facility in the North American Credit Agreement and available cash. Convertible Senior Notes due 2023 On May 26, 2017, the Company completed the private offering of $345.0 million in aggregate principal amount of its 3.50% Convertible Senior Notes due June 1, 2023 (the "2023 Notes" and, together with the 2020 Notes, the "Convertible 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. 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 September 30, 2020, the Company does not believe that any of the conditions allowing holders of the 2023 Notes to convert their notes have 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 2023 Notes issuance cost as debt issuance cost and the remaining $1.3 million as equity issuance cost. The balances of the liability and equity components of the Convertible Notes outstanding were as follows as of the dates indicated (amounts in thousands): September 30, 2020 December 31, 2019 Liability component - principal amount $ 345,000 $ 632,500 Unamortized debt discount (22,562) (31,414) Liability component - net carrying amount $ 322,438 $ 601,086 Equity component $ 44,910 $ 76,216 The debt discount is amortized into interest expense over the remaining life of the Convertible Notes. The 2020 Notes were using the effective interest rate of 4.92% through August 1, 2020. The 2023 Notes are using an effective interest rate of 6.20%. Interest expense related to the Convertible Notes was as follows for the periods indicated (amounts in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Interest expense - stated coupon rate $ 3,695 $ 5,175 $ 14,045 $ 15,525 Interest expense - amortization of debt discount 2,388 3,128 8,852 9,241 Total interest expense - Convertible Notes $ 6,083 $ 8,303 $ 22,897 $ 24,766 |
Derivatives
Derivatives | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives:The Company periodically enters into derivative financial instruments, typically interest rate swap agreements, interest rate caps, and foreign currency contracts to reduce its exposure to fluctuations in interest rates on variable-rate debt and foreign currency exchange rates. The Company does not utilize derivative financial instruments with a level of complexity or with a risk greater than the exposure to be managed nor does it enter into or hold derivatives for trading or speculative purposes. The Company periodically reviews the creditworthiness of the counterparty to assess the counterparty’s ability to honor its obligation. Counterparty default would expose the Company to fluctuations in interest and currency rates. Derivative financial instruments are recognized at fair value in the Consolidated Balance Sheets, in accordance with the guidance of ASC Topic 815 “Derivatives and Hedging” (“ASC 815”). The following table summarizes the fair value of derivative instruments in the Company's Consolidated Balance Sheets as of the dates indicated (amounts in thousands): September 30, 2020 December 31, 2019 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives designated as hedging instruments: Interest rate contracts Other assets $ — Other assets $ 323 Interest rate contracts Other liabilities 46,570 Other liabilities 17,807 Derivatives not designated as hedging instruments: Foreign currency contracts Other assets 2,877 Other assets 552 Foreign currency contracts Other liabilities 17,690 Other liabilities 5,856 Derivatives Designated as Hedging Instruments: Changes in fair value of derivative contracts designated as cash flow hedging instruments are recognized in other comprehensive income ("OCI"). As of September 30, 2020 and December 31, 2019, the notional amount of interest rate contracts designated as cash flow hedging instruments was $932.3 million and $959.0 million, respectively. Derivatives designated as cash flow hedging instruments were evaluated and remain highly effective at September 30, 2020 and have initial terms of one The following table summarizes the effects of derivatives designated as cash flow hedging instruments on the consolidated financial statements for the three and nine months ended September 30, 2020 and 2019 (amounts in thousands): Loss recognized in OCI, net of tax Three Months Ended September 30, Nine Months Ended September 30, Derivatives designated as cash flow hedging instruments 2020 2019 2020 2019 Interest rate contracts $ (1,089) $ (6,245) $ (27,953) $ (20,160) Loss reclassified from OCI into income Three Months Ended September 30, Nine Months Ended September 30, Location of loss reclassified from OCI into income 2020 2019 2020 2019 Interest expense, net $ (3,175) $ (413) $ (6,488) $ (611) Derivatives Not Designated as Hedging Instruments: Changes in fair value of derivative contracts not designated as hedging instruments are recognized in earnings. The Company also enters into foreign currency contracts to economically hedge the foreign currency re-measurement exposure related to certain balances that are denominated in currencies other than the functional currency of the entity. As of September 30, 2020 and December 31, 2019, the notional amount of foreign currency contracts that are not designated as hedging instruments was $466.2 million and $469.9 million, respectively. The following table summarizes the effects of derivatives not designated as hedging instruments on the Company’s Consolidated Income Statements for the three and nine months ended September 30, 2020 and 2019 (amounts in thousands): Amount of gain or (loss) recognized in income Three Months Ended September 30, Derivatives not designated as hedging instruments Location of gain or (loss) recognized in income 2020 2019 Foreign currency contracts Foreign exchange gains $ 2,280 $ 4,270 Foreign currency contracts Interest expense, net (322) (1,141) Interest rate contracts Interest expense, net — 15 Amount of gain or (loss) recognized in income Nine Months Ended September 30, Derivatives not designated as hedging instruments Location of gain or (loss) recognized in income 2020 2019 Foreign currency contracts Foreign exchange gains $ 27,437 $ (3,401) Foreign currency contracts Interest expense, net (2,135) (2,628) Interest rate contracts Interest expense, net — (492) |
Fair Value Measurements and Dis
Fair Value Measurements and Disclosures | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value: As defined by ASC Topic 820, "Fair Value Measurements and Disclosures" ("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 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 September 30, 2020 and December 31, 2019 (amounts in thousands): September 30, 2020 December 31, 2019 Carrying Estimated Carrying Estimated Financial assets: Cash and cash equivalents $ 92,779 $ 92,779 $ 119,774 $ 119,774 Finance receivables, net 3,332,748 3,408,353 3,514,165 3,645,610 Financial liabilities: Interest-bearing deposits 119,834 119,834 106,246 106,246 Revolving lines of credit 1,440,751 1,440,751 1,789,502 1,789,502 Term loan 472,500 472,500 425,000 425,000 Senior Notes 300,000 313,104 — — Convertible Notes 322,438 378,720 601,086 648,968 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 that can be found in active markets. Accordingly, the Company estimates the fair value of cash and cash equivalents using Level 1 inputs. Finance receivables, net: The Company estimates the fair value of these receivables using proprietary pricing models that the Company utilizes to make portfolio acquisition decisions. Accordingly, the Company's fair value estimates use Level 3 inputs as there is little observable market data available and management is required to use significant judgment in its estimates. Interest-bearing deposits: The carrying amount approximates fair value due to the short-term nature of the deposits and the observable quoted prices for similar instruments in active markets. Accordingly, the Company uses Level 2 inputs for its fair value estimates. Revolving lines of credit: The carrying amount approximates fair value due to the short-term nature of the interest rate periods and the observable quoted prices for similar instruments in active markets. Accordingly, the Company uses Level 2 inputs for its fair value estimates. Term loan: 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 estimate. Senior and Convertible Notes: The fair value estimates for the Senior Notes and the Convertible 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 classified as debt, while estimated fair value pertains to their face amount. 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 September 30, 2020 and December 31, 2019 (amounts in thousands): Fair Value Measurements as of September 30, 2020 Level 1 Level 2 Level 3 Total Assets: Available-for-sale investments Government bonds $ 4,890 $ — $ — $ 4,890 Fair value through net income Exchange traded funds 19,132 — — 19,132 Mutual funds 639 — — 639 Derivative contracts (recorded in other assets) — 2,877 — 2,877 Liabilities: Derivative contracts (recorded in other liabilities) — 64,260 — 64,260 Fair Value Measurements as of December 31, 2019 Level 1 Level 2 Level 3 Total Assets: Available-for-sale investments Government bonds $ 5,052 $ — $ — $ 5,052 Fair value through net income Mutual funds 33,677 — — 33,677 Derivative contracts (recorded in other assets) — 875 — 875 Liabilities: Derivative contracts (recorded in other liabilities) — 23,663 — 23,663 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 Exchange traded funds: Fair value of the Company's investment in exchange traded funds is estimated using quoted market prices. Accordingly, the Company uses Level 1 inputs. 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, the nature of the investments in this class is that distributions are received through the liquidation of the underlying assets of the fund. The investments are expected to be returned through distributions as a result of liquidations of the funds' underlying assets over one |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss: The following table provides details about the reclassifications from accumulated other comprehensive loss for the three and nine months ended September 30, 2020 and 2019 (amounts in thousands): Three Months Ended September 30, Gains and losses on cash flow hedges 2020 2019 Affected line in the consolidated income statement Interest rate swaps $ (3,175) $ (413) Interest expense, net Income tax effect of item above 692 — Income tax expense Total losses on cash flow hedges $ (2,483) $ (413) Net of tax Nine Months Ended September 30, Gains and losses on cash flow hedges 2020 2019 Affected line in the consolidated income statement Interest rate swaps $ (6,488) $ (611) Interest expense, net Income tax effect of item above 1,461 — Income tax expense Total losses on cash flow hedges $ (5,027) $ (611) Net of tax The following table represents the changes in accumulated other comprehensive loss by component, after tax, for the three and nine months ended September 30, 2020 and 2019 (amounts in thousands): Three Months Ended September 30, 2020 Debt Securities Cash Flow Currency Translation Accumulated Other Available-for-sale Hedges Adjustments Comprehensive Loss (1) Balance at beginning of period $ 177 $ (37,409) $ (309,980) $ (347,212) Other comprehensive (loss)/income before reclassifications (30) (1,089) 32,288 31,169 Reclassifications, net — 2,483 — 2,483 Net current period other comprehensive (loss)/income (30) 1,394 32,288 33,652 Balance at end of period $ 147 $ (36,015) $ (277,692) $ (313,560) Three Months Ended September 30, 2019 Debt Securities Cash Flow Currency Translation Accumulated Other Available-for-sale Hedges Adjustments Comprehensive Loss (1) Balance at beginning of period $ (1) $ (13,673) $ (238,450) $ (252,124) Other comprehensive income/(loss) before reclassifications (1) (6,245) (47,999) (54,245) Reclassifications, net — 413 — 413 Net current period other comprehensive loss (1) (5,832) (47,999) (53,832) Balance at end of period $ (2) $ (19,505) $ (286,449) $ (305,956) (1) For the three months ended September 30, 2020 and 2019, net deferred taxes for unrealized gains/(losses) from cash flow hedges were $0.5 million and $(2.0) million, respectively. Nine Months Ended September 30, 2020 Debt Securities Cash Flow Currency Translation Accumulated Other Available-for-sale Hedges Adjustments Comprehensive Loss (2) Balance at beginning of period $ (44) $ (13,088) $ (247,886) $ (261,018) Other comprehensive income/(loss) before reclassifications 191 (27,954) (29,806) (57,569) Reclassifications, net — 5,027 — 5,027 Net current period other comprehensive income/(loss) 191 (22,927) (29,806) (52,542) Balance at end of period $ 147 $ (36,015) $ (277,692) $ (313,560) Nine Months Ended September 30, 2019 Debt Securities Cash Flow Currency Translation Accumulated Other Available-for-sale Hedges Adjustments Comprehensive Loss (2) Balance at beginning of period $ (83) $ 44 $ (242,070) $ (242,109) Other comprehensive income/(loss) before reclassifications 81 (20,160) (44,379) (64,458) Reclassifications, net — 611 — 611 Net current period other comprehensive income/(loss) 81 (19,549) (44,379) (63,847) Balance at end of period $ (2) $ (19,505) $ (286,449) $ (305,956) (2) For the nine months ended September 30, 2020 and 2019, net deferred taxes for unrealized losses from cash flow hedges were $10.2 million and $6.4 million, respectively. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2020 | |
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 Convertible Notes and nonvested share awards, if dilutive. There has been no dilutive effect of the Convertible Notes since issuance through September 30, 2020. 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 three and nine months ended September 30, 2020 and 2019 (amounts in thousands, except per share amounts): For the Three Months Ended September 30, 2020 2019 Net Income Attributable to PRA Group, Inc. Weighted EPS Net Income Attributable to PRA Group, Inc. Weighted EPS Basic EPS $ 42,492 45,579 $ 0.93 $ 24,971 45,410 $ 0.55 Dilutive effect of nonvested share awards 561 (0.01) 235 — Diluted EPS $ 42,492 46,140 $ 0.92 $ 24,971 45,645 $ 0.55 For the Nine Months Ended September 30, 2020 2019 Net income attributable to PRA Group, Inc. Weighted EPS Net income attributable to PRA Group, Inc. Weighted EPS Basic EPS $ 119,541 45,526 $ 2.63 $ 58,817 45,378 $ 1.30 Dilutive effect of nonvested share awards 445 (0.03) 142 (0.01) Diluted EPS $ 119,541 45,971 $ 2.60 $ 58,817 45,520 $ 1.29 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes: The Company accounts for income taxes in accordance with FASB ASC Topic 740 "Income Taxes" ("ASC 740") as it relates to the provision for income taxes and uncertainty in income taxes. The guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. On May 10, 2017, the Company reached a settlement with the Internal Revenue Service ("IRS") regarding the IRS assertion that tax revenue recognition using the cost recovery method did not clearly reflect taxable income. In accordance with the settlement, the Company changed its tax accounting method used to recognize finance receivables revenue effective with tax year 2017. Under the new method, a portion of the annual collections amortizes principal and the remaining portion is taxable income. The deferred tax liability related to the difference in timing between the new method and the cost recovery method has been incorporated evenly into the Company’s tax filings over four years effective with tax year 2017 and ending with tax year 2020. The Company was not required to pay any interest or penalties in connection with the settlement. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security ("CARES") Act was enacted into U.S. law in response to COVID-19, with varying legislation enacted in many of the other countries in which the Company operates. While the Company is continuing to evaluate impact, the Company has implemented the tax payment and filing deferral provisions as applicable on a global basis and does not believe that any of the other provisions will have a material impact to its financial reporting. As tax legislative updates continue to be released, they will be monitored by the Company. At September 30, 2020, the tax years subject to examination by the major federal, state and international taxing jurisdictions are 2013 and subsequent years. The Company intends for predominantly all international earnings to be indefinitely reinvested in its international operations; therefore, the recording of deferred tax liabilities for such unremitted earnings is not required. If international earnings were repatriated, the Company may need to accrue and pay taxes, although foreign tax credits may be available to partially reduce U.S. income taxes. The amount of cash on hand related to international operations with indefinitely reinvested earnings was $81.6 million and $109.7 million as of September 30, 2020 and December 31, 2019, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments And Contingencies | Commitments and Contingencies: Employment Agreements: The Company has entered into employment agreements, most of which expire on December 31, 2020, with all of its U.S. executive officers and with several members of its U.S. senior management group. Such agreements provide for base salary payments as well as potential discretionary bonuses that take into consideration the Company’s overall performance against its short and long-term financial and strategic objectives. At September 30, 2020, estimated future compensation under these agreements was approximately $2.0 million. The agreements also contain confidentiality and non-compete provisions. Outside the U.S., employment agreements are in place with employees pursuant to local country regulations. Generally, these agreements do not have expiration dates and therefore it is impractical to estimate the amount of future compensation under these agreements. Accordingly, the future compensation under these agreements is not included in the $2.0 million total above. 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 September 30, 2020, was approximately $395.6 million. Finance Receivables: Certain agreements for the purchase of finance receivables portfolios contain provisions that may, in limited circumstances, require the Company to refund a portion or all of the collections subsequently received by the Company on particular accounts. The potential refunds as of the balance sheet date are not considered to be significant. Litigation and Regulatory Matters: The Company and its subsidiaries are from time to time subject to a variety of routine legal and regulatory claims, inquiries and 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 September 30, 2020, 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. At September 30, 2020 and December 31, 2019, the Company recorded $1.8 million and $1.0 million in recoveries receivable under the Company's insurance policies or third-party indemnities, respectively. These amounts are included in other receivables, net in the Consolidated Balance Sheets. Matters that are not considered routine legal proceedings were disclosed previously in the 2019 Form 10-K and in Note 13 to the Company's Consolidated Financial Statements included in Part 1. Item 1 to its Quarterly Report on Form 10-Q for the period ended June 30, 2020. |
Organization and Business (Poli
Organization and Business (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
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. On January 1, 2020, the Company adopted ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment" ("ASU 2017-04"). The Company performs its annual assessment of goodwill 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, an impairment loss is recognized. The loss will be recorded at the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to the respective reporting unit. |
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"). The accompanying interim financial statements have been prepared in accordance with the instructions for Quarterly Reports on Form 10-Q and, therefore, do not include all information and Notes to the Consolidated Financial Statements necessary for a complete presentation of financial position, results of operations, comprehensive income/(loss) and cash flows in conformity with GAAP. In the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair presentation of the Company's Consolidated Balance Sheets as of September 30, 2020, its Consolidated Income Statements, and its Consolidated Statements of Comprehensive Income/(Loss) for the three and nine months ended September 30, 2020 and 2019, and its Consolidated Statements of Changes in Equity and Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 and 2019, have been included. The Consolidated Income Statements of the Company for the three and nine months ended September 30, 2020 may not be indicative of future results. |
New Accounting Pronouncements | Financial Instruments - Credit Losses In June 2016, FASB issued ASU 2016-13, which introduced a new methodology requiring the measurement of expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. ASU 2016-13 utilizes a lifetime “expected credit loss” measurement objective for the recognition of credit losses for loans, held-to-maturity debt securities and other receivables measured at amortized cost. The new methodology requires an entity to present on the balance sheet the net amount expected to be collected. This methodology replaces the multiple impairment methods under prior GAAP, including for purchased credit impaired ("PCI") assets, and introduces the concept of PCD assets. The Company's PCI assets previously accounted for under ASC 310-30 are now accounted for as PCD assets upon adoption. ASU 2016-13 requires PCD assets to be recognized at their purchase price plus the allowance for credit losses expected at the time of acquisition. ASU 2016-13 also requires that financial assets should be written off when they are deemed uncollectible. In November 2019, FASB issued ASU 2019-11, which amended the PCD asset guidance in ASU 2016-13 to clarify that expected recoveries of amounts previously written off and expected to be written off should be included in the valuation account. Additionally, they should not exceed the aggregate of amounts previously written off and expected to be written off by an entity. Further, ASU 2019-11 clarifies that a negative allowance is recognized when an entity determines, after a full or partial write off of the amortized cost basis, that it will recover all or a portion of the basis. The Company adopted ASC 326 on January 1, 2020 on a prospective basis. In accordance with the guidance, substantially all the Company’s PCI assets were transitioned using the PCD guidance, with immediate write off of the amortized cost basis of individual accounts and establishment of a negative allowance for expected recoveries equal to the amortized cost basis written off. Accounts previously accounted for under ASC 310-30, were aggregated into annual pools based on similar risk characteristics and an effective interest rate was established based on the estimated remaining cash flows of the annual pool. The immediate write off and subsequent recognition of expected recoveries had no impact on the Company’s Consolidated Income Statements or the Consolidated Balance Sheets at the date of adoption. The Company develops its estimate of expected recoveries by applying discounted cash flow methodologies to its ERC and recognizes income over the estimated life of the pool at the constant effective interest rate of the pool. Changes (favorable and unfavorable) in expected cash flows are recognized in current period earnings by adjusting the present value of the changes in expected recoveries. Recently issued accounting standards adopted: Financial Instruments - Credit Losses Effective January 1, 2020, the Company adopted ASC 326 on a prospective basis. Prior to January 1, 2020, substantially all of the Company's investment in finance receivables were accounted for under ASC 310-30. Refer to Note 2 for comprehensive details. Intangibles - Goodwill and Other In January 2017, FASB issued ASU 2017-04 which eliminates Step 2 of the goodwill impairment test. Instead, an entity performs its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity recognizes 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. The Company adopted ASU 2017-04 on January 1, 2020 which had no impact on its consolidated financial statements. Fair Value Measurement In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement” ("ASU 2018-13"). ASU 2018-13 eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of its disclosure framework project. The Company adopted ASU 2018-13 on January 1, 2020 which had no impact to the Company's Notes to Consolidated Financial Statements. Recently issued accounting standards not yet adopted: Income Taxes In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 removes certain exceptions for recognizing deferred taxes for investments and calculating income taxes in interim periods. Additionally, it adds guidance to reduce complexity in certain areas, including recognizing taxes for tax goodwill and allocating taxes to members of a consolidated group. ASU 2019-12 is effective for annual and interim periods beginning after December 15, 2020 on a prospective basis, and early adoption is permitted. The Company is currently evaluating the impact of ASU 2019-12 on its consolidated financial statements and expects to adopt on January 1, 2021. The Company does not expect adoption to have a material impact on its consolidated financial statements. Investments-Equity Securities I n January 2020, the FASB issued ASU 2020-01 “Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)-Clarifying the Interactions between Topic 321, Topic 323, and Topic 815” (“ASU 2020-01”). ASU 2020-01 clarifies that a company should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323, Investments-Equity Method and Joint Ventures, for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. Additionally, it clarifies that, when determining the accounting for certain forward contracts and purchased options a company should not consider, whether upon settlement or exercise, if the underlying securities would be accounted for under the equity method or fair value option. This standard is effective for public entities for financial statements issued for fiscal years and interim periods beginning after December 15, 2020. The Company is evaluating the impact of ASU 2020-01 but does not expect adoption to have a material effect on its consolidated financial statements. Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). ASU 2020-04 provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference London Inter-bank Offered Rate ("LIBOR") or another reference rate expected to be discontinued. ASU 2020-04 is effective immediately for a limited time through December 31, 202 2. The Company is evaluating the impact of ASU 2020-04 but does not expect it to have a material impact on its financial statements. Accounting for Convertible Instruments In August 2020, the FASB issued ASU 2020-06, "Debt —Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging —Contracts in Entity 's Own Equity (Subtopic 815-40) —Accounting for Convertible Instruments and Contracts in an Entity 's Own Equity" ("ASU 2020-06"). ASU 2020-06 reduces the number of accounting models for convertible debt instruments and convertible preferred stock. Additionally, ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for public entities for financial statements issued for fiscal years and interim periods beginning after December 15, 2021 with early adoption permitted at the beginning of a fiscal year. The Company is currently evaluating the impact of ASU 2020-06 including the likelihood of early adoption. The Company does not expect that any other recently issued accounting pronouncements will have a material effect on its consolidated financial statements. |
Organization and Business (Tabl
Organization and Business (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Revenue And Long-Lived Assets Held By Geographical Location | The following table shows the amount of revenue generated for the three and nine months ended September 30, 2020 and 2019, and long-lived assets held at September 30, 2020 and 2019, both for the U.S., the Company's country of domicile, and outside of the U.S. (amounts in thousands): As of and for the As of and for the Three Months Ended September 30, 2020 Three Months Ended September 30, 2019 Revenues (2) Long-Lived Assets Revenues (2) Long-Lived Assets United States $ 172,286 $ 98,049 $ 166,284 $ 114,595 United Kingdom 34,387 2,578 28,446 3,586 Other (1) 61,191 8,805 55,284 9,389 Total $ 267,864 $ 109,432 $ 250,014 $ 127,570 As of and for the As of and for the Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2019 Revenues (2) Long-Lived Assets Revenues (2) Long-Lived Assets United States $ 517,914 $ 98,049 $ 501,783 $ 114,595 United Kingdom 98,768 2,578 86,494 3,586 Other (1) 174,876 8,805 159,671 9,389 Total $ 791,558 $ 109,432 $ 747,948 $ 127,570 (1) None of the countries included in "Other" comprise greater than 10% of the Company's consolidated revenues or long-lived assets. (2) Based on the Company’s financial statement information used to produce the Company's general-purpose financial statements, it is impracticable to report further breakdowns of revenues from external customers by product or service. |
Change in Accounting Principle
Change in Accounting Principle (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | Following the transition guidance for PCD assets, the Company grossed up the amortized cost of its net finance receivables at January 1, 2020 as shown below (amounts in thousands): Amortized cost $ 3,514,165 Allowance for credit losses 125,757,689 Noncredit discount 3,240,131 Face value $ 132,511,985 Allowance for credit losses $ 125,757,689 Writeoffs, net (125,757,689) Expected recoveries 3,514,165 Initial negative allowance for expected recoveries $ 3,514,165 |
Finance Receivables, net (Table
Finance Receivables, net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
Schedule of Finance Receivables, Net | Finance receivables, net consisted of the following at September 30, 2020 (amounts in thousands): Amortized cost $ — Negative allowance for expected recoveries (1) 3,332,748 Balance at end of period $ 3,332,748 |
Schedule of Changes in Negative Allowance for Expected Recoveries | Changes in the negative allowance for expected recoveries by portfolio segment for the three months ended September 30, 2020 were as follows (amounts in thousands): For the Three Months Ended September 30, 2020 Core Insolvency Total Balance at beginning of period $ 2,908,136 $ 443,396 $ 3,351,532 Initial negative allowance for expected recoveries - portfolio acquisitions (1) 159,069 18,531 177,600 Foreign currency translation adjustment 53,934 6,752 60,686 Recoveries applied to negative allowance (2) (246,738) (35,735) (282,473) Changes in expected recoveries (3) 23,744 1,659 25,403 Balance at end of period $ 2,898,145 $ 434,603 $ 3,332,748 (1) Initial negative allowance for expected recoveries - portfolio acquisitions Portfolio acquisitions for the three months ended September 30, 2020 were as follows (amounts in thousands): For the Three Months Ended September 30, 2020 Core Insolvency Total Face value $ 1,106,910 $ 91,793 $ 1,198,703 Noncredit discount (159,766) (8,522) (168,288) Allowance for credit losses at acquisition (788,075) (64,740) (852,815) Purchase price $ 159,069 $ 18,531 $ 177,600 The initial negative allowance recorded on portfolio acquisitions for the three months ended September 30, 2020 was as follows (amounts in thousands): For the Three Months Ended September 30, 2020 Core Insolvency Total Allowance for credit losses at acquisition $ (788,075) $ (64,740) $ (852,815) Writeoffs, net 788,075 64,740 852,815 Expected recoveries 159,069 18,531 177,600 Initial negative allowance for expected recoveries $ 159,069 $ 18,531 $ 177,600 (2) Recoveries applied to negative allowance Recoveries applied to the negative allowance for the three months ended September 30, 2020 were as follows (amounts in thousands): For the Three Months Ended September 30, 2020 Core Insolvency Total Recoveries (a) $ 470,056 $ 52,667 $ 522,723 Less - amounts reclassified to portfolio income (b) 223,318 16,932 240,250 Recoveries applied to negative allowance $ 246,738 $ 35,735 $ 282,473 (a) Recoveries includes cash collections, buybacks and other adjustments. (b) For more information, refer to the Company's discussion of portfolio income within finance receivables and income recognition in Note 1. (3) Changes in expected recoveries Changes in expected recoveries for the three months ended September 30, 2020 were as follows (amounts in thousands): For the Three Months Ended September 30, 2020 Core Insolvency Total Changes in expected future recoveries $ (62,999) $ (588) $ (63,587) Recoveries received in excess of forecast 86,743 2,247 88,990 Changes in expected recoveries $ 23,744 $ 1,659 $ 25,403 Nine Months Ended September 30, 2020 Changes in the negative allowance for expected recoveries by portfolio segment for the nine months ended September 30, 2020 were as follows (amounts in thousands): For the Nine Months Ended September 30, 2020 Core Insolvency Total Balance at beginning of period $ 3,051,426 $ 462,739 $ 3,514,165 Initial negative allowance for expected recoveries - portfolio acquisitions (1) 537,477 77,859 615,336 Foreign currency translation adjustment (42,065) (3,020) (45,085) Recoveries applied to negative allowance (2) (677,211) (106,845) (784,056) Changes in expected recoveries (3) 28,518 3,870 32,388 Balance at end of period $ 2,898,145 $ 434,603 $ 3,332,748 (1) Initial negative allowance for expected recoveries - portfolio acquisitions Portfolio acquisitions for the nine months ended September 30, 2020 were as follows (amounts in thousands): For the Nine Months Ended September 30, 2020 Core Insolvency Total Face value $ 4,286,296 $ 366,211 $ 4,652,507 Noncredit discount (533,465) (29,533) (562,998) Allowance for credit losses at acquisition (3,215,354) (258,819) (3,474,173) Purchase price $ 537,477 $ 77,859 $ 615,336 The initial negative allowance recorded on portfolio acquisitions for the nine months ended September 30, 2020 was as follows (amounts in thousands): For the Nine Months Ended September 30, 2020 Core Insolvency Total Allowance for credit losses at acquisition $ (3,215,354) $ (258,819) $ (3,474,173) Writeoffs, net 3,215,354 258,819 3,474,173 Expected recoveries 537,477 77,859 615,336 Initial negative allowance for expected recoveries $ 537,477 $ 77,859 $ 615,336 (2) Recoveries applied to negative allowance Recoveries applied to the negative allowance for the nine months ended September 30, 2020 were as follows (amounts in thousands): For the Nine Months Ended September 30, 2020 Core Insolvency Total Recoveries (a) $ 1,371,988 $ 162,624 $ 1,534,612 Less - amounts reclassified to portfolio income (b) 694,777 55,779 750,556 Recoveries applied to negative allowance $ 677,211 $ 106,845 $ 784,056 (a) Recoveries includes cash collections, buybacks and other adjustments. (b) For more information, refer to the Company's discussion of portfolio income within finance receivables and income recognition in Note 1. (3) Changes in expected recoveries Changes in expected recoveries for the nine months ended September 30, 2020 were as follows (amounts in thousands): For the Nine Months Ended September 30, 2020 Core Insolvency Total Changes in expected future recoveries $ (181,433) $ (2,478) $ (183,911) Recoveries received in excess of forecast 209,951 6,348 216,299 Changes in expected recoveries $ 28,518 $ 3,870 $ 32,388 |
Schedule of Changes in Finance Receivables | Changes in finance receivables, net for the three and nine months ended September 30, 2019 were as follows (amounts in thousands): Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Balance at beginning of period $ 3,230,949 $ 3,084,777 Acquisitions of finance receivables (1) 276,918 874,812 Foreign currency translation adjustment (59,172) (60,213) Cash collections (453,217) (1,384,662) Income recognized on finance receivables 247,471 735,526 Net allowance charges (4,136) (11,427) Balance at end of period $ 3,238,813 $ 3,238,813 |
Schedule of Cash Collections Applied to Principal | At the time of acquisition and each quarter thereafter, the life of each quarterly accounting pool was estimated based on projected amounts and timing of future cash collections using the proprietary models of the Company. Based upon projections, cash collections expected to be applied to principal were estimated to be as follows for the twelve-month periods ending September 30, (amounts in thousands): 2020 $ 864,692 2021 692,946 2023 507,491 2024 378,679 2025 259,808 2026 171,873 2027 110,078 2028 84,212 2029 61,656 2030 47,347 Thereafter 60,031 Total ERC expected to be applied to principal $ 3,238,813 |
Schedule of Changes in Accretable Yield | Changes in accretable yield for the three and nine months ended September 30, 2019 were as follows (amounts in thousands): Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Balance at beginning of period $ 3,173,013 $ 3,058,445 Income recognized on finance receivables (247,471) (735,526) Net allowance charges 4,136 11,427 Additions from portfolio acquisitions 228,443 693,053 Reclassifications from nonaccretable difference 59,694 191,756 Foreign currency translation adjustment (60,944) (62,284) Balance at end of period $ 3,156,871 $ 3,156,871 |
Schedule of Valuation Allowance Account | The following is a summary of activity within the Company's valuation allowance account, all of which relates to acquired finance receivables, for the three and nine months ended September 30, 2019 (amounts in thousands): Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Beginning balance $ 264,591 $ 257,148 Allowance charges 8,087 21,596 Reversal of previously recorded allowance charges (3,951) (10,169) Net allowance charges 4,136 11,427 Foreign currency translation adjustment (1,192) (1,040) Ending balance $ 267,535 $ 267,535 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Investments | Investments consisted of the following at September 30, 2020 and December 31, 2019 (amounts in thousands): September 30, 2020 December 31, 2019 Debt securities Available-for-sale $ 4,890 $ 5,052 Equity securities Exchange traded funds 19,132 — Private equity funds 5,818 7,218 Mutual funds 639 33,677 Equity method investments 7,342 10,229 Total investments $ 37,821 $ 56,176 |
Schedule of Amortized Cost and Estimated Fair Value in Debt Securities | The amortized cost and estimated fair value of investments in debt securities at September 30, 2020 and December 31, 2019 were as follows (amounts in thousands): September 30, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value Available-for-sale Government bonds $ 4,742 $ 148 $ — $ 4,890 December 31, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value Available-for-sale Government bonds $ 5,095 $ — $ 43 $ 5,052 |
Goodwill And Intangible Asset_2
Goodwill And Intangible Assets, net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Goodwill | The following table represents the changes in goodwill for the three and nine months ended September 30, 2020 and 2019 (amounts in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Balance at beginning of period $ 444,507 $ 489,293 $ 480,794 $ 464,116 Changes: Acquisition (1) — 467 — 18,831 Foreign currency translation adjustment 11,801 (24,188) (24,486) (17,375) Net change in goodwill 11,801 (23,721) (24,486) 1,456 Balance at end of period $ 456,308 $ 465,572 $ 456,308 $ 465,572 (1) The $0.5 million and $18.8 million additions to goodwill during the three and nine months ended September 30, 2019 respectively, were related to the acquisition of a business in Canada. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Lease, Cost | The components of lease expense for the three and nine months ended September 30, 2020 and 2019, were as follows (amounts in thousands): Three Months Ended September 30 Nine Months Ended September 30 2020 2019 2020 2019 Operating lease expense $ 3,035 $ 3,018 $ 9,072 $ 8,948 Short-term lease expense 661 657 2,030 2,219 Total lease expense $ 3,696 $ 3,675 $ 11,102 $ 11,167 Supplemental cash flow information and non-cash activity related to leases for the nine months ended September 30, 2020 and 2019 were as follows (amounts in thousands): Nine Months Ended September 30 2020 2019 Cash paid for amounts included in the measurement of operating lease liabilities $ 9,179 $ 8,597 ROU assets obtained in exchange for operating lease obligations (10,465) 80,581 Lease term and discount rate information related to operating leases were as follows as of the dates indicated: September 30, 2020 2019 Weighted-average remaining lease term (years) 9.5 11.0 Weighted-average discount rate 4.82 % 4.97 % |
Lessee, Operating Lease, Liability, Maturity | Maturities of lease liabilities at September 30, 2020 are as follows for the following periods (amounts in thousands): Operating Leases For the three months ending December 31, 2020 $ 3,005 For the year ending December 31, 2021 11,011 For the year ending December 31, 2022 8,750 For the year ending December 31, 2023 6,520 For the year ending December 31, 2024 5,683 Thereafter 35,154 Total lease payments $ 70,123 Less imputed interest 14,136 Total $ 55,987 |
Borrowings (Tables)
Borrowings (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The Company's borrowings consisted of the following as of the dates indicated (amounts in thousands): September 30, 2020 December 31, 2019 Americas revolving credit $ 414,803 $ 772,037 Europe revolving credit 1,025,948 1,017,465 Term loan 472,500 425,000 Senior notes 300,000 — Convertible senior notes 345,000 632,500 2,558,251 2,847,002 Less: Debt discount and issuance costs (33,822) (38,577) Total $ 2,524,429 $ 2,808,425 |
Schedule of Maturities of Long-term Debt | The following principal payments are due on the Company's borrowings as of September 30, 2020 for the 12-month periods ending September 30, (amounts in thousands): 2021 $ 10,937 2022 10,937 2023 1,381,120 2024 855,257 Thereafter 300,000 Total $ 2,558,251 |
Schedule of Liability and Equity Components | The balances of the liability and equity components of the Convertible Notes outstanding were as follows as of the dates indicated (amounts in thousands): September 30, 2020 December 31, 2019 Liability component - principal amount $ 345,000 $ 632,500 Unamortized debt discount (22,562) (31,414) Liability component - net carrying amount $ 322,438 $ 601,086 Equity component $ 44,910 $ 76,216 |
Schedule of Debt Interest Expense | Interest expense related to the Convertible Notes was as follows for the periods indicated (amounts in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Interest expense - stated coupon rate $ 3,695 $ 5,175 $ 14,045 $ 15,525 Interest expense - amortization of debt discount 2,388 3,128 8,852 9,241 Total interest expense - Convertible Notes $ 6,083 $ 8,303 $ 22,897 $ 24,766 |
Derivatives (Tables)
Derivatives (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The following table summarizes the fair value of derivative instruments in the Company's Consolidated Balance Sheets as of the dates indicated (amounts in thousands): September 30, 2020 December 31, 2019 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives designated as hedging instruments: Interest rate contracts Other assets $ — Other assets $ 323 Interest rate contracts Other liabilities 46,570 Other liabilities 17,807 Derivatives not designated as hedging instruments: Foreign currency contracts Other assets 2,877 Other assets 552 Foreign currency contracts Other liabilities 17,690 Other liabilities 5,856 |
Schedule of Cash Flow Hedging Instruments, Statements of Financial Performance and Financial Position, Location | The following table summarizes the effects of derivatives designated as cash flow hedging instruments on the consolidated financial statements for the three and nine months ended September 30, 2020 and 2019 (amounts in thousands): Loss recognized in OCI, net of tax Three Months Ended September 30, Nine Months Ended September 30, Derivatives designated as cash flow hedging instruments 2020 2019 2020 2019 Interest rate contracts $ (1,089) $ (6,245) $ (27,953) $ (20,160) Loss reclassified from OCI into income Three Months Ended September 30, Nine Months Ended September 30, Location of loss reclassified from OCI into income 2020 2019 2020 2019 Interest expense, net $ (3,175) $ (413) $ (6,488) $ (611) |
Schedule of derivative instruments not designated as hedging instruments | The following table summarizes the effects of derivatives not designated as hedging instruments on the Company’s Consolidated Income Statements for the three and nine months ended September 30, 2020 and 2019 (amounts in thousands): Amount of gain or (loss) recognized in income Three Months Ended September 30, Derivatives not designated as hedging instruments Location of gain or (loss) recognized in income 2020 2019 Foreign currency contracts Foreign exchange gains $ 2,280 $ 4,270 Foreign currency contracts Interest expense, net (322) (1,141) Interest rate contracts Interest expense, net — 15 Amount of gain or (loss) recognized in income Nine Months Ended September 30, Derivatives not designated as hedging instruments Location of gain or (loss) recognized in income 2020 2019 Foreign currency contracts Foreign exchange gains $ 27,437 $ (3,401) Foreign currency contracts Interest expense, net (2,135) (2,628) Interest rate contracts Interest expense, net — (492) |
Fair Value Measurements and D_2
Fair Value Measurements and Disclosures (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of financial instruments not required to be carried at fair value | The carrying amounts in the table are recorded in the Consolidated Balance Sheets at September 30, 2020 and December 31, 2019 (amounts in thousands): September 30, 2020 December 31, 2019 Carrying Estimated Carrying Estimated Financial assets: Cash and cash equivalents $ 92,779 $ 92,779 $ 119,774 $ 119,774 Finance receivables, net 3,332,748 3,408,353 3,514,165 3,645,610 Financial liabilities: Interest-bearing deposits 119,834 119,834 106,246 106,246 Revolving lines of credit 1,440,751 1,440,751 1,789,502 1,789,502 Term loan 472,500 472,500 425,000 425,000 Senior Notes 300,000 313,104 — — Convertible Notes 322,438 378,720 601,086 648,968 |
Schedule of 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 September 30, 2020 and December 31, 2019 (amounts in thousands): Fair Value Measurements as of September 30, 2020 Level 1 Level 2 Level 3 Total Assets: Available-for-sale investments Government bonds $ 4,890 $ — $ — $ 4,890 Fair value through net income Exchange traded funds 19,132 — — 19,132 Mutual funds 639 — — 639 Derivative contracts (recorded in other assets) — 2,877 — 2,877 Liabilities: Derivative contracts (recorded in other liabilities) — 64,260 — 64,260 Fair Value Measurements as of December 31, 2019 Level 1 Level 2 Level 3 Total Assets: Available-for-sale investments Government bonds $ 5,052 $ — $ — $ 5,052 Fair value through net income Mutual funds 33,677 — — 33,677 Derivative contracts (recorded in other assets) — 875 — 875 Liabilities: Derivative contracts (recorded in other liabilities) — 23,663 — 23,663 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table represents the changes in accumulated other comprehensive loss by component, after tax, for the three and nine months ended September 30, 2020 and 2019 (amounts in thousands): Three Months Ended September 30, 2020 Debt Securities Cash Flow Currency Translation Accumulated Other Available-for-sale Hedges Adjustments Comprehensive Loss (1) Balance at beginning of period $ 177 $ (37,409) $ (309,980) $ (347,212) Other comprehensive (loss)/income before reclassifications (30) (1,089) 32,288 31,169 Reclassifications, net — 2,483 — 2,483 Net current period other comprehensive (loss)/income (30) 1,394 32,288 33,652 Balance at end of period $ 147 $ (36,015) $ (277,692) $ (313,560) Three Months Ended September 30, 2019 Debt Securities Cash Flow Currency Translation Accumulated Other Available-for-sale Hedges Adjustments Comprehensive Loss (1) Balance at beginning of period $ (1) $ (13,673) $ (238,450) $ (252,124) Other comprehensive income/(loss) before reclassifications (1) (6,245) (47,999) (54,245) Reclassifications, net — 413 — 413 Net current period other comprehensive loss (1) (5,832) (47,999) (53,832) Balance at end of period $ (2) $ (19,505) $ (286,449) $ (305,956) (1) For the three months ended September 30, 2020 and 2019, net deferred taxes for unrealized gains/(losses) from cash flow hedges were $0.5 million and $(2.0) million, respectively. Nine Months Ended September 30, 2020 Debt Securities Cash Flow Currency Translation Accumulated Other Available-for-sale Hedges Adjustments Comprehensive Loss (2) Balance at beginning of period $ (44) $ (13,088) $ (247,886) $ (261,018) Other comprehensive income/(loss) before reclassifications 191 (27,954) (29,806) (57,569) Reclassifications, net — 5,027 — 5,027 Net current period other comprehensive income/(loss) 191 (22,927) (29,806) (52,542) Balance at end of period $ 147 $ (36,015) $ (277,692) $ (313,560) Nine Months Ended September 30, 2019 Debt Securities Cash Flow Currency Translation Accumulated Other Available-for-sale Hedges Adjustments Comprehensive Loss (2) Balance at beginning of period $ (83) $ 44 $ (242,070) $ (242,109) Other comprehensive income/(loss) before reclassifications 81 (20,160) (44,379) (64,458) Reclassifications, net — 611 — 611 Net current period other comprehensive income/(loss) 81 (19,549) (44,379) (63,847) Balance at end of period $ (2) $ (19,505) $ (286,449) $ (305,956) (2) For the nine months ended September 30, 2020 and 2019, net deferred taxes for unrealized losses from cash flow hedges were $10.2 million and $6.4 million, respectively. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Reconciliation Between the Computation of Basic and Diluted EPS | The following table provides a reconciliation between the computation of basic EPS and diluted EPS for the three and nine months ended September 30, 2020 and 2019 (amounts in thousands, except per share amounts): For the Three Months Ended September 30, 2020 2019 Net Income Attributable to PRA Group, Inc. Weighted EPS Net Income Attributable to PRA Group, Inc. Weighted EPS Basic EPS $ 42,492 45,579 $ 0.93 $ 24,971 45,410 $ 0.55 Dilutive effect of nonvested share awards 561 (0.01) 235 — Diluted EPS $ 42,492 46,140 $ 0.92 $ 24,971 45,645 $ 0.55 For the Nine Months Ended September 30, 2020 2019 Net income attributable to PRA Group, Inc. Weighted EPS Net income attributable to PRA Group, Inc. Weighted EPS Basic EPS $ 119,541 45,526 $ 2.63 $ 58,817 45,378 $ 1.30 Dilutive effect of nonvested share awards 445 (0.03) 142 (0.01) Diluted EPS $ 119,541 45,971 $ 2.60 $ 58,817 45,520 $ 1.29 |
Organization and Business (Deta
Organization and Business (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)segment | Sep. 30, 2019USD ($) | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Number of reportable segments | segment | 1 | |||
Revenues (2) | $ 267,864 | $ 250,014 | $ 791,558 | $ 747,948 |
Long-Lived Assets | 109,432 | 127,570 | $ 109,432 | 127,570 |
Warranty period for international agreements | 24 months | |||
UNITED STATES | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenues (2) | 172,286 | 166,284 | $ 517,914 | 501,783 |
Long-Lived Assets | 98,049 | 114,595 | 98,049 | 114,595 |
UNITED KINGDOM | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenues (2) | 34,387 | 28,446 | 98,768 | 86,494 |
Long-Lived Assets | 2,578 | 3,586 | 2,578 | 3,586 |
Outside the United States | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenues (2) | 61,191 | 55,284 | 174,876 | 159,671 |
Long-Lived Assets | $ 8,805 | $ 9,389 | $ 8,805 | $ 9,389 |
Minimum | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Warranty period | 90 days | |||
Maximum | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Warranty period | 180 days |
Change in Accounting Principl_2
Change in Accounting Principle (Details) - USD ($) $ in Thousands | Jan. 01, 2020 | Sep. 30, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Purchase price | $ 3,514,165 | $ 177,600 | $ 615,336 | ||
Allowance for credit losses | 125,757,689 | 852,815 | 3,474,173 | ||
Noncredit discount | 3,240,131 | 168,288 | 562,998 | ||
Face value | 132,511,985 | 1,198,703 | 4,652,507 | ||
Writeoffs, net | (125,757,689) | ||||
Expected recoveries | 3,514,165 | 282,473 | 784,056 | ||
Initial negative allowance for expected recoveries | $ 3,514,165 | $ 3,332,748 | $ 3,332,748 | $ 3,351,532 | $ 3,514,165 |
Finance Receivables, net (Rollf
Finance Receivables, net (Rollforward) (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2020 | Jun. 30, 2020 | Jan. 01, 2020 | Dec. 31, 2019 | |
Receivables [Abstract] | ||||
Amortized cost | $ 0 | |||
Initial negative allowance for expected recoveries | 3,332,748 | $ 3,351,532 | $ 3,514,165 | $ 3,514,165 |
Balance at end of period | $ 3,332,748 | |||
Beneficial interest, percentage of balance | 1.00% |
Finance Receivables, net Financ
Finance Receivables, net Finance Receivables, net (Allowance for Expected Recoveries) (Details) - USD ($) $ in Thousands | Jan. 01, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||||
Balance at beginning of period | $ 3,514,165 | $ 3,351,532 | $ 3,514,165 | ||
Initial negative allowance for expected recoveries - acquisitions | 177,600 | 615,336 | |||
Foreign currency translation adjustment | 60,686 | (45,085) | |||
Expected recoveries | (3,514,165) | (282,473) | (784,056) | ||
Changes in estimated recoveries | 25,403 | $ 0 | 32,388 | $ 0 | |
Balance at end of period | 3,514,165 | 3,332,748 | 3,332,748 | ||
Core | |||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||||
Balance at beginning of period | 3,051,426 | 2,908,136 | 3,051,426 | ||
Initial negative allowance for expected recoveries - acquisitions | 159,069 | 537,477 | |||
Foreign currency translation adjustment | 53,934 | (42,065) | |||
Expected recoveries | (246,738) | (677,211) | |||
Changes in estimated recoveries | 23,744 | 28,518 | |||
Balance at end of period | 2,898,145 | 2,898,145 | |||
Insolvency | |||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||||
Balance at beginning of period | $ 462,739 | 443,396 | 462,739 | ||
Initial negative allowance for expected recoveries - acquisitions | 18,531 | 77,859 | |||
Foreign currency translation adjustment | 6,752 | (3,020) | |||
Expected recoveries | (35,735) | (106,845) | |||
Changes in estimated recoveries | 1,659 | 3,870 | |||
Balance at end of period | $ 434,603 | $ 434,603 |
Finance Receivables, net (Portf
Finance Receivables, net (Portfolio Acquisitions) (Details) - USD ($) $ in Thousands | Jan. 01, 2020 | Sep. 30, 2020 | Sep. 30, 2020 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Face value | $ 132,511,985 | $ 1,198,703 | $ 4,652,507 |
Noncredit discount | (3,240,131) | (168,288) | (562,998) |
Allowance for credit losses at acquisition | (125,757,689) | (852,815) | (3,474,173) |
Purchase price | $ 3,514,165 | 177,600 | 615,336 |
Insolvency | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Face value | 91,793 | 366,211 | |
Noncredit discount | (8,522) | (29,533) | |
Allowance for credit losses at acquisition | (64,740) | (258,819) | |
Purchase price | 18,531 | 77,859 | |
Core | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Face value | 1,106,910 | 4,286,296 | |
Noncredit discount | (159,766) | (533,465) | |
Allowance for credit losses at acquisition | (788,075) | (3,215,354) | |
Purchase price | $ 159,069 | $ 537,477 |
Finance Receivables, net Fina_2
Finance Receivables, net Finance Receivables, net (Initial Negative Allowance for Recoveries) (Details) - USD ($) $ in Thousands | Jan. 01, 2020 | Sep. 30, 2020 | Sep. 30, 2020 |
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Allowance for credit losses at acquisition | $ (125,757,689) | $ (852,815) | $ (3,474,173) |
Writeoffs, net | 852,815 | 3,474,173 | |
Expected recoveries | 177,600 | 615,336 | |
Initial negative allowance for expected recoveries | $ 3,514,165 | 177,600 | 615,336 |
Insolvency | |||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Allowance for credit losses at acquisition | (64,740) | (258,819) | |
Writeoffs, net | 64,740 | 258,819 | |
Expected recoveries | 18,531 | 77,859 | |
Initial negative allowance for expected recoveries | 18,531 | 77,859 | |
Core | |||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Allowance for credit losses at acquisition | (788,075) | (3,215,354) | |
Writeoffs, net | 788,075 | 3,215,354 | |
Expected recoveries | 159,069 | 537,477 | |
Initial negative allowance for expected recoveries | $ 159,069 | $ 537,477 |
Finance Receivables, net Fina_3
Finance Receivables, net Finance Receivables, net (Recoveries) (Details) - USD ($) $ in Thousands | Jan. 01, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||
Financing Receivable, Allowance For Credit Losses, Recoveries And Other Adjustments | $ 522,723 | $ 1,534,612 | |||
Financing Receivable, Allowance For Credit Losses, Recoveries Reclassified To Income | 240,250 | $ 0 | 750,556 | $ 0 | |
Expected recoveries | $ 3,514,165 | 282,473 | 784,056 | ||
Core | |||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||
Financing Receivable, Allowance For Credit Losses, Recoveries And Other Adjustments | 470,056 | 1,371,988 | |||
Financing Receivable, Allowance For Credit Losses, Recoveries Reclassified To Income | 223,318 | 694,777 | |||
Expected recoveries | 246,738 | 677,211 | |||
Insolvency | |||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||
Financing Receivable, Allowance For Credit Losses, Recoveries And Other Adjustments | 52,667 | 162,624 | |||
Financing Receivable, Allowance For Credit Losses, Recoveries Reclassified To Income | 16,932 | 55,779 | |||
Expected recoveries | $ 35,735 | $ 106,845 |
Finance Receivables, net (Chang
Finance Receivables, net (Changes in Estimated Future Recoveries) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Financing Receivable, Allowance For Credit Loss, Changes In Expected Future Recoveries | $ (63,587) | $ (183,911) | ||
Financing Receivable, Allowance For Credit Loss, Recoveries In Excess (Shortfall) Of Forecast | 88,990 | 216,299 | ||
Changes in estimated recoveries | 25,403 | $ 0 | 32,388 | $ 0 |
Core | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Financing Receivable, Allowance For Credit Loss, Changes In Expected Future Recoveries | (62,999) | (181,433) | ||
Financing Receivable, Allowance For Credit Loss, Recoveries In Excess (Shortfall) Of Forecast | 86,743 | 209,951 | ||
Changes in estimated recoveries | 23,744 | 28,518 | ||
Insolvency | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Financing Receivable, Allowance For Credit Loss, Changes In Expected Future Recoveries | (588) | (2,478) | ||
Financing Receivable, Allowance For Credit Loss, Recoveries In Excess (Shortfall) Of Forecast | 2,247 | 6,348 | ||
Changes in estimated recoveries | $ 1,659 | $ 3,870 |
Finance Receivables, net (Sched
Finance Receivables, net (Schedule of Changes In Finance Receivables) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount [Roll Forward] | ||||
Balance at beginning of period | $ 3,230,949 | $ 3,514,165 | $ 3,084,777 | |
Acquisitions of finance receivables | 276,918 | 874,812 | ||
Foreign currency translation adjustment | (59,172) | (60,213) | ||
Cash collections | (453,217) | (1,384,662) | ||
Income recognized on finance receivables | $ 0 | 247,471 | 0 | 735,526 |
Net allowance charges | 0 | (4,136) | 0 | (11,427) |
Balance at end of period | $ 3,332,748 | $ 3,238,813 | $ 3,332,748 | $ 3,238,813 |
Finance Receivables, net (Narra
Finance Receivables, net (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Changes in estimated recoveries | $ 25,403 | $ 0 | $ 32,388 | $ 0 |
Face value of receivable portfolios | 2,400,000 | 8,900,000 | ||
Payments to acquire finance receivables | 279,000 | 887,000 | ||
Estimated remaining collections on purchased receivables | 494,800 | 1,400,000 | ||
Unamortized purchased principal (purchase price) under the cost recovery method | $ 36,200 | $ 36,200 | ||
Financing Receivable, Allowance For Credit Loss, Changes In Expected Future Recoveries | (63,587) | (183,911) | ||
Financing Receivable, Allowance For Credit Loss, Recoveries In Excess (Shortfall) Of Forecast | $ 88,990 | $ 216,299 |
Finance Receivables, net (Sch_2
Finance Receivables, net (Schedule of Cash Collections Applied to Principal) (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Receivables [Abstract] | |
2020 | $ 864,692 |
2021 | 692,946 |
2022 | 507,491 |
2023 | 378,679 |
2024 | 259,808 |
2025 | 171,873 |
2026 | 110,078 |
2027 | 84,212 |
2028 | 61,656 |
2029 | 47,347 |
Thereafter | 60,031 |
Total ERC expected to be applied to principal | $ 3,238,813 |
Finance Receivables, net (Sch_3
Finance Receivables, net (Schedule of Changes in Accretable Yield) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward] | ||||
Balance at beginning of period | $ 3,173,013 | $ 3,058,445 | ||
Income recognized on finance receivables | $ 0 | (247,471) | $ 0 | (735,526) |
Net allowance charges | $ 0 | 4,136 | $ 0 | 11,427 |
Additions from portfolio acquisitions | 228,443 | 693,053 | ||
Reclassifications from nonaccretable difference | 59,694 | 191,756 | ||
Foreign currency translation adjustment | (60,944) | (62,284) | ||
Balance at end of period | $ 3,156,871 | $ 3,156,871 |
Finance Receivables, net (Sch_4
Finance Receivables, net (Schedule of Valuation Allowance Account) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Allowance For Loan Losses [Roll Forward] | ||||
Beginning balance | $ 264,591 | $ 257,148 | ||
Allowance charges | 8,087 | 21,596 | ||
Reversal of previously recorded allowance charges | (3,951) | (10,169) | ||
Net allowance charges | $ 0 | 4,136 | $ 0 | 11,427 |
Foreign currency translation adjustment | (1,192) | (1,040) | ||
Ending balance | $ 267,535 | $ 267,535 |
Investments - Summary of Invest
Investments - Summary of Investments (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Debt securities | ||
Available-for-sale | $ 4,890 | $ 5,052 |
Equity securities | ||
Equity method investments | 7,342 | 10,229 |
Investments | 37,821 | 56,176 |
Private equity funds | ||
Equity securities | ||
Equity securities | 5,818 | 7,218 |
Mutual funds | ||
Equity securities | ||
Equity securities | 639 | 33,677 |
Exchange traded funds | ||
Equity securities | ||
Equity securities | $ 19,132 | $ 0 |
Investments - Amortized Costs (
Investments - Amortized Costs (Details) - Government Bonds and Fixed Income Funds - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Available-for-sale | ||
Amortized Cost | $ 4,742 | $ 5,095 |
Gross Unrealized Gains | 148 | 0 |
Gross Unrealized Losses | 0 | 43 |
Aggregate Fair Value | $ 4,890 | $ 5,052 |
Investments - Narrative (Detail
Investments - Narrative (Details) | 9 Months Ended |
Sep. 30, 2020 | |
Debt and Equity Securities, FV-NI [Line Items] | |
Cost-method investment, ownership percentage | 1.00% |
RCB Investimentos S.A. | |
Debt and Equity Securities, FV-NI [Line Items] | |
Ownership percentage | 11.70% |
Goodwill And Intangible Asset_3
Goodwill And Intangible Assets, Net Schedule of Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Goodwill [Roll Forward] | ||||
Balance at beginning of period | $ 444,507 | $ 489,293 | $ 480,794 | $ 464,116 |
Acquisition | 0 | 467 | 0 | 18,831 |
Foreign currency translation adjustment | 11,801 | (24,188) | (24,486) | (17,375) |
Net change in goodwill | 11,801 | (23,721) | (24,486) | 1,456 |
Balance at end of period | $ 456,308 | $ 465,572 | $ 456,308 | $ 465,572 |
Leases - Narrative (Details)
Leases - Narrative (Details) | 9 Months Ended |
Sep. 30, 2020 | |
Lessee, Lease, Description [Line Items] | |
Renewal term | 5 years |
Termination period | 1 year |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 20 years |
Leases - Lease Cost and Other I
Leases - Lease Cost and Other Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Leases [Abstract] | ||||
Operating lease expense | $ 3,035 | $ 3,018 | $ 9,072 | $ 8,948 |
Short-term lease expense | 661 | 657 | 2,030 | 2,219 |
Total lease expense | $ 3,696 | $ 3,675 | 11,102 | 11,167 |
Cash paid for amounts included in the measurement of operating lease liabilities | 9,179 | 8,597 | ||
ROU assets obtained in exchange for operating lease obligations | $ (10,465) | $ 80,581 | ||
Weighted-average remaining lease term (years) | 9 years 6 months | 11 years | 9 years 6 months | 11 years |
Weighted-average discount rate | 4.82% | 4.97% | 4.82% | 4.97% |
Leases - Schedule of Operating
Leases - Schedule of Operating Lease Liability Maturity (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
For the three months ending December 31, 2020 | $ 3,005 | |
For the year ending December 31, 2021 | 11,011 | |
For the year ending December 31, 2022 | 8,750 | |
For the year ending December 31, 2023 | 6,520 | |
For the year ending December 31, 2024 | 5,683 | |
Thereafter | 35,154 | |
Total lease payments | 70,123 | |
Less imputed interest | (14,136) | |
Total | $ 55,987 | $ 73,377 |
Borrowings - Components of Borr
Borrowings - Components of Borrowings (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Debt outstanding | $ 2,558,251 | $ 2,847,002 |
Less: Debt discount and issuance costs | (33,822) | (38,577) |
Total | 2,524,429 | 2,808,425 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Debt outstanding | 472,500 | 425,000 |
Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt outstanding | 300,000 | 0 |
Convertible Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt outstanding | 345,000 | 632,500 |
Americas revolving credit | Line of Credit | ||
Debt Instrument [Line Items] | ||
Debt outstanding | 414,803 | 772,037 |
Europe revolving credit | Line of Credit | ||
Debt Instrument [Line Items] | ||
Debt outstanding | $ 1,025,948 | $ 1,017,465 |
Borrowings - Long-Term Debt Mat
Borrowings - Long-Term Debt Maturities (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
2021 | $ 10,937 | |
2022 | 10,937 | |
2023 | 1,381,120 | |
2024 | 855,257 | |
Thereafter | 300,000 | |
Total | $ 2,558,251 | $ 2,847,002 |
Borrowings - North American Rev
Borrowings - North American Revolving Credit and Term Loan (Details) | Aug. 26, 2020USD ($) | Jul. 31, 2020 | Sep. 30, 2020USD ($) |
Credit Agreement | |||
Debt Instrument [Line Items] | |||
Unused commitment fee | 0.375% | ||
Maximum cash dividends | $ 20,000,000 | ||
Stock repurchases authorized amount | $ 100,000,000 | ||
Maximum percentage of principal amount of debt | 75.00% | ||
Subsidiary indebtedness limit | $ 200,000,000 | ||
Subsidiary indebtedness limit, maximum percentage of consolidated total assets | 5.00% | ||
Credit Agreement | End Of June 30, 2020 | |||
Debt Instrument [Line Items] | |||
Credit agreement consolidated leverage ratio | 3.50 | ||
North American Credit Agreement | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 1,547,500,000 | ||
Unused portion | 662,200,000 | ||
Current borrowing capacity | $ 353,700,000 | ||
Third Amendment To North American Credit Agreement | |||
Debt Instrument [Line Items] | |||
Debt instrument, additional term | 2 years | ||
Consolidated Senior Secured Leverage | Credit Agreement | End Of Any Fiscal Quarter Until March 31, 2021 | |||
Debt Instrument [Line Items] | |||
Credit agreement consolidated leverage ratio | 2.75 | ||
Consolidated Senior Secured Leverage | Credit Agreement | March 31, 2021 Until Maturity | |||
Debt Instrument [Line Items] | |||
Credit agreement consolidated leverage ratio | 2.25 | ||
Eurodollar Rate | |||
Debt Instrument [Line Items] | |||
Basis spread variable rate | 1.00% | ||
Eurodollar Rate | Credit Agreement | |||
Debt Instrument [Line Items] | |||
Basis spread variable rate | 2.50% | ||
Base Rate | Credit Agreement | |||
Debt Instrument [Line Items] | |||
Basis spread variable rate | 1.50% | ||
Additional basis points added to margin | 55.00% | ||
Federal Funds Rate | |||
Debt Instrument [Line Items] | |||
Basis spread variable rate | 0.50% | ||
Canadian Prime Rate | |||
Debt Instrument [Line Items] | |||
Basis spread variable rate | 1.50% | ||
Interest Rate Floor | |||
Debt Instrument [Line Items] | |||
Basis spread variable rate | 0.75% | ||
Line of Credit | Line of Credit | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 472,500,000 | ||
Revolving Credit Facility | North American Credit Agreement | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 1,000,000,000 | ||
Line of credit facility, optional increase in borrowing capacity | 500,000,000 | ||
Line of credit facility, option for letters of credit | 25,000,000 | ||
Line of credit facility, option to reduce borrowing capacity | 25,000,000 | ||
Revolving Credit Facility | Third Amendment To North American Credit Agreement | |||
Debt Instrument [Line Items] | |||
Increase (decrease) in line of credit | $ 68,000,000 | ||
Canadian Revolving Credit Facility | North American Credit Agreement | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 75,000,000 | ||
Canadian Revolving Credit Facility | Third Amendment To North American Credit Agreement | |||
Debt Instrument [Line Items] | |||
Increase (decrease) in line of credit | (25,000,000) | ||
Term Loan Facility | Third Amendment To North American Credit Agreement | |||
Debt Instrument [Line Items] | |||
Increase in borrowing capacity | $ 55,000,000 | ||
Acquisition Subsequent to 2014 | Credit Agreement | |||
Debt Instrument [Line Items] | |||
Maximum business combinations | 250,000,000 | ||
Maximum business combinations, non-loan | $ 50,000,000 | ||
Eligible Core Asset Pool | Credit Agreement | |||
Debt Instrument [Line Items] | |||
Percentage of maximum level of borrowings of ERC of eligible asset pools | 40.00% | 35.00% | |
Eligible Insolvent Asset Pool | Credit Agreement | |||
Debt Instrument [Line Items] | |||
Percentage of maximum level of borrowings of ERC 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 - European Revolving
Borrowings - European Revolving Credit Facility and Term Loan (Details) $ in Thousands | Mar. 27, 2020USD ($) | Sep. 30, 2020SEK (kr) | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
Line of Credit Facility [Line Items] | ||||
Debt outstanding | $ 2,558,251 | $ 2,847,002 | ||
European Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Loan-to-value covenant | 45.00% | |||
European Revolving Credit Facility | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Current borrowing capacity | 314,100 | |||
Debt Instrument, covenant, interest bearing deposits, maximum | kr | kr 1,200,000,000 | |||
European Revolving Credit Facility | Overdraft Facility | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | 40,000 | |||
Facility line fee | 0.125% | |||
Line of Credit | Europe revolving credit | ||||
Line of Credit Facility [Line Items] | ||||
Debt outstanding | 1,025,948 | $ 1,017,465 | ||
Line of Credit | European Revolving Credit Facility | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Increase in borrowing capacity | $ 200,000 | |||
Debt instrument, additional term | 2 years | |||
New lender minimum commitment | $ 100,000 | |||
Maximum borrowing capacity | 1,300,000 | |||
Unused commitment fee | 1.23% | |||
Unused line fee as a percentage of margin | 35.00% | |||
Current borrowing capacity | $ 118,100 | |||
Debt instrument, covenant, maximum GIBD | 3.25 | |||
Minimum | Line of Credit | European Revolving Credit Facility | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit, increase limit | 50,000 | |||
Minimum | Interbank Offered Rate (IBOR) | Line of Credit | European Revolving Credit Facility | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread variable rate | 2.70% | |||
Maximum | Line of Credit | European Revolving Credit Facility | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit, increase limit | $ 500,000 | |||
Maximum | Interbank Offered Rate (IBOR) | Line of Credit | European Revolving Credit Facility | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread variable rate | 3.80% |
Borrowings - Colombian Revolvin
Borrowings - Colombian Revolving Credit Facility (Details) - Revolving Credit Facility - Colombian Revolving Credit Facility $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 5.1 |
Outstanding borrowings under credit facility | $ 2 |
Weighted average interest rate | 7.13% |
Maturity, term from last draw | 3 years |
Unused portion of credit agreement | $ 3.1 |
Indicador Bancario De Referencia Rate (IBR) | |
Debt Instrument [Line Items] | |
Basis spread variable rate | 2.74% |
Borrowings - Convertible Senior
Borrowings - Convertible Senior Notes (Details) - Convertible Senior Notes | May 26, 2017USD ($)day$ / shares | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Aug. 13, 2013USD ($) |
Debt Instrument [Line Items] | ||||
Carrying amount of convertible debt | $ 44,910,000 | $ 76,216,000 | ||
Note Due 2020 | ||||
Debt Instrument [Line Items] | ||||
Face amount | $ 287,500,000 | |||
Stated percentage | 3.00% | |||
Interest rate at period end | 4.92% | |||
Note Due 2023 | ||||
Debt Instrument [Line Items] | ||||
Face amount | $ 345,000,000 | |||
Stated percentage | 3.50% | |||
Minimum sales price for conversion | 130.00% | |||
Trading days threshold | day | 20 | |||
Consecutive treading days threshold | 30 | |||
Conversion ratio | 21.6275 | |||
Minimum average share price triggering dilutive effect (usd per share) | $ / shares | $ 46.24 | |||
Convertible debt, estimated fair value | $ 298,800,000 | |||
Carrying amount of convertible debt | 46,200,000 | |||
Debt Issuance Cost | 8,300,000 | |||
Equity and debt issuance costs | 9,600,000 | |||
Equity Issuance Costs | $ 1,300,000 | |||
Interest rate at period end | 6.20% |
Borrowings - Senior Notes (Deta
Borrowings - Senior Notes (Details) - 2025 Notes - Senior Notes | Aug. 27, 2020USD ($) |
Line of Credit Facility [Line Items] | |
Face amount | $ 300,000,000 |
Stated percentage | 7.375% |
On Or After September 1, 2022 | |
Line of Credit Facility [Line Items] | |
Redemption price of original principal amount | 103.688% |
September 1, 2023 To October 31, 2024 | |
Line of Credit Facility [Line Items] | |
Redemption price of original principal amount | 101.844% |
September 1, 2024 And Thereafter | |
Line of Credit Facility [Line Items] | |
Redemption price of original principal amount | 100.00% |
On Or Before September 1, 2022 | |
Line of Credit Facility [Line Items] | |
Redemption price, percentage of aggregate principal amount | 40.00% |
Redemption price of original principal amount | 107.375% |
Debt redemption period | 90 days |
Redemption price, minimum percentage of principal amount outstanding | 60.00% |
On Or Before September 1, 2022 | Change Of Control Event | |
Line of Credit Facility [Line Items] | |
Redemption price, percentage of aggregate principal amount | 100.00% |
Redemption price of original principal amount | 101.00% |
Borrowings - Balances of Liabil
Borrowings - Balances of Liability and Equity Components (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Debt outstanding | $ 2,558,251 | $ 2,847,002 |
Convertible Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt outstanding | 345,000 | 632,500 |
Less: Debt discount and issuance costs | (22,562) | (31,414) |
Total | 322,438 | 601,086 |
Equity component | $ 44,910 | $ 76,216 |
Borrowings - Interest Expense (
Borrowings - Interest Expense (Details) - Convertible Senior Notes - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Debt Instrument [Line Items] | ||||
Interest expense - stated coupon rate | $ 3,695 | $ 5,175 | $ 14,045 | $ 15,525 |
Amortization of debt discount | 2,388 | 3,128 | 8,852 | 9,241 |
Total interest expense - convertible notes | $ 6,083 | $ 8,303 | $ 22,897 | $ 24,766 |
Derivatives - Schedule of Deriv
Derivatives - Schedule of Derivatives by Balance Sheet Location (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Derivatives, Fair Value [Line Items] | ||
Derivative contracts (recorded in other liabilities) | $ 64,260 | $ 23,663 |
Derivative contracts (recorded in other assets) | 2,877 | 875 |
Interest rate contracts | Designated as Hedging Instrument | Other assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative contracts (recorded in other liabilities) | 46,570 | 17,807 |
Interest rate contracts | Designated as Hedging Instrument | Other assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative contracts (recorded in other assets) | 0 | 323 |
Foreign currency contracts | Not Designated as Hedging Instrument | Other assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative contracts (recorded in other liabilities) | 17,690 | 5,856 |
Foreign currency contracts | Not Designated as Hedging Instrument | Other assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative contracts (recorded in other assets) | $ 2,877 | $ 552 |
Derivatives - Narrative (Detail
Derivatives - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Designated as Hedging Instrument | Interest rate contracts | ||
Derivative [Line Items] | ||
Net derivative gain (loss) included in OCI to be reclassified next 12 months | $ 10.1 | |
Derivative, Notional Amount1 | 932.3 | $ 959 |
Not Designated as Hedging Instrument | Foreign currency contracts | ||
Derivative [Line Items] | ||
Derivative, Notional Amount1 | $ 466.2 | $ 469.9 |
Maximum | ||
Derivative [Line Items] | ||
Derivative, Term of Contract | 6 years | |
Minimum | ||
Derivative [Line Items] | ||
Derivative, Term of Contract | 1 year |
Derivatives - Schedule of Effec
Derivatives - Schedule of Effects of Derivatives Designated as Cash Flow Hedging Instruments (Details) - Interest rate contracts - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Loss recognized in OCI, net of tax | $ (1,089) | $ (6,245) | $ (27,953) | $ (20,160) |
Interest expense, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Loss reclassified from OCI into income | $ (3,175) | $ (413) | $ (6,488) | $ (611) |
Derivatives - Schedule of Eff_2
Derivatives - Schedule of Effects of Derivatives Not Designated as Hedging Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Foreign currency contracts | Foreign exchange gains | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gain or (loss) recognized in income | $ 2,280 | $ 4,270 | $ 27,437 | $ (3,401) |
Foreign currency contracts | Interest expense, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gain or (loss) recognized in income | (322) | (1,141) | (2,135) | (2,628) |
Interest rate contracts | Interest expense, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gain or (loss) recognized in income | $ 0 | $ 15 | $ 0 | $ (492) |
Fair Value Measurements And D_3
Fair Value Measurements And Disclosures - Financial Instruments Not Required to be Carried at Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Financial assets: | |||||
Cash and cash equivalents, carrying amount | $ 92,779 | $ 119,774 | $ 90,000 | ||
Finance receivables, net, carrying amount | 3,332,748 | 3,514,165 | $ 3,238,813 | $ 3,230,949 | $ 3,084,777 |
Financial liabilities: | |||||
Interest-bearing deposits, carrying value | 119,834 | 106,246 | |||
Carrying Amount | |||||
Financial assets: | |||||
Cash and cash equivalents, carrying amount | 92,779 | 119,774 | |||
Finance receivables, net, carrying amount | 3,332,748 | 3,514,165 | |||
Financial liabilities: | |||||
Interest-bearing deposits, carrying value | 119,834 | 106,246 | |||
Outstanding borrowings under credit facility | 1,440,751 | 1,789,502 | |||
Term loans, carrying amount | 472,500 | 425,000 | |||
Senior Notes, carrying amount | 300,000 | ||||
Convertible debt | 322,438 | 601,086 | |||
Estimated Fair Value | |||||
Financial assets: | |||||
Cash and cash equivalents, estimated fair value | 92,779 | 119,774 | |||
Finance receivables, net, estimated fair value | 3,408,353 | 3,645,610 | |||
Financial liabilities: | |||||
Interest-bearing deposits, fair value | 119,834 | 106,246 | |||
Revolving lines of credit, estimated fair value | 1,440,751 | 1,789,502 | |||
Term loans, estimated fair value | 472,500 | 425,000 | |||
Debt Instrument, Fair Value Disclosure | 313,104 | ||||
Convertible debt, estimated fair value | $ 378,720 | $ 648,968 |
Fair Value Fair Value Measureme
Fair Value Fair Value Measurements and Disclosures - Financial Instruments Required to be Carried at Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Assets: | ||
Government bonds | $ 4,890 | $ 5,052 |
Derivative contracts (recorded in other assets) | 2,877 | 875 |
Liabilities: | ||
Derivative contracts (recorded in other liabilities) | 64,260 | 23,663 |
Level 1 | ||
Assets: | ||
Derivative contracts (recorded in other assets) | 0 | 0 |
Liabilities: | ||
Derivative contracts (recorded in other liabilities) | 0 | 0 |
Level 2 | ||
Assets: | ||
Derivative contracts (recorded in other assets) | 2,877 | 875 |
Liabilities: | ||
Derivative contracts (recorded in other liabilities) | 64,260 | 23,663 |
Level 3 | ||
Assets: | ||
Derivative contracts (recorded in other assets) | 0 | 0 |
Liabilities: | ||
Derivative contracts (recorded in other liabilities) | 0 | 0 |
Government bonds | ||
Assets: | ||
Government bonds | 4,890 | 5,052 |
Government bonds | Level 1 | ||
Assets: | ||
Government bonds | 4,890 | 5,052 |
Government bonds | Level 2 | ||
Assets: | ||
Government bonds | 0 | 0 |
Government bonds | Level 3 | ||
Assets: | ||
Government bonds | 0 | 0 |
Exchange traded funds | ||
Assets: | ||
Mutual funds | 19,132 | 0 |
Exchange traded funds | Level 1 | ||
Assets: | ||
Mutual funds | 19,132 | |
Exchange traded funds | Level 2 | ||
Assets: | ||
Mutual funds | 0 | |
Exchange traded funds | Level 3 | ||
Assets: | ||
Mutual funds | 0 | |
Mutual funds | ||
Assets: | ||
Mutual funds | 639 | 33,677 |
Mutual funds | Level 1 | ||
Assets: | ||
Mutual funds | 639 | 33,677 |
Mutual funds | Level 2 | ||
Assets: | ||
Mutual funds | 0 | 0 |
Mutual funds | Level 3 | ||
Assets: | ||
Mutual funds | $ 0 | $ 0 |
Fair Value - Narrative (Details
Fair Value - Narrative (Details) - Private equity funds - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Private equity funds | $ 5.8 | $ 7.2 |
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 | 5 years |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss - Reclassifications out of AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Interest rate swaps | $ 291 | $ (19) | $ (1,367) | $ (123) |
Income tax effect of item above | 7,497 | 6,665 | 24,734 | 15,607 |
Net income | 47,829 | 27,548 | 131,093 | 66,660 |
Reclassification out of Accumulated Other Comprehensive Income | Cash Flow Hedges | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Interest rate swaps | (3,175) | (413) | (6,488) | (611) |
Income tax effect of item above | 692 | 0 | 1,461 | 0 |
Net income | $ (2,483) | $ (413) | $ (5,027) | $ (611) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Loss - AOCI by Component (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 1,194,862 | $ 1,150,857 | $ 1,227,013 | $ 1,123,969 |
Other comprehensive (loss)/income before reclassifications, net | 31,169 | (54,245) | (57,569) | (64,458) |
Reclassifications | 2,483 | 413 | 5,027 | 611 |
Other comprehensive loss attributable to PRA Group, Inc. | 33,652 | (53,832) | (52,542) | (63,847) |
Ending balance | 1,272,172 | 1,146,313 | 1,272,172 | 1,146,313 |
Deferred taxes for unrealized losses from cash flow hedges | 500 | (2,000) | 10,200 | 6,400 |
Debt Securities Available-for-sale | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | 177 | (1) | (44) | (83) |
Other comprehensive (loss)/income before reclassifications, net | (30) | (1) | 191 | 81 |
Reclassifications | 0 | 0 | 0 | 0 |
Other comprehensive loss attributable to PRA Group, Inc. | (30) | (1) | 191 | 81 |
Ending balance | 147 | (2) | 147 | (2) |
Cash Flow Hedges | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (37,409) | (13,673) | (13,088) | 44 |
Other comprehensive (loss)/income before reclassifications, net | (1,089) | (6,245) | (27,954) | (20,160) |
Reclassifications | 2,483 | 413 | 5,027 | 611 |
Other comprehensive loss attributable to PRA Group, Inc. | 1,394 | (5,832) | (22,927) | (19,549) |
Ending balance | (36,015) | (19,505) | (36,015) | (19,505) |
Currency Translation Adjustments | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (309,980) | (238,450) | (247,886) | (242,070) |
Other comprehensive (loss)/income before reclassifications, net | 32,288 | (47,999) | (29,806) | (44,379) |
Reclassifications | 0 | 0 | 0 | 0 |
Other comprehensive loss attributable to PRA Group, Inc. | 32,288 | (47,999) | (29,806) | (44,379) |
Ending balance | (277,692) | (286,449) | (277,692) | (286,449) |
Accumulated Other Comprehensive (Loss) | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (347,212) | (252,124) | (261,018) | (242,109) |
Ending balance | $ (313,560) | $ (305,956) | $ (313,560) | $ (305,956) |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings Per Share [Abstract] | ||||
Net income | $ 42,492 | $ 24,971 | $ 119,541 | $ 58,817 |
Weighted Average Common Shares, Basic EPS | 45,579,000 | 45,410,000 | 45,526,000 | 45,378,000 |
Weighted Average Common Shares, Dilutive effect of nonvested share awards | 561,000 | 235,000 | 445,000 | 142,000 |
Weighted Average Common Shares, Diluted EPS | 46,140,000 | 45,645,000 | 45,971,000 | 45,520,000 |
EPS, Basic (in dollars per share) | $ 0.93 | $ 0.55 | $ 2.63 | $ 1.30 |
EPS, Dilutive effect of nonvested share awards (in dollars per share) | (0.01) | 0 | (0.03) | (0.01) |
EPS, Diluted (in dollars per share) | $ 0.92 | $ 0.55 | $ 2.60 | $ 1.29 |
Antidilutive options outstanding | 0 | 0 | 0 | 0 |
Income Taxes - Additional Discl
Income Taxes - Additional Disclosures (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Cash on hand related to foreign operations with permanently reinvested earnings | $ 81.6 | $ 109.7 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
Future compensation under employment agreements | $ 2 | |
Amount to be purchased under forward flow agreements | 395.6 | |
Recoveries receivable | $ 1.8 | $ 1 |
Uncategorized Items - praa-2020
Label | Element | Value |
Restricted Cash | us-gaap_RestrictedCash | $ 12,378,000 |
Restricted Cash | us-gaap_RestrictedCash | $ 6,895,000 |