Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 03, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
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 | 43,613,019 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
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, 2021 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Recently Issued Accounting Standards | Change in Accounting Principle: In August 2020, the FASB issued Accounting Standards Update ("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 ("EPS") calculation in certain areas. The Company accounts for its 3.50% Convertible Notes due 2023 (the "2023 Notes" or the "Convertible Notes") in accordance with ASC 470-20, "Debt with Conversion and Other Options" ("ASC 470"). Under ASU 2020-06, the embedded conversion features are no longer separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives under ASC Topic 815 "Derivatives and Hedging" ("ASC 815"), or that do not result in substantial premiums accounted for as paid-in capital. Consequently, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost. The Company adopted the standard using a modified retrospective method, with adjustments which increased retained earnings by $12.0 million, reduced additional paid-in capital by $26.7 million and increased the net carrying amount of the 2023 Notes by $19.8 million at January 1, 2021. Additionally, for the three and nine months ended September 30, 2021, the effect of adoption reduced interest expense by $2.1 million and $6.1 million, increased net income by $1.5 million and $4.8 million and impacted EPS by $0.03 per share and $0.11 per share, respectively. For more information on the 2023 Notes, see Note 7 . Recently issued accounting standards 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, the standard 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. The Company adopted ASU 2019-12 on January 1, 2021 with no material impact to its financial statements upon adoption. 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. The Company adopted ASU 2020-01 on January 1, 2021 with no impact to its financial statements upon adoption. Accounting for Convertible Instruments Effective January 1, 2021, the Company early adopted ASU 2020-06. Refer to Note 2 for details. Reference Rate Reform In January 2021, the FASB issued ASU 2021-01, "Reference Rate Reform (Topic 848): Overall" ("ASU 2021-01"). ASU 2021-01 expands the scope of ASC 848 to include derivatives affected by the discounting transition for certain optional expedients and exceptions. ASU 2021-01 is effective immediately for a limited time through December 31, 2022. The Company is evaluating the impact of ASU 2021-01 but does not expect it to have a material impact on its financial statements. Recently issued accounting standards not yet adopted: 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, 2021 | Dec. 31, 2020 |
Assets | ||
Cash and cash equivalents | $ 56,545 | $ 108,613 |
Restricted cash | 4,752 | 12,434 |
Investments | 85,171 | 55,759 |
Finance receivables, net | 3,449,939 | 3,514,788 |
Other receivables, net | 7,065 | 13,194 |
Income taxes receivable | 21,863 | 21,928 |
Deferred tax assets, net | 77,213 | 83,205 |
Property and equipment, net | 53,767 | 58,356 |
Right-of-use assets | 51,998 | 52,951 |
Goodwill | 482,479 | 492,989 |
Other assets | 41,168 | 38,844 |
Total assets | 4,331,960 | 4,453,061 |
Liabilities: | ||
Accounts payable | 5,379 | 5,294 |
Accrued expenses | 100,342 | 97,320 |
Income taxes payable | 20,719 | 29,692 |
Deferred tax liabilities, net | 32,604 | 40,867 |
Interest-bearing deposits | 132,612 | 132,739 |
Borrowings | 2,520,903 | 2,661,289 |
Lease liabilities | 56,409 | 57,348 |
Other liabilities | 34,342 | 54,986 |
Total liabilities | 2,903,310 | 3,079,535 |
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, 44,040 shares issued and outstanding at September 30, 2021; 100,000 shares authorized, 45,585 shares issued and outstanding at December 31, 2020 | 440 | 456 |
Additional paid-in capital | 0 | 75,282 |
Retained earnings | 1,654,544 | 1,511,970 |
Accumulated other comprehensive loss | (264,781) | (245,791) |
Total stockholders' equity - PRA Group, Inc. | 1,390,203 | 1,341,917 |
Noncontrolling interest | 38,447 | 31,609 |
Total equity | 1,428,650 | 1,373,526 |
Total liabilities and equity | $ 4,331,960 | $ 4,453,061 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
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 | 44,040,000 | 45,585,000 |
Common stock, shares outstanding | 44,040,000 | 45,585,000 |
Consolidated Income Statements
Consolidated Income Statements - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenues: | ||||
Portfolio income | $ 212,905 | $ 240,250 | $ 663,714 | $ 750,556 |
Changes in expected recoveries | 43,820 | 25,403 | 157,504 | 32,388 |
Total portfolio revenue | 256,725 | 265,653 | 821,218 | 782,944 |
Fee income | 6,209 | 1,978 | 10,843 | 6,826 |
Other revenue | 764 | 233 | 6,735 | 1,788 |
Total revenues | 263,698 | 267,864 | 838,796 | 791,558 |
Operating expenses: | ||||
Compensation and employee services | 74,584 | 71,974 | 228,200 | 217,617 |
Legal collection fees | 10,993 | 13,661 | 36,208 | 41,975 |
Legal collection costs | 21,450 | 26,043 | 61,231 | 79,997 |
Agency fees | 15,646 | 14,900 | 47,145 | 38,619 |
Outside fees and services | 29,434 | 22,719 | 71,167 | 60,796 |
Communication | 9,782 | 9,379 | 33,039 | 31,702 |
Rent and occupancy | 4,571 | 4,460 | 13,694 | 13,415 |
Depreciation and amortization | 3,724 | 4,301 | 11,520 | 12,494 |
Other operating expenses | 15,935 | 11,761 | 44,045 | 34,457 |
Total operating expenses | 186,119 | 179,198 | 546,249 | 531,072 |
Income from operations | 77,579 | 88,666 | 292,547 | 260,486 |
Other income and (expense): | ||||
Interest expense, net | (29,599) | (33,692) | (91,987) | (106,319) |
Foreign exchange gain | 1,232 | 61 | 127 | 3,027 |
Other | 85 | 291 | 294 | (1,367) |
Income before income taxes | 49,297 | 55,326 | 200,981 | 155,827 |
Income tax expense | 12,627 | 7,497 | 41,870 | 24,734 |
Net income | 36,670 | 47,829 | 159,111 | 131,093 |
Adjustment for net income attributable to noncontrolling interests | 2,190 | 5,337 | 10,229 | 11,552 |
Net income attributable to PRA Group, Inc. | $ 34,480 | $ 42,492 | $ 148,882 | $ 119,541 |
Net income per common share attributable to PRA Group, Inc.: | ||||
Basic (in dollars per share) | $ 0.76 | $ 0.93 | $ 3.27 | $ 2.63 |
Diluted (in dollars per share) | $ 0.76 | $ 0.92 | $ 3.24 | $ 2.60 |
Weighted average number of shares outstanding: | ||||
Basic (shares) | 45,305 | 45,579 | 45,594 | 45,526 |
Diluted (shares) | 45,656 | 46,140 | 45,920 | 45,971 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 36,670 | $ 47,829 | $ 159,111 | $ 131,093 |
Currency translation adjustments | (38,238) | 30,705 | (43,682) | (48,448) |
Cash flow hedges | 5,522 | 1,394 | 19,200 | (22,927) |
Debt securities available-for-sale | (50) | (30) | (192) | 191 |
Other comprehensive (loss)/income | (32,766) | 32,069 | (24,674) | (71,184) |
Total comprehensive income | 3,904 | 79,898 | 134,437 | 59,909 |
Less comprehensive (loss)/income attributable to noncontrolling interests | (1,154) | 3,753 | 4,544 | (7,091) |
Comprehensive income attributable to PRA Group, Inc. | $ 5,058 | $ 76,145 | $ 129,893 | $ 67,000 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Equity - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Cumulative Effect, Period of Adoption, Adjusted Balance | Common Stock | Common StockCumulative Effect, Period of Adoption, Adjusted Balance | Additional Paid-in Capital | Additional Paid-in CapitalCumulative Effect, Period of Adoption, Adjustment | Additional Paid-in CapitalCumulative Effect, Period of Adoption, Adjusted Balance | Retained Earnings | Retained EarningsCumulative Effect, Period of Adoption, Adjustment | Retained EarningsCumulative Effect, Period of Adoption, Adjusted Balance | Accumulated Other Comprehensive (Loss) | Accumulated Other Comprehensive (Loss)Cumulative Effect, Period of Adoption, Adjusted Balance | Noncontrolling Interest | Noncontrolling InterestCumulative Effect, Period of Adoption, Adjusted Balance |
Beginning balance (in shares) at Dec. 31, 2019 | 45,416,000 | ||||||||||||||
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) | 124,000 | ||||||||||||||
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 | 45,540,000 | ||||||||||||||
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 | 45,416,000 | ||||||||||||||
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 | 45,579,000 | ||||||||||||||
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 | 45,540,000 | ||||||||||||||
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) | 39,000 | ||||||||||||||
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 | 45,579,000 | ||||||||||||||
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) | |||||||||||||
Share-based compensation expense | 3,097 | 3,097 | |||||||||||||
Other | (3,126) | (3,126) | |||||||||||||
Ending balance (in shares) at Sep. 30, 2020 | 45,579,000 | ||||||||||||||
Ending balance at Sep. 30, 2020 | 1,272,172 | $ 456 | 70,036 | 1,482,172 | (313,560) | 33,068 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Contributions from noncontrolling interest | $ 1,118 | 1,118 | |||||||||||||
Beginning balance (in shares) at Dec. 31, 2020 | 45,585,000 | 45,585,000 | 45,585,000 | ||||||||||||
Beginning balance at Dec. 31, 2020 | $ 1,373,526 | $ (14,689) | $ 1,358,837 | $ 456 | $ 456 | 75,282 | $ (26,697) | $ 48,585 | 1,511,970 | $ 12,008 | $ 1,523,978 | (245,791) | $ (245,791) | 31,609 | $ 31,609 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Net income | 61,880 | 58,406 | 3,474 | ||||||||||||
Currency translation adjustments | (24,531) | (20,108) | (4,423) | ||||||||||||
Cash flow hedges | 12,323 | 12,323 | |||||||||||||
Distributions to noncontrolling interest | (3,933) | (3,933) | |||||||||||||
Vesting of restricted stock (in shares) | 214,000 | ||||||||||||||
Vesting of restricted stock | 0 | $ 2 | (2) | ||||||||||||
Share-based compensation expense | 4,113 | 4,113 | |||||||||||||
Employee stock relinquished for payment of taxes | (5,460) | (5,460) | |||||||||||||
Ending balance (in shares) at Mar. 31, 2021 | 45,799,000 | ||||||||||||||
Ending balance at Mar. 31, 2021 | $ 1,403,229 | $ 458 | 47,236 | 1,582,384 | (253,576) | 26,727 | |||||||||
Beginning balance (in shares) at Dec. 31, 2020 | 45,585,000 | 45,585,000 | 45,585,000 | ||||||||||||
Beginning balance at Dec. 31, 2020 | $ 1,373,526 | $ (14,689) | $ 1,358,837 | $ 456 | $ 456 | 75,282 | $ (26,697) | $ 48,585 | 1,511,970 | $ 12,008 | $ 1,523,978 | (245,791) | $ (245,791) | 31,609 | $ 31,609 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Cash flow hedges | 19,200 | ||||||||||||||
Debt securities available-for-sale | $ (192) | ||||||||||||||
Ending balance (in shares) at Sep. 30, 2021 | 44,040,000 | 44,040,000 | |||||||||||||
Ending balance at Sep. 30, 2021 | $ 1,428,650 | $ 440 | 0 | 1,654,544 | (264,781) | 38,447 | |||||||||
Beginning balance (in shares) at Mar. 31, 2021 | 45,799,000 | ||||||||||||||
Beginning balance at Mar. 31, 2021 | 1,403,229 | $ 458 | 47,236 | 1,582,384 | (253,576) | 26,727 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Net income | 60,561 | 55,996 | 4,565 | ||||||||||||
Currency translation adjustments | 19,087 | 17,004 | 2,083 | ||||||||||||
Cash flow hedges | 1,355 | 1,355 | |||||||||||||
Debt securities available-for-sale | (142) | (142) | |||||||||||||
Distributions to noncontrolling interest | (13,120) | (13,120) | |||||||||||||
Vesting of restricted stock (in shares) | 38,000 | ||||||||||||||
Share-based compensation expense | 4,040 | 4,040 | |||||||||||||
Employee stock relinquished for payment of taxes | (70) | (70) | |||||||||||||
Ending balance (in shares) at Jun. 30, 2021 | 45,837,000 | ||||||||||||||
Ending balance at Jun. 30, 2021 | 1,474,940 | $ 458 | 51,206 | 1,638,380 | (235,359) | 20,255 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Net income | 36,670 | 34,480 | 2,190 | ||||||||||||
Currency translation adjustments | (38,238) | (34,894) | (3,344) | ||||||||||||
Cash flow hedges | 5,522 | 5,522 | |||||||||||||
Debt securities available-for-sale | (50) | (50) | |||||||||||||
Distributions to noncontrolling interest | (3,397) | (3,397) | |||||||||||||
Noncontrolling Interest, Increase from Subsidiary Equity Issuance | 22,743 | ||||||||||||||
Repurchase and cancellation of common stock (shares) | (1,797,000) | ||||||||||||||
Repurchase and cancellation of common stock | (73,847) | $ (18) | (55,513) | (18,316) | |||||||||||
Vesting of restricted stock (in shares) | 4,317,000 | ||||||||||||||
Share-based compensation expense | 4,317 | ||||||||||||||
Employee stock relinquished for payment of taxes | $ (10) | (10) | |||||||||||||
Ending balance (in shares) at Sep. 30, 2021 | 44,040,000 | 44,040,000 | |||||||||||||
Ending balance at Sep. 30, 2021 | $ 1,428,650 | $ 440 | $ 0 | $ 1,654,544 | $ (264,781) | $ 38,447 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities: | ||
Net income | $ 159,111 | $ 131,093 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Share-based compensation expense | 12,470 | 9,017 |
Depreciation and amortization | 11,520 | 12,494 |
Amortization of debt discount and issuance costs | 7,053 | 16,711 |
Changes in expected recoveries | (157,504) | (32,388) |
Deferred income taxes | (4,235) | (44,905) |
Net unrealized foreign currency transactions | 7,462 | 34,060 |
Fair value in earnings for equity securities | 92 | 1,159 |
Other | 91 | (449) |
Changes in operating assets and liabilities: | ||
Other assets | 1,746 | 1,466 |
Other receivables, net | 6,033 | (1,686) |
Accounts payable | 201 | 45 |
Income taxes payable, net | (9,391) | 5,664 |
Accrued expenses | 3,086 | (5,315) |
Other liabilities | 531 | 4,408 |
Right of use asset/lease liability | 17 | (15) |
Net cash provided by operating activities | 38,283 | 131,359 |
Cash flows from investing activities: | ||
Purchases of property and equipment, net | (6,772) | (12,906) |
Purchases of finance receivables | (770,377) | (613,050) |
Recoveries applied to negative allowance | 934,002 | 784,056 |
Purchases of investments | (74,485) | (27,565) |
Proceeds from sales and maturities of investments | 42,110 | 41,932 |
Business acquisition, net of cash acquired | (647) | 0 |
Net cash provided by investing activities | 123,831 | 172,467 |
Cash flows from financing activities: | ||
Proceeds from lines of credit | 426,135 | 998,088 |
Principal payments on lines of credit | (908,215) | (1,331,303) |
Payments on convertible senior notes | 0 | (287,442) |
Proceeds from senior notes | 350,000 | 300,000 |
Proceeds from long-term debt | 0 | 55,000 |
Other financing activities | 0 | (3,183) |
Principal payments on long-term debt | (7,500) | (7,500) |
Payments for Repurchase of Common Stock | (73,847) | 0 |
Payments of origination cost and fees | (8,835) | (16,998) |
Tax withholdings related to share-based payments | (5,540) | (3,176) |
Contributions from noncontrolling interest | 22,743 | 1,118 |
Distributions paid to noncontrolling interest | (20,450) | (18,585) |
Net increase in interest-bearing deposits | 8,847 | 8,115 |
Net cash used in financing activities | (216,662) | (305,866) |
Effect of exchange rate on cash | (5,202) | (16,610) |
Net decrease in cash, cash equivalents and restricted cash | (59,750) | (18,650) |
Cash, cash equivalents and restricted cash beginning of period | 121,047 | 123,807 |
Cash, cash equivalents and restricted cash, end of period | 61,297 | 105,157 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 88,676 | 88,003 |
Cash paid for income taxes | $ 55,234 | $ 64,719 |
Organization and Business
Organization and Business | 9 Months Ended |
Sep. 30, 2021 | |
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."). 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, 2021, its Consolidated Income Statements and Statements of Comprehensive Income/(Loss) for the three and nine months ended September 30, 2021 and 2020, and its Consolidated Statements of Changes in Equity and Statements of Cash Flows for the nine months ended September 30, 2021 and 2020, have been included. The Company's Consolidated Income Statements for the three and nine months ended September 30, 2021 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, 2020 (the "2020 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 of whether changes in the facts and circumstances regarding the Company’s involvement with an entity cause the Company’s consolidation conclusion to change. 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 two 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 tables show the amount of revenue generated for the three and nine months ended September 30, 2021 and 2020, and long-lived assets held at September 30, 2021 and 2020, 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, 2021 Three Months Ended September 30, 2020 Revenues (2) Long-Lived Assets Revenues (2) Long-Lived Assets United States $ 157,124 $ 90,980 $ 172,286 $ 98,049 United Kingdom 42,388 2,040 34,387 2,578 Other (1) 64,186 12,745 61,191 8,805 Total $ 263,698 $ 105,765 $ 267,864 $ 109,432 As of and for the As of and for the Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020 Revenues (2) Long-Lived Assets Revenues (2) Long-Lived Assets United States $ 503,994 $ 90,980 $ 517,914 $ 98,049 United Kingdom 133,024 2,040 98,768 2,578 Other (1) 201,778 12,745 174,876 8,805 Total $ 838,796 $ 105,765 $ 791,558 $ 109,432 (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 . |
Change in Accounting Principle
Change in Accounting Principle | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Changes and Error Corrections [Abstract] | |
Change in Accounting Principle | Change in Accounting Principle: In August 2020, the FASB issued Accounting Standards Update ("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 ("EPS") calculation in certain areas. The Company accounts for its 3.50% Convertible Notes due 2023 (the "2023 Notes" or the "Convertible Notes") in accordance with ASC 470-20, "Debt with Conversion and Other Options" ("ASC 470"). Under ASU 2020-06, the embedded conversion features are no longer separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives under ASC Topic 815 "Derivatives and Hedging" ("ASC 815"), or that do not result in substantial premiums accounted for as paid-in capital. Consequently, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost. The Company adopted the standard using a modified retrospective method, with adjustments which increased retained earnings by $12.0 million, reduced additional paid-in capital by $26.7 million and increased the net carrying amount of the 2023 Notes by $19.8 million at January 1, 2021. Additionally, for the three and nine months ended September 30, 2021, the effect of adoption reduced interest expense by $2.1 million and $6.1 million, increased net income by $1.5 million and $4.8 million and impacted EPS by $0.03 per share and $0.11 per share, respectively. For more information on the 2023 Notes, see Note 7 . Recently issued accounting standards 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, the standard 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. The Company adopted ASU 2019-12 on January 1, 2021 with no material impact to its financial statements upon adoption. 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. The Company adopted ASU 2020-01 on January 1, 2021 with no impact to its financial statements upon adoption. Accounting for Convertible Instruments Effective January 1, 2021, the Company early adopted ASU 2020-06. Refer to Note 2 for details. Reference Rate Reform In January 2021, the FASB issued ASU 2021-01, "Reference Rate Reform (Topic 848): Overall" ("ASU 2021-01"). ASU 2021-01 expands the scope of ASC 848 to include derivatives affected by the discounting transition for certain optional expedients and exceptions. ASU 2021-01 is effective immediately for a limited time through December 31, 2022. The Company is evaluating the impact of ASU 2021-01 but does not expect it to have a material impact on its financial statements. Recently issued accounting standards not yet adopted: 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, 2021 | |
Receivables [Abstract] | |
Finance Receivables, net | Finance Receivables, net: Finance receivables, net consisted of the following at September 30, 2021 and December 31, 2020 (amounts in thousands): September 30, 2021 December 31, 2020 Amortized cost $ — $ — Negative allowance for expected recoveries (1) 3,449,939 3,514,788 Balance at end of period $ 3,449,939 $ 3,514,788 (1) The negative allowance balance includes certain portfolios of nonperforming loans for which the Company holds a beneficial interest representing approximatel y 1% of the balance. Three Months Ended September 30, 2021 and 2020 Changes in the negative allowance for expected recoveries by portfolio segment for the three months ended September 30, 2021 and 2020 were as follows (amounts in thousands): Three Months Ended September 30, 2021 Core Insolvency Total Balance at beginning of period $ 2,894,963 $ 454,075 $ 3,349,038 Initial negative allowance for expected recoveries - portfolio acquisitions (1) 374,645 17,302 391,947 Foreign currency translation adjustment (52,650) (5,558) (58,208) Recoveries applied to negative allowance (2) (230,237) (46,421) (276,658) Changes in expected recoveries (3) 40,583 3,237 43,820 Balance at end of period $ 3,027,304 $ 422,635 $ 3,449,939 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, 2021 and 2020 were as follows (amounts in thousands): Three Months Ended September 30, 2021 Core Insolvency Total Face value $ 2,499,453 $ 82,704 $ 2,582,157 Noncredit discount (280,213) (6,355) (286,568) Allowance for credit losses at acquisition (1,844,595) (59,047) (1,903,642) Purchase price $ 374,645 $ 17,302 $ 391,947 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, 2021 and 2020 were as follows (amounts in thousands): Three Months Ended September 30, 2021 Core Insolvency Total Allowance for credit losses at acquisition $ (1,844,595) $ (59,047) $ (1,903,642) Writeoffs, net 1,844,595 59,047 1,903,642 Expected recoveries 374,645 17,302 391,947 Initial negative allowance for expected recoveries $ 374,645 $ 17,302 $ 391,947 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 were calculated as follows for the three months ended September 30, 2021 and 2020 (amounts in thousands): Three Months Ended September 30, 2021 Core Insolvency Total Recoveries (a) $ 429,166 $ 60,397 $ 489,563 Less - amounts reclassified to portfolio income 198,929 13,976 212,905 Recoveries applied to negative allowance $ 230,237 $ 46,421 $ 276,658 Three Months Ended September 30, 2020 Core Insolvency Total Recoveries (a) $ 470,056 $ 52,667 $ 522,723 Less - amounts reclassified to portfolio income 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 cash-based adjustments. (3) Changes in expected recoveries Changes in expected recoveries consisted of the following for the three months ended September 30, 2021 and 2020 (amounts in thousands): Three Months Ended September 30, 2021 Core Insolvency Total Changes in expected future recoveries $ 4,114 $ (6,026) $ (1,912) Recoveries received in excess of forecast 36,469 9,263 45,732 Changes in expected recoveries $ 40,583 $ 3,237 $ 43,820 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 In order to make estimates of future cash collections, the Company considered historical performance, current economic forecasts, short-term and long-term growth in the various geographies in which the Company operates and consumer habits. The Company considered recent collection activity in its determination to adjust assumptions related to near-term estimated remaining collections ("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. Changes in expected recoveries for the three months ended September 30, 2021 were a net positive $43.8 million. This reflects $45.7 million in recoveries received in excess of forecast, which was largely due to cash collections overperformance in the quarter partially offset by a $1.9 million adjustment to changes in expected future recoveries. The changes in expected future recoveries includes the Company's assumption that the majority of the current period overperformance was due to acceleration of future collections. The Company made adjustments in some geographies to increase near-term expected collections, bringing them in line with recent performance trends in collections, with corresponding reductions made later in the forecast period. Changes in expected recoveries for the three months ended September 30, 2020 were a net positive $25.4 million. This reflected $89.0 million in recoveries received during the third quarter of 2020 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 reflected 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 in the quarter that it deemed appropriate given the environment in which the Company was operating. Nine Months Ended September 30, 2021 and 2020 Changes in the negative allowance for expected recoveries by portfolio segment for the nine months ended September 30, 2021 and 2020 were as follows (amounts in thousands): For the Nine Months Ended September 30, 2021 Core Insolvency Total Balance at beginning of period $ 3,019,477 $ 495,311 $ 3,514,788 Initial negative allowance for expected recoveries - portfolio acquisitions (1) 712,687 57,898 770,585 Foreign currency translation adjustment (56,387) (2,549) (58,936) Recoveries applied to negative allowance (2) (797,648) (136,354) (934,002) Changes in expected recoveries (3) 149,175 8,329 157,504 Balance at end of period $ 3,027,304 $ 422,635 $ 3,449,939 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, 2021 and 2020 were as follows (amounts in thousands): For the Nine Months Ended September 30, 2021 Core Insolvency Total Face value $ 4,863,736 $ 277,831 $ 5,141,567 Noncredit discount (585,400) (19,368) (604,768) Allowance for credit losses at acquisition (3,565,649) (200,565) (3,766,214) Purchase price $ 712,687 $ 57,898 $ 770,585 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, 2021 and 2020 were as follows (amounts in thousands): For the Nine Months Ended September 30, 2021 Core Insolvency Total Allowance for credit losses at acquisition $ (3,565,649) $ (200,565) $ (3,766,214) Writeoffs, net 3,565,649 200,565 3,766,214 Expected recoveries 712,687 57,898 770,585 Initial negative allowance for expected recoveries $ 712,687 $ 57,898 $ 770,585 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 were calculated as follows for the nine months ended September 30, 2021 and 2020 (amounts in thousands): For the Nine Months Ended September 30, 2021 Core Insolvency Total Recoveries (a) $ 1,415,619 $ 182,097 $ 1,597,716 Less - amounts reclassified to portfolio income 617,971 45,743 663,714 Recoveries applied to negative allowance $ 797,648 $ 136,354 $ 934,002 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 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 cash-based adjustments. (3) Changes in expected recoveries Changes in expected recoveries consisted of the following for the nine months ended September 30, 2021 and 2020 (amounts in thousands): For the Nine Months Ended September 30, 2021 Core Insolvency Total Changes in expected future recoveries $ (47,738) $ (18,871) $ (66,609) Recoveries received in excess of forecast 196,913 27,200 224,113 Changes in expected recoveries $ 149,175 $ 8,329 $ 157,504 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 Changes in expected recoveries for the nine months ended September 30, 2021 were a net positive $157.5 million . The changes were the net result of recoveries in excess of forecast of $224.1 million from significant cash collections overperformance in the current period reduced by a $66.6 million negative adjustment to changes in expected future recoveries. The changes in expected future recoveries includes the Company's assumption that the majority of the current period overperformance was due to acceleration of future collections. The Company made adjustments in some geographies to increase near-term expected collections, bringing them in line with recent performance trends in collections, with corresponding reductions made later in the forecast period. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments: Investments consisted of the following at September 30, 2021 and December 31, 2020 (amounts in thousands): September 30, 2021 December 31, 2020 Debt securities Available-for-sale $ 69,406 $ 5,368 Equity securities Exchange traded funds — 34,847 Private equity funds 5,150 6,123 Mutual funds 2,670 1,023 Equity method investments 7,945 8,398 Total investments $ 85,171 $ 55,759 Debt Securities Available-for-sale Government securities: The Company's investments in government instruments, including bonds and treasury securities, 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, 2021 and December 31, 2020 were as follows (amounts in thousands): September 30, 2021 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value Available-for-sale Government securities $ 69,469 $ — $ 63 $ 69,406 December 31, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value Available-for-sale Government securities $ 5,239 $ 129 $ — $ 5,368 Equity Securities Exchange traded funds: The Company invested in certain treasury bill exchange traded funds, which were accounted for as equity securities and carried at fair value. In August 2021, the Company sold these funds. Gains and losses from these investments are included within Other income and (expense) in the Company's Consolidated Income Statements. Private equity funds: Investments in private equity funds represent limited partnerships in which the Company has less than a 1% interest. Mutual funds: Mutual funds represent 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 these investments 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 contributions made and distributions received. |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill: 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, 2020 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, 2021, which included considering current market conditions. The Company concluded that no triggering event had occurred as of September 30, 2021 and will continue to monitor the market for any adverse conditions. The changes in goodwill for the three and nine months ended September 30, 2021 and 2020, were as follows (amounts in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Balance at beginning of period $ 492,843 $ 444,507 $ 492,989 $ 480,794 Change in foreign currency translation adjustment (10,364) 11,801 (10,510) (24,486) Balance at end of period $ 482,479 $ 456,308 $ 482,479 $ 456,308 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2021 | |
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 15 years, some of which include options to extend the leases for up to 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, 2021 and 2020, were as follows (amounts in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Operating lease expense $ 3,072 $ 3,035 $ 9,096 $ 9,072 Short-term lease expense 695 661 2,118 2,030 Sublease income (81) — (81) — Total lease expense $ 3,686 $ 3,696 $ 11,133 $ 11,102 Supplemental cash flow information and non-cash activity related to leases for the nine months ended September 30, 2021 and 2020 were as follows (amounts in thousands): Nine Months Ended September 30, 2021 2020 Cash paid for amounts included in the measurement of operating lease liabilities $ 8,946 $ 9,179 ROU assets obtained in exchange for operating lease obligations 6,436 (10,465) Lease term and discount rate information related to operating leases were as follows as of the dates indicated: Nine Months Ended September 30, 2021 2020 Weighted-average remaining lease term (years) 8.6 9.5 Weighted-average discount rate 4.64 % 4.82 % Maturities of lease liabilities at September 30, 2021 are as follows for the following periods (amounts in thousands): Operating Leases For the three months ending December 31, 2021 $ 3,068 For the year ending December 31, 2022 10,649 For the year ending December 31, 2023 8,245 For the year ending December 31, 2024 7,791 For the year ending December 31, 2025 7,600 Thereafter 31,569 Total lease payments $ 68,922 Less: imputed interest 12,513 Total present value of lease liabilities $ 56,409 |
Borrowings
Borrowings | 3 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings: The Company's borrowings consisted of the following as of September 30, 2021 and December 31, 2020 (amounts in thousands): September 30, 2021 December 31, 2020 Americas revolving credit (1) $ 120,850 $ 405,706 Europe revolving credit 957,554 1,171,890 Term loan 462,500 470,000 Senior Notes 650,000 300,000 Convertible Notes 345,000 345,000 2,535,904 2,692,596 Less: Debt discount and issuance costs (15,001) (31,307) Total $ 2,520,903 $ 2,661,289 (1) Includes North American revolving credit facility and Colombian revolving credit facility. The following principal payments are due on the Company's borrowings as of September 30, 2021 for the 12-month periods ending September 30, (amounts in thousands): 2022 $ 10,949 2023 1,312,728 2024 10,000 2025 310,000 2026 542,227 Thereafter 350,000 Total $ 2,535,904 The Company determined that it was in compliance with the covenants of its financing arrangements as of September 30, 2021. North American Revolving Credit and Term Loan The Company has a 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 ("North American Credit Agreement"). On July 30, 2021, the Company entered into the Fourth Amendment to the North American Credit Agreement, which extended the maturity date to July 30, 2026 and, among other things, decreased the revolving loans base rate floors, increased the limit of stock repurchases and redemption of convertible notes, lowered both the margin and unused line fee and added London Interbank Offered Rate ("LIBOR") replacement provisions to reflect the current market approach. The total credit facility under the North American Credit Agreement includes an aggregate principal amount of $1.5 billion (subject to compliance with a borrowing base and applicable debt covenants), which consists of (i) a fully-funded $462.5 million term loan, (ii) a $1.0 billion 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, Canadian Dollar Offered Rate ("CDOR"), or the Eurodollar rate (as defined in the North American Credit Agreement), for the applicable term plus 2.25% per annum, or 2.00% if the consolidated senior secured leverage ratio is less than or equal to 1.60 to 1.0. The revolving loans within the credit facility are subject to a 0.0% floor. The revolving credit facilities also bear an unused line fee of 0.35% per annum, or 0.30% if the consolidated senior secured leverage ratio (as defined in the North American Credit Agreement) is less than or equal to 1.60 to 1.0, payable quarterly in arrears. As of September 30, 2021, the unused portion of the North American Credit Agreement was $955.3 million. Considering borrowing base restrictions, as of September 30, 2021, the amount available to be drawn was $410.3 million. The North American Credit Agreement is secured by a first priority lien on substantially all of the Company's North American assets. The North American Credit Agreement contains restrictive covenants and events of default, including the following: • the ERC borrowing base is 35% for all eligible core asset pools and 55% for all insolvency eligible asset pools; • the consolidated total leverage ratio (as defined in the North American Credit Agreement) cannot exceed 3.50 to 1.0 as of the end of any fiscal quarter; • the consolidated senior secured leverage ratio cannot exceed 2.25 to 1.0 as of the end of any fiscal quarter; • subject to no default or event of default, cash dividends and distributions during any fiscal year cannot exceed $20.0 million; and • the Company must maintain positive consolidated income from operations during any fiscal quarter. European Revolving Credit Facility European subsidiaries of the Company ("PRA Europe") are parties to a credit agreement with DNB Bank ASA and a syndicate of lenders named therein, for a Multicurrency Revolving Credit Facility (the "European Credit Agreement"). On March 12, 2021, the Company entered into the Seventh Amendment and Restatement to its European Credit Agreement that, among other things, increased borrowings by $50.0 million through the accordion feature. The European Credit Agreement provides borrowings for an aggregate amount of approximately $1.35 billion (subject to the borrowing base), accrues interest at the Interbank Offered Rate 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, 2021, the unused portion of the European Credit Agreement (including the overdraft facility) was $432.4 million. Considering borrowing base restrictions and other covenants as of September 30, 2021, the amount available to be drawn under the European Credit Agreement (including the overdraft facility) was $349.4 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, is party to a credit agreement with Bancolombia in an aggregate amount of approximately $5.2 million. As of September 30, 2021, the outstanding balance under the credit agreement was approximately $1.1 million, with a weighted average interest rate of 7.13%. The outstanding balance accrues interest at the Indicador Bancario de Referencia rate 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, 2021, the unused portion of the credit agreement was approximately $4.1 million. Senior Notes due 2029 On September 22, 2021, the Company completed the private offering of $350.0 million in aggregate principal amount of its 5.00% Senior Notes due October 1, 2029 (the "2029 Notes"). The 2029 Notes were issued pursuant to an Indenture dated September 22, 2021 (the "2021 Indenture"), between the Company and Regions Bank, as trustee. The 2021 Indenture contains customary terms and covenants, including certain events of default after which the 2029 Notes may be due and payable immediately. The 2029 Notes are senior unsecured obligations of the Company and are guaranteed on a senior unsecured basis by all of the Company's existing and future domestic restricted subsidiaries that guarantee the North American Credit Agreement, subject to certain exceptions. Interest on the Notes is payable semi-annually, in arrears, on October 1 and April 1 of each year. On or after October 1, 2024, the Notes may be redeemed, at the Company's option in whole or in part at a price equal to 102.50% of the aggregate principal amount of the 2029 Notes being redeemed. The applicable redemption price changes if redeemed during the 12-months beginning October 1 of each year to 101.25% for 2025 and then 100% for 2026 and thereafter. In addition, on or before October 1, 2024, the Company may redeem up to 40% of the aggregate principal amount of the 2029 Notes at a redemption price of 105.00% plus accrued and unpaid interest subject to the rights of holders of the 2029 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 2029 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 2021 Indenture), each holder will have the right to require the Company to repurchase all or any part of such holder's 2029 Notes at an offer price equal to 101% of the 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 2029 Notes at 100% of their principal amount. 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" and, together with the 2029 Notes, the "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 and are guaranteed on a senior unsecured basis by all of the Company's existing and future domestic restricted subsidiaries that guarantee the North American Credit Agreement, subject to certain exceptions. Interest on the 2025 Notes is payable semi-annually, in arrears, on March 1 and September 1 of each year. 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), each holder will have the right to require the Company to repurchase all or any part of such holder's 2025 Notes 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. 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 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. The holders of the 2023 Notes have the right to convert all, or a portion of, the 2023 Notes upon occurrence of specific events prior to the close of business on the business day immediately preceding prior to March 1, 2023, including: • if during any calendar quarter, the last reported sales price of the Company's common stock is greater than 130% of the conversion price for at least 20 trading days during the period of 30 consecutive trading days; • if the trading price of the 2023 Notes is less than 98% of the product of the last reported sales price of the Company's common stock and the conversion rate for a 10 consecutive trading day period; • the Company elects to issue to all, or substantially all, holders of its common stock any rights, options or warrants entitling them, for a period of more than 45 calendar days, to subscribe for or purchase shares at a price per share that is less than the average of the last reported sales price (as defined in the 2017 Indenture) for the 10 consecutive trading day-period ending on the trading day immediately preceding the date of announcement of such issuance; • the Company elects to distribute to all, or substantially all, holders of its common stock the Company’s assets, debt securities or rights to purchase securities of the Company, which distribution has a share value exceeding 10% of the last reported sale price (as defined in the 2017 Indenture) on the trading day preceding the announcement of such distribution; or • a transaction occurs that constitutes a fundamental change (as defined in the 2017 Indenture) or, the Company is party to a consolidation, merger, binding share exchange, or transfer or lease of all, or substantially all, of the Company’s assets. On or after March 1, 2023, the 2023 Notes will be convertible at any time. As of September 30, 2021, the Company does not believe that any of the conditions allowing holders of the 2023 Notes to convert their notes has occurred. Furthermore, 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) of the Company's common stock 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. The conversion rate for the 2023 Notes is 21.6275 shares per $1,000 principal amount, 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 has made an irrevocable election to settle conversions by paying holders of the 2023 Notes cash up to the aggregate principal amount of the 2023 Notes and shares of the Company's common stock or a combination of cash a n d shares of the Company's common stock, at the Company's election, for the remaining amounts owed, if any. In accordance with authoritative guidance related to derivatives and hedging and EPS, only the conversion spread is included in the diluted EPS calculation, if dilutive. Under such method, the settlement of the conversion spread has a dilutive effect when the market conversion criteria is met. 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. Upon adoption of ASU 2020-06, the equity classification model was eliminated, resulting in an adjustment to retained earnings and an increase to the 2023 Notes. Refer to Note 2 , Change in Accounting Principle, for further information. The balances of the liability and equity components of the Company's convertible notes outstanding as of September 30, 2021 and December 31, 2020, were as follows (amounts in thousands): September 30, 2021 December 31, 2020 Liability component - principal amount $ 345,000 $ 345,000 Unamortized debt discount — (20,603) Unamortized debt issuance costs (2,902) (3,335) Liability component - net carrying amount $ 342,098 $ 321,062 Equity component $ — $ 44,910 The Company amortizes debt issuance costs over the life of the debt using the effective interest method. Upon adoption of ASU 2020-06 the debt discount was eliminated and the debt issuance costs were remeasured, resulting in an effective interest rate of 4.00%. Interest expense related to the Company's convertible notes for the three and nine months ended September 30, 2021 and 2020, were as follows (amounts in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (1) Interest expense - stated coupon rate $ 3,019 $ 3,695 $ 9,057 $ 14,045 Interest expense - amortization of debt discount — 2,388 — 8,852 Interest expense - amortization of debt issuance costs 412 432 1,234 1,644 Total interest expense - convertible notes $ 3,431 $ 6,515 $ 10,291 $ 24,541 (1) 2020 amounts include interest expense related to the 3.00% Convertible Senior Notes due August 1, 2020, which were repaid in the third quarter of 2020. Refer to Note 7 of the Company's Consolidated Financial Statements included in Item 8 of the 2020 Form 10-K. |
Derivatives
Derivatives | 3 Months Ended |
Sep. 30, 2021 | |
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 815. In 2020, the Company adopted ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effect of Reference Rate Reform on Financial Reporting" ("ASU 2020-04"). ASU 2020-04 allows the Company to elect certain expedients to continue accounting for its interest rate swap contracts designated as cash flow hedges. The following tables summarize the fair value of derivative instruments in the Company's Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020 (amounts in thousands): September 30, 2021 December 31, 2020 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives designated as hedging instruments: Interest rate contracts Other assets $ 2,815 Other assets $ — Interest rate contracts Other liabilities 22,181 Other liabilities 43,017 Derivatives not designated as hedging instruments: Foreign currency contracts Other assets 5,521 Other assets 3,512 Foreign currency contracts Other liabilities 1,944 Other liabilities 2,415 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, 2021 and December 31, 2020, the notional amount of interest rate contracts designated as cash flow hedging instruments was $867.6 million and $967.2 million, respectively. Derivatives designated as cash flow hedging instruments were evaluated and remain highly effective at September 30, 2021 and have terms of one The following tables summarize the effects of derivatives designated as cash flow hedging instruments on the Consolidated Financial Statements for the three and nine months ended September 30, 2021 and 2020 (amounts in thousands): Gain or (loss) recognized in OCI, net of tax Three Months Ended September 30, Nine Months Ended September 30, Derivatives designated as cash flow hedging instruments 2021 2020 2021 2020 Interest rate contracts $ 3,036 $ (1,089) $ 11,588 $ (27,953) Gain or (loss) reclassified from OCI into income Three Months Ended September 30, Nine Months Ended September 30, Location of gain or (loss) reclassified from OCI into income 2021 2020 2021 2020 Interest expense, net $ (3,165) $ (3,175) $ (9,644) $ (6,488) 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, 2021 and December 31, 2020, the notional amount of foreign currency contracts that are not designated as hedging instruments was $799.4 million and $500.8 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, 2021 and 2020 (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 2021 2020 Foreign currency contracts Foreign exchange gain $ 8,197 $ 2,280 Foreign currency contracts Interest expense, net 130 (322) 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 2021 2020 Foreign currency contracts Foreign exchange gain $ 10,741 $ 27,437 Foreign currency contracts Interest expense, net 475 (2,135) |
Fair Value Measurements and Dis
Fair Value Measurements and Disclosures | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value: As defined by ASC Topic 820, "Fair Value Measurement 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, 2021 and December 31, 2020 (amounts in thousands): September 30, 2021 December 31, 2020 Carrying Estimated Carrying Estimated Financial assets: Cash and cash equivalents $ 56,545 $ 56,545 $ 108,613 $ 108,613 Restricted cash 4,752 4,752 12,434 12,434 Finance receivables, net 3,449,939 3,354,634 3,514,788 3,541,159 Financial liabilities: Interest-bearing deposits 132,612 132,612 132,739 132,739 Revolving lines of credit 1,078,404 1,078,404 1,577,596 1,577,596 Term loan 462,500 462,500 470,000 470,000 Senior Notes 650,000 671,989 300,000 324,408 Convertible Notes 345,000 382,484 324,397 376,012 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 and restricted cash: 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, cash equivalents and restricted cash 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 Notes 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, the carrying amount of December 31, 2020 represents the Convertible Notes net of the debt discount. Upon adoption of ASU 2020-06, the carrying amount of the Convertible Notes reflects face value as the debt discount was eliminated. Financial Instruments Required To Be Carried At Fair Value The carrying amounts in the following tables are measured at fair value on a recurring basis in the accompanying Consolidated Balance Sheets at September 30, 2021 and December 31, 2020 (amounts in thousands): Fair Value Measurements as of September 30, 2021 Level 1 Level 2 Level 3 Total Assets: Available-for-sale investments Government securities $ 69,406 $ — $ — $ 69,406 Fair value through net income Mutual funds 2,670 — — 2,670 Derivative contracts (recorded in Other assets) — 8,336 — 8,336 Liabilities: Derivative contracts (recorded in Other liabilities) — 24,125 — 24,125 Fair Value Measurements as of December 31, 2020 Level 1 Level 2 Level 3 Total Assets: Available-for-sale investments Government securities $ 5,368 $ — $ — $ 5,368 Fair value through net income Exchange traded funds 34,847 — — 34,847 Mutual funds 1,023 — — 1,023 Derivative contracts (recorded in Other assets) — 3,512 — 3,512 Liabilities: Derivative contracts (recorded in Other liabilities) — 45,432 — 45,432 Available-for-sale investments Government securities: Fair value of the Company's investment in government instruments are estimated using quoted market prices. Accordingly, the Company uses Level 1 inputs. Fair value through net income investments Mutual funds: Fair value of the Company's investment in mutual funds is estimated using quoted market prices. Accordingly, the Company uses Level 1 inputs. Derivative contracts: The estimated fair value of the derivative contracts is determined using industry standard valuation models. These models project future cash flows and discount the future amounts to a present value using market-based observable inputs, including interest rate curves and other factors. Accordingly, the Company uses Level 2 inputs for its fair value estimates. Investments measured using net asset value ("NAV") 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, 2021 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss: The following tables provide details about the reclassifications from accumulated other comprehensive loss for the three and nine months ended September 30, 2021 and 2020 (amounts in thousands): Three Months Ended September 30, Gains and losses on cash flow hedges 2021 2020 Affected line in the Consolidated Income Statement Interest rate swaps $ (3,165) $ (3,175) Interest expense, net Income tax effect of item above 679 692 Income tax expense Total losses on cash flow hedges $ (2,486) $ (2,483) Net of tax Nine Months Ended September 30, Gains and losses on cash flow hedges 2021 2020 Affected line in the Consolidated Income Statement Interest rate swaps $ (9,644) $ (6,488) Interest expense, net Income tax effect of item above 2,032 1,461 Income tax expense Total losses on cash flow hedges $ (7,612) $ (5,027) 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, 2021 and 2020 (amounts in thousands): Three Months Ended September 30, 2021 Debt Securities Cash Flow Currency Translation Accumulated Other Available-for-sale Hedges Adjustments Comprehensive Loss (1) Balance at beginning of period $ (15) $ (19,671) $ (215,673) $ (235,359) Other comprehensive (loss)/gain before reclassifications (50) 3,036 (34,894) (31,908) Reclassifications, net — 2,486 — 2,486 Net current period other comprehensive (loss)/gain (50) 5,522 (34,894) (29,422) Balance at end of period $ (65) $ (14,149) $ (250,567) $ (264,781) 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)/gain before reclassifications (30) (1,089) 32,288 31,169 Reclassifications, net — 2,483 — 2,483 Net current period other comprehensive (loss)/gain (30) 1,394 32,288 33,652 Balance at end of period $ 147 $ (36,015) $ (277,692) $ (313,560) (1) Net of deferred taxes for unrealized (gains)/losses from cash flow hedges of $(1.0) million and $0.5 million for the three months ended September 30, 2021 and 2020, respectively. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings per Share: Basic 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, 2021. 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. On July 29, 2021, the Board of Directors of the Company ("Board of Directors") approved a share repurchase program to purchase up to $150.0 million of the Company's outstanding shares of common stock. During the three months ended September 30, 2021, the Company repurchased 1,796,874 shares of it's common stock for approximately $73.8 million, at an average price of $41.10 per share. The Company's practice is to retire the shares it repurchases. On October 28, 2021, the Board of Directors authorized an increase to the existing program. Refer to Note 15 . The following tables provide a reconciliation between the computation of basic EPS and diluted EPS for the three and nine months ended September 30, 2021 and 2020 (amounts in thousands, except per share amounts): Three Months Ended September 30, 2021 2020 Net Income Attributable to PRA Group, Inc. Weighted EPS Net Income Attributable to PRA Group, Inc. Weighted EPS Basic EPS $ 34,480 45,305 $ 0.76 $ 42,492 45,579 $ 0.93 Dilutive effect of nonvested share awards 351 — 561 (0.01) Diluted EPS $ 34,480 45,656 $ 0.76 $ 42,492 46,140 $ 0.92 Nine Months Ended September 30, 2021 2020 Net Income Attributable to PRA Group, Inc. Weighted EPS Net Income Attributable to PRA Group, Inc. Weighted EPS Basic EPS $ 148,882 45,594 $ 3.27 $ 119,541 45,526 $ 2.63 Dilutive effect of nonvested share awards 326 (0.03) 445 (0.03) Diluted EPS $ 148,882 45,920 $ 3.24 $ 119,541 45,971 $ 2.60 There were no options outstanding, antidilutive or otherwise, as of September 30, 2021 and 2020. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
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. At September 30, 2021, 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 $46.0 million and $97.0 million as of September 30, 2021 and December 31, 2020, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments And Contingencies | Commitments and Contingencies: Employment Agreements: The Company has entered into employment agreements with each of its U.S. executive officers, which expire on December 31, 2023. Such agreements provide for base salary payments as well as potential discretionary bonuses that consider the Company’s overall performance against its short and long-term financial and strategic objectives. The agreements also contain customary confidentiality and non-compete provisions. At September 30, 2021, estimated future compensation under these agreements was approximate ly $14.6 million. Outside the U.S., the Company has entered into employment agreements with certain employees pursuant to local country regulations. Generally, these agreements do not have expiration dates. As a result 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 $14.6 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, 2021, was $873.7 million. Finance Receivables: Certain agreements for the purchase of finance receivables portfolios contain provisions that may, in limited circumstances, require the Company to refund a portion or all of the collections subsequently received by the Company on particular accounts. The potential refunds as of the balance sheet date are not considered to be significant. Litigation and Regulatory Matters: The Company 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, 2021, where the range of loss can be estimated, was not material. |
Subsequent Events (Notes)
Subsequent Events (Notes) | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events:On October 28, 2021, the Board of Directors approved an increase of $80.0 million to the Company's existing share repurchase program under which the Company was previously authorized to repurchase up to $150.0 million of its outstanding common stock. Repurchases maybe made from time-to-time in open market transactions, through privately negotiated transactions, in block transactions,through purchases made in accordance with trading plans adopted under Rule 10b5-1 of the Securities Exchange Act of 1934 or other methods, subject to market and/or other conditions and applicable regulatory requirements. The share repurchase program does not obligate the Company to repurchase any specified amount of shares, remains subject to the discretion of the Board of Directors and, subject to compliance with applicable laws, may be modified, suspended or discontinued at any time. |
Organization and Business (Poli
Organization and Business (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of presentation: The Consolidated Financial Statements of the Company are prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). 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, 2021, its Consolidated Income Statements and Statements of Comprehensive Income/(Loss) for the three and nine months ended September 30, 2021 and 2020, and its Consolidated Statements of Changes in Equity and Statements of Cash Flows for the nine months ended September 30, 2021 and 2020, have been included. The Company's Consolidated Income Statements for the three and nine months ended September 30, 2021 may not be indicative of future results. |
Consolidation | 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 of whether changes in the facts and circumstances regarding the Company’s involvement with an entity cause the Company’s consolidation conclusion to change. |
Segments | Segments : Under the guidance of the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") ASC Topic 280 "Segment Reporting" ("ASC 280"), the Company has determined that it has two 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. |
New Accounting Pronouncements | Recently Issued Accounting Standards: Recently issued accounting standards 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, the standard 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. The Company adopted ASU 2019-12 on January 1, 2021 with no material impact to its financial statements upon adoption. 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. The Company adopted ASU 2020-01 on January 1, 2021 with no impact to its financial statements upon adoption. Accounting for Convertible Instruments Effective January 1, 2021, the Company early adopted ASU 2020-06. Refer to Note 2 for details. Reference Rate Reform In January 2021, the FASB issued ASU 2021-01, "Reference Rate Reform (Topic 848): Overall" ("ASU 2021-01"). ASU 2021-01 expands the scope of ASC 848 to include derivatives affected by the discounting transition for certain optional expedients and exceptions. ASU 2021-01 is effective immediately for a limited time through December 31, 2022. The Company is evaluating the impact of ASU 2021-01 but does not expect it to have a material impact on its financial statements. Recently issued accounting standards not yet adopted: The Company does not expect that any other recently issued accounting pronouncements will have a material effect on its Consolidated Financial Statements. |
Change in Accounting Principle
Change in Accounting Principle (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Pronouncements | Recently Issued Accounting Standards: Recently issued accounting standards 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, the standard 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. The Company adopted ASU 2019-12 on January 1, 2021 with no material impact to its financial statements upon adoption. 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. The Company adopted ASU 2020-01 on January 1, 2021 with no impact to its financial statements upon adoption. Accounting for Convertible Instruments Effective January 1, 2021, the Company early adopted ASU 2020-06. Refer to Note 2 for details. Reference Rate Reform In January 2021, the FASB issued ASU 2021-01, "Reference Rate Reform (Topic 848): Overall" ("ASU 2021-01"). ASU 2021-01 expands the scope of ASC 848 to include derivatives affected by the discounting transition for certain optional expedients and exceptions. ASU 2021-01 is effective immediately for a limited time through December 31, 2022. The Company is evaluating the impact of ASU 2021-01 but does not expect it to have a material impact on its financial statements. Recently issued accounting standards not yet adopted: 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, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Revenue And Long-Lived Assets Held By Geographical Location | The following tables show the amount of revenue generated for the three and nine months ended September 30, 2021 and 2020, and long-lived assets held at September 30, 2021 and 2020, 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, 2021 Three Months Ended September 30, 2020 Revenues (2) Long-Lived Assets Revenues (2) Long-Lived Assets United States $ 157,124 $ 90,980 $ 172,286 $ 98,049 United Kingdom 42,388 2,040 34,387 2,578 Other (1) 64,186 12,745 61,191 8,805 Total $ 263,698 $ 105,765 $ 267,864 $ 109,432 As of and for the As of and for the Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020 Revenues (2) Long-Lived Assets Revenues (2) Long-Lived Assets United States $ 503,994 $ 90,980 $ 517,914 $ 98,049 United Kingdom 133,024 2,040 98,768 2,578 Other (1) 201,778 12,745 174,876 8,805 Total $ 838,796 $ 105,765 $ 791,558 $ 109,432 (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. |
Finance Receivables, net (Table
Finance Receivables, net (Tables) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Receivables [Abstract] | ||
Schedule of Finance Receivables, Net | Finance receivables, net consisted of the following at September 30, 2021 and December 31, 2020 (amounts in thousands): September 30, 2021 December 31, 2020 Amortized cost $ — $ — Negative allowance for expected recoveries (1) 3,449,939 3,514,788 Balance at end of period $ 3,449,939 $ 3,514,788 (1) The negative allowance balance includes certain portfolios of nonperforming loans for which the Company holds a beneficial interest representing approximatel y 1% of the | |
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, 2021 and 2020 were as follows (amounts in thousands): Three Months Ended September 30, 2021 Core Insolvency Total Balance at beginning of period $ 2,894,963 $ 454,075 $ 3,349,038 Initial negative allowance for expected recoveries - portfolio acquisitions (1) 374,645 17,302 391,947 Foreign currency translation adjustment (52,650) (5,558) (58,208) Recoveries applied to negative allowance (2) (230,237) (46,421) (276,658) Changes in expected recoveries (3) 40,583 3,237 43,820 Balance at end of period $ 3,027,304 $ 422,635 $ 3,449,939 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, 2021 and 2020 were as follows (amounts in thousands): Three Months Ended September 30, 2021 Core Insolvency Total Face value $ 2,499,453 $ 82,704 $ 2,582,157 Noncredit discount (280,213) (6,355) (286,568) Allowance for credit losses at acquisition (1,844,595) (59,047) (1,903,642) Purchase price $ 374,645 $ 17,302 $ 391,947 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, 2021 and 2020 were as follows (amounts in thousands): Three Months Ended September 30, 2021 Core Insolvency Total Allowance for credit losses at acquisition $ (1,844,595) $ (59,047) $ (1,903,642) Writeoffs, net 1,844,595 59,047 1,903,642 Expected recoveries 374,645 17,302 391,947 Initial negative allowance for expected recoveries $ 374,645 $ 17,302 $ 391,947 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 were calculated as follows for the three months ended September 30, 2021 and 2020 (amounts in thousands): Three Months Ended September 30, 2021 Core Insolvency Total Recoveries (a) $ 429,166 $ 60,397 $ 489,563 Less - amounts reclassified to portfolio income 198,929 13,976 212,905 Recoveries applied to negative allowance $ 230,237 $ 46,421 $ 276,658 Three Months Ended September 30, 2020 Core Insolvency Total Recoveries (a) $ 470,056 $ 52,667 $ 522,723 Less - amounts reclassified to portfolio income 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 cash-based adjustments. (3) Changes in expected recoveries Changes in expected recoveries consisted of the following for the three months ended September 30, 2021 and 2020 (amounts in thousands): Three Months Ended September 30, 2021 Core Insolvency Total Changes in expected future recoveries $ 4,114 $ (6,026) $ (1,912) Recoveries received in excess of forecast 36,469 9,263 45,732 Changes in expected recoveries $ 40,583 $ 3,237 $ 43,820 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 In order to make estimates of future cash collections, the Company considered historical performance, current economic forecasts, short-term and long-term growth in the various geographies in which the Company operates and consumer habits. The Company considered recent collection activity in its determination to adjust assumptions related to near-term estimated remaining collections ("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. Changes in expected recoveries for the three months ended September 30, 2021 were a net positive $43.8 million. This reflects $45.7 million in recoveries received in excess of forecast, which was largely due to cash collections overperformance in the quarter partially offset by a $1.9 million adjustment to changes in expected future recoveries. The changes in expected future recoveries includes the Company's assumption that the majority of the current period overperformance was due to acceleration of future collections. The Company made adjustments in some geographies to increase near-term expected collections, bringing them in line with recent performance trends in collections, with corresponding reductions made later in the forecast period. Changes in expected recoveries for the three months ended September 30, 2020 were a net positive $25.4 million. This reflected $89.0 million in recoveries received during the third quarter of 2020 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 reflected 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 in the quarter that it deemed appropriate given the environment in which the Company was operating. Nine Months Ended September 30, 2021 and 2020 Changes in the negative allowance for expected recoveries by portfolio segment for the nine months ended September 30, 2021 and 2020 were as follows (amounts in thousands): For the Nine Months Ended September 30, 2021 Core Insolvency Total Balance at beginning of period $ 3,019,477 $ 495,311 $ 3,514,788 Initial negative allowance for expected recoveries - portfolio acquisitions (1) 712,687 57,898 770,585 Foreign currency translation adjustment (56,387) (2,549) (58,936) Recoveries applied to negative allowance (2) (797,648) (136,354) (934,002) Changes in expected recoveries (3) 149,175 8,329 157,504 Balance at end of period $ 3,027,304 $ 422,635 $ 3,449,939 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, 2021 and 2020 were as follows (amounts in thousands): For the Nine Months Ended September 30, 2021 Core Insolvency Total Face value $ 4,863,736 $ 277,831 $ 5,141,567 Noncredit discount (585,400) (19,368) (604,768) Allowance for credit losses at acquisition (3,565,649) (200,565) (3,766,214) Purchase price $ 712,687 $ 57,898 $ 770,585 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, 2021 and 2020 were as follows (amounts in thousands): For the Nine Months Ended September 30, 2021 Core Insolvency Total Allowance for credit losses at acquisition $ (3,565,649) $ (200,565) $ (3,766,214) Writeoffs, net 3,565,649 200,565 3,766,214 Expected recoveries 712,687 57,898 770,585 Initial negative allowance for expected recoveries $ 712,687 $ 57,898 $ 770,585 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 were calculated as follows for the nine months ended September 30, 2021 and 2020 (amounts in thousands): For the Nine Months Ended September 30, 2021 Core Insolvency Total Recoveries (a) $ 1,415,619 $ 182,097 $ 1,597,716 Less - amounts reclassified to portfolio income 617,971 45,743 663,714 Recoveries applied to negative allowance $ 797,648 $ 136,354 $ 934,002 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 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 cash-based adjustments. (3) Changes in expected recoveries Changes in expected recoveries consisted of the following for the nine months ended September 30, 2021 and 2020 (amounts in thousands): For the Nine Months Ended September 30, 2021 Core Insolvency Total Changes in expected future recoveries $ (47,738) $ (18,871) $ (66,609) Recoveries received in excess of forecast 196,913 27,200 224,113 Changes in expected recoveries $ 149,175 $ 8,329 $ 157,504 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 Changes in expected recoveries for the nine months ended September 30, 2021 were a net positive $157.5 million . The changes were the net result of recoveries in excess of forecast of $224.1 million from significant cash collections overperformance in the current period reduced by a $66.6 million negative adjustment to changes in expected future recoveries. The changes in expected future recoveries includes the Company's assumption that the majority of the current period overperformance was due to acceleration of future collections. The Company made adjustments in some geographies to increase near-term expected collections, bringing them in line with recent performance trends in collections, with corresponding reductions made later in the forecast period. |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Investments | Investments consisted of the following at September 30, 2021 and December 31, 2020 (amounts in thousands): September 30, 2021 December 31, 2020 Debt securities Available-for-sale $ 69,406 $ 5,368 Equity securities Exchange traded funds — 34,847 Private equity funds 5,150 6,123 Mutual funds 2,670 1,023 Equity method investments 7,945 8,398 Total investments $ 85,171 $ 55,759 |
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, 2021 and December 31, 2020 were as follows (amounts in thousands): September 30, 2021 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value Available-for-sale Government securities $ 69,469 $ — $ 63 $ 69,406 December 31, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value Available-for-sale Government securities $ 5,239 $ 129 $ — $ 5,368 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Goodwill | The changes in goodwill for the three and nine months ended September 30, 2021 and 2020, were as follows (amounts in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Balance at beginning of period $ 492,843 $ 444,507 $ 492,989 $ 480,794 Change in foreign currency translation adjustment (10,364) 11,801 (10,510) (24,486) Balance at end of period $ 482,479 $ 456,308 $ 482,479 $ 456,308 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Lease, Cost | The components of lease expense for the three and nine months ended September 30, 2021 and 2020, were as follows (amounts in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Operating lease expense $ 3,072 $ 3,035 $ 9,096 $ 9,072 Short-term lease expense 695 661 2,118 2,030 Sublease income (81) — (81) — Total lease expense $ 3,686 $ 3,696 $ 11,133 $ 11,102 Supplemental cash flow information and non-cash activity related to leases for the nine months ended September 30, 2021 and 2020 were as follows (amounts in thousands): Nine Months Ended September 30, 2021 2020 Cash paid for amounts included in the measurement of operating lease liabilities $ 8,946 $ 9,179 ROU assets obtained in exchange for operating lease obligations 6,436 (10,465) Lease term and discount rate information related to operating leases were as follows as of the dates indicated: Nine Months Ended September 30, 2021 2020 Weighted-average remaining lease term (years) 8.6 9.5 Weighted-average discount rate 4.64 % 4.82 % |
Lessee, Operating Lease, Liability, Maturity | Maturities of lease liabilities at September 30, 2021 are as follows for the following periods (amounts in thousands): Operating Leases For the three months ending December 31, 2021 $ 3,068 For the year ending December 31, 2022 10,649 For the year ending December 31, 2023 8,245 For the year ending December 31, 2024 7,791 For the year ending December 31, 2025 7,600 Thereafter 31,569 Total lease payments $ 68,922 Less: imputed interest 12,513 Total present value of lease liabilities $ 56,409 |
Borrowings (Tables)
Borrowings (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The Company's borrowings consisted of the following as of September 30, 2021 and December 31, 2020 (amounts in thousands): September 30, 2021 December 31, 2020 Americas revolving credit (1) $ 120,850 $ 405,706 Europe revolving credit 957,554 1,171,890 Term loan 462,500 470,000 Senior Notes 650,000 300,000 Convertible Notes 345,000 345,000 2,535,904 2,692,596 Less: Debt discount and issuance costs (15,001) (31,307) Total $ 2,520,903 $ 2,661,289 |
Schedule of Maturities of Long-term Debt | The following principal payments are due on the Company's borrowings as of September 30, 2021 for the 12-month periods ending September 30, (amounts in thousands): 2022 $ 10,949 2023 1,312,728 2024 10,000 2025 310,000 2026 542,227 Thereafter 350,000 Total $ 2,535,904 |
Schedule of Liability and Equity Components | The balances of the liability and equity components of the Company's convertible notes outstanding as of September 30, 2021 and December 31, 2020, were as follows (amounts in thousands): September 30, 2021 December 31, 2020 Liability component - principal amount $ 345,000 $ 345,000 Unamortized debt discount — (20,603) Unamortized debt issuance costs (2,902) (3,335) Liability component - net carrying amount $ 342,098 $ 321,062 Equity component $ — $ 44,910 |
Schedule of Debt Interest Expense | Interest expense related to the Company's convertible notes for the three and nine months ended September 30, 2021 and 2020, were as follows (amounts in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (1) Interest expense - stated coupon rate $ 3,019 $ 3,695 $ 9,057 $ 14,045 Interest expense - amortization of debt discount — 2,388 — 8,852 Interest expense - amortization of debt issuance costs 412 432 1,234 1,644 Total interest expense - convertible notes $ 3,431 $ 6,515 $ 10,291 $ 24,541 (1) 2020 amounts include interest expense related to the 3.00% Convertible Senior Notes due August 1, 2020, which were repaid in the third quarter of 2020. Refer to Note 7 of the Company's Consolidated Financial Statements included in Item 8 of the 2020 Form 10-K. |
Derivatives (Tables)
Derivatives (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The following tables summarize the fair value of derivative instruments in the Company's Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020 (amounts in thousands): September 30, 2021 December 31, 2020 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives designated as hedging instruments: Interest rate contracts Other assets $ 2,815 Other assets $ — Interest rate contracts Other liabilities 22,181 Other liabilities 43,017 Derivatives not designated as hedging instruments: Foreign currency contracts Other assets 5,521 Other assets 3,512 Foreign currency contracts Other liabilities 1,944 Other liabilities 2,415 |
Schedule of Cash Flow Hedging Instruments, Statements of Financial Performance and Financial Position, Location | The following tables summarize the effects of derivatives designated as cash flow hedging instruments on the Consolidated Financial Statements for the three and nine months ended September 30, 2021 and 2020 (amounts in thousands): Gain or (loss) recognized in OCI, net of tax Three Months Ended September 30, Nine Months Ended September 30, Derivatives designated as cash flow hedging instruments 2021 2020 2021 2020 Interest rate contracts $ 3,036 $ (1,089) $ 11,588 $ (27,953) Gain or (loss) reclassified from OCI into income Three Months Ended September 30, Nine Months Ended September 30, Location of gain or (loss) reclassified from OCI into income 2021 2020 2021 2020 Interest expense, net $ (3,165) $ (3,175) $ (9,644) $ (6,488) |
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, 2021 and 2020 (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 2021 2020 Foreign currency contracts Foreign exchange gain $ 8,197 $ 2,280 Foreign currency contracts Interest expense, net 130 (322) 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 2021 2020 Foreign currency contracts Foreign exchange gain $ 10,741 $ 27,437 Foreign currency contracts Interest expense, net 475 (2,135) |
Fair Value Measurements and D_2
Fair Value Measurements and Disclosures (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
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, 2021 and December 31, 2020 (amounts in thousands): September 30, 2021 December 31, 2020 Carrying Estimated Carrying Estimated Financial assets: Cash and cash equivalents $ 56,545 $ 56,545 $ 108,613 $ 108,613 Restricted cash 4,752 4,752 12,434 12,434 Finance receivables, net 3,449,939 3,354,634 3,514,788 3,541,159 Financial liabilities: Interest-bearing deposits 132,612 132,612 132,739 132,739 Revolving lines of credit 1,078,404 1,078,404 1,577,596 1,577,596 Term loan 462,500 462,500 470,000 470,000 Senior Notes 650,000 671,989 300,000 324,408 Convertible Notes 345,000 382,484 324,397 376,012 |
Schedule of financial instruments required to be carried at fair value | The carrying amounts in the following tables are measured at fair value on a recurring basis in the accompanying Consolidated Balance Sheets at September 30, 2021 and December 31, 2020 (amounts in thousands): Fair Value Measurements as of September 30, 2021 Level 1 Level 2 Level 3 Total Assets: Available-for-sale investments Government securities $ 69,406 $ — $ — $ 69,406 Fair value through net income Mutual funds 2,670 — — 2,670 Derivative contracts (recorded in Other assets) — 8,336 — 8,336 Liabilities: Derivative contracts (recorded in Other liabilities) — 24,125 — 24,125 Fair Value Measurements as of December 31, 2020 Level 1 Level 2 Level 3 Total Assets: Available-for-sale investments Government securities $ 5,368 $ — $ — $ 5,368 Fair value through net income Exchange traded funds 34,847 — — 34,847 Mutual funds 1,023 — — 1,023 Derivative contracts (recorded in Other assets) — 3,512 — 3,512 Liabilities: Derivative contracts (recorded in Other liabilities) — 45,432 — 45,432 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
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, 2021 and 2020 (amounts in thousands): Three Months Ended September 30, 2021 Debt Securities Cash Flow Currency Translation Accumulated Other Available-for-sale Hedges Adjustments Comprehensive Loss (1) Balance at beginning of period $ (15) $ (19,671) $ (215,673) $ (235,359) Other comprehensive (loss)/gain before reclassifications (50) 3,036 (34,894) (31,908) Reclassifications, net — 2,486 — 2,486 Net current period other comprehensive (loss)/gain (50) 5,522 (34,894) (29,422) Balance at end of period $ (65) $ (14,149) $ (250,567) $ (264,781) 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)/gain before reclassifications (30) (1,089) 32,288 31,169 Reclassifications, net — 2,483 — 2,483 Net current period other comprehensive (loss)/gain (30) 1,394 32,288 33,652 Balance at end of period $ 147 $ (36,015) $ (277,692) $ (313,560) (1) Net of deferred taxes for unrealized (gains)/losses from cash flow hedges of $(1.0) million and $0.5 million for the three months ended September 30, 2021 and 2020, respectively. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Reconciliation Between the Computation of Basic and Diluted EPS | The following tables provide a reconciliation between the computation of basic EPS and diluted EPS for the three and nine months ended September 30, 2021 and 2020 (amounts in thousands, except per share amounts): Three Months Ended September 30, 2021 2020 Net Income Attributable to PRA Group, Inc. Weighted EPS Net Income Attributable to PRA Group, Inc. Weighted EPS Basic EPS $ 34,480 45,305 $ 0.76 $ 42,492 45,579 $ 0.93 Dilutive effect of nonvested share awards 351 — 561 (0.01) Diluted EPS $ 34,480 45,656 $ 0.76 $ 42,492 46,140 $ 0.92 Nine Months Ended September 30, 2021 2020 Net Income Attributable to PRA Group, Inc. Weighted EPS Net Income Attributable to PRA Group, Inc. Weighted EPS Basic EPS $ 148,882 45,594 $ 3.27 $ 119,541 45,526 $ 2.63 Dilutive effect of nonvested share awards 326 (0.03) 445 (0.03) Diluted EPS $ 148,882 45,920 $ 3.24 $ 119,541 45,971 $ 2.60 |
Organization and Business (Deta
Organization and Business (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)segment | Sep. 30, 2020USD ($) | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Number of reportable segments | segment | 1 | |||
Revenues | $ 263,698 | $ 267,864 | $ 838,796 | $ 791,558 |
Long-Lived Assets | 105,765 | 109,432 | 105,765 | 109,432 |
UNITED STATES | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenues | 157,124 | 172,286 | 503,994 | 517,914 |
Long-Lived Assets | 90,980 | 98,049 | 90,980 | 98,049 |
UNITED KINGDOM | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenues | 42,388 | 34,387 | 133,024 | 98,768 |
Long-Lived Assets | 2,040 | 2,578 | 2,040 | 2,578 |
Outside the United States | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenues | 64,186 | 61,191 | 201,778 | 174,876 |
Long-Lived Assets | $ 12,745 | $ 8,805 | $ 12,745 | $ 8,805 |
Change in Accounting Principl_2
Change in Accounting Principle (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Jan. 01, 2021 | Dec. 31, 2020 | May 26, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Retained earnings | $ 1,654,544 | $ 1,654,544 | $ 1,511,970 | ||||
Reduction in interest expense | 29,599 | $ 33,692 | 91,987 | $ 106,319 | |||
Net income | 36,670 | $ 47,829 | 159,111 | $ 131,093 | |||
Note Due 2023 | Convertible Senior Notes | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Interest rate on debt | 3.50% | ||||||
Accounting Standards Update 2020-06 | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Retained earnings | $ 12,000 | ||||||
Reduction in additional paid in capital | 26,700 | ||||||
Convertible debt | $ 19,800 | ||||||
Reduction in interest expense | 2,100 | 6,100 | |||||
Net income | $ 1,500 | $ 4,800 | |||||
Earnings per share (in dollars per share) | $ 0.03 | $ 0.11 |
Finance Receivables, net (Rollf
Finance Receivables, net (Rollforward) (Details) - USD ($) $ in Thousands | 9 Months Ended | |||||
Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | |
Receivables [Abstract] | ||||||
Amortized cost | $ 0 | $ 0 | ||||
Negative allowance for expected recoveries | 3,449,939 | $ 3,349,038 | 3,514,788 | $ 3,332,748 | $ 3,351,532 | $ 3,514,165 |
Balance at end of period | $ 3,449,939 | $ 3,514,788 | ||||
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 | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||||
Balance at beginning of period | $ 3,349,038 | $ 3,351,532 | $ 3,514,788 | $ 3,514,165 |
Initial negative allowance for expected recoveries - acquisitions | 391,947 | 177,600 | 770,585 | 615,336 |
Foreign currency translation adjustment | (58,208) | 60,686 | (58,936) | (45,085) |
Recoveries applied to negative allowance | (276,658) | (282,473) | (934,002) | (784,056) |
Changes in estimated recoveries | 43,820 | 25,403 | 157,504 | 32,388 |
Balance at end of period | 3,449,939 | 3,332,748 | 3,449,939 | 3,332,748 |
Core | ||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||||
Balance at beginning of period | 2,894,963 | 2,908,136 | 3,019,477 | 3,051,426 |
Initial negative allowance for expected recoveries - acquisitions | 374,645 | 159,069 | 712,687 | 537,477 |
Foreign currency translation adjustment | (52,650) | 53,934 | (56,387) | (42,065) |
Recoveries applied to negative allowance | (230,237) | (246,738) | (797,648) | (677,211) |
Changes in estimated recoveries | 40,583 | 23,744 | 149,175 | 28,518 |
Balance at end of period | 3,027,304 | 2,898,145 | 3,027,304 | 2,898,145 |
Insolvency | ||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||||
Balance at beginning of period | 454,075 | 443,396 | 495,311 | 462,739 |
Initial negative allowance for expected recoveries - acquisitions | 17,302 | 18,531 | 57,898 | 77,859 |
Foreign currency translation adjustment | (5,558) | 6,752 | (2,549) | (3,020) |
Recoveries applied to negative allowance | (46,421) | (35,735) | (136,354) | (106,845) |
Changes in estimated recoveries | 3,237 | 1,659 | 8,329 | 3,870 |
Balance at end of period | $ 422,635 | $ 434,603 | $ 422,635 | $ 434,603 |
Finance Receivables, net (Portf
Finance Receivables, net (Portfolio Acquisitions) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Face value | $ 2,582,157 | $ 1,198,703 | $ 5,141,567 | $ 4,652,507 |
Noncredit discount | (286,568) | (168,288) | (604,768) | (562,998) |
Allowance for credit losses at acquisition | (1,903,642) | (852,815) | (3,766,214) | (3,474,173) |
Purchase price | 391,947 | 177,600 | 770,585 | 615,336 |
Core | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Face value | 2,499,453 | 1,106,910 | 4,863,736 | 4,286,296 |
Noncredit discount | (280,213) | (159,766) | (585,400) | (533,465) |
Allowance for credit losses at acquisition | (1,844,595) | (788,075) | (3,565,649) | (3,215,354) |
Purchase price | 374,645 | 159,069 | 712,687 | 537,477 |
Insolvency | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Face value | 82,704 | 91,793 | 277,831 | 366,211 |
Noncredit discount | (6,355) | (8,522) | (19,368) | (29,533) |
Allowance for credit losses at acquisition | (59,047) | (64,740) | (200,565) | (258,819) |
Purchase price | $ 17,302 | $ 18,531 | $ 57,898 | $ 77,859 |
Finance Receivables, net Fina_2
Finance Receivables, net Finance Receivables, net (Initial Negative Allowance for Recoveries) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Allowance for credit losses at acquisition | $ (1,903,642) | $ (852,815) | $ (3,766,214) | $ (3,474,173) |
Writeoffs, net | 1,903,642 | 852,815 | 3,766,214 | 3,474,173 |
Expected recoveries | 391,947 | 177,600 | 770,585 | 615,336 |
Purchase price | 391,947 | 177,600 | 770,585 | 615,336 |
Core | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Allowance for credit losses at acquisition | (1,844,595) | (788,075) | (3,565,649) | (3,215,354) |
Writeoffs, net | 1,844,595 | 788,075 | 3,565,649 | 3,215,354 |
Expected recoveries | 374,645 | 159,069 | 712,687 | 537,477 |
Purchase price | 374,645 | 159,069 | 712,687 | 537,477 |
Insolvency | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Allowance for credit losses at acquisition | (59,047) | (64,740) | (200,565) | (258,819) |
Writeoffs, net | 59,047 | 64,740 | 200,565 | 258,819 |
Expected recoveries | 17,302 | 18,531 | 57,898 | 77,859 |
Purchase price | $ 17,302 | $ 18,531 | $ 57,898 | $ 77,859 |
Finance Receivables, net Fina_3
Finance Receivables, net Finance Receivables, net (Recoveries) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Recoveries | $ 489,563 | $ 522,723 | $ 1,597,716 | $ 1,534,612 |
Less - amounts reclassified to portfolio income | 212,905 | 240,250 | 663,714 | 750,556 |
Recoveries applied to negative allowance | 276,658 | 282,473 | 934,002 | 784,056 |
Core | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Recoveries | 429,166 | 470,056 | 1,415,619 | 1,371,988 |
Less - amounts reclassified to portfolio income | 198,929 | 223,318 | 617,971 | 694,777 |
Recoveries applied to negative allowance | 230,237 | 246,738 | 797,648 | 677,211 |
Insolvency | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Recoveries | 60,397 | 52,667 | 182,097 | 162,624 |
Less - amounts reclassified to portfolio income | 13,976 | 16,932 | 45,743 | 55,779 |
Recoveries applied to negative allowance | $ 46,421 | $ 35,735 | $ 136,354 | $ 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, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Changes in expected future recoveries | $ (1,912) | $ (63,587) | $ (66,609) | $ (183,911) |
Recoveries received in excess of forecast | 45,732 | 88,990 | 224,113 | 216,299 |
Changes in expected recoveries | 43,820 | 25,403 | 157,504 | 32,388 |
Core | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Changes in expected future recoveries | 4,114 | (62,999) | (47,738) | (181,433) |
Recoveries received in excess of forecast | 36,469 | 86,743 | 196,913 | 209,951 |
Changes in expected recoveries | 40,583 | 23,744 | 149,175 | 28,518 |
Insolvency | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Changes in expected future recoveries | (6,026) | (588) | (18,871) | (2,478) |
Recoveries received in excess of forecast | 9,263 | 2,247 | 27,200 | 6,348 |
Changes in expected recoveries | $ 3,237 | $ 1,659 | $ 8,329 | $ 3,870 |
Finance Receivables, net (Narra
Finance Receivables, net (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Receivables [Abstract] | ||||
Changes in estimated recoveries | $ 43,820 | $ 25,403 | $ 157,504 | $ 32,388 |
Recoveries received in excess of forecast | 45,732 | 88,990 | 224,113 | 216,299 |
Changes in expected future recoveries | $ (1,912) | $ (63,587) | $ (66,609) | $ (183,911) |
Investments - Summary of Invest
Investments - Summary of Investments (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Debt securities | ||
Available-for-sale | $ 69,406 | $ 5,368 |
Equity securities | ||
Equity method investments | 7,945 | 8,398 |
Investments | 85,171 | 55,759 |
Private equity funds | ||
Equity securities | ||
Equity securities | 5,150 | 6,123 |
Mutual funds | ||
Equity securities | ||
Equity securities | $ 2,670 | 1,023 |
Exchange traded funds | ||
Equity securities | ||
Equity securities | $ 34,847 |
Investments - Amortized Costs (
Investments - Amortized Costs (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Available-for-sale | ||
Government securities | $ 69,406 | $ 5,368 |
Government Bonds and Fixed Income Funds | ||
Available-for-sale | ||
Amortized Cost | 69,469 | 5,239 |
Gross Unrealized Gains | 0 | 129 |
Gross Unrealized Losses | 63 | 0 |
Government securities | $ 69,406 | $ 5,368 |
Investments - Narrative (Detail
Investments - Narrative (Details) | 9 Months Ended |
Sep. 30, 2021 | |
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 (Details)
Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Goodwill [Roll Forward] | ||||
Balance at beginning of period | $ 492,843 | $ 444,507 | $ 492,989 | $ 480,794 |
Change in foreign currency translation adjustment | (10,364) | 11,801 | (10,510) | (24,486) |
Balance at end of period | $ 482,479 | $ 456,308 | $ 482,479 | $ 456,308 |
Leases - Narrative (Details)
Leases - Narrative (Details) | 9 Months Ended |
Sep. 30, 2021 | |
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 | 15 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, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Leases [Abstract] | ||||
Operating lease expense | $ 3,072 | $ 3,035 | $ 9,096 | $ 9,072 |
Short-term lease expense | 695 | 661 | 2,118 | 2,030 |
Sublease income | (81) | 0 | (81) | 0 |
Total lease expense | $ 3,686 | $ 3,696 | 11,133 | 11,102 |
Cash paid for amounts included in the measurement of operating lease liabilities | 8,946 | 9,179 | ||
ROU assets obtained in exchange for operating lease obligations | $ 6,436 | $ (10,465) | ||
Weighted-average remaining lease term (years) | 8 years 7 months 6 days | 9 years 6 months | 8 years 7 months 6 days | 9 years 6 months |
Weighted-average discount rate | 4.64% | 4.82% | 4.64% | 4.82% |
Leases - Schedule of Operating
Leases - Schedule of Operating Lease Liability Maturity (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
For the three months ending December 31, 2021 | $ 3,068 | |
For the year ending December 31, 2022 | 10,649 | |
For the year ending December 31, 2023 | 8,245 | |
For the year ending December 31, 2024 | 7,791 | |
For the year ending December 31, 2025 | 7,600 | |
Thereafter | 31,569 | |
Total lease payments | 68,922 | |
Less: imputed interest | (12,513) | |
Total present value of lease liabilities | $ 56,409 | $ 57,348 |
Borrowings - Components of Borr
Borrowings - Components of Borrowings (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Debt outstanding | $ 2,535,904 | $ 2,692,596 |
Less: Debt discount and issuance costs | (15,001) | (31,307) |
Total | 2,520,903 | 2,661,289 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Debt outstanding | 462,500 | 470,000 |
Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt outstanding | 650,000 | 300,000 |
Convertible Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt outstanding | 345,000 | 345,000 |
Americas revolving credit (1) | Line of Credit | ||
Debt Instrument [Line Items] | ||
Debt outstanding | 120,850 | 405,706 |
Europe revolving credit | Line of Credit | ||
Debt Instrument [Line Items] | ||
Debt outstanding | $ 957,554 | $ 1,171,890 |
Borrowings - Long-Term Debt Mat
Borrowings - Long-Term Debt Maturities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Disclosure [Abstract] | ||
2022 | $ 10,949 | |
2023 | 1,312,728 | |
2024 | 10,000 | |
2025 | 310,000 | |
2026 | 542,227 | |
Thereafter | 350,000 | |
Total | $ 2,535,904 | $ 2,692,596 |
Borrowings - North American Rev
Borrowings - North American Revolving Credit and Term Loan (Details) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2021USD ($) | Sep. 30, 2021USD ($) | Dec. 31, 2020USD ($) | |
Credit Agreement | |||
Debt Instrument [Line Items] | |||
Credit agreement consolidated leverage ratio | 3.50 | 3.50 | |
Consolidated senior secured leverage ratio | 2.25 | 2.25 | |
Maximum cash dividends | $ 20,000,000 | ||
Credit Agreement | Minimum | |||
Debt Instrument [Line Items] | |||
Unused commitment fee | 0.30% | ||
Credit Agreement | Maximum | |||
Debt Instrument [Line Items] | |||
Unused commitment fee | 0.35% | ||
North American Credit Agreement | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 1,500,000,000 | $ 1,500,000,000 | |
Unused portion | 955,300,000 | 955,300,000 | |
Current borrowing capacity | 410,300,000 | 410,300,000 | |
Convertible Senior Notes | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 342,098,000 | $ 342,098,000 | $ 321,062,000 |
Convertible Senior Notes | Credit Agreement | |||
Debt Instrument [Line Items] | |||
Consolidated senior secured leverage ratio | 1.60 | 1.60 | |
Eurodollar Rate | Credit Agreement | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread variable rate | 2.00% | ||
Eurodollar Rate | Credit Agreement | Maximum | |||
Debt Instrument [Line Items] | |||
Basis spread variable rate | 2.25% | ||
Interest Rate Floor | |||
Debt Instrument [Line Items] | |||
Basis spread variable rate | 0.00% | ||
Line of Credit | Line of Credit | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 462,500,000 | $ 462,500,000 | |
Revolving Credit Facility | North American Credit Agreement | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 1,000,000,000 | 1,000,000,000 | |
Line of credit facility, optional increase in borrowing capacity | 500,000,000 | 500,000,000 | |
Line of credit facility, option for letters of credit | 25,000,000 | 25,000,000 | |
Line of credit facility, option to reduce borrowing capacity | 25,000,000 | 25,000,000 | |
Canadian Revolving Credit Facility | North American Credit Agreement | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 75,000,000 | $ 75,000,000 | |
Eligible Core Asset Pool | Credit Agreement | |||
Debt Instrument [Line Items] | |||
Percentage of maximum level of borrowings of ERC of eligible asset pools | 35.00% | ||
Eligible Insolvent Asset Pool | Credit Agreement | |||
Debt Instrument [Line Items] | |||
Percentage of maximum level of borrowings of ERC of insolvent asset pools | 55.00% |
Borrowings - European Revolving
Borrowings - European Revolving Credit Facility and Term Loan (Details) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2021SEK (kr) | Sep. 30, 2021USD ($) | Mar. 12, 2021USD ($) | Dec. 31, 2020USD ($) | |
Line of Credit Facility [Line Items] | ||||
Debt outstanding | $ 2,535,904 | $ 2,692,596 | ||
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 | 432,400 | |||
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 | 957,554 | $ 1,171,890 | ||
Line of Credit | European Revolving Credit Facility | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit, increase limit | $ 50,000 | |||
Maximum borrowing capacity | 1,350,000 | |||
Unused commitment fee | 1.23% | |||
Unused line fee as a percentage of margin | 35.00% | |||
Current borrowing capacity | $ 349,400 | |||
Debt instrument, covenant, maximum GIBD | 3.25 | |||
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 | 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, 2021USD ($) | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 5.2 |
Outstanding borrowings under credit facility | $ 1.1 |
Weighted average interest rate | 7.13% |
Maturity, term from last draw | 3 years |
Unused portion of credit agreement | $ 4.1 |
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 ($) | May 26, 2017USD ($) | May 26, 2017USD ($) | May 26, 2017USD ($)day | May 26, 2017USD ($)$ / shares | Sep. 30, 2021USD ($) | Dec. 31, 2020USD ($) |
Debt Instrument [Line Items] | |||||||
Carrying amount of convertible debt | $ 0 | $ 44,910,000 | |||||
Note Due 2023 | |||||||
Debt Instrument [Line Items] | |||||||
Face amount | $ 345,000,000 | $ 345,000,000 | $ 345,000,000 | $ 345,000,000 | $ 345,000,000 | ||
Stated percentage | 3.50% | 3.50% | 3.50% | 3.50% | 3.50% | ||
Minimum sales price for conversion | 130.00% | ||||||
Trading days threshold | day | 20 | ||||||
Consecutive treading days threshold | 30 | 30 | |||||
Threshold percentage used in trading price calculation | 98.00% | 98.00% | 98.00% | 98.00% | 98.00% | ||
Threshold trading days used in trading price calculation | 10 days | ||||||
Share subscription or sale period | 45 days | ||||||
Consecutive trading days used in share price calculation | 10 days | ||||||
Distribution share value, percentage in excess of sale price | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | ||
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 | $ 298,800,000 | $ 298,800,000 | $ 298,800,000 | $ 298,800,000 | ||
Carrying amount of convertible debt | 46,200,000 | 46,200,000 | 46,200,000 | 46,200,000 | 46,200,000 | ||
Debt issuance cost | $ 8,300,000 | $ 8,300,000 | 8,300,000 | $ 8,300,000 | $ 8,300,000 | ||
Equity and debt issuance costs | 9,600,000 | ||||||
Equity issuance cost | $ 1,300,000 | ||||||
Interest rate at period end | 4.00% |
Borrowings - Senior Notes (Deta
Borrowings - Senior Notes (Details) - Senior Notes - USD ($) | Sep. 22, 2021 | Aug. 27, 2020 |
2025 Notes | ||
Line of Credit Facility [Line Items] | ||
Face amount | $ 300,000,000 | |
Stated percentage | 7.375% | |
2025 Notes | On Or After September 1, 2022 | ||
Line of Credit Facility [Line Items] | ||
Redemption price of original principal amount | 103.688% | |
2025 Notes | September 1, 2023 To October 31, 2024 | ||
Line of Credit Facility [Line Items] | ||
Redemption price of original principal amount | 101.844% | |
2025 Notes | September 1, 2024 And Thereafter | ||
Line of Credit Facility [Line Items] | ||
Redemption price of original principal amount | 100.00% | |
2025 Notes | 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% | |
2025 Notes | On Or Before September 1, 2022 | Change Of Control Event | ||
Line of Credit Facility [Line Items] | ||
Redemption price of original principal amount | 101.00% | |
2029 Notes | ||
Line of Credit Facility [Line Items] | ||
Face amount | $ 350,000,000 | |
Stated percentage | 5.00% | |
2029 Notes | On Or After September 1, 2022 | ||
Line of Credit Facility [Line Items] | ||
Redemption price of original principal amount | 102.50% | |
2029 Notes | September 1, 2023 To October 31, 2024 | ||
Line of Credit Facility [Line Items] | ||
Redemption price of original principal amount | 101.25% | |
2029 Notes | September 1, 2024 And Thereafter | ||
Line of Credit Facility [Line Items] | ||
Redemption price of original principal amount | 100.00% | |
2029 Notes | 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 | 105.00% | |
Debt redemption period | 90 days | |
Redemption price, minimum percentage of principal amount outstanding | 60.00% | |
2029 Notes | On Or Before September 1, 2022 | Change Of Control Event | ||
Line of Credit Facility [Line Items] | ||
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, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Debt outstanding | $ 2,535,904 | $ 2,692,596 |
Convertible Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt outstanding | 345,000 | 345,000 |
Less: Debt discount and issuance costs | 0 | (20,603) |
Unamortized debt issuance costs | (2,902) | (3,335) |
Total | 342,098 | 321,062 |
Equity component | $ 0 | $ 44,910 |
Borrowings - Interest Expense (
Borrowings - Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Debt Instrument [Line Items] | ||||
Interest expense - amortization of debt issuance costs | $ 412 | $ 432 | $ 1,234 | $ 1,644 |
Convertible Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Interest expense - stated coupon rate | 3,019 | 3,695 | 9,057 | 14,045 |
Amortization of debt discount | 0 | 2,388 | 0 | 8,852 |
Total interest expense - convertible notes | $ 3,431 | $ 6,515 | $ 10,291 | $ 24,541 |
Convertible Senior Notes | Note Due 2020 | ||||
Debt Instrument [Line Items] | ||||
Stated percentage | 3.00% | 3.00% |
Derivatives - Schedule of Deriv
Derivatives - Schedule of Derivatives by Balance Sheet Location (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Derivatives, Fair Value [Line Items] | ||
Derivative contracts (recorded in Other liabilities) | $ 24,125 | $ 45,432 |
Derivative contracts (recorded in Other assets) | 8,336 | 3,512 |
Interest rate contracts | Designated as Hedging Instrument | Other assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative contracts (recorded in Other liabilities) | 22,181 | 43,017 |
Interest rate contracts | Designated as Hedging Instrument | Other assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative contracts (recorded in Other assets) | 2,815 | 0 |
Foreign currency contracts | Not Designated as Hedging Instrument | Other assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative contracts (recorded in Other liabilities) | 1,944 | 2,415 |
Foreign currency contracts | Not Designated as Hedging Instrument | Other assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative contracts (recorded in Other assets) | $ 5,521 | $ 3,512 |
Derivatives - Narrative (Detail
Derivatives - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Designated as Hedging Instrument | Interest rate contracts | ||
Derivative [Line Items] | ||
Net derivative gain (loss) included in OCI to be reclassified next 12 months | $ 7.1 | |
Derivative, Notional Amount1 | 867.6 | $ 967.2 |
Not Designated as Hedging Instrument | Foreign currency contracts | ||
Derivative [Line Items] | ||
Derivative, Notional Amount1 | $ 799.4 | $ 500.8 |
Maximum | ||
Derivative [Line Items] | ||
Derivative, Term of Contract | 4 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, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain or (loss) recognized in OCI, net of tax | $ 3,036 | $ (1,089) | $ 11,588 | $ (27,953) |
Interest expense, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Three Months Ended September 30, | $ (3,165) | $ (3,175) | $ (9,644) | $ (6,488) |
Derivatives - Schedule of Eff_2
Derivatives - Schedule of Effects of Derivatives Not Designated as Hedging Instruments (Details) - Foreign currency contracts - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Foreign exchange gain | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gain or (loss) recognized in income | $ 8,197 | $ 2,280 | $ 10,741 | $ 27,437 |
Interest expense, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gain or (loss) recognized in income | $ 130 | $ (322) | $ 475 | $ (2,135) |
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, 2021 | Dec. 31, 2020 |
Financial assets: | ||
Cash and cash equivalents, carrying amount | $ 56,545 | $ 108,613 |
Finance receivables, net, carrying amount | 3,449,939 | 3,514,788 |
Financial liabilities: | ||
Interest-bearing deposits, carrying value | 132,612 | 132,739 |
Restricted cash | 4,752 | 12,434 |
Carrying Amount | ||
Financial assets: | ||
Cash and cash equivalents, carrying amount | 56,545 | 108,613 |
Finance receivables, net, carrying amount | 3,449,939 | 3,514,788 |
Financial liabilities: | ||
Interest-bearing deposits, carrying value | 132,612 | 132,739 |
Outstanding borrowings under credit facility | 1,078,404 | 1,577,596 |
Term loans, carrying amount | 462,500 | 470,000 |
Senior Notes, carrying amount | 300,000 | |
Convertible debt | 345,000 | 324,397 |
Restricted cash | 4,752 | 12,434 |
Estimated Fair Value | ||
Financial assets: | ||
Cash and cash equivalents, estimated fair value | 56,545 | 108,613 |
Finance receivables, net, estimated fair value | 3,354,634 | 3,541,159 |
Financial liabilities: | ||
Interest-bearing deposits, fair value | 132,612 | 132,739 |
Revolving lines of credit, estimated fair value | 1,078,404 | 1,577,596 |
Term loans, estimated fair value | 462,500 | 470,000 |
Debt Instrument, Fair Value Disclosure | 671,989 | 324,408 |
Convertible debt, estimated fair value | $ 382,484 | 376,012 |
Restricted Cash And Cash Equivalents, Fair Value Disclosure | $ 12,434 |
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, 2021 | Dec. 31, 2020 |
Assets: | ||
Government securities | $ 69,406 | $ 5,368 |
Derivative contracts (recorded in Other assets) | 8,336 | 3,512 |
Liabilities: | ||
Derivative contracts (recorded in Other liabilities) | 24,125 | 45,432 |
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) | 8,336 | 3,512 |
Liabilities: | ||
Derivative contracts (recorded in Other liabilities) | 24,125 | 45,432 |
Level 3 | ||
Assets: | ||
Derivative contracts (recorded in Other assets) | 0 | 0 |
Liabilities: | ||
Derivative contracts (recorded in Other liabilities) | 0 | 0 |
Government securities | ||
Assets: | ||
Government securities | 69,406 | 5,368 |
Government securities | Level 1 | ||
Assets: | ||
Government securities | 69,406 | 5,368 |
Government securities | Level 2 | ||
Assets: | ||
Government securities | 0 | 0 |
Government securities | Level 3 | ||
Assets: | ||
Government securities | 0 | 0 |
Exchange traded funds | ||
Assets: | ||
Mutual funds | 34,847 | |
Exchange traded funds | Level 1 | ||
Assets: | ||
Mutual funds | 0 | |
Exchange traded funds | Level 2 | ||
Assets: | ||
Mutual funds | 0 | |
Exchange traded funds | Level 3 | ||
Assets: | ||
Mutual funds | 0 | |
Mutual funds | ||
Assets: | ||
Mutual funds | 2,670 | 1,023 |
Mutual funds | Level 1 | ||
Assets: | ||
Mutual funds | 2,670 | 1,023 |
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, 2021 | Dec. 31, 2020 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Private equity funds | $ 5.2 | $ 6.1 |
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, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Interest rate swaps | $ 85 | $ 291 | $ 294 | $ (1,367) |
Income tax effect of item above | 12,627 | 7,497 | 41,870 | 24,734 |
Net income | 36,670 | 47,829 | 159,111 | 131,093 |
Reclassification out of Accumulated Other Comprehensive Income | Cash Flow Hedges | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Interest rate swaps | (3,165) | (3,175) | (9,644) | (6,488) |
Income tax effect of item above | 679 | 692 | 2,032 | 1,461 |
Net income | $ (2,486) | $ (2,483) | $ (7,612) | $ (5,027) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Loss - AOCI by Component (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 1,474,940 | $ 1,194,862 | $ 1,373,526 | $ 1,227,013 |
Other comprehensive (loss)/income before reclassifications, net | (31,908) | 31,169 | (26,602) | (57,569) |
Reclassifications | 2,486 | 2,483 | 7,612 | 5,027 |
Other comprehensive loss attributable to PRA Group, Inc. | (29,422) | 33,652 | (18,990) | (52,542) |
Ending balance | 1,428,650 | 1,272,172 | 1,428,650 | 1,272,172 |
Deferred taxes for unrealized losses from cash flow hedges | (1,000) | 500 | 5,000 | 10,200 |
Debt Securities Available-for-sale | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (15) | 177 | 127 | (44) |
Other comprehensive (loss)/income before reclassifications, net | (50) | (30) | (192) | 191 |
Reclassifications | 0 | 0 | 0 | 0 |
Other comprehensive loss attributable to PRA Group, Inc. | (50) | (30) | (192) | 191 |
Ending balance | (65) | 147 | (65) | 147 |
Cash Flow Hedges | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (19,671) | (37,409) | (33,349) | (13,088) |
Other comprehensive (loss)/income before reclassifications, net | 3,036 | (1,089) | 11,588 | (27,954) |
Reclassifications | 2,486 | 2,483 | 7,612 | 5,027 |
Other comprehensive loss attributable to PRA Group, Inc. | 5,522 | 1,394 | 19,200 | (22,927) |
Ending balance | (14,149) | (36,015) | (14,149) | (36,015) |
Currency Translation Adjustments | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (215,673) | (309,980) | (212,569) | (247,886) |
Other comprehensive (loss)/income before reclassifications, net | (34,894) | 32,288 | (37,998) | (29,806) |
Reclassifications | 0 | 0 | 0 | 0 |
Other comprehensive loss attributable to PRA Group, Inc. | (34,894) | 32,288 | (37,998) | (29,806) |
Ending balance | (250,567) | (277,692) | (250,567) | (277,692) |
Accumulated Other Comprehensive (Loss) | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (235,359) | (347,212) | (245,791) | (261,018) |
Ending balance | $ (264,781) | $ (313,560) | $ (264,781) | $ (313,560) |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Jul. 29, 2021 | |
Earnings Per Share [Abstract] | |||||
Net income | $ 34,480,000 | $ 42,492,000 | $ 148,882,000 | $ 119,541,000 | |
Weighted Average Common Shares, Basic EPS | 45,305,000 | 45,579,000 | 45,594,000 | 45,526,000 | |
Weighted Average Common Shares, Dilutive effect of nonvested share awards | 351,000 | 561,000 | 326,000 | 445,000 | |
Weighted Average Common Shares, Diluted EPS | 45,656,000 | 46,140,000 | 45,920,000 | 45,971,000 | |
EPS, Basic (in dollars per share) | $ 0.76 | $ 0.93 | $ 3.27 | $ 2.63 | |
EPS, Dilutive effect of nonvested share awards (in dollars per share) | 0 | (0.01) | (0.03) | (0.03) | |
EPS, Diluted (in dollars per share) | $ 0.76 | $ 0.92 | $ 3.24 | $ 2.60 | |
Antidilutive options outstanding | 0 | 0 | |||
Stock repurchases authorized amount | $ 150,000,000 | $ 150,000,000 | $ 150,000,000 | ||
Stock Repurchased During Period, Shares | 1,796,874 | ||||
Stock Repurchased During Period, Value | $ 73,800,000 | ||||
Average price of shares repurchased and retired | $ 41.10 |
Income Taxes - Additional Discl
Income Taxes - Additional Disclosures (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Income Tax Disclosure [Abstract] | ||
Cash on hand related to foreign operations with permanently reinvested earnings | $ 46 | $ 97 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Sep. 30, 2021USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Future compensation under employment agreements | $ 14.6 |
Amount to be purchased under forward flow agreements | $ 873.7 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Oct. 28, 2021 | Sep. 30, 2021 | Jul. 29, 2021 |
Subsequent Event [Line Items] | |||
Stock repurchases authorized amount | $ 150,000,000 | $ 150,000,000 | |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Stock repurchases authorized amount | $ 80,000,000 |