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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Encore Capital Group Inc | NASDAQ:ECPG | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.50 | 1.17% | 43.32 | 43.32 | 44.87 | 43.7339 | 43.05 | 43.05 | 250,696 | 22:05:06 |
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
48-1090909
|
(State or other jurisdiction of
incorporation or organization)
|
(IRS Employer
Identification No.)
|
|
|
3111 Camino Del Rio North, Suite 103
San Diego, California
|
92108
|
(Address of principal executive offices)
|
(Zip code)
|
Class
|
|
Outstanding at May 1, 2018
|
Common Stock, $0.01 par value
|
|
25,917,344 shares
|
|
Page
|
|
|
|
|
|
|
Condensed Consolidated Statements of
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
217,138
|
|
|
$
|
212,139
|
|
Investment in receivable portfolios, net
|
3,024,141
|
|
|
2,890,613
|
|
||
Deferred court costs, net
|
85,887
|
|
|
79,963
|
|
||
Property and equipment, net
|
81,008
|
|
|
76,276
|
|
||
Other assets
|
276,966
|
|
|
302,728
|
|
||
Goodwill
|
957,120
|
|
|
928,993
|
|
||
Total assets
|
$
|
4,642,260
|
|
|
$
|
4,490,712
|
|
Liabilities and equity
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
244,948
|
|
|
$
|
284,774
|
|
Debt, net
|
3,607,101
|
|
|
3,446,876
|
|
||
Other liabilities
|
33,187
|
|
|
35,151
|
|
||
Total liabilities
|
3,885,236
|
|
|
3,766,801
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Redeemable noncontrolling interest
|
155,249
|
|
|
151,978
|
|
||
Equity:
|
|
|
|
||||
Convertible preferred stock, $.01 par value, 5,000 shares authorized, no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock, $.01 par value, 50,000 shares authorized, 25,912 shares and 25,801 shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively
|
259
|
|
|
258
|
|
||
Additional paid-in capital
|
45,906
|
|
|
42,646
|
|
||
Accumulated earnings
|
626,130
|
|
|
616,314
|
|
||
Accumulated other comprehensive loss
|
(61,463
|
)
|
|
(77,356
|
)
|
||
Total Encore Capital Group, Inc. stockholders’ equity
|
610,832
|
|
|
581,862
|
|
||
Noncontrolling interest
|
(9,057
|
)
|
|
(9,929
|
)
|
||
Total equity
|
601,775
|
|
|
571,933
|
|
||
Total liabilities, redeemable equity and equity
|
$
|
4,642,260
|
|
|
$
|
4,490,712
|
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
104,679
|
|
|
$
|
88,902
|
|
Investment in receivable portfolios, net
|
1,423,774
|
|
|
1,342,300
|
|
||
Deferred court costs, net
|
30,169
|
|
|
26,482
|
|
||
Property and equipment, net
|
23,089
|
|
|
23,138
|
|
||
Other assets
|
121,499
|
|
|
122,263
|
|
||
Goodwill
|
750,427
|
|
|
724,054
|
|
||
Liabilities
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
126,691
|
|
|
$
|
151,208
|
|
Debt, net
|
2,133,605
|
|
|
2,014,202
|
|
||
Other liabilities
|
2,103
|
|
|
1,494
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Revenues
|
|
|
|
||||
Revenue from receivable portfolios
|
$
|
281,009
|
|
|
$
|
249,838
|
|
Other revenues
|
35,968
|
|
|
19,971
|
|
||
Total revenues
|
316,977
|
|
|
269,809
|
|
||
Allowance reversals on receivable portfolios, net
|
9,811
|
|
|
2,132
|
|
||
Total revenues, adjusted by net allowances
|
326,788
|
|
|
271,941
|
|
||
Operating expenses
|
|
|
|
||||
Salaries and employee benefits
|
89,259
|
|
|
68,278
|
|
||
Cost of legal collections
|
53,855
|
|
|
47,957
|
|
||
Other operating expenses
|
33,748
|
|
|
26,360
|
|
||
Collection agency commissions
|
11,754
|
|
|
11,562
|
|
||
General and administrative expenses
|
39,284
|
|
|
33,318
|
|
||
Depreciation and amortization
|
10,436
|
|
|
8,625
|
|
||
Total operating expenses
|
238,336
|
|
|
196,100
|
|
||
Income from operations
|
88,452
|
|
|
75,841
|
|
||
Other (expense) income
|
|
|
|
||||
Interest expense
|
(57,462
|
)
|
|
(49,198
|
)
|
||
Other income
|
2,193
|
|
|
602
|
|
||
Total other expense
|
(55,269
|
)
|
|
(48,596
|
)
|
||
Income from continuing operations before income taxes
|
33,183
|
|
|
27,245
|
|
||
Provision for income taxes
|
(9,470
|
)
|
|
(12,067
|
)
|
||
Income from continuing operations
|
23,713
|
|
|
15,178
|
|
||
Loss from discontinued operations, net of tax
|
—
|
|
|
(199
|
)
|
||
Net income
|
23,713
|
|
|
14,979
|
|
||
Net (income) loss attributable to noncontrolling interest
|
(1,886
|
)
|
|
7,119
|
|
||
Net income attributable to Encore Capital Group, Inc. stockholders
|
$
|
21,827
|
|
|
$
|
22,098
|
|
Amounts attributable to Encore Capital Group, Inc.:
|
|
|
|
||||
Income from continuing operations
|
$
|
21,827
|
|
|
$
|
22,297
|
|
Loss from discontinued operations, net of tax
|
—
|
|
|
(199
|
)
|
||
Net income
|
$
|
21,827
|
|
|
$
|
22,098
|
|
|
|
|
|
||||
Earnings (loss) per share attributable to Encore Capital Group, Inc.:
|
|
|
|
||||
Basic earnings (loss) per share from:
|
|
|
|
||||
Continuing operations
|
$
|
0.84
|
|
|
$
|
0.86
|
|
Discontinued operations
|
$
|
—
|
|
|
$
|
(0.01
|
)
|
Net basic earnings per share
|
$
|
0.84
|
|
|
$
|
0.85
|
|
Diluted earnings per share from:
|
|
|
|
||||
Continuing operations
|
$
|
0.83
|
|
|
$
|
0.85
|
|
Discontinued operations
|
$
|
—
|
|
|
$
|
—
|
|
Net diluted earnings per share
|
$
|
0.83
|
|
|
$
|
0.85
|
|
|
|
|
|
||||
Weighted average shares outstanding:
|
|
|
|
||||
Basic
|
26,056
|
|
|
25,876
|
|
||
Diluted
|
26,416
|
|
|
26,087
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Net income
|
$
|
23,713
|
|
|
$
|
14,979
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
||||
Change in unrealized gains/losses on derivative instruments:
|
|
|
|
||||
Unrealized (loss) gain on derivative instruments
|
(669
|
)
|
|
471
|
|
||
Income tax effect
|
(160
|
)
|
|
(547
|
)
|
||
Unrealized loss on derivative instruments, net of tax
|
(829
|
)
|
|
(76
|
)
|
||
Change in foreign currency translation:
|
|
|
|
||||
Unrealized gain on foreign currency translation
|
18,505
|
|
|
14,464
|
|
||
Other comprehensive income, net of tax
|
17,676
|
|
|
14,388
|
|
||
Comprehensive income
|
41,389
|
|
|
29,367
|
|
||
Comprehensive (income) loss attributable to noncontrolling interest:
|
|
|
|
||||
Net (income) loss
|
(1,886
|
)
|
|
7,119
|
|
||
Unrealized gain on foreign currency translation
|
(1,783
|
)
|
|
(3,250
|
)
|
||
Comprehensive (income) loss attributable to noncontrolling interest
|
(3,669
|
)
|
|
3,869
|
|
||
Comprehensive income attributable to Encore Capital Group, Inc. stockholders
|
$
|
37,720
|
|
|
$
|
33,236
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Operating activities:
|
|
|
|
||||
Net income
|
$
|
23,713
|
|
|
$
|
14,979
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Loss from discontinued operations, net of income taxes
|
—
|
|
|
199
|
|
||
Depreciation and amortization
|
10,436
|
|
|
8,625
|
|
||
Other non-cash expense, net
|
12,939
|
|
|
11,904
|
|
||
Stock-based compensation expense
|
2,276
|
|
|
750
|
|
||
Deferred income taxes
|
5,071
|
|
|
(4,040
|
)
|
||
Allowance reversals on receivable portfolios, net
|
(9,811
|
)
|
|
(2,132
|
)
|
||
Changes in operating assets and liabilities
|
|
|
|
||||
Deferred court costs and other assets
|
(5,811
|
)
|
|
(2,413
|
)
|
||
Prepaid income tax and income taxes payable
|
(2,245
|
)
|
|
15,383
|
|
||
Accounts payable, accrued liabilities and other liabilities
|
(35,539
|
)
|
|
(16,095
|
)
|
||
Net cash provided by operating activities
|
1,029
|
|
|
27,160
|
|
||
Investing activities:
|
|
|
|
||||
Purchases of receivable portfolios, net of put-backs
|
(280,909
|
)
|
|
(222,885
|
)
|
||
Collections applied to investment in receivable portfolios, net
|
206,402
|
|
|
189,665
|
|
||
Purchases of property and equipment
|
(11,220
|
)
|
|
(6,081
|
)
|
||
Other, net
|
1,239
|
|
|
(9,690
|
)
|
||
Net cash used in investing activities
|
(84,488
|
)
|
|
(48,991
|
)
|
||
Financing activities:
|
|
|
|
||||
Payment of loan costs
|
(90
|
)
|
|
(2,742
|
)
|
||
Proceeds from credit facilities
|
177,449
|
|
|
199,962
|
|
||
Repayment of credit facilities
|
(87,356
|
)
|
|
(258,073
|
)
|
||
Repayment of senior secured notes
|
(1,029
|
)
|
|
(3,087
|
)
|
||
Proceeds from issuance of convertible senior notes
|
—
|
|
|
150,000
|
|
||
Repayment of convertible senior notes
|
—
|
|
|
(60,406
|
)
|
||
Proceeds from convertible hedge instruments
|
—
|
|
|
5,580
|
|
||
Taxes paid related to net share settlement of equity awards
|
(2,571
|
)
|
|
(2,065
|
)
|
||
Other, net
|
(1,765
|
)
|
|
(876
|
)
|
||
Net cash provided by financing activities
|
84,638
|
|
|
28,293
|
|
||
Net increase in cash and cash equivalents
|
1,179
|
|
|
6,462
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
3,820
|
|
|
3,704
|
|
||
Cash and cash equivalents, beginning of period
|
212,139
|
|
|
149,765
|
|
||
Cash and cash equivalents, end of period
|
$
|
217,138
|
|
|
$
|
159,931
|
|
|
Three Months Ended
March 31, |
||||
|
2018
|
|
2017
|
||
Weighted average common shares outstanding—basic
|
26,056
|
|
|
25,876
|
|
Dilutive effect of stock-based awards
|
360
|
|
|
211
|
|
Weighted average common shares outstanding—diluted
|
26,416
|
|
|
26,087
|
|
•
|
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
|
•
|
Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
|
•
|
Level 3: Unobservable inputs, including inputs that reflect the reporting entity’s own assumptions.
|
|
Fair Value Measurements as of
March 31, 2018 |
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Foreign currency exchange contracts
|
$
|
—
|
|
|
$
|
1,256
|
|
|
$
|
—
|
|
|
$
|
1,256
|
|
Interest rate cap contracts
|
—
|
|
|
3,984
|
|
|
—
|
|
|
3,984
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Foreign currency exchange contracts
|
—
|
|
|
(477
|
)
|
|
—
|
|
|
(477
|
)
|
||||
Interest rate swap agreements
|
—
|
|
|
(19
|
)
|
|
—
|
|
|
(19
|
)
|
||||
Contingent consideration
|
—
|
|
|
—
|
|
|
(8,142
|
)
|
|
(8,142
|
)
|
||||
Temporary Equity
|
|
|
|
|
|
|
|
||||||||
Redeemable noncontrolling interest
|
—
|
|
|
—
|
|
|
(155,249
|
)
|
|
(155,249
|
)
|
|
Fair Value Measurements as of
December 31, 2017 |
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Foreign currency exchange contracts
|
$
|
—
|
|
|
$
|
1,912
|
|
|
$
|
—
|
|
|
$
|
1,912
|
|
Interest rate cap contracts
|
—
|
|
|
3,922
|
|
|
—
|
|
|
3,922
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Foreign currency exchange contracts
|
—
|
|
|
(1,110
|
)
|
|
—
|
|
|
(1,110
|
)
|
||||
Interest rate swap agreements
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
(7
|
)
|
||||
Contingent consideration
|
—
|
|
|
—
|
|
|
(10,612
|
)
|
|
(10,612
|
)
|
||||
Temporary Equity
|
|
|
|
|
|
|
|
||||||||
Redeemable noncontrolling interest
|
—
|
|
|
—
|
|
|
(151,978
|
)
|
|
(151,978
|
)
|
|
Amount
|
||
Balance at December 31, 2016
|
$
|
2,531
|
|
Issuance of contingent consideration in connection with acquisition
|
10,808
|
|
|
Change in fair value of contingent consideration
|
(2,465
|
)
|
|
Payment of contingent consideration
|
(781
|
)
|
|
Effect of foreign currency translation
|
519
|
|
|
Balance at December 31, 2017
|
10,612
|
|
|
Change in fair value of contingent consideration
|
(2,274
|
)
|
|
Payment of contingent consideration
|
(232
|
)
|
|
Effect of foreign currency translation
|
36
|
|
|
Balance at March 31, 2018
|
$
|
8,142
|
|
|
Amount
|
||
Balance at December 31, 2016
|
$
|
45,755
|
|
Addition to redeemable noncontrolling interest
|
277
|
|
|
Net loss attributable to redeemable noncontrolling interest
|
(4,905
|
)
|
|
Adjustment of the redeemable noncontrolling interest to fair value
|
108,296
|
|
|
Effect of foreign currency translation attributable to redeemable noncontrolling interest
|
2,555
|
|
|
Balance at December 31, 2017
|
151,978
|
|
|
Redemption of redeemable noncontrolling interest
|
(11,536
|
)
|
|
Net income attributable to redeemable noncontrolling interest
|
1,184
|
|
|
Adjustment of the redeemable noncontrolling interest to fair value
|
12,011
|
|
|
Effect of foreign currency translation attributable to redeemable noncontrolling interest
|
1,612
|
|
|
Balance at March 31, 2018
|
$
|
155,249
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||
Balance Sheet
Location
|
|
Fair Value
|
|
Balance Sheet
Location
|
|
Fair Value
|
|||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||||
Foreign currency exchange contracts
|
Other assets
|
|
$
|
1,256
|
|
|
Other assets
|
|
$
|
1,912
|
|
Interest rate swap agreements
|
Other liabilities
|
|
(19
|
)
|
|
Other liabilities
|
|
(7
|
)
|
||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||
Foreign currency exchange contracts
|
Other liabilities
|
|
(477
|
)
|
|
Other liabilities
|
|
(1,110
|
)
|
||
Interest rate cap contracts
|
Other assets
|
|
3,984
|
|
|
Other assets
|
|
3,922
|
|
Derivatives Designated as Hedging Instruments
|
|
Gain or (Loss)
Recognized in OCI- Effective Portion |
|
Location of Gain
or (Loss) Reclassified from OCI into Income - Effective Portion |
|
Gain or (Loss)
Reclassified from OCI into Income - Effective Portion |
|
Location of
Gain or (Loss) Recognized - Ineffective Portion and Amount Excluded from Effectiveness Testing |
|
Amount of
Gain or (Loss) Recognized - Ineffective Portion and Amount Excluded from Effectiveness Testing |
||||||||||||||||||
|
Three Months Ended
March 31, |
|
|
|
Three Months Ended
March 31, |
|
|
|
Three Months Ended
March 31, |
|||||||||||||||||||
|
2018
|
|
2017
|
|
|
|
2018
|
|
2017
|
|
|
|
2018
|
|
2017
|
|||||||||||||
Foreign currency exchange contracts
|
|
$
|
(107
|
)
|
|
$
|
589
|
|
|
Salaries and
employee benefits |
|
$
|
549
|
|
|
$
|
175
|
|
|
Other (expense)
income |
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency exchange contracts
|
|
—
|
|
|
80
|
|
|
General and
administrative expenses |
|
—
|
|
|
14
|
|
|
Other (expense)
income |
|
—
|
|
|
—
|
|
||||||
Interest rate swap agreements
|
|
9
|
|
|
5
|
|
|
Interest expense
|
|
—
|
|
|
77
|
|
|
Other (expense)
income |
|
—
|
|
|
—
|
|
Derivatives Not Designated as Hedging Instruments
|
|
Location of Gain or (Loss) Recognized in income on Derivative
|
|
Amount of Gain or (Loss) Recognized in Income on Derivative
|
||||||
|
|
|
Three Months Ended
March 31, |
|||||||
|
|
|
2018
|
|
2017
|
|||||
Foreign currency exchange contracts
|
|
Other income (expense)
|
|
$
|
(766
|
)
|
|
$
|
(252
|
)
|
Interest rate cap contracts
|
|
Interest expense
|
|
(88
|
)
|
|
—
|
|
||
Interest rate swap agreements
|
|
Interest expense
|
|
—
|
|
|
77
|
|
|
Accretable
Yield
|
|
Estimate of
Zero Basis
Cash Flows
|
|
Total
|
||||||
Balance at December 31, 2017
|
$
|
3,695,069
|
|
|
$
|
369,632
|
|
|
$
|
4,064,701
|
|
Revenue from receivable portfolios
|
(249,821
|
)
|
|
(31,188
|
)
|
|
(281,009
|
)
|
|||
Allowance reversals on receivable portfolios, net
|
(8,082
|
)
|
|
(1,729
|
)
|
|
(9,811
|
)
|
|||
Reductions on existing portfolios, net
|
(24,945
|
)
|
|
(39,529
|
)
|
|
(64,474
|
)
|
|||
Additions for current purchases, net
|
285,172
|
|
|
—
|
|
|
285,172
|
|
|||
Effect of foreign currency translation
|
57,577
|
|
|
643
|
|
|
58,220
|
|
|||
Balance at March 31, 2018
|
$
|
3,754,970
|
|
|
$
|
297,829
|
|
|
$
|
4,052,799
|
|
|
Accretable
Yield
|
|
Estimate of
Zero Basis
Cash Flows
|
|
Total
|
||||||
Balance at December 31, 2016
|
$
|
3,092,004
|
|
|
$
|
365,504
|
|
|
$
|
3,457,508
|
|
Revenue from receivable portfolios
|
(211,105
|
)
|
|
(38,733
|
)
|
|
(249,838
|
)
|
|||
Allowance reversals on receivable portfolios, net
|
(613
|
)
|
|
(1,519
|
)
|
|
(2,132
|
)
|
|||
(Reductions) additions on existing portfolios, net
|
(90,138
|
)
|
|
57,446
|
|
|
(32,692
|
)
|
|||
Additions for current purchases, net
|
200,728
|
|
|
—
|
|
|
200,728
|
|
|||
Effect of foreign currency translation
|
38,712
|
|
|
467
|
|
|
39,179
|
|
|||
Balance at March 31, 2017
|
$
|
3,029,588
|
|
|
$
|
383,165
|
|
|
$
|
3,412,753
|
|
|
Three Months Ended March 31, 2018
|
||||||||||||||
|
Accrual Basis
Portfolios
|
|
Cost Recovery
Portfolios
|
|
Zero Basis
Portfolios
|
|
Total
|
||||||||
Balance, beginning of period
|
$
|
2,879,170
|
|
|
$
|
11,443
|
|
|
$
|
—
|
|
|
$
|
2,890,613
|
|
Purchases of receivable portfolios
|
276,762
|
|
|
—
|
|
|
—
|
|
|
276,762
|
|
||||
Disposals or transfers to held for sale
|
(3,072
|
)
|
|
—
|
|
|
—
|
|
|
(3,072
|
)
|
||||
Gross collections
(1)
|
(455,143
|
)
|
|
(1,171
|
)
|
|
(32,788
|
)
|
|
(489,102
|
)
|
||||
Put-backs and Recalls
(2)
|
(3,691
|
)
|
|
—
|
|
|
(129
|
)
|
|
(3,820
|
)
|
||||
Foreign currency adjustments
|
61,590
|
|
|
350
|
|
|
—
|
|
|
61,940
|
|
||||
Revenue recognized
|
249,821
|
|
|
—
|
|
|
31,188
|
|
|
281,009
|
|
||||
Portfolio allowance reversals, net
|
8,082
|
|
|
—
|
|
|
1,729
|
|
|
9,811
|
|
||||
Balance, end of period
|
$
|
3,013,519
|
|
|
$
|
10,622
|
|
|
$
|
—
|
|
|
$
|
3,024,141
|
|
Revenue as a percentage of collections
(3)
|
54.9
|
%
|
|
0.0
|
%
|
|
95.1
|
%
|
|
57.5
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended March 31, 2017
|
||||||||||||||
|
Accrual Basis
Portfolios
|
|
Cost Recovery
Portfolios
|
|
Zero Basis
Portfolios
|
|
Total
|
||||||||
Balance, beginning of period
|
$
|
2,368,366
|
|
|
$
|
14,443
|
|
|
$
|
—
|
|
|
$
|
2,382,809
|
|
Purchases of receivable portfolios
|
218,727
|
|
|
—
|
|
|
—
|
|
|
218,727
|
|
||||
Disposals or transfers to held for sale
|
(4,771
|
)
|
|
—
|
|
|
—
|
|
|
(4,771
|
)
|
||||
Gross collections
(1)
|
(400,004
|
)
|
|
(640
|
)
|
|
(40,219
|
)
|
|
(440,863
|
)
|
||||
Put-backs and Recalls
(2)
|
(1,757
|
)
|
|
—
|
|
|
(33
|
)
|
|
(1,790
|
)
|
||||
Foreign currency adjustments
|
30,020
|
|
|
(84
|
)
|
|
—
|
|
|
29,936
|
|
||||
Revenue recognized
|
211,105
|
|
|
—
|
|
|
38,733
|
|
|
249,838
|
|
||||
Portfolio allowance reversals, net
|
613
|
|
|
—
|
|
|
1,519
|
|
|
2,132
|
|
||||
Balance, end of period
|
$
|
2,422,299
|
|
|
$
|
13,719
|
|
|
$
|
—
|
|
|
$
|
2,436,018
|
|
Revenue as a percentage of collections
(3)
|
52.8
|
%
|
|
0.0
|
%
|
|
96.3
|
%
|
|
56.7
|
%
|
(1)
|
Does not include amounts collected on behalf of others.
|
(2)
|
Put-backs represent accounts that are returned to the seller in accordance with the respective purchase agreement (“Put-Backs”). Recalls represent accounts that are recalled by the seller in accordance with the respective purchase agreement (“Recalls”).
|
(3)
|
Revenue as a percentage of collections excludes the effects of net portfolio allowances or net portfolio allowance reversals.
|
|
Valuation Allowance
|
||||||
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Balance at beginning of period
|
$
|
102,576
|
|
|
$
|
137,037
|
|
Provision for portfolio allowances
|
940
|
|
|
—
|
|
||
Reversal of prior allowances
|
(10,751
|
)
|
|
(2,132
|
)
|
||
Effect of foreign currency translation
|
1,552
|
|
|
1,420
|
|
||
Balance at end of period
|
$
|
94,317
|
|
|
$
|
136,325
|
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Court costs advanced
|
$
|
774,091
|
|
|
$
|
743,584
|
|
Court costs recovered
|
(310,014
|
)
|
|
(299,606
|
)
|
||
Court costs reserve
|
(378,190
|
)
|
|
(364,015
|
)
|
||
Deferred court costs
|
$
|
85,887
|
|
|
$
|
79,963
|
|
|
Court Cost Reserve
|
||||||
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Balance at beginning of period
|
$
|
(364,015
|
)
|
|
$
|
(327,926
|
)
|
Provision for court costs
|
(25,067
|
)
|
|
(18,005
|
)
|
||
Net down of reserve after deferral period
|
12,952
|
|
|
12,024
|
|
||
Effect of foreign currency translation
|
(2,060
|
)
|
|
(732
|
)
|
||
Balance at end of period
|
$
|
(378,190
|
)
|
|
$
|
(334,639
|
)
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Identifiable intangible assets, net
|
$
|
75,620
|
|
|
$
|
75,736
|
|
Prepaid expenses
|
29,472
|
|
|
27,606
|
|
||
Prepaid income taxes
|
27,962
|
|
|
27,917
|
|
||
Service fee receivables
|
25,998
|
|
|
25,609
|
|
||
Assets held for sale
|
20,117
|
|
|
18,741
|
|
||
Other financial receivables
|
16,861
|
|
|
18,997
|
|
||
Deferred tax assets
|
16,231
|
|
|
18,773
|
|
||
Derivative instruments
|
5,240
|
|
|
5,834
|
|
||
Security deposits
|
3,329
|
|
|
3,451
|
|
||
Funds held in escrow
|
—
|
|
|
28,199
|
|
||
Other
|
56,136
|
|
|
51,865
|
|
||
Total
|
$
|
276,966
|
|
|
$
|
302,728
|
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Encore revolving credit facility
|
$
|
363,000
|
|
|
$
|
328,961
|
|
Encore term loan facility
|
203,670
|
|
|
181,687
|
|
||
Encore senior secured notes
|
325,000
|
|
|
326,029
|
|
||
Encore convertible notes
|
483,500
|
|
|
483,500
|
|
||
Less: debt discount
|
(30,291
|
)
|
|
(32,720
|
)
|
||
Cabot senior secured notes
|
1,260,399
|
|
|
1,216,485
|
|
||
Less: debt discount
|
(2,120
|
)
|
|
(1,927
|
)
|
||
Cabot senior revolving credit facility
|
219,914
|
|
|
179,008
|
|
||
Cabot securitisation senior facility
|
407,508
|
|
|
391,790
|
|
||
Preferred equity certificates
|
271,284
|
|
|
253,324
|
|
||
Other credit facilities
|
68,319
|
|
|
68,001
|
|
||
Other
|
76,345
|
|
|
92,792
|
|
||
Capital lease obligations
|
5,058
|
|
|
6,069
|
|
||
|
3,651,586
|
|
|
3,492,999
|
|
||
Less: debt issuance costs, net of amortization
|
(44,485
|
)
|
|
(46,123
|
)
|
||
Total
|
$
|
3,607,101
|
|
|
$
|
3,446,876
|
|
•
|
Revolving Credit Facility commitments of (1)
$626.0 million
that expire in December 2021 and (2)
$168.6 million
that expire in February 2019, in each case with interest at a floating rate equal to, at the Company’s option, either: (a) reserve adjusted London Interbank Offered Rate (“LIBOR”), plus a spread that ranges from
250
to
300
basis points depending on the cash flow leverage ratio of Encore and its restricted subsidiaries; or (b) alternate base rate, plus a spread that ranges from
150
to
200
basis points, depending on the cash flow leverage ratio of Encore and its restricted subsidiaries. “Alternate base rate,” as defined in the Restated Credit Agreement, means the highest of (i) the per annum rate which the administrative agent publicly announces from time to time as its prime lending rate, (ii) the federal funds effective rate from time to time, plus
0.5%
per annum, (iii) reserved adjusted LIBOR determined on a daily basis for a one month interest period, plus
1.0%
per annum and (iv) zero;
|
•
|
A
$190.8 million
term loan maturing in December 2021, with interest at a floating rate equal to, at the Company’s option, either: (1) reserve adjusted LIBOR, plus a spread that ranges from
250
to
300
basis points, depending on the cash flow leverage ratio of Encore and its restricted subsidiaries; or (2) alternate base rate, plus a spread that ranges from
150
to
200
basis points, depending on the cash flow leverage ratio of Encore and its restricted subsidiaries. Principal amortizes
$7.4 million
in 2018 and
$14.8 million
in each of 2019 and 2020 with the remaining principal due in 2021;
|
•
|
A
$15.9 million
term loan maturing in February 2019, with interest at a floating rate equal to, at the Company’s option, either: (1) reserve adjusted LIBOR, plus a spread that ranges from
250
to
300
basis points, depending on the cash flow leverage ratio of Encore and its restricted subsidiaries; or (2) alternate base rate, plus a spread that ranges from
150
to
200
basis points, depending on the cash flow leverage ratio of Encore and its restricted subsidiaries. Principal amortizes
$1.6 million
in 2018 with the remaining principal due in 2019;
|
•
|
A borrowing base under the Revolving Credit Facility equal to
35%
of all eligible non-bankruptcy estimated remaining collections plus
55%
of eligible estimated remaining collections for consumer receivables subject to bankruptcy;
|
•
|
A maximum cash flow leverage ratio permitted of
3.00
:1.00;
|
•
|
A maximum cash flow first-lien leverage ratio of
2.00
:1.00;
|
•
|
A minimum interest coverage ratio of
1.75
:1.00;
|
•
|
The allowance of indebtedness in the form of senior secured notes not to exceed
$350.0 million
;
|
•
|
The allowance of additional unsecured or subordinated indebtedness not to exceed
$1.1 billion
, including junior lien indebtedness not to exceed
$400.0 million
;
|
•
|
Restrictions and covenants, which limit the payment of dividends and the incurrence of additional indebtedness and liens, among other limitations;
|
•
|
Repurchases of up to
$150.0 million
of Encore’s common stock after July 9, 2015, subject to compliance with certain covenants and available borrowing capacity;
|
•
|
A change of control definition, that excludes acquisitions of stock by Red Mountain Capital Partners LLC, JCF FPK I, LP and their respective affiliates of up to
50%
of the outstanding shares of Encore’s voting stock;
|
•
|
Events of default which, upon occurrence, may permit the lenders to terminate the facility and declare all amounts outstanding to be immediately due and payable;
|
•
|
A pre-approved acquisition limit of
$225.0 million
per fiscal year;
|
•
|
A basket to allow for investments not to exceed the greater of (1)
200%
of the consolidated net worth of Encore and its restricted subsidiaries; and (2) an unlimited amount such that after giving effect to the making of any investment, the cash flow leverage ratio is less than
1.25
:1:00;
|
•
|
A basket to allow for investments in persons organized under the laws of Canada in the amount of
$50.0 million
;
|
•
|
A requirement that Encore and its restricted subsidiaries, for the four-month period ending February 2019, have sufficient cash or availability under the Revolving Credit Facility (excluding availability under revolving
|
•
|
Collateralization by all assets of the Company, other than the assets of certain foreign subsidiaries and all unrestricted subsidiaries as defined in the Restated Credit Agreement.
|
|
2020 Convertible Notes
|
|
2021 Convertible Notes
|
|
2022 Convertible Notes
|
||||||
Initial conversion price
|
$
|
45.72
|
|
|
$
|
59.39
|
|
|
$
|
45.57
|
|
Closing stock price at date of issuance
|
$
|
33.35
|
|
|
$
|
47.51
|
|
|
$
|
35.05
|
|
Closing stock price date
|
June 24, 2013
|
|
|
March 5, 2014
|
|
|
February 27, 2017
|
|
|||
Conversion rate (shares per $1,000 principal amount)
|
21.8718
|
|
|
16.8386
|
|
|
21.9467
|
|
|||
Conversion date
|
January 1, 2020
|
|
|
September 15, 2020
|
|
|
September 15, 2021
|
|
|
2020 Convertible Notes
|
|
2021 Convertible Notes
|
|
2022 Convertible Notes
|
||||||
Debt component
|
$
|
140,247
|
|
|
$
|
143,645
|
|
|
$
|
137,266
|
|
Equity component
|
$
|
32,253
|
|
|
$
|
17,355
|
|
|
$
|
12,734
|
|
Equity issuance cost
|
$
|
1,106
|
|
|
$
|
581
|
|
|
$
|
398
|
|
Stated interest rate
|
3.000
|
%
|
|
2.875
|
%
|
|
3.250
|
%
|
|||
Effective interest rate
|
6.350
|
%
|
|
4.700
|
%
|
|
5.200
|
%
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Liability component—principal amount
|
$
|
483,500
|
|
|
$
|
483,500
|
|
Unamortized debt discount
|
(30,291
|
)
|
|
(32,720
|
)
|
||
Liability component—net carrying amount
|
$
|
453,209
|
|
|
$
|
450,780
|
|
Equity component
|
$
|
62,696
|
|
|
$
|
62,696
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Interest expense—stated coupon rate
|
$
|
3,642
|
|
|
$
|
3,524
|
|
Interest expense—amortization of debt discount
|
2,428
|
|
|
2,486
|
|
||
Total interest expense—convertible notes
|
$
|
6,070
|
|
|
$
|
6,010
|
|
|
2020 Convertible Notes
|
|
2021 Convertible Notes
|
||||
Cost of the hedge transaction(s)
|
$
|
18,113
|
|
|
$
|
19,545
|
|
Initial conversion price
|
$
|
45.72
|
|
|
$
|
59.39
|
|
Effective conversion price
|
$
|
61.55
|
|
|
$
|
83.14
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Interest expense—stated coupon rate
|
$
|
21,600
|
|
|
$
|
23,982
|
|
Interest income—accretion of debt premium
|
—
|
|
|
(1,016
|
)
|
||
Interest expense—amortization of debt discount
|
(116
|
)
|
|
110
|
|
||
Total interest expense—Cabot senior secured notes
|
$
|
21,484
|
|
|
$
|
23,076
|
|
•
|
Interest at LIBOR (or EURIBOR for any loan drawn in euro) plus
3.25%
per annum, which may decrease to
2.75%
upon certain specified conditions;
|
•
|
A restrictive covenant that limits the loan to value ratio to
0.75
in the event that the Cabot Credit Facility is more than
20%
utilized;
|
•
|
A restrictive covenant that limits the super senior loan (i.e. the Cabot Credit Facility and any super priority hedging liabilities) to value ratio to
0.275
in the event that the Cabot Credit Facility is more than
20%
utilized;
|
•
|
Additional restrictions and covenants which limit, among other things, the payment of dividends and the incurrence of additional indebtedness and liens; and
|
•
|
Events of default which, upon occurrence, may permit the lenders to terminate the Cabot Credit Facility and declare all amounts outstanding to be immediately due and payable.
|
|
Three Months Ended
March 31, |
||||
|
2018
|
|
2017
|
||
Federal provision
|
21.0
|
%
|
|
35.0
|
%
|
State provision
|
1.4
|
%
|
|
3.3
|
%
|
International provision
(1)
|
7.0
|
%
|
|
4.3
|
%
|
Permanent items
|
0.4
|
%
|
|
0.8
|
%
|
Other
(2)
|
(1.3
|
)%
|
|
0.9
|
%
|
Effective rate
|
28.5
|
%
|
|
44.3
|
%
|
(1)
|
Relates primarily to the lower tax rates attributable to international operations, and the impact of valuation allowances recorded on foreign loss jurisdictions.
|
(2)
|
Includes impact of discrete items.
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Revenues, adjusted by net allowances
(1)
:
|
|
|
|
||||
United States
|
$
|
171,944
|
|
|
$
|
170,316
|
|
International
|
|
|
|
||||
Europe
(2)
|
130,423
|
|
|
77,938
|
|
||
Other geographies
|
24,421
|
|
|
23,687
|
|
||
|
154,844
|
|
|
101,625
|
|
||
Total
|
$
|
326,788
|
|
|
$
|
271,941
|
|
(1)
|
Revenues, adjusted by net allowances, are attributed to countries based on location of customer.
|
(2)
|
Based on the financial information that is used to produce the general-purpose financial statements, providing further geographic information is impracticable.
|
|
Total
|
||
Balance, December 31, 2017
|
$
|
928,993
|
|
Goodwill adjustments
|
(2,212
|
)
|
|
Effect of foreign currency translation
|
30,339
|
|
|
Balance, March 31, 2018
|
$
|
957,120
|
|
|
As of March 31, 2018
|
|
As of December 31, 2017
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
Customer relationships
|
$
|
76,661
|
|
|
$
|
(8,973
|
)
|
|
$
|
67,688
|
|
|
$
|
73,875
|
|
|
$
|
(6,800
|
)
|
|
$
|
67,075
|
|
Developed technologies
|
6,848
|
|
|
(5,825
|
)
|
|
1,023
|
|
|
6,683
|
|
|
(5,411
|
)
|
|
1,272
|
|
||||||
Trade name and other
|
14,782
|
|
|
(7,873
|
)
|
|
6,909
|
|
|
14,413
|
|
|
(7,024
|
)
|
|
7,389
|
|
||||||
Total intangible assets
|
$
|
98,291
|
|
|
$
|
(22,671
|
)
|
|
$
|
75,620
|
|
|
$
|
94,971
|
|
|
$
|
(19,235
|
)
|
|
$
|
75,736
|
|
|
|||||||
|
2018
|
|
2017
|
||||
United States:
|
|
|
|
||||
Credit card
|
$
|
166,190
|
|
|
$
|
112,726
|
|
Other
|
12,848
|
|
|
10,152
|
|
||
Subtotal
|
179,038
|
|
|
122,878
|
|
||
Europe:
|
|
|
|
||||
Credit card
|
68,397
|
|
|
85,113
|
|
||
Other
|
18,918
|
|
|
—
|
|
||
Subtotal
|
87,315
|
|
|
85,113
|
|
||
Other geographies:
|
|
|
|
||||
Credit card
|
10,409
|
|
|
10,000
|
|
||
Other
|
—
|
|
|
736
|
|
||
Subtotal
|
10,409
|
|
|
10,736
|
|
||
Total purchases
|
$
|
276,762
|
|
|
$
|
218,727
|
|
|
|||||||
|
2018
|
|
2017
|
||||
United States:
|
|
|
|
||||
Collection sites
|
$
|
153,967
|
|
|
$
|
131,718
|
|
Legal collections
|
132,642
|
|
|
142,964
|
|
||
Collection agencies
|
12,358
|
|
|
12,793
|
|
||
Subtotal
|
298,967
|
|
|
287,475
|
|
||
Europe:
|
|
|
|
||||
Collection sites
|
82,011
|
|
|
75,818
|
|
||
Legal collections
|
31,380
|
|
|
29,266
|
|
||
Collection agencies
|
48,786
|
|
|
20,874
|
|
||
Subtotal
|
162,177
|
|
|
125,958
|
|
||
Other geographies:
|
|
|
|
||||
Collection sites
|
22,171
|
|
|
21,122
|
|
||
Legal collections
|
2,107
|
|
|
1,784
|
|
||
Collection agencies
|
3,680
|
|
|
4,524
|
|
||
Subtotal
|
27,958
|
|
|
27,430
|
|
||
Total collections
|
$
|
489,102
|
|
|
$
|
440,863
|
|
|
Three Months Ended March 31,
|
||||||||||||
|
2018
|
|
2017
|
||||||||||
Revenues
|
|
|
|
|
|
|
|
||||||
Revenue from receivable portfolios
|
$
|
281,009
|
|
|
86.0
|
%
|
|
$
|
249,838
|
|
|
91.9
|
%
|
Other revenues
|
35,968
|
|
|
11.0
|
%
|
|
19,971
|
|
|
7.3
|
%
|
||
Total revenues
|
316,977
|
|
|
97.0
|
%
|
|
269,809
|
|
|
99.2
|
%
|
||
Allowance reversals on receivable portfolios, net
|
9,811
|
|
|
3.0
|
%
|
|
2,132
|
|
|
0.8
|
%
|
||
Total revenues, adjusted by net allowances
|
326,788
|
|
|
100.0
|
%
|
|
271,941
|
|
|
100.0
|
%
|
||
Operating expenses
|
|
|
|
|
|
|
|
||||||
Salaries and employee benefits
|
89,259
|
|
|
27.3
|
%
|
|
68,278
|
|
|
25.1
|
%
|
||
Cost of legal collections
|
53,855
|
|
|
16.5
|
%
|
|
47,957
|
|
|
17.6
|
%
|
||
Other operating expenses
|
33,748
|
|
|
10.3
|
%
|
|
26,360
|
|
|
9.7
|
%
|
||
Collection agency commissions
|
11,754
|
|
|
3.6
|
%
|
|
11,562
|
|
|
4.2
|
%
|
||
General and administrative expenses
|
39,284
|
|
|
12.0
|
%
|
|
33,318
|
|
|
12.3
|
%
|
||
Depreciation and amortization
|
10,436
|
|
|
3.2
|
%
|
|
8,625
|
|
|
3.2
|
%
|
||
Total operating expenses
|
238,336
|
|
|
72.9
|
%
|
|
196,100
|
|
|
72.1
|
%
|
||
Income from operations
|
88,452
|
|
|
27.1
|
%
|
|
75,841
|
|
|
27.9
|
%
|
||
Other (expense) income
|
|
|
|
|
|
|
|
||||||
Interest expense
|
(57,462
|
)
|
|
(17.6
|
)%
|
|
(49,198
|
)
|
|
(18.1
|
)%
|
||
Other income
|
2,193
|
|
|
0.7
|
%
|
|
602
|
|
|
0.2
|
%
|
||
Total other expense
|
(55,269
|
)
|
|
(16.9
|
)%
|
|
(48,596
|
)
|
|
(17.9
|
)%
|
||
Income from continuing operations before income taxes
|
33,183
|
|
|
10.2
|
%
|
|
27,245
|
|
|
10.0
|
%
|
||
Provision for income taxes
|
(9,470
|
)
|
|
(2.9
|
)%
|
|
(12,067
|
)
|
|
(4.4
|
)%
|
||
Income from continuing operations
|
23,713
|
|
|
7.3
|
%
|
|
15,178
|
|
|
5.6
|
%
|
||
Loss from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
(199
|
)
|
|
(0.1
|
)%
|
||
Net income
|
23,713
|
|
|
7.3
|
%
|
|
14,979
|
|
|
5.5
|
%
|
||
Net (income) loss attributable to noncontrolling interest
|
(1,886
|
)
|
|
(0.6
|
)%
|
|
7,119
|
|
|
2.6
|
%
|
||
Net income attributable to Encore Capital Group, Inc. stockholders
|
$
|
21,827
|
|
|
6.7
|
%
|
|
$
|
22,098
|
|
|
8.1
|
%
|
|
Three Months Ended March 31, 2018
|
|
Three Months Ended March 31, 2017
|
||||||||||||||||||||
|
Janus Holdings
|
|
Encore Europe
(1)
|
|
Consolidated
|
|
Janus Holdings
|
|
Encore Europe
(1)
|
|
Consolidated
|
||||||||||||
Total revenues, adjusted by net allowances
|
$
|
122,225
|
|
|
$
|
—
|
|
|
$
|
122,225
|
|
|
$
|
70,306
|
|
|
$
|
—
|
|
|
$
|
70,306
|
|
Total operating expenses
|
(71,219
|
)
|
|
—
|
|
|
(71,219
|
)
|
|
(43,327
|
)
|
|
—
|
|
|
(43,327
|
)
|
||||||
Income from operations
|
51,006
|
|
|
—
|
|
|
51,006
|
|
|
26,979
|
|
|
—
|
|
|
26,979
|
|
||||||
Interest expense-non-PEC
|
(28,746
|
)
|
|
—
|
|
|
(28,746
|
)
|
|
(25,639
|
)
|
|
—
|
|
|
(25,639
|
)
|
||||||
PEC interest (expense) income
|
(15,141
|
)
|
|
7,420
|
|
|
(7,721
|
)
|
|
(12,039
|
)
|
|
5,900
|
|
|
(6,139
|
)
|
||||||
Other income (expense)
|
778
|
|
|
—
|
|
|
778
|
|
|
(352
|
)
|
|
—
|
|
|
(352
|
)
|
||||||
Income (loss) before income taxes
|
7,897
|
|
|
7,420
|
|
|
15,317
|
|
|
(11,051
|
)
|
|
5,900
|
|
|
(5,151
|
)
|
||||||
(Provision) benefit for income taxes
|
(4,779
|
)
|
|
—
|
|
|
(4,779
|
)
|
|
180
|
|
|
—
|
|
|
180
|
|
||||||
Net income (loss)
|
3,118
|
|
|
7,420
|
|
|
10,538
|
|
|
(10,871
|
)
|
|
5,900
|
|
|
(4,971
|
)
|
||||||
Net (income) loss attributable to noncontrolling interest
|
(704
|
)
|
|
(1,205
|
)
|
|
(1,909
|
)
|
|
1,427
|
|
|
4,712
|
|
|
6,139
|
|
||||||
Net income (loss) attributable to Encore Capital Group, Inc. stockholders
|
$
|
2,414
|
|
|
$
|
6,215
|
|
|
$
|
8,629
|
|
|
$
|
(9,444
|
)
|
|
$
|
10,612
|
|
|
$
|
1,168
|
|
(1)
|
Includes only the results of operations related to Janus Holdings and therefore does not represent the complete financial performance of Encore Europe.
|
|
Three Months Ended March 31, 2018
|
|
As of
March 31, 2018 |
|||||||||||||||||||||
|
Collections
(1)
|
|
Revenue
|
|
Revenue
Recognition
Rate
|
|
Net
Reversal (Portfolio Allowance) |
|
Revenue
% of Total
Revenue
|
|
Unamortized
Balances
|
|
Monthly
IRR
|
|||||||||||
United States:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
ZBA
(2)
|
$
|
29,919
|
|
|
$
|
28,319
|
|
|
94.7
|
%
|
|
$
|
1,729
|
|
|
10.1
|
%
|
|
$
|
—
|
|
|
—
|
|
2008
|
1,042
|
|
|
194
|
|
|
18.6
|
%
|
|
—
|
|
|
0.1
|
%
|
|
569
|
|
|
5.2
|
%
|
||||
2009
(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
2010
(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
2011
|
3,601
|
|
|
3,493
|
|
|
97.0
|
%
|
|
—
|
|
|
1.2
|
%
|
|
4,477
|
|
|
25.0
|
%
|
||||
2012
|
9,745
|
|
|
8,729
|
|
|
89.6
|
%
|
|
(723
|
)
|
|
3.2
|
%
|
|
14,656
|
|
|
18.6
|
%
|
||||
2013
|
28,557
|
|
|
22,787
|
|
|
79.8
|
%
|
|
—
|
|
|
8.1
|
%
|
|
42,890
|
|
|
16.1
|
%
|
||||
2014
|
26,699
|
|
|
14,949
|
|
|
56.0
|
%
|
|
—
|
|
|
5.3
|
%
|
|
100,747
|
|
|
4.5
|
%
|
||||
2015
|
36,950
|
|
|
16,136
|
|
|
43.7
|
%
|
|
—
|
|
|
5.7
|
%
|
|
181,712
|
|
|
2.7
|
%
|
||||
2016
|
67,702
|
|
|
29,331
|
|
|
43.3
|
%
|
|
—
|
|
|
10.4
|
%
|
|
330,757
|
|
|
2.7
|
%
|
||||
2017
|
86,211
|
|
|
41,971
|
|
|
48.7
|
%
|
|
—
|
|
|
14.9
|
%
|
|
449,677
|
|
|
2.9
|
%
|
||||
2018
|
8,541
|
|
|
5,024
|
|
|
58.8
|
%
|
|
—
|
|
|
1.8
|
%
|
|
175,317
|
|
|
3.1
|
%
|
||||
Subtotal
|
298,967
|
|
|
170,933
|
|
|
57.2
|
%
|
|
1,006
|
|
|
60.8
|
%
|
|
1,300,802
|
|
|
3.7
|
%
|
||||
Europe:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
ZBA
(2)
|
5
|
|
|
5
|
|
|
100.0
|
%
|
|
—
|
|
|
0.0
|
%
|
|
—
|
|
|
—
|
|
||||
2013
|
36,129
|
|
|
25,462
|
|
|
70.5
|
%
|
|
2,766
|
|
|
9.2
|
%
|
|
274,328
|
|
|
3.1
|
%
|
||||
2014
|
35,808
|
|
|
21,949
|
|
|
61.3
|
%
|
|
5,419
|
|
|
7.8
|
%
|
|
290,217
|
|
|
2.5
|
%
|
||||
2015
|
24,605
|
|
|
13,613
|
|
|
55.3
|
%
|
|
462
|
|
|
4.8
|
%
|
|
230,083
|
|
|
2.0
|
%
|
||||
2016
|
23,570
|
|
|
13,503
|
|
|
57.3
|
%
|
|
—
|
|
|
4.8
|
%
|
|
210,993
|
|
|
2.2
|
%
|
||||
2017
|
40,874
|
|
|
15,279
|
|
|
37.4
|
%
|
|
—
|
|
|
5.4
|
%
|
|
439,643
|
|
|
1.4
|
%
|
||||
2018
|
1,186
|
|
|
1,251
|
|
|
105.5
|
%
|
|
—
|
|
|
0.4
|
%
|
|
87,848
|
|
|
1.5
|
%
|
||||
Subtotal
|
162,177
|
|
|
91,062
|
|
|
56.1
|
%
|
|
8,647
|
|
|
32.4
|
%
|
|
1,533,112
|
|
|
2.1
|
%
|
||||
Other geographies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
ZBA
(2)
|
2,864
|
|
|
2,864
|
|
|
100.0
|
%
|
|
—
|
|
|
1.0
|
%
|
|
—
|
|
|
—
|
|
||||
2013
(3)
|
150
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
2014
|
1,600
|
|
|
4,373
|
|
|
273.3
|
%
|
|
—
|
|
|
1.6
|
%
|
|
63,071
|
|
|
2.4
|
%
|
||||
2015
|
8,836
|
|
|
5,668
|
|
|
64.1
|
%
|
|
—
|
|
|
2.0
|
%
|
|
31,779
|
|
|
5.4
|
%
|
||||
2016
|
7,420
|
|
|
3,472
|
|
|
46.8
|
%
|
|
158
|
|
|
1.2
|
%
|
|
41,274
|
|
|
2.6
|
%
|
||||
2017
|
6,711
|
|
|
2,426
|
|
|
36.1
|
%
|
|
—
|
|
|
0.9
|
%
|
|
43,804
|
|
|
1.8
|
%
|
||||
2018
|
377
|
|
|
211
|
|
|
56.0
|
%
|
|
—
|
|
|
0.1
|
%
|
|
10,299
|
|
|
3.5
|
%
|
||||
Subtotal
|
27,958
|
|
|
19,014
|
|
|
68.0
|
%
|
|
158
|
|
|
6.8
|
%
|
|
190,227
|
|
|
2.9
|
%
|
||||
Total
|
$
|
489,102
|
|
|
$
|
281,009
|
|
|
57.5
|
%
|
|
$
|
9,811
|
|
|
100.0
|
%
|
|
$
|
3,024,141
|
|
|
2.8
|
%
|
(1)
|
Does not include amounts collected on behalf of others.
|
(2)
|
Zero basis revenue typically has a 100% revenue recognition rate. However, collections on ZBA pool groups where a valuation allowance remains must first be recorded as an allowance reversal until the allowance for that pool group is zero. Once the entire valuation allowance is reversed, the revenue recognition rate will become 100%. ZBA gross revenue includes an immaterial amount of accounts that are returned to the seller in accordance with the respective purchase agreement (“Put-Backs”).
|
(3)
|
Total collections realized exceed the net book value of the portfolio and have been converted to ZBA.
|
|
Three Months Ended March 31, 2017
|
|
As of
March 31, 2017 |
|||||||||||||||||||||
|
Collections
(1)
|
|
Revenue
|
|
Revenue
Recognition
Rate
|
|
Net
Portfolio Allowance Reversal |
|
Revenue
% of Total
Revenue
|
|
Unamortized
Balances
|
|
Monthly
IRR
|
|||||||||||
United States:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
ZBA
(2)
|
$
|
37,095
|
|
|
$
|
35,586
|
|
|
95.9
|
%
|
|
$
|
1,519
|
|
|
14.2
|
%
|
|
$
|
—
|
|
|
—
|
|
2007
|
546
|
|
|
130
|
|
|
23.8
|
%
|
|
—
|
|
|
0.1
|
%
|
|
567
|
|
|
4.6
|
%
|
||||
2008
|
1,253
|
|
|
640
|
|
|
51.1
|
%
|
|
613
|
|
|
0.3
|
%
|
|
3,630
|
|
|
5.2
|
%
|
||||
2009
(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
2010
|
1,106
|
|
|
299
|
|
|
27.0
|
%
|
|
—
|
|
|
0.1
|
%
|
|
—
|
|
|
—
|
|
||||
2011
|
5,795
|
|
|
4,422
|
|
|
76.3
|
%
|
|
—
|
|
|
1.8
|
%
|
|
6,489
|
|
|
19.2
|
%
|
||||
2012
|
22,614
|
|
|
14,567
|
|
|
64.4
|
%
|
|
—
|
|
|
5.8
|
%
|
|
30,818
|
|
|
13.1
|
%
|
||||
2013
|
39,513
|
|
|
25,729
|
|
|
65.1
|
%
|
|
—
|
|
|
10.3
|
%
|
|
76,828
|
|
|
9.8
|
%
|
||||
2014
|
43,524
|
|
|
22,383
|
|
|
51.4
|
%
|
|
—
|
|
|
9.0
|
%
|
|
165,808
|
|
|
4.1
|
%
|
||||
2015
|
55,981
|
|
|
21,773
|
|
|
38.9
|
%
|
|
—
|
|
|
8.7
|
%
|
|
278,224
|
|
|
2.4
|
%
|
||||
2016
|
76,187
|
|
|
39,030
|
|
|
51.2
|
%
|
|
—
|
|
|
15.6
|
%
|
|
477,710
|
|
|
2.5
|
%
|
||||
2017
|
3,861
|
|
|
3,586
|
|
|
92.9
|
%
|
|
—
|
|
|
1.4
|
%
|
|
122,486
|
|
|
2.7
|
%
|
||||
Subtotal
|
287,475
|
|
|
168,145
|
|
|
58.5
|
%
|
|
2,132
|
|
|
67.3
|
%
|
|
1,162,560
|
|
|
3.6
|
%
|
||||
Europe:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
2013
|
38,107
|
|
|
23,007
|
|
|
60.4
|
%
|
|
—
|
|
|
9.2
|
%
|
|
246,034
|
|
|
3.0
|
%
|
||||
2014
|
35,125
|
|
|
18,978
|
|
|
54.0
|
%
|
|
—
|
|
|
7.6
|
%
|
|
297,590
|
|
|
2.1
|
%
|
||||
2015
|
27,898
|
|
|
12,255
|
|
|
43.9
|
%
|
|
—
|
|
|
4.9
|
%
|
|
244,022
|
|
|
1.6
|
%
|
||||
2016
|
22,748
|
|
|
9,668
|
|
|
42.5
|
%
|
|
—
|
|
|
3.9
|
%
|
|
220,602
|
|
|
1.6
|
%
|
||||
2017
|
2,080
|
|
|
1,071
|
|
|
51.5
|
%
|
|
—
|
|
|
0.4
|
%
|
|
84,452
|
|
|
1.3
|
%
|
||||
Subtotal
|
125,958
|
|
|
64,979
|
|
|
51.6
|
%
|
|
—
|
|
|
26.0
|
%
|
|
1,092,700
|
|
|
2.0
|
%
|
||||
Other geographies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
ZBA
(2)
|
3,124
|
|
|
3,146
|
|
|
100.7
|
%
|
|
—
|
|
|
1.3
|
%
|
|
—
|
|
|
—
|
|
||||
2013
|
326
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.0
|
%
|
|
721
|
|
|
0.0
|
%
|
||||
2014
|
2,547
|
|
|
3,881
|
|
|
152.4
|
%
|
|
—
|
|
|
1.5
|
%
|
|
59,069
|
|
|
2.2
|
%
|
||||
2015
|
10,934
|
|
|
5,669
|
|
|
51.8
|
%
|
|
—
|
|
|
2.3
|
%
|
|
49,225
|
|
|
3.6
|
%
|
||||
2016
|
9,824
|
|
|
3,904
|
|
|
39.7
|
%
|
|
—
|
|
|
1.6
|
%
|
|
61,553
|
|
|
2.0
|
%
|
||||
2017
|
675
|
|
|
114
|
|
|
16.9
|
%
|
|
—
|
|
|
0.0
|
%
|
|
10,190
|
|
|
1.4
|
%
|
||||
Subtotal
|
27,430
|
|
|
16,714
|
|
|
60.9
|
%
|
|
—
|
|
|
6.7
|
%
|
|
180,758
|
|
|
2.4
|
%
|
||||
Total
|
$
|
440,863
|
|
|
$
|
249,838
|
|
|
56.7
|
%
|
|
$
|
2,132
|
|
|
100.0
|
%
|
|
$
|
2,436,018
|
|
|
2.8
|
%
|
(1)
|
Does not include amounts collected on behalf of others.
|
(2)
|
Zero basis revenue typically has a 100% revenue recognition rate. However, collections on ZBA pool groups where a valuation allowance remains must first be recorded as an allowance reversal until the allowance for that pool group is zero. Once the entire valuation allowance is reversed, the revenue recognition rate will become 100%. ZBA gross revenue includes an immaterial amount of Put-Backs.
|
(3)
|
Total collections realized exceed the net book value of the portfolio and have been converted to ZBA.
|
|
Three Months Ended March 31,
|
||||||||||
|
2018
|
|
2017
|
|
$ Change
|
||||||
Stated interest on debt obligations
|
$
|
44,356
|
|
|
$
|
37,871
|
|
|
$
|
6,485
|
|
Interest expense on preferred equity certificates
|
7,721
|
|
|
6,139
|
|
|
1,582
|
|
|||
Amortization of loan fees and other loan costs
|
3,073
|
|
|
3,608
|
|
|
(535
|
)
|
|||
Amortization of debt discount
|
2,312
|
|
|
2,596
|
|
|
(284
|
)
|
|||
Accretion of debt premium
|
—
|
|
|
(1,016
|
)
|
|
1,016
|
|
|||
Total interest expense
|
$
|
57,462
|
|
|
$
|
49,198
|
|
|
$
|
8,264
|
|
|
Three Months Ended
March 31, |
||||
|
2018
|
|
2017
|
||
Federal provision
|
21.0
|
%
|
|
35.0
|
%
|
State provision
|
1.4
|
%
|
|
3.3
|
%
|
International provision
(1)
|
7.0
|
%
|
|
4.3
|
%
|
Permanent items
|
0.4
|
%
|
|
0.8
|
%
|
Other
(2)
|
(1.3
|
)%
|
|
0.9
|
%
|
Effective rate
|
28.5
|
%
|
|
44.3
|
%
|
(1)
|
Relates primarily to the lower tax rates attributable to international operations, and the impact of valuation allowances recorded on foreign loss jurisdictions.
|
(2)
|
Includes impact of discrete items.
|
|
Three Months Ended
March 31, |
||||
|
2018
|
|
2017
|
||
United States
|
43.6
|
%
|
|
40.6
|
%
|
Europe
|
27.4
|
%
|
|
28.5
|
%
|
Other geographies
|
47.8
|
%
|
|
51.1
|
%
|
Overall cost per dollar collected
|
38.5
|
%
|
|
37.8
|
%
|
|
Three Months Ended March 31,
|
||||||||||||||
|
2018
|
|
2017
|
||||||||||||
|
$
|
|
Per Diluted
Share— Accounting and Economic |
|
$
|
|
Per Diluted
Share— Accounting and Economic |
||||||||
GAAP net income from continuing operations attributable to Encore, as reported
|
$
|
21,827
|
|
|
$
|
0.83
|
|
|
$
|
22,297
|
|
|
$
|
0.85
|
|
Adjustments:
|
|
|
|
|
|
|
|
||||||||
Convertible notes non-cash interest and issuance cost amortization
|
3,035
|
|
|
0.12
|
|
|
3,014
|
|
|
0.12
|
|
||||
Acquisition, integration and restructuring related expenses
(1)
|
572
|
|
|
0.02
|
|
|
855
|
|
|
0.04
|
|
||||
Net gain on fair value adjustments to contingent consideration
(2)
|
(2,274
|
)
|
|
(0.09
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of certain acquired intangible assets
(3)
|
2,068
|
|
|
0.08
|
|
|
560
|
|
|
0.02
|
|
||||
Expenses related to Cabot IPO
(4)
|
2,984
|
|
|
0.11
|
|
|
—
|
|
|
—
|
|
||||
Income tax effect of the adjustments
(5)
|
(810
|
)
|
|
(0.03
|
)
|
|
(1,489
|
)
|
|
(0.06
|
)
|
||||
Adjustments attributable to noncontrolling interest
(6)
|
(1,558
|
)
|
|
(0.06
|
)
|
|
(482
|
)
|
|
(0.02
|
)
|
||||
Adjusted income attributable to Encore
|
$
|
25,844
|
|
|
$
|
0.98
|
|
|
$
|
24,755
|
|
|
$
|
0.95
|
|
(1)
|
Amount represents acquisition, integration and restructuring related expenses. We adjust for this amount because we believe these expenses are not indicative of ongoing operations; therefore adjusting for these expenses enhances comparability to prior periods, anticipated future periods, and our competitors’ results.
|
(2)
|
Amount represents the net gain recognized as a result of fair value adjustments to contingent considerations that were established for our acquisitions of debt solution service providers in Europe. We have adjusted for this amount because we do not believe this is indicative of ongoing operations. Refer to Note
3
“Fair Value Measurement - Contingent Consideration” in the notes to our condensed consolidated financial statements for further details.
|
(3)
|
As we continue to acquire debt solution service providers around the world, the acquired intangible assets, such as trade names and customer relationships, have grown substantially. These intangible assets are valued at the time of the acquisition and amortized over their estimated lives. We believe that amortization of acquisition-related intangible assets, especially the amortization of an acquired company’s trade names and customer relationships, is the result of pre-acquisition activities. In addition, the amortization of these acquired intangibles is a non-cash static expense that is not affected by operations during any reporting period. As a result, the amortization of certain acquired intangible assets is excluded from our adjusted income from continuing operations attributable to Encore and adjusted income from continuing operations per share.
|
(4)
|
Amount represents expenses related to our process to assess options in relation to a potential initial public offering by our subsidiary Cabot. We adjust for this amount because we believe these expenses are not indicative of ongoing operations; therefore adjusting for these expenses enhances comparability to prior periods, anticipated future periods, and our competitors’ results.
|
(5)
|
Amount represents the total income tax effect of the adjustments, which is generally calculated based on the applicable marginal tax rate of the jurisdiction in which the portion of the adjustment occurred.
|
(6)
|
Certain of the above pre-tax adjustments include expenses recognized by our partially-owned subsidiaries. This adjustment represents the portion of the non-GAAP adjustments that are attributable to noncontrolling interest.
|
|
Three Months Ended
March 31, |
||||||
2018
|
|
2017
|
|||||
GAAP net income, as reported
|
$
|
23,713
|
|
|
$
|
14,979
|
|
Adjustments:
|
|
|
|
||||
Loss from discontinued operations, net of tax
|
—
|
|
|
199
|
|
||
Interest expense
|
57,462
|
|
|
49,198
|
|
||
Interest income
|
(1,017
|
)
|
|
(779
|
)
|
||
Provision for income taxes
|
9,470
|
|
|
12,067
|
|
||
Depreciation and amortization
|
10,436
|
|
|
8,625
|
|
||
Stock-based compensation expense
|
2,276
|
|
|
750
|
|
||
Acquisition, integration and restructuring related expenses
(1)
|
572
|
|
|
855
|
|
||
Net gain on fair value adjustments to contingent consideration
(2)
|
(2,274
|
)
|
|
—
|
|
||
Expenses related to Cabot IPO
(3)
|
2,984
|
|
|
—
|
|
||
Adjusted EBITDA
|
$
|
103,622
|
|
|
$
|
85,894
|
|
|
|
|
|
||||
Collections applied to principal balance
(4)
|
$
|
198,282
|
|
|
$
|
188,893
|
|
(1)
|
Amount represents acquisition, integration and restructuring related expenses. We adjust for this amount because we believe these expenses are not indicative of ongoing operations; therefore adjusting for these expenses enhances comparability to prior periods, anticipated future periods, and our competitors’ results.
|
(2)
|
Am
ount represents the net gain recognized as a result of fair value adjustments to contingent considerations that were established for our acquisitions of debt solution service providers in Europe. We have adjusted for this amount because we do not believe this is indicative of ongoing operations. Refer to Note
3
“Fair Value Measurement - Contingent Consideration” in the notes to our condensed consolidated financial statements for further details.
|
(3)
|
Amount represents expenses related to our process to assess options in relation to a potential initial public offering by our subsidiary Cabot. We adjust for this amount because we believe these expenses are not indicative of ongoing operations; therefore adjusting for these expenses enhances comparability to prior periods, anticipated future periods, and our competitors’ results.
|
(4)
|
Amount
represents (a) gross collections from receivable portfolios less (b) revenue from receivable portfolios and (c) allowance charges or allowance reversals on receivable portfolios.
|
|
Three Months Ended
March 31, |
||||||
2018
|
|
2017
|
|||||
GAAP total operating expenses, as reported
|
$
|
238,336
|
|
|
$
|
196,100
|
|
Adjustments:
|
|
|
|
||||
Stock-based compensation expense
|
(2,276
|
)
|
|
(750
|
)
|
||
Operating expenses related to non-portfolio purchasing and recovery business
(1)
|
(46,614
|
)
|
|
(27,946
|
)
|
||
Acquisition, integration and restructuring related expenses
(2)
|
(572
|
)
|
|
(855
|
)
|
||
Net gain on fair value adjustments to contingent consideration
(3)
|
2,274
|
|
|
—
|
|
||
Expenses related to Cabot IPO
(4)
|
(2,984
|
)
|
|
—
|
|
||
Adjusted operating expenses related to portfolio purchasing and recovery business
|
$
|
188,164
|
|
|
$
|
166,549
|
|
(1)
|
Operating expenses related to non-portfolio purchasing and recovery business include operating expenses from other operating segments that primarily engage in fee-based business, as well as corporate overhead not related to our portfolio purchasing and recovery business.
|
(2)
|
Amount represents acquisition, integration and restructuring related operating expenses. We adjust for this amount because we believe these expenses are not indicative of ongoing operations; therefore adjusting for these expenses enhances comparability to prior periods, anticipated future periods, and our competitors’ results.
|
(3)
|
Amount represents the net gain recognized as a result of fair value adjustments to contingent considerations that were established for our acquisitions of debt solution service providers in Europe. We have adjusted for this amount because we do not believe this is indicative of ongoing operations. Refer to Note
3
“Fair Value Measurement - Contingent Consideration” in the notes to our condensed consolidated financial statements for further details.
|
(4)
|
Amount represents expenses related to our process to assess options in relation to a potential initial public offering by our subsidiary Cabot. We adjust for this amount because we believe these expenses are not indicative of ongoing operations; therefore adjusting for these expenses enhances comparability to prior periods, anticipated future periods, and our competitors’ results.
|
(1)
|
Adjusted for Put-Backs and Recalls. Recalls represent accounts that are recalled by the seller in accordance with the respective purchase agreement (“Recalls”).
|
(2)
|
Cumulative collections from inception through
March 31, 2018
, excluding collections on behalf of others.
|
(3)
|
Cumulative Collections Multiple (“CCM”) through
March 31, 2018
refers to collections as a multiple of purchase price.
|
(1)
|
Adjusted for Put-Backs and Recalls.
|
(2)
|
Cumulative collections from inception through
March 31, 2018
, excluding collections on behalf of others.
|
(3)
|
Includes portfolios acquired in connection with certain business combinations.
|
(1)
|
ERC for Zero Basis Portfolios can extend beyond our collection forecasts. As of
March 31, 2018
, ERC for Zero Basis Portfolios include approximately $290.9 million for purchased consumer and bankruptcy receivables in the United States. ERC for Zero Basis Portfolios in Europe and other geographies were immaterial.
|
(2)
|
The collection forecast of each pool is generally estimated up to 120 months in the United States and up to 180 months in Europe. Expected collections beyond the 120 month collection forecast in the United States are included in ERC but are not included in the calculation of IRRs.
|
(3)
|
2018 amount consists of nine months data from April 1, 2018 to December 31, 2018.
|
(4)
|
Includes portfolios acquired in connection with certain business combinations.
|
|
Unamortized
Balance as of March 31, 2018 |
|
Purchase
Price
(1)
|
|
Unamortized
Balance as a
Percentage of
Purchase Price
|
|
Unamortized
Balance as a
Percentage
of Total
|
||||||
United States:
|
|
|
|
|
|
|
|
||||||
2008
|
$
|
569
|
|
|
$
|
227,648
|
|
|
0.2
|
%
|
|
0.0
|
%
|
2009
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
2010
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
2011
|
4,477
|
|
|
383,830
|
|
|
1.2
|
%
|
|
0.3
|
%
|
||
2012
|
14,656
|
|
|
548,865
|
|
|
2.7
|
%
|
|
1.1
|
%
|
||
2013
(3)
|
42,890
|
|
|
552,052
|
|
|
7.8
|
%
|
|
3.4
|
%
|
||
2014
(3)
|
100,747
|
|
|
518,289
|
|
|
19.4
|
%
|
|
7.7
|
%
|
||
2015
|
181,712
|
|
|
500,192
|
|
|
36.3
|
%
|
|
14.0
|
%
|
||
2016
|
330,757
|
|
|
555,087
|
|
|
59.6
|
%
|
|
25.4
|
%
|
||
2017
|
449,677
|
|
|
533,289
|
|
|
84.3
|
%
|
|
34.6
|
%
|
||
2018
|
175,317
|
|
|
178,827
|
|
|
98.0
|
%
|
|
13.5
|
%
|
||
Subtotal
|
1,300,802
|
|
|
3,998,079
|
|
|
32.5
|
%
|
|
100.0
|
%
|
||
Europe:
|
|
|
|
|
|
|
|
||||||
2013
(3)
|
274,328
|
|
|
619,079
|
|
|
44.3
|
%
|
|
17.9
|
%
|
||
2014
(3)
|
290,217
|
|
|
630,342
|
|
|
46.0
|
%
|
|
18.9
|
%
|
||
2015
(3)
|
230,083
|
|
|
423,306
|
|
|
54.4
|
%
|
|
15.0
|
%
|
||
2016
|
210,993
|
|
|
258,867
|
|
|
81.5
|
%
|
|
13.8
|
%
|
||
2017
|
439,643
|
|
|
464,120
|
|
|
94.7
|
%
|
|
28.7
|
%
|
||
2018
|
87,848
|
|
|
87,316
|
|
|
100.6
|
%
|
|
5.7
|
%
|
||
Subtotal
|
1,533,112
|
|
|
2,483,030
|
|
|
61.7
|
%
|
|
100.0
|
%
|
||
Other geographies:
|
|
|
|
|
|
|
|
||||||
2014
|
63,071
|
|
|
86,989
|
|
|
72.5
|
%
|
|
33.2
|
%
|
||
2015
(3)
|
31,779
|
|
|
91,126
|
|
|
34.9
|
%
|
|
16.7
|
%
|
||
2016
|
41,274
|
|
|
79,804
|
|
|
51.7
|
%
|
|
21.7
|
%
|
||
2017
|
43,804
|
|
|
58,108
|
|
|
75.4
|
%
|
|
23.0
|
%
|
||
2018
|
10,299
|
|
|
10,409
|
|
|
98.9
|
%
|
|
5.4
|
%
|
||
Subtotal
|
190,227
|
|
|
326,436
|
|
|
58.3
|
%
|
|
100.0
|
%
|
||
Total
|
$
|
3,024,141
|
|
|
$
|
6,807,545
|
|
|
44.4
|
%
|
|
100.0
|
%
|
(1)
|
Purchase price refers to the cash paid to a seller to acquire a portfolio less Put-Backs, Recalls, and other adjustments.
|
(2)
|
Total collections realized exceed the net book value of the portfolio and have been converted to ZBA.
|
(3)
|
Includes portfolios acquired in connection with certain business combinations.
|
Years Ending December 31,
|
United States
|
|
Europe
|
|
Other Geographies
|
|
Total
Amortization
|
||||||||
2018
(1)
|
$
|
257,006
|
|
|
$
|
100,357
|
|
|
$
|
10,611
|
|
|
$
|
367,974
|
|
2019
|
363,643
|
|
|
179,986
|
|
|
31,170
|
|
|
574,799
|
|
||||
2020
|
253,405
|
|
|
182,299
|
|
|
36,676
|
|
|
472,380
|
|
||||
2021
|
161,265
|
|
|
161,770
|
|
|
33,885
|
|
|
356,920
|
|
||||
2022
|
106,059
|
|
|
141,989
|
|
|
33,010
|
|
|
281,058
|
|
||||
2023
|
68,352
|
|
|
126,025
|
|
|
26,962
|
|
|
221,339
|
|
||||
2024
|
48,536
|
|
|
115,097
|
|
|
11,235
|
|
|
174,868
|
|
||||
2025
|
27,147
|
|
|
107,492
|
|
|
4,005
|
|
|
138,644
|
|
||||
2026
|
13,225
|
|
|
105,842
|
|
|
2,227
|
|
|
121,294
|
|
||||
2027
|
2,162
|
|
|
101,754
|
|
|
431
|
|
|
104,347
|
|
||||
2028
|
2
|
|
|
95,327
|
|
|
15
|
|
|
95,344
|
|
||||
2029
|
—
|
|
|
50,939
|
|
|
—
|
|
|
50,939
|
|
||||
2030
|
—
|
|
|
30,194
|
|
|
—
|
|
|
30,194
|
|
||||
2031
|
—
|
|
|
22,977
|
|
|
—
|
|
|
22,977
|
|
||||
2032
|
—
|
|
|
10,515
|
|
|
—
|
|
|
10,515
|
|
||||
2033
|
—
|
|
|
549
|
|
|
—
|
|
|
549
|
|
||||
Total
|
$
|
1,300,802
|
|
|
$
|
1,533,112
|
|
|
$
|
190,227
|
|
|
$
|
3,024,141
|
|
(1)
|
2018 amount consists of three months data from April 1, 2018 to December 31, 2018.
|
|
Headcount as of March 31,
|
||||||||||
|
2018
|
|
2017
|
||||||||
|
Domestic
|
|
International
|
|
Domestic
|
|
International
|
||||
General & Administrative
|
970
|
|
|
2,725
|
|
|
890
|
|
|
2,211
|
|
Account Manager
|
446
|
|
|
4,367
|
|
|
314
|
|
|
3,362
|
|
Total
|
1,416
|
|
|
7,092
|
|
|
1,204
|
|
|
5,573
|
|
Quarter
|
# of
Accounts
|
|
Face Value
|
|
Purchase
Price
|
|||||
Q1 2016
|
1,450
|
|
|
$
|
3,544,338
|
|
|
$
|
256,753
|
|
Q2 2016
|
946
|
|
|
2,841,527
|
|
|
233,116
|
|
||
Q3 2016
|
874
|
|
|
1,475,381
|
|
|
206,359
|
|
||
Q4 2016
|
1,159
|
|
|
1,943,775
|
|
|
210,491
|
|
||
Q1 2017
|
807
|
|
|
1,657,393
|
|
|
218,727
|
|
||
Q2 2017
|
1,347
|
|
|
2,441,909
|
|
|
246,415
|
|
||
Q3 2017
|
1,010
|
|
|
3,018,072
|
|
|
292,332
|
|
||
Q4 2017
|
1,434
|
|
|
2,985,978
|
|
|
300,761
|
|
||
Q1 2018
|
973
|
|
|
1,799,804
|
|
|
276,762
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
|
|
|
|
||||
|
(Unaudited)
|
||||||
Net cash provided by operating activities
|
$
|
1,029
|
|
|
$
|
27,160
|
|
Net cash used in investing activities
|
(84,488
|
)
|
|
(48,991
|
)
|
||
Net cash provided by financing activities
|
84,638
|
|
|
28,293
|
|
Number
|
|
Description
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
3.3
|
|
|
|
|
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document (filed herewith)
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document (filed herewith)
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith)
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document (filed herewith)
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document (filed herewith)
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith)
|
|
ENCORE CAPITAL GROUP, INC.
|
||
|
|
|
|
|
By:
|
|
/s/ Jonathan C. Clark
|
|
|
|
Jonathan C. Clark
|
|
|
|
Executive Vice President,
|
|
|
|
Chief Financial Officer and Treasurer
|
1 Year Encore Capital Chart |
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