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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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48-1090909
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(State or other jurisdiction of
incorporation or organization)
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(IRS Employer
Identification No.)
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3111 Camino Del Rio North, Suite 103 San Diego, California
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92108
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(Address of principal executive offices)
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(Zip code)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, $.01 Par Value Per Share
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The NASDAQ Stock Market LLC
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Large accelerated filer
x
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Accelerated filer
¨
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Non-accelerated filer
¨
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Smaller reporting company
¨
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Page
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Item 5—Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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•
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Superior Analytics
, including our extensive investments in data and behavioral science and our use of sophisticated predictive modeling techniques;
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•
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Operational Scale and Cost Leadership
, driven by our specialized call centers, efficient international operations, and effective internal and external litigation operations;
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•
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Strong Capital Stewardship
, underpinned by our disciplined ability to raise and deploy capital prudently;
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•
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Consumer-centric Commitment to Ethics and Principled Intent:
we strive to conduct business ethically and in ways that support consumers’ financial recovery. We commit to treat consumers with respect, compassion and integrity, and we demonstrate that commitment by continuous investment in compliance programs that enable us to efficiently adjust our business practices to a changing regulatory environment; and
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•
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Extendable Business Model
, driven by our scalable platform that supports strategic investment opportunities in new asset classes and geographic areas.
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•
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Inactive
. We strive to use our financial resources judiciously and efficiently by not deploying resources on accounts where the prospects of collection are remote based on a consumer’s situation.
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•
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Direct Mail
. We develop innovative, low-cost mail campaigns offering consumers appropriate discounts to encourage settlement of their accounts.
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•
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Call Centers
. We maintain domestic collection call centers in Phoenix, Arizona, St. Cloud, Minnesota, Troy, Michigan, and Roanoke, Virginia and international call centers in Gurgaon, India and San Jose, Costa Rica. Call centers generally consist of multiple collection departments. Account managers supervised by group managers are trained and divided into specialty teams. Account managers assess our consumers’ willingness and capacity to pay. They attempt to work with consumers to evaluate sources and means of repayment to achieve a full or negotiated lump sum settlement or develop payment programs customized to the individual’s ability to pay. In cases where a payment plan is developed, account managers encourage consumers to pay through automatic payment arrangements. We continuously educate account managers to understand and apply applicable laws and policies that are relevant in the account manager’s daily collection activities. Our ongoing training and monitoring efforts help ensure compliance with applicable laws and policies by account managers.
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•
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Skip Tracing
. If a consumer’s phone number proves inaccurate when an account manager calls an account, or if current contact information for a consumer is not available at the time of account purchase, then the account could be routed to our skip tracing process. We currently use a number of different skip tracing companies to provide accurate phone numbers and addresses.
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•
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Legal Action
. We generally refer accounts for legal action where the consumer has not responded to our direct mail efforts or our calls and it appears the consumer is able, but unwilling, to pay his or her obligations. When we decide to pursue legal action, we place the account into our internal legal channel or refer them to our network of retained law firms. If placed to our internal legal channel, attorneys in that channel will evaluate the accounts and make the final determination whether to pursue legal action. If referred to our network of retained law firms, we rely on our law firms’ expertise with respect to applicable debt collection laws to evaluate the accounts placed in that channel in order to make the decision about whether or not to pursue collection litigation. Prior to engaging an external law firm, we evaluate the firm’s compliance with consumer credit laws and regulations, operations, financial condition, and experience, among other key criteria. The law firms we hire may also attempt to communicate with the consumers in an attempt to collect their debts prior to initiating litigation. We pay these law firms a contingent fee based on amounts they collect on our behalf.
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•
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Third-Party Collection Agencies
. We selectively employ a strategy that uses collection agencies. Collection agencies receive a contingent fee for each dollar collected. Generally, we use these agencies on accounts when we believe they can liquidate better or less expensively than we can or to supplement capacity in our internal call centers. We also use agencies to initially provide us a way to scale quickly when large purchases are made and as a challenge to our internal call center collection teams. Prior to engaging a collection agency, we evaluate, among other things, those aspects of the agency’s business that we believe are relevant to its performance and compliance with consumer credit laws and regulations.
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•
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Online
. We offer an online payment portal that enhances consumer convenience by providing consumers the ability to make payments and submit inquiries online.
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•
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Sale
. We do not resell accounts to third parties in the ordinary course of our business.
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Dodd-Frank Act, including the Consumer Financial Protection Act (Title X of the Dodd-Frank Act, “CFPA”)
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Servicemembers’ Civil Relief Act
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Electronic Fund Transfer Act
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Telephone Consumer Protection Act (“TCPA”)
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Equal Credit Opportunity Act
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Truth In Lending Act
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Fair Credit Billing Act
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U.S. Bankruptcy Code
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Fair Credit Reporting Act (“FCRA”)
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Wire Act
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Federal Trade Commission Act (“FTCA”)
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Credit CARD Act
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Gramm-Leach-Bliley Act
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Foreign Corrupt Practices Act
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Health Insurance Portability and Accountability Act
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•
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the timing and ability of consumers to make payments, including the effects of seasonality and macroeconomic conditions on their ability to pay;
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•
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any charge to earnings resulting from an allowance against the carrying value of our receivable portfolios;
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•
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increases in operating expenses associated with the growth or change of our operations or compliance with increased regulatory and other legal requirements;
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•
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the cost of credit; and
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•
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the supply of receivables portfolios for sale on acceptable terms.
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•
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defaults in consumer debt;
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•
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continued origination of loans by originating institutions at sufficient volumes;
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•
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continued sale of receivable portfolios by originating institutions and portfolio resellers at sufficient volumes and acceptable price levels;
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•
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competition in the marketplace;
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•
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our ability to develop and maintain favorable relationships with key major credit originators and portfolio resellers;
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•
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our ability to obtain adequate data from credit originators or portfolio resellers to appropriately evaluate the collectability of, estimate the value of, and collect on portfolios; and
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•
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changes in laws and regulations governing consumer lending, bankruptcy, and collections.
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•
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compliance with and changes in international laws, including regulatory and compliance requirements that could affect our business;
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•
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differing accounting standards and practices;
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•
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increased exposure to U.S. laws that apply abroad, such as the Foreign Corrupt Practices Act, and exposure to other anti-corruption laws such as the U.K. Bribery Act;
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•
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social, political and economic instability or recessions;
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•
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fluctuations in foreign economies and currency exchange rates;
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•
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difficulty in hiring, staffing and managing qualified and proficient local employees and advisors to run international operations;
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•
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the difficulty of managing and operating an international enterprise, including difficulties in maintaining effective communications with employees due to distance, language, and cultural barriers;
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•
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difficulties implementing and maintaining effective internal controls and risk management and compliance initiatives;
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•
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potential disagreements with our joint venture business partners;
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•
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differing labor regulations and business practices; and
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•
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foreign tax consequences.
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•
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increase our vulnerability to general economic downturns and industry conditions;
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•
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require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate requirements;
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•
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limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
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•
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place us at a competitive disadvantage compared to competitors that have less debt;
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•
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increase our exposure to market and regulatory changes that could diminish the amount and value of our inventory that we borrow against under our secured credit facilities; and
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•
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limit, along with the financial and other restrictive covenants contained in the documents governing our indebtedness, our ability to borrow additional funds, make investments and incur liens, among other things.
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•
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acceleration of outstanding indebtedness;
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•
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exercise by our lenders of rights with respect to the collateral pledged under certain of our outstanding indebtedness;
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•
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our inability to continue to purchase receivables needed to operate our business; or
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•
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our inability to secure alternative financing on favorable terms, if at all.
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•
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our operating and financial performance and prospects;
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•
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our ability to repay our debt;
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•
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our access to financial and capital markets to refinance our debt;
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•
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investor perceptions of us and the industry and markets in which we operate;
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•
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future sales of equity or equity-related securities;
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•
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changes in earnings estimates or buy/sell recommendations by analysts;
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•
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changes in the supply of, demand for or price of portfolios;
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•
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our acquisition activity, including our expansion into new markets;
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•
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regulatory changes affecting our industry generally or our business and operations;
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•
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general financial, domestic, international, economic and other market conditions; and
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•
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the number of short positions on our stock at any particular time.
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Location
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Primary use
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Approximate
square footage
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San Diego, CA
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Corporate headquarters, internal legal and consumer support services
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118,000
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India
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Call center and administrative offices
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146,000
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United Kingdom
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Cabot corporate office, call center, internal legal and consumer support services
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83,000
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Troy, MI
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Call center and internal legal
|
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62,000
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St. Cloud, MN
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Call center
|
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46,000
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Roanoke, VA
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Call center and administrative offices
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40,000
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Spain
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Call center and administrative offices
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39,000
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Costa Rica
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Call center and administrative offices
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32,000
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Phoenix, AZ
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Call center and administrative offices
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31,000
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Australia
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Baycorp corporate office, call center, and administrative offices
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31,000
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|
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12/11
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12/12
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12/13
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12/14
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12/15
|
|
12/16
|
||||||||||||
Encore Capital Group, Inc.
|
$
|
100.00
|
|
|
$
|
144.03
|
|
|
$
|
236.41
|
|
|
$
|
208.84
|
|
|
$
|
136.78
|
|
|
$
|
134.76
|
|
NASDAQ Composite Index
|
$
|
100.00
|
|
|
$
|
116.41
|
|
|
$
|
165.47
|
|
|
$
|
188.69
|
|
|
$
|
200.32
|
|
|
$
|
216.54
|
|
Peer Group
|
$
|
100.00
|
|
|
$
|
154.84
|
|
|
$
|
223.78
|
|
|
$
|
244.82
|
|
|
$
|
149.47
|
|
|
$
|
169.32
|
|
|
As of and For The Year Ended December 31,
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||||||||||||||||||
|
2016
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2015
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|
2014
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2013
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2012
|
||||||||||
Revenues
|
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|
||||||||||
Revenue from receivable portfolios, net
(1)
|
$
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946,615
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|
$
|
1,072,436
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|
|
$
|
992,832
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|
|
$
|
744,870
|
|
|
$
|
545,412
|
|
Other revenues
|
82,643
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|
|
57,531
|
|
|
50,597
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|
|
11,407
|
|
|
7
|
|
|||||
Total revenues
|
1,029,258
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|
|
1,129,967
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|
|
1,043,429
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|
756,277
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|
545,419
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|
|||||
Operating expenses
|
|
|
|
|
|
|
|
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||||||||||
Salaries and employee benefits
|
281,097
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|
|
262,281
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|
|
238,942
|
|
|
159,319
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|
|
98,173
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|
|||||
Cost of legal collections
|
200,855
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|
|
229,847
|
|
|
205,661
|
|
|
186,959
|
|
|
168,703
|
|
|||||
Other operating expenses
|
100,737
|
|
|
93,210
|
|
|
89,934
|
|
|
63,229
|
|
|
47,500
|
|
|||||
Collection agency commissions
|
36,141
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|
|
37,858
|
|
|
33,343
|
|
|
33,097
|
|
|
15,332
|
|
|||||
General and administrative expenses
|
134,046
|
|
|
191,357
|
|
|
139,977
|
|
|
106,813
|
|
|
60,466
|
|
|||||
Depreciation and amortization
|
34,868
|
|
|
33,160
|
|
|
27,101
|
|
|
13,057
|
|
|
5,580
|
|
|||||
Total operating expenses
|
787,744
|
|
|
847,713
|
|
|
734,958
|
|
|
562,474
|
|
|
395,754
|
|
|||||
Income from operations
|
241,514
|
|
|
282,254
|
|
|
308,471
|
|
|
193,803
|
|
|
149,665
|
|
|||||
Other (expense) income
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
(198,367
|
)
|
|
(186,556
|
)
|
|
(166,942
|
)
|
|
(73,269
|
)
|
|
(25,564
|
)
|
|||||
Other income (expense)
|
14,228
|
|
|
2,235
|
|
|
113
|
|
|
(4,225
|
)
|
|
800
|
|
|||||
Total other expense
|
(184,139
|
)
|
|
(184,321
|
)
|
|
(166,829
|
)
|
|
(77,494
|
)
|
|
(24,764
|
)
|
|||||
Income from continuing operations before income taxes
|
57,375
|
|
|
97,933
|
|
|
141,642
|
|
|
116,309
|
|
|
124,901
|
|
|||||
Provision for income taxes
|
(38,205
|
)
|
|
(27,162
|
)
|
|
(48,569
|
)
|
|
(43,653
|
)
|
|
(49,832
|
)
|
|||||
Income from continuing operations
|
19,170
|
|
|
70,771
|
|
|
93,073
|
|
|
72,656
|
|
|
75,069
|
|
|||||
(Loss) income from discontinued operations, net of tax
|
(2,353
|
)
|
|
(23,387
|
)
|
|
5,205
|
|
|
1,084
|
|
|
(5,592
|
)
|
|||||
Net income
|
16,817
|
|
|
47,384
|
|
|
98,278
|
|
|
73,740
|
|
|
69,477
|
|
|||||
Net loss (income) attributable to noncontrolling interest
|
59,753
|
|
|
(2,249
|
)
|
|
5,448
|
|
|
1,559
|
|
|
—
|
|
|||||
Net income attributable to Encore Capital Group, Inc. stockholders
|
$
|
76,570
|
|
|
$
|
45,135
|
|
|
$
|
103,726
|
|
|
$
|
75,299
|
|
|
$
|
69,477
|
|
Amounts attributable to Encore Capital Group, Inc.:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from continuing operations
|
78,923
|
|
|
68,522
|
|
|
98,521
|
|
|
74,215
|
|
|
75,069
|
|
|||||
(Loss) income from discontinued operations, net of tax
|
(2,353
|
)
|
|
(23,387
|
)
|
|
5,205
|
|
|
1,084
|
|
|
(5,592
|
)
|
|||||
Net income
|
$
|
76,570
|
|
|
$
|
45,135
|
|
|
$
|
103,726
|
|
|
$
|
75,299
|
|
|
$
|
69,477
|
|
|
As of and For The Year Ended December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Earnings (loss) per share attributable to Encore Capital Group, Inc.:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic earnings (loss) per share from:
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
3.07
|
|
|
$
|
2.66
|
|
|
$
|
3.81
|
|
|
$
|
3.01
|
|
|
$
|
3.02
|
|
Discontinued operations
|
$
|
(0.09
|
)
|
|
$
|
(0.91
|
)
|
|
$
|
0.20
|
|
|
$
|
0.04
|
|
|
$
|
(0.22
|
)
|
Net basic earnings per share
|
$
|
2.98
|
|
|
$
|
1.75
|
|
|
$
|
4.01
|
|
|
$
|
3.05
|
|
|
$
|
2.80
|
|
Diluted earnings (loss) per share from:
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
3.05
|
|
|
$
|
2.57
|
|
|
$
|
3.58
|
|
|
$
|
2.83
|
|
|
$
|
2.91
|
|
Discontinued operations
|
$
|
(0.09
|
)
|
|
$
|
(0.88
|
)
|
|
$
|
0.19
|
|
|
$
|
0.04
|
|
|
$
|
(0.22
|
)
|
Net diluted earnings per share
|
$
|
2.96
|
|
|
$
|
1.69
|
|
|
$
|
3.77
|
|
|
$
|
2.87
|
|
|
$
|
2.69
|
|
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
25,713
|
|
|
25,722
|
|
|
25,853
|
|
|
24,659
|
|
|
24,855
|
|
|||||
Diluted
|
25,909
|
|
|
26,647
|
|
|
27,495
|
|
|
26,204
|
|
|
25,836
|
|
|||||
Selected operating data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of receivable portfolios, at cost
|
$
|
906,719
|
|
|
$
|
1,023,722
|
|
|
$
|
1,251,360
|
|
|
$
|
1,204,779
|
|
|
$
|
562,335
|
|
Gross collections for the period
|
1,685,604
|
|
|
1,700,725
|
|
|
1,607,497
|
|
|
1,279,506
|
|
|
948,055
|
|
|||||
Consolidated statements of financial condition data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
149,765
|
|
|
$
|
123,993
|
|
|
$
|
91,519
|
|
|
$
|
118,539
|
|
|
$
|
15,915
|
|
Investment in receivable portfolios, net
|
2,382,809
|
|
|
2,440,669
|
|
|
2,143,560
|
|
|
1,590,249
|
|
|
873,119
|
|
|||||
Total assets
|
3,670,497
|
|
|
4,174,819
|
|
|
3,711,631
|
|
|
2,657,208
|
|
|
1,157,584
|
|
|||||
Total debt
|
2,805,983
|
|
|
2,944,063
|
|
|
2,550,646
|
|
|
1,654,301
|
|
|
574,679
|
|
|||||
Total liabilities
|
3,069,982
|
|
|
3,526,331
|
|
|
3,046,692
|
|
|
2,054,737
|
|
|
751,768
|
|
|||||
Total Encore equity
|
559,304
|
|
|
596,453
|
|
|
623,000
|
|
|
571,897
|
|
|
405,816
|
|
(1)
|
Includes net allowance charge of
$84.2 million
for the year ended December 31, 2016, and net allowance reversals of
$6.8 million
, $17.4 million, $12.2 million and $4.2 million for the years ended December 31, 2015, 2014, 2013 and 2012, respectively.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
United States:
|
|
|
|
|
|
||||||
Credit card
|
$
|
517,590
|
|
|
$
|
481,759
|
|
|
$
|
525,813
|
|
Consumer bankruptcy receivables
|
43,953
|
|
|
24,373
|
|
|
—
|
|
|||
Subtotal
|
561,543
|
|
|
506,132
|
|
|
525,813
|
|
|||
Europe:
|
|
|
|
|
|
||||||
Credit card
|
237,473
|
|
|
396,364
|
|
|
622,419
|
|
|||
Other
|
27,240
|
|
|
27,200
|
|
|
9,837
|
|
|||
Subtotal
|
264,713
|
|
|
423,564
|
|
|
632,256
|
|
|||
Other geographies:
|
|
|
|
|
|
||||||
Credit card
|
70,902
|
|
|
86,638
|
|
|
36,537
|
|
|||
Mortgages
|
—
|
|
|
5,440
|
|
|
56,754
|
|
|||
Other
|
9,561
|
|
|
1,948
|
|
|
—
|
|
|||
Subtotal
|
80,463
|
|
|
94,026
|
|
|
93,291
|
|
|||
Total purchases
|
$
|
906,719
|
|
|
$
|
1,023,722
|
|
|
$
|
1,251,360
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
United States:
|
|
|
|
|
|
||||||
Collection sites
|
$
|
470,898
|
|
|
$
|
480,485
|
|
|
$
|
502,829
|
|
Legal collections
|
557,250
|
|
|
633,166
|
|
|
610,285
|
|
|||
Collection agencies
(1)
|
53,572
|
|
|
68,283
|
|
|
79,699
|
|
|||
Subtotal
|
1,081,720
|
|
|
1,181,934
|
|
|
1,192,813
|
|
|||
Europe:
|
|
|
|
|
|
||||||
Collection sites
|
250,036
|
|
|
234,904
|
|
|
221,771
|
|
|||
Legal collections
|
122,392
|
|
|
92,464
|
|
|
42,456
|
|
|||
Collection agencies
|
121,572
|
|
|
148,758
|
|
|
120,629
|
|
|||
Subtotal
|
494,000
|
|
|
476,126
|
|
|
384,856
|
|
|||
Other geographies:
|
|
|
|
|
|
||||||
Collection sites
|
79,680
|
|
|
38,334
|
|
|
29,828
|
|
|||
Legal collections
|
9,936
|
|
|
1,145
|
|
|
—
|
|
|||
Collection agencies
|
20,268
|
|
|
3,186
|
|
|
—
|
|
|||
Subtotal
|
109,884
|
|
|
42,665
|
|
|
29,828
|
|
|||
Total collections
|
$
|
1,685,604
|
|
|
$
|
1,700,725
|
|
|
$
|
1,607,497
|
|
(1)
|
Collections through our collection agency channel in the United States include accounts subject to bankruptcy filings collected by others. Additionally, collection agency collections often include accounts purchased from a competitor where we maintain the collection agency servicing until the accounts can be recalled and placed in our collection channels.
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Revenue from receivable portfolios, net
|
$
|
946,615
|
|
|
92.0
|
%
|
|
$
|
1,072,436
|
|
|
94.9
|
%
|
|
$
|
992,832
|
|
|
95.2
|
%
|
Other revenues
|
82,643
|
|
|
8.0
|
%
|
|
57,531
|
|
|
5.1
|
%
|
|
50,597
|
|
|
4.8
|
%
|
|||
Total revenues
|
1,029,258
|
|
|
100.0
|
%
|
|
1,129,967
|
|
|
100.0
|
%
|
|
1,043,429
|
|
|
100.0
|
%
|
|||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Salaries and employee benefits
|
281,097
|
|
|
27.3
|
%
|
|
262,281
|
|
|
23.2
|
%
|
|
238,942
|
|
|
22.9
|
%
|
|||
Cost of legal collections
|
200,855
|
|
|
19.5
|
%
|
|
229,847
|
|
|
20.3
|
%
|
|
205,661
|
|
|
19.7
|
%
|
|||
Other operating expenses
|
100,737
|
|
|
9.8
|
%
|
|
93,210
|
|
|
8.2
|
%
|
|
89,934
|
|
|
8.6
|
%
|
|||
Collection agency commissions
|
36,141
|
|
|
3.5
|
%
|
|
37,858
|
|
|
3.5
|
%
|
|
33,343
|
|
|
3.2
|
%
|
|||
General and administrative expenses
|
134,046
|
|
|
13.0
|
%
|
|
191,357
|
|
|
16.9
|
%
|
|
139,977
|
|
|
13.4
|
%
|
|||
Depreciation and amortization
|
34,868
|
|
|
3.4
|
%
|
|
33,160
|
|
|
2.9
|
%
|
|
27,101
|
|
|
2.6
|
%
|
|||
Total operating expenses
|
787,744
|
|
|
76.5
|
%
|
|
847,713
|
|
|
75.0
|
%
|
|
734,958
|
|
|
70.4
|
%
|
|||
Income from operations
|
241,514
|
|
|
23.5
|
%
|
|
282,254
|
|
|
25.0
|
%
|
|
308,471
|
|
|
29.6
|
%
|
|||
Other (expense) income
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest expense
|
(198,367
|
)
|
|
(19.3
|
)%
|
|
(186,556
|
)
|
|
(16.5
|
)%
|
|
(166,942
|
)
|
|
(16.0
|
)%
|
|||
Other income
|
14,228
|
|
|
1.4
|
%
|
|
2,235
|
|
|
0.2
|
%
|
|
113
|
|
|
0.0
|
%
|
|||
Total other expense
|
(184,139
|
)
|
|
(17.9
|
)%
|
|
(184,321
|
)
|
|
(16.3
|
)%
|
|
(166,829
|
)
|
|
(16.0
|
)%
|
|||
Income from continuing operations before income taxes
|
57,375
|
|
|
5.6
|
%
|
|
97,933
|
|
|
8.7
|
%
|
|
141,642
|
|
|
13.6
|
%
|
|||
Provision for income taxes
|
(38,205
|
)
|
|
(3.7
|
)%
|
|
(27,162
|
)
|
|
(2.4
|
)%
|
|
(48,569
|
)
|
|
(4.7
|
)%
|
|||
Income from continuing operations
|
19,170
|
|
|
1.9
|
%
|
|
70,771
|
|
|
6.3
|
%
|
|
93,073
|
|
|
8.9
|
%
|
|||
(Loss) income from discontinued operations, net of tax
|
(2,353
|
)
|
|
(0.3
|
)%
|
|
(23,387
|
)
|
|
(2.1
|
)%
|
|
5,205
|
|
|
0.5
|
%
|
|||
Net income
|
16,817
|
|
|
1.6
|
%
|
|
47,384
|
|
|
4.2
|
%
|
|
98,278
|
|
|
9.4
|
%
|
|||
Net loss (income) attributable to noncontrolling interest
|
59,753
|
|
|
5.8
|
%
|
|
(2,249
|
)
|
|
(0.2
|
)%
|
|
5,448
|
|
|
0.5
|
%
|
|||
Net income attributable to Encore Capital Group, Inc. stockholders
|
$
|
76,570
|
|
|
7.4
|
%
|
|
$
|
45,135
|
|
|
4.0
|
%
|
|
$
|
103,726
|
|
|
9.9
|
%
|
|
Year Ended December 31, 2016
|
||||||||||
|
Janus Holdings
|
|
Encore Europe
(1)
|
|
Consolidated
|
||||||
Total revenues
|
$
|
242,114
|
|
|
$
|
—
|
|
|
$
|
242,114
|
|
Total operating expenses
|
(197,341
|
)
|
|
—
|
|
|
(197,341
|
)
|
|||
Income from operations
|
44,773
|
|
|
—
|
|
|
44,773
|
|
|||
Interest expense-non-PEC
|
(109,178
|
)
|
|
—
|
|
|
(109,178
|
)
|
|||
PEC interest (expense) income
|
(47,646
|
)
|
|
23,349
|
|
|
(24,297
|
)
|
|||
Other income
|
15,270
|
|
|
—
|
|
|
15,270
|
|
|||
(Loss) income before income taxes
|
(96,781
|
)
|
|
23,349
|
|
|
(73,432
|
)
|
|||
Provision for income taxes
|
12,073
|
|
|
—
|
|
|
12,073
|
|
|||
Net (loss) income
|
(84,708
|
)
|
|
23,349
|
|
|
(61,359
|
)
|
|||
Net loss attributable to noncontrolling interest
|
11,863
|
|
|
36,350
|
|
|
48,213
|
|
|||
Net (loss) income attributable to Encore
|
$
|
(72,845
|
)
|
|
$
|
59,699
|
|
|
$
|
(13,146
|
)
|
|
Year Ended December 31, 2015
|
||||||||||
|
Janus Holdings
|
|
Encore Europe
(1)
|
|
Consolidated
|
||||||
Total revenues
|
$
|
349,379
|
|
|
$
|
—
|
|
|
$
|
349,379
|
|
Total operating expenses
|
(188,296
|
)
|
|
—
|
|
|
(188,296
|
)
|
|||
Income from operations
|
161,083
|
|
|
—
|
|
|
161,083
|
|
|||
Interest expense-non-PEC
|
(106,318
|
)
|
|
—
|
|
|
(106,318
|
)
|
|||
PEC interest (expense) income
|
(48,013
|
)
|
|
23,529
|
|
|
(24,484
|
)
|
|||
Other income
|
591
|
|
|
—
|
|
|
591
|
|
|||
Income before income taxes
|
7,343
|
|
|
23,529
|
|
|
30,872
|
|
|||
Provision for income taxes
|
1,294
|
|
|
—
|
|
|
1,294
|
|
|||
Net income
|
8,637
|
|
|
23,529
|
|
|
32,166
|
|
|||
Net income attributable to noncontrolling interest
|
(1,211
|
)
|
|
(3,705
|
)
|
|
(4,916
|
)
|
|||
Net income attributable to Encore
|
$
|
7,426
|
|
|
$
|
19,824
|
|
|
$
|
27,250
|
|
(1)
|
Includes only the results of operations related to Janus Holdings and therefore does not represent the complete financial performance of Encore Europe.
|
|
Year Ended December 31, 2014
|
||||||||||
|
Janus Holdings
|
|
Encore Europe
(1)
|
|
Consolidated
|
||||||
Total revenues
|
$
|
286,630
|
|
|
$
|
—
|
|
|
$
|
286,630
|
|
Total operating expenses
|
(150,349
|
)
|
|
—
|
|
|
(150,349
|
)
|
|||
Income from operations
|
136,281
|
|
|
—
|
|
|
136,281
|
|
|||
Interest expense-non-PEC
|
(96,419
|
)
|
|
—
|
|
|
(96,419
|
)
|
|||
PEC interest (expense) income
|
(43,630
|
)
|
|
21,201
|
|
|
(22,429
|
)
|
|||
Other expense
|
(646
|
)
|
|
—
|
|
|
(646
|
)
|
|||
(Loss) income before income taxes
|
(4,414
|
)
|
|
21,201
|
|
|
16,787
|
|
|||
Provision for income taxes
|
(3,241
|
)
|
|
—
|
|
|
(3,241
|
)
|
|||
Net (loss) income
|
(7,655
|
)
|
|
21,201
|
|
|
13,546
|
|
|||
Net loss attributable to noncontrolling interest
|
1,108
|
|
|
3,267
|
|
|
4,375
|
|
|||
Net (loss) income attributable to Encore
|
$
|
(6,547
|
)
|
|
$
|
24,468
|
|
|
$
|
17,921
|
|
(1)
|
Includes only the results of operations related to Janus Holdings and therefore does not represent the complete financial performance of Encore Europe.
|
|
Year Ended December 31, 2016
|
|
As of
December 31, 2016 |
|||||||||||||||||||||
|
Collections
(1)
|
|
Gross
Revenue
(2)
|
|
Revenue
Recognition
Rate
(3)
|
|
Net
Reversal
(Portfolio
Allowance)
|
|
Revenue
% of Total
Revenue
|
|
Unamortized
Balances
|
|
Monthly
IRR
|
|||||||||||
United States:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
ZBA
(4)
|
$
|
137,287
|
|
|
$
|
130,627
|
|
|
95.1
|
%
|
|
$
|
6,820
|
|
|
12.7
|
%
|
|
$
|
—
|
|
|
—
|
|
2007
|
2,200
|
|
|
748
|
|
|
34.0
|
%
|
|
795
|
|
|
0.1
|
%
|
|
941
|
|
|
4.5
|
%
|
||||
2008
|
8,687
|
|
|
4,301
|
|
|
49.5
|
%
|
|
2,219
|
|
|
0.4
|
%
|
|
3,631
|
|
|
5.2
|
%
|
||||
2009
(5)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.0
|
%
|
||||
2010
|
10,402
|
|
|
7,493
|
|
|
72.0
|
%
|
|
—
|
|
|
0.7
|
%
|
|
807
|
|
|
25.0
|
%
|
||||
2011
|
54,991
|
|
|
35,643
|
|
|
64.8
|
%
|
|
—
|
|
|
3.4
|
%
|
|
7,866
|
|
|
17.7
|
%
|
||||
2012
|
113,068
|
|
|
72,877
|
|
|
64.5
|
%
|
|
—
|
|
|
7.1
|
%
|
|
38,886
|
|
|
11.7
|
%
|
||||
2013
|
196,752
|
|
|
126,666
|
|
|
64.4
|
%
|
|
—
|
|
|
12.3
|
%
|
|
90,720
|
|
|
9.1
|
%
|
||||
2014
|
216,356
|
|
|
112,554
|
|
|
52.0
|
%
|
|
—
|
|
|
10.9
|
%
|
|
187,083
|
|
|
4.1
|
%
|
||||
2015
|
231,101
|
|
|
103,073
|
|
|
44.6
|
%
|
|
—
|
|
|
10.0
|
%
|
|
313,089
|
|
|
2.4
|
%
|
||||
2016
|
110,876
|
|
|
65,639
|
|
|
59.2
|
%
|
|
—
|
|
|
6.4
|
%
|
|
515,260
|
|
|
2.4
|
%
|
||||
Subtotal
|
1,081,720
|
|
|
659,621
|
|
|
61.0
|
%
|
|
9,834
|
|
|
64.0
|
%
|
|
1,158,283
|
|
|
3.7
|
%
|
||||
Europe:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
2013
|
165,616
|
|
|
127,606
|
|
|
77.0
|
%
|
|
(76,018
|
)
|
|
12.4
|
%
|
|
256,725
|
|
|
3.0
|
%
|
||||
2014
|
156,666
|
|
|
93,657
|
|
|
59.8
|
%
|
|
(13,150
|
)
|
|
9.1
|
%
|
|
308,568
|
|
|
2.1
|
%
|
||||
2015
|
127,083
|
|
|
62,769
|
|
|
49.4
|
%
|
|
(4,843
|
)
|
|
6.1
|
%
|
|
255,445
|
|
|
1.6
|
%
|
||||
2016
|
44,635
|
|
|
24,733
|
|
|
55.4
|
%
|
|
—
|
|
|
2.4
|
%
|
|
230,225
|
|
|
1.8
|
%
|
||||
Subtotal
|
494,000
|
|
|
308,765
|
|
|
62.5
|
%
|
|
(94,011
|
)
|
|
30.0
|
%
|
|
1,050,963
|
|
|
2.1
|
%
|
||||
Other geographies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
ZBA
(4)
|
7,552
|
|
|
7,433
|
|
|
98.4
|
%
|
|
—
|
|
|
0.7
|
%
|
|
—
|
|
|
—
|
|
||||
2013
|
1,548
|
|
|
—
|
|
|
0.0
|
%
|
|
—
|
|
|
0.0
|
%
|
|
1,008
|
|
|
—
|
|
||||
2014
|
17,443
|
|
|
17,675
|
|
|
101.3
|
%
|
|
—
|
|
|
1.7
|
%
|
|
56,691
|
|
|
2.2
|
%
|
||||
2015
|
57,055
|
|
|
27,810
|
|
|
48.7
|
%
|
|
—
|
|
|
2.7
|
%
|
|
51,758
|
|
|
3.5
|
%
|
||||
2016
|
26,286
|
|
|
9,488
|
|
|
36.1
|
%
|
|
—
|
|
|
0.9
|
%
|
|
64,106
|
|
|
1.9
|
%
|
||||
Subtotal
|
109,884
|
|
|
62,406
|
|
|
56.8
|
%
|
|
—
|
|
|
6.0
|
%
|
|
173,563
|
|
|
2.4
|
%
|
||||
Total
|
$
|
1,685,604
|
|
|
$
|
1,030,792
|
|
|
61.2
|
%
|
|
$
|
(84,177
|
)
|
|
100.0
|
%
|
|
$
|
2,382,809
|
|
|
2.9
|
%
|
(1)
|
Does not include amounts collected on behalf of others.
|
(2)
|
Gross revenue excludes the effects of net portfolio allowance or net portfolio allowance reversals.
|
(3)
|
Revenue recognition rate excludes the effects of net portfolio allowance or net portfolio allowance reversals.
|
(4)
|
ZBA 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”).
|
(5)
|
Total collections realized exceed the net book value of the portfolio and have been converted to ZBA.
|
|
Year Ended December 31, 2015
|
|
As of
December 31, 2015 |
|||||||||||||||||||||
|
Collections
(1)
|
|
Gross
Revenue
(2)
|
|
Revenue
Recognition
Rate
(3)
|
|
Net
Reversal
(Portfolio
Allowance)
|
|
Revenue
% of Total
Revenue
|
|
Unamortized
Balances
|
|
Monthly
IRR
|
|||||||||||
United States:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
ZBA
(4)
|
$
|
103,398
|
|
|
$
|
91,876
|
|
|
88.9
|
%
|
|
$
|
11,765
|
|
|
8.6
|
%
|
|
$
|
—
|
|
|
—
|
|
2007
|
3,150
|
|
|
1,118
|
|
|
35.5
|
%
|
|
1,009
|
|
|
0.1
|
%
|
|
1,573
|
|
|
4.6
|
%
|
||||
2008
|
13,529
|
|
|
8,665
|
|
|
64.0
|
%
|
|
2,311
|
|
|
0.8
|
%
|
|
5,798
|
|
|
10.0
|
%
|
||||
2009
|
18,084
|
|
|
10,347
|
|
|
57.2
|
%
|
|
—
|
|
|
1.0
|
%
|
|
—
|
|
|
—
|
|
||||
2010
|
42,615
|
|
|
25,629
|
|
|
60.1
|
%
|
|
—
|
|
|
2.4
|
%
|
|
3,742
|
|
|
21.2
|
%
|
||||
2011
|
112,753
|
|
|
85,303
|
|
|
75.7
|
%
|
|
—
|
|
|
8.0
|
%
|
|
27,257
|
|
|
18.5
|
%
|
||||
2012
|
176,914
|
|
|
108,968
|
|
|
61.6
|
%
|
|
—
|
|
|
10.2
|
%
|
|
79,973
|
|
|
8.6
|
%
|
||||
2013
|
298,068
|
|
|
176,878
|
|
|
59.3
|
%
|
|
—
|
|
|
16.6
|
%
|
|
161,539
|
|
|
7.4
|
%
|
||||
2014
|
307,814
|
|
|
146,583
|
|
|
47.6
|
%
|
|
—
|
|
|
13.8
|
%
|
|
291,402
|
|
|
3.6
|
%
|
||||
2015
|
105,609
|
|
|
47,300
|
|
|
44.8
|
%
|
|
—
|
|
|
4.4
|
%
|
|
445,527
|
|
|
1.8
|
%
|
||||
Impact of CFPB settlement
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,322
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Subtotal
|
1,181,934
|
|
|
702,667
|
|
|
59.5
|
%
|
|
6,763
|
|
|
65.9
|
%
|
|
1,016,811
|
|
|
4.4
|
%
|
||||
Europe:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
2013
|
212,129
|
|
|
171,750
|
|
|
81.0
|
%
|
|
—
|
|
|
16.1
|
%
|
|
439,619
|
|
|
3.1
|
%
|
||||
2014
|
198,127
|
|
|
122,490
|
|
|
61.8
|
%
|
|
—
|
|
|
11.5
|
%
|
|
444,618
|
|
|
2.1
|
%
|
||||
2015
|
65,870
|
|
|
38,129
|
|
|
57.9
|
%
|
|
—
|
|
|
3.6
|
%
|
|
384,231
|
|
|
1.9
|
%
|
||||
Subtotal
|
476,126
|
|
|
332,369
|
|
|
69.8
|
%
|
|
—
|
|
|
31.2
|
%
|
|
1,268,468
|
|
|
2.4
|
%
|
||||
Other geographies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
ZBA
(4)
|
4,565
|
|
|
4,571
|
|
|
100.1
|
%
|
|
—
|
|
|
0.4
|
%
|
|
—
|
|
|
—
|
|
||||
2012
|
471
|
|
|
—
|
|
|
0.0
|
%
|
|
—
|
|
|
0.0
|
%
|
|
—
|
|
|
—
|
|
||||
2013
|
6,507
|
|
|
319
|
|
|
4.9
|
%
|
|
—
|
|
|
0.0
|
%
|
|
2,480
|
|
|
0.0
|
%
|
||||
2014
|
16,062
|
|
|
19,910
|
|
|
124.0
|
%
|
|
—
|
|
|
1.9
|
%
|
|
67,714
|
|
|
2.4
|
%
|
||||
2015
|
15,060
|
|
|
5,837
|
|
|
38.8
|
%
|
|
—
|
|
|
0.5
|
%
|
|
85,196
|
|
|
2.9
|
%
|
||||
Subtotal
|
42,665
|
|
|
30,637
|
|
|
71.8
|
%
|
|
—
|
|
|
2.9
|
%
|
|
155,390
|
|
|
2.6
|
%
|
||||
Total
|
$
|
1,700,725
|
|
|
$
|
1,065,673
|
|
|
62.7
|
%
|
|
$
|
6,763
|
|
|
100.0
|
%
|
|
$
|
2,440,669
|
|
|
3.2
|
%
|
(1)
|
Does not include amounts collected on behalf of others.
|
(2)
|
Gross revenue excludes the effects of net portfolio allowance or net portfolio allowance reversals.
|
(3)
|
Revenue recognition rate excludes the effects of net portfolio allowance or net portfolio allowance reversals.
|
(4)
|
ZBA 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”).
|
|
Year Ended December 31,
|
||||
|
2016
|
|
2015
|
||
United States
|
40.5
|
%
|
|
42.0
|
%
|
Europe
|
32.8
|
%
|
|
33.0
|
%
|
Other geographies
|
44.1
|
%
|
|
32.9
|
%
|
Overall cost per dollar collected
|
38.5
|
%
|
|
39.2
|
%
|
|
Year Ended December 31,
|
|||||||||||||
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|||||||
Stated interest on debt obligations
|
$
|
159,883
|
|
|
$
|
151,617
|
|
|
$
|
8,266
|
|
|
5.5
|
%
|
Interest expense on preferred equity certificates
|
24,297
|
|
|
24,484
|
|
|
(187
|
)
|
|
(0.8
|
)%
|
|||
Amortization of loan fees and other loan costs
|
12,618
|
|
|
11,792
|
|
|
826
|
|
|
7.0
|
%
|
|||
Amortization of debt discount
|
10,520
|
|
|
9,410
|
|
|
1,110
|
|
|
11.8
|
%
|
|||
Accretion of debt premium
|
(8,951
|
)
|
|
(10,747
|
)
|
|
1,796
|
|
|
(16.7
|
)%
|
|||
Total interest expense
|
$
|
198,367
|
|
|
$
|
186,556
|
|
|
$
|
11,811
|
|
|
6.3
|
%
|
|
Year Ended December 31,
|
||||
|
2016
|
|
2015
|
||
Federal provision
|
35.0
|
%
|
|
35.0
|
%
|
State provision
|
2.3
|
%
|
|
0.2
|
%
|
International benefit
(1)
|
(3.6
|
)%
|
|
(7.8
|
)%
|
Tax reserves
(2)
|
(3.2
|
)%
|
|
(2.0
|
)%
|
Permanent items
(3)
|
14.7
|
%
|
|
6.0
|
%
|
Increase (decrease) in valuation allowance
(4)
|
20.7
|
%
|
|
(5.6
|
)%
|
Other
|
0.7
|
%
|
|
1.9
|
%
|
Effective rate
|
66.6
|
%
|
|
27.7
|
%
|
(1)
|
Relates primarily to the lower tax rate on the income attributable to international operations.
|
(2)
|
Represents release of reserves taken for a certain tax position.
|
(3)
|
Represents a provision for nondeductible items, including overall foreign loss in 2016 and a settlement with the CFPB in 2015. The Company incurred a
$10.0 million
civil monetary penalty related to a settlement with the CFPB during the year ended December 31, 2015, which is not deductible for income tax purposes.
|
(4)
|
Valuation allowance increased in 2016 due to a foreign subsidiary’s cumulative operating loss.
|
|
Year Ended December 31, 2015
|
|
As of
December 31, 2015 |
|||||||||||||||||||||
|
Collections
(1)
|
|
Gross
Revenue
(2)
|
|
Revenue
Recognition
Rate
(3)
|
|
Net
Reversal
(Portfolio
Allowance)
|
|
Revenue
% of Total
Revenue
|
|
Unamortized
Balances
|
|
Monthly
IRR
|
|||||||||||
United States:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
ZBA
(4)
|
$
|
103,398
|
|
|
$
|
91,876
|
|
|
88.9
|
%
|
|
$
|
11,765
|
|
|
8.6
|
%
|
|
$
|
—
|
|
|
—
|
|
2007
|
3,150
|
|
|
1,118
|
|
|
35.5
|
%
|
|
1,009
|
|
|
0.1
|
%
|
|
1,573
|
|
|
4.6
|
%
|
||||
2008
|
13,529
|
|
|
8,665
|
|
|
64.0
|
%
|
|
2,311
|
|
|
0.8
|
%
|
|
5,798
|
|
|
10.0
|
%
|
||||
2009
|
18,084
|
|
|
10,347
|
|
|
57.2
|
%
|
|
—
|
|
|
1.0
|
%
|
|
—
|
|
|
—
|
|
||||
2010
|
42,615
|
|
|
25,629
|
|
|
60.1
|
%
|
|
—
|
|
|
2.4
|
%
|
|
3,742
|
|
|
21.2
|
%
|
||||
2011
|
112,753
|
|
|
85,303
|
|
|
75.7
|
%
|
|
—
|
|
|
8.0
|
%
|
|
27,257
|
|
|
18.5
|
%
|
||||
2012
|
176,914
|
|
|
108,968
|
|
|
61.6
|
%
|
|
—
|
|
|
10.2
|
%
|
|
79,973
|
|
|
8.6
|
%
|
||||
2013
|
298,068
|
|
|
176,878
|
|
|
59.3
|
%
|
|
—
|
|
|
16.6
|
%
|
|
161,539
|
|
|
7.4
|
%
|
||||
2014
|
307,814
|
|
|
146,583
|
|
|
47.6
|
%
|
|
—
|
|
|
13.8
|
%
|
|
291,402
|
|
|
3.6
|
%
|
||||
2015
|
105,609
|
|
|
47,300
|
|
|
44.8
|
%
|
|
—
|
|
|
4.4
|
%
|
|
445,527
|
|
|
1.8
|
%
|
||||
Impact of CFPB settlement
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,322
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Subtotal
|
1,181,934
|
|
|
702,667
|
|
|
59.5
|
%
|
|
6,763
|
|
|
65.9
|
%
|
|
1,016,811
|
|
|
4.4
|
%
|
||||
Europe:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
2013
|
212,129
|
|
|
171,750
|
|
|
81.0
|
%
|
|
—
|
|
|
16.1
|
%
|
|
439,619
|
|
|
3.1
|
%
|
||||
2014
|
198,127
|
|
|
122,490
|
|
|
61.8
|
%
|
|
—
|
|
|
11.5
|
%
|
|
444,618
|
|
|
2.1
|
%
|
||||
2015
|
65,870
|
|
|
38,129
|
|
|
57.9
|
%
|
|
—
|
|
|
3.6
|
%
|
|
384,231
|
|
|
1.9
|
%
|
||||
Subtotal
|
476,126
|
|
|
332,369
|
|
|
69.8
|
%
|
|
—
|
|
|
31.2
|
%
|
|
1,268,468
|
|
|
2.4
|
%
|
||||
Other geographies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
ZBA
(4)
|
4,565
|
|
|
4,571
|
|
|
100.1
|
%
|
|
—
|
|
|
0.4
|
%
|
|
—
|
|
|
—
|
|
||||
2012
|
471
|
|
|
—
|
|
|
0.0
|
%
|
|
—
|
|
|
0.0
|
%
|
|
—
|
|
|
—
|
|
||||
2013
|
6,507
|
|
|
319
|
|
|
4.9
|
%
|
|
—
|
|
|
0.0
|
%
|
|
2,480
|
|
|
0.0
|
%
|
||||
2014
|
16,062
|
|
|
19,910
|
|
|
124.0
|
%
|
|
—
|
|
|
1.9
|
%
|
|
67,714
|
|
|
2.4
|
%
|
||||
2015
|
15,060
|
|
|
5,837
|
|
|
38.8
|
%
|
|
—
|
|
|
0.5
|
%
|
|
85,196
|
|
|
2.9
|
%
|
||||
Subtotal
|
42,665
|
|
|
30,637
|
|
|
71.8
|
%
|
|
—
|
|
|
2.9
|
%
|
|
155,390
|
|
|
2.6
|
%
|
||||
Total
|
$
|
1,700,725
|
|
|
$
|
1,065,673
|
|
|
62.7
|
%
|
|
$
|
6,763
|
|
|
100.0
|
%
|
|
$
|
2,440,669
|
|
|
3.2
|
%
|
(1)
|
Does not include amounts collected on behalf of others.
|
(2)
|
Gross revenue excludes the effects of net portfolio allowance or net portfolio allowance reversals.
|
(3)
|
Revenue recognition rate excludes the effects of net portfolio allowance or net portfolio allowance reversals.
|
(4)
|
ZBA 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.
|
|
Year Ended December 31, 2014
|
|
As of
December 31, 2014 |
|||||||||||||||||||||
|
Collections
(1)
|
|
Gross
Revenue
(2)
|
|
Revenue
Recognition
Rate
(3)
|
|
Net
Portfolio
Allowance
Reversal
|
|
Revenue
% of Total
Revenue
|
|
Unamortized
Balances
|
|
Monthly
IRR
|
|||||||||||
United States:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
ZBA
(4)
|
$
|
34,491
|
|
|
$
|
22,271
|
|
|
64.6
|
%
|
|
$
|
12,229
|
|
|
2.3
|
%
|
|
$
|
—
|
|
|
—
|
|
2006
|
3,067
|
|
|
601
|
|
|
19.6
|
%
|
|
—
|
|
|
0.1
|
%
|
|
—
|
|
|
—
|
|
||||
2007
|
7,971
|
|
|
3,316
|
|
|
41.6
|
%
|
|
1,612
|
|
|
0.3
|
%
|
|
2,603
|
|
|
4.8
|
%
|
||||
2008
|
27,715
|
|
|
14,939
|
|
|
53.9
|
%
|
|
3,566
|
|
|
1.5
|
%
|
|
8,400
|
|
|
8.6
|
%
|
||||
2009
|
52,661
|
|
|
39,586
|
|
|
75.2
|
%
|
|
—
|
|
|
4.1
|
%
|
|
7,894
|
|
|
25.6
|
%
|
||||
2010
|
111,058
|
|
|
82,375
|
|
|
74.2
|
%
|
|
—
|
|
|
8.4
|
%
|
|
21,180
|
|
|
22.9
|
%
|
||||
2011
|
154,930
|
|
|
108,167
|
|
|
69.8
|
%
|
|
—
|
|
|
11.1
|
%
|
|
55,968
|
|
|
13.5
|
%
|
||||
2012
|
259,252
|
|
|
137,986
|
|
|
53.2
|
%
|
|
—
|
|
|
14.1
|
%
|
|
150,876
|
|
|
6.4
|
%
|
||||
2013
|
397,864
|
|
|
220,121
|
|
|
55.3
|
%
|
|
—
|
|
|
22.6
|
%
|
|
284,819
|
|
|
5.0
|
%
|
||||
2014
|
143,804
|
|
|
79,585
|
|
|
55.3
|
%
|
|
—
|
|
|
8.2
|
%
|
|
456,970
|
|
|
2.7
|
%
|
||||
Subtotal
|
1,192,813
|
|
|
708,947
|
|
|
59.4
|
%
|
|
17,407
|
|
|
72.7
|
%
|
|
988,710
|
|
|
5.0
|
%
|
||||
Europe:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
2013
|
249,307
|
|
|
160,074
|
|
|
64.2
|
%
|
|
—
|
|
|
16.4
|
%
|
|
505,213
|
|
|
2.4
|
%
|
||||
2014
|
135,549
|
|
|
101,285
|
|
|
74.7
|
%
|
|
—
|
|
|
10.4
|
%
|
|
555,323
|
|
|
1.9
|
%
|
||||
Subtotal
|
384,856
|
|
|
261,359
|
|
|
67.9
|
%
|
|
—
|
|
|
26.8
|
%
|
|
1,060,536
|
|
|
2.1
|
%
|
||||
Other geographies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
2012
|
2,561
|
|
|
—
|
|
|
0.0
|
%
|
|
—
|
|
|
0.0
|
%
|
|
505
|
|
|
0.0
|
%
|
||||
2013
|
17,615
|
|
|
3,032
|
|
|
17.2
|
%
|
|
—
|
|
|
0.3
|
%
|
|
10,530
|
|
|
0.0
|
%
|
||||
2014
|
9,652
|
|
|
2,087
|
|
|
21.6
|
%
|
|
—
|
|
|
0.2
|
%
|
|
83,279
|
|
|
1.8
|
%
|
||||
Subtotal
|
29,828
|
|
|
5,119
|
|
|
17.2
|
%
|
|
—
|
|
|
0.5
|
%
|
|
94,314
|
|
|
1.6
|
%
|
||||
Total
|
$
|
1,607,497
|
|
|
$
|
975,425
|
|
|
60.7
|
%
|
|
$
|
17,407
|
|
|
100.0
|
%
|
|
$
|
2,143,560
|
|
|
3.1
|
%
|
(1)
|
Does not include amounts collected on behalf of others.
|
(2)
|
Gross revenue excludes the effects of net portfolio allowance or net portfolio allowance reversals.
|
(3)
|
Revenue recognition rate excludes the effects of net portfolio allowance or net portfolio allowance reversals.
|
(4)
|
ZBA 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.
|
|
Year Ended December 31,
|
||||
|
2015
|
|
2014
|
||
United States
|
42.0
|
%
|
|
41.7
|
%
|
Europe
|
33.0
|
%
|
|
29.3
|
%
|
Other geographies
|
32.9
|
%
|
|
30.2
|
%
|
Overall cost per dollar collected
|
39.2
|
%
|
|
38.6
|
%
|
|
Year Ended December 31,
|
|||||||||||||
|
2015
|
|
2014
|
|
$ Change
|
|
% Change
|
|||||||
Stated interest on debt obligations
|
$
|
151,616
|
|
|
$
|
137,274
|
|
|
$
|
14,342
|
|
|
10.4
|
%
|
Interest expense on preferred equity certificates
|
24,484
|
|
|
22,429
|
|
|
2,055
|
|
|
9.2
|
%
|
|||
Amortization of loan fees and other loan costs
|
11,792
|
|
|
9,049
|
|
|
2,743
|
|
|
30.3
|
%
|
|||
Amortization of debt discount
|
9,410
|
|
|
8,423
|
|
|
987
|
|
|
11.7
|
%
|
|||
Accretion of debt premium
|
(10,746
|
)
|
|
(10,233
|
)
|
|
(513
|
)
|
|
5.0
|
%
|
|||
Total interest expense
|
$
|
186,556
|
|
|
$
|
166,942
|
|
|
$
|
19,614
|
|
|
11.7
|
%
|
|
Year Ended December 31,
|
||||
|
2015
|
|
2014
|
||
Federal provision
|
35.0
|
%
|
|
35.0
|
%
|
State provision
(1)
|
0.2
|
%
|
|
5.7
|
%
|
International benefit
(2)
|
(7.8
|
)%
|
|
(3.8
|
)%
|
Tax reserves
(3)
|
(2.0
|
)%
|
|
0.0
|
%
|
Permanent items
(4)
|
6.0
|
%
|
|
4.3
|
%
|
Release of valuation allowance
|
(5.6
|
)%
|
|
0.0
|
%
|
Other
(5)
|
1.9
|
%
|
|
(6.9
|
)%
|
Effective rate
|
27.7
|
%
|
|
34.3
|
%
|
(1)
|
Primarily relates to a beneficial settlement with a state tax authority.
|
(2)
|
Relates primarily to the lower tax rate on the income attributable to international operations.
|
(3)
|
Represents a release of reserves for a certain tax position.
|
(4)
|
Represents a provision for nondeductible items, including a settlement with the CFPB in 2015.
|
(5)
|
Includes the effect of discrete items, primarily relates to the recognition of tax benefit as a result of a favorable tax settlement with taxing authorities as discussed below.
|
|
Year Ended December 31,
|
||||||||||||||||||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||||||||||||||||||||||||||
|
$
|
|
Per Diluted
Share— Accounting |
|
Per Diluted
Share— Economic |
|
$
|
|
Per Diluted
Share— Accounting |
|
Per Diluted
Share— Economic |
|
$
|
|
Per Diluted
Share— Accounting |
|
Per Diluted
Share— Economic |
||||||||||||||||||
GAAP net income from continuing operations attributable to Encore, as reported
|
$
|
78,923
|
|
|
$
|
3.05
|
|
|
$
|
3.05
|
|
|
$
|
68,522
|
|
|
$
|
2.57
|
|
|
$
|
2.64
|
|
|
$
|
98,521
|
|
|
$
|
3.58
|
|
|
$
|
3.73
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Convertible notes non-cash interest and issuance cost amortization
|
11,830
|
|
|
0.46
|
|
|
0.46
|
|
|
11,332
|
|
|
0.43
|
|
|
0.44
|
|
|
10,306
|
|
|
0.37
|
|
|
0.39
|
|
|||||||||
Acquisition, integration and restructuring related expenses
(1)
|
17,630
|
|
|
0.68
|
|
|
0.68
|
|
|
16,933
|
|
|
0.64
|
|
|
0.65
|
|
|
20,762
|
|
|
0.76
|
|
|
0.79
|
|
|||||||||
Gain on reversal of contingent consideration
(2)
|
(8,111
|
)
|
|
(0.31
|
)
|
|
(0.31
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Settlement fees and related administrative expenses
(3)
|
6,299
|
|
|
0.24
|
|
|
0.24
|
|
|
63,019
|
|
|
2.36
|
|
|
2.43
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Amortization of certain acquired intangible assets
(4)
|
2,593
|
|
|
0.10
|
|
|
0.10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Income tax effect of the adjustments
(5)
|
(12,577
|
)
|
|
(0.49
|
)
|
|
(0.49
|
)
|
|
(28,514
|
)
|
|
(1.07
|
)
|
|
(1.11
|
)
|
|
(10,552
|
)
|
|
(0.38
|
)
|
|
(0.40
|
)
|
|||||||||
Adjustments attributable to noncontrolling interest
(6)
|
(6,461
|
)
|
|
(0.25
|
)
|
|
(0.25
|
)
|
|
(5,273
|
)
|
|
(0.20
|
)
|
|
(0.20
|
)
|
|
(6,812
|
)
|
|
(0.25
|
)
|
|
(0.26
|
)
|
|||||||||
Adjusted income from continuing operations attributable to Encore
|
$
|
90,126
|
|
|
$
|
3.48
|
|
|
$
|
3.48
|
|
|
$
|
126,019
|
|
|
$
|
4.73
|
|
|
$
|
4.85
|
|
|
$
|
112,225
|
|
|
$
|
4.08
|
|
|
$
|
4.25
|
|
(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 a gain recognized as a result of reversing a liability for contingent consideration that was established in October 2015 when we acquired a debt solution service provider in Europe. We have adjusted for this amount because we do not believe this is indicative of ongoing operations. Refer to Note 4 “Fair Value Measurement - Contingent Consideration” in the notes to our consolidated financial statements for further details.
|
(3)
|
Amount represents litigation and government settlement fees and related administrative expenses. For the year ended December 31, 2016, amount consists of settlement and administrative fees related to certain TCPA settlements. For the year ended December 31, 2015, amount relates to the consent order with the CFPB that we entered into in September 2015. We believe these fees and 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)
|
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, particularly in recent quarters. 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.
|
(5)
|
Amount represents the total income tax effect of the adjustments, which is 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.
|
|
Year Ended December 31,
|
||||||||||
2016
|
|
2015
|
|
2014
|
|||||||
GAAP net income, as reported
|
$
|
16,817
|
|
|
$
|
47,384
|
|
|
$
|
98,278
|
|
Adjustments:
|
|
|
|
|
|
||||||
Loss (income) from discontinued operations, net of tax
|
2,353
|
|
|
23,387
|
|
|
(5,205
|
)
|
|||
Interest expense
|
198,367
|
|
|
186,556
|
|
|
166,942
|
|
|||
Interest income
(1)
|
(2,538
|
)
|
|
(1,664
|
)
|
|
(962
|
)
|
|||
Provision for income taxes
|
38,205
|
|
|
27,162
|
|
|
48,569
|
|
|||
Depreciation and amortization
|
34,868
|
|
|
33,160
|
|
|
27,101
|
|
|||
Stock-based compensation expense
|
12,627
|
|
|
22,008
|
|
|
17,181
|
|
|||
Acquisition, integration and restructuring related expenses
(2)
|
16,712
|
|
|
15,528
|
|
|
18,771
|
|
|||
Gain on reversal of contingent consideration
(3)
|
(8,111
|
)
|
|
—
|
|
|
—
|
|
|||
Settlement fees and related administrative expenses
(4)
|
6,299
|
|
|
63,019
|
|
|
—
|
|
|||
Adjusted EBITDA
|
$
|
315,599
|
|
|
$
|
416,540
|
|
|
$
|
370,675
|
|
|
|
|
|
|
|
||||||
Collections applied to principal balance
(5)
|
$
|
738,989
|
|
|
$
|
628,289
|
|
|
$
|
614,665
|
|
(1)
|
In the fourth quarter of 2016, we made a change to our presentation of adjusted EBITDA to adjust for interest income. In previous years we did not include interest income as an adjustment because it was immaterial. We have updated prior periods for comparability.
|
(2)
|
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.
|
(3)
|
Amount represents a gain recognized as a result of reversing a liability for contingent consideration that was established in October 2015 when we acquired a debt solution service provider in Europe. We have adjusted for this amount because we do not believe this is indicative of ongoing operations. Refer to Note 4 “Fair Value Measurement - Contingent Consideration” in the notes to our consolidated financial statements for further details.
|
(4)
|
Amount represents litigation and government settlement fees and related administrative expenses. For the year ended December 31, 2016, amount consists of settlement and administrative fees related to certain TCPA settlements. For the year ended December 31, 2015, amount relates to the consent order with the CFPB that we entered into in September 2015. We believe these fees and 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)
|
In our previous filings, amount was referred to as “Amount applied to principal on receivable portfolios.” Amount represents (a) gross collections from receivable portfolios less (b) revenue from receivable portfolios, net. Historically, we included this amount in our calculation of adjusted EBITDA. For transition purposes only, if we had included “collections applied to principal balance” in Adjusted EBITDA amounts would have been reported as:
|
|
Year Ended December 31,
|
||||||||||
2016
|
|
2015
|
|
2014
|
|||||||
Adjusted EBITDA (as reported above and as will be reported in future filings)
|
$
|
315,599
|
|
|
$
|
416,540
|
|
|
$
|
370,675
|
|
Collections applied to principal balance
|
738,989
|
|
|
628,289
|
|
|
614,665
|
|
|||
Adjusted EBITDA (using historical methods)
|
$
|
1,054,588
|
|
|
$
|
1,044,829
|
|
|
$
|
985,340
|
|
|
Year Ended December 31,
|
||||||||||
2016
|
|
2015
|
|
2014
|
|||||||
GAAP total operating expenses, as reported
|
$
|
787,744
|
|
|
$
|
847,713
|
|
|
$
|
734,958
|
|
Adjustments:
|
|
|
|
|
|
||||||
Stock-based compensation expense
|
(12,627
|
)
|
|
(22,008
|
)
|
|
(17,181
|
)
|
|||
Operating expenses related to non-portfolio purchasing and recovery business
(1)
|
(110,875
|
)
|
|
(88,548
|
)
|
|
(79,306
|
)
|
|||
Acquisition, integration and restructuring related operating expenses
(2)
|
(17,630
|
)
|
|
(15,528
|
)
|
|
(18,771
|
)
|
|||
Gain on reversal of contingent consideration
(3)
|
8,111
|
|
|
—
|
|
|
—
|
|
|||
Settlement fees and related administrative expenses
(4)
|
(6,299
|
)
|
|
(54,697
|
)
|
|
—
|
|
|||
Adjusted operating expenses related to portfolio purchasing and recovery business
|
$
|
648,424
|
|
|
$
|
666,932
|
|
|
$
|
619,700
|
|
(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 a gain recognized as a result of reversing a liability for contingent consideration that was established in October 2015 when we acquired a debt solution service provider in Europe. We have adjusted for this amount because we do not believe this is indicative of ongoing operations. Refer to Note 4 “Fair Value Measurement - Contingent Consideration” in the notes to our consolidated financial statements for further details.
|
(4)
|
Amount represents litigation and government settlement fees and related administrative expenses. For the year ended December 31, 2016, amount consists of settlement and administrative fees related to certain TCPA settlements. For the year ended December 31, 2015, amount relates to the consent order with the CFPB that we entered into in September 2015. We believe these fees and 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
December 31, 2016
, excluding collections on behalf of others.
|
(3)
|
Cumulative Collections Multiple (“CCM”) through
December 31, 2016
refers to collections as a multiple of purchase price.
|
|
Purchase Price
(1)
|
|
Historical
Collections
(2)
|
|
Estimated
Remaining
Collections
(3)
|
|
Total Estimated
Gross Collections
|
|
Total Estimated Gross
Collections to
Purchase Price
|
|||||||||
United States:
|
|
|
|
|
|
|
|
|
|
|||||||||
<2007
|
$
|
719,081
|
|
|
$
|
2,210,234
|
|
|
$
|
29,132
|
|
|
$
|
2,239,366
|
|
|
3.1
|
|
2007
|
204,063
|
|
|
525,148
|
|
|
21,999
|
|
|
547,147
|
|
|
2.7
|
|
||||
2008
|
227,752
|
|
|
622,728
|
|
|
47,822
|
|
|
670,550
|
|
|
2.9
|
|
||||
2009
|
252,984
|
|
|
791,374
|
|
|
73,155
|
|
|
864,529
|
|
|
3.4
|
|
||||
2010
|
357,367
|
|
|
1,043,354
|
|
|
108,431
|
|
|
1,151,785
|
|
|
3.2
|
|
||||
2011
|
385,274
|
|
|
997,408
|
|
|
147,782
|
|
|
1,145,190
|
|
|
3.0
|
|
||||
2012
|
549,035
|
|
|
1,087,088
|
|
|
195,173
|
|
|
1,282,261
|
|
|
2.3
|
|
||||
2013
(4)
|
552,433
|
|
|
1,129,151
|
|
|
357,628
|
|
|
1,486,779
|
|
|
2.7
|
|
||||
2014
(4)
|
519,136
|
|
|
668,349
|
|
|
432,089
|
|
|
1,100,438
|
|
|
2.1
|
|
||||
2015
|
501,300
|
|
|
336,711
|
|
|
551,667
|
|
|
888,378
|
|
|
1.8
|
|
||||
2016
|
559,421
|
|
|
110,876
|
|
|
917,194
|
|
|
1,028,070
|
|
|
1.8
|
|
||||
Subtotal
|
4,827,846
|
|
|
9,522,421
|
|
|
2,882,072
|
|
|
12,404,493
|
|
|
2.6
|
|
||||
Europe:
|
|
|
|
|
|
|
|
|
|
|||||||||
2013
(4)
|
619,079
|
|
|
761,305
|
|
|
804,903
|
|
|
1,566,208
|
|
|
2.5
|
|
||||
2014
(4)
|
630,343
|
|
|
490,341
|
|
|
756,966
|
|
|
1,247,307
|
|
|
2.0
|
|
||||
2015
(4)
|
423,352
|
|
|
192,954
|
|
|
542,850
|
|
|
735,804
|
|
|
1.7
|
|
||||
2016
|
259,485
|
|
|
44,641
|
|
|
502,918
|
|
|
547,559
|
|
|
2.1
|
|
||||
Subtotal
|
1,932,259
|
|
|
1,489,241
|
|
|
2,607,637
|
|
|
4,096,878
|
|
|
2.1
|
|
||||
Other geographies:
|
|
|
|
|
|
|
|
|
||||||||||
2012
|
6,706
|
|
|
8,159
|
|
|
1,931
|
|
|
10,090
|
|
|
1.5
|
|
||||
2013
|
29,568
|
|
|
39,172
|
|
|
3,844
|
|
|
43,016
|
|
|
1.5
|
|
||||
2014
|
86,989
|
|
|
44,117
|
|
|
109,871
|
|
|
153,988
|
|
|
1.8
|
|
||||
2015
|
91,290
|
|
|
72,125
|
|
|
120,528
|
|
|
192,653
|
|
|
2.1
|
|
||||
2016
|
79,890
|
|
|
29,269
|
|
|
114,434
|
|
|
143,703
|
|
|
1.8
|
|
||||
Subtotal
|
294,443
|
|
|
192,842
|
|
|
350,608
|
|
|
543,450
|
|
|
1.8
|
|
||||
Total
|
$
|
7,054,548
|
|
|
$
|
11,204,504
|
|
|
$
|
5,840,317
|
|
|
$
|
17,044,821
|
|
|
2.4
|
|
(1)
|
Adjusted for Put-Backs and Recalls.
|
(2)
|
Cumulative collections from inception through
December 31, 2016
, excluding collections on behalf of others.
|
(3)
|
ERC for charged-off consumer receivables includes
$74.2 million
related to accounts that converted to bankruptcy after purchase.
|
(4)
|
Includes portfolios acquired in connection with certain business combinations.
|
(1)
|
ERC for ZBAs can extend beyond our collection forecasts. As part of our process to continually refine our forecasting of collections, in the fourth quarter, we identified approximately $167.1 million additional ERC for ZBAs. As of
December 31, 2016
, ERC for ZBAs include approximately $337.1 million for purchased consumer receivables in the United States. ERC for ZBAs for purchased consumer receivables in Europe and other geographies and purchased U.S. bankruptcy receivables were immaterial.
|
(2)
|
ERC for purchased consumer receivables includes
$74.2 million
related to accounts that converted to bankruptcy after purchase. 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)
|
Includes portfolios acquired in connection with certain business combinations.
|
|
Unamortized
Balance as of December 31, 2016 |
|
Purchase
Price
(1)
|
|
Unamortized
Balance as a
Percentage of
Purchase Price
|
|
Unamortized
Balance as a
Percentage
of Total
|
||||||
United States:
|
|
|
|
|
|
|
|
||||||
2007
|
$
|
941
|
|
|
$
|
204,063
|
|
|
0.5
|
%
|
|
0.1
|
%
|
2008
|
3,631
|
|
|
227,752
|
|
|
1.6
|
%
|
|
0.3
|
%
|
||
2009
|
—
|
|
|
252,984
|
|
|
0.0
|
%
|
|
0.0
|
%
|
||
2010
|
807
|
|
|
345,396
|
|
|
0.2
|
%
|
|
0.1
|
%
|
||
2011
|
7,866
|
|
|
383,632
|
|
|
2.1
|
%
|
|
0.7
|
%
|
||
2012
|
38,886
|
|
|
549,035
|
|
|
7.1
|
%
|
|
3.4
|
%
|
||
2013
(2)
|
90,720
|
|
|
552,433
|
|
|
16.4
|
%
|
|
7.8
|
%
|
||
2014
(2)
|
187,083
|
|
|
519,136
|
|
|
36.0
|
%
|
|
16.2
|
%
|
||
2015
|
313,089
|
|
|
501,300
|
|
|
62.5
|
%
|
|
27.0
|
%
|
||
2016
|
515,260
|
|
|
559,421
|
|
|
92.1
|
%
|
|
44.5
|
%
|
||
Subtotal
|
1,158,283
|
|
|
4,095,152
|
|
|
28.3
|
%
|
|
100.0
|
%
|
||
Europe:
|
|
|
|
|
|
|
|
||||||
2013
(2)
|
256,725
|
|
|
619,079
|
|
|
41.5
|
%
|
|
24.4
|
%
|
||
2014
(2)
|
308,568
|
|
|
630,343
|
|
|
49.0
|
%
|
|
29.4
|
%
|
||
2015
(2)
|
255,445
|
|
|
423,352
|
|
|
60.3
|
%
|
|
24.3
|
%
|
||
2016
|
230,225
|
|
|
259,485
|
|
|
88.7
|
%
|
|
21.9
|
%
|
||
Subtotal
|
1,050,963
|
|
|
1,932,259
|
|
|
54.4
|
%
|
|
100.0
|
%
|
||
Other geographies:
|
|
|
|
|
|
|
|
||||||
2013
|
1,008
|
|
|
29,568
|
|
|
3.4
|
%
|
|
0.6
|
%
|
||
2014
|
56,691
|
|
|
86,989
|
|
|
65.2
|
%
|
|
32.7
|
%
|
||
2015
|
51,758
|
|
|
91,290
|
|
|
56.7
|
%
|
|
29.8
|
%
|
||
2016
|
64,106
|
|
|
79,890
|
|
|
80.2
|
%
|
|
36.9
|
%
|
||
Subtotal
|
173,563
|
|
|
287,737
|
|
|
60.3
|
%
|
|
100.0
|
%
|
||
Total
|
$
|
2,382,809
|
|
|
$
|
6,315,148
|
|
|
37.7
|
%
|
|
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)
|
Includes portfolios acquired in connection with certain business combinations.
|
Years Ending December 31,
|
United States |
|
Europe
|
|
Other
Geographies
|
|
Total
Amortization
|
||||||||
2017
|
$
|
264,593
|
|
|
$
|
77,596
|
|
|
$
|
7,754
|
|
|
$
|
349,943
|
|
2018
|
318,420
|
|
|
139,548
|
|
|
51,890
|
|
|
509,858
|
|
||||
2019
|
208,066
|
|
|
117,907
|
|
|
50,121
|
|
|
376,094
|
|
||||
2020
|
140,151
|
|
|
97,707
|
|
|
28,829
|
|
|
266,687
|
|
||||
2021
|
92,172
|
|
|
83,019
|
|
|
13,732
|
|
|
188,923
|
|
||||
2022
|
56,372
|
|
|
74,256
|
|
|
10,365
|
|
|
140,993
|
|
||||
2023
|
37,447
|
|
|
70,989
|
|
|
4,231
|
|
|
112,667
|
|
||||
2024
|
23,651
|
|
|
67,450
|
|
|
3,149
|
|
|
94,250
|
|
||||
2025
|
13,028
|
|
|
73,724
|
|
|
2,163
|
|
|
88,915
|
|
||||
2026
|
4,383
|
|
|
64,735
|
|
|
1,329
|
|
|
70,447
|
|
||||
2027
|
—
|
|
|
66,414
|
|
|
—
|
|
|
66,414
|
|
||||
2028
|
—
|
|
|
65,960
|
|
|
—
|
|
|
65,960
|
|
||||
2029
|
—
|
|
|
30,798
|
|
|
—
|
|
|
30,798
|
|
||||
2030
|
—
|
|
|
15,981
|
|
|
—
|
|
|
15,981
|
|
||||
2031
|
—
|
|
|
4,879
|
|
|
—
|
|
|
4,879
|
|
||||
Total
|
$
|
1,158,283
|
|
|
$
|
1,050,963
|
|
|
$
|
173,563
|
|
|
$
|
2,382,809
|
|
|
Headcount as of December 31,
|
||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||||||||
|
Domestic
|
|
International
|
|
Domestic
(1)
|
|
International
|
|
Domestic
(1)
|
|
International
|
||||||
General & Administrative
|
894
|
|
|
2,151
|
|
|
944
|
|
|
2,198
|
|
|
1,010
|
|
|
1,628
|
|
Account Manager
|
287
|
|
|
3,371
|
|
|
269
|
|
|
3,254
|
|
|
351
|
|
|
2,388
|
|
Total
|
1,181
|
|
|
5,522
|
|
|
1,213
|
|
|
5,452
|
|
|
1,361
|
|
|
4,016
|
|
(1)
|
Headcount as of December 31, 2015 and 2014 includes 79 and 86 Propel employees, respectively.
|
Quarter
|
# of
Accounts
|
|
Face Value
|
|
Purchase
Price
|
|||||
Q1 2014
(1)
|
1,104
|
|
|
$
|
4,288,159
|
|
|
$
|
467,565
|
|
Q2 2014
|
1,210
|
|
|
3,075,343
|
|
|
225,762
|
|
||
Q3 2014
(1)
|
2,203
|
|
|
3,970,145
|
|
|
299,509
|
|
||
Q4 2014
|
859
|
|
|
2,422,128
|
|
|
258,524
|
|
||
Q1 2015
|
734
|
|
|
1,041,011
|
|
|
125,154
|
|
||
Q2 2015
(1)
|
2,970
|
|
|
5,544,885
|
|
|
418,780
|
|
||
Q3 2015
|
1,267
|
|
|
2,085,381
|
|
|
187,180
|
|
||
Q4 2015
(1)
|
2,363
|
|
|
4,068,252
|
|
|
292,608
|
|
||
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
|
|
(1)
|
Includes portfolios acquired in connection with certain business combinations.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Net cash provided by operating activities
|
$
|
130,332
|
|
|
$
|
114,425
|
|
|
$
|
111,544
|
|
Net cash used in investing activities
|
(168,789
|
)
|
|
(472,709
|
)
|
|
(755,197
|
)
|
|||
Net cash provided by financing activities
|
43,253
|
|
|
401,845
|
|
|
626,323
|
|
|
Payment Due By Period
|
||||||||||||||||||
Contractual Obligations
|
Total
|
|
Less
Than
1 Year
|
|
1 – 3 Years
|
|
3 – 5 Years
|
|
More
Than
5 Years
|
||||||||||
Principal payments on debt
|
$
|
2,653,052
|
|
|
$
|
221,131
|
|
|
$
|
323,220
|
|
|
$
|
1,662,648
|
|
|
$
|
446,053
|
|
Estimated interest payments
(1)
|
670,085
|
|
|
146,193
|
|
|
290,553
|
|
|
176,822
|
|
|
56,517
|
|
|||||
Capital leases
|
5,445
|
|
|
3,470
|
|
|
1,705
|
|
|
270
|
|
|
—
|
|
|||||
Operating leases
|
61,824
|
|
|
17,347
|
|
|
21,315
|
|
|
11,960
|
|
|
11,202
|
|
|||||
Purchase commitments on receivable portfolios
|
262,114
|
|
|
254,744
|
|
|
7,370
|
|
|
—
|
|
|
—
|
|
|||||
Preferred equity certificates
(2)
|
205,975
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
205,975
|
|
|||||
Total contractual cash obligations
(3)
|
$
|
3,858,495
|
|
|
$
|
642,885
|
|
|
$
|
644,163
|
|
|
$
|
1,851,700
|
|
|
$
|
719,747
|
|
(1)
|
Estimated interest payments are calculated based on outstanding principal amounts, applicable fixed interest rates or currently effective interest rates as of December 31, 2016 for variable rate debt, timing of scheduled payments and the term of the debt obligations.
|
(2)
|
As of
December 31, 2016
, we carried a liability of approximately
$206.0 million
related to principal and accumulated interests for PECs issued in connection with the Cabot Acquisition. The PECs have a maturity date of May 2043, accrue interest at 12% per annum, and are held by Cabot’s noncontrolling interest holders. The future accrued interest is excluded from the table above due to uncertainty in determining the timing of the payment because the payment will only be satisfied in connection with the disposition of the noncontrolling interest. See Note
10
, “Debt” to our consolidated financial statements for additional information on our PECs.
|
(3)
|
We had approximately
$21.2 million
of liabilities and accrued interests related to uncertain tax positions at
December 31, 2016
. We are unable to reasonably estimate the timing of the cash settlement with the tax authorities due to the uncertainties related to these tax matters and, as a result, these obligations are not included in the table. See Note
13
, “Income Taxes” to our consolidated financial statements for additional information on our uncertain tax positions.
|
Name
|
RSAs (shares)
|
Restricted Cash
|
|||
Kenneth A. Vecchione, President and Chief Executive Officer
|
23,633
|
|
$
|
800,000
|
|
Jonathan Clark, Executive Vice President, Chief Financial Officer and Treasurer
|
13,293
|
|
$
|
450,000
|
|
Paul Grinberg, Group Executive, International and Corporate Development
|
13,293
|
|
$
|
450,000
|
|
Ashish Masih, President MCM
|
11,816
|
|
$
|
400,000
|
|
Gregory L. Call, Senior Vice President, General Counsel and Corporate Secretary
|
9,403
|
|
$
|
318,300
|
|
|
Page
|
Report of Independent Registered Public Accounting Firm
|
|
Consolidated Statements of Financial Condition at December 31, 2016 and 2015
|
|
Consolidated Statements of Income for the years ended December 31, 2016, 2015 and 2014
|
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2016, 2015 and 2014
|
|
Consolidated Statements of Equity for the years ended December 31, 2016, 2015 and 2014
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014
|
|
Notes to Consolidated Financial Statements
|
|
|
Number
|
Description
|
2.1
|
Agreement and Plan of Merger dated March 6, 2013, by and among Encore Capital Group, Inc., Pinnacle Sub, Inc. and Asset Acceptance Capital Corp. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on March 6, 2013)
|
|
|
2.2
|
Stock Purchase Agreement, dated August 1, 2014, by and among Encore Capital Group, Inc., the sellers party thereto, Atlantic Credit & Finance, Inc. and Richard Woolwine as the sellers’ representative (incorporated by reference to Exhibit 2.1 to the Company’s Quarterly Report on Form 10-Q filed on August 7, 2014)
|
|
|
3.1
|
Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to Amendment No. 2 to the Company’s Registration Statement on Form S-1/A filed on June 14, 1999, File No. 333-77483)
|
|
|
3.2
|
Certificate of Amendment to the Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on April 4, 2002)
|
|
|
3.3
|
Bylaws, as amended through February 8, 2011 (incorporated by reference to Exhibit 3.3 to the Company’s Annual Report on Form 10-K filed on February 14, 2011)
|
|
|
4.1
|
Form of Common Stock Certificate (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S-3 filed on December 21, 2009, File No. 333-163876)
|
|
|
4.2*
|
Amended and Restated Senior Secured Note Purchase Agreement, dated February 10, 2011, by and among Encore Capital Group, Inc., The Prudential Insurance Company of America, Pruco Life Insurance Company, Prudential Retirement Insurance and Annuity Company and Prudential Annuities Life Assurance Corporation (incorporated by reference to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q filed on April 27, 2011)
|
|
|
4.3
|
Form of 7.75% Senior Secured Note due 2017 (incorporated by reference to Exhibit 4.2 to the Company’s Quarterly Report on Form 10-Q filed on April 27, 2011)
|
|
|
4.4
|
Form of 7.375% Senior Secured Note due 2018 (incorporated by reference to Exhibit 4.3 to the Company’s Quarterly Report on Form 10-Q filed on April 27, 2011)
|
|
|
Number
|
Description
|
4.5
|
Amendment No. 1, dated May 8, 2012, to Amended and Restated Senior Secured Note Purchase Agreement, dated February 10, 2011, by and among Encore Capital Group, Inc., The Prudential Insurance Company of America, Pruco Life Insurance Company, Prudential Retirement Insurance and Annuity Company and Prudential Annuities Life Assurance Corporation, and SunTrust Bank as collateral agent and administrative agent (incorporated by reference to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q filed on May 9, 2012)
|
|
|
4.6
|
Indenture, dated November 27, 2012, between Encore Capital Group, Inc. and Union Bank, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on 8-K filed on December 3, 2012)
|
|
|
4.7
|
Indenture (including the form of the Note), dated as of June 24, 2013, by and among Encore Capital Group, Inc., Midland Credit Management, Inc., as guarantor, and Union Bank, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on June 24, 2013)
|
|
|
4.8
|
Indenture (including the form of the Note), dated August 2, 2013, by and among Cabot Financial (Luxembourg) S.A., Cabot Credit Management Limited, Cabot Financial Limited and all material subsidiaries of Cabot Financial Limited, as guarantors, J.P. Morgan Europe Limited, as security agent, and Citibank, N.A., London Branch as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on August 6, 2013)
|
|
|
4.9
|
Indenture (including the form of the Note), dated September 20, 2012, by and among Cabot Financial (Luxembourg) S.A., Cabot Credit Management Limited, Cabot Financial Limited and all material subsidiaries of Cabot Financial Limited, as guarantors, J.P. Morgan Europe Limited, as security agent, and Citibank, N.A., London Branch as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q filed on November 7, 2013)
|
|
|
4.10
|
First Supplemental Indenture, dated June 13, 2013, between Cabot Financial (Luxembourg) S.A. and Citibank, N.A., London Branch as trustee (incorporated by reference to Exhibit 4.2 to the Company’s Quarterly Report on Form 10-Q filed on November 7, 2013)
|
|
|
4.11
|
Indenture (including the form of the Note), dated July 25, 2013, by and among Marlin Intermediate Holdings plc, Marlin Financial Group Limited, Marlin Financial Intermediate Limited, certain subsidiaries of Marlin Financial Intermediate Limited, The Bank of New York Mellon, London Branch as trustee, paying agent, transfer agent and registrar, and Royal Bank of Scotland plc, as security agent (incorporated by reference to Exhibit 4.11 to the Company’s Annual Report on Form 10-K filed on February 25, 2014)
|
|
|
4.12
|
First Supplemental Indenture, dated February 19, 2014, by and among Marlin Intermediate Holdings plc, Marlin Financial Intermediate II Limited, Cabot Financial Limited the guarantors party thereto and the Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 4.12 to the Company’s Annual Report on Form 10-K filed on February 25, 2014)
|
|
|
4.13
|
Indenture (including form of Note), dated as of March 11, 2014, by and between Encore Capital Group, Inc., Midland Credit Management, Inc., as guarantor, and Union Bank, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on March 11, 2014)
|
|
|
4.14
|
Second Supplemental Indenture, dated March 14, 2014, by and among Cabot Financial (Luxembourg) S.A., Cabot Financial Limited, Cabot Credit Management Limited, as guarantor, and Citibank, N.A., London Branch, as trustee (filed with the Company’s Quarterly Report on Form 10-Q filed on May 8, 2014)
|
|
|
4.15
|
Second Supplemental Indenture, dated March 14, 2014, by and among Marlin Intermediate Holdings plc, Cabot Financial Limited, the subsidiary guarantors party thereto and the Bank of New York Mellon, London Branch, as trustee (filed with the Company’s Quarterly Report on Form 10-Q filed on May 8, 2014)
|
|
|
Number
|
Description
|
4.16
|
Indenture (including form of Note), dated March 27, 2014, between Cabot Financial (Luxembourg) S.A., Cabot Credit Management Limited, Cabot Financial Limited, the subsidiary guarantors party thereto, J.P. Morgan Europe Limited, as security agent, Citibank, N.A., London Branch as trustee, principal paying agent and transfer agent and Citigroup Global Markets Deutschland AG, as registrar (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on March 28, 2014)
|
|
|
4.17
|
Indenture (including form of Note), dated May 6, 2014, by and between PFS Tax Lien Trust 2014-1 and Citibank, N.A., as trustee (filed with the Company’s Quarterly Report on Form 10-Q filed on May 8, 2014)
|
|
|
4.18
|
First Supplemental Indenture, dated March 14, 2014, by and among Cabot Financial (Luxembourg) S.A., Cabot Financial Limited, Cabot Credit Management Limited, as guarantor, and Citibank, N.A., London Branch, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q filed on August 7, 2014)
|
|
|
4.19
|
Third Supplemental Indenture, dated May 19, 2014, by and among Cabot Financial (Luxembourg) S.A., Cabot Financial Limited, Citibank, N.A., London Branch, as trustee, and the guarantors party thereto (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed on May 20, 2014)
|
|
|
4.20
|
Second Supplemental Indenture, dated May 19, 2014, by and among Cabot Financial (Luxembourg) S.A., Cabot Financial Limited, Citibank, N.A., London Branch, as trustee, and the guarantors party thereto (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K filed on May 20, 2014)
|
|
|
4.21
|
Third Supplemental Indenture, dated May 19, 2014, by and among Marlin Intermediate Holdings plc, Cabot Financial Limited, The Bank of New York Mellon, London Branch, as trustee, and the guarantors party thereto (incorporated by reference to Exhibit 4.3 of the Company’s Current Report on Form 8-K filed on May 20, 2014)
|
|
|
4.22
|
Fourth Supplemental Indenture, dated May 28, 2015, by and among Cabot Asset Purchases (Ireland) Limited, Cabot Financial (Ireland) Limited, Cabot Financial (Luxembourg) S.A., Cabot Credit Management Limited, Cabot Financial Limited and Citibank, N.A., London Branch, as trustee (incorporated by reference to Exhibit 4.22 to the Company’s Annual Report on Form 10-K filed on February 24, 2016)
|
|
|
4.23
|
Third Supplemental Indenture, dated May 28, 2015, by and among Cabot Asset Purchases (Ireland) Limited, Cabot Financial (Ireland) Limited, Cabot Financial (Luxembourg) S.A., Cabot Credit Management Limited, Cabot Financial Limited and Citibank, N.A., London Branch, as trustee (incorporated by reference to Exhibit 4.23 to the Company’s Annual Report on Form 10-K filed on February 24, 2016)
|
|
|
4.24
|
Fourth Supplemental Indenture, dated May 28, 2015, by and among Cabot Asset Purchases (Ireland) Limited, Cabot Financial (Ireland) Limited, Marlin Intermediate Holdings plc, Marlin Financial Group Limited, Marlin Financial Intermediate Limited, Marlin Financial Intermediate II Limited and The Bank of New York Mellon, London Branch, as trustee (incorporated by reference to Exhibit 4.24 to the Company’s Annual Report on Form 10-K filed on February 24, 2016)
|
|
|
4.25
|
Supplemental Indenture, dated May 28, 2015, by and among Cabot Asset Purchases (Ireland) Limited, Cabot Financial (Ireland) Limited, Cabot Financial (Luxembourg) S.A., Cabot Credit Management Limited, Cabot Financial Limited and Citibank, N.A., London Branch, as trustee (incorporated by reference to Exhibit 4.25 to the Company’s Annual Report on Form 10-K filed on February 24, 2016)
|
|
|
4.26
|
Fifth Supplemental Indenture, dated July 28, 2015, by and among Hillesden Securities Limited, Cabot Financial (Luxembourg) S.A., Cabot Credit Management Limited, Cabot Financial Limited and Citibank, N.A., London Branch, as trustee (incorporated by reference to Exhibit 4.26 to the Company’s Annual Report on Form 10-K filed on February 24, 2016)
|
|
|
4.27
|
Fourth Supplemental Indenture, dated July 28, 2015, by and among Hillesden Securities Limited, Cabot Financial (Luxembourg) S.A., Cabot Credit Management Limited, Cabot Financial Limited and Citibank, N.A., London Branch, as trustee (incorporated by reference to Exhibit 4.27 to the Company’s Annual Report on Form 10-K filed on February 24, 2016)
|
Number
|
Description
|
|
|
4.28
|
Fifth Supplemental Indenture, dated July 28, 2015, by and among Hillesden Securities Limited, Marlin Intermediate Holdings plc, Marlin Financial Group Limited, Marlin Financial Intermediate Limited, Marlin Financial Intermediate II Limited and The Bank of New York Mellon, London Branch, as trustee (incorporated by reference to Exhibit 4.28 to the Company’s Annual Report on Form 10-K filed on February 24, 2016)
|
|
|
4.29
|
Second Supplemental Indenture, dated July 28, 2015, by and among Hillesden Securities Limited, Cabot Financial (Luxembourg) S.A., Cabot Credit Management Limited, Cabot Financial Limited and Citibank, N.A., London Branch, as trustee (incorporated by reference to Exhibit 4.29 to the Company’s Annual Report on Form 10-K filed on February 24, 2016)
|
|
|
4.30
|
Indenture, dated November 11, 2015, between Cabot Financial (Luxembourg) II S.A., Cabot Credit Management Limited, Cabot Financial Limited, the subsidiary guarantors party thereto, J.P. Morgan Europe Limited, as security agent, Citibank, N.A., London Branch as trustee, principal paying agent and transfer agent and Citigroup Global Markets Deutschland AG, as registrar (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 13, 2015)
|
|
|
4.31
|
Sixth Supplemental Indenture, dated November 11, 2015, by and among Cabot Financial (Luxembourg) II S.A., Cabot Financial (Treasury) Ireland, Cabot Financial (Luxembourg) S.A., Cabot Credit Management Limited, Cabot Financial Limited and Citibank, N.A., London Branch, as trustee (incorporated by reference to Exhibit 4.31 to the Company’s Annual Report on Form 10-K filed on February 24, 2016)
|
|
|
4.32
|
Fifth Supplemental Indenture, dated November 11, 2015, by and among Cabot Financial (Luxembourg) II S.A., Cabot Financial (Treasury) Ireland, Cabot Financial (Luxembourg) S.A., Cabot Credit Management Limited, Cabot Financial Limited and Citibank, N.A., London Branch, as trustee (incorporated by reference to Exhibit 4.32 to the Company’s Annual Report on Form 10-K filed on February 24, 2016)
|
|
|
4.33
|
Sixth Supplemental Indenture, dated November 11, 2015, by and among Cabot Financial (Luxembourg) II S.A., Cabot Financial (Treasury) Ireland, Marlin Intermediate Holdings PLC, Marlin Financial Group Limited, Marlin Financial Intermediate Limited, Marlin Financial Intermediate II Limited, and The Bank of New York Mellon, London Branch, as trustee (incorporated by reference to Exhibit 4.33 to the Company’s Annual Report on Form 10-K filed on February 24, 2016)
|
|
|
4.34
|
Third Supplemental Indenture, dated November 11, 2015, by and among Cabot Financial (Luxembourg) II S.A., Cabot Financial (Treasury) Ireland, Cabot Financial (Luxembourg) S.A., Cabot Credit Management Limited, Cabot Financial Limited and Citibank, N.A., London Branch, as trustee (incorporated by reference to Exhibit 4.34 to the Company’s Annual Report on Form 10-K filed on February 24, 2016)
|
|
|
4.35
|
Indenture, dated October 6, 2016, between Cabot Financial (Luxembourg) S.A., Cabot Credit Management Limited, Cabot Financial Limited, the subsidiary guarantors party thereto, J.P. Morgan Europe Limited, as security agent, Citibank, N.A., London Branch as trustee, principal paying agent and transfer agent and Citigroup Global Markets Deutschland AG, as registrar (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on October 7, 2016)
|
|
|
10.1+
|
Form of Indemnification Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 4, 2006)
|
|
|
10.2+
|
Severance protection letter agreement, dated March 11, 2009, between Encore Capital Group, Inc. and Paul Grinberg (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on March 13, 2009)
|
|
|
10.3
|
Lease Deed, dated April 22, 2009, between Midland Credit Management India Private Limited and R.S. Technologies Private Limited, for real property located in Gurgaon, India (incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q filed on April 29, 2009)
|
|
|
10.4+
|
Encore Capital Group, Inc. 2005 Stock Incentive Plan, as amended and restated (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 15, 2009)
|
|
|
Number
|
Description
|
10.5+
|
Amended Form of Stock Option Agreement for awards under the Encore Capital Group, Inc. 2005 Stock Incentive Plan (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed on July 30, 2009)
|
|
|
10.6+
|
Amended Form of Restricted Stock Unit Grant Notice and Agreement under the Encore Capital Group, Inc. 2005 Stock Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on July 30, 2009)
|
|
|
10.7
|
Lease Deed, dated October 26, 2010, between Midland Credit Management India Private Limited and R.S. Technologies Private Limited, for real property located in Gurgaon, India (incorporated by reference to Exhibit 10.47 to the Company’s Annual Report on Form 10-K filed on February 14, 2011)
|
|
|
10.8
|
Lease Deed, dated March 4, 2011, between Midland Credit Management, Inc. and Teachers Insurance and Annuity Association of America for the Benefit of its Separate Real Estate Account for real property located in San Diego, California (the “San Diego Lease”) (incorporated by reference to Exhibit 10.49 to the Company’s Annual Report on Form 10-K filed on February 9, 2012)
|
|
|
10.9
|
Lease Guaranty, dated March 4, 2011, by Encore Capital Group, Inc., in favor of Teachers Insurance and Annuity Association of America for the Benefit of its Separate Real Estate Account in connection with the San Diego Lease (incorporated by reference to Exhibit 10.50 to the Company’s Annual Report on Form 10-K filed on February 9, 2012)
|
|
|
10.10+
|
Form of Restricted Stock Award Grant Notice and Agreement under the Encore Capital Group, Inc. 2005 Stock Incentive Plan (Executive) (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on November 1, 2012)
|
|
|
10.11+
|
Form of Non-Incentive Stock Option Agreement under the Encore Capital Group, Inc. 2005 Stock Incentive Plan (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed on November 1, 2012)
|
|
|
10.12
|
Amended and Restated Credit Agreement, dated November 5, 2012, by and among Encore Capital Group, Inc., the several banks and other financial institutions and lenders from time to time party thereto and listed on the signature pages thereof, and SunTrust Bank, as administrative agent and collateral agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on 8-K filed on November 7, 2012)
|
|
|
10.13
|
Second Amended and Restated Pledge and Security Agreement, dated November 5, 2012, by and among Encore Capital Group, Inc., certain of its subsidiaries and SunTrust Bank, as collateral agent (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on 8-K filed on November 7, 2012)
|
|
|
10.14
|
Amended and Restated Guaranty, dated November 5, 2012, by and among certain subsidiaries of Encore Capital Group, Inc. and SunTrust Bank, as administrative agent (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on 8-K filed on November 7, 2012)
|
|
|
10.15
|
Amended and Restated Intercreditor Agreement, dated November 5, 2012, by and among Encore Capital Group, Inc., certain of its subsidiaries, SunTrust Bank, as administrative agent for the lenders, and the holders of the Company’s 7.75% Senior Secured Notes due 2017 and 7.375% Senior Secured Notes due 2018 (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on 8-K filed on November 7, 2012)
|
|
|
10.16
|
Amendment No. 2 to Note Purchase Agreement, dated November 5, 2012, by and among Encore Capital Group, Inc., the holders of the Company’s 7.75% Senior Secured Notes due 2017 and 7.375% Senior Secured Notes due 2018, and SunTrust Bank, as collateral agent and administrative agent (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on 8-K filed on November 7, 2012)
|
|
|
10.17
|
Letter Agreement, dated November 20, 2012, between Deutsche Bank AG, London Branch and Encore Capital Group, Inc., regarding the Base Call Option Transaction (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on 8-K filed on December 3, 2012)
|
|
|
Number
|
Description
|
10.18
|
Letter Agreement, dated November 20, 2012, between RBC Capital Markets, LLC and Encore Capital Group, Inc., regarding the Base Call Option Transaction (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on 8-K filed on December 3, 2012)
|
|
|
10.19
|
Letter Agreement, dated November 20, 2012, between Société Générale and Encore Capital Group, Inc., regarding the Base Call Option Transaction (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on 8-K filed on December 3, 2012)
|
|
|
10.20
|
Letter Agreement, dated November 20, 2012, between Deutsche Bank AG, London Branch and Encore Capital Group, Inc., regarding the Base Warrant Transaction (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on 8-K filed on December 3, 2012)
|
|
|
10.21
|
Letter Agreement, dated November 20, 2012, between RBC Capital Markets, LLC and Encore Capital Group, Inc., regarding the Base Warrant Transaction (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on 8-K filed on December 3, 2012)
|
|
|
10.22
|
Letter Agreement, dated November 20, 2012, between Société Générale and Encore Capital Group, Inc., regarding the Base Warrant Transaction (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on 8-K filed on December 3, 2012)
|
|
|
10.23
|
Letter Agreement, dated December 6, 2012, between Deutsche Bank AG, London Branch and Encore Capital Group, Inc., regarding the Additional Call Option Transaction (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on 8-K filed on December 12, 2012)
|
|
|
10.24
|
Letter Agreement, dated December 6, 2012, between RBC Capital Markets, LLC and Encore Capital Group, Inc., regarding the Additional Call Option Transaction (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on 8-K filed on December 12, 2012)
|
|
|
10.25
|
Letter Agreement, dated December 6, 2012, between Société Générale and Encore Capital Group, Inc., regarding the Additional Call Option Transaction (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on 8-K filed on December 12, 2012)
|
|
|
10.26
|
Letter Agreement, dated December 6, 2012, between Deutsche Bank AG, London Branch and Encore Capital Group, Inc., regarding the Additional Warrant Transaction (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on 8-K filed on December 12, 2012)
|
|
|
10.27
|
Letter Agreement, dated December 6, 2012, between RBC Capital Markets, LLC and Encore Capital Group, Inc., regarding the Additional Warrant Transaction (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on 8-K filed on December 12, 2012)
|
|
|
10.28
|
Letter Agreement, dated December 6, 2012, between Société Générale and Encore Capital Group, Inc., regarding the Additional Warrant Transaction (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on 8-K filed on December 12, 2012)
|
|
|
10.29
|
Incremental Facility Agreement, dated December 6, 2012, among Encore Capital Group, Inc., Barclays Bank PLC, SunTrust Bank and each of the guarantors party thereto (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on 8-K filed on December 12, 2012)
|
|
|
10.30+
|
Amendment, dated January 9, 2013, to the Severance Protection Letter Agreement dated March 11, 2009 between Encore Capital Group, Inc. and Paul Grinberg (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 15, 2013)
|
|
|
10.31+
|
Letter Agreement, dated January 9, 2013, between Encore Capital Group, Inc. and Paul Grinberg (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on January 15, 2013)
|
|
|
10.32+
|
Employment offer letter, dated as of April 8, 2013, by and between Encore Capital Group, Inc. and Kenneth A. Vecchione (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on April 9, 2013)
|
|
|
Number
|
Description
|
10.33
|
Amendment No. 1 and Limited Waiver, dated May 9, 2013, to Amended and Restated Credit Agreement, dated as of November 5, 2012, by and among Encore Capital Group, Inc., the several banks and other financial institutions and lenders from time to time party thereto and SunTrust Bank, as administrative agent and collateral agent (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on August 8, 2013)
|
|
|
10.34
|
Second Amended and Restated Senior Secured Note Purchase Agreement, dated May 9, 2013, by and among Encore Capital Group, Inc., The Prudential Insurance Company of America, Pruco Life Insurance Company, Prudential Retirement Insurance and Annuity Company and Prudential Annuities Life Assurance Corporation (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed on August 8, 2013)
|
|
|
10.35+
|
Encore Capital Group, Inc. 2013 Incentive Compensation Plan (incorporated by reference to Appendix A of the Company’s definitive Proxy Statement on Schedule 14A filed on April 26, 2013)
|
|
|
10.36+
|
Form of Non-Incentive Stock Option Agreement under the Encore Capital Group, Inc. 2013 Incentive Compensation Plan (incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q filed on August 8, 2013)
|
|
|
10.37+
|
Form of Restricted Stock Award Grant Notice and Agreement (Executive) under the Encore Capital Group, Inc. 2013 Incentive Compensation Plan (incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q filed on August 8, 2013)
|
|
|
10.38+
|
Form of Restricted Stock Award Grant Notice and Agreement (Non-Executive) under the Encore Capital Group, Inc. 2013 Incentive Compensation Plan (incorporated by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q filed on August 8, 2013)
|
|
|
10.39+
|
Form of Restricted Stock Unit Grant Notice and Agreement (Executive) under the Encore Capital Group, Inc. 2013 Incentive Compensation Plan (incorporated by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q filed on August 8, 2013)
|
|
|
10.40+
|
Form of Performance Stock Grant Notice and Agreement under the Encore Capital Group, Inc. 2013 Incentive Compensation Plan (incorporated by reference to Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q filed on August 8, 2013)
|
|
|
10.41+
|
Form of Performance Stock Unit Grant Notice and Agreement under the Encore Capital Group, Inc. 2013 Incentive Compensation Plan (incorporated by reference to Exhibit 10.10 to the Company’s Quarterly Report on Form 10-Q filed on August 8, 2013)
|
|
|
10.42+
|
Form of Restricted Stock Unit Grant Notice and Agreement (Non-Employee Director) under the Encore Capital Group, Inc. 2013 Incentive Compensation Plan (incorporated by reference to Exhibit 10.11 to the Company’s Quarterly Report on Form 10-Q filed on August 8, 2013)
|
|
|
10.43
|
Incremental Facility Agreement, dated May 9, 2013, among Encore Capital Group, Inc., each of the banks and guarantors party thereto and SunTrust Bank, as administrative agent, issuing bank and swingline lender (incorporated by reference to Exhibit 10.12 to the Company’s Quarterly Report on Form 10-Q filed on August 8, 2013)
|
|
|
10.44
|
Securities Purchase Agreement, dated May 29, 2013, by and between Encore Capital Group, Inc. and JCF III Europe S.À R.L. (incorporated by reference to Exhibit 10.16 to the Company’s Quarterly Report on Form 10-Q filed on August 8, 2013)
|
|
|
10.45
|
Amendment No. 2, dated May 29, 2013, to Amended and Restated Credit Agreement, dated November 5, 2012, by and among Encore Capital Group, Inc., the guarantors identified therein, the lenders party thereto and SunTrust Bank, as administrative agent and collateral agent (incorporated by reference to Exhibit 10.17 to the Company’s Quarterly Report on Form 10-Q filed on August 8, 2013)
|
|
|
Number
|
Description
|
10.46
|
Amendment No. 1, dated May 29, 2013, to Second Amended and Restated Senior Secured Note Purchase Agreement, dated May 9, 2013, by and between Encore Capital Group, Inc., The Prudential Insurance Company of America, Pruco Life Insurance Company, Prudential Retirement Insurance and Annuity Company and Prudential Annuities Life Assurance Corporations (incorporated by reference to Exhibit 10.18 to the Company’s Quarterly Report on Form 10-Q filed on August 8, 2013)
|
|
|
10.47
|
Letter Agreement, dated June 18, 2013, between Barclays Bank PLC and Encore Capital Group, Inc., regarding the Capped Call Transaction (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 24, 2013)
|
|
|
10.48
|
Letter Agreement, dated June 18, 2013, between Credit Suisse International and Encore Capital Group, Inc., regarding the Capped Call Transaction (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on June 24, 2013)
|
|
|
10.49
|
Letter Agreement, dated June 18, 2013, between Morgan Stanley & Co. International plc and Encore Capital Group, Inc., regarding the Capped Call Transaction (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on June 24, 2013)
|
|
|
10.50
|
Letter Agreement, dated June 18, 2013, between RBC Capital Markets, LLC and Encore Capital Group, Inc., regarding the Capped Call Transaction (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on June 24, 2013)
|
|
|
10.51
|
Amendment, dated July 1, 2013, to Securities Purchase Agreement, dated May 29, 2013, by and between Encore Capital Group, Inc. and JCF III Europe S.À R.L. (incorporated by reference to Exhibit 10.23 to the Company’s Quarterly Report on Form 10-Q filed on August 8, 2013)
|
|
|
10.52*
|
Investors Agreement, dated July 1, 2013, by and between Encore Europe Holdings S.À R.L., JCF III Europe S.À R.L. and the other parties thereto (incorporated by reference to Exhibit 10.24 to the Company’s Quarterly Report on Form 10-Q/A filed on December 20, 2013)
|
|
|
10.53
|
Letter Agreement, dated July 18, 2013, between Barclays Bank PLC and Encore Capital Group, Inc., regarding the Capped Call Transaction (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 23, 2013)
|
|
|
10.54
|
Letter Agreement, dated July 18, 2013, between Credit Suisse International and Encore Capital Group, Inc., regarding the Capped Call Transaction (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on July 23, 2013)
|
|
|
10.55
|
Letter Agreement, dated July 18, 2013, between Morgan Stanley & Co. International plc and Encore Capital Group, Inc., regarding the Capped Call Transaction (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on July 23, 2013)
|
|
|
10.56
|
Letter Agreement, dated July 18, 2013, between RBC Capital Markets, LLC and Encore Capital Group, Inc., regarding the Capped Call Transaction (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on July 23, 2013)
|
|
|
10.57
|
Amended and Restated Senior Facilities Agreement, dated June 28, 2013, by and among Cabot Financial (UK) Limited, the several guarantors, banks and other financial institutions and lenders from time to time party thereto and J.P. Morgan Europe Limited as Agent and Security Agent (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on November 7, 2013)
|
|
|
10.58
|
Second Amendment to Securities Purchase Agreement, dated September 25, 2013, by and between Encore Europe Holdings S.À R.L. and JCF III Europe S.À R.L. (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on November 7, 2013)
|
|
|
10.59
|
Amendment to Letter Agreement, dated December 16, 2013, between Deutsche Bank AG, London Branch and Encore Capital Group, Inc., regarding the Warrant Transactions (incorporated by reference to Exhibit 10.77 to the Company’s Annual Report on Form 10-K filed February 25, 2014)
|
|
|
Number
|
Description
|
10.60
|
Amendment to Letter Agreement, dated December 16, 2013, between RBC Capital Markets, LLC and Encore Capital Group, Inc., regarding the Warrant Transactions (incorporated by reference to Exhibit 10.78 to the Company’s Annual Report on Form 10-K filed February 25, 2014)
|
|
|
10.61
|
Amendment to Letter Agreement, dated December 16, 2013, between Société Générale and Encore Capital Group, Inc., regarding the Warrant Transactions (incorporated by reference to Exhibit 10.79 to the Company’s Annual Report on Form 10-K filed February 25, 2014)
|
|
|
10.62
|
Amendment No. 2, dated December 27, 2013, to the Credit Facility Loan Agreement, dated May 8, 2012, by and among Propel Financial Services, LLC, certain banks and Texas Capital Bank, National Association, as administrative agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 2, 2014)
|
|
|
10.63
|
Share Sale and Purchase Agreement, dated February 7, 2014, by and among Cabot Financial Holdings Group Limited, certain funds managed by Duke Street and certain individuals, including certain executive management of Marlin Financial Group Limited (incorporated by reference to Exhibit 10.82 to the Company’s Annual Report on Form 10-K filed on February 25, 2014)
|
|
|
10.64+
|
First Amendment to Encore Capital Group, Inc. 2013 Incentive Compensation Plan, dated February 20, 2014 (incorporated by reference to Exhibit 10.84 to the Company’s Annual Report on Form 10-K filed on February 25, 2014)
|
|
|
10.65+
|
Letter Agreement, dated February 24, 2014, between Encore Capital Group, Inc. and Paul Grinberg (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 24, 2014)
|
|
|
10.66
|
Second Amended and Restated Credit Agreement, dated February 25, 2014, by and among Encore Capital Group, Inc., the several banks and other financial institutions and lenders from time to time party thereto and listed on the signature pages thereof, and SunTrust Bank, as administrative agent and collateral agent (incorporated by reference to Exhibit 10.86 to the Company’s Annual Report on Form 10-K filed on February 25, 2014)
|
|
|
10.67
|
Amendment No. 2, dated February 25, 2014, to Second Amended and Restated Senior Secured Note Purchase Agreement, dated May 9, 2013, by and between Encore Capital Group, Inc., The Prudential Insurance Company of America, Pruco Life Insurance Company, Prudential Retirement Insurance and Annuity Company and Prudential Annuities Life Assurance Corporations (incorporated by reference to Exhibit 10.87 to the Company’s Annual Report on Form 10-K filed on February 25, 2014)
|
|
|
10.68
|
Amendment No. 1, dated February 25, 2014, to Amended and Restated Guaranty, dated November 5, 2012, by and among certain subsidiaries of Encore Capital Group, Inc. and SunTrust Bank, as administrative agent (incorporated by reference to Exhibit 10.88 to the Company’s Annual Report on Form 10-K filed on February 25, 2014)
|
|
|
10.69
|
Letter Agreement, dated March 5, 2014, between Citibank, N.A. and Encore Capital Group, Inc., regarding the Base Capped Call Transaction (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on March 11, 2014)
|
|
|
10.70
|
Letter Agreement, dated March 5, 2014, between Credit Suisse International and Encore Capital Group, Inc., regarding the Base Capped Call Transaction (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on March 11, 2014)
|
|
|
10.71
|
Letter Agreement, dated March 5, 2014, between Morgan Stanley & Co. LLC and Encore Capital Group, Inc., regarding the Base Capped Call Transaction (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on March 11, 2014)
|
|
|
10.72
|
Letter Agreement, dated March 5, 2014, between Société Générale and Encore Capital Group, Inc., regarding the Base Capped Call Transaction (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on March 11, 2014)
|
|
|
10.73
|
Letter Agreement, dated March 6, 2014, between Citibank, N.A. and Encore Capital Group, Inc., regarding the Additional Capped Call Transaction (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on March 11, 2014)
|
Number
|
Description
|
|
|
10.74
|
Letter Agreement, dated March 6, 2014, between Credit Suisse International and Encore Capital Group, Inc., regarding the Additional Capped Call Transaction (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed on March 11, 2014)
|
|
|
10.75
|
Letter Agreement, dated March 6, 2014, between Morgan Stanley & Co. LLC and Encore Capital Group, Inc., regarding the Additional Capped Call Transaction (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed on March 11, 2014)
|
|
|
10.76
|
Letter Agreement, dated March 6, 2014, between Société Générale and Encore Capital Group, Inc., regarding the Additional Capped Call Transaction (incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K filed on March 11, 2014)
|
|
|
10.77+
|
Restricted Stock Award Grant Notice and Agreement, dated March 7, 2014, between Encore Capital Group, Inc. and Paul Grinberg (incorporated by reference to Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q filed on May 8, 2014)
|
|
|
10.78+
|
Restricted Stock Award Grant Notice and Agreement, dated April 15, 2013, between Encore Capital Group, Inc. and Kenneth A. Vecchione (incorporated by reference to Exhibit 10.10 to the Company’s Quarterly Report on Form 10-Q filed on May 8, 2014)
|
|
|
10.79+
|
Restricted Stock Award Grant Notice and Agreement, dated April 15, 2013, between Encore Capital Group, Inc. and Kenneth A. Vecchione (incorporated by reference to Exhibit 10.11 to the Company’s Quarterly Report on Form 10-Q filed on May 8, 2014)
|
|
|
10.80+
|
Performance Stock Grant Notice and Agreement, dated June 4, 2013, between Encore Capital Group, Inc. and Kenneth A. Vecchione (incorporated by reference to Exhibit 10.12 to the Company’s Quarterly Report on Form 10-Q filed on May 8, 2014)
|
|
|
10.81
|
Amendment No. 1 to Second Amended and Restated Credit Agreement, dated August 1, 2014, by and among Encore Capital Group, Inc., the several banks and other financial institutions and lenders from time to time party thereto and listed on the signature pages thereof, and SunTrust Bank, as administrative agent and collateral agent (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on August 7, 2014)
|
|
|
10.82
|
Amendment No. 3, dated August 1, 2014, to Second Amended and Restated Senior Secured Note Purchase Agreement, dated May 9, 2013, by and between Encore Capital Group, Inc., The Prudential Insurance Company of America, Pruco Life Insurance Company, Prudential Retirement Insurance and Annuity Company and Prudential Annuities Life Assurance Corporations (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on August 7, 2014)
|
|
|
10.83+
|
Form of Performance Award Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on November 6, 2014)
|
|
|
10.84+
|
Encore Capital Group, Inc. Executive Separation Plan (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on November 6, 2014)
|
|
|
10.85+
|
Employment offer letter dated October 9, 2014 by and between Encore Capital Group, Inc. and Jonathan Clark (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 26, 2015)
|
|
|
10.86
|
Amendment Agreement, dated February 5, 2015, for Cabot Financial (UK) Limited, as Parent, with J.P. Morgan Europe Limited, as Agent, relating to a Senior Facilities Agreement originally dated September 20, 2012 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on May 7, 2015)
|
|
|
10.87
|
Amendment No. 1 to Limited Guarantee, dated April 3, 2015, by Encore Capital Group, Inc., in favor of Wells Fargo Bank, N.A. (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on August 10, 2015)
|
|
|
Number
|
Description
|
10.88
|
Credit Facility Loan Agreement, dated May 8, 2015, by and among Texas Capital Bank, National Association, as administrative agent, certain banks and Propel Financial Services, LLC (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed on August 10, 2015)
|
|
|
10.89
|
Amendment No. 2 to Second Amended and Restated Credit Agreement, dated July 9, 2015, by and among Encore Capital Group, Inc., the several banks and other financial institutions and lenders from time to time party thereto and listed on the signature pages thereof, and SunTrust Bank, as administrative agent and collateral agent (incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q filed on August 10, 2015)
|
|
|
10.90
|
Amendment No. 4, dated July 9, 2015, to Second Amended and Restated Senior Secured Note Purchase Agreement, dated May 9, 2013, by and between Encore Capital Group, Inc., The Prudential Insurance Company of America, Pruco Life Insurance Company, Prudential Retirement Insurance and Annuity Company and Prudential Annuities Life Assurance Corporations (incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q filed on August 10, 2015)
|
|
|
10.91
|
Amended and Restated Senior Facilities Agreement, dated November 11, 2015, by and among Cabot Financial (UK) Limited, the several guarantors, banks and other financial institutions and lenders from time to time party thereto and J.P. Morgan Europe Limited as Agent and Security Agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 13, 2015)
|
|
|
10.92
|
Incremental Facility Agreement, dated November 19, 2015, by and among Encore Capital Group, Inc., Credit Suisse AG, Northwest Bank, SunTrust Bank, and each of the guarantors, party thereto (incorporated by reference to Exhibit 10.104 to the Company’s Annual Report on Form 10-K filed on February 24, 2016)
|
|
|
10.93+
|
Form of Performance Stock Grant Notice and Agreement (TSR) under the Encore Capital Group, Inc. 2013 Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 10-Q filed on May 10, 2016)
|
|
|
10.94+
|
Form of Restricted Stock Award Grant Notice and Agreement (Executive - Umbrella) under the Encore Capital Group, Inc. 2013 Incentive Compensation Plan (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 10-Q filed on May 10, 2016)
|
|
|
10.95+
|
Form of Performance Stock Grant Notice and Agreement under the Encore Capital Group, Inc. 2013 Incentive Compensation Plan (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 10-Q filed on May 10, 2016)
|
|
|
10.96
|
Amendment No. 3 to Second Amended and Restated Credit Agreement, dated March 24, 2016, by and among Encore Capital Group, Inc., the several banks and other financial institutions and lenders from time to time party thereto and listed on the signature pages thereof, and SunTrust Bank, as administrative agent and collateral agent (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 10-Q filed on May 10, 2016)
|
|
|
10.97
|
Amendment No. 5, dated March 24, 2016, to Second Amended and Restated Senior Secured Note Purchase Agreement, dated May 9, 2013, by and between Encore Capital Group, Inc., The Prudential Insurance Company of America, Pruco Life Insurance Company, Prudential Retirement Insurance and Annuity Company and Prudential Annuities Life Assurance Corporations (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 10-Q filed on May 10, 2016)
|
|
|
10.98+
|
Non-Employee Director Compensation Program Guidelines, effective June 1, 2016 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 10-Q filed on August 4, 2016)
|
|
|
10.99+
|
Non-Employee Director Deferred Stock Compensation Plan (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 10-Q filed on August 4, 2016)
|
|
|
Number
|
Description
|
10.100
|
Amendment Letter, dated June 6, 2016, related to the Amended and Restated Senior Facilities Agreement, dated November 11, 2015, by and among Cabot Financial (UK) Limited, the several guarantors, banks and other financial institutions and lenders from time to time party thereto and J.P. Morgan Europe Limited as Agent and Security Agent (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 10-Q filed on August 4, 2016)
|
|
|
10.101+
|
First Amendment to Non-Employee Director Deferred Stock Compensation Plan, dated August 6, 2016 (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 10-Q filed on November 9, 2016)
|
|
|
10.102
|
Amended and Restated Senior Facilities Agreement, dated October 6, 2016, by and among Cabot Financial (UK) Limited, the several guarantors, banks and other financial institutions and lenders from time to time party thereto and J.P. Morgan Europe Limited as Agent and Security Agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 7, 2016)
|
|
|
10.103
|
Third Amended and Restated Credit Agreement, dated December 20, 2016, by and among Encore Capital Group, Inc., the several banks and other financial institutions and lenders from time to time party thereto and listed on the signature pages thereof, and SunTrust Bank, as administrative agent and collateral agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 27, 2016)
|
|
|
10.104
|
Amendment No. 6, dated December 20, 2016, to Second Amended and Restated Senior Secured Note Purchase Agreement, dated May 9, 2013, by and between Encore Capital Group, Inc., The Prudential Insurance Company of America, Pruco Life Insurance Company, Prudential Retirement Insurance and Annuity Company and Prudential Annuities Life Assurance Corporation (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on December 27, 2016)
|
|
|
10.105+
|
Form of Restricted Stock Award Grant Notice and Agreement (Retention) under the Encore Capital Group, Inc. 2013 Incentive Compensation Plan (filed herewith)
|
|
|
10.106+
|
Form of Restricted Cash Award Grant Notice and Agreement (Retention) under the Encore Capital Group, Inc. 2013 Incentive Compensation Plan (filed herewith)
|
|
|
10.107+
|
Amendment, dated February 21, 2017, to the employment offer letter, dated as of April 8, 2013, by and between Encore Capital Group, Inc. and Kenneth A. Vecchione (filed herewith)
|
|
|
10.108+
|
Form of Performance Stock Option Agreement under the Encore Capital Group, Inc. 2013 Incentive Compensation Plan (filed herewith)
|
|
|
21
|
List of Subsidiaries (filed herewith)
|
|
|
23
|
Consent of Independent Registered Public Accounting Firm, BDO USA, LLP, dated February 23, 2017 (filed herewith)
|
|
|
31.1
|
Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934 (filed herewith)
|
|
|
31.2
|
Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934 (filed herewith)
|
|
|
32.1
|
Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
|
|
|
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)
|
|
|
Number
|
Description
|
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)
|
*
|
The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.
|
+
|
Management contract or compensatory plan or arrangement.
|
|
ENCORE CAPITAL GROUP, INC.,
a Delaware corporation
|
|
|
|
|
|
By:
|
/s/ K
ENNETH
A. V
ECCHIONE
|
|
|
Kenneth A. Vecchione
|
|
|
President and Chief Executive Officer
|
Name and Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ K
ENNETH
A. V
ECCHIONE
|
|
President and Chief Executive
Officer and Director
(Principal Executive Officer)
|
|
February 23, 2017
|
Kenneth A. Vecchione
|
|
|
|
|
|
|
|
|
|
/s/ J
ONATHAN
C. C
LARK
|
|
Executive Vice President,
Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)
|
|
February 23, 2017
|
Jonathan C. Clark
|
|
|
|
|
|
|
|
|
|
/s/ A
SHWINI
G
UPTA
|
|
Director
|
|
February 23, 2017
|
Ashwini Gupta
|
|
|
|
|
|
|
|
|
|
/s/ W
ENDY
H
ANNAM
|
|
Director
|
|
February 23, 2017
|
Wendy Hannam
|
|
|
|
|
|
|
|
|
|
/s/ W
ILLEM
M
ESDAG
|
|
Director
|
|
February 23, 2017
|
Willem Mesdag
|
|
|
|
|
|
|
|
|
|
/s/ M
ICHAEL
P. M
ONACO
|
|
Director
|
|
February 23, 2017
|
Michael P. Monaco
|
|
|
|
|
|
|
|
|
|
/s/
L
AURA
O
LLE
|
|
Director
|
|
February 23, 2017
|
Laura Olle
|
|
|
|
|
|
|
|
|
|
/s/ F
RANCIS
E. Q
UINLAN
|
|
Director
|
|
February 23, 2017
|
Francis E. Quinlan
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/s/ N
ORMAN
R. S
ORENSEN
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Director
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February 23, 2017
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Norman R. Sorensen
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/s/ R
ICHARD
J. S
REDNICKI
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Director
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February 23, 2017
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Richard J. Srednicki
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Page
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Report of Independent Registered Public Accounting Firm
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Consolidated Statements of Financial Condition at December 31, 2016 and 2015
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Consolidated Statements of Income for the years ended December 31, 2016, 2015 and 2014
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Consolidated Statements of Comprehensive Income for the years ended December 31, 2016, 2015 and 2014
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Consolidated Statements of Equity for the years ended December 31, 2016, 2015 and 2014
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Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014
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Notes to Consolidated Financial Statements
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December 31,
2016 |
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December 31,
2015 |
||||
Assets
|
|
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|
||||
Cash and cash equivalents
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$
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149,765
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$
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123,993
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Investment in receivable portfolios, net
|
2,382,809
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2,440,669
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Property and equipment, net
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72,257
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72,546
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Deferred court costs, net
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65,187
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75,239
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Other assets
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215,447
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148,762
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Goodwill
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785,032
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924,847
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Assets associated with discontinued operations
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—
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388,763
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Total assets
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$
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3,670,497
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$
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4,174,819
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Liabilities and equity
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||||
Liabilities:
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Accounts payable and accrued liabilities
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$
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234,398
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$
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290,608
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Debt
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2,805,983
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2,944,063
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Other liabilities
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29,601
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59,226
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Liabilities associated with discontinued operations
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—
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232,434
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Total liabilities
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3,069,982
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3,526,331
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Commitments and contingencies
|
|
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Redeemable noncontrolling interest
|
45,755
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38,624
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Redeemable equity component of convertible senior notes
|
2,995
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6,126
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Equity:
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Convertible preferred stock, $.01 par value, 5,000 shares authorized, no shares issued and outstanding
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—
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—
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Common stock, $.01 par value, 50,000 shares authorized, 25,593 shares and 25,288 shares issued and outstanding as of December 31, 2016 and December 31, 2015, respectively
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256
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253
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Additional paid-in capital
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103,392
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110,533
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Accumulated earnings
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560,567
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543,489
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Accumulated other comprehensive loss
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(104,911
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)
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(57,822
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)
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Total Encore Capital Group, Inc. stockholders’ equity
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559,304
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596,453
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Noncontrolling interest
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(7,539
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)
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7,285
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Total equity
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551,765
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603,738
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Total liabilities, redeemable equity and equity
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$
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3,670,497
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$
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4,174,819
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December 31,
2016 |
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December 31,
2015 |
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Assets
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Cash and cash equivalents
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$
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55,823
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$
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50,483
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Investment in receivable portfolios, net
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972,841
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1,197,513
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Property and equipment, net
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19,284
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19,767
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Deferred court costs, net
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22,760
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33,296
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Other assets
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79,767
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31,679
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Goodwill
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584,868
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706,812
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Liabilities
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Accounts payable and accrued liabilities
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$
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99,689
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$
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142,375
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Debt
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1,514,799
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1,665,009
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Other liabilities
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1,921
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839
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Year Ended December 31,
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||||||||||
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2016
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2015
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2014
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||||||
Revenues
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Revenue from receivable portfolios, net
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$
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946,615
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$
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1,072,436
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$
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992,832
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Other revenues
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82,643
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57,531
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50,597
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Total revenues
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1,029,258
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1,129,967
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1,043,429
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Operating expenses
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Salaries and employee benefits
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281,097
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262,281
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238,942
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Cost of legal collections
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200,855
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229,847
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205,661
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Other operating expenses
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100,737
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93,210
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89,934
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Collection agency commissions
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36,141
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37,858
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33,343
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General and administrative expenses
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134,046
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191,357
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139,977
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Depreciation and amortization
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34,868
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33,160
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27,101
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Total operating expenses
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787,744
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847,713
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734,958
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Income from operations
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241,514
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282,254
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308,471
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Other (expense) income
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Interest expense
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(198,367
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)
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(186,556
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)
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(166,942
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)
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Other income
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14,228
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2,235
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113
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Total other expense
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(184,139
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)
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(184,321
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(166,829
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)
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Income from continuing operations before income taxes
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57,375
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97,933
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141,642
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Provision for income taxes
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(38,205
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(27,162
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(48,569
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Income from continuing operations
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19,170
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70,771
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93,073
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(Loss) income from discontinued operations, net of tax
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(2,353
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)
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(23,387
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)
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5,205
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Net income
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16,817
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47,384
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98,278
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Net loss (income) attributable to noncontrolling interest
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59,753
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(2,249
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)
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5,448
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Net income attributable to Encore Capital Group, Inc. stockholders
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$
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76,570
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$
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45,135
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$
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103,726
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Amounts attributable to Encore Capital Group, Inc.:
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Income from continuing operations
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$
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78,923
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$
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68,522
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$
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98,521
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(Loss) income from discontinued operations, net of tax
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(2,353
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)
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(23,387
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)
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5,205
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Net income
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$
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76,570
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$
|
45,135
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$
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103,726
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Earnings (loss) per share attributable to Encore Capital Group, Inc.:
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||||||
Basic earnings (loss) per share from:
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||||||
Continuing operations
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$
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3.07
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$
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2.66
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$
|
3.81
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Discontinued operations
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$
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(0.09
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)
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$
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(0.91
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)
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$
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0.20
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Net basic earnings per share
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$
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2.98
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$
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1.75
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$
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4.01
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Diluted earnings (loss) per share from:
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Continuing operations
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$
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3.05
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$
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2.57
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$
|
3.58
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Discontinued operations
|
$
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(0.09
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)
|
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$
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(0.88
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)
|
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$
|
0.19
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Net diluted earnings per share
|
$
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2.96
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$
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1.69
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$
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3.77
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Weighted average shares outstanding:
|
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||||||
Basic
|
25,713
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25,722
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25,853
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|||
Diluted
|
25,909
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|
26,647
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|
|
27,495
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Year Ended December 31,
|
||||||||||
|
2016
|
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2015
|
|
2014
|
||||||
Net income
|
$
|
16,817
|
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$
|
47,384
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|
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$
|
98,278
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Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Change in unrealized gains/losses on derivative instruments:
|
|
|
|
|
|
||||||
Unrealized gain (loss) on derivative instruments
|
407
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|
|
(1,527
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)
|
|
3,048
|
|
|||
Income tax effect
|
(87
|
)
|
|
(151
|
)
|
|
(708
|
)
|
|||
Unrealized gain (loss) on derivative instruments, net of tax
|
320
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|
|
(1,678
|
)
|
|
2,340
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|
|||
Change in foreign currency translation:
|
|
|
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Unrealized loss on foreign currency translation
|
(67,943
|
)
|
|
(57,144
|
)
|
|
(10,562
|
)
|
|||
Income tax effect
|
361
|
|
|
(1,468
|
)
|
|
(1,774
|
)
|
|||
Unrealized loss on foreign currency translation, net of tax
|
(67,582
|
)
|
|
(58,612
|
)
|
|
(12,336
|
)
|
|||
Other comprehensive loss, net of tax
|
(67,262
|
)
|
|
(60,290
|
)
|
|
(9,996
|
)
|
|||
Comprehensive (loss) income
|
(50,445
|
)
|
|
(12,906
|
)
|
|
88,282
|
|
|||
Comprehensive loss (income) attributable to noncontrolling interest:
|
|
|
|
|
|
||||||
Net loss (income)
|
59,753
|
|
|
(2,249
|
)
|
|
5,448
|
|
|||
Unrealized loss on foreign currency translation
|
20,173
|
|
|
3,390
|
|
|
3,879
|
|
|||
Comprehensive loss attributable to noncontrolling interest
|
79,926
|
|
|
1,141
|
|
|
9,327
|
|
|||
Comprehensive income (loss) attributable to Encore Capital Group, Inc. stockholders
|
$
|
29,481
|
|
|
$
|
(11,765
|
)
|
|
$
|
97,609
|
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Accumulated
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Noncontrolling
Interest
|
|
Total
Equity
|
|||||||||||||||
Shares
|
|
Par
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|
|||||||||||||||||||||||
Balance at December 31, 2013
|
25,457
|
|
|
$
|
255
|
|
|
$
|
171,819
|
|
|
$
|
394,628
|
|
|
$
|
5,195
|
|
|
$
|
4,010
|
|
|
$
|
575,907
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
103,726
|
|
|
—
|
|
|
(935
|
)
|
|
102,791
|
|
||||||
Other comprehensive (loss) gain, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,117
|
)
|
|
14
|
|
|
(6,103
|
)
|
||||||
Initial noncontrolling interest related to business combinations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
892
|
|
|
892
|
|
||||||
Change in fair value of redeemable noncontrolling interest
|
—
|
|
|
—
|
|
|
(5,730
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,730
|
)
|
||||||
Exercise of stock options and issuance of share-based awards, net of shares withheld for employee taxes
|
737
|
|
|
7
|
|
|
(15,496
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,489
|
)
|
||||||
Repurchase of common stock
|
(400
|
)
|
|
(4
|
)
|
|
(16,811
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,815
|
)
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
17,181
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,181
|
|
||||||
Tax benefit related to stock-based compensation
|
—
|
|
|
—
|
|
|
11,580
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,580
|
|
||||||
Issuance of convertible notes, net of hedge transactions
|
—
|
|
|
—
|
|
|
(28,160
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28,160
|
)
|
||||||
Reclassification of redeemable equity component of convertible senior notes
|
—
|
|
|
—
|
|
|
(9,073
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,073
|
)
|
||||||
Balance at December 31, 2014
|
25,794
|
|
|
258
|
|
|
125,310
|
|
|
498,354
|
|
|
(922
|
)
|
|
3,981
|
|
|
626,981
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
45,135
|
|
|
—
|
|
|
878
|
|
|
46,013
|
|
||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(56,900
|
)
|
|
—
|
|
|
(56,900
|
)
|
||||||
Initial noncontrolling interest related to business combinations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,426
|
|
|
2,426
|
|
||||||
Change in fair value of redeemable noncontrolling interest
|
—
|
|
|
—
|
|
|
(2,349
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,349
|
)
|
||||||
Exercise of stock options and issuance of share-based awards, net of shares withheld for employee taxes
|
333
|
|
|
3
|
|
|
(5,321
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,318
|
)
|
||||||
Repurchase of common stock
|
(839
|
)
|
|
(8
|
)
|
|
(33,177
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(33,185
|
)
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
22,008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,008
|
|
||||||
Tax benefit related to stock-based compensation
|
—
|
|
|
—
|
|
|
1,251
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,251
|
|
||||||
Reclassification of redeemable equity component of convertible senior notes
|
—
|
|
|
—
|
|
|
2,948
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,948
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
(137
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(137
|
)
|
||||||
Balance at December 31, 2015
|
25,288
|
|
|
253
|
|
|
110,533
|
|
|
543,489
|
|
|
(57,822
|
)
|
|
7,285
|
|
|
603,738
|
|
||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
76,570
|
|
|
—
|
|
|
(11,922
|
)
|
|
64,648
|
|
||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(47,089
|
)
|
|
(3,677
|
)
|
|
(50,766
|
)
|
||||||
Initial noncontrolling interest related to business combinations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
775
|
|
|
775
|
|
||||||
Change in fair value of redeemable noncontrolling interest
|
—
|
|
|
—
|
|
|
(14,702
|
)
|
|
(59,492
|
)
|
|
—
|
|
|
—
|
|
|
(74,194
|
)
|
||||||
Exercise of stock options and issuance of share-based awards, net of shares withheld for employee taxes
|
305
|
|
|
3
|
|
|
(4,481
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,478
|
)
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
12,627
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,627
|
|
||||||
Tax benefit related to stock-based compensation
|
—
|
|
|
—
|
|
|
(2,324
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,324
|
)
|
||||||
Reclassification of redeemable equity component of convertible senior notes
|
—
|
|
|
—
|
|
|
3,130
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,130
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
(1,391
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,391
|
)
|
||||||
Balance at December 31, 2016
|
25,593
|
|
|
$
|
256
|
|
|
$
|
103,392
|
|
|
$
|
560,567
|
|
|
$
|
(104,911
|
)
|
|
$
|
(7,539
|
)
|
|
$
|
551,765
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
16,817
|
|
|
$
|
47,384
|
|
|
$
|
98,278
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Loss (income) from discontinued operations, net of income taxes
|
2,353
|
|
|
23,387
|
|
|
(6,816
|
)
|
|||
Depreciation and amortization
|
34,868
|
|
|
33,160
|
|
|
27,100
|
|
|||
Other non-cash expense, net
|
30,623
|
|
|
35,104
|
|
|
27,660
|
|
|||
Stock-based compensation expense
|
12,627
|
|
|
22,008
|
|
|
17,181
|
|
|||
Gain on derivative instruments, net
|
(7,816
|
)
|
|
—
|
|
|
—
|
|
|||
Deferred income taxes
|
(52,905
|
)
|
|
(16,665
|
)
|
|
(48,078
|
)
|
|||
Excess tax benefit from stock-based payment arrangements
|
—
|
|
|
(1,724
|
)
|
|
(11,928
|
)
|
|||
Provision for (reversal of) allowances on receivable portfolios, net
|
84,177
|
|
|
(6,763
|
)
|
|
(17,407
|
)
|
|||
Changes in operating assets and liabilities
|
|
|
|
|
|
||||||
Deferred court costs and other assets
|
(20,364
|
)
|
|
(33,430
|
)
|
|
(11,282
|
)
|
|||
Prepaid income tax and income taxes payable
|
25,417
|
|
|
(29,504
|
)
|
|
22,180
|
|
|||
Accounts payable, accrued liabilities and other liabilities
|
2,439
|
|
|
43,135
|
|
|
9,832
|
|
|||
Net cash provided by operating activities from continuing operations
|
128,236
|
|
|
116,092
|
|
|
106,720
|
|
|||
Net cash provided by (used in) operating activities from discontinued operations
|
2,096
|
|
|
(1,667
|
)
|
|
4,824
|
|
|||
Net cash provided by operating activities
|
130,332
|
|
|
114,425
|
|
|
111,544
|
|
|||
Investing activities:
|
|
|
|
|
|
||||||
Cash paid for acquisitions, net of cash acquired
|
(675
|
)
|
|
(276,575
|
)
|
|
(446,165
|
)
|
|||
Proceeds from divestiture of business, net of cash divested
|
106,041
|
|
|
—
|
|
|
—
|
|
|||
Purchases of assets held for sale
|
(19,874
|
)
|
|
—
|
|
|
—
|
|
|||
Purchases of receivable portfolios, net of put-backs
|
(907,413
|
)
|
|
(749,760
|
)
|
|
(862,997
|
)
|
|||
Collections applied to investment in receivable portfolios, net
|
659,321
|
|
|
635,899
|
|
|
633,960
|
|
|||
Purchases of property and equipment
|
(31,668
|
)
|
|
(28,624
|
)
|
|
(23,084
|
)
|
|||
Proceeds from derivative instruments, net
|
8,800
|
|
|
—
|
|
|
—
|
|
|||
Other, net
|
1,994
|
|
|
(1,233
|
)
|
|
(5,102
|
)
|
|||
Net cash used in investing activities from continuing operations
|
(183,474
|
)
|
|
(420,293
|
)
|
|
(703,388
|
)
|
|||
Net cash provided by (used in) used in investing activities from discontinued operations
|
14,685
|
|
|
(52,416
|
)
|
|
(51,809
|
)
|
|||
Net cash used in investing activities
|
(168,789
|
)
|
|
(472,709
|
)
|
|
(755,197
|
)
|
|||
Financing activities:
|
|
|
|
|
|
||||||
Payment of loan costs
|
(32,338
|
)
|
|
(17,995
|
)
|
|
(20,101
|
)
|
|||
Proceeds from credit facilities
|
586,016
|
|
|
1,084,393
|
|
|
1,343,417
|
|
|||
Repayment of credit facilities
|
(615,857
|
)
|
|
(898,086
|
)
|
|
(1,184,244
|
)
|
|||
Proceeds from senior secured notes
|
442,610
|
|
|
332,693
|
|
|
288,645
|
|
|||
Repayment of senior secured notes
|
(352,549
|
)
|
|
(15,000
|
)
|
|
(15,000
|
)
|
|||
Proceeds from issuance of convertible senior notes
|
—
|
|
|
—
|
|
|
161,000
|
|
|||
Proceeds from issuance of securitized notes
|
—
|
|
|
—
|
|
|
134,000
|
|
|||
Repayment of securitized notes
|
(935
|
)
|
|
(44,251
|
)
|
|
(29,753
|
)
|
|||
Purchases of convertible hedge instruments
|
—
|
|
|
—
|
|
|
(33,576
|
)
|
|||
Repurchase of common stock
|
—
|
|
|
(33,185
|
)
|
|
(16,815
|
)
|
|||
Taxes paid related to net share settlement of equity awards
|
(4,829
|
)
|
|
(6,289
|
)
|
|
(20,324
|
)
|
|||
Excess tax benefit from stock-based payment arrangements
|
—
|
|
|
1,724
|
|
|
11,928
|
|
|||
Proceeds from other debt
|
36,172
|
|
|
—
|
|
|
—
|
|
|||
Other, net
|
(15,037
|
)
|
|
(2,159
|
)
|
|
7,146
|
|
|||
Net cash provided by financing activities
|
43,253
|
|
|
401,845
|
|
|
626,323
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
4,796
|
|
|
43,561
|
|
|
(17,330
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(8,624
|
)
|
|
(14,131
|
)
|
|
15,280
|
|
|||
Cash and cash equivalents, beginning of period
|
153,593
|
|
|
124,163
|
|
|
126,213
|
|
|||
Cash and cash equivalents, end of period
|
149,765
|
|
|
153,593
|
|
|
124,163
|
|
|||
Cash and cash equivalents of discontinued operations, end of period
|
—
|
|
|
29,600
|
|
|
32,644
|
|
|||
Cash and cash equivalents of continuing operations, end of period
|
$
|
149,765
|
|
|
$
|
123,993
|
|
|
$
|
91,519
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
147,899
|
|
|
$
|
151,946
|
|
|
$
|
95,034
|
|
Cash paid for income taxes, net
|
60,071
|
|
|
84,101
|
|
|
69,948
|
|
|||
Supplemental schedule of non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Fixed assets acquired through capital lease
|
$
|
55
|
|
|
$
|
2,220
|
|
|
$
|
8,341
|
|
Fixed Asset Category
|
|
Estimated Useful Life
|
Leasehold improvements
|
|
Lesser of lease term, including periods covered
by renewal options, or useful life
|
Furniture, fixtures and equipment
|
|
5 to 10 years
|
Computer hardware and software
|
|
3 to 10 years
|
|
Year Ended December 31,
|
|||||||
|
2016
|
|
2015
|
|
2014
|
|||
Weighted average common shares outstanding—basic
|
25,713
|
|
|
25,722
|
|
|
25,853
|
|
Dilutive effect of stock-based awards
|
196
|
|
|
253
|
|
|
556
|
|
Dilutive effect of convertible senior notes
|
—
|
|
|
672
|
|
|
1,082
|
|
Dilutive effect of warrants
|
—
|
|
|
—
|
|
|
4
|
|
Weighted average common shares outstanding—diluted
|
25,909
|
|
|
26,647
|
|
|
27,495
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Revenue
|
$
|
4,950
|
|
|
$
|
31,605
|
|
|
$
|
29,361
|
|
Salaries and employee benefits
|
(3,074
|
)
|
|
(8,053
|
)
|
|
(7,304
|
)
|
|||
Other operating expenses
|
(1,366
|
)
|
|
(4,972
|
)
|
|
(3,926
|
)
|
|||
General and administrative expenses
|
(1,551
|
)
|
|
(5,470
|
)
|
|
(9,059
|
)
|
|||
Depreciation and amortization
|
(127
|
)
|
|
(785
|
)
|
|
(849
|
)
|
|||
Impairment charge for goodwill and identifiable intangible assets
|
—
|
|
|
(49,277
|
)
|
|
—
|
|
|||
(Loss) income from discontinued operations, before income taxes
|
(1,168
|
)
|
|
(36,952
|
)
|
|
8,223
|
|
|||
Loss on sale of discontinued operations, before income taxes
|
(1,679
|
)
|
|
—
|
|
|
—
|
|
|||
Total (loss) income on discontinued operations, before income taxes
|
(2,847
|
)
|
|
(36,952
|
)
|
|
8,223
|
|
|||
Income tax benefit (provision)
|
494
|
|
|
13,565
|
|
|
(3,018
|
)
|
|||
Total (loss) income from discontinued operations, net of tax
|
$
|
(2,353
|
)
|
|
$
|
(23,387
|
)
|
|
$
|
5,205
|
|
Purchase price:
|
|
||
Cash paid at acquisition
|
$
|
268,391
|
|
Deferred consideration
|
6,306
|
|
|
Total purchase price
|
$
|
274,697
|
|
|
|
||
Allocation of purchase price:
|
|
||
Cash
|
$
|
30,518
|
|
Investment in receivable portfolios
|
215,988
|
|
|
Deferred court costs
|
760
|
|
|
Property and equipment
|
1,327
|
|
|
Other assets
|
2,384
|
|
|
Liabilities assumed
|
(46,435
|
)
|
|
Identifiable intangible assets
|
3,669
|
|
|
Goodwill
|
66,486
|
|
|
Total net assets acquired
|
$
|
274,697
|
|
•
|
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
December 31, 2016 |
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Foreign currency exchange contracts
|
$
|
—
|
|
|
$
|
1,122
|
|
|
$
|
—
|
|
|
$
|
1,122
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Foreign currency exchange contracts
|
—
|
|
|
(1,360
|
)
|
|
—
|
|
|
(1,360
|
)
|
||||
Interest rate swap agreements
|
—
|
|
|
(131
|
)
|
|
—
|
|
|
(131
|
)
|
||||
Contingent consideration
|
—
|
|
|
—
|
|
|
(2,531
|
)
|
|
(2,531
|
)
|
||||
Temporary Equity
|
|
|
|
|
|
|
|
||||||||
Redeemable noncontrolling interest
|
—
|
|
|
—
|
|
|
(45,755
|
)
|
|
(45,755
|
)
|
|
Fair Value Measurements as of
December 31, 2015 |
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Foreign currency exchange contracts
|
$
|
—
|
|
|
$
|
718
|
|
|
$
|
—
|
|
|
$
|
718
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Foreign currency exchange contracts
|
—
|
|
|
(601
|
)
|
|
—
|
|
|
(601
|
)
|
||||
Interest rate swap agreements
|
—
|
|
|
(352
|
)
|
|
—
|
|
|
(352
|
)
|
||||
Contingent consideration
|
—
|
|
|
—
|
|
|
(10,403
|
)
|
|
(10,403
|
)
|
||||
Temporary Equity
|
|
|
|
|
|
|
|
||||||||
Redeemable noncontrolling interest
|
—
|
|
|
—
|
|
|
(38,624
|
)
|
|
(38,624
|
)
|
|
Amount
|
||
Balance at December 31, 2014
|
$
|
—
|
|
Issuance of contingent consideration in connection with acquisition
|
10,587
|
|
|
Change in fair value of contingent consideration
|
132
|
|
|
Effect of foreign currency translation
|
(316
|
)
|
|
Balance at December 31, 2015
|
10,403
|
|
|
Change in fair value of contingent consideration
|
(7,602
|
)
|
|
Effect of foreign currency translation
|
(270
|
)
|
|
Balance at December 31, 2016
|
$
|
2,531
|
|
|
Amount
|
||
Balance at December 31, 2013
|
$
|
26,564
|
|
Addition to redeemable noncontrolling interest
|
4,997
|
|
|
Net loss attributable to redeemable noncontrolling interest
|
(4,513
|
)
|
|
Adjustment of the redeemable noncontrolling interest to fair value
|
5,730
|
|
|
Effect of foreign currency translation attributable to redeemable noncontrolling interest
|
(3,893
|
)
|
|
Balance at December 31, 2014
|
28,885
|
|
|
Addition to redeemable noncontrolling interest
|
9,409
|
|
|
Net income attributable to redeemable noncontrolling interest
|
1,371
|
|
|
Adjustment of the redeemable noncontrolling interest to fair value
|
2,349
|
|
|
Effect of foreign currency translation attributable to redeemable noncontrolling interest
|
(3,390
|
)
|
|
Balance at December 31, 2015
|
38,624
|
|
|
Addition to redeemable noncontrolling interest
|
826
|
|
|
Redemption of redeemable noncontrolling interest
|
(3,562
|
)
|
|
Net loss attributable to redeemable noncontrolling interest
|
(47,831
|
)
|
|
Adjustment of the redeemable noncontrolling interest to fair value
|
74,194
|
|
|
Effect of foreign currency translation attributable to redeemable noncontrolling interest
|
(16,496
|
)
|
|
Balance at December 31, 2016
|
$
|
45,755
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||
Balance Sheet
Location
|
|
Fair Value
|
|
Balance Sheet
Location
|
|
Fair Value
|
|||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||||
Foreign currency exchange contracts
|
Other assets
|
|
$
|
707
|
|
|
Other assets
|
|
$
|
718
|
|
Foreign currency exchange contracts
|
Other liabilities
|
|
(51
|
)
|
|
Other liabilities
|
|
(601
|
)
|
||
Interest rate swap agreements
|
Other liabilities
|
|
(131
|
)
|
|
Other liabilities
|
|
—
|
|
||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||
Foreign currency exchange contracts
|
Other assets
|
|
415
|
|
|
Other assets
|
|
—
|
|
||
Foreign currency exchange contracts
|
Other liabilities
|
|
(1,309
|
)
|
|
Other liabilities
|
|
—
|
|
||
Interest rate swap agreements
|
Other liabilities
|
|
—
|
|
|
Other liabilities
|
|
(352
|
)
|
|
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
|
||||||||||||||||||
|
2016
|
|
2015
|
|
|
|
2016
|
|
2015
|
|
|
|
2016
|
|
2015
|
||||||||||||
Foreign currency exchange contracts
|
$
|
1,404
|
|
|
$
|
(248
|
)
|
|
Salaries and
employee benefits |
|
$
|
755
|
|
|
$
|
(472
|
)
|
|
Other (expense)
income |
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency exchange contracts
|
(5
|
)
|
|
88
|
|
|
General and
administrative expenses |
|
105
|
|
|
(74
|
)
|
|
Other (expense)
income |
|
—
|
|
|
—
|
|
||||||
Interest rate swap agreements
|
(131
|
)
|
|
—
|
|
|
Interest expense
|
|
—
|
|
|
—
|
|
|
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
|
||||||
|
|
|
2016
|
|
2015
|
|||||
Foreign currency exchange contracts
(1)
|
|
Other income (expense)
|
|
$
|
8,248
|
|
|
$
|
—
|
|
Interest rate swap agreements
|
|
Interest expense
|
|
144
|
|
|
92
|
|
(1)
|
After the effect of income tax and noncontrolling interest, the net impact of the derivative contracts to consolidated net income from continuing income attributable to Encore was a gain of
$1.3 million
and
zero
during the years ended December 31, 2016 and 2015, respectively.
|
|
Accretable
Yield
|
|
Estimate of
Zero Basis
Cash Flows
|
|
Total
|
||||||
Balance at December 31, 2014
|
$
|
2,993,321
|
|
|
$
|
66,392
|
|
|
$
|
3,059,713
|
|
Revenue recognized, net
|
(964,225
|
)
|
|
(108,211
|
)
|
|
(1,072,436
|
)
|
|||
Net additions on existing portfolios
|
263,713
|
|
|
266,252
|
|
|
529,965
|
|
|||
Additions for current purchases, net
|
846,632
|
|
|
—
|
|
|
846,632
|
|
|||
Effect of foreign currency translation
|
(91,801
|
)
|
|
(1,402
|
)
|
|
(93,203
|
)
|
|||
Balance at December 31, 2015
|
3,047,640
|
|
|
223,031
|
|
|
3,270,671
|
|
|||
Revenue recognized, net
|
(801,736
|
)
|
|
(144,879
|
)
|
|
(946,615
|
)
|
|||
Net additions on existing portfolios
|
441,632
|
|
|
287,116
|
|
|
728,748
|
|
|||
Additions for current purchases, net
|
861,698
|
|
|
—
|
|
|
861,698
|
|
|||
Effect of foreign currency translation
|
(457,230
|
)
|
|
236
|
|
|
(456,994
|
)
|
|||
Balance at December 31, 2016
|
$
|
3,092,004
|
|
|
$
|
365,504
|
|
|
$
|
3,457,508
|
|
|
Year Ended December 31, 2016
|
||||||||||||||
|
Accrual Basis
Portfolios
|
|
Cost Recovery
Portfolios
|
|
Zero Basis
Portfolios
|
|
Total
|
||||||||
Balance, beginning of period
|
$
|
2,436,054
|
|
|
$
|
4,615
|
|
|
$
|
—
|
|
|
$
|
2,440,669
|
|
Purchases of receivable portfolios
|
906,719
|
|
|
—
|
|
|
—
|
|
|
906,719
|
|
||||
Transfer of portfolios
|
(13,076
|
)
|
|
13,076
|
|
|
—
|
|
|
—
|
|
||||
Gross collections
(1)
|
(1,538,663
|
)
|
|
(2,102
|
)
|
|
(144,839
|
)
|
|
(1,685,604
|
)
|
||||
Put-backs and Recalls
(2)
|
(27,561
|
)
|
|
(1,019
|
)
|
|
(33
|
)
|
|
(28,613
|
)
|
||||
Foreign currency adjustments
|
(196,842
|
)
|
|
(127
|
)
|
|
(8
|
)
|
|
(196,977
|
)
|
||||
Revenue recognized
|
892,732
|
|
|
—
|
|
|
138,060
|
|
|
1,030,792
|
|
||||
Portfolio (allowance) reversals, net
|
(90,997
|
)
|
|
—
|
|
|
6,820
|
|
|
(84,177
|
)
|
||||
Balance, end of period
|
$
|
2,368,366
|
|
|
$
|
14,443
|
|
|
$
|
—
|
|
|
$
|
2,382,809
|
|
Revenue as a percentage of collections
(3)
|
58.0
|
%
|
|
0.0
|
%
|
|
95.3
|
%
|
|
61.2
|
%
|
(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.
|
|
Year Ended December 31, 2015
|
||||||||||||||
|
Accrual Basis
Portfolios |
|
Cost Recovery
Portfolios |
|
Zero Basis
Portfolios |
|
Total
|
||||||||
Balance, beginning of period
|
$
|
2,131,084
|
|
|
$
|
12,476
|
|
|
$
|
—
|
|
|
$
|
2,143,560
|
|
Purchases of receivable portfolios
|
1,023,722
|
|
|
—
|
|
|
—
|
|
|
1,023,722
|
|
||||
Gross collections
(1)
|
(1,587,525
|
)
|
|
(5,237
|
)
|
|
(107,963
|
)
|
|
(1,700,725
|
)
|
||||
Put-backs and Recalls
(2)
|
(13,009
|
)
|
|
(20
|
)
|
|
(268
|
)
|
|
(13,297
|
)
|
||||
Foreign currency adjustments
|
(82,443
|
)
|
|
(2,604
|
)
|
|
20
|
|
|
(85,027
|
)
|
||||
Revenue recognized
|
969,227
|
|
|
—
|
|
|
96,446
|
|
|
1,065,673
|
|
||||
Portfolio (allowance) reversals, net
|
(5,002
|
)
|
|
—
|
|
|
11,765
|
|
|
6,763
|
|
||||
Balance, end of period
|
$
|
2,436,054
|
|
|
$
|
4,615
|
|
|
$
|
—
|
|
|
$
|
2,440,669
|
|
Revenue as a percentage of collections
(3)
|
61.1
|
%
|
|
0.0
|
%
|
|
89.3
|
%
|
|
62.7
|
%
|
|
Year Ended December 31, 2014
|
||||||||||||||
|
Accrual Basis
Portfolios |
|
Cost Recovery
Portfolios |
|
Zero Basis
Portfolios |
|
Total
|
||||||||
Balance, beginning of period
|
$
|
1,585,587
|
|
|
$
|
4,662
|
|
|
$
|
—
|
|
|
$
|
1,590,249
|
|
Purchases of receivable portfolios
|
1,249,651
|
|
|
1,709
|
|
|
—
|
|
|
1,251,360
|
|
||||
Transfer of portfolios
|
(18,682
|
)
|
|
18,682
|
|
|
—
|
|
|
—
|
|
||||
Gross collections
(1)
|
(1,563,996
|
)
|
|
(9,010
|
)
|
|
(34,491
|
)
|
|
(1,607,497
|
)
|
||||
Put-backs and Recalls
(2)
|
(15,164
|
)
|
|
(536
|
)
|
|
(9
|
)
|
|
(15,709
|
)
|
||||
Foreign currency adjustments
|
(64,644
|
)
|
|
(3,031
|
)
|
|
—
|
|
|
(67,675
|
)
|
||||
Revenue recognized
|
953,154
|
|
|
—
|
|
|
22,271
|
|
|
975,425
|
|
||||
Portfolio allowance reversals, net
|
5,178
|
|
|
—
|
|
|
12,229
|
|
|
17,407
|
|
||||
Balance, end of period
|
$
|
2,131,084
|
|
|
$
|
12,476
|
|
|
$
|
—
|
|
|
$
|
2,143,560
|
|
Revenue as a percentage of collections
(3)
|
60.9
|
%
|
|
0.0
|
%
|
|
64.6
|
%
|
|
60.7
|
%
|
(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
|
||
Balance at December 31, 2013
|
$
|
93,080
|
|
Reversal of prior allowances
|
(17,407
|
)
|
|
Balance at December 31, 2014
|
75,673
|
|
|
Provision for portfolio allowances
|
8,322
|
|
|
Reversal of prior allowances
|
(15,085
|
)
|
|
Allowance charged off to investment in receivable portfolios
|
(8,322
|
)
|
|
Balance at December 31, 2015
|
60,588
|
|
|
Provision for portfolio allowances
|
94,011
|
|
|
Reversal of prior allowances
|
(9,834
|
)
|
|
Balance at December 31, 2016
|
$
|
144,765
|
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
Court costs advanced
|
$
|
654,356
|
|
|
$
|
636,922
|
|
Court costs recovered
|
(261,243
|
)
|
|
(242,899
|
)
|
||
Court costs reserve
|
(327,926
|
)
|
|
(318,784
|
)
|
||
Deferred court costs
|
$
|
65,187
|
|
|
$
|
75,239
|
|
|
December 31,
2016 |
|
December 31,
2015 |
|
December 31,
2014 |
||||||
Balance at beginning of period
|
$
|
(318,784
|
)
|
|
$
|
(279,572
|
)
|
|
$
|
(210,889
|
)
|
Provision for court costs
|
(67,850
|
)
|
|
(82,593
|
)
|
|
(69,062
|
)
|
|||
Net down of reserve after deferral period
|
53,527
|
|
|
42,745
|
|
|
—
|
|
|||
Effect of foreign currency translation
|
5,181
|
|
|
636
|
|
|
379
|
|
|||
Balance at end of period
|
$
|
(327,926
|
)
|
|
$
|
(318,784
|
)
|
|
$
|
(279,572
|
)
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
Furniture, fixtures and equipment
|
$
|
19,230
|
|
|
$
|
21,754
|
|
Computer equipment and software
|
138,232
|
|
|
125,967
|
|
||
Telecommunications equipment
|
4,442
|
|
|
4,030
|
|
||
Leasehold improvements
|
17,493
|
|
|
19,058
|
|
||
Other
|
1,923
|
|
|
1,693
|
|
||
|
181,320
|
|
|
172,502
|
|
||
Less: accumulated depreciation and amortization
|
(109,063
|
)
|
|
(99,956
|
)
|
||
|
$
|
72,257
|
|
|
$
|
72,546
|
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
Deferred tax assets
|
$
|
51,077
|
|
|
$
|
12,695
|
|
Identifiable intangible assets, net
|
28,243
|
|
|
15,712
|
|
||
Assets held for sale
|
21,147
|
|
|
911
|
|
||
Other financial receivables
|
18,732
|
|
|
11,275
|
|
||
Prepaid expenses
|
18,036
|
|
|
21,872
|
|
||
Service fee receivables
|
15,156
|
|
|
13,708
|
|
||
Receivable from seller
|
5,388
|
|
|
8,605
|
|
||
Security deposits
|
2,781
|
|
|
2,368
|
|
||
Derivative instruments
|
1,122
|
|
|
718
|
|
||
Prepaid income taxes
|
649
|
|
|
25,839
|
|
||
Other
|
53,116
|
|
|
35,059
|
|
||
Total
|
$
|
215,447
|
|
|
$
|
148,762
|
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
Encore revolving credit facility
|
$
|
578,000
|
|
|
$
|
627,000
|
|
Encore term loan facility
|
164,615
|
|
|
143,078
|
|
||
Encore senior secured notes
|
11,320
|
|
|
28,750
|
|
||
Encore convertible notes
|
448,500
|
|
|
448,500
|
|
||
Less: Debt discount
|
(31,968
|
)
|
|
(41,867
|
)
|
||
Cabot senior secured notes
|
1,280,241
|
|
|
1,360,000
|
|
||
Add: Debt premium
|
17,686
|
|
|
53,440
|
|
||
Less: Debt discount
|
(2,200
|
)
|
|
(3,184
|
)
|
||
Cabot senior revolving credit facility
|
33,218
|
|
|
54,089
|
|
||
Preferred equity certificates
|
205,975
|
|
|
221,516
|
|
||
Other credit facilities
|
74,551
|
|
|
49,895
|
|
||
Other
|
62,608
|
|
|
33,447
|
|
||
Capital lease obligations
|
5,091
|
|
|
11,054
|
|
||
|
2,847,637
|
|
|
2,985,718
|
|
||
Less: debt issuance costs, net of amortization
|
(41,654
|
)
|
|
(41,655
|
)
|
||
Total
|
$
|
2,805,983
|
|
|
$
|
2,944,063
|
|
•
|
Revolving Credit Facility commitments of (1)
$541.8 million
that expire in December 2021, (2)
$207.8 million
that expire in February 2019 and (3)
$32.1 million
that expire in November 2017, 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;
|
•
|
An
$88.3 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
$4.4 million
in each of 2017 and 2018,
$6.6 million
in each of 2019 and 2020, and
$8.8 million
in 2021 with the remaining principal due at the end of the term;
|
•
|
A
$22.6 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
$4.4 million
in each of 2017 and 2018 with the remaining principal due at the end of the term;
|
•
|
A
$4.9 million
term loan maturing in
November 2017
, 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
$0.5 million
in 2017 with the remaining principal due at the end of the term;
|
•
|
A
$50.6 million
term loan maturing in
February 2017
, with interest at a floating rate equal to, at the Company’s option, either: (1) reserve adjusted LIBOR, plus a spread that ranges from
200
to
250 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
100
to
150 basis points
, depending on the cash flow leverage ratio of Encore and its restricted subsidiaries;
|
•
|
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;
|
•
|
The allowance of indebtedness in the form of senior secured notes not to exceed
$150.0 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 commitments expiring in February 2019) to satisfy any amounts due under the revolving commitments that expire in February 2019 and the sub-tranche of the Term Loan Facility that expires in February 2019;
|
•
|
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.
|
|
2017 Convertible Notes
|
|
2020 Convertible Notes
|
|
2021 Convertible Notes
|
||||||
Initial conversion price
|
$
|
31.56
|
|
|
$
|
45.72
|
|
|
$
|
59.39
|
|
Closing stock price at date of issuance
|
$
|
25.66
|
|
|
$
|
33.35
|
|
|
$
|
47.51
|
|
Closing stock price date
|
November 27, 2012
|
|
|
June 24, 2013
|
|
|
March 5, 2014
|
|
|||
Conversion rate (shares per $1,000 principal amount)
|
31.6832
|
|
|
21.8718
|
|
|
16.8386
|
|
|||
Conversion date
(1)
|
May 27, 2017
|
|
|
January 1, 2020
|
|
|
September 15, 2020
|
|
(1)
|
The 2017 Convertible Notes became convertible on January 2, 2014, as certain early conversion events were satisfied. Refer to “Conversion and Earnings Per Share Impact” section below for further details.
|
|
2017 Convertible Notes
|
|
2020 Convertible Notes
|
|
2021 Convertible Notes
|
||||||
Debt component
|
$
|
100,298
|
|
|
$
|
140,247
|
|
|
$
|
143,645
|
|
Equity component
|
$
|
14,702
|
|
|
$
|
32,253
|
|
|
$
|
17,355
|
|
Equity issuance cost
|
$
|
788
|
|
|
$
|
1,106
|
|
|
$
|
581
|
|
Stated interest rate
|
3.000
|
%
|
|
3.000
|
%
|
|
2.875
|
%
|
|||
Effective interest rate
|
6.000
|
%
|
|
6.350
|
%
|
|
4.700
|
%
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
Liability component—principal amount
|
$
|
448,500
|
|
|
$
|
448,500
|
|
Unamortized debt discount
|
(31,968
|
)
|
|
(41,867
|
)
|
||
Liability component—net carrying amount
|
$
|
416,532
|
|
|
$
|
406,633
|
|
Equity component
|
$
|
61,314
|
|
|
$
|
58,184
|
|
|
Year ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Interest expense—stated coupon rate
|
$
|
13,263
|
|
|
$
|
13,245
|
|
Interest expense—amortization of debt discount
|
9,900
|
|
|
9,335
|
|
||
Total interest expense—convertible notes
|
$
|
23,163
|
|
|
$
|
22,580
|
|
|
2017 Convertible Notes
|
|
2020 Convertible Notes
|
|
2021 Convertible Notes
|
||||||
Cost of the hedge transaction(s)
|
$
|
50,595
|
|
|
$
|
18,113
|
|
|
$
|
19,545
|
|
Initial conversion price
|
$
|
31.56
|
|
|
$
|
45.72
|
|
|
$
|
59.39
|
|
Effective conversion price
|
$
|
60.00
|
|
|
$
|
61.55
|
|
|
$
|
83.14
|
|
|
Year ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Interest expense—stated coupon rate
|
$
|
105,606
|
|
|
$
|
98,988
|
|
Interest income—accretion of debt premium
|
(8,951
|
)
|
|
(10,747
|
)
|
||
Interest expense—amortization of debt discount
|
620
|
|
|
75
|
|
||
Total interest expense—Cabot senior secured notes
|
$
|
97,275
|
|
|
$
|
88,316
|
|
•
|
Interest at LIBOR (or EURIBOR for any loan drawn in euro) plus
3.25%
;
|
•
|
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
0.25
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.
|
2017
|
$
|
224,394
|
|
2018
|
18,760
|
|
|
2019
|
306,032
|
|
|
2020
|
887,084
|
|
|
2021
|
775,821
|
|
|
Thereafter
|
652,028
|
|
|
Total
|
$
|
2,864,119
|
|
|
Number of
Shares
|
|
Option Price
Per Share
|
|
Weighted Average
Exercise Price
|
|
Aggregate
Intrinsic
Value
(in thousands)
|
|||||
Outstanding at December 31, 2015
|
118,879
|
|
|
$2.89 –$24.65
|
|
$
|
16.23
|
|
|
|
||
Exercised
|
(15,333
|
)
|
|
22.17 –24.65
|
|
22.87
|
|
|
|
|||
Outstanding at December 31, 2016
|
103,546
|
|
|
$2.89 –$22.17
|
|
$
|
15.24
|
|
|
$
|
1,388
|
|
Exercisable at December 31, 2016
|
103,546
|
|
|
$2.89 –$22.17
|
|
$
|
15.24
|
|
|
$
|
1,388
|
|
|
Year Ended December 31,
|
|||||||
|
2016
|
|
2015
|
|
2014
|
|||
Federal provision
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State provision
(1)
|
2.3
|
%
|
|
0.2
|
%
|
|
8.7
|
%
|
International benefit
(2)
|
(3.6
|
)%
|
|
(7.8
|
)%
|
|
(3.0
|
)%
|
Tax reserves
(3)
|
(3.2
|
)%
|
|
(2.0
|
)%
|
|
(3.8
|
)%
|
Permanent items
(4)
|
14.7
|
%
|
|
6.0
|
%
|
|
4.3
|
%
|
Increase (decrease) in valuation allowance
(5)
|
20.7
|
%
|
|
(5.6
|
)%
|
|
0.0
|
%
|
Other
(6)
|
0.7
|
%
|
|
1.9
|
%
|
|
(6.9
|
)%
|
Effective rate
|
66.6
|
%
|
|
27.7
|
%
|
|
34.3
|
%
|
(1)
|
Change from 2014 to 2015 relates primarily to a beneficial settlement with a state tax authority.
|
(2)
|
Relates primarily to the lower tax rate on the income attributable to international operations.
|
(3)
|
Represent release of reserves taken for certain tax positions.
|
(4)
|
Represents a provision for nondeductible items, including overall foreign loss in 2016 and a settlement with the Consumer Finance Protection Bureau (“CFPB”) in 2015. The Company incurred a
$10.0 million
civil monetary penalty related to a settlement with the CFPB during the year ended December 31, 2015, which is not deductible for income tax purposes.
|
(5)
|
Valuation allowance increased in 2016 due to a foreign subsidiary’s cumulative operating loss.
|
(6)
|
Includes the effect of discrete items, primarily relates to the recognition of tax benefit as a result of a favorable tax settlement with taxing authorities as discussed below.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Current expense:
|
|
|
|
|
|
||||||
Federal
|
$
|
58,816
|
|
|
$
|
38,831
|
|
|
$
|
68,142
|
|
State
|
1,173
|
|
|
363
|
|
|
7,538
|
|
|||
Foreign
|
10,364
|
|
|
7,124
|
|
|
3,752
|
|
|||
|
70,353
|
|
|
46,318
|
|
|
79,432
|
|
|||
Deferred (benefit) expense:
|
|
|
|
|
|
||||||
Federal
|
(22,951
|
)
|
|
(18,755
|
)
|
|
(34,479
|
)
|
|||
State
|
25
|
|
|
(610
|
)
|
|
2,698
|
|
|||
Foreign
|
(9,222
|
)
|
|
209
|
|
|
918
|
|
|||
|
(32,148
|
)
|
|
(19,156
|
)
|
|
(30,863
|
)
|
|||
|
$
|
38,205
|
|
|
$
|
27,162
|
|
|
$
|
48,569
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Computed “expected” Federal income tax expense
|
$
|
20,081
|
|
|
$
|
34,277
|
|
|
$
|
49,578
|
|
(Decrease) increase in income taxes resulting from:
|
|
|
|
|
|
||||||
State income taxes, net
|
1,331
|
|
|
637
|
|
|
7,975
|
|
|||
Foreign non-taxed income, rate differential
|
(2,076
|
)
|
|
(7,609
|
)
|
|
(5,453
|
)
|
|||
Other adjustments, net
|
18,869
|
|
|
(143
|
)
|
|
(3,531
|
)
|
|||
|
$
|
38,205
|
|
|
$
|
27,162
|
|
|
$
|
48,569
|
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
Deferred tax assets:
|
|
|
|
||||
Stock-based compensation expense
|
$
|
7,549
|
|
|
$
|
1,301
|
|
Accrued expenses
|
19,868
|
|
|
7,220
|
|
||
Differences in income recognition related to receivable portfolios
|
45,419
|
|
|
33,652
|
|
||
State and international operating losses
|
26,386
|
|
|
15,234
|
|
||
Difference in basis of depreciable assets
|
3,427
|
|
|
3,069
|
|
||
Capitalized legal fees—international
|
171
|
|
|
4,143
|
|
||
Cumulative translation adjustment
|
715
|
|
|
958
|
|
||
Tax benefit of uncertain tax positions
|
677
|
|
|
1,349
|
|
||
Difference in basis of bond and loan costs
|
3,007
|
|
|
9,480
|
|
||
Other
|
1,077
|
|
|
2,372
|
|
||
Valuation allowance
|
(18,892
|
)
|
|
(4,517
|
)
|
||
|
89,404
|
|
|
74,261
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
State taxes
|
(377
|
)
|
|
(707
|
)
|
||
Deferred court costs
|
(19,860
|
)
|
|
(25,277
|
)
|
||
Difference in basis of amortizable assets
|
(16,488
|
)
|
|
(11,044
|
)
|
||
Difference in basis of depreciable assets
|
(7,705
|
)
|
|
(8,932
|
)
|
||
Differences in income recognition related to receivable portfolios
|
—
|
|
|
(17,432
|
)
|
||
Deferred debt cancellation income
|
(1,313
|
)
|
|
(1,957
|
)
|
||
Other
|
(242
|
)
|
|
(46
|
)
|
||
|
(45,985
|
)
|
|
(65,395
|
)
|
||
Net deferred tax asset
(1)
|
$
|
43,419
|
|
|
$
|
8,866
|
|
(1)
|
The Company operates in multiple jurisdictions. In accordance with authoritative guidance relating to income taxes, deferred tax assets and liabilities are netted for each tax-paying component of the Company within a particular tax jurisdiction, and presented as a single amount in the statement of financial condition.
|
|
Amount
|
||
Balance at December 31, 2013
|
$
|
71,273
|
|
Increases related to current and prior year tax positions
|
34,356
|
|
|
Decreases related to settlements with taxing authorities
|
(67,204
|
)
|
|
Balance at December 31, 2014
|
38,425
|
|
|
Increases related to prior year tax positions
|
5,835
|
|
|
Increases related to current year tax positions
|
11,882
|
|
|
Decreases related to prior year tax positions
|
(8,193
|
)
|
|
Balance at December 31, 2015
|
47,949
|
|
|
Increases related to prior year tax positions
|
2,505
|
|
|
Increases related to current year tax positions
|
1,259
|
|
|
Decreases related to settlements with taxing authorities
|
(31,111
|
)
|
|
Decreases related to prior year tax positions
|
(1,657
|
)
|
|
Balance at December 31, 2016
|
$
|
18,945
|
|
|
Capital
Leases
|
|
Operating
Leases
|
|
Total
|
||||||
2017
|
$
|
3,470
|
|
|
$
|
17,347
|
|
|
$
|
20,817
|
|
2018
|
1,227
|
|
|
13,033
|
|
|
14,260
|
|
|||
2019
|
478
|
|
|
8,282
|
|
|
8,760
|
|
|||
2020
|
270
|
|
|
6,361
|
|
|
6,631
|
|
|||
2021
|
—
|
|
|
5,599
|
|
|
5,599
|
|
|||
Thereafter
|
—
|
|
|
11,202
|
|
|
11,202
|
|
|||
Total minimal leases payments
|
5,445
|
|
|
$
|
61,824
|
|
|
$
|
67,269
|
|
|
Less: Interest
|
(354
|
)
|
|
|
|
|
|||||
Present value of minimal lease payments
|
$
|
5,091
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Revenues
(1)
:
|
|
|
|
|
|
||||||
United States
|
$
|
669,636
|
|
|
$
|
709,405
|
|
|
$
|
723,247
|
|
International
|
|
|
|
|
|
||||||
Europe
(2)
|
270,411
|
|
|
376,055
|
|
|
295,173
|
|
|||
Other geographies
|
89,211
|
|
|
44,507
|
|
|
25,009
|
|
|||
Total
|
$
|
1,029,258
|
|
|
$
|
1,129,967
|
|
|
$
|
1,043,429
|
|
(1)
|
Revenues 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.
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
Long-lived assets
(1)
:
|
|
|
|
||||
United States
|
$
|
39,126
|
|
|
$
|
38,921
|
|
International
|
|
|
|
||||
United Kingdom
|
20,860
|
|
|
20,795
|
|
||
Other foreign countries
|
12,271
|
|
|
12,830
|
|
||
|
33,131
|
|
|
33,625
|
|
||
Total
|
$
|
72,257
|
|
|
$
|
72,546
|
|
(1)
|
Long-lived assets consists of property and equipment, net.
|
|
Total
|
||
Balance, December 31, 2015
|
$
|
924,847
|
|
Goodwill acquired
|
623
|
|
|
Goodwill adjustment
(1)
|
(20,674
|
)
|
|
Effect of foreign currency translation
|
(119,764
|
)
|
|
Balance, December 31, 2016
|
$
|
785,032
|
|
(1)
|
Represent adjustments made to preliminary purchase price allocations as a result of obtaining fair value of intangible assets acquired and finalizing certain established deferred income tax associated with prior year business combinations.
|
|
As of December 31, 2016
|
|
As of December 31, 2015
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
Customer relationships
|
$
|
21,200
|
|
|
$
|
(3,220
|
)
|
|
$
|
17,980
|
|
|
$
|
5,356
|
|
|
$
|
(903
|
)
|
|
$
|
4,453
|
|
Developed technologies
|
6,497
|
|
|
(3,891
|
)
|
|
2,606
|
|
|
8,141
|
|
|
(3,793
|
)
|
|
4,348
|
|
||||||
Trade name and other
|
12,566
|
|
|
(4,909
|
)
|
|
7,657
|
|
|
10,324
|
|
|
(3,413
|
)
|
|
6,911
|
|
||||||
Total intangible assets
|
$
|
40,263
|
|
|
$
|
(12,020
|
)
|
|
$
|
28,243
|
|
|
$
|
23,821
|
|
|
$
|
(8,109
|
)
|
|
$
|
15,712
|
|
2017
|
$
|
5,417
|
|
2018
|
4,442
|
|
|
2019
|
3,109
|
|
|
2020
|
2,972
|
|
|
2021
|
2,849
|
|
|
Thereafter
|
9,454
|
|
|
Total
|
$
|
28,243
|
|
|
Three Months Ended
|
||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
2016
|
|
|
|
|
|
|
|
||||||||
Gross collections
|
$
|
447,805
|
|
|
$
|
434,100
|
|
|
$
|
406,961
|
|
|
$
|
396,738
|
|
Revenues
|
289,017
|
|
|
289,442
|
|
|
179,415
|
|
|
271,384
|
|
||||
Total operating expenses
|
205,513
|
|
|
197,695
|
|
|
200,597
|
|
|
183,939
|
|
||||
Income (loss) from continuing operations
|
29,789
|
|
|
30,833
|
|
|
(51,946
|
)
|
|
10,494
|
|
||||
Net income (loss)
|
26,607
|
|
|
30,833
|
|
|
(51,946
|
)
|
|
11,323
|
|
||||
Amounts attributable to Encore Capital Group, Inc.:
|
|
|
|
|
|
|
|
||||||||
Income from (loss) continuing operations
|
28,876
|
|
|
29,588
|
|
|
(1,524
|
)
|
|
21,983
|
|
||||
Net income (loss) attributable to Encore Capital Group, Inc. stockholders
|
25,694
|
|
|
29,588
|
|
|
(1,524
|
)
|
|
22,812
|
|
||||
Earnings (loss) per share attributable to Encore Capital Group, Inc.:
|
|
|
|
|
|
|
|
||||||||
From continuing operations:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.13
|
|
|
$
|
1.15
|
|
|
$
|
(0.06
|
)
|
|
$
|
0.85
|
|
Diluted
|
1.12
|
|
|
1.14
|
|
|
(0.06
|
)
|
|
0.85
|
|
||||
From net income:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.01
|
|
|
$
|
1.15
|
|
|
$
|
(0.06
|
)
|
|
$
|
0.88
|
|
Diluted
|
0.99
|
|
|
1.14
|
|
|
(0.06
|
)
|
|
0.88
|
|
||||
2015
|
|
|
|
|
|
|
|
||||||||
Gross collections
|
$
|
425,071
|
|
|
$
|
437,324
|
|
|
$
|
421,753
|
|
|
$
|
416,577
|
|
Revenues
|
277,782
|
|
|
282,662
|
|
|
278,914
|
|
|
290,609
|
|
||||
Total operating expenses
|
194,895
|
|
|
198,362
|
|
|
248,185
|
|
|
206,271
|
|
||||
Income (loss) from continuing operations
|
28,087
|
|
|
23,524
|
|
|
(11,650
|
)
|
|
30,810
|
|
||||
Net income (loss)
|
29,967
|
|
|
25,185
|
|
|
(9,364
|
)
|
|
1,596
|
|
||||
Amounts attributable to Encore Capital Group, Inc.:
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations
|
27,545
|
|
|
25,996
|
|
|
(13,245
|
)
|
|
28,226
|
|
||||
Net income (loss)
|
1,880
|
|
|
1,661
|
|
|
2,286
|
|
|
(29,214
|
)
|
||||
Earnings (loss) per share attributable to Encore Capital Group, Inc.:
|
|
|
|
|
|
|
|
||||||||
From continuing operations:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.06
|
|
|
$
|
1.00
|
|
|
$
|
(0.52
|
)
|
|
$
|
1.11
|
|
Diluted
|
1.01
|
|
|
0.97
|
|
|
(0.52
|
)
|
|
1.08
|
|
||||
From net income:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.13
|
|
|
$
|
1.07
|
|
|
$
|
(0.43
|
)
|
|
$
|
(0.04
|
)
|
Diluted
|
1.08
|
|
|
1.03
|
|
|
(0.43
|
)
|
|
(0.04
|
)
|
Participant:
|
|
Date of Grant:
|
February 21, 2017
|
Vesting Commencement Date:
|
See Vesting Schedule below
|
Number of Shares Subject to Award:
|
|
Consideration:
|
Participant’s Services
|
Vesting Schedule:
|
shares will vest on December 31, 2018
|
|
shares will vest on December 31, 2019
|
|
In addition, the vesting of the shares may accelerate in the sole discretion of the Committee and upon certain events described in the Restricted Stock Agreement. Except as otherwise provided in the Restricted Stock Agreement, (i) vesting will cease and the Award will be forfeited in its entirety if the Company does not achieve Adjusted Net Income of at least $ , and (ii) vesting shall terminate upon the Participant’s termination of Continuous Service.
|
Encore Capital Group, Inc.
|
PARTICIPANT
:
|
|
|
Name: Kenneth A. Vecchione
Title: President and Chief Executive Officer
Date:
|
Name:
Date:
|
Participant:
|
|
Date of Grant:
|
February 21, 2017
|
Vesting Commencement Date:
|
See Vesting Schedule below
|
Award Amount:
|
$
|
Consideration:
|
Participant’s Services
|
Vesting Schedule:
|
$ will vest on June 30, 2018
$ will vest on December 31, 2018
$ will vest on June 30, 2019
$ will vest on December 31, 2019
|
|
|
Encore Capital Group, Inc.
|
PARTICIPANT
:
|
|
|
Name: Kenneth A. Vecchione
Title: President and Chief Executive Officer
Date:
|
Name:
Date:
|
1.
|
In Section 10, the “and” from the end of the paragraph in the third bullet point is deleted.
|
2.
|
In Section 10, the following language is inserted as a new bullet point between the third and fourth bullet points:
|
/s/ Kenneth Vecchione
|
|
2/21/2017
|
Kenneth Vecchione
|
|
Date
|
(a)
|
One third of such shares of Common Stock shall vest and be exercisable on or after if the performance conditions detailed in
Exhibit A
(the “Performance Conditions”) have been satisfied;
|
(b)
|
an additional one third of such shares of Common Stock shall vest and be exercisable on or after if the Performance Conditions have been satisfied; and
|
(c)
|
all such shares of Common Stock shall be exercisable on or after
if the Performance Conditions have been satisfied.
|
(a)
|
_____;
|
(b)
|
the termination of the Optionee’s Continuous Service, in which event the Option shall terminate as follows:
|
(i)
|
if such termination constitutes or is attributable to a breach by the Optionee of an employment or consulting agreement with the Company or any of its Affiliates, or if the Optionee is discharged or if his or her Continuous Service is terminated for Cause, then the Option shall terminate immediately upon such termination date;
|
(ii)
|
if such termination is due to the death or Disability of the Optionee, then the Option shall terminate on the one-year anniversary of the date of death or Disability of the Optionee; or
|
(iii)
|
if such termination is for any other reason including the voluntary or involuntary termination of the Optionee’s Continuous Service (except for the reasons stated in
Section 5(b)(i)
), then the Option shall terminate on the ninetieth (90th) day following the date of termination of Continuous Service;
|
(c)
|
the occurrence of a Change of Control; provided, however, that the Option shall be exercisable until the earlier of (A) the date described in Section 5(a) and (B) the later of (i) the first anniversary of the Change of Control and (ii) the time otherwise determined pursuant to the foregoing provisions of this Section 5; or
|
(d)
|
if the Performance Conditions have not been satisfied,
.
|
(a)
|
cash or by check payable to the Company or to a third party administrator appointed by the Company for such purposes;
|
(b)
|
delivery of unrestricted shares of Common Stock having a Fair Market Value (determined as of the date the Option is exercised, but in no event at a price per share less than the par value per share of the Common Stock delivered) equal to all or part of the purchase price and that have been held for more than six months (or other period required by the Company); provided, that, whenever the Optionee is permitted to pay the exercise price of an Option by delivering shares of Common Stock, the Optionee may, subject to procedures satisfactory to the Committee, satisfy such delivery requirement by presenting proof of beneficial ownership of such shares, in which case the Company shall treat the Option as exercised without further payment and shall withhold such number of shares from the shares acquired by the exercise of the Option;
|
(c)
|
delivery of irrevocable instructions to a broker in a form acceptable to the Company providing for the assignment to the Company of the proceeds of a sale or loan with respect to some or all of the shares of Common Stock being acquired upon the exercise of the Option sufficient to pay the exercise price and/or applicable withholding pursuant to a program or procedure approved by the Company (including, without limitation, through an exercise complying with the provisions of Regulation T as promulgated from time to time by the Board of Governors of the Federal Reserve System); provided that the Company reserves the right, in its sole discretion, to establish, decline to approve or terminate any such program or procedures, including with respect to the Optionee notwithstanding that such program or procedures may be available to others;
|
(d)
|
upon prior written approval by the Committee, an election by the Optionee to have the Company withhold from those shares of Common Stock that
|
(e)
|
any other form permitted by the Committee in its sole discretion; and/or
|
(f)
|
any combination of any of the foregoing methods.
|
|
||
|
|
|
Name
|
Jurisdiction of Incorporation or Formation
|
|
|
||
ACF Medical Services, Inc.
|
Virginia
|
|
Alliance Factoring Pty Limited
|
Australia
|
|
Apex Collections Limited
|
United Kingdom
|
|
Apex Credit Management Holdings Limited
|
United Kingdom
|
|
Apex Credit Management Limited
|
United Kingdom
|
|
Ascension Capital Group, Inc.
|
Delaware
|
|
Asset Acceptance Capital Corp.
|
Delaware
|
|
Asset Acceptance Recovery Services, LLC
|
Delaware
|
|
Asset Acceptance Solutions Group, LLC
|
Delaware
|
|
Asset Acceptance, LLC
|
Delaware
|
|
Atlantic Credit & Finance Special Finance Unit III, LLC
|
Virginia
|
|
Atlantic Credit & Finance Special Finance Unit, LLC
|
Virginia
|
|
Atlantic Credit & Finance, Inc.
|
Virginia
|
|
Baycorp (Aust) Pty Limited
|
Australia
|
|
Baycorp (NZ) Limited
|
New Zealand
|
|
Baycorp (WA) Pty Limited
|
Australia
|
|
Baycorp Collection Services (Aust) Pty Limited
|
Australia
|
|
Baycorp Collection Services Pty Limited
|
Australia
|
|
Baycorp Collections PDL (Australia) Pty LTD
|
Australia
|
|
Baycorp Group Finance Pty Limited
|
Australia
|
|
Baycorp Holdings (NZ) Limited
|
New Zealand
|
|
Baycorp Holdings Pty Limited
|
Australia
|
|
Baycorp International (Philippines Branch)
|
Philippines
|
|
Baycorp International Pty Limited
|
Australia
|
|
Baycorp Legal Pty Limited
|
Australia
|
|
Baycorp PDL (NZ) Limited
|
New Zealand
|
|
BC Encore AU Pty Limited
|
Australia
|
|
BC Holdings I Pty Limited
|
Australia
|
|
BC Holdings II Pty Limited
|
Australia
|
|
Bedford Colombia S.A.S.
|
Colombia
|
|
Black Tip Capital Holdings Limited
|
United Kingdom
|
|
Cabot (Group Holdings) Limited
|
United Kingdom
|
|
Cabot (Spain) S.L.
|
Spain
|
|
Cabot Asset Purchases (Ireland) Limited
|
Ireland
|
|
Cabot Credit Management Group Limited
|
United Kingdom
|
|
Cabot Credit Management Limited
|
United Kingdom
|
|
Cabot Financial (Europe) Limited
|
United Kingdom
|
|
Cabot Financial (International) Limited
|
United Kingdom
|
|
Cabot Financial (Ireland) Limited
|
Ireland
|
|
Cabot Financial (Luxembourg) II S.A.
|
Luxembourg
|
|
Cabot Financial (Luxembourg) S.A.
|
Luxembourg
|
|
Cabot Financial (Marlin) Limited
|
United Kingdom
|
|
Cabot Financial (UK) Limited
|
United Kingdom
|
|
Cabot Financial Debt Recovery Services Limited
|
United Kingdom
|
Cabot Financial Holdings Group Limited
|
United Kingdom
|
|
Cabot Financial Limited
|
United Kingdom
|
|
Cabot Financial Portfolios Limited
|
United Kingdom
|
|
Cabot Holdings S.à.r.L
|
Luxembourg
|
|
Cabot Securitisation Europe Limited
|
Ireland
|
|
Cabot Services (Europe) S.A.S
|
France
|
|
Carat UK Holdco Limited
|
United Kingdom
|
|
Carat UK Midco Limited
|
United Kingdom
|
|
Dessetec Desarrollo De Sistemas, S.A. DE C.V.
|
Mexico
|
|
Encore Asset Reconstruction Company Private Limited
|
India
|
|
Encore Australia Holdings I Pty Limited
|
Australia
|
|
Encore Australia Holdings II Pty Limited
|
Australia
|
|
Encore Capital Group Singapore Pte. Ltd.
|
Singapore
|
|
Encore Europe Holdings S.à r.l.
|
Luxembourg
|
|
Encore Holdings Luxembourg S.à r.l.
|
Luxembourg
|
|
Encore Luxembourg Brazil S.à r.l.
|
Luxembourg
|
|
Encore Luxembourg India S.à r.l.
|
Luxembourg
|
|
Encore Luxembourg Mexico S.à r.l.
|
Luxembourg
|
|
Encore Mexico Nominee LLC
|
Delaware
|
|
Encore Real Estate Group, LLC
|
Delaware
|
|
Encoremex Holdings S. de R.L. de C.V.
|
Mexico
|
|
Encoremex, S.A. de C.V.
|
Mexico
|
|
Fideicomiso PA NPL
|
Colombia
|
|
Fideicomiso PA Refinancia
|
Colombia
|
|
Financial Investigations and Recoveries (Europe) Limited
|
United Kingdom
|
|
GC Encore Euro S.à r.l.
|
Luxembourg
|
|
GC Encore GBP S.à r.l.
|
Luxembourg
|
|
Gesif S.A.U.
|
Spain
|
|
Global Security Refinancia Management
|
Cayman Islands
|
|
Green Box Asset Management, S.L.
|
Spain
|
|
Grove Capital Management España S.L.
|
Spain
|
|
Grove Capital Management Limited
|
United Kingdom
|
|
Grove Europe S.à r.l.
|
Luxembourg
|
|
Grove Holdings
|
Cayman Islands
|
|
Grove Performance Management Limited
|
United Kingdom
|
|
Heptus 229. GmbH
|
Germany
|
|
Hillesden Securities Limited
|
United Kingdom
|
|
Janus Holdings Luxembourg S.à r.l.
|
Luxembourg
|
|
Legal Recovery Solutions, LLC
|
Delaware
|
|
LSF7 Silverstone S.à r.l.
|
Luxembourg
|
|
Lucania Gestión, S.L.
|
Spain
|
|
Lucania Software, S.L.
|
Spain
|
|
Lucas et Degand S.à r.l.
|
Luxembourg
|
|
Lynx Commercial Re Spain, S.L.U.
|
Spain
|
|
Lynx Residential Re Spain, S.L.U.
|
Spain
|
|
Macrocom (948) Limited
|
United Kingdom
|
|
Marlin Capital Europe Limited
|
United Kingdom
|
|
Marlin Europe I Limited
|
United Kingdom
|
|
Marlin Europe II Limited
|
United Kingdom
|
Marlin Europe V Limited
|
United Kingdom
|
|
Marlin Europe VI Limited
|
United Kingdom
|
|
Marlin Europe IX Limited
|
United Kingdom
|
|
Marlin Europe X Limited
|
United Kingdom
|
|
Marlin Financial Group Limited
|
United Kingdom
|
|
Marlin Financial Intermediate II Limited
|
United Kingdom
|
|
Marlin Financial Intermediate Limited
|
United Kingdom
|
|
Marlin Financial Services Limited
|
United Kingdom
|
|
Marlin Intermediate Holdings Plc
|
United Kingdom
|
|
Marlin Legal Services Limited
|
United Kingdom
|
|
Marlin Midway Limited
|
United Kingdom
|
|
Marlin Portfolio Holdings Limited
|
United Kingdom
|
|
Marlin Senior Holdings Limited
|
United Kingdom
|
|
Marlin Unrestricted Holdings Limited
|
United Kingdom
|
|
MCE Portfolio Limited
|
United Kingdom
|
|
MCM Midland Management Costa Rica, S.R.L
|
Costa Rica
|
|
MDB Collection Services Limited
|
United Kingdom
|
|
ME III Limited
|
United Kingdom
|
|
ME IV Limited
|
United Kingdom
|
|
Mercantile Data Bureau
|
United Kingdom
|
|
MFS Portfolio Limited
|
United Kingdom
|
|
Midland Credit Management (Mauritius) Limited
|
Mauritius
|
|
Midland Credit Management India Private Limited
|
India
|
|
Midland Credit Management Puerto Rico, LLC
|
Puerto Rico
|
|
Midland Credit Management UK Limited
|
England
|
|
Midland Credit Management, Inc.
|
Kansas
|
|
Midland Funding LLC
|
Delaware
|
|
Midland Funding NCC-2 Corporation
|
Delaware
|
|
Midland India LLC
|
Minnesota
|
|
Midland International LLC
|
Delaware
|
|
Midland Portfolio Services, Inc.
|
Delaware
|
|
Morley Limited
|
United Kingdom
|
|
Mortimer Clarke Solicitors Limited
|
United Kingdom
|
|
MRC Receivables Corporation
|
Delaware
|
|
Nemo Recouvrement SAS
|
France
|
|
PA FC Refinancia
|
Colombia
|
|
PA FC Refinancia-Fenalco Bogotá
|
Colombia
|
|
PD Encore, S. de R.L. de C.V.
|
Mexico
|
|
PMG Collect Pty Limited
|
Australia
|
|
Propela Capital, S.A. de C.V., SOFOM. E.N.R.
|
Mexico
|
|
Propiedades Residenciales S.L.
|
Spain
|
|
Referencia Peru S.A.C.
|
Perú
|
|
Referencia S.A.S.
|
Colombia
|
|
Refinancia Peru S.A.
|
Perú
|
|
Refinancia S.A.S.
|
Colombia
|
|
RF Encore Perú S.R.L.
|
Perú
|
|
RF Encore S.A.S.
|
Colombia
|
|
RNPL Advisory Corp
|
Virgin Islands
|
|
Virginia Credit & Finance, Inc.
|
Virginia
|
1.
|
I have reviewed this annual report on Form 10-K of Encore Capital Group, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
|
|
|
By:
|
|
/
S
/ K
ENNETH
A. V
ECCHIONE
|
|
|
Kenneth A. Vecchione
President and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of Encore Capital Group, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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By:
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/
S
/ J
ONATHAN
C. C
LARK
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Jonathan C. Clark
Executive Vice President, Chief Financial Officer and Treasurer
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(1)
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the consolidated financial condition and results of operations of the Company.
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/s/ K
ENNETH
A. V
ECCHIONE
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Kenneth A. Vecchione
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President and Chief Executive Officer
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/s/ J
ONATHAN
C. C
LARK
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Jonathan C. Clark
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Executive Vice President,
Chief Financial Officer and Treasurer
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