Page
|
||||
Part I
|
||||
|
Item 1.
|
Business
|
||
|
Item 1A.
|
Risk Factors
|
||
|
Item 1B.
|
Unresolved Staff Comments
|
||
|
Item 2.
|
Properties
|
||
|
Item 3.
|
Legal Proceedings
|
||
|
Item 4.
|
Mine Safety Disclosures
|
||
|
||||
Part II
|
||||
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
||
|
Item 6.
|
Selected Financial Data
|
||
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
||
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
||
|
Item 8.
|
Financial Statements and Supplementary Data
|
||
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
||
|
Item 9A.
|
Controls and Procedures
|
||
|
Item 9B.
|
Other Information
|
||
|
||||
Part III
|
||||
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
||
|
Item 11.
|
Executive Compensation
|
||
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
||
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
||
|
Item 14.
|
Principal Accountant Fees and Services
|
||
|
||||
Part IV
|
||||
|
Item 15.
|
Exhibits and Financial Statement Schedules
|
||
|
Item 16.
|
Form 10-K Summary
|
•
|
the availability of adequate financing to support growth;
|
•
|
the extent to which federal, state, local and foreign governmental regulation of our various business lines and the products we service for others limits or prohibits the operation of our businesses;
|
•
|
current and future litigation and regulatory proceedings against us;
|
•
|
the effect of adverse economic conditions on our revenues, loss rates and cash flows;
|
•
|
competition from various sources providing similar financial products, or other alternative sources of credit, to consumers;
|
•
|
the adequacy of our allowances for uncollectible loans and fees receivable and estimates of loan losses used within our risk management and analyses;
|
•
|
the possible impairment of assets;
|
•
|
our ability to manage costs in line with the expansion or contraction of our various business lines;
|
•
|
our relationship with (i) the merchants that participate in point-of-sale finance operations and (ii) the banks that issue credit cards and provide certain other credit products utilizing our technology platform and related services; and
|
•
|
theft and employee errors.
|
ITEM 1.
|
BUSINESS
|
ITEM 1A.
|
RISK FACTORS
|
•
|
the availability of funding on favorable terms;
|
•
|
our relationships with the banks that issue credit cards;
|
•
|
the degree to which we lose business to competitors;
|
•
|
the level of usage of our credit card products by consumers;
|
•
|
the availability of portfolios for purchase on attractive terms;
|
•
|
levels of delinquencies and charge offs;
|
•
|
the level of costs of acquiring new receivables;
|
•
|
our ability to employ and train new personnel;
|
•
|
our ability to maintain adequate management systems, collection procedures, internal controls and automated systems; and
|
•
|
general economic and other factors beyond our control.
|
•
|
receivables not originated in compliance with law (or revised interpretations) could become unenforceable and uncollectible under their terms against the obligors;
|
•
|
we may be required to credit or refund previously collected amounts;
|
•
|
certain fees and finance charges could be limited, prohibited or restricted, which would reduce the profitability of certain investments in receivables;
|
•
|
certain collection methods could be prohibited, forcing us to revise our practices or adopt more costly or less effective practices;
|
•
|
limitations on our ability to recover on charged-off receivables regardless of any act or omission on our part;
|
•
|
some credit products and services could be banned in certain states or at the federal level;
|
•
|
federal or state bankruptcy or debtor relief laws could offer additional protections to consumers seeking bankruptcy protection, providing a court greater leeway to reduce or discharge amounts owed to us; and
|
•
|
a reduction in our ability or willingness to invest in receivables arising under loans to certain consumers, such as military personnel.
|
•
|
actual or anticipated fluctuations in our operating results;
|
•
|
changes in expectations as to our future financial performance, including financial estimates by securities analysts and investors;
|
•
|
the overall financing environment, which is critical to our value;
|
•
|
the operating and stock performance of our competitors;
|
•
|
announcements by us or our competitors of new products or services or significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments;
|
•
|
changes in interest rates;
|
•
|
the announcement of enforcement actions or investigations against us or our competitors or other negative publicity relating to us or our industry;
|
•
|
changes in GAAP, laws, regulations or the interpretations thereof that affect our various business activities and segments;
|
•
|
general domestic or international economic, market and political conditions;
|
•
|
changes in ownership by executive officers, directors and parties related to them who control a majority of our common stock;
|
•
|
additions or departures of key personnel; and
|
•
|
future sales of our common stock and the transfer or cancellation of shares of common stock pursuant to a share lending agreement.
|
ITEM 1B.
|
UNRESOLVED STAFF COMMENTS
|
ITEM 2.
|
PROPERTIES
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
|
|
2015
|
High
|
Low
|
1st Quarter 2015
|
$3.10
|
$2.08
|
2nd Quarter 2015
|
$3.86
|
$2.03
|
3rd Quarter 2015
|
$4.02
|
$3.40
|
4th Quarter 2015
|
$3.64
|
$2.88
|
|
|
|
2016
|
High
|
Low
|
1st Quarter 2016
|
$3.48
|
$2.90
|
2nd Quarter 2016
|
$3.23
|
$2.64
|
3rd Quarter 2016
|
$3.15
|
$2.72
|
4th Quarter 2016
|
$3.50
|
$2.71
|
|
Total Number of
Shares Purchased |
|
Average Price
Paid per Share |
|
Total Number of
Shares Purchased as Part of Publicly Announced Plans or Programs |
|
Maximum Number
of Shares that May Yet Be Purchased under the Plans or Programs (1)(2) |
|||||
October 1- October 31
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
4,912,401
|
|
November 1 - November 30
|
24,799
|
|
|
$
|
3.21
|
|
|
—
|
|
|
4,912,401
|
|
December 1 - December 31
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
4,912,401
|
|
Total
|
24,799
|
|
|
$
|
3.21
|
|
|
—
|
|
|
4,912,401
|
|
(1)
|
Because withholding tax-related stock repurchases are permitted outside the scope of our 5,000,000 share Board-authorized repurchase plan, these amounts exclude shares of stock returned to us by employees in satisfaction of withholding tax requirements on vested stock grants. There were 24,799 such shares returned to us during the three months ended
December 31, 2016
.
|
(2)
|
Pursuant to a share repurchase plan authorized by our Board of Directors on May 12, 2016, we are authorized to repurchase 5,000,000 shares of our common stock through June 30, 2018.
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
|
|
|
|
Income
|
||||||
|
For the Year Ended December 31,
|
|
Increases (Decreases)
|
||||||||
(In Thousands)
|
2016
|
|
2015
|
|
from 2015 to 2016
|
||||||
Total interest income
|
$
|
88,622
|
|
|
$
|
69,917
|
|
|
$
|
18,705
|
|
Interest expense
|
(20,207
|
)
|
|
(18,330
|
)
|
|
(1,877
|
)
|
|||
Fees and related income on earning assets:
|
|
|
|
|
|
||||||
Fees on credit products
|
3,526
|
|
|
6,907
|
|
|
(3,381
|
)
|
|||
Changes in fair value of loans and fees receivable recorded at fair value
|
1,587
|
|
|
6,265
|
|
|
(4,678
|
)
|
|||
Changes in fair value of notes payable associated with structured financings recorded at fair value
|
3,773
|
|
|
1,262
|
|
|
2,511
|
|
|||
Rental revenue
|
8,235
|
|
|
36,032
|
|
|
(27,797
|
)
|
|||
Other
|
195
|
|
|
2,716
|
|
|
(2,521
|
)
|
|||
Other operating income:
|
|
|
|
|
|
||||||
Servicing income
|
4,087
|
|
|
5,004
|
|
|
(917
|
)
|
|||
Other income
|
320
|
|
|
553
|
|
|
(233
|
)
|
|||
Gain on repurchase of convertible senior notes
|
1,151
|
|
|
—
|
|
|
1,151
|
|
|||
Equity in income equity-method investee
|
2,150
|
|
|
2,780
|
|
|
(630
|
)
|
|||
Total
|
$
|
93,439
|
|
|
$
|
113,106
|
|
|
$
|
(19,667
|
)
|
Net recovery of losses upon charge off of loans and fees receivable recorded at fair value
|
(22,096
|
)
|
|
(38,878
|
)
|
|
(16,782
|
)
|
|||
Provision for losses on loans and fees receivable recorded at net realizable value
|
53,721
|
|
|
26,608
|
|
|
(27,113
|
)
|
|||
Other operating expenses:
|
|
|
|
|
|
||||||
Salaries and benefits
|
24,026
|
|
|
19,825
|
|
|
(4,201
|
)
|
|||
Card and loan servicing
|
30,662
|
|
|
37,071
|
|
|
6,409
|
|
|||
Marketing and solicitation
|
3,171
|
|
|
2,235
|
|
|
(936
|
)
|
|||
Depreciation, primarily related to rental merchandise
|
7,477
|
|
|
40,778
|
|
|
33,301
|
|
|||
Other
|
8,834
|
|
|
21,932
|
|
|
13,098
|
|
|||
Net (loss) income
|
(6,341
|
)
|
|
1,706
|
|
|
(8,047
|
)
|
|||
Net loss attributable to noncontrolling interests
|
6
|
|
|
7
|
|
|
(1
|
)
|
|||
Net (loss) income attributable to controlling interests
|
(6,335
|
)
|
|
1,713
|
|
|
(8,048
|
)
|
•
|
declines in rental revenue as we significantly reduced rent-to-own operations in the fourth quarter of 2015 and for which we discontinued new acquisitions in 2016. We expect minimal future revenues associated with this product offering as existing rent-to-own contracts culminate with no new acquisitions expected;
|
•
|
reductions in fees on receivables, associated with general net declines in historical credit card receivables, offset slightly by new acquisitions of credit card receivables under our direct-to-consumer product offerings;
|
•
|
the effects of changes in the fair values of credit card receivables recorded at fair value and notes payable associated with structured financings recorded at fair value as described below; and
|
•
|
a reduction in other fees for 2016 as the 2015 results were positively impacted by the resolution of an outstanding dispute that resulted in the recovery of approximately $2.0 million associated with a receivable that was fully reserved in a prior period.
|
•
|
reductions in card and loan servicing expenses in the
year ended
December 31, 2016
when compared to the
year ended
December 31, 2015
based on lower acquisitions of our rent-to-own products as well as continued net liquidations in our historical credit card portfolios, the receivables of which declined from
$51.2 million
outstanding to
$32.1 million
outstanding at
December 31, 2015
and
December 31, 2016
, respectively, as well as declines associated with our rental program. Further, as our relative level and mix of receivables have changed we have been better able to negotiate certain third party fixed costs as existing contracts expired. These declines have been offset somewhat by expenses related to growth in point-of-sale and direct-to-consumer products, the receivables of which grew from
$105.3 million
outstanding to
$214.9 million
outstanding at
December 31, 2015
and
December 31, 2016
, respectively;
|
•
|
decreases in depreciation primarily associated with declines in acquisitions under our rent-to-own program which declined to
$5.3 million
from
$38.6 million
for the
years ended
December 31, 2016
and 2015, respectively; and
|
•
|
decreases in other expenses due to the reversal of a
£3.4 million
(
$5.0 million
) reserve in the
year ended December 31, 2016
. This reserve related to a review in the U.K. by HM Revenue and Customs (“HMRC”) associated with filings by one of our U.K. subsidiaries to reclaim VAT that it paid on its inputs and that it believed were and are eligible to be reclaimed. In February of 2016, we received correspondence from HMRC stating that it (1) had chosen to discontinue its review of our U.K. subsidiary’s VAT filings with no changes to the returns as filed by our U.K. subsidiary, and (2) would pay VAT refund claims made by our U.K. subsidiary that had been suspended during the HMRC review. We subsequently received substantially all of such refunds, and as such we reversed the
£3.4 million
(
$5.0 million
) of VAT review-related liabilities in the first quarter of 2016. Additionally, lower occupancy costs as we shut down our data center in late 2015 and a more favorable exchange rate helped to further reduce other expenses in 2016 relative to 2015.
|
•
|
increases in salaries and benefit costs for the
year ended
December 31, 2016
when compared to the
year ended
December 31, 2015
resulting from growth in our new credit receivables and related activities as well as increased costs associated with employee benefits;
|
•
|
increases in marketing and solicitation costs for the
year ended
December 31, 2016
as brand marketing expanded in late 2015 and throughout 2016, as well as volume related increases in costs attributable to the growth in our retail point-of-sale and direct-to-consumer portfolios. We expect that increased origination and brand marketing support will result in overall increases in year over year costs during 2017 although the frequency and timing of marketing efforts could result in reductions in quarter over quarter marketing costs; and
|
•
|
general increases in other expenses related to receivables acquisition, risk management costs and third party costs associated with ongoing information technology upgrades.
|
|
At or for the Three Months Ended
|
||||||||||||||||||||||
|
2016
|
|
2015
|
||||||||||||||||||||
|
Dec. 31
|
|
Sept. 30
|
|
Jun. 30
|
|
Mar. 31
|
|
Dec. 31
|
|
Sept. 30
|
|
Jun. 30
|
|
Mar. 31
|
||||||||
Period-end managed receivables
|
$245,007
|
|
$221,683
|
|
$201,406
|
|
$155,425
|
|
$152,528
|
|
$151,055
|
|
$142,338
|
|
$140,660
|
||||||||
Percent 30 or more days past due
|
11.8
|
%
|
|
10.9
|
%
|
|
8.2
|
%
|
|
9.7
|
%
|
|
11.5
|
%
|
|
10.5
|
%
|
|
11.8
|
%
|
|
10.1
|
%
|
Percent 60 or more days past due
|
8.1
|
%
|
|
7.3
|
%
|
|
5.3
|
%
|
|
7.1
|
%
|
|
7.9
|
%
|
|
7.2
|
%
|
|
8.8
|
%
|
|
7.5
|
%
|
Percent 90 or more days past due
|
5.2
|
%
|
|
4.7
|
%
|
|
3.4
|
%
|
|
5.1
|
%
|
|
5.4
|
%
|
|
5.0
|
%
|
|
4.9
|
%
|
|
5.4
|
%
|
Average managed receivables
|
$236,103
|
|
$216,951
|
|
$188,128
|
|
$152,831
|
|
$152,983
|
|
$143,946
|
|
$139,401
|
|
$146,792
|
||||||||
Total yield ratio
|
32.6
|
%
|
|
33.5
|
%
|
|
36.8
|
%
|
|
35.4
|
%
|
|
35.2
|
%
|
|
41.3
|
%
|
|
38.1
|
%
|
|
38.3
|
%
|
Combined gross charge-off ratio
|
21.1
|
%
|
|
13.3
|
%
|
|
14.9
|
%
|
|
18.2
|
%
|
|
16.8
|
%
|
|
21.5
|
%
|
|
17.4
|
%
|
|
23.8
|
%
|
Adjusted charge-off ratio
|
17.8
|
%
|
|
10.7
|
%
|
|
11.7
|
%
|
|
14.1
|
%
|
|
12.9
|
%
|
|
16.5
|
%
|
|
13.2
|
%
|
|
19.2
|
%
|
|
At or for the Three Months Ended
|
||||||||||||||||||||||||||||||
|
2016
|
|
2015
|
||||||||||||||||||||||||||||
|
Dec. 31
|
|
Sept. 30
|
|
Jun. 30
|
|
Mar. 31
|
|
Dec. 31
|
|
Sept. 30
|
|
Jun. 30
|
|
Mar. 31
|
||||||||||||||||
Period-end managed receivables
|
$
|
79,683
|
|
|
$
|
76,615
|
|
|
$
|
80,903
|
|
|
$
|
78,415
|
|
|
$
|
77,833
|
|
|
$
|
75,428
|
|
|
$
|
78,342
|
|
|
$
|
73,371
|
|
Percent 30 or more days past due
|
14.2
|
%
|
|
12.7
|
%
|
|
12.3
|
%
|
|
10.2
|
%
|
|
14.0
|
%
|
|
13.3
|
%
|
|
13.5
|
%
|
|
10.7
|
%
|
||||||||
Percent 60 or more days past due
|
5.4
|
%
|
|
4.5
|
%
|
|
3.9
|
%
|
|
4.2
|
%
|
|
5.5
|
%
|
|
5.3
|
%
|
|
5.6
|
%
|
|
4.4
|
%
|
||||||||
Percent 90 or more days past due
|
2.4
|
%
|
|
1.8
|
%
|
|
1.5
|
%
|
|
2.2
|
%
|
|
2.5
|
%
|
|
2.6
|
%
|
|
2.5
|
%
|
|
2.1
|
%
|
||||||||
Average managed receivables
|
$
|
78,209
|
|
|
$
|
78,089
|
|
|
$
|
80,213
|
|
|
$
|
78,122
|
|
|
$
|
76,413
|
|
|
$
|
75,987
|
|
|
$
|
77,182
|
|
|
$
|
72,258
|
|
Total yield ratio
|
37.8
|
%
|
|
39.1
|
%
|
|
38.0
|
%
|
|
37.3
|
%
|
|
38.3
|
%
|
|
38.2
|
%
|
|
37.6
|
%
|
|
39.2
|
%
|
||||||||
Combined gross charge-off ratio
|
2.6
|
%
|
|
2.8
|
%
|
|
3.1
|
%
|
|
2.7
|
%
|
|
3.3
|
%
|
|
3.0
|
%
|
|
1.9
|
%
|
|
0.5
|
%
|
||||||||
Recovery ratio
|
1.6
|
%
|
|
1.0
|
%
|
|
1.5
|
%
|
|
1.3
|
%
|
|
1.6
|
%
|
|
1.3
|
%
|
|
0.6
|
%
|
|
1.5
|
%
|
Revolving credit facility (expiring October 29, 2017) that is secured by certain receivables and restricted cash
|
$
|
34.7
|
|
Revolving credit facility (expiring November 1, 2018) that is secured by the financial and operating assets of our CAR operations
|
29.2
|
|
|
Revolving credit facility (expiring December 31, 2019) that is secured by certain receivables and restricted cash
|
19.5
|
|
|
Senior secured term loan from related parties (expiring November 22, 2017) that is secured by certain assets of the Company with an annual interest rate equal to 9.0%
|
40.0
|
|
|
Total
|
$
|
123.4
|
|
•
|
During the
year
ended
December 31, 2016
, we
generated
$39.0 million
of cash flows from operations compared to the
generation of
$0.9 million
of cash flows from operations during the
year
ended
December 31, 2015
. The increase in cash provided by operating activities was principally related to 1) reductions in purchases of rental merchandise associated with point-of-sale finance operations, 2) cost reductions associated with card and loan servicing, 3) collections associated with reimbursements received in respect of one of our portfolios, and 4) the timing of payments associated with accrued liabilities including those associated with a portion of the reimbursements received in respect of one of our portfolios that are ultimately payable to customers. These increases in cash provided by operating activities were offset by decreases in collections associated with our credit card finance charge receivables and rental payments in the
year
ended
December 31, 2016
relative to the same period in 2015, given diminished receivables levels.
|
•
|
During the
year
ended
December 31, 2016
, we
used
$75.8 million
of cash from our investing activities, compared to
generating
$14.5 million
of cash from investing activities during the
year
ended
December 31, 2015
. This decrease is primarily due to increasing levels of investments in the point-of-sale and direct-to-consumer receivables relative to the same period in 2015 and the shrinking size of our historical credit card receivables and corresponding payments from consumers. Offsetting these declines are the subsequent cash returns on our increasing investments in point-of-sale and direct to consumer receivables as well as reductions in our restricted cash levels, both of which contributed positively to our cash generated from investing activities.
|
•
|
During the
year
ended
December 31, 2016
, we
generated
$63.5 million
of cash in financing activities, compared to our
use of
$3.6 million
of cash in financing activities during the
year
ended
December 31, 2015
. In both periods, the data reflect borrowings associated with point-of-sale and direct-to-consumer receivables offset by net repayments of amortizing debt facilities as payments are made on the underlying receivables that serve as collateral.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
|
Page
|
Report of Independent Public Accounting Firm
|
|
Consolidated Balance Sheets as of December 31, 2016 and 2015
|
|
Consolidated Statements of Operations for the Years Ended December 31, 2016 and 2015
|
|
Consolidated Statements of Comprehensive (Loss) Income for the Years Ended December 31, 2016 and 2015
|
|
Consolidated Statements of Equity for the Years Ended December 31, 2016 and 2015
|
|
Consolidated Statements of Cash Flows for the Years Ended December 31, 2016 and 2015
|
|
Notes to Consolidated Financial Statements as of December 31, 2016 and 2015
|
Exhibit Number
|
|
Description of Exhibit
|
|
Incorporated by Reference from Atlanticus’ SEC Filings Unless Otherwise Indicated(1)
|
3.1
|
|
Articles of Incorporation
|
|
June 8, 2009, Proxy Statement/Prospectus, Annex B
|
3.1(a)
|
|
Articles of Amendment to Articles of Incorporation
|
|
November 30, 2012, Form 8-K exhibit 3.1
|
3.2
|
|
Amended and Restated Bylaws (as amended through November 30, 2012)
|
|
November 30, 2012, Form 8-K exhibit 3.2
|
4.1
|
|
Form of common stock certificate
|
|
March 30, 2016, Form 10-K, exhibit 4.1
|
4.2
|
|
Indenture dated November 23, 2005 with U.S. Bank National Association, as successor to Wachovia Bank, National Association
|
|
November 28, 2005, Form 8-K, exhibit 4.1
|
4.3
|
|
Supplemental Indenture dated June 30, 2009 with U.S. Bank National Association, as successor to Wachovia Bank, National Association
|
|
July 7, 2009, Form 8-K, exhibit 4.2
|
10.1
|
|
Stockholders Agreement dated as of April 28, 1999
|
|
January 18, 2000, Form S-1, exhibit 10.1
|
10.2†
|
|
Amended and Restated 2014 Equity Incentive Plan
|
|
April 15, 2016, Definitive Proxy Statement on Schedule 14A, Appendix A
|
10.2(a)†
|
|
Form of Restricted Stock Agreement–Directors
|
|
May 18, 2016, Form 8-K, exhibit 10.2
|
10.2(b)†
|
|
Form of Restricted Stock Agreement–Employees
|
|
May 18, 2016, Form 8-K, exhibit 10.3
|
10.2(c)†
|
|
Form of Stock Option Agreement–Directors
|
|
May 18, 2016, Form 8-K, exhibit 10.4
|
10.2(d)†
|
|
Form of Stock Option Agreement–Employees
|
|
May 18, 2016, Form 8-K, exhibit 10.5
|
10.2(e)†
|
|
Form of Restricted Stock Unit Agreement–Directors
|
|
May 18, 2016, Form 8-K, exhibit 10.6
|
10.2(f)†
|
|
Form of Restricted Stock Unit Agreement–Employees
|
|
May 18, 2016, Form 8-K, exhibit 10.7
|
10.3†
|
|
Amended and Restated Employee Stock Purchase Plan
|
|
April 16, 2008, Definitive Proxy Statement on Schedule 14A, Appendix B
|
10.4†
|
|
Amended and Restated Employment Agreement for David G. Hanna
|
|
December 29, 2008, Form 8-K, exhibit 10.1
|
10.5†
|
|
Amended and Restated Employment Agreement for Richard W. Gilbert
|
|
December 29, 2008, Form 8-K, exhibit 10.3
|
10.6†
|
|
Employment Agreement for Jeffrey A. Howard
|
|
March 28, 2014, Form 10-K, exhibit 10.7
|
10.7†
|
|
Employment Agreement for William R. McCamey
|
|
March 28, 2014, Form 10-K, exhibit 10.8
|
10.8†
|
|
Outside Director Compensation Package
|
|
November 14, 2016, Form 10-Q, exhibit 10.1
|
10.9
|
|
Amended and Restated Note Purchase Agreement, dated March 1, 2010, among Merrill Lynch Mortgage Capital Inc., CCFC Corp. (formerly CompuCredit Funding Corp.), Atlanticus Services Corporation (formerly CompuCredit Corporation), and CompuCredit Credit Card Master Note Business Trust
|
|
June 25, 2010, Form 8-K/A, exhibit 10.1
|
10.10
|
|
Share Lending Agreement
|
|
November 22, 2005, Form 8-K, exhibit 10.1
|
10.10(a)
|
|
Amendment to Share Lending Agreement
|
|
March 6, 2012, Form 10-K, exhibit 10.12(a)
|
Exhibit Number
|
|
Description of Exhibit
|
|
Incorporated by Reference from Atlanticus’ SEC Filings Unless Otherwise Indicated(1)
|
10.11
|
|
Agreement relating to the Sale and Purchase of Monument Business, dated April 4, 2007
|
|
August 1, 2007, Form 10-Q, exhibit 10.1
|
10.11(a)
|
|
Account Ownership Agreement for Partridge Acquired Portfolio Business Trust, dated April 4, 2007, with R Raphael & Sons PLC
|
|
August 1, 2007, Form 10-Q, exhibit 10.2
|
10.11(b)
|
|
Receivables Purchase Agreement for Partridge Acquired Portfolio Business Trust, dated April 4, 2007, with R Raphael & Sons PLC
|
|
August 1, 2007, Form 10-Q, exhibit 10.3
|
10.11(c)
|
|
Receivables Purchase Agreement for Partridge Acquired Portfolio Business Trust, dated April 4, 2007, with Partridge Funding Corporation
|
|
August 1, 2007, Form 10-Q, exhibit 10.4
|
10.11(d)
|
|
Master Indenture for Partridge Acquired Portfolio Business Trust, dated April 4, 2007, among Partridge Acquired Portfolio Business Trust, Deutsche Bank Trust Company Americas, Deutsche Bank AG, London Branch and CIAC Corporation (formerly CompuCredit International Acquisition Corporation)
|
|
August 1, 2007, Form 10-Q, exhibit 10.5
|
10.11(e)
|
|
Series 2007-One Indenture Supplement for Partridge Acquired Portfolio Business Trust, dated April 4, 2007
|
|
August 1, 2007, Form 10-Q, exhibit 10.6
|
10.11(f)
|
|
Transfer and Servicing Agreement for Partridge Acquired Portfolio Business Trust, dated April 4, 2007, among Partridge Funding Corporation, CIAC Corporation (formerly CompuCredit International Acquisition Corporation), Partridge Acquired Portfolio Business Trust and Deutsche Bank Trust Company Americas
|
|
August 1, 2007, Form 10-Q, exhibit 10.7
|
10.12
|
|
Assumption Agreement dated June 30, 2009 between Atlanticus Holdings Corporation (formerly CompuCredit Holdings Corporation) and Atlanticus Services Corporation (formerly CompuCredit Corporation)
|
|
July 7, 2009, Form 8-K, exhibit 10.1
|
10.13
|
|
Loan and Security Agreement, dated October 4, 2011 among CARS Acquisition LLC, et al and Wells Fargo Preferred Capital, Inc.
|
|
March 6, 2012, Form 10-K, exhibit 10.16(a)
|
10.13(a)
|
|
First Amendment to Loan and Security Agreement
|
|
August 13, 2013, Form 10-Q, exhibit 10.1
|
10.13(b)
|
|
Second Amendment and Joinder to Loan and Security Agreement
|
|
August 13, 2013, Form 10-Q, exhibit 10.2
|
10.13(c)
|
|
Third Amendment to Loan and Security Agreement
|
|
March 28, 2014, Form 10-K, exhibit 10.15(c)
|
10.13(d)
|
|
Fourth Amendment to Loan and Security Agreement
|
|
March 28, 2014, Form 10-K, exhibit 10.15(d)
|
10.13(e)
|
|
Fifth Amendment to Loan and Security Agreement
|
|
August 14, 2014, Form 10-Q, exhibit 10.1
|
10.13(f)
|
|
Agreement by Atlanticus Holdings Corporation (formerly CompuCredit Holdings Corporation) in favor of Wells Fargo Preferred Capital, Inc.
|
|
March 6, 2012, Form 10-K, exhibit 10.16(a)
|
10.14
|
|
Loan and Security Agreement, dated November 26, 2014, by and among Atlanticus Holdings Corporation, Certain Subsidiaries Named Therein, and Dove Ventures, LLC
|
|
March 6, 2015, Form 10-K, exhibit 10.15
|
10.14(a)
|
|
First Amendment to Loan and Security Agreement, dated November 23, 2015
|
|
March 30, 2016, Form 10-K, exhibit 10.14(a)
|
10.14(b)
|
|
Second Amendment to Loan and Security Agreement, dated November 22, 2016
|
|
Filed herewith
|
21.1
|
|
Subsidiaries of the Registrant
|
|
Filed herewith
|
23.1
|
|
Consent of BDO USA, LLP
|
|
Filed herewith
|
31.1
|
|
Certification of Principal Executive Officer pursuant to Rule 13a-14(a)
|
|
Filed herewith
|
31.2
|
|
Certification of Principal Financial Officer pursuant to Rule 13a-14(a)
|
|
Filed herewith
|
32.1
|
|
Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350
|
|
Filed herewith
|
Exhibit Number
|
|
Description of Exhibit
|
|
Incorporated by Reference from Atlanticus’ SEC Filings Unless Otherwise Indicated(1)
|
101.INS
|
|
XBRL Instance Document
|
|
Filed herewith
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
Filed herewith
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
Filed herewith
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
Filed herewith
|
101.PRE
|
|
XBRL Taxonomy Presentation Linkbase Document
|
|
Filed herewith
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
Filed herewith
|
†
|
Management contract, compensatory plan or arrangement.
|
(1)
|
Documents incorporated by reference from SEC filings made prior to June 2009 were filed under CompuCredit Corporation (now Atlanticus Services Corporation) (File No. 000-25751), our predecessor issuer.
|
ITEM 16.
|
FORM 10-K SUMMARY
|
|
Atlanticus Holdings Corporation
|
|
|
By:
|
/s/ David G. Hanna
|
|
David G. Hanna
Chief Executive Officer and Chairman of the Board
|
|
|
|
Signature
|
Title
|
Date
|
|
|
|
/s/David G. Hanna
David G. Hanna
|
Chief Executive Officer and Chairman of the Board (Principal Executive Officer)
|
March 31, 2017
|
|
|
|
/s/ William R. McCamey
William R. McCamey
|
Chief Financial Officer (Principal Financial Officer)
|
March 31, 2017
|
|
|
|
/s/ Mitchell C. Saunders
Mitchell C. Saunders
|
Chief Accounting Officer (Principal Accounting Officer)
|
March 31, 2017
|
|
|
|
/s/ Jeffrey A. Howard
Jeffrey A. Howard
|
Director
|
March 31, 2017
|
|
|
|
/s/ Deal W. Hudson
Deal W. Hudson
|
Director
|
March 31, 2017
|
|
|
|
/s/ Mack F. Mattingly
Mack F. Mattingly
|
Director
|
March 31, 2017
|
|
|
|
/s/ Thomas G. Rosencrants
Thomas G. Rosencrants
|
Director
|
March 31, 2017
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
Assets
|
|
|
|
||||
Unrestricted cash and cash equivalents
|
$
|
76,052
|
|
|
$
|
51,033
|
|
Restricted cash and cash equivalents
|
16,589
|
|
|
20,547
|
|
||
Loans and fees receivable:
|
|
|
|
|
|
||
Loans and fees receivable, at fair value
|
15,648
|
|
|
26,706
|
|
||
Loans and fees receivable, gross
|
290,697
|
|
|
180,144
|
|
||
Allowances for uncollectible loans and fees receivable
|
(43,275
|
)
|
|
(21,474
|
)
|
||
Deferred revenue
|
(23,639
|
)
|
|
(16,721
|
)
|
||
Net loans and fees receivable
|
239,431
|
|
|
168,655
|
|
||
Rental merchandise, net of depreciation
|
27
|
|
|
4,666
|
|
||
Property at cost, net of depreciation
|
3,829
|
|
|
5,686
|
|
||
Investment in equity-method investee
|
6,725
|
|
|
10,123
|
|
||
Deposits
|
505
|
|
|
825
|
|
||
Prepaid expenses and other assets
|
20,831
|
|
|
19,194
|
|
||
Total assets
|
$
|
363,989
|
|
|
$
|
280,729
|
|
Liabilities
|
|
|
|
|
|
||
Accounts payable and accrued expenses
|
$
|
86,768
|
|
|
$
|
51,722
|
|
Notes payable, at face value
|
141,589
|
|
|
90,000
|
|
||
Notes payable to related parties
|
40,000
|
|
|
20,000
|
|
||
Notes payable associated with structured financings, at fair value
|
12,276
|
|
|
20,970
|
|
||
Convertible senior notes
|
61,810
|
|
|
64,783
|
|
||
Income tax liability
|
15,769
|
|
|
22,303
|
|
||
Total liabilities
|
358,212
|
|
|
269,778
|
|
||
Commitments and contingencies (Note 11)
|
|
|
|
|
|
||
Equity
|
|
|
|
|
|
||
Common stock, no par value, 150,000,000 shares authorized: 15,348,086 shares issued and outstanding (including 1,459,233 loaned shares to be returned) at December 31, 2016; and 15,332,041 shares issued and outstanding (including 1,459,233 loaned shares to be returned) at December 31, 2015
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
211,646
|
|
|
211,083
|
|
||
Accumulated other comprehensive loss
|
—
|
|
|
(600
|
)
|
||
Retained deficit
|
(205,859
|
)
|
|
(199,524
|
)
|
||
Total shareholders’ equity
|
5,787
|
|
|
10,959
|
|
||
Noncontrolling interests
|
(10
|
)
|
|
(8
|
)
|
||
Total equity
|
5,777
|
|
|
10,951
|
|
||
Total liabilities and equity
|
$
|
363,989
|
|
|
$
|
280,729
|
|
|
For the Year Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Interest income:
|
|
|
|
||||
Consumer loans, including past due fees
|
$
|
88,389
|
|
|
$
|
69,830
|
|
Other
|
233
|
|
|
87
|
|
||
Total interest income
|
88,622
|
|
|
69,917
|
|
||
Interest expense
|
(20,207
|
)
|
|
(18,330
|
)
|
||
Net interest income before fees and related income on earning assets and provision for losses on loans and fees receivable
|
68,415
|
|
|
51,587
|
|
||
Fees and related income on earning assets
|
17,316
|
|
|
53,182
|
|
||
Net recovery of charge off of loans and fees receivable recorded at fair value
|
22,096
|
|
|
38,878
|
|
||
Provision for losses on loans and fees receivable recorded at net realizable value
|
(53,721
|
)
|
|
(26,608
|
)
|
||
Net interest income, fees and related income on earning assets
|
54,106
|
|
|
117,039
|
|
||
Other operating income:
|
|
|
|
||||
Servicing income
|
4,087
|
|
|
5,004
|
|
||
Other income
|
320
|
|
|
553
|
|
||
Gain on repurchase of convertible senior notes
|
1,151
|
|
|
—
|
|
||
Equity in income of equity-method investee
|
2,150
|
|
|
2,780
|
|
||
Total other operating income
|
7,708
|
|
|
8,337
|
|
||
Other operating expense:
|
|
|
|
||||
Salaries and benefits
|
24,026
|
|
|
19,825
|
|
||
Card and loan servicing
|
30,662
|
|
|
37,071
|
|
||
Marketing and solicitation
|
3,171
|
|
|
2,235
|
|
||
Depreciation, primarily related to rental merchandise
|
7,477
|
|
|
40,778
|
|
||
Other
|
8,834
|
|
|
21,932
|
|
||
Total other operating expense
|
74,170
|
|
|
121,841
|
|
||
(Loss) income before income taxes
|
(12,356
|
)
|
|
3,535
|
|
||
Income tax benefit (expense)
|
6,015
|
|
|
(1,829
|
)
|
||
Net (loss) income
|
(6,341
|
)
|
|
1,706
|
|
||
Net loss attributable to noncontrolling interests
|
6
|
|
|
7
|
|
||
Net (loss) income attributable to controlling interests
|
$
|
(6,335
|
)
|
|
$
|
1,713
|
|
Net (loss) income attributable to controlling interests per common share—basic
|
$
|
(0.46
|
)
|
|
$
|
0.12
|
|
Net (loss) income attributable to controlling interests per common share—diluted
|
$
|
(0.46
|
)
|
|
$
|
0.12
|
|
|
For the Year Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Net (loss) income
|
$
|
(6,341
|
)
|
|
$
|
1,706
|
|
Other comprehensive (loss) income:
|
|
|
|
||||
Foreign currency translation adjustment
|
—
|
|
|
(50
|
)
|
||
Reclassifications of foreign currency translation adjustment to consolidated statements of operations
|
600
|
|
|
1,849
|
|
||
Income tax expense related to other comprehensive income
|
—
|
|
|
(558
|
)
|
||
Comprehensive (loss) income
|
(5,741
|
)
|
|
2,947
|
|
||
Comprehensive loss attributable to noncontrolling interests
|
6
|
|
|
7
|
|
||
Comprehensive (loss) income attributable to controlling interests
|
$
|
(5,735
|
)
|
|
$
|
2,954
|
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Shares Issued
|
|
Amount
|
|
Additional Paid-In Capital
|
|
Accumulated Other Comprehensive Loss
|
|
Retained Deficit
|
|
Noncontrolling Interests
|
|
Total Equity
|
|||||||||||||
Balance at December 31, 2014
|
15,308,971
|
|
|
$
|
—
|
|
|
$
|
210,519
|
|
|
$
|
(1,841
|
)
|
|
$
|
(201,237
|
)
|
|
$
|
1
|
|
|
$
|
7,442
|
|
Stock options exercises and proceeds related thereto
|
3,334
|
|
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|||||||
Compensatory stock issuances, net of forfeitures
|
106,334
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Distributions to owners of noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
||||||
Amortization of deferred stock-based compensation costs
|
—
|
|
|
—
|
|
|
846
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
846
|
|
||||||
Redemption and retirement of shares
|
(86,598
|
)
|
|
—
|
|
|
(259
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(259
|
)
|
||||||
Tax effects of stock-based compensation costs
|
—
|
|
|
—
|
|
|
(31
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
1,241
|
|
|
1,713
|
|
|
(7
|
)
|
|
2,947
|
|
||||||
Balance at December 31, 2015
|
15,332,041
|
|
|
$
|
—
|
|
|
$
|
211,083
|
|
|
$
|
(600
|
)
|
|
$
|
(199,524
|
)
|
|
$
|
(8
|
)
|
|
$
|
10,951
|
|
Stock options exercises and proceeds related thereto
|
5,999
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
||||||
Compensatory stock issuances, net of forfeitures
|
321,068
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Contributions from owners of noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
||||||
Amortization of deferred stock-based compensation costs
|
—
|
|
|
—
|
|
|
1,416
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,416
|
|
||||||
Redemption and retirement of shares
|
(311,022
|
)
|
|
—
|
|
|
(949
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(949
|
)
|
||||||
Tax effects of stock-based compensation plans
|
—
|
|
|
—
|
|
|
82
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
82
|
|
||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
600
|
|
|
(6,335
|
)
|
|
(6
|
)
|
|
(5,741
|
)
|
||||||
Balance at December 31, 2016
|
15,348,086
|
|
|
$
|
—
|
|
|
$
|
211,646
|
|
|
$
|
—
|
|
|
$
|
(205,859
|
)
|
|
$
|
(10
|
)
|
|
$
|
5,777
|
|
|
For the Year Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Operating activities
|
|
|
|
||||
Net (loss) income
|
$
|
(6,341
|
)
|
|
$
|
1,706
|
|
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||
Depreciation of rental merchandise
|
5,273
|
|
|
38,565
|
|
||
Depreciation, amortization and accretion, net
|
2,204
|
|
|
2,000
|
|
||
Losses upon charge off of loans and fees receivable recorded at fair value
|
6,110
|
|
|
7,440
|
|
||
Provision for losses on loans and fees receivable
|
53,721
|
|
|
26,608
|
|
||
Interest expense from accretion of discount on convertible senior notes
|
515
|
|
|
481
|
|
||
Income from accretion of discount associated with receivables purchases
|
(41,953
|
)
|
|
(40,777
|
)
|
||
Unrealized gain on loans and fees receivable and underlying notes payable held at fair value
|
(5,360
|
)
|
|
(7,527
|
)
|
||
Income from equity-method investments
|
(2,150
|
)
|
|
(2,780
|
)
|
||
Gain on repurchase of convertible senior notes
|
(1,151
|
)
|
|
—
|
|
||
Changes in assets and liabilities:
|
|
|
|
|
|
||
Increase in uncollected fees on earning assets
|
(4,687
|
)
|
|
(2,962
|
)
|
||
(Decrease) increase in income tax liability
|
(6,452
|
)
|
|
719
|
|
||
Decrease in deposits
|
320
|
|
|
764
|
|
||
Increase in accounts payable and accrued expenses
|
41,436
|
|
|
12,752
|
|
||
Additions to rental merchandise
|
(634
|
)
|
|
(29,053
|
)
|
||
Other
|
(1,836
|
)
|
|
(7,072
|
)
|
||
Net cash provided by operating activities
|
39,015
|
|
|
864
|
|
||
Investing activities
|
|
|
|
|
|
||
Decrease in restricted cash
|
3,869
|
|
|
2,167
|
|
||
Proceeds from equity-method investee
|
5,548
|
|
|
8,490
|
|
||
Investments in earning assets
|
(381,212
|
)
|
|
(271,061
|
)
|
||
Proceeds from earning assets
|
296,304
|
|
|
275,825
|
|
||
Purchases and development of property, net of disposals
|
(349
|
)
|
|
(884
|
)
|
||
Net cash (used in) provided by investing activities
|
(75,840
|
)
|
|
14,537
|
|
||
Financing activities
|
|
|
|
|
|
||
Noncontrolling interests contributions (distributions), net
|
4
|
|
|
(2
|
)
|
||
Purchase and retirement of outstanding stock
|
(949
|
)
|
|
(259
|
)
|
||
Proceeds from borrowings
|
242,388
|
|
|
164,897
|
|
||
Repayment of borrowings
|
(177,984
|
)
|
|
(168,208
|
)
|
||
Net cash provided by (used in) financing activities
|
63,459
|
|
|
(3,572
|
)
|
||
Effect of exchange rate changes on cash
|
(1,615
|
)
|
|
(721
|
)
|
||
Net increase in unrestricted cash
|
25,019
|
|
|
11,108
|
|
||
Unrestricted cash and cash equivalents at beginning of period
|
51,033
|
|
|
39,925
|
|
||
Unrestricted cash and cash equivalents at end of period
|
$
|
76,052
|
|
|
$
|
51,033
|
|
Supplemental cash flow information
|
|
|
|
|
|
||
Cash paid for interest
|
$
|
19,481
|
|
|
$
|
17,922
|
|
Net cash income tax payments
|
$
|
437
|
|
|
$
|
1,117
|
|
Supplemental non-cash information
|
|
|
|
|
|
||
Issuance of stock options and restricted stock
|
$
|
2,310
|
|
|
$
|
532
|
|
1.
|
Description of Our Business
|
2.
|
Significant Accounting Policies and Consolidated Financial Statement Components
|
For the Year Ended December 31, 2016
|
|
Credit Cards
|
|
Auto Finance
|
|
Other Unsecured Lending Products
|
|
Total
|
||||||||
Allowance for uncollectible loans and fees receivable:
|
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
|
$
|
(1.2
|
)
|
|
$
|
(1.7
|
)
|
|
$
|
(18.6
|
)
|
|
$
|
(21.5
|
)
|
Provision for loan losses
|
|
0.7
|
|
|
(2.6
|
)
|
|
(51.8
|
)
|
|
(53.7
|
)
|
||||
Charge offs
|
|
1.8
|
|
|
3.3
|
|
|
32.6
|
|
|
37.7
|
|
||||
Recoveries
|
|
(2.7
|
)
|
|
(1.1
|
)
|
|
(2.0
|
)
|
|
(5.8
|
)
|
||||
Balance at end of period
|
|
$
|
(1.4
|
)
|
|
$
|
(2.1
|
)
|
|
$
|
(39.8
|
)
|
|
$
|
(43.3
|
)
|
As of December 31, 2016
|
|
Credit Cards
|
|
Auto Finance
|
|
Other Unsecured Lending Products
|
|
Total
|
||||||||
Allowance for uncollectible loans and fees receivable:
|
|
|
|
|
|
|
|
|
||||||||
Balance at end of period individually evaluated for impairment
|
|
$
|
—
|
|
|
$
|
(0.3
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
(0.6
|
)
|
Balance at end of period collectively evaluated for impairment
|
|
$
|
(1.4
|
)
|
|
$
|
(1.8
|
)
|
|
$
|
(39.5
|
)
|
|
$
|
(42.7
|
)
|
Loans and fees receivable:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loans and fees receivable, gross
|
|
$
|
11.0
|
|
|
$
|
77.1
|
|
|
$
|
202.6
|
|
|
$
|
290.7
|
|
Loans and fees receivable individually evaluated for impairment
|
|
$
|
—
|
|
|
$
|
0.7
|
|
|
$
|
0.3
|
|
|
$
|
1.0
|
|
Loans and fees receivable collectively evaluated for impairment
|
|
$
|
11.0
|
|
|
$
|
76.4
|
|
|
$
|
202.3
|
|
|
$
|
289.7
|
|
For the Year Ended December 31, 2015
|
|
Credit Cards
|
|
Auto Finance
|
|
Other Unsecured Lending Products
|
|
Total
|
||||||||
Allowance for uncollectible loans and fees receivable:
|
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
|
$
|
(2.7
|
)
|
|
$
|
(1.2
|
)
|
|
$
|
(16.1
|
)
|
|
$
|
(20.0
|
)
|
Provision for loan losses
|
|
(1.7
|
)
|
|
(2.2
|
)
|
|
(22.7
|
)
|
|
(26.6
|
)
|
||||
Charge offs
|
|
3.7
|
|
|
2.6
|
|
|
21.5
|
|
|
27.8
|
|
||||
Recoveries
|
|
(0.5
|
)
|
|
(0.9
|
)
|
|
(1.3
|
)
|
|
(2.7
|
)
|
||||
Balance at end of period
|
|
$
|
(1.2
|
)
|
|
$
|
(1.7
|
)
|
|
$
|
(18.6
|
)
|
|
$
|
(21.5
|
)
|
As of December 31, 2015
|
|
Credit Cards
|
|
Auto Finance
|
|
Other Unsecured Lending Products
|
|
Total
|
||||||||
Allowance for uncollectible loans and fees receivable:
|
|
|
|
|
|
|
|
|
||||||||
Balance at end of period individually evaluated for impairment
|
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
|
$
|
(1.3
|
)
|
|
$
|
(1.4
|
)
|
Balance at end of period collectively evaluated for impairment
|
|
$
|
(1.2
|
)
|
|
$
|
(1.6
|
)
|
|
$
|
(17.3
|
)
|
|
$
|
(20.1
|
)
|
Loans and fees receivable:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loans and fees receivable, gross
|
|
$
|
5.2
|
|
|
$
|
76.0
|
|
|
$
|
98.9
|
|
|
$
|
180.1
|
|
Loans and fees receivable individually evaluated for impairment
|
|
$
|
—
|
|
|
$
|
0.2
|
|
|
$
|
1.5
|
|
|
$
|
1.7
|
|
Loans and fees receivable collectively evaluated for impairment
|
|
$
|
5.2
|
|
|
$
|
75.8
|
|
|
$
|
97.4
|
|
|
$
|
178.4
|
|
Balance at December 31, 2016
|
|
Credit Cards
|
|
Auto Finance
|
|
Other Unsecured Lending Products
|
|
Total
|
||||||||
30-59 days past due
|
|
$
|
0.2
|
|
|
$
|
7.0
|
|
|
$
|
8.2
|
|
|
$
|
15.4
|
|
60-89 days past due
|
|
0.2
|
|
|
2.4
|
|
|
6.7
|
|
|
9.3
|
|
||||
90 or more days past due
|
|
0.4
|
|
|
1.9
|
|
|
11.4
|
|
|
13.7
|
|
||||
Delinquent loans and fees receivable, gross
|
|
0.8
|
|
|
11.3
|
|
|
26.3
|
|
|
38.4
|
|
||||
Current loans and fees receivable, gross
|
|
10.2
|
|
|
65.8
|
|
|
176.3
|
|
|
252.3
|
|
||||
Total loans and fees receivable, gross
|
|
$
|
11.0
|
|
|
$
|
77.1
|
|
|
$
|
202.6
|
|
|
$
|
290.7
|
|
Balance of loans 90 or more days past due and still accruing interest and fees
|
|
$
|
—
|
|
|
$
|
1.5
|
|
|
$
|
—
|
|
|
$
|
1.5
|
|
Balance at December 31, 2015
|
Credit Cards
|
|
Auto Finance
|
|
Other Unsecured Lending Products
|
|
Total
|
||||||||
30-59 days past due
|
$
|
0.2
|
|
|
$
|
6.9
|
|
|
$
|
4.4
|
|
|
$
|
11.5
|
|
60-89 days past due
|
0.1
|
|
|
2.2
|
|
|
3.1
|
|
|
5.4
|
|
||||
90 or more days past due
|
0.4
|
|
|
1.8
|
|
|
6.5
|
|
|
8.7
|
|
||||
Delinquent loans and fees receivable, gross
|
0.7
|
|
|
10.9
|
|
|
14.0
|
|
|
25.6
|
|
||||
Current loans and fees receivable, gross
|
4.5
|
|
|
65.1
|
|
|
84.9
|
|
|
154.5
|
|
||||
Total loans and fees receivable, gross
|
$
|
5.2
|
|
|
$
|
76.0
|
|
|
$
|
98.9
|
|
|
$
|
180.1
|
|
Balance of loans 90 or more days past due and still accruing interest and fees
|
$
|
—
|
|
|
$
|
1.5
|
|
|
$
|
—
|
|
|
$
|
1.5
|
|
|
Year ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Fees on credit products
|
$
|
3,526
|
|
|
$
|
6,907
|
|
Changes in fair value of loans and fees receivable recorded at fair value
|
1,587
|
|
|
6,265
|
|
||
Changes in fair value of notes payable associated with structured financings recorded at fair value
|
3,773
|
|
|
1,262
|
|
||
Rental revenue
|
8,235
|
|
|
36,032
|
|
||
Other
|
195
|
|
|
2,716
|
|
||
Total fees and related income on earning assets
|
$
|
17,316
|
|
|
$
|
53,182
|
|
3.
|
Segment Reporting
|
Year ended December 31, 2016
|
|
Credit and Other Investments
|
|
Auto Finance
|
|
Total
|
||||||
Interest income:
|
|
|
|
|
|
|
||||||
Consumer loans, including past due fees
|
|
$
|
59,614
|
|
|
$
|
28,775
|
|
|
$
|
88,389
|
|
Other
|
|
233
|
|
|
—
|
|
|
233
|
|
|||
Total interest income
|
|
59,847
|
|
|
28,775
|
|
|
88,622
|
|
|||
Interest expense
|
|
(19,011
|
)
|
|
(1,196
|
)
|
|
(20,207
|
)
|
|||
Net interest income before fees and related income on earning assets and provision for losses on loans and fees receivable
|
|
$
|
40,836
|
|
|
$
|
27,579
|
|
|
$
|
68,415
|
|
Fees and related income on earning assets
|
|
$
|
17,214
|
|
|
$
|
102
|
|
|
$
|
17,316
|
|
Servicing income
|
|
$
|
3,115
|
|
|
$
|
972
|
|
|
$
|
4,087
|
|
Gain on repurchase of convertible senior notes
|
|
$
|
1,151
|
|
|
$
|
—
|
|
|
$
|
1,151
|
|
Depreciation of rental merchandise
|
|
$
|
(5,273
|
)
|
|
$
|
—
|
|
|
$
|
(5,273
|
)
|
Equity in income of equity-method investee
|
|
$
|
2,150
|
|
|
$
|
—
|
|
|
$
|
2,150
|
|
(Loss) income before income taxes
|
|
$
|
(18,915
|
)
|
|
$
|
6,559
|
|
|
$
|
(12,356
|
)
|
Income tax benefit (expense)
|
|
$
|
8,390
|
|
|
$
|
(2,375
|
)
|
|
$
|
6,015
|
|
Total assets
|
|
$
|
295,018
|
|
|
$
|
68,971
|
|
|
$
|
363,989
|
|
Year ended December 31, 2015
|
|
Credit and Other Investments
|
|
Auto Finance
|
|
Total
|
||||||
Interest income:
|
|
|
|
|
|
|
||||||
Consumer loans, including past due fees
|
|
$
|
42,140
|
|
|
$
|
27,690
|
|
|
$
|
69,830
|
|
Other
|
|
87
|
|
|
—
|
|
|
87
|
|
|||
Total interest income
|
|
42,227
|
|
|
27,690
|
|
|
69,917
|
|
|||
Interest expense
|
|
(17,130
|
)
|
|
(1,200
|
)
|
|
(18,330
|
)
|
|||
Net interest income before fees and related income on earning assets and provision for losses on loans and fees receivable
|
|
$
|
25,097
|
|
|
$
|
26,490
|
|
|
$
|
51,587
|
|
Fees and related income on earning assets
|
|
$
|
50,817
|
|
|
$
|
2,365
|
|
|
$
|
53,182
|
|
Servicing income
|
|
$
|
4,136
|
|
|
$
|
868
|
|
|
$
|
5,004
|
|
Depreciation of rental merchandise
|
|
$
|
(38,565
|
)
|
|
$
|
—
|
|
|
$
|
(38,565
|
)
|
Equity in income of equity-method investee
|
|
$
|
2,780
|
|
|
$
|
—
|
|
|
$
|
2,780
|
|
(Loss) income before income taxes
|
|
$
|
(4,689
|
)
|
|
$
|
8,224
|
|
|
$
|
3,535
|
|
Income tax benefit (expense)
|
|
$
|
500
|
|
|
$
|
(2,329
|
)
|
|
$
|
(1,829
|
)
|
Total assets
|
|
$
|
211,227
|
|
|
$
|
69,502
|
|
|
$
|
280,729
|
|
4.
|
Shareholders’ Equity
|
5.
|
Investment in Equity-Method Investee
|
|
As of
|
||||||
|
December 31, 2016
|
|
December 31, 2015
|
||||
Loans and fees receivable, at fair value
|
$
|
9,650
|
|
|
$
|
14,470
|
|
Total assets
|
$
|
10,291
|
|
|
$
|
15,237
|
|
Total liabilities
|
$
|
204
|
|
|
$
|
54
|
|
Members’ capital
|
$
|
10,087
|
|
|
$
|
15,183
|
|
|
Year ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Net interest income, fees and related income on earning assets
|
$
|
3,249
|
|
|
$
|
4,200
|
|
Net income
|
$
|
2,714
|
|
|
$
|
3,447
|
|
Net income attributable to our equity investment in investee
|
$
|
2,150
|
|
|
$
|
2,780
|
|
6.
|
Fair Values of Assets and Liabilities
|
Assets – As of December 31, 2016 (1)
|
|
Quoted Prices in Active
Markets for Identical Assets (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
|
Carrying Amount of Assets
|
||||||||
Loans and fees receivable, net for which it is practicable to estimate fair value
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
248,171
|
|
|
$
|
223,783
|
|
Loans and fees receivable, at fair value
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15,648
|
|
|
$
|
15,648
|
|
Assets – As of December 31, 2015 (1)
|
|
Quoted Prices in Active
Markets for Identical Assets (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
|
Carrying Amount of Assets
|
||||||||
Loans and fees receivable, net for which it is practicable to estimate fair value
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
161,199
|
|
|
$
|
141,949
|
|
Loans and fees receivable, at fair value
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
26,706
|
|
|
$
|
26,706
|
|
(1)
|
For cash, deposits and other short-term investments (including our investments in rental merchandise), the carrying amount is a reasonable estimate of fair value.
|
|
Loans and Fees Receivable, at
Fair Value |
||||||
|
2016
|
|
2015
|
||||
Balance at January 1,
|
$
|
26,706
|
|
|
$
|
53,160
|
|
Total gains—realized/unrealized:
|
|
|
|
|
|||
Net revaluations of loans and fees receivable, at fair value
|
1,587
|
|
|
6,265
|
|
||
Settlements, net
|
(12,335
|
)
|
|
(32,440
|
)
|
||
Impact of foreign currency translation
|
(310
|
)
|
|
(279
|
)
|
||
Balance at December 31,
|
$
|
15,648
|
|
|
$
|
26,706
|
|
Liabilities – As of December 31, 2016
|
|
Quoted Prices in Active
Markets for Identical Assets (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
|
Carrying Amount of Liabilities
|
||||||||
Liabilities not carried at fair value
|
|
|
|
|
|
|
|
|
||||||||
Revolving credit facilities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
83,399
|
|
|
$
|
83,399
|
|
Amortizing debt facilities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
58,190
|
|
|
$
|
58,190
|
|
Senior secured term loan
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
40,000
|
|
|
$
|
40,000
|
|
5.875% convertible senior notes
|
|
$
|
—
|
|
|
$
|
40,609
|
|
|
$
|
—
|
|
|
$
|
61,810
|
|
Liabilities carried at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Notes payable associated with structured financings, at fair value
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,276
|
|
|
$
|
12,276
|
|
Liabilities - As of December 31, 2015
|
|
Quoted Prices in Active
Markets for Identical Assets (Level 1) |
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
|
Carrying Amount of Liabilities
|
||||||||
Liabilities not carried at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revolving credit facilities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
53,800
|
|
|
$
|
53,800
|
|
Amortizing debt facilities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
36,200
|
|
|
$
|
36,200
|
|
Senior secured term loan
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20,000
|
|
|
$
|
20,000
|
|
5.875% convertible senior notes
|
|
$
|
—
|
|
|
$
|
42,734
|
|
|
$
|
—
|
|
|
$
|
64,783
|
|
Liabilities carried at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Notes payable associated with structured financings, at fair value
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20,970
|
|
|
$
|
20,970
|
|
|
Notes Payable Associated with
Structured Financings, at Fair Value |
||||||
|
2016
|
|
2015
|
||||
Beginning balance, January 1
|
$
|
20,970
|
|
|
$
|
36,511
|
|
Total (gains) losses—realized/unrealized:
|
|
|
|
|
|
||
Net revaluations of notes payable associated with structured financings, at fair value
|
(3,773
|
)
|
|
(1,262
|
)
|
||
Repayments on outstanding notes payable, net
|
(4,921
|
)
|
|
(14,279
|
)
|
||
Ending balance, December 31
|
$
|
12,276
|
|
|
$
|
20,970
|
|
As of December 31, 2016
|
|
Loans and Fees
Receivable at Fair Value |
|
Loans and Fees Receivable Pledged as Collateral under Structured Financings at Fair Value
|
||||
Aggregate unpaid principal balance within loans and fees receivable that are reported at fair value
|
|
$
|
6,251
|
|
|
$
|
16,614
|
|
Aggregate fair value of loans and fees receivable that are reported at fair value
|
|
$
|
3,484
|
|
|
$
|
12,164
|
|
Aggregate fair value of receivables carried at fair value that are 90 days or more past due (which also coincides with finance charge and fee non-accrual policies)
|
|
$
|
6
|
|
|
$
|
22
|
|
Aggregate excess of balance of unpaid principal receivables within loans and fees receivable that are reported at fair value and are 90 days or more past due (which also coincides with finance charge and fee non-accrual policies) over the fair value of such loans and fees receivable
|
|
$
|
204
|
|
|
$
|
562
|
|
As of December 31, 2015
|
|
Loans and Fees
Receivable at Fair Value |
|
Loans and Fees
Receivable Pledged as Collateral under Structured Financings at Fair Value |
||||
Aggregate unpaid principal balance within loans and fees receivable that are reported at fair value
|
|
$
|
8,560
|
|
|
$
|
25,837
|
|
Aggregate fair value of loans and fees receivable that are reported at fair value
|
|
$
|
6,353
|
|
|
$
|
20,353
|
|
Aggregate fair value of receivables carried at fair value that are 90 days or more past due (which also coincides with finance charge and fee non-accrual policies)
|
|
$
|
12
|
|
|
$
|
31
|
|
Aggregate excess of balance of unpaid principal receivables within loans and fees receivable that are reported at fair value and are 90 days or more past due (which also coincides with finance charge and fee non-accrual policies) over the fair value of such loans and fees receivable
|
|
$
|
374
|
|
|
$
|
889
|
|
Notes Payable
|
|
Notes Payable Associated with Structured Financings, at Fair Value as of December 31, 2016
|
|
Notes Payable Associated with Structured Financings, at Fair Value as of December 31, 2015
|
||||
Aggregate unpaid principal balance of notes payable
|
|
$
|
102,035
|
|
|
$
|
106,956
|
|
Aggregate fair value of notes payable
|
|
$
|
12,276
|
|
|
$
|
20,970
|
|
7.
|
Property
|
|
|
As of December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Software
|
|
$
|
5,194
|
|
|
$
|
10,665
|
|
Furniture and fixtures
|
|
6,191
|
|
|
6,037
|
|
||
Data processing and telephone equipment
|
|
11,008
|
|
|
11,064
|
|
||
Leasehold improvements
|
|
10,638
|
|
|
10,649
|
|
||
Total cost
|
|
33,031
|
|
|
38,415
|
|
||
Less accumulated depreciation
|
|
(29,202
|
)
|
|
(32,729
|
)
|
||
Property, net
|
|
$
|
3,829
|
|
|
$
|
5,686
|
|
8.
|
Leases
|
|
|
Gross
|
|
Sublease
Income
|
|
Net
|
||||||
2017
|
|
$
|
8,493
|
|
|
$
|
(6,643
|
)
|
|
$
|
1,850
|
|
2018
|
|
9,756
|
|
|
(6,441
|
)
|
|
3,315
|
|
|||
2019
|
|
9,734
|
|
|
(6,324
|
)
|
|
3,410
|
|
|||
2020
|
|
9,778
|
|
|
(6,499
|
)
|
|
3,279
|
|
|||
2021
|
|
9,832
|
|
|
(6,678
|
)
|
|
3,154
|
|
|||
Thereafter
|
|
4,157
|
|
|
(2,838
|
)
|
|
1,319
|
|
|||
Total
|
|
$
|
51,750
|
|
|
$
|
(35,423
|
)
|
|
$
|
16,327
|
|
9.
|
Notes Payable
|
|
Carrying Amounts at Fair Value as of
|
||||||
|
December 31, 2016
|
|
December 31, 2015
|
||||
Amortizing securitization facility issued out of our upper-tier portfolio master trust (stated maturity of December 2021), outstanding face amount of $102.0 million ($107.0 million as of December 31, 2015) bearing interest at a weighted average 6.1% interest rate (5.6% as of December 31, 2015), which is secured by credit card receivables and restricted cash aggregating $12.3 million ($21.0 million as of December 31, 2015) in carrying amount
|
$
|
12.3
|
|
|
$
|
21.0
|
|
|
As of
|
||||||
|
December 31, 2016
|
|
December 31, 2015
|
||||
Revolving credit facilities at a weighted average interest rate equal to 4.8% (4.4% at December 31, 2015) secured by the financial and operating assets of CAR and/or certain receivables and restricted cash with a combined aggregate carrying amount of $127.9 million ($97.4 million at December 31, 2015)
|
|
|
|
||||
Revolving credit facility (repaid in October 2016) (1)
|
$
|
—
|
|
|
$
|
28.9
|
|
Revolving credit facility (expiring December 31, 2019) (2) (3)
|
19.5
|
|
|
—
|
|
||
Revolving credit facility (expiring November 1, 2018) (1)
|
29.2
|
|
|
—
|
|
||
Revolving credit facility (expiring October 29, 2017) (2) (3)
|
34.7
|
|
|
24.9
|
|
||
Amortizing facilities at a weighted average interest rate equal to 5.4% (5.4% at December 31, 2015) secured by certain receivables and restricted cash with a combined aggregate carrying amount of $69.9 million ($41.6 million as of December 31, 2015)
|
|
|
|
||||
Amortizing debt facility (expiring March 31, 2018) (2) (3) (4)
|
14.6
|
|
|
—
|
|
||
Amortizing debt facility (expiring July 15, 2017) (2) (3) (4)
|
20.4
|
|
|
23.0
|
|
||
Amortizing debt facility (repaid in June 2016)
|
—
|
|
|
9.2
|
|
||
Amortizing debt facility (expiring August 17, 2018) (2) (3)
|
6.0
|
|
|
4.0
|
|
||
Amortizing debt facility (expiring August 24, 2018) (2) (3)
|
9.7
|
|
|
—
|
|
||
Amortizing debt facility (expiring September 1, 2017) (2) (3)
|
7.5
|
|
|
—
|
|
||
Other facilities
|
|
|
|
||||
Senior secured term loan from related parties (expiring November 22, 2017) that is secured by certain assets of the Company with an annual interest rate equal to 9.0% (5)
|
40.0
|
|
|
20.0
|
|
||
Total notes payable outstanding
|
$
|
181.6
|
|
|
$
|
110.0
|
|
(1)
|
Loan is subject to certain affirmative covenants, including a coverage ratio, a leverage ratio and a collateral performance test, the failure of which could result in required early repayment of all or a portion of the outstanding balance by our CAR Auto Finance operations.
|
(2)
|
Loans are subject to certain affirmative covenants tied to default rates and other performance metrics the failure of which could result in required early repayment of the remaining unamortized balances of the notes.
|
(3)
|
These notes reflect modifications to either extend the maturity date, increase the loaned amount or both.
|
(4)
|
Loans are comprised of two tranches with the same lender. Terms and conditions are substantially identical with the exception of maturity date as indicated in the table above.
|
(5)
|
See below for additional information.
|
10.
|
Convertible Senior Notes
|
|
As of
|
||||||
|
December 31, 2016
|
|
December 31, 2015
|
||||
Face amount of 5.875% convertible senior notes
|
$
|
88,280
|
|
|
$
|
93,280
|
|
Discount
|
(26,470
|
)
|
|
(28,497
|
)
|
||
Net carrying value
|
$
|
61,810
|
|
|
$
|
64,783
|
|
Carrying amount of equity component included in additional paid-in capital
|
$
|
108,714
|
|
|
$
|
108,714
|
|
Excess of instruments’ if-converted values over face principal amounts
|
$
|
—
|
|
|
$
|
—
|
|
11.
|
Commitments and Contingencies
|
12.
|
Income Taxes
|
|
|
For the Year Ended December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Federal income tax benefit (expense):
|
|
|
|
|
||||
Current tax benefit (expense)
|
|
$
|
59
|
|
|
$
|
3,421
|
|
Deferred tax benefit (expense)
|
|
5,884
|
|
|
(3,824
|
)
|
||
Total federal income tax benefit (expense)
|
|
$
|
5,943
|
|
|
$
|
(403
|
)
|
Foreign income tax benefit (expense):
|
|
|
|
|
||||
Current tax expense
|
|
$
|
(41
|
)
|
|
$
|
(53
|
)
|
Deferred tax benefit (expense)
|
|
3
|
|
|
(1,775
|
)
|
||
Total foreign income tax expense
|
|
$
|
(38
|
)
|
|
$
|
(1,828
|
)
|
State and other income tax benefit (expense):
|
|
|
|
|
||||
Current tax benefit (expense)
|
|
$
|
(116
|
)
|
|
$
|
28
|
|
Deferred tax benefit
|
|
226
|
|
|
374
|
|
||
Total state and other income tax benefit
|
|
$
|
110
|
|
|
$
|
402
|
|
Total income tax benefit (expense)
|
|
$
|
6,015
|
|
|
$
|
(1,829
|
)
|
|
|
For the Year Ended December 31,
|
||||
|
|
2016
|
|
2015
|
||
Statutory benefit (expense) rate
|
|
35.0
|
%
|
|
(35.0
|
)%
|
(Increase) decrease in statutory tax rate and increase (decrease) in statutory tax benefit rate resulting from:
|
|
|
|
|
|
|
Changes in valuation allowances
|
|
6.2
|
|
|
(46.8
|
)
|
Interest and penalties related to uncertain tax positions
|
|
(0.1
|
)
|
|
21.2
|
|
Foreign income taxes
|
|
7.5
|
|
|
(1.5
|
)
|
Permanent and other differences
|
|
(0.5
|
)
|
|
3.1
|
|
State and other income taxes, net
|
|
0.6
|
|
|
7.3
|
|
Effective benefit (expense) rate
|
|
48.7
|
%
|
|
(51.7
|
)%
|
|
|
As of December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Software development costs/fixed assets
|
|
$
|
—
|
|
|
$
|
345
|
|
Goodwill and intangible assets
|
|
3,798
|
|
|
3,455
|
|
||
Provision for loan loss
|
|
18,353
|
|
|
16,107
|
|
||
Equity-based compensation
|
|
670
|
|
|
287
|
|
||
Accrued expenses
|
|
1,678
|
|
|
1,249
|
|
||
Other
|
|
—
|
|
|
288
|
|
||
Accruals for state taxes and interest associated with unrecognized tax benefits
|
|
286
|
|
|
610
|
|
||
Federal net operating loss carry-forward
|
|
70,778
|
|
|
75,687
|
|
||
Federal credit carry-forward
|
|
2,145
|
|
|
2,381
|
|
||
Foreign net operating loss carry-forward
|
|
374
|
|
|
637
|
|
||
State tax benefits
|
|
35,409
|
|
|
36,384
|
|
||
Deferred tax assets, gross
|
|
$
|
133,491
|
|
|
$
|
137,430
|
|
Valuation allowances
|
|
(33,924
|
)
|
|
(35,971
|
)
|
||
Deferred tax assets net of valuation allowance
|
|
$
|
99,567
|
|
|
$
|
101,459
|
|
Deferred tax liabilities:
|
|
|
|
|
||||
Prepaid expenses and other
|
|
$
|
(184
|
)
|
|
$
|
(267
|
)
|
Software development costs/fixed assets
|
|
(157
|
)
|
|
—
|
|
||
Equity in income of equity-method investee
|
|
(1,455
|
)
|
|
(1,347
|
)
|
||
Other
|
|
(58
|
)
|
|
—
|
|
||
Credit card fair value election differences
|
|
(42,939
|
)
|
|
(38,717
|
)
|
||
Deferred costs
|
|
(696
|
)
|
|
(681
|
)
|
||
Convertible senior notes
|
|
(28,921
|
)
|
|
(28,154
|
)
|
||
Cancellation of indebtedness income
|
|
(29,491
|
)
|
|
(42,822
|
)
|
||
Deferred tax liabilities, gross
|
|
$
|
(103,901
|
)
|
|
$
|
(111,988
|
)
|
Deferred tax liabilities, net
|
|
$
|
(4,334
|
)
|
|
$
|
(10,529
|
)
|
|
|
2016
|
|
2015
|
||||
Balance at January 1,
|
|
$
|
(1,798
|
)
|
|
$
|
(5,245
|
)
|
Reductions based on tax positions related to prior years
|
|
1,167
|
|
|
2,658
|
|
||
Additions based on tax positions related to prior years
|
|
—
|
|
|
(160
|
)
|
||
Additions based on tax positions related to the current year
|
|
(82
|
)
|
|
(70
|
)
|
||
Interest and penalties accrued
|
|
(105
|
)
|
|
(197
|
)
|
||
Settlement
|
|
—
|
|
|
1,216
|
|
||
Balance at December 31,
|
|
$
|
(818
|
)
|
|
$
|
(1,798
|
)
|
13.
|
Net (Loss) Income Attributable to Controlling Interests Per Common Share
|
|
For the Year Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Numerator:
|
|
|
|
||||
Net (loss) income attributable to controlling interests
|
$
|
(6,335
|
)
|
|
$
|
1,713
|
|
Denominator:
|
|
|
|
|
|
||
Basic (including unvested share-based payment awards) (1)
|
13,867
|
|
|
13,906
|
|
||
Effect of dilutive stock compensation arrangements (2)
|
70
|
|
|
55
|
|
||
Diluted (including unvested share-based payment awards) (1)
|
13,937
|
|
|
13,961
|
|
||
Net (loss) income attributable to controlling interests per common share—basic
|
$
|
(0.46
|
)
|
|
$
|
0.12
|
|
Net (loss) income attributable to controlling interests per common share—diluted
|
$
|
(0.46
|
)
|
|
$
|
0.12
|
|
(1)
|
Shares related to unvested share-based payment awards included in our basic and diluted share counts were
300,478
for the
year ended
December 31, 2016
, compared to
385,193
for the
year ended
December 31, 2015
.
|
(2)
|
The effect of dilutive stock compensation arrangements is shown only for informational purposes where we are in a net loss position. In such situations, the effect of including outstanding options and restricted stock would be anti-dilutive, and they are thus excluded from all loss period calculations.
|
14.
|
Stock-Based Compensation
|
|
December 31, 2016
|
|||||||||||
|
Number of
Shares |
|
Weighted-
Average Exercise Price |
|
Weighted-
Average of Remaining Contractual Life (in years) |
|
Aggregate
Intrinsic Value |
|||||
Outstanding at December 31, 2015
|
551,666
|
|
|
$
|
2.80
|
|
|
|
|
|
|
|
Issued
|
886,000
|
|
|
$
|
3.26
|
|
|
|
|
|
||
Exercised
|
(5,999
|
)
|
|
$
|
2.27
|
|
|
|
|
|
|
|
Cancelled/Forfeited
|
(20,000
|
)
|
|
$
|
3.04
|
|
|
|
|
|
|
|
Outstanding at December 31, 2016
|
1,411,667
|
|
|
$
|
3.09
|
|
|
3.5
|
|
$
|
135,905
|
|
Exercisable at December 31, 2016
|
428,164
|
|
|
$
|
2.67
|
|
|
2.5
|
|
$
|
111,677
|
|
15.
|
Employee Benefit Plans
|
16.
|
Related Party Transactions
|
|
BORROWER:
|
|
ATLANTICUS HOLDINGS CORPORATION
|
|
|
|
By:
/s/ William R. McCamey
|
|
William R. McCamey
Chief Financial Officer
|
|
GUARANTORS:
|
|
ACC HOLDING, LLC
|
|
|
|
By:
/s/William R. McCamey
|
|
Name:
Title:
|
|
|
|
ACCESS FINANCING, LLC
|
|
|
|
By:
/s/Mitch Saunders
|
|
Name: Mitch Saunders
Title: Vice President
|
|
|
|
ATLANTICUS SERVICES CORPORATION
|
|
|
|
By:
/s/William R. McCamey
|
|
Name: William R. McCamey
Title: Chief Financial Officer
|
|
CC SERVE CORPORATION
|
|
|
|
By:
/s/William R. McCamey
|
|
Name: William R. McCamey
Title: Vice President |
|
|
|
CIAC CORPORATION
|
|
|
|
By:
/s/William R. McCamey
|
|
Name: William R. McCamey
Title: Vice President |
|
|
|
MOBILE TECH INVESTMENTS, LLC
|
|
|
|
By:
/s/Mitch Saunders
|
|
Name: Mitch Saunders
Title: Vice President |
|
|
|
WILTON ACQUISITIONS, LLC
|
|
|
|
By:
/s/Mitch Saunders
|
|
Name: Mitch Saunders
Title: Manager |
|
LENDER:
|
|
DOVE VENTURES, LLC, as Lender
By: Bravo Two Company, Inc.,
its manager
By:
/s/Joshua C. Miller
Joshua C. Miller
Assistant Secretary
|
Subsidiaries of the Registrant
|
||
Name
|
|
State or other Jurisdiction of Incorporation or Organization
|
ACC Holding LLC
|
|
Georgia
|
Access Financing LLC
|
|
Georgia
|
Atlanticus Funding IV LLC
|
|
Georgia
|
Atlanticus Funding VII, LLC
|
|
Georgia
|
Atlanticus Holdings Corporation
|
|
Georgia
|
Atlanticus Services Corporation
|
|
Georgia
|
Cahaba Energy LLC
|
|
Georgia
|
CAR Financial Services Guam Inc.
|
|
Guam
|
CAR Financial Services Inc.
|
|
Georgia
|
CAR Financial Services Saipan Inc.
|
|
Saipan
|
CAR Funding II Inc.
|
|
Nevada
|
Card Services Inc.
|
|
Georgia
|
CARDS Credit Services LLC
|
|
South Carolina
|
CARDS LLC
|
|
South Carolina
|
CARS Acquisition LLC
|
|
Georgia
|
CCFC Corp.
|
|
Nevada
|
CCIS LLC
|
|
Georgia
|
CCR Reinsurance Ltd.
|
|
Turks and Caicos Islands
|
CC Serve Corporation
|
|
Georgia
|
CCUK Finance Limited
|
|
United Kingdom
|
CCUK Holding Limited
|
|
United Kingdom
|
CIAC Corporation
|
|
Nevada
|
Consumer Auto Receivables Servicing LLC
|
|
Georgia
|
Ecache Acquisitions LLC
|
|
Georgia
|
Express Financial LLC
|
|
Georgia
|
Fortiva Capital LLC
|
|
Georgia
|
Fortiva Financial LLC
|
|
Georgia
|
Fortiva Funding III LLC
|
|
Georgia
|
Fortiva Funding IV LLC
|
|
Georgia
|
Fortiva Funding LLC
|
|
Georgia
|
Fortiva Funding V LLC
|
|
Georgia
|
Fortiva Holdings LLC
|
|
Georgia
|
Knightsbridge, LLC
|
|
Delaware
|
Mobile Tech Investments, LLC (1)
|
|
Georgia
|
Ochotiva, LLC
|
|
Georgia
|
Perimeter Investment Solutions LLC
|
|
Georgia
|
Polygon Servicing LLC
|
|
Georgia
|
TCK, LLC
|
|
Delaware
|
Transistor Holdings LLC (2)
|
|
Delaware
|
Wilton Acquisitions LLC
|
|
Georgia
|
YBUY Financial LLC
|
|
Georgia
|
YBUY Holdings LLC
|
|
Georgia
|
YBUY Operations LLC
|
|
Georgia
|
|
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 fourth fiscal period 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;
|
|
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.
|
|
|
|
/s/ DAVID G. HANNA
|
|
David G. Hanna
|
|
Chief Executive Officer and Chairman of the Board
|
|
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 fourth fiscal period 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;
|
|
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.
|
|
|
|
/s/ WILLIAM R. McCAMEY
|
|
William R. McCamey
|
|
Chief Financial Officer
|
|
|
|
/s/ DAVID G. HANNA
|
|
David G. Hanna
|
|
Chief Executive Officer and
|
|
Chairman of the Board
|
|
|
|
/s/ WILLIAM R. McCAMEY
|
|
William R. McCamey
|
|
Chief Financial Officer
|