1. Significant Accounting Policies
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Nature of the Company
\nEnova International, Inc., formed on September 7, 2011, is an independent, publicly traded company, and the Company’s shares of common stock are listed on the New York Stock Exchange under the symbol “ENVA.” The Company operates an internet-based lending platform to serve customers in need of cash to fulfill their financial responsibilities. Through a network of direct and indirect marketing channels, the Company offers funds to its customers through a variety of unsecured loan and finance receivable products. The business is operated primarily through the internet to provide convenient, fully-automated financial solutions to its customers. As of December 31, 2017, the Company offered or arranged loans to consumers under the names “CashNetUSA” and “NetCredit” in 33 states in the United States, under the names “QuickQuid,” “Pounds to Pocket” and “On Stride Financial” in the United Kingdom, and under the name “Simplic” in Brazil. The Company also offered financing to small businesses in all 50 states and Washington D.C. in the United States under the names “Headway Capital” and “The Business Backer.” During 2016, the Company also launched “Enova Decisions” its analytics as a service business that leverages existing tools and technologies in order to help companies make decisions about their own customers.
\nThe Company originates, guarantees or purchases consumer loans. Consumer loans provide customers with cash in their bank account, typically in exchange for an obligation to repay the amount advanced plus fees and/or interest. Consumer loans include short-term loans, line of credit accounts and installment loans. The Company provides financing to small businesses through either a line of credit account, installment loan or a receivables purchase agreement product (“RPAs”). RPAs represent a right to receive future receivables from a small business. Small businesses receive funds in exchange for a portion of the business’ future receivables at an agreed upon discount. In contrast, lending is a commitment to repay principal and interest. “Loans and finance receivables” include consumer loans, small business loans and RPAs.
\nShort-term loans include unsecured short-term loans written by the Company or by a third-party lender through the Company’s credit services organization and credit access business programs (“CSO programs” as further described below) that the Company guarantees. Line of credit accounts include draws made through the Company’s line of credit product. Installment loans are longer-term multi-payment loans that generally require the outstanding principal balance to be paid down in multiple installments and are written by the Company, by a third-party lender through the CSO programs or by a bank partner.
\nThrough the Company’s CSO programs, the Company provides services related to a third-party lender’s consumer loan products in some markets by acting as a credit services organization or credit access business on behalf of consumers in accordance with applicable state laws. Services offered under the CSO programs include credit-related services such as arranging loans with independent third-party lenders and assisting in the preparation of loan applications and loan documents (“CSO loans”). Under the CSO programs, the Company guarantees consumer loan payment obligations to the third-party lender in the event that the customer defaults on the loan. CSO loans are not included in the Company’s financial statements, but the Company has established a liability for the estimated losses related to the guarantee on these loans in its consolidated balance sheets.
\nThe Company operates a program with a bank to provide technology, marketing services, and loan servicing for near-prime unsecured consumer installment loans. Under the program, the Company receives marketing and servicing fees while the bank receives an origination fee. The bank has the ability to sell the loans it originates to the Company. The Company does not guarantee the performance of the loans originated by the bank.
\nBasis of Presentation
\nThe consolidated financial statements of the Company reflect the historical results of operations and cash flows of the Company during each respective period. The financial statements include goodwill and intangible assets arising from businesses previously acquired. The financial information included herein may not be indicative of the consolidated financial position, operating results, changes in stockholders’ equity and cash flows of the Company in the future. Intercompany transactions are eliminated.
\nThe Company consolidates any variable interest entity (“VIE”) where it has determined the Company is the primary beneficiary. The primary beneficiary is the entity which has both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance as well as the obligation to absorb losses or receive benefits of the entity that could potentially be significant to the VIE.
\nUse of Estimates
\nThe preparation of these financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the dates of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. On an on-going basis, management evaluates its estimates and judgments, including those related to revenue recognition, allowance for losses on loans and finance receivables, goodwill, long-lived and intangible assets, income taxes, contingencies and litigation. Management bases its estimates on historical experience, empirical data and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates.
\nOut-of-Period Adjustment
\nIn a review of its revenue recognition policy during 2015, the Company determined that certain fees on its line of credit product should be deferred over the period the draw is outstanding rather than recognized as revenue when assessed. The Company recorded a $2.5 million reduction to revenue in the fourth quarter of 2015 as an out-of-period adjustment. This adjustment included a $2.8 million reduction of revenue associated with periods prior to 2015. The Company believes this adjustment was not material to any of the prior years’ financial statements.
\nForeign Currency Translations
\nThe functional currencies for the Company’s subsidiaries that serve or have served residents of the United Kingdom, Australia, Canada and Brazil are the British pound, the Australian dollar, the Canadian dollar and the Brazilian real, respectively. The assets and liabilities of these subsidiaries are translated into U.S. dollars at the exchange rates in effect at each balance sheet date, and the resulting adjustments are recorded in “Accumulated other comprehensive income (loss)” (“AOCI”) as a separate component of stockholders’ equity. Revenue and expenses are translated at the monthly average exchange rates occurring during each period.
\nCash and Cash Equivalents
\nThe Company considers deposits in banks and short-term investments with original maturities of 90 days or less as cash and cash equivalents.
\nRestricted Cash
\nThe Company includes funds to be used for future debt payments relating to its securitization transactions and escrow deposits in restricted cash and cash equivalents.
\nRevenue Recognition
\nThe Company recognizes revenue based on the financing products and services it offers and on loans it acquires. “Revenue” in the consolidated statements of income includes: interest income, finance charges, fees for services provided through the Company’s credit services organization and credit access business programs (“CSO programs”) (“CSO fees”), revenue on RPAs, draw fees, minimum billing fees, purchase fees, late fees and non-sufficient funds fees as permitted by applicable laws and pursuant to the agreement with the customer. For short-term loans that the Company offers, interest and finance charges are recognized on an effective yield basis over the term of the loan. For line of credit accounts, interest is recognized over the reporting period based upon the balance outstanding and the contractual interest rate, draw fees are recognized on an effective yield basis over the estimated outstanding period of the draw, and minimum billing fees are recognized when assessed to the customer. For installment loans, interest is recognized on an effective yield basis over the term of the loan. For RPAs, revenue and purchase fees are recognized on an effective yield basis over the projected delivery term of the agreements and fees are recognized when assessed. CSO fees are recognized on an effective yield basis over the term of the loan. Late and nonsufficient funds fees are recognized when assessed to the customer. Direct costs associated with originating loans or RPAs and purchasing installment loans, such as third-party customer acquisition costs or purchase premiums, are deferred and amortized against revenue on an effective yield basis over the term of the loan or the projected delivery term of the finance receivable. Short-term loans, line of credit accounts, installment loans, RPAs, unpaid and accrued interest, fees and revenue and deferred origination costs are included in “Loans and finance receivables, net” in the consolidated balance sheets.
\nCurrent and Delinquent Loans and Finance Receivables
\nThe Company classifies its loans and finance receivables as either current or delinquent. Short-term loans are considered delinquent when payment of an amount due is not made as of the due date. If a line of credit account or installment loan customer misses one payment, that payment is considered delinquent and the balance of the loan is considered current. If a line of credit account or installment loan customer does not make two consecutive payments, the entire account or loan is classified as delinquent and placed on a non-accrual status. The Company allows for normal payment processing time before considering a loan delinquent but does not provide for any additional grace period.
\nWhere permitted by law and as long as a loan is not considered delinquent, a customer may choose to renew a short-term loan or installment loan or extend the due date on a short-term loan. In order to renew or extend a short-term loan, a customer must agree to pay the current finance charge for the right to make a later payment of the outstanding principal balance plus an additional finance charge. In order to renew an installment loan, the customer enters into a new installment loan contract and agrees to pay the principal balance and finance charge in accordance with the terms of the new loan contract. If a short-term loan is renewed, but the customer fails to pay that loan’s current finance charge as of the due date, the unpaid finance charge is classified as delinquent.
\nThe Company does not accrue interest on delinquent loans and does not resume accrual of interest on a delinquent loan unless it is returned to current status. In addition, delinquent loans generally may not be renewed, and if, during its attempt to collect on a delinquent loan, the Company allows additional time for payment through a payment plan or a promise to pay, it is still considered delinquent. Generally, all payments received are first applied against accrued but unpaid interest and fees and then against the principal balance of the loan.
\nAllowance and Liability for Estimated Losses on Loans and Finance Receivables
\nThe Company monitors the performance of its loan and finance receivable portfolios and maintains either an allowance or liability for estimated losses on loans and finance receivables (including revenue, fees and/or interest) at a level estimated to be adequate to absorb losses inherent in the portfolio. The allowance for losses on the Company’s owned loans and finance receivables reduces the outstanding loans and finance receivables balance in the consolidated balance sheets. The liability for estimated losses related to loans guaranteed under its CSO programs is initially recorded at fair value and is included in “Accounts payable and accrued expenses” in the consolidated balance sheets.
\nIn determining the allowance or liability for estimated losses on loans and finance receivables, the Company applies a documented systematic methodology. In calculating the allowance or liability for receivable losses, outstanding loans and finance receivables are divided into discrete groups of short-term loans, line of credit accounts, installment loans and RPAs and are analyzed as current or delinquent. Increases in either the allowance or the liability, net of charge-offs and recoveries, are recorded as a “Cost of revenue” in the consolidated statements of income.
\nThe allowance or liability for short-term loans classified as current is based on historical loss rates adjusted for recent default trends for current loans. For delinquent short-term loans, the allowance or liability is based on a six-month rolling average of loss rates by stage of collection. For line of credit account, installment loan and RPA portfolios, the Company generally uses either a migration analysis or roll-rate based methodology to estimate losses inherent in the portfolio. The allowance or liability calculation under the migration analysis and roll-rate methodology is based on historical charge-off experience and the loss emergence period, which represents the average amount of time between the first occurrence of a loss event and the charge-off of a loan or RPA. The factors the Company considers to assess the adequacy of the allowance or liability include past due performance, historical behavior of monthly vintages, underwriting changes, delinquency status, payment history and recency factors.
\nThe Company fully reserves for loans and finance receivables once the receivable or a portion of the receivable has been classified as delinquent for 60 consecutive days and generally charges off loans and finance receivables between 60 – 65 days delinquent. If a loan or finance receivable is deemed uncollectible before it is fully reserved, it is charged off at that point. Loans and finance receivables classified as delinquent generally have an age of one to 64 days from the date any portion of the receivable became delinquent, as defined above. Recoveries on loans and finance receivables previously charged to the allowance are credited to the allowance when collected.
\nProperty and Equipment
\nProperty and equipment is recorded at cost. The cost of property retired or sold and the related accumulated depreciation are removed from the accounts, and any resulting gain or loss is recognized in the consolidated statements of income. Costs associated with repair and maintenance activities are expensed as incurred. Depreciation expense is generally provided on a straight-line basis, using the following estimated useful lives:
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| \n Computer hardware and software | \n\n
| \n\n 3 to 5 years | \n
| \n Furniture, fixtures and equipment | \n\n
| \n\n 3 to 7 years | \n
| \n Leasehold improvements (1) | \n\n
| \n\n 3 to 10 years | \n
\n
| \n (1) | \n\n Leasehold improvements are depreciated over the lesser of the estimated useful life, remaining lease term, or 10 years. |
Software Development Costs
\nThe Company applies Accounting Standards Codification (“ASC”) 350-40, Internal Use Software (“ASC 350-40”), to its software purchase and development activities. Under ASC 350-40, eligible internal and external costs incurred for the development of computer software applications, as well as for upgrades and enhancements that result in additional functionality of the applications, are capitalized to “Property and equipment” on the consolidated balance sheets. Internal and external training and maintenance costs are charged to expense as incurred or over the related service period. When a software application is placed in service, the Company begins amortizing the related capitalized software costs using the straight-line method based on its estimated useful life, which currently ranges from one to five years.
\nGoodwill
\nGoodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in each business combination. In accordance with ASC 350, Intangibles—Goodwill and Other (“ASC 350”), the Company tests goodwill and intangible assets with an indefinite life for potential impairment annually as of June 30 and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.
\nThe Company first assesses qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. In assessing the qualitative factors, management considers relevant events and circumstances including but not limited to macroeconomic conditions, industry and market environment, overall financial performance of the Company, cash flow from operating activities, market capitalization and stock price. If the Company determines that the two-step quantitative impairment test is required, management uses the income approach to complete its annual goodwill assessment. The income approach uses future cash flows and estimated terminal values for the Company that are discounted using a market participant perspective to determine the fair value, which is then compared to the carrying value to determine if there is impairment. The income approach includes assumptions about revenue growth rates, operating margins and terminal growth rates discounted by an estimated weighted-average cost of capital derived from other publicly-traded companies that are similar but not identical from an operational and economic standpoint. The Company completed its annual assessment of goodwill as of June 30, 2017 based on qualitative factors and determined that the fair value of its goodwill exceeded carrying value, and, as a result, no impairment existed at that date. Although no goodwill impairment was noted, there can be no assurances that future goodwill impairments will not occur.
\nAs of December 31, 2017, the Company had $267.0 million of goodwill, all of which is expected to be deductible for tax purposes.
\nLong-Lived Assets Other Than Goodwill
\nAn evaluation of the recoverability of property and equipment and intangible assets subject to amortization is performed whenever the facts and circumstances indicate that the carrying value may be impaired. An impairment loss is recognized if the future undiscounted cash flows associated with the asset and the estimated fair value of the asset are less than the asset’s corresponding carrying value. The amount of the impairment loss, if any, is the excess of the asset’s carrying value over its estimated fair value.
\nThe Company amortizes intangible assets subject to amortization on the basis of their expected periods of benefit, generally three to 20 years. The costs of start-up activities and organization costs are charged to expense as incurred.
\nHedging and Derivatives Activity
\nThe Company periodically uses foreign currency forward contracts, which are considered derivative instruments, to minimize the effects of foreign currency risk in Brazil and the United Kingdom related to the operations of the Company. The forward contracts are not designated as hedges as defined by ASC 815, Derivatives and Hedging; therefore, any changes in the fair value of the forward contracts are recognized in “Foreign currency transaction gain (loss), net” in the consolidated statements of income. See Note 13.
\nInvestment in Unconsolidated Investee
\nThe Company accounts for its investments in unconsolidated investees in accordance with ASC 325, Investments—Other Investments are recorded on a cost basis. The Company evaluates investments for impairment if an event occurs or circumstances change that would more likely than not reduce the fair value of the investment below carrying value. If an impairment of an investment is determined to be other than temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period the other-than-temporary-impairment is identified. The Company’s investments in unconsolidated investees are held in “Other assets” on the consolidated balance sheets.
\nAs of December 31, 2017, the Company owned a $6.7 million investment in the preferred stock of a privately-held developing financial services entity. The Company’s impairment evaluation of this investment as of December 31, 2017 determined that an impairment loss was not probable as of that date.
\nMarketing Expenses
\nMarketing expenses consist of digital costs, lead purchase costs and offline marketing costs such as television and direct mail advertising. Marketing costs directly related to loan and RPA originations are deferred and amortized against revenue. Marketing costs not directly resulting in loan and RPA originations are expensed as incurred. The production costs associated with offline marketing are expensed as incurred.
\nIn 2015 and 2016, the Company also had an agreement with an independent third party pursuant to which the Company paid a portion of the net revenue received from the customers referred to the Company by such third party.
\nOperations and Technology Expenses
\nOperations and technology expenses include all expenses related to the direct operations and technology infrastructure related to loan underwriting and processing. This includes call center and operations personnel costs, software maintenance expense, underwriting data from third-party vendors, bank and transaction fees and telephony costs.
\nGeneral and Administrative Expenses
\nGeneral and Administrative expenses primarily include the Company’s corporate personnel costs, as well as legal, occupancy, and other related costs.
\nStock-Based Compensation
\nThe Company accounts for its stock-based employee compensation plans in accordance with ASC 718, Compensation—Stock Compensation (“ASC 718”) and recognizes compensation expense based on the grant date fair value over the remaining vesting periods for stock-based awards.
\nUnder applicable accounting standards, the fair value of share-based compensation is determined at the grant date and the recognition of the related expense is recorded over the period in which the share-based compensation vests. However, with respect to income taxes, the related deduction from taxes payable is based on the award’s intrinsic value at the time of exercise (for an option) or on the fair value upon vesting of the award (for RSUs), which can be either greater (creating an excess tax benefit) or less (creating a tax deficiency) than the deferred tax benefit recognized as compensation cost is recognized in the financial statements. Pursuant to Accounting Standards Update (“ASU”) 2016-09, Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”), these excess tax benefits/deficiencies are recognized as income tax benefit/expense in the statement of income and, within the statement of cash flows, are classified in operating activities in the same manner as other cash flows related to income taxes. The extent of excess tax benefits/deficiencies is subject to variation in the Company’s stock price and timing/extent of RSU vestings and employee stock option exercises.
\nIncome Taxes
\nThe provision for income taxes is based on income before income taxes as reported for financial statement purposes. Deferred income taxes are provided for in accordance with the assets and liability method of accounting for income taxes in order to recognize the tax effects of temporary differences between financial statement and income tax accounting.
\nThe Company accounts for uncertainty in income taxes in accordance with ASC 740, Income Taxes (“ASC 740”). ASC 740 requires that a more-likely-than-not threshold (greater than 50 percent) be met before the benefit of a tax position may be recognized in the consolidated financial statements and prescribes how such benefit should be measured. It also provides guidance on recognition adjustment, classification, accrual of interest and penalties, accounting in interim periods, disclosure and transition. The Company records interest and penalties related to tax matters as income tax expense in the consolidated statements of income.
\nThe Company performs an evaluation of the recoverability of its deferred tax assets on a quarterly basis. The Company establishes a valuation allowance if it is more likely than not that all or some portion of the deferred tax asset will not be realized. The Company analyzes several factors, including the nature and frequency of operating losses, the Company’s carryforward period for any losses, the reversal of future taxable temporary differences, the expected occurrence of future income or loss and the feasibility of available tax planning strategies to protect against the loss of deferred tax assets. See Note 9 for further discussion.
\nEarnings Per Share
\nBasic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the year. Diluted earnings per share is calculated by giving effect to the potential dilution that could occur if securities or other contracts to issue common shares were exercised and converted into common shares during the year. Restricted stock units issued under the Company’s stock-based employee compensation plans are included in diluted shares upon the granting of the awards even though the vesting of shares will occur over time.
\nThe following table sets forth the reconciliation of numerators and denominators of basic and diluted earnings per share computations for the years ended December 31, 2017, 2016 and 2015 (in thousands, except per share amounts):
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| \n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n|||||||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n\n
| \n\n 2015 | \n\n
| \n|||
| \n Numerator: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Net income | \n\n
| \n\n $ | \n\n 29,240 | \n\n
| \n\n
| \n\n $ | \n\n 34,602 | \n\n
| \n\n
| \n\n $ | \n\n 43,992 | \n\n
| \n
| \n Denominator: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Total weighted average basic shares | \n\n
| \n\n
| \n\n 33,523 | \n\n
| \n\n
| \n\n
| \n\n 33,192 | \n\n
| \n\n
| \n\n
| \n\n 33,006 | \n\n
| \n
| \n Shares applicable to stock-based compensation | \n\n
| \n\n
| \n\n 609 | \n\n
| \n\n
| \n\n
| \n\n 270 | \n\n
| \n\n
| \n\n
| \n\n 20 | \n\n
| \n
| \n Total weighted average diluted shares | \n\n
| \n\n
| \n\n 34,132 | \n\n
| \n\n
| \n\n
| \n\n 33,462 | \n\n
| \n\n
| \n\n
| \n\n 33,026 | \n\n
| \n
| \n Earnings per share – basic | \n\n
| \n\n $ | \n\n 0.87 | \n\n
| \n\n
| \n\n $ | \n\n 1.04 | \n\n
| \n\n
| \n\n $ | \n\n 1.33 | \n\n
| \n
| \n Earnings per share – diluted | \n\n
| \n\n $ | \n\n 0.86 | \n\n
| \n\n
| \n\n $ | \n\n 1.03 | \n\n
| \n\n
| \n\n $ | \n\n 1.33 | \n\n
| \n
\n
For the years ended December 31, 2017, 2016 and 2015, 1,563,975, 1,622,331 and 1,700,296 shares of common stock underlying stock options, respectively, and 182,008, 464,500 and 368,111 shares of common stock underlying restricted stock units, respectively, were excluded from the calculation of diluted net income per share because their effect would have been antidilutive.
\nAdopted Accounting Standards
\nIn March 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-09. The amendments in ASU 2016-09 simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company adopted ASU 2016-09 on January 1, 2017. The adoption of ASU 2016-09 did not have a material impact on the Company’s financial statements.
\nIn August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force) (“ASU 2016-15”). The amendments in ASU 2016-15 provide guidance on eight specific cash flow issues, including debt prepayment or debt extinguishment costs, contingent consideration payments made after a business combination, distributions received from equity method investees and beneficial interests in securitization transactions. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company early-adopted ASU 2016-15 on July 1, 2017. The adoption of ASU 2016-15 did not have a material impact on the Company’s financial statements.
\nAccounting Standards to be Adopted in Future Periods
\nIn February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income, (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“ASU 2018-02”) which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the newly enacted federal corporate income tax rate under the Tax Cuts and Jobs Act. The amount of the reclassification would be the difference between the historical corporate income tax rate and the newly enacted 21 percent corporate income tax rate. ASU 2018-02 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2018 with early adoption in any interim period permitted. The Company will adopt this ASU in the first quarter of 2018. The adoption of ASU 2018-02 is not expected to have a material impact on the Company’s financial statements.
\nIn May 2017, the FASB issued ASU 2017-09, Compensation–Stock Compensation (Topic 718): Scope of Modification Accounting (“ASU 2017-09”) clarifying when a change to the terms or conditions of a share-based payment award must be accounted for as a modification. The new guidance requires modification accounting if the fair value, vesting condition or the classification of the award is not the same immediately before and after a change to the terms and conditions of the award. The new guidance is effective on a prospective basis for annual periods beginning after December 15, 2017, and interim periods within those annual periods, with early adoption permitted. The adoption of ASU 2017-09 is not expected to have a material impact on the Company’s financial statements.
\nIn January 2017, the FASB issued ASU 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets (“ASU 2017-05”) to clarify the scope of Subtopic 610-20, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets, and to add guidance for partial sales of nonfinancial assets. ASU 2017-05 is effective at the same time as the amendments in ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). Therefore, for public entities, the amendments are effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. The Company does not expect that the adoption of ASU 2017-05 will have a material effect on its consolidated financial statements.
\nIn January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350) – Simplifying the Test for Goodwill Impairment (“ASU 2017-04”) to simplify the accounting for goodwill impairment. ASU 2017-04 removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. Goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the impact ASU 2017-04 will have on its consolidated financial statements.
\nIn January 2017, the FASB issued ASU 2017-01 Business Combinations (Topic 805) – Clarifying the Definition of a Business (“ASU 2017-01”). ASU 2017-01 provides a screen to determine when an asset or group of assets acquired is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. ASU 2017-01 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2017. The Company does not expect that the adoption of ASU 2017-01 will have a material effect on its consolidated financial statements.
\nIn November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230), Restricted Cash (“ASU 2016-18”). ASU 2016-18 clarifies certain existing principles in ASC 230, Statement of Cash Flows, including providing additional guidance related to transfers between cash and restricted cash and how entities present, in their statement of cash flows, the cash receipts and cash payments that directly affect the restricted cash accounts. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The adoption of ASU 2016-18 will modify the Company's current disclosures and classifications within the consolidated statement of cash flows and the presentation of its restricted cash activity.
\nIn October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory (“ASU 2016-16”), which requires entities to recognize the income tax impact of an intra-entity sale or transfer of an asset other than inventory when the sale or transfer occurs, rather than when the asset has been sold to an outside party. ASU 2016-16 is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. Early adoption is permitted. The Company does not expect that the adoption of ASU 2016-16 will have a material effect on its consolidated financial statements.
\nIn June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016‑13”). The amendments in ASU 2016‑13 replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016‑13 is effective for annual periods beginning after December 15, 2019, and interim periods within those annual periods. Early adoption is permitted for annual periods beginning after December 15, 2018, and interim periods within those fiscal years. The Company is assessing the impact of ASU 2016‑13, which at the date of adoption is expected to increase the allowance for credit losses with a resulting negative adjustment to retained earnings.
\nIn February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 requires lessee recognition on the balance sheet of a right-of-use asset and a lease liability, initially measured at the present value of the lease payments. It further requires recognition in the income statement of a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis. Finally, it requires classification of all cash payments within operating activities in the statement of cash flows. ASU 2016-02 is effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2018. Early adoption is permitted for all entities upon issuance. Upon adoption of ASU 2016-02, the Company expects to report higher assets and liabilities as a result of including additional leases on the consolidated balance sheet. The Company does not expect the adoption of ASU 2016-02 to have a material impact on the consolidated statements of income or the consolidated statements of stockholders' equity.
\nIn January 2016, the FASB issued ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016‑01”), which requires that equity investments, except for those accounted for under the equity method or those that result in consolidation of the investee, be measured at fair value, with subsequent changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. ASU 2016-01 also impacts the presentation and disclosure requirements for financial instruments. ASU 2016-01 is effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted only for certain provisions. The Company does not expect that the adoption of ASU 2016-01 will have a material effect on its consolidated financial statements.
\nIn May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which supersedes the revenue recognition requirements in Accounting Standards Codification 605, Revenue Recognition. ASU 2014-09 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The Company will adopt this ASU under the modified-prospective method effective January 1, 2018. The Company has completed its assessment of the guidance and determined its loan and finance receivables are excluded from the scope of ASU 2014-09. As a result of this scope exception, the Company has concluded the impact will not be material to its consolidated financial statements.
2. Acquisitions
\nOn June 23, 2015, the Company completed the purchase of certain assets and assumed certain liabilities of a company operating as The Business Backer, LLC, which purchases discounted future accounts receivables from small businesses throughout the United States through RPAs, which provide working capital for small businesses. The total consideration of $26.4 million was comprised of $17.7 million in cash at closing, a $3.0 million promissory note (included in “Accounts payable and accrued expenses” in the consolidated balance sheets) and estimated contingent consideration of $5.7 million based on future earn-out opportunities. The contingent purchase consideration was recorded at its estimated fair value at the date of acquisition based upon the Company’s assessment of the probable earnings attributable to the business as defined in the purchase agreement. To the extent operating results exceed the Company’s estimate, additional contingent consideration would be due, however the total consideration paid may not exceed $71 million. The contingent purchase consideration is revalued each reporting period with changes in fair value of the contingent consideration obligations recognized as a gain or loss on fair value remeasurement in the Company’s consolidated statements of income. The fair value of the contingent purchase consideration was remeasured as of December 31, 2016 a gain from the fair value remeasurement of $3.3 million was recognized in “General and administrative expenses” in the consolidated statements of income. Based on future expected earnings, the Company did not expect to pay any additional contingent consideration and recorded an adjustment to write-off the remaining liability of $2.7 million in 2017.
3. Loans and Finance Receivables, Credit Quality Information and Allowances and Liabilities for Estimated Losses on Loans and Finance Receivables
\nRevenue generated from the Company’s loans and finance receivables for the years ended December 31, 2017, 2016 and 2015 was as follows (in thousands):
\n\n
| \n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n|||||||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n\n
| \n\n 2015 | \n\n
| \n|||
| \n Short-term loans | \n\n
| \n\n $ | \n\n 197,408 | \n\n
| \n\n
| \n\n $ | \n\n 196,255 | \n\n
| \n\n
| \n\n $ | \n\n 204,893 | \n\n
| \n
| \n Line of credit accounts | \n\n
| \n\n
| \n\n 262,760 | \n\n
| \n\n
| \n\n
| \n\n 220,462 | \n\n
| \n\n
| \n\n
| \n\n 185,521 | \n\n
| \n
| \n Installment loans and RPAs | \n\n
| \n\n
| \n\n 382,683 | \n\n
| \n\n
| \n\n
| \n\n 327,375 | \n\n
| \n\n
| \n\n
| \n\n 260,507 | \n\n
| \n
| \n Total loans and finance receivables revenue | \n\n
| \n\n
| \n\n 842,851 | \n\n
| \n\n
| \n\n
| \n\n 744,092 | \n\n
| \n\n
| \n\n
| \n\n 650,921 | \n\n
| \n
| \n Other | \n\n
| \n\n
| \n\n 890 | \n\n
| \n\n
| \n\n
| \n\n 1,477 | \n\n
| \n\n
| \n\n
| \n\n 1,679 | \n\n
| \n
| \n Total Revenue | \n\n
| \n\n $ | \n\n 843,741 | \n\n
| \n\n
| \n\n $ | \n\n 745,569 | \n\n
| \n\n
| \n\n $ | \n\n 652,600 | \n\n
| \n
\n
The components of Company-owned loans and finance receivables at December 31, 2017 and 2016 were as follows (in thousands):
\n\n
| \n
| \n\n
| \n\n As of December 31, 2017 | \n\n
| \n|||||||||||||
| \n
| \n\n
| \n\n Short-term | \n\n
| \n\n
| \n\n Line of Credit | \n\n
| \n\n
| \n\n Installment Loans and | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n|||
| \n
| \n\n
| \n\n Loans | \n\n
| \n\n
| \n\n Accounts | \n\n
| \n\n
| \n\n RPAs | \n\n
| \n\n
| \n\n Total | \n\n
| \n||||
| \n Current receivables | \n\n
| \n\n $ | \n\n 45,552 | \n\n
| \n\n
| \n\n $ | \n\n 161,070 | \n\n
| \n\n
| \n\n $ | \n\n 537,634 | \n\n
| \n\n
| \n\n $ | \n\n 744,256 | \n\n
| \n
| \n Delinquent receivables: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Delinquent payment amounts(1) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 7,696 | \n\n
| \n\n
| \n\n
| \n\n 3,635 | \n\n
| \n\n
| \n\n
| \n\n 11,331 | \n\n
| \n
| \n Receivables on non-accrual status | \n\n
| \n\n
| \n\n 28,120 | \n\n
| \n\n
| \n\n
| \n\n 1,302 | \n\n
| \n\n
| \n\n
| \n\n 42,740 | \n\n
| \n\n
| \n\n
| \n\n 72,162 | \n\n
| \n
| \n Total delinquent receivables | \n\n
| \n\n
| \n\n 28,120 | \n\n
| \n\n
| \n\n
| \n\n 8,998 | \n\n
| \n\n
| \n\n
| \n\n 46,375 | \n\n
| \n\n
| \n\n
| \n\n 83,493 | \n\n
| \n
| \n Total loans and finance receivables, gross | \n\n
| \n\n
| \n\n 73,672 | \n\n
| \n\n
| \n\n
| \n\n 170,068 | \n\n
| \n\n
| \n\n
| \n\n 584,009 | \n\n
| \n\n
| \n\n
| \n\n 827,749 | \n\n
| \n
| \n Less: Allowance for losses | \n\n
| \n\n
| \n\n (19,917 | \n\n ) | \n\n
| \n\n
| \n\n (31,148 | \n\n ) | \n\n
| \n\n
| \n\n (71,979 | \n\n ) | \n\n
| \n\n
| \n\n (123,044 | \n\n ) | \n
| \n Loans and finance receivables, net | \n\n
| \n\n $ | \n\n 53,755 | \n\n
| \n\n
| \n\n $ | \n\n 138,920 | \n\n
| \n\n
| \n\n $ | \n\n 512,030 | \n\n
| \n\n
| \n\n $ | \n\n 704,705 | \n\n
| \n
\n
| \n
| \n\n
| \n\n As of December 31, 2016 | \n\n
| \n|||||||||||||
| \n
| \n\n
| \n\n Short-term | \n\n
| \n\n
| \n\n Line of Credit | \n\n
| \n\n
| \n\n Installment Loans and | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n|||
| \n
| \n\n
| \n\n Loans | \n\n
| \n\n
| \n\n Accounts | \n\n
| \n\n
| \n\n RPAs | \n\n
| \n\n
| \n\n Total | \n\n
| \n||||
| \n Current receivables | \n\n
| \n\n $ | \n\n 35,516 | \n\n
| \n\n
| \n\n $ | \n\n 130,576 | \n\n
| \n\n
| \n\n $ | \n\n 413,638 | \n\n
| \n\n
| \n\n $ | \n\n 579,730 | \n\n
| \n
| \n Delinquent receivables: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Delinquent payment amounts(1) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 4,560 | \n\n
| \n\n
| \n\n
| \n\n 2,110 | \n\n
| \n\n
| \n\n
| \n\n 6,670 | \n\n
| \n
| \n Receivables on non-accrual status | \n\n
| \n\n
| \n\n 27,489 | \n\n
| \n\n
| \n\n
| \n\n 9,047 | \n\n
| \n\n
| \n\n
| \n\n 37,559 | \n\n
| \n\n
| \n\n
| \n\n 74,095 | \n\n
| \n
| \n Total delinquent receivables | \n\n
| \n\n
| \n\n 27,489 | \n\n
| \n\n
| \n\n
| \n\n 13,607 | \n\n
| \n\n
| \n\n
| \n\n 39,669 | \n\n
| \n\n
| \n\n
| \n\n 80,765 | \n\n
| \n
| \n Total loans and finance receivables, gross | \n\n
| \n\n
| \n\n 63,005 | \n\n
| \n\n
| \n\n
| \n\n 144,183 | \n\n
| \n\n
| \n\n
| \n\n 453,307 | \n\n
| \n\n
| \n\n
| \n\n 660,495 | \n\n
| \n
| \n Less: Allowance for losses | \n\n
| \n\n
| \n\n (17,770 | \n\n ) | \n\n
| \n\n
| \n\n (26,594 | \n\n ) | \n\n
| \n\n
| \n\n (54,581 | \n\n ) | \n\n
| \n\n
| \n\n (98,945 | \n\n ) | \n
| \n Loans and finance receivables, net | \n\n
| \n\n $ | \n\n 45,235 | \n\n
| \n\n
| \n\n $ | \n\n 117,589 | \n\n
| \n\n
| \n\n $ | \n\n 398,726 | \n\n
| \n\n
| \n\n $ | \n\n 561,550 | \n\n
| \n
\n
| \n (1) | \n\n Represents the delinquent portion of installment loans and line of credit account balances for customers that have only missed one payment. See Note 1 “Significant Accounting Policies-Current and Delinquent Loans and Finance Receivables” for additional information. |
Changes in the allowance for losses for the Company-owned loans and finance receivables and the liability for estimated losses on the Company’s guarantees of third-party lender-owned loans through the CSO programs for the years ended December 31, 2017, 2016 and 2015 were as follows (in thousands):
\n\n
| \n
| \n\n
| \n\n Year Ended December 31, 2017 | \n\n
| \n|||||||||||||
| \n
| \n\n
| \n\n Short-term | \n\n
| \n\n
| \n\n Line of Credit | \n\n
| \n\n
| \n\n Installment Loans and | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n|||
| \n
| \n\n
| \n\n Loans | \n\n
| \n\n
| \n\n Accounts | \n\n
| \n\n
| \n\n RPAs | \n\n
| \n\n
| \n\n Total | \n\n
| \n||||
| \n Allowance for losses for Company-owned loans and finance receivables: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Balance at beginning of period | \n\n
| \n\n $ | \n\n 17,770 | \n\n
| \n\n
| \n\n $ | \n\n 26,594 | \n\n
| \n\n
| \n\n $ | \n\n 54,581 | \n\n
| \n\n
| \n\n $ | \n\n 98,945 | \n\n
| \n
| \n Cost of revenue | \n\n
| \n\n
| \n\n 77,775 | \n\n
| \n\n
| \n\n
| \n\n 93,416 | \n\n
| \n\n
| \n\n
| \n\n 225,179 | \n\n
| \n\n
| \n\n
| \n\n 396,370 | \n\n
| \n
| \n Charge-offs | \n\n
| \n\n
| \n\n (98,243 | \n\n ) | \n\n
| \n\n
| \n\n (102,725 | \n\n ) | \n\n
| \n\n
| \n\n (254,109 | \n\n ) | \n\n
| \n\n
| \n\n (455,077 | \n\n ) | \n
| \n Recoveries | \n\n
| \n\n
| \n\n 22,089 | \n\n
| \n\n
| \n\n
| \n\n 13,863 | \n\n
| \n\n
| \n\n
| \n\n 45,773 | \n\n
| \n\n
| \n\n
| \n\n 81,725 | \n\n
| \n
| \n Effect of foreign currency translation | \n\n
| \n\n
| \n\n 526 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 555 | \n\n
| \n\n
| \n\n
| \n\n 1,081 | \n\n
| \n
| \n Balance at end of period | \n\n
| \n\n $ | \n\n 19,917 | \n\n
| \n\n
| \n\n $ | \n\n 31,148 | \n\n
| \n\n
| \n\n $ | \n\n 71,979 | \n\n
| \n\n
| \n\n $ | \n\n 123,044 | \n\n
| \n
| \n Liability for third-party lender-owned loans: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Balance at beginning of period | \n\n
| \n\n $ | \n\n 1,716 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 280 | \n\n
| \n\n
| \n\n $ | \n\n 1,996 | \n\n
| \n
| \n Increase (decrease) in liability | \n\n
| \n\n
| \n\n 389 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (127 | \n\n ) | \n\n
| \n\n
| \n\n 262 | \n\n
| \n
| \n Balance at end of period | \n\n
| \n\n $ | \n\n 2,105 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 153 | \n\n
| \n\n
| \n\n $ | \n\n 2,258 | \n\n
| \n
\n
| \n
| \n\n
| \n\n Year Ended December 31, 2016 | \n\n
| \n|||||||||||||
| \n
| \n\n
| \n\n Short-term | \n\n
| \n\n
| \n\n Line of Credit | \n\n
| \n\n
| \n\n Installment Loans and | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n|||
| \n
| \n\n
| \n\n Loans | \n\n
| \n\n
| \n\n Accounts | \n\n
| \n\n
| \n\n RPAs | \n\n
| \n\n
| \n\n Total | \n\n
| \n||||
| \n Allowance for losses for Company-owned loans and finance receivables: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Balance at beginning of period | \n\n
| \n\n $ | \n\n 14,652 | \n\n
| \n\n
| \n\n $ | \n\n 15,727 | \n\n
| \n\n
| \n\n $ | \n\n 36,943 | \n\n
| \n\n
| \n\n $ | \n\n 67,322 | \n\n
| \n
| \n Cost of revenue | \n\n
| \n\n
| \n\n 69,202 | \n\n
| \n\n
| \n\n
| \n\n 88,489 | \n\n
| \n\n
| \n\n
| \n\n 170,035 | \n\n
| \n\n
| \n\n
| \n\n 327,726 | \n\n
| \n
| \n Charge-offs | \n\n
| \n\n
| \n\n (85,599 | \n\n ) | \n\n
| \n\n
| \n\n (92,044 | \n\n ) | \n\n
| \n\n
| \n\n (182,471 | \n\n ) | \n\n
| \n\n
| \n\n (360,114 | \n\n ) | \n
| \n Recoveries | \n\n
| \n\n
| \n\n 20,362 | \n\n
| \n\n
| \n\n
| \n\n 14,422 | \n\n
| \n\n
| \n\n
| \n\n 29,804 | \n\n
| \n\n
| \n\n
| \n\n 64,588 | \n\n
| \n
| \n Effect of foreign currency translation | \n\n
| \n\n
| \n\n (847 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 270 | \n\n
| \n\n
| \n\n
| \n\n (577 | \n\n ) | \n
| \n Balance at end of period | \n\n
| \n\n $ | \n\n 17,770 | \n\n
| \n\n
| \n\n $ | \n\n 26,594 | \n\n
| \n\n
| \n\n $ | \n\n 54,581 | \n\n
| \n\n
| \n\n $ | \n\n 98,945 | \n\n
| \n
| \n Liability for third-party lender-owned loans: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Balance at beginning of period | \n\n
| \n\n $ | \n\n 1,298 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 458 | \n\n
| \n\n
| \n\n $ | \n\n 1,756 | \n\n
| \n
| \n Increase (decrease) in liability | \n\n
| \n\n
| \n\n 418 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (178 | \n\n ) | \n\n
| \n\n
| \n\n 240 | \n\n
| \n
| \n Balance at end of period | \n\n
| \n\n $ | \n\n 1,716 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 280 | \n\n
| \n\n
| \n\n $ | \n\n 1,996 | \n\n
| \n
\n
| \n
| \n\n
| \n\n Year Ended December 31, 2015 | \n\n
| \n|||||||||||||
| \n
| \n\n
| \n\n Short-term | \n\n
| \n\n
| \n\n Line of Credit | \n\n
| \n\n
| \n\n Installment Loans and | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n|||
| \n
| \n\n
| \n\n Loans | \n\n
| \n\n
| \n\n Accounts | \n\n
| \n\n
| \n\n RPAs | \n\n
| \n\n
| \n\n Total | \n\n
| \n||||
| \n Allowance for losses for Company-owned loans and finance receivables: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Balance at beginning of period | \n\n
| \n\n $ | \n\n 14,324 | \n\n
| \n\n
| \n\n $ | \n\n 19,749 | \n\n
| \n\n
| \n\n $ | \n\n 30,875 | \n\n
| \n\n
| \n\n $ | \n\n 64,948 | \n\n
| \n
| \n Cost of revenue | \n\n
| \n\n
| \n\n 62,571 | \n\n
| \n\n
| \n\n
| \n\n 43,547 | \n\n
| \n\n
| \n\n
| \n\n 110,560 | \n\n
| \n\n
| \n\n
| \n\n 216,678 | \n\n
| \n
| \n Charge-offs | \n\n
| \n\n
| \n\n (83,316 | \n\n ) | \n\n
| \n\n
| \n\n (68,075 | \n\n ) | \n\n
| \n\n
| \n\n (129,537 | \n\n ) | \n\n
| \n\n
| \n\n (280,928 | \n\n ) | \n
| \n Recoveries | \n\n
| \n\n
| \n\n 21,374 | \n\n
| \n\n
| \n\n
| \n\n 20,694 | \n\n
| \n\n
| \n\n
| \n\n 25,585 | \n\n
| \n\n
| \n\n
| \n\n 67,653 | \n\n
| \n
| \n Effect of foreign currency translation | \n\n
| \n\n
| \n\n (301 | \n\n ) | \n\n
| \n\n
| \n\n (188 | \n\n ) | \n\n
| \n\n
| \n\n (540 | \n\n ) | \n\n
| \n\n
| \n\n (1,029 | \n\n ) | \n
| \n Balance at end of period | \n\n
| \n\n $ | \n\n 14,652 | \n\n
| \n\n
| \n\n $ | \n\n 15,727 | \n\n
| \n\n
| \n\n $ | \n\n 36,943 | \n\n
| \n\n
| \n\n $ | \n\n 67,322 | \n\n
| \n
| \n Liability for third-party lender-owned loans: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Balance at beginning of period | \n\n
| \n\n $ | \n\n 1,575 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 1 | \n\n
| \n\n
| \n\n $ | \n\n 1,576 | \n\n
| \n
| \n (Decrease) increase in liability | \n\n
| \n\n
| \n\n (277 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 457 | \n\n
| \n\n
| \n\n
| \n\n 180 | \n\n
| \n
| \n Balance at end of period | \n\n
| \n\n $ | \n\n 1,298 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 458 | \n\n
| \n\n
| \n\n $ | \n\n 1,756 | \n\n
| \n
\n
In connection with its CSO programs, the Company guarantees consumer loan payment obligations to unrelated third-party lenders for short-term and installment loans and is required to purchase any defaulted loans it has guaranteed. The guarantee represents an obligation to purchase specific loans that go into default. As of December 31, 2017 and 2016, the amount of consumer loans guaranteed by the Company was $34.1 million and $32.2 million, respectively, representing amounts due under consumer loans originated by third-party lenders under the CSO programs. The estimated fair value of the liability for estimated losses on consumer loans guaranteed by the Company of $2.3 million and $2.0 million as of December 31, 2017 and 2016, respectively, is included in “Accounts payable and accrued expenses” in the consolidated balance sheets.
4. Property and Equipment
\nAs a leading technology and analytics company, a significant amount of capital is invested in developing computer software and systems infrastructure.
\nMajor classifications of property and equipment at December 31, 2017 and 2016 were as follows (in thousands):
\n\n
| \n
| \n\n
| \n\n As of December 31, 2017 | \n\n
| \n|||||||||
| \n
| \n\n
| \n\n Cost | \n\n
| \n\n
| \n\n Accumulated Depreciation | \n\n
| \n\n
| \n\n Net | \n\n
| \n|||
| \n Computer software | \n\n
| \n\n $ | \n\n 82,757 | \n\n
| \n\n
| \n\n $ | \n\n (56,282 | \n\n ) | \n\n
| \n\n $ | \n\n 26,475 | \n\n
| \n
| \n Furniture, fixtures and equipment | \n\n
| \n\n
| \n\n 33,834 | \n\n
| \n\n
| \n\n
| \n\n (25,912 | \n\n ) | \n\n
| \n\n
| \n\n 7,922 | \n\n
| \n
| \n Leasehold improvements | \n\n
| \n\n
| \n\n 25,196 | \n\n
| \n\n
| \n\n
| \n\n (11,068 | \n\n ) | \n\n
| \n\n
| \n\n 14,128 | \n\n
| \n
| \n Total | \n\n
| \n\n $ | \n\n 141,787 | \n\n
| \n\n
| \n\n $ | \n\n (93,262 | \n\n ) | \n\n
| \n\n $ | \n\n 48,525 | \n\n
| \n
\n
| \n
| \n\n
| \n\n As of December 31, 2016 | \n\n
| \n|||||||||
| \n
| \n\n
| \n\n Cost | \n\n
| \n\n
| \n\n Accumulated Depreciation | \n\n
| \n\n
| \n\n Net | \n\n
| \n|||
| \n Computer software | \n\n
| \n\n $ | \n\n 72,277 | \n\n
| \n\n
| \n\n $ | \n\n (48,680 | \n\n ) | \n\n
| \n\n $ | \n\n 23,597 | \n\n
| \n
| \n Furniture, fixtures and equipment | \n\n
| \n\n
| \n\n 30,974 | \n\n
| \n\n
| \n\n
| \n\n (22,159 | \n\n ) | \n\n
| \n\n
| \n\n 8,815 | \n\n
| \n
| \n Leasehold improvements | \n\n
| \n\n
| \n\n 24,267 | \n\n
| \n\n
| \n\n
| \n\n (9,579 | \n\n ) | \n\n
| \n\n
| \n\n 14,688 | \n\n
| \n
| \n Total | \n\n
| \n\n $ | \n\n 127,518 | \n\n
| \n\n
| \n\n $ | \n\n (80,418 | \n\n ) | \n\n
| \n\n $ | \n\n 47,100 | \n\n
| \n
\n
The Company capitalized internal software development costs of $12.0 million, $8.1 million and $9.8 million during 2017, 2016 and 2015, respectively.
\nThe Company recognized depreciation expense of $13.3 million, $14.4 million and $17.9 million during 2017, 2016 and 2015, respectively.
5. Goodwill and Other Intangible Assets
\nGoodwill is tested for impairment at least annually. See Note 1 for further discussion.
\nGoodwill
\nChanges in the carrying value of goodwill for the years ended December 31, 2017 and 2016 were as follows (in thousands):
\n\n
| \n Balance as of January 1, 2016 | \n\n
| \n\n $ | \n\n 267,008 | \n\n
| \n
| \n Effect of foreign currency translation | \n\n
| \n\n
| \n\n 2 | \n\n
| \n
| \n Balance as of December 31, 2016 | \n\n
| \n\n $ | \n\n 267,010 | \n\n
| \n
| \n Effect of foreign currency translation | \n\n
| \n\n
| \n\n 5 | \n\n
| \n
| \n Balance as of December 31, 2017 | \n\n
| \n\n $ | \n\n 267,015 | \n\n
| \n
\n
Acquisitions represent the original goodwill allocation and final adjustments to purchase price allocations during the measurement period subsequent to the acquisition date. The impact of final purchase price allocation adjustments on the Company’s results of operations and financial position were immaterial.
\nAcquired Intangible Assets
\nAcquired intangible assets that are subject to amortization as of December 31, 2017 and 2016, were as follows (in thousands):
\n\n
| \n
| \n\n
| \n\n As of December 31, 2017 | \n\n
| \n|||||||||
| \n
| \n\n
| \n\n Cost | \n\n
| \n\n
| \n\n Accumulated Amortization | \n\n
| \n\n
| \n\n Net | \n\n
| \n|||
| \n Customer relationships | \n\n
| \n\n $ | \n\n 3,536 | \n\n
| \n\n
| \n\n $ | \n\n (3,136 | \n\n ) | \n\n
| \n\n $ | \n\n 400 | \n\n
| \n
| \n Lead provider and broker relationships | \n\n
| \n\n
| \n\n 5,689 | \n\n
| \n\n
| \n\n
| \n\n (4,089 | \n\n ) | \n\n
| \n\n
| \n\n 1,600 | \n\n
| \n
| \n Trademarks | \n\n
| \n\n
| \n\n 2,595 | \n\n
| \n\n
| \n\n
| \n\n (670 | \n\n ) | \n\n
| \n\n
| \n\n 1,925 | \n\n
| \n
| \n Non-competition agreements | \n\n
| \n\n
| \n\n 800 | \n\n
| \n\n
| \n\n
| \n\n (400 | \n\n ) | \n\n
| \n\n
| \n\n 400 | \n\n
| \n
| \n Total | \n\n
| \n\n $ | \n\n 12,620 | \n\n
| \n\n
| \n\n $ | \n\n (8,295 | \n\n ) | \n\n
| \n\n $ | \n\n 4,325 | \n\n
| \n
\n
| \n
| \n\n
| \n\n As of December 31, 2016 | \n\n
| \n|||||||||
| \n
| \n\n
| \n\n Cost | \n\n
| \n\n
| \n\n Accumulated Amortization | \n\n
| \n\n
| \n\n Net | \n\n
| \n|||
| \n Customer relationships | \n\n
| \n\n $ | \n\n 3,533 | \n\n
| \n\n
| \n\n $ | \n\n (2,973 | \n\n ) | \n\n
| \n\n $ | \n\n 560 | \n\n
| \n
| \n Lead provider and broker relationships | \n\n
| \n\n
| \n\n 5,689 | \n\n
| \n\n
| \n\n
| \n\n (3,449 | \n\n ) | \n\n
| \n\n
| \n\n 2,240 | \n\n
| \n
| \n Trademarks | \n\n
| \n\n
| \n\n 2,590 | \n\n
| \n\n
| \n\n
| \n\n (546 | \n\n ) | \n\n
| \n\n
| \n\n 2,044 | \n\n
| \n
| \n Non-competition agreements | \n\n
| \n\n
| \n\n 800 | \n\n
| \n\n
| \n\n
| \n\n (240 | \n\n ) | \n\n
| \n\n
| \n\n 560 | \n\n
| \n
| \n Total | \n\n
| \n\n $ | \n\n 12,612 | \n\n
| \n\n
| \n\n $ | \n\n (7,208 | \n\n ) | \n\n
| \n\n $ | \n\n 5,404 | \n\n
| \n
\n
Non-competition agreements are amortized over the applicable terms of the contract. Customer, lead provider and broker relationships are generally amortized over three to five years based on the pattern of economic benefits provided. Trademarks are generally amortized over three to 20 years on a straight-line basis.
\nAmortization
\nAmortization expense for acquired intangible assets was $1.1 million, $1.1 million and $0.5 million for the years ended December 31, 2017, 2016 and 2015, respectively.
\nEstimated future amortization expense for the years ended December 31, is as follows (in thousands):
\n\n
| \n Year | \n\n
| \n\n Amount | \n\n
| \n|
| \n 2018 | \n\n
| \n\n $ | \n\n 1,070 | \n\n
| \n
| \n 2019 | \n\n
| \n\n
| \n\n 1,070 | \n\n
| \n
| \n 2020 | \n\n
| \n\n
| \n\n 590 | \n\n
| \n
| \n 2021 | \n\n
| \n\n
| \n\n 110 | \n\n
| \n
| \n 2022 | \n\n
| \n\n
| \n\n 110 | \n\n
| \n
6. Accounts Payable and Accrued Expenses
\nAccounts payable and accrued expenses at December 31, 2017, 2016 were as follows (in thousands):
\n\n
| \n
| \n\n
| \n\n As of December 31, | \n\n
| \n|||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n||
| \n Trade accounts payable | \n\n
| \n\n $ | \n\n 25,579 | \n\n
| \n\n
| \n\n $ | \n\n 25,420 | \n\n
| \n
| \n Accrued payroll and fringe benefits | \n\n
| \n\n
| \n\n 14,877 | \n\n
| \n\n
| \n\n
| \n\n 14,165 | \n\n
| \n
| \n Accrued interest payable | \n\n
| \n\n
| \n\n 11,064 | \n\n
| \n\n
| \n\n
| \n\n 5,043 | \n\n
| \n
| \n Deferred finish out allowance | \n\n
| \n\n
| \n\n 7,979 | \n\n
| \n\n
| \n\n
| \n\n 8,939 | \n\n
| \n
| \n Deferred fees on third-party consumer loans | \n\n
| \n\n
| \n\n 7,074 | \n\n
| \n\n
| \n\n
| \n\n 6,869 | \n\n
| \n
| \n Accrual for consumer loan payments rejected for non-sufficient funds | \n\n
| \n\n
| \n\n 5,096 | \n\n
| \n\n
| \n\n
| \n\n 3,680 | \n\n
| \n
| \n Promissory note | \n\n
| \n\n
| \n\n 3,000 | \n\n
| \n\n
| \n\n
| \n\n 3,000 | \n\n
| \n
| \n Liability for losses on third-party lender owned consumer loans | \n\n
| \n\n
| \n\n 2,258 | \n\n
| \n\n
| \n\n
| \n\n 1,996 | \n\n
| \n
| \n Contingent consideration | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 2,358 | \n\n
| \n
| \n Other accrued liabilities | \n\n
| \n\n
| \n\n 196 | \n\n
| \n\n
| \n\n
| \n\n 201 | \n\n
| \n
| \n Total | \n\n
| \n\n $ | \n\n 77,123 | \n\n
| \n\n
| \n\n $ | \n\n 71,671 | \n\n
| \n
\n
7. Marketing Expenses
\nMarketing expenses for the years ended December 31, 2017, 2016 and 2015 were as follows (in thousands):
\n\n
| \n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n|||||||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n\n
| \n\n 2015 | \n\n
| \n|||
| \n Advertising | \n\n
| \n\n $ | \n\n 64,186 | \n\n
| \n\n
| \n\n $ | \n\n 66,184 | \n\n
| \n\n
| \n\n $ | \n\n 80,526 | \n\n
| \n
| \n Customer procurement expense including lead purchase costs | \n\n
| \n\n
| \n\n 37,224 | \n\n
| \n\n
| \n\n
| \n\n 30,551 | \n\n
| \n\n
| \n\n
| \n\n 29,327 | \n\n
| \n
| \n Customer referral and revenue sharing expense | \n\n
| \n\n
| \n\n 19 | \n\n
| \n\n
| \n\n
| \n\n 669 | \n\n
| \n\n
| \n\n
| \n\n 7,029 | \n\n
| \n
| \n Total | \n\n
| \n\n $ | \n\n 101,429 | \n\n
| \n\n
| \n\n $ | \n\n 97,404 | \n\n
| \n\n
| \n\n $ | \n\n 116,882 | \n\n
| \n
\n
See Note 1 for further discussion.
\n
8. Long-term debt
\nThe Company’s long-term debt instruments and balances outstanding as of December 31, 2017 and 2016 were as follows (in thousands):
\n\n
| \n
| \n\n
| \n\n December 31, | \n\n
| \n|||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n||
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Securitization notes | \n\n
| \n\n $ | \n\n 211,406 | \n\n
| \n\n
| \n\n $ | \n\n 165,419 | \n\n
| \n
| \n 9.75% senior notes due 2021 | \n\n
| \n\n
| \n\n 342,558 | \n\n
| \n\n
| \n\n
| \n\n 495,622 | \n\n
| \n
| \n 8.50% senior notes due 2024 | \n\n
| \n\n
| \n\n 250,000 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Subtotal | \n\n
| \n\n
| \n\n 803,964 | \n\n
| \n\n
| \n\n
| \n\n 661,041 | \n\n
| \n
| \n Less: Long-term debt issuance costs | \n\n
| \n\n
| \n\n (15,422 | \n\n ) | \n\n
| \n\n
| \n\n (11,130 | \n\n ) | \n
| \n Total long-term debt | \n\n
| \n\n $ | \n\n 788,542 | \n\n
| \n\n
| \n\n $ | \n\n 649,911 | \n\n
| \n
\n
8.50% Senior Unsecured Notes Due 2024
\nOn September 1, 2017, the Company issued and sold $250.0 million in aggregate principal amount of 8.50% Senior Notes due 2024 (the “2024 Senior Notes”). The 2024 Senior Notes were sold to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) and outside the United States pursuant to Regulation S under the Securities Act. The 2024 Senior Notes bear interest at a rate of 8.50% annually on the principal amount payable semi-annually in arrears on March 1 and September 1 of each year, beginning on March 1, 2018. The 2024 Senior Notes were sold at a price of 100%. The 2024 Senior Notes will mature on September 1, 2024. The 2024 Senior Notes are unsecured debt obligations of the Company, and are unconditionally guaranteed by certain of its domestic subsidiaries.
\nThe 2024 Senior Notes are redeemable at the Company’s option, in whole or in part, (i) at any time prior to September 1, 2020 at 100% of the aggregate principal amount of 2024 Senior Notes redeemed plus the applicable “make whole” premium specified in the 2024 Senior Notes Indenture, plus accrued and unpaid interest, if any, to the redemption date and (ii) at any time on or after September 1, 2020 at the premium, if any, specified in the 2024 Senior Notes Indenture that will decrease over time, plus accrued and unpaid interest, if any, to the redemption date. In addition, prior to September 1, 2020, at its option, the Company may redeem up to 40% of the aggregate principal amount of the 2024 Senior Notes at a redemption price of 108.5% of the aggregate principal amount of 2024 Senior Notes redeemed, plus accrued and unpaid interest, if any, to the redemption date, with the proceeds of certain equity offerings as described in the 2024 Senior Notes Indenture.
\nThe 2024 Senior Notes and the related guarantees have not been and will not be registered under the Securities Act, or the securities laws of any state or other jurisdiction, and may not be offered or sold in the United States without registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities or blue sky laws and foreign securities laws.
\nThe Company used the net proceeds of the 2024 Senior Notes offering to retire a portion of its outstanding 9.75% senior notes due 2021, to pay the related accrued interest, premiums, fees and expenses associated therewith and for general corporate purposes, which may include working capital and future repurchases of its outstanding debt securities.
\nAs of December 31, 2017, the carrying amount of the 2024 Senior Notes was $242.8 million, which included unamortized issuance costs of $7.2 million. The issuance costs are being amortized to interest expense over a period of seven years, through the maturity date of September 1, 2024. For the year ended December 31, 2017 the total interest expense recognized was $7.4 million of which $0.4 million represented the non-cash amortization of the issuance costs.
\nConsumer Loan Securitization
\n2016-1 Facility
\nOn January 15, 2016, the Company and certain of its subsidiaries entered into a receivables securitization (as amended, the “2016-1 Securitization Facility”) with certain purchasers, Jefferies Funding LLC, as administrative agent (the “Administrative Agent”) and Bankers Trust Company, as indenture trustee and securities intermediary (the “Indenture Trustee”). The 2016-1 Securitization Facility securitizes unsecured consumer installment loans (“Receivables”) that have been, or will be, originated or acquired under the Company’s NetCredit brand and that meet specified eligibility criteria. Under the 2016-1 Securitization Facility, Receivables are sold to EFR 2016-1, LLC, a wholly-owned special purpose subsidiary (the “Issuer”), and serviced by another subsidiary.
\nThe Issuer issued an initial term note of $107.4 million (the “Initial Term Note”), which was secured by $134 million in unsecured consumer loans, and variable funding notes (the “Variable Funding Notes”) with an aggregate availability of $20 million per month; the 2016-1 Securitization Facility has been amended to increase the availability to $40 million until December 31, 2016, and $30 million thereafter, as discussed below. As described below, the Issuer has issued and will subsequently issue term notes (the “Term Notes” and, together with the Initial Term Note and the Variable Funding Notes, the “Securitization Notes”). The maximum principal amount of the Securitization Notes that may be outstanding at any time under the 2016-1 Securitization Facility was limited to $175 million; the 2016-1 Securitization Facility has been amended to increase the maximum principal amount to $275 million, as discussed below.
\nAt the end of each month during the nine-month revolving period, the Receivables funded by the Variable Funding Notes have been and will be refinanced through the creation of two Term Notes, which Term Notes have been and will be issued to the holders of the Variable Funding Notes. The non-recourse Securitization Notes mature at various dates, the latest of which will be October 15, 2020 (the “Final Maturity Date”).
\nThe Securitization Notes are issued pursuant to an indenture, dated as of January 15, 2016 (the “Closing Date”). The Securitization Notes bear interest at an annual rate equal to the one month London Interbank Offered Rate (“LIBOR”) (subject to a floor of 1%) plus 7.75%, which rate is initially 8.75%. In addition, the Issuer paid certain customary upfront closing fees and will pay customary annual commitment and other fees to the purchasers under the 2016-1 Securitization Facility. The Issuer is permitted to voluntarily prepay any outstanding Securitization Notes, subject to an optional redemption premium. Interest and principal payments on outstanding Securitization Notes will be made monthly. Any remaining amounts outstanding will be payable no later than the Final Maturity Date. The Securitization Notes are supported by the expected cash flows from the underlying Receivables. The holders of the Securitization Notes have no recourse to the Company if the cash flows from the underlying Receivables are not sufficient to pay all of the principal and interest on the Securitization Notes. Additionally, the Receivables will be held by the Issuer at least until the obligations under the Securitization Notes are extinguished. For so long as they are held by the Issuer, the outstanding Receivables will not be available to satisfy the debts and other obligations of the Company.
\nAll amounts due under the Securitization Notes are secured by all of the Issuer’s assets, which include the Receivables transferred to the Issuer, related rights under the Receivables, specified bank accounts, and certain other related collateral.
\nThe 2016-1 Securitization Facility documents contain customary provisions for securitizations, including: representations and warranties as to the eligibility of the Receivables and other matters; indemnification for specified losses not including losses due to the inability of consumers to repay their loans; covenants regarding special purpose entity matters and other subjects; and default and termination provisions which provide for the acceleration of the Securitization Notes under the 2016-1 Securitization Facility in circumstances including, but not limited to, failure to make payments when due, servicer defaults, certain insolvency events, breaches of representations, warranties or covenants, failure to maintain the security interest in the receivables, defaults under other material indebtedness and certain regulatory matters.
\nOn July 26, 2016, the Company and certain of its subsidiaries entered into a First Omnibus Amendment (the “First Amendment”) of the 2016-1 Facility that was established on the Closing Date, pursuant to various agreements with certain purchasers, the Administrative Agent and the Indenture Trustee. The agreements evidencing the 2016-1 Facility, all dated as of the Closing Date, include (i) an Indenture between the Issuer and the Indenture Trustee, (ii) a Note Purchase Agreement among the Issuer, NetCredit Loan Services, LLC (f/k/a Enova Lending Services, LLC), as the Master Servicer, the Administrative Agent and certain purchasers, and (iii) a Receivables Purchase Agreement between the Company and Enova Finance 5, LLC. The First Amendment effected a variety of minor technical changes to the Indenture, the Note Purchase Agreement, the Receivables Purchase Agreement and the servicing agreement for the 2016-1 Facility. These changes include revised procedures under the Note Purchase Agreement for the disbursement to the Issuer of proceeds from draws under the Variable Funding Notes and clarification of modifications that the servicer is permitted to effect to the terms of consumer installment loans that have been transferred into the EFR 2016-1 Facility.
\nOn August 17, 2016, the Company and one of its subsidiaries entered into an Amendment to the Receivables Purchase Agreement. This amendment modified an eligibility criterion for receivables that the Company sells under the Agreement.
\nOn September 12, 2016, the Company and certain of its subsidiaries entered into a Second Omnibus Amendment (the “Second Amendment”) to amend the Indenture and Receivables Purchase Agreement. The Second Amendment authorized the Company to include in the 2016-1 Facility receivables originated by a state-chartered bank and acquired by a subsidiary of the Company from that bank, and it adjusted the Investment Pool Cumulative Net Loss Trigger for the Initial Term Note Investment Pool (as such terms are defined in the Indenture), which was the seasoned pool of receivables securitized under the 2016-1 Facility on the Closing Date.
\nOn October 20, 2016, the Company and certain of its subsidiaries entered into a Third Amendment and Limited Waiver (the “Third Amendment”) to amend the Indenture and Receivables Purchase Agreement. The Third Amendment increased the maximum principal amount to $275 million, increased the Variable Funding Notes maximum principal amount to $40 million until December 31, 2016, and $30 million thereafter, and extended the revolving period of the facility to October 2017. The Third Amendment also adjusted the Note Interest Rate on Term Notes issued after, and amounts outstanding under the Variable Funding Notes after, the date of the Third Amendment (as such terms are defined in the Indenture). The weighted average interest rate on such adjusted Notes is 9.5%.
\nOn November 14, 2016, the Company and certain of its subsidiaries entered into a Fourth Amendment (the “Fourth Amendment”) to amend the Indenture and Receivables Purchase Agreement. The Fourth Amendment adjusted the Investment Pool Cumulative Delinquency Trigger (as such term is defined in the Indenture), with an effective date of October 31, 2016.
\nOn December 14, 2016, the Company and certain of its subsidiaries entered into a Fifth Amendment (the “Fifth Amendment”) to amend the Indenture and Receivables Purchase Agreement. The Fifth Amendment adjusted the Investment Pool Cumulative Delinquency Trigger for the Initial Term Notes (as such terms are defined in the Indenture), with an effective date of November 30, 2016, expanded the categories of receivables that could be financed through the securitization facility and made certain other minor changes. These changes provide the Company with additional flexibility under the securitization facility.
\nOn October 20, 2017 (the “Amendment Closing Date”), the Company and certain of its subsidiaries amended and restated the 2016‑1 Securitization Facility (the “Amended Facility”). The counterparties to the Amended Facility included certain purchasers, the Administrative Agent and the Indenture Trustee. The Amended Facility relates to Receivables that have been and will be originated or acquired under the Company’s NetCredit brand by the Originators and that meet specified eligibility criteria. The eligible Receivables that were owned by the Issuer remained in the Amended Facility and the ineligible Receivables were removed. Under the Amended Facility, additional eligible Receivables may be sold to the Issuer and serviced by another subsidiary of the Company. As of the Amendment Closing Date, the Issuer owned eligible Receivables with an outstanding principal balance equal to $226.4 million.
\nIn connection with the amendment and restatement, all of the outstanding notes issued by the Issuer prior to the Amendment Closing Date were redeemed and the Issuer issued an initial term note with an initial principal amount of $181.1 million (the “2017 Initial Term Note”) and variable funding notes (the “2017 Variable Funding Notes”) with an aggregate committed availability of $75 million per quarter with an option to increase the commitment to $90 million with the consent of the holders of the 2017 Variable Funding Notes. As described below, the Issuer will subsequently issue term notes (the “2017 Term Notes” and, together with the 2017 Initial Term Note and the 2017 Variable Funding Notes the “2017 Securitization Notes”) at the end of each calendar quarter. The maximum principal amount of the 2017 Securitization Notes that may be outstanding at any time under the Amended Facility is $275 million.
\nOn each of January 2, 2018, April 2, 2018, July 2, 2018, October 1, 2018, December 31, 2018 and April 1, 2019, the Receivables financed under the 2017 Variable Funding Notes will be allocated to a 2017 Term Note, which 2017 Term Note will be issued to the holders of the 2017 Variable Funding Notes and the 2017 Variable Funding Note on such date will be reduced to zero. The 2017 Securitization Notes are non-recourse to the Company and mature at various dates, the latest of which will be April 15, 2022 (the “2017 Final Maturity Date”).
\nThe 2017 Securitization Notes are issued pursuant to an amended and restated indenture, dated as of the Amendment Closing Date, between the Issuer and the Indenture Trustee. The 2017 Securitization Notes bear interest at a rate per annum equal to One-Month LIBOR (subject to a floor) plus 7.50%. In addition, the Issuer paid certain customary upfront closing fees to the Administrative Agent and will pay customary annual commitment and other fees to the purchasers under the Amended Facility. Subject to certain exceptions, the Issuer is not permitted to prepay or redeem any of the 2017 Securitization Notes prior to April 15, 2019 except for a one-time prepayment of the 2017 Securitization Notes related to a removal of Receivables in an amount no greater than $100 million. Following such date, the Issuer is permitted to voluntarily prepay any of the 2017 Securitization Notes, subject to an optional redemption premium. Interest and principal payments on the 2017 Securitization Notes will be made monthly. Any remaining amounts outstanding will be payable no later than the 2017 Final Maturity Date.
\nAll amounts due under the 2017 Securitization Notes are secured by all of the Issuer’s assets, which include the Receivables transferred to the Issuer, related rights under the Receivables, specified bank accounts and certain other related collateral.
\nThe Amended Facility documents contain customary provisions for securitizations, including: representations and warranties as to the eligibility of the Receivables and other matters; indemnification for specified losses not including losses due to the inability of consumers to repay their loans; covenants regarding special purpose entity matters and other subjects; and default and termination provisions which provide for the acceleration of the 2017 Securitization Notes under the Amended Facility in circumstances including, but not limited to, failure to make payments when due, servicer defaults, certain insolvency events, breaches of representations, warranties or covenants, failure to maintain the security interest in the receivables, and defaults under other material indebtedness.
\nOn October 25, 2017, the Issuer and the Indenture Trustee amended the Amended Facility to permit a holder of a 2017 Term Note or the 2017 Initial Term Note to exchange such notes for notes with an alternative structure with terms not materially different to the Issuer than the exchanged Term Notes or Initial Term Notes.
\nAs of December 31, 2017, the carrying amount of the Amended Facility was $193.0 million, which included unamortized issuance costs of $3.3 million. The issuance costs are being amortized to interest expense over a period of three years. The total interest expense recognized related to the 2016-1 Securitization facility and the Amended Facility was $16.6 million, of which $2.1 million represented the non-cash amortization of the issuance costs, and $13.5 million, of which $3.2 million represented the non-cash amortization of the issuance costs for the years ended December 31, 2017 and 2016, respectively.
\n2016-2 Facility
\nOn December 1, 2016, the Company and certain of its subsidiaries entered into a receivables securitization (the “2016-2 Facility”) with Redpoint Capital Asset Funding, LLC, as lender (the “Lender”). The 2016-2 Facility securitizes unsecured consumer installment loans (“Redpoint Receivables”) that have been and will be originated or acquired under the Company’s NetCredit brand by several of the Company’s subsidiaries (the “Originators”) and that meet specified eligibility criteria, including that the annual percentage rate for each securitized consumer loan is greater than or equal to 90%. The average annual percentage rate for loans securitized under the 2016-2 Facility in 2016 was approximately 135%. Under the 2016-2 Facility, Redpoint Receivables are sold to a wholly-owned special purpose subsidiary of the Company (the “Debtor”) and serviced by another subsidiary of the Company.
\nThe Debtor has issued a revolving note with an initial maximum principal balance of $20.0 million (the “Initial Facility Size”), which is required to be secured by $25.0 million in unsecured consumer loans. The Initial Facility Size may be increased under the 2016-2 Facility to $40 million. The 2016-2 Facility is non-recourse to the Company and matures on December 1, 2019.
\nThe 2016-2 Facility is governed by a loan and security agreement, dated as of December 1, 2016, between the Lender and the Debtor. The 2016-2 Facility bears interest at a rate per annum equal to LIBOR (subject to a floor) plus an applicable margin, which rate per annum is initially 12.50%. In addition, the Debtor paid certain customary upfront closing fees to the Lender. Interest payments on the 2016-2 Facility will be made monthly. Subject to certain exceptions, the Debtor is not permitted to prepay the 2016-2 Facility prior to October 1, 2018. Following such date, the Debtor is permitted to voluntarily prepay the 2016-2 Facility without penalty. Any remaining amounts outstanding will be payable no later than December 1, 2019.
\nAll amounts due under the 2016-2 Facility are secured by all of the Debtor’s assets, which include the Redpoint Receivables transferred to the Debtor, related rights under the Redpoint Receivables, a bank account and certain other related collateral.
\nThe 2016-2 Facility documents contain customary provisions for securitizations, including: representations and warranties as to the eligibility of the Redpoint Receivables and other matters; indemnification for specified losses not including losses due to the inability of consumers to repay their loans; covenants regarding special purpose entity matters; and default and termination provisions which provide for the acceleration of the 2016-2 Facility in circumstances including, but not limited to, failure to make payments when due, servicer defaults, certain insolvency events, breaches of representations, warranties or covenants, failure to maintain the security interest in the receivables and defaults under other material indebtedness of the Debtor.
\nAs of December 31, 2017 and 2016, the carrying amount of the 2016-2 Facility was $15.1 million and $12.1 million, respectively. In connection with the issuance of the 2016-2 Facility, the Company incurred debt issuance costs of approximately $0.2 million. The unamortized balance of these costs as of December 31, 2017 is included in “Other assets” in the consolidated balance sheets. These costs are being amortized to interest expense over a period of 36 months, the term of the 2016-2 Facility. The total interest expense recognized was $1.9 million and $0.1 million for the years ended December 31, 2017 and 2016, respectively.
\nRevolving Credit Facilities
\n2017 Credit Agreement
\nOn June 30, 2017, the Company and certain of its operating subsidiaries entered into a secured revolving credit agreement with a syndicate of banks including TBK Bank, SSB (“TBK”), as Administrative Agent and Collateral Agent, Jefferies Finance LLC and TBK as Joint Lead Arrangers and Joint Lead Bookrunners, and Green Bank, N.A., as Lender (the “2017 Credit Agreement”).
\nThe 2017 Credit Agreement is secured by domestic receivables and replaced the 2014 Credit Agreement (as described below). The borrowing limit in the 2017 Credit Agreement increased to $40 million from $35 million in the 2014 Credit Agreement, and its maturity date is May 1, 2020. The Company had no borrowings outstanding under the 2017 Credit Agreement as of December 31, 2017.
\nThe 2017 Credit Agreement provides for a revolving credit line with interest on borrowings under the facility at prime rate plus 1.00%. In addition, the 2017 Credit Agreement provides for payment of a commitment fee calculated with respect to the unused portion of the line, and ranges from 0.30% per annum to 0.50% per annum depending on usage. A portion of the revolving credit facility, up to a maximum of $20 million, is available for the issuance of letters of credit. The Company had outstanding letters of credit under the 2017 Credit Agreement of $8.0 million as of December 31, 2017. The 2017 Credit Agreement provides for certain prepayment penalties if it is terminated on or before its first and second anniversary date, subject to certain exceptions.
\nThe 2017 Credit Agreement contains certain limitations on the incurrence of additional indebtedness, investments, the attachment of liens to the Company’s property, the amount of dividends and other distributions, fundamental changes to the Company or its business and certain other activities of the Company. The 2017 Credit Agreement contains standard financial covenants for a facility of this type based on a leverage ratio and a fixed charge coverage ratio. The 2017 Credit Agreement also provides for customary affirmative covenants, including financial reporting requirements, and certain events of default, including payment defaults, covenant defaults and other customary defaults.
\nIn connection with the issuance of the 2017 Credit Agreement, as amended, the Company incurred debt issuance costs of approximately $2.2 million, which primarily consisted of underwriting fees and legal expenses. The unamortized balance of these costs as of December 31, 2017 is included in “Other assets” in the consolidated balance sheets. These costs are being amortized to interest expense over a period of 34 months, the term of the 2017 Credit Agreement.
\n2014 Credit Agreement
\nOn May 14, 2014, the Company and its domestic subsidiaries as guarantors entered into a credit agreement among the Company, the guarantors, Jefferies Finance LLC as administrative agent and Jefferies Group LLC as lender (the “2014 Credit Agreement”). The 2014 Credit Agreement provided for an unsecured revolving credit facility of up to $75.0 million, including a multi-currency sub-facility that gives the Company the ability to borrow up to $25.0 million that may be specified in foreign currencies subject to the terms and conditions of the 2014 Credit Agreement. On March 25, 2015, an amendment to the 2014 Credit Agreement reduced the Company’s unsecured revolving line of credit to $65.0 million (from $75.0 million) and increased an additional senior secured indebtedness basket to the greater of $20.0 million or 2.75% of consolidated total assets (as defined in the credit agreement) (from $15.0 million or 2% of consolidated total assets). In addition, the March 25, 2015 amendment revised certain definitions and provisions relating to limitations on indebtedness, investments, dispositions, fundamental changes and burdensome agreements to allow certain of the Company’s foreign subsidiaries, which opt to become guarantors of its obligations under the credit agreement, to be treated as domestic subsidiaries for purposes of those provisions. On November 5, 2015 the Company and certain of its domestic subsidiaries, as guarantors, entered into an amendment to the 2014 Credit Agreement, which further reduced the Company’s unsecured revolving line of credit to $60.0 million (from $65.0 million) and increased the maximum allowable leverage ratio as defined in the 2014 Credit Agreement to 3.75 to 1.00 (from 3.00 to 1.00) solely for the fiscal quarters ending December 31, 2015 and March 31, 2016. In addition, the November 5, 2015 amendment (i) revised certain definitions and provisions to clarify the treatment of securitization subsidiaries as defined in the credit, and (ii) clarified the treatment of operating leases under the credit agreement in light of contemplated changes to accounting treatment concerning such operating leases.
\nOn December 29, 2015, the Company and certain of its domestic subsidiaries, as guarantors, entered into an amendment to the 2014 Credit Agreement, which temporarily increased the Company’s revolving line of credit to $75 million, an increase of $15.0 million ($5.0 million on December 29, 2015 and $10.0 million on January 4, 2016). Once the Company received the proceeds from the consumer loan securitization financing in January 2016, it repaid the outstanding balance on the revolving line of credit in full and, in accordance with the terms of the amendment, the revolving commitment amount was reduced to $40.0 million.
\nOn June 30, 2016, the Company and certain of its domestic subsidiaries, as guarantors, entered into a fourth amendment to the 2014 Credit Agreement, which increased the maximum allowable leverage ratio (as defined in the credit agreement) for the fiscal quarter ended June 30, 2016 to 4.00 to 1.00 (from 3.00 to 1.00) and for the fiscal quarters ended September 30, 2016 and December 31, 2016 to 3.50 to 1.00 (in each case, from 3.00 to 1.00).
\nOn September 30, 2016, the Company and certain of its domestic subsidiaries, as guarantors, entered into a fifth amendment to the 2014 Credit Agreement, which increased the maximum allowable leverage ratio (as defined in the credit agreement) for the fiscal quarters ended September 30, 2016 and thereafter to 4.25 to 1.00 (from 3.50 to 1.00) and decreased the Company’s unsecured revolving line of credit by $5.0 million from $40.0 million to $35.0 million.
\nInterest on the amounts borrowed was charged, at the Company’s option, at either LIBOR for one week or one-, two-, three- or six-month periods, as selected by the Company, plus a margin varying from 2.50% to 3.75% or at the agent’s base rate plus a margin varying from 1.50% to 2.75%. The margin for the borrowings under the 2014 Credit Agreement was dependent on the Company’s cash flow leverage ratios. The weighted average interest rate (including margin) on the revolving line of credit was 4.18% at December 31, 2016. The Company was also required to pay a fee on the unused portion of the line of credit ranging from 0.25% to 0.50% (0.50% as of December 31, 2016) based on the Company’s cash flow leverage ratios. The 2014 Credit Agreement matured on June 30, 2017. The Company had no outstanding borrowings under the 2014 Credit Agreement as of December 31, 2016.
\nThe 2014 Credit Agreement also included a sub-limit of up to $20.0 million for standby or commercial letters of credit that was guaranteed by the Company’s domestic subsidiaries. In the event that an amount was paid by the issuing bank under a letter of credit, it was due and payable by the Company on demand. Pursuant to the terms of the 2014 Credit Agreement, the Company agreed to pay fees equal to the LIBOR margin per annum on the undrawn amount of each outstanding standby letter of credit plus a one-time commercial letter of credit fee of 0.20% of the face amount of each commercial letter of credit plus 0.25% per annum on the average daily amount of the total letter of credit exposure. The Company had outstanding letters of credit of $6.6 million under its 2014 Credit Agreement as of December 31, 2016.
\nIn connection with the issuance of the 2014 Credit Agreement, the Company incurred debt issuance costs of approximately $1.6 million, which primarily consisted of underwriting fees and legal expenses. The unamortized balance of these costs were included in “Other assets” in the consolidated balance sheets. These costs were amortized to interest expense over a period of 37 months, the term of the 2014 Credit Agreement.
\n$500.0 Million 9.75% Senior Unsecured Notes
\nOn May 30, 2014, the Company issued and sold $500.0 million in aggregate principal amount of 9.75% Senior Notes due 2021 (the “2021 Senior Notes”). The 2021 Senior Notes bear interest at a rate of 9.75% annually on the principal amount payable semi-annually in arrears on June 1 and December 1 of each year, beginning on December 1, 2014. The 2021 Senior Notes were sold at a discount of the principal amount to yield 10.0% to maturity and will mature on June 1, 2021. The 2021 Senior Notes are unsecured debt obligations of the Company, and are unconditionally guaranteed by all of the Company’s domestic subsidiaries, except for designated securitization subsidiaries. The 2021 Senior Notes were sold to qualified institutional buyers in accordance with Rule 144A under the Securities Act, and outside the United States pursuant to Regulation S under the Securities Act. As required by a registration rights agreement that the Company entered into with the initial purchaser when the 2021 Senior Notes were issued, the Company completed an exchange offer in April 2015. All of the unregistered 2021 Senior Notes have been exchanged for identical new notes registered under the Securities Act.
\nThe 2021 Senior Notes are governed by an indenture (the “2021 Senior Notes Indenture”), dated May 30, 2014, between the Company, the Company’s domestic subsidiaries, as guarantors, and the trustee. The 2021 Senior Notes Indenture contains certain covenants that, among other things, limit the Company’s, and certain of its subsidiaries’, ability to incur additional debt, acquire or create new subsidiaries, create liens, engage in certain transactions with affiliates and consolidate or merge with or into other companies. The 2021 Senior Notes Indenture provides for customary events of default, including non-payment and failure to comply with covenants or other agreements in the 2021 Senior Notes Indenture.
\nThe 2021 Senior Notes are redeemable at the Company’s option, in whole or in part, (i) at any time prior to June 1, 2017 at 100% of the aggregate principal amount of 2021 Senior Notes redeemed plus the applicable “make whole” redemption price specified in the 2021 Senior Notes Indenture, plus accrued and unpaid interest, if any, to the redemption date and (ii) at any time on or after June 1, 2017 at a premium specified in the 2021 Senior Notes Indenture that will decrease over time, plus accrued and unpaid interest, if any, to the redemption date. In addition, prior to June 1, 2017, at its option, the Company may redeem up to 35% of the aggregate principal amount of the 2021 Senior Notes at a redemption price equal to 109.75% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date, with the proceeds of certain equity offerings as described in the 2021 Senior Notes Indenture. If a change of control occurs, as that term is defined in the 2021 Senior Notes Indenture, the holders of the 2021 Senior Notes will have the right, subject to certain conditions, to require the Company to repurchase their 2021 Senior Notes at a purchase price equal to 101% of the aggregate principal amount, plus accrued and unpaid interest, if any, as of the date of repurchase. The Spin-off did not constitute a change of control under the 2021 Senior Notes Indenture.
\nThe Company used all of the net proceeds of the 2021 Senior Notes offering, or $479.0 million, to repay all of its intercompany indebtedness due to Cash America, which was $361.4 million as of May 30, 2014, and the remaining net proceeds were used to pay a significant portion of the $122.4 million in cash dividends to Cash America.
\nDuring the year ended December 31, 2017 the Company repurchased $155.0 million principal amount of the 2021 Senior Notes for aggregate cash consideration of $166.3 million plus accrued interest. In connection with these purchases, the Company recorded a loss on extinguishment of debt of approximately $14.9 million ($9.2 million net of tax), which is included in “Loss on early extinguishment of debt” in the consolidated statements of income.
\nAs of December 31, 2017 and 2016, the carrying amount of the 2021 Senior Notes was $337.6 million and $486.4 million, respectively, which included an unamortized discount of $2.4 million and $4.4 million, respectively and unamortized issuance costs of $4.9 million and $9.3 million, respectively. The discount and issuance costs are being amortized to interest expense over a period of seven years, through the maturity date of June 1, 2021. For the years ended December 31, 2017 and 2016 the total interest expense recognized was $46.9 million, of which $0.8 million represented the non-cash amortization of the discount and $1.9 million represented the non-cash amortization of the issuance costs, and $51.6 million of which $0.7 million represented the non-cash amortization of the discount and $2.1 million represented the non-cash amortization of the issuance costs, respectively.
\nWeighted-average interest rates on long-term debt were 10.63% and 10.71% during 2017 and 2016, respectively.
\nAs of December 31, 2017 and 2016, the Company was in compliance with all covenants and other requirements set forth in the prevailing long-term debt agreements.
\nAs of December 31, 2017, required principal payments under the terms of the long-term debt for each of the five years after December 31, 2017 are as follows (in thousands):
\n\n
| \n Year | \n\n
| \n\n Amount | \n\n
| \n\n
| \n\n
| \n\n
| \n|
| \n 2018 | \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n 2019 | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n 2020 | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n 2021 | \n\n
| \n\n
| \n\n 345,000 | \n\n
| \n\n
| \n\n (1 | \n\n ) | \n
| \n 2022 | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Thereafter | \n\n
| \n\n
| \n\n 250,000 | \n\n
| \n\n
| \n\n (2 | \n\n ) | \n
| \n Securitization | \n\n
| \n\n
| \n\n 211,406 | \n\n
| \n\n
| \n\n (3 | \n\n ) | \n
| \n Total | \n\n
| \n\n $ | \n\n 806,406 | \n\n
| \n\n
| \n\n
| \n\n
| \n
\n
\n
(1) The $345.0 million 9.75% Senior Unsecured Notes mature June 1, 2021.
\n(2) The $250.0 million 8.50% Senior Unsecured Notes mature September 1, 2024
\n| \n (3) | \n\n The 2016-1 Securitization Facility matures at various dates, the latest of which will be April 15, 2021, and the 2016-2 Facility matures on December 1, 2019. |
9. Income Taxes
\nThe components of the Company’s deferred tax assets and liabilities as of December 31, 2017 and 2016 were as follows (in thousands):
\n\n
| \n
| \n\n
| \n\n As of December 31, | \n\n
| \n|||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n||
| \n Deferred tax assets: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Loans and finance receivables, net | \n\n
| \n\n $ | \n\n 27,444 | \n\n
| \n\n
| \n\n $ | \n\n 38,275 | \n\n
| \n
| \n Compensation and benefits | \n\n
| \n\n
| \n\n 4,423 | \n\n
| \n\n
| \n\n
| \n\n 7,397 | \n\n
| \n
| \n Translation adjustments | \n\n
| \n\n
| \n\n 2,531 | \n\n
| \n\n
| \n\n
| \n\n 6,726 | \n\n
| \n
| \n Accrued rent and deferred finish out allowance | \n\n
| \n\n
| \n\n 2,786 | \n\n
| \n\n
| \n\n
| \n\n 4,372 | \n\n
| \n
| \n Foreign net operating loss carryforward | \n\n
| \n\n
| \n\n 2,164 | \n\n
| \n\n
| \n\n
| \n\n 1,449 | \n\n
| \n
| \n Other | \n\n
| \n\n
| \n\n 1,441 | \n\n
| \n\n
| \n\n
| \n\n 1,960 | \n\n
| \n
| \n Total deferred tax assets | \n\n
| \n\n $ | \n\n 40,789 | \n\n
| \n\n
| \n\n $ | \n\n 60,179 | \n\n
| \n
| \n Deferred tax liabilities: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Amortizable intangible assets | \n\n
| \n\n $ | \n\n 42,334 | \n\n
| \n\n
| \n\n $ | \n\n 60,762 | \n\n
| \n
| \n Property and equipment | \n\n
| \n\n
| \n\n 7,760 | \n\n
| \n\n
| \n\n
| \n\n 11,443 | \n\n
| \n
| \n Other | \n\n
| \n\n
| \n\n 153 | \n\n
| \n\n
| \n\n
| \n\n 483 | \n\n
| \n
| \n Total deferred tax liabilities | \n\n
| \n\n $ | \n\n 50,247 | \n\n
| \n\n
| \n\n $ | \n\n 72,688 | \n\n
| \n
| \n Net deferred tax liabilities before valuation allowance | \n\n
| \n\n $ | \n\n (9,458 | \n\n ) | \n\n
| \n\n $ | \n\n (12,509 | \n\n ) | \n
| \n Valuation allowance | \n\n
| \n\n
| \n\n (2,650 | \n\n ) | \n\n
| \n\n
| \n\n (1,807 | \n\n ) | \n
| \n Net deferred tax liabilities | \n\n
| \n\n $ | \n\n (12,108 | \n\n ) | \n\n
| \n\n $ | \n\n (14,316 | \n\n ) | \n
\n
The components of the provision for income taxes and the income to which it relates for the years ended December 31, 2017, 2016 and 2015 are shown below (in thousands):
\n\n
| \n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n|||||||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n\n
| \n\n 2015 | \n\n
| \n|||
| \n Income before income taxes: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Domestic | \n\n
| \n\n $ | \n\n 37,900 | \n\n
| \n\n
| \n\n $ | \n\n 57,422 | \n\n
| \n\n
| \n\n $ | \n\n 70,519 | \n\n
| \n
| \n International | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 14 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Income before income taxes | \n\n
| \n\n $ | \n\n 37,900 | \n\n
| \n\n
| \n\n $ | \n\n 57,436 | \n\n
| \n\n
| \n\n $ | \n\n 70,519 | \n\n
| \n
| \n Current provision (benefit): | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Federal | \n\n
| \n\n $ | \n\n 11,366 | \n\n
| \n\n
| \n\n $ | \n\n 22,656 | \n\n
| \n\n
| \n\n $ | \n\n 25,601 | \n\n
| \n
| \n International | \n\n
| \n\n
| \n\n (3 | \n\n ) | \n\n
| \n\n
| \n\n 94 | \n\n
| \n\n
| \n\n
| \n\n 114 | \n\n
| \n
| \n State and local | \n\n
| \n\n
| \n\n 2,045 | \n\n
| \n\n
| \n\n
| \n\n 2,347 | \n\n
| \n\n
| \n\n
| \n\n 2,211 | \n\n
| \n
| \n Total current provision for income taxes | \n\n
| \n\n $ | \n\n 13,408 | \n\n
| \n\n
| \n\n $ | \n\n 25,097 | \n\n
| \n\n
| \n\n $ | \n\n 27,926 | \n\n
| \n
| \n Deferred benefit: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Federal | \n\n
| \n\n $ | \n\n (4,461 | \n\n ) | \n\n
| \n\n $ | \n\n (2,152 | \n\n ) | \n\n
| \n\n $ | \n\n (1,360 | \n\n ) | \n
| \n International | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n State and local | \n\n
| \n\n
| \n\n (287 | \n\n ) | \n\n
| \n\n
| \n\n (111 | \n\n ) | \n\n
| \n\n
| \n\n (39 | \n\n ) | \n
| \n Total deferred benefit for income taxes | \n\n
| \n\n $ | \n\n (4,748 | \n\n ) | \n\n
| \n\n $ | \n\n (2,263 | \n\n ) | \n\n
| \n\n $ | \n\n (1,399 | \n\n ) | \n
| \n Total provision for income taxes | \n\n
| \n\n $ | \n\n 8,660 | \n\n
| \n\n
| \n\n $ | \n\n 22,834 | \n\n
| \n\n
| \n\n $ | \n\n 26,527 | \n\n
| \n
\n
\n
The effective tax rate on income differs from the federal statutory rate of 35% for the following reasons (dollars in thousands):
\n\n
| \n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n|||||||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n\n
| \n\n 2015 | \n\n
| \n|||
| \n Tax provision computed at the federal statutory income tax rate | \n\n
| \n\n $ | \n\n 13,265 | \n\n
| \n\n
| \n\n $ | \n\n 20,103 | \n\n
| \n\n
| \n\n $ | \n\n 24,682 | \n\n
| \n
| \n Deferred tax impact of tax reform | \n\n
| \n\n
| \n\n (7,491 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n State and local income taxes, net of federal tax benefits | \n\n
| \n\n
| \n\n 1,440 | \n\n
| \n\n
| \n\n
| \n\n 1,401 | \n\n
| \n\n
| \n\n
| \n\n 1,408 | \n\n
| \n
| \n Share based compensation | \n\n
| \n\n
| \n\n (1,005 | \n\n ) | \n\n
| \n\n
| \n\n 1,656 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Foreign exchange gain | \n\n
| \n\n
| \n\n 724 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Other | \n\n
| \n\n
| \n\n 1,727 | \n\n
| \n\n
| \n\n
| \n\n (326 | \n\n ) | \n\n
| \n\n
| \n\n 437 | \n\n
| \n
| \n Total provision | \n\n
| \n\n $ | \n\n 8,660 | \n\n
| \n\n
| \n\n $ | \n\n 22,834 | \n\n
| \n\n
| \n\n $ | \n\n 26,527 | \n\n
| \n
| \n Effective tax rate | \n\n
| \n\n
| \n\n 22.9 | \n\n % | \n\n
| \n\n
| \n\n 39.8 | \n\n % | \n\n
| \n\n
| \n\n 37.6 | \n\n % | \n
\n
On December 22, 2017, the Tax Cuts and Jobs Acts was enacted into law. The new tax legislation contains several key tax provisions including the reduction of the corporate income tax rate to 21% effective January 1, 2018 as well as a variety of other changes including the acceleration of expensing of certain business assets and reductions in the amount of executive pay that could qualify as a tax deduction. The Company has recorded an estimated net tax benefit of $7.5 million from the remeasurement of deferred tax assets and liabilities at lower enacted corporate tax rates. ASC 740 requires the Company to recognize the effect of the tax law changes in the period of enactment. Adjustments to deferred tax expense could arise when deferred taxes are trued-up to the amounts reported on the tax returns through the return-to-provision process. In addition, the legislation is unclear in many respects and could be subject to potential amendments and technical corrections, as well as interpretations and implementing regulations by the Treasury and Internal Revenue Service (“IRS”), any of which could affect the estimates included in the provision. In addition, it is unclear how these U.S. federal income tax changes will affect state and local taxation, which often uses federal taxable income as a starting point for computing state and local tax liabilities. If any adjustment is required, it will be reflected as an additional expense or benefit in the 2018 financial statements, as allowed by SEC Staff Accounting Bulletin No. 118.
\nThe Company has gross foreign net operating loss carryforwards from Brazilian operations of $10.7 million as of December 31, 2017, $4.3 million as of December 31, 2016, and $2.8 million as of December 31, 2015. These net operating loss carryforwards are subject to annual limitations and have an unlimited carryforward period. The Company has recorded a full valuation allowance related to the foreign net operating loss carryforwards, as well as other foreign deferred tax assets, as they are not more likely than not to be utilized.
\nThe following table summarizes the valuation account activity for the years ended December 31, 2017, 2016 and 2015 (in thousands):
\n\n
| \n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n|||||||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n\n
| \n\n 2015 | \n\n
| \n|||
| \n Balance at beginning of period | \n\n
| \n\n $ | \n\n 1,807 | \n\n
| \n\n
| \n\n $ | \n\n 1,220 | \n\n
| \n\n
| \n\n $ | \n\n 670 | \n\n
| \n
| \n Additions | \n\n
| \n\n
| \n\n 843 | \n\n
| \n\n
| \n\n
| \n\n 587 | \n\n
| \n\n
| \n\n
| \n\n 550 | \n\n
| \n
| \n Deductions | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Balance at end of period | \n\n
| \n\n $ | \n\n 2,650 | \n\n
| \n\n
| \n\n $ | \n\n 1,807 | \n\n
| \n\n
| \n\n $ | \n\n 1,220 | \n\n
| \n
\n
A reconciliation of the activity related to unrecognized tax benefits follows for the fiscal years indicated (in thousands):
\n\n
| \n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n|||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n||
| \n Balance at beginning of period | \n\n
| \n\n $ | \n\n 351 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n
| \n Additions based on tax positions related to the current year | \n\n
| \n\n
| \n\n 229 | \n\n
| \n\n
| \n\n
| \n\n 118 | \n\n
| \n
| \n Additions for tax positions of prior years | \n\n
| \n\n
| \n\n 147 | \n\n
| \n\n
| \n\n
| \n\n 233 | \n\n
| \n
| \n Balance at end of period | \n\n
| \n\n $ | \n\n 727 | \n\n
| \n\n
| \n\n $ | \n\n 351 | \n\n
| \n
\n
The Company does not believe it is reasonably possible that, within the next twelve months, unrecognized domestic tax benefits will change by a significant amount. The Company recorded no expense for interest and penalties related to tax matters as of December 31, 2017.
\nThe Company’s U.S. tax returns are subject to examination by federal and state taxing authorities. The IRS audits for tax years 2011 through 2014 were concluded with no adjustments to the financial statements. The 2015 and 2016 tax years are open to examination by the IRS. The years open to examination by state, local, and foreign government authorities vary by jurisdiction, but the statute of limitation is generally three years from the date the tax return is filed.
\n
10. Commitments and Contingencies
\nLeases
\nThe Company leases its headquarters in Chicago, Illinois, a call center facility in Gurnee, Illinois, and office space in Blue Ash, Ohio and London, United Kingdom under operating leases with remaining terms ranging from two to ten years with certain rights to extend for additional periods. The operating expenses and real estate taxes are not included in the table below. Future minimum rentals due under non-cancelable leases as of December 31, 2017 are as follows for each of the years ending December 31 (in thousands):
\n\n
| \n Year | \n\n
| \n\n Amount | \n\n
| \n|
| \n 2018 | \n\n
| \n\n $ | \n\n 6,020 | \n\n
| \n
| \n 2019 | \n\n
| \n\n
| \n\n 6,875 | \n\n
| \n
| \n 2020 | \n\n
| \n\n
| \n\n 6,719 | \n\n
| \n
| \n 2021 | \n\n
| \n\n
| \n\n 6,922 | \n\n
| \n
| \n 2022 | \n\n
| \n\n
| \n\n 6,970 | \n\n
| \n
| \n Thereafter | \n\n
| \n\n
| \n\n 30,378 | \n\n
| \n
| \n Total | \n\n
| \n\n $ | \n\n 63,884 | \n\n
| \n
\n
Rent expense was $5.2 million, $5.8 million and $6.8 million for the years ended December 31, 2017, 2016 or 2015, respectively.
\nHeadquarters Relocation
\nThe Company provided notice in the second quarter of 2014 to the landlord at 200 W. Jackson Boulevard in Chicago, Illinois that it was accelerating the lease expiration date for approximately 86,000 rentable square feet effective June 30, 2015. In July 2014, the Company entered into a lease agreement for its current headquarters office space at 175 W. Jackson Boulevard in Chicago as part of its plans to relocate from its former headquarters. In the second quarter of 2015, the Company ceased using the 200 W. Jackson location and, as a result, recognized additional expense of $3.7 million for the year ended December 31, 2015, which was included as “General and administrative expense” and consisted of a lease exit liability of $2.9 million for the remaining lease payments, net of estimated sublease income of $1.7 million, and $0.8 million for the removal of property and restoration costs related to the 200 W. Jackson lease. The Company did not incur further material costs related to the relocation.
\nThe following table is a summary of the exit and disposal activity and liability balances as a result of the headquarters relocation (in thousands):
\n\n
| \n
| \n\n
| \n\n Lease Termination Costs | \n\n
| \n\n
| \n\n Other Exit Costs | \n\n
| \n\n
| \n\n Total | \n\n
| \n|||
| \n Balance at January 1, 2016 | \n\n
| \n\n $ | \n\n 1,425 | \n\n
| \n\n
| \n\n $ | \n\n 204 | \n\n
| \n\n
| \n\n $ | \n\n 1,629 | \n\n
| \n
| \n Payments | \n\n
| \n\n
| \n\n (1,132 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (1,132 | \n\n ) | \n
| \n Adjustments | \n\n
| \n\n
| \n\n 344 | \n\n
| \n\n
| \n\n
| \n\n (69 | \n\n ) | \n\n
| \n\n
| \n\n 275 | \n\n
| \n
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Balance at December 31, 2016 | \n\n
| \n\n $ | \n\n 637 | \n\n
| \n\n
| \n\n $ | \n\n 135 | \n\n
| \n\n
| \n\n $ | \n\n 772 | \n\n
| \n
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Balance at January 1, 2017 | \n\n
| \n\n $ | \n\n 637 | \n\n
| \n\n
| \n\n $ | \n\n 135 | \n\n
| \n\n
| \n\n $ | \n\n 772 | \n\n
| \n
| \n Payments | \n\n
| \n\n
| \n\n (554 | \n\n ) | \n\n
| \n\n
| \n\n (9 | \n\n ) | \n\n
| \n\n
| \n\n (563 | \n\n ) | \n
| \n Adjustments | \n\n
| \n\n
| \n\n (83 | \n\n ) | \n\n
| \n\n
| \n\n (126 | \n\n ) | \n\n
| \n\n
| \n\n (209 | \n\n ) | \n
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Balance at December 31, 2017 | \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n
Guarantees of Consumer Loans
\nIn connection with its CSO programs, the Company guarantees consumer loan payment obligations to unrelated third-party lenders for short-term and installment loans and is required to purchase any defaulted loans it has guaranteed. As of December 31, 2017 and 2016, the amount of consumer loans guaranteed by the Company was $34.1 million and $32.2 million, respectively, representing amounts due under consumer loans originated by third-party lenders under the CSO programs. The estimated fair value of the liability for estimated losses on consumer loans guaranteed by the Company of $2.3 million and $2.0 million, as of December 31, 2017 and 2016, respectively, is included in “Accounts payable and accrued expenses” in the accompanying consolidated balance sheets.
\nLitigation
\nOn March 8, 2013, Flemming Kristensen, on behalf of himself and others similarly situated, filed a purported class action lawsuit in the U.S. District Court of Nevada against the Company and other unaffiliated lenders and lead providers. The lawsuit alleges that the lead provider defendants sent unauthorized text messages to consumers on behalf of the Company and the other lender defendants in violation of the Telephone Consumer Protection Act. The complaint seeks class certification, statutory damages, an injunction against “wireless spam activities,” and attorneys’ fees and costs. The Company filed an answer to the complaint denying all liability. On March 26, 2014, the Court granted class certification. On July 20, 2015, the court granted the Company’s motion for summary judgment, denied Plaintiff’s motion for summary judgment and, on July 21, 2015, entered judgment in favor of the Company. Plaintiff filed a motion for reconsideration, which was denied. On May 3, 2016, Plaintiff filed a notice of appeal of the order granting summary judgment for the Company, the judgment in favor of the company, and the order denying Plaintiff’s motion to reconsider. On January 10, 2018, the Ninth Circuit filed an opinion affirming the district court's entry of summary judgment for us and the other defendants. The plaintiff has 90 days from the date of the opinion (until April 10, 2018) to petition the United States Supreme Court to review the matter. Neither the likelihood of an unfavorable appellate decision nor the ultimate liability, if any, with respect to this matter can be determined at this time, and the Company is currently unable to estimate a range of reasonably possible losses, as defined by ASC 450-20-20, Contingencies–Loss Contingencies–Glossary, for this litigation. The Company believes that the Plaintiff’s claims in the complaint are without merit and intends to vigorously defend this lawsuit.
\nThe Company is also a defendant in certain routine litigation matters encountered in the ordinary course of its business. Certain of these matters may be covered to an extent by insurance. In the opinion of management, the resolution of these matters will not have a material adverse effect on the Company’s financial position, results of operations or liquidity.
\n
11. Employee Benefit Plans
\nThe Company sponsors the Enova International, Inc. 401(k) Savings Plan (the “401(k) Plan”), which is open to all U.S. employees of the Company and its subsidiaries. New employees are automatically enrolled in this plan unless they elect not to participate. Prior to January 1, 2015, the Company made matching cash contributions of 50% of each participant’s contributions, based on participant contributions of up to 5% of compensation. Effective January 1, 2015, the Company makes matching contributions of 100% of the first 1% of pay and 50% of the next 5% of pay that each employee contributes to the 401(k) Plan. Company contributions made prior to January 1, 2015 vest at the rate of 20% each year after one year of service; thus a participant is 100% vested after five years of service. The Company’s matching contributions subsequent to January 1, 2015 fully vest after a participant’s second year of service with the Company. The Company also offers the Enova International, Inc. Nonqualified Savings Plan (the “NQSP”) for certain members of Company management. The Company’s consolidated contributions to the 401(k) Plan and the NQSP were $1.9 million, $2.2 million and $1.4 million for the years ended December 31, 2017, 2016 and 2015, respectively.
\nThe Company sponsors the Enova International, Inc. Supplemental Executive Retirement Plan (“SERP”) in which certain officers and certain other employees of the Company participate. Under this defined contribution plan, the Company makes an annual supplemental cash contribution to the SERP based on the objectives of the plan as approved by the Company’s Management Development and Compensation Committee of the Board of Directors. The Company recorded compensation expense of $0.5 million, $0.2 million and $0.4 million for SERP contributions for the years ended December 31, 2017, 2016 and 2015, respectively.
\nThe NQSP and the SERP are non-qualified deferred compensation plans. Benefits under the NQSP and the SERP are unfunded. As of December 31, 2017, 2016 and 2015, the Company held securities in rabbi trusts to pay benefits under these plans. These securities are classified as trading securities, and the unrealized gains and losses on these securities are netted with the costs of the plans in “General and administrative expenses” in the consolidated statements of income.
\nAmounts included in the consolidated balance sheets relating to the NQSP and the SERP were as follows (in thousands):
\n\n
| \n
| \n\n
| \n\n As of December 31, | \n\n
| \n|||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n||
| \n Prepaid expenses and other assets | \n\n
| \n\n $ | \n\n 1,460 | \n\n
| \n\n
| \n\n $ | \n\n 1,590 | \n\n
| \n
| \n Accounts payable and accrued expenses | \n\n
| \n\n $ | \n\n 1,993 | \n\n
| \n\n
| \n\n $ | \n\n 1,860 | \n\n
| \n
12. Stock-Based Compensation
\nEnova Awards
\nUnder the Enova International, Inc. 2014 First Amended and Restated Long-Term Incentive Plan (the “Enova LTIP”), the Company is authorized to issue 8,000,000 shares of Common Stock pursuant to “Awards” granted as incentive stock options (intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended), nonqualified stock options, restricted stock units (“RSUs”), restricted stock, performance shares, stock appreciation rights or other stock-based awards. Since 2014, nonqualified stock options and RSU awards are the only stock-based awards granted under the Plan. As of December 31, 2017, there were 2,924,099 shares available for future grants under the Enova LTIP.
\nDuring the year ended December 31, 2017, the Company received 102,253 shares of its common stock valued at approximately $1.5 million as partial payment of taxes required to be withheld upon issuance of shares under RSUs.
\nRestricted Stock Units
\nDuring the years ended December 31, 2017, 2016 and 2015, the Company granted RSUs to Company officers, certain employees and to the non-management members of the Board of Directors under the Enova LTIP. Each vested RSU entitles the holder to receive a share of the common stock of the Company. For Company officers and certain employees, the shares are to be issued upon vesting of the RSUs generally over a period of three or four years. Shares for vested RSU awards granted to members of the Board of Directors are issued twelve months after the grant date.
\nIn accordance with ASC 718, the grant date fair value of RSUs is generally based on the Company’s closing stock price on the day before the grant date and is amortized to expense over the vesting periods. The agreements relating to awards provide that the vesting and payment of awards would be accelerated if there is a change in control of the Company.
\nThe following table summarizes the Company’s restricted stock unit activity during 2017, 2016 and 2015:
\n\n
| \n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n|||||||||||||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n\n
| \n\n 2015 | \n\n
| \n|||||||||||||||
| \n
| \n\n
| \n\n Units | \n\n
| \n\n
| \n\n Weighted Average Fair Value at Date of Grant | \n\n
| \n\n
| \n\n Units | \n\n
| \n\n
| \n\n Weighted Average Fair Value at Date of Grant | \n\n
| \n\n
| \n\n Units | \n\n
| \n\n
| \n\n Weighted Average Fair Value at Date of Grant | \n\n
| \n||||||
| \n Outstanding at beginning of year | \n\n
| \n\n
| \n\n 1,359,057 | \n\n
| \n\n
| \n\n $ | \n\n 9.49 | \n\n
| \n\n
| \n\n
| \n\n 641,878 | \n\n
| \n\n
| \n\n $ | \n\n 20.55 | \n\n
| \n\n
| \n\n
| \n\n 549,707 | \n\n
| \n\n
| \n\n $ | \n\n 23.04 | \n\n
| \n
| \n Units granted | \n\n
| \n\n
| \n\n 763,727 | \n\n
| \n\n
| \n\n
| \n\n 14.70 | \n\n
| \n\n
| \n\n
| \n\n 1,189,136 | \n\n
| \n\n
| \n\n
| \n\n 6.67 | \n\n
| \n\n
| \n\n
| \n\n 356,064 | \n\n
| \n\n
| \n\n
| \n\n 18.39 | \n\n
| \n
| \n Shares issued | \n\n
| \n\n
| \n\n (563,689 | \n\n ) | \n\n
| \n\n
| \n\n 9.68 | \n\n
| \n\n
| \n\n
| \n\n (213,437 | \n\n ) | \n\n
| \n\n
| \n\n 19.65 | \n\n
| \n\n
| \n\n
| \n\n (151,088 | \n\n ) | \n\n
| \n\n
| \n\n 22.62 | \n\n
| \n
| \n Units forfeited | \n\n
| \n\n
| \n\n (133,212 | \n\n ) | \n\n
| \n\n
| \n\n 11.62 | \n\n
| \n\n
| \n\n
| \n\n (258,520 | \n\n ) | \n\n
| \n\n
| \n\n 15.65 | \n\n
| \n\n
| \n\n
| \n\n (112,805 | \n\n ) | \n\n
| \n\n
| \n\n 23.04 | \n\n
| \n
| \n Outstanding at end of year | \n\n
| \n\n
| \n\n 1,425,883 | \n\n
| \n\n
| \n\n $ | \n\n 12.00 | \n\n
| \n\n
| \n\n
| \n\n 1,359,057 | \n\n
| \n\n
| \n\n $ | \n\n 9.49 | \n\n
| \n\n
| \n\n
| \n\n 641,878 | \n\n
| \n\n
| \n\n $ | \n\n 20.55 | \n\n
| \n
\n
Compensation expense related to these RSUs totaling $7.3 million ($5.6 million net of related taxes), $5.2 million ($3.1 million net of related taxes) and $4.9 million ($3.1 million net of related taxes) was recognized for the years ended December 31, 2017, 2016 and 2015, respectively. Total unrecognized compensation cost related to these RSUs at December 31, 2017 was $12.7 million, which will be recognized over a weighted average period of approximately 2.4 years. The outstanding RSUs had an aggregate intrinsic value of $21.7 million at December 31, 2017.
\nOn May 21, 2015, in connection with the resignation of a certain executive, the Company entered into an employment agreement pursuant to which the executive would become vested on January 1, 2016 in 50% of his RSU Award granted under the RSU award agreement rather than 25% as previously agreed under the RSU award agreement. The acceleration of the vesting was a modification of the plan and required that the fair value be reestablished on the date of the modification. The modification resulted in additional expense in 2015 of approximately $0.3 million.
\nStock Options
\nDuring the years ended December 31, 2017, 2016 and 2015, the Company granted stock options to purchase Company stock to Company officers and certain employees under the Enova LTIP. Stock options would allow the holder to purchase shares of the Company’s common stock at a price not less than the fair market value of the shares as of the grant date, or the exercise price.
\nStock options granted under the Enova LTIP become exercisable in equal increments on the first, second and third anniversaries of their date of grant, and expire on the 7th anniversary of their date of grant. Exercise prices of these stock options are equal to the closing stock price on the day before the grant date. In accordance with ASC 718, compensation expense on stock options is based on the fair value of the stock options on the day before the grant date and is amortized to expense over the vesting periods. For the year ended December 31, 2017, the Company estimated the fair value of the stock option grants using the Black-Scholes option-pricing model based on the following assumptions: risk-free interest rate of 1.9%, expected term (life) of options of 4.5 years, expected volatility of 52.3% and no expected dividends.
\nDetermining the fair value of stock-based awards at their respective grant dates requires considerable judgment, including estimating expected volatility and expected term (life). The Company based its expected volatility on a weighted average of the historical volatility of the Company and the historical volatility of comparable public companies over the option’s expected term. The Company calculated its expected term based on the simplified method, which is the mid-point between the weighted-average graded-vesting term and the contractual term. The simplified method was chosen as a means to determine expected term as the Company has limited historical option exercise experience as a public company. The Company derived the risk-free rate from a weighted-average yield for the three-and five-year zero-coupon U.S. Treasury Strips. The Company estimates forfeitures at the grant date based on its historical forfeiture rate, which is based on activity of cash-based long-term incentive units granted and outstanding prior to the Spin-off, and will revise the estimate, if necessary, in subsequent periods if actual forfeitures differ from those estimates.
\nThe following table summarizes the Company’s stock option activity during 2017, 2016 and 2015:
\n\n
| \n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n|||||||||||||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n\n
| \n\n 2015 | \n\n
| \n|||||||||||||||
| \n
| \n\n
| \n\n Units | \n\n
| \n\n
| \n\n Weighted Average Exercise Price | \n\n
| \n\n
| \n\n Units | \n\n
| \n\n
| \n\n Weighted Average Exercise Price | \n\n
| \n\n
| \n\n Units | \n\n
| \n\n
| \n\n Weighted Average Exercise Price | \n\n
| \n||||||
| \n Outstanding at beginning of year | \n\n
| \n\n
| \n\n 1,587,056 | \n\n
| \n\n
| \n\n $ | \n\n 17.98 | \n\n
| \n\n
| \n\n
| \n\n 1,891,153 | \n\n
| \n\n
| \n\n $ | \n\n 21.44 | \n\n
| \n\n
| \n\n
| \n\n 1,425,196 | \n\n
| \n\n
| \n\n $ | \n\n 23.04 | \n\n
| \n
| \n Options granted | \n\n
| \n\n
| \n\n 590,988 | \n\n
| \n\n
| \n\n
| \n\n 14.80 | \n\n
| \n\n
| \n\n
| \n\n 337,081 | \n\n
| \n\n
| \n\n
| \n\n 6.29 | \n\n
| \n\n
| \n\n
| \n\n 785,294 | \n\n
| \n\n
| \n\n
| \n\n 19.19 | \n\n
| \n
| \n Options exercised | \n\n
| \n\n
| \n\n (4,459 | \n\n ) | \n\n
| \n\n
| \n\n 6.29 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Options forfeited | \n\n
| \n\n
| \n\n (119,493 | \n\n ) | \n\n
| \n\n
| \n\n 21.02 | \n\n
| \n\n
| \n\n
| \n\n (641,178 | \n\n ) | \n\n
| \n\n
| \n\n 22.01 | \n\n
| \n\n
| \n\n
| \n\n (319,337 | \n\n ) | \n\n
| \n\n
| \n\n 23.04 | \n\n
| \n
| \n Outstanding at end of year | \n\n
| \n\n
| \n\n 2,054,092 | \n\n
| \n\n
| \n\n $ | \n\n 16.92 | \n\n
| \n\n
| \n\n
| \n\n 1,587,056 | \n\n
| \n\n
| \n\n $ | \n\n 17.98 | \n\n
| \n\n
| \n\n
| \n\n 1,891,153 | \n\n
| \n\n
| \n\n $ | \n\n 21.44 | \n\n
| \n
| \n Options vested at end of year | \n\n
| \n\n
| \n\n 1,165,837 | \n\n
| \n\n
| \n\n
| \n\n 19.94 | \n\n
| \n\n
| \n\n
| \n\n 734,896 | \n\n
| \n\n
| \n\n
| \n\n 21.67 | \n\n
| \n\n
| \n\n
| \n\n 475,127 | \n\n
| \n\n
| \n\n
| \n\n 23.05 | \n\n
| \n
\n
The weighted average fair value of options granted in 2017 was $6.60. Compensation expense related to stock options totaling $4.0 million ($3.1 million net of related taxes), $3.3 million ($2.0 million net of related taxes) and $4.7 million ($2.9 million net of related taxes) was recognized for the years ended December 31, 2017, 2016 and 2015, respectively. Total unrecognized compensation cost related to stock options at December 31, 2017 was $3.2 million, which will be recognized over a period of approximately 1.9 years. At December 31, 2017, the intrinsic value of stock options outstanding was $4.2 million and the intrinsic value of stock options exercisable was $1.8 million, respectively.
\nOn May 21, 2015, in connection with the resignation of a certain executive, the Company entered into an employment agreement pursuant to which the executive would become vested on January 1, 2016 in 66.6% of his stock options granted under the stock options award agreement rather than 33.3% as previously agreed under the stock option award agreement. The acceleration of the vesting was a modification of the plan and required that the fair value be reestablished on the date of the modification. The modification resulted in additional expense in 2015 of approximately $0.3 million.
13. Derivative Instruments
\nThe Company periodically uses derivative instruments to manage risk from changes in market conditions that may affect the Company’s financial performance. The Company primarily uses derivative instruments to manage its primary market risks, which are interest rate risk and foreign currency exchange rate risk.
\nThe Company periodically uses forward currency exchange contracts to minimize the effects of foreign currency risk in Brazil and the United Kingdom. The forward currency exchange contracts are non-designated derivatives. Any gain or loss resulting from these contracts is recorded as income or loss and is included in “Foreign currency transaction gain (loss), net” in the Company’s consolidated statements of income.
\nThe Company’s derivative instruments are presented in its financial statements on a net basis. The Company had no outstanding derivative instruments as of December 31, 2016. The following table presents information related to the Company’s derivative instruments as of December 31, 2017 (in thousands):
\nNon-designated derivatives:
\n\n
| \n
| \n\n
| \n\n As of December 31, 2017 | \n\n
| \n|||||||||||||
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n Gross Amounts | \n\n
| \n\n
| \n\n Gross Amounts | \n\n
| \n\n
| \n\n Net Amounts of Assets | \n\n
| \n|||
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n of Recognized | \n\n
| \n\n
| \n\n Offset in the | \n\n
| \n\n
| \n\n Presented in the | \n\n
| \n|||
| \n
| \n\n
| \n\n Notional | \n\n
| \n\n
| \n\n Financial | \n\n
| \n\n
| \n\n Consolidated | \n\n
| \n\n
| \n\n Consolidated Balance | \n\n
| \n||||
| \n Forward currency exchange contracts | \n\n
| \n\n Amount | \n\n
| \n\n
| \n\n Instruments | \n\n
| \n\n
| \n\n Balance Sheets(1) | \n\n
| \n\n
| \n\n Sheets(2) | \n\n
| \n||||
| \n Assets | \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n
| \n Liabilities | \n\n
| \n\n $ | \n\n 12,039 | \n\n
| \n\n
| \n\n $ | \n\n 55 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 55 | \n\n
| \n
\n
| \n (1) | \n\n As of December 31, 2017, the Company had no gross amounts of recognized derivative instruments that the Company makes an accounting policy election not to offset. In addition, there was no financial collateral related to the Company’s derivatives. The Company has no assets or liabilities that are subject to an enforceable master netting agreement or similar arrangement. |
| \n (2) | \n\n Represents the fair value of forward currency contracts, which is recorded in “Accounts payable and accrued expenses” in the consolidated balance sheets. |
The following table presents information on the effect of derivative instruments on the consolidated results of operations and AOCI for years ended December 31, 2017, 2016 and 2015 (in thousands):
\n\n
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n Gains (Losses) | \n\n
| \n||||||||||||||
| \n
| \n\n
| \n\n Gains (Losses) | \n\n
| \n\n
| \n\n Gains (Losses) | \n\n
| \n\n
| \n\n Reclassified From | \n\n
| \n|||||||||||||||||||||||||||
| \n
| \n\n
| \n\n Recognized in Income | \n\n
| \n\n
| \n\n Recognized in AOCI | \n\n
| \n\n
| \n\n AOCI into Income | \n\n
| \n|||||||||||||||||||||||||||
| \n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n|||||||||||||||||||||||||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n\n
| \n\n 2015 | \n\n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n\n
| \n\n 2015 | \n\n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n\n
| \n\n 2015 | \n\n
| \n|||||||||
| \n Non-designated derivatives: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Forward currency exchange contracts(1) | \n\n
| \n\n $ | \n\n (55 | \n\n ) | \n\n
| \n\n $ | \n\n 3,020 | \n\n
| \n\n
| \n\n $ | \n\n 4,525 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n
| \n Total | \n\n
| \n\n $ | \n\n (55 | \n\n ) | \n\n
| \n\n $ | \n\n 3,020 | \n\n
| \n\n
| \n\n $ | \n\n 4,525 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n
\n
| \n (1) | \n\n The gains (losses) on these derivatives substantially offset the (losses) gains on the hedged portion of the foreign intercompany balances. |
14. Related Party Transactions
\nA current officer of the Company has an ongoing ownership interest in the small business from which the Company acquired certain assets and assumed certain liabilities in June 2015 (see Note 2 for additional information). In the normal course of business, the Company has attained certain customer relationships from the small business by entering into transactions with the customers to obtain additional RPA financing. In these transactions, the Company satisfies the customer’s existing RPA balance with the small business which terminates such customer’s responsibilities to the small business. During the year ended December 31, 2017, the Company did not attain any additional relationships through these transactions with the small business. During the years ended December 31, 2016 and 2015, the Company paid $0.4 million and $7.7 million, respectively, to the small business to satisfy customers’ existing RPA balances. Pursuant to the acquisition, a subsidiary of the Company issued a promissory note to the small business in the amount of $3.0 million (the “Promissory Note”) and granted the company an opportunity to earn certain contingent purchase consideration (see Note 2 for additional information), both of which are guaranteed by the Company. The Promissory Note accrues interest at a rate of 4.0% per annum and will mature on June 23, 2018. The Company incurred interest expense related to the Promissory Note of $0.1 million in each of the years ended December 31, 2017, 2016 and 2015. In addition, as a condition precedent to the acquisition, a subsidiary of the Company executed a Transition Services Agreement with the small business from which the Company acquired certain assets whereby it agreed to provide certain transition services to the business for three years following the acquisition. During the years ended December 31, 2017, 2016 and 2015, the Company was paid $33 thousand, $34 thousand and $0.1 million, respectively, for such services. The subsidiary of the Company also entered into a short-term employee leasing agreement whereby it leased employees at cost from the small business until such employees could be formally hired, under which the Company paid a total of $0.2 million during the year ended December 31, 2015; no additional payments will be made under this agreement.
\nAfter the Spin-off, Cash America charged the Company a transition services fee related to utilization of financial reporting systems and accounts payable processing that is included in general and administrative expenses. The Company recorded $0.4 million in expense for these services for the year ended December 31, 2015. The Company transitioned to its own financial reporting system in late 2015 and the transition services agreement with Cash America ended on December 31, 2015.
\nThe Company and Cash America entered into an agreement for the Company to administer the consumer loan underwriting model utilized by Cash America’s Retail Services Division in exchange for fee per transaction paid to the Company as well as the reimbursement of the Company’s direct third-party costs incurred in providing the service. The Company received $0.8 million, $1.0 million and $1.2 million for the years ended December 31, 2017, 2016 and 2015, respectively pursuant to this agreement.
\nSince May 30, 2014, amounts due to Cash America or First Cash have been settled a month in arrears. The balance due from First Cash of $0.1 million as of each of December 31, 2017 and 2016 is included in “Other receivables and prepaid expenses” in the consolidated balance.
\nOn December 8, 2016, Cash America completed the sale of its entire holding in the Company and no longer has any ownership interest in the Company.
\nIn October 2017, the Company entered into an agreement for direct mail services with a marketing agency where David Fisher, the Company’s Chief Executive Officer and Chairman of the Board, also serves as a member of the marketing agency’s Board of Directors. As of December 31, 2017, there were no amounts due or paid to the agency.
| \n 15. | \n\n Variable Interest Entities |
As part of the Company’s overall funding strategy and as part of its efforts to support its liquidity from sources other than its traditional capital market sources, the Company has established a securitization program through the 2016-1 and 2016-2 Securitization Facilities. The Company transfers certain consumer loan receivables to wholly owned, bankruptcy-remote special purpose subsidiaries (VIEs), which issue term notes backed by the underlying consumer loan receivables and are serviced by another wholly owned subsidiary. The cash flows from the loans held by the VIEs are used to repay obligations under the notes.
\nThe Company is required to evaluate the VIEs for consolidation. The Company has the ability to direct the activities of the VIEs that most significantly impact the economic performance of the entities as the servicer of the securitized loan receivables. Additionally, the Company has the right to returns related to servicing fee revenue from the VIEs and to receive residual payments, which expose it to potentially significant losses and returns. Accordingly, the Company determined it is the primary beneficiary of the VIEs and is required to consolidate them.
\nThe assets and liabilities related to the VIEs are included in the Company’s consolidated financial statements and are accounted for as secured borrowings.
\nThe Company parenthetically discloses on its consolidated balance sheets the VIE’s assets that can only be used to settle the VIE’s obligations and the VIE liabilities if the VIE’s creditors have no recourse against the Company’s general credit. The carrying amounts of consolidated VIE assets and liabilities associated with the Company’s securitization entities were as follows (in thousands):
\n\n
| \n
| \n\n
| \n\n December 31, | \n\n
| \n|||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n||
| \n Assets | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Restricted cash and cash equivalents | \n\n
| \n\n $ | \n\n 21,696 | \n\n
| \n\n
| \n\n $ | \n\n 19,468 | \n\n
| \n
| \n Loans and finance receivables, net | \n\n
| \n\n
| \n\n 259,996 | \n\n
| \n\n
| \n\n
| \n\n 216,766 | \n\n
| \n
| \n Other receivables and prepaid expenses | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 3 | \n\n
| \n
| \n Other assets | \n\n
| \n\n
| \n\n 178 | \n\n
| \n\n
| \n\n
| \n\n 2,459 | \n\n
| \n
| \n Total assets | \n\n
| \n\n $ | \n\n 281,870 | \n\n
| \n\n
| \n\n $ | \n\n 238,696 | \n\n
| \n
| \n Liabilities | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Accounts payable and accrued expenses | \n\n
| \n\n $ | \n\n 1,671 | \n\n
| \n\n
| \n\n $ | \n\n 1,350 | \n\n
| \n
| \n Long-term debt | \n\n
| \n\n
| \n\n 208,135 | \n\n
| \n\n
| \n\n
| \n\n 163,550 | \n\n
| \n
| \n Total liabilities | \n\n
| \n\n $ | \n\n 209,806 | \n\n
| \n\n
| \n\n $ | \n\n 164,900 | \n\n
| \n
16. Supplemental Disclosures of Cash Flow Information
\nThe following table sets forth certain cash and non-cash activities for the years ended December 31, 2017, 2016 and 2015 (in thousands):
\n\n
| \n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n|||||||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n\n
| \n\n 2015 | \n\n
| \n|||
| \n Cash paid during the year for: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Interest | \n\n
| \n\n $ | \n\n 63,529 | \n\n
| \n\n
| \n\n $ | \n\n 59,609 | \n\n
| \n\n
| \n\n $ | \n\n 49,390 | \n\n
| \n
| \n Income taxes paid | \n\n
| \n\n
| \n\n 17,263 | \n\n
| \n\n
| \n\n
| \n\n 19,213 | \n\n
| \n\n
| \n\n
| \n\n 40,759 | \n\n
| \n
| \n Non-cash investing and financing activities: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Loans and finance receivables renewed | \n\n
| \n\n $ | \n\n 322,648 | \n\n
| \n\n
| \n\n $ | \n\n 310,425 | \n\n
| \n\n
| \n\n $ | \n\n 253,279 | \n\n
| \n
| \n Liabilities assumed in acquisitions | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 8,658 | \n\n
| \n
17. Operating Segment Information
\nThe Company provides online financial services to non-prime credit consumers and small businesses in the United States, United Kingdom, and Brazil and has one reportable segment, which is composed of the Company’s domestic and international operations and corporate services. The Company has aggregated all components of its business into a single operating segment based on the similarities of the economic characteristics, the nature of the products and services, the nature of the production and distribution methods, the type of customer and the nature of the regulatory environment.
\nThe following tables present information on the Company’s domestic and international operations as of and for the years ended December 31, 2017, 2016 and 2015 (in thousands).
\n\n
| \n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n|||||||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n\n
| \n\n 2015 | \n\n
| \n|||
| \n Revenue | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Domestic | \n\n
| \n\n $ | \n\n 709,537 | \n\n
| \n\n
| \n\n $ | \n\n 622,991 | \n\n
| \n\n
| \n\n $ | \n\n 510,242 | \n\n
| \n
| \n International | \n\n
| \n\n
| \n\n 134,204 | \n\n
| \n\n
| \n\n
| \n\n 122,578 | \n\n
| \n\n
| \n\n
| \n\n 142,358 | \n\n
| \n
| \n Total revenue | \n\n
| \n\n $ | \n\n 843,741 | \n\n
| \n\n
| \n\n $ | \n\n 745,569 | \n\n
| \n\n
| \n\n $ | \n\n 652,600 | \n\n
| \n
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Income from operations | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Domestic | \n\n
| \n\n $ | \n\n 233,065 | \n\n
| \n\n
| \n\n $ | \n\n 204,084 | \n\n
| \n\n
| \n\n $ | \n\n 183,582 | \n\n
| \n
| \n International | \n\n
| \n\n
| \n\n 6,147 | \n\n
| \n\n
| \n\n
| \n\n 19,787 | \n\n
| \n\n
| \n\n
| \n\n 42,787 | \n\n
| \n
| \n Corporate services | \n\n
| \n\n
| \n\n (104,798 | \n\n ) | \n\n
| \n\n
| \n\n (102,394 | \n\n ) | \n\n
| \n\n
| \n\n (101,982 | \n\n ) | \n
| \n Total income from operations | \n\n
| \n\n $ | \n\n 134,414 | \n\n
| \n\n
| \n\n $ | \n\n 121,477 | \n\n
| \n\n
| \n\n $ | \n\n 124,387 | \n\n
| \n
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Depreciation and amortization | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Domestic | \n\n
| \n\n $ | \n\n 6,769 | \n\n
| \n\n
| \n\n $ | \n\n 6,005 | \n\n
| \n\n
| \n\n $ | \n\n 7,920 | \n\n
| \n
| \n International | \n\n
| \n\n
| \n\n 1,539 | \n\n
| \n\n
| \n\n
| \n\n 2,167 | \n\n
| \n\n
| \n\n
| \n\n 2,254 | \n\n
| \n
| \n Corporate services | \n\n
| \n\n
| \n\n 6,080 | \n\n
| \n\n
| \n\n
| \n\n 7,392 | \n\n
| \n\n
| \n\n
| \n\n 8,214 | \n\n
| \n
| \n Total depreciation and amortization | \n\n
| \n\n $ | \n\n 14,388 | \n\n
| \n\n
| \n\n $ | \n\n 15,564 | \n\n
| \n\n
| \n\n $ | \n\n 18,388 | \n\n
| \n
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Expenditures for property and equipment | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Domestic | \n\n
| \n\n $ | \n\n 6,449 | \n\n
| \n\n
| \n\n $ | \n\n 6,955 | \n\n
| \n\n
| \n\n $ | \n\n 6,268 | \n\n
| \n
| \n International | \n\n
| \n\n
| \n\n 4,589 | \n\n
| \n\n
| \n\n
| \n\n 3,158 | \n\n
| \n\n
| \n\n
| \n\n 3,797 | \n\n
| \n
| \n Corporate services | \n\n
| \n\n
| \n\n 5,490 | \n\n
| \n\n
| \n\n
| \n\n 4,283 | \n\n
| \n\n
| \n\n
| \n\n 22,176 | \n\n
| \n
| \n Total expenditures for property and equipment | \n\n
| \n\n $ | \n\n 16,528 | \n\n
| \n\n
| \n\n $ | \n\n 14,396 | \n\n
| \n\n
| \n\n $ | \n\n 32,241 | \n\n
| \n
\n
| \n
| \n\n
| \n\n December 31, | \n\n
| \n|||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n||
| \n Property and equipment, net | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Domestic | \n\n
| \n\n $ | \n\n 25,732 | \n\n
| \n\n
| \n\n $ | \n\n 19,734 | \n\n
| \n
| \n International | \n\n
| \n\n
| \n\n 7,670 | \n\n
| \n\n
| \n\n
| \n\n 5,410 | \n\n
| \n
| \n Corporate services | \n\n
| \n\n
| \n\n 15,123 | \n\n
| \n\n
| \n\n
| \n\n 21,956 | \n\n
| \n
| \n Total property and equipment, net | \n\n
| \n\n $ | \n\n 48,525 | \n\n
| \n\n
| \n\n $ | \n\n 47,100 | \n\n
| \n
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Assets | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Domestic | \n\n
| \n\n $ | \n\n 964,697 | \n\n
| \n\n
| \n\n $ | \n\n 823,390 | \n\n
| \n
| \n International | \n\n
| \n\n
| \n\n 133,449 | \n\n
| \n\n
| \n\n
| \n\n 96,606 | \n\n
| \n
| \n Corporate services | \n\n
| \n\n
| \n\n 61,314 | \n\n
| \n\n
| \n\n
| \n\n 57,883 | \n\n
| \n
| \n Total assets | \n\n
| \n\n $ | \n\n 1,159,460 | \n\n
| \n\n
| \n\n $ | \n\n 977,879 | \n\n
| \n
\n
Geographic Information
\nThe following table presents the Company’s revenue by geographic region for the years ended December 31, 2017, 2016 and 2015 (in thousands):
\n\n
| \n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n|||||||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n\n
| \n\n 2015 | \n\n
| \n|||
| \n Revenue | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n United States | \n\n
| \n\n $ | \n\n 709,537 | \n\n
| \n\n
| \n\n $ | \n\n 622,991 | \n\n
| \n\n
| \n\n $ | \n\n 510,242 | \n\n
| \n
| \n United Kingdom | \n\n
| \n\n
| \n\n 114,838 | \n\n
| \n\n
| \n\n
| \n\n 103,478 | \n\n
| \n\n
| \n\n
| \n\n 129,703 | \n\n
| \n
| \n Other international countries | \n\n
| \n\n
| \n\n 19,366 | \n\n
| \n\n
| \n\n
| \n\n 19,100 | \n\n
| \n\n
| \n\n
| \n\n 12,655 | \n\n
| \n
| \n Total revenue | \n\n
| \n\n $ | \n\n 843,741 | \n\n
| \n\n
| \n\n $ | \n\n 745,569 | \n\n
| \n\n
| \n\n $ | \n\n 652,600 | \n\n
| \n
\n
The Company’s long-lived assets, which consist of the Company’s property and equipment, were $48.5 million and $47.1 million at December 31, 2017 and 2016, respectively. The operations for the Company’s domestic and international businesses are primarily located within the United States, and the value of any long-lived assets located outside of the United States is immaterial.
18. Fair Value Measurements
\nRecurring Fair Value Measurements
\nIn accordance with ASC 820, certain of the Company’s assets and liabilities, which are carried at fair value, are classified in one of the following three categories:
\nLevel 1: Quoted market prices in active markets for identical assets or liabilities.
\nLevel 2: Observable market based inputs or unobservable inputs that are corroborated by market data.
\nLevel 3: Unobservable inputs that are not corroborated by market data.
\nDuring the years ended December 31, 2017 and 2016, there were no transfers of assets or liabilities in or out of Level 1, Level 2 or Level 3 fair value measurements. It is the Company’s policy to value any transfers between levels of the fair value hierarchy based on end of period values.
\nThe Company’s financial assets that are measured at fair value on a recurring basis as of December 31, 2017 and 2016 are as follows (in thousands):
\n\n
| \n
| \n\n
| \n\n December 31, | \n\n
| \n\n
| \n\n Fair Value Measurements Using | \n\n
| \n||||||||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n Level 1 | \n\n
| \n\n
| \n\n Level 2 | \n\n
| \n\n
| \n\n Level 3 | \n\n
| \n||||
| \n Financial assets (liabilities) | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Forward currency exchange contracts | \n\n
| \n\n $ | \n\n (55 | \n\n ) | \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n (55 | \n\n ) | \n\n
| \n\n $ | \n\n — | \n\n
| \n
| \n Nonqualified savings plan assets(1) | \n\n
| \n\n
| \n\n 1,460 | \n\n
| \n\n
| \n\n
| \n\n 1,460 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Total | \n\n
| \n\n $ | \n\n 1,405 | \n\n
| \n\n
| \n\n $ | \n\n 1,460 | \n\n
| \n\n
| \n\n $ | \n\n (55 | \n\n ) | \n\n
| \n\n $ | \n\n — | \n\n
| \n
\n
| \n
| \n\n
| \n\n December 31, | \n\n
| \n\n
| \n\n Fair Value Measurements Using | \n\n
| \n||||||||||
| \n
| \n\n
| \n\n 2016 | \n\n
| \n\n
| \n\n Level 1 | \n\n
| \n\n
| \n\n Level 2 | \n\n
| \n\n
| \n\n Level 3 | \n\n
| \n||||
| \n Financial assets (liabilities) | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Nonqualified savings plan assets(1) | \n\n
| \n\n $ | \n\n 1,590 | \n\n
| \n\n
| \n\n $ | \n\n 1,590 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n
| \n Contingent consideration | \n\n
| \n\n
| \n\n (2,358 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (2,358 | \n\n ) | \n
| \n Total | \n\n
| \n\n $ | \n\n (768 | \n\n ) | \n\n
| \n\n $ | \n\n 1,590 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n (2,358 | \n\n ) | \n
\n
| \n (1) | \n\n The non-qualified savings plan assets have an offsetting liability of a greater amount, which is included in “Accounts payable and accrued expenses” in the Company’s consolidated balance sheets. |
The Company measures the fair value of its forward currency exchange contracts under Level 2 inputs as defined by ASC 820. For these forward currency exchange contracts, current market rates are used to determine fair value. The significant inputs used in these models are derived from observable market rates. The fair value of the nonqualified savings plan assets are measured under a Level 1 input. These assets are publicly traded equity securities for which market prices are readily observable.
\nThe Company determined the fair value of the liability for the contingent consideration based on a probability-weighted discounted cash flow analysis. This analysis reflects the contractual terms of the purchase agreement and utilizes assumptions with regard to future earnings, probabilities of achieving such future earnings, the timing of expected payments and a discount rate. Significant increases with respect to assumptions as to future earnings and probabilities of achieving such future earnings would result in a higher fair value measurement while an increase in the discount rate would result in a lower fair value measurement. The fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement as defined in the fair value hierarchy.
\nThe changes in the fair value of the contingent consideration, which is a Level 3 liability measured at fair value on a recurring basis, are summarized in the table below for the years ended December 31, 2017 and 2016 (in thousands):
\n\n
| \n
| \n\n
| \n\n Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | \n\n
| \n|||||
| \n
| \n\n
| \n\n Contingent consideration | \n\n
| \n\n
| \n\n Total | \n\n
| \n||
| \n Balance at December 31, 2015 | \n\n
| \n\n $ | \n\n 5,658 | \n\n
| \n\n
| \n\n $ | \n\n 5,658 | \n\n
| \n
| \n Remeasurement of contingent consideration (see Note 2) | \n\n
| \n\n
| \n\n (3,300 | \n\n ) | \n\n
| \n\n
| \n\n (3,300 | \n\n ) | \n
| \n Balance at December 31, 2016 | \n\n
| \n\n $ | \n\n 2,358 | \n\n
| \n\n
| \n\n $ | \n\n 2,358 | \n\n
| \n
| \n Remeasurement of contingent consideration (see Note 2) | \n\n
| \n\n
| \n\n (2,358 | \n\n ) | \n\n
| \n\n
| \n\n (2,358 | \n\n ) | \n
| \n Balance at December 31, 2017 | \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n
Fair Value Measurements on a Non-Recurring Basis
\nThe Company measures non-financial assets and liabilities such as property and equipment and intangible assets at fair value on a nonrecurring basis or when events or circumstances indicate that the carrying amount of the assets may be impaired. At December 31, 2017 and 2016, there were no assets or liabilities recorded at fair value on a nonrecurring basis.
\nFinancial Assets and Liabilities Not Measured at Fair Value
\nThe Company’s financial assets and liabilities as of December 31, 2017 and 2016 that are not measured at fair value in the consolidated balance sheets are as follows (in thousands):
\n\n
| \n
| \n\n
| \n\n December 31, | \n\n
| \n\n
| \n\n Fair Value Measurements Using | \n\n
| \n||||||||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n Level 1 | \n\n
| \n\n
| \n\n Level 2 | \n\n
| \n\n
| \n\n Level 3 | \n\n
| \n||||
| \n Financial assets: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Cash and cash equivalents | \n\n
| \n\n $ | \n\n 68,684 | \n\n
| \n\n
| \n\n $ | \n\n 68,684 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n
| \n Short-term loans and line of credit accounts, net (1) | \n\n
| \n\n
| \n\n 192,675 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 192,675 | \n\n
| \n
| \n Installment loans and RPAs, net (1) | \n\n
| \n\n
| \n\n 512,030 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 544,799 | \n\n
| \n
| \n Restricted cash | \n\n
| \n\n
| \n\n 29,460 | \n\n
| \n\n
| \n\n
| \n\n 29,460 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Investment in unconsolidated investee (2)(3) | \n\n
| \n\n
| \n\n 6,703 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 6,703 | \n\n
| \n
| \n Total | \n\n
| \n\n $ | \n\n 809,552 | \n\n
| \n\n
| \n\n $ | \n\n 98,144 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 744,177 | \n\n
| \n
| \n Financial liabilities: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Liability for estimated losses on consumer loans guaranteed by the Company | \n\n
| \n\n $ | \n\n 2,258 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 2,258 | \n\n
| \n
| \n Promissory note | \n\n
| \n\n
| \n\n 3,000 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 3,287 | \n\n
| \n
| \n Securitization Notes | \n\n
| \n\n
| \n\n 211,406 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 215,063 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n 9.75% senior notes due 2021 | \n\n
| \n\n
| \n\n 342,558 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 365,700 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n 8.50% senior notes due 2024 | \n\n
| \n\n
| \n\n 250,000 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 255,000 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Total | \n\n
| \n\n $ | \n\n 809,222 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 835,763 | \n\n
| \n\n
| \n\n $ | \n\n 5,545 | \n\n
| \n
\n
| \n
| \n\n
| \n\n December 31, | \n\n
| \n\n
| \n\n Fair Value Measurements Using | \n\n
| \n||||||||||
| \n
| \n\n
| \n\n 2016 | \n\n
| \n\n
| \n\n Level 1 | \n\n
| \n\n
| \n\n Level 2 | \n\n
| \n\n
| \n\n Level 3 | \n\n
| \n||||
| \n Financial assets: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Cash and cash equivalents | \n\n
| \n\n $ | \n\n 39,934 | \n\n
| \n\n
| \n\n $ | \n\n 39,934 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n
| \n Short-term loans and line of credit accounts, net (1) | \n\n
| \n\n
| \n\n 162,824 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 162,824 | \n\n
| \n
| \n Installment loans and RPAs, net (1) | \n\n
| \n\n
| \n\n 398,726 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 430,895 | \n\n
| \n
| \n Restricted cash | \n\n
| \n\n
| \n\n 26,306 | \n\n
| \n\n
| \n\n
| \n\n 26,306 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Investment in unconsolidated investee (2)(3) | \n\n
| \n\n
| \n\n 6,703 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 6,703 | \n\n
| \n
| \n Total | \n\n
| \n\n $ | \n\n 634,493 | \n\n
| \n\n
| \n\n $ | \n\n 66,240 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 600,422 | \n\n
| \n
| \n Financial liabilities: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Liability for estimated losses on consumer loans guaranteed by the Company | \n\n
| \n\n $ | \n\n 1,996 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 1,996 | \n\n
| \n
| \n Promissory note | \n\n
| \n\n
| \n\n 3,000 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 3,111 | \n\n
| \n
| \n Securitization Notes | \n\n
| \n\n
| \n\n 165,419 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 168,216 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n 9.75% senior notes due 2021 | \n\n
| \n\n
| \n\n 495,622 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 495,940 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Total | \n\n
| \n\n $ | \n\n 666,037 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 664,156 | \n\n
| \n\n
| \n\n $ | \n\n 5,107 | \n\n
| \n
\n
| \n (1) | \n\n Short-term loans, line of credit accounts and installment loans and RPAs are included in “Loans and finance receivables, net” in the consolidated balance sheets. |
| \n (2) | \n\n Investment in unconsolidated investee is included in “Other assets” in the consolidated balance sheets. |
| \n (3) | \n\n See Note 1 for additional information related to the investment in unconsolidated investee. |
Cash and cash equivalents and restricted cash bear interest at market rates and have maturities of less than 90 days. The carrying amount of restricted cash and cash equivalents approximates fair value.
\nShort-term loans, line of credit accounts, installment loans and RPAs are carried in the consolidated balance sheet net of the allowance for estimated losses, which is calculated by applying historical loss rates combined with recent default trends to the gross receivable balance. Short-term loans and line of credit accounts have relatively short maturity periods that are generally 12 months or less. The unobservable inputs used to calculate the fair value of these receivables include historical loss rates, recent default trends and estimated remaining loan term; therefore, the carrying value approximates the fair value. The fair value of installment loans and RPAs is estimated using discounted cash flow analyses, which consider interest rates on loans and discounts offered for receivables with similar terms to customers with similar credit quality, the timing of expected payments, estimated customer default rates and/or valuations of comparable portfolios. As of December 31, 2017 and 2016, the fair value of the Company’s installment loans and RPAs was greater than the carrying value of these loans and finance receivables. Unsecured installment loans typically have terms between two and 60 months. RPAs typically have estimated delivery terms between six and 18 months.
\nThe Company measures the fair value of its investment in unconsolidated investee using Level 3 inputs. Because the unconsolidated investee is a private company and financial information is limited, the Company estimates the fair value based on the best available information at the measurement date. As of December 31, 2017, the Company estimated the fair value of its investment to be approximately equal to the book value.
\nIn connection with its CSO programs, the Company guarantees consumer loan payment obligations to unrelated third-party lenders for short-term and installment loans the Company arranges for consumers on the third-party lenders’ behalf and is required to purchase any defaulted loans it has guaranteed. The estimated fair value of the liability for estimated losses on consumer loans guaranteed by the Company was $2.3 million and $2.0 million as of December 31, 2017 and 2016, respectively. The Company measures the fair value of its liability for third-party lender-owned consumer loans under Level 3 inputs. The fair value of these liabilities is calculated by applying historical loss rates combined with recent default trends to the gross consumer loan balance. The unobservable inputs used to calculate the fair value of these loans include historical loss rates, recent default trends and estimated remaining loan terms; therefore, the carrying value of these liabilities approximates the fair value.
\nThe Company measures the fair value of the Promissory Note using Level 3 inputs. The fair value of the Promissory Note is estimated using a discounted cash flow analysis. As of December 31, 2017 and 2016, the Promissory Note had a higher fair value than the carrying value.
\nThe Company measures the fair value of its Securitization Notes using Level 2 inputs. The fair value of the Company’s Securitization Notes is estimated based on quoted prices in markets that are not active. As of December 31, 2017 and 2016, the Company’s Securitization Notes had a higher fair value than the carrying value.
\nThe Company measures the fair value of its 9.75% senior notes due 2021 using Level 2 inputs. The fair value of the Company’s 9.75% senior notes due 2021 is estimated based on quoted prices in markets that are not active. As of December 31, 2017 and 2016, the Company’s 9.75% senior notes due 2021 had a higher fair value than the carrying value.
\nThe Company measures the fair value of its 8.50 % senior notes due 2024 using Level 2 inputs. The fair value of the 8.50 % senior notes due 2024 is estimated based on quoted prices in markets that are not active. As of December 31, 2017, the Company’s 8.50 % senior notes due 2024 had a higher fair value than the carrying value.
\n
19. Condensed Consolidating Financial Statements
\nThe Company’s Senior Notes are unconditionally guaranteed by certain of the Company’s subsidiaries (the “Guarantor Subsidiaries”) and are not secured by its other subsidiaries (the “Non-Guarantor Subsidiaries”). The Guarantor Subsidiaries are 100% owned, all guarantees are full and unconditional, and all guarantees are joint and several. As a result of the guarantee arrangements, we are required to present the following condensed consolidating financial statements.
\nThe condensed consolidating financial statements reflect the investments in subsidiaries of the Company using the equity method of accounting. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions. Condensed consolidating financial statements of Enova International, Inc. (the “Parent”), its Guarantor Subsidiaries and Non-Guarantor Subsidiaries as of December 31, 2017 and 2016 and for the years ended December 31, 2017, 2016 and 2015 are shown on the following pages.
\nCONDENSED CONSOLIDATING BALANCE SHEETS
\nAs of December 31, 2017
\n(in thousands)
\n\n
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n Guarantor | \n\n
| \n\n
| \n\n Non-Guarantor | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n||
| \n
| \n\n
| \n\n Parent | \n\n
| \n\n
| \n\n Subsidiaries | \n\n
| \n\n
| \n\n Subsidiaries | \n\n
| \n\n
| \n\n Eliminations | \n\n
| \n\n
| \n\n Consolidated | \n\n
| \n|||||
| \n Assets | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Cash and cash equivalents | \n\n
| \n\n $ | \n\n 12,183 | \n\n
| \n\n
| \n\n $ | \n\n 54,659 | \n\n
| \n\n
| \n\n $ | \n\n 1,842 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 68,684 | \n\n
| \n
| \n Restricted cash | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 7,764 | \n\n
| \n\n
| \n\n
| \n\n 21,696 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 29,460 | \n\n
| \n
| \n Loans and finance receivables, net | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 442,516 | \n\n
| \n\n
| \n\n
| \n\n 262,189 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 704,705 | \n\n
| \n
| \n Income taxes receivable | \n\n
| \n\n
| \n\n 114,494 | \n\n
| \n\n
| \n\n
| \n\n (110,852 | \n\n ) | \n\n
| \n\n
| \n\n 450 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 4,092 | \n\n
| \n
| \n Other receivables and prepaid expenses | \n\n
| \n\n
| \n\n 833 | \n\n
| \n\n
| \n\n
| \n\n 20,731 | \n\n
| \n\n
| \n\n
| \n\n 2,253 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 23,817 | \n\n
| \n
| \n Property and equipment, net | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 47,965 | \n\n
| \n\n
| \n\n
| \n\n 560 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 48,525 | \n\n
| \n
| \n Goodwill | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 267,015 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 267,015 | \n\n
| \n
| \n Intangible assets, net | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 4,325 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 4,325 | \n\n
| \n
| \n Investment in subsidiaries | \n\n
| \n\n
| \n\n 388,538 | \n\n
| \n\n
| \n\n
| \n\n 63,956 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (452,494 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Intercompany receivable | \n\n
| \n\n
| \n\n 354,457 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (354,457 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Other assets | \n\n
| \n\n
| \n\n 1,785 | \n\n
| \n\n
| \n\n
| \n\n 6,874 | \n\n
| \n\n
| \n\n
| \n\n 178 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 8,837 | \n\n
| \n
| \n Total assets | \n\n
| \n\n $ | \n\n 872,290 | \n\n
| \n\n
| \n\n $ | \n\n 804,953 | \n\n
| \n\n
| \n\n $ | \n\n 289,168 | \n\n
| \n\n
| \n\n $ | \n\n (806,951 | \n\n ) | \n\n
| \n\n $ | \n\n 1,159,460 | \n\n
| \n
| \n Liabilities and Stockholders' Equity | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Accounts payable and accrued expenses | \n\n
| \n\n $ | \n\n 10,336 | \n\n
| \n\n
| \n\n $ | \n\n 64,541 | \n\n
| \n\n
| \n\n $ | \n\n 2,246 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 77,123 | \n\n
| \n
| \n Intercompany payables | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 331,425 | \n\n
| \n\n
| \n\n
| \n\n 23,032 | \n\n
| \n\n
| \n\n
| \n\n (354,457 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Deferred tax liabilities, net | \n\n
| \n\n
| \n\n (140 | \n\n ) | \n\n
| \n\n
| \n\n 12,726 | \n\n
| \n\n
| \n\n
| \n\n (478 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 12,108 | \n\n
| \n
| \n Long-term debt | \n\n
| \n\n
| \n\n 580,407 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 208,135 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 788,542 | \n\n
| \n
| \n Total liabilities | \n\n
| \n\n
| \n\n 590,603 | \n\n
| \n\n
| \n\n
| \n\n 408,692 | \n\n
| \n\n
| \n\n
| \n\n 232,935 | \n\n
| \n\n
| \n\n
| \n\n (354,457 | \n\n ) | \n\n
| \n\n
| \n\n 877,773 | \n\n
| \n
| \n Commitments and contingencies | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Stockholders' equity | \n\n
| \n\n
| \n\n 281,687 | \n\n
| \n\n
| \n\n
| \n\n 396,261 | \n\n
| \n\n
| \n\n
| \n\n 56,233 | \n\n
| \n\n
| \n\n
| \n\n (452,494 | \n\n ) | \n\n
| \n\n
| \n\n 281,687 | \n\n
| \n
| \n Total liabilities and stockholders' equity | \n\n
| \n\n $ | \n\n 872,290 | \n\n
| \n\n
| \n\n $ | \n\n 804,953 | \n\n
| \n\n
| \n\n $ | \n\n 289,168 | \n\n
| \n\n
| \n\n $ | \n\n (806,951 | \n\n ) | \n\n
| \n\n $ | \n\n 1,159,460 | \n\n
| \n
\n
CONDENSED CONSOLIDATING BALANCE SHEETS
\nAs of December 31, 2016
\n(in thousands)
\n\n
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n Guarantor | \n\n
| \n\n
| \n\n Non-Guarantor | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n||
| \n
| \n\n
| \n\n Parent | \n\n
| \n\n
| \n\n Subsidiaries | \n\n
| \n\n
| \n\n Subsidiaries | \n\n
| \n\n
| \n\n Eliminations | \n\n
| \n\n
| \n\n Consolidated | \n\n
| \n|||||
| \n Assets | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Cash and cash equivalents | \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 36,057 | \n\n
| \n\n
| \n\n $ | \n\n 3,877 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 39,934 | \n\n
| \n
| \n Restricted cash | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 6,838 | \n\n
| \n\n
| \n\n
| \n\n 19,468 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 26,306 | \n\n
| \n
| \n Loans and finance receivables, net | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 335,161 | \n\n
| \n\n
| \n\n
| \n\n 226,390 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 561,550 | \n\n
| \n
| \n Income taxes receivable | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Other receivables and prepaid expenses | \n\n
| \n\n
| \n\n 127 | \n\n
| \n\n
| \n\n
| \n\n 19,095 | \n\n
| \n\n
| \n\n
| \n\n 302 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 19,524 | \n\n
| \n
| \n Property and equipment, net | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 46,507 | \n\n
| \n\n
| \n\n
| \n\n 593 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 47,100 | \n\n
| \n
| \n Goodwill | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 267,010 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 267,010 | \n\n
| \n
| \n Intangible assets, net | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 5,400 | \n\n
| \n\n
| \n\n
| \n\n 4 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 5,404 | \n\n
| \n
| \n Investment in subsidiaries | \n\n
| \n\n
| \n\n 294,647 | \n\n
| \n\n
| \n\n
| \n\n 25,131 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (319,778 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Intercompany receivable | \n\n
| \n\n
| \n\n 363,941 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (363,941 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Other assets | \n\n
| \n\n
| \n\n 597 | \n\n
| \n\n
| \n\n
| \n\n 7,995 | \n\n
| \n\n
| \n\n
| \n\n 2,459 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 11,051 | \n\n
| \n
| \n Total assets | \n\n
| \n\n $ | \n\n 659,312 | \n\n
| \n\n
| \n\n $ | \n\n 749,194 | \n\n
| \n\n
| \n\n $ | \n\n 253,093 | \n\n
| \n\n
| \n\n $ | \n\n (683,719 | \n\n ) | \n\n
| \n\n $ | \n\n 977,879 | \n\n
| \n
| \n Liabilities and Stockholders' Equity | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Accounts payable and accrued expenses | \n\n
| \n\n $ | \n\n 4,310 | \n\n
| \n\n
| \n\n $ | \n\n 65,714 | \n\n
| \n\n
| \n\n $ | \n\n 1,647 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 71,671 | \n\n
| \n
| \n Intercompany payables | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 295,764 | \n\n
| \n\n
| \n\n
| \n\n 68,179 | \n\n
| \n\n
| \n\n
| \n\n (363,943 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Income taxes currently payable | \n\n
| \n\n
| \n\n (72,704 | \n\n ) | \n\n
| \n\n
| \n\n 73,006 | \n\n
| \n\n
| \n\n
| \n\n (20 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 282 | \n\n
| \n
| \n Deferred tax liabilities, net | \n\n
| \n\n
| \n\n (354 | \n\n ) | \n\n
| \n\n
| \n\n 15,156 | \n\n
| \n\n
| \n\n
| \n\n (486 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 14,316 | \n\n
| \n
| \n Long-term debt | \n\n
| \n\n
| \n\n 486,361 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 163,550 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 649,911 | \n\n
| \n
| \n Total liabilities | \n\n
| \n\n
| \n\n 417,613 | \n\n
| \n\n
| \n\n
| \n\n 449,640 | \n\n
| \n\n
| \n\n
| \n\n 232,870 | \n\n
| \n\n
| \n\n
| \n\n (363,943 | \n\n ) | \n\n
| \n\n
| \n\n 736,180 | \n\n
| \n
| \n Commitments and contingencies | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Stockholders' equity | \n\n
| \n\n
| \n\n 241,699 | \n\n
| \n\n
| \n\n
| \n\n 299,554 | \n\n
| \n\n
| \n\n
| \n\n 20,223 | \n\n
| \n\n
| \n\n
| \n\n (319,777 | \n\n ) | \n\n
| \n\n
| \n\n 241,699 | \n\n
| \n
| \n Total liabilities and stockholders' equity | \n\n
| \n\n $ | \n\n 659,312 | \n\n
| \n\n
| \n\n $ | \n\n 749,194 | \n\n
| \n\n
| \n\n $ | \n\n 253,093 | \n\n
| \n\n
| \n\n $ | \n\n (683,720 | \n\n ) | \n\n
| \n\n $ | \n\n 977,879 | \n\n
| \n
\n
CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
\nFor the Year Ended December 31, 2017
\n(in thousands)
\n\n
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n Guarantor | \n\n
| \n\n
| \n\n Non-Guarantor | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n||
| \n
| \n\n
| \n\n Parent | \n\n
| \n\n
| \n\n Subsidiaries | \n\n
| \n\n
| \n\n Subsidiaries | \n\n
| \n\n
| \n\n Eliminations | \n\n
| \n\n
| \n\n Consolidated | \n\n
| \n|||||
| \n Revenue | \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 696,446 | \n\n
| \n\n
| \n\n $ | \n\n 151,233 | \n\n
| \n\n
| \n\n $ | \n\n (3,938 | \n\n ) | \n\n
| \n\n $ | \n\n 843,741 | \n\n
| \n
| \n Cost of Revenue | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 313,815 | \n\n
| \n\n
| \n\n
| \n\n 82,817 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 396,632 | \n\n
| \n
| \n Gross Profit | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 382,631 | \n\n
| \n\n
| \n\n
| \n\n 68,416 | \n\n
| \n\n
| \n\n
| \n\n (3,938 | \n\n ) | \n\n
| \n\n
| \n\n 447,109 | \n\n
| \n
| \n Expenses | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Marketing | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 99,522 | \n\n
| \n\n
| \n\n
| \n\n 1,907 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 101,429 | \n\n
| \n
| \n Operations and technology | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 85,899 | \n\n
| \n\n
| \n\n
| \n\n 10,660 | \n\n
| \n\n
| \n\n
| \n\n (1,404 | \n\n ) | \n\n
| \n\n
| \n\n 95,155 | \n\n
| \n
| \n General and administrative | \n\n
| \n\n
| \n\n 360 | \n\n
| \n\n
| \n\n
| \n\n 97,762 | \n\n
| \n\n
| \n\n
| \n\n 6,135 | \n\n
| \n\n
| \n\n
| \n\n (2,534 | \n\n ) | \n\n
| \n\n
| \n\n 101,723 | \n\n
| \n
| \n Depreciation and amortization | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 14,209 | \n\n
| \n\n
| \n\n
| \n\n 179 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 14,388 | \n\n
| \n
| \n Total Expenses | \n\n
| \n\n
| \n\n 360 | \n\n
| \n\n
| \n\n
| \n\n 297,392 | \n\n
| \n\n
| \n\n
| \n\n 18,881 | \n\n
| \n\n
| \n\n
| \n\n (3,938 | \n\n ) | \n\n
| \n\n
| \n\n 312,695 | \n\n
| \n
| \n (Loss) Income from Operations | \n\n
| \n\n
| \n\n (360 | \n\n ) | \n\n
| \n\n
| \n\n 85,239 | \n\n
| \n\n
| \n\n
| \n\n 49,535 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 134,414 | \n\n
| \n
| \n Interest expense, net | \n\n
| \n\n
| \n\n (55,506 | \n\n ) | \n\n
| \n\n
| \n\n (152 | \n\n ) | \n\n
| \n\n
| \n\n (18,345 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (74,003 | \n\n ) | \n
| \n Foreign currency transaction gain | \n\n
| \n\n
| \n\n 381 | \n\n
| \n\n
| \n\n
| \n\n 3 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 384 | \n\n
| \n
| \n (Loss) gain on early extinguishment of debt | \n\n
| \n\n
| \n\n (14,927 | \n\n ) | \n\n
| \n\n
| \n\n (8,594 | \n\n ) | \n\n
| \n\n
| \n\n 626 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (22,895 | \n\n ) | \n
| \n (Loss) Income before Income Taxes and Equity in Net Earnings of Subsidiaries | \n\n
| \n\n
| \n\n (70,412 | \n\n ) | \n\n
| \n\n
| \n\n 76,496 | \n\n
| \n\n
| \n\n
| \n\n 31,816 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 37,900 | \n\n
| \n
| \n (Benefit from) provision for income taxes | \n\n
| \n\n
| \n\n (16,089 | \n\n ) | \n\n
| \n\n
| \n\n 17,479 | \n\n
| \n\n
| \n\n
| \n\n 7,270 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 8,660 | \n\n
| \n
| \n (Loss) Income before Equity in Net Earnings of Subsidiaries | \n\n
| \n\n
| \n\n (54,323 | \n\n ) | \n\n
| \n\n
| \n\n 59,017 | \n\n
| \n\n
| \n\n
| \n\n 24,546 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 29,240 | \n\n
| \n
| \n Net earnings of subsidiaries | \n\n
| \n\n
| \n\n 83,563 | \n\n
| \n\n
| \n\n
| \n\n 24,546 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (108,109 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Net Income (Loss) | \n\n
| \n\n $ | \n\n 29,240 | \n\n
| \n\n
| \n\n $ | \n\n 83,563 | \n\n
| \n\n
| \n\n $ | \n\n 24,546 | \n\n
| \n\n
| \n\n $ | \n\n (108,109 | \n\n ) | \n\n
| \n\n $ | \n\n 29,240 | \n\n
| \n
| \n Other comprehensive gain (loss), net of tax: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Foreign currency translation gain (loss) | \n\n
| \n\n
| \n\n 4,492 | \n\n
| \n\n
| \n\n
| \n\n 4,963 | \n\n
| \n\n
| \n\n
| \n\n (471 | \n\n ) | \n\n
| \n\n
| \n\n (4,492 | \n\n ) | \n\n
| \n\n
| \n\n 4,492 | \n\n
| \n
| \n Total other comprehensive gain (loss), net of tax | \n\n
| \n\n
| \n\n 4,492 | \n\n
| \n\n
| \n\n
| \n\n 4,963 | \n\n
| \n\n
| \n\n
| \n\n (471 | \n\n ) | \n\n
| \n\n
| \n\n (4,492 | \n\n ) | \n\n
| \n\n
| \n\n 4,492 | \n\n
| \n
| \n Comprehensive Income (Loss) | \n\n
| \n\n $ | \n\n 33,732 | \n\n
| \n\n
| \n\n $ | \n\n 88,526 | \n\n
| \n\n
| \n\n $ | \n\n 24,075 | \n\n
| \n\n
| \n\n $ | \n\n (112,601 | \n\n ) | \n\n
| \n\n $ | \n\n 33,732 | \n\n
| \n
\n
CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
\nFor the Year Ended December 31, 2016
\n(in thousands)
\n\n
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n Guarantor | \n\n
| \n\n
| \n\n Non-Guarantor | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n||
| \n
| \n\n
| \n\n Parent | \n\n
| \n\n
| \n\n Subsidiaries | \n\n
| \n\n
| \n\n Subsidiaries | \n\n
| \n\n
| \n\n Eliminations | \n\n
| \n\n
| \n\n Consolidated | \n\n
| \n|||||
| \n Revenue | \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 653,517 | \n\n
| \n\n
| \n\n $ | \n\n 95,646 | \n\n
| \n\n
| \n\n $ | \n\n (3,594 | \n\n ) | \n\n
| \n\n $ | \n\n 745,569 | \n\n
| \n
| \n Cost of Revenue | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 260,996 | \n\n
| \n\n
| \n\n
| \n\n 66,970 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 327,966 | \n\n
| \n
| \n Gross Profit | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 392,521 | \n\n
| \n\n
| \n\n
| \n\n 28,676 | \n\n
| \n\n
| \n\n
| \n\n (3,594 | \n\n ) | \n\n
| \n\n
| \n\n 417,603 | \n\n
| \n
| \n Expenses | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Marketing | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 95,972 | \n\n
| \n\n
| \n\n
| \n\n 1,432 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 97,404 | \n\n
| \n
| \n Operations and technology | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 80,999 | \n\n
| \n\n
| \n\n
| \n\n 4,203 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 85,202 | \n\n
| \n
| \n General and administrative | \n\n
| \n\n
| \n\n 315 | \n\n
| \n\n
| \n\n
| \n\n 95,840 | \n\n
| \n\n
| \n\n
| \n\n 5,395 | \n\n
| \n\n
| \n\n
| \n\n (3,594 | \n\n ) | \n\n
| \n\n
| \n\n 97,956 | \n\n
| \n
| \n Depreciation and amortization | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 15,464 | \n\n
| \n\n
| \n\n
| \n\n 100 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 15,564 | \n\n
| \n
| \n Total Expenses | \n\n
| \n\n
| \n\n 315 | \n\n
| \n\n
| \n\n
| \n\n 288,275 | \n\n
| \n\n
| \n\n
| \n\n 11,130 | \n\n
| \n\n
| \n\n
| \n\n (3,594 | \n\n ) | \n\n
| \n\n
| \n\n 296,126 | \n\n
| \n
| \n (Loss) Income from Operations | \n\n
| \n\n
| \n\n (315 | \n\n ) | \n\n
| \n\n
| \n\n 104,246 | \n\n
| \n\n
| \n\n
| \n\n 17,546 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 121,477 | \n\n
| \n
| \n Interest expense, net | \n\n
| \n\n
| \n\n (53,512 | \n\n ) | \n\n
| \n\n
| \n\n 562 | \n\n
| \n\n
| \n\n
| \n\n (12,653 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (65,603 | \n\n ) | \n
| \n Foreign currency transaction gain (loss) | \n\n
| \n\n
| \n\n 1,569 | \n\n
| \n\n
| \n\n
| \n\n (7 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 1,562 | \n\n
| \n
| \n (Loss) Income before Income Taxes and Equity in Net Earnings of Subsidiaries | \n\n
| \n\n
| \n\n (52,258 | \n\n ) | \n\n
| \n\n
| \n\n 104,801 | \n\n
| \n\n
| \n\n
| \n\n 4,893 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 57,436 | \n\n
| \n
| \n Provision for income taxes | \n\n
| \n\n
| \n\n (20,776 | \n\n ) | \n\n
| \n\n
| \n\n 41,665 | \n\n
| \n\n
| \n\n
| \n\n 1,945 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 22,834 | \n\n
| \n
| \n (Loss) Income before Equity in Net Earnings of Subsidiaries | \n\n
| \n\n
| \n\n (31,482 | \n\n ) | \n\n
| \n\n
| \n\n 63,136 | \n\n
| \n\n
| \n\n
| \n\n 2,948 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 34,602 | \n\n
| \n
| \n Net earnings of subsidiaries | \n\n
| \n\n
| \n\n 66,084 | \n\n
| \n\n
| \n\n
| \n\n 2,948 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (69,032 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Net Income (Loss) | \n\n
| \n\n $ | \n\n 34,602 | \n\n
| \n\n
| \n\n $ | \n\n 66,084 | \n\n
| \n\n
| \n\n $ | \n\n 2,948 | \n\n
| \n\n
| \n\n $ | \n\n (69,032 | \n\n ) | \n\n
| \n\n $ | \n\n 34,602 | \n\n
| \n
| \n Other comprehensive (loss) gain, net of tax: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Foreign currency translation (loss) gain | \n\n
| \n\n
| \n\n (6,956 | \n\n ) | \n\n
| \n\n
| \n\n (8,269 | \n\n ) | \n\n
| \n\n
| \n\n 1,331 | \n\n
| \n\n
| \n\n
| \n\n 6,938 | \n\n
| \n\n
| \n\n
| \n\n (6,956 | \n\n ) | \n
| \n Total other comprehensive (loss) gain, net of tax | \n\n
| \n\n
| \n\n (6,956 | \n\n ) | \n\n
| \n\n
| \n\n (8,269 | \n\n ) | \n\n
| \n\n
| \n\n 1,331 | \n\n
| \n\n
| \n\n
| \n\n 6,938 | \n\n
| \n\n
| \n\n
| \n\n (6,956 | \n\n ) | \n
| \n Comprehensive Income (Loss) | \n\n
| \n\n $ | \n\n 27,646 | \n\n
| \n\n
| \n\n $ | \n\n 57,815 | \n\n
| \n\n
| \n\n $ | \n\n 4,279 | \n\n
| \n\n
| \n\n $ | \n\n (62,094 | \n\n ) | \n\n
| \n\n $ | \n\n 27,646 | \n\n
| \n
\n
CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
\nFor the Year Ended December 31, 2015
\n(in thousands)
\n\n
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n Guarantor | \n\n
| \n\n
| \n\n Non-Guarantor | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n||
| \n
| \n\n
| \n\n Parent | \n\n
| \n\n
| \n\n Subsidiaries | \n\n
| \n\n
| \n\n Subsidiaries | \n\n
| \n\n
| \n\n Eliminations | \n\n
| \n\n
| \n\n Consolidated | \n\n
| \n|||||
| \n Revenue | \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 650,295 | \n\n
| \n\n
| \n\n $ | \n\n 2,305 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 652,600 | \n\n
| \n
| \n Cost of Revenue | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 215,637 | \n\n
| \n\n
| \n\n
| \n\n 1,221 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 216,858 | \n\n
| \n
| \n Gross Profit | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 434,658 | \n\n
| \n\n
| \n\n
| \n\n 1,084 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 435,742 | \n\n
| \n
| \n Expenses | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Marketing | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 116,330 | \n\n
| \n\n
| \n\n
| \n\n 552 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 116,882 | \n\n
| \n
| \n Operations and technology | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 71,993 | \n\n
| \n\n
| \n\n
| \n\n 2,019 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 74,012 | \n\n
| \n
| \n General and administrative | \n\n
| \n\n
| \n\n 673 | \n\n
| \n\n
| \n\n
| \n\n 100,642 | \n\n
| \n\n
| \n\n
| \n\n 758 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 102,073 | \n\n
| \n
| \n Depreciation and amortization | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 18,350 | \n\n
| \n\n
| \n\n
| \n\n 38 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 18,388 | \n\n
| \n
| \n Total Expenses | \n\n
| \n\n
| \n\n 673 | \n\n
| \n\n
| \n\n
| \n\n 307,315 | \n\n
| \n\n
| \n\n
| \n\n 3,367 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 311,355 | \n\n
| \n
| \n (Loss) Income from Operations | \n\n
| \n\n
| \n\n (673 | \n\n ) | \n\n
| \n\n
| \n\n 127,343 | \n\n
| \n\n
| \n\n
| \n\n (2,283 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 124,387 | \n\n
| \n
| \n Interest expense, net | \n\n
| \n\n
| \n\n (52,816 | \n\n ) | \n\n
| \n\n
| \n\n (71 | \n\n ) | \n\n
| \n\n
| \n\n 4 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (52,883 | \n\n ) | \n
| \n Foreign currency transaction gain (loss) | \n\n
| \n\n
| \n\n 532 | \n\n
| \n\n
| \n\n
| \n\n (1,516 | \n\n ) | \n\n
| \n\n
| \n\n (1 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (985 | \n\n ) | \n
| \n (Loss) Income before Income Taxes and Equity in Net Earnings of Subsidiaries | \n\n
| \n\n
| \n\n (52,957 | \n\n ) | \n\n
| \n\n
| \n\n 125,756 | \n\n
| \n\n
| \n\n
| \n\n (2,280 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 70,519 | \n\n
| \n
| \n (Benefit from) provision for income taxes | \n\n
| \n\n
| \n\n (19,921 | \n\n ) | \n\n
| \n\n
| \n\n 47,306 | \n\n
| \n\n
| \n\n
| \n\n (858 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 26,527 | \n\n
| \n
| \n (Loss) Income before Equity in Net Earnings of Subsidiaries | \n\n
| \n\n
| \n\n (33,036 | \n\n ) | \n\n
| \n\n
| \n\n 78,450 | \n\n
| \n\n
| \n\n
| \n\n (1,422 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 43,992 | \n\n
| \n
| \n Net earnings of subsidiaries | \n\n
| \n\n
| \n\n 77,028 | \n\n
| \n\n
| \n\n
| \n\n (1,422 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (75,606 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Net Income (Loss) | \n\n
| \n\n $ | \n\n 43,992 | \n\n
| \n\n
| \n\n $ | \n\n 77,028 | \n\n
| \n\n
| \n\n $ | \n\n (1,422 | \n\n ) | \n\n
| \n\n $ | \n\n (75,606 | \n\n ) | \n\n
| \n\n $ | \n\n 43,992 | \n\n
| \n
| \n Other comprehensive (loss) gain, net of tax: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Foreign currency translation (loss) gain | \n\n
| \n\n
| \n\n (1,451 | \n\n ) | \n\n
| \n\n
| \n\n (245 | \n\n ) | \n\n
| \n\n
| \n\n (866 | \n\n ) | \n\n
| \n\n
| \n\n 1,111 | \n\n
| \n\n
| \n\n
| \n\n (1,451 | \n\n ) | \n
| \n Total other comprehensive (loss) gain, net of tax | \n\n
| \n\n
| \n\n (1,451 | \n\n ) | \n\n
| \n\n
| \n\n (245 | \n\n ) | \n\n
| \n\n
| \n\n (866 | \n\n ) | \n\n
| \n\n
| \n\n 1,111 | \n\n
| \n\n
| \n\n
| \n\n (1,451 | \n\n ) | \n
| \n Comprehensive Income (Loss) | \n\n
| \n\n $ | \n\n 42,541 | \n\n
| \n\n
| \n\n $ | \n\n 76,783 | \n\n
| \n\n
| \n\n $ | \n\n (2,288 | \n\n ) | \n\n
| \n\n $ | \n\n (74,495 | \n\n ) | \n\n
| \n\n $ | \n\n 42,541 | \n\n
| \n
\n
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
\nFor the Year Ended December 31, 2017
\n(in thousands)
\n\n
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n Guarantor | \n\n
| \n\n
| \n\n Non-Guarantor | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n||
| \n
| \n\n
| \n\n Parent | \n\n
| \n\n
| \n\n Subsidiaries | \n\n
| \n\n
| \n\n Subsidiaries | \n\n
| \n\n
| \n\n Eliminations | \n\n
| \n\n
| \n\n Consolidated | \n\n
| \n|||||
| \n Cash Flows from Operating Activities | \n\n
| \n\n $ | \n\n (50,319 | \n\n ) | \n\n
| \n\n $ | \n\n 616,042 | \n\n
| \n\n
| \n\n $ | \n\n (91,660 | \n\n ) | \n\n
| \n\n $ | \n\n (26,890 | \n\n ) | \n\n
| \n\n $ | \n\n 447,173 | \n\n
| \n
| \n Cash Flows from Investing Activities | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Loans and finance receivables originated or acquired | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (1,401,302 | \n\n ) | \n\n
| \n\n
| \n\n (29,720 | \n\n ) | \n\n
| \n\n
| \n\n 11,623 | \n\n
| \n\n
| \n\n
| \n\n (1,419,399 | \n\n ) | \n
| \n Securitized loans transferred | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 231,863 | \n\n
| \n\n
| \n\n
| \n\n (231,863 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Loans and finance receivables repaid | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 621,495 | \n\n
| \n\n
| \n\n
| \n\n 299,682 | \n\n
| \n\n
| \n\n
| \n\n (11,623 | \n\n ) | \n\n
| \n\n
| \n\n 909,554 | \n\n
| \n
| \n Change in restricted cash | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (337 | \n\n ) | \n\n
| \n\n
| \n\n (2,228 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (2,565 | \n\n ) | \n
| \n Purchases of property and equipment | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (16,375 | \n\n ) | \n\n
| \n\n
| \n\n (153 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (16,528 | \n\n ) | \n
| \n Capital contributions to subsidiaries | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (11,935 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 11,935 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Other investing activities | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 1,805 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 1,805 | \n\n
| \n
| \n Net cash (used in) provided by investing activities | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (574,786 | \n\n ) | \n\n
| \n\n
| \n\n 35,718 | \n\n
| \n\n
| \n\n
| \n\n 11,935 | \n\n
| \n\n
| \n\n
| \n\n (527,133 | \n\n ) | \n
| \n Cash Flows from Financing Activities | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n (Payments for) proceeds from member's equity | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (26,890 | \n\n ) | \n\n
| \n\n
| \n\n 11,935 | \n\n
| \n\n
| \n\n
| \n\n 14,955 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Debt issuance costs paid | \n\n
| \n\n
| \n\n (10,753 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (3,909 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (14,662 | \n\n ) | \n
| \n Debt prepayment penalty | \n\n
| \n\n
| \n\n (16,694 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (16,694 | \n\n ) | \n
| \n Treasury shares purchased | \n\n
| \n\n
| \n\n (5,079 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (5,079 | \n\n ) | \n
| \n Issuance of Senior Notes | \n\n
| \n\n
| \n\n 250,000 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 250,000 | \n\n
| \n
| \n Repayments of Senior Notes | \n\n
| \n\n
| \n\n (155,000 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (155,000 | \n\n ) | \n
| \n Borrowings under revolving line of credit | \n\n
| \n\n
| \n\n 30,000 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 30,000 | \n\n
| \n
| \n Repayments under revolving line of credit | \n\n
| \n\n
| \n\n (30,000 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (30,000 | \n\n ) | \n
| \n Borrowings under securitization facility | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 359,842 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 359,842 | \n\n
| \n
| \n Repayments under securitization facility | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (313,853 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (313,853 | \n\n ) | \n
| \n Proceeds from exercise of stock options | \n\n
| \n\n
| \n\n 28 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 28 | \n\n
| \n
| \n Net cash provided by (used in) financing activities | \n\n
| \n\n
| \n\n 62,502 | \n\n
| \n\n
| \n\n
| \n\n (26,890 | \n\n ) | \n\n
| \n\n
| \n\n 54,015 | \n\n
| \n\n
| \n\n
| \n\n 14,955 | \n\n
| \n\n
| \n\n
| \n\n 104,582 | \n\n
| \n
| \n Effect of exchange rates on cash | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 4,236 | \n\n
| \n\n
| \n\n
| \n\n (108 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 4,128 | \n\n
| \n
| \n Net increase (decrease) in cash and cash equivalents | \n\n
| \n\n
| \n\n 12,183 | \n\n
| \n\n
| \n\n
| \n\n 18,602 | \n\n
| \n\n
| \n\n
| \n\n (2,035 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 28,750 | \n\n
| \n
| \n Cash and cash equivalents at beginning of year | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 36,057 | \n\n
| \n\n
| \n\n
| \n\n 3,877 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 39,934 | \n\n
| \n
| \n Cash and cash equivalents at end of period | \n\n
| \n\n $ | \n\n 12,183 | \n\n
| \n\n
| \n\n $ | \n\n 54,659 | \n\n
| \n\n
| \n\n $ | \n\n 1,842 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 68,684 | \n\n
| \n
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
\nFor the Year Ended December 31, 2016
\n(in thousands)
\n| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n Guarantor | \n\n
| \n\n
| \n\n Non-Guarantor | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n||
| \n
| \n\n
| \n\n Parent | \n\n
| \n\n
| \n\n Subsidiaries | \n\n
| \n\n
| \n\n Subsidiaries | \n\n
| \n\n
| \n\n Eliminations | \n\n
| \n\n
| \n\n Consolidated | \n\n
| \n|||||
| \n Cash Flows from Operating Activities | \n\n
| \n\n $ | \n\n 59,337 | \n\n
| \n\n
| \n\n $ | \n\n 296,876 | \n\n
| \n\n
| \n\n $ | \n\n 37,859 | \n\n
| \n\n
| \n\n $ | \n\n (699 | \n\n ) | \n\n
| \n\n $ | \n\n 393,373 | \n\n
| \n
| \n Cash Flows from Investing Activities | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Loans and finance receivables originated or acquired | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (1,293,273 | \n\n ) | \n\n
| \n\n
| \n\n (14,924 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (1,308,197 | \n\n ) | \n
| \n Securitized loans transferred | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 359,000 | \n\n
| \n\n
| \n\n
| \n\n (359,000 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Loans and finance receivables repaid | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 669,088 | \n\n
| \n\n
| \n\n
| \n\n 188,960 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 858,048 | \n\n
| \n
| \n Change in restricted cash | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (658 | \n\n ) | \n\n
| \n\n
| \n\n (19,468 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (20,126 | \n\n ) | \n
| \n Purchases of property and equipment | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (14,007 | \n\n ) | \n\n
| \n\n
| \n\n (389 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (14,396 | \n\n ) | \n
| \n Capital contributions to subsidiaries | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (10,255 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 10,255 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Other investing activities | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 95 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 95 | \n\n
| \n
| \n Net cash used in investing activities | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (290,010 | \n\n ) | \n\n
| \n\n
| \n\n (204,821 | \n\n ) | \n\n
| \n\n
| \n\n 10,255 | \n\n
| \n\n
| \n\n
| \n\n (484,576 | \n\n ) | \n
| \n Cash Flows from Financing Activities | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n (Payments for) proceeds from member's equity | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (699 | \n\n ) | \n\n
| \n\n
| \n\n 10,255 | \n\n
| \n\n
| \n\n
| \n\n (9,556 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Debt issuance costs paid | \n\n
| \n\n
| \n\n (500 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (6,202 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (6,702 | \n\n ) | \n
| \n Treasury shares purchased | \n\n
| \n\n
| \n\n (437 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (437 | \n\n ) | \n
| \n Borrowings under revolving line of credit | \n\n
| \n\n
| \n\n 58,400 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 58,400 | \n\n
| \n
| \n Repayments under revolving line of credit, net | \n\n
| \n\n
| \n\n (116,800 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (116,800 | \n\n ) | \n
| \n Borrowings under securitization facility | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 280,075 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 280,075 | \n\n
| \n
| \n Repayments under securitization facility | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (114,656 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (114,656 | \n\n ) | \n
| \n Net cash provided by (used in) provided by financing activities | \n\n
| \n\n
| \n\n (59,337 | \n\n ) | \n\n
| \n\n
| \n\n (699 | \n\n ) | \n\n
| \n\n
| \n\n 169,472 | \n\n
| \n\n
| \n\n
| \n\n (9,556 | \n\n ) | \n\n
| \n\n
| \n\n 99,880 | \n\n
| \n
| \n Effect of exchange rates on cash | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (11,037 | \n\n ) | \n\n
| \n\n
| \n\n 228 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (10,809 | \n\n ) | \n
| \n Net (decrease) increase in cash and cash equivalents | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (4,870 | \n\n ) | \n\n
| \n\n
| \n\n 2,738 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (2,132 | \n\n ) | \n
| \n Cash and cash equivalents at beginning of year | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 40,927 | \n\n
| \n\n
| \n\n
| \n\n 1,139 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 42,066 | \n\n
| \n
| \n Cash and cash equivalents at end of period | \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 36,057 | \n\n
| \n\n
| \n\n $ | \n\n 3,877 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 39,934 | \n\n
| \n
\n
\n
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
\nFor the Year Ended December 31, 2015
\n(in thousands)
\n\n
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n Guarantor | \n\n
| \n\n
| \n\n Non-Guarantor | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n||
| \n
| \n\n
| \n\n Parent | \n\n
| \n\n
| \n\n Subsidiaries | \n\n
| \n\n
| \n\n Subsidiaries | \n\n
| \n\n
| \n\n Eliminations | \n\n
| \n\n
| \n\n Consolidated | \n\n
| \n|||||
| \n Cash Flows from Operating Activities | \n\n
| \n\n $ | \n\n 31,259 | \n\n
| \n\n
| \n\n $ | \n\n 331,954 | \n\n
| \n\n
| \n\n $ | \n\n (2,695 | \n\n ) | \n\n
| \n\n $ | \n\n (76,597 | \n\n ) | \n\n
| \n\n $ | \n\n 283,921 | \n\n
| \n
| \n Cash Flows from Investing Activities | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Loans and finance receivables originated or acquired | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (1,167,107 | \n\n ) | \n\n
| \n\n
| \n\n (5,062 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (1,172,169 | \n\n ) | \n
| \n Loans and finance receivables repaid | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 849,638 | \n\n
| \n\n
| \n\n
| \n\n (280 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 849,358 | \n\n
| \n
| \n Acquisitions | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (17,735 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (17,735 | \n\n ) | \n
| \n Purchases of property and equipment | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (31,977 | \n\n ) | \n\n
| \n\n
| \n\n (264 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (32,241 | \n\n ) | \n
| \n Capital contributions to subsidiaries | \n\n
| \n\n
| \n\n (87,876 | \n\n ) | \n\n
| \n\n
| \n\n (7,255 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 95,131 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Other investing activities | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 618 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 618 | \n\n
| \n
| \n Net cash used in investing activities | \n\n
| \n\n
| \n\n (87,876 | \n\n ) | \n\n
| \n\n
| \n\n (373,818 | \n\n ) | \n\n
| \n\n
| \n\n (5,606 | \n\n ) | \n\n
| \n\n
| \n\n 95,131 | \n\n
| \n\n
| \n\n
| \n\n (372,169 | \n\n ) | \n
| \n Cash Flows from Financing Activities | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n (Payments for) proceeds from member's equity | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 11,279 | \n\n
| \n\n
| \n\n
| \n\n 7,255 | \n\n
| \n\n
| \n\n
| \n\n (18,534 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Debt issuance costs paid | \n\n
| \n\n
| \n\n (1,596 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (1,596 | \n\n ) | \n
| \n Treasury shares purchased | \n\n
| \n\n
| \n\n (187 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (187 | \n\n ) | \n
| \n Borrowings under revolving line of credit | \n\n
| \n\n
| \n\n 63,400 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 63,400 | \n\n
| \n
| \n Repayments under revolving line of credit | \n\n
| \n\n
| \n\n (5,000 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (5,000 | \n\n ) | \n
| \n Net cash provided by (used in) financing activities | \n\n
| \n\n
| \n\n 56,617 | \n\n
| \n\n
| \n\n
| \n\n 11,279 | \n\n
| \n\n
| \n\n
| \n\n 7,255 | \n\n
| \n\n
| \n\n
| \n\n (18,534 | \n\n ) | \n\n
| \n\n
| \n\n 56,617 | \n\n
| \n
| \n Effect of exchange rates on cash | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (855 | \n\n ) | \n\n
| \n\n
| \n\n (554 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (1,409 | \n\n ) | \n
| \n Net decrease in cash and cash equivalents | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (31,440 | \n\n ) | \n\n
| \n\n
| \n\n (1,600 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (33,040 | \n\n ) | \n
| \n Cash and cash equivalents at beginning of year | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 72,367 | \n\n
| \n\n
| \n\n
| \n\n 2,739 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 75,106 | \n\n
| \n
| \n Cash and cash equivalents at end of period | \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 40,927 | \n\n
| \n\n
| \n\n $ | \n\n 1,139 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 42,066 | \n\n
| \n
20. Quarterly Financial Data (Unaudited)
\nThe Company’s operations are subject to seasonal fluctuations. Demand has historically been highest in the third and fourth quarters of each year, corresponding to the holiday season, and lowest in the first quarter of each year, corresponding to customers’ receipt of income tax refunds in the United States. Typically, the Company’s cost of revenue, which represents its loan loss provision, is lowest as a percentage of revenue in the first quarter of each year. The following is a summary of the quarterly results of operations for the years ended December 31, 2017 and 2016 (in thousands, except per share data):
\n\n
| \n
| \n\n
| \n\n First | \n\n
| \n\n
| \n\n Second | \n\n
| \n\n
| \n\n Third | \n\n
| \n\n
| \n\n Fourth | \n\n
| \n||||
| \n
| \n\n
| \n\n Quarter | \n\n
| \n\n
| \n\n Quarter | \n\n
| \n\n
| \n\n Quarter | \n\n
| \n\n
| \n\n Quarter | \n\n
| \n||||
| \n 2017 | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Total Revenue | \n\n
| \n\n $ | \n\n 192,263 | \n\n
| \n\n
| \n\n $ | \n\n 189,904 | \n\n
| \n\n
| \n\n $ | \n\n 217,878 | \n\n
| \n\n
| \n\n $ | \n\n 243,696 | \n\n
| \n
| \n Cost of Revenue | \n\n
| \n\n
| \n\n 81,884 | \n\n
| \n\n
| \n\n
| \n\n 79,862 | \n\n
| \n\n
| \n\n
| \n\n 107,341 | \n\n
| \n\n
| \n\n
| \n\n 127,545 | \n\n
| \n
| \n Gross Profit | \n\n
| \n\n $ | \n\n 110,379 | \n\n
| \n\n
| \n\n $ | \n\n 110,042 | \n\n
| \n\n
| \n\n $ | \n\n 110,537 | \n\n
| \n\n
| \n\n $ | \n\n 116,151 | \n\n
| \n
| \n Net Income (Loss) | \n\n
| \n\n $ | \n\n 13,852 | \n\n
| \n\n
| \n\n $ | \n\n 11,873 | \n\n
| \n\n
| \n\n $ | \n\n (3,368 | \n\n ) | \n\n
| \n\n $ | \n\n 6,883 | \n\n
| \n
| \n Diluted earnings per share | \n\n
| \n\n $ | \n\n 0.41 | \n\n
| \n\n
| \n\n $ | \n\n 0.35 | \n\n
| \n\n
| \n\n $ | \n\n (0.10 | \n\n ) | \n\n
| \n\n $ | \n\n 0.20 | \n\n
| \n
| \n Diluted weighted average common shares (1) | \n\n
| \n\n
| \n\n 34,036 | \n\n
| \n\n
| \n\n
| \n\n 34,125 | \n\n
| \n\n
| \n\n
| \n\n 33,670 | \n\n
| \n\n
| \n\n
| \n\n 34,172 | \n\n
| \n
| \n 2016 | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Total Revenue | \n\n
| \n\n $ | \n\n 174,653 | \n\n
| \n\n
| \n\n $ | \n\n 172,535 | \n\n
| \n\n
| \n\n $ | \n\n 195,943 | \n\n
| \n\n
| \n\n $ | \n\n 202,438 | \n\n
| \n
| \n Cost of Revenue | \n\n
| \n\n
| \n\n 69,577 | \n\n
| \n\n
| \n\n
| \n\n 65,453 | \n\n
| \n\n
| \n\n
| \n\n 95,391 | \n\n
| \n\n
| \n\n
| \n\n 97,545 | \n\n
| \n
| \n Gross Profit | \n\n
| \n\n $ | \n\n 105,076 | \n\n
| \n\n
| \n\n $ | \n\n 107,082 | \n\n
| \n\n
| \n\n $ | \n\n 100,552 | \n\n
| \n\n
| \n\n $ | \n\n 104,893 | \n\n
| \n
| \n Net Income | \n\n
| \n\n $ | \n\n 9,863 | \n\n
| \n\n
| \n\n $ | \n\n 8,188 | \n\n
| \n\n
| \n\n $ | \n\n 7,837 | \n\n
| \n\n
| \n\n $ | \n\n 8,714 | \n\n
| \n
| \n Diluted earnings per share | \n\n
| \n\n $ | \n\n 0.30 | \n\n
| \n\n
| \n\n $ | \n\n 0.25 | \n\n
| \n\n
| \n\n $ | \n\n 0.23 | \n\n
| \n\n
| \n\n $ | \n\n 0.26 | \n\n
| \n
| \n Diluted weighted average common shares (1) | \n\n
| \n\n
| \n\n 33,187 | \n\n
| \n\n
| \n\n
| \n\n 33,335 | \n\n
| \n\n
| \n\n
| \n\n 33,558 | \n\n
| \n\n
| \n\n
| \n\n 33,767 | \n\n
| \n
\n
| \n (1) | \n\n See Note 1 for Basis of Presentation. |
21. Subsequent Events
\nSubsequent events have been reviewed through the date these financial statements were available to be issued.
\nOn January 22, 2018, the Company redeemed $50,000,000 in principal amount of the outstanding 2021 Senior Notes. The redemption price of the 2021 Senior Notes, as set forth in the 2021 Senior Notes Indenture, was equal to 107.313% of the principal amount of such 2021 Senior Notes redeemed, plus accrued and unpaid interest thereon. In connection with these purchases, the Company recorded a loss on extinguishment of debt of approximately $4.7 million, which will be included in “Loss on early extinguishment of debt” in the consolidated statements of income.
\n
Basis of Presentation
\nThe consolidated financial statements of the Company reflect the historical results of operations and cash flows of the Company during each respective period. The financial statements include goodwill and intangible assets arising from businesses previously acquired. The financial information included herein may not be indicative of the consolidated financial position, operating results, changes in stockholders’ equity and cash flows of the Company in the future. Intercompany transactions are eliminated.
\nThe Company consolidates any variable interest entity (“VIE”) where it has determined the Company is the primary beneficiary. The primary beneficiary is the entity which has both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance as well as the obligation to absorb losses or receive benefits of the entity that could potentially be significant to the VIE.
Use of Estimates
\nThe preparation of these financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the dates of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. On an on-going basis, management evaluates its estimates and judgments, including those related to revenue recognition, allowance for losses on loans and finance receivables, goodwill, long-lived and intangible assets, income taxes, contingencies and litigation. Management bases its estimates on historical experience, empirical data and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates.
Out-of-Period Adjustment
\nIn a review of its revenue recognition policy during 2015, the Company determined that certain fees on its line of credit product should be deferred over the period the draw is outstanding rather than recognized as revenue when assessed. The Company recorded a $2.5 million reduction to revenue in the fourth quarter of 2015 as an out-of-period adjustment. This adjustment included a $2.8 million reduction of revenue associated with periods prior to 2015. The Company believes this adjustment was not material to any of the prior years’ financial statements.
Foreign Currency Translations
\nThe functional currencies for the Company’s subsidiaries that serve or have served residents of the United Kingdom, Australia, Canada and Brazil are the British pound, the Australian dollar, the Canadian dollar and the Brazilian real, respectively. The assets and liabilities of these subsidiaries are translated into U.S. dollars at the exchange rates in effect at each balance sheet date, and the resulting adjustments are recorded in “Accumulated other comprehensive income (loss)” (“AOCI”) as a separate component of stockholders’ equity. Revenue and expenses are translated at the monthly average exchange rates occurring during each period.
Cash and Cash Equivalents
\nThe Company considers deposits in banks and short-term investments with original maturities of 90 days or less as cash and cash equivalents.
Restricted Cash
\nThe Company includes funds to be used for future debt payments relating to its securitization transactions and escrow deposits in restricted cash and cash equivalents.
Revenue Recognition
\nThe Company recognizes revenue based on the financing products and services it offers and on loans it acquires. “Revenue” in the consolidated statements of income includes: interest income, finance charges, fees for services provided through the Company’s credit services organization and credit access business programs (“CSO programs”) (“CSO fees”), revenue on RPAs, draw fees, minimum billing fees, purchase fees, late fees and non-sufficient funds fees as permitted by applicable laws and pursuant to the agreement with the customer. For short-term loans that the Company offers, interest and finance charges are recognized on an effective yield basis over the term of the loan. For line of credit accounts, interest is recognized over the reporting period based upon the balance outstanding and the contractual interest rate, draw fees are recognized on an effective yield basis over the estimated outstanding period of the draw, and minimum billing fees are recognized when assessed to the customer. For installment loans, interest is recognized on an effective yield basis over the term of the loan. For RPAs, revenue and purchase fees are recognized on an effective yield basis over the projected delivery term of the agreements and fees are recognized when assessed. CSO fees are recognized on an effective yield basis over the term of the loan. Late and nonsufficient funds fees are recognized when assessed to the customer. Direct costs associated with originating loans or RPAs and purchasing installment loans, such as third-party customer acquisition costs or purchase premiums, are deferred and amortized against revenue on an effective yield basis over the term of the loan or the projected delivery term of the finance receivable. Short-term loans, line of credit accounts, installment loans, RPAs, unpaid and accrued interest, fees and revenue and deferred origination costs are included in “Loans and finance receivables, net” in the consolidated balance sheets.
Current and Delinquent Loans and Finance Receivables
\nThe Company classifies its loans and finance receivables as either current or delinquent. Short-term loans are considered delinquent when payment of an amount due is not made as of the due date. If a line of credit account or installment loan customer misses one payment, that payment is considered delinquent and the balance of the loan is considered current. If a line of credit account or installment loan customer does not make two consecutive payments, the entire account or loan is classified as delinquent and placed on a non-accrual status. The Company allows for normal payment processing time before considering a loan delinquent but does not provide for any additional grace period.
\nWhere permitted by law and as long as a loan is not considered delinquent, a customer may choose to renew a short-term loan or installment loan or extend the due date on a short-term loan. In order to renew or extend a short-term loan, a customer must agree to pay the current finance charge for the right to make a later payment of the outstanding principal balance plus an additional finance charge. In order to renew an installment loan, the customer enters into a new installment loan contract and agrees to pay the principal balance and finance charge in accordance with the terms of the new loan contract. If a short-term loan is renewed, but the customer fails to pay that loan’s current finance charge as of the due date, the unpaid finance charge is classified as delinquent.
\nThe Company does not accrue interest on delinquent loans and does not resume accrual of interest on a delinquent loan unless it is returned to current status. In addition, delinquent loans generally may not be renewed, and if, during its attempt to collect on a delinquent loan, the Company allows additional time for payment through a payment plan or a promise to pay, it is still considered delinquent. Generally, all payments received are first applied against accrued but unpaid interest and fees and then against the principal balance of the loan.
Allowance and Liability for Estimated Losses on Loans and Finance Receivables
\nThe Company monitors the performance of its loan and finance receivable portfolios and maintains either an allowance or liability for estimated losses on loans and finance receivables (including revenue, fees and/or interest) at a level estimated to be adequate to absorb losses inherent in the portfolio. The allowance for losses on the Company’s owned loans and finance receivables reduces the outstanding loans and finance receivables balance in the consolidated balance sheets. The liability for estimated losses related to loans guaranteed under its CSO programs is initially recorded at fair value and is included in “Accounts payable and accrued expenses” in the consolidated balance sheets.
\nIn determining the allowance or liability for estimated losses on loans and finance receivables, the Company applies a documented systematic methodology. In calculating the allowance or liability for receivable losses, outstanding loans and finance receivables are divided into discrete groups of short-term loans, line of credit accounts, installment loans and RPAs and are analyzed as current or delinquent. Increases in either the allowance or the liability, net of charge-offs and recoveries, are recorded as a “Cost of revenue” in the consolidated statements of income.
\nThe allowance or liability for short-term loans classified as current is based on historical loss rates adjusted for recent default trends for current loans. For delinquent short-term loans, the allowance or liability is based on a six-month rolling average of loss rates by stage of collection. For line of credit account, installment loan and RPA portfolios, the Company generally uses either a migration analysis or roll-rate based methodology to estimate losses inherent in the portfolio. The allowance or liability calculation under the migration analysis and roll-rate methodology is based on historical charge-off experience and the loss emergence period, which represents the average amount of time between the first occurrence of a loss event and the charge-off of a loan or RPA. The factors the Company considers to assess the adequacy of the allowance or liability include past due performance, historical behavior of monthly vintages, underwriting changes, delinquency status, payment history and recency factors.
\nThe Company fully reserves for loans and finance receivables once the receivable or a portion of the receivable has been classified as delinquent for 60 consecutive days and generally charges off loans and finance receivables between 60 – 65 days delinquent. If a loan or finance receivable is deemed uncollectible before it is fully reserved, it is charged off at that point. Loans and finance receivables classified as delinquent generally have an age of one to 64 days from the date any portion of the receivable became delinquent, as defined above. Recoveries on loans and finance receivables previously charged to the allowance are credited to the allowance when collected.
Property and Equipment
\nProperty and equipment is recorded at cost. The cost of property retired or sold and the related accumulated depreciation are removed from the accounts, and any resulting gain or loss is recognized in the consolidated statements of income. Costs associated with repair and maintenance activities are expensed as incurred. Depreciation expense is generally provided on a straight-line basis, using the following estimated useful lives:
\n\n
| \n Computer hardware and software | \n\n
| \n\n 3 to 5 years | \n
| \n Furniture, fixtures and equipment | \n\n
| \n\n 3 to 7 years | \n
| \n Leasehold improvements (1) | \n\n
| \n\n 3 to 10 years | \n
\n
| \n (1) | \n\n Leasehold improvements are depreciated over the lesser of the estimated useful life, remaining lease term, or 10 years. |
Software Development Costs
\nThe Company applies Accounting Standards Codification (“ASC”) 350-40, Internal Use Software (“ASC 350-40”), to its software purchase and development activities. Under ASC 350-40, eligible internal and external costs incurred for the development of computer software applications, as well as for upgrades and enhancements that result in additional functionality of the applications, are capitalized to “Property and equipment” on the consolidated balance sheets. Internal and external training and maintenance costs are charged to expense as incurred or over the related service period. When a software application is placed in service, the Company begins amortizing the related capitalized software costs using the straight-line method based on its estimated useful life, which currently ranges from one to five years.
Goodwill
\nGoodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in each business combination. In accordance with ASC 350, Intangibles—Goodwill and Other (“ASC 350”), the Company tests goodwill and intangible assets with an indefinite life for potential impairment annually as of June 30 and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.
\nThe Company first assesses qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. In assessing the qualitative factors, management considers relevant events and circumstances including but not limited to macroeconomic conditions, industry and market environment, overall financial performance of the Company, cash flow from operating activities, market capitalization and stock price. If the Company determines that the two-step quantitative impairment test is required, management uses the income approach to complete its annual goodwill assessment. The income approach uses future cash flows and estimated terminal values for the Company that are discounted using a market participant perspective to determine the fair value, which is then compared to the carrying value to determine if there is impairment. The income approach includes assumptions about revenue growth rates, operating margins and terminal growth rates discounted by an estimated weighted-average cost of capital derived from other publicly-traded companies that are similar but not identical from an operational and economic standpoint. The Company completed its annual assessment of goodwill as of June 30, 2017 based on qualitative factors and determined that the fair value of its goodwill exceeded carrying value, and, as a result, no impairment existed at that date. Although no goodwill impairment was noted, there can be no assurances that future goodwill impairments will not occur.
\nAs of December 31, 2017, the Company had $267.0 million of goodwill, all of which is expected to be deductible for tax purposes.
Long-Lived Assets Other Than Goodwill
\nAn evaluation of the recoverability of property and equipment and intangible assets subject to amortization is performed whenever the facts and circumstances indicate that the carrying value may be impaired. An impairment loss is recognized if the future undiscounted cash flows associated with the asset and the estimated fair value of the asset are less than the asset’s corresponding carrying value. The amount of the impairment loss, if any, is the excess of the asset’s carrying value over its estimated fair value.
\nThe Company amortizes intangible assets subject to amortization on the basis of their expected periods of benefit, generally three to 20 years. The costs of start-up activities and organization costs are charged to expense as incurred.
Hedging and Derivatives Activity
\nThe Company periodically uses foreign currency forward contracts, which are considered derivative instruments, to minimize the effects of foreign currency risk in Brazil and the United Kingdom related to the operations of the Company. The forward contracts are not designated as hedges as defined by ASC 815, Derivatives and Hedging; therefore, any changes in the fair value of the forward contracts are recognized in “Foreign currency transaction gain (loss), net” in the consolidated statements of income. See Note 13.
Investment in Unconsolidated Investee
\nThe Company accounts for its investments in unconsolidated investees in accordance with ASC 325, Investments—Other Investments are recorded on a cost basis. The Company evaluates investments for impairment if an event occurs or circumstances change that would more likely than not reduce the fair value of the investment below carrying value. If an impairment of an investment is determined to be other than temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period the other-than-temporary-impairment is identified. The Company’s investments in unconsolidated investees are held in “Other assets” on the consolidated balance sheets.
\nAs of December 31, 2017, the Company owned a $6.7 million investment in the preferred stock of a privately-held developing financial services entity. The Company’s impairment evaluation of this investment as of December 31, 2017 determined that an impairment loss was not probable as of that date.
Marketing Expenses
\nMarketing expenses consist of digital costs, lead purchase costs and offline marketing costs such as television and direct mail advertising. Marketing costs directly related to loan and RPA originations are deferred and amortized against revenue. Marketing costs not directly resulting in loan and RPA originations are expensed as incurred. The production costs associated with offline marketing are expensed as incurred.
\nIn 2015 and 2016, the Company also had an agreement with an independent third party pursuant to which the Company paid a portion of the net revenue received from the customers referred to the Company by such third party.
Operations and Technology Expenses
\nOperations and technology expenses include all expenses related to the direct operations and technology infrastructure related to loan underwriting and processing. This includes call center and operations personnel costs, software maintenance expense, underwriting data from third-party vendors, bank and transaction fees and telephony costs.
General and Administrative Expenses
\nGeneral and Administrative expenses primarily include the Company’s corporate personnel costs, as well as legal, occupancy, and other related costs.
Stock-Based Compensation
\nThe Company accounts for its stock-based employee compensation plans in accordance with ASC 718, Compensation—Stock Compensation (“ASC 718”) and recognizes compensation expense based on the grant date fair value over the remaining vesting periods for stock-based awards.
\nUnder applicable accounting standards, the fair value of share-based compensation is determined at the grant date and the recognition of the related expense is recorded over the period in which the share-based compensation vests. However, with respect to income taxes, the related deduction from taxes payable is based on the award’s intrinsic value at the time of exercise (for an option) or on the fair value upon vesting of the award (for RSUs), which can be either greater (creating an excess tax benefit) or less (creating a tax deficiency) than the deferred tax benefit recognized as compensation cost is recognized in the financial statements. Pursuant to Accounting Standards Update (“ASU”) 2016-09, Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”), these excess tax benefits/deficiencies are recognized as income tax benefit/expense in the statement of income and, within the statement of cash flows, are classified in operating activities in the same manner as other cash flows related to income taxes. The extent of excess tax benefits/deficiencies is subject to variation in the Company’s stock price and timing/extent of RSU vestings and employee stock option exercises.
Income Taxes
\nThe provision for income taxes is based on income before income taxes as reported for financial statement purposes. Deferred income taxes are provided for in accordance with the assets and liability method of accounting for income taxes in order to recognize the tax effects of temporary differences between financial statement and income tax accounting.
\nThe Company accounts for uncertainty in income taxes in accordance with ASC 740, Income Taxes (“ASC 740”). ASC 740 requires that a more-likely-than-not threshold (greater than 50 percent) be met before the benefit of a tax position may be recognized in the consolidated financial statements and prescribes how such benefit should be measured. It also provides guidance on recognition adjustment, classification, accrual of interest and penalties, accounting in interim periods, disclosure and transition. The Company records interest and penalties related to tax matters as income tax expense in the consolidated statements of income.
\nThe Company performs an evaluation of the recoverability of its deferred tax assets on a quarterly basis. The Company establishes a valuation allowance if it is more likely than not that all or some portion of the deferred tax asset will not be realized. The Company analyzes several factors, including the nature and frequency of operating losses, the Company’s carryforward period for any losses, the reversal of future taxable temporary differences, the expected occurrence of future income or loss and the feasibility of available tax planning strategies to protect against the loss of deferred tax assets. See Note 9 for further discussion.
Earnings Per Share
\nBasic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the year. Diluted earnings per share is calculated by giving effect to the potential dilution that could occur if securities or other contracts to issue common shares were exercised and converted into common shares during the year. Restricted stock units issued under the Company’s stock-based employee compensation plans are included in diluted shares upon the granting of the awards even though the vesting of shares will occur over time.
\nThe following table sets forth the reconciliation of numerators and denominators of basic and diluted earnings per share computations for the years ended December 31, 2017, 2016 and 2015 (in thousands, except per share amounts):
\n\n
| \n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n|||||||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n\n
| \n\n 2015 | \n\n
| \n|||
| \n Numerator: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Net income | \n\n
| \n\n $ | \n\n 29,240 | \n\n
| \n\n
| \n\n $ | \n\n 34,602 | \n\n
| \n\n
| \n\n $ | \n\n 43,992 | \n\n
| \n
| \n Denominator: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Total weighted average basic shares | \n\n
| \n\n
| \n\n 33,523 | \n\n
| \n\n
| \n\n
| \n\n 33,192 | \n\n
| \n\n
| \n\n
| \n\n 33,006 | \n\n
| \n
| \n Shares applicable to stock-based compensation | \n\n
| \n\n
| \n\n 609 | \n\n
| \n\n
| \n\n
| \n\n 270 | \n\n
| \n\n
| \n\n
| \n\n 20 | \n\n
| \n
| \n Total weighted average diluted shares | \n\n
| \n\n
| \n\n 34,132 | \n\n
| \n\n
| \n\n
| \n\n 33,462 | \n\n
| \n\n
| \n\n
| \n\n 33,026 | \n\n
| \n
| \n Earnings per share – basic | \n\n
| \n\n $ | \n\n 0.87 | \n\n
| \n\n
| \n\n $ | \n\n 1.04 | \n\n
| \n\n
| \n\n $ | \n\n 1.33 | \n\n
| \n
| \n Earnings per share – diluted | \n\n
| \n\n $ | \n\n 0.86 | \n\n
| \n\n
| \n\n $ | \n\n 1.03 | \n\n
| \n\n
| \n\n $ | \n\n 1.33 | \n\n
| \n
\n
For the years ended December 31, 2017, 2016 and 2015, 1,563,975, 1,622,331 and 1,700,296 shares of common stock underlying stock options, respectively, and 182,008, 464,500 and 368,111 shares of common stock underlying restricted stock units, respectively, were excluded from the calculation of diluted net income per share because their effect would have been antidilutive.
Adopted Accounting Standards
\nIn March 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-09. The amendments in ASU 2016-09 simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company adopted ASU 2016-09 on January 1, 2017. The adoption of ASU 2016-09 did not have a material impact on the Company’s financial statements.
\nIn August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force) (“ASU 2016-15”). The amendments in ASU 2016-15 provide guidance on eight specific cash flow issues, including debt prepayment or debt extinguishment costs, contingent consideration payments made after a business combination, distributions received from equity method investees and beneficial interests in securitization transactions. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company early-adopted ASU 2016-15 on July 1, 2017. The adoption of ASU 2016-15 did not have a material impact on the Company’s financial statements.
\nAccounting Standards to be Adopted in Future Periods
\nIn February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income, (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“ASU 2018-02”) which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the newly enacted federal corporate income tax rate under the Tax Cuts and Jobs Act. The amount of the reclassification would be the difference between the historical corporate income tax rate and the newly enacted 21 percent corporate income tax rate. ASU 2018-02 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2018 with early adoption in any interim period permitted. The Company will adopt this ASU in the first quarter of 2018. The adoption of ASU 2018-02 is not expected to have a material impact on the Company’s financial statements.
\nIn May 2017, the FASB issued ASU 2017-09, Compensation–Stock Compensation (Topic 718): Scope of Modification Accounting (“ASU 2017-09”) clarifying when a change to the terms or conditions of a share-based payment award must be accounted for as a modification. The new guidance requires modification accounting if the fair value, vesting condition or the classification of the award is not the same immediately before and after a change to the terms and conditions of the award. The new guidance is effective on a prospective basis for annual periods beginning after December 15, 2017, and interim periods within those annual periods, with early adoption permitted. The adoption of ASU 2017-09 is not expected to have a material impact on the Company’s financial statements.
\nIn January 2017, the FASB issued ASU 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets (“ASU 2017-05”) to clarify the scope of Subtopic 610-20, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets, and to add guidance for partial sales of nonfinancial assets. ASU 2017-05 is effective at the same time as the amendments in ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). Therefore, for public entities, the amendments are effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. The Company does not expect that the adoption of ASU 2017-05 will have a material effect on its consolidated financial statements.
\nIn January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350) – Simplifying the Test for Goodwill Impairment (“ASU 2017-04”) to simplify the accounting for goodwill impairment. ASU 2017-04 removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. Goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the impact ASU 2017-04 will have on its consolidated financial statements.
\nIn January 2017, the FASB issued ASU 2017-01 Business Combinations (Topic 805) – Clarifying the Definition of a Business (“ASU 2017-01”). ASU 2017-01 provides a screen to determine when an asset or group of assets acquired is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. ASU 2017-01 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2017. The Company does not expect that the adoption of ASU 2017-01 will have a material effect on its consolidated financial statements.
\nIn November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230), Restricted Cash (“ASU 2016-18”). ASU 2016-18 clarifies certain existing principles in ASC 230, Statement of Cash Flows, including providing additional guidance related to transfers between cash and restricted cash and how entities present, in their statement of cash flows, the cash receipts and cash payments that directly affect the restricted cash accounts. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The adoption of ASU 2016-18 will modify the Company's current disclosures and classifications within the consolidated statement of cash flows and the presentation of its restricted cash activity.
\nIn October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory (“ASU 2016-16”), which requires entities to recognize the income tax impact of an intra-entity sale or transfer of an asset other than inventory when the sale or transfer occurs, rather than when the asset has been sold to an outside party. ASU 2016-16 is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. Early adoption is permitted. The Company does not expect that the adoption of ASU 2016-16 will have a material effect on its consolidated financial statements.
\nIn June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016‑13”). The amendments in ASU 2016‑13 replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016‑13 is effective for annual periods beginning after December 15, 2019, and interim periods within those annual periods. Early adoption is permitted for annual periods beginning after December 15, 2018, and interim periods within those fiscal years. The Company is assessing the impact of ASU 2016‑13, which at the date of adoption is expected to increase the allowance for credit losses with a resulting negative adjustment to retained earnings.
\nIn February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 requires lessee recognition on the balance sheet of a right-of-use asset and a lease liability, initially measured at the present value of the lease payments. It further requires recognition in the income statement of a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis. Finally, it requires classification of all cash payments within operating activities in the statement of cash flows. ASU 2016-02 is effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2018. Early adoption is permitted for all entities upon issuance. Upon adoption of ASU 2016-02, the Company expects to report higher assets and liabilities as a result of including additional leases on the consolidated balance sheet. The Company does not expect the adoption of ASU 2016-02 to have a material impact on the consolidated statements of income or the consolidated statements of stockholders' equity.
\nIn January 2016, the FASB issued ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016‑01”), which requires that equity investments, except for those accounted for under the equity method or those that result in consolidation of the investee, be measured at fair value, with subsequent changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. ASU 2016-01 also impacts the presentation and disclosure requirements for financial instruments. ASU 2016-01 is effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted only for certain provisions. The Company does not expect that the adoption of ASU 2016-01 will have a material effect on its consolidated financial statements.
\nIn May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which supersedes the revenue recognition requirements in Accounting Standards Codification 605, Revenue Recognition. ASU 2014-09 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The Company will adopt this ASU under the modified-prospective method effective January 1, 2018. The Company has completed its assessment of the guidance and determined its loan and finance receivables are excluded from the scope of ASU 2014-09. As a result of this scope exception, the Company has concluded the impact will not be material to its consolidated financial statements.
The Company periodically uses forward currency exchange contracts to minimize the effects of foreign currency risk in Brazil and the United Kingdom. The forward currency exchange contracts are non-designated derivatives. Any gain or loss resulting from these contracts is recorded as income or loss and is included in “Foreign currency transaction gain (loss), net” in the Company’s consolidated statements of income.
Depreciation expense is generally provided on a straight-line basis, using the following estimated useful lives:
\n| \n Computer hardware and software | \n\n
| \n\n 3 to 5 years | \n
| \n Furniture, fixtures and equipment | \n\n
| \n\n 3 to 7 years | \n
| \n Leasehold improvements (1) | \n\n
| \n\n 3 to 10 years | \n
\n
| \n (1) | \n\n Leasehold improvements are depreciated over the lesser of the estimated useful life, remaining lease term, or 10 years. |
The following table sets forth the reconciliation of numerators and denominators of basic and diluted earnings per share computations for the years ended December 31, 2017, 2016 and 2015 (in thousands, except per share amounts):
\n\n
| \n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n|||||||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n\n
| \n\n 2015 | \n\n
| \n|||
| \n Numerator: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Net income | \n\n
| \n\n $ | \n\n 29,240 | \n\n
| \n\n
| \n\n $ | \n\n 34,602 | \n\n
| \n\n
| \n\n $ | \n\n 43,992 | \n\n
| \n
| \n Denominator: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Total weighted average basic shares | \n\n
| \n\n
| \n\n 33,523 | \n\n
| \n\n
| \n\n
| \n\n 33,192 | \n\n
| \n\n
| \n\n
| \n\n 33,006 | \n\n
| \n
| \n Shares applicable to stock-based compensation | \n\n
| \n\n
| \n\n 609 | \n\n
| \n\n
| \n\n
| \n\n 270 | \n\n
| \n\n
| \n\n
| \n\n 20 | \n\n
| \n
| \n Total weighted average diluted shares | \n\n
| \n\n
| \n\n 34,132 | \n\n
| \n\n
| \n\n
| \n\n 33,462 | \n\n
| \n\n
| \n\n
| \n\n 33,026 | \n\n
| \n
| \n Earnings per share – basic | \n\n
| \n\n $ | \n\n 0.87 | \n\n
| \n\n
| \n\n $ | \n\n 1.04 | \n\n
| \n\n
| \n\n $ | \n\n 1.33 | \n\n
| \n
| \n Earnings per share – diluted | \n\n
| \n\n $ | \n\n 0.86 | \n\n
| \n\n
| \n\n $ | \n\n 1.03 | \n\n
| \n\n
| \n\n $ | \n\n 1.33 | \n\n
| \n
Revenue generated from the Company’s loans and finance receivables for the years ended December 31, 2017, 2016 and 2015 was as follows (in thousands):
\n\n
| \n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n|||||||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n\n
| \n\n 2015 | \n\n
| \n|||
| \n Short-term loans | \n\n
| \n\n $ | \n\n 197,408 | \n\n
| \n\n
| \n\n $ | \n\n 196,255 | \n\n
| \n\n
| \n\n $ | \n\n 204,893 | \n\n
| \n
| \n Line of credit accounts | \n\n
| \n\n
| \n\n 262,760 | \n\n
| \n\n
| \n\n
| \n\n 220,462 | \n\n
| \n\n
| \n\n
| \n\n 185,521 | \n\n
| \n
| \n Installment loans and RPAs | \n\n
| \n\n
| \n\n 382,683 | \n\n
| \n\n
| \n\n
| \n\n 327,375 | \n\n
| \n\n
| \n\n
| \n\n 260,507 | \n\n
| \n
| \n Total loans and finance receivables revenue | \n\n
| \n\n
| \n\n 842,851 | \n\n
| \n\n
| \n\n
| \n\n 744,092 | \n\n
| \n\n
| \n\n
| \n\n 650,921 | \n\n
| \n
| \n Other | \n\n
| \n\n
| \n\n 890 | \n\n
| \n\n
| \n\n
| \n\n 1,477 | \n\n
| \n\n
| \n\n
| \n\n 1,679 | \n\n
| \n
| \n Total Revenue | \n\n
| \n\n $ | \n\n 843,741 | \n\n
| \n\n
| \n\n $ | \n\n 745,569 | \n\n
| \n\n
| \n\n $ | \n\n 652,600 | \n\n
| \n
The components of Company-owned loans and finance receivables at December 31, 2017 and 2016 were as follows (in thousands):
\n\n
| \n
| \n\n
| \n\n As of December 31, 2017 | \n\n
| \n|||||||||||||
| \n
| \n\n
| \n\n Short-term | \n\n
| \n\n
| \n\n Line of Credit | \n\n
| \n\n
| \n\n Installment Loans and | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n|||
| \n
| \n\n
| \n\n Loans | \n\n
| \n\n
| \n\n Accounts | \n\n
| \n\n
| \n\n RPAs | \n\n
| \n\n
| \n\n Total | \n\n
| \n||||
| \n Current receivables | \n\n
| \n\n $ | \n\n 45,552 | \n\n
| \n\n
| \n\n $ | \n\n 161,070 | \n\n
| \n\n
| \n\n $ | \n\n 537,634 | \n\n
| \n\n
| \n\n $ | \n\n 744,256 | \n\n
| \n
| \n Delinquent receivables: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Delinquent payment amounts(1) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 7,696 | \n\n
| \n\n
| \n\n
| \n\n 3,635 | \n\n
| \n\n
| \n\n
| \n\n 11,331 | \n\n
| \n
| \n Receivables on non-accrual status | \n\n
| \n\n
| \n\n 28,120 | \n\n
| \n\n
| \n\n
| \n\n 1,302 | \n\n
| \n\n
| \n\n
| \n\n 42,740 | \n\n
| \n\n
| \n\n
| \n\n 72,162 | \n\n
| \n
| \n Total delinquent receivables | \n\n
| \n\n
| \n\n 28,120 | \n\n
| \n\n
| \n\n
| \n\n 8,998 | \n\n
| \n\n
| \n\n
| \n\n 46,375 | \n\n
| \n\n
| \n\n
| \n\n 83,493 | \n\n
| \n
| \n Total loans and finance receivables, gross | \n\n
| \n\n
| \n\n 73,672 | \n\n
| \n\n
| \n\n
| \n\n 170,068 | \n\n
| \n\n
| \n\n
| \n\n 584,009 | \n\n
| \n\n
| \n\n
| \n\n 827,749 | \n\n
| \n
| \n Less: Allowance for losses | \n\n
| \n\n
| \n\n (19,917 | \n\n ) | \n\n
| \n\n
| \n\n (31,148 | \n\n ) | \n\n
| \n\n
| \n\n (71,979 | \n\n ) | \n\n
| \n\n
| \n\n (123,044 | \n\n ) | \n
| \n Loans and finance receivables, net | \n\n
| \n\n $ | \n\n 53,755 | \n\n
| \n\n
| \n\n $ | \n\n 138,920 | \n\n
| \n\n
| \n\n $ | \n\n 512,030 | \n\n
| \n\n
| \n\n $ | \n\n 704,705 | \n\n
| \n
\n
| \n
| \n\n
| \n\n As of December 31, 2016 | \n\n
| \n|||||||||||||
| \n
| \n\n
| \n\n Short-term | \n\n
| \n\n
| \n\n Line of Credit | \n\n
| \n\n
| \n\n Installment Loans and | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n|||
| \n
| \n\n
| \n\n Loans | \n\n
| \n\n
| \n\n Accounts | \n\n
| \n\n
| \n\n RPAs | \n\n
| \n\n
| \n\n Total | \n\n
| \n||||
| \n Current receivables | \n\n
| \n\n $ | \n\n 35,516 | \n\n
| \n\n
| \n\n $ | \n\n 130,576 | \n\n
| \n\n
| \n\n $ | \n\n 413,638 | \n\n
| \n\n
| \n\n $ | \n\n 579,730 | \n\n
| \n
| \n Delinquent receivables: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Delinquent payment amounts(1) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 4,560 | \n\n
| \n\n
| \n\n
| \n\n 2,110 | \n\n
| \n\n
| \n\n
| \n\n 6,670 | \n\n
| \n
| \n Receivables on non-accrual status | \n\n
| \n\n
| \n\n 27,489 | \n\n
| \n\n
| \n\n
| \n\n 9,047 | \n\n
| \n\n
| \n\n
| \n\n 37,559 | \n\n
| \n\n
| \n\n
| \n\n 74,095 | \n\n
| \n
| \n Total delinquent receivables | \n\n
| \n\n
| \n\n 27,489 | \n\n
| \n\n
| \n\n
| \n\n 13,607 | \n\n
| \n\n
| \n\n
| \n\n 39,669 | \n\n
| \n\n
| \n\n
| \n\n 80,765 | \n\n
| \n
| \n Total loans and finance receivables, gross | \n\n
| \n\n
| \n\n 63,005 | \n\n
| \n\n
| \n\n
| \n\n 144,183 | \n\n
| \n\n
| \n\n
| \n\n 453,307 | \n\n
| \n\n
| \n\n
| \n\n 660,495 | \n\n
| \n
| \n Less: Allowance for losses | \n\n
| \n\n
| \n\n (17,770 | \n\n ) | \n\n
| \n\n
| \n\n (26,594 | \n\n ) | \n\n
| \n\n
| \n\n (54,581 | \n\n ) | \n\n
| \n\n
| \n\n (98,945 | \n\n ) | \n
| \n Loans and finance receivables, net | \n\n
| \n\n $ | \n\n 45,235 | \n\n
| \n\n
| \n\n $ | \n\n 117,589 | \n\n
| \n\n
| \n\n $ | \n\n 398,726 | \n\n
| \n\n
| \n\n $ | \n\n 561,550 | \n\n
| \n
\n
| \n (1) | \n\n Represents the delinquent portion of installment loans and line of credit account balances for customers that have only missed one payment. See Note 1 “Significant Accounting Policies-Current and Delinquent Loans and Finance Receivables” for additional information. |
Changes in the allowance for losses for the Company-owned loans and finance receivables and the liability for estimated losses on the Company’s guarantees of third-party lender-owned loans through the CSO programs for the years ended December 31, 2017, 2016 and 2015 were as follows (in thousands):
\n\n
| \n
| \n\n
| \n\n Year Ended December 31, 2017 | \n\n
| \n|||||||||||||
| \n
| \n\n
| \n\n Short-term | \n\n
| \n\n
| \n\n Line of Credit | \n\n
| \n\n
| \n\n Installment Loans and | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n|||
| \n
| \n\n
| \n\n Loans | \n\n
| \n\n
| \n\n Accounts | \n\n
| \n\n
| \n\n RPAs | \n\n
| \n\n
| \n\n Total | \n\n
| \n||||
| \n Allowance for losses for Company-owned loans and finance receivables: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Balance at beginning of period | \n\n
| \n\n $ | \n\n 17,770 | \n\n
| \n\n
| \n\n $ | \n\n 26,594 | \n\n
| \n\n
| \n\n $ | \n\n 54,581 | \n\n
| \n\n
| \n\n $ | \n\n 98,945 | \n\n
| \n
| \n Cost of revenue | \n\n
| \n\n
| \n\n 77,775 | \n\n
| \n\n
| \n\n
| \n\n 93,416 | \n\n
| \n\n
| \n\n
| \n\n 225,179 | \n\n
| \n\n
| \n\n
| \n\n 396,370 | \n\n
| \n
| \n Charge-offs | \n\n
| \n\n
| \n\n (98,243 | \n\n ) | \n\n
| \n\n
| \n\n (102,725 | \n\n ) | \n\n
| \n\n
| \n\n (254,109 | \n\n ) | \n\n
| \n\n
| \n\n (455,077 | \n\n ) | \n
| \n Recoveries | \n\n
| \n\n
| \n\n 22,089 | \n\n
| \n\n
| \n\n
| \n\n 13,863 | \n\n
| \n\n
| \n\n
| \n\n 45,773 | \n\n
| \n\n
| \n\n
| \n\n 81,725 | \n\n
| \n
| \n Effect of foreign currency translation | \n\n
| \n\n
| \n\n 526 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 555 | \n\n
| \n\n
| \n\n
| \n\n 1,081 | \n\n
| \n
| \n Balance at end of period | \n\n
| \n\n $ | \n\n 19,917 | \n\n
| \n\n
| \n\n $ | \n\n 31,148 | \n\n
| \n\n
| \n\n $ | \n\n 71,979 | \n\n
| \n\n
| \n\n $ | \n\n 123,044 | \n\n
| \n
| \n Liability for third-party lender-owned loans: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Balance at beginning of period | \n\n
| \n\n $ | \n\n 1,716 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 280 | \n\n
| \n\n
| \n\n $ | \n\n 1,996 | \n\n
| \n
| \n Increase (decrease) in liability | \n\n
| \n\n
| \n\n 389 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (127 | \n\n ) | \n\n
| \n\n
| \n\n 262 | \n\n
| \n
| \n Balance at end of period | \n\n
| \n\n $ | \n\n 2,105 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 153 | \n\n
| \n\n
| \n\n $ | \n\n 2,258 | \n\n
| \n
\n
| \n
| \n\n
| \n\n Year Ended December 31, 2016 | \n\n
| \n|||||||||||||
| \n
| \n\n
| \n\n Short-term | \n\n
| \n\n
| \n\n Line of Credit | \n\n
| \n\n
| \n\n Installment Loans and | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n|||
| \n
| \n\n
| \n\n Loans | \n\n
| \n\n
| \n\n Accounts | \n\n
| \n\n
| \n\n RPAs | \n\n
| \n\n
| \n\n Total | \n\n
| \n||||
| \n Allowance for losses for Company-owned loans and finance receivables: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Balance at beginning of period | \n\n
| \n\n $ | \n\n 14,652 | \n\n
| \n\n
| \n\n $ | \n\n 15,727 | \n\n
| \n\n
| \n\n $ | \n\n 36,943 | \n\n
| \n\n
| \n\n $ | \n\n 67,322 | \n\n
| \n
| \n Cost of revenue | \n\n
| \n\n
| \n\n 69,202 | \n\n
| \n\n
| \n\n
| \n\n 88,489 | \n\n
| \n\n
| \n\n
| \n\n 170,035 | \n\n
| \n\n
| \n\n
| \n\n 327,726 | \n\n
| \n
| \n Charge-offs | \n\n
| \n\n
| \n\n (85,599 | \n\n ) | \n\n
| \n\n
| \n\n (92,044 | \n\n ) | \n\n
| \n\n
| \n\n (182,471 | \n\n ) | \n\n
| \n\n
| \n\n (360,114 | \n\n ) | \n
| \n Recoveries | \n\n
| \n\n
| \n\n 20,362 | \n\n
| \n\n
| \n\n
| \n\n 14,422 | \n\n
| \n\n
| \n\n
| \n\n 29,804 | \n\n
| \n\n
| \n\n
| \n\n 64,588 | \n\n
| \n
| \n Effect of foreign currency translation | \n\n
| \n\n
| \n\n (847 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 270 | \n\n
| \n\n
| \n\n
| \n\n (577 | \n\n ) | \n
| \n Balance at end of period | \n\n
| \n\n $ | \n\n 17,770 | \n\n
| \n\n
| \n\n $ | \n\n 26,594 | \n\n
| \n\n
| \n\n $ | \n\n 54,581 | \n\n
| \n\n
| \n\n $ | \n\n 98,945 | \n\n
| \n
| \n Liability for third-party lender-owned loans: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Balance at beginning of period | \n\n
| \n\n $ | \n\n 1,298 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 458 | \n\n
| \n\n
| \n\n $ | \n\n 1,756 | \n\n
| \n
| \n Increase (decrease) in liability | \n\n
| \n\n
| \n\n 418 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (178 | \n\n ) | \n\n
| \n\n
| \n\n 240 | \n\n
| \n
| \n Balance at end of period | \n\n
| \n\n $ | \n\n 1,716 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 280 | \n\n
| \n\n
| \n\n $ | \n\n 1,996 | \n\n
| \n
\n
| \n
| \n\n
| \n\n Year Ended December 31, 2015 | \n\n
| \n|||||||||||||
| \n
| \n\n
| \n\n Short-term | \n\n
| \n\n
| \n\n Line of Credit | \n\n
| \n\n
| \n\n Installment Loans and | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n|||
| \n
| \n\n
| \n\n Loans | \n\n
| \n\n
| \n\n Accounts | \n\n
| \n\n
| \n\n RPAs | \n\n
| \n\n
| \n\n Total | \n\n
| \n||||
| \n Allowance for losses for Company-owned loans and finance receivables: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Balance at beginning of period | \n\n
| \n\n $ | \n\n 14,324 | \n\n
| \n\n
| \n\n $ | \n\n 19,749 | \n\n
| \n\n
| \n\n $ | \n\n 30,875 | \n\n
| \n\n
| \n\n $ | \n\n 64,948 | \n\n
| \n
| \n Cost of revenue | \n\n
| \n\n
| \n\n 62,571 | \n\n
| \n\n
| \n\n
| \n\n 43,547 | \n\n
| \n\n
| \n\n
| \n\n 110,560 | \n\n
| \n\n
| \n\n
| \n\n 216,678 | \n\n
| \n
| \n Charge-offs | \n\n
| \n\n
| \n\n (83,316 | \n\n ) | \n\n
| \n\n
| \n\n (68,075 | \n\n ) | \n\n
| \n\n
| \n\n (129,537 | \n\n ) | \n\n
| \n\n
| \n\n (280,928 | \n\n ) | \n
| \n Recoveries | \n\n
| \n\n
| \n\n 21,374 | \n\n
| \n\n
| \n\n
| \n\n 20,694 | \n\n
| \n\n
| \n\n
| \n\n 25,585 | \n\n
| \n\n
| \n\n
| \n\n 67,653 | \n\n
| \n
| \n Effect of foreign currency translation | \n\n
| \n\n
| \n\n (301 | \n\n ) | \n\n
| \n\n
| \n\n (188 | \n\n ) | \n\n
| \n\n
| \n\n (540 | \n\n ) | \n\n
| \n\n
| \n\n (1,029 | \n\n ) | \n
| \n Balance at end of period | \n\n
| \n\n $ | \n\n 14,652 | \n\n
| \n\n
| \n\n $ | \n\n 15,727 | \n\n
| \n\n
| \n\n $ | \n\n 36,943 | \n\n
| \n\n
| \n\n $ | \n\n 67,322 | \n\n
| \n
| \n Liability for third-party lender-owned loans: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Balance at beginning of period | \n\n
| \n\n $ | \n\n 1,575 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 1 | \n\n
| \n\n
| \n\n $ | \n\n 1,576 | \n\n
| \n
| \n (Decrease) increase in liability | \n\n
| \n\n
| \n\n (277 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 457 | \n\n
| \n\n
| \n\n
| \n\n 180 | \n\n
| \n
| \n Balance at end of period | \n\n
| \n\n $ | \n\n 1,298 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 458 | \n\n
| \n\n
| \n\n $ | \n\n 1,756 | \n\n
| \n
Major classifications of property and equipment at December 31, 2017 and 2016 were as follows (in thousands):
\n\n
| \n
| \n\n
| \n\n As of December 31, 2017 | \n\n
| \n|||||||||
| \n
| \n\n
| \n\n Cost | \n\n
| \n\n
| \n\n Accumulated Depreciation | \n\n
| \n\n
| \n\n Net | \n\n
| \n|||
| \n Computer software | \n\n
| \n\n $ | \n\n 82,757 | \n\n
| \n\n
| \n\n $ | \n\n (56,282 | \n\n ) | \n\n
| \n\n $ | \n\n 26,475 | \n\n
| \n
| \n Furniture, fixtures and equipment | \n\n
| \n\n
| \n\n 33,834 | \n\n
| \n\n
| \n\n
| \n\n (25,912 | \n\n ) | \n\n
| \n\n
| \n\n 7,922 | \n\n
| \n
| \n Leasehold improvements | \n\n
| \n\n
| \n\n 25,196 | \n\n
| \n\n
| \n\n
| \n\n (11,068 | \n\n ) | \n\n
| \n\n
| \n\n 14,128 | \n\n
| \n
| \n Total | \n\n
| \n\n $ | \n\n 141,787 | \n\n
| \n\n
| \n\n $ | \n\n (93,262 | \n\n ) | \n\n
| \n\n $ | \n\n 48,525 | \n\n
| \n
\n
| \n
| \n\n
| \n\n As of December 31, 2016 | \n\n
| \n|||||||||
| \n
| \n\n
| \n\n Cost | \n\n
| \n\n
| \n\n Accumulated Depreciation | \n\n
| \n\n
| \n\n Net | \n\n
| \n|||
| \n Computer software | \n\n
| \n\n $ | \n\n 72,277 | \n\n
| \n\n
| \n\n $ | \n\n (48,680 | \n\n ) | \n\n
| \n\n $ | \n\n 23,597 | \n\n
| \n
| \n Furniture, fixtures and equipment | \n\n
| \n\n
| \n\n 30,974 | \n\n
| \n\n
| \n\n
| \n\n (22,159 | \n\n ) | \n\n
| \n\n
| \n\n 8,815 | \n\n
| \n
| \n Leasehold improvements | \n\n
| \n\n
| \n\n 24,267 | \n\n
| \n\n
| \n\n
| \n\n (9,579 | \n\n ) | \n\n
| \n\n
| \n\n 14,688 | \n\n
| \n
| \n Total | \n\n
| \n\n $ | \n\n 127,518 | \n\n
| \n\n
| \n\n $ | \n\n (80,418 | \n\n ) | \n\n
| \n\n $ | \n\n 47,100 | \n\n
| \n
Changes in the carrying value of goodwill for the years ended December 31, 2017 and 2016 were as follows (in thousands):
\n\n
| \n Balance as of January 1, 2016 | \n\n
| \n\n $ | \n\n 267,008 | \n\n
| \n
| \n Effect of foreign currency translation | \n\n
| \n\n
| \n\n 2 | \n\n
| \n
| \n Balance as of December 31, 2016 | \n\n
| \n\n $ | \n\n 267,010 | \n\n
| \n
| \n Effect of foreign currency translation | \n\n
| \n\n
| \n\n 5 | \n\n
| \n
| \n Balance as of December 31, 2017 | \n\n
| \n\n $ | \n\n 267,015 | \n\n
| \n
Acquired intangible assets that are subject to amortization as of December 31, 2017 and 2016, were as follows (in thousands):
\n\n
| \n
| \n\n
| \n\n As of December 31, 2017 | \n\n
| \n|||||||||
| \n
| \n\n
| \n\n Cost | \n\n
| \n\n
| \n\n Accumulated Amortization | \n\n
| \n\n
| \n\n Net | \n\n
| \n|||
| \n Customer relationships | \n\n
| \n\n $ | \n\n 3,536 | \n\n
| \n\n
| \n\n $ | \n\n (3,136 | \n\n ) | \n\n
| \n\n $ | \n\n 400 | \n\n
| \n
| \n Lead provider and broker relationships | \n\n
| \n\n
| \n\n 5,689 | \n\n
| \n\n
| \n\n
| \n\n (4,089 | \n\n ) | \n\n
| \n\n
| \n\n 1,600 | \n\n
| \n
| \n Trademarks | \n\n
| \n\n
| \n\n 2,595 | \n\n
| \n\n
| \n\n
| \n\n (670 | \n\n ) | \n\n
| \n\n
| \n\n 1,925 | \n\n
| \n
| \n Non-competition agreements | \n\n
| \n\n
| \n\n 800 | \n\n
| \n\n
| \n\n
| \n\n (400 | \n\n ) | \n\n
| \n\n
| \n\n 400 | \n\n
| \n
| \n Total | \n\n
| \n\n $ | \n\n 12,620 | \n\n
| \n\n
| \n\n $ | \n\n (8,295 | \n\n ) | \n\n
| \n\n $ | \n\n 4,325 | \n\n
| \n
\n
| \n
| \n\n
| \n\n As of December 31, 2016 | \n\n
| \n|||||||||
| \n
| \n\n
| \n\n Cost | \n\n
| \n\n
| \n\n Accumulated Amortization | \n\n
| \n\n
| \n\n Net | \n\n
| \n|||
| \n Customer relationships | \n\n
| \n\n $ | \n\n 3,533 | \n\n
| \n\n
| \n\n $ | \n\n (2,973 | \n\n ) | \n\n
| \n\n $ | \n\n 560 | \n\n
| \n
| \n Lead provider and broker relationships | \n\n
| \n\n
| \n\n 5,689 | \n\n
| \n\n
| \n\n
| \n\n (3,449 | \n\n ) | \n\n
| \n\n
| \n\n 2,240 | \n\n
| \n
| \n Trademarks | \n\n
| \n\n
| \n\n 2,590 | \n\n
| \n\n
| \n\n
| \n\n (546 | \n\n ) | \n\n
| \n\n
| \n\n 2,044 | \n\n
| \n
| \n Non-competition agreements | \n\n
| \n\n
| \n\n 800 | \n\n
| \n\n
| \n\n
| \n\n (240 | \n\n ) | \n\n
| \n\n
| \n\n 560 | \n\n
| \n
| \n Total | \n\n
| \n\n $ | \n\n 12,612 | \n\n
| \n\n
| \n\n $ | \n\n (7,208 | \n\n ) | \n\n
| \n\n $ | \n\n 5,404 | \n\n
| \n
Estimated future amortization expense for the years ended December 31, is as follows (in thousands):
\n\n
| \n Year | \n\n
| \n\n Amount | \n\n
| \n|
| \n 2018 | \n\n
| \n\n $ | \n\n 1,070 | \n\n
| \n
| \n 2019 | \n\n
| \n\n
| \n\n 1,070 | \n\n
| \n
| \n 2020 | \n\n
| \n\n
| \n\n 590 | \n\n
| \n
| \n 2021 | \n\n
| \n\n
| \n\n 110 | \n\n
| \n
| \n 2022 | \n\n
| \n\n
| \n\n 110 | \n\n
| \n
Accounts payable and accrued expenses at December 31, 2017, 2016 were as follows (in thousands):
\n\n
| \n
| \n\n
| \n\n As of December 31, | \n\n
| \n|||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n||
| \n Trade accounts payable | \n\n
| \n\n $ | \n\n 25,579 | \n\n
| \n\n
| \n\n $ | \n\n 25,420 | \n\n
| \n
| \n Accrued payroll and fringe benefits | \n\n
| \n\n
| \n\n 14,877 | \n\n
| \n\n
| \n\n
| \n\n 14,165 | \n\n
| \n
| \n Accrued interest payable | \n\n
| \n\n
| \n\n 11,064 | \n\n
| \n\n
| \n\n
| \n\n 5,043 | \n\n
| \n
| \n Deferred finish out allowance | \n\n
| \n\n
| \n\n 7,979 | \n\n
| \n\n
| \n\n
| \n\n 8,939 | \n\n
| \n
| \n Deferred fees on third-party consumer loans | \n\n
| \n\n
| \n\n 7,074 | \n\n
| \n\n
| \n\n
| \n\n 6,869 | \n\n
| \n
| \n Accrual for consumer loan payments rejected for non-sufficient funds | \n\n
| \n\n
| \n\n 5,096 | \n\n
| \n\n
| \n\n
| \n\n 3,680 | \n\n
| \n
| \n Promissory note | \n\n
| \n\n
| \n\n 3,000 | \n\n
| \n\n
| \n\n
| \n\n 3,000 | \n\n
| \n
| \n Liability for losses on third-party lender owned consumer loans | \n\n
| \n\n
| \n\n 2,258 | \n\n
| \n\n
| \n\n
| \n\n 1,996 | \n\n
| \n
| \n Contingent consideration | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 2,358 | \n\n
| \n
| \n Other accrued liabilities | \n\n
| \n\n
| \n\n 196 | \n\n
| \n\n
| \n\n
| \n\n 201 | \n\n
| \n
| \n Total | \n\n
| \n\n $ | \n\n 77,123 | \n\n
| \n\n
| \n\n $ | \n\n 71,671 | \n\n
| \n
Marketing expenses for the years ended December 31, 2017, 2016 and 2015 were as follows (in thousands):
\n\n
| \n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n|||||||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n\n
| \n\n 2015 | \n\n
| \n|||
| \n Advertising | \n\n
| \n\n $ | \n\n 64,186 | \n\n
| \n\n
| \n\n $ | \n\n 66,184 | \n\n
| \n\n
| \n\n $ | \n\n 80,526 | \n\n
| \n
| \n Customer procurement expense including lead purchase costs | \n\n
| \n\n
| \n\n 37,224 | \n\n
| \n\n
| \n\n
| \n\n 30,551 | \n\n
| \n\n
| \n\n
| \n\n 29,327 | \n\n
| \n
| \n Customer referral and revenue sharing expense | \n\n
| \n\n
| \n\n 19 | \n\n
| \n\n
| \n\n
| \n\n 669 | \n\n
| \n\n
| \n\n
| \n\n 7,029 | \n\n
| \n
| \n Total | \n\n
| \n\n $ | \n\n 101,429 | \n\n
| \n\n
| \n\n $ | \n\n 97,404 | \n\n
| \n\n
| \n\n $ | \n\n 116,882 | \n\n
| \n
The Company’s long-term debt instruments and balances outstanding as of December 31, 2017 and 2016 were as follows (in thousands):
\n\n
| \n
| \n\n
| \n\n December 31, | \n\n
| \n|||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n||
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Securitization notes | \n\n
| \n\n $ | \n\n 211,406 | \n\n
| \n\n
| \n\n $ | \n\n 165,419 | \n\n
| \n
| \n 9.75% senior notes due 2021 | \n\n
| \n\n
| \n\n 342,558 | \n\n
| \n\n
| \n\n
| \n\n 495,622 | \n\n
| \n
| \n 8.50% senior notes due 2024 | \n\n
| \n\n
| \n\n 250,000 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Subtotal | \n\n
| \n\n
| \n\n 803,964 | \n\n
| \n\n
| \n\n
| \n\n 661,041 | \n\n
| \n
| \n Less: Long-term debt issuance costs | \n\n
| \n\n
| \n\n (15,422 | \n\n ) | \n\n
| \n\n
| \n\n (11,130 | \n\n ) | \n
| \n Total long-term debt | \n\n
| \n\n $ | \n\n 788,542 | \n\n
| \n\n
| \n\n $ | \n\n 649,911 | \n\n
| \n
As of December 31, 2017, required principal payments under the terms of the long-term debt for each of the five years after December 31, 2017 are as follows (in thousands):
\n\n
| \n Year | \n\n
| \n\n Amount | \n\n
| \n\n
| \n\n
| \n\n
| \n|
| \n 2018 | \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n 2019 | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n 2020 | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n 2021 | \n\n
| \n\n
| \n\n 345,000 | \n\n
| \n\n
| \n\n (1 | \n\n ) | \n
| \n 2022 | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Thereafter | \n\n
| \n\n
| \n\n 250,000 | \n\n
| \n\n
| \n\n (2 | \n\n ) | \n
| \n Securitization | \n\n
| \n\n
| \n\n 211,406 | \n\n
| \n\n
| \n\n (3 | \n\n ) | \n
| \n Total | \n\n
| \n\n $ | \n\n 806,406 | \n\n
| \n\n
| \n\n
| \n\n
| \n
\n
\n
(1) The $345.0 million 9.75% Senior Unsecured Notes mature June 1, 2021.
\n(2) The $250.0 million 8.50% Senior Unsecured Notes mature September 1, 2024
\n| \n (3) | \n\n The 2016-1 Securitization Facility matures at various dates, the latest of which will be April 15, 2021, and the 2016-2 Facility matures on December 1, 2019. |
The components of the Company’s deferred tax assets and liabilities as of December 31, 2017 and 2016 were as follows (in thousands):
\n\n
| \n
| \n\n
| \n\n As of December 31, | \n\n
| \n|||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n||
| \n Deferred tax assets: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Loans and finance receivables, net | \n\n
| \n\n $ | \n\n 27,444 | \n\n
| \n\n
| \n\n $ | \n\n 38,275 | \n\n
| \n
| \n Compensation and benefits | \n\n
| \n\n
| \n\n 4,423 | \n\n
| \n\n
| \n\n
| \n\n 7,397 | \n\n
| \n
| \n Translation adjustments | \n\n
| \n\n
| \n\n 2,531 | \n\n
| \n\n
| \n\n
| \n\n 6,726 | \n\n
| \n
| \n Accrued rent and deferred finish out allowance | \n\n
| \n\n
| \n\n 2,786 | \n\n
| \n\n
| \n\n
| \n\n 4,372 | \n\n
| \n
| \n Foreign net operating loss carryforward | \n\n
| \n\n
| \n\n 2,164 | \n\n
| \n\n
| \n\n
| \n\n 1,449 | \n\n
| \n
| \n Other | \n\n
| \n\n
| \n\n 1,441 | \n\n
| \n\n
| \n\n
| \n\n 1,960 | \n\n
| \n
| \n Total deferred tax assets | \n\n
| \n\n $ | \n\n 40,789 | \n\n
| \n\n
| \n\n $ | \n\n 60,179 | \n\n
| \n
| \n Deferred tax liabilities: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Amortizable intangible assets | \n\n
| \n\n $ | \n\n 42,334 | \n\n
| \n\n
| \n\n $ | \n\n 60,762 | \n\n
| \n
| \n Property and equipment | \n\n
| \n\n
| \n\n 7,760 | \n\n
| \n\n
| \n\n
| \n\n 11,443 | \n\n
| \n
| \n Other | \n\n
| \n\n
| \n\n 153 | \n\n
| \n\n
| \n\n
| \n\n 483 | \n\n
| \n
| \n Total deferred tax liabilities | \n\n
| \n\n $ | \n\n 50,247 | \n\n
| \n\n
| \n\n $ | \n\n 72,688 | \n\n
| \n
| \n Net deferred tax liabilities before valuation allowance | \n\n
| \n\n $ | \n\n (9,458 | \n\n ) | \n\n
| \n\n $ | \n\n (12,509 | \n\n ) | \n
| \n Valuation allowance | \n\n
| \n\n
| \n\n (2,650 | \n\n ) | \n\n
| \n\n
| \n\n (1,807 | \n\n ) | \n
| \n Net deferred tax liabilities | \n\n
| \n\n $ | \n\n (12,108 | \n\n ) | \n\n
| \n\n $ | \n\n (14,316 | \n\n ) | \n
The components of the provision for income taxes and the income to which it relates for the years ended December 31, 2017, 2016 and 2015 are shown below (in thousands):
\n\n
| \n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n|||||||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n\n
| \n\n 2015 | \n\n
| \n|||
| \n Income before income taxes: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Domestic | \n\n
| \n\n $ | \n\n 37,900 | \n\n
| \n\n
| \n\n $ | \n\n 57,422 | \n\n
| \n\n
| \n\n $ | \n\n 70,519 | \n\n
| \n
| \n International | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 14 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Income before income taxes | \n\n
| \n\n $ | \n\n 37,900 | \n\n
| \n\n
| \n\n $ | \n\n 57,436 | \n\n
| \n\n
| \n\n $ | \n\n 70,519 | \n\n
| \n
| \n Current provision (benefit): | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Federal | \n\n
| \n\n $ | \n\n 11,366 | \n\n
| \n\n
| \n\n $ | \n\n 22,656 | \n\n
| \n\n
| \n\n $ | \n\n 25,601 | \n\n
| \n
| \n International | \n\n
| \n\n
| \n\n (3 | \n\n ) | \n\n
| \n\n
| \n\n 94 | \n\n
| \n\n
| \n\n
| \n\n 114 | \n\n
| \n
| \n State and local | \n\n
| \n\n
| \n\n 2,045 | \n\n
| \n\n
| \n\n
| \n\n 2,347 | \n\n
| \n\n
| \n\n
| \n\n 2,211 | \n\n
| \n
| \n Total current provision for income taxes | \n\n
| \n\n $ | \n\n 13,408 | \n\n
| \n\n
| \n\n $ | \n\n 25,097 | \n\n
| \n\n
| \n\n $ | \n\n 27,926 | \n\n
| \n
| \n Deferred benefit: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Federal | \n\n
| \n\n $ | \n\n (4,461 | \n\n ) | \n\n
| \n\n $ | \n\n (2,152 | \n\n ) | \n\n
| \n\n $ | \n\n (1,360 | \n\n ) | \n
| \n International | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n State and local | \n\n
| \n\n
| \n\n (287 | \n\n ) | \n\n
| \n\n
| \n\n (111 | \n\n ) | \n\n
| \n\n
| \n\n (39 | \n\n ) | \n
| \n Total deferred benefit for income taxes | \n\n
| \n\n $ | \n\n (4,748 | \n\n ) | \n\n
| \n\n $ | \n\n (2,263 | \n\n ) | \n\n
| \n\n $ | \n\n (1,399 | \n\n ) | \n
| \n Total provision for income taxes | \n\n
| \n\n $ | \n\n 8,660 | \n\n
| \n\n
| \n\n $ | \n\n 22,834 | \n\n
| \n\n
| \n\n $ | \n\n 26,527 | \n\n
| \n
The effective tax rate on income differs from the federal statutory rate of 35% for the following reasons (dollars in thousands):
\n\n
| \n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n|||||||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n\n
| \n\n 2015 | \n\n
| \n|||
| \n Tax provision computed at the federal statutory income tax rate | \n\n
| \n\n $ | \n\n 13,265 | \n\n
| \n\n
| \n\n $ | \n\n 20,103 | \n\n
| \n\n
| \n\n $ | \n\n 24,682 | \n\n
| \n
| \n Deferred tax impact of tax reform | \n\n
| \n\n
| \n\n (7,491 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n State and local income taxes, net of federal tax benefits | \n\n
| \n\n
| \n\n 1,440 | \n\n
| \n\n
| \n\n
| \n\n 1,401 | \n\n
| \n\n
| \n\n
| \n\n 1,408 | \n\n
| \n
| \n Share based compensation | \n\n
| \n\n
| \n\n (1,005 | \n\n ) | \n\n
| \n\n
| \n\n 1,656 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Foreign exchange gain | \n\n
| \n\n
| \n\n 724 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Other | \n\n
| \n\n
| \n\n 1,727 | \n\n
| \n\n
| \n\n
| \n\n (326 | \n\n ) | \n\n
| \n\n
| \n\n 437 | \n\n
| \n
| \n Total provision | \n\n
| \n\n $ | \n\n 8,660 | \n\n
| \n\n
| \n\n $ | \n\n 22,834 | \n\n
| \n\n
| \n\n $ | \n\n 26,527 | \n\n
| \n
| \n Effective tax rate | \n\n
| \n\n
| \n\n 22.9 | \n\n % | \n\n
| \n\n
| \n\n 39.8 | \n\n % | \n\n
| \n\n
| \n\n 37.6 | \n\n % | \n
The following table summarizes the valuation account activity for the years ended December 31, 2017, 2016 and 2015 (in thousands):
\n\n
| \n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n|||||||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n\n
| \n\n 2015 | \n\n
| \n|||
| \n Balance at beginning of period | \n\n
| \n\n $ | \n\n 1,807 | \n\n
| \n\n
| \n\n $ | \n\n 1,220 | \n\n
| \n\n
| \n\n $ | \n\n 670 | \n\n
| \n
| \n Additions | \n\n
| \n\n
| \n\n 843 | \n\n
| \n\n
| \n\n
| \n\n 587 | \n\n
| \n\n
| \n\n
| \n\n 550 | \n\n
| \n
| \n Deductions | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Balance at end of period | \n\n
| \n\n $ | \n\n 2,650 | \n\n
| \n\n
| \n\n $ | \n\n 1,807 | \n\n
| \n\n
| \n\n $ | \n\n 1,220 | \n\n
| \n
A reconciliation of the activity related to unrecognized tax benefits follows for the fiscal years indicated (in thousands):
\n\n
| \n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n|||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n||
| \n Balance at beginning of period | \n\n
| \n\n $ | \n\n 351 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n
| \n Additions based on tax positions related to the current year | \n\n
| \n\n
| \n\n 229 | \n\n
| \n\n
| \n\n
| \n\n 118 | \n\n
| \n
| \n Additions for tax positions of prior years | \n\n
| \n\n
| \n\n 147 | \n\n
| \n\n
| \n\n
| \n\n 233 | \n\n
| \n
| \n Balance at end of period | \n\n
| \n\n $ | \n\n 727 | \n\n
| \n\n
| \n\n $ | \n\n 351 | \n\n
| \n
Future minimum rentals due under non-cancelable leases as of December 31, 2017 are as follows for each of the years ending December 31 (in thousands):
\n\n
| \n Year | \n\n
| \n\n Amount | \n\n
| \n|
| \n 2018 | \n\n
| \n\n $ | \n\n 6,020 | \n\n
| \n
| \n 2019 | \n\n
| \n\n
| \n\n 6,875 | \n\n
| \n
| \n 2020 | \n\n
| \n\n
| \n\n 6,719 | \n\n
| \n
| \n 2021 | \n\n
| \n\n
| \n\n 6,922 | \n\n
| \n
| \n 2022 | \n\n
| \n\n
| \n\n 6,970 | \n\n
| \n
| \n Thereafter | \n\n
| \n\n
| \n\n 30,378 | \n\n
| \n
| \n Total | \n\n
| \n\n $ | \n\n 63,884 | \n\n
| \n
The following table is a summary of the exit and disposal activity and liability balances as a result of the headquarters relocation (in thousands):
\n\n
| \n
| \n\n
| \n\n Lease Termination Costs | \n\n
| \n\n
| \n\n Other Exit Costs | \n\n
| \n\n
| \n\n Total | \n\n
| \n|||
| \n Balance at January 1, 2016 | \n\n
| \n\n $ | \n\n 1,425 | \n\n
| \n\n
| \n\n $ | \n\n 204 | \n\n
| \n\n
| \n\n $ | \n\n 1,629 | \n\n
| \n
| \n Payments | \n\n
| \n\n
| \n\n (1,132 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (1,132 | \n\n ) | \n
| \n Adjustments | \n\n
| \n\n
| \n\n 344 | \n\n
| \n\n
| \n\n
| \n\n (69 | \n\n ) | \n\n
| \n\n
| \n\n 275 | \n\n
| \n
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Balance at December 31, 2016 | \n\n
| \n\n $ | \n\n 637 | \n\n
| \n\n
| \n\n $ | \n\n 135 | \n\n
| \n\n
| \n\n $ | \n\n 772 | \n\n
| \n
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Balance at January 1, 2017 | \n\n
| \n\n $ | \n\n 637 | \n\n
| \n\n
| \n\n $ | \n\n 135 | \n\n
| \n\n
| \n\n $ | \n\n 772 | \n\n
| \n
| \n Payments | \n\n
| \n\n
| \n\n (554 | \n\n ) | \n\n
| \n\n
| \n\n (9 | \n\n ) | \n\n
| \n\n
| \n\n (563 | \n\n ) | \n
| \n Adjustments | \n\n
| \n\n
| \n\n (83 | \n\n ) | \n\n
| \n\n
| \n\n (126 | \n\n ) | \n\n
| \n\n
| \n\n (209 | \n\n ) | \n
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Balance at December 31, 2017 | \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n
Amounts included in the consolidated balance sheets relating to the NQSP and the SERP were as follows (in thousands):
\n\n
| \n
| \n\n
| \n\n As of December 31, | \n\n
| \n|||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n||
| \n Prepaid expenses and other assets | \n\n
| \n\n $ | \n\n 1,460 | \n\n
| \n\n
| \n\n $ | \n\n 1,590 | \n\n
| \n
| \n Accounts payable and accrued expenses | \n\n
| \n\n $ | \n\n 1,993 | \n\n
| \n\n
| \n\n $ | \n\n 1,860 | \n\n
| \n
The following table summarizes the Company’s restricted stock unit activity during 2017, 2016 and 2015:
\n\n
| \n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n|||||||||||||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n\n
| \n\n 2015 | \n\n
| \n|||||||||||||||
| \n
| \n\n
| \n\n Units | \n\n
| \n\n
| \n\n Weighted Average Fair Value at Date of Grant | \n\n
| \n\n
| \n\n Units | \n\n
| \n\n
| \n\n Weighted Average Fair Value at Date of Grant | \n\n
| \n\n
| \n\n Units | \n\n
| \n\n
| \n\n Weighted Average Fair Value at Date of Grant | \n\n
| \n||||||
| \n Outstanding at beginning of year | \n\n
| \n\n
| \n\n 1,359,057 | \n\n
| \n\n
| \n\n $ | \n\n 9.49 | \n\n
| \n\n
| \n\n
| \n\n 641,878 | \n\n
| \n\n
| \n\n $ | \n\n 20.55 | \n\n
| \n\n
| \n\n
| \n\n 549,707 | \n\n
| \n\n
| \n\n $ | \n\n 23.04 | \n\n
| \n
| \n Units granted | \n\n
| \n\n
| \n\n 763,727 | \n\n
| \n\n
| \n\n
| \n\n 14.70 | \n\n
| \n\n
| \n\n
| \n\n 1,189,136 | \n\n
| \n\n
| \n\n
| \n\n 6.67 | \n\n
| \n\n
| \n\n
| \n\n 356,064 | \n\n
| \n\n
| \n\n
| \n\n 18.39 | \n\n
| \n
| \n Shares issued | \n\n
| \n\n
| \n\n (563,689 | \n\n ) | \n\n
| \n\n
| \n\n 9.68 | \n\n
| \n\n
| \n\n
| \n\n (213,437 | \n\n ) | \n\n
| \n\n
| \n\n 19.65 | \n\n
| \n\n
| \n\n
| \n\n (151,088 | \n\n ) | \n\n
| \n\n
| \n\n 22.62 | \n\n
| \n
| \n Units forfeited | \n\n
| \n\n
| \n\n (133,212 | \n\n ) | \n\n
| \n\n
| \n\n 11.62 | \n\n
| \n\n
| \n\n
| \n\n (258,520 | \n\n ) | \n\n
| \n\n
| \n\n 15.65 | \n\n
| \n\n
| \n\n
| \n\n (112,805 | \n\n ) | \n\n
| \n\n
| \n\n 23.04 | \n\n
| \n
| \n Outstanding at end of year | \n\n
| \n\n
| \n\n 1,425,883 | \n\n
| \n\n
| \n\n $ | \n\n 12.00 | \n\n
| \n\n
| \n\n
| \n\n 1,359,057 | \n\n
| \n\n
| \n\n $ | \n\n 9.49 | \n\n
| \n\n
| \n\n
| \n\n 641,878 | \n\n
| \n\n
| \n\n $ | \n\n 20.55 | \n\n
| \n
The following table summarizes the Company’s stock option activity during 2017, 2016 and 2015:
\n\n
| \n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n|||||||||||||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n\n
| \n\n 2015 | \n\n
| \n|||||||||||||||
| \n
| \n\n
| \n\n Units | \n\n
| \n\n
| \n\n Weighted Average Exercise Price | \n\n
| \n\n
| \n\n Units | \n\n
| \n\n
| \n\n Weighted Average Exercise Price | \n\n
| \n\n
| \n\n Units | \n\n
| \n\n
| \n\n Weighted Average Exercise Price | \n\n
| \n||||||
| \n Outstanding at beginning of year | \n\n
| \n\n
| \n\n 1,587,056 | \n\n
| \n\n
| \n\n $ | \n\n 17.98 | \n\n
| \n\n
| \n\n
| \n\n 1,891,153 | \n\n
| \n\n
| \n\n $ | \n\n 21.44 | \n\n
| \n\n
| \n\n
| \n\n 1,425,196 | \n\n
| \n\n
| \n\n $ | \n\n 23.04 | \n\n
| \n
| \n Options granted | \n\n
| \n\n
| \n\n 590,988 | \n\n
| \n\n
| \n\n
| \n\n 14.80 | \n\n
| \n\n
| \n\n
| \n\n 337,081 | \n\n
| \n\n
| \n\n
| \n\n 6.29 | \n\n
| \n\n
| \n\n
| \n\n 785,294 | \n\n
| \n\n
| \n\n
| \n\n 19.19 | \n\n
| \n
| \n Options exercised | \n\n
| \n\n
| \n\n (4,459 | \n\n ) | \n\n
| \n\n
| \n\n 6.29 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Options forfeited | \n\n
| \n\n
| \n\n (119,493 | \n\n ) | \n\n
| \n\n
| \n\n 21.02 | \n\n
| \n\n
| \n\n
| \n\n (641,178 | \n\n ) | \n\n
| \n\n
| \n\n 22.01 | \n\n
| \n\n
| \n\n
| \n\n (319,337 | \n\n ) | \n\n
| \n\n
| \n\n 23.04 | \n\n
| \n
| \n Outstanding at end of year | \n\n
| \n\n
| \n\n 2,054,092 | \n\n
| \n\n
| \n\n $ | \n\n 16.92 | \n\n
| \n\n
| \n\n
| \n\n 1,587,056 | \n\n
| \n\n
| \n\n $ | \n\n 17.98 | \n\n
| \n\n
| \n\n
| \n\n 1,891,153 | \n\n
| \n\n
| \n\n $ | \n\n 21.44 | \n\n
| \n
| \n Options vested at end of year | \n\n
| \n\n
| \n\n 1,165,837 | \n\n
| \n\n
| \n\n
| \n\n 19.94 | \n\n
| \n\n
| \n\n
| \n\n 734,896 | \n\n
| \n\n
| \n\n
| \n\n 21.67 | \n\n
| \n\n
| \n\n
| \n\n 475,127 | \n\n
| \n\n
| \n\n
| \n\n 23.05 | \n\n
| \n
The following table presents information related to the Company’s derivative instruments as of December 31, 2017 (in thousands):
\nNon-designated derivatives:
\n\n
| \n
| \n\n
| \n\n As of December 31, 2017 | \n\n
| \n|||||||||||||
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n Gross Amounts | \n\n
| \n\n
| \n\n Gross Amounts | \n\n
| \n\n
| \n\n Net Amounts of Assets | \n\n
| \n|||
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n of Recognized | \n\n
| \n\n
| \n\n Offset in the | \n\n
| \n\n
| \n\n Presented in the | \n\n
| \n|||
| \n
| \n\n
| \n\n Notional | \n\n
| \n\n
| \n\n Financial | \n\n
| \n\n
| \n\n Consolidated | \n\n
| \n\n
| \n\n Consolidated Balance | \n\n
| \n||||
| \n Forward currency exchange contracts | \n\n
| \n\n Amount | \n\n
| \n\n
| \n\n Instruments | \n\n
| \n\n
| \n\n Balance Sheets(1) | \n\n
| \n\n
| \n\n Sheets(2) | \n\n
| \n||||
| \n Assets | \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n
| \n Liabilities | \n\n
| \n\n $ | \n\n 12,039 | \n\n
| \n\n
| \n\n $ | \n\n 55 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 55 | \n\n
| \n
\n
| \n (1) | \n\n As of December 31, 2017, the Company had no gross amounts of recognized derivative instruments that the Company makes an accounting policy election not to offset. In addition, there was no financial collateral related to the Company’s derivatives. The Company has no assets or liabilities that are subject to an enforceable master netting agreement or similar arrangement. |
| \n (2) | \n\n Represents the fair value of forward currency contracts, which is recorded in “Accounts payable and accrued expenses” in the consolidated balance sheets. |
The following table presents information on the effect of derivative instruments on the consolidated results of operations and AOCI for years ended December 31, 2017, 2016 and 2015 (in thousands):
\n\n
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n Gains (Losses) | \n\n
| \n||||||||||||||
| \n
| \n\n
| \n\n Gains (Losses) | \n\n
| \n\n
| \n\n Gains (Losses) | \n\n
| \n\n
| \n\n Reclassified From | \n\n
| \n|||||||||||||||||||||||||||
| \n
| \n\n
| \n\n Recognized in Income | \n\n
| \n\n
| \n\n Recognized in AOCI | \n\n
| \n\n
| \n\n AOCI into Income | \n\n
| \n|||||||||||||||||||||||||||
| \n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n|||||||||||||||||||||||||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n\n
| \n\n 2015 | \n\n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n\n
| \n\n 2015 | \n\n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n\n
| \n\n 2015 | \n\n
| \n|||||||||
| \n Non-designated derivatives: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Forward currency exchange contracts(1) | \n\n
| \n\n $ | \n\n (55 | \n\n ) | \n\n
| \n\n $ | \n\n 3,020 | \n\n
| \n\n
| \n\n $ | \n\n 4,525 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n
| \n Total | \n\n
| \n\n $ | \n\n (55 | \n\n ) | \n\n
| \n\n $ | \n\n 3,020 | \n\n
| \n\n
| \n\n $ | \n\n 4,525 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n
\n
| \n (1) | \n\n The gains (losses) on these derivatives substantially offset the (losses) gains on the hedged portion of the foreign intercompany balances. |
The carrying amounts of consolidated VIE assets and liabilities associated with the Company’s securitization entities were as follows (in thousands):
\n\n
| \n
| \n\n
| \n\n December 31, | \n\n
| \n|||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n||
| \n Assets | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Restricted cash and cash equivalents | \n\n
| \n\n $ | \n\n 21,696 | \n\n
| \n\n
| \n\n $ | \n\n 19,468 | \n\n
| \n
| \n Loans and finance receivables, net | \n\n
| \n\n
| \n\n 259,996 | \n\n
| \n\n
| \n\n
| \n\n 216,766 | \n\n
| \n
| \n Other receivables and prepaid expenses | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 3 | \n\n
| \n
| \n Other assets | \n\n
| \n\n
| \n\n 178 | \n\n
| \n\n
| \n\n
| \n\n 2,459 | \n\n
| \n
| \n Total assets | \n\n
| \n\n $ | \n\n 281,870 | \n\n
| \n\n
| \n\n $ | \n\n 238,696 | \n\n
| \n
| \n Liabilities | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Accounts payable and accrued expenses | \n\n
| \n\n $ | \n\n 1,671 | \n\n
| \n\n
| \n\n $ | \n\n 1,350 | \n\n
| \n
| \n Long-term debt | \n\n
| \n\n
| \n\n 208,135 | \n\n
| \n\n
| \n\n
| \n\n 163,550 | \n\n
| \n
| \n Total liabilities | \n\n
| \n\n $ | \n\n 209,806 | \n\n
| \n\n
| \n\n $ | \n\n 164,900 | \n\n
| \n
The following table sets forth certain cash and non-cash activities for the years ended December 31, 2017, 2016 and 2015 (in thousands):
\n\n
| \n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n|||||||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n\n
| \n\n 2015 | \n\n
| \n|||
| \n Cash paid during the year for: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Interest | \n\n
| \n\n $ | \n\n 63,529 | \n\n
| \n\n
| \n\n $ | \n\n 59,609 | \n\n
| \n\n
| \n\n $ | \n\n 49,390 | \n\n
| \n
| \n Income taxes paid | \n\n
| \n\n
| \n\n 17,263 | \n\n
| \n\n
| \n\n
| \n\n 19,213 | \n\n
| \n\n
| \n\n
| \n\n 40,759 | \n\n
| \n
| \n Non-cash investing and financing activities: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Loans and finance receivables renewed | \n\n
| \n\n $ | \n\n 322,648 | \n\n
| \n\n
| \n\n $ | \n\n 310,425 | \n\n
| \n\n
| \n\n $ | \n\n 253,279 | \n\n
| \n
| \n Liabilities assumed in acquisitions | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 8,658 | \n\n
| \n
The following tables present information on the Company’s domestic and international operations as of and for the years ended December 31, 2017, 2016 and 2015 (in thousands).
\n\n
| \n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n|||||||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n\n
| \n\n 2015 | \n\n
| \n|||
| \n Revenue | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Domestic | \n\n
| \n\n $ | \n\n 709,537 | \n\n
| \n\n
| \n\n $ | \n\n 622,991 | \n\n
| \n\n
| \n\n $ | \n\n 510,242 | \n\n
| \n
| \n International | \n\n
| \n\n
| \n\n 134,204 | \n\n
| \n\n
| \n\n
| \n\n 122,578 | \n\n
| \n\n
| \n\n
| \n\n 142,358 | \n\n
| \n
| \n Total revenue | \n\n
| \n\n $ | \n\n 843,741 | \n\n
| \n\n
| \n\n $ | \n\n 745,569 | \n\n
| \n\n
| \n\n $ | \n\n 652,600 | \n\n
| \n
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Income from operations | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Domestic | \n\n
| \n\n $ | \n\n 233,065 | \n\n
| \n\n
| \n\n $ | \n\n 204,084 | \n\n
| \n\n
| \n\n $ | \n\n 183,582 | \n\n
| \n
| \n International | \n\n
| \n\n
| \n\n 6,147 | \n\n
| \n\n
| \n\n
| \n\n 19,787 | \n\n
| \n\n
| \n\n
| \n\n 42,787 | \n\n
| \n
| \n Corporate services | \n\n
| \n\n
| \n\n (104,798 | \n\n ) | \n\n
| \n\n
| \n\n (102,394 | \n\n ) | \n\n
| \n\n
| \n\n (101,982 | \n\n ) | \n
| \n Total income from operations | \n\n
| \n\n $ | \n\n 134,414 | \n\n
| \n\n
| \n\n $ | \n\n 121,477 | \n\n
| \n\n
| \n\n $ | \n\n 124,387 | \n\n
| \n
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Depreciation and amortization | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Domestic | \n\n
| \n\n $ | \n\n 6,769 | \n\n
| \n\n
| \n\n $ | \n\n 6,005 | \n\n
| \n\n
| \n\n $ | \n\n 7,920 | \n\n
| \n
| \n International | \n\n
| \n\n
| \n\n 1,539 | \n\n
| \n\n
| \n\n
| \n\n 2,167 | \n\n
| \n\n
| \n\n
| \n\n 2,254 | \n\n
| \n
| \n Corporate services | \n\n
| \n\n
| \n\n 6,080 | \n\n
| \n\n
| \n\n
| \n\n 7,392 | \n\n
| \n\n
| \n\n
| \n\n 8,214 | \n\n
| \n
| \n Total depreciation and amortization | \n\n
| \n\n $ | \n\n 14,388 | \n\n
| \n\n
| \n\n $ | \n\n 15,564 | \n\n
| \n\n
| \n\n $ | \n\n 18,388 | \n\n
| \n
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Expenditures for property and equipment | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Domestic | \n\n
| \n\n $ | \n\n 6,449 | \n\n
| \n\n
| \n\n $ | \n\n 6,955 | \n\n
| \n\n
| \n\n $ | \n\n 6,268 | \n\n
| \n
| \n International | \n\n
| \n\n
| \n\n 4,589 | \n\n
| \n\n
| \n\n
| \n\n 3,158 | \n\n
| \n\n
| \n\n
| \n\n 3,797 | \n\n
| \n
| \n Corporate services | \n\n
| \n\n
| \n\n 5,490 | \n\n
| \n\n
| \n\n
| \n\n 4,283 | \n\n
| \n\n
| \n\n
| \n\n 22,176 | \n\n
| \n
| \n Total expenditures for property and equipment | \n\n
| \n\n $ | \n\n 16,528 | \n\n
| \n\n
| \n\n $ | \n\n 14,396 | \n\n
| \n\n
| \n\n $ | \n\n 32,241 | \n\n
| \n
\n
| \n
| \n\n
| \n\n December 31, | \n\n
| \n|||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n||
| \n Property and equipment, net | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Domestic | \n\n
| \n\n $ | \n\n 25,732 | \n\n
| \n\n
| \n\n $ | \n\n 19,734 | \n\n
| \n
| \n International | \n\n
| \n\n
| \n\n 7,670 | \n\n
| \n\n
| \n\n
| \n\n 5,410 | \n\n
| \n
| \n Corporate services | \n\n
| \n\n
| \n\n 15,123 | \n\n
| \n\n
| \n\n
| \n\n 21,956 | \n\n
| \n
| \n Total property and equipment, net | \n\n
| \n\n $ | \n\n 48,525 | \n\n
| \n\n
| \n\n $ | \n\n 47,100 | \n\n
| \n
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Assets | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Domestic | \n\n
| \n\n $ | \n\n 964,697 | \n\n
| \n\n
| \n\n $ | \n\n 823,390 | \n\n
| \n
| \n International | \n\n
| \n\n
| \n\n 133,449 | \n\n
| \n\n
| \n\n
| \n\n 96,606 | \n\n
| \n
| \n Corporate services | \n\n
| \n\n
| \n\n 61,314 | \n\n
| \n\n
| \n\n
| \n\n 57,883 | \n\n
| \n
| \n Total assets | \n\n
| \n\n $ | \n\n 1,159,460 | \n\n
| \n\n
| \n\n $ | \n\n 977,879 | \n\n
| \n
The following table presents the Company’s revenue by geographic region for the years ended December 31, 2017, 2016 and 2015 (in thousands):
\n\n
| \n
| \n\n
| \n\n Year Ended December 31, | \n\n
| \n|||||||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n 2016 | \n\n
| \n\n
| \n\n 2015 | \n\n
| \n|||
| \n Revenue | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n United States | \n\n
| \n\n $ | \n\n 709,537 | \n\n
| \n\n
| \n\n $ | \n\n 622,991 | \n\n
| \n\n
| \n\n $ | \n\n 510,242 | \n\n
| \n
| \n United Kingdom | \n\n
| \n\n
| \n\n 114,838 | \n\n
| \n\n
| \n\n
| \n\n 103,478 | \n\n
| \n\n
| \n\n
| \n\n 129,703 | \n\n
| \n
| \n Other international countries | \n\n
| \n\n
| \n\n 19,366 | \n\n
| \n\n
| \n\n
| \n\n 19,100 | \n\n
| \n\n
| \n\n
| \n\n 12,655 | \n\n
| \n
| \n Total revenue | \n\n
| \n\n $ | \n\n 843,741 | \n\n
| \n\n
| \n\n $ | \n\n 745,569 | \n\n
| \n\n
| \n\n $ | \n\n 652,600 | \n\n
| \n
The Company’s financial assets that are measured at fair value on a recurring basis as of December 31, 2017 and 2016 are as follows (in thousands):
\n\n
| \n
| \n\n
| \n\n December 31, | \n\n
| \n\n
| \n\n Fair Value Measurements Using | \n\n
| \n||||||||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n Level 1 | \n\n
| \n\n
| \n\n Level 2 | \n\n
| \n\n
| \n\n Level 3 | \n\n
| \n||||
| \n Financial assets (liabilities) | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Forward currency exchange contracts | \n\n
| \n\n $ | \n\n (55 | \n\n ) | \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n (55 | \n\n ) | \n\n
| \n\n $ | \n\n — | \n\n
| \n
| \n Nonqualified savings plan assets(1) | \n\n
| \n\n
| \n\n 1,460 | \n\n
| \n\n
| \n\n
| \n\n 1,460 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Total | \n\n
| \n\n $ | \n\n 1,405 | \n\n
| \n\n
| \n\n $ | \n\n 1,460 | \n\n
| \n\n
| \n\n $ | \n\n (55 | \n\n ) | \n\n
| \n\n $ | \n\n — | \n\n
| \n
\n
| \n
| \n\n
| \n\n December 31, | \n\n
| \n\n
| \n\n Fair Value Measurements Using | \n\n
| \n||||||||||
| \n
| \n\n
| \n\n 2016 | \n\n
| \n\n
| \n\n Level 1 | \n\n
| \n\n
| \n\n Level 2 | \n\n
| \n\n
| \n\n Level 3 | \n\n
| \n||||
| \n Financial assets (liabilities) | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Nonqualified savings plan assets(1) | \n\n
| \n\n $ | \n\n 1,590 | \n\n
| \n\n
| \n\n $ | \n\n 1,590 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n
| \n Contingent consideration | \n\n
| \n\n
| \n\n (2,358 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (2,358 | \n\n ) | \n
| \n Total | \n\n
| \n\n $ | \n\n (768 | \n\n ) | \n\n
| \n\n $ | \n\n 1,590 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n (2,358 | \n\n ) | \n
\n
| \n (1) | \n\n The non-qualified savings plan assets have an offsetting liability of a greater amount, which is included in “Accounts payable and accrued expenses” in the Company’s consolidated balance sheets. |
The changes in the fair value of the contingent consideration, which is a Level 3 liability measured at fair value on a recurring basis, are summarized in the table below for the years ended December 31, 2017 and 2016 (in thousands):
\n\n
| \n
| \n\n
| \n\n Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | \n\n
| \n|||||
| \n
| \n\n
| \n\n Contingent consideration | \n\n
| \n\n
| \n\n Total | \n\n
| \n||
| \n Balance at December 31, 2015 | \n\n
| \n\n $ | \n\n 5,658 | \n\n
| \n\n
| \n\n $ | \n\n 5,658 | \n\n
| \n
| \n Remeasurement of contingent consideration (see Note 2) | \n\n
| \n\n
| \n\n (3,300 | \n\n ) | \n\n
| \n\n
| \n\n (3,300 | \n\n ) | \n
| \n Balance at December 31, 2016 | \n\n
| \n\n $ | \n\n 2,358 | \n\n
| \n\n
| \n\n $ | \n\n 2,358 | \n\n
| \n
| \n Remeasurement of contingent consideration (see Note 2) | \n\n
| \n\n
| \n\n (2,358 | \n\n ) | \n\n
| \n\n
| \n\n (2,358 | \n\n ) | \n
| \n Balance at December 31, 2017 | \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n
The Company’s financial assets and liabilities as of December 31, 2017 and 2016 that are not measured at fair value in the consolidated balance sheets are as follows (in thousands):
\n\n
| \n
| \n\n
| \n\n December 31, | \n\n
| \n\n
| \n\n Fair Value Measurements Using | \n\n
| \n||||||||||
| \n
| \n\n
| \n\n 2017 | \n\n
| \n\n
| \n\n Level 1 | \n\n
| \n\n
| \n\n Level 2 | \n\n
| \n\n
| \n\n Level 3 | \n\n
| \n||||
| \n Financial assets: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Cash and cash equivalents | \n\n
| \n\n $ | \n\n 68,684 | \n\n
| \n\n
| \n\n $ | \n\n 68,684 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n
| \n Short-term loans and line of credit accounts, net (1) | \n\n
| \n\n
| \n\n 192,675 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 192,675 | \n\n
| \n
| \n Installment loans and RPAs, net (1) | \n\n
| \n\n
| \n\n 512,030 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 544,799 | \n\n
| \n
| \n Restricted cash | \n\n
| \n\n
| \n\n 29,460 | \n\n
| \n\n
| \n\n
| \n\n 29,460 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Investment in unconsolidated investee (2)(3) | \n\n
| \n\n
| \n\n 6,703 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 6,703 | \n\n
| \n
| \n Total | \n\n
| \n\n $ | \n\n 809,552 | \n\n
| \n\n
| \n\n $ | \n\n 98,144 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 744,177 | \n\n
| \n
| \n Financial liabilities: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Liability for estimated losses on consumer loans guaranteed by the Company | \n\n
| \n\n $ | \n\n 2,258 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 2,258 | \n\n
| \n
| \n Promissory note | \n\n
| \n\n
| \n\n 3,000 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 3,287 | \n\n
| \n
| \n Securitization Notes | \n\n
| \n\n
| \n\n 211,406 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 215,063 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n 9.75% senior notes due 2021 | \n\n
| \n\n
| \n\n 342,558 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 365,700 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n 8.50% senior notes due 2024 | \n\n
| \n\n
| \n\n 250,000 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 255,000 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Total | \n\n
| \n\n $ | \n\n 809,222 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 835,763 | \n\n
| \n\n
| \n\n $ | \n\n 5,545 | \n\n
| \n
\n
| \n
| \n\n
| \n\n December 31, | \n\n
| \n\n
| \n\n Fair Value Measurements Using | \n\n
| \n||||||||||
| \n
| \n\n
| \n\n 2016 | \n\n
| \n\n
| \n\n Level 1 | \n\n
| \n\n
| \n\n Level 2 | \n\n
| \n\n
| \n\n Level 3 | \n\n
| \n||||
| \n Financial assets: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Cash and cash equivalents | \n\n
| \n\n $ | \n\n 39,934 | \n\n
| \n\n
| \n\n $ | \n\n 39,934 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n
| \n Short-term loans and line of credit accounts, net (1) | \n\n
| \n\n
| \n\n 162,824 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 162,824 | \n\n
| \n
| \n Installment loans and RPAs, net (1) | \n\n
| \n\n
| \n\n 398,726 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 430,895 | \n\n
| \n
| \n Restricted cash | \n\n
| \n\n
| \n\n 26,306 | \n\n
| \n\n
| \n\n
| \n\n 26,306 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Investment in unconsolidated investee (2)(3) | \n\n
| \n\n
| \n\n 6,703 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 6,703 | \n\n
| \n
| \n Total | \n\n
| \n\n $ | \n\n 634,493 | \n\n
| \n\n
| \n\n $ | \n\n 66,240 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 600,422 | \n\n
| \n
| \n Financial liabilities: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Liability for estimated losses on consumer loans guaranteed by the Company | \n\n
| \n\n $ | \n\n 1,996 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 1,996 | \n\n
| \n
| \n Promissory note | \n\n
| \n\n
| \n\n 3,000 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 3,111 | \n\n
| \n
| \n Securitization Notes | \n\n
| \n\n
| \n\n 165,419 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 168,216 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n 9.75% senior notes due 2021 | \n\n
| \n\n
| \n\n 495,622 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 495,940 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Total | \n\n
| \n\n $ | \n\n 666,037 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 664,156 | \n\n
| \n\n
| \n\n $ | \n\n 5,107 | \n\n
| \n
\n
| \n (1) | \n\n Short-term loans, line of credit accounts and installment loans and RPAs are included in “Loans and finance receivables, net” in the consolidated balance sheets. |
| \n (2) | \n\n Investment in unconsolidated investee is included in “Other assets” in the consolidated balance sheets. |
| \n (3) | \n\n See Note 1 for additional information related to the investment in unconsolidated investee. |
CONDENSED CONSOLIDATING BALANCE SHEETS
\nAs of December 31, 2017
\n(in thousands)
\n\n
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n Guarantor | \n\n
| \n\n
| \n\n Non-Guarantor | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n||
| \n
| \n\n
| \n\n Parent | \n\n
| \n\n
| \n\n Subsidiaries | \n\n
| \n\n
| \n\n Subsidiaries | \n\n
| \n\n
| \n\n Eliminations | \n\n
| \n\n
| \n\n Consolidated | \n\n
| \n|||||
| \n Assets | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Cash and cash equivalents | \n\n
| \n\n $ | \n\n 12,183 | \n\n
| \n\n
| \n\n $ | \n\n 54,659 | \n\n
| \n\n
| \n\n $ | \n\n 1,842 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 68,684 | \n\n
| \n
| \n Restricted cash | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 7,764 | \n\n
| \n\n
| \n\n
| \n\n 21,696 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 29,460 | \n\n
| \n
| \n Loans and finance receivables, net | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 442,516 | \n\n
| \n\n
| \n\n
| \n\n 262,189 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 704,705 | \n\n
| \n
| \n Income taxes receivable | \n\n
| \n\n
| \n\n 114,494 | \n\n
| \n\n
| \n\n
| \n\n (110,852 | \n\n ) | \n\n
| \n\n
| \n\n 450 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 4,092 | \n\n
| \n
| \n Other receivables and prepaid expenses | \n\n
| \n\n
| \n\n 833 | \n\n
| \n\n
| \n\n
| \n\n 20,731 | \n\n
| \n\n
| \n\n
| \n\n 2,253 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 23,817 | \n\n
| \n
| \n Property and equipment, net | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 47,965 | \n\n
| \n\n
| \n\n
| \n\n 560 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 48,525 | \n\n
| \n
| \n Goodwill | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 267,015 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 267,015 | \n\n
| \n
| \n Intangible assets, net | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 4,325 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 4,325 | \n\n
| \n
| \n Investment in subsidiaries | \n\n
| \n\n
| \n\n 388,538 | \n\n
| \n\n
| \n\n
| \n\n 63,956 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (452,494 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Intercompany receivable | \n\n
| \n\n
| \n\n 354,457 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (354,457 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Other assets | \n\n
| \n\n
| \n\n 1,785 | \n\n
| \n\n
| \n\n
| \n\n 6,874 | \n\n
| \n\n
| \n\n
| \n\n 178 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 8,837 | \n\n
| \n
| \n Total assets | \n\n
| \n\n $ | \n\n 872,290 | \n\n
| \n\n
| \n\n $ | \n\n 804,953 | \n\n
| \n\n
| \n\n $ | \n\n 289,168 | \n\n
| \n\n
| \n\n $ | \n\n (806,951 | \n\n ) | \n\n
| \n\n $ | \n\n 1,159,460 | \n\n
| \n
| \n Liabilities and Stockholders' Equity | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Accounts payable and accrued expenses | \n\n
| \n\n $ | \n\n 10,336 | \n\n
| \n\n
| \n\n $ | \n\n 64,541 | \n\n
| \n\n
| \n\n $ | \n\n 2,246 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 77,123 | \n\n
| \n
| \n Intercompany payables | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 331,425 | \n\n
| \n\n
| \n\n
| \n\n 23,032 | \n\n
| \n\n
| \n\n
| \n\n (354,457 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Deferred tax liabilities, net | \n\n
| \n\n
| \n\n (140 | \n\n ) | \n\n
| \n\n
| \n\n 12,726 | \n\n
| \n\n
| \n\n
| \n\n (478 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 12,108 | \n\n
| \n
| \n Long-term debt | \n\n
| \n\n
| \n\n 580,407 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 208,135 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 788,542 | \n\n
| \n
| \n Total liabilities | \n\n
| \n\n
| \n\n 590,603 | \n\n
| \n\n
| \n\n
| \n\n 408,692 | \n\n
| \n\n
| \n\n
| \n\n 232,935 | \n\n
| \n\n
| \n\n
| \n\n (354,457 | \n\n ) | \n\n
| \n\n
| \n\n 877,773 | \n\n
| \n
| \n Commitments and contingencies | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Stockholders' equity | \n\n
| \n\n
| \n\n 281,687 | \n\n
| \n\n
| \n\n
| \n\n 396,261 | \n\n
| \n\n
| \n\n
| \n\n 56,233 | \n\n
| \n\n
| \n\n
| \n\n (452,494 | \n\n ) | \n\n
| \n\n
| \n\n 281,687 | \n\n
| \n
| \n Total liabilities and stockholders' equity | \n\n
| \n\n $ | \n\n 872,290 | \n\n
| \n\n
| \n\n $ | \n\n 804,953 | \n\n
| \n\n
| \n\n $ | \n\n 289,168 | \n\n
| \n\n
| \n\n $ | \n\n (806,951 | \n\n ) | \n\n
| \n\n $ | \n\n 1,159,460 | \n\n
| \n
\n
CONDENSED CONSOLIDATING BALANCE SHEETS
\nAs of December 31, 2016
\n(in thousands)
\n\n
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n Guarantor | \n\n
| \n\n
| \n\n Non-Guarantor | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n||
| \n
| \n\n
| \n\n Parent | \n\n
| \n\n
| \n\n Subsidiaries | \n\n
| \n\n
| \n\n Subsidiaries | \n\n
| \n\n
| \n\n Eliminations | \n\n
| \n\n
| \n\n Consolidated | \n\n
| \n|||||
| \n Assets | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Cash and cash equivalents | \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 36,057 | \n\n
| \n\n
| \n\n $ | \n\n 3,877 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 39,934 | \n\n
| \n
| \n Restricted cash | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 6,838 | \n\n
| \n\n
| \n\n
| \n\n 19,468 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 26,306 | \n\n
| \n
| \n Loans and finance receivables, net | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 335,161 | \n\n
| \n\n
| \n\n
| \n\n 226,390 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 561,550 | \n\n
| \n
| \n Income taxes receivable | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Other receivables and prepaid expenses | \n\n
| \n\n
| \n\n 127 | \n\n
| \n\n
| \n\n
| \n\n 19,095 | \n\n
| \n\n
| \n\n
| \n\n 302 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 19,524 | \n\n
| \n
| \n Property and equipment, net | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 46,507 | \n\n
| \n\n
| \n\n
| \n\n 593 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 47,100 | \n\n
| \n
| \n Goodwill | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 267,010 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 267,010 | \n\n
| \n
| \n Intangible assets, net | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 5,400 | \n\n
| \n\n
| \n\n
| \n\n 4 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 5,404 | \n\n
| \n
| \n Investment in subsidiaries | \n\n
| \n\n
| \n\n 294,647 | \n\n
| \n\n
| \n\n
| \n\n 25,131 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (319,778 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Intercompany receivable | \n\n
| \n\n
| \n\n 363,941 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (363,941 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Other assets | \n\n
| \n\n
| \n\n 597 | \n\n
| \n\n
| \n\n
| \n\n 7,995 | \n\n
| \n\n
| \n\n
| \n\n 2,459 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 11,051 | \n\n
| \n
| \n Total assets | \n\n
| \n\n $ | \n\n 659,312 | \n\n
| \n\n
| \n\n $ | \n\n 749,194 | \n\n
| \n\n
| \n\n $ | \n\n 253,093 | \n\n
| \n\n
| \n\n $ | \n\n (683,719 | \n\n ) | \n\n
| \n\n $ | \n\n 977,879 | \n\n
| \n
| \n Liabilities and Stockholders' Equity | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Accounts payable and accrued expenses | \n\n
| \n\n $ | \n\n 4,310 | \n\n
| \n\n
| \n\n $ | \n\n 65,714 | \n\n
| \n\n
| \n\n $ | \n\n 1,647 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 71,671 | \n\n
| \n
| \n Intercompany payables | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 295,764 | \n\n
| \n\n
| \n\n
| \n\n 68,179 | \n\n
| \n\n
| \n\n
| \n\n (363,943 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Income taxes currently payable | \n\n
| \n\n
| \n\n (72,704 | \n\n ) | \n\n
| \n\n
| \n\n 73,006 | \n\n
| \n\n
| \n\n
| \n\n (20 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 282 | \n\n
| \n
| \n Deferred tax liabilities, net | \n\n
| \n\n
| \n\n (354 | \n\n ) | \n\n
| \n\n
| \n\n 15,156 | \n\n
| \n\n
| \n\n
| \n\n (486 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 14,316 | \n\n
| \n
| \n Long-term debt | \n\n
| \n\n
| \n\n 486,361 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 163,550 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 649,911 | \n\n
| \n
| \n Total liabilities | \n\n
| \n\n
| \n\n 417,613 | \n\n
| \n\n
| \n\n
| \n\n 449,640 | \n\n
| \n\n
| \n\n
| \n\n 232,870 | \n\n
| \n\n
| \n\n
| \n\n (363,943 | \n\n ) | \n\n
| \n\n
| \n\n 736,180 | \n\n
| \n
| \n Commitments and contingencies | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Stockholders' equity | \n\n
| \n\n
| \n\n 241,699 | \n\n
| \n\n
| \n\n
| \n\n 299,554 | \n\n
| \n\n
| \n\n
| \n\n 20,223 | \n\n
| \n\n
| \n\n
| \n\n (319,777 | \n\n ) | \n\n
| \n\n
| \n\n 241,699 | \n\n
| \n
| \n Total liabilities and stockholders' equity | \n\n
| \n\n $ | \n\n 659,312 | \n\n
| \n\n
| \n\n $ | \n\n 749,194 | \n\n
| \n\n
| \n\n $ | \n\n 253,093 | \n\n
| \n\n
| \n\n $ | \n\n (683,720 | \n\n ) | \n\n
| \n\n $ | \n\n 977,879 | \n\n
| \n
CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
\nFor the Year Ended December 31, 2017
\n(in thousands)
\n\n
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n Guarantor | \n\n
| \n\n
| \n\n Non-Guarantor | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n||
| \n
| \n\n
| \n\n Parent | \n\n
| \n\n
| \n\n Subsidiaries | \n\n
| \n\n
| \n\n Subsidiaries | \n\n
| \n\n
| \n\n Eliminations | \n\n
| \n\n
| \n\n Consolidated | \n\n
| \n|||||
| \n Revenue | \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 696,446 | \n\n
| \n\n
| \n\n $ | \n\n 151,233 | \n\n
| \n\n
| \n\n $ | \n\n (3,938 | \n\n ) | \n\n
| \n\n $ | \n\n 843,741 | \n\n
| \n
| \n Cost of Revenue | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 313,815 | \n\n
| \n\n
| \n\n
| \n\n 82,817 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 396,632 | \n\n
| \n
| \n Gross Profit | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 382,631 | \n\n
| \n\n
| \n\n
| \n\n 68,416 | \n\n
| \n\n
| \n\n
| \n\n (3,938 | \n\n ) | \n\n
| \n\n
| \n\n 447,109 | \n\n
| \n
| \n Expenses | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Marketing | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 99,522 | \n\n
| \n\n
| \n\n
| \n\n 1,907 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 101,429 | \n\n
| \n
| \n Operations and technology | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 85,899 | \n\n
| \n\n
| \n\n
| \n\n 10,660 | \n\n
| \n\n
| \n\n
| \n\n (1,404 | \n\n ) | \n\n
| \n\n
| \n\n 95,155 | \n\n
| \n
| \n General and administrative | \n\n
| \n\n
| \n\n 360 | \n\n
| \n\n
| \n\n
| \n\n 97,762 | \n\n
| \n\n
| \n\n
| \n\n 6,135 | \n\n
| \n\n
| \n\n
| \n\n (2,534 | \n\n ) | \n\n
| \n\n
| \n\n 101,723 | \n\n
| \n
| \n Depreciation and amortization | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 14,209 | \n\n
| \n\n
| \n\n
| \n\n 179 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 14,388 | \n\n
| \n
| \n Total Expenses | \n\n
| \n\n
| \n\n 360 | \n\n
| \n\n
| \n\n
| \n\n 297,392 | \n\n
| \n\n
| \n\n
| \n\n 18,881 | \n\n
| \n\n
| \n\n
| \n\n (3,938 | \n\n ) | \n\n
| \n\n
| \n\n 312,695 | \n\n
| \n
| \n (Loss) Income from Operations | \n\n
| \n\n
| \n\n (360 | \n\n ) | \n\n
| \n\n
| \n\n 85,239 | \n\n
| \n\n
| \n\n
| \n\n 49,535 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 134,414 | \n\n
| \n
| \n Interest expense, net | \n\n
| \n\n
| \n\n (55,506 | \n\n ) | \n\n
| \n\n
| \n\n (152 | \n\n ) | \n\n
| \n\n
| \n\n (18,345 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (74,003 | \n\n ) | \n
| \n Foreign currency transaction gain | \n\n
| \n\n
| \n\n 381 | \n\n
| \n\n
| \n\n
| \n\n 3 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 384 | \n\n
| \n
| \n (Loss) gain on early extinguishment of debt | \n\n
| \n\n
| \n\n (14,927 | \n\n ) | \n\n
| \n\n
| \n\n (8,594 | \n\n ) | \n\n
| \n\n
| \n\n 626 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (22,895 | \n\n ) | \n
| \n (Loss) Income before Income Taxes and Equity in Net Earnings of Subsidiaries | \n\n
| \n\n
| \n\n (70,412 | \n\n ) | \n\n
| \n\n
| \n\n 76,496 | \n\n
| \n\n
| \n\n
| \n\n 31,816 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 37,900 | \n\n
| \n
| \n (Benefit from) provision for income taxes | \n\n
| \n\n
| \n\n (16,089 | \n\n ) | \n\n
| \n\n
| \n\n 17,479 | \n\n
| \n\n
| \n\n
| \n\n 7,270 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 8,660 | \n\n
| \n
| \n (Loss) Income before Equity in Net Earnings of Subsidiaries | \n\n
| \n\n
| \n\n (54,323 | \n\n ) | \n\n
| \n\n
| \n\n 59,017 | \n\n
| \n\n
| \n\n
| \n\n 24,546 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 29,240 | \n\n
| \n
| \n Net earnings of subsidiaries | \n\n
| \n\n
| \n\n 83,563 | \n\n
| \n\n
| \n\n
| \n\n 24,546 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (108,109 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Net Income (Loss) | \n\n
| \n\n $ | \n\n 29,240 | \n\n
| \n\n
| \n\n $ | \n\n 83,563 | \n\n
| \n\n
| \n\n $ | \n\n 24,546 | \n\n
| \n\n
| \n\n $ | \n\n (108,109 | \n\n ) | \n\n
| \n\n $ | \n\n 29,240 | \n\n
| \n
| \n Other comprehensive gain (loss), net of tax: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Foreign currency translation gain (loss) | \n\n
| \n\n
| \n\n 4,492 | \n\n
| \n\n
| \n\n
| \n\n 4,963 | \n\n
| \n\n
| \n\n
| \n\n (471 | \n\n ) | \n\n
| \n\n
| \n\n (4,492 | \n\n ) | \n\n
| \n\n
| \n\n 4,492 | \n\n
| \n
| \n Total other comprehensive gain (loss), net of tax | \n\n
| \n\n
| \n\n 4,492 | \n\n
| \n\n
| \n\n
| \n\n 4,963 | \n\n
| \n\n
| \n\n
| \n\n (471 | \n\n ) | \n\n
| \n\n
| \n\n (4,492 | \n\n ) | \n\n
| \n\n
| \n\n 4,492 | \n\n
| \n
| \n Comprehensive Income (Loss) | \n\n
| \n\n $ | \n\n 33,732 | \n\n
| \n\n
| \n\n $ | \n\n 88,526 | \n\n
| \n\n
| \n\n $ | \n\n 24,075 | \n\n
| \n\n
| \n\n $ | \n\n (112,601 | \n\n ) | \n\n
| \n\n $ | \n\n 33,732 | \n\n
| \n
\n
CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
\nFor the Year Ended December 31, 2016
\n(in thousands)
\n\n
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n Guarantor | \n\n
| \n\n
| \n\n Non-Guarantor | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n||
| \n
| \n\n
| \n\n Parent | \n\n
| \n\n
| \n\n Subsidiaries | \n\n
| \n\n
| \n\n Subsidiaries | \n\n
| \n\n
| \n\n Eliminations | \n\n
| \n\n
| \n\n Consolidated | \n\n
| \n|||||
| \n Revenue | \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 653,517 | \n\n
| \n\n
| \n\n $ | \n\n 95,646 | \n\n
| \n\n
| \n\n $ | \n\n (3,594 | \n\n ) | \n\n
| \n\n $ | \n\n 745,569 | \n\n
| \n
| \n Cost of Revenue | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 260,996 | \n\n
| \n\n
| \n\n
| \n\n 66,970 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 327,966 | \n\n
| \n
| \n Gross Profit | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 392,521 | \n\n
| \n\n
| \n\n
| \n\n 28,676 | \n\n
| \n\n
| \n\n
| \n\n (3,594 | \n\n ) | \n\n
| \n\n
| \n\n 417,603 | \n\n
| \n
| \n Expenses | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Marketing | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 95,972 | \n\n
| \n\n
| \n\n
| \n\n 1,432 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 97,404 | \n\n
| \n
| \n Operations and technology | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 80,999 | \n\n
| \n\n
| \n\n
| \n\n 4,203 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 85,202 | \n\n
| \n
| \n General and administrative | \n\n
| \n\n
| \n\n 315 | \n\n
| \n\n
| \n\n
| \n\n 95,840 | \n\n
| \n\n
| \n\n
| \n\n 5,395 | \n\n
| \n\n
| \n\n
| \n\n (3,594 | \n\n ) | \n\n
| \n\n
| \n\n 97,956 | \n\n
| \n
| \n Depreciation and amortization | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 15,464 | \n\n
| \n\n
| \n\n
| \n\n 100 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 15,564 | \n\n
| \n
| \n Total Expenses | \n\n
| \n\n
| \n\n 315 | \n\n
| \n\n
| \n\n
| \n\n 288,275 | \n\n
| \n\n
| \n\n
| \n\n 11,130 | \n\n
| \n\n
| \n\n
| \n\n (3,594 | \n\n ) | \n\n
| \n\n
| \n\n 296,126 | \n\n
| \n
| \n (Loss) Income from Operations | \n\n
| \n\n
| \n\n (315 | \n\n ) | \n\n
| \n\n
| \n\n 104,246 | \n\n
| \n\n
| \n\n
| \n\n 17,546 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 121,477 | \n\n
| \n
| \n Interest expense, net | \n\n
| \n\n
| \n\n (53,512 | \n\n ) | \n\n
| \n\n
| \n\n 562 | \n\n
| \n\n
| \n\n
| \n\n (12,653 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (65,603 | \n\n ) | \n
| \n Foreign currency transaction gain (loss) | \n\n
| \n\n
| \n\n 1,569 | \n\n
| \n\n
| \n\n
| \n\n (7 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 1,562 | \n\n
| \n
| \n (Loss) Income before Income Taxes and Equity in Net Earnings of Subsidiaries | \n\n
| \n\n
| \n\n (52,258 | \n\n ) | \n\n
| \n\n
| \n\n 104,801 | \n\n
| \n\n
| \n\n
| \n\n 4,893 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 57,436 | \n\n
| \n
| \n Provision for income taxes | \n\n
| \n\n
| \n\n (20,776 | \n\n ) | \n\n
| \n\n
| \n\n 41,665 | \n\n
| \n\n
| \n\n
| \n\n 1,945 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 22,834 | \n\n
| \n
| \n (Loss) Income before Equity in Net Earnings of Subsidiaries | \n\n
| \n\n
| \n\n (31,482 | \n\n ) | \n\n
| \n\n
| \n\n 63,136 | \n\n
| \n\n
| \n\n
| \n\n 2,948 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 34,602 | \n\n
| \n
| \n Net earnings of subsidiaries | \n\n
| \n\n
| \n\n 66,084 | \n\n
| \n\n
| \n\n
| \n\n 2,948 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (69,032 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Net Income (Loss) | \n\n
| \n\n $ | \n\n 34,602 | \n\n
| \n\n
| \n\n $ | \n\n 66,084 | \n\n
| \n\n
| \n\n $ | \n\n 2,948 | \n\n
| \n\n
| \n\n $ | \n\n (69,032 | \n\n ) | \n\n
| \n\n $ | \n\n 34,602 | \n\n
| \n
| \n Other comprehensive (loss) gain, net of tax: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Foreign currency translation (loss) gain | \n\n
| \n\n
| \n\n (6,956 | \n\n ) | \n\n
| \n\n
| \n\n (8,269 | \n\n ) | \n\n
| \n\n
| \n\n 1,331 | \n\n
| \n\n
| \n\n
| \n\n 6,938 | \n\n
| \n\n
| \n\n
| \n\n (6,956 | \n\n ) | \n
| \n Total other comprehensive (loss) gain, net of tax | \n\n
| \n\n
| \n\n (6,956 | \n\n ) | \n\n
| \n\n
| \n\n (8,269 | \n\n ) | \n\n
| \n\n
| \n\n 1,331 | \n\n
| \n\n
| \n\n
| \n\n 6,938 | \n\n
| \n\n
| \n\n
| \n\n (6,956 | \n\n ) | \n
| \n Comprehensive Income (Loss) | \n\n
| \n\n $ | \n\n 27,646 | \n\n
| \n\n
| \n\n $ | \n\n 57,815 | \n\n
| \n\n
| \n\n $ | \n\n 4,279 | \n\n
| \n\n
| \n\n $ | \n\n (62,094 | \n\n ) | \n\n
| \n\n $ | \n\n 27,646 | \n\n
| \n
\n
CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
\nFor the Year Ended December 31, 2015
\n(in thousands)
\n\n
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n Guarantor | \n\n
| \n\n
| \n\n Non-Guarantor | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n||
| \n
| \n\n
| \n\n Parent | \n\n
| \n\n
| \n\n Subsidiaries | \n\n
| \n\n
| \n\n Subsidiaries | \n\n
| \n\n
| \n\n Eliminations | \n\n
| \n\n
| \n\n Consolidated | \n\n
| \n|||||
| \n Revenue | \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 650,295 | \n\n
| \n\n
| \n\n $ | \n\n 2,305 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 652,600 | \n\n
| \n
| \n Cost of Revenue | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 215,637 | \n\n
| \n\n
| \n\n
| \n\n 1,221 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 216,858 | \n\n
| \n
| \n Gross Profit | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 434,658 | \n\n
| \n\n
| \n\n
| \n\n 1,084 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 435,742 | \n\n
| \n
| \n Expenses | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Marketing | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 116,330 | \n\n
| \n\n
| \n\n
| \n\n 552 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 116,882 | \n\n
| \n
| \n Operations and technology | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 71,993 | \n\n
| \n\n
| \n\n
| \n\n 2,019 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 74,012 | \n\n
| \n
| \n General and administrative | \n\n
| \n\n
| \n\n 673 | \n\n
| \n\n
| \n\n
| \n\n 100,642 | \n\n
| \n\n
| \n\n
| \n\n 758 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 102,073 | \n\n
| \n
| \n Depreciation and amortization | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 18,350 | \n\n
| \n\n
| \n\n
| \n\n 38 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 18,388 | \n\n
| \n
| \n Total Expenses | \n\n
| \n\n
| \n\n 673 | \n\n
| \n\n
| \n\n
| \n\n 307,315 | \n\n
| \n\n
| \n\n
| \n\n 3,367 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 311,355 | \n\n
| \n
| \n (Loss) Income from Operations | \n\n
| \n\n
| \n\n (673 | \n\n ) | \n\n
| \n\n
| \n\n 127,343 | \n\n
| \n\n
| \n\n
| \n\n (2,283 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 124,387 | \n\n
| \n
| \n Interest expense, net | \n\n
| \n\n
| \n\n (52,816 | \n\n ) | \n\n
| \n\n
| \n\n (71 | \n\n ) | \n\n
| \n\n
| \n\n 4 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (52,883 | \n\n ) | \n
| \n Foreign currency transaction gain (loss) | \n\n
| \n\n
| \n\n 532 | \n\n
| \n\n
| \n\n
| \n\n (1,516 | \n\n ) | \n\n
| \n\n
| \n\n (1 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (985 | \n\n ) | \n
| \n (Loss) Income before Income Taxes and Equity in Net Earnings of Subsidiaries | \n\n
| \n\n
| \n\n (52,957 | \n\n ) | \n\n
| \n\n
| \n\n 125,756 | \n\n
| \n\n
| \n\n
| \n\n (2,280 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 70,519 | \n\n
| \n
| \n (Benefit from) provision for income taxes | \n\n
| \n\n
| \n\n (19,921 | \n\n ) | \n\n
| \n\n
| \n\n 47,306 | \n\n
| \n\n
| \n\n
| \n\n (858 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 26,527 | \n\n
| \n
| \n (Loss) Income before Equity in Net Earnings of Subsidiaries | \n\n
| \n\n
| \n\n (33,036 | \n\n ) | \n\n
| \n\n
| \n\n 78,450 | \n\n
| \n\n
| \n\n
| \n\n (1,422 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 43,992 | \n\n
| \n
| \n Net earnings of subsidiaries | \n\n
| \n\n
| \n\n 77,028 | \n\n
| \n\n
| \n\n
| \n\n (1,422 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (75,606 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Net Income (Loss) | \n\n
| \n\n $ | \n\n 43,992 | \n\n
| \n\n
| \n\n $ | \n\n 77,028 | \n\n
| \n\n
| \n\n $ | \n\n (1,422 | \n\n ) | \n\n
| \n\n $ | \n\n (75,606 | \n\n ) | \n\n
| \n\n $ | \n\n 43,992 | \n\n
| \n
| \n Other comprehensive (loss) gain, net of tax: | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Foreign currency translation (loss) gain | \n\n
| \n\n
| \n\n (1,451 | \n\n ) | \n\n
| \n\n
| \n\n (245 | \n\n ) | \n\n
| \n\n
| \n\n (866 | \n\n ) | \n\n
| \n\n
| \n\n 1,111 | \n\n
| \n\n
| \n\n
| \n\n (1,451 | \n\n ) | \n
| \n Total other comprehensive (loss) gain, net of tax | \n\n
| \n\n
| \n\n (1,451 | \n\n ) | \n\n
| \n\n
| \n\n (245 | \n\n ) | \n\n
| \n\n
| \n\n (866 | \n\n ) | \n\n
| \n\n
| \n\n 1,111 | \n\n
| \n\n
| \n\n
| \n\n (1,451 | \n\n ) | \n
| \n Comprehensive Income (Loss) | \n\n
| \n\n $ | \n\n 42,541 | \n\n
| \n\n
| \n\n $ | \n\n 76,783 | \n\n
| \n\n
| \n\n $ | \n\n (2,288 | \n\n ) | \n\n
| \n\n $ | \n\n (74,495 | \n\n ) | \n\n
| \n\n $ | \n\n 42,541 | \n\n
| \n
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
\nFor the Year Ended December 31, 2017
\n(in thousands)
\n\n
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n Guarantor | \n\n
| \n\n
| \n\n Non-Guarantor | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n||
| \n
| \n\n
| \n\n Parent | \n\n
| \n\n
| \n\n Subsidiaries | \n\n
| \n\n
| \n\n Subsidiaries | \n\n
| \n\n
| \n\n Eliminations | \n\n
| \n\n
| \n\n Consolidated | \n\n
| \n|||||
| \n Cash Flows from Operating Activities | \n\n
| \n\n $ | \n\n (50,319 | \n\n ) | \n\n
| \n\n $ | \n\n 616,042 | \n\n
| \n\n
| \n\n $ | \n\n (91,660 | \n\n ) | \n\n
| \n\n $ | \n\n (26,890 | \n\n ) | \n\n
| \n\n $ | \n\n 447,173 | \n\n
| \n
| \n Cash Flows from Investing Activities | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Loans and finance receivables originated or acquired | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (1,401,302 | \n\n ) | \n\n
| \n\n
| \n\n (29,720 | \n\n ) | \n\n
| \n\n
| \n\n 11,623 | \n\n
| \n\n
| \n\n
| \n\n (1,419,399 | \n\n ) | \n
| \n Securitized loans transferred | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 231,863 | \n\n
| \n\n
| \n\n
| \n\n (231,863 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Loans and finance receivables repaid | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 621,495 | \n\n
| \n\n
| \n\n
| \n\n 299,682 | \n\n
| \n\n
| \n\n
| \n\n (11,623 | \n\n ) | \n\n
| \n\n
| \n\n 909,554 | \n\n
| \n
| \n Change in restricted cash | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (337 | \n\n ) | \n\n
| \n\n
| \n\n (2,228 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (2,565 | \n\n ) | \n
| \n Purchases of property and equipment | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (16,375 | \n\n ) | \n\n
| \n\n
| \n\n (153 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (16,528 | \n\n ) | \n
| \n Capital contributions to subsidiaries | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (11,935 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 11,935 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Other investing activities | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 1,805 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 1,805 | \n\n
| \n
| \n Net cash (used in) provided by investing activities | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (574,786 | \n\n ) | \n\n
| \n\n
| \n\n 35,718 | \n\n
| \n\n
| \n\n
| \n\n 11,935 | \n\n
| \n\n
| \n\n
| \n\n (527,133 | \n\n ) | \n
| \n Cash Flows from Financing Activities | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n (Payments for) proceeds from member's equity | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (26,890 | \n\n ) | \n\n
| \n\n
| \n\n 11,935 | \n\n
| \n\n
| \n\n
| \n\n 14,955 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Debt issuance costs paid | \n\n
| \n\n
| \n\n (10,753 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (3,909 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (14,662 | \n\n ) | \n
| \n Debt prepayment penalty | \n\n
| \n\n
| \n\n (16,694 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (16,694 | \n\n ) | \n
| \n Treasury shares purchased | \n\n
| \n\n
| \n\n (5,079 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (5,079 | \n\n ) | \n
| \n Issuance of Senior Notes | \n\n
| \n\n
| \n\n 250,000 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 250,000 | \n\n
| \n
| \n Repayments of Senior Notes | \n\n
| \n\n
| \n\n (155,000 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (155,000 | \n\n ) | \n
| \n Borrowings under revolving line of credit | \n\n
| \n\n
| \n\n 30,000 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 30,000 | \n\n
| \n
| \n Repayments under revolving line of credit | \n\n
| \n\n
| \n\n (30,000 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (30,000 | \n\n ) | \n
| \n Borrowings under securitization facility | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 359,842 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 359,842 | \n\n
| \n
| \n Repayments under securitization facility | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (313,853 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (313,853 | \n\n ) | \n
| \n Proceeds from exercise of stock options | \n\n
| \n\n
| \n\n 28 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 28 | \n\n
| \n
| \n Net cash provided by (used in) financing activities | \n\n
| \n\n
| \n\n 62,502 | \n\n
| \n\n
| \n\n
| \n\n (26,890 | \n\n ) | \n\n
| \n\n
| \n\n 54,015 | \n\n
| \n\n
| \n\n
| \n\n 14,955 | \n\n
| \n\n
| \n\n
| \n\n 104,582 | \n\n
| \n
| \n Effect of exchange rates on cash | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 4,236 | \n\n
| \n\n
| \n\n
| \n\n (108 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 4,128 | \n\n
| \n
| \n Net increase (decrease) in cash and cash equivalents | \n\n
| \n\n
| \n\n 12,183 | \n\n
| \n\n
| \n\n
| \n\n 18,602 | \n\n
| \n\n
| \n\n
| \n\n (2,035 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 28,750 | \n\n
| \n
| \n Cash and cash equivalents at beginning of year | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 36,057 | \n\n
| \n\n
| \n\n
| \n\n 3,877 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 39,934 | \n\n
| \n
| \n Cash and cash equivalents at end of period | \n\n
| \n\n $ | \n\n 12,183 | \n\n
| \n\n
| \n\n $ | \n\n 54,659 | \n\n
| \n\n
| \n\n $ | \n\n 1,842 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 68,684 | \n\n
| \n
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
\nFor the Year Ended December 31, 2016
\n(in thousands)
\n| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n Guarantor | \n\n
| \n\n
| \n\n Non-Guarantor | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n||
| \n
| \n\n
| \n\n Parent | \n\n
| \n\n
| \n\n Subsidiaries | \n\n
| \n\n
| \n\n Subsidiaries | \n\n
| \n\n
| \n\n Eliminations | \n\n
| \n\n
| \n\n Consolidated | \n\n
| \n|||||
| \n Cash Flows from Operating Activities | \n\n
| \n\n $ | \n\n 59,337 | \n\n
| \n\n
| \n\n $ | \n\n 296,876 | \n\n
| \n\n
| \n\n $ | \n\n 37,859 | \n\n
| \n\n
| \n\n $ | \n\n (699 | \n\n ) | \n\n
| \n\n $ | \n\n 393,373 | \n\n
| \n
| \n Cash Flows from Investing Activities | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Loans and finance receivables originated or acquired | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (1,293,273 | \n\n ) | \n\n
| \n\n
| \n\n (14,924 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (1,308,197 | \n\n ) | \n
| \n Securitized loans transferred | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 359,000 | \n\n
| \n\n
| \n\n
| \n\n (359,000 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Loans and finance receivables repaid | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 669,088 | \n\n
| \n\n
| \n\n
| \n\n 188,960 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 858,048 | \n\n
| \n
| \n Change in restricted cash | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (658 | \n\n ) | \n\n
| \n\n
| \n\n (19,468 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (20,126 | \n\n ) | \n
| \n Purchases of property and equipment | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (14,007 | \n\n ) | \n\n
| \n\n
| \n\n (389 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (14,396 | \n\n ) | \n
| \n Capital contributions to subsidiaries | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (10,255 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 10,255 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Other investing activities | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 95 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 95 | \n\n
| \n
| \n Net cash used in investing activities | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (290,010 | \n\n ) | \n\n
| \n\n
| \n\n (204,821 | \n\n ) | \n\n
| \n\n
| \n\n 10,255 | \n\n
| \n\n
| \n\n
| \n\n (484,576 | \n\n ) | \n
| \n Cash Flows from Financing Activities | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n (Payments for) proceeds from member's equity | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (699 | \n\n ) | \n\n
| \n\n
| \n\n 10,255 | \n\n
| \n\n
| \n\n
| \n\n (9,556 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Debt issuance costs paid | \n\n
| \n\n
| \n\n (500 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (6,202 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (6,702 | \n\n ) | \n
| \n Treasury shares purchased | \n\n
| \n\n
| \n\n (437 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (437 | \n\n ) | \n
| \n Borrowings under revolving line of credit | \n\n
| \n\n
| \n\n 58,400 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 58,400 | \n\n
| \n
| \n Repayments under revolving line of credit, net | \n\n
| \n\n
| \n\n (116,800 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (116,800 | \n\n ) | \n
| \n Borrowings under securitization facility | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 280,075 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 280,075 | \n\n
| \n
| \n Repayments under securitization facility | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (114,656 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (114,656 | \n\n ) | \n
| \n Net cash provided by (used in) provided by financing activities | \n\n
| \n\n
| \n\n (59,337 | \n\n ) | \n\n
| \n\n
| \n\n (699 | \n\n ) | \n\n
| \n\n
| \n\n 169,472 | \n\n
| \n\n
| \n\n
| \n\n (9,556 | \n\n ) | \n\n
| \n\n
| \n\n 99,880 | \n\n
| \n
| \n Effect of exchange rates on cash | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (11,037 | \n\n ) | \n\n
| \n\n
| \n\n 228 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (10,809 | \n\n ) | \n
| \n Net (decrease) increase in cash and cash equivalents | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (4,870 | \n\n ) | \n\n
| \n\n
| \n\n 2,738 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (2,132 | \n\n ) | \n
| \n Cash and cash equivalents at beginning of year | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 40,927 | \n\n
| \n\n
| \n\n
| \n\n 1,139 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 42,066 | \n\n
| \n
| \n Cash and cash equivalents at end of period | \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 36,057 | \n\n
| \n\n
| \n\n $ | \n\n 3,877 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 39,934 | \n\n
| \n
\n
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
\nFor the Year Ended December 31, 2015
\n(in thousands)
\n\n
| \n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n Guarantor | \n\n
| \n\n
| \n\n Non-Guarantor | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n||
| \n
| \n\n
| \n\n Parent | \n\n
| \n\n
| \n\n Subsidiaries | \n\n
| \n\n
| \n\n Subsidiaries | \n\n
| \n\n
| \n\n Eliminations | \n\n
| \n\n
| \n\n Consolidated | \n\n
| \n|||||
| \n Cash Flows from Operating Activities | \n\n
| \n\n $ | \n\n 31,259 | \n\n
| \n\n
| \n\n $ | \n\n 331,954 | \n\n
| \n\n
| \n\n $ | \n\n (2,695 | \n\n ) | \n\n
| \n\n $ | \n\n (76,597 | \n\n ) | \n\n
| \n\n $ | \n\n 283,921 | \n\n
| \n
| \n Cash Flows from Investing Activities | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Loans and finance receivables originated or acquired | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (1,167,107 | \n\n ) | \n\n
| \n\n
| \n\n (5,062 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (1,172,169 | \n\n ) | \n
| \n Loans and finance receivables repaid | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 849,638 | \n\n
| \n\n
| \n\n
| \n\n (280 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 849,358 | \n\n
| \n
| \n Acquisitions | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (17,735 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (17,735 | \n\n ) | \n
| \n Purchases of property and equipment | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (31,977 | \n\n ) | \n\n
| \n\n
| \n\n (264 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (32,241 | \n\n ) | \n
| \n Capital contributions to subsidiaries | \n\n
| \n\n
| \n\n (87,876 | \n\n ) | \n\n
| \n\n
| \n\n (7,255 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 95,131 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Other investing activities | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 618 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 618 | \n\n
| \n
| \n Net cash used in investing activities | \n\n
| \n\n
| \n\n (87,876 | \n\n ) | \n\n
| \n\n
| \n\n (373,818 | \n\n ) | \n\n
| \n\n
| \n\n (5,606 | \n\n ) | \n\n
| \n\n
| \n\n 95,131 | \n\n
| \n\n
| \n\n
| \n\n (372,169 | \n\n ) | \n
| \n Cash Flows from Financing Activities | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n (Payments for) proceeds from member's equity | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 11,279 | \n\n
| \n\n
| \n\n
| \n\n 7,255 | \n\n
| \n\n
| \n\n
| \n\n (18,534 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n
| \n Debt issuance costs paid | \n\n
| \n\n
| \n\n (1,596 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (1,596 | \n\n ) | \n
| \n Treasury shares purchased | \n\n
| \n\n
| \n\n (187 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (187 | \n\n ) | \n
| \n Borrowings under revolving line of credit | \n\n
| \n\n
| \n\n 63,400 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 63,400 | \n\n
| \n
| \n Repayments under revolving line of credit | \n\n
| \n\n
| \n\n (5,000 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (5,000 | \n\n ) | \n
| \n Net cash provided by (used in) financing activities | \n\n
| \n\n
| \n\n 56,617 | \n\n
| \n\n
| \n\n
| \n\n 11,279 | \n\n
| \n\n
| \n\n
| \n\n 7,255 | \n\n
| \n\n
| \n\n
| \n\n (18,534 | \n\n ) | \n\n
| \n\n
| \n\n 56,617 | \n\n
| \n
| \n Effect of exchange rates on cash | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (855 | \n\n ) | \n\n
| \n\n
| \n\n (554 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (1,409 | \n\n ) | \n
| \n Net decrease in cash and cash equivalents | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (31,440 | \n\n ) | \n\n
| \n\n
| \n\n (1,600 | \n\n ) | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n (33,040 | \n\n ) | \n
| \n Cash and cash equivalents at beginning of year | \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 72,367 | \n\n
| \n\n
| \n\n
| \n\n 2,739 | \n\n
| \n\n
| \n\n
| \n\n — | \n\n
| \n\n
| \n\n
| \n\n 75,106 | \n\n
| \n
| \n Cash and cash equivalents at end of period | \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 40,927 | \n\n
| \n\n
| \n\n $ | \n\n 1,139 | \n\n
| \n\n
| \n\n $ | \n\n — | \n\n
| \n\n
| \n\n $ | \n\n 42,066 | \n\n
| \n
The following is a summary of the quarterly results of operations for the years ended December 31, 2017 and 2016 (in thousands, except per share data):
\n\n
| \n
| \n\n
| \n\n First | \n\n
| \n\n
| \n\n Second | \n\n
| \n\n
| \n\n Third | \n\n
| \n\n
| \n\n Fourth | \n\n
| \n||||
| \n
| \n\n
| \n\n Quarter | \n\n
| \n\n
| \n\n Quarter | \n\n
| \n\n
| \n\n Quarter | \n\n
| \n\n
| \n\n Quarter | \n\n
| \n||||
| \n 2017 | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Total Revenue | \n\n
| \n\n $ | \n\n 192,263 | \n\n
| \n\n
| \n\n $ | \n\n 189,904 | \n\n
| \n\n
| \n\n $ | \n\n 217,878 | \n\n
| \n\n
| \n\n $ | \n\n 243,696 | \n\n
| \n
| \n Cost of Revenue | \n\n
| \n\n
| \n\n 81,884 | \n\n
| \n\n
| \n\n
| \n\n 79,862 | \n\n
| \n\n
| \n\n
| \n\n 107,341 | \n\n
| \n\n
| \n\n
| \n\n 127,545 | \n\n
| \n
| \n Gross Profit | \n\n
| \n\n $ | \n\n 110,379 | \n\n
| \n\n
| \n\n $ | \n\n 110,042 | \n\n
| \n\n
| \n\n $ | \n\n 110,537 | \n\n
| \n\n
| \n\n $ | \n\n 116,151 | \n\n
| \n
| \n Net Income (Loss) | \n\n
| \n\n $ | \n\n 13,852 | \n\n
| \n\n
| \n\n $ | \n\n 11,873 | \n\n
| \n\n
| \n\n $ | \n\n (3,368 | \n\n ) | \n\n
| \n\n $ | \n\n 6,883 | \n\n
| \n
| \n Diluted earnings per share | \n\n
| \n\n $ | \n\n 0.41 | \n\n
| \n\n
| \n\n $ | \n\n 0.35 | \n\n
| \n\n
| \n\n $ | \n\n (0.10 | \n\n ) | \n\n
| \n\n $ | \n\n 0.20 | \n\n
| \n
| \n Diluted weighted average common shares (1) | \n\n
| \n\n
| \n\n 34,036 | \n\n
| \n\n
| \n\n
| \n\n 34,125 | \n\n
| \n\n
| \n\n
| \n\n 33,670 | \n\n
| \n\n
| \n\n
| \n\n 34,172 | \n\n
| \n
| \n 2016 | \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n\n
| \n
| \n Total Revenue | \n\n
| \n\n $ | \n\n 174,653 | \n\n
| \n\n
| \n\n $ | \n\n 172,535 | \n\n
| \n\n
| \n\n $ | \n\n 195,943 | \n\n
| \n\n
| \n\n $ | \n\n 202,438 | \n\n
| \n
| \n Cost of Revenue | \n\n
| \n\n
| \n\n 69,577 | \n\n
| \n\n
| \n\n
| \n\n 65,453 | \n\n
| \n\n
| \n\n
| \n\n 95,391 | \n\n
| \n\n
| \n\n
| \n\n 97,545 | \n\n
| \n
| \n Gross Profit | \n\n
| \n\n $ | \n\n 105,076 | \n\n
| \n\n
| \n\n $ | \n\n 107,082 | \n\n
| \n\n
| \n\n $ | \n\n 100,552 | \n\n
| \n\n
| \n\n $ | \n\n 104,893 | \n\n
| \n
| \n Net Income | \n\n
| \n\n $ | \n\n 9,863 | \n\n
| \n\n
| \n\n $ | \n\n 8,188 | \n\n
| \n\n
| \n\n $ | \n\n 7,837 | \n\n
| \n\n
| \n\n $ | \n\n 8,714 | \n\n
| \n
| \n Diluted earnings per share | \n\n
| \n\n $ | \n\n 0.30 | \n\n
| \n\n
| \n\n $ | \n\n 0.25 | \n\n
| \n\n
| \n\n $ | \n\n 0.23 | \n\n
| \n\n
| \n\n $ | \n\n 0.26 | \n\n
| \n
| \n Diluted weighted average common shares (1) | \n\n
| \n\n
| \n\n 33,187 | \n\n
| \n\n
| \n\n
| \n\n 33,335 | \n\n
| \n\n
| \n\n
| \n\n 33,558 | \n\n
| \n\n
| \n\n
| \n\n 33,767 | \n\n
| \n
\n
| \n (1) | \n\n See Note 1 for Basis of Presentation. |