Page
|
|||||
PART I.
FINANCIAL INFORMATION
|
|||||
Item 1.
|
Financial
Statements (Unaudited)
|
||||
1 | |||||
2 | |||||
3 | |||||
4 | |||||
5 | |||||
6 | |||||
Item
2.
|
31 | ||||
Item
3.
|
55 | ||||
Item
4.
|
57 | ||||
PART II.
OTHER INFORMATION
|
|||||
Item
1.
|
58 | ||||
Item 1A.
|
59 | ||||
Item
6.
|
72 | ||||
Signatures | 73 |
September
30,
2009
|
December
31,
2008
|
|||||||
(as
adjusted)
|
||||||||
Assets
|
||||||||
Cash
and cash equivalents (including restricted cash of $3,639 at September 30,
2009 and $19,913 at December 31, 2008)
|
$ | 119,595 | $ | 94,428 | ||||
Securitized
earning assets
|
122,107 | 813,793 | ||||||
Non-securitized
earning assets, net:
|
||||||||
Loans
and fees receivable, net (of $17,440 and $24,757 in deferred revenue and
$59,340 and $55,753 in allowances for uncollectible loans and fees
receivable at September 30, 2009 and December 31, 2008,
respectively)
|
307,109 | 340,734 | ||||||
Investments
in previously charged-off receivables
|
29,854 | 47,676 | ||||||
Investments
in securities
|
3,151 | 4,678 | ||||||
Deferred
costs, net
|
5,202 | 6,161 | ||||||
Property
at cost, net of depreciation
|
35,439 | 48,297 | ||||||
Investments
in equity-method investees
|
19,152 | 53,093 | ||||||
Intangibles,
net
|
3,030 | 4,547 | ||||||
Goodwill
|
43,413 | 59,129 | ||||||
Prepaid
expenses and other assets
|
41,420 | 52,575 | ||||||
Total
assets
|
$ | 729,472 | $ | 1,525,111 | ||||
Liabilities
|
||||||||
Accounts
payable and accrued expenses
|
$ | 83,601 | $ | 120,235 | ||||
Notes
payable and other borrowings
|
60,889 | 199,939 | ||||||
Convertible
senior notes (Note 9)
|
307,153 | 299,834 | ||||||
Deferred
revenue
|
1,991 | 23,492 | ||||||
Current
and deferred income tax liabilities
|
21,695 | 134,754 | ||||||
Total
liabilities
|
475,329 | 778,254 | ||||||
Commitments
and contingencies (Note 11)
|
||||||||
Equity
|
||||||||
Common
stock, no par value, 150,000,000 shares authorized: 58,639,531 shares
issued and 49,982,839 shares outstanding at September 30, 2009
(including 2,252,388 loaned shares to be returned); and 59,947,301 shares
issued and 51,213,385 shares outstanding at December 31, 2008
(including 3,651,069 loaned shares to be returned)
|
— | — | ||||||
Additional
paid-in capital
|
524,338 | 522,571 | ||||||
Treasury
stock, at cost, 8,656,692 and 8,733,916 shares at September 30, 2009 and
December 31, 2008, respectively
|
(220,375 | ) | (222,310 | ) | ||||
Accumulated
other comprehensive loss
|
(32,572 | ) | (31,431 | ) | ||||
Retained
(deficit) earnings
|
(33,123 | ) | 453,149 | |||||
Total
shareholders’ equity (Note 2)
|
238,268 | 721,979 | ||||||
Noncontrolling
interests (Note 2)
|
15,875 | 24,878 | ||||||
Total
equity
|
254,143 | 746,857 | ||||||
Total
liabilities and equity (Note 2)
|
$ | 729,472 | $ | 1,525,111 |
For
the Three Months Ended
September
30,
|
For
the Nine Months Ended
September
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
(as
adjusted)
|
(as
adjusted)
|
|||||||||||||||
Interest
income:
|
||||||||||||||||
Consumer
loans, including past due fees
|
$ | 17,987 | $ | 23,556 | $ | 56,755 | $ | 71,338 | ||||||||
Other
|
325 | 971 | 906 | 4,444 | ||||||||||||
Total
interest income
|
18,312 | 24,527 | 57,661 | 75,782 | ||||||||||||
Interest
expense
|
(9,465 | ) | (12,619 | ) | (29,675 | ) | (39,558 | ) | ||||||||
Net
interest income before fees and related income on non-securitized earning
assets and provision for loan losses
|
8,847 | 11,908 | 27,986 | 36,224 | ||||||||||||
Fees
and related income on non-securitized earning assets
|
58,890 | 42,478 | 142,462 | 146,629 | ||||||||||||
Provision
for loan losses
|
(16,712 | ) | (16,700 | ) | (47,520 | ) | (52,585 | ) | ||||||||
Net
interest income, fees and related income on non-securitized earning
assets
|
51,025 | 37,686 | 122,928 | 130,268 | ||||||||||||
Other
operating (loss) income:
|
||||||||||||||||
(Loss)
gain on securitized earning assets
|
(216,416 | ) | 4,238 | (530,130 | ) | (13,830 | ) | |||||||||
Servicing
income
|
21,999 | 44,537 | 92,873 | 137,691 | ||||||||||||
Ancillary
and interchange revenues
|
4,028 | 14,401 | 15,255 | 45,532 | ||||||||||||
Gain
on repurchase of convertible senior notes
|
— | — | 160 | 13,728 | ||||||||||||
Gain
on buy-out of equity-method investee members
|
— | — | 20,990 | — | ||||||||||||
Equity
in (loss) income of equity-method investees
|
(2,170 | ) | 1,674 | (12,185 | ) | 17,130 | ||||||||||
Total
other operating (loss) income
|
(192,559 | ) | 64,850 | (413,037 | ) | 200,251 | ||||||||||
Other
operating expense:
|
||||||||||||||||
Salaries
and benefits
|
12,182 | 16,407 | 40,257 | 53,094 | ||||||||||||
Card
and loan servicing
|
55,930 | 65,188 | 166,680 | 212,301 | ||||||||||||
Marketing
and solicitation
|
4,418 | 8,754 | 12,472 | 41,653 | ||||||||||||
Depreciation
|
4,520 | 8,351 | 16,161 | 25,621 | ||||||||||||
Goodwill
impairment
|
— | 29,164 | 20,000 | 29,164 | ||||||||||||
Other
|
22,840 | 27,800 | 73,343 | 92,297 | ||||||||||||
Total
other operating expense
|
99,890 | 155,664 | 328,913 | 454,130 | ||||||||||||
Loss
from continuing operations before income taxes
|
(241,424 | ) | (53,128 | ) | (619,022 | ) | (123,611 | ) | ||||||||
Income
tax benefit
|
2,791 | 20,571 | 123,381 | 42,460 | ||||||||||||
Loss
from continuing operations
|
(238,633 | ) | (32,557 | ) | (495,641 | ) | (81,151 | ) | ||||||||
Discontinued
operations:
|
||||||||||||||||
Loss
from discontinued operations before income taxes
|
— | (1,925 | ) | (6,599 | ) | (9,101 | ) | |||||||||
Income
tax benefit
|
— | 674 | 2,310 | 3,186 | ||||||||||||
Loss
from discontinued operations
|
— | (1,251 | ) | (4,289 | ) | (5,915 | ) | |||||||||
Net
loss
|
(238,633 | ) | (33,808 | ) | (499,930 | ) | (87,066 | ) | ||||||||
Net
(income) loss attributable to noncontrolling interests
|
(778 | ) | 30 | 13,658 | (1,471 | ) | ||||||||||
Net
loss attributable to controlling interests
|
$ | (239,411 | ) | $ | (33,778 | ) | $ | (486,272 | ) | $ | (88,537 | ) | ||||
Loss
from continuing operations attributable to controlling interests per
common share—basic
|
$ | (5.02 | ) | $ | (0.68 | ) | $ | (10.11 | ) | $ | (1.74 | ) | ||||
Loss
from continuing operations attributable to controlling interests per
common share—diluted
|
$ | (5.02 | ) | $ | (0.68 | ) | $ | (10.11 | ) | $ | (1.74 | ) | ||||
Loss
from discontinued operations attributable to controlling interests per
common share—basic
|
$ | — | $ | (0.03 | ) | $ | (0.09 | ) | $ | (0.12 | ) | |||||
Loss
from discontinued operations attributable to controlling interests per
common share—diluted
|
$ | — | $ | (0.03 | ) | $ | (0.09 | ) | $ | (0.12 | ) | |||||
Net
loss attributable to controlling interests per common
share—basic
|
$ | (5.02 | ) | $ | (0.71 | ) | $ | (10.20 | ) | $ | (1.86 | ) | ||||
Net
loss attributable to controlling interests per common
share—diluted
|
$ | (5.02 | ) | $ | (0.71 | ) | $ | (10.20 | ) | $ | (1.86 | ) |
Common
Stock
|
||||||||||||||||||||||||||||||||||||
Shares
Issued
|
Amount
|
Additional
Paid-In Capital
|
Treasury
Stock
|
Accumulated
Other Comprehensive Loss
|
Retained
Earnings (Deficit)
|
Noncontrolling
Interests
|
Comprehensive
Loss
|
Total
Equity
|
||||||||||||||||||||||||||||
Balance
at December 31, 2008 (as adjusted)
|
59,947,301 | $ | — | $ | 522,571 | $ | (222,310 | ) | $ | (31,431 | ) | $ | 453,149 | $ | 24,878 | $ | — | $ | 746,857 | |||||||||||||||||
Use
of treasury stock for stock-based compensation plans
|
(114,898 | ) | — | (2,054 | ) | 2,054 | — | — | — | — | — | |||||||||||||||||||||||||
Issuance
of restricted stock
|
205,809 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Amortization
of deferred stock-based compensation costs
|
— | — | 6,738 | — | — | — | — | — | 6,738 | |||||||||||||||||||||||||||
Purchase
of treasury stock
|
— | — | — | (119 | ) | — | — | — | — | (119 | ) | |||||||||||||||||||||||||
Tax
effects of stock-based compensation plans
|
— | — | (1,321 | ) | — | — | — | — | — | (1,321 | ) | |||||||||||||||||||||||||
Settlement
of contingent earn-out as referenced in Note 10, “Goodwill and Intangible
Assets”
|
— | — | (1,596 | ) | — | — | — | 5,431 | — | 3,835 | ||||||||||||||||||||||||||
Distributions
to owners of noncontrolling interests
|
— | — | — | — | — | — | (774 | ) | — | (774 | ) | |||||||||||||||||||||||||
Retired
shares
|
(1,398,681 | ) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Comprehensive
loss:
|
||||||||||||||||||||||||||||||||||||
Net
loss
|
— | — | — | — | — | (486,272 | ) | (13,658 | ) | (499,930 | ) | (499,930 | ) | |||||||||||||||||||||||
Foreign
currency translation adjustment, net of tax
|
— | — | — | — | (1,141 | ) | — | (2 | ) | (1,143 | ) | (1,143 | ) | |||||||||||||||||||||||
Comprehensive
loss
|
— | — | — | — | — | — | — | $ | (501,073 | ) | — | |||||||||||||||||||||||||
Balance
at September 30, 2009
|
58,639,531 | $ | — | $ | 524,338 | $ | (220,375 | ) | $ | (32,572 | ) | $ | (33,123 | ) | $ | 15,875 | $ | 254,143 |
For the Three
Months Ended
September
30,
|
For the Nine
Months Ended
September
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
(as
adjusted)
|
(as
adjusted)
|
|||||||||||||||
Net
loss
|
$ | (238,633 | ) | $ | (33,808 | ) | $ | (499,930 | ) | $ | (87,066 | ) | ||||
Other
comprehensive loss:
|
||||||||||||||||
Foreign
currency translation adjustment
|
(2,484 | ) | (15,993 | ) | 10,763 | (16,272 | ) | |||||||||
Income
tax benefit (expense) related to other comprehensive loss
|
1 | 4,502 | (11,906 | ) | 4,598 | |||||||||||
Comprehensive
loss
|
(241,116 | ) | (45,299 | ) | (501,073 | ) | (98,740 | ) | ||||||||
Comprehensive
(income) loss attributable to noncontrolling interests
|
(778 | ) | 29 | 13,660 | (1,476 | ) | ||||||||||
Comprehensive
loss attributable to controlling interests
|
$ | (241,894 | ) | $ | (45,270 | ) | $ | (487,413 | ) | $ | (100,216 | ) |
For
the Nine Months Ended
September 30,
|
||||||||
2009
|
2008
|
|||||||
(as
adjusted)
|
||||||||
Operating
activities
|
||||||||
Net
loss
|
$ | (499,930 | ) | $ | (87,066 | ) | ||
Adjustments
to reconcile net loss to net cash provided by operating
activities:
|
||||||||
Depreciation
expense
|
16,202 | 25,756 | ||||||
Impairment
of goodwill
|
23,483 | 30,296 | ||||||
Provision
for loan losses
|
48,212 | 53,792 | ||||||
Amortization
and impairment of intangibles
|
1,518 | 1,840 | ||||||
Accretion
of deferred revenue
|
(21,500 | ) | (11,583 | ) | ||||
Stock-based
compensation expense
|
6,738 | 7,499 | ||||||
Retained
interests adjustments, net
|
960,764 | 451,264 | ||||||
Unrealized
loss on debt and equity securities classified as trading
securities
|
— | 1,950 | ||||||
Gain
on repurchase of convertible senior notes
|
(160 | ) | (13,728 | ) | ||||
Interest
expense accreted on convertible senior notes
|
7,572 | 7,570 | ||||||
Gain
on buy-out of equity-method investee members
|
(20,990 | ) | — | |||||
Income
in excess of distributions from equity-method investments
|
— | (20 | ) | |||||
Changes
in assets and liabilities, exclusive of business
acquisitions:
|
||||||||
Net
(increase) decrease in valuation of debt, equity and U.S. government
securities classified as trading securities
|
(309 | ) | 18,217 | |||||
Decrease
in uncollected fees on non-securitized earning assets
|
6,870 | 11,411 | ||||||
Decrease
in deferred costs
|
958 | 1,799 | ||||||
(Decrease)
increase in income tax liability
|
(126,208 | ) | 41,524 | |||||
Increase
in deferred revenue
|
— | 1,914 | ||||||
Decrease
(increase) in prepaid expenses
|
6,177 | (25,972 | ) | |||||
Decrease
in accounts payable and accrued expenses
|
(34,721 | ) | (39,667 | ) | ||||
Other
|
4,566 | (10,248 | ) | |||||
Net
cash provided by operating activities
|
379,242 | 466,548 | ||||||
Investing
activities
|
||||||||
Purchase
of third-party interest in equity-method investee
|
(19,542 | ) | — | |||||
Proceeds
from equity-method investees
|
53,483 | 9,506 | ||||||
Investments
in securitized earning assets
|
(448,544 | ) | (1,358,460 | ) | ||||
Proceeds
from securitized earning assets
|
209,695 | 1,023,686 | ||||||
Investments
in non-securitized earning assets
|
(711,248 | ) | (925,405 | ) | ||||
Proceeds
from non-securitized earning assets
|
709,233 | 820,963 | ||||||
Acquisition
of assets
|
(621 | ) | — | |||||
Purchases
and development of buildings, software, furniture, fixtures and equipment,
net of disposals
|
(2,444 | ) | (6,865 | ) | ||||
Net
cash used in investing activities
|
(209,988 | ) | (436,575 | ) | ||||
Financing
activities
|
||||||||
Noncontrolling
interests distributions, net
|
(774 | ) | (4,880 | ) | ||||
Proceeds
from exercise of stock options
|
— | 74 | ||||||
Purchase
of treasury stock
|
(119 | ) | (564 | ) | ||||
Purchase
of noncontrolling interest
|
(1,096 | ) | — | |||||
Proceeds
from borrowings
|
52,897 | 88,376 | ||||||
Repayment
of borrowings
|
(195,755 | ) | (129,402 | ) | ||||
Net
cash used in financing activities
|
(144,847 | ) | (46,396 | ) | ||||
Effect
of exchange rate changes on cash
|
760 | (1,739 | ) | |||||
Net
increase (decrease) in cash
|
25,167 | (18,162 | ) | |||||
Cash
and cash equivalents at beginning of period
|
94,428 | 137,526 | ||||||
Cash
and cash equivalents at end of period
|
$ | 119,595 | $ | 119,364 | ||||
Supplemental
cash flow information
|
||||||||
Cash
paid for interest
|
$ | 23,284 | $ | 22,699 | ||||
Net
cash paid for (refunds of) income taxes
|
$ | 131 | $ | (87,094 | ) | |||
Supplemental
non-cash information
|
||||||||
Notes
payable associated with capital leases
|
$ | 1,011 | $ | 6,839 | ||||
Issuance
of stock options and restricted stock
|
$ | 1,129 | $ | 6,989 |
1.
|
Basis
of Presentation
|
For the Three
Months Ended
September
30,
|
For the Nine
Months Ended
September
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Roll-forward
of accretable yield:
|
||||||||||||||||
Balance
at beginning of period
|
$ | (10,923 | ) | $ | (20,363 | ) | $ | (15,934 | ) | $ | (28,737 | ) | ||||
Impairment
of accretable yield
|
— | — | (404 | ) | — | |||||||||||
Accretion
of yield
|
2,212 | 3,506 | 7,627 | 11,880 | ||||||||||||
Balance
at end of period
|
$ | (8,711 | ) | $ | (16,857 | ) | $ | (8,711 | ) | $ | (16,857 | ) |
Acquired
loans and fees receivable subject to accretable yield accounting
rules:
|
||||
Carrying
amount of loans and fees receivable at acquisition date
|
$ | 160,592 | ||
Carrying
amount of loans and fees receivable at September 30, 2009
|
$ | 43,976 | ||
Gross
loans and fees receivable balance at acquisition date
|
$ | 191,976 | ||
Gross
loans and fees receivable balance at September 30, 2009
|
$ | 50,220 |
Balance
at
December 31,
2008
|
Additions
|
Subtractions
|
Balance
at
September
30,
2009
|
|||||||||||||
Loans and fees receivable, gross
|
$ | 421.3 | $ | 765.3 | $ | (802.8 | ) | $ | 383.8 | |||||||
Deferred
revenue
|
(24.8 | ) | (51.5 | ) | 58.9 | (17.4 | ) | |||||||||
Allowance
for uncollectible loans and fees receivable
|
(55.8 | ) | (47.5 | ) | 44.0 | (59.3 | ) | |||||||||
Loans and fees receivable, net | $ |
340.7
|
$ |
666.3
|
$ |
(699.9)
|
$ | 307.1 |
For
the Three Months Ended
September
30,
|
For
the Nine Months Ended
September
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Balance
at beginning of period
|
$ | (56.7 | ) | $ | (55.7 | ) | $ | (55.8 | ) | $ | (51.5 | ) | ||||
Provision
for loan losses
|
(16.7 | ) | (16.7 | ) | (47.5 | ) | (52.6 | ) | ||||||||
Charge
offs
|
15.0 | 21.2 | 47.8 | 57.9 | ||||||||||||
Recoveries
|
(0.9 | ) | (1.5 | ) | (3.8 | ) | (6.5 | ) | ||||||||
Balance
at end of period
|
$ | (59.3 | ) | $ | (52.7 | ) | $ | (59.3 | ) | $ | (52.7 | ) |
For the Three
Months
Ended
September
30, 2009
|
For the Nine
Months
Ended
September
30, 2009
|
|||||||
Unrecovered
balance at beginning of period
|
$ | 59,271 | $ | 47,676 | ||||
Acquisitions
of defaulted accounts
|
8,776 | 40,427 | ||||||
Cash
collections
|
(54,668 | ) | (82,889 | ) | ||||
Cost-recovery
method income recognized on defaulted accounts (included within fees and
related income on non-securitized earning assets on our consolidated
statements of operations) (1)
|
16,475 | 24,640 | ||||||
Unrecovered
balance at end of period
|
$ | 29,854 | $ | 29,854 | ||||
Estimated
remaining collections (“ERC”)
|
$ | 86,946 | $ | 86,946 |
As
of
September 30,
2009
|
As
of
December
31, 2008
|
|||||||
Held
to maturity:
|
||||||||
Investments
in debt securities of equity-method investees
|
$ | 2,549 | $ | 4,385 | ||||
Trading:
|
||||||||
Investments
in equity securities
|
602 | 293 | ||||||
Total
investments in securities
|
$ | 3,151 | $ | 4,678 |
For
the Three Months Ended
September
30,
|
For
the Nine Months Ended
September
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Retail
micro-loan fees
|
$ | 19,393 | $ | 16,177 | $ | 52,635 | $ | 51,384 | ||||||||
Internet
micro-loan fees
|
18,636 | 12,362 | 45,528 | 30,132 | ||||||||||||
Fees
on lower-tier credit card receivables while held on balance
sheet
|
— | 960 | — | 6,363 | ||||||||||||
Income
on investments in previously charged-off receivables (including income
associated with the settlement of our dispute with Encore)
|
16,475 | 4,892 | 24,640 | 34,718 | ||||||||||||
Gross
profit on auto sales
|
4,274 | 7,355 | 17,883 | 25,362 | ||||||||||||
Gains
(losses) on investments in securities
|
146 | (276 | ) | 309 | (6,527 | ) | ||||||||||
Other
|
(34 | ) | 1,008 | 1,467 | 5,197 | |||||||||||
Total
fees and related income on non-securitized earning assets
|
$ | 58,890 | $ | 42,478 | $ | 142,462 | $ | 146,629 |
For the Three Months
Ended
September
30,
|
For
the Nine Months Ended
September
30,
|
|||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Securitization
gain
|
$ | 113,961 | $ | — | $ | 113,961 | $ | — | ||||||||
Loss
on retained interests in credit card receivables
securitized
|
(334,035 | ) | (3,571 | ) | (657,869 | ) | (37,409 | ) | ||||||||
Fees
on securitized receivables
|
3,658 | 7,809 | 13,778 | 23,579 | ||||||||||||
Total
(loss) gain on securitized earning assets
|
$ | (216,416 | ) | $ | 4,238 | $ | (530,130 | ) | $ | (13,830 | ) |
|
•
|
Acquisition
costs generally are expensed as
incurred;
|
|
•
|
Noncontrolling
interests (formerly known as minority interests) are valued at fair value
at the acquisition date;
|
|
•
|
Acquired
contingent liabilities are recorded at fair value at the acquisition date
and subsequently measured at either the higher of such amount or the
amount determined under previously existing rules for non-acquired
contingencies;
|
|
•
|
In-process
research and development is recorded at fair value as an indefinite-lived
intangible asset at the acquisition
date;
|
|
•
|
Restructuring
costs associated with a business combination are generally expensed
subsequent to the acquisition date;
and
|
|
•
|
Changes
in deferred tax asset valuation allowances and income tax uncertainties
after the acquisition date generally affect income tax
expense.
|
As
originally reported
|
Retrospective
application of Instrument C convertible debt rules
|
Retrospective
application of noncontrolling interests rules
|
As
adjusted
|
|||||||||||||
Additional
paid-in capital (as of December 31, 2008)
|
$ | 413,857 | $ | 108,714 | $ | — | $ | 522,571 | ||||||||
Retained
earnings (as of December 31, 2008)
|
$ | 505,728 | $ | (52,579 | ) | $ | — | $ | 453,149 | |||||||
Total
equity (as of December 31,2008)
|
$ | 665,844 | $ | 56,135 | $ | 24,878 | $ | 746,857 | ||||||||
Loss
from continuing operations (for the three months ended September 30, 2008)
(1)
|
$ | (31,001 | ) | $ | (1,526 | ) | $ | (30 | ) | $ | (32,557 | ) | ||||
Net
loss (for the three months ended September 30, 2008)
|
$ | (32,252 | ) | $ | (1,526 | ) | $ | (30 | ) | $ | (33,808 | ) | ||||
Loss
from continuing operations attributable to controlling interests per
common share (for the three months ended September 30, 2008)—basic
(1)
|
$ | (0.65 | ) | $ | (0.03 | ) | $ | — | $ | (0.68 | ) | |||||
Loss
from continuing operations attributable to controlling interests per
common share (for the three months ended September 30, 2008)—diluted
(1)
|
$ | (0.65 | ) | $ | (0.03 | ) | $ | — | $ | (0.68 | ) | |||||
Net
loss attributable to controlling interests per common share (for the three
months ended September 30, 2008)—basic
|
$ | (0.68 | ) | $ | (0.03 | ) | $ | — | $ | (0.71 | ) | |||||
Net
loss attributable to controlling interests per common share (for the three
months ended September 30, 2008)—diluted
|
$ | (0.68 | ) | $ | (0.03 | ) | $ | — | $ | (0.71 | ) | |||||
Loss
from continuing operations (for the nine months ended September 30, 2008)
(1)
|
$ | (68,789 | ) | $ | (13,833 | ) | $ | 1,471 | $ | (81,151 | ) | |||||
Net
loss (for the nine months ended September 30, 2008)
|
$ | (74,704 | ) | $ | (13,833 | ) | $ | 1,471 | $ | (87,066 | ) | |||||
Loss
from continuing operations attributable to controlling interests per
common share (for the nine months ended September 30, 2008)—basic
(1)
|
$ | (1.45 | ) | $ | (0.29 | ) | $ | — | $ | (1.74 | ) | |||||
Loss
from continuing operations attributable to controlling interests per
common share (for the nine months ended September 30, 2008)—diluted
(1)
|
$ | (1.45 | ) | $ | (0.29 | ) | $ | — | $ | (1.74 | ) | |||||
Net
loss attributable to controlling interests per common share (for the nine
months ended September 30, 2008)—basic
|
$ | (1.57 | ) | $ | (0.29 | ) | $ | — | $ | (1.86 | ) | |||||
Net
loss attributable to controlling interests per common share (for the nine
months ended September 30, 2008)—diluted
|
$ | (1.57 | ) | $ | (0.29 | ) | $ | — | $ | (1.86 | ) |
For
the Three Months Ended September 30,
|
For
the Nine Months Ended September 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Net
interest income, fees and related income on non-securitized earning
assets
|
$ | — | $ | 3,886 | $ | 1,684 | $ | 11,533 | ||||||||
Other
operating expense
|
— | 5,811 | 2,021 | 18,731 | ||||||||||||
Loss
upon closure/sale
|
— | — | 2,779 | 771 | ||||||||||||
Goodwill
impairment
|
— | — | 3,483 | 1,132 | ||||||||||||
Loss
before income taxes
|
— | (1,925 | ) | (6,599 | ) | (9,101 | ) | |||||||||
Income
tax benefit
|
— | 674 | 2,310 | 3,186 | ||||||||||||
Net
loss
|
$ | — | $ | (1,251 | ) | $ | ( 4,289 | ) | $ | (5,915 | ) |
Three Months
Ended September 30, 2009
|
Credit Cards
|
Investments in
Previously
Charged-Off
Receivables
|
Retail
Micro-Loans
|
Auto Finance
|
Other
|
Total
|
||||||||||||||||||
Net
interest income, fees and related income (loss) on non-securitized earning
assets
|
$ | (7,268 | ) | $ | 16,585 | $ | 17,311 | $ | 11,132 | $ | 13,265 | $ | 51,025 | |||||||||||
Total
other operating (loss) income
|
$ | (192,727 | ) | $ | 83 | $ | — | $ | 85 | $ | — | $ | (192,559 | ) | ||||||||||
(Loss)
income from continuing operations before income taxes
|
$ | (254,564 | ) | $ | 7,041 | $ | 4,369 | $ | (1,518 | ) | $ | 3,248 | $ | (241,424 | ) | |||||||||
Loss
from discontinued operations before income taxes
|
$ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Loans
and fees receivable, gross
|
$ | 15,698 | $ | — | $ | 37,350 | $ | 300,551 | $ | 30,290 | $ | 383,889 | ||||||||||||
Loans
and fees receivable, net
|
$ | 12,277 | $ | — | $ | 32,007 | $ | 242,221 | $ | 20,604 | $ | 307,109 | ||||||||||||
Total
assets
|
$ | 298,351 | $ | 31,700 | $ | 68,747 | $ | 268,179 | $ | 62,495 | $ | 729,472 | ||||||||||||
Three Months
Ended September 30, 2008
|
Credit Cards
|
Investments in
Previously
Charged-Off
Receivables
|
Retail
Micro-Loans
|
Auto Finance
|
Other
|
Total
|
||||||||||||||||||
Net
interest income, fees and related income (loss) on non-securitized earning
assets
|
$ | (6,546 | ) | $ | 4,927 | $ | 12,735 | $ | 18,054 | $ | 8,516 | $ | 37,686 | |||||||||||
Total
other operating income
|
$ | 64,686 | $ | 64 | $ | — | $ | 100 | $ | — | $ | 64,850 | ||||||||||||
(Loss)
income from continuing operations before income taxes
|
$ | (23,072 | ) | $ | (781 | ) | $ | 9 | $ | (30,529 | ) | $ | 1,245 | $ | (53,128 | ) | ||||||||
Loss
from discontinued operations before income taxes
|
$ | — | $ | — | $ | (1,628 | ) | $ | — | $ | (297 | ) | $ | (1,925 | ) | |||||||||
Loans
and fees receivable, gross
|
$ | 4,189 | $ | — | $ | 35,858 | $ | 380,920 | $ | 20,797 | $ | 441,764 | ||||||||||||
Loans
and fees receivable, net
|
$ | 4,022 | $ | — | $ | 29,809 | $ | 311,843 | $ | 14,957 | $ | 360,631 | ||||||||||||
Total
assets
|
$ | 1,124,687 | $ | 46,705 | $ | 97,507 | $ | 359,762 | $ | 70,064 | $ | 1,698,725 |
Nine
Months Ended September 30, 2009
|
Credit Cards
|
Investments in
Previously
Charged-Off
Receivables
|
Retail
Micro-Loans
|
Auto Finance
|
Other
|
Total
|
||||||||||||||||||
Net
interest income, fees and related income (loss) on non-securitized earning
assets
|
$ | (19,152 | ) | $ | 24,533 | $ | 45,803 | $ | 39,130 | $ | 32,614 | $ | 122,928 | |||||||||||
Total
other operating (loss) income
|
$ | (413,664 | ) | $ | 138 | $ | — | $ | 488 | $ | 1 | $ | (413,037 | ) | ||||||||||
(Loss)
income from continuing operations before income taxes
|
$ | (609,354 | ) | $ | (2,336 | ) | $ | (13,258 | ) | $ | (5,653 | ) | $ | 11,579 | $ | (619,022 | ) | |||||||
Loss
from discontinued operations before income taxes
|
$ | — | $ | — | $ | (6,599 | ) | $ | — | $ | — | $ | (6,599 | ) | ||||||||||
Loans
and fees receivable, gross
|
$ | 15,698 | $ | — | $ | 37,350 | $ | 300,551 | $ | 30,290 | $ | 383,889 | ||||||||||||
Loans
and fees receivable, net
|
$ | 12,277 | $ | — | $ | 32,007 | $ | 242,221 | $ | 20,604 | $ | 307,109 | ||||||||||||
Total
assets
|
$ | 298,351 | $ | 31,700 | $ | 68,747 | $ | 268,179 | $ | 62,495 | $ | 729,472 | ||||||||||||
Nine
Months Ended September 30, 2008
|
Credit Cards
|
Investments in
Previously
Charged-Off
Receivables
|
Retail
Micro-Loans
|
Auto Finance
|
Other
|
Total
|
||||||||||||||||||
Net
interest income, fees and related income (loss) on non-securitized earning
assets
|
$ | (19,802 | ) | $ | 34,958 | $ | 43,660 | $ | 53,723 | $ | 17,729 | $ | 130,268 | |||||||||||
Total
other operating income
|
$ | 199,453 | $ | 502 | $ | — | $ | 296 | $ | — | $ | 200,251 | ||||||||||||
(Loss)
income from continuing operations before income taxes
|
$ | (111,051 | ) | $ | 18,509 | $ | 6,417 | $ | (35,051 | ) | $ | (2,435 | ) | $ | (123,611 | ) | ||||||||
Loss
from discontinued operations before income taxes
|
$ | — | $ | — | $ | (7,855 | ) | $ | — | $ | (1,246 | ) | $ | (9,101 | ) | |||||||||
Loans
and fees receivable, gross
|
$ | 4,189 | $ | — | $ | 35,858 | $ | 380,920 | $ | 20,797 | $ | 441,764 | ||||||||||||
Loans
and fees receivable, net
|
$ | 4,022 | $ | — | $ | 29,809 | $ | 311,843 | $ | 14,957 | $ | 360,631 | ||||||||||||
Total
assets
|
$ | 1,124,687 | $ | 46,705 | $ | 97,507 | $ | 359,762 | $ | 70,064 | $ | 1,698,725 |
As of
September 30, 2009
|
As of December
31, 2008
|
|||||||
Securitized
earning assets
|
$ | 51,937 | $ | 116,510 | ||||
Total
assets
|
$ | 54,449 | $ | 118,962 | ||||
Total
liabilities
|
$ | 1,449 | $ | 1,967 | ||||
Members’
capital
|
$ | 53,000 | $ | 116,995 |
For
the Three Months
Ended
September 30,
|
For
the Nine Months
Ended
September 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Net
interest income, fees and related income on non-securitized earning
assets
|
$ | — | $ | — | $ | — | $ | 1 | ||||||||
Fees
and related (loss) income on securitized earning assets
|
$ | (6,230 | ) | $ | 835 | $ | (37,241 | ) | $ | 34,066 | ||||||
Total
other operating (loss) income
|
$ | (5,315 | ) | $ | 2,973 | $ | (33,920 | ) | $ | 40,839 | ||||||
Net
(loss) income
|
$ | (5,892 | ) | $ | 2,418 | $ | (28,892 | ) | $ | 38,067 |
For
the Three Months Ended September 30,
|
For
the Nine Months Ended September 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Gross
amount of receivables securitized at period end
|
$ | 1,671,930 | $ | 2,912,102 | $ | 1,671,930 | $ | 2,912,102 | ||||||||
Proceeds
from new transfers of financial assets to securitization
trusts
|
$ | 90,601 | $ | 384,827 | $ | 395,330 | $ | 1,134,754 | ||||||||
Proceeds
from collections reinvested in revolving-period
securitizations
|
$ | 106,872 | $ | 341,817 | $ | 382,334 | $ | 1,131,716 | ||||||||
Excess
cash flows received on retained interests
|
$ | 24,893 | $ | 49,951 | $ | 80,377 | $ | 139,785 | ||||||||
Securitization
gain
|
$ | 113,961 | $ | — | $ | 113,961 | $ | — | ||||||||
Loss
on retained interests in credit card receivables
securitized
|
(334,035 | ) | (3,571 | ) | (657,869 | ) | (37,409 | ) | ||||||||
Fees
on securitized receivables
|
3,658 | 7,809 | 13,778 | 23,579 | ||||||||||||
Total
(loss) income on securitized earning assets
|
$ | (216,416 | ) | $ | 4,238 | $ | (530,130 | ) | $ | (13,830 | ) |
September
30,
2009
|
June
30,
2009
|
December
31,
2008
|
||||||||||
I/O
strip
|
$ | 43,142 | $ | 134,384 | $ | 132,360 | ||||||
Accrued
interest and fees
|
16,978 | 13,887 | 22,723 | |||||||||
Net
servicing liability
|
(48,347 | ) | (23,008 | ) | (10,670 | ) | ||||||
Amounts
due from securitization
|
5,999 | 54,929 | 12,369 | |||||||||
Fair
value of retained interests
|
106,120 | 292,641 | 659,156 | |||||||||
Issuing
bank partner continuing interests
|
(1,785 | ) | (1,467 | ) | (2,145 | ) | ||||||
Securitized
earning assets
|
$ | 122,107 | $ | 471,366 | $ | 813,793 |
For
the Three Months Ended
|
||||||||||||
September
30,
2009
|
December
31,
2008
|
September
30,
2008
|
||||||||||
Net
servicing liability at beginning of period
|
$ | 23.0 | $ | 6.4 | $ | 18.6 | ||||||
Changes
in fair value of net servicing liability due to changes in valuations
inputs, including receivables levels within securitization trusts, length
of servicing period, servicing costs and changes in servicing compensation
rates (including an assumed 0.0% servicing compensation rate once debt
holders have been repaid in an early amortization scenario that we first
used in our retained interests fair value computations in the three months
ended September 30, 2009)
|
25.3 | 4.3 | (12.1 | ) | ||||||||
Balance
at end of period
|
$ | 48.3 |