Page
|
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PART I. FINANCIAL INFORMATION
|
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Item 1.
|
|||||
1 | |||||
2 | |||||
3 | |||||
4 | |||||
5 | |||||
6 | |||||
Item 2.
|
26 | ||||
Item 3.
|
42 | ||||
Item 4.
|
42 | ||||
Item 1.
|
43 | ||||
Item 1A.
|
43 | ||||
Item 2.
|
51 | ||||
Item 5.
|
52 | ||||
Item 6.
|
52 | ||||
53 |
September 30, 2011
|
December 31, 2010
|
|||||||
Assets
|
(unaudited)
|
|||||||
Unrestricted cash and cash equivalents
|
$ | 105,996 | $ | 68,931 | ||||
Restricted cash and cash equivalents
|
25,161 | 36,023 | ||||||
Loans and fees receivable:
|
||||||||
Loans and fees receivable, net (of $7,965 and $4,591 in deferred revenue and $5,896 and $9,282 in allowances for uncollectible loans and fees receivable at September 30, 2011 and December 31, 2010, respectively)
|
61,989 | 50,805 | ||||||
Loans and fees receivable pledged as collateral under structured financings, net (of $1,847 and $15,912 in deferred revenue and $10,304 and $28,340 in allowances for uncollectible loans and fees receivable at September 30, 2011 and December 31, 2010, respectively)
|
38,719 | 118,801 | ||||||
Loans and fees receivable, at fair value
|
35,000 | 12,437 | ||||||
Loans and fees receivable pledged as collateral under structured financings, at fair value
|
275,815 | 373,155 | ||||||
Investments in previously charged-off receivables
|
39,818 | 29,889 | ||||||
Investments in securities
|
6,132 | 64,317 | ||||||
Deferred costs, net
|
2,551 | 3,151 | ||||||
Property at cost, net of depreciation
|
7,561 | 15,893 | ||||||
Investments in equity-method investees
|
53,189 | 8,279 | ||||||
Intangibles, net
|
66 | 2,378 | ||||||
Prepaid expenses and other assets
|
10,218 | 16,591 | ||||||
Assets held for sale
|
48,623 | 80,259 | ||||||
Total assets
|
$ | 710,838 | $ | 880,909 | ||||
Liabilities
|
||||||||
Accounts payable and accrued expenses
|
$ | 58,246 | $ | 50,861 | ||||
Notes payable associated with structured financings, at face value
|
30,959 | 96,905 | ||||||
Notes payable associated with structured financings, at fair value
|
277,793 | 370,544 | ||||||
Convertible senior notes (Note 9)
|
197,497 | 229,844 | ||||||
Deferred revenue
|
1,073 | 1,413 | ||||||
Income tax liability
|
62,955 | 60,411 | ||||||
Liabilities related to assets held for sale
|
2,808 | 9,114 | ||||||
Total liabilities
|
631,331 | 819,092 | ||||||
Commitments and contingencies (Note 10)
|
||||||||
Equity
|
||||||||
Common stock, no par value, 150,000,000 shares authorized: 31,997,581 shares issued and 24,068,602 shares outstanding at September 30, 2011 (including 1,672,656 loaned shares to be returned); and 46,217,050 shares issued and 37,997,708 shares outstanding at December 31, 2010 (including 2,252,388 loaned shares to be returned)
|
— | — | ||||||
Additional paid-in capital
|
297,636 | 408,751 | ||||||
Treasury stock, at cost, 7,928,979 and 8,219,342 shares at September 30, 2011 and December 31, 2010, respectively
|
(185,941 | ) | (208,696 | ) | ||||
Accumulated other comprehensive loss
|
(1,183 | ) | (5,608 | ) | ||||
Retained deficit
|
(31,354 | ) | (151,609 | ) | ||||
Total shareholders’ equity (Note 2)
|
79,158 | 42,838 | ||||||
Noncontrolling interests (Note 2)
|
349 | 18,979 | ||||||
Total equity
|
79,507 | 61,817 | ||||||
Total liabilities and equity (Note 2)
|
$ | 710,838 | $ | 880,909 |
For the Three Months Ended
September 30,
|
For the Nine Months Ended
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Interest income:
|
||||||||||||||||
Consumer loans, including past due fees
|
$ | 35,802 | $ | 60,609 | $ | 117,281 | $ | 213,976 | ||||||||
Other
|
241 | 416 | 1,015 | 775 | ||||||||||||
Total interest income
|
36,043 | 61,025 | 118,296 | 214,751 | ||||||||||||
Interest expense
|
(10,148 | ) | (11,600 | ) | (33,454 | ) | (45,435 | ) | ||||||||
Net interest income before fees and related income on earning assets and provision for losses on loans and fees receivable
|
25,895 | 49,425 | 84,842 | 169,316 | ||||||||||||
Fees and related income on earning assets
|
25,892 | 68,924 | 117,646 | 275,588 | ||||||||||||
Losses upon charge off of loans and fees receivable recorded at fair value
|
(28,019 | ) | (86,971 | ) | (117,209 | ) | (391,615 | ) | ||||||||
Provision for losses on loans and fees receivable recorded at net realizable value
|
(1,234 | ) | (8,330 | ) | (1,992 | ) | (27,294 | ) | ||||||||
Net interest income, fees and related income on earning assets
|
22,534 | 23,048 | 83,287 | 25,995 | ||||||||||||
Other operating income (loss):
|
||||||||||||||||
Servicing income
|
767 | 1,621 | 2,593 | 5,447 | ||||||||||||
Ancillary and interchange revenues
|
2,359 | 2,728 | 7,324 | 8,722 | ||||||||||||
Gain on repurchase of convertible senior notes
|
138 | 5,681 | 607 | 28,374 | ||||||||||||
Gain on buy-out of equity-method investee members
|
— | — | 619 | — | ||||||||||||
Equity in income (loss) of equity-method investees
|
6,630 | (1,372 | ) | 28,757 | (11,043 | ) | ||||||||||
Total other operating income
|
9,894 | 8,658 | 39,900 | 31,500 | ||||||||||||
Other operating expense:
|
||||||||||||||||
Salaries and benefits
|
4,785 | 7,454 | 17,615 | 26,439 | ||||||||||||
Card and loan servicing
|
18,107 | 21,010 | 56,314 | 77,958 | ||||||||||||
Marketing and solicitation
|
1,181 | 593 | 2,386 | 1,292 | ||||||||||||
Depreciation
|
539 | 2,685 | 4,322 | 8,580 | ||||||||||||
Other
|
7,785 | 8,727 | 21,921 | 34,854 | ||||||||||||
Total other operating expense
|
32,397 | 40,469 | 102,558 | 149,123 | ||||||||||||
Income from (loss on) continuing operations before income taxes
|
31 | (8,763 | ) | 20,629 | (91,628 | ) | ||||||||||
Income tax (expense) benefit
|
(619 | ) | 1,648 | (1,743 | ) | 2,896 | ||||||||||
(Loss on) income from continuing operations
|
(588 | ) | (7,115 | ) | 18,886 | (88,732 | ) | |||||||||
Discontinued operations:
|
||||||||||||||||
Income from discontinued operations before income taxes
|
2,052 | 10,688 | 117,189 | 23,914 | ||||||||||||
Income tax expense
|
(42 | ) | (2,248 | ) | (4,142 | ) | (4,596 | ) | ||||||||
Income from discontinued operations
|
2,010 | 8,440 | 113,047 | 19,318 | ||||||||||||
Net income (loss)
|
1,422 | 1,325 | 131,933 | (69,414 | ) | |||||||||||
Net (income) loss attributable to noncontrolling interests (including $0 and $1,131 of income associated with noncontrolling interests in discontinued operations for the three and nine months ended September 30, 2011, versus to $1,050 and $2,269 of such income in the same 2010 periods)
|
277 | 436 | (1,013 | ) | (565 | ) | ||||||||||
Net income (loss) attributable to controlling interests
|
$ | 1,699 | $ | 1,761 | $ | 130,920 | $ | (69,979 | ) | |||||||
(Loss on) income from continuing operations attributable to controlling interests per common share—basic
|
$ | (0.01 | ) | $ | (0.16 | ) | $ | 0.70 | $ | (2.11 | ) | |||||
(Loss on) income from continuing operations attributable to controlling interests per common share—diluted
|
$ | (0.01 | ) | $ | (0.16 | ) | $ | 0.70 | $ | (2.11 | ) | |||||
Income from discontinued operations attributable to controlling interests per common share—basic
|
$ | 0.09 | $ | 0.21 | $ | 4.15 | $ | 0.41 | ||||||||
Income from discontinued operations attributable to controlling interests per common share—diluted
|
$ | 0.09 | $ | 0.21 | $ | 4.13 | $ | 0.41 | ||||||||
Net income (loss) attributable to controlling interests per common share—basic
|
$ | 0.08 | $ | 0.05 | $ | 4.85 | $ | (1.70 | ) | |||||||
Net income (loss) attributable to controlling interests per common share—diluted
|
$ | 0.08 | $ | 0.05 | $ | 4.83 | $ | (1.70 | ) |
Common Stock
|
||||||||||||||||||||||||||||||||||||
Shares Issued
|
Amount
|
Additional Paid-In Capital
|
Treasury Stock
|
Accumulated Other Comprehensive Loss
|
Retained Deficit
|
Noncontrolling Interests
|
Comprehensive Income
|
Total Equity
|
||||||||||||||||||||||||||||
Balance at December 31, 2010
|
46,217,050 | $ | — | $ | 408,751 | $ | (208,696 | ) | $ | (5,608 | ) | $ | (151,609 | ) | $ | 18,979 | $ | 61,817 | ||||||||||||||||||
Use of treasury stock for stock-based compensation plans
|
(550,414 | ) | — | (13,804 | ) | 24,469 | — | (10,665 | ) | — | — | |||||||||||||||||||||||||
Issuance of restricted stock
|
35,677 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Amortization of deferred stock-based compensation costs
|
— | — | 2,337 | — | — | — | — | 2,337 | ||||||||||||||||||||||||||||
Purchase of treasury stock
|
— | — | — | (1,714 | ) | — | — | — | (1,714 | ) | ||||||||||||||||||||||||||
Repurchase of noncontrolling interests
|
— | — | 5,385 | — | — | — | (20,243 | ) | (14,858 | ) | ||||||||||||||||||||||||||
Contributions by owners of noncontrolling interests
|
— | — | — | — | — | — | 600 | 600 | ||||||||||||||||||||||||||||
Redemption and retirement of shares
|
(13,704,732 | ) | — | (105,000 | ) | — | — | — | — | (105,000 | ) | |||||||||||||||||||||||||
Net income
|
— | — | — | — | — | 130,920 | 1,013 | $ | 131,933 | 131,933 | ||||||||||||||||||||||||||
Foreign currency translation adjustment, net of tax
|
— | — | (33 | ) | — | 4,425 | — | — | 4,425 | 4,392 | ||||||||||||||||||||||||||
Comprehensive income
|
— | — | — | — | — | — | — | $ | 136,358 | — | ||||||||||||||||||||||||||
Balance at September 30, 2011
|
31,997,581 | $ | — | $ | 297,636 | $ | (185,941 | ) | $ | (1,183 | ) | $ | (31,354 | ) | $ | 349 | $ | 79,507 |
For the Three Months Ended
September 30,
|
For the Nine Months Ended
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Net income (loss)
|
$ | 1,422 | $ | 1,325 | $ | 131,933 | $ | (69,414 | ) | |||||||
Other comprehensive income (loss):
|
||||||||||||||||
Foreign currency translation adjustment
|
(314 | ) | 3,069 | 2,079 | (108 | ) | ||||||||||
Amount of translation adjustment reclassified to earnings during the period
|
— | — | 2,301 | (500 | ) | |||||||||||
Income tax benefit related to other comprehensive income
|
91 | — | 45 | 1 | ||||||||||||
Comprehensive income (loss)
|
1,199 | 4,394 | 136,358 | (70,021 | ) | |||||||||||
Comprehensive loss (income) attributable to noncontrolling interests
|
277 | 436 | (1,013 | ) | (565 | ) | ||||||||||
Comprehensive income (loss) attributable to controlling interests
|
$ | 1,476 | $ | 4,830 | $ | 135,345 | $ | (70,586 | ) |
For the Nine Months Ended September 30,
|
||||||||
2011
|
2010
|
|||||||
Operating activities
|
||||||||
Net income (loss)
|
$ | 131,933 | $ | (69,414 | ) | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
||||||||
Depreciation, amortization and accretion, net
|
5,698 | 10,462 | ||||||
Losses upon charge off of loans and fees receivable recorded at fair value
|
117,209 | 391,615 | ||||||
Provision for losses on loans and fees receivable
|
17,550 | 53,505 | ||||||
Accretion of discount on convertible senior notes
|
5,112 | 7,022 | ||||||
Stock-based compensation expense
|
2,337 | 7,055 | ||||||
Unrealized gain on loans and fees receivable and underlying notes payable held at fair value
|
(83,657 | ) | (217,882 | ) | ||||
Unrealized loss (gain) on trading securities
|
358 | (301 | ) | |||||
Other-than-temporary declines in investments in non-marketable debt securities
|
5,330 | — | ||||||
Gain on repurchase of convertible senior notes
|
(607 | ) | (28,374 | ) | ||||
(Income) loss on equity-method investments
|
(28,757 | ) | 11,043 | |||||
Gain on buy-out of equity-method investee members
|
(619 | ) | — | |||||
Net gain on sale of subsidiary
|
(101,359 | ) | — | |||||
Changes in assets and liabilities, exclusive of business acquisitions and dispositions:
|
||||||||
Increase in uncollected fees on non-securitized earning assets
|
(9,862 | ) | (5,594 | ) | ||||
Decrease in JRAS auto loans receivable
|
10,702 | 31,168 | ||||||
Increase in tax liability
|
39 | 95,222 | ||||||
Decrease in prepaid expenses
|
8,058 | 6,463 | ||||||
Increase (decrease) in accounts payable and accrued expenses
|
14,017 | (6,649 | ) | |||||
Other
|
(278 | ) | 8,975 | |||||
Net cash provided by operating activities
|
93,204 | 294,316 | ||||||
Investing activities
|
||||||||
Decrease (increase) in restricted cash
|
12,349 | (19,954 | ) | |||||
Investment in equity-method investees
|
(34,336 | ) | — | |||||
Proceeds from equity-method investees
|
17,553 | 5,145 | ||||||
Investments in earning assets
|
(562,253 | ) | (786,663 | ) | ||||
Proceeds from earning assets
|
763,819 | 926,704 | ||||||
Net cash associated with newly acquired consolidated subsidiaries
|
1,025 | — | ||||||
Proceeds from sale of subsidiary
|
147,449 | — | ||||||
Purchases and development of property, net of disposals
|
(1,390 | ) | (1,667 | ) | ||||
Net cash provided by investing activities
|
344,216 | 123,565 | ||||||
Financing activities
|
||||||||
Noncontrolling interests contributions (distributions), net
|
600 | (765 | ) | |||||
Purchase of outstanding stock subject to tender offers
|
(105,000 | ) | (85,264 | ) | ||||
Purchase of treasury stock
|
(1,714 | ) | (624 | ) | ||||
Purchases of noncontrolling interests
|
(4,067 | ) | (7,537 | ) | ||||
Proceeds from borrowings
|
9,697 | 8,143 | ||||||
Repayment of borrowings
|
(306,127 | ) | (428,250 | ) | ||||
Net cash used in financing activities
|
(406,611 | ) | (514,297 | ) | ||||
Effect of exchange rate changes on cash
|
986 | (274 | ) | |||||
Net increase (decrease) in unrestricted cash
|
31,795 | (96,690 | ) | |||||
Unrestricted cash and cash equivalents at beginning of period
|
85,350 | 185,019 | ||||||
Unrestricted cash and cash equivalents at end of period
|
$ | 117,145 | $ | 88,329 | ||||
Supplemental cash flow information
|
||||||||
Effect of adoption of accounting pronouncements on restricted cash
|
$ | — | $ | (14,082 | ) | |||
Unrestricted cash included in assets held for sale
|
$ | 11,149 | $ | — | ||||
Cash paid for interest
|
$ | 29,894 | $ | 39,911 | ||||
Net cash income tax payments (refunds)
|
$ | 5,891 | $ | (93,456 | ) | |||
Supplemental non-cash information
|
||||||||
Notes payable associated with capital leases
|
$ | — | $ | 684 | ||||
Issuance of stock options and restricted stock
|
$ | 303 | $ | 1,127 |
1.
|
Basis of Presentation
|
2.
|
Significant Accounting Policies and Consolidated Financial Statement Components
|
Balance at
December 31,
2010
|
Additions
|
Subtractions
|
Transfer to Assets Held for Sale
|
Balance at
September 30,
2011
|
||||||||||||||||
Loans and fees receivable, gross
|
$ | 227.7 | $ | 317.5 | $ | (376.2 | ) | $ | (42.3 | ) | $ | 126.7 | ||||||||
Deferred revenue
|
(20.5 | ) | (33.3 | ) | 38.2 | 5.8 | (9.8 | ) | ||||||||||||
Allowance for uncollectible loans and fees receivable
|
(37.6 | ) | (7.1 | ) | 24.5 | 4.0 | (16.2 | ) | ||||||||||||
Loans and fees receivable, net
|
$ | 169.6 | $ | 277.1 | $ | (313.5 | ) | $ | (32.5 | ) | $ | 100.7 |
Balance at
December 31,
2009
|
Additions
|
Subtractions
|
Balance at
September 30,
2010
|
|||||||||||||
Loans and fees receivable, gross
|
$ | 379.7 | $ | 846.4 | $ | (932.4 | ) | $ | 293.7 | |||||||
Deferred revenue
|
(40.9 | ) | (50.9 | ) | 63.9 | (27.9 | ) | |||||||||
Allowance for uncollectible loans and fees receivable
|
(53.4 | ) | (53.5 | ) | 59.3 | (47.6 | ) | |||||||||
Loans and fees receivable, net
|
$ | 285.4 | $ | 742.0 | $ | (809.2 | ) | $ | 218.2 |
For the Three Months Ended September 30, 2011
|
Credit Cards
|
Micro-Loans
|
Auto Finance
|
Other
|
Total
|
|||||||||||||||
Allowance for uncollectible loans and fees receivable:
|
||||||||||||||||||||
Balance at beginning of period
|
$ | (2.8 | ) | $ | (0.8 | ) | $ | (15.0 | ) | $ | (0.4 | ) | $ | (19.0 | ) | |||||
Provision for loan losses
|
(1.3 | ) | (0.9 | ) | 1.2 | (0.2 | ) | (1.2 | ) | |||||||||||
Charge offs
|
0.8 | 0.9 | 4.1 | — | 5.8 | |||||||||||||||
Recoveries
|
(0.2 | ) | — | (1.6 | ) | — | (1.8 | ) | ||||||||||||
Transfer to assets held for sale
|
— | — | — | — | — | |||||||||||||||
Sale of assets
|
— | — | — | — | — | |||||||||||||||
Balance at end of period
|
$ | (3.5 | ) | $ | (0.8 | ) | $ | (11.3 | ) | $ | (0.6 | ) | $ | (16.2 | ) | |||||
Balance at end of period individually evaluated for impairment
|
$ | — | $ | — | $ | (0.3 | ) | $ | — | $ | (0.3 | ) | ||||||||
Balance at end of period collectively evaluated for impairment
|
$ | (3.5 | ) | $ | (0.8 | ) | $ | (11.0 | ) | $ | (0.6 | ) | $ | (15.9 | ) | |||||
Loans and fees receivable:
|
||||||||||||||||||||
Loans and fees receivable, gross
|
$ | 18.6 | $ | 2.2 | $ | 103.5 | $ | 2.4 | $ | 126.7 | ||||||||||
Loans and fees receivable individually evaluated for impairment
|
$ | — | $ | — | $ | 0.6 | $ | — | $ | 0.6 | ||||||||||
Loans and fees receivable collectively evaluated for impairment
|
$ | 18.6 | $ | 2.2 | $ | 102.9 | $ | 2.4 | $ | 126.1 |
For the Nine Months Ended September 30, 2011
|
Credit Cards
|
Micro-Loans
|
Auto
Finance
|
Other
|
Total
|
|||||||||||||||
Allowance for uncollectible loans and fees receivable:
|
||||||||||||||||||||
Balance at beginning of period
|
$ | (4.0 | ) | $ | (5.2 | ) | $ | (28.3 | ) | $ | (0.1 | ) | $ | (37.6 | ) | |||||
Provision for loan losses (includes $5.1 million of provision netted within income from discontinued operations)
|
(2.5 | ) | (7.1 | ) | 3.0 | (0.5 | ) | (7.1 | ) | |||||||||||
Charge offs
|
3.8 | 7.9 | 18.6 | — | 30.3 | |||||||||||||||
Recoveries
|
(0.8 | ) | (0.4 | ) | (5.3 | ) | — | (6.5 | ) | |||||||||||
Transfers to assets held for sale
|
— | 4.0 | — | — | 4.0 | |||||||||||||||
Sale of assets
|
— | — | 0.7 | — | 0.7 | |||||||||||||||
Balance at end of period
|
$ | (3.5 | ) | $ | (0.8 | ) | $ | (11.3 | ) | $ | (0.6 | ) | $ | (16.2 | ) | |||||
Balance at end of period individually evaluated for impairment
|
$ | — | $ | — | $ | (0.3 | ) | $ | — | $ | (0.3 | ) | ||||||||
Balance at end of period collectively evaluated for impairment
|
$ | (3.5 | ) | $ | (0.8 | ) | $ | (11.0 | ) | $ | (0.6 | ) | $ | (15.9 | ) | |||||
Loans and fees receivable:
|
||||||||||||||||||||
Loans and fees receivable, gross
|
$ | 18.6 | $ | 2.2 | $ | 103.5 | $ | 2.4 | $ | 126.7 | ||||||||||
Loans and fees receivable individually evaluated for impairment
|
$ | — | $ | — | $ | 0.6 | $ | — | $ | 0.6 | ||||||||||
Loans and fees receivable collectively evaluated for impairment
|
$ | 18.6 | $ | 2.2 | $ | 102.9 | $ | 2.4 | $ | 126.1 |
For the Three Months Ended September 30, 2010
|
Credit Cards
|
Micro-Loans
|
Auto Finance
|
Other
|
Total
|
|||||||||||||||
Allowance for uncollectible loans and fees receivable:
|
||||||||||||||||||||
Balance at beginning of period
|
$ | (4.0 | ) | $ | (11.4 | ) | $ | (33.1 | ) | $ | — | $ | (48.5 | ) | ||||||
Provision for loan losses (includes $9.2 million of provision netted within income from discontinued operations)
|
(2.2 | ) | (10.5 | ) | (4.8 | ) | — | (17.5 | ) | |||||||||||
Charge offs
|
1.4 | 10.4 | 9.3 | — | 21.1 | |||||||||||||||
Recoveries
|
(0.3 | ) | (0.2 | ) | (2.2 | ) | — | (2.7 | ) | |||||||||||
Balance at end of period
|
$ | (5.1 | ) | $ | (11.7 | ) | $ | (30.8 | ) | $ | — | $ | (47.6 | ) | ||||||
Balance at end of period individually evaluated for impairment
|
$ | — | $ | — | $ | (0.8 | ) | $ | — | $ | (0.8 | ) | ||||||||
Balance at end of period collectively evaluated for impairment
|
$ | (5.1 | ) | $ | (11.7 | ) | $ | (30.0 | ) | $ | — | $ | (46.8 | ) | ||||||
Loans and fees receivable:
|
||||||||||||||||||||
Loans and fees receivable, gross
|
$ | 18.6 | $ | 85.9 | $ | 189.2 | $ | — | $ | 293.7 | ||||||||||
Loans and fees receivable individually evaluated for impairment
|
$ | — | $ | — | $ | 2.5 | $ | — | $ | 2.5 | ||||||||||
Loans and fees receivable collectively evaluated for impairment
|
$ | 18.6 | $ | 85.9 | $ | 186.7 | $ | — | $ | 291.2 |
For the Nine Months Ended September 30, 2010
|
Credit Cards
|
Micro-Loans
|
Auto Finance
|
Other
|
Total
|
|||||||||||||||
Allowance for uncollectible loans and fees receivable:
|
||||||||||||||||||||
Balance at beginning of period
|
$ | (5.0 | ) | $ | (10.0 | ) | $ | (38.4 | ) | $ | — | $ | (53.4 | ) | ||||||
Provision for loan losses (includes $26.2 million of provision netted within income from discontinued operations)
|
(4.0 | ) | (27.0 | ) | (22.5 | ) | — | (53.5 | ) | |||||||||||
Charge offs
|
5.0 | 26.0 | 36.3 | — | 67.3 | |||||||||||||||
Recoveries
|
(1.1 | ) | (0.7 | ) | (6.2 | ) | — | (8.0 | ) | |||||||||||
Balance at end of period
|
$ | (5.1 | ) | $ | (11.7 | ) | $ | (30.8 | ) | $ | — | $ | (47.6 | ) | ||||||
Balance at end of period individually evaluated for impairment
|
$ | — | $ | — | $ | (0.8 | ) | $ | — | $ | (0.8 | ) | ||||||||
Balance at end of period collectively evaluated for impairment
|
$ | (5.1 | ) | $ | (11.7 | ) | $ | (30.0 | ) | $ | — | $ | (46.8 | ) | ||||||
Loans and fees receivable:
|
||||||||||||||||||||
Loans and fees receivable, gross
|
$ | 18.6 | $ | 85.9 | $ | 189.2 | $ | — | $ | 293.7 | ||||||||||
Loans and fees receivable individually evaluated for impairment
|
$ | — | $ | — | $ | 2.5 | $ | — | $ | 2.5 | ||||||||||
Loans and fees receivable collectively evaluated for impairment
|
$ | 18.6 | $ | 85.9 | $ | 186.7 | $ | — | $ | 291.2 |
As of
|
||||||||
September 30, 2011
|
December 31, 2010
|
|||||||
Current loans receivable
|
$ | 109.4 | $ | 189.9 | ||||
Current fees receivable
|
1.1 | 7.7 | ||||||
Delinquent loans and fees receivable
|
16.2 | 30.1 | ||||||
Loans and fees receivable, gross
|
$ | 126.7 | $ | 227.7 |
As of September 30, 2011
|
Credit Cards
|
Micro-Loans
|
Auto Finance
|
Other
|
Total
|
|||||||||||||||
0-29 days past due
|
$ | 0.8 | $ | 0.4 | $ | 7.2 | $ | — | $ | 8.4 | ||||||||||
30-59 days past due
|
0.6 | 0.3 | 2.4 | — | 3.3 | |||||||||||||||
60 or more days past due
|
1.5 | 0.7 | 2.3 | — | 4.5 | |||||||||||||||
Delinquent loans and fees receivable, gross
|
$ | 2.9 | $ | 1.4 | $ | 11.9 | $ | — | $ | 16.2 | ||||||||||
Current loans and fees receivable, gross
|
15.7 | 0.8 | 91.6 | 2.4 | 110.5 | |||||||||||||||
Total loans and fees receivable, gross
|
$ | 18.6 | $ | 2.2 | $ | 103.5 | $ | 2.4 | $ | 126.7 | ||||||||||
Balance of loans greater than 90-days delinquent still accruing interest and fees
|
$ | — | $ | — | $ | 1.8 | $ | — | $ | 1.8 |
As of December 31, 2010
|
Credit Cards
|
Micro-Loans
|
Auto Finance
|
Other
|
Total
|
|||||||||||||||
0-29 days past due
|
$ | 0.8 | $ | 3.6 | $ | 11.6 | $ | — | $ | 16.0 | ||||||||||
30-59 days past due
|
0.7 | 2.2 | 4.3 | — | 7.2 | |||||||||||||||
60 or more days past due
|
1.8 | 1.4 | 3.7 | — | 6.9 | |||||||||||||||
Delinquent loans and fees receivable, gross
|
$ | 3.3 | $ | 7.2 | $ | 19.6 | $ | — | $ | 30.1 | ||||||||||
Current loans and fees receivable, gross
|
15.4 | 38.4 | 143.5 | 0.3 | 197.6 | |||||||||||||||
Total loans and fees receivable, gross
|
$ | 18.7 | $ | 45.6 | $ | 163.1 | $ | 0.3 | $ | 227.7 | ||||||||||
Balance of loans greater than 90-days delinquent still accruing interest and fees
|
$ | — | $ | — | $ | 2.7 | $ | — | $ | 2.7 |
For the Three Months Ended
September 30,
|
For the Nine Months Ended
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Unrecovered balance at beginning of period
|
$ | 31,280 | $ | 33,297 | $ | 29,889 | $ | 29,669 | ||||||||
Acquisitions of defaulted accounts
|
19,191 | 5,839 | 38,675 | 22,409 | ||||||||||||
Cash collections
|
(20,948 | ) | (17,158 | ) | (60,804 | ) | (45,858 | ) | ||||||||
Cost-recovery method income recognized on defaulted accounts (included as a component of fees and related income on non-securitized earning assets on our consolidated statements of operations)
|
10,295 | 8,676 | 32,058 | 24,434 | ||||||||||||
Unrecovered balance at end of period
|
$ | 39,818 | $ | 30,654 | $ | 39,818 | $ | 30,654 |
As of
|
||||||||
September 30,
2011
|
December 31,
2010
|
|||||||
Held to maturity:
|
||||||||
Investments in non-marketable debt securities
|
$ | 93 | $ | 2,414 | ||||
Available for sale:
|
||||||||
Investments in non-marketable debt securities
|
3,776 | 4,087 | ||||||
Investments in non-marketable equity securities
|
2,075 | 1,500 | ||||||
Trading:
|
||||||||
Investments in marketable debt securities
|
— | 55,770 | ||||||
Investments in marketable equity securities
|
188 | 546 | ||||||
Total investments in securities
|
$ | 6,132 | $ | 64,317 |
For the Three Months Ended
September 30, 2011
|
For the Nine Months Ended
September 30, 2011
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Internet micro-loan fees
|
$ | 954 | $ | 718 | $ | 2,202 | $ | 1,210 | ||||||||
Fees on credit card receivables held on balance sheet
|
2,454 | 5,002 | 8,441 | 20,861 | ||||||||||||
Changes in fair value of loans and fees receivable recorded at fair value (1)
|
46,646 | 61,183 | 166,164 | 186,846 | ||||||||||||
Changes in fair value of notes payable associated with structured financings recorded at fair value
|
(29,538 | ) | (19,158 | ) | (82,507 | ) | 31,036 | |||||||||
Income on investments in previously charged-off receivables
|
10,295 | 8,676 | 32,058 | 24,434 | ||||||||||||
Gross loss on auto sales
|
— | (478 | ) | (111 | ) | (2,127 | ) | |||||||||
(Losses) gains on investments in securities
|
(5,418 | ) | 153 | (5,277 | ) | 301 | ||||||||||
Loss on sale of JRAS assets
|
— | — | (4,648 | ) | — | |||||||||||
Gains upon litigation settlement with former third-party issuing bank partner
|
— | 12,150 | — | 12,150 | ||||||||||||
Other
|
499 | 678 | 1,324 | 877 | ||||||||||||
Total fees and related income on earning assets
|
$ | 25,892 | $ | 68,924 | $ | 117,646 | $ | 275,588 |
(1)
|
The above changes in fair value of loans and fees receivable recorded at fair value category excludes the impact of charge offs associated with these receivables which are separately stated on our consolidated statements of operations. See Note 9, “Fair values of Assets and Liabilities,” for further discussion of these receivables and their effects on our consolidated statements of operations.
|
3.
|
Discontinued Operations
|
For the Three Months Ended
September 30,
|
For the Nine Months Ended
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Net interest income, fees and related income on non-securitized earning assets
|
$ | 15,330 | $ | 34,525 | $ | 65,121 | $ | 92,345 | ||||||||
Gain on sale of assets
|
— | — | 103,706 | — | ||||||||||||
Other operating expense
|
13,278 | 23,837 | 51,638 | 68,431 | ||||||||||||
Income before income taxes
|
2,052 | 10,688 | 117,189 | 23,914 | ||||||||||||
Income tax expense
|
(42 | ) | (2,248 | ) | (4,142 | ) | (4,596 | ) | ||||||||
Net income
|
$ | 2,010 | $ | 8,440 | $ | 113,047 | $ | 19,318 | ||||||||
Net income attributable to noncontrolling interests
|
$ | — | $ | 1,050 | $ | 1,131 | $ | 2,269 |
As of
|
||||||||
September 30, 2011
|
December 31, 2010
|
|||||||
Assets held for sale:
|
||||||||
Unrestricted cash and cash equivalents
|
$ | 11,149 | $ | 16,419 | ||||
Loans and fees receivable, net (of $6,110 and $5,218 in deferred revenue and $4,430 and $8,465 of allowances for uncollectible loans and fees receivable as of September 30, 2011 and December 31, 2010, respectively)
|
33,508 | 32,786 | ||||||
Property at cost, net of depreciation
|
752 | 6,506 | ||||||
Prepaid expenses and other assets
|
1,058 | 1,537 | ||||||
Intangibles, net
|
2,156 | — | ||||||
Goodwill
|
— | 23,011 | ||||||
Total assets held for sale
|
$ | 48,623 | $ | 80,259 | ||||
Liabilities related to assets held for sale:
|
||||||||
Accounts payable and accrued expenses
|
$ | 2,808 | $ | 3,396 | ||||
Income tax liability
|
— | 5,718 | ||||||
Total liabilities related to assets held for sale
|
$ | 2,808 | $ | 9,114 |
4.
|
Segment Reporting
|
Three Months Ended September 30, 2011
|
Credit Cards
|
Investments in
Previously
Charged-Off
Receivables
|
Retail
Micro-Loans
|
Auto Finance
|
Internet Micro-Loans
|
Total
|
||||||||||||||||||
Net interest income, fees and related income on earning assets
|
$ | 3,471 | $ | 10,509 | $ | — | $ | 8,300 | $ | 254 | $ | 22,534 | ||||||||||||
Total other operating income
|
$ | 8,951 | $ | 801 | $ | — | $ | 130 | $ | 12 | $ | 9,894 | ||||||||||||
Income (loss) from continuing operations before income taxes
|
$ | (4,350 | ) | $ | 3,239 | $ | — | $ | 3,209 | $ | (2,067 | ) | $ | 31 | ||||||||||
Income from discontinued operations before income taxes
|
$ | — | $ | — | $ | 2,052 | $ | — | $ | — | $ | 2,052 | ||||||||||||
Loans and fees receivable, gross
|
$ | 20,957 | $ | — | $ | — | $ | 103,548 | $ | 2,215 | $ | 126,720 | ||||||||||||
Loans and fees receivable, net
|
$ | 16,750 | $ | — | $ | — | $ | 82,629 | $ | 1,329 | $ | 100,708 | ||||||||||||
Loans and fees receivable held at fair value
|
$ | 310,815 | $ | — | $ | — | $ | — | $ | — | $ | 310,815 | ||||||||||||
Total assets
|
$ | 560,465 | $ | 53,630 | $ | — | $ | 92,272 | $ | 4,471 | $ | 710,838 |
Nine Months Ended September 30, 2011
|
Credit Cards
|
Investments in
Previously
Charged-Off
Receivables
|
Retail
Micro-Loans
|
Auto Finance
|
Internet Micro-Loans
|
Total
|
||||||||||||||||||
Net interest income, fees and related income on earning assets
|
$ | 30,712 | $ | 32,133 | $ | — | $ | 19,872 | $ | 570 | $ | 83,287 | ||||||||||||
Total other operating income
|
$ | 37,233 | $ | 2,269 | $ | — | $ | 386 | $ | 12 | $ | 39,900 | ||||||||||||
Income (loss) from continuing operations before income taxes
|
$ | 11,235 | $ | 11,250 | $ | — | $ | 2,741 | $ | (4,597 | ) | $ | 20,629 | |||||||||||
Income from discontinued operations before income taxes
|
$ | — | $ | — | $ | 6,139 | $ | — | $ | 111,050 | $ | 117,189 | ||||||||||||
Loans and fees receivable, gross
|
$ | 20,957 | $ | — | $ | — | $ | 103,548 | $ | 2,215 | $ | 126,720 | ||||||||||||
Loans and fees receivable, net
|
$ | 16,750 | $ | — | $ | — | $ | 82,629 | $ | 1,329 | $ | 100,708 | ||||||||||||
Loans and fees receivable held at fair value
|
$ | 310,815 | $ | — | $ | — | $ | — | $ | — | $ | 310,815 | ||||||||||||
Total assets
|
$ | 560,465 | $ | 53,630 | $ | — | $ | 92,272 | $ | 4,471 | $ | 710,838 |
Three Months Ended September 30, 2010
|
Credit Cards
|
Investments in
Previously
Charged-Off
Receivables
|
Retail
Micro-Loans
|
Auto Finance
|
Internet Micro-Loans
|
Total
|
||||||||||||||||||
Net interest income, fees and related income (loss) on earning assets
|
$ | 9,474 | $ | 8,567 | $ | — | $ | 5,046 | $ | (39 | ) | $ | 23,048 | |||||||||||
Total other operating income
|
$ | 8,031 | $ | 494 | $ | — | $ | 133 | $ | — | $ | 8,658 | ||||||||||||
(Loss) income from continuing operations before income taxes
|
$ | (6,932 | ) | $ | 2,482 | $ | — | $ | (3,324 | ) | $ | (989 | ) | $ | (8,763 | ) | ||||||||
Income from discontinued operations before income taxes
|
$ | — | $ | — | $ | 2,835 | $ | — | $ | 7,853 | $ | 10,688 | ||||||||||||
Loans and fees receivable, gross
|
$ | 18,659 | $ | — | $ | 40,291 | $ | 189,172 | $ | 45,649 | $ | 293,771 | ||||||||||||
Loans and fees receivable, net
|
$ | 14,478 | $ | — | $ | 32,504 | $ | 139,146 | $ | 32,087 | $ | 218,215 | ||||||||||||
Loans and fees receivable held at fair value
|
$ | 469,713 | $ | — | $ | — | $ | — | $ | — | $ | 469,713 | ||||||||||||
Total assets
|
$ | 676,926 | $ | 36,316 | $ | 67,605 | $ | 155,950 | $ | 75,130 | $ | 1,011,927 |
Nine Months Ended September 30, 2010
|
Credit Cards
|
Investments in
Previously
Charged-Off
Receivables
|
Retail
Micro-Loans
|
Auto Finance
|
Internet Micro-Loans
|
Total
|