0001084961-21-000099 | 10-Q | XBRL Viewer

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Cover Page - shares	6 Months Ended
Cover Page - shares	Jun. 30, 2021	Jul. 28, 2021
Cover [Abstract]
Amendment Flag	false
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Entity Central Index Key	0001084961
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2021
Document Transition Report	false
Entity File Number	000-26489
Entity Registrant Name	ENCORE CAPITAL GROUP, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	48-1090909
Entity Address, Address Line One	350 Camino De La Reina
Entity Address, Address Line Two	Suite 100
Entity Address, City or Town	San Diego
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92108
City Area Code	877
Local Phone Number	445 - 4581
Title of 12(b) Security	Common Stock, $0.01 Par Value Per Share
Trading Symbol	ECPG
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		30,270,009

Consolidated Statements of Financial Condition - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Assets
Cash and cash equivalents	$ 198,516	$ 189,184
Investment in receivable portfolios, net	3,154,001	3,291,918
Property and equipment, net	120,090	127,297
Other assets	292,078	349,162
Goodwill	915,067	906,962
Total assets	4,679,752	4,864,523
Liabilities:
Accounts payable and accrued liabilities	190,707	215,920
Borrowings	2,999,296	3,281,634
Other liabilities	135,399	146,893
Total liabilities	3,325,402	3,644,447
Commitments and Contingencies
Equity:
Convertible preferred stock, $0.01 par value, 5,000 shares authorized, no shares issued and outstanding	0	0
Common stock, $0.01 par value, 75,000 shares authorized, 30,413 and 31,345 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively	304	313
Additional paid-in capital	143,827	230,440
Accumulated earnings	1,269,259	1,055,668
Accumulated other comprehensive loss	(59,040)	(68,813)
Total Encore Capital Group, Inc. stockholders’ equity	1,354,350	1,217,608
Noncontrolling interest	0	2,468
Total equity	1,354,350	1,220,076
Total liabilities and equity	4,679,752	4,864,523
Variable Interest Entity
Assets
Cash and cash equivalents	678	2,223
Investment in receivable portfolios, net	516,048	553,621
Other assets	4,404	5,127
Liabilities:
Borrowings	484,078	478,131
Other liabilities	$ 11	$ 37

Consolidated Statements of Financial Condition (Parenthetical) - $ / shares	Jun. 30, 2021	Dec. 31, 2020
Statement of Financial Position [Abstract]
Convertible preferred stock, par value (USD per share)	$ 0.01	$ 0.01
Convertible preferred stock authorized (shares)	5,000,000	5,000,000
Convertible preferred stock issued (shares)	0	0
Convertible preferred stock outstanding (shares)	0	0
Common stock, par value (USD per share)	$ 0.01	$ 0.01
Common stock authorized (shares)	75,000,000	75,000,000
Common stock issued (shares)	30,413,000	31,345,000
Common stock outstanding (shares)	30,413,000	31,345,000

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Revenues
Revenue from receivable portfolios	$ 328,150	$ 335,287	$ 666,168	$ 692,652
Changes in expected current and future recoveries	66,178	66,007	110,715	(32,654)
Servicing revenue	32,064	23,950	64,580	52,630
Other revenues	1,343	789	3,109	2,486
Total revenues	427,735	426,033	844,572	715,114
Operating expenses
Salaries and employee benefits	97,774	90,867	194,230	183,965
Cost of legal collections	66,900	37,356	134,042	103,635
General and administrative expenses	34,823	28,618	66,971	60,495
Other operating expenses	28,228	28,275	56,669	55,439
Collection agency commissions	13,677	10,683	26,501	23,859
Depreciation and amortization	12,046	10,542	23,558	20,827
Total operating expenses	253,448	206,341	501,971	448,220
Income from operations	174,287	219,692	342,601	266,894
Other (expense) income
Interest expense	(44,159)	(50,327)	(90,685)	(104,989)
Loss on extinguishment of debt	(9,300)	0	(9,300)	0
Other income (expense)	566	(3,011)	511	(1,572)
Total other expense	(52,893)	(53,338)	(99,474)	(106,561)
Income before income taxes	121,394	166,354	243,127	160,333
Provision for income taxes	(24,607)	(35,570)	(51,575)	(40,128)
Net income	96,787	130,784	191,552	120,205
Net income attributable to noncontrolling interest	(284)	(452)	(419)	(327)
Net income attributable to Encore Capital Group, Inc. stockholders	$ 96,503	$ 130,332	$ 191,133	$ 119,878
Earnings per share attributable to Encore Capital Group, Inc.:
Basic (USD per share)	$ 3.12	$ 4.15	$ 6.13	$ 3.82
Diluted (USD per share)	$ 3.07	$ 4.13	$ 6.04	$ 3.79
Weighted average shares outstanding:
Basic (shares)	30,909	31,413	31,187	31,361
Diluted (shares)	31,415	31,560	31,622	31,628

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Statement of Comprehensive Income [Abstract]
Net Income	$ 96,787	$ 130,784	$ 191,552	$ 120,205
Change in unrealized gain (loss) on derivative instruments:
Unrealized gain (loss) on derivative instruments	2,055	948	3,816	(4,103)
Income tax effect	(502)	(384)	(880)	1,113
Unrealized gain (loss) on derivative instruments, net of tax	1,553	564	2,936	(2,990)
Change in foreign currency translation:
Unrealized gain (loss) on foreign currency translation	3,947	(2,032)	6,837	(63,070)
Removal of other comprehensive loss in connection with divestiture	0	2,632	0	2,632
Unrealized gain (loss) on foreign currency translation, net of divestiture	3,947	600	6,837	(60,438)
Other comprehensive income (loss), net of tax:	5,500	1,164	9,773	(63,428)
Comprehensive income	102,287	131,948	201,325	56,777
Comprehensive income attributable to noncontrolling interest:
Net income attributable to noncontrolling interest	(284)	(452)	(419)	(327)
Unrealized loss on foreign currency translation	1	1	0	4
Comprehensive income attributable to noncontrolling interest:	(283)	(451)	(419)	(323)
Comprehensive income attributable to Encore Capital Group, Inc. stockholders	$ 102,004	$ 131,497	$ 200,906	$ 56,454

Consolidated Statements of Equity - USD ($) $ in Thousands	Total	Adjustment	Common Stock	Additional Paid-In Capital	Additional Paid-In Capital Adjustment	Accumulated Earnings	Accumulated Earnings Adjustment	Accumulated Other Comprehensive (Loss) Income	Noncontrolling Interest
Balance at beginning of period (shares) at Dec. 31, 2019			31,097,000
Balance at beginning of period at Dec. 31, 2019	$ 1,025,406	$ (44,238)	$ 311	$ 222,590		$ 888,058	$ (44,238)	$ (88,766)	$ 3,213
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	120,205					119,878			327
Other comprehensive income (loss), net of tax	(66,060)							(66,056)	(4)
Exercise of stock options and issuance of share-based awards, net of shares withheld for employee taxes (shares)			191,000
Exercise of stock options and issuance of share-based awards, net of shares withheld for employee taxes	(4,863)		$ 2	(4,865)
Stock-based compensation	9,305			9,305
Stockholders' Equity, Other	2,632							2,632
Balance at end of period (shares) at Jun. 30, 2020			31,288,000
Balance at end of period at Jun. 30, 2020	1,042,387		$ 313	227,030		963,698		(152,190)	3,536
Balance at beginning of period (shares) at Mar. 31, 2020			31,234,000
Balance at beginning of period at Mar. 31, 2020	905,811		$ 312	222,403		833,366		(153,355)	3,085
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	130,784					130,332			452
Other comprehensive income (loss), net of tax	(1,468)							(1,467)	(1)
Exercise of stock options and issuance of share-based awards, net of shares withheld for employee taxes (shares)			54,000
Exercise of stock options and issuance of share-based awards, net of shares withheld for employee taxes	(150)		$ 1	(151)
Stock-based compensation	4,778			4,778
Stockholders' Equity, Other	2,632							2,632
Balance at end of period (shares) at Jun. 30, 2020			31,288,000
Balance at end of period at Jun. 30, 2020	1,042,387		$ 313	227,030		963,698		(152,190)	3,536
Balance at beginning of period (shares) at Dec. 31, 2020			31,345,000
Balance at beginning of period at Dec. 31, 2020	1,220,076	$ (17,914)	$ 313	230,440	$ (40,372)	1,055,668	$ 22,458	(68,813)	2,468
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	191,552					191,133			419
Other comprehensive income (loss), net of tax	9,773							9,773	0
Noncontrolling Interest, Decrease from Redemptions or Purchase of Interests	(5,556)			(2,669)					(2,887)
Exercise of stock options and issuance of share-based awards, net of shares withheld for employee taxes (shares)			191,000
Exercise of stock options and issuance of share-based awards, net of shares withheld for employee taxes	$ (5,216)		$ 2	(5,218)
Stock Repurchased During Period (in shares)	(1,122,855)		(1,123,000)
Stock Repurchased During Period, Value	$ (47,421)		$ (11)	(47,410)
Stock-based compensation	9,056			9,056
Balance at end of period (shares) at Jun. 30, 2021			30,413,000
Balance at end of period at Jun. 30, 2021	1,354,350		$ 304	143,827		1,269,259		(59,040)	0
Balance at beginning of period (shares) at Mar. 31, 2021			31,010,000
Balance at beginning of period at Mar. 31, 2021	1,278,784		$ 310	167,655		1,172,756		(64,541)	2,604
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	96,787					96,503			284
Other comprehensive income (loss), net of tax	5,500							5,501	(1)
Noncontrolling Interest, Decrease from Redemptions or Purchase of Interests	(5,556)			(2,669)					(2,887)
Exercise of stock options and issuance of share-based awards, net of shares withheld for employee taxes (shares)			8,000
Exercise of stock options and issuance of share-based awards, net of shares withheld for employee taxes	$ 215			215
Stock Repurchased During Period (in shares)	(604,995)		(605,000)
Stock Repurchased During Period, Value	$ (27,031)		$ (6)	(27,025)
Stock-based compensation	5,651			5,651
Balance at end of period (shares) at Jun. 30, 2021			30,413,000
Balance at end of period at Jun. 30, 2021	$ 1,354,350		$ 304	$ 143,827		$ 1,269,259		$ (59,040)	$ 0

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Operating activities:
Net income	$ 191,552	$ 120,205
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	23,558	20,827
Loss on extinguishment of debt	9,300	0
Other non-cash interest expense, net	9,403	12,127
Stock-based compensation expense	9,056	9,305
Deferred income taxes	(5,097)	(17,101)
Changes in expected current and future recoveries	(110,715)	32,654
Other, net	12,006	4,923
Changes in operating assets and liabilities
Other assets	11,474	11,917
Prepaid income tax and income taxes payable	31,374	41,748
Accounts payable, accrued liabilities and other liabilities	(32,946)	(26,890)
Net cash provided by operating activities	148,965	209,715
Investing activities:
Purchases of receivable portfolios, net of put-backs	(306,549)	(350,658)
Collections applied to investment in receivable portfolios, net	552,720	342,842
Payments to Acquire Property, Plant, and Equipment	(10,351)	(13,028)
Other, net	4,877	9,831
Net cash provided by (used in) investing activities	240,697	(11,013)
Financing activities:
Payments of Financing Costs	(10,617)	0
Proceeds from credit facilities	358,063	279,070
Repayment of credit facilities	(511,200)	(315,622)
Proceeds from senior secured notes	353,747	0
Repayment of senior secured notes	(339,585)	(32,500)
Repayments of Other Debt	0	(14,882)
Repayment of convertible senior notes	(161,000)	0
Repurchase of common stock	(47,421)	0
Other, net	(11,634)	(3,634)
Net cash used in financing activities	(369,647)	(87,568)
Net increase in cash and cash equivalents	20,015	111,134
Effect of exchange rate changes on cash and cash equivalents	(10,683)	(9,669)
Cash and cash equivalents, beginning of period	189,184	192,335
Cash and cash equivalents, end of period	198,516	293,800
Supplemental disclosure of cash information:
Cash paid for interest	69,152	88,363
Cash paid for taxes, net of refunds	$ 24,273	$ 16,292

Ownership, Description of Business, and Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2021

Accounting Policies [Abstract]

Ownership, Description of Business, and Summary of Significant Accounting Policies

Encore Capital Group, Inc. (“Encore”), through its subsidiaries (collectively with Encore, the “Company”), is an international specialty finance company providing debt recovery solutions and other related services for consumers across a broad range of financial assets. The Company purchases portfolios of defaulted consumer receivables at deep discounts to face value and manages them by working with individuals as they repay their obligations and work toward financial recovery. Defaulted receivables are consumers’ unpaid financial obligations to credit originators, including banks, credit unions, consumer finance companies and commercial retailers. Defaulted receivables may also include receivables subject to bankruptcy proceedings. The Company also provides debt servicing and other portfolio management services to credit originators for non-performing loans.

Through Midland Credit Management, Inc. and its domestic affiliates (collectively, “MCM”), the Company is a market leader in portfolio purchasing and recovery in the United States. Through Cabot Credit Management Limited (“CCM”) and its subsidiaries and European affiliates (collectively, “Cabot”), the Company is one of the largest credit management services providers in Europe and a market leader in the United Kingdom and Ireland. These are the Company’s primary operations.

The Company also has investments and operations in Latin America and Asia-Pacific, which the Company refers to as “LAAP.”

COVID-19

On March 11, 2020, the World Health Organization declared the outbreak of a novel coronavirus (“COVID-19”) as a global pandemic, which continues to spread throughout the United States and around the world. The COVID-19 outbreak and resulting containment measures implemented by governments around the world, as well as increased business uncertainty, have impacted the Company. The circumstances around the COVID-19 pandemic continue to rapidly evolve and will continue to impact the Company’s business and its estimation of expected recoveries in future periods. The Company will continue to closely monitor the COVID-19 situation and update its assumptions accordingly.

Financial Statement Preparation and Presentation

The accompanying interim consolidated financial statements have been prepared by the Company, without audit, in accordance with the instructions to the Quarterly Report on Form 10-Q, and Rule 10-01 of Regulation S-X promulgated by the United States Securities and Exchange Commission (the “SEC”) and, therefore, do not include all information and footnotes necessary for a fair presentation of its consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”).

In the opinion of management, the unaudited financial information for the interim periods presented reflects all adjustments, consisting of only normal and recurring adjustments, necessary for a fair presentation of the Company’s consolidated financial statements. These consolidated financial statements should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020. Operating results for interim periods are not necessarily indicative of operating results for an entire fiscal year.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in the Company’s financial statements and the accompanying notes. The inputs into the judgments and estimates consider the economic implications of the COVID-19 pandemic on the Company’s critical and significant accounting estimates. Actual results could materially differ from those estimates.

Basis of Consolidation

The consolidated financial statements have been prepared in conformity with GAAP and reflect the accounts and operations of the Company and those of its subsidiaries in which the Company has a controlling financial interest. The Company also consolidates variable interest entities for which it is the primary beneficiary. The primary beneficiary has both (a) the power to direct the activities of the VIE that most significantly affect the entity’s economic performance, and (b) either the obligation to absorb losses or the right to receive benefits. Refer to “Note 8: Variable Interest Entities” for further details. All intercompany transactions and balances have been eliminated in consolidation.

Translation of Foreign Currencies

The financial statements of certain of the Company’s foreign subsidiaries are measured using their local currency as the functional currency. Assets and liabilities of foreign operations are translated into U.S. dollars using period-end exchange rates, and revenues and expenses are translated into U.S. dollars using average exchange rates in effect during each period. The resulting translation adjustments are recorded as a component of other comprehensive income or loss. Equity accounts are translated at historical rates, except for the change in retained earnings during the year which is the result of the income statement translation process. Intercompany transaction gains or losses at each period end arising from subsequent measurement of balances for which settlement is not planned or anticipated in the foreseeable future are included as translation adjustments and recorded within other comprehensive income or loss. Translation gains or losses are the material components of accumulated other comprehensive income or loss and are reclassified to earnings upon the substantial sale or liquidation of investments in foreign operations.

Recently Adopted Accounting Guidance

On January 1, 2021, the Company adopted Accounting Standards Update (“ASU”) No. 2020-06, Debt — Debt with Conversion and Other Options (“Subtopic 470-20”) and Derivatives and Hedging — Contracts in Entity’s Own Equity (“Subtopic 815-40”): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). The Company adopted ASU 2020-06 using the modified-retrospective approach, by recording a net cumulative-effect adjustment to equity of approximately $17.9 million.

The ASU simplifies the accounting for convertible instruments by removing certain models in Subtopic 470-20 and revises the guidance in Subtopic 815-40 to simplify the accounting for contracts in an entity’s own equity. The ASU also amends the guidance to improve the consistency of earnings per share calculations, which requires the if-converted method be used for convertible instruments.

Under ASU 2020-06, the Company’s convertible and exchangeable notes are no longer bifurcated to a debt component and an equity component, instead, they are carried as a single liability which reflects the principal amount of the convertible and exchangeable notes. The interest expense recognized on the convertible and exchangeable notes is based on coupon rates, rather than higher effective interest rates. As a result, the Company recognizes lower interest expense after the adoption. Additionally, effective January 1, 2021, the Company uses the if-converted method in calculating the dilutive effect of its convertible and exchangeable notes for earnings per share.

The Company has not adjusted prior period comparative information and will continue to disclose prior period financial information in accordance with the previous accounting guidance. The following table summarizes the cumulative effects of adopting the new guidance on the Company’s consolidated statements of financial condition at January 1, 2021 (in thousands):


	Balance as of December 31, 2020		Adjustment		Opening Balance as of January 1, 2021
Liabilities
Convertible notes and exchangeable notes	$	583,500	$	—	$	583,500
Debt discount	(19,364)		19,364		—
Other liabilities (for deferred tax liabilities)	146,893		(1,450)		145,443
Equity
Additional paid-in capital	230,440		(40,372)		190,068
Accumulated earnings	1,055,668		22,458		1,078,126

With the exception of the updated standard discussed above, there have been no recent accounting pronouncements or changes in accounting pronouncements during the three and six months ended June 30, 2021, as compared to the recent accounting pronouncements described in our Annual Report, that have significance, or potential significance, to the Company’s consolidated financial statements.

Earnings Per Share

6 Months Ended

Jun. 30, 2021

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per ShareBasic earnings per share is calculated by dividing net earnings attributable to Encore by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is calculated based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares during the period. Dilutive potential common shares include outstanding stock options, non-vested share awards, and the dilutive effect of the convertible and exchangeable senior notes, if applicable.

The Company adopted ASU 2020-06 on January 1, 2021, using a modified retrospective approach. Effective January 1, 2021, the dilutive effect of the Company’s convertible and exchangeable notes is calculated using the if-converted method. Prior to the adoption, the dilutive effect of the convertible and exchangeable notes was calculated using the treasury stock method. Since all of the Company’s convertible and exchangeable notes require net share settlement, using the if-converted method results in a similar dilutive effect as using the treasury stock method under the previous accounting standard, due to the fact that only in-the-money shares are included in the dilutive effect. The Company had 0.2 million and 0.1 million shares of dilutive effect from its convertible and exchangeable notes during the three and six months ended June 30, 2021.

On August 12, 2015, the Company’s Board of Directors approved a $50.0 million share repurchase program. On May 5, 2021, the Company announced that the Board of Directors had approved an increase in the size of the repurchase program from $50.0 million to $300.0 million (an increase of $250.0 million). Repurchases under this program are expected to be made with cash on hand and may be made from time to time, subject to market conditions and other factors, in the open market, through private transactions, block transactions, or other methods as determined by the Company’s management and Board of Directors, and in accordance with market conditions, other corporate considerations, and applicable regulatory requirements. The program does not obligate the Company to acquire any particular amount of common stock, and it may be modified or suspended at any time at the Company’s discretion. During the three and six months ended June 30, 2021, the Company repurchased 604,995 and 1,122,855 shares of our common stock for approximately $27.0 million and $47.4 million, respectively. The Company’s practice is to retire the shares repurchased.

A reconciliation of shares used in calculating earnings per basic and diluted shares follows (in thousands, except per share amounts):


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net income attributable to Encore Capital Group, Inc. stockholders	$	96,503	$	130,332	$	191,133	$	119,878

Total weighted-average basic shares outstanding	30,909		31,413		31,187		31,361
Dilutive effect of stock-based awards	307		147		335		267
Dilutive effect of convertible and exchangeable senior notes	199		—		100		—

Total weighted-average dilutive shares outstanding	31,415		31,560		31,622		31,628

Basic earnings per share	$	3.12	$	4.15	$	6.13	$	3.82
Diluted earnings per share	$	3.07	$	4.13	$	6.04	$	3.79

Anti-dilutive employee stock options outstanding were 0 and approximately 7,000 during the three and six months ended June 30, 2021, respectively. Anti-dilutive employee stock options outstanding were approximately 164,000 and 89,000 during each of the three and six months ended June 30, 2020, respectively.

Fair Value Measurements

6 Months Ended

Jun. 30, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair value is defined as the price that would be received upon sale of an asset or the price paid to transfer a liability, in an orderly transaction between market participants at the measurement date (i.e., the “exit price”). The Company uses a fair value hierarchy that prioritizes the inputs used in valuation techniques to measure fair value into three broad levels. The following is a brief description of each level:

•Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

•Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

•Level 3: Unobservable inputs, including inputs that reflect the reporting entity’s own assumptions.

Financial Instruments Required To Be Carried At Fair Value

Financial assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands):


	Fair Value Measurements as of June 30, 2021
	Level 1		Level 2		Level 3		Total
Assets

Interest rate cap contracts	$	—	$	727	$	—	$	727
Liabilities
Interest rate swap agreements	—		(2,501)				(2,501)
Cross-currency swap agreements	—		(968)				(968)
Contingent consideration	—				(5,404)		(5,404)


	Fair Value Measurements as of December 31, 2020
	Level 1		Level 2		Level 3		Total
Assets
Cross-currency swap agreements	$	—	$	11,578	$	—	$	11,578
Interest rate cap contracts	—		659		—		659
Liabilities

Interest rate swap agreements	—		(5,232)		—		(5,232)
Contingent consideration	—		—		(2,957)		(2,957)

Derivative Contracts:

The Company uses derivative instruments to manage its exposure to fluctuations in interest rates and foreign currency exchange rates. Fair values of these derivative instruments are estimated using industry standard valuation models. These models project future cash flows and discount the future amounts to a present value using market-based observable inputs, including interest rate curves, foreign currency exchange rates, and forward and spot prices for currencies.

Contingent Consideration:

The Company carries certain contingent liabilities resulting from its mergers and acquisition activities. Certain sellers of the Company’s acquired entities could earn additional earn-out payments in cash based on the entities’ subsequent operating performance. The Company recorded the acquisition date fair values of these contingent liabilities, based on the likelihood of contingent earn-out payments, as part of the consideration transferred. The earn-out payments are subsequently remeasured to fair value at each reporting date based on actual and forecasted operating performance.

The following table provides a roll-forward of the fair value of contingent consideration for the six months ended June 30, 2021 and year ended December 31, 2020 (in thousands):


	Amount




Balance as of December 31, 2019	$	66
Issuance of contingent consideration in connection with purchase of noncontrolling interest	2,848
Payment of contingent consideration	(88)
Effect of foreign currency translation	131
Balance as of December 31, 2020	2,957
Issuance of contingent consideration in connection with purchase of noncontrolling interest	2,913
Change in fair value of contingent consideration	(388)
Payment of contingent consideration	(113)
Effect of foreign currency translation	35
Balance as of June 30, 2021	$	5,404

Non-Recurring Fair Value Measurement:

Certain assets are measured at fair value on a nonrecurring basis. These assets include real estate-owned assets classified as held for sale at the lower of their carrying value or fair value less cost to sell. The fair value of the assets held for sale and estimated selling expenses were determined at the time of initial recognition using Level 3 measurements. The fair value estimate of these assets was approximately $37.9 million and $42.2 million as of June 30, 2021 and December 31, 2020, respectively.

Financial Instruments Not Required To Be Carried At Fair Value

The table below summarizes fair value estimates for the Company's financial instruments that are not required to be carried at fair value. The total of the fair value calculations presented does not represent, and should not be construed to represent, the underlying value of the Company.

The carrying amounts in the following table are included in the consolidated statements of financial condition as of June 30, 2021 and December 31, 2020 (in thousands):


	June 30, 2021				December 31, 2020
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Financial Assets
Investment in receivable portfolios, net	$	3,154,001	$	3,530,567	$	3,291,918	$	3,705,672
Financial Liabilities
Convertible notes and exchangeable notes(1)	422,500		524,195		564,136		622,081
Senior secured notes(2)	1,659,406		1,732,423		1,642,058		1,684,729

_______________________

(1)Prior to January 1, 2021, under the previous accounting standard, the convertible and exchangeable notes included a debt discount. The carrying amount as of December 31, 2020 represented the principal amount of the notes, net of the debt discount.

(2)Carrying amount represents historical cost, adjusted for any related debt discount or debt premium.

Investment in Receivable Portfolios:

The fair value of investment in receivable portfolios is measured using Level 3 inputs by discounting the estimated future cash flows generated by the Company’s proprietary forecasting models. The key inputs include the estimated future gross cash flow, average cost to collect, and discount rate. The determination of such inputs requires significant judgment, including assessing the assumed market participant’s cost structure, its determination of whether to include fixed costs in its valuation, its collection strategies, and determining the appropriate weighted average cost of capital. The Company evaluates the use of these key inputs on an ongoing basis and refines the data as it continues to obtain better information from market participants in the debt recovery and purchasing business.

Borrowings:

The Company’s convertible notes, exchangeable notes and senior secured notes are carried at historical cost, adjusted for the debt discount. The fair value estimate for the convertible and exchangeable notes incorporates quoted market prices using Level 2 inputs. The fair value of the senior secured notes is estimated using widely accepted valuation techniques, including discounted cash flow analyses using available market information on discount and borrowing rates with similar terms, maturities, and credit ratings. Accordingly, the Company used Level 2 inputs for these debt instrument fair value estimates.

The carrying value of the Company’s senior secured revolving credit facility agreement approximates fair value due to the short-term nature of the interest rate period. The Company’s borrowings also include private placement notes, a securitisation senior facility and finance lease liabilities for which the carrying value approximates respective fair value.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Derivatives and Hedging Instruments

6 Months Ended

Jun. 30, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Hedging Instruments

The Company may periodically enter into derivative financial instruments to manage risks related to interest rates and foreign currency.

The following table summarizes the fair value of derivative instruments as included in the Company’s consolidated statements of financial condition (in thousands):

June 30, 2021

December 31, 2020

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Derivatives designated as hedging instruments:

Interest rate cap contracts

Other assets

727

Other assets

659

Interest rate swap agreements

Other liabilities

(2,501)

Other liabilities

(5,232)

Cross-currency swap agreements

Other liabilities

(968)

Other assets

11,578

Derivatives Designated as Hedging Instruments

The Company has operations in foreign countries which expose the Company to foreign currency exchange rate fluctuations due to transactions denominated in foreign currencies. To mitigate a portion of this risk, the Company may enter into derivative financial instruments, principally foreign currency forward contracts with financial counterparties. The Company adjusts the level and use of derivatives as soon as practicable after learning that an exposure has changed and reviews all exposures and derivative positions on an ongoing basis.

The Company may periodically enter into interest rate swap agreements to reduce its exposure to fluctuations in interest rates on variable interest rate debt and their impact on earnings and cash flows. Under the swap agreements, the Company receives floating interest rate payments and makes interest payments based on fixed interest rates. The Company designates its interest rate swap instruments as cash flow hedges. Previously, the Company held four interest rate swap agreements that hedged the risk of USD-LIBOR interest rate fluctuations for the Encore revolving credit facility and term loan facility. As part of the financing transactions completed in September 2020, the Company settled two of the interest rate swap agreements. As of June 30, 2021, there were two interest rate swap agreements outstanding with a total notional amount of $186.2 million. The Company expects to reclassify approximately $4.2 million of net derivative loss from OCI into earnings relating to interest rate swaps within the next 12 months.

In connection with the financing transactions discussed above, the Company entered into cross-currency swap agreements, which are used to manage foreign currency exchange risk by converting fixed-rate Euro-denominated borrowings including periodic interest payments and the payment of principal at maturity to fixed-rate USD debt and are accounted for as cash flow hedges. As of June 30, 2021, there were four cross-currency swap agreements outstanding with a total notional amount of €350.0 million (approximately $415.0 million based on an exchange rate of $1.00 to €0.84, the exchange rate as of June 30, 2021). The Company expects to reclassify approximately $4.4 million of net derivative loss from OCI into earnings relating to cross-currency swaps within the next 12 months.

Previously, the Company held two interest rate cap contracts (the “2018 Caps”) that hedged the risk of GBP-LIBOR interest rate fluctuations for the Cabot Securitisation Senior Facility interest payments. In February 2020, the Company settled the 2018 Caps and ceased the hedge relationship, which resulted in the reclassification of the associated other comprehensive loss balance to interest expense for approximately $2.5 million during the first quarter of 2020.

As of June 30, 2021, the Company held two interest rate cap contracts with a notional amount of approximately $958.4 million that are used to manage its risk related to interest rate fluctuations on the Company’s variable interest rate bearing debt. The interest rate cap hedging the fluctuations in three-month EURIBOR floating rate debt (“2019 Cap”) has a notional amount of €400.0 million (approximately $474.3 million based on an exchange rate of $1.00 to €0.84, the exchange rate as of June 30, 2021) and matures in 2024. The interest rate cap hedging the fluctuations in sterling overnight index average (“SONIA”) bearing debt (“2020 Cap”) has a notional amount of £350.0 million (approximately $484.1 million based on an exchange rate of $1.00 to £0.72, the exchange rate as of June 30, 2021) and matures in 2023. The Company expects the hedge relationships to be highly effective and designates the 2019 Cap and 2020 Cap as cash flow hedge instruments. The Company expects to reclassify approximately $0.7 million of net derivative loss from OCI into earnings relating to interest rate caps within the next 12 months.

The following tables summarize the effects of derivatives in cash flow hedging relationships designated as hedging instruments in the Company’s consolidated financial statements (in thousands):


Derivatives Designated as Hedging Instruments	Gain (Loss) Recognized in OCI				Location of Gain (Loss) Reclassified from OCI into Income (Loss)	Gain (Loss) Reclassified from OCI into Income (Loss)
	Three Months Ended June 30,					Three Months Ended June 30,
	2021		2020			2021		2020
Foreign currency exchange contracts	$	—	$	48	Salaries and employee benefits	$	—	$	(78)
Foreign currency exchange contracts	—		1		General and administrative expenses	—		(6)
Interest rate swap agreements	(37)		(558)		Interest expense	(2,268)		(2,012)
Interest rate cap contracts	(127)		(735)		Interest expense	(109)		(96)
Cross-currency swap agreements	3,507		—		Interest expense / Other (expense) income	3,665		—


Derivatives Designated as Hedging Instruments	Gain (Loss) Recognized in OCI				Location of Gain (Loss) Reclassified from OCI into Income (Loss)	Gain (Loss) Reclassified from OCI into Income (Loss)
	Six Months Ended June 30,					Six Months Ended June 30,
	2021		2020			2021		2020
Foreign currency exchange contracts	$	—	$	(341)	Salaries and employee benefits	$	—	$	49
Foreign currency exchange contracts	—		(44)		General and administrative expenses	—		11
Interest rate swap agreements	(48)		(7,265)		Interest expense	(4,539)		(3,100)
Interest rate cap contracts	68		(2,131)		Interest expense	(216)		(2,638)
Cross-currency swap agreements	(14,822)		—		Interest expense / Other (expense) income	(13,863)		—

Derivatives Not Designated as Hedging Instruments

The Company enters into currency exchange forward contracts to reduce the effects of currency exchange rate fluctuations between the British Pound and Euro. These derivative contracts generally mature within one to three months and are not designated as hedge instruments for accounting purposes. The Company continues to monitor the level of exposure of the foreign currency exchange risk and may enter into additional short-term forward contracts on an ongoing basis. The gains or losses on these derivative contracts are recognized in other income or expense based on the changes in fair value. As of June 30, 2021, the Company had no outstanding currency exchange forward contracts that were not designated as cash flow hedging instruments.

The following table summarizes the effects of derivatives in cash flow hedging relationships not designated as hedging instruments in the Company’s consolidated statements of operations (in thousands):


		Amount of Gain (Loss) Recognized in Income (Loss)
		Three Months Ended June 30,				Six Months Ended June 30,
Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivative	2021		2020		2021		2020
Foreign currency exchange contracts	Other income (expense)	$	—	$	2,028	$	—	$	3,971

Investment in Receivable Portfolios, Net

6 Months Ended

Jun. 30, 2021

Receivables [Abstract]

Investment in Receivable Portfolios, Net

The Company’s purchased portfolios of loans are grossed-up to their face value with an offsetting allowance and noncredit discount allocated to the individual receivables as the unit of account is at the individual loan level. Since each loan is deeply delinquent and deemed uncollectible at the individual loan level, the Company applies its charge-off policy and fully writes-off the amortized costs (i.e., face value net of noncredit discount) of the individual receivables immediately after purchasing the portfolio. The Company then records a negative allowance that represents the present value of all expected future recoveries for pools of receivables that share similar risk characteristics using a discounted cash flow approach, which ultimately equals the amount paid for a portfolio purchase and presented as “Investment in receivable portfolios, net” in the Company’s consolidated statements of financial condition. The discount rate is an effective interest rate (or “purchase EIR”) based on the purchase price of the portfolio and the expected future cash flows at the time of purchase.

Receivable portfolio purchases are aggregated into pools based on similar risk characteristics. Examples of risk characteristics include financial asset type, collateral type, size, interest rate, date of origination, term, and geographic location. The Company’s static pools are typically grouped into credit card, purchased consumer bankruptcy, and mortgage portfolios. The Company further groups these static pools by geographic location. Once a pool is established, the portfolios will remain in the designated pool unless the underlying risk characteristics change. The purchase EIR of a pool will not change over the life of the pool even if expected future cash flows change.

Revenue is recognized for each static pool over the economic life of the pool. Revenue primarily includes two components: (1) accretion of the discount on the negative allowance due to the passage of time, and (2) changes in expected cash flows, which includes (a) the current period variances between actual cash collected and expected cash recoveries and (b) the present value change of expected future recoveries.

The Company measures expected future recoveries based on historical experience, current conditions, and reasonable and supportable forecasts. Factors that may change the expected future recoveries may include both internal as well as external factors. Internal factors include operational performance, such as capacity and the productivity of our collection staff. External factors that may have an impact on our collections include new laws or regulations, new interpretations of existing laws or regulations, and macroeconomic conditions.

The table below provides the detail on the establishment of negative allowance for expected recoveries of portfolios purchased during the periods presented (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Purchase price	$	142,728	$	147,939	$	312,906	$	362,052
Allowance for credit losses	350,537		371,424		725,112		892,618
Amortized cost	493,265		519,363		1,038,018		1,254,670
Noncredit discount	658,358		786,512		1,442,470		1,754,227
Face value	1,151,623		1,305,875		2,480,488		3,008,897
Write-off of amortized cost	(493,265)		(519,363)		(1,038,018)		(1,254,670)
Write-off of noncredit discount	(658,358)		(786,512)		(1,442,470)		(1,754,227)
Negative allowance	142,728		147,939		312,906		362,052
Negative allowance for expected recoveries - current period purchases	$	142,728	$	147,939	$	312,906	$	362,052

The following table summarizes the changes in the balance of the investment in receivable portfolios during the periods presented (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Balance, beginning of period	$	3,225,678	$	3,166,018	$	3,291,918	$	3,328,150
Purchases of receivable portfolios	142,728		147,939		312,906		362,052
Deconsolidation of receivable portfolios(1)	—		(2,822)		—		(2,822)
Put-backs and Recalls	(3,204)		(6,326)		(6,357)		(11,394)
Disposals and transfers to assets held for sale	(2,647)		(1,182)		(4,312)		(2,713)
Cash collections	(612,427)		(508,215)		(1,218,888)		(1,035,494)
Revenue from receivable portfolios	328,150		335,287		666,168		692,652
Changes in expected current period recoveries	109,396		108,572		200,797		118,887
Changes in expected future period recoveries	(43,218)		(42,565)		(90,082)		(151,541)
Foreign currency adjustments	9,545		4,535		1,851		(96,536)
Balance, end of period	$	3,154,001	$	3,201,241	$	3,154,001	$	3,201,241

_______________________

(1)Deconsolidation of receivable portfolios as a result of the Company’s divestiture of its investment in Brazil.

Changes in expected current period recoveries represent over and under-performance in the reporting period. Collections during the six months ended June 30, 2021 significantly outperformed the projected cash flows. The Company believes the collection over-performance was a result of its sustained improvements in portfolio collections driven by change in consumer behavior during the COVID-19 pandemic and its liquidation improvement initiatives. The over-performance was also driven by higher collections as compared to the reduced near-term expected recoveries as a result of adjustments made to the projected cash flow forecast during recent periods associated with the COVID-19 pandemic.

While the Company now has additional information with respect to the impact on collections of the COVID-19 pandemic, the future outlook remains uncertain, and will continue to evolve depending on future developments, including the duration and spread of the pandemic, as well as related actions taken by governments. When reassessing the future forecasts of expected lifetime recoveries during the three months ended June 30, 2021, management considered historical and current collection performance, as well as the uncertainty in economic forecasts in the geographies in which we operate, and believes that for certain static pools collections over-performance resulted in increased total expected recoveries, and for other static pools the over-performance continued to be the result of a shift forward in timing rather than an increase in total estimated remaining collections. Additionally, management believes that the relevant macroeconomic conditions have improved and therefore no longer materially impacts the Company’s collections performance. As a result of a combination of the above, the Company has updated its forecast, resulting in a net reduction of total estimated remaining collections which in turn, when discounted to present value, resulted in a negative change in expected future period recoveries of approximately $43.2 million and $90.1 million during the three and six months ended June 30, 2021, respectively. During the three and six months ended June 30, 2020, the Company recorded approximately $42.6 million and $151.5 million, respectively, in negative change in expected future period recoveries. The circumstances around this pandemic continue to rapidly evolve, and will continue to impact the Company’s business and its estimation of expected recoveries in future periods. The Company will continue to closely monitor the COVID-19 situation and update its assumptions accordingly.

Other Assets

6 Months Ended

Jun. 30, 2021

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other Assets

Other AssetsOther assets consist of the following (in thousands):


	June 30, 2021		December 31, 2020
Operating lease right-of-use assets	$	69,151	$	72,164
Identifiable intangible assets, net	41,193		45,012
Real estate owned	37,940		42,173
Deferred tax assets	35,309		33,202
Prepaid expenses	26,120		26,717
Service fee receivables	22,756		26,539
Equity method investments	17,026		10,155
Other financial receivables	5,569		12,238
Income tax deposits	791		35,853
Other	36,223		45,109
Total	$	292,078	$	349,162

Borrowings

6 Months Ended

Jun. 30, 2021

Debt Disclosure [Abstract]

Borrowings

The Company is in compliance in all material respects with all covenants under its financing arrangements as of June 30, 2021. The components of the Company’s consolidated borrowings were as follows (in thousands):


	June 30, 2021		December 31, 2020
Global senior secured revolving credit facility	$	330,318	$	481,007


Encore private placement notes	127,060		146,550
Senior secured notes	1,667,865		1,651,619
Convertible notes and exchangeable notes	422,500		583,500

Cabot securitisation senior facility	484,078		478,131
Other	22,992		24,398
Finance lease liabilities	8,951		8,288
	3,063,764		3,373,493
Less: debt discount and issuance costs, net of amortization	(64,468)		(91,859)
Total	$	2,999,296	$	3,281,634

Encore is the parent of the restricted group for the Global Senior Facility, the Senior Secured Notes and the Private Placement Notes, each of which is guaranteed by the same group of material Encore subsidiaries and secured by the same collateral, which represents substantially all of the assets of those subsidiaries.

Global Senior Secured Revolving Credit Facility

In September 2020, the Company entered into a multi-currency senior secured revolving credit facility agreement (as amended and restated, the “Global Senior Facility”). In previous periods, the Company referred to this facility as the Cabot Credit Facility. As of June 30, 2021, the Global Senior Facility provided for a total committed facility of $1,050.0 million that matures in September 2024 and included the following key provisions:

•Interest at LIBOR (or EURIBOR for any loan drawn in euro) plus 2.50% per annum, with a LIBOR (or EURIBOR) floor of 0.75%;

•A restrictive covenant that limits the LTV Ratio (defined in the Global Senior Facility) to 0.75 in the event that the Global Senior Facility is more than 20% utilized;

•A restrictive covenant that limits the SSRCF LTV Ratio (defined in the Global Senior Facility) to 0.275;

•A restrictive covenant that requires the Company to maintain a Fixed Charge Coverage Ratio (as defined in the Global Senior Facility) of at least 2.0;

•Additional restrictions and covenants which limit, among other things, the payment of dividends and the incurrence of additional indebtedness and liens; and

•Standard events of default which, upon occurrence, may permit the lenders to terminate the Global Senior Facility and declare all amounts outstanding to be immediately due and payable.

The Global Senior Facility is secured by substantially all of the assets of the Company and the guarantors. Pursuant to the terms of an intercreditor agreement entered into with respect to the relative positions of (1) the Global Senior Facility, any super priority hedging liabilities and the Private Placement Notes (collectively, “Super Senior Liabilities”) and (2) the Senior Secured Notes, Super Senior Liabilities that are secured by assets that also secure the Senior Secured Notes will receive priority with respect to any proceeds received upon any enforcement action over any such assets.

As of June 30, 2021, the outstanding borrowings under the Global Senior Facility were $330.3 million. The weighted average interest rate of the Global Senior Facility was 3.25% for both the three and six months ended June 30, 2021. The weighted average interest rate of the previous Cabot Credit Facility was 3.15% and 3.36% for the three and six months ended June 30, 2020, respectively. The weighted average interest rate of the previous Encore revolving credit facility was 3.52% and 4.01% for the three and six months ended June 30, 2020, respectively. Available capacity under the Global Senior Facility was approximately $719.7 million as of June 30, 2021.

Private Placement Notes

In August 2017, Encore entered into $325.0 million in senior secured notes with a group of insurance companies (the “Private Placement Notes”). As of June 30, 2021, $127.1 million of the Private Placement Notes remained outstanding. The Private Placement Notes bear an annual interest rate of 5.625%, mature in August 2024 and require quarterly principal payments of $9.8 million. The covenants and material terms for the Private Placement Notes are substantially similar to those for the Global Senior Facility.

Senior Secured Notes

The following table provides a summary of the Company’s senior secured notes (the “Senior Secured Notes”) ($ in thousands):


	June 30, 2021		December 31, 2020		Maturity Date	Interest Payment Dates	Interest Rate
Cabot 2023 Notes	$	—	$	309,034	Oct 1, 2023	Apr 1, Oct 1	7.500	%

Encore 2025 Notes	415,046		426,752		Oct 15, 2025	Apr 15, Oct 15	4.875	%
Encore 2026 Notes	414,924		409,827		Feb 15, 2026	Feb 15, Aug 15	5.375	%
Encore 2028 Notes	345,770		—		Jun 1, 2028	Jun 1, Dec 1	4.250	%
Encore 2028 Floating Rate Notes	492,125		506,006		Jan 15, 2028	Jan 15, Apr 15, Jul 15, Oct 15	EURIBOR +4.250%(1)
	$	1,667,865	$	1,651,619

_______________________

(1)Interest rate is based on a three-months EURIBOR (subject to a 0% floor) plus 4.250% per annum, resets quarterly.

On June 1, 2021, Encore issued £250.0 million (approximately $345.8 million based on an exchange rate of $1.00 to £0.72, the exchange rate as of June 30, 2021) aggregate principal amount of senior secured notes due 2028 (the “Encore 2028 Notes”). The Encore 2028 Notes accrue interest at a rate of 4.250% per annum, payable semi-annually in arrears on June 1 and December 1 of each year, commencing on December 1, 2021. The Encore 2028 Notes will mature on June 1, 2028, unless earlier repurchased or redeemed by the Company. Encore used the proceeds from the offering to redeem in full the then outstanding £226.2 million (approximately $312.9 million based on an exchange rate of $1.00 to £0.72, the exchange rate as of June 30, 2021) aggregate principal amount of 7.500% senior secured notes due 2023 (the “Cabot 2023 Notes”) at a redemption price of 101.875%, and to pay certain transaction fees and expenses incurred in connection with the offering. The Company recognized a loss on extinguishment of debt of approximately $9.3 million associated with this transaction during the three months ended June 30, 2021.

The Senior Secured Notes are secured by the same collateral as the Global Senior Facility and the Private Placement Notes. The guarantees provided in respect of the Senior Secured Notes are pari passu with each such guarantee given in respect of the Global Senior Facility and Private Placement Notes. Subject to the intercreditor agreement described above under “Global Senior Secured Revolving Credit Facility,” Super Senior Liabilities that are secured by assets that also secure the Senior Secured Notes will receive priority with respect to any proceeds received upon any enforcement action over any such assets.

Convertible Notes and Exchangeable Notes

The following table provides a summary of the principal balance, maturity date and interest rate for the Company’s convertible and exchangeable senior notes (the “Convertible Notes” or “Exchangeable Notes,” as applicable) ($ in thousands):


	June 30, 2021		December 31, 2020		Maturity Date	Interest Payment Dates	Interest Rate
2021 Convertible Notes(1)	$	—	$	161,000	Mar 15, 2021	Mar 15, Sep 15	2.875	%
2022 Convertible Notes	150,000		150,000		Mar 15, 2022	Mar 15, Sep 15	3.250	%
2023 Exchangeable Notes	172,500		172,500		Sep 1, 2023	Mar 1, Sep 1	4.500	%
2025 Convertible Notes	100,000		100,000		Oct 1, 2025	Apr 1, Oct 1	3.250	%
	$	422,500	$	583,500

_______________________

(1)The 2021 Convertible Notes matured on March 15, 2021 and the Company repaid the outstanding principal in cash.

The Exchangeable Notes were issued by Encore Capital Europe Finance Limited (“Encore Finance”), a 100% owned finance subsidiary of Encore, and are fully and unconditionally guaranteed by Encore. Unless otherwise indicated in connection with a particular offering of debt securities, Encore will fully and unconditionally guarantee any debt securities issued by Encore Finance. Amounts related to Encore Finance are included in the consolidated financial statements of Encore subsequent to April 30, 2018, the date of the incorporation of Encore Finance.

Prior to the close of business on the business day immediately preceding their respective free conversion or exchange date (listed below), holders may convert or exchange their Convertible Notes or Exchangeable Notes under certain circumstances set forth in the applicable indentures. On or after their respective free conversion or exchange dates until the close of business on the second scheduled trading day immediately preceding their respective maturity date, holders may convert or exchange their notes at any time. Certain key terms related to the convertible and exchangeable features as of June 30, 2021 are listed below:


	2022 Convertible Notes			2023 Exchangeable Notes			2025 Convertible Notes
Initial conversion or exchange price	$	45.57		$	44.62		$	40.00
Closing stock price at date of issuance	$	35.05		$	36.45		$	32.00
Closing stock price date	Feb 27, 2017			Jul 20, 2018			Sep 4, 2019
Conversion or exchange rate (shares per $1,000 principal amount)	21.9467			22.4090			25.0000
Free conversion or exchange date	Sep 15, 2021			Mar 1, 2023			Jul 1, 2025
Stated interest rate	3.250		%	4.500		%	3.250		%

In the event of conversion or exchange, the notes are convertible or exchangeable into cash up to the aggregate principal amount of the notes and the excess conversion premium, if any, may be settled in cash or shares of the Company’s common stock at the Company’s election and subject to certain restrictions contained in each of the indentures governing the Convertible Notes and Exchangeable Notes.

As discussed in “Note 1: Ownership, Description of Business, and Summary of Significant Accounting Policies,” the Company adopted ASU 2020-06 on January 1, 2021 using a modified-retrospective approach. The Company’s convertible and exchangeable notes are no longer bifurcated to a debt component and an equity component, instead, they are carried as a single liability, which reflects the principal amount of the convertible and exchangeable notes. The interest expense recognized on the convertible and exchangeable notes is based on coupon rates, rather than higher effective interest rates. The Company has not adjusted prior period comparative information and will continue to disclose prior period financial information in accordance with the previous accounting guidance.

Interest expense related to the Convertible Notes and Exchangeable Notes during the periods presented was as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Interest expense—stated coupon rate	$	3,972	$	5,799	$	8,895	$	11,598
Interest expense—amortization of debt discount	—		3,095		—		6,139
Interest expense—Convertible Notes and Exchangeable Notes	$	3,972	$	8,894	$	8,895	$	17,737

Hedge Transactions

In order to reduce the risk related to the potential dilution and/or the potential cash payments the Company may be required to make in the event that the market price of the Company’s common stock becomes greater than the exchange price of the 2023 Exchangeable Notes, the Company maintains a hedge program that increases the effective exchange price for the 2023 Exchangeable Notes. The Company did not hedge the 2022 Convertible Notes or the 2025 Convertible Notes.

The details of the hedge program are listed below (in thousands, except conversion or exchange price):


	2023 Exchangeable Notes
Cost of the hedge transaction(s)	$	17,785
Initial exchange price	$	44.62
Effective exchange price	$	62.48

Cabot Securitisation Senior Facility

Cabot Securitisation UK Ltd (“Cabot Securitisation”), an indirect subsidiary of Encore, has a senior facility for a committed amount of £350.0 million (as amended, the “Cabot Securitisation Senior Facility”). The Cabot Securitisation Senior Facility matures in March 2025. Funds drawn under the Cabot Securitisation Senior Facility bear interest at a rate per annum equal to SONIA plus a margin of 3.06% plus, for periods after March 15, 2023, a step-up margin ranging from zero to 1.00%.

As of June 30, 2021, the outstanding borrowings under the Cabot Securitisation Senior Facility were £350.0 million (approximately $484.1 million based on an exchange rate of $1.00 to £0.72, the exchange rate as of June 30, 2021). The obligations of Cabot Securitisation under the Cabot Securitisation Senior Facility are secured by first ranking security interests over all of Cabot Securitisation’s property, assets and rights (including receivables purchased from Cabot Financial UK from time to time), the book value of which was approximately £366.1 million (approximately $506.3 million based on an exchange rate of $1.00 to £0.72, the exchange rate as of June 30, 2021) as of June 30, 2021. The weighted average interest rate was 3.11% for the three and six months ended June 30, 2021 and 3.14% and 3.33% for the three and six months ended June 30, 2020, respectively.

Cabot Securitisation is a securitized financing vehicle and is a VIE for consolidation purposes. Refer to “Note 8: Variable Interest Entities” for further details.

Variable Interest Entities	6 Months Ended
Variable Interest Entities	Jun. 30, 2021
Variable Interest Entity, Measure of Activity [Abstract]
Variable Interest Entities	Variable Interest Entities A VIE is defined as a legal entity whose equity owners do not have sufficient equity at risk, or, as a group, the holders of the equity investment at risk lack any of the following three characteristics: decision-making rights, the obligation to absorb expected losses, or the right to receive expected residual returns of the entity. The primary beneficiary is identified as the variable interest holder that has both the power to direct the activities of the VIE that most significantly affect the entity’s economic performance and the obligation to absorb expected losses or the right to receive benefits from the entity that could potentially be significant to the VIE. The Company consolidates VIEs when it is the primary beneficiary. As of June 30, 2021, the Company’s VIEs include certain securitized financing vehicles and other immaterial special purpose entities that were created to purchase receivable portfolios in certain geographies. The Company is the primary beneficiary of these VIEs. The Company has the power to direct the activities of the VIEs which includes but is not limited to the ability to exercise discretion in the servicing of the financial assets. The Company evaluates its relationships with its VIEs on an ongoing basis to ensure that it continues to be the primary beneficiary. Most assets recognized as a result of consolidating these VIEs do not represent additional assets that could be used to satisfy claims against the Company’s general assets. Conversely, liabilities recognized as a result of consolidating these VIEs do not represent additional claims on the Company’s general assets; rather, they represent claims against the specific assets of the VIE.

Income Taxes	6 Months Ended
Income Taxes	Jun. 30, 2021
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The Company's effective tax rate for the three and six months ended June 30, 2021 was 20.3% and 21.2%, respectively. For the three and six months ended June 30, 2020, the Company's effective tax rate was 21.4% and 25.0%, respectively. For the three months ended June 30, 2021, the difference between the effective tax rate and the federal statutory rate was primarily due to a tax benefit recognized on the U.K. tax rate adjustment which passed legislation in the current period, and is effective from April 2023. For the six months ended June 30, 2020, the difference between the effective tax rate and the federal statutory rate was primarily due to a change in valuation allowance over consolidated pre-tax loss for the period, recognized in the period under the discrete method. The Company utilized the discrete method for recording income taxes during 2020 due to uncertainty in estimating annual pre-tax earnings, primarily due to the COVID-19 pandemic. The Company returned to using the estimated annual effective tax rate method beginning January 1, 2021. Each interim period is considered an integral part of the annual period and tax expense or benefit is measured using an estimated annual effective income tax rate. The estimated annual effective tax rate for the full year is applied to the respective interim period, taking into account year-to-date amounts and projected amounts for the year. Since the Company operates in foreign countries with varying tax rates, the Company's quarterly effective tax rate is dependent on the level of income or loss from international operations in the reporting period. The Company's subsidiary in Costa Rica is operating under a 100% tax holiday through December 31, 2026. The impact of the tax holiday in Costa Rica for the three and six months ended June 30, 2021 and 2020, was immaterial. The Company is subject to income taxes in the U.S. and foreign jurisdictions. Significant judgement is required in evaluating uncertain tax positions and determining our provision for income taxes. There has been no material change to the Company’s total gross unrecognized tax benefits from December 31, 2020.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Commitments and Contingencies	6 Months Ended
Commitments and Contingencies	Jun. 30, 2021
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Litigation and Regulatory The Company is involved in disputes, legal actions, regulatory investigations, inquiries, and other actions from time to time in the ordinary course of business. The Company, along with others in its industry, is routinely subject to legal actions based on the Fair Debt Collection Practices Act (“FDCPA”), comparable state statutes, the Telephone Consumer Protection Act (“TCPA”), state and federal unfair competition statutes, and common law causes of action. The violations of law investigated or alleged in these actions often include claims that the Company lacks specified licenses to conduct its business, attempts to collect debts on which the statute of limitations has run, has made inaccurate or unsupported assertions of fact in support of its collection actions and/or has acted improperly in connection with its efforts to contact consumers. Such litigation and regulatory actions could involve potential compensatory or punitive damage claims, fines, sanctions, injunctive relief, or changes in business practices. Many continue on for some length of time and involve substantial investigation, litigation, negotiation, and other expense and effort before a result is achieved, and during the process the Company often cannot determine the substance or timing of any eventual outcome. As of June 30, 2021, there were no material developments in any of the legal proceedings disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020. In certain legal proceedings, the Company may have recourse to insurance or third-party contractual indemnities to cover all or portions of its litigation expenses, judgments, or settlements. The Company records loss contingencies in its financial statements only for matters in which losses are probable and can be reasonably estimated. Where a range of loss can be reasonably estimated with no best estimate in the range, the Company records the minimum estimated liability. The Company continuously assesses the potential liability related to its pending litigation and regulatory matters and revises its estimates when additional information becomes available. The Company’s legal costs are recorded to expense as incurred. As of June 30, 2021, the Company has no material reserves for legal matters. Purchase Commitments In the normal course of business, the Company enters into forward flow purchase agreements. A forward flow purchase agreement is a commitment to purchase receivables over a duration that is typically three to twelve months, but can be longer, generally with a specifically defined volume range, frequency, and pricing. Typically, these forward flow contracts have provisions that allow for early termination or price re-negotiation should the underlying quality of the portfolio deteriorate over time or if any particular month’s delivery is materially different than the original portfolio used to price the forward flow contract. Certain of these forward flow purchase agreements may also have termination clauses, whereby the agreements can be canceled by either party upon providing a certain specified amount of notice. As of June 30, 2021, the Company had entered into forward flow purchase agreements for the purchase of nonperforming loans with an estimated minimum aggregate purchase price of approximately $277.7 million. The Company expects actual purchases under these forward flow purchase agreements to be significantly greater than the estimated minimum aggregate purchase price.

Segment and Geographic Information

6 Months Ended

Jun. 30, 2021

Segment Reporting [Abstract]

Segment and Geographic Information

Segment and Geographic InformationThe Company conducts business through several operating segments that have similar economic and other qualitative characteristics and have been aggregated in accordance with authoritative guidance into one reportable segment, portfolio purchasing and recovery. Since the Company operates in one reportable segment, all required segment information can be found in the consolidated financial statements.

The Company has operations in the United States, Europe and other foreign countries. The following table presents the Company’s total revenues by geographic area in which the Company operates (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Total revenues(1):
United States	$	288,491	$	286,767	$	576,278	$	494,985
International
Europe(2)	134,991		135,490		258,893		211,455
Other geographies	4,253		3,776		9,401		8,674
	139,244		139,266		268,294		220,129
Total	$	427,735	$	426,033	$	844,572	$	715,114

________________________

(1)Total revenues are attributed to countries based on consumer location.

(2)Based on the financial information that is used to produce the general-purpose financial statements, providing further geographic information is impracticable.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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+ Details

Goodwill and Identifiable Intangible Assets

6 Months Ended

Jun. 30, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Identifiable Intangible Assets

The annual goodwill testing date for the reporting units that are included in the portfolio purchasing and recovery reportable segment is October 1st. There have been no events or circumstances during the three and six months ended June 30, 2021 that have required the Company to perform an interim assessment of goodwill carried at these reporting units. Management continues to evaluate and monitor all key factors impacting the carrying value of the Company’s recorded goodwill and long-lived assets. Adverse changes in the Company’s actual or expected operating results, market capitalization, business climate, economic factors or other negative events that may be outside the control of management could result in a material non-cash impairment charge in the future.

The Company’s goodwill is attributable to reporting units included in its portfolio purchasing and recovery segment. The following table summarizes the activity in the Company’s goodwill balance (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Balance, beginning of period	$	912,170	$	839,301	$	906,962	$	884,185

Effect of foreign currency translation	2,897		(1,277)		8,105		(46,161)
Balance, end of period	$	915,067	$	838,024	$	915,067	$	838,024

The Company’s acquired intangible assets are summarized as follows (in thousands):


	As of June 30, 2021						As of December 31, 2020
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Customer relationships	$	68,722	$	(28,183)	$	40,539	$	66,796	$	(22,714)	$	44,082
Developed technologies	2,658		(2,545)		113		5,048		(4,760)		288
Trade name and other	1,587		(1,046)		541		6,644		(6,002)		642
Total intangible assets	$	72,967	$	(31,774)	$	41,193	$	78,488	$	(33,476)	$	45,012

Subsequent Event	6 Months Ended
Subsequent Event	Jun. 30, 2021
Subsequent Events [Abstract]
Subsequent Event	Subsequent EventOn July 30, 2021, certain subsidiaries of the Company entered into an agreement to sell the entities that own the Company’s portfolios in Colombia and Peru. The Company expects that the sale will be completed in the third quarter of 2021 and estimates that the Company will incur an approximately $15 million after-tax loss as a result of the sale. The majority of the loss will be attributable to the recognition of the cumulative foreign currency translation adjustment on the Company’s investment as a result of weakening of the currencies in Colombia and Peru as compared to the U.S. dollar over the term of the investment.

Ownership, Description of Business, and Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2021

Accounting Policies [Abstract]

Basis of Presentation

Use of Estimates

Basis of Consolidation

Translation of Foreign Currencies

Translation of Foreign CurrenciesThe financial statements of certain of the Company’s foreign subsidiaries are measured using their local currency as the functional currency. Assets and liabilities of foreign operations are translated into U.S. dollars using period-end exchange rates, and revenues and expenses are translated into U.S. dollars using average exchange rates in effect during each period. The resulting translation adjustments are recorded as a component of other comprehensive income or loss. Equity accounts are translated at historical rates, except for the change in retained earnings during the year which is the result of the income statement translation process. Intercompany transaction gains or losses at each period end arising from subsequent measurement of balances for which settlement is not planned or anticipated in the foreseeable future are included as translation adjustments and recorded within other comprehensive income or loss. Translation gains or losses are the material components of accumulated other comprehensive income or loss and are reclassified to earnings upon the substantial sale or liquidation of investments in foreign operations.

Recently Adopted Accounting Pronouncement and Recent Accounting Pronouncements Not Yet Effective

Recently Adopted Accounting Guidance


	Balance as of December 31, 2020		Adjustment		Opening Balance as of January 1, 2021
Liabilities
Convertible notes and exchangeable notes	$	583,500	$	—	$	583,500
Debt discount	(19,364)		19,364		—
Other liabilities (for deferred tax liabilities)	146,893		(1,450)		145,443
Equity
Additional paid-in capital	230,440		(40,372)		190,068
Accumulated earnings	1,055,668		22,458		1,078,126

Earnings Per Share

Basic earnings per share is calculated by dividing net earnings attributable to Encore by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is calculated based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares during the period. Dilutive potential common shares include outstanding stock options, non-vested share awards, and the dilutive effect of the convertible and exchangeable senior notes, if applicable.

Fair Value Measurements

•Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

•Level 3: Unobservable inputs, including inputs that reflect the reporting entity’s own assumptions.

Derivatives

The Company may periodically enter into derivative financial instruments to manage risks related to interest rates and foreign currency. The Company has operations in foreign countries which expose the Company to foreign currency exchange rate fluctuations due to transactions denominated in foreign currencies. To mitigate a portion of this risk, the Company may enter into derivative financial instruments, principally foreign currency forward contracts with financial counterparties. The Company adjusts the level and use of derivatives as soon as practicable after learning that an exposure has changed and reviews all exposures and derivative positions on an ongoing basis.

Investment in Receivable Portfolios, Net

Variable Interest Entities

A VIE is defined as a legal entity whose equity owners do not have sufficient equity at risk, or, as a group, the holders of the equity investment at risk lack any of the following three characteristics: decision-making rights, the obligation to absorb expected losses, or the right to receive expected residual returns of the entity. The primary beneficiary is identified as the variable interest holder that has both the power to direct the activities of the VIE that most significantly affect the entity’s economic performance and the obligation to absorb expected losses or the right to receive benefits from the entity that could potentially be significant to the VIE. The Company consolidates VIEs when it is the primary beneficiary.

As of June 30, 2021, the Company’s VIEs include certain securitized financing vehicles and other immaterial special purpose entities that were created to purchase receivable portfolios in certain geographies. The Company is the primary beneficiary of these VIEs. The Company has the power to direct the activities of the VIEs which includes but is not limited to the ability to exercise discretion in the servicing of the financial assets. The Company evaluates its relationships with its VIEs on an ongoing basis to ensure that it continues to be the primary beneficiary.

Most assets recognized as a result of consolidating these VIEs do not represent additional assets that could be used to satisfy claims against the Company’s general assets. Conversely, liabilities recognized as a result of consolidating these VIEs do not represent additional claims on the Company’s general assets; rather, they represent claims against the specific assets of the VIE.

Segment Reporting

The Company conducts business through several operating segments that have similar economic and other qualitative characteristics and have been aggregated in accordance with authoritative guidance into one reportable segment, portfolio purchasing and recovery. Since the Company operates in one reportable segment, all required segment information can be found in the consolidated financial statements.

Goodwill

The Company’s goodwill is tested for impairment at the reporting unit level annually and in interim periods if certain events occur that indicate that the fair value of a reporting unit may be below its carrying value. Determining the number of reporting units and the fair value of a reporting unit requires the Company to make judgments and involves the use of significant estimates and assumptions.Management continues to evaluate and monitor all key factors impacting the carrying value of the Company’s recorded goodwill and long-lived assets. Adverse changes in the Company’s actual or expected operating results, market capitalization, business climate, economic factors or other negative events that may be outside the control of management could result in a material non-cash impairment charge in the future.

Ownership, Description of Business, and Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2021

Accounting Policies [Abstract]

Schedule of New Accounting Pronouncements and Changes in Accounting Principles

The following table summarizes the cumulative effects of adopting the new guidance on the Company’s consolidated statements of financial condition at January 1, 2021 (in thousands):


	Balance as of December 31, 2020		Adjustment		Opening Balance as of January 1, 2021
Liabilities
Convertible notes and exchangeable notes	$	583,500	$	—	$	583,500
Debt discount	(19,364)		19,364		—
Other liabilities (for deferred tax liabilities)	146,893		(1,450)		145,443
Equity
Additional paid-in capital	230,440		(40,372)		190,068
Accumulated earnings	1,055,668		22,458		1,078,126

Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2021

Earnings Per Share [Abstract]

Schedule of Reconciliation of Shares Used in Calculating Earnings Per Basic and Diluted Shares

A reconciliation of shares used in calculating earnings per basic and diluted shares follows (in thousands, except per share amounts):


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net income attributable to Encore Capital Group, Inc. stockholders	$	96,503	$	130,332	$	191,133	$	119,878

Total weighted-average basic shares outstanding	30,909		31,413		31,187		31,361
Dilutive effect of stock-based awards	307		147		335		267
Dilutive effect of convertible and exchangeable senior notes	199		—		100		—

Total weighted-average dilutive shares outstanding	31,415		31,560		31,622		31,628

Basic earnings per share	$	3.12	$	4.15	$	6.13	$	3.82
Diluted earnings per share	$	3.07	$	4.13	$	6.04	$	3.79

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2021

Fair Value Disclosures [Abstract]

Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

Financial assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands):


	Fair Value Measurements as of June 30, 2021
	Level 1		Level 2		Level 3		Total
Assets

Interest rate cap contracts	$	—	$	727	$	—	$	727
Liabilities
Interest rate swap agreements	—		(2,501)				(2,501)
Cross-currency swap agreements	—		(968)				(968)
Contingent consideration	—				(5,404)		(5,404)


	Fair Value Measurements as of December 31, 2020
	Level 1		Level 2		Level 3		Total
Assets
Cross-currency swap agreements	$	—	$	11,578	$	—	$	11,578
Interest rate cap contracts	—		659		—		659
Liabilities

Interest rate swap agreements	—		(5,232)		—		(5,232)
Contingent consideration	—		—		(2,957)		(2,957)

Schedule of Roll Forward of the Fair Value of Contingent Consideration

The following table provides a roll-forward of the fair value of contingent consideration for the six months ended June 30, 2021 and year ended December 31, 2020 (in thousands):


	Amount




Balance as of December 31, 2019	$	66
Issuance of contingent consideration in connection with purchase of noncontrolling interest	2,848
Payment of contingent consideration	(88)
Effect of foreign currency translation	131
Balance as of December 31, 2020	2,957
Issuance of contingent consideration in connection with purchase of noncontrolling interest	2,913
Change in fair value of contingent consideration	(388)
Payment of contingent consideration	(113)
Effect of foreign currency translation	35
Balance as of June 30, 2021	$	5,404

Schedule of Financial Instruments Not Required to be Carried at Fair Value

The carrying amounts in the following table are included in the consolidated statements of financial condition as of June 30, 2021 and December 31, 2020 (in thousands):


	June 30, 2021				December 31, 2020
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Financial Assets
Investment in receivable portfolios, net	$	3,154,001	$	3,530,567	$	3,291,918	$	3,705,672
Financial Liabilities
Convertible notes and exchangeable notes(1)	422,500		524,195		564,136		622,081
Senior secured notes(2)	1,659,406		1,732,423		1,642,058		1,684,729

_______________________

(2)Carrying amount represents historical cost, adjusted for any related debt discount or debt premium.

Derivatives and Hedging Instruments (Tables)

6 Months Ended

Jun. 30, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Fair Value of Derivative Instruments

The following table summarizes the fair value of derivative instruments as included in the Company’s consolidated statements of financial condition (in thousands):

June 30, 2021

December 31, 2020

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Derivatives designated as hedging instruments:

Interest rate cap contracts

Other assets

727

Other assets

659

Interest rate swap agreements

Other liabilities

(2,501)

Other liabilities

(5,232)

Cross-currency swap agreements

Other liabilities

(968)

Other assets

11,578

Effects of Derivatives in Cash Flow Hedging Relationships

The following tables summarize the effects of derivatives in cash flow hedging relationships designated as hedging instruments in the Company’s consolidated financial statements (in thousands):


Derivatives Designated as Hedging Instruments	Gain (Loss) Recognized in OCI				Location of Gain (Loss) Reclassified from OCI into Income (Loss)	Gain (Loss) Reclassified from OCI into Income (Loss)
	Three Months Ended June 30,					Three Months Ended June 30,
	2021		2020			2021		2020
Foreign currency exchange contracts	$	—	$	48	Salaries and employee benefits	$	—	$	(78)
Foreign currency exchange contracts	—		1		General and administrative expenses	—		(6)
Interest rate swap agreements	(37)		(558)		Interest expense	(2,268)		(2,012)
Interest rate cap contracts	(127)		(735)		Interest expense	(109)		(96)
Cross-currency swap agreements	3,507		—		Interest expense / Other (expense) income	3,665		—


Derivatives Designated as Hedging Instruments	Gain (Loss) Recognized in OCI				Location of Gain (Loss) Reclassified from OCI into Income (Loss)	Gain (Loss) Reclassified from OCI into Income (Loss)
	Six Months Ended June 30,					Six Months Ended June 30,
	2021		2020			2021		2020
Foreign currency exchange contracts	$	—	$	(341)	Salaries and employee benefits	$	—	$	49
Foreign currency exchange contracts	—		(44)		General and administrative expenses	—		11
Interest rate swap agreements	(48)		(7,265)		Interest expense	(4,539)		(3,100)
Interest rate cap contracts	68		(2,131)		Interest expense	(216)		(2,638)
Cross-currency swap agreements	(14,822)		—		Interest expense / Other (expense) income	(13,863)		—


		Amount of Gain (Loss) Recognized in Income (Loss)
		Three Months Ended June 30,				Six Months Ended June 30,
Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivative	2021		2020		2021		2020
Foreign currency exchange contracts	Other income (expense)	$	—	$	2,028	$	—	$	3,971

Investment in Receivable Portfolios, Net (Tables)

6 Months Ended

Jun. 30, 2021

Receivables [Abstract]

Transition of Receivable Portfolios

The table below provides the detail on the establishment of negative allowance for expected recoveries of portfolios purchased during the periods presented (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Purchase price	$	142,728	$	147,939	$	312,906	$	362,052
Allowance for credit losses	350,537		371,424		725,112		892,618
Amortized cost	493,265		519,363		1,038,018		1,254,670
Noncredit discount	658,358		786,512		1,442,470		1,754,227
Face value	1,151,623		1,305,875		2,480,488		3,008,897
Write-off of amortized cost	(493,265)		(519,363)		(1,038,018)		(1,254,670)
Write-off of noncredit discount	(658,358)		(786,512)		(1,442,470)		(1,754,227)
Negative allowance	142,728		147,939		312,906		362,052
Negative allowance for expected recoveries - current period purchases	$	142,728	$	147,939	$	312,906	$	362,052

Schedule of Investment in Receivable Portfolios

The following table summarizes the changes in the balance of the investment in receivable portfolios during the periods presented (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Balance, beginning of period	$	3,225,678	$	3,166,018	$	3,291,918	$	3,328,150
Purchases of receivable portfolios	142,728		147,939		312,906		362,052
Deconsolidation of receivable portfolios(1)	—		(2,822)		—		(2,822)
Put-backs and Recalls	(3,204)		(6,326)		(6,357)		(11,394)
Disposals and transfers to assets held for sale	(2,647)		(1,182)		(4,312)		(2,713)
Cash collections	(612,427)		(508,215)		(1,218,888)		(1,035,494)
Revenue from receivable portfolios	328,150		335,287		666,168		692,652
Changes in expected current period recoveries	109,396		108,572		200,797		118,887
Changes in expected future period recoveries	(43,218)		(42,565)		(90,082)		(151,541)
Foreign currency adjustments	9,545		4,535		1,851		(96,536)
Balance, end of period	$	3,154,001	$	3,201,241	$	3,154,001	$	3,201,241

_______________________

(1)Deconsolidation of receivable portfolios as a result of the Company’s divestiture of its investment in Brazil.

Other Assets (Tables)

6 Months Ended

Jun. 30, 2021

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Components of Other Assets

Other assets consist of the following (in thousands):


	June 30, 2021		December 31, 2020
Operating lease right-of-use assets	$	69,151	$	72,164
Identifiable intangible assets, net	41,193		45,012
Real estate owned	37,940		42,173
Deferred tax assets	35,309		33,202
Prepaid expenses	26,120		26,717
Service fee receivables	22,756		26,539
Equity method investments	17,026		10,155
Other financial receivables	5,569		12,238
Income tax deposits	791		35,853
Other	36,223		45,109
Total	$	292,078	$	349,162

Borrowings (Tables)

6 Months Ended

Jun. 30, 2021

Debt Disclosure [Abstract]

Schedule of Consolidated Debt and Capital Lease Obligations

The components of the Company’s consolidated borrowings were as follows (in thousands):


	June 30, 2021		December 31, 2020
Global senior secured revolving credit facility	$	330,318	$	481,007


Encore private placement notes	127,060		146,550
Senior secured notes	1,667,865		1,651,619
Convertible notes and exchangeable notes	422,500		583,500

Cabot securitisation senior facility	484,078		478,131
Other	22,992		24,398
Finance lease liabilities	8,951		8,288
	3,063,764		3,373,493
Less: debt discount and issuance costs, net of amortization	(64,468)		(91,859)
Total	$	2,999,296	$	3,281,634

Schedule of Notes

The following table provides a summary of the Company’s senior secured notes (the “Senior Secured Notes”) ($ in thousands):


	June 30, 2021		December 31, 2020		Maturity Date	Interest Payment Dates	Interest Rate
Cabot 2023 Notes	$	—	$	309,034	Oct 1, 2023	Apr 1, Oct 1	7.500	%

Encore 2025 Notes	415,046		426,752		Oct 15, 2025	Apr 15, Oct 15	4.875	%
Encore 2026 Notes	414,924		409,827		Feb 15, 2026	Feb 15, Aug 15	5.375	%
Encore 2028 Notes	345,770		—		Jun 1, 2028	Jun 1, Dec 1	4.250	%
Encore 2028 Floating Rate Notes	492,125		506,006		Jan 15, 2028	Jan 15, Apr 15, Jul 15, Oct 15	EURIBOR +4.250%(1)
	$	1,667,865	$	1,651,619

_______________________

(1)Interest rate is based on a three-months EURIBOR (subject to a 0% floor) plus 4.250% per annum, resets quarterly.


	June 30, 2021		December 31, 2020		Maturity Date	Interest Payment Dates	Interest Rate
2021 Convertible Notes(1)	$	—	$	161,000	Mar 15, 2021	Mar 15, Sep 15	2.875	%
2022 Convertible Notes	150,000		150,000		Mar 15, 2022	Mar 15, Sep 15	3.250	%
2023 Exchangeable Notes	172,500		172,500		Sep 1, 2023	Mar 1, Sep 1	4.500	%
2025 Convertible Notes	100,000		100,000		Oct 1, 2025	Apr 1, Oct 1	3.250	%
	$	422,500	$	583,500

_______________________

(1)The 2021 Convertible Notes matured on March 15, 2021 and the Company repaid the outstanding principal in cash.

Schedule of Hedge Program for Convertible Notes

Certain key terms related to the convertible and exchangeable features as of June 30, 2021 are listed below:


	2022 Convertible Notes			2023 Exchangeable Notes			2025 Convertible Notes
Initial conversion or exchange price	$	45.57		$	44.62		$	40.00
Closing stock price at date of issuance	$	35.05		$	36.45		$	32.00
Closing stock price date	Feb 27, 2017			Jul 20, 2018			Sep 4, 2019
Conversion or exchange rate (shares per $1,000 principal amount)	21.9467			22.4090			25.0000
Free conversion or exchange date	Sep 15, 2021			Mar 1, 2023			Jul 1, 2025
Stated interest rate	3.250		%	4.500		%	3.250		%

The details of the hedge program are listed below (in thousands, except conversion or exchange price):


	2023 Exchangeable Notes
Cost of the hedge transaction(s)	$	17,785
Initial exchange price	$	44.62
Effective exchange price	$	62.48

Schedule of Interest Expense

Interest expense related to the Convertible Notes and Exchangeable Notes during the periods presented was as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Interest expense—stated coupon rate	$	3,972	$	5,799	$	8,895	$	11,598
Interest expense—amortization of debt discount	—		3,095		—		6,139
Interest expense—Convertible Notes and Exchangeable Notes	$	3,972	$	8,894	$	8,895	$	17,737

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

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+ Details

Segment and Geographic Information (Tables)

6 Months Ended

Jun. 30, 2021

Segment Reporting [Abstract]

Schedule of Geographical Areas of Operations


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Total revenues(1):
United States	$	288,491	$	286,767	$	576,278	$	494,985
International
Europe(2)	134,991		135,490		258,893		211,455
Other geographies	4,253		3,776		9,401		8,674
	139,244		139,266		268,294		220,129
Total	$	427,735	$	426,033	$	844,572	$	715,114

________________________

(1)Total revenues are attributed to countries based on consumer location.

(2)Based on the financial information that is used to produce the general-purpose financial statements, providing further geographic information is impracticable.

Goodwill and Identifiable Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Activity in the Goodwill Balance

The following table summarizes the activity in the Company’s goodwill balance (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Balance, beginning of period	$	912,170	$	839,301	$	906,962	$	884,185

Effect of foreign currency translation	2,897		(1,277)		8,105		(46,161)
Balance, end of period	$	915,067	$	838,024	$	915,067	$	838,024

Schedule of Acquired Intangible Assets

The Company’s acquired intangible assets are summarized as follows (in thousands):


	As of June 30, 2021						As of December 31, 2020
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Customer relationships	$	68,722	$	(28,183)	$	40,539	$	66,796	$	(22,714)	$	44,082
Developed technologies	2,658		(2,545)		113		5,048		(4,760)		288
Trade name and other	1,587		(1,046)		541		6,644		(6,002)		642
Total intangible assets	$	72,967	$	(31,774)	$	41,193	$	78,488	$	(33,476)	$	45,012

Ownership, Description of Business, and Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Convertible notes and exchangeable notes			$ 583,500
Debt Instrument, Unamortized Discount			(19,364)
Other liabilities	$ 135,399		146,893
Additional paid-in capital	143,827		230,440
Accumulated earnings	1,269,259		1,055,668
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	$ 1,354,350	$ 1,278,784	1,220,076	$ 1,042,387	$ 905,811	$ 1,025,406
Adjustment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Convertible notes and exchangeable notes			0
Debt Instrument, Unamortized Discount			19,364
Other liabilities			(1,450)
Additional paid-in capital			(40,372)
Accumulated earnings			22,458
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest			(17,914)			$ (44,238)
Adjusted Balance
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Convertible notes and exchangeable notes			583,500
Debt Instrument, Unamortized Discount			0
Other liabilities			145,443
Additional paid-in capital			190,068
Accumulated earnings			$ 1,078,126

- Definition

Amount of stockholders' equity (deficit), net of receivables from officers, directors, owners, and affiliates of the entity, attributable to both the parent and noncontrolling interests. Amount excludes temporary equity. Alternate caption for the concept is permanent equity.

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+ Details

Earnings Per Share - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	May 05, 2021	Aug. 12, 2015
Earnings Per Share [Abstract]
Incremental Common Shares Attributable to Dilutive Effect of Conversion of Debt Securities (in shares)	199,000	0	100,000	0
Stock Repurchase Program, Authorized Amount					$ 300,000	$ 50,000
Stock Repurchase Program, Increase of Authorized Amount					$ 250,000
Stock Repurchased During Period, Shares	604,995		1,122,855
Repurchase of common stock	$ 27,000		$ 47,421	$ 0
Antidilutive securities excluded from computation of earnings per share (shares)	0	164,000	7,000	89,000

Earnings Per Share - Table (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Earnings Per Share [Abstract]
Net income attributable to Encore Capital Group, Inc. stockholders	$ 96,503	$ 130,332	$ 191,133	$ 119,878
Total weighted-average basic shares outstanding (shares)	30,909	31,413	31,187	31,361
Dilutive effect of stock-based awards (shares)	307	147	335	267
Incremental Common Shares Attributable to Dilutive Effect of Conversion of Debt Securities (in shares)	199	0	100	0
Total weighted-average dilutive shares outstanding (shares)	31,415	31,560	31,622	31,628
Basic earnings per share (USD per share)	$ 3.12	$ 4.15	$ 6.13	$ 3.82
Diluted earnings per share (USD per share)	$ 3.07	$ 4.13	$ 6.04	$ 3.79

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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+ Details

- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

Fair Value Measurements - Financial Instruments Required to be Carried at Fair Value (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Liabilities
Contingent consideration	$ (5,404)	$ (2,957)
Level 1
Liabilities
Contingent consideration	0	0
Level 2
Liabilities
Contingent consideration		0
Level 3
Liabilities
Contingent consideration	(5,404)	(2,957)
Interest rate cap contracts
Assets
Interest rate derivatives	727	659
Interest rate cap contracts \| Level 1
Assets
Interest rate derivatives	0	0
Interest rate cap contracts \| Level 2
Assets
Interest rate derivatives	727	659
Interest rate cap contracts \| Level 3
Assets
Interest rate derivatives	0	0
Interest rate swap agreements
Liabilities
Swap agreements	(2,501)	(5,232)
Interest rate swap agreements \| Level 1
Liabilities
Swap agreements	0	0
Interest rate swap agreements \| Level 2
Liabilities
Swap agreements	(2,501)	(5,232)
Interest rate swap agreements \| Level 3
Liabilities
Swap agreements		0
Cross-currency swap agreements
Assets
Interest rate derivatives		11,578
Liabilities
Swap agreements	(968)
Cross-currency swap agreements \| Level 1
Assets
Interest rate derivatives		0
Liabilities
Swap agreements	0
Cross-currency swap agreements \| Level 2
Assets
Interest rate derivatives		11,578
Liabilities
Swap agreements	(968)
Cross-currency swap agreements \| Level 3
Assets
Interest rate derivatives		$ 0
Liabilities
Swap agreements

Fair Value Measurements - Contingent Consideration Roll Forward (Details) - Contingent Consideration - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at beginning of period	$ 2,957	$ 66
Issuance of contingent consideration in connection with purchase of noncontrolling interest	2,913	2,848
Change in fair value of contingent consideration	(388)
Payment of contingent consideration	(113)	(88)
Effect of foreign currency translation	35	131
Balance at end of period	$ 5,404	$ 2,957

Fair Value Measurements - Narrative (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Fair Value Disclosures [Abstract]
Assets held for sale	$ 37,940	$ 42,173

Fair Value Measurements - Financial Instruments Not Required to be Carried at Fair Value (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Carrying Amount
Financial Assets
Investment in receivable portfolios, net	$ 3,154,001	$ 3,291,918
Carrying Amount \| Convertible notes and exchangeable notes
Financial Liabilities
Convertible Notes and Exchangeable Notes	422,500	564,136
Carrying Amount \| Secured Debt
Financial Liabilities
Senior Secured Notes	1,659,406	1,642,058
Estimated Fair Value
Financial Assets
Investment in receivable portfolios, net	3,530,567	3,705,672
Estimated Fair Value \| Convertible notes and exchangeable notes
Financial Liabilities
Convertible Notes and Exchangeable Notes	524,195	622,081
Estimated Fair Value \| Secured Debt
Financial Liabilities
Senior Secured Notes	$ 1,732,423	$ 1,684,729

Derivatives and Hedging Instruments - Fair Value of Derivative Instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Interest rate cap contracts
Derivative [Line Items]
Interest rate derivative - assets	$ 727	$ 659
Interest rate swap agreements
Derivative [Line Items]
Interest rate swap agreements - liabilities	(2,501)	(5,232)
Cross-currency swap agreements
Derivative [Line Items]
Interest rate derivative - assets		11,578
Interest rate swap agreements - liabilities	(968)
Derivatives Designated as Hedging Instruments \| Interest rate cap contracts \| Other assets
Derivative [Line Items]
Interest rate derivative - assets	727	659
Derivatives Designated as Hedging Instruments \| Interest rate swap agreements \| Other liabilities
Derivative [Line Items]
Interest rate swap agreements - liabilities	(2,501)	(5,232)
Derivatives Designated as Hedging Instruments \| Cross-currency swap agreements \| Other assets
Derivative [Line Items]
Cross-currency swap agreements		$ (11,578)
Derivatives Designated as Hedging Instruments \| Cross-currency swap agreements \| Other liabilities
Derivative [Line Items]
Cross-currency swap agreements	$ 968

Derivatives and Hedging Instruments - Narrative (Details) $ in Millions	1 Months Ended	3 Months Ended	6 Months Ended
	Sep. 30, 2020 instrument	Mar. 31, 2020 USD ($)	Jun. 30, 2021 USD ($) instrument	Jun. 30, 2021 EUR (€) instrument	Jun. 30, 2021 GBP (£) instrument	Aug. 31, 2020 instrument
Reclassification out of Accumulated Other Comprehensive Income
Derivative [Line Items]
Loss reclassified from OCI into income (loss)		$ 2.5
Forward contracts \| Not Designated as Hedging Instrument
Derivative [Line Items]
Number of instruments held \| instrument			0	0	0
Interest rate swap agreements
Derivative [Line Items]
Loss expected to be reclassified to earnings in next twelve months			$ (4.2)
Interest rate swap agreements \| Cash Flow Hedging
Derivative [Line Items]
Number of interest rate derivatives held \| instrument			2	2	2	4
Number of interest rate derivatives settled \| instrument	2
Derivative instrument, notional amount			$ 186.2
Cross-currency swap agreements
Derivative [Line Items]
Loss expected to be reclassified to earnings in next twelve months			$ (4.4)
Cross-currency swap agreements \| Cash Flow Hedging
Derivative [Line Items]
Number of instruments held \| instrument			4	4	4
Derivative instrument, notional amount			$ 415.0	€ 350,000,000.0
Interest rate cap contracts
Derivative [Line Items]
Loss expected to be reclassified to earnings in next twelve months			(0.7)
Interest rate cap contracts \| 2019 Cap
Derivative [Line Items]
Derivative instrument, notional amount \| €				€ 400,000,000.0
Interest rate cap contracts \| 2020 Caps
Derivative [Line Items]
Derivative instrument, notional amount			$ 484.1
Interest rate cap contracts \| Cash Flow Hedging
Derivative [Line Items]
Number of interest rate derivatives held \| instrument			2	2	2
Derivative instrument, notional amount			$ 958.4
Interest rate cap contracts \| Cash Flow Hedging \| 2018 Caps
Derivative [Line Items]
Number of interest rate derivatives held \| instrument			2	2	2
Interest rate cap contracts \| Cash Flow Hedging \| 2019 Cap
Derivative [Line Items]
Derivative instrument, notional amount			$ 474.3
Interest rate cap contracts \| Cash Flow Hedging \| 2020 Caps
Derivative [Line Items]
Derivative instrument, notional amount \| £					£ 350,000,000.0
Minimum \| Not Designated as Hedging Instrument \| Cash Flow Hedging
Derivative [Line Items]
Term of contract (years)			1 month
Maximum \| Not Designated as Hedging Instrument \| Cash Flow Hedging
Derivative [Line Items]
Term of contract (years)			3 months

Derivatives and Hedging Instruments - Effects of Derivatives (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Derivative [Line Items]
Gain (Loss) Recognized in OCI	$ 1,553	$ 564	$ 2,936	$ (2,990)
Derivatives Designated as Hedging Instruments \| Foreign currency exchange contracts \| Cash Flow Hedging \| Salaries and employee benefits
Derivative [Line Items]
Gain (Loss) Recognized in OCI	0	48	0	(341)
Gain (Loss) Reclassified from OCI into Income (Loss)	0	(78)	0	49
Derivatives Designated as Hedging Instruments \| Foreign currency exchange contracts \| Cash Flow Hedging \| General and administrative expenses
Derivative [Line Items]
Gain (Loss) Recognized in OCI	0	1	0	(44)
Gain (Loss) Reclassified from OCI into Income (Loss)	0	(6)	0	11
Derivatives Designated as Hedging Instruments \| Interest rate swap agreements \| Cash Flow Hedging \| Interest expense
Derivative [Line Items]
Gain (Loss) Recognized in OCI	(37)	(558)	(48)	(7,265)
Gain (Loss) Reclassified from OCI into Income (Loss)	(2,268)	(2,012)	(4,539)	(3,100)
Derivatives Designated as Hedging Instruments \| Interest rate cap contracts \| Cash Flow Hedging \| Interest expense
Derivative [Line Items]
Gain (Loss) Recognized in OCI	(127)	(735)	68	(2,131)
Gain (Loss) Reclassified from OCI into Income (Loss)	(109)	(96)	(216)	(2,638)
Derivatives Designated as Hedging Instruments \| Cross-currency swap agreements \| Cash Flow Hedging \| Interest expense / Other (expense) income
Derivative [Line Items]
Gain (Loss) Recognized in OCI	3,507	0	(14,822)	0
Gain (Loss) Reclassified from OCI into Income (Loss)	$ 3,665	$ 0	$ (13,863)	$ 0

Derivatives and Hedging Instruments - Summary of Effects of Derivatives not Designated as Hedging Instruments (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Other Expense \| Cash Flow Hedging \| Foreign currency exchange contracts
Derivative [Line Items]
Amount of Gain (Loss) Recognized in Income (Loss)	$ 0	$ 2,028	$ 0	$ 3,971

Investment in Receivable Portfolios, Net - Establishment of Negative Allowance (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Receivables [Abstract]
Purchase price	$ 142,728	$ 147,939	$ 312,906	$ 362,052
Allowance for credit losses	350,537	371,424	725,112	892,618
Amortized cost	493,265	519,363	1,038,018	1,254,670
Noncredit discount	658,358	786,512	1,442,470	1,754,227
Face value	1,151,623	1,305,875	2,480,488	3,008,897
Write-off of amortized cost	(493,265)	(519,363)	(1,038,018)	(1,254,670)
Write-off of noncredit discount	(658,358)	(786,512)	(1,442,470)	(1,754,227)
Negative allowance	142,728	147,939	312,906	362,052
Negative allowance for expected recoveries - current period purchases	$ 142,728	$ 147,939	$ 312,906	$ 362,052

Investment in Receivable Portfolios, Net - Change in the Balance of the Investment in Receivable Portfolios (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Investment in Receivables Portfolio [Roll Forward]
Balance, beginning of period	$ 3,225,678	$ 3,166,018	$ 3,291,918	$ 3,328,150
Purchases of receivable portfolios	142,728	147,939	312,906	362,052
Deconsolidation of receivables portfolio	0	(2,822)	0	(2,822)
Put-backs and Recalls	(3,204)	(6,326)	(6,357)	(11,394)
Disposals and transfers to assets held for sale	(2,647)	(1,182)	(4,312)	(2,713)
Cash collections	(612,427)	(508,215)	(1,218,888)	(1,035,494)
Revenue from receivable portfolios	328,150	335,287	666,168	692,652
Changes in expected current period recoveries	109,396	108,572	200,797	118,887
Changes in expected future period recoveries	(43,218)	(42,565)	(90,082)	(151,541)
Foreign currency adjustments	9,545	4,535	1,851	(96,536)
Balance, end of period	$ 3,154,001	$ 3,201,241	$ 3,154,001	$ 3,201,241

Other Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	us-gaap:OtherAssets	us-gaap:OtherAssets
Operating lease right-of-use assets	$ 69,151	$ 72,164
Identifiable intangible assets, net	41,193	45,012
Real estate owned	37,940	42,173
Deferred tax assets	35,309	33,202
Prepaid expenses	26,120	26,717
Service fee receivables	22,756	26,539
Equity method investments	17,026	10,155
Other financial receivables	5,569	12,238
Income tax deposits	791	35,853
Other	36,223	45,109
Total	$ 292,078	$ 349,162

Borrowings - Consolidated Debt and Capital Lease Obligations - Table and Narrative (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Debt Instrument [Line Items]
Finance Lease, Liability, Statement of Financial Position [Extensible List]	us-gaap:DebtAndCapitalLeaseObligations	us-gaap:DebtAndCapitalLeaseObligations
Finance lease liabilities	$ 8,951	$ 8,288
Debt and finance lease liabilities, gross	3,063,764	3,373,493
Less: debt discount and issuance costs, net of amortization	(64,468)	(91,859)
Borrowings	2,999,296	3,281,634
Credit Facility \| Global senior secured revolving credit facility
Debt Instrument [Line Items]
Long-term debt	330,318	481,007
Credit Facility \| Cabot securitisation senior facility
Debt Instrument [Line Items]
Long-term debt	484,078	478,131
Encore private placement notes \| Encore private placement notes
Debt Instrument [Line Items]
Long-term debt	127,060	146,550
Senior secured notes \| Senior secured notes
Debt Instrument [Line Items]
Long-term debt	1,667,865	1,651,619
Convertible notes and exchangeable notes \| Convertible notes and exchangeable notes
Debt Instrument [Line Items]
Long-term debt	422,500	583,500
Other
Debt Instrument [Line Items]
Long-term debt	$ 22,992	$ 24,398

Borrowings - Global Senior Secured Revolving Credit Facility - Narrative (Details) - Revolving Credit Facility - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Global senior secured revolving credit facility
Debt Instrument [Line Items]
Revolving credit facility	$ 1,050,000,000.0		$ 1,050,000,000.0
Maximum ratio of financial indebtedness to cash and cash equivalent investments	0.75		0.75
Utilization threshold (as a percent)	20.00%		20.00%
Maximum ratio of super senior liabilities to cash and cash equivalent investments	0.275		0.275
Fixed charge coverage ratio	2.0		2.0
Long-term debt	$ 330,300,000		$ 330,300,000
Weighted average interest rate (as a percent)	3.25%		3.25%
Remaining borrowing capacity	$ 719,700,000		$ 719,700,000
Cabot credit facility
Debt Instrument [Line Items]
Weighted average interest rate (as a percent)		3.15%		3.36%
Encore revolving credit facility
Debt Instrument [Line Items]
Weighted average interest rate (as a percent)		3.52%		4.01%
Euro Interbank Offered Rate (EURIBOR) \| Global senior secured revolving credit facility
Debt Instrument [Line Items]
Basis spread on variable rate (as a percent)			2.50%
Floor interest rate (as a percent)	0.75%		0.75%
LIBOR \| Global senior secured revolving credit facility
Debt Instrument [Line Items]
Basis spread on variable rate (as a percent)			2.50%
Floor interest rate (as a percent)	0.75%		0.75%

Borrowings - Encore Private Placement Notes - Narrative (Details) - USD ($)	6 Months Ended
	Jun. 30, 2021	Dec. 31, 2020	Aug. 31, 2017
Debt Instrument [Line Items]
Debt issued	$ 422,500,000	$ 583,500,000
Encore private placement notes \| Notes Payable, Other Payables
Debt Instrument [Line Items]
Debt issued			$ 325,000,000.0
Long-term debt	$ 127,060,000	$ 146,550,000
Stated interest rate (as a percent)	5.625%
Senior secured notes, periodic principal repayment	$ 9,800,000

Borrowings - Senior Secured Notes - Table and Narrative (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2021 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2021 GBP (£)	Jun. 01, 2021 USD ($)	Jun. 01, 2021 GBP (£)	Dec. 31, 2020 USD ($)
Debt Instrument [Line Items]
Senior secured notes	$ 1,667,865		$ 1,667,865					$ 1,651,619
Loss on extinguishment of debt	(9,300)	$ 0	(9,300)	$ 0
Cabot 2023 Notes \| Secured Debt
Debt Instrument [Line Items]
Senior secured notes	$ 0		$ 0			$ 312,900	£ 226,200,000	309,034
Stated interest rate (as a percent)	7.50%		7.50%		7.50%	7.50%	7.50%
Debt Instrument, Redemption Price, Percentage	101.875%
Encore 2025 Notes \| Secured Debt
Debt Instrument [Line Items]
Senior secured notes	$ 415,046		$ 415,046					426,752
Stated interest rate (as a percent)	4.875%		4.875%		4.875%
Encore 2026 Notes \| Secured Debt
Debt Instrument [Line Items]
Senior secured notes	$ 414,924		$ 414,924					409,827
Stated interest rate (as a percent)	5.375%		5.375%		5.375%
Encore 2028 Notes \| Secured Debt
Debt Instrument [Line Items]
Senior secured notes	$ 345,770		$ 345,770		£ 250,000,000.0			0
Stated interest rate (as a percent)	4.25%		4.25%		4.25%	4.25%	4.25%
Encore 2028 Floating Rate Notes \| Secured Debt
Debt Instrument [Line Items]
Senior secured notes	$ 492,125		$ 492,125					$ 506,006
Variable rate floor	0.00%		0.00%		0.00%
Euro Interbank Offered Rate (EURIBOR) \| Encore 2028 Floating Rate Notes \| Secured Debt
Debt Instrument [Line Items]
Basis spread on variable rate (as a percent)			4.25%

Borrowings - Encore Convertible Notes and Exchangeable Notes (Details) $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2021 USD ($) $ / shares	Dec. 31, 2020 USD ($)
Debt Instrument [Line Items]
Debt issued \| $	$ 422,500	$ 583,500
Convertible Notes \| 2021 Convertible Notes
Debt Instrument [Line Items]
Debt issued \| $	$ 0	161,000
Stated interest rate (as a percent)	2.875%
Convertible Notes \| 2022 Convertible Notes
Debt Instrument [Line Items]
Debt issued \| $	$ 150,000	150,000
Stated interest rate (as a percent)	3.25%
Initial conversion price (USD per share)	$ 45.57
Closing stock price at date of issuance (in dollars per share)	$ 35.05
Conversion rate (shares per $1,000 principal amount)	0.0219467
Convertible Notes \| 2025 Convertible Notes
Debt Instrument [Line Items]
Debt issued \| $	$ 100,000	100,000
Stated interest rate (as a percent)	3.25%
Initial conversion price (USD per share)	$ 40.00
Closing stock price at date of issuance (in dollars per share)	$ 32.00
Conversion rate (shares per $1,000 principal amount)	0.025
Exchangeable Notes \| 2023 Exchangeable Notes
Debt Instrument [Line Items]
Debt issued \| $	$ 172,500	$ 172,500
Stated interest rate (as a percent)	4.50%
Initial conversion price (USD per share)	$ 44.62
Closing stock price at date of issuance (in dollars per share)	$ 36.45
Conversion rate (shares per $1,000 principal amount)	0.022409

Borrowings - Interest Expense Related to Convertible and Exchangeable Notes (Details) - Convertible notes and exchangeable notes - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Debt Instrument [Line Items]
Interest expense—stated coupon rate	$ 3,972	$ 5,799	$ 8,895	$ 11,598
Interest expense—amortization of debt discount	0	3,095	0	6,139
Total interest expense	$ 3,972	$ 8,894	$ 8,895	$ 17,737

Borrowings - Conversion and EPS Impact of Convertible Notes Hedging Transactions (Details) - 2023 Exchangeable Notes - Exchangeable Notes $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2021 USD ($) $ / shares
Debt Instrument [Line Items]
Cost of the hedge transaction(s) \| $	$ 17,785
Conversion price (USD per share)	$ 44.62
Hedging of Convertible Debt Instrument
Debt Instrument [Line Items]
Conversion price (USD per share)	$ 62.48

Borrowings - Cabot Securitisation Senior Facility (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021 USD ($)	Jun. 30, 2020	Jun. 30, 2021 USD ($)	Jun. 30, 2020	Jun. 30, 2021 GBP (£)	Dec. 31, 2020 USD ($)
Debt Instrument [Line Items]
Book value	$ 4,679,752		$ 4,679,752			$ 4,864,523
Cabot securitisation senior facility
Debt Instrument [Line Items]
Maximum borrowing capacity	484,100		484,100		£ 350,000,000.0
Book value	$ 506,300		$ 506,300		£ 366,100,000
Weighted average interest rate (as a percent)	3.11%	3.14%	3.11%	3.33%
Cabot securitisation senior facility \| Sterling Overnight Index Average (SONIA) \| Debt Instrument, Redemption, Period One
Debt Instrument [Line Items]
Basis spread on variable rate (as a percent)			3.06%
Cabot securitisation senior facility \| Minimum \| Sterling Overnight Index Average (SONIA) \| Debt Instrument, Redemption, Period Two
Debt Instrument [Line Items]
Basis spread on variable rate (as a percent)			0.00%
Cabot securitisation senior facility \| Maximum \| Sterling Overnight Index Average (SONIA) \| Debt Instrument, Redemption, Period Two
Debt Instrument [Line Items]
Basis spread on variable rate (as a percent)			1.00%

Income Taxes - Narrative (Details)	3 Months Ended		6 Months Ended
Income Taxes - Narrative (Details)	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Income Tax Contingency [Line Items]
Effective rate (as a percent)	20.30%	21.40%	21.20%	25.00%
Costa Rica \| Tax holiday through December 31, 2026
Income Tax Contingency [Line Items]
Holiday tax rate (as a percent)			100.00%

Commitments and Contingencies (Details)	Jun. 30, 2021 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Material reserves for litigation	$ 0
Purchase price	$ 277,700,000

Segment and Geographic Information (Details) $ in Thousands	3 Months Ended		6 Months Ended
Segment and Geographic Information (Details) $ in Thousands	Jun. 30, 2021 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2021 USD ($) segment	Jun. 30, 2020 USD ($)
Segment Reporting [Abstract]
Number of reportable segments \| segment			1
Segment Reporting Information [Line Items]
Revenues	$ 427,735	$ 426,033	$ 844,572	$ 715,114
United States
Segment Reporting Information [Line Items]
Revenues	288,491	286,767	576,278	494,985
International
Segment Reporting Information [Line Items]
Revenues	139,244	139,266	268,294	220,129
Europe
Segment Reporting Information [Line Items]
Revenues	134,991	135,490	258,893	211,455
Other geographies
Segment Reporting Information [Line Items]
Revenues	$ 4,253	$ 3,776	$ 9,401	$ 8,674

Goodwill and Identifiable Intangible Assets - Activity in Goodwill Balance (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Goodwill [Roll Forward]
Balance at beginning of period	$ 912,170	$ 839,301	$ 906,962	$ 884,185
Effect of foreign currency translation	2,897	(1,277)	8,105	(46,161)
Balance at end of period	$ 915,067	$ 838,024	$ 915,067	$ 838,024

Goodwill and Identifiable Intangible Assets - Acquired Intangible Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 72,967	$ 78,488
Accumulated Amortization	(31,774)	(33,476)
Net Carrying Amount	41,193	45,012
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	68,722	66,796
Accumulated Amortization	(28,183)	(22,714)
Net Carrying Amount	40,539	44,082
Developed technologies
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	2,658	5,048
Accumulated Amortization	(2,545)	(4,760)
Net Carrying Amount	113	288
Trade name and other
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	1,587	6,644
Accumulated Amortization	(1,046)	(6,002)
Net Carrying Amount	$ 541	$ 642

Subsequent Event (Details) $ in Millions	3 Months Ended
Subsequent Event (Details) $ in Millions	Sep. 30, 2021 USD ($)
Forecast
Earnings per Basic and Diluted Shares [Line Items]
Expected loss on disposition of businesses	$ 15