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Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2017
Income Tax Disclosure [Abstract]  
Schedule of Effective Tax Rates
The effective tax rates for the respective periods are shown below:
 
Year Ended December 31,
 
2017
 
2016
 
2015
Federal provision
35.0
 %
 
35.0
 %
 
35.0
 %
State provision
0.5
 %
 
2.3
 %
 
0.2
 %
Foreign rate differential(1)
(20.0
)%
 
(3.6
)%
 
(7.8
)%
Transaction costs(2)
5.0
 %
 
0.0
 %
 
0.0
 %
Tax reserves
0.0
 %
 
(3.2
)%
 
(2.0
)%
Permanent items(3)
10.2
 %
 
14.7
 %
 
6.0
 %
Change in valuation allowance(4)
8.2
 %
 
20.7
 %
 
(5.6
)%
Other(5)
0.8
 %
 
0.7
 %
 
1.9
 %
Effective rate
39.7
 %
 
66.6
 %
 
27.7
 %
________________________
(1)
Relates primarily to the lower tax rates on the income or loss attributable to international operations.
(2)
Relates primarily to the effect of certain costs related to the withdrawn Cabot IPO that are disallowed for U.K. tax purposes.
(3)
Includes nondeductible interest reported in a foreign subsidiary. The year ending December 31, 2017 also includes certain foreign income taxable in the U.S. under Internal Revenue Code Section 951 (Subpart F) in 2017. The year ending December 31, 2015 also includes a settlement with the Consumer Finance Protection Bureau (“CFPB”) for which the Company incurred a $10.0 million civil monetary penalty related to a settlement with the CFPB, which is not deductible for income tax purposes.
(4)
Valuation allowance recorded as a result of certain foreign subsidiaries’ cumulative operating losses for tax purposes.
(5)
Includes the impact from the Tax Reform Act for the year ended December 31, 2017.
Components of Pretax Income
The pretax income (loss) from continuing operations consisted of the following (in thousands):
 
Year Ended December 31,
 
2017
 
2016
 
2015
Domestic
$
71,794

 
$
112,483

 
$
59,056

Foreign
59,432

 
(55,108
)
 
38,877

 
$
131,226

 
$
57,375

 
$
97,933
Components of Provision for Income Taxes
The income tax provisions for continuing operations consisted of the following (in thousands):
 
Year Ended December 31,
 
2017
 
2016
 
2015
Current expense (benefit):
 
 
 
 
 
Federal
$
9,969

 
$
58,816

 
$
38,831

State
(794
)
 
1,173

 
363

Foreign
15,690

 
10,364

 
7,124

 
24,865

 
70,353

 
46,318

Deferred expense (benefit):
 
 
 
 
 
Federal
16,563

 
(22,951
)
 
(18,755
)
State
784

 
25

 
(610
)
Foreign
9,837

 
(9,222
)
 
209

 
27,184

 
(32,148
)
 
(19,156
)
 
$
52,049

 
$
38,205

 
$
27,162
Components of Deferred Tax Assets and Liabilities
The components of deferred tax assets and liabilities consisted of the following (in thousands):
 
December 31,
2017
 
December 31,
2016
Deferred tax assets:
 
 
 
Stock-based compensation expense
$
4,777

 
$
7,549

Accrued expenses
14,708

 
19,868

Differences in income recognition related to receivable portfolios
20,612

 
45,419

Net operating losses
46,615

 
26,386

Difference in basis of bond and loan costs
7,878

 
3,007

Other
522

 
6,067

Total deferred tax assets
95,112

 
108,296

Valuation allowance
(34,642
)
 
(18,892
)
Total deferred tax assets net of valuation allowance
60,470

 
89,404

Deferred tax liabilities:
 
 
 
State taxes
(1,237
)
 
(377
)
Deferred court costs
(20,207
)
 
(19,860
)
Difference in basis of amortizable assets
(18,573
)
 
(16,488
)
Difference in basis of depreciable assets
(2,059
)
 
(7,705
)
Other
(9,144
)
 
(1,555
)
Total deferred tax liabilities
(51,220
)
 
(45,985
)
Net deferred tax asset(1)
$
9,250

 
$
43,419

________________________ 
(1)
The Company operates in multiple jurisdictions. In accordance with authoritative guidance relating to income taxes, deferred tax assets and liabilities are netted for each tax-paying component of the Company within a particular tax jurisdiction, and presented as a single amount in the statement of financial condition.
Unrecognized Tax Benefit
A reconciliation of the beginning and ending amount of the Company’s unrecognized tax benefit is as follows (in thousands):
 
Amount
Balance at December 31, 2014
$
38,425

Increases related to current and prior year tax positions
5,835

Increases related to current year tax positions
11,882

Decreases related to settlements with taxing authorities
(8,193
)
Balance at December 31, 2015
47,949

Increases related to prior year tax positions
2,505

Increases related to current year tax positions
1,259

Decreases related to settlements with taxing authorities
(31,111
)
Decreases related to prior year tax positions
(1,657
)
Balance at December 31, 2016
18,945

Increases related to current year tax positions
5,902

Decreases related to settlements with taxing authorities
(228
)
Decreases related to current year tax positions
(4,599
)
Balance at December 31, 2017
$
20,020