Investment in Receivable Portfolios, Net (Tables)

12 Months Ended

Dec. 31, 2013

Summary of Accretable Yield and an Estimate of Zero Basis Future Cash Flows

The following table summarizes the Company’s accretable yield and an estimate of zero basis future cash flows at the beginning and end of the period presented (in thousands):


	Accretable Yield			Estimate of Zero Basis Cash Flows			Total
Balance at December 31, 2011	$	821,527		$	32,676		$	854,203
Revenue recognized, net		(519,136	)		(26,276	)		(545,412	)
Net additions on existing portfolios⁽¹⁾		229,207			10,966			240,173
Additions for current purchases⁽¹⁾		453,346			—			453,346

Balance at December 31, 2012	$	984,944		$	17,366		$	1,002,310

Revenue recognized, net		(717,733	)		(27,119	)		(744,852	)
Net additions on existing portfolios⁽¹⁾		357,189			18,218			375,407
Additions for current purchases⁽¹⁾⁽²⁾		1,767,071			—			1,767,071

Balance at December 31, 2013	$	2,391,471		$	8,465		$	2,399,936

⁽¹⁾	Estimated remaining collections and accretable yield include anticipated collections beyond the 84 to 96 month collection forecast for United States portfolios.

⁽²⁾	Includes $383.4 million of portfolios acquired in connection with the AACC Merger and $559.0 million of portfolios acquired in connection with the Cabot Acquisition discussed in Note 3, “Business Combinations.”

Summary of Changes in Balance of the Investment in Receivable Portfolios

The following tables summarize the changes in the balance of the investment in receivable portfolios during the following periods (in thousands, except percentages):


	Year Ended December 31, 2013
	Accrual Basis Portfolios			Cost Recovery Portfolios			Zero Basis Portfolios			Total
Balance, beginning of period	$	873,119		$	—		$	—		$	873,119
Purchases of receivable portfolios ⁽¹⁾		1,203,706			1,073			—			1,204,779
Transfer of portfolios		(6,649	)		6,649			—			—
Gross collections⁽²⁾		(1,249,625	)		(2,764	)		(27,117	)		(1,279,506	)
Put-backs and recalls		(2,331	)		(296	)		(2	)		(2,629	)
Foreign currency adjustments		49,634			—			—			49,634
Revenue recognized		715,458			—			17,201			732,659
Portfolio allowance reversals, net		2,275			—			9,918			12,193

Balance, end of period	$	1,585,587		$	4,662		$	—		$	1,590,249

Revenue as a percentage of collections⁽³⁾		57.3	%		0.0	%		63.4	%		57.3	%


	Year Ended December 31, 2012
	Accrual Basis Portfolios			Cost Recovery Portfolios			Zero Basis Portfolios			Total
Balance, beginning of period	$	716,454		$	—		$	—		$	716,454
Purchases of receivable portfolios⁽¹⁾		562,335			—			—			562,335
Gross collections⁽²⁾		(921,730	)		—			(26,276	)		(948,006	)
Put-backs and recalls		(3,076	)		—			—			(3,076	)
Revenue recognized		518,617			—			22,574			541,191
Portfolio allowance reversals, net		519			—			3,702			4,221

Balance, end of period	$	873,119		$	—		$	—		$	873,119

Revenue as a percentage of collections⁽³⁾		56.3	%		0.0	%		85.9	%		57.1	%


	Year Ended December 31, 2011
	Accrual Basis Portfolios			Cost Recovery Portfolios			Zero Basis Portfolios			Total
Balance, beginning of period	$	644,753		$	—		$	—		$	644,753
Purchases of receivable portfolios⁽¹⁾		386,850			—			—			386,850
Gross collections⁽²⁾		(740,402	)		—			(20,609	)		(761,011	)
Put-backs and recalls		(2,843	)		—			(9	)		(2,852	)
Revenue recognized		443,367			—			16,170			459,537
(Portfolio allowances) portfolio allowance reversals, net		(15,271	)		—			4,448			(10,823	)

Balance, end of period	$	716,454		$	—		$	—		$	716,454

Revenue as a percentage of collections⁽³⁾		59.9	%		0.0	%		78.5	%		60.4	%

⁽¹⁾	Purchases of portfolio receivables include $383.4 million acquired in connection with the AACC Merger in June 2013 and $559.0 million acquired in connection with the Cabot Acquisition in July 2013 discussed in Note 3, “Business Combinations.”

⁽²⁾	Does not include amounts collected on behalf of others.

⁽³⁾	Revenue as a percentage of collections excludes the effects of net portfolio allowances or net portfolio allowance reversals.

Summary of Change in the Valuation Allowance for Investment in Receivable Portfolios

The following table summarizes the change in the valuation allowance for investment in receivable portfolios during the periods presented (in thousands):


	Valuation Allowance
Balance at December 31, 2010	$	98,671

Provision for portfolio allowances		17,707
Reversal of prior allowances		(6,884	)

Balance at December 31, 2011	$	109,494

Provision for portfolio allowances		6,745
Reversal of prior allowances		(10,966	)

Balance at December 31, 2012	$	105,273

Provision for portfolio allowances		479
Reversal of prior allowances		(12,672	)

Balance at December 31, 2013	$	93,080