2.2.0.25falsefalse0202 - Disclosure - Finance Receivables, nettruefalsefalse1falsefalseUSDfalsefalse1/1/2011 - 3/31/2011
USD ($)
USD ($) / shares
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<div align="left" style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>2. Finance Receivables, net:</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company’s principal business consists of the acquisition and collection of pools of
accounts that have experienced deterioration of credit quality between origination and the
Company’s acquisition of the accounts. The amount paid for any pool reflects the Company’s
determination that it is probable the Company will be unable to collect all amounts due according
to an account’s contractual terms. At acquisition, the Company reviews the portfolio both by
account and aggregate pool to determine whether there is evidence of deterioration of credit
quality
since origination and if it is probable that the Company will be unable to collect all amounts
due according to the account’s contractual terms. If both conditions exist, the Company determines
whether each such account is to be accounted for individually or whether such accounts will be
assembled into pools based on common risk characteristics. The Company considers expected
prepayments and estimates the amount and timing of undiscounted expected principal, interest and
other cash flows for each acquired portfolio and subsequently aggregates pools of accounts. The
Company determines the excess of the pool’s scheduled contractual principal and contractual
interest payments over all cash flows expected at acquisition as an amount that should not be
accreted (nonaccretable difference) based on the Company’s proprietary acquisition models. The
remaining amount, representing the excess of the pool’s cash flows expected to be collected over
the amount paid, is accreted into income recognized on finance receivables over the estimated
remaining life of the pool (accretable yield).
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company accounts for its investment in finance receivables under the guidance of FASB ASC
Topic 310-30 “Loans and Debt Securities Acquired with Deteriorated Credit Quality” (“ASC 310-30”).
Under ASC 310-30, static pools of accounts may be established. These pools are aggregated based on
certain common risk criteria. Each static pool is recorded at cost, which includes certain direct
costs of acquisition paid to third parties, and is accounted for as a single unit for the
recognition of income, payments applied to principal and loss provision. Once a static pool is
established for a calendar quarter, individual receivable accounts are not added to the pool
(unless replaced by the seller) or removed from the pool (unless sold or returned to the seller).
ASC 310-30 requires that the excess of the contractual cash flows over expected cash flows, based
on the Company’s estimates derived from its proprietary collection models, not be recognized as an
adjustment of revenue or expense or on the balance sheet. ASC 310-30, utilizing the interest
method, initially freezes the yield estimated when the accounts are purchased as the basis for
subsequent impairment testing. Significant increases in actual, or expected future cash flows may
be recognized prospectively through an upward adjustment of the yield over a portfolio’s remaining
life. Any increase to the yield then becomes the new benchmark for impairment testing. Under ASC
310-30, rather than lowering the estimated yield if the collection estimates are not received or
projected to be received, the carrying value of a pool would be written down to maintain the then
current yield and shown as a reduction in revenue in the consolidated income statements with a
corresponding valuation allowance offsetting finance receivables, net, on the consolidated balance
sheet. Income on finance receivables is accrued quarterly based on each static pool’s effective
yield. Quarterly cash flows greater than the interest accrual will reduce the carrying value of the
static pool. This reduction in carrying value is defined as payments applied to principal (also
referred to as finance receivable amortization). Likewise, cash flows that are less than the
interest accrual will increase, or “accrete,” the carrying balance. The Company generally does not
record accretion in the first six to twelve months of the estimated life of the pool; accordingly,
the Company utilizes either the cost recovery method or cash method when necessary to prevent
accretion as permitted by ASC 310-30. The yield is estimated and periodically recalculated based
on the timing and amount of anticipated cash flows using the Company’s proprietary collection
models. A pool can become fully amortized (zero carrying balance on the balance sheet)
while still generating cash collections. In this case, all cash collections are recognized as
revenue when received. Under the cash method, revenue is recognized as it would be under the
interest method up to the amount of cash collections. Additionally, the Company uses the cost
recovery method when collections on a particular pool of accounts cannot be reasonably predicted.
These cost recovery pools are not aggregated with other portfolios. Under the cost recovery
method, no revenue is recognized until the Company has fully collected the cost of the portfolio,
or until such time that the Company considers the collections to be probable and estimable and
begins to recognize income based on the interest method as described above. At March 31, 2011 and
2010, the Company had unamortized purchased principal (purchase price) in pools accounted for under
the cost recovery method of $1.4 million and $2.3 million, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company establishes valuation allowances, if necessary, for acquired accounts subject to
ASC 310-30 to reflect only those losses incurred after acquisition (that is, the present value of
cash flows initially expected at acquisition that are no longer expected to be collected).
Valuation allowances are established only subsequent to acquisition of the accounts. At March 31,
2011 and 2010, the Company had a valuation allowance against its finance receivables of $80,447,000
and $58,125,000, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company implements the accounting for income recognized on finance receivables under ASC
310-30 as follows. The Company creates each accounting pool using its projections of estimated
cash flows and expected
economic life. The Company then computes the effective yield that fully amortizes the pool to
the end of its expected economic life based on the current projections of estimated cash flows
using the interest method. As actual cash flow results are recorded, the Company balances those
results to the data contained in its proprietary models to ensure accuracy, then reviews each
accounting pool watching for trends, actual performance versus projections and curve shape (a
graphical depiction of the timing of cash flows), sometimes re-forecasting future cash flows
utilizing the Company’s statistical models. The review process is primarily performed by the
Company’s finance staff; additionally, the Company’s operational and statistical staffs may also be
involved. To the extent there is overperformance, the Company will either increase the yield or
release the allowance and consider increasing future cash projections, if persuasive evidence
indicates that the overperformance is considered to be a significant betterment. If the
overperformance is considered more of an acceleration of cash flows (a timing difference), the
Company will adjust estimated future cash flows downward, which effectively extends the
amortization period, or take no action at all if the amortization period is reasonable and falls
within the pool’s expected economic life. In either case, the yield may or may not be increased
due to the time value of money (accelerated cash collections). To the extent there is
underperformance, the Company will record an allowance if the underperformance is significant and
will also consider revising estimated future cash flows based on current period information, or
take no action if the pool’s amortization period is reasonable and falls within the currently
projected economic life.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company capitalizes certain fees paid to third parties related to the direct acquisition
of a portfolio of accounts. These fees are added to the acquisition cost of the portfolio and
accordingly are amortized over the life of the portfolio using the interest method. The balance of
the unamortized capitalized fees at March 31, 2011 and 2010 was $3,206,705 and $3,122,600,
respectively. During the three months ended March 31, 2011 and 2010, the Company capitalized
$255,778 and $161,621, respectively, of these direct acquisition fees. During the three months
ended March 31, 2011 and 2010, the Company amortized $344,588 and $270,947, respectively, of these
direct acquisition fees.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The agreements to purchase the aforementioned receivables include general representations and
warranties from the sellers covering account holder death or bankruptcy and accounts settled or
disputed prior to sale. The representation and warranty period permitting the return of these
accounts from the Company to the seller is typically 90 to 180 days. Any funds received from the
seller of finance receivables as a return of purchase price are referred to as buybacks. Buyback
funds are applied against the finance receivable balance received and are not included in the
Company’s cash collections from operations. In some cases, the seller will replace the returned
accounts with new accounts in lieu of returning the purchase price. In that case, the old account
is removed from the pool and the new account is added.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Changes
in finance receivables, net for the three months ended March 31,
2011 and 2010 were as
follows (amounts in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Three Months Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Three Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>March 31, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>March 31, 2010</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at beginning of period
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">831,330</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">693,462</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Acquisitions of finance receivables, net of buybacks
</div></td>
<td> </td>
<td> </td>
<td align="right">106,405</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">100,266</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Cash collections
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(166,717</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(119,195</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Income recognized on finance receivables, net
</div></td>
<td> </td>
<td> </td>
<td align="right">95,974</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">67,951</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Cash collections applied to principal
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(70,743</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(51,244</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at end of period
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">866,992</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">742,484</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     At the time of acquisition, the life of each pool is generally estimated to be between 72 to
96 months based on projected amounts and timing of future cash collections using the proprietary
models of the Company. Based upon current projections, cash collections applied to principal on
finance receivables as of March 31, 2011 are estimated to be as follows for the twelve months in
the periods ending (amounts in thousands):
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-top: 6pt; margin-left:15px; text-indent:-15px">March 31, 2012
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">234,860</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">March 31, 2013
</div></td>
<td> </td>
<td> </td>
<td align="right">246,877</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">March 31, 2014
</div></td>
<td> </td>
<td> </td>
<td align="right">214,753</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">March 31, 2015
</div></td>
<td> </td>
<td> </td>
<td align="right">133,718</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">March 31, 2016
</div></td>
<td> </td>
<td> </td>
<td align="right">34,849</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">March 31, 2017
</div></td>
<td> </td>
<td> </td>
<td align="right">1,935</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">866,992</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     During the three months ended March 31, 2011 and 2010, the Company purchased approximately
$1.49 billion and $1.89 billion, respectively, in face
value of finance receivables.
At March 31, 2011, the estimated remaining collections (“ERC”) on the receivables purchased in the
three months ended March 31, 2011 and 2010 were $211.2 million and $169.3 million, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Accretable yield represents the amount of income recognized on finance receivables the Company
can expect to generate over the remaining life of its existing portfolios based on estimated future
cash flows as of the balance sheet date. Additions represent the original expected accretable
yield to be earned by the Company based on its proprietary buying models. Reclassifications from
nonaccretable difference to accretable yield primarily result from the Company’s increase in its
estimate of future cash flows. Reclassifications to nonaccretable difference from accretable yield
result from the Company’s decrease in its estimates of future cash flows and allowance charges that
exceed the Company’s increase in its estimate of future cash flows. Changes in accretable yield
for the three months ended March 31, 2011 and 2010 were as follows (amounts in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Three Months Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Three Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>March 31, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>March 31, 2010</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at beginning of period
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">892,188</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">721,984</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Income recognized on finance receivables, net
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(95,974</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(67,951</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Additions
</div></td>
<td> </td>
<td> </td>
<td align="right">109,502</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">122,510</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Reclassifications from nonaccretable difference
</div></td>
<td> </td>
<td> </td>
<td align="right">20,562</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">17,102</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at end of period
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">926,278</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">793,645</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     ASC 310-30 requires that a valuation allowance be recorded for significant decreases in
expected cash flows or change in timing of cash flows which would otherwise require a reduction in
the stated yield on a pool of accounts. In any given period, the Company may be required to
record valuation allowances due to pools of receivables underperforming expectations. Factors that
may contribute to the recording of valuation allowances may include both internal as well as
external factors. External factors which may have an impact on the collectability, and
subsequently to the overall profitability of purchased pools of defaulted consumer receivables
would include: new laws or regulations relating to collections, new interpretations of existing
laws or regulations, and the overall condition of the economy. Internal factors which may have an
impact on the collectability, and subsequently the overall profitability of purchased pools of
defaulted consumer receivables would include: necessary revisions to initial and post-acquisition
scoring and modeling estimates, non-optimal operational activities (which relates to the collection
and movement of accounts on both the collection floor of the Company and external channels), as
well as decreases in productivity related to turnover and tenure of the Company’s collection staff.
The following is a summary of activity within the Company’s valuation allowance account, all of
which relates to loans acquired with deteriorated credit quality, for the three months ended March
31, 2011 and 2010 (amounts in thousands):
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10"><b>Three Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>March 31, 2011</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Purchased Bankruptcy</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Core Portfolio <sup style="font-size: 85%; vertical-align: text-top">(1)</sup></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Portfolio <sup style="font-size: 85%; vertical-align: text-top">(2)</sup></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Total</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Valuation allowance — finance receivables:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Beginnning balance
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">70,030</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">6,377</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">76,407</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Allowance charges
</div></td>
<td> </td>
<td> </td>
<td align="right">2,850</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,450</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,300</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Reversal of previous recorded allowance charges
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,050</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(210</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,260</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net allowance charge
</div></td>
<td> </td>
<td> </td>
<td align="right">1,800</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,240</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,040</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Ending balance
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">71,830</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">8,617</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">80,447</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Finance receivables, net:
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">428,091</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">438,901</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">866,992</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10"><b>Three Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>March
31, 2010</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Purchased Bankruptcy</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Core Portfolio <sup style="font-size: 85%; vertical-align: text-top">(1)</sup></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Portfolio <sup style="font-size: 85%; vertical-align: text-top">(2)</sup></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Total</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Valuation allowance — finance receivables:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Beginnning balance
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">47,580</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3,675</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">51,255</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Allowance charges
</div></td>
<td> </td>
<td> </td>
<td align="right">5,525</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,350</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,875</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Reversal of previous recorded allowance charges
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net allowance charge
</div></td>
<td> </td>
<td> </td>
<td align="right">5,525</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,345</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,870</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Ending balance
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">53,105</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5,020</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">58,125</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Finance receivables, net:
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">398,453</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">344,031</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">742,484</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96%"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(1)</td>
<td> </td>
<td>“Core” accounts or portfolios refer to accounts or portfolios that are
defaulted consumer receivables and are not in a bankrupt status upon purchase. These
accounts are aggregated separately from purchased bankruptcy accounts.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(2)</td>
<td> </td>
<td>“Purchased bankruptcy” accounts or portfolios refer to accounts or
portfolios that are in bankruptcy status when purchased, and as such, are purchased as a
pool of bankrupt accounts.</td>
</tr>
</table>
</div>
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