PRA Group Reports Fourth Quarter and Full Year 2018 Results

NORFOLK, Va., Feb. 28, 2019 /PRNewswire/ -- PRA Group (Nasdaq: PRAA), a global leader in acquiring and collecting nonperforming loans, today reported its financial results for the fourth quarter and full year of 2018.  Net income attributable to PRA Group, Inc. in the fourth quarter of 2018 was $14.9 million compared to $88.9 million in the fourth quarter of 2017.  Diluted earnings per share in the fourth quarter of 2018 were $0.33 compared to $1.96 in the fourth quarter of 2017.  For the year ended December 31, 2018, net income attributable to PRA Group, Inc. was $65.6 million, or $1.44 in diluted earnings per share, compared to $164.3 million, or $3.59 in diluted earnings per share, during the year ended December 31, 2017.  Financial performance in the fourth quarter and full year of 2017 was impacted by a net after-tax benefit of $73.2 million due to the Tax Cuts and Jobs Act. 

During the quarter, the Company completed a review of seller contracts in light of recent interpretations of the rules governing revenue recognition on portfolios that do not qualify for sale accounting.  As a result, the Company has determined that two contracts in Austria did not meet the recent interpretations, and the Company should have applied different revenue recognition methodology for portfolios acquired under these contracts.  The impact of this change is that the Company should have recognized an additional $5.5 million of revenue from 2016 to 2018.  Of the $5.5 million, $1.2 million should have been recognized during 2018.  These revenue increases were spread over a number of prior years and, although none were material to any individual year, the impact could have been material had the Company reflected the full change in its 2018 results.  The conclusion does not impact the economics of the transactions, only the revenue recognition methodology.  This press release includes reconciliations from previously reported results to results adjusted for the additional revenue for the three and twelve months ended December 31, 2017.  Additionally, all numbers presented herein reflect adjusted results.  

As a result of this analysis, the Company experienced unanticipated delays in completing the year end closing process.  The Company, and as a result, its auditors, have not fully completed the activities required to complete Form 10-K for the fiscal year ended December 31, 2018.  Therefore, the Company is not in a position to file its Form 10-K within the prescribed time period without unreasonable expense and effort. The Company expects to file its Form 10-K within the 15 day period specified by Rule 12b-25 of the Securities Exchange Act of 1934, as amended.

Fourth Quarter Highlights

  • Cash collections of $402.7 million, an increase of 7% compared to the fourth quarter of 2017. Cash collections on a currency adjusted basis increased 9% compared to the fourth quarter of 2017.
    • Americas Core cash collections increased 15%, or 16% on a currency adjusted basis.
      • U.S. legal cash collections increased 24%.
      • U.S. call center cash collections increased 12%.
    • Europe Core cash collections increased 6%, or 9% on a currency adjusted basis. 
  • Record quarterly portfolio investment, excluding acquisitions, of $490.9 million driven by Americas Core and Europe Core.
  • Record estimated remaining collections of $6.14 billion which increased $331.5 million from the third quarter of 2018. 
  • Income recognized on finance receivables of $231.0 million compared to $203.4 million in the fourth quarter of 2017.

Full-Year Highlights

  • Expanded North American revolving credit facility to provide significant additional capacity for investment in the United States.
  • Completed a strategic partnership with Banco Bradesco, enhancing the Company's position in Latin America's largest economy, creating additional investment opportunities and maintaining majority ownership of the revenue generating operation for PRA Group. The Company recognized a gain of $26.6 million on the sale of the majority stake in the servicing platform during the fourth quarter.
  • Record total cash collections of $1.63 billion, driven by record cash collections in Americas Core, Europe Core and Europe Insolvency.
  • Record portfolio investment in Americas Core of $657.1 million, increasing 23% compared to the previous record in 2017.

"The fourth quarter of 2018 culminated a year of exceptional portfolio investment and record cash collections for PRA Group.  During the fourth quarter, we invested nearly a half billion dollars, with substantial deployments in Americas Core and in European countries where we have extensive data and operational experience.  This increased estimated remaining collections to an all-time high of $6.14 billion," said Kevin Stevenson, president and chief executive officer of PRA Group, Inc.  "Total cash collections for the year set a record at $1.63 billion, fueled by growth in Americas Core and Europe Core.  U.S call centers delivered an increase of 16% compared to 2017 and we are seeing U.S. legal collections accelerate after the investment in the third and fourth quarters." 

Cash Collections, Revenues, and Net Allowance Charges

  • The following table presents cash collections by quarter and by source on an as reported and currency-adjusted basis:

Cash Collection Source


2018


2017

($ in thousands)


Q4

Q3

Q2

Q1


Q4

Americas-Core


$  233,937

$  231,253

$  233,752

$  246,237


$   204,245

Americas-Insolvency


48,000

48,518

56,063

55,280


59,103

Europe-Core


113,154

102,780

109,359

118,109


107,124

Europe-Insolvency


7,618

6,731

7,460

6,954


5,794

Total Cash Collections


$  402,709

$  389,282

$  406,634

$  426,580


$   376,266

























Cash Collection Source - 








Constant Currency Adjusted


2018





2017

($ in thousands)


Q4





Q4

Americas-Core


$  233,937





$   201,559

Americas-Insolvency


48,000





59,013

Europe-Core


113,154





103,442

Europe-Insolvency


7,618





5,615

Total Cash Collections


$  402,709





$   369,629









  • Cash collections in the quarter increased 7%, or 9% on a currency adjusted basis, compared to the fourth quarter of 2017. The increase was largely due to U.S. legal collections increasing 24% and U.S. call center collections increasing 12%. This was partially offset by a 14% decrease in Global Insolvency cash collections primarily due to muted portfolio investment in 2018. For the full year, total cash collections were a record $1.63 billion, an increase of 7% compared to the full year of 2017.
  • For the quarter, cash collections on fully amortized pools were $12.0 million and cash collections on nonaccrual pools were $4.1 million.
  • Income recognized on finance receivables increased 14% compared to the fourth quarter of 2017 due primarily to Americas Core portfolio investment during 2017 and 2018, Europe Core portfolio investment in 2017 and yield increases in Europe Core. For the full year of 2018, income recognized on finance receivables increased 12% compared to the full year of 2017.
  • Net allowance charges in the quarter were $21.4 million primarily due to allowances incurred in the 2013, 2014 and 2015 U.S. Core vintages.
  • Fee income and other income in the quarter was $5.7 million.

Expenses

  • Operating expenses in the quarter increased $32.7 million compared to the fourth quarter of 2017 largely due to increased legal collection expenses, as the Company had more accounts qualifying for the legal collection channel and increases in compensation and employee services primarily due to expansion in U.S. collection staff. For the twelve months ended December 31, 2018, operating expenses increased $87.0 million compared to the twelve months ended December 31, 2017.
  • During the quarter, the Company recorded $3.0 million in noncash interest expense, $2.7 million in amortization of debt issuance costs, and $0.9 million in amortization of intangible assets. The Company also recorded a $0.7 million loss on the change in fair value on interest rate swap agreements.
  • The effective tax rate for the full year of 2018 was 15.4%.

Portfolio Acquisitions

  • The Company invested $490.9 million in finance receivables in the fourth quarter.
  • The Company had in place forward flow commitments as of the end of 2018 for the purchase of nonperforming loans with a maximum purchase price of $303.7 million.

Portfolio Purchase Source

2018


2017

($ in thousands)

Q4

Q3

Q2

Q1


Q4

Americas-Core

$    172,511

$    170,426

$    182,768

$    131,427


$ 160,278

Americas-Insolvency

52,871

17,151

16,651

13,436


44,195

Europe-Core

231,810

45,754

19,403

18,000


152,417

Europe-Insolvency

33,661

4,159

2,577

5,392


17,698

Total Portfolio Purchasing

$    490,853

$    237,490

$    221,399

$    168,255


$ 374,588


Conference Call Information
PRA Group, Inc. will hold a conference call today at 5:00 p.m. ET to discuss results with institutional investors and stock analysts.  To listen to a webcast of the call and view the accompanying slides, visit https://ir.pragroup.com/events-and-presentations. To listen by phone, call 877-870-4263 in the U.S. or 412-317-0790 outside the U.S. and ask for the PRA Group conference call.  To listen to a replay of the call until March 07, 2019, call 877-344-7529 in the U.S. or 412-317-0088 outside the U.S. and use access code 10125880.                         

About PRA Group, Inc.
As a global leader in acquiring and collecting nonperforming loans, PRA Group, Inc. returns capital to banks and other creditors to help expand financial services for consumers in the Americas and Europe. With almost 5,400 employees worldwide, PRA Group, Inc. companies collaborate with customers to help them resolve their debt. For more information, please visit www.pragroup.com.

About Forward-Looking Statements
Statements made herein which are not historical in nature, including PRA Group, Inc.'s or its management's intentions, hopes, beliefs, expectations, representations, projections, plans or predictions of the future, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

The forward-looking statements in this press release are based upon management's current beliefs, estimates, assumptions and expectations of PRA Group, Inc.'s future operations and financial and economic performance, taking into account currently available information. These statements are not statements of historical fact or guarantees of future performance, and there can be no assurance that anticipated events will transpire or that our expectations will prove to be correct. Forward-looking statements involve risks and uncertainties, some of which are not currently known to PRA Group, Inc.  Actual events or results may differ materially from those expressed or implied in any such forward-looking statements as a result of various factors, including risk factors and other risks that are described from time to time in PRA Group, Inc.'s filings with the Securities and Exchange Commission including but not limited to PRA Group, Inc.'s annual reports on Form 10-K, its quarterly reports on Form 10-Q and its current reports on Form 8-K, which are available through PRA Group, Inc.'s website and contain a detailed discussion of PRA Group, Inc.'s business, including risks and uncertainties that may affect future results.

Due to such uncertainties and risks, you are cautioned not to place undue reliance on such forward-looking statements, which speak only as of today. Information in this press release may be superseded by recent information or statements, which may be disclosed in later press releases, subsequent filings with the Securities and Exchange Commission or otherwise. Except as required by law, PRA Group, Inc. assumes no obligation to publicly update or revise its forward-looking statements contained herein to reflect any change in PRA Group, Inc.'s expectations with regard thereto or to reflect any change in events, conditions or circumstances on which any such forward-looking statements are based, in whole or in part.

PRA Group, Inc.

Unaudited Consolidated Income Statements

(in thousands, except per share amounts)










Three Months Ended


Twelve Months Ended


December 31,


December 31,


2018


2017


2018


2017









Revenues:








Income recognized on finance receivables

$ 231,029


$ 203,397


$ 891,899


$    795,435

Fee income

4,686


6,043


14,916


24,916

Other revenue

1,027


1,454


1,441


7,855

Total revenues

236,742


210,894


908,256


828,206









Net allowance charges

(21,381)


(2,486)


(33,425)


(11,898)









Operating expenses:








Compensation and employee services

79,123


69,253


319,400


273,033

Legal collection fees

11,501


10,061


42,941


43,351

Legal collection costs

33,281


18,781


104,988


76,047

Agency fees

9,088


7,877


33,854


35,530

Outside fees and services

17,068


15,815


61,492


62,792

Communication

10,645


8,028


43,224


33,132

Rent and occupancy

4,319


3,985


16,906


14,823

Depreciation and amortization

5,092


4,666


19,322


19,763

Other operating expenses

13,030


12,032


47,444


44,103

Total operating expenses

183,147


150,498


689,571


602,574

Income from operations

32,214


57,910


185,260


213,734









Other income and (expense):








Gain on sale of subsidiaries

26,575


-


26,575


48,474

Interest expense, net

(33,549)


(28,379)


(121,078)


(98,041)

Foreign exchange (loss)/gain

(4,553)


317


(944)


(1,104)

Other

(381)


(2,790)


(316)


(2,790)

Income before income taxes

20,306


27,058


89,497


160,273









Income tax expense/(benefit)

1,980


(63,709)


13,763


(10,852)

Net income

18,326


90,767


75,734


171,125

Adjustment for net income attributable to noncontrolling interests

3,384


1,847


10,171


6,810

Net income attributable to PRA Group, Inc.

$   14,942


$   88,920


$   65,563


$    164,315









Net income per common share attributable to PRA Group, Inc.:








Basic

$      0.33


$      1.97


$      1.45


$         3.60

Diluted

$      0.33


$      1.96


$      1.44


$         3.59









Weighted average number of shares outstanding:








Basic

45,304


45,170


45,280


45,671

Diluted

45,394


45,318


45,413


45,823

 

 

PRA Group, Inc.

Consolidated Balance Sheets

December 31, 2018 and December 31, 2017

(Amounts in thousands)


(unaudited)




December 31,


December 31,

ASSETS

2018


2017





Cash and cash equivalents

$                 98,695


$              120,516

Investments

45,173


78,290

Finance receivables, net

3,084,777


2,776,199

Other receivables, net

46,157


15,770

Income taxes receivable

16,809


21,686

Net deferred tax asset

61,453


56,459

Property and equipment, net

54,136


49,311

Goodwill

464,116


526,513

Intangible assets, net

5,522


23,572

Other assets

32,721


32,656





Total assets

$            3,909,559


$            3,700,972





LIABILITIES AND EQUITY








Liabilities:




Accounts payable

$                   6,110


$                   4,992

Accrued expenses

79,396


85,993

Income taxes payable

15,080


10,771

Net deferred tax liability

114,979


171,185

Interest-bearing deposits

82,666


98,580

Borrowings

2,473,656


2,170,182

Other liabilities

7,370


9,018





Total liabilities

2,779,257


2,550,721





Redeemable noncontrolling interest

6,333


9,534





Equity:




Preferred stock, par value $0.01, authorized shares, 2,000,




   issued and outstanding shares, 0

-


-

Common stock, par value $0.01, 100,000 shares authorized, 45,304 shares




   issued and outstanding at December 31, 2018; 100,000 shares authorized,




   45,189 shares issued and outstanding at December 31, 2017

453


452

Additional paid-in capital

60,303


53,870

Retained earnings

1,276,473


1,214,840

Accumulated other comprehensive loss

(242,109)


(178,607)

Total stockholders' equity - PRA Group, Inc.

1,095,120


1,090,555

Noncontrolling interests

28,849


50,162

Total equity

1,123,969


1,140,717

Total liabilities and equity

$            3,909,559


$            3,700,972

 

 

Select Expenses (Income)

(in thousands)

Three Months Ended


December 31,
2018

September 30,
2018

June 30, 2018

March 31,
2018

December 31,
2017

September 30,
2017

June 30, 2017

March 31,
2017

Acquisition/divestiture-related expenses


-

4

10

-

-

-

2,100

Legal costs not associated with normal operations

647

95

231

92

160

218

2,615

1,024

Noncash interest expense - amortization of debt
discount

2,986

2,958

2,904

2,877

2,823

2,796

1,809

1,155

Noncash interest expense - amortization of debt
issuance costs

2,723

2,524

2,532

2,553

2,501

2,505

2,635

1,928

Change in fair value on Interest rate swap
agreements

673

(504)

972

(3,673)

420

(1,025)

(1,578)

158

Amortization of intangibles

907

994

1,133

1,222

1,016

1,037

869

1,410

Share-based compensation expense

1,600

2,361

2,146

2,415

2,415

2,218

1,846

2,199

 

 

Purchase Price Mutiples

as of December 31, 2018

Amounts in thousands









Purchase Period

Purchase Price (1)(2)

Net Finance
Receivables
Balance(3)

ERC-Historical
Period
Exchange
Rates (4)

Total Estimated
Collections (5)

ERC-Current
Period
Exchange
Rates (6)

Current
Estimated
Purchase Price
Multiple

Original
Estimated
Purchase Price
Multiple (7)

Americas-Core








1996-2008

$                804,883

$             9,108

$           35,385

$      2,423,212

$           35,385

301%

236%

2009

125,153

653

22,518

459,318

22,518

367%

252%

2010

148,199

4,644

37,181

534,994

37,181

361%

247%

2011

209,607

10,434

64,203

738,173

64,203

352%

245%

2012

254,142

19,643

79,446

681,221

79,446

268%

226%

2013

391,031

50,555

143,328

942,934

143,328

241%

211%

2014

405,459

81,050

210,315

930,676

206,685

230%

204%

2015

444,063

134,024

310,233

965,382

310,059

217%

205%

2016

454,552

196,236

458,039

1,041,655

452,225

229%

201%

2017

534,410

371,366

724,197

1,112,042

720,535

208%

193%

2018

658,490

630,508

1,204,192

1,327,453

1,201,445

202%

202%

Subtotal

4,429,989

1,508,221

3,289,037

11,157,060

3,273,010



Americas-Insolvency







2004-2008

241,465

-

658

365,653

658

151%

155%

2009

155,988

-

1,232

470,626

1,232

302%

214%

2010

208,942

-

2,191

547,219

2,191

262%

184%

2011

180,434

-

434

368,821

434

204%

155%

2012

251,419

-

356

389,910

356

155%

136%

2013

227,904

-

5,820

355,738

5,820

156%

133%

2014

148,712

7,493

16,938

215,568

16,896

145%

124%

2015

63,184

16,234

22,790

83,989

22,790

133%

125%

2016

92,285

30,580

39,669

114,088

39,516

124%

123%

2017

275,293

155,609

200,144

346,550

200,144

126%

125%

2018

99,386

95,194

119,444

126,142

119,444

127%

127%

Subtotal

1,945,012

305,110

409,676

3,384,304

409,481



Total Americas

6,375,001

1,813,331

3,698,713

14,541,364

3,682,491



Europe-Core








2012

20,424

-

1,387

39,210

1,086

192%

187%

2013

20,347

100

831

24,227

639

119%

119%

2014

796,899

240,603

921,669

2,173,128

791,947

273%

208%

2015

420,956

189,588

421,252

751,455

377,175

179%

160%

2016

348,436

225,044

395,574

582,324

394,089

167%

167%

2017

247,757

188,893

284,707

357,298

276,223

144%

144%

2018 (8)

346,933

325,907

488,989

513,635

484,567

148%

148%

Subtotal

2,201,752

1,170,135

2,514,409

4,441,277

2,325,726



Europe-Insolvency







2014

10,876

985

2,656

18,010

2,389

166%

129%

2015

19,396

5,059

10,245

29,042

8,805

150%

139%

2016

42,190

19,002

29,476

61,117

28,993

145%

130%

2017

38,830

31,688

41,590

50,661

40,206

130%

128%

2018

45,636

44,577

55,360

56,029

54,569

123%

123%

Subtotal

156,928

101,311

139,327

214,859

134,962



Total Europe

2,358,680

1,271,446

2,653,736

4,656,136

2,460,688



Total PRA Group

$          8,733,681

$   3,084,777

$   6,352,449

$ 19,197,500

$   6,143,179




(1) The amount reflected in the Purchase Price also includes the acquisition date finance receivables portfolios that were acquired through our various business acquisitions.

(2) For our international amounts, Purchase Price is presented at the exchange rate at the end of the quarter in which the pool was purchased. In addition, any purchase price adjustments that occur throughout the life of the pool are presented at the period-end exchange rate for the respective quarter of purchase.

(3) For our international amounts, Net Finance Receivables are presented at the December 31, 2018 exchange rate.

(4) For our international amounts, Estimated Remaining Collections ("ERC")-Historical Period Exchange Rates is presented at the period-end exchange rate for the respective quarter of purchase.

(5) For our international amounts, Total Estimated Collections is presented at the period-end exchange rate for the respective quarter of purchase.

(6) For our international amounts, ERC-Current Period Exchange Rates is presented at the December 30, 2018 exchange rate.

(7) The Original Estimated Purchase Price Multiple represents the purchase price multiple at the end of the year of acquisition.

(8) The Europe-Core purchases include a $34.9 million finance receivables portfolio addition in the third quarter of 2018 relating to the consolidation of a Polish investment fund.

 

 

Portfolio Financial Information

Year-to-date as of December 31, 2018

Amounts in thousands









Purchase Period

Purchase
Price (1)(2)

Cash
Collections(3)

Gross
Revenue(3)

Amortization (3)

Net Allowance
Charges/
(Reversals)(3)

Net Revenue (3)(4)

Net Finance
Receivables as of
December 31, 2018 (5)

Americas-Core








1996-2008

$      804,883

$            15,092

$         10,645

$              4,447

$            (1,970)

$             12,615

$                        9,108

2009

125,153

8,180

7,899

281

125

7,774

653

2010

148,199

11,140

9,654

1,486

(2,625)

12,279

4,644

2011

209,607

21,622

18,912

2,710

25

18,887

10,434

2012

254,142

27,797

18,251

9,546

(4,005)

22,256

19,643

2013

391,031

56,449

41,274

15,175

11,480

29,794

50,555

2014

405,459

82,244

58,426

23,818

22,395

36,031

81,050

2015

444,063

126,605

74,083

52,522

4,632

69,451

134,024

2016

454,552

194,605

110,399

84,206

631

109,768

196,236

2017

534,410

278,733

155,298

123,435

318

154,980

371,366

2018

658,490

122,712

96,202

26,510

-

96,202

630,508

Subtotal

4,429,989

945,179

601,043

344,136

31,006

570,037

1,508,221

Americas-Insolvency







2004-2008

241,465

356

356

-

-

356

-

2009

155,988

747

747

-

-

747

-

2010

208,942

1,352

1,352

-

-

1,352

-

2011

180,434

1,584

1,584

-

-

1,584

-

2012

251,419

4,284

4,284

-

-

4,284

-

2013

227,904

21,948

14,364

7,584

-

14,364

-

2014

148,712

28,759

9,433

19,326

-

9,433

7,493

2015

63,184

19,769

3,793

15,976

-

3,793

16,234

2016

92,285

25,047

4,209

20,838

435

3,774

30,580

2017

275,293

97,315

17,518

79,797

-

17,518

155,609

2018

99,386

6,700

2,509

4,191

-

2,509

95,194

Subtotal

1,945,012

207,861

60,149

147,712

435

59,714

305,110

Total Americas

6,375,001

1,153,040

661,192

491,848

31,441

629,751

1,813,331

Europe-Core








2012

20,424

1,996

2,000

(4)

-

2,000

-

2013

20,347

1,331

894

437

-

894

100

2014

796,899

206,255

131,812

74,443

(1,393)

133,205

240,603

2015

420,956

80,858

34,556

46,302

(3,258)

37,814

189,588

2016

348,436

72,603

28,839

43,764

6,035

22,804

225,044

2017

247,757

56,033

15,027

41,006

599

14,428

188,893

2018 (6)

346,933

24,326

6,585

17,741

-

6,585

325,907

Subtotal

2,201,752

443,402

219,713

223,689

1,983

217,730

1,170,135

Europe-Insolvency







2014

10,876

2,620

1,496

1,124

-

1,496

985

2015

19,396

4,783

1,891

2,892

(63)

1,954

5,059

2016

42,190

12,856

4,941

7,915

64

4,877

19,002

2017

38,830

7,862

2,411

5,451

-

2,411

31,688

2018

45,636

642

255

387

-

255

44,577

Subtotal

156,928

28,763

10,994

17,769

1

10,993

101,311

Total Europe

2,358,680

472,165

230,707

241,458

1,984

228,723

1,271,446

Total PRA Group

$   8,733,681

$       1,625,205

$       891,899

$          733,306

$            33,425

$           858,474

$                 3,084,777


(1) The amount reflected in the Purchase Price also includes the acquisition date finance receivables portfolios that were acquired through our various business acquisitions.

(2) For our international amounts, Purchase Price is presented at the exchange rate at the end of the quarter in which the pool was purchased. In addition, any purchase price adjustments that occur throughout the life of the pool are presented at the period-end exchange rate for the respective quarter of purchase.

(3) For our international amounts, amounts are presented using the average exchange rates during the current reporting period.

(4) Net Revenue refers to income recognized on finance receivables, net of allowance charges/(reversals).

(5) For our international amounts, Net Finance Receivables are presented at the December 31, 2018 exchange rate.

(6) The Europe-Core purchases include a $34.9 million finance receivables portfolio addition in the third quarter of 2018 relating to the consolidation of a Polish investment fund.

 

 

Cash Collections by Year, By Year of Purchase(1)

as of December 31, 2018

Amounts in thousands




Purchase Period

Purchase Price
(2)(3)

Cash Collections

1996-2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Total

Americas-Core














1996-2008

$         804,883

$      1,366,034

$      240,929

$      200,052

$      169,205

$      132,255

$         95,262

$         66,274

$         46,277

$         29,734

$         19,458

$         15,092

$      2,380,572

2009

125,153

40,703

95,627

84,339

69,385

51,121

35,555

24,896

16,000

10,994

8,180

436,800

2010

148,199

47,076

113,554

109,873

82,014

55,946

38,110

24,515

15,587

11,140

497,815

2011

209,607

61,971

174,461

152,908

108,513

73,793

48,711

31,991

21,622

673,970

2012

254,142

56,901

173,589

146,198

97,267

59,981

40,042

27,797

601,775

2013

391,031

101,614

247,849

194,026

120,789

78,880

56,449

799,607

2014

405,459

92,660

253,448

170,311

114,219

82,244

712,882

2015

444,063

116,951

228,432

185,898

126,605

657,886

2016

454,552

138,723

256,531

194,605

589,859

2017

534,410

107,327

278,733

386,060

2018

658,490

122,712

122,712

Subtotal

4,429,989

1,366,034

281,632

342,755

429,069

542,875

656,508

752,995

844,768

837,196

860,927

945,179

7,859,938

Americas-Insolvency













2004-2008

241,465

117,972

69,736

65,321

53,924

37,530

13,534

3,035

1,836

1,098

653

356

364,995

2009

155,988

16,635

81,780

102,780

107,888

95,725

53,945

5,781

2,531

1,581

747

469,393

2010

208,942

39,486

104,499

125,020

121,717

101,873

43,649

5,008

2,425

1,352

545,029

2011

180,434

15,218

66,379

82,752

85,816

76,915

35,996

3,726

1,584

368,386

2012

251,419

17,388

103,610

94,141

80,079

60,715

29,337

4,284

389,554

2013

227,904

52,528

82,596

81,679

63,386

47,781

21,948

349,918

2014

148,712

37,045

50,880

44,313

37,350

28,759

198,347

2015

63,184

3,395

17,892

20,143

19,769

61,199

2016

92,285

18,869

30,426

25,047

74,342

2017

275,293

49,093

97,315

146,408

2018

99,386

6,700

6,700

Subtotal

1,945,012

117,972

86,371

186,587

276,421

354,205

469,866

458,451

344,214

249,808

222,515

207,861

2,974,271

Total Americas

6,375,001

1,484,006

368,003

529,342

705,490

897,080

1,126,374

1,211,446

1,188,982

1,087,004

1,083,442

1,153,040

10,834,209

Europe-Core














2012

20,424

11,604

8,995

5,641

3,175

2,198

2,038

1,996

35,647

2013

20,347

7,068

8,540

2,347

1,326

1,239

1,331

21,851

2014

796,899

153,180

291,980

246,365

220,765

206,255

1,118,545

2015

420,956

45,760

100,263

86,156

80,858

313,037

2016

348,436

40,368

78,915

72,603

191,886

2017

247,757

17,894

56,033

73,927

2018 (4)

346,933

24,326

24,326

Subtotal

2,201,752

-

-

-

-

11,604

16,063

167,361

343,262

390,520

407,007

443,402

1,779,219

Europe-Insolvency













2014

10,876

5

4,297

3,921

3,207

2,620

14,050

2015

19,396

2,954

4,366

5,013

4,783

17,116

2016

42,190

6,175

12,703

12,856

31,734

2017

38,830

1,233

7,862

9,095

2018

45,636

642

642

Subtotal

156,928

-

-

-

-

-

-

5

7,251

14,462

22,156

28,763

72,637

Total Europe

2,358,680

-

-

-

-

11,604

16,063

167,366

350,513

404,982

429,163

472,165

1,851,856

Total PRA Group

$   8,733,681

$   1,484,006

$   368,003

$   529,342

$   705,490

$   908,684

$ 1,142,437

$ 1,378,812

$ 1,539,495

$ 1,491,986

$ 1,512,605

$ 1,625,205

$ 12,686,065


(1) For our international amounts, Cash Collections are presented using the average exchange rates during the cash collection period.

(2) The amount reflected in the Purchase Price also includes the acquisition date finance receivables portfolios that were acquired through our various business acquisitions.

(3) For our international amounts, Purchase Price is presented at the exchange rate at the end of the quarter in which the portfolio was purchased. In addition, any purchase price adjustments that occur throughout the life of the pool are presented at the period end exchange rate for the respective quarter of purchase.

(4) The Europe-Core purchases include a $34.9 million finance receivables portfolio addition in the third quarter of 2018 relating to the consolidation of a Polish investment fund.

 

 

PRA Group, Inc.

Unaudited Consolidated Income Statements

(in thousands, except per share amounts)



Three Months Ended December 31, 2017


Twelve Months Ended December 31, 2017


As Previously
Reported






As Previously
Reported









As Corrected





As Corrected



Correction




Correction


Revenues:












Income recognized on finance receivables

$        200,663


$            2,734


$        203,397


$        792,701


$            2,734


$        795,435

Fee income

6,043


-


6,043


24,916


-


24,916

Other revenue

1,454


-


1,454


7,855


-


7,855

Total revenues

208,160


2,734


210,894


825,472


2,734


828,206













Net allowance charges

(2,486)


-


(2,486)


(11,898)


-


(11,898)













Operating expenses:












Compensation and employee services

69,253


-


69,253


273,033


-


273,033

Legal collection fees

10,061


-


10,061


43,351


-


43,351

Legal collection costs

18,781


-


18,781


76,047


-


76,047

Agency fees

7,877


-


7,877


35,530


-


35,530

Outside fees and services

15,815


-


15,815


62,792


-


62,792

Communication

8,028


-


8,028


33,132


-


33,132

Rent and occupancy

3,985


-


3,985


14,823


-


14,823

Depreciation and amortization

4,666


-


4,666


19,763


-


19,763

Other operating expenses

12,032


-


12,032


44,103


-


44,103

Total operating expenses

150,498


-


150,498


602,574


-


602,574

Income from operations

55,176


2,734


57,910


211,000


2,734


213,734













Other income and (expense):












Gain on sale of subsidiaries

-


-


-


48,474


-


48,474

Interest expense, net

(28,379)


-


(28,379)


(98,041)


-


(98,041)

Foreign exchange gain/(loss)

317


-


317


(1,104)


-


(1,104)

Other

(2,790)


-


(2,790)


(2,790)


-


(2,790)

Income before income taxes

24,324


2,734


27,058


157,539


2,734


160,273













Income tax (benefit)/expense

(64,393)


684


(63,709)


(11,536)


684


(10,852)

Net income

88,717


2,050


90,767


169,075


2,050


171,125

Adjustment for net income attributable to noncontrolling interests

1,847


-


1,847


6,810


-


6,810

Net income attributable to PRA Group, Inc.

$          86,870


$            2,050


$          88,920


$        162,265


$            2,050


$        164,315













Net income per common share attributable to PRA Group, Inc.:












Basic

$             1.92


$             0.05


$             1.97


$             3.55


$             0.04


$             3.60

Diluted

$             1.92


$             0.05


$             1.96


$             3.54


$             0.04


$             3.59













Weighted average number of shares outstanding:












Basic

45,170


45,170


45,170


45,671


45,671


45,671

Diluted

45,318


45,318


45,318


45,823


45,823


45,823

Investor Contact:
Darby Schoenfeld, CPA
Vice President, Investor Relations
(757) 431-7913
IR@PRAGroup.com

News Media Contact:
Elizabeth Kersey
Vice President, Communications and Public Policy
(757) 431-3398
Elizabeth.Kersey@PRAGroup.com

SOURCE PRA Group