PRA Group Reports Fourth Quarter 2020 Results

NORFOLK, Va., Feb. 25, 2021 /PRNewswire/ -- PRA Group, Inc. (Nasdaq: PRAA), a global leader in acquiring and collecting nonperforming loans, today reported its financial results for the fourth quarter and full year of 2020.  Net income attributable to PRA Group, Inc. increased $2.5 million, or 9%, to $29.8 million compared to the fourth quarter of 2019. Diluted earnings per share were $0.65 compared to $0.60 in the fourth quarter of 2019.  For the year ended December 31, 2020, net income attributable to PRA Group, Inc. increased $63.2 million, or 73%, to $149.3 million, or $3.26 per diluted share, compared to the year ended December 31, 2019.   

Fourth Quarter Highlights (compared to the fourth quarter of 2019)

  • Total cash collections increased 6% to $481.9 million on a reported basis and a constant currency adjusted basis.
  • Total revenues increased 2% to $273.9 million.
  • Income from operations increased 26% to $89.2 million.
  • Cash efficiency ratio1 of 61.9% during the quarter compared to 59.7% in the fourth quarter of 2019.
  • Net income attributable to PRA Group, Inc. increased 9% to $29.8 million.
  • Diluted earnings per share increased 8% to $0.65.
  • Debt to Adjusted EBITDA2 for the last 12 months decreased to 1.99x from 2.53x at December 31, 2019.
  • Total portfolio purchases of $289.8 million.
  • Estimated Remaining Collections (ERC) of $6.5 billion.

Full Year 2020 Highlights (compared to the full year of 2019)

  • Record total cash collections which increased 9% to $2.0 billion.
  • Record total revenues which increased 5% to $1.1 billion.
  • Record income from operations which increased 41% to $349.7 million.
  • Record cash efficiency ratio1 of 64.5%.

"Cash collections grew in the quarter driven primarily by increases in nonlegal collections in the U.S. and by Core and Insolvency in Europe.  In the U.S., we continue to see customers choosing to voluntarily resolve their debts through the call centers and digital platforms.  In Europe, cash collections were driven by record portfolio purchases in 2019, as well as strong investment levels in 2020 at increased underwritten net returns," said Kevin Stevenson, president and chief executive officer.  "Looking ahead, we entered 2021 with a similar base of maximum forward flow commitments as 2020, but we expect they will deliver more actual investment volume.  We believe that the pipeline for 2021 is strong, particularly in Europe, and we remain optimistic about supply globally."      

  1. Calculated by dividing cash receipts less operating expenses by cash receipts.
  2. A reconciliation of this non-GAAP financial measure to the most directly comparable GAAP measure can be found at the end of this press release.

Cash Collections and Revenues
The following table presents cash collections by quarter and by source on an as reported and constant currency adjusted basis:








Cash Collection Source

2020


2019

($ in thousands)

Q4

Q3

Q2

Q1


Q4

Americas Core

$   286,524

$   336,322

$   343,269

$   305,780


$          276,639

Americas Insolvency

36,048

37,344

38,685

43,210


40,801

Europe Core

141,471

131,702

115,145

131,340


126,649

Europe Insolvency

17,830

13,971

12,841

14,243


12,520

Total Cash Collections

$   481,873

$   519,339

$   509,940

$   494,573


$          456,609






















Cash Collection Source







Constant Currency Adjusted

2020





2019

($ in thousands)

Q4





Q4

Americas Core

$   286,524





$          269,231

Americas Insolvency

36,048





40,808

Europe Core

141,471





132,291

Europe Insolvency

17,830





12,960

Total Cash Collections

$   481,873





$          455,290

  

  • Cash collections in the quarter increased $25.3 million compared to the fourth quarter of 2019. The increase was primarily due to a 22% increase in U.S. call center and other cash collections, a 12% increase in Europe Core cash collections and a 42% increase in Europe Insolvency cash collections. This increase was partially offset by a decrease in U.S. legal and Americas Insolvency cash collections. While cash collections decreased in Other Americas, this was primarily driven by foreign exchange rates. For the full year, cash collections increased $164.5 million compared to the full year of 2019.
  • Portfolio income was $233.5 million compared to $262.8 million in income recognized on finance receivables in the fourth quarter of 2019. For the full year, portfolio income was $984.0 million compared to $998.4 million in income recognized on finance receivables for the same period in 2019.
  • Changes in expected recoveries were a net positive of $36.9 million. This amount reflects $66.3 million in recoveries in excess of forecast from overperformance during the quarter, partially offset by a negative $29.4 million adjustment for changes in expected future recoveries. The Company has assumed that a portion of the current quarter overperformance is acceleration of future collections and made cash forecast adjustments deemed appropriate given the current environment.

Expenses

  • Operating expenses in the quarter decreased $1.1 million compared to the fourth quarter of 2019. The decrease was primarily driven by a reduction in legal collection costs mainly as a result of a shift in collections from the legal channel to the call centers and digital platforms. This decrease was partially offset by an increase in outside fees and services which was driven by a number of factors, none of which was individually material. For the full year, operating expenses decreased $29.7 million compared to the same period in 2019.
  • Interest expense, net decreased $0.7 million compared to the fourth quarter of 2019 primarily due to lower average interest rates. For the full year, interest expense, net was almost flat to the same period in 2019.
  • The effective tax rate for the full year was 19.7%.

Portfolio Acquisitions

  • The Company purchased $289.8 million in finance receivables in the fourth quarter of 2020.
  • At the end of the fourth quarter, the Company had in place forward flow commitments of up to $501.9 million with $324.1 million in the Americas and $177.8 million in Europe.

  








Portfolio Acquisition Source

2020


2019

($ in thousands)

Q4

Q3

Q2

Q1


Q4

Americas Core

$       67,460

$       84,139

$     110,474

$     172,697


$     118,153

Americas Insolvency

12,504

14,328

14,527

20,772


22,650

Europe Core

137,647

74,930

34,247

60,990


218,919

Europe Insolvency

72,171

4,203

5,251

18,778


42,613

Total Portfolio Acquisitions

$     289,782

$     177,600

$     164,499

$     273,237


$     402,335















 

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 844-835-9982 in the U.S. or 412-317-5267 outside the U.S. and ask for the PRA Group conference call.  To listen to a replay of the call until Mar. 4, 2021, call 877-344-7529 in the U.S. or 412-317-0088 outside the U.S. and use access code 10148612.                         

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 thousands of 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 that 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 more 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

(Amounts in thousands, except per share amounts)






















Three Months Ended


Twelve Months Ended








December 31,


December 31,








2020


2019


2020


2019















Revenues:










Portfolio income

$  233,480


$              -


$    984,036


$                 -


Changes in expected recoveries

36,909


-


69,297


-


Income recognized on finance receivables

-


262,835


-


998,361


Fee income

2,922


4,297


9,748


15,769


Other revenue

545


2,001


2,333


2,951



Total revenues

273,856


269,133


1,065,414


1,017,081















Net allowance charges

-


(12,598)


-


(24,025)















Operating expenses:









Compensation and employee services

77,533


75,671


295,150


310,441


Legal collection fees

11,783


13,822


53,758


55,261


Legal collection costs

21,638


34,411


101,635


134,156


Agency fees

17,799


15,979


56,418


55,812


Outside fees and services

23,291


15,239


84,087


63,513


Communication

9,099


9,722


40,801


44,057


Rent and occupancy

4,558


4,586


17,973


17,854


Depreciation and amortization

5,971


4,123


18,465


17,464


Other operating expenses

12,969


12,198


47,426


46,811



Total operating expenses

184,641


185,751


715,713


745,369



Income from operations

89,215


70,784


349,701


247,687















Other income and (expense):









Interest expense, net

(35,393)


(36,046)


(141,712)


(141,918)


Foreign exchange (loss)/gain

(1,022)


595


2,005


11,954


Other



318


(241)


(1,049)


(364)



Income before income taxes

53,118


35,092


208,945


117,359

















Income tax expense

16,469


4,073


41,203


19,680



Net income

36,649


31,019


167,742


97,679




Adjustment for net income attributable to noncontrolling interests

6,851


3,678


18,403


11,521



Net income attributable to PRA Group, Inc.

$    29,798


$    27,341


$    149,339


$       86,158















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









Basic



$       0.65


$       0.60


$         3.28


$          1.90


Diluted



$       0.65


$       0.60


$         3.26


$          1.89















Weighted average number of shares outstanding:









Basic



45,583


45,413


45,540


45,387


Diluted



45,973


45,748


45,860


45,577

 

PRA Group, Inc.

Consolidated Balance Sheets

(Amounts in thousands, except per share amounts)









(unaudited)










December 31,

December 31,

ASSETS

2020


2019











Cash and cash equivalents

$                 108,613


$                 119,774

Restricted cash

12,434


4,033

Investments

55,759


56,176

Finance receivables, net

3,514,788


3,514,165

Other receivables, net

13,194


10,606

Income taxes receivable

21,928


17,918

Deferred tax assets, net

83,205


63,225

Right-of-use assets

52,951


68,972

Property and equipment, net

58,356


56,501

Goodwill

492,989


480,794

Other assets

38,844


31,727





Total assets

$              4,453,061


$              4,423,891





LIABILITIES AND EQUITY








Liabilities:





Accounts payable

$                     5,294


$                     4,258


Accrued expenses

97,320


88,925


Income taxes payable

29,692


4,046


Deferred tax liabilities, net

40,867


85,390


Lease liabilities

57,348


73,377


Interest-bearing deposits

132,739


106,246


Borrowings

2,661,289


2,808,425


Other liabilities

54,986


26,211











Total liabilities

3,079,535


3,196,878











Equity:









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






     no shares issued and outstanding shares

-


-



Common stock, $0.01 par value, 100,000 shares authorized, 45,585 shares






     issued and outstanding at December 31, 2020; 100,000 shares authorized,






     45,416 shares issued and outstanding at December 31, 2019

456


454



Additional paid-in capital

75,282


67,321



Retained earnings

1,511,970


1,362,631



Accumulated other comprehensive loss

(245,791)


(261,018)




Total stockholders' equity - PRA Group, Inc.

1,341,917


1,169,388





Noncontrolling interests

31,609


57,625





Total equity

1,373,526


1,227,013






Total liabilities and equity

$              4,453,061


$              4,423,891











 

Select Expenses (Income)









(in thousands, pre-tax)

Three Months Ended


December 31,
2020

September 30,
2020

June 30,
2020

March 31,
2020

December 31,
2019

September 30,
2019

June 30,
2019

March 31,
2019

Acquisition/divestiture-related expenses

-

-

-

-

-

-

227

223

Legal costs not associated with normal operations

-

-

-

-

-

-

-

-

Noncash interest expense - amortization of debt discount

1,959

2,388

3,247

3,217

3,157

3,128

3,071

3,042

Noncash interest expense - amortization of debt
issuance costs

2,393

2,476

2,743

2,640

2,649

2,649

2,655

2,636

Change in fair value on derivatives

3,875

3,701

3,284

2,039

1,247

1,126

1,645

349

Amortization of intangibles

1,792

360

351

349

407

400

418

347

Share-based compensation expense

5,370

3,097

3,063

2,857

2,809

2,974

2,620

2,314










 

Purchase Price Multiples

as of December 31, 2020

Amounts in thousands







Purchase Period

Purchase Price (1)(2)

Total Estimated
Collections (3)

Estimated
Remaining
Collections (4)

Current Estimated
Purchase Price
Multiple

Original
Estimated
Purchase Price
Multiple (5)

Americas Core






1996-2010

$             1,078,219

$             3,398,610

$              28,969

315%

240%

2011

209,602

720,510

19,048

344%

245%

2012

254,076

653,102

21,655

257%

226%

2013

390,826

896,381

36,759

229%

211%

2014

404,117

866,597

58,983

214%

204%

2015

443,114

927,497

132,263

209%

205%

2016

455,767

1,092,218

230,039

240%

201%

2017

532,851

1,210,475

367,123

227%

193%

2018

653,975

1,362,777

521,466

208%

202%

2019

581,476

1,240,122

717,793

213%

206%

2020

435,668

929,706

796,502

213%

213%

Subtotal

5,439,691

13,297,995

2,930,600



Americas Insolvency





1996-2010

606,395

1,382,682

1,105

228%

180%

2011

180,432

370,180

567

205%

155%

2012

251,395

392,605

256

156%

136%

2013

227,834

354,923

832

156%

133%

2014

148,420

218,485

2,045

147%

124%

2015

63,170

87,254

1,489

138%

125%

2016

91,442

116,918

9,209

128%

123%

2017

275,257

348,732

62,593

127%

125%

2018

97,879

130,683

66,033

134%

127%

2019

123,077

160,804

116,037

131%

128%

2020

62,130

84,622

78,098

136%

136%

Subtotal

2,127,431

3,647,888

338,264



Total Americas

7,567,122

16,945,883

3,268,864



Europe Core






2012

20,409

41,210

-

202%

187%

2013

20,334

25,448

-

125%

119%

2014

773,811

2,229,255

630,934

288%

208%

2015

411,340

734,276

274,714

179%

160%

2016

333,090

556,493

295,560

167%

167%

2017

252,174

353,557

194,165

140%

144%

2018

341,775

524,117

361,355

153%

148%

2019

518,610

778,422

630,040

150%

152%

2020

324,119

557,289

523,089

172%

172%

Subtotal

2,995,662

5,800,067

2,909,857



Europe Insolvency





2014

10,876

18,223

213

168%

129%

2015

18,973

29,023

2,512

153%

139%

2016

39,338

56,801

10,424

144%

130%

2017

39,235

49,142

20,019

125%

128%

2018

44,908

52,955

36,032

118%

123%

2019

77,218

101,891

77,854

132%

130%

2020

105,440

135,890

129,591

129%

129%

Subtotal

335,988

443,925

276,645



Total Europe

3,331,650

6,243,992

3,186,502



Total PRA Group

$        10,898,772

$        23,189,875

$      6,455,366





(1)

Includes the acquisition date finance receivables portfolios that were acquired through our business acquisitions.

(2)

For our non-US amounts, purchase price is presented at the exchange rate at the end of the year in which the portfolio was purchased. In addition, any purchase price adjustments that occur throughout the life of the portfolio are presented at the year-end exchange rate for the respective year of purchase.

(3)

For our non-US amounts, TEC is presented at the year-end exchange rate for the respective year of purchase.

(4)

For our non-U.S. amounts, ERC is presented at the December 31, 2020 exchange rate.

(5)

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

 

Portfolio Financial Information

For the Year Ended December 31, 2020

Amounts in thousands







Purchase Period

Cash Collections(1)

Portfolio
Income (1)

Changes in
Expected
Recoveries(1)

Total Portfolio
Revenue (1) (2)

Net Finance
Receivables as of
December 31,2020 (3)

Americas Core






1996-2010

$            18,838

$          15,419

$              (3,156)

$             12,263

$                        6,140

2011

10,855

10,016

(3,722)

6,294

3,142

2012

11,805

10,055

(7,485)

2,570

6,761

2013

23,161

16,709

(10,833)

5,876

16,290

2014

31,921

23,563

(21,081)

2,482

25,525

2015

57,223

34,339

(14,111)

20,228

56,170

2016

105,905

59,388

796

60,184

93,024

2017

192,524

91,632

25,085

116,717

165,492

2018

337,697

135,689

32,123

167,812

286,204

2019

349,021

175,258

36,325

211,583

380,756

2020

132,945

78,573

18,114

96,687

398,271

Subtotal

1,271,895

650,641

52,055

702,696

1,437,775

Americas Insolvency





1996-2010

844

$               992

(128)

864

-

2011

483

406

79

485

-

2012

925

697

509

1,206

-

2013

1,311

1,310

11

1,321

-

2014

2,229

2,500

(734)

1,766

224

2015

7,909

4,036

(1,002)

3,034

898

2016

14,362

3,402

970

4,372

7,423

2017

58,826

15,607

(428)

15,179

51,771

2018

30,513

8,762

2,960

11,722

55,653

2019

31,360

11,293

3,480

14,773

97,250

2020

6,525

4,064

(869)

3,195

57,929

Subtotal

155,287

53,069

4,848

57,917

271,148

Total Americas

1,427,182

703,710

56,903

760,613

1,708,923

Europe Core






2012

1,218

687

531

1,218

-

2013

685

333

353

686

-

2014

149,782

106,875

11,173

118,048

168,604

2015

54,252

30,917

(575)

30,342

144,112

2016

48,333

26,722

(2,260)

24,462

172,697

2017

36,084

13,521

(5,500)

8,021

135,149

2018

71,253

26,261

3,519

29,780

235,099

2019

125,712

43,091

(2,837)

40,254

416,812

2020

32,339

12,507

6,199

18,706

309,229

Subtotal

519,658

260,914

10,603

271,517

1,581,702

Europe Insolvency





2014

802

511

69

580

90

2015

2,871

1,367

49

1,416

1,627

2016

7,950

3,047

(204)

2,843

7,583

2017

9,819

1,960

568

2,528

17,602

2018

10,315

2,935

(2,229)

706

31,143

2019

21,082

6,637

1,933

8,570

63,230

2020

6,046

2,955

1,605

4,560

102,888

Subtotal

58,885

19,412

1,791

21,203

224,163

Total Europe

578,543

280,326

12,394

292,720

1,805,865

Total PRA Group

$       2,005,725

$        984,036

$             69,297

$        1,053,333

$                 3,514,788








(1)

For our non-U.S., amounts are presented using the average exchange rates during the current reporting period.

(2)

Total Portfolio Revenue refers to Portfolio Income and Changes in Expected Recoveries combined.

(3)

For our non-U.S. amounts, Net Finance Receivables are presented at the December 31, 2020 exchange rate.

 

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

as of December 31, 2020

Amounts in millions




Purchase Period (2)

Purchase Price (2)(3)

Cash Collections

1996-2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Total

Americas Core














1996-2010

$                  1,078.2

$                 1,990.5

$           367.1

$           311.5

$            228.4

$            157.7

$            109.3

$              70.2

$              46.0

$              34.4

$              28.4

$              18.8

$           3,362.3

2011

209.6

62.0

174.5

152.9

108.5

73.8

48.7

32.0

21.6

16.6

10.9

701.5

2012

254.1

56.9

173.6

146.2

97.3

60.0

40.0

27.8

17.9

11.8

631.5

2013

390.8

101.6

247.8

194.0

120.8

78.9

56.4

36.9

23.2

859.6

2014

404.1

92.7

253.4

170.3

114.2

82.2

55.3

31.9

800.0

2015

443.1

117.0

228.4

185.9

126.6

83.6

57.2

798.7

2016

455.8

138.7

256.5

194.6

140.6

105.9

836.3

2017

532.9

107.3

278.7

256.5

192.5

835.0

2018

654.0

122.7

361.9

337.7

822.3

2019

581.5

143.8

349.0

492.8

2020

435.7

-

133.0

133.0

Subtotal

5,439.8

1,990.5

429.1

542.9

656.5

752.9

844.8

837.1

860.8

945.0

1,141.5

1,271.9

$         10,273.0

Americas Insolvency













1996-2010

606.4

390.9

261.2

270.4

231.0

158.9

51.2

8.6

4.6

2.5

1.4

0.8

1,381.5

2011

180.4

15.2

66.4

82.8

85.8

76.9

36.0

3.7

1.6

0.7

0.5

369.6

2012

251.4

17.4

103.6

94.1

80.1

60.7

29.3

4.3

1.9

0.9

392.3

2013

227.8

52.5

82.6

81.7

63.4

47.8

21.9

2.9

1.3

354.1

2014

148.4

37.0

50.9

44.3

37.4

28.8

15.8

2.2

216.4

2015

63.2

3.4

17.9

20.1

19.8

16.7

7.9

85.8

2016

91.4

18.9

30.4

25.0

19.9

14.4

108.6

2017

275.3

49.1

97.3

80.9

58.8

286.1

2018

97.9

6.7

27.4

30.5

64.6

2019

123.1

13.3

31.4

44.7

2020

62.1

6.6

6.6

Subtotal

2,127.4

390.9

276.4

354.2

469.9

458.4

344.2

249.8

222.4

207.9

180.9

155.3

3,310.3

Total Americas

7,567.2

2,381.4

705.5

897.1

1,126.4

1,211.3

1,189.0

1,086.9

1,083.2

1,152.9

1,322.4

1,427.2

13,583.3

Europe Core














2012

20.4

11.6

9.0

5.6

3.2

2.2

2.0

2.0

1.5

1.2

38.3

2013

20.3

7.1

8.5

2.3

1.3

1.2

1.3

0.9

0.7

23.3

2014

773.8

153.2

292.0

246.4

220.8

206.3

172.9

149.8

1,441.4

2015

411.3

45.8

100.3

86.2

80.9

66.1

54.3

433.6

2016

333.1

40.4

78.9

72.6

58.0

48.3

298.2

2017

252.2

17.9

56.0

44.1

36.1

154.1

2018

341.8

24.3

88.7

71.2

184.2

2019

518.6

47.9

125.7

173.6

2020

324.1

32.4

32.4

Subtotal

2,995.6

-

-

11.6

16.1

167.3

343.3

390.6

407.0

443.4

480.1

519.7

2,779.1

Europe Insolvency














2014

10.9

-

4.3

3.9

3.2

2.6

1.5

0.8

16.3

2015

19.0

3.0

4.4

5.0

4.8

3.9

2.9

24.0

2016

39.3

6.2

12.7

12.9

10.7

7.9

50.4

2017

39.2

1.2

7.9

9.2

9.8

28.1

2018

44.9

0.6

8.4

10.3

19.3

2019

77.2

5.1

21.1

26.2

2020

105.4

6.1

6.1

Subtotal

335.9

-

-

-

-

-

7.3

14.5

22.1

28.8

38.8

58.9

170.4

Total Europe

3,331.5

-

-

11.6

16.1

167.3

350.6

405.1

429.1

472.2

518.9

578.6

2,949.5

Total PRA Group

$             10,898.7

$              2,381.4

$        705.5

$        908.7

$      1,142.5

$      1,378.6

$      1,539.6

$      1,492.0

$      1,512.3

$      1,625.1

$      1,841.3

$      2,005.8

$      16,532.8


(1)

For our non-U.S. amounts, cash collections are presented using the average exchange rates during the cash collection period.

(2)

Includes the finance receivables portfolios that were acquired through our business acquisitions.

(3)

For our non-US amounts, Purchase Price is presented at the exchange rate at the end of the year in which the portfolio was purchased.  In addition, any purchase price adjustments that occur throughout the life of the pool are presented at the year end exchange rate for the respective year of purchase.


 

Use of Non-GAAP Financial Measures
PRA Group, Inc. reports financial results in accordance with U.S. generally accepted accounting principles (GAAP).  However, management uses certain non-GAAP financial measures, including Adjusted EBITDA, internally to evaluate the Company's performance and to set performance goals.  Adjusted EBITDA is calculated as net income attributable to PRA Group, Inc. plus interest expense, net and other; plus income tax expense (or less income tax benefit); plus depreciation and amortization; plus recoveries applied to negative allowance; less gain on sale of subsidiaries; less foreign exchange gain (or plus foreign exchange loss); and plus net income attributable to noncontrolling interests. Adjusted EBITDA is a supplemental measure of performance that is not required by, or presented in accordance with, GAAP. PRA Group, Inc. presents Adjusted EBITDA because the Company considers it an important supplemental measure of operations and financial performance. Management believes Adjusted EBITDA helps provide enhanced period-to-period comparability of operations and financial performance and is useful to investors as other companies in the industry report similar financial measures. Adjusted EBITDA should not be considered as an alternative to net income determined in accordance with GAAP. Set forth below is a reconciliation of Adjusted EBITDA to net income, the most directly comparable financial measure calculated and reported in accordance with GAAP. The calculation of Adjusted EBITDA below may not be comparable to the calculation of similarly titled measures reported by other companies.

 

LTM Adjusted EBITDA for PRA Group ($ in millions)

12/31/2020

12/31/2019

Net income attributable to PRA Group, Inc.


$               149

$                  86

Income tax expense (benefit)



41

20

Foreign exchange (gain) loss



(2)

(12)

Interest expense, net and other


143

142

Depreciation and amortization


18

17

Adjustment for net income attributable to noncontrolling interests

18

12

Gain on sale of subsidiaries



-

-

Recoveries applied to negative allowance less changes in expected in recoveries*

968

843

LTM Adjusted EBITDA



$            1,337

$            1,108








*Prior to Q1 2020, this included collections applied to principal on finance receivables










Borrowings




$            2,661

$            2,808

LTM Adjusted EBITDA



1,337

1,108

Debt to LTM Adjusted EBITDA



1.99

2.53

  

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

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

SOURCE PRA Group, Inc.