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PRA Group Reports Fourth Quarter 2021 Results

NORFOLK, Va., Feb. 28, 2022 /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 2021. Net income attributable to PRA Group, Inc. increased $4.5 million, or 15%, to $34.3 million compared to the fourth quarter of 2020. Diluted earnings per share were $0.79 compared to $0.65 in the fourth quarter of 2020.  For the year ended December 31, 2021, net income attributable to PRA Group, Inc. increased $33.8 million, or 23%, to $183.2 million, or $4.04 per diluted share, compared to the year ended December 31, 2020.  

 Fourth Quarter Highlights

  • Total cash collections were $473.7 million.
  • Total revenues were $256.9 million.
  • Cash efficiency ratio1 of 63.5%.
  • Diluted earnings per share increased 22% to $0.79.
  • Common stock repurchases of $139 million, or 3.0 million shares, at an average price of $45.66 per share.
  • Debt to Adjusted EBITDA2 decreased to 1.89x from 1.99x at December 31, 2020. 
  • $1.4 billion available for portfolio purchases.
  • Total portfolio purchases of $201.7 million.
  • Estimated remaining collections (ERC) of $6.0 billion.

Full Year Highlights

  • Record total cash collections were $2.1 billion.
  • Record total revenues were $1.1 billion.
  • Record cash efficiency ratio1 of 65.3%.
  • Record net income attributable to PRA Group, Inc. of $183.2 million.
  • Total portfolio purchases of $972.3 million.
  • Common stock repurchases of $212.9 million, or 4.8 million shares, at an average price of $43.97 per share.

"The fourth quarter culminated an excellent year for PRA.  We collected record levels of cash globally and had record revenues and net income.  In Europe, strong portfolio purchases over the last two years drove robust collections.  The increase in cash collections, coupled with efficiencies achieved in our operations, produced a record cash efficiency ratio for the year," said Kevin Stevenson, president and chief executive officer.  "Entering 2022, we had maximum forward flow commitments that were $149 million higher than the commitments we had entering 2021.  Despite increased competition and pricing pressure, we believe the European pipeline is strong and economic indicators point to an increasing pipeline in the U.S. by the end of 2022. We believe our strong balance sheet will allow us to capitalize on these opportunities."              

1. Calculated by dividing cash receipts less operating expense by cash receipts.
2. A reconciliation of this non-GAAP financial measure to the most 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

 

2021

 

2020

($ in thousands)

 

Q4

 

Q3

 

Q2

 

Q1

 

Q4

Americas and Australia Core

 

$       257,705

 

$       276,691

 

$       324,845

 

$       347,638

 

$       286,524

Americas Insolvency

 

36,851

 

37,464

 

37,768

 

35,253

 

36,048

Europe Core

 

155,853

 

151,625

 

157,637

 

149,486

 

141,471

Europe Insolvency

 

23,262

 

22,574

 

23,579

 

23,510

 

17,830

Total Cash Collections

 

$       473,671

 

$       488,354

 

$       543,829

 

$       555,887

 

$       481,873

                     
                     
                     
                     

Cash Collection Source -

                   

Constant Currency Adjusted

 

2021

             

2020

($ in thousands)

 

Q4

             

Q4

Americas and Australia Core

 

$       257,705

             

$       285,712

Americas Insolvency

 

36,851

             

36,072

Europe Core

 

155,853

             

140,570

Europe Insolvency

 

23,262

             

18,022

Total Cash Collections

 

$       473,671

             

$       480,376

 

  • Total cash collections in the quarter decreased $8.2 million compared to the fourth quarter of 2020. A 12% increase in Europe cash collections was more than offset by an 11% decrease in U.S. call center and other cash collections and a 29% decrease in Brazil cash collections. For the full year, cash collections increased $55.9 million compared to the full year of 2020. 
  • Total portfolio revenue in the quarter was $252.0 million compared to $270.4 million in the fourth quarter of 2020. The Company assumed that the majority of the fourth quarter 2021 overperformance was acceleration of future collections, consistent with its assumptions during prior periods.  The Company also increased near-term expected collections in certain geographies to  reflect recent performance and trends in collections, and made corresponding reductions later in the forecast period. For the full year, total portfolio revenue increased $19.9 million compared to the full year 2020.

Expenses

  • Operating expenses in the quarter decreased $10.2 million compared to the fourth quarter of 2020.  The decrease was primarily driven by a reduction in legal collection costs due to fewer accounts being placed into the Company's legal channel as a result of a shift in collections from the legal channel to the call centers and digital platforms and lower levels of portfolio acquisitions in the U.S. This decrease was partially offset by an increase in other operating expenses. For the full year, operating expenses increased $5.0 million compared to the same period in 2020.
  • Interest expense, net decreased $3.2 million compared to the fourth quarter of 2020 primarily due to the Company's early adoption of the new accounting for convertible debt as well as lower outstanding balances.  For the full year, interest expense, net decreased $17.6 million compared to the same period in 2020.
  • The effective tax rate for the full year was 21.9% compared to 19.7% in 2020.

Portfolio Acquisitions

  • The Company purchased $201.7 million in nonperforming loan portfolios in the fourth quarter of 2021.    
  • At the end of the fourth quarter, the Company had in place forward flow commitments of up to $650.6 million with $246.7 million in the Americas and Australia and $403.9 million in Europe.

 

                     

Portfolio Purchase Source

 

2021

 

2020

($ in thousands)

 

Q4

 

Q3

 

Q2

 

Q1

 

Q4

Americas and Australia Core

 

$         90,263

 

$         162,451

 

$           98,901

 

$           88,912

 

$           67,460

Americas Insolvency

 

21,183

 

9,878

 

14,642

 

9,486

 

12,504

Europe Core

 

60,430

 

212,194

 

106,134

 

44,095

 

137,647

Europe Insolvency

 

29,820

 

7,424

 

 

16,468

 

72,171

Total Portfolio Acquisitions

 

$       201,696

 

$         391,947

 

$         219,677

 

$         158,961

 

$         289,782

                     

Share Repurchases

During 2021, the Company executed the majority of its $230 million share repurchase program:

  • During the fourth quarter, the Company purchased 3.0 million shares at an average price of $45.66 per share.
  • For the full year of 2021, the Company purchased 4.8 million shares at an average price of $43.97 per share.
  • On February 25, 2022, the Company's board of directors authorized a new $150 million program upon completion of the previous program. 

The new share repurchase program has no stated expiration date and repurchases may be made through open market purchases or other available means at the Company's discretion, subject to applicable regulatory requirements. Repurchases are subject to market conditions and other factors, and the new share repurchase program remains subject to the discretion of the Company's board of directors.

"Our strong cash and financial performance and conservative capital structure provide considerable flexibility for balanced capital deployment across portfolio acquisitions, share repurchases and other growth initiatives," said Pete Graham, executive vice president and chief financial officer.

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, either visit the same website until February 28, 2023, or  call 877-344-7529 in the U.S. or 412-317-0088 outside the U.S. and use access code 8916228 until March 7, 2022.   

About PRA Group
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, Europe and Australia. 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 the Company's 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 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.

Consolidated Income Statements

(Amounts in thousands, except per share amounts)

 

 
 

(unaudited)

       
 

Three Months Ended
December 31,

 

Twelve Months Ended
December 31,

 

2021

 

2020

 

2021

 

2020

Revenues:

             

Portfolio income

$          211,613

 

$          233,480

 

$          875,327

 

$          984,036

Changes in expected recoveries

40,400

 

36,909

 

197,904

 

69,297

        Total portfolio revenue

252,013

 

270,389

 

1,073,231

 

1,053,333

Fee income

3,856

 

2,922

 

14,699

 

9,748

Other revenue

1,067

 

545

 

7,802

 

2,333

Total revenues

256,936

 

273,856

 

1,095,732

 

1,065,414

Operating expenses:

             

Compensation and employee services

73,781

 

77,533

 

301,981

 

295,150

Legal collection fees

10,998

 

11,783

 

47,206

 

53,758

Legal collection costs

17,099

 

21,638

 

78,330

 

101,635

Agency fees

15,995

 

17,799

 

63,140

 

56,418

Outside fees and services

21,448

 

23,291

 

92,615

 

84,087

Communication

9,716

 

9,099

 

42,755

 

40,801

Rent and occupancy

4,682

 

4,558

 

18,376

 

17,973

Depreciation and amortization

3,736

 

5,971

 

15,256

 

18,465

Other operating expenses

17,032

 

12,969

 

61,077

 

47,426

Total operating expenses

174,487

 

184,641

 

720,736

 

715,713

Income from operations

82,449

 

89,215

 

374,996

 

349,701

Other income and (expense):

             

Interest expense, net

(32,156)

 

(35,393)

 

(124,143)

 

(141,712)

Foreign exchange (loss)/gain

(936)

 

(1,022)

 

(809)

 

2,005

Other

(12)

 

318

 

282

 

(1,049)

Income before income taxes

49,345

 

53,118

 

250,326

 

208,945

Income tax expense

12,947

 

16,469

 

54,817

 

41,203

Net Income

36,398

 

36,649

 

195,509

 

167,742

Adjustment for net income attributable to noncontrolling interests

2,122

 

6,851

 

12,351

 

18,403

Net income attributable to PRA Group, Inc.

$            34,276

 

$            29,798

 

$          183,158

 

$          149,339

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

             

Basic

$                 0.80

 

$                 0.65

 

$                 4.07

 

$                 3.28

Diluted

$                 0.79

 

$                 0.65

 

$                 4.04

 

$                 3.26

Weighted average number of shares outstanding:

             

Basic

43,056

 

45,583

 

44,960

 

45,540

Diluted

43,562

 

45,973

 

45,330

 

45,860

 

PRA Group, Inc.

Consolidated Balance Sheets

(Amounts in thousands)

 

 
 

December 31, 2021

 

December 31, 2020

Assets

     

Cash and cash equivalents

$                       87,584

 

$                    108,613

Investments

92,977

 

55,759

Finance receivables, net

3,428,285

 

3,514,788

Income taxes receivable

41,146

 

21,928

Deferred tax assets, net

67,760

 

83,205

Right-of-use assets

56,713

 

52,951

Property and equipment, net

54,513

 

58,356

Goodwill

480,263

 

492,989

Other assets

57,002

 

64,472

Total assets

$                 4,366,243

 

$                 4,453,061

Liabilities and Equity

     

Liabilities:

     

Accounts payable

$                         3,821

 

$                         5,294

Accrued expenses

127,802

 

97,320

Income taxes payable

19,276

 

29,692

Deferred tax liabilities, net

36,630

 

40,867

Lease liabilities

61,188

 

57,348

Interest-bearing deposits

124,623

 

132,739

Borrowings

2,608,714

 

2,661,289

Other liabilities

59,352

 

54,986

Total liabilities

3,041,406

 

3,079,535

Equity:

     

Preferred stock, $0.01 par value, 2,000 shares authorized, no shares issued
and outstanding

 

Common stock, $0.01 par value, 100,000 shares authorized, 41,008 shares
issued and outstanding at December 31, 2021; 100,000 shares authorized,
45,585 shares issued and outstanding at December 31, 2020

410

 

456

Additional paid-in capital

 

75,282

Retained earnings

1,552,845

 

1,511,970

Accumulated other comprehensive loss

(266,909)

 

(245,791)

Total stockholders' equity - PRA Group, Inc.

1,286,346

 

1,341,917

Noncontrolling interest

38,491

 

31,609

Total equity

1,324,837

 

1,373,526

Total liabilities and equity

$                 4,366,243

 

$                 4,453,061

 

 

Select Expenses (Income)

Amounts in thousands, pre-tax

 
 

Three Months Ended

 

December 31,
2021

September 30,
2021

June 30,
2021

March 31,
2021

December 31,
2020

September 30,
2020

June 30,
2020

March 31,
2020

Noncash interest expense - amortization of debt discount

1,959

2,388

3,247

3,217

Noncash interest expense - amortization of debt issuance costs

2,455

2,406

2,391

2,256

2,393

2,476

2,743

2,640

Change in fair value of derivatives

3,115

2,982

2,911

3,102

3,875

3,701

3,284

2,039

Amortization of intangibles

(269)

104

105

181

1,792

360

351

349

Stock-based compensation expense

3,470

4,317

4,040

4,113

5,370

3,097

3,063

2,857

 

 

 

Purchase Price Multiples

as of December 31, 2021

Amounts in thousands

 

Purchase Period

Purchase Price (1)(2)

Total Estimated
Collections (3)

Estimated
Remaining
Collections (4)

Current Purchase
Price Multiple

Original Purchase
Price Multiple (5)

Americas and Australia Core

         

1996-2011

$                  1,287,821

$              4,119,794

$                  27,874

320%

240%

2012

254,076

652,359

11,867

257%

226%

2013

390,826

894,234

17,955

229%

211%

2014

404,117

859,555

29,634

213%

204%

2015

443,114

910,077

79,134

205%

205%

2016

455,767

1,117,255

163,295

245%

201%

2017

532,851

1,215,524

240,172

228%

193%

2018

653,975

1,394,839

301,952

213%

202%

2019

581,476

1,257,641

434,423

216%

206%

2020

435,668

940,982

522,918

216%

213%

2021

435,846

833,624

748,852

191%

191%

Subtotal

5,875,537

14,195,884

2,578,076

   

Americas Insolvency

       

1996-2011

786,827

1,752,771

790

223%

174%

2012

251,395

393,018

67

156%

136%

2013

227,834

355,274

373

156%

133%

2014

148,420

219,141

1,583

148%

124%

2015

63,170

87,377

361

138%

125%

2016

91,442

116,498

1,468

127%

123%

2017

275,257

353,296

23,180

128%

125%

2018

97,879

134,417

38,130

137%

127%

2019

123,077

163,200

79,392

133%

128%

2020

62,130

86,107

63,473

139%

136%

2021

55,187

74,931

70,317

136%

136%

Subtotal

2,182,618

3,736,030

279,134

   

Total Americas and Australia

8,058,155

17,931,914

2,857,210

   

Europe Core

         

2012

20,409

42,579

209%

187%

2013

20,334

26,267

129%

119%

2014

773,811

2,239,932

460,391

289%

208%

2015

411,340

720,559

203,212

175%

160%

2016

333,090

561,569

243,437

169%

167%

2017

252,174

353,450

154,560

140%

144%

2018

341,775

527,012

287,725

154%

148%

2019

518,610

775,332

485,171

150%

152%

2020

324,119

553,951

410,322

171%

172%

2021

412,411

699,959

652,200

170%

170%

Subtotal

3,408,073

6,500,610

2,897,018

   

Europe Insolvency

       

2014

10,876

18,370

28

169%

129%

2015

18,973

29,002

892

153%

139%

2016

39,338

56,831

4,398

144%

130%

2017

39,235

49,287

10,641

126%

128%

2018

44,908

51,499

22,265

115%

123%

2019

77,218

102,095

53,796

132%

130%

2020

105,440

135,907

94,242

129%

129%

2021

53,230

71,526

66,095

134%

134%

Subtotal

389,218

514,517

252,357

   

Total Europe

3,797,291

7,015,127

3,149,375

   

Total PRA Group

$                11,855,446

$            24,947,041

$              6,006,585

   
   

(1)

Includes the acquisition date finance receivables portfolios that were acquired through the Company's business acquisitions.

(2)

For the Company's non-U.S. 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 the Company's non-U.S. amounts, TEC is presented at the year-end exchange rate for the respective year of purchase.

(4)

For the Company's non-U.S. amounts, ERC is presented at the December 31, 2021 exchange rate.

(5)

The Original 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, 2021

Amounts in thousands

 

 

Purchase Period

Cash

Collections (1)

Portfolio
Income (1)

Change in
Expected
Recoveries (1)

Total Portfolio
Revenue (1)

Net Finance
Receivables as of
December 31, 2021 (2)

Americas and Australia Core

         

1996-2011

$                   20,819

$            12,632

$                     5,346

$                   17,978

$                         6,433

2012

9,046

4,123

2,610

6,733

4,446

2013

16,657

7,520

1,613

9,133

8,763

2014

22,323

10,040

(742)

9,298

12,225

2015

34,938

19,582

(9,082)

10,500

31,412

2016

74,206

40,717

(1,395)

39,322

58,086

2017

129,962

61,776

11,275

73,051

108,433

2018

239,862

83,566

38,960

122,526

167,343

2019

289,779

117,189

34,744

151,933

240,112

2020

284,284

125,173

46,195

171,368

299,290

2021

85,003

61,842

(4,866)

56,976

408,212

Subtotal

1,206,879

544,160

124,658

668,818

1,344,755

Americas Insolvency

         

1996-2011

792

882

(73)

809

2012

601

188

425

613

2013

811

459

363

822

2014

1,118

1,108

(44)

1,064

148

2015

1,250

538

32

570

218

2016

7,352

1,321

(332)

989

1,060

2017

43,978

7,795

4,718

12,513

20,304

2018

31,637

5,944

3,757

9,701

33,715

2019

39,073

8,739

2,590

11,329

69,514

2020

16,108

7,220

1,885

9,105

50,482

2021

4,616

2,799

804

3,603

53,837

Subtotal

147,336

36,993

14,125

51,118

229,278

Total Americas and Australia

1,354,215

581,153

138,783

719,936

1,574,033

Europe Core

         

2012

1,160

1,160

1,160

2013

680

681

681

2014

149,246

94,750

25,771

120,521

131,950

2015

51,397

26,474

(7,320)

19,154

107,415

2016

46,702

23,859

(1,569)

22,290

141,981

2017

34,800

11,718

(2,815)

8,903

106,026

2018

69,106

23,502

5,352

28,854

189,813

2019

121,385

37,266

12,333

49,599

328,709

2020

91,672

35,697

13,610

49,307

250,434

2021

48,453

18,809

6,159

24,968

388,850

Subtotal

614,601

272,075

53,362

325,437

1,645,178

Europe Insolvency

         

2014

328

109

144

253

14

2015

1,605

647

3

650

653

2016

5,951

1,685

208

1,893

3,398

2017

9,366

1,301

379

1,680

9,673

2018

11,678

2,212

(1,153)

1,059

19,877

2019

23,867

5,552

1,307

6,859

45,649

2020

34,647

8,791

3,067

11,858

79,363

2021

5,483

1,802

1,804

3,606

50,447

Subtotal

92,925

22,099

5,759

27,858

209,074

Total Europe

707,526

294,174

59,121

353,295

1,854,252

Total PRA Group

$              2,061,741

$          875,327

$                  197,904

$               1,073,231

$                   3,428,285

   

(1)

Non-U.S. amounts are presented using the average exchange rates during the reporting period.

(2)

For non-U.S. amounts, net finance receivables are presented at the December 31, 2021 exchange rate.

 

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

as of December 31, 2021 

Amounts in millions

 
   

Cash Collections

Purchase
Period

Purchase
Price (2)(3)

1996-2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

Total

Americas and Australia Core

                   

1996-2011

$  1,287.8

$  2,419.5

$    486.0

$    381.3

$    266.3

$    183.1

$    119.0

$     78.0

$     56.0

$     45.0

$     29.7

$     20.8

$ 4,084.7

2012

254.1

56.9

173.6

146.2

97.3

60.0

40.0

27.8

17.9

11.8

9.0

640.5

2013

390.8

101.6

247.8

194.0

120.8

78.9

56.4

36.9

23.2

16.7

876.3

2014

404.1

92.7

253.4

170.3

114.2

82.2

55.3

31.9

22.3

822.3

2015

443.1

117.0

228.4

185.9

126.6

83.6

57.2

34.9

833.6

2016

455.8

 

138.7

256.5

194.6

140.6

105.9

74.2

910.5

2017

532.9

107.3

278.7

256.5

192.5

130.0

965.0

2018

654.0

122.7

361.9

337.7

239.9

1062.2

2019

581.5

143.8

349.0

289.8

782.6

2020

435.7

133.0

284.3

417.3

2021

435.8

85.0

85.0

Subtotal

5,875.6

2,419.5

542.9

656.5

753.0

844.8

837.2

860.8

945.0

1,141.5

1,271.9

1,206.9

11,480.0

Americas Insolvency

                   

1996-2011

786.8

667.4

336.8

313.7

244.7

128.2

44.6

8.4

4.0

2.1

1.3

0.8

1,752.0

2012

251.4

17.4

103.6

94.1

80.1

60.7

29.3

4.3

1.9

0.9

0.6

392.9

2013

227.8

52.5

82.6

81.7

63.4

47.8

21.9

2.9

1.3

0.8

354.9

2014

148.4

37.0

50.9

44.3

37.4

28.8

15.8

2.2

1.1

217.5

2015

63.2

3.4

17.9

20.1

19.8

16.7

7.9

1.3

87.1

2016

91.4

18.9

30.4

25.0

19.9

14.4

7.4

116.0

2017

275.3

49.1

97.3

80.9

58.8

44.0

330.1

2018

97.9

6.7

27.4

30.5

31.6

96.2

2019

123.1

13.4

31.4

39.1

83.9

2020

62.1

6.5

16.1

22.6

2021

55.2

4.5

4.5

Subtotal

2,182.6

667.4

354.2

469.8

458.4

344.3

249.8

222.5

207.8

181.0

155.2

147.3

3,457.7

Total Americas and Australia

8,058.2

3,086.9

897.1

1,126.3

1,211.4

1,189.1

1,087.0

1,083.3

1,152.8

1,322.5

1,427.1

1,354.2

14,937.7

Europe Core

                       

2012

20.4

11.6

9.0

5.6

3.2

2.2

2.0

2.0

1.5

1.2

1.2

39.5

2013

20.3

7.1

8.5

2.3

1.3

1.2

1.3

0.9

0.7

0.7

24.0

2014

773.8

153.2

292.0

246.4

220.8

206.3

172.9

149.8

149.2

1,590.6

2015

411.3

45.8

100.3

86.2

80.9

66.1

54.3

51.4

485.0

2016

333.1

40.4

78.9

72.6

58.0

48.3

46.7

344.9

2017

252.2

17.9

56.0

44.1

36.1

34.8

188.9

2018

341.8

24.3

88.7

71.2

69.1

253.3

2019

518.6

47.9

125.7

121.4

295.0

2020

324.1

32.4

91.7

124.1

2021

412.4

48.4

48.4

Subtotal

3,408.0

11.6

16.1

167.3

343.3

390.6

407.0

443.4

480.1

519.7

614.6

3,393.7

Europe Insolvency

                     

2014

10.9

4.3

3.9

3.2

2.6

1.5

0.8

0.3

16.6

2015

19.0

3.0

4.4

5.0

4.8

3.9

2.9

1.6

25.6

2016

39.3

6.2

12.7

12.9

10.7

7.9

6.0

56.4

2017

39.2

1.2

7.9

9.2

9.8

9.4

37.5

2018

44.9

0.6

8.4

10.3

11.7

31.0

2019

77.2

5.1

21.1

23.9

50.1

2020

105.4

6.1

34.6

40.7

2021

53.3

5.4

5.4

Subtotal

389.2

7.3

14.5

22.1

28.8

38.8

58.9

92.9

263.3

Total Europe

3,797.2

11.6

16.1

167.3

350.6

405.1

429.1

472.2

518.9

578.6

707.5

3,657.0

Total PRA Group

$ 11,855.4

$  3,086.9

$    908.7

$ 1,142.4

$ 1,378.7

$ 1,539.7

$ 1,492.1

$ 1,512.4

$ 1,625.0

$ 1,841.4

$ 2,005.7

$ 2,061.7

$  18,594.7

   

(1)

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

(2)

Includes the nonperforming loan portfolios that were acquired through the Company's business acquisitions.

(3)

For the Company's non-U.S. 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 its 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 income tax expense; less foreign exchange gain (or plus foreign exchange loss); plus interest expense, net; plus other expense (or less other income); plus depreciation and amortization; plus adjustment for net income attributable to noncontrolling interests; and plus recoveries applied to negative allowance less changes in expected recoveries. 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 for the years ended December 31, 2021 and 2020, 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.

Reconciliation of Non-GAAP Financial Measures

 

 LTM Adjusted EBITDA for PRA Group ($ in millions)

December 31, 2021

December 31, 2020

Net income attributable to PRA Group, Inc.

$                                  183

$                                 149

Adjustments:

           

Income tax expense

55

41

Foreign exchange (gains)/losses

1

(2)

Interest expense, net

124

142

Other (income)/expense

1

Depreciation and amortization

15

18

Adjustment for net income attributable to noncontrolling interests

12

18

Recoveries applied to negative allowance less Changes in
expected recoveries

       

988

968

 LTM Adjusted EBITDA

$                              1,378

$                              1,337

     

Additionally, the Company evaluates its business using certain ratios that use Adjusted EBITDA.  Debt to Adjusted EBITDA is calculated by dividing borrowings by Adjusted EBITDA.  The following table reflects the Company's Debt to Adjusted EBITDA for the years ended December 31, 2021 and 2020 (amounts in millions):

 

Debt to Adjusted EBITDA

     
 

December 31, 2021

December 31, 2020

Borrowings

$                              2,609

$                              2,661

LTM Adjusted EBITDA

   

Debt to LTM Adjusted EBITDA

1,378

1,337

 

1.89

1.99

Investor Contact:
Pete Graham
Executive Vice President and Chief Financial Officer
(757) 431-7913
IR@PRAGroup.com

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

SOURCE PRA Group