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