PRA Group Reports First Quarter 2022 Results

NORFOLK, Va., May 9, 2022 /PRNewswire/ -- PRA Group, Inc. (Nasdaq: PRAA), a global leader in acquiring and collecting nonperforming loans, today reported its financial results for the first quarter of 2022. The Company reported net income attributable to PRA Group, Inc. of $40.0 million in the first quarter, compared with $58.4 million in the prior year period. Diluted earnings per share were $0.97 versus $1.27 in the first quarter of 2021.  

 First Quarter Highlights

  • Total cash collections were $481.0 million.
  • Total revenues were $240.6 million.
  • Cash efficiency ratio1 of 65.1%.
  • Diluted earnings per share were $0.97.
  • Common stock repurchases2 of $39.5 million, or 0.9 million shares, at an average price of $45.88.
  • At March 31, 2022, $127.7 million remaining under share repurchase authorization.
  • Debt to Adjusted EBITDA3 for the last 12 months was 1.94x.
  • Available capacity under credit facilities of $1.4 billion; $571.1 million after considering borrowing base restrictions.
  • Total portfolio purchases of $147.5 million.
  • Estimated remaining collections (ERC) of $5.7 billion.
  • Refinanced Europe's credit facilities.

1.

Calculated by dividing cash receipts less operating expense by cash receipts.

2.

Share repurchases are subject to market conditions and other factors, and the share repurchase program remains subject to the
discretion of PRA Group, Inc.'s board of directors. 

3.

A reconciliation of this non-GAAP financial measure to the most comparable GAAP measure can be found at the end of this press release. 

"We invested $147 million in portfolio purchases in the first quarter, reflecting continuing lower levels of supply in the U.S. and increased competition in Europe. We also returned nearly $40 million of value to shareholders through share repurchases," said Kevin Stevenson, president and chief executive officer. "We believe our strong balance sheet puts us in a great position to deploy capital as U.S. supply returns in the coming quarters. In the interim, we will continue to maintain our discipline and look for alternative ways to provide value to our shareholders." 

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


2022


2021

($ in thousands)


Q1


Q4


Q3


Q2


Q1

Americas and Australia Core


$       270,284


$       257,705


$       276,691


$       324,845


$       347,638

Americas Insolvency


35,209


36,851


37,464


37,768


35,253

Europe Core


151,162


155,853


151,625


157,637


149,486

Europe Insolvency


24,325


23,262


22,574


23,579


23,510

Total Cash Collections


$       480,980


$       473,671


$       488,354


$       543,829


$       555,887


































Cash Collection Source -











Constant Currency Adjusted


2022








2021

($ in thousands)


Q1








Q1

Americas and Australia Core


$       270,284








$       348,494

Americas Insolvency


35,209








35,252

Europe Core


151,162








142,230

Europe Insolvency


24,325








22,785

Total Cash Collections


$       480,980








$       548,761












  • Cash collections in the quarter decreased $74.9 million, or $67.8 million on a currency adjusted basis, compared to the first quarter of 2021. This was driven by a decrease in U.S. call center and other collections of 27% and a 14% decrease in U.S. legal collections. The decrease in U.S. cash collections was due to the excess consumer liquidity in 2021 and lower levels of portfolio purchases during the pandemic. These decreases were partially offset by a 1% increase in Europe cash collections, 6% on a currency adjusted basis, driven by high levels of portfolio purchases in the last few years.
  • Total portfolio revenue in the quarter was $237.4 million compared to $281.8 million during the first quarter of 2021.

Expenses

  • Operating expenses in the quarter decreased $10.1 million compared to the first quarter of 2021. The decrease was primarily driven by:
    • a decrease in legal collection costs due to fewer accounts in the legal channel;
    • a decrease in compensation and employee services expenses primarily due to lower collector compensation expenses in the U.S. call centers; and
    • a decrease in legal collection fees due to lower external legal cash collections.
  • The effective tax rate for the first quarter of 2022 was 11.7%, reflecting discrete items in the quarter.

Portfolio Acquisitions

  • The Company purchased $147.5 million in portfolios of nonperforming loans in the first quarter of 2022.
  • At the end of the first quarter, the Company had in place maximum forward flow commitments of up to $618.9 million with $366.3 million in the Americas and Australia and $252.6 million in Europe.











Portfolio Purchase Source


2022


2021

($ in thousands)


Q1


Q4


Q3


Q2


Q1

Americas and Australia Core


$         90,639


$           90,263


$         162,451


$           98,901


$           88,912

Americas Insolvency


9,118


21,183


9,878


14,642


9,486

Europe Core


38,764


60,430


212,194


106,134


44,095

Europe Insolvency


8,929


29,820


7,424



16,468

Total Portfolio Acquisitions


$       147,450


$         201,696


$         391,947


$         219,677


$         158,961












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 May 9, 2023, or call 877-344-7529 in the U.S. or 412-317-0088 outside the U.S. and use access code 5393948 until May 16, 2022.        

The Company is also announcing that it currently plans to report second quarter 2022 results after market close on August 8, 2022. 

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, 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 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 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 March 31,


2022


2021

Revenues:




     Portfolio income

$                207,532


$                231,672

     Changes in expected recoveries

29,914


50,136

          Total portfolio revenue

237,446


281,808

     Fee income

1,830


2,181

     Other revenue

1,329


5,480

               Total revenues

240,605


289,469

Operating expenses:




          Compensation and employee services

71,096


73,984

          Legal collection fees

10,873


12,926

          Legal collection costs

16,557


21,312

          Agency fees

17,388


15,591

          Outside fees and services

19,378


20,760

          Communication

12,583


12,663

          Rent and occupancy

4,987


4,480

          Depreciation and amortization

3,778


3,981

          Other operating expenses

11,998


13,018

               Total operating expenses

168,638


178,715

                  Income from operations

71,967


110,754

Other income and (expense):




     Interest expense, net

(31,748)


(31,552)

     Foreign exchange loss

(532)


(26)

          Other

(490)


26

               Income before income taxes

39,197


79,202

     Income tax expense

4,579


17,322

               Net income

34,618


61,880

                    Adjustment for net (loss)/income attributable to noncontrolling
                    interests

(5,354)


3,474

               Net income attributable to PRA Group, Inc.

$                  39,972


$                  58,406

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




     Basic

$                       0.98


$                       1.28

     Diluted

$                       0.97


$                       1.27

Weighted average number of shares outstanding:




     Basic

40,777


45,669

     Diluted

41,304


46,045

 

PRA Group, Inc.

Consolidated Balance Sheets

(Amounts in thousands)



(unaudited)




March 31,
2022


December 31,
2021

Assets




     Cash and cash equivalents

$                       79,089


$                       87,584

     Investments

93,249


92,977

     Finance receivables, net

3,310,747


3,428,285

     Income taxes receivable

49,064


41,146

     Deferred tax assets, net

63,965


67,760

     Right-of-use assets

55,093


56,713

     Property and equipment, net

54,401


54,513

     Goodwill

483,380


480,263

     Other assets

68,845


57,002

                    Total assets

$                 4,257,833


$                 4,366,243

Liabilities and Equity




     Liabilities:




     Accounts payable

$                         6,339


$                         3,821

     Accrued expenses

90,282


127,802

     Income taxes payable

13,743


19,276

     Deferred tax liabilities, net

45,365


36,630

     Lease liabilities

59,706


61,188

     Interest-bearing deposits

117,035


124,623

     Borrowings

2,539,462


2,608,714

     Other liabilities

39,734


59,352

                    Total liabilities

2,911,666


3,041,406

Equity:




     Preferred stock, $0.01 par value, 2,000 shares authorized, 0 shares
     issued and outstanding


     Common stock, $0.01 par value, 100,000 shares authorized, 40,410 shares
     issued and outstanding at March 31, 2022; 100,000 shares authorized, 41,008
     shares issued and outstanding at December 31, 2021

404


410

     Additional paid-in capital


     Retained earnings

1,548,845


1,552,845

     Accumulated other comprehensive loss

(243,709)


(266,909)

        Total stockholders' equity - PRA Group, Inc.

1,305,540


1,286,346

           Noncontrolling interest

40,627


38,491

               Total equity

1,346,167


1,324,837

                    Total liabilities and equity

$                 4,257,833


$                 4,366,243

 

Select Expenses (Income)

Amounts in thousands, pre-tax











Three Months Ended


March 31,
2022

December 31,
2021

September 30,
2021

June 30,
2021

March 31,
2021

December 31,
2020

September 30,
2020

June 30,
2020










Noncash interest
expense - amortization
of debt discount

1,959

2,388

3,247

Noncash interest
expense - amortization
of debt issuance costs

2,627

2,455

2,406

2,391

2,256

2,393

2,476

2,743

Change in fair value of
derivatives

2,726

3,115

2,982

2,911

3,102

3,875

3,701

3,284

Amortization of
intangibles

83

(269)

104

105

181

1,792

360

351

Stock-based
compensation expense

3,891

3,470

4,317

4,040

4,113

5,370

3,097

3,063

 

Purchase Price Multiples

as of March 31, 2022

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

$              4,120,576

$                  23,760

320%

240%

2012

254,076

652,359

9,692

257%

226%

2013

390,826

895,469

15,406

229%

211%

2014

404,117

860,995

26,686

213%

204%

2015

443,114

909,879

73,147

205%

205%

2016

455,767

1,111,717

149,697

244%

201%

2017

532,851

1,215,288

215,435

228%

193%

2018

653,975

1,392,227

257,838

213%

202%

2019

581,476

1,262,829

390,874

217%

206%

2020

435,668

940,908

465,621

216%

213%

2021

435,846

815,458

705,018

187%

191%

2022

92,317

161,069

158,656

174%

174%

Subtotal

5,967,854

14,338,774

2,491,830



Americas Insolvency





1996-2011

786,827

1,752,738

628

223%

174%

2012

251,395

393,135

48

156%

136%

2013

227,834

355,374

303

156%

133%

2014

148,420

218,938

1,175

148%

124%

2015

63,170

87,501

318

139%

125%

2016

91,442

116,398

798

127%

123%

2017

275,257

354,405

16,594

129%

125%

2018

97,879

135,030

31,899

138%

127%

2019

123,077

164,379

70,431

134%

128%

2020

62,130

86,298

58,929

139%

136%

2021

55,187

74,991

66,027

136%

136%

2022

9,118

11,880

11,846

130%

130%

Subtotal

2,191,736

3,751,067

258,996



Total Americas and Australia

8,159,590

18,089,841

2,750,826



Europe Core






2012

20,409

42,893

210%

187%

2013

20,334

26,454

130%

119%

2014

773,811

2,240,226

419,645

290%

208%

2015

411,340

718,933

184,673

175%

160%

2016

333,090

561,591

230,564

169%

167%

2017

252,174

353,518

144,408

140%

144%

2018

341,775

526,571

264,369

154%

148%

2019

518,610

775,328

448,151

150%

152%

2020

324,119

554,006

381,766

171%

172%

2021

412,411

701,400

620,962

170%

170%

2022

37,943

62,847

61,040

166%

166%

Subtotal

3,446,016

6,563,767

2,755,578



Europe Insolvency





2014

10,876

18,447

15

170%

129%

2015

18,973

28,979

628

153%

139%

2016

39,338

56,750

3,280

144%

130%

2017

39,235

49,398

8,401

126%

128%

2018

44,908

50,640

18,113

113%

123%

2019

77,218

102,101

46,840

132%

130%

2020

105,440

135,908

82,789

129%

129%

2021

53,230

71,526

60,699

134%

134%

2022

8,778

11,829

11,810

135%

135%

Subtotal

397,996

525,578

232,575



Total Europe

3,844,012

7,089,345

2,988,153



Total PRA Group

$                12,003,602

$            25,179,186

$              5,738,979




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

(2)     Non-U.S. amounts are 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)     Non-U.S. amounts are presented at the year-end exchange rate for the respective year of purchase.

(4)     Non-U.S. amounts are presented at the March 31, 2022 exchange rate.

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

 

Portfolio Financial Information

Year-to-date as of March 31, 2022

Amounts in thousands

Purchase Period

Cash

Collections (1)

Portfolio
Income (1)

Change inExpected
Recoveries (1)

Total Portfolio
Revenue (1)

Net Finance
Receivables as of
March 31, 2022 (2)

Americas and Australia Core






1996-2011

$                     4,896

$              2,552

$                      1,720

$                      4,272

$                         5,808

2012

2,175

818

879

1,697

3,969

2013

3,784

1,309

1,157

2,466

7,444

2014

4,536

1,656

1,562

3,218

10,945

2015

6,225

3,667

(697)

2,970

28,192

2016

12,851

8,970

(2,899)

6,071

51,370

2017

25,253

12,009

1,300

13,309

96,421

2018

46,510

15,233

21,013

36,246

157,922

2019

55,143

22,294

11,704

33,998

223,137

2020

58,529

25,954

5,189

31,143

272,211

2021

48,010

32,061

(31,445)

616

371,339

2022

2,372

1,872

(518)

1,354

91,253

Subtotal

270,284

128,395

8,965

137,360

1,320,011

Americas Insolvency






1996-2011

129

162

(33)

129

2012

136

19

117

136

2013

169

70

99

169

2014

203

241

(63)

178

118

2015

167

62

98

160

210

2016

575

116

(78)

38

522

2017

7,694

996

1,121

2,117

14,715

2018

6,845

1,055

1,032

2,087

28,539

2019

10,167

1,748

1,228

2,976

62,299

2020

4,735

1,610

226

1,836

47,568

2021

4,353

1,831

(11)

1,820

51,125

2022

36

60

60

9,142

Subtotal

35,209

7,970

3,736

11,706

214,238

Total Americas and Australia

305,493

136,365

12,701

149,066

1,534,249

Europe Core






2012

259

259

259

2013

151

151

151

2014

32,690

20,539

7,829

28,368

125,532

2015

12,028

5,533

41

5,574

98,264

2016

10,513

5,142

100

5,242

135,768

2017

7,257

2,496

395

2,891

99,579

2018

15,099

4,961

791

5,752

175,277

2019

25,771

7,894

2,138

10,032

304,920

2020

19,694

7,668

1,359

9,027

234,001

2021

25,868

11,318

2,086

13,404

371,587

2022

1,832

409

1,033

1,442

37,385

Subtotal

151,162

65,960

16,182

82,142

1,582,313

Europe Insolvency






2014

84

8

71

79

9

2015

223

78

(21)

57

472

2016

935

231

(87)

144

2,531

2017

2,093

204

163

367

7,715

2018

2,781

402

(708)

(306)

16,303

2019

5,574

1,091

331

1,422

40,308

2020

8,997

1,800

801

2,601

70,849

2021

3,620

1,344

458

1,802

47,173

2022

18

49

23

72

8,825

Subtotal

24,325

5,207

1,031

6,238

194,185

Total Europe

175,487

71,167

17,213

88,380

1,776,498

Total PRA Group

$                 480,980

$          207,532

$                    29,914

$                  237,446

$                  3,310,747


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

(2)    Non-U.S. amounts are presented at the March 31, 2022 exchange rate.

 

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

as of March 31, 2022

Amounts in millions



Cash Collections

Purchase Period

Purchase
Price (2)(3)

1996-2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

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

$     4.9

4,089.6

2012

254.1

56.9

173.6

146.2

97.3

60.0

40.0

27.8

17.9

11.8

9.0

2.2

642.7

2013

390.8

101.6

247.8

194.0

120.8

78.9

56.4

36.9

23.2

16.7

3.8

880.1

2014

404.1

92.7

253.4

170.3

114.2

82.2

55.3

31.9

22.3

4.5

826.8

2015

443.1

117.0

228.4

185.9

126.6

83.6

57.2

34.9

6.2

839.8

2016

455.8


138.7

256.5

194.6

140.6

105.9

74.2

12.9

923.4

2017

532.9

107.3

278.7

256.5

192.5

130.0

25.3

990.3

2018

654.0

122.7

361.9

337.7

239.9

46.5

1,108.7

2019

581.5

143.8

349.0

289.8

55.1

837.7

2020

435.7

133.0

284.3

58.5

475.8

2021

435.8

85.0

48.0

133.0

2022

92.3

2.4

2.4

Subtotal

5,967.9

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

270.3

11,750.3

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

0.1

1,752.1

2012

251.4

17.4

103.6

94.1

80.1

60.7

29.3

4.3

1.9

0.9

0.6

0.1

393.0

2013

227.8

52.5

82.6

81.7

63.4

47.8

21.9

2.9

1.3

0.8

0.2

355.1

2014

148.4

37.0

50.9

44.3

37.4

28.8

15.8

2.2

1.1

0.2

217.7

2015

63.2

3.4

17.9

20.1

19.8

16.7

7.9

1.3

0.2

87.3

2016

91.4

18.9

30.4

25.0

19.9

14.4

7.4

0.6

116.6

2017

275.3

49.1

97.3

80.9

58.8

44.0

7.7

337.8

2018

97.9

6.7

27.4

30.5

31.6

6.8

103.0

2019

123.1

13.4

31.4

39.1

10.2

94.1

2020

62.1

6.5

16.1

4.7

27.3

2021

55.2

4.5

4.4

8.9

2022

9.1

Subtotal

2,191.7

667.4

354.2

469.8

458.4

344.3

249.8

222.5

207.8

181.0

155.2

147.3

35.2

3,492.9

Total Americas and Australia

8,159.6

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

305.5

15,243.2

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

0.3

39.8

2013

20.3

7.1

8.5

2.3

1.3

1.2

1.3

0.9

0.7

0.7

0.2

24.2

2014

773.8

153.2

292.0

246.4

220.8

206.3

172.9

149.8

149.2

32.7

1,623.3

2015

411.3

45.8

100.3

86.2

80.9

66.1

54.3

51.4

12.0

497.0

2016

333.1

40.4

78.9

72.6

58.0

48.3

46.7

10.5

355.4

2017

252.2

17.9

56.0

44.1

36.1

34.8

7.3

196.2

2018

341.8

24.3

88.7

71.2

69.1

15.1

268.4

2019

518.6

47.9

125.7

121.4

25.8

320.8

2020

324.1

32.4

91.7

19.7

143.8

2021

412.4

48.4

25.9

74.3

2022

37.9

1.7

1.7

Subtotal

3,445.9

11.6

16.1

167.3

343.3

390.6

407.0

443.4

480.1

519.7

614.6

151.2

3,544.9

Europe Insolvency













2014

10.9

4.3

3.9

3.2

2.6

1.5

0.8

0.3

0.1

16.7

2015

19.0

3.0

4.4

5.0

4.8

3.9

2.9

1.6

0.2

25.8

2016

39.3

6.2

12.7

12.9

10.7

7.9

6.0

0.9

57.3

2017

39.2

1.2

7.9

9.2

9.8

9.4

2.1

39.6

2018

44.9

0.6

8.4

10.3

11.7

2.8

33.8

2019

77.2

5.1

21.1

23.9

5.6

55.7

2020

105.4

6.1

34.6

9.0

49.7

2021

53.3

5.4

3.6

9.0

2022

8.8

Subtotal

398.0

7.3

14.5

22.1

28.8

38.8

58.9

92.9

24.3

287.6

Total Europe

3,843.9

11.6

16.1

167.3

350.6

405.1

429.1

472.2

518.9

578.6

707.5

175.5

3,832.5

Total PRA Group

$     12,003.5

$  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

$ 481.0

$  19,075.7


(1)       Non-U.S. amounts are presented using the average exchange rates during the cash collection period.

(2)       Includes the nonperforming loan portfolios that were acquired through our business acquisitions.

(3)       Non-U.S. amounts are 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 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 last twelve months (LTM) ended March 31, 2022 and for the year ended December 31, 2021, 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

For the Year Ended

Adjusted EBITDA for PRA Group ($ in millions)

March 31, 2022

December 31, 2021

   Net income attributable to PRA Group, Inc.

$                                  165

$                                  183

   Adjustments:







   Income tax expense

42

55

   Foreign exchange losses/(gains)

1

1

   Interest expense, net

124

124

   Other expense

   Depreciation and amortization

15

15

   Adjustment for net income attributable to noncontrolling interests

4

12

   Recoveries applied to negative allowance less Changes in expected
   recoveries

958

988

Adjusted EBITDA

$                              1,309

$                              1,378

Additionally, management evaluates the Company's business using certain ratios that use Adjusted EBITDA, including Debt to Adjusted EBITDA, which is calculated by dividing borrowings by Adjusted EBITDA.  The following table reflects our Debt to Adjusted EBITDA for LTM as of March 31, 2022 and for the year ended December 31, 2021 (amounts in millions):

Debt to Adjusted EBITDA


LTM

For the Year Ended


March 31, 2022

December 31, 2021

Borrowings

$                              2,539

$                              2,609

LTM Adjusted EBITDA

1,309

1,378

Debt to LTM Adjusted EBITDA                                

1.94

1.89

 

Investor Contact:
Lauren Partin
Senior Vice President, Finance and Investor Relations
(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