PRA Group Reports Second Quarter 2022 Results

NORFOLK, Va., Aug. 8, 2022 /PRNewswire/ -- PRA Group, Inc. (Nasdaq: PRAA) (the "Company"), a global leader in acquiring and collecting nonperforming loans, today reported its financial results for the second quarter of 2022 ("Q2 2022").

Q2 2022 Highlights

  • Total portfolio purchases of $231.3 million.
  • Total cash collections were $444.1 million.
  • Estimated remaining collections (ERC)1 of $5.6 billion.
  • Cash efficiency ratio2 of 61.3%.
  • Diluted earnings per share were $0.91.
  • Common stock repurchases3 of $34.9 million, or 0.8 million shares.
  • Debt to Adjusted EBITDA4 for the 12 months ended June 30, 2022 was 2.03x.
  • Available capacity under the Company's credit facilities of $1.6 billion; $452.9 million after considering borrowing base restrictions.












Three Months Ended June 30,


Six Months Ended June 30,

($ in thousands, except per share amount)


2022


2021


2022


2021


Net income attributable to PRA Group, Inc.


$          36,484


$          55,996


$          76,456


$        114,402


Diluted earnings per share


$              0.91


$              1.22


$              1.88


$              2.48












     

"We had a solid purchasing quarter, driven by increased portfolio acquisitions in Europe, specifically in Northern Europe," said Kevin Stevenson, president and chief executive officer. "We continue to see deterioration in consumer savings, higher credit card balances, and rising delinquency rates, which we believe suggests that more supply will be available in the coming months. Our strong balance sheet and geographic diversity provide us with a significant competitive advantage in capitalizing on what appears to be an increasingly favorable purchasing environment, and permit us to be disciplined in our capital allocation strategy. During the quarter, we repurchased nearly $35 million of shares of our common stock, underscoring our commitment to deploy capital in the areas that can generate the highest returns for our shareholders. Looking ahead, we will continue executing this measured strategy, while remaining active in the market and preparing to ramp up our purchasing as supply increases."

1.

Refers to the sum of all future projected cash collections on the Company's nonperforming loan portfolios.

2.

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

3.

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.

4.

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


2022


2021

($ in thousands)


Q2


Q1


Q4


Q3


Q2

Americas and Australia Core


$       244,377


$       270,284


$       257,705


$       276,691


$       324,845

Americas Insolvency


34,278


35,209


36,851


37,464


37,768

Europe Core


142,470


151,162


155,853


151,625


157,637

Europe Insolvency


22,935


24,325


23,262


22,574


23,579

Total Cash Collections


$       444,060


$       480,980


$       473,671


$       488,354


$       543,829


































Cash Collection Source -











Constant Currency Adjusted


2022








2021

($ in thousands)


Q2








Q2

Americas and Australia Core


$       244,377








$       325,895

Americas Insolvency


34,278








37,744

Europe Core


142,470








140,199

Europe Insolvency


22,935








21,227

Total Cash Collections


$       444,060








$       525,065












 

  • Total cash collections in Q2 2022 decreased 18.3%, or 15.4% on a constant currency adjusted basis, to $444.1 million compared to $543.8 million in the second quarter of 2021 ("Q2 2021"). The decrease was driven primarily by a 32.5% decrease in U.S. call center and other collections, and a 15.8% decrease in U.S. legal collections. The overall decrease in U.S. cash collections was due to excess consumer liquidity in 2021, which generated high levels of collections then, as well as lower levels of portfolio purchases. Europe cash collections decreased by 8.7%; however, on a currency adjusted basis, they increased by 2.5%. For the six months ended June 30, 2022, cash collections decreased $174.7 million compared to the same period last year.
  • Total portfolio revenue in Q2 2022 was $250.6 million compared to $282.7 million in Q2 2021.

Expenses

  • Operating expenses in Q2 2022 decreased by $6.9 million, or 3.8%, compared to Q2 2021. The decrease was primarily driven by:
    • a 6.9% decrease in compensation and employee services expenses primarily due to the level and timing of compensation accruals in the prior year and lower collector compensation expenses in the U.S. call centers; and
    • a 22.3% decrease in legal collection fees due to lower external legal cash collections, which was partially offset by a 31.1% increase in outside fees and services related to higher corporate legal expenses.
  • For the six months ended June 30, 2022, operating expenses decreased $17.0 million to $343.2 million compared to $360.1 million in the same period last year.
  • The effective tax rate for the six months ended June 30, 2022 was 20.3%.

Portfolio Acquisitions

  • The Company purchased $231.3 million in portfolios of nonperforming loans in Q2 2022.
  • At the end of Q2 2022, the Company had in place maximum forward flow commitments1 of up to $960.2 million, comprised of $300.9 million in the Americas and Australia and $659.3 million in Europe.


1.

Contractual agreements with sellers of nonperforming loans that allow for the purchase of nonperforming portfolios at pre-established prices.

 












Portfolio Purchase Source


2022


2021

($ in thousands)


Q2


Q1


Q4


Q3


Q2

Americas and Australia Core


$         99,962


$           90,639


$           90,263


$         162,451


$           98,901

Americas Insolvency


6,369


9,118


21,183


9,878


14,642

Europe Core


123,814


38,764


60,430


212,194


106,134

Europe Insolvency


1,202


8,929


29,820


7,424


Total Portfolio Acquisitions


$       231,347


$         147,450


$         201,696


$         391,947


$         219,677












Share Repurchases

  • The Company repurchased $34.9 million, or 0.8 million shares, with $92.7 million remaining under its current share repurchase plan as of June 30, 2022.
  • At June 30, 2022, the Company has repurchased more than 14% of its common stock since it began its share repurchases in 2021.

Conference Call Information

PRA Group, Inc. will hold a conference call today at 5:00 p.m. Eastern time to discuss its financial and operational results.

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 the operator for the PRA Group conference call.  To listen to a replay of the call, either visit the same website until August 8, 2023, or call 877-344-7529 in the U.S. or 412-317-0088 outside the U.S. and use access code 6057434 until August 15, 2022.        

The Company plans to report its third quarter 2022 results after market close on November 3, 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 June 30,


Six Months Ended June 30,


2022


2021


2022


2021

Revenues:








Portfolio income

$                194,009


$                219,137


$          401,541


$          450,809

Changes in expected recoveries

56,567


63,548


86,481


113,684

Total portfolio revenue

250,576


282,685


488,022


564,493

Fee income

6,467


2,453


8,297


4,634

Other revenue

1,219


491


2,548


5,971

Total revenues

258,262


285,629


498,867


575,098

Operating expenses:








Compensation and employee services

74,137


79,632


145,233


153,616

Legal collection fees

9,554


12,289


20,427


25,215

Legal collection costs

17,746


18,469


34,303


39,781

Agency fees

14,826


15,908


32,214


31,499

Outside fees and services

27,493


20,973


46,871


41,733

Communication

9,528


10,594


22,111


23,257

Rent and occupancy

4,633


4,643


9,620


9,123

Depreciation and amortization

3,865


3,815


7,643


7,796

Other operating expenses

12,743


15,092


24,741


28,110

Total operating expenses

174,525


181,415


343,163


360,130

   Income from operations

83,737


104,214


155,704


214,968

Other income and (expense):








Interest expense, net

(31,562)


(30,836)


(63,310)


(62,388)

Foreign exchange gain/(loss)

1,319


(1,079)


787


(1,105)

Other

(181)


183


(671)


209

Income before income taxes

53,313


72,482


92,510


151,684

Income tax expense

14,177


11,921


18,756


29,243

Net income

39,136


60,561


73,754


122,441

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

2,652


4,565


(2,702)


8,039

Net income attributable to PRA Group, Inc.

$                  36,484


$                  55,996


$            76,456


$          114,402

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








Basic

$                       0.92


$                       1.22


$                 1.90


$                 2.50

Diluted

$                       0.91


$                       1.22


$                 1.88


$                 2.48

Weighted average number of shares outstanding:








Basic

39,779


45,807


40,278


45,738

Diluted

39,900


46,059


40,602


46,051

 

PRA Group, Inc.

Consolidated Balance Sheets

(Amounts in thousands)



(unaudited)




June 30, 2022


December 31,
2021

Assets




Cash and cash equivalents

$                       67,974


$                       87,584

Investments

86,386


92,977

Finance receivables, net

3,183,632


3,428,285

Income taxes receivable

42,207


41,146

Deferred tax assets, net

63,810


67,760

Right-of-use assets

55,877


56,713

Property and equipment, net

54,182


54,513

Goodwill

437,032


480,263

Other assets

97,653


57,002

Total assets

$                 4,088,753


$                 4,366,243

Liabilities and Equity




Liabilities:




Accounts payable

$                         4,689


$                         3,821

Accrued expenses

97,139


127,802

Income taxes payable

15,575


19,276

Deferred tax liabilities, net

44,029


36,630

Lease liabilities

60,681


61,188

Interest-bearing deposits

114,383


124,623

Borrowings

2,481,622


2,608,714

Other liabilities

28,268


59,352

Total liabilities

2,846,386


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, 39,639 shares issued and outstanding
at June 30, 2022; 100,000 shares authorized, 41,008 shares issued and outstanding at December 31, 2021

396


410

Additional paid-in capital


Retained earnings

1,554,237


1,552,845

Accumulated other comprehensive loss

(347,821)


(266,909)

Total stockholders' equity - PRA Group, Inc.

1,206,812


1,286,346

Noncontrolling interest

35,555


38,491

Total equity

1,242,367


1,324,837

Total liabilities and equity

$                 4,088,753


$                 4,366,243

 

Select Expenses (Income)

Amounts in thousands, pre-tax











Three Months Ended


June 30,
2022

March 31,
2022

December 31,
2021

September 30,
2021

June 30,
2021

March 31,
2021

December 31,
2020

September 30,
2020










Noncash interest expense - amortization of debt discount

1,959

2,388

Noncash interest expense - amortization of debt issuance costs

2,471

2,627

2,455

2,406

2,391

2,256

2,393

2,476

Change in fair value of derivatives

1,525

2,726

3,115

2,982

2,911

3,102

3,875

3,701

Amortization of intangibles

77

83

(269)

104

105

181

1,792

360

Stock-based compensation expense

3,849

3,891

3,470

4,317

4,040

4,113

5,370

3,097

 

Purchase Price Multiples

as of June 30, 2022

Amounts in thousands

Purchase Period

Purchase Price (2)(3)

Total Estimated
Collections (4)

Estimated
Remaining
Collections (5)

Current Purchase
Price Multiple

Original Purchase
Price Multiple (6)

Americas and Australia Core






1996-2011

$                  1,287,821

$              4,129,821

$                  28,610

321 %

240 %

2012

254,076

658,792

14,240

259 %

226 %

2013

390,826

901,496

18,209

231 %

211 %

2014

404,117

867,655

29,052

215 %

204 %

2015

443,114

909,063

67,094

205 %

205 %

2016

455,767

1,100,432

126,762

241 %

201 %

2017

532,851

1,216,134

195,337

228 %

193 %

2018

653,975

1,435,326

256,051

219 %

202 %

2019

581,476

1,264,852

338,254

218 %

206 %

2020

435,668

939,503

412,666

216 %

213 %

2021

435,846

823,057

652,069

189 %

191 %

2022

189,008

326,906

314,050

173 %

173 %

Subtotal

6,064,545

14,573,037

2,452,394



Americas Insolvency





1996-2011

786,827

1,752,738

487

223 %

174 %

2012

251,395

393,285

34

156 %

136 %

2013

227,834

355,469

241

156 %

133 %

2014

148,420

218,894

930

147 %

124 %

2015

63,170

87,521

188

139 %

125 %

2016

91,442

116,606

520

128 %

123 %

2017

275,257

354,999

11,154

129 %

125 %

2018

97,879

136,590

26,747

140 %

127 %

2019

123,077

166,922

63,023

136 %

128 %

2020

62,130

86,969

54,366

140 %

136 %

2021

55,187

75,444

62,017

137 %

136 %

2022

15,487

21,168

20,497

137 %

137 %

Subtotal

2,198,105

3,766,605

240,204



Total Americas and Australia

8,262,650

18,339,642

2,692,598



Europe Core






2012

20,409

43,182

212 %

187 %

2013

20,334

26,618

131 %

119 %

2014 (1)

773,811

2,326,310

427,901

301 %

208 %

2015

411,340

727,139

169,579

177 %

160 %

2016

333,090

561,978

200,511

169 %

167 %

2017

252,174

358,481

131,223

142 %

144 %

2018

341,775

527,914

233,268

154 %

148 %

2019

518,610

775,679

392,617

150 %

152 %

2020

324,119

555,868

335,393

172 %

172 %

2021

412,411

702,825

542,754

170 %

170 %

2022

156,018

265,207

243,846

170 %

170 %

Subtotal

3,564,091

6,871,201

2,677,092



Europe Insolvency





2014 (1)

10,876

18,507

5

170 %

129 %

2015

18,973

28,867

332

152 %

139 %

2016

39,338

56,985

2,558

145 %

130 %

2017

39,235

49,996

6,627

127 %

128 %

2018

44,908

50,016

13,881

111 %

123 %

2019

77,218

102,120

38,269

132 %

130 %

2020

105,440

142,714

74,518

135 %

129 %

2021

53,230

71,526

52,846

134 %

134 %

2022

9,294

12,707

11,946

137 %

137 %

Subtotal

398,512

533,438

200,982



Total Europe

3,962,603

7,404,639

2,878,074



Total PRA Group

$                12,225,253

$            25,744,281

$              5,570,672





(1)

Includes finance receivables portfolios that were acquired through the acquisition of Aktiv Kapital AS in 2014 (as described in our 2021 Form 10-K).

(2)

Includes the acquisition date finance receivables 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 portfolio are presented at the year-end exchange rate for the respective year of purchase.

(4)

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

(5)

Non-U.S. amounts are presented at the June 30, 2022 exchange rate.

(6)

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 June 30, 2022

Amounts in thousands

Purchase Period

Cash

Collections (2)

Portfolio Income (2)

Change in Expected
Recoveries (2)

Total Portfolio
Revenue (2)

Net Finance
Receivables as of
June 30, 2022 (3)

Americas and Australia Core






1996-2011

$                     9,290

$              4,850

$                      4,121

$                      8,971

$                         6,112

2012

4,060

1,537

2,856

4,393

4,779

2013

7,009

2,407

3,267

5,674

7,428

2014

8,428

3,112

4,006

7,118

10,827

2015

11,397

6,968

(903)

6,065

26,081

2016

22,959

16,400

(8,667)

7,733

42,829

2017

45,524

22,712

1,644

24,356

86,986

2018

86,025

29,629

38,110

67,739

148,802

2019

103,082

42,796

10,968

53,764

191,387

2020

108,985

49,429

(2,664)

46,765

236,150

2021

94,843

60,622

(29,540)

31,082

347,652

2022

13,059

9,735

(382)

9,353

184,283

Subtotal

514,661

250,197

22,816

273,013

1,293,316

Americas Insolvency






1996-2011

270

303

(34)

269

2012

300

33

267

300

2013

326

132

195

327

2014

402

432

(72)

360

101

2015

318

119

118

237

137

2016

1,063

193

136

329

326

2017

13,729

1,707

1,753

3,460

10,023

2018

13,556

1,942

2,566

4,508

24,213

2019

20,072

3,306

3,679

6,985

56,306

2020

9,970

3,120

908

4,028

44,517

2021

8,811

3,556

925

4,481

48,766

2022

670

379

355

734

15,391

Subtotal

69,487

15,222

10,796

26,018

199,780

Total Americas and Australia

584,148

265,419

33,612

299,031

1,493,096

Europe Core






2012

483

483

483

2013

276

276

276

2014 (1)

65,187

39,018

21,507

60,525

115,595

2015

22,334

10,469

5,643

16,112

91,262

2016

20,077

9,781

193

9,974

118,088

2017

13,643

4,750

2,254

7,004

89,349

2018

28,166

9,371

2,668

12,039

155,679

2019

49,329

14,970

4,040

19,010

268,004

2020

37,785

14,558

3,257

17,815

205,856

2021

48,978

21,573

2,524

24,097

324,509

2022

7,374

1,789

2,808

4,597

153,103

Subtotal

293,632

126,279

45,653

171,932

1,521,445

Europe Insolvency






2014 (1)

146

12

124

136

4

2015

386

133

(94)

39

261

2016

1,676

400

77

477

1,952

2017

3,834

360

644

1,004

6,079

2018

5,203

721

(1,224)

(503)

12,571

2019

10,823

2,017

570

2,587

33,313

2020

17,381

3,341

6,329

9,670

64,336

2021

7,025

2,551

590

3,141

41,617

2022

786

308

200

508

8,958

Subtotal

47,260

9,843

7,216

17,059

169,091

Total Europe

340,892

136,122

52,869

188,991

1,690,536

Total PRA Group

$                 925,040

$          401,541

$                    86,481

$                  488,022

$                  3,183,632



(1)

Includes finance receivables portfolios that were acquired through the acquisition of Aktiv Kapital AS in 2014 (as described in our 2021 Form 10-K).

(2)

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

(3)

Non-U.S. amounts are presented at the June 30, 2022 exchange rate.

 

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

as of June 30, 2022

Amounts in millions



Cash Collections

Purchase Period

Purchase
Price (3)(4)

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

$     9.3

$ 4,094.0

2012

254.1

56.9

173.6

146.2

97.3

60.0

40.0

27.8

17.9

11.8

9.0

4.1

644.6

2013

390.8

101.6

247.8

194.0

120.8

78.9

56.4

36.9

23.2

16.7

7.0

883.3

2014

404.1

92.7

253.4

170.3

114.2

82.2

55.3

31.9

22.3

8.4

830.7

2015

443.1

117.0

228.4

185.9

126.6

83.6

57.2

34.9

11.4

845.0

2016

455.8


138.7

256.5

194.6

140.6

105.9

74.2

23.0

933.5

2017

532.9

107.3

278.7

256.5

192.5

130.0

45.5

1010.5

2018

654.0

122.7

361.9

337.7

239.9

86.0

1,148.2

2019

581.5

143.8

349.0

289.8

103.1

885.7

2020

435.7

133.0

284.3

109.0

526.3

2021

435.8

85.0

94.8

179.8

2022

189.0

13.1

13.1

Subtotal

6,064.6

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

514.7

11,994.7

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

0.3

1,752.3

2012

251.4

17.4

103.6

94.1

80.1

60.7

29.3

4.3

1.9

0.9

0.6

0.3

393.2

2013

227.8

52.5

82.6

81.7

63.4

47.8

21.9

2.9

1.3

0.8

0.3

355.2

2014

148.4

37.0

50.9

44.3

37.4

28.8

15.8

2.2

1.1

0.4

217.9

2015

63.2

3.4

17.9

20.1

19.8

16.7

7.9

1.3

0.3

87.4

2016

91.4

18.9

30.4

25.0

19.9

14.4

7.4

1.1

117.1

2017

275.3

49.1

97.3

80.9

58.8

44.0

13.7

343.8

2018

97.9

6.7

27.4

30.5

31.6

13.6

109.8

2019

123.1

13.4

31.4

39.1

20.0

103.9

2020

62.1

6.5

16.1

10.0

32.6

2021

55.2

4.5

8.8

13.3

2022

15.5

0.7

0.7

Subtotal

2,198.1

667.4

354.2

469.8

458.4

344.3

249.8

222.5

207.8

181.0

155.2

147.3

69.5

3,527.2

Total Americas and Australia

8,262.7

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

584.2

15,521.9

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

0.5

40.0

2013

20.3

7.1

8.5

2.3

1.3

1.2

1.3

0.9

0.7

0.7

0.3

24.3

2014 (2)

773.8

153.2

292.0

246.4

220.8

206.3

172.9

149.8

149.2

65.2

1,655.8

2015

411.3

45.8

100.3

86.2

80.9

66.1

54.3

51.4

22.3

507.3

2016

333.1

40.4

78.9

72.6

58.0

48.3

46.7

20.1

365.0

2017

252.2

17.9

56.0

44.1

36.1

34.8

13.6

202.5

2018

341.8

24.3

88.7

71.2

69.1

28.2

281.5

2019

518.6

47.9

125.7

121.4

49.2

344.2

2020

324.1

32.4

91.7

37.8

161.9

2021

412.4

48.4

49.0

97.4

2022

156.0

7.4

7.4

Subtotal

3,564.0

11.6

16.1

167.3

343.3

390.6

407.0

443.4

480.1

519.7

614.6

293.6

3,687.3

Europe Insolvency













2014 (2)

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

0.4

26.0

2016

39.3

6.2

12.7

12.9

10.7

7.9

6.0

1.7

58.1

2017

39.2

1.2

7.9

9.2

9.8

9.4

3.8

41.3

2018

44.9

0.6

8.4

10.3

11.7

5.2

36.2

2019

77.2

5.1

21.1

23.9

10.8

60.9

2020

105.4

6.1

34.6

17.5

58.2

2021

53.3

5.4

7.0

12.4

2022

9.3

0.8

0.8

Subtotal

398.5

7.3

14.5

22.1

28.8

38.8

58.9

92.9

47.3

310.6

Total Europe

3,962.5

11.6

16.1

167.3

350.6

405.1

429.1

472.2

518.9

578.6

707.5

340.9

3,997.9

Total PRA Group

$     12,225.2

$  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

$ 925.1

$  19,519.8



(1)

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

(2)

Includes finance receivables portfolios that were acquired through the acquisition of Aktiv Kapital AS in 2014 (as described in our 2021 Form 10-K).

(3)

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

(4)

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 June 30, 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)

June 30, 2022

December 31, 2021

Net income attributable to PRA Group, Inc.

$                                  145

$                                  183

Adjustments:







Income tax expense

44

55

Foreign exchange (gains)/losses

(1)

1

Interest expense, net

125

124

Other expense

1

Depreciation and amortization

15

15

Adjustment for net income attributable to noncontrolling interests

2

12

Recoveries applied to negative allowance less Changes in expected recoveries

893

988

Adjusted EBITDA

$                              1,224

$                              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 June 30, 2022 and for the year ended December 31, 2021 (amounts in millions):

Debt to Adjusted EBITDA


LTM

For the Year Ended


June 30, 2022

December 31, 2021

Borrowings

$                              2,482

$                              2,609

LTM Adjusted EBITDA

1,224

1,378

Debt to LTM Adjusted EBITDA

2.03

1.89

 

Investor Contact:
Najim Mostamand, CFA
Vice President, 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