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Pra Group, Inc.
PRA Group Reports First Quarter 2021 Results
Published May 6 2021
4 min read

PRA Group Reports First Quarter 2021 Results

NORFOLK, Va., May 6, 2021 /PRNewswire/ -- PRA Group (Nasdaq: PRAA), a global leader in acquiring and collecting nonperforming loans, today reported its financial results for the first quarter of 2021.  The Company reported net income attributable to PRA Group Inc. of $58.4 million in the first quarter, compared with $19.1 million in the prior year period. Diluted earnings per share were $1.27 versus $0.42 in the first quarter of 2020.

First Quarter Highlights (compared to the first quarter of 2020, unless otherwise indicated)

  • Record total cash collections which increased 12% to $555.9 million.
  • Record total revenues which increased 15% to $289.5 million.
  • Income from operations increased 83% to $110.8 million.
  • Cash efficiency ratio1 of 68.0% during the quarter compared to 61.5% in the first quarter of 2020.
  • Net income attributable to PRA Group, Inc. increased 205% to $58.4 million.
  • Diluted earnings per share increased 202% to $1.27.
  • Debt to Adjusted EBITDA2 for the last 12 months decreased to 1.77x from 1.99x at December 31, 2020.
  • Total portfolio purchases of $159.0 million.
  • Estimated remaining collections (ERC) of $6.1 billion.
  • $1.2 billion available for portfolio purchases.

"PRA started 2021 with another record setting quarter.  We collected record levels of cash globally and had record revenues.  In Europe, solid portfolio purchases in 2020 drove record collections.  In the U.S., we continued to see strong collections particularly in our call centers and digital platform.  These results combined with increases in productivity helped to produce a near record cash efficiency ratio for the quarter," said Kevin Stevenson, president and chief executive officer.  "Portfolio purchases during the quarter increased sequentially in the U.S.  The market remains stable with little change in seller behavior; however, lower charge off rates are pushing forward flow volumes to the lower end of the contracted range.  In Europe, we were pleased with our investment volume in what is normally a seasonally slower quarter.  We have solid volumes of forward flows secured, believe the pipeline in Europe is larger than what 2020 offered, and were awarded our first portfolio, a forward flow, in Australia."  

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)

Q1

Q4

Q3

Q2

Q1

Americas and Australia Core

$

347,638

$

286,524

$

336,322

$

343,269

$

305,780

Americas Insolvency

35,253

36,048

37,344

38,685

43,210

Europe Core

149,486

141,471

131,702

115,145

131,340

Europe Insolvency

23,510

17,830

13,971

12,841

14,243

Total Cash Collections

$

555,887

$

481,873

$

519,339

$

509,940

$

494,573

Cash Collection Source -

Constant Currency Adjusted

2021

2020

($ in thousands)

Q1

Q1

Americas and Australia Core

$

347,638

$

301,696

Americas Insolvency

35,253

43,239

Europe Core

149,486

142,004

Europe Insolvency

23,510

15,366

Total Cash Collections

$

555,887

$

502,305

  • Cash collections in the quarter increased $61.3 million compared to the first quarter of 2020.  The increase was primarily due to a 32% increase in U.S. call center and other cash collections and a 19% increase in Europe cash collections.  This increase was partially offset by a decrease in U.S. legal and Americas Insolvency cash collections.  While cash collections decreased in Other Americas Core, this decrease was primarily driven by foreign exchange rates. 
  • Portfolio income was $231.7 million compared to $262.0 million in  the first quarter of 2020. This decrease was primarily driven by the Company's assumption that the significant cash overperformance in 2020 was largely acceleration versus an increase in total estimated collections, combined with recent purchases not offsetting runoff, primarily in Americas Insolvency and Other Americas. 
  • Changes in expected recoveries were a net positive of $50.1 million.  This amount reflects $103.0 million in recoveries received in excess of forecast from overperformance during the quarter, partially offset by a negative $52.9 million adjustment for changes in expected future recoveries.  The Company has assumed that the majority of the current quarter overperformance is acceleration of future collections and made cash forecast adjustments deemed appropriate given the current environment. 

Expenses

  • Operating expenses in the quarter decreased $12.5 million compared to the first quarter of 2020. The decrease was primarily driven by a reduction in legal collection costs mainly as a result of a shift in collections from the legal channel to the call centers and digital platforms. This decrease was partially offset by an increase in agency fees primarily outside of the U.S.
  • Interest expense, net decreased $5.7 million compared to the first quarter of 2020 primarily due to the Company's early adoption of the new accounting for convertible debt as well as lower outstanding balances.
  • The effective tax rate for the first quarter of 2021 was 21.9%.

Portfolio Acquisitions

  • The Company purchased $159.0 million in finance receivables in the first quarter of 2021.
  • At the end of the first quarter, the Company had in place forward flow commitments of up to $640.7 million with $452.7 million in the Americas and Australia and $188.0 million in Europe.

Portfolio Purchase Source

2021

2020

($ in thousands)

Q1

Q4

Q3

Q2

Q1

Americas and Australia Core

$

88,912

$

67,460

$

84,139

$

110,474

$

172,697

Americas Insolvency

9,486

12,504

14,328

14,527

20,772

Europe Core

44,095

137,647

74,930

34,247

60,990

Europe Insolvency

16,468

72,171

4,203

5,251

18,778

Total Portfolio Acquisitions

$

158,961

$

289,782

$

177,600

$

164,499

$

273,237

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 6, 2022, or  call 877-344-7529 in the U.S. or 412-317-0088 outside the U.S. and use access code 10155063 until May 13, 2021.                                                 

About PRA GroupAs 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 StatementsStatements 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,

2021

2020

Revenues:

Portfolio income

$

231,672

$

262,022

Changes in expected recoveries

50,136

(12,816)

Fee income

2,181

2,209

Other revenue

5,480

369

Total revenues

289,469

251,784

Operating expenses:

Compensation and employee services

73,984

75,171

Legal collection fees

12,926

14,572

Legal collection costs

21,312

34,447

Agency fees

15,591

13,376

Outside fees and services

20,760

19,394

Communication

12,663

13,511

Rent and occupancy

4,480

4,484

Depreciation and amortization

3,981

4,084

Other operating expenses

13,018

12,205

Total operating expenses

178,715

191,244

   Income from operations

110,754

60,540

Other income and (expense):

Interest expense, net

(31,552)

(37,211)

Foreign exchange (loss)/gain

(26)

2,283

Other

26

(76)

Income before income taxes

79,202

25,536

Income tax expense

17,322

3,100

Net income

61,880

22,436

Adjustment for net income attributable to noncontrolling interests

3,474

3,301

Net income attributable to PRA Group, Inc.

$

58,406

$

19,135

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

Basic

$

1.28

$

0.42

Diluted

$

1.27

$

0.42

Weighted average number of shares outstanding:

Basic

45,669

45,452

Diluted

46,045

45,784

 

PRA Group, Inc.

Consolidated Balance Sheets

(Amounts in thousands)

(unaudited)

March 31, 2021

December 31,2020

Assets

Cash and cash equivalents

$

92,798

$

108,613

Restricted cash

16,057

12,434

Investments

54,682

55,759

Finance receivables, net

3,372,666

3,514,788

Other receivables, net

3,223

13,194

Income taxes receivable

27,246

21,928

Deferred tax assets, net

72,523

83,205

Right-of-use assets

50,839

52,951

Property and equipment, net

56,825

58,356

Goodwill

492,751

492,989

Other assets

38,920

38,844

Total assets

$

4,278,530

$

4,453,061

Liabilities and Equity

Liabilities:

Accounts payable

$

4,817

$

5,294

Accrued expenses

76,684

97,320

Income taxes payable

31,853

29,692

Deferred tax liabilities, net

39,739

40,867

Lease liabilities

55,322

57,348

Interest-bearing deposits

124,998

132,739

Borrowings

2,501,133

2,661,289

Other liabilities

40,755

54,986

Total liabilities

2,875,301

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, 45,799 shares issued and outstanding at March 31, 2021; 100,000 shares authorized, 45,585 shares issued and outstanding at December 31, 2020

458

456

Additional paid-in capital

47,236

75,282

Retained earnings

1,582,384

1,511,970

Accumulated other comprehensive loss

(253,576)

(245,791)

Total stockholders' equity - PRA Group, Inc.

1,376,502

1,341,917

Noncontrolling interest

26,727

31,609

Total equity

1,403,229

1,373,526

Total liabilities and equity

$

4,278,530

$

4,453,061

 

Select Expenses (Income)

Amounts in thousands, pre-tax

Three Months Ended

March 31,2021

December 31,2020

September 30,2020

June 30,2020

March 31,2020

December 31,2019

September 30,2019

June 30,2019

Acquisition/divestiture-related expenses

—

—

—

—

—

—

—

227

Legal costs not associated with normal operations

—

—

—

—

—

—

—

—

Noncash interest expense- amortization of debt discount

—

1,959

2,388

3,247

3,217

3,157

3,128

3,071

Noncash interest expense - amortization of debt issuance costs

2,256

2,393

2,476

2,743

2,640

2,649

2,649

2,655

Change in fair value of derivatives

3,102

3,875

3,701

3,284

2,039

1,247

1,126

1,645

Amortization of intangibles

181

1,792

360

351

349

407

400

418

Stock-based compensation expense

4,113

5,370

3,097

3,063

2,857

2,809

2,974

2,620

 

Purchase Price Multiples

as of March 31, 2021

Amounts in thousands

Purchase Period

Purchase Price (1)(2)

Total Estimated Collections (3)

Estimated Remaining Collections (4)

Current Estimated Purchase PriceMultiple

Original Estimated Purchase Price Multiple (5)

Americas and Australia Core

1996-2010

$

1,078,219

$

3,397,952

$

24,585

315%

240%

2011

209,602

719,618

15,897

343%

245%

2012

254,076

652,293

18,061

257%

226%

2013

390,826

894,640

30,051

229%

211%

2014

404,117

859,775

45,345

213%

204%

2015

443,114

913,857

106,551

206%

205%

2016

455,767

1,098,295

207,608

241%

201%

2017

532,851

1,211,584

325,675

227%

193%

2018

653,975

1,368,879

447,682

209%

202%

2019

581,476

1,239,777

622,713

213%

206%

2020

435,668

931,493

717,342

214%

213%

2021

88,822

188,644

184,196

212%

212%

Subtotal

5,528,513

13,476,807

2,745,706

Americas Insolvency

1996-2010

606,395

1,382,677

920

228%

180%

2011

180,432

370,183

493

205%

155%

2012

251,395

392,723

184

156%

136%

2013

227,834

354,943

651

156%

133%

2014

148,420

218,432

1,695

147%

124%

2015

63,170

87,087

876

138%

125%

2016

91,442

117,159

6,736

128%

123%

2017

275,257

349,209

51,318

127%

125%

2018

97,879

131,461

58,999

134%

127%

2019

123,077

158,692

105,361

129%

128%

2020

62,130

84,972

75,489

137%

136%

2021

9,486

13,185

13,168

139%

139%

Subtotal

2,136,917

3,660,723

315,890

Total Americas and Australia

7,665,430

17,137,530

3,061,596

Europe Core

2012

20,409

41,543

—

204%

187%

2013

20,334

25,653

—

126%

119%

2014

773,811

2,240,653

586,113

290%

208%

2015

411,340

725,713

250,732

176%

160%

2016

333,090

562,194

285,405

169%

167%

2017

252,174

354,024

184,108

140%

144%

2018

341,775

529,154

346,370

155%

148%

2019

518,610

776,604

587,133

150%

152%

2020

324,119

557,506

491,301

172%

172%

2021

43,635

77,780

76,397

178%

178%

Subtotal

3,039,297

5,890,824

2,807,559

Europe Insolvency

2014

10,876

18,228

130

168%

129%

2015

18,973

29,018

1,997

153%

139%

2016

39,338

56,926

8,784

145%

130%

2017

39,235

49,255

17,707

126%

128%

2018

44,908

52,080

32,060

116%

123%

2019

77,218

101,866

72,242

132%

130%

2020

105,440

135,896

121,891

129%

129%

2021

16,621

20,786

20,151

125%

125%

Subtotal

352,609

464,055

274,962

Total Europe

3,391,906

6,354,879

3,082,521

Total PRA Group

$

11,057,336

$

23,492,409

$

6,144,117

(1)

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

(2)

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

(4)

For our non-U.S. amounts, ERC is presented at the March 31, 2021 exchange rate.

(5)

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

Portfolio Financial Information

Year-to-date as of March 31, 2021

Amounts in thousands

Purchase Period

Cash

Collections (1)

Portfolio Income (1)

Change in Expected Recoveries (1)

Total Portfolio Revenue (1)(2)

Net Finance Receivables as of March 31, 2021 (3)

Americas and Australia Core

1996-2010

$

3,726

$

2,319

$

447

$

2,766

$

5,178

2011

2,259

1,405

309

1,714

2,596

2012

2,786

1,286

375

1,661

5,638

2013

4,968

2,526

(351)

2,175

13,495

2014

6,937

3,494

(2,154)

1,340

19,677

2015

11,958

6,355

(4,961)

1,394

45,306

2016

24,893

11,990

3,908

15,898

84,015

2017

41,722

18,236

3,937

22,173

145,799

2018

75,462

25,404

10,591

35,995

245,467

2019

88,246

35,129

6,417

41,546

331,169

2020

80,231

35,446

16,613

52,059

369,418

2021

4,450

2,728

838

3,566

87,902

Subtotal

347,638

146,318

35,969

182,287

1,355,660

Americas Insolvency

1996-2010

181

186

(5)

181

—

2011

76

73

3

76

—

2012

190

72

120

192

—

2013

201

181

20

201

—

2014

298

355

(90)

265

190

2015

446

247

(202)

45

497

2016

2,727

491

241

732

5,429

2017

11,752

2,621

468

3,089

43,107

2018

7,812

1,778

751

2,529

50,368

2019

8,594

2,488

(1,786)

702

89,380

2020

2,960

1,897

535

2,432

57,174

2021

16

101

(14)

87

9,553

Subtotal

35,253

10,490

41

10,531

255,698

Total Americas and Australia

382,891

156,808

36,010

192,818

1,611,358

Europe Core

2012

283

—

283

283

—

2013

171

—

171

171

—

2014

37,843

25,589

7,184

32,773

159,401

2015

13,464

7,427

(6,091)

1,336

130,541

2016

11,956

6,431

(649)

5,782

164,228

2017

9,565

3,191

(1,076)

2,115

127,233

2018

18,365

6,289

4,576

10,865

226,773

2019

32,020

10,111

2,450

12,561

390,892

2020

24,425

9,595

4,578

14,173

293,315

2021

1,394

210

1,015

1,225

43,431

Subtotal

149,486

68,843

12,441

81,284

1,535,814

Europe Insolvency

2014

88

48

6

54

55

2015

530

225

5

230

1,335

2016

1,762

546

118

664

6,487

2017

2,484

398

140

538

15,696

2018

2,967

640

(764)

(124)

27,919

2019

6,222

1,554

183

1,737

59,244

2020

8,817

2,410

850

3,260

98,227

2021

640

200

1,147

1,347

16,531

Subtotal

23,510

6,021

1,685

7,706

225,494

Total Europe

172,996

74,864

14,126

88,990

1,761,308

Total PRA Group

$

555,887

$

231,672

$

50,136

$

281,808

$

3,372,666

(1)

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

(2)

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

(3)

For our non-U.S. amounts, Net Finance Receivables are presented at the March 31, 2021 exchange rate.

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

as of March 31, 2021 

Amounts in millions

Cash Collections

Purchase Period

PurchasePrice (2)(3)

1996-2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

Total

Americas and Australia Core

1996-2010

$

1,078.2

$

1,990.5

$

367.1

$

311.5

$

228.4

$

157.7

$

109.3

$

70.2

$

46.0

$

34.4

$

28.4

$

18.8

$

3.7

$

3,366.0

2011

209.6

—

62.0

174.5

152.9

108.5

73.8

48.7

32.0

21.6

16.6

10.9

2.3

703.8

2012

254.1

—

—

56.9

173.6

146.2

97.3

60.0

40.0

27.8

17.9

11.8

2.8

634.3

2013

390.8

—

—

—

101.6

247.8

194.0

120.8

78.9

56.4

36.9

23.2

5.0

864.6

2014

404.1

—

—

—

—

92.7

253.4

170.3

114.2

82.2

55.3

31.9

6.9

806.9

2015

443.1

—

—

—

—

—

117.0

228.4

185.9

126.6

83.6

57.2

12.0

810.7

2016

455.8

—

—

—

—

—

—

138.7

256.5

194.6

140.6

105.9

24.9

861.2

2017

532.9

—

—

—

—

—

—

—

107.3

278.7

256.5

192.5

41.7

876.7

2018

654.0

—

—

—

—

—

—

—

—

122.7

361.9

337.7

75.5

897.8

2019

581.5

—

—

—

—

—

—

—

—

—

143.8

349.0

88.2

581.0

2020

435.7

—

—

—

—

—

—

—

—

—

—

133.0

80.2

213.2

2021

88.8

—

—

—

—

—

—

—

—

—

—

—

4.4

4.4

Subtotal

5,528.6

1,990.5

429.1

542.9

656.5

752.9

844.8

837.1

860.8

945.0

1,141.5

1,271.9

347.6

10,620.6

Americas Insolvency

1996-2010

606.4

390.9

261.2

270.4

231.0

158.9

51.2

8.6

4.6

2.5

1.4

0.8

0.2

1,381.7

2011

180.4

—

15.2

66.4

82.8

85.8

76.9

36.0

3.7

1.6

0.7

0.5

0.1

369.7

2012

251.4

—

—

17.4

103.6

94.1

80.1

60.7

29.3

4.3

1.9

0.9

0.2

392.5

2013

227.8

—

—

—

52.5

82.6

81.7

63.4

47.8

21.9

2.9

1.3

0.2

354.3

2014

148.4

—

—

—

—

37.0

50.9

44.3

37.4

28.8

15.8

2.2

0.3

216.7

2015

63.2

—

—

—

—

—

3.4

17.9

20.1

19.8

16.7

7.9

0.4

86.2

2016

91.4

—

—

—

—

—

—

18.9

30.4

25.0

19.9

14.4

2.7

111.3

2017

275.3

—

—

—

—

—

—

—

49.1

97.3

80.9

58.8

11.8

297.9

2018

97.9

—

—

—

—

—

—

—

—

6.7

27.4

30.5

7.8

72.4

2019

123.1

—

—

—

—

—

—

—

—

—

13.3

31.4

8.6

53.3

2020

62.1

—

—

—

—

—

—

—

—

—

—

6.6

3.0

9.6

2021

9.5

—

—

—

—

—

—

—

—

—

—

—

—

—

Subtotal

2,136.9

390.9

276.4

354.2

469.9

458.4

344.2

249.8

222.4

207.9

180.9

155.3

35.3

3,345.6

Total Americas and Australia

7,665.5

2,381.4

705.5

897.1

1,126.4

1,211.3

1,189.0

1,086.9

1,083.2

1,152.9

1,322.4

1,427.2

382.9

13,966.2

Europe Core

2012

20.4

—

—

11.6

9.0

5.6

3.2

2.2

2.0

2.0

1.5

1.2

0.3

38.6

2013

20.3

—

—

—

7.1

8.5

2.3

1.3

1.2

1.3

0.9

0.7

0.2

23.5

2014

773.8

—

—

—

—

153.2

292.0

246.4

220.8

206.3

172.9

149.8

37.8

1,479.2

2015

411.3

—

—

—

—

—

45.8

100.3

86.2

80.9

66.1

54.3

13.4

447.0

2016

333.1

—

—

—

—

—

—

40.4

78.9

72.6

58.0

48.3

12.0

310.2

2017

252.2

—

—

—

—

—

—

—

17.9

56.0

44.1

36.1

9.6

163.7

2018

341.8

—

—

—

—

—

—

—

—

24.3

88.7

71.2

18.4

202.6

2019

518.6

—

—

—

—

—

—

—

—

—

47.9

125.7

32.0

205.6

2020

324.1

—

—

—

—

—

—

—

—

—

—

32.4

24.4

56.8

2021

43.6

—

—

—

—

—

—

—

—

—

—

—

1.4

1.4

Subtotal

3,039.2

—

—

11.6

16.1

167.3

343.3

390.6

407.0

443.4

480.1

519.7

149.5

2,928.6

Europe Insolvency

2014

10.9

—

—

—

—

—

4.3

3.9

3.2

2.6

1.5

0.8

0.1

16.4

2015

19.0

—

—

—

—

—

3.0

4.4

5.0

4.8

3.9

2.9

0.5

24.5

2016

39.3

—

—

—

—

—

—

6.2

12.7

12.9

10.7

7.9

1.8

52.2

2017

39.2

—

—

—

—

—

—

—

1.2

7.9

9.2

9.8

2.5

30.6

2018

44.9

—

—

—

—

—

—

—

—

0.6

8.4

10.3

3.0

22.3

2019

77.2

—

—

—

—

—

—

—

—

—

5.1

21.1

6.2

32.4

2020

105.4

—

—

—

—

—

—

—

—

—

—

6.1

8.8

14.9

2021

16.7

—

—

—

—

—

—

—

—

—

—

—

0.6

0.6

Subtotal

352.6

—

—

—

—

—

7.3

14.5

22.1

28.8

38.8

58.9

23.5

193.9

Total Europe

3,391.8

—

—

11.6

16.1

167.3

350.6

405.1

429.1

472.2

518.9

578.6

173.0

3,122.5

Total PRA Group

$

11,057.3

$

2,381.4

$

705.5

$

908.7

$

1,142.5

$

1,378.6

$

1,539.6

$

1,492.0

$

1,512.3

$

1,625.1

$

1,841.3

$

2,005.8

$

555.9

$

17,088.7

(1)

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

(2)

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

(3)

For our non-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 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; 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, 2021 and for the year ended December 31, 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

For the Year Ended

Adjusted EBITDA for PRA Group ($ in millions)

March 31, 2021

December 31, 2020

Net income attributable to PRA Group, Inc.

$

189

$

149

Adjustments:

Income tax expense

55

41

Foreign exchange losses/(gains)

—

(2)

Interest expense, net

136

142

Other expense

1

1

Depreciation and amortization

18

18

Adjustment for net income attributable to noncontrolling interests

19

18

Recoveries applied to negative allowance less Changes in expected recoveries

997

968

Adjusted EBITDA

$

1,416

$

1,337

Additionally, The Company evaluates our business using certain ratios that use Adjusted EBITDA.  Debt to Adjusted EBITDA is calculated by dividing borrowings by Adjusted EBITDA.  The following table reflects our Debt to Adjusted EBITDA for LTM as of March 31, 2021 and for the year ended December 31, 2020 (amounts in millions):

Debt to Adjusted EBITDA

LTM

For the Year Ended

March 31, 2021

December 31, 2020

Borrowings

$

2,501

$

2,661

LTM Adjusted EBITDA

1,416

1,337

Debt to LTM Adjusted EBITDA

1.77

1.99

 

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

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

Cision View original content:http://www.prnewswire.com/news-releases/pra-group-reports-first-quarter-2021-results-301286071.html

SOURCE PRA Group