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Pra Group, Inc.
PRA Group Reports Second Quarter 2022 Results
Aug 8 2022
5 min read

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").

(PRNewsfoto/PRA Group)

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 outstandingat 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 EstimatedCollections (4)

EstimatedRemainingCollections (5)

Current PurchasePrice Multiple

Original PurchasePrice 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 ExpectedRecoveries (2)

Total PortfolioRevenue (2)

Net FinanceReceivables as ofJune 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

PurchasePrice (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, CFAVice President, Investor Relations757-431-7913IR@PRAGroup.com

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

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/pra-group-reports-second-quarter-2022-results-301601723.html

SOURCE PRA Group