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 InformationPRA 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 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, | |||
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 PurchasePrice 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 PartinSenior Vice President, Finance and Investor Relations(757) 431-7913[email protected]
News Media Contact:Elizabeth KerseySenior Vice President, Communications and Public Policy(757) 431-3398[email protected]
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SOURCE PRA Group