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05.08.2021 22:05:00
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PRA Group Reports Second Quarter 2021 Results
NORFOLK, Va., Aug. 5, 2021 /PRNewswire/ -- PRA Group, Inc. (Nasdaq: PRAA), a global leader in acquiring and collecting nonperforming loans, today reported its financial results for the second quarter of 2021. The Company reported net income attributable to PRA Group, Inc. of $56.0 million in the second quarter, compared with $57.9 million in the prior year period. Diluted earnings per share were $1.22 versus $1.26 in the second quarter of 2020. For the six months ended June 30, 2021, net income attributable to PRA Group, Inc. was $114.4 million, or $2.48 per diluted share, compared with $77.0 million, or $1.68 per diluted share, during the same period in 2020.
Second Quarter Highlights (compared to the second quarter of 2020, unless otherwise indicated)
- Total cash collections increased 7% to $543.8 million.
- Total revenues increased 5% to $285.6 million.
- Cash efficiency ratio1 of 66.8%.
- Diluted earnings per share were $1.22.
- Debt to Adjusted EBITDA2 for the last 12 months improved to 1.69x from 1.99x at December 31, 2020.
- Total portfolio purchases of $219.7 million, an increase of $61 million, or 38%, from the first quarter of 2021.
- Estimated remaining collections (ERC) of $6.1 billion.
- $1.2 billion available for portfolio purchases.
"This quarter's strong performance is yet another in a line of outstanding results that we have delivered in the past year and a half. Global cash collections were only $12 million behind our record setting first quarter and Europe delivered the largest quarter ever. Portfolio purchases during the quarter increased on a sequential basis, with the Americas registering its largest quarter since the second quarter of 2020, and Europe recording its second best Q2 since PRA became a global enterprise in July 2014," said Kevin Stevenson, president and chief executive officer. "Based on our strong results and capital position, the Board of Directors approved a $150 million share repurchase program."
Cash Collections and Revenues
- The following table presents cash collections by quarter and by source on an as reported and constant currency-adjusted basis:
Cash Collection Source | 2021 | 2020 | ||||||||||||||||||
($ in thousands) | Q2 | Q1 | Q4 | Q3 | Q2 | |||||||||||||||
Americas and Australia Core | $ | 324,845 | $ | 347,638 | $ | 286,524 | $ | 336,322 | $ | 343,269 | ||||||||||
Americas Insolvency | 37,768 | 35,253 | 36,048 | 37,344 | 38,685 | |||||||||||||||
Europe Core | 157,637 | 149,486 | 141,471 | 131,702 | 115,145 | |||||||||||||||
Europe Insolvency | 23,579 | 23,510 | 17,830 | 13,971 | 12,841 | |||||||||||||||
Total Cash Collections | $ | 543,829 | $ | 555,887 | $ | 481,873 | $ | 519,339 | $ | 509,940 | ||||||||||
Cash Collection Source - | ||||||||||||||||||||
Constant Currency Adjusted | 2021 | 2020 | ||||||||||||||||||
($ in thousands) | Q2 | Q2 | ||||||||||||||||||
Americas and Australia Core | $ | 324,845 | $ | 344,539 | ||||||||||||||||
Americas Insolvency | 37,768 | 38,732 | ||||||||||||||||||
Europe Core | 157,637 | 128,859 | ||||||||||||||||||
Europe Insolvency | 23,579 | 14,393 | ||||||||||||||||||
Total Cash Collections | $ | 543,829 | $ | 526,523 | ||||||||||||||||
- Cash collections in the quarter increased $33.9 million compared to the second quarter of 2020. The increase was primarily due to a 42% increase in Europe cash collections and a 20% increase in Other Americas & Australia Core cash collections. This increase was partially offset by a decrease in U.S. call centers and U.S. legal cash collections. For the six months ended June 30, 2021, cash collections increased $95.2 million compared to the same period last year.
- Total portfolio revenue was $282.7 million, an increase of $14.6 million, compared to $268.1 million during the second quarter of 2020. The Company has assumed that the majority of the current quarter overperformance was acceleration of future collections and made adjustments in some geographies to increase near term expected collections, bringing them in line with recent performance and trends in collections, with the corresponding reductions later in the forecast period.
Expenses
- Operating expenses in the quarter increased $20.8 million compared to the second quarter of 2020. The increase is primarily driven by:
- an increase in compensation and employee services primarily due to medical benefits, unfavorable foreign exchange and the timing of performance based compensation accruals;
- an increase in agency fees due to increased fees outside the U.S.; and
- an increase in other operating expenses primarily due to investments in digital and data.
- For the six months ended June 30, 2021, operating expenses increased $8.3 million compared to the same period last year.
- Interest expense, net decreased $4.6 million compared to the second quarter of 2020 primarily due to lower average borrowings this year and a change in accounting for convertible notes.
- The effective tax rate for the six months ended June 30, 2021 was 19.3%.
Portfolio Acquisitions
- The Company purchased $219.7 million in finance receivables in the second quarter of 2021.
- At the end of the second quarter, the Company had in place forward flow commitments of up to $521.1 million with $377.2 million in the Americas and Australia and $143.9 million in Europe.
Portfolio Purchase Source | 2021 | 2020 | ||||||||||||||||||
($ in thousands) | Q2 | Q1 | Q4 | Q3 | Q2 | |||||||||||||||
Americas and Australia Core | $ | 98,901 | $ | 88,912 | $ | 67,460 | $ | 84,139 | $ | 110,474 | ||||||||||
Americas Insolvency | 14,642 | 9,486 | 12,504 | 14,328 | 14,527 | |||||||||||||||
Europe Core | 106,134 | 44,095 | 137,647 | 74,930 | 34,247 | |||||||||||||||
Europe Insolvency | — | 16,468 | 72,171 | 4,203 | 5,251 | |||||||||||||||
Total Portfolio Acquisitions | $ | 219,677 | $ | 158,961 | $ | 289,782 | $ | 177,600 | $ | 164,499 | ||||||||||
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 August 5, 2022, or call 877-344-7529 in the U.S. or 412-317-0088 outside the U.S. and use access code 10158082 until August 12, 2021.
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, | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Revenues: | |||||||||||||||
Portfolio income | $ | 219,137 | $ | 248,284 | $ | 450,809 | $ | 510,306 | |||||||
Changes in expected recoveries | 63,548 | 19,801 | 113,684 | 6,985 | |||||||||||
Total portfolio revenue | 282,685 | 268,085 | 564,493 | 517,291 | |||||||||||
Fee income | 2,453 | 2,639 | 4,634 | 4,848 | |||||||||||
Other revenue | 491 | 1,186 | 5,971 | 1,555 | |||||||||||
Total revenues | 285,629 | 271,910 | 575,098 | 523,694 | |||||||||||
Operating expenses: | |||||||||||||||
Compensation and employee services | 79,632 | 70,472 | 153,616 | 145,643 | |||||||||||
Legal collection fees | 12,289 | 13,742 | 25,215 | 28,314 | |||||||||||
Legal collection costs | 18,469 | 19,507 | 39,781 | 53,954 | |||||||||||
Agency fees | 15,908 | 10,343 | 31,499 | 23,719 | |||||||||||
Outside fees and services | 20,973 | 18,683 | 41,733 | 38,077 | |||||||||||
Communication | 10,594 | 8,812 | 23,257 | 22,323 | |||||||||||
Rent and occupancy | 4,643 | 4,471 | 9,123 | 8,955 | |||||||||||
Depreciation and amortization | 3,815 | 4,109 | 7,796 | 8,193 | |||||||||||
Other operating expenses | 15,092 | 10,491 | 28,110 | 22,696 | |||||||||||
Total operating expenses | 181,415 | 160,630 | 360,130 | 351,874 | |||||||||||
Income from operations | 104,214 | 111,280 | 214,968 | 171,820 | |||||||||||
Other income and (expense): | |||||||||||||||
Interest expense, net | (30,836) | (35,416) | (62,388) | (72,627) | |||||||||||
Foreign exchange (loss)/gain | (1,079) | 683 | (1,105) | 2,966 | |||||||||||
Other | 183 | (1,582) | 209 | (1,658) | |||||||||||
Income before income taxes | 72,482 | 74,965 | 151,684 | 100,501 | |||||||||||
Income tax expense | 11,921 | 14,137 | 29,243 | 17,237 | |||||||||||
Net income | 60,561 | 60,828 | 122,441 | 83,264 | |||||||||||
Adjustment for net income attributable to noncontrolling interests | 4,565 | 2,914 | 8,039 | 6,215 | |||||||||||
Net income attributable to PRA Group, Inc. | $ | 55,996 | $ | 57,914 | $ | 114,402 | $ | 77,049 | |||||||
Net income per common share attributable to PRA Group, Inc.: | |||||||||||||||
Basic | $ | 1.22 | $ | 1.27 | $ | 2.50 | $ | 1.69 | |||||||
Diluted | $ | 1.22 | $ | 1.26 | $ | 2.48 | $ | 1.68 | |||||||
Weighted average number of shares outstanding: | |||||||||||||||
Basic | 45,807 | 45,548 | 45,738 | 45,500 | |||||||||||
Diluted | 46,059 | 45,987 | 46,051 | 45,886 | |||||||||||
PRA Group, Inc. | |||||||
Consolidated Balance Sheets | |||||||
(Amounts in thousands) | |||||||
(unaudited) | |||||||
June 30, 2021 | December 31, | ||||||
Assets | |||||||
Cash and cash equivalents | $ | 76,013 | $ | 108,613 | |||
Restricted cash | 4,631 | 12,434 | |||||
Investments | 87,631 | 55,759 | |||||
Finance receivables, net | 3,349,038 | 3,514,788 | |||||
Other receivables, net | 7,096 | 13,194 | |||||
Income taxes receivable | 21,366 | 21,928 | |||||
Deferred tax assets, net | 78,935 | 83,205 | |||||
Right-of-use assets | 50,068 | 52,951 | |||||
Property and equipment, net | 54,895 | 58,356 | |||||
Goodwill | 492,843 | 492,989 | |||||
Other assets | 38,777 | 38,844 | |||||
Total assets | $ | 4,261,293 | $ | 4,453,061 | |||
Liabilities and Equity | |||||||
Liabilities: | |||||||
Accounts payable | $ | 5,229 | $ | 5,294 | |||
Accrued expenses | 86,634 | 97,320 | |||||
Income taxes payable | 27,872 | 29,692 | |||||
Deferred tax liabilities, net | 35,682 | 40,867 | |||||
Lease liabilities | 54,506 | 57,348 | |||||
Interest-bearing deposits | 131,221 | 132,739 | |||||
Borrowings | 2,408,875 | 2,661,289 | |||||
Other liabilities | 36,334 | 54,986 | |||||
Total liabilities | 2,786,353 | 3,079,535 | |||||
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, 45,837 shares issued and outstanding at June 30, 2021; 100,000 shares authorized, 45,585 shares issued and outstanding at December 31, 2020 | 458 | 456 | |||||
Additional paid-in capital | 51,206 | 75,282 | |||||
Retained earnings | 1,638,380 | 1,511,970 | |||||
Accumulated other comprehensive loss | (235,359) | (245,791) | |||||
Total stockholders' equity - PRA Group, Inc. | 1,454,685 | 1,341,917 | |||||
Noncontrolling interest | 20,255 | 31,609 | |||||
Total equity | 1,474,940 | 1,373,526 | |||||
Total liabilities and equity | $ | 4,261,293 | $ | 4,453,061 | |||
Select Expenses (Income) Amounts in thousands, pre-tax | ||||||||||||||||
Three Months Ended | ||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||
Acquisition/divestiture-related expenses | — | — | — | — | — | — | — | — | ||||||||
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 | ||||||||
Noncash interest expense - amortization of debt issuance costs | 2,391 | 2,256 | 2,393 | 2,476 | 2,743 | 2,640 | 2,649 | 2,649 | ||||||||
Change in fair value of derivatives | 2,911 | 3,102 | 3,875 | 3,701 | 3,284 | 2,039 | 1,247 | 1,126 | ||||||||
Amortization of intangibles | 105 | 181 | 1,792 | 360 | 351 | 349 | 407 | 400 | ||||||||
Stock-based compensation expense | 4,040 | 4,113 | 5,370 | 3,097 | 3,063 | 2,857 | 2,809 | 2,974 | ||||||||
Purchase Price Multiples as of June 30, 2021 Amounts in thousands | |||||||||||
Purchase Period | Purchase Price (1)(2) | Total Estimated | Estimated | Current Estimated | Original Estimated | ||||||
Americas and Australia Core | |||||||||||
1996-2010 | $ | 1,078,219 | $ | 3,399,742 | $ | 22,911 | 315% | 240% | |||
2011 | 209,602 | 719,746 | 13,914 | 343% | 245% | ||||||
2012 | 254,076 | 652,359 | 15,602 | 257% | 226% | ||||||
2013 | 390,826 | 894,134 | 24,948 | 229% | 211% | ||||||
2014 | 404,117 | 859,490 | 39,040 | 213% | 204% | ||||||
2015 | 443,114 | 908,215 | 90,848 | 205% | 205% | ||||||
2016 | 455,767 | 1,101,515 | 185,065 | 242% | 201% | ||||||
2017 | 532,851 | 1,213,368 | 292,041 | 228% | 193% | ||||||
2018 | 653,975 | 1,405,115 | 413,129 | 215% | 202% | ||||||
2019 | 581,476 | 1,245,056 | 555,835 | 214% | 206% | ||||||
2020 | 435,668 | 931,600 | 639,764 | 214% | 213% | ||||||
2021 | 187,751 | 372,447 | 351,984 | 198% | 198% | ||||||
Subtotal | 5,627,442 | 13,702,787 | 2,645,081 | ||||||||
Americas Insolvency | |||||||||||
1996-2010 | 606,395 | 1,382,687 | 753 | 228% | 180% | ||||||
2011 | 180,432 | 370,168 | 428 | 205% | 155% | ||||||
2012 | 251,395 | 392,828 | 132 | 156% | 136% | ||||||
2013 | 227,834 | 355,056 | 545 | 156% | 133% | ||||||
2014 | 148,420 | 218,441 | 1,370 | 147% | 124% | ||||||
2015 | 63,170 | 87,122 | 562 | 138% | 125% | ||||||
2016 | 91,442 | 117,355 | 4,647 | 128% | 123% | ||||||
2017 | 275,257 | 349,729 | 40,051 | 127% | 125% | ||||||
2018 | 97,879 | 131,541 | 50,765 | 134% | 127% | ||||||
2019 | 123,077 | 158,965 | 95,913 | 129% | 128% | ||||||
2020 | 62,130 | 84,971 | 71,527 | 137% | 136% | ||||||
2021 | 24,133 | 33,183 | 32,819 | 138% | 138% | ||||||
Subtotal | 2,151,564 | 3,682,046 | 299,512 | ||||||||
Total Americas and Australia | 7,779,006 | 17,384,833 | 2,944,593 | ||||||||
Europe Core | |||||||||||
2012 | 20,409 | 41,917 | — | 205% | 187% | ||||||
2013 | 20,334 | 25,881 | — | 127% | 119% | ||||||
2014 | 773,811 | 2,240,702 | 552,490 | 290% | 208% | ||||||
2015 | 411,340 | 724,135 | 238,174 | 176% | 160% | ||||||
2016 | 333,090 | 561,788 | 274,769 | 169% | 167% | ||||||
2017 | 252,174 | 353,405 | 175,394 | 140% | 144% | ||||||
2018 | 341,775 | 528,763 | 331,552 | 155% | 148% | ||||||
2019 | 518,610 | 775,304 | 560,752 | 149% | 152% | ||||||
2020 | 324,119 | 554,083 | 468,618 | 171% | 172% | ||||||
2021 | 148,907 | 262,529 | 254,428 | 176% | 176% | ||||||
Subtotal | 3,144,569 | 6,068,507 | 2,856,177 | ||||||||
Europe Insolvency | |||||||||||
2014 | 10,876 | 18,258 | 79 | 168% | 129% | ||||||
2015 | 18,973 | 29,005 | 1,539 | 153% | 139% | ||||||
2016 | 39,338 | 56,883 | 7,124 | 145% | 130% | ||||||
2017 | 39,235 | 49,255 | 15,447 | 126% | 128% | ||||||
2018 | 44,908 | 52,080 | 29,309 | 116% | 123% | ||||||
2019 | 77,218 | 101,982 | 66,492 | 132% | 130% | ||||||
2020 | 105,440 | 135,895 | 113,782 | 129% | 129% | ||||||
2021 | 16,705 | 20,633 | 19,137 | 124% | 124% | ||||||
Subtotal | 352,693 | 463,991 | 252,909 | ||||||||
Total Europe | 3,497,262 | 6,532,498 | 3,109,086 | ||||||||
Total PRA Group | $ | 11,276,268 | $ | 23,917,331 | $ | 6,053,679 | |||||
(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 June 30, 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 June 30, 2021 Amounts in thousands | |||||||||||||||
Purchase Period | Cash Collections (1) | Portfolio Income | Change in Expected | Total Portfolio | Net Finance | ||||||||||
Americas and Australia Core | |||||||||||||||
1996-2010 | $ | 7,190 | $ | 4,282 | $ | 1,944 | $ | 6,226 | $ | 5,173 | |||||
2011 | 4,371 | 2,586 | 1,146 | 3,732 | 2,503 | ||||||||||
2012 | 5,310 | 2,364 | 1,042 | 3,406 | 4,857 | ||||||||||
2013 | 9,565 | 4,580 | (493) | 4,087 | 10,810 | ||||||||||
2014 | 13,130 | 6,135 | (2,361) | 3,774 | 15,970 | ||||||||||
2015 | 21,951 | 11,424 | (8,717) | 2,707 | 36,653 | ||||||||||
2016 | 45,983 | 22,459 | 3,354 | 25,813 | 72,898 | ||||||||||
2017 | 77,310 | 34,297 | 7,802 | 42,099 | 130,286 | ||||||||||
2018 | 141,054 | 47,049 | 24,688 | 71,737 | 216,883 | ||||||||||
2019 | 166,716 | 65,539 | 18,558 | 84,097 | 299,328 | ||||||||||
2020 | 159,431 | 67,614 | 35,441 | 103,055 | 341,846 | ||||||||||
2021 | 20,472 | 13,641 | 148 | 13,789 | 180,575 | ||||||||||
Subtotal | 672,483 | 281,970 | 82,552 | 364,522 | 1,317,782 | ||||||||||
Americas Insolvency | |||||||||||||||
1996-2010 | 357 | 352 | 5 | 357 | — | ||||||||||
2011 | 126 | 138 | (12) | 126 | — | ||||||||||
2012 | 347 | 124 | 225 | 349 | — | ||||||||||
2013 | 421 | 287 | 134 | 421 | — | ||||||||||
2014 | 633 | 652 | (117) | 535 | 125 | ||||||||||
2015 | 795 | 383 | (167) | 216 | 319 | ||||||||||
2016 | 5,031 | 867 | 447 | 1,314 | 3,707 | ||||||||||
2017 | 23,539 | 4,792 | 1,113 | 5,905 | 34,136 | ||||||||||
2018 | 16,125 | 3,380 | 932 | 4,312 | 43,837 | ||||||||||
2019 | 18,361 | 4,768 | (1,467) | 3,301 | 82,243 | ||||||||||
2020 | 6,920 | 3,755 | 637 | 4,392 | 55,112 | ||||||||||
2021 | 366 | 566 | (92) | 474 | 24,153 | ||||||||||
Subtotal | 73,021 | 20,064 | 1,638 | 21,702 | 243,632 | ||||||||||
Total Americas and Australia | 745,504 | 302,034 | 84,190 | 386,224 | 1,561,414 | ||||||||||
Europe Core | |||||||||||||||
2012 | 604 | — | 604 | 604 | — | ||||||||||
2013 | 363 | — | 363 | 363 | — | ||||||||||
2014 | 77,988 | 50,288 | 15,601 | 65,889 | 153,921 | ||||||||||
2015 | 26,926 | 14,276 | (7,091) | 7,185 | 124,109 | ||||||||||
2016 | 24,620 | 12,632 | (597) | 12,035 | 158,984 | ||||||||||
2017 | 18,839 | 6,259 | (3,049) | 3,210 | 119,645 | ||||||||||
2018 | 36,684 | 12,439 | 5,101 | 17,540 | 217,182 | ||||||||||
2019 | 63,968 | 19,814 | 7,106 | 26,920 | 376,028 | ||||||||||
2020 | 48,947 | 18,892 | 6,322 | 25,214 | 282,525 | ||||||||||
2021 | 8,184 | 2,474 | 1,680 | 4,154 | 144,787 | ||||||||||
Subtotal | 307,123 | 137,074 | 26,040 | 163,114 | 1,577,181 | ||||||||||
Europe Insolvency | |||||||||||||||
2014 | 171 | 79 | 36 | 115 | 34 | ||||||||||
2015 | 989 | 406 | 64 | 470 | 1,115 | ||||||||||
2016 | 3,449 | 1,012 | 295 | 1,307 | 5,454 | ||||||||||
2017 | 4,874 | 754 | 298 | 1,052 | 13,865 | ||||||||||
2018 | 5,962 | 1,224 | (655) | 569 | 25,789 | ||||||||||
2019 | 12,523 | 3,017 | 880 | 3,897 | 55,338 | ||||||||||
2020 | 17,618 | 4,713 | 1,545 | 6,258 | 92,948 | ||||||||||
2021 | 1,503 | 496 | 991 | 1,487 | 15,900 | ||||||||||
Subtotal | 47,089 | 11,701 | 3,454 | 15,155 | 210,443 | ||||||||||
Total Europe | 354,212 | 148,775 | 29,494 | 178,269 | 1,787,624 | ||||||||||
Total PRA Group | $ | 1,099,716 | $ | 450,809 | $ | 113,684 | $ | 564,493 | $ | 3,349,038 | |||||
(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 June 30, 2021 exchange rate. |
Cash Collections by Year, By Year of Purchase (1) as of June 30, 2021 Amounts in millions | ||||||||||||||||||||||||||||||||||||||||||
Cash Collections | ||||||||||||||||||||||||||||||||||||||||||
Purchase Period | Purchase | 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 | $ | 7.2 | $ | 3,369.5 | ||||||||||||||
2011 | 209.6 | — | 62.0 | 174.5 | 152.9 | 108.5 | 73.8 | 48.7 | 32.0 | 21.6 | 16.6 | 10.9 | 4.4 | 705.9 | ||||||||||||||||||||||||||||
2012 | 254.1 | — | — | 56.9 | 173.6 | 146.2 | 97.3 | 60.0 | 40.0 | 27.8 | 17.9 | 11.8 | 5.3 | 636.8 | ||||||||||||||||||||||||||||
2013 | 390.8 | — | — | — | 101.6 | 247.8 | 194.0 | 120.8 | 78.9 | 56.4 | 36.9 | 23.2 | 9.6 | 869.2 | ||||||||||||||||||||||||||||
2014 | 404.1 | — | — | — | — | 92.7 | 253.4 | 170.3 | 114.2 | 82.2 | 55.3 | 31.9 | 13.1 | 813.1 | ||||||||||||||||||||||||||||
2015 | 443.1 | — | — | — | — | — | 117.0 | 228.4 | 185.9 | 126.6 | 83.6 | 57.2 | 22.0 | 820.7 | ||||||||||||||||||||||||||||
2016 | 455.8 | — | — | — | — | — | — | 138.7 | 256.5 | 194.6 | 140.6 | 105.9 | 46.0 | 882.3 | ||||||||||||||||||||||||||||
2017 | 532.9 | — | — | — | — | — | — | — | 107.3 | 278.7 | 256.5 | 192.5 | 77.3 | 912.3 | ||||||||||||||||||||||||||||
2018 | 654.0 | — | — | — | — | — | — | — | — | 122.7 | 361.9 | 337.7 | 141.1 | 963.4 | ||||||||||||||||||||||||||||
2019 | 581.5 | — | — | — | — | — | — | — | — | — | 143.8 | 349.0 | 166.7 | 659.5 | ||||||||||||||||||||||||||||
2020 | 435.7 | — | — | — | — | — | — | — | — | — | — | 133.0 | 159.4 | 292.4 | ||||||||||||||||||||||||||||
2021 | 187.8 | — | — | — | — | — | — | — | — | — | — | — | 20.4 | 20.4 | ||||||||||||||||||||||||||||
Subtotal | 5,627.6 | 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 | 672.5 | 10,945.5 | ||||||||||||||||||||||||||||
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 | 0.4 | 1,381.9 | ||||||||||||||||||||||||||||
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 | 0.3 | 392.6 | ||||||||||||||||||||||||||||
2013 | 227.8 | — | — | — | 52.5 | 82.6 | 81.7 | 63.4 | 47.8 | 21.9 | 2.9 | 1.3 | 0.4 | 354.5 | ||||||||||||||||||||||||||||
2014 | 148.4 | — | — | — | — | 37.0 | 50.9 | 44.3 | 37.4 | 28.8 | 15.8 | 2.2 | 0.6 | 217.0 | ||||||||||||||||||||||||||||
2015 | 63.2 | — | — | — | — | — | 3.4 | 17.9 | 20.1 | 19.8 | 16.7 | 7.9 | 0.8 | 86.6 | ||||||||||||||||||||||||||||
2016 | 91.4 | — | — | — | — | — | — | 18.9 | 30.4 | 25.0 | 19.9 | 14.4 | 5.0 | 113.6 | ||||||||||||||||||||||||||||
2017 | 275.3 | — | — | — | — | — | — | — | 49.1 | 97.3 | 80.9 | 58.8 | 23.6 | 309.7 | ||||||||||||||||||||||||||||
2018 | 97.9 | — | — | — | — | — | — | — | — | 6.7 | 27.4 | 30.5 | 16.1 | 80.7 | ||||||||||||||||||||||||||||
2019 | 123.1 | — | — | — | — | — | — | — | — | — | 13.3 | 31.4 | 18.4 | 63.1 | ||||||||||||||||||||||||||||
2020 | 62.1 | — | — | — | — | — | — | — | — | — | — | 6.6 | 6.9 | 13.5 | ||||||||||||||||||||||||||||
2021 | 24.1 | — | — | — | — | — | — | — | — | — | — | — | 0.4 | 0.4 | ||||||||||||||||||||||||||||
Subtotal | 2,151.5 | 390.9 | 276.4 | 354.2 | 469.9 | 458.4 | 344.2 | 249.8 | 222.4 | 207.9 | 180.9 | 155.3 | 73.0 | 3,383.3 | ||||||||||||||||||||||||||||
Total Americas and Australia | 7,779.1 | 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 | 745.5 | 14,328.8 | ||||||||||||||||||||||||||||
Europe Core | ||||||||||||||||||||||||||||||||||||||||||
2012 | 20.4 | — | — | 11.6 | 9.0 | 5.6 | 3.2 | 2.2 | 2.0 | 2.0 | 1.5 | 1.2 | 0.6 | 38.9 | ||||||||||||||||||||||||||||
2013 | 20.3 | — | — | — | 7.1 | 8.5 | 2.3 | 1.3 | 1.2 | 1.3 | 0.9 | 0.7 | 0.4 | 23.7 | ||||||||||||||||||||||||||||
2014 | 773.8 | — | — | — | — | 153.2 | 292.0 | 246.4 | 220.8 | 206.3 | 172.9 | 149.8 | 78.0 | 1,519.4 | ||||||||||||||||||||||||||||
2015 | 411.3 | — | — | — | — | — | 45.8 | 100.3 | 86.2 | 80.9 | 66.1 | 54.3 | 26.9 | 460.5 | ||||||||||||||||||||||||||||
2016 | 333.1 | — | — | — | — | — | — | 40.4 | 78.9 | 72.6 | 58.0 | 48.3 | 24.6 | 322.8 | ||||||||||||||||||||||||||||
2017 | 252.2 | — | — | — | — | — | — | — | 17.9 | 56.0 | 44.1 | 36.1 | 18.8 | 172.9 | ||||||||||||||||||||||||||||
2018 | 341.8 | — | — | — | — | — | — | — | — | 24.3 | 88.7 | 71.2 | 36.7 | 220.9 | ||||||||||||||||||||||||||||
2019 | 518.6 | — | — | — | — | — | — | — | — | — | 47.9 | 125.7 | 64.0 | 237.6 | ||||||||||||||||||||||||||||
2020 | 324.1 | — | — | — | — | — | — | — | — | — | — | 32.4 | 48.9 | 81.3 | ||||||||||||||||||||||||||||
2021 | 148.9 | — | — | — | — | — | — | — | — | — | — | — | 8.2 | 8.2 | ||||||||||||||||||||||||||||
Subtotal | 3,144.5 | — | — | 11.6 | 16.1 | 167.3 | 343.3 | 390.6 | 407.0 | 443.4 | 480.1 | 519.7 | 307.1 | 3,086.2 | ||||||||||||||||||||||||||||
Europe Insolvency | ||||||||||||||||||||||||||||||||||||||||||
2014 | 10.9 | — | — | — | — | — | 4.3 | 3.9 | 3.2 | 2.6 | 1.5 | 0.8 | 0.2 | 16.5 | ||||||||||||||||||||||||||||
2015 | 19.0 | — | — | — | — | — | 3.0 | 4.4 | 5.0 | 4.8 | 3.9 | 2.9 | 1.0 | 25.0 | ||||||||||||||||||||||||||||
2016 | 39.3 | — | — | — | — | — | — | 6.2 | 12.7 | 12.9 | 10.7 | 7.9 | 3.4 | 53.8 | ||||||||||||||||||||||||||||
2017 | 39.2 | — | — | — | — | — | — | — | 1.2 | 7.9 | 9.2 | 9.8 | 4.9 | 33.0 | ||||||||||||||||||||||||||||
2018 | 44.9 | — | — | — | — | — | — | — | — | 0.6 | 8.4 | 10.3 | 6.0 | 25.3 | ||||||||||||||||||||||||||||
2019 | 77.2 | — | — | — | — | — | — | — | — | — | 5.1 | 21.1 | 12.5 | 38.7 | ||||||||||||||||||||||||||||
2020 | 105.4 | — | — | — | — | — | — | — | — | — | — | 6.1 | 17.6 | 23.7 | ||||||||||||||||||||||||||||
2021 | 16.7 | — | — | — | — | — | — | — | — | — | — | — | 1.5 | 1.5 | ||||||||||||||||||||||||||||
Subtotal | 352.6 | — | — | — | — | — | 7.3 | 14.5 | 22.1 | 28.8 | 38.8 | 58.9 | 47.1 | 217.5 | ||||||||||||||||||||||||||||
Total Europe | 3,497.1 | — | — | 11.6 | 16.1 | 167.3 | 350.6 | 405.1 | 429.1 | 472.2 | 518.9 | 578.6 | 354.2 | 3,303.7 | ||||||||||||||||||||||||||||
Total PRA Group | $ | 11,276.2 | $ | 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 | $ | 1,099.7 | $ | 17,632.5 | ||||||||||||||
(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 June 30, 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) | June 30, 2021 | December 31, 2020 | ||||||||
Net income attributable to PRA Group, Inc. | $ | 187 | $ | 149 | ||||||
Adjustments: | ||||||||||
Income tax expense | 53 | 41 | ||||||||
Foreign exchange losses/(gains) | 2 | (2) | ||||||||
Interest expense, net | 131 | 142 | ||||||||
Other expense | (1) | 1 | ||||||||
Depreciation and amortization | 18 | 18 | ||||||||
Adjustment for net income attributable to noncontrolling interests | 20 | 18 | ||||||||
Recoveries applied to negative allowance less Changes in expected recoveries | 1,017 | 968 | ||||||||
Adjusted EBITDA | $ | 1,428 | $ | 1,337 | ||||||
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, 2021 and for the year ended December 31, 2020 (amounts in millions):
Debt to Adjusted EBITDA | ||||||
LTM | For the Year Ended | |||||
June 30, 2021 | December 31, 2020 | |||||
Borrowings | $ | 2,409 | $ | 2,661 | ||
LTM Adjusted EBITDA | 1,428 | 1,337 | ||||
Debt to LTM Adjusted EBITDA | 1.69 | 1.99 | ||||
Investor Contact:
Darby Schoenfeld, CPA
Vice President, Investor Relations
(757) 431-7913
Darby.Schoenfeld@PRAGroup.com
News Media Contact:
Elizabeth Kersey
Senior Vice President, Communications and Public Policy
(757) 431-3398
Elizabeth.Kersey@PRAGroup.com
View original content:https://www.prnewswire.com/news-releases/pra-group-reports-second-quarter-2021-results-301349658.html
SOURCE PRA Group
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