PRA Group Reports Second Quarter 2021 Results

Rhea-AI Summary

PRA Group, Inc. (PRAA) reported Q2 2021 net income of $56 million, a slight decrease from $57.9 million in Q2 2020. Diluted EPS was $1.22, down from $1.26. However, net income for the first half of 2021 reached $114.4 million, up from $77 million YoY. Total cash collections increased 7% to $543.8 million, while revenues rose 5% to $285.6 million. Debt to Adjusted EBITDA improved to 1.69x. The company announced a $150 million share repurchase program, highlighting strong performance and portfolio purchases of $219.7 million, a 38% increase from Q1.

Positive

• Net income for the first half of 2021 increased to $114.4 million, up from $77 million YoY.
• Total cash collections for Q2 rose to $543.8 million, a 7% increase from Q2 2020.
• Total revenues for Q2 improved by 5% to $285.6 million.
• Debt to Adjusted EBITDA improved to 1.69x, down from 1.99x in December 2020.
• PRA Group announced a $150 million share repurchase program.

Negative

• Net income for Q2 decreased to $56 million, compared to $57.9 million in Q2 2020.
• Diluted EPS fell to $1.22 from $1.26 YoY.
• Operating expenses increased by $20.8 million, driven by higher employee compensation and agency fees.

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."

1. Calculated by dividing cash receipts less operating expense by cash receipts.
2. A reconciliation of this non-GAAP financial measure to the most comparable GAAP measure can be found at the end of this press release.

Cash Collections and Revenues

• The following table presents cash collections by quarter and by source on an as reported and constant currency-adjusted basis:

Cash Collection Source		2021								2020
($ in thousands)		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, 2020
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, 2021		March 31, 2021		December 31, 2020		September 30, 2020		June 30, 2020		March 31, 2020		December 31, 2019		September 30, 2019
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 Collections (3)			Estimated Remaining Collections (4)			Current Estimated Purchase Price Multiple	Original Estimated Purchase Price Multiple (5)
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 (1)			Change in Expected Recoveries (1)			Total Portfolio Revenue (1)(2)			Net Finance Receivables as of June 30, 2021 (3)
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 Price (2)(3)			1996-2010			2011			2012			2013			2014			2015			2016			2017			2018			2019			2020			2021			Total
Americas and Australia Core
1996-2010	$	1,078.2		$	1,990.5		$	367.1		$	311.5		$	228.4		$	157.7		$	109.3		$	70.2		$	46.0		$	34.4		$	28.4		$	18.8		$	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

FAQ

What were PRA Group's financial results for Q2 2021?

In Q2 2021, PRA Group reported a net income of $56 million and diluted earnings per share of $1.22.

How much did PRA Group's cash collections increase in Q2 2021?

PRA Group's cash collections increased 7% to $543.8 million in Q2 2021.

What is PRA Group's EPS for the first half of 2021?

For the first half of 2021, PRA Group reported an EPS of $2.48.

What share buyback program did PRA Group announce?

PRA Group announced a $150 million share repurchase program.

How much did PRA Group spend on portfolio purchases in Q2 2021?

PRA Group purchased $219.7 million in finance receivables in Q2 2021.