8-K
PRA GROUP INC (PRAA)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
| Date of Report (Date of Earliest Event Reported): | May 6, 2024 |
|---|
PRA Group, Inc.
_________________________________________
(Exact name of registrant as specified in its charter)
| Delaware | 000-50058 | 75-3078675 | |||||
|---|---|---|---|---|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | |||||
| 120 Corporate Boulevard | |||||||
| Norfolk, | Virginia | 23502 | |||||
| (Address of principal executive offices) | (Zip Code) | Registrant’s telephone number, including area code: | (888) | 772-7326 | |||
| --- | --- | --- |
Not Applicable
______________________________________________
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $0.01 par value per share | PRAA | NASDAQ Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐
Item 2.02 Results of Operations and Financial Condition.
On May 6, 2024, PRA Group, Inc. (the “Company”) issued a press release announcing its first quarter 2024 results. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K and is incorporated into this Item 2.02 by reference.
Item 7.01 Regulation FD Disclosure.
The slide presentation being used in connection with the Company’s previously announced May 6, 2024 webcast and conference call to discuss its first quarter 2024 results is available in the Investor Relations section of the Company’s website at https://ir.pragroup.com/events-and-presentations.
None of the information furnished in Item 2.02, Item 7.01 or Exhibit 99.1 of this Form 8-K shall be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that Section. Unless expressly set forth by specific reference in such filings, none of the information furnished in this Form 8-K shall be incorporated by reference in any filing under the Securities Act of 1933, as amended, whether made before or after the date hereof and regardless of any general incorporation language in such filings.
Item 9.01 Financial Statements and Exhibits
| (d) | Exhibits | |
|---|---|---|
| 99.1 | Press release datedMay 6, 2024 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| PRA Group, Inc. | ||
|---|---|---|
| Date: May 6, 2024 | By: | /s/ Rakesh Sehgal |
| Rakesh Sehgal | ||
| Executive Vice President and Chief Financial Officer |
Document
PRA Group Reports First Quarter 2024 Results
Accelerated Turnaround of U.S. Business Continuing to Gain Momentum
NORFOLK, Va., May 6, 2024 - PRA Group, Inc. (Nasdaq: PRAA) (the "Company"), a global leader in acquiring and collecting nonperforming loans, today reported its financial results for the first quarter of 2024 ("Q1 2024").
Q1 2024 Highlights
•Total portfolio purchases of $245.8 million.
•Total cash collections of $449.5 million.
•Estimated remaining collections (ERC)1 of $6.5 billion.
•Cash efficiency ratio2 of 58.0%.
•Diluted earnings per share of $0.09.
•Debt to Adjusted EBITDA3 for the 12 months ended March 31, 2024 was 2.83x.
•Total availability under the Company's credit facilities as of March 31, 2024 was $1.2 billion, comprised of $366.9 million based on current ERC and $855.2 million of additional availability subject to borrowing base and debt covenants, including advance rates.
| Three Months Ended March 31, | ||||
|---|---|---|---|---|
| ($ in thousands, except per share amounts) | 2024 | 2023 | ||
| Net income/(loss) attributable to PRA Group, Inc. | $ | 3,475 | $ | (58,629) |
| Diluted earnings per share | $ | 0.09 | $ | (1.50) |
“We began 2024 on a positive note, and are well-positioned to achieve our financial and operational targets for the full year. Building on the momentum from last year, the first quarter demonstrated continued progress as we drive the turnaround and deliver substantially improved results," said Vikram Atal, president and chief executive officer. "Total cash collections of $450 million were up 9% year-over-year, reflecting higher portfolio purchases and the impact of our cash-generating and operational initiatives. Looking ahead, we are keenly focused on expanding profitability and delivering shareholder value."
1.Refers to the sum of all future projected cash collections on the Company's nonperforming loan portfolios.
2.Calculated by dividing cash receipts less operating expenses by cash receipts. Cash receipts refers to cash collections on the Company's nonperforming loan portfolios, fees and revenue recognized from the Company's class action claims recovery services.
3.A reconciliation of net income, the most directly comparable financial measure calculated and reported in accordance with GAAP, to Adjusted EBITDA can be found at the end of this press release.
Cash Collections and Revenues
The following table presents cash collections by quarter and by source on an as reported and constant currency-adjusted basis:
| Cash Collection Source | 2024 | 2023 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands) | Q1 | Q4 | Q3 | Q2 | Q1 | |||||
| Americas and Australia Core | $ | 256,861 | $ | 220,127 | $ | 223,714 | $ | 220,886 | $ | 227,960 |
| Americas Insolvency | 25,209 | 24,293 | 27,809 | 26,384 | 25,751 | |||||
| Europe Core | 145,933 | 144,361 | 144,402 | 149,324 | 134,005 | |||||
| Europe Insolvency | 21,515 | 21,502 | 23,639 | 22,725 | 23,568 | |||||
| Total Cash Collections | $ | 449,518 | $ | 410,283 | $ | 419,564 | $ | 419,319 | $ | 411,284 |
| Cash Collection Source - | ||||||||||
| Constant Currency-Adjusted | 2024 | 2023 | ||||||||
| ($ in thousands) | Q1 | Q1 | ||||||||
| Americas and Australia Core | $ | 256,861 | $ | 230,382 | ||||||
| Americas Insolvency | 25,209 | 25,752 | ||||||||
| Europe Core | 145,933 | 138,330 | ||||||||
| Europe Insolvency | 21,515 | 24,580 | ||||||||
| Total Cash Collections | $ | 449,518 | $ | 419,044 |
•Total cash collections in Q1 2024 increased 9.3%, or 7.3% on a constant currency-adjusted basis, to $449.5 million compared to $411.3 million in the first quarter of 2023 ("Q1 2023"). The increase was driven by higher cash collections in our U.S., Europe, and Brazil Core portfolios.
•Total portfolio revenue in Q1 2024 was $253.7 million compared to $151.3 million in Q1 2023.
| Three Months Ended March 31, | ||||
|---|---|---|---|---|
| ($ in thousands) | 2024 | 2023 | ||
| Portfolio income | $ | 202,056 | $ | 188,242 |
| Changes in expected future recoveries | $ | 15,836 | $ | (40,750) |
| Recoveries received in excess of forecast | 35,838 | 3,838 | ||
| Changes in expected recoveries | $ | 51,674 | $ | (36,912) |
| Total portfolio revenue | $ | 253,730 | $ | 151,330 |
Expenses
•Operating expenses in Q1 2024 increased $0.1 million, or 0.1%, to $189.2 million compared to $189.1 million in Q1 2023.
◦Compensation and employee services expenses decreased $8.8 million, primarily due to $7.5 million in severance expenses in Q1 2023.
◦Legal collection fees increased $3.3 million, primarily due to higher external legal collections within our U.S. Core portfolio.
◦Legal collection costs increased $2.8 million, primarily due to higher volumes of lawsuits filed in Europe, as well as the costs associated with our legal cash-generating initiatives in the U.S.
◦Agency fees increased $2.3 million, primarily due to higher cash collections in Brazil.
◦Communication expenses increased $2.1 million, primarily due to higher account volumes.
•Interest expense, net in Q1 2024 was $52.3 million, an increase of $14.0 million, or 36.6%, compared to $38.3 million in Q1 2023, primarily reflecting a higher average debt balance and increased interest rates.
•The effective tax rate for Q1 2024 was 16.9%.
Portfolio Acquisitions
•The Company purchased $245.8 million in portfolios of nonperforming loans in Q1 2024.
•At the end of Q1 2024, the Company had in place estimated forward flow commitments1 of $473.9 million over the next 12 months, comprised of $375.8 million in the Americas and Australia and $98.1 million in Europe.
| Portfolio Purchase Source | 2024 | 2023 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands) | Q1 | Q4 | Q3 | Q2 | Q1 | |||||
| Americas & Australia Core | $ | 174,660 | $ | 143,052 | $ | 187,554 | $ | 171,440 | $ | 116,867 |
| Americas Insolvency | 22,156 | 18,608 | 44,279 | 12,189 | 15,701 | |||||
| Europe Core | 43,997 | 110,780 | 60,628 | 136,834 | 90,454 | |||||
| Europe Insolvency | 5,004 | 12,476 | 18,722 | 7,296 | 7,203 | |||||
| Total Portfolio Acquisitions | $ | 245,817 | $ | 284,916 | $ | 311,183 | $ | 327,759 | $ | 230,225 |
2024 Financial and Operational Targets
The Company reiterates its expectation to achieve the following financial and operational targets for full year 2024:
•Strong portfolio investment levels
•Double-digit cash collections growth
•Modest expense growth
•60%+ cash efficiency ratio
•6% - 8% return on average tangible equity2
Conference Call Information
PRA Group, Inc. will hold a conference call today at 5:00 p.m. ET to discuss its financial and operational results. To listen to a webcast of the call and view the accompanying slides, visit https://ir.pragroup.com/events-and-presentations. To listen by phone, call 646-357-8785 in the U.S. or 1-800-836-8184 outside the U.S. and ask for the PRA Group conference call. To listen to a replay of the call, either visit the same website until May 6, 2025, or call 646-517-4150 in the U.S. or 1-888-660-6345 outside the U.S. and use access code 41062# until May 13, 2024.
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.
1.Contractual agreements with sellers of nonperforming loans that allow for the purchase of nonperforming portfolios at pre-established prices. These amounts represent our estimated forward flow purchases over the next 12 months based on projections and other factors, including sellers' estimates of future flows sales, and are dependent on actual delivery by the sellers. Accordingly, amounts purchased under these agreements may vary significantly.
2.A reconciliation of total stockholders' equity – PRA Group, Inc., the most directly comparable financial measure calculated and reported in accordance with GAAP, to average tangible equity can be found at the end of this press release.
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 the Company's 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, | ||||
|---|---|---|---|---|
| 2024 | 2023 | |||
| Revenues: | ||||
| Portfolio income | $ | 202,056 | $ | 188,242 |
| Changes in expected recoveries | 51,674 | (36,912) | ||
| Total portfolio revenue | 253,730 | 151,330 | ||
| Other revenue | 1,856 | 4,140 | ||
| Total revenues | 255,586 | 155,470 | ||
| Operating expenses: | ||||
| Compensation and employee services | 73,597 | 82,403 | ||
| Legal collection fees | 12,112 | 8,838 | ||
| Legal collection costs | 26,691 | 23,945 | ||
| Agency fees | 19,723 | 17,378 | ||
| Outside fees and services | 25,050 | 24,944 | ||
| Communication | 12,578 | 10,527 | ||
| Rent and occupancy | 4,144 | 4,448 | ||
| Depreciation and amortization | 2,720 | 3,589 | ||
| Other operating expenses | 12,575 | 13,042 | ||
| Total operating expenses | 189,190 | 189,114 | ||
| Income/(loss) from operations | 66,396 | (33,644) | ||
| Other income and (expense): | ||||
| Interest expense, net | (52,278) | (38,283) | ||
| Foreign exchange gain/(loss), net | 227 | (9) | ||
| Other | (206) | (650) | ||
| Income/(loss) before income taxes | 14,139 | (72,586) | ||
| Income tax expense/(benefit) | 2,386 | (18,683) | ||
| Net income/(loss) | 11,753 | (53,903) | ||
| Adjustment for net income attributable to noncontrolling interests | 8,278 | 4,726 | ||
| Net income/(loss) attributable to PRA Group, Inc. | $ | 3,475 | $ | (58,629) |
| Net income/(loss) per common share attributable to PRA Group, Inc.: | ||||
| Basic | $ | 0.09 | $ | (1.50) |
| Diluted | $ | 0.09 | $ | (1.50) |
| Weighted average number of shares outstanding: | ||||
| Basic | 39,274 | 39,033 | ||
| Diluted | 39,448 | 39,033 |
PRA Group, Inc.
Consolidated Balance Sheets
(Amounts in thousands)
| (unaudited) | ||||||||
|---|---|---|---|---|---|---|---|---|
| March 31,<br>2024 | December 31,<br>2023 | |||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 108,100 | $ | 112,528 | ||||
| Investments | 58,879 | 72,404 | ||||||
| Finance receivables, net | 3,650,195 | 3,656,598 | ||||||
| Income taxes receivable | 32,067 | 27,713 | ||||||
| Deferred tax assets, net | 78,883 | 74,694 | ||||||
| Right-of-use assets | 44,187 | 45,877 | ||||||
| Property and equipment, net | 34,054 | 36,450 | ||||||
| Goodwill | 411,846 | 431,564 | ||||||
| Other assets | 63,971 | 67,526 | ||||||
| Total assets | $ | 4,482,182 | $ | 4,525,354 | ||||
| Liabilities and Equity | ||||||||
| Liabilities: | ||||||||
| Accounts payable | $ | 10,814 | $ | 6,325 | ||||
| Accrued expenses | 98,902 | 131,893 | ||||||
| Income taxes payable | 23,541 | 17,912 | ||||||
| Deferred tax liabilities, net | 16,888 | 17,051 | ||||||
| Lease liabilities | 48,557 | 50,300 | ||||||
| Interest-bearing deposits | 113,259 | 115,589 | ||||||
| Borrowings | 2,953,048 | 2,914,270 | ||||||
| Other liabilities | 20,855 | 32,638 | ||||||
| Total liabilities | 3,285,864 | 3,285,978 | ||||||
| Equity: | ||||||||
| Preferred stock, $0.01 par value, 2,000 shares authorized, no shares issued and outstanding | — | — | ||||||
| Common stock, $0.01 par value, 100,000 shares authorized, 39,345 shares issued and outstanding as of March 31, 2024; 100,000 shares authorized, 39,247 shares issued and outstanding as of December 31, 2023 | 393 | 392 | ||||||
| Additional paid-in capital | 8,928 | 7,071 | ||||||
| Retained earnings | 1,493,023 | 1,489,548 | ||||||
| Accumulated other comprehensive loss | (373,018) | (329,899) | ||||||
| Total stockholders' equity - PRA Group, Inc. | 1,129,326 | 1,167,112 | ||||||
| Noncontrolling interests | 66,992 | 72,264 | ||||||
| Total equity | 1,196,318 | 1,239,376 | ||||||
| Total liabilities and equity | $ | 4,482,182 | $ | 4,525,354 | ||||
| Select Expenses (Income)<br><br>Amounts in thousands, pre-tax | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Three Months Ended | ||||||||
| March 31,<br>2024 | December 31,<br>2023 | September 30,<br>2023 | June 30,<br>2023 | March 31,<br>2023 | December 31,<br>2022 | September 30,<br>2022 | June 30,<br>2022 | |
| Noncash interest expense - amortization of debt issuance costs | 2,200 | 2,177 | 2,220 | 2,384 | 2,441 | 2,444 | 2,555 | 2,471 |
| Change in fair value of derivatives | (5,930) | (6,734) | (6,545) | (6,960) | (5,470) | (3,309) | (1,042) | 1,525 |
| Amortization of intangibles | 60 | 69 | 69 | 68 | 66 | 73 | 73 | 77 |
| Impairment of real estate | — | 202 | 5,037 | — | — | — | — | — |
| Stock-based compensation expense | 3,327 | 2,952 | 1,629 | 2,715 | 3,799 | 2,206 | 3,101 | 3,849 |
| Purchase Price Multiples<br><br>as of March 31, 2024<br><br>Amounts in thousands | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Purchase Period | Purchase Price (1)(2) | Total Estimated Collections (3) | Estimated Remaining Collections (4) | Current Purchase Price Multiple | Original Purchase Price Multiple (5) | |||
| Americas and Australia Core | ||||||||
| 1996-2013 | $ | 1,932,722 | $ | 5,735,181 | $ | 53,058 | 297% | 233% |
| 2014 | 404,117 | 887,557 | 26,537 | 220% | 204% | |||
| 2015 | 443,114 | 903,490 | 35,096 | 204% | 205% | |||
| 2016 | 455,767 | 1,081,231 | 61,791 | 237% | 201% | |||
| 2017 | 532,851 | 1,204,662 | 98,626 | 226% | 193% | |||
| 2018 | 653,975 | 1,495,710 | 144,303 | 229% | 202% | |||
| 2019 | 581,476 | 1,294,975 | 159,210 | 223% | 206% | |||
| 2020 | 435,668 | 952,081 | 189,210 | 219% | 213% | |||
| 2021 | 435,846 | 745,705 | 325,686 | 171% | 191% | |||
| 2022 | 406,082 | 712,575 | 417,252 | 175% | 179% | |||
| 2023 | 622,583 | 1,227,658 | 1,038,459 | 197% | 197% | |||
| 2024 | 174,596 | 368,538 | 362,801 | 211% | 211% | |||
| Subtotal | 7,078,797 | 16,609,363 | 2,912,029 | |||||
| Americas Insolvency | ||||||||
| 1996-2013 | 1,266,056 | 2,502,843 | 54 | 198% | 159% | |||
| 2014 | 148,420 | 218,846 | 67 | 147% | 124% | |||
| 2015 | 63,170 | 88,037 | 51 | 139% | 125% | |||
| 2016 | 91,442 | 118,193 | 268 | 129% | 123% | |||
| 2017 | 275,257 | 357,959 | 1,435 | 130% | 125% | |||
| 2018 | 97,879 | 135,560 | 1,013 | 138% | 127% | |||
| 2019 | 123,077 | 168,504 | 12,379 | 137% | 128% | |||
| 2020 | 62,130 | 91,371 | 24,293 | 147% | 136% | |||
| 2021 | 55,187 | 73,991 | 29,902 | 134% | 136% | |||
| 2022 | 33,442 | 46,945 | 31,961 | 140% | 139% | |||
| 2023 | 91,282 | 120,803 | 105,383 | 132% | 135% | |||
| 2024 | 22,156 | 33,077 | 32,692 | 149% | 149% | |||
| Subtotal | 2,329,498 | 3,956,129 | 239,498 | |||||
| Total Americas and Australia | 9,408,295 | 20,565,492 | 3,151,527 | |||||
| Europe Core | ||||||||
| 2012-2013 | 40,742 | 72,345 | 1 | 178% | 153% | |||
| 2014 | 773,811 | 2,551,509 | 431,677 | 330% | 208% | |||
| 2015 | 411,340 | 750,954 | 138,612 | 183% | 160% | |||
| 2016 | 333,090 | 578,002 | 161,067 | 174% | 167% | |||
| 2017 | 252,174 | 368,260 | 105,187 | 146% | 144% | |||
| 2018 | 341,775 | 548,888 | 186,849 | 161% | 148% | |||
| 2019 | 518,610 | 843,205 | 334,701 | 163% | 152% | |||
| 2020 | 324,119 | 564,901 | 247,220 | 174% | 172% | |||
| 2021 | 412,411 | 698,784 | 399,930 | 169% | 170% | |||
| 2022 | 359,447 | 583,939 | 460,431 | 162% | 162% | |||
| 2023 | 410,593 | 693,985 | 603,457 | 169% | 169% | |||
| 2024 | 43,809 | 82,653 | 81,224 | 189% | 189% | |||
| Subtotal | 4,221,921 | 8,337,425 | 3,150,356 | |||||
| Europe Insolvency | ||||||||
| 2014 | 10,876 | 18,933 | — | 174% | 129% | |||
| 2015 | 18,973 | 29,335 | — | 155% | 139% | |||
| 2016 | 39,338 | 57,747 | 742 | 147% | 130% | |||
| 2017 | 39,235 | 52,006 | 1,517 | 133% | 128% | |||
| 2018 | 44,908 | 52,670 | 3,747 | 117% | 123% | |||
| 2019 | 77,218 | 112,606 | 17,421 | 146% | 130% | |||
| 2020 | 105,440 | 156,347 | 35,698 | 148% | 129% | |||
| 2021 | 53,230 | 73,023 | 29,947 | 137% | 134% | |||
| 2022 | 44,604 | 61,163 | 43,051 | 137% | 137% | |||
| 2023 | 46,558 | 64,359 | 56,671 | 138% | 138% | |||
| 2024 | 4,978 | 7,530 | 7,495 | 151% | 151% | |||
| Subtotal | 485,358 | 685,719 | 196,289 | |||||
| Total Europe | 4,707,279 | 9,023,144 | 3,346,645 | |||||
| Total PRA Group | $ | 14,115,574 | $ | 29,588,636 | $ | 6,498,172 |
(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, 2024 exchange rate.
(5)The Original Purchase Price Multiple represents the purchase price multiple at the end of the year of acquisition.
| Portfolio Financial Information (1) | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Amounts in thousands | ||||||||||
| March 31, 2024 (year-to-date) | As of March 31, 2024 | |||||||||
| Purchase Period | Cash Collections (2) | Portfolio Income (2) | Change in Expected Recoveries (2) | Total Portfolio Revenue (2) | Net Finance Receivables (3) | |||||
| Americas and Australia Core | ||||||||||
| 1996-2013 | $ | 9,021 | $ | 3,462 | $ | 5,949 | $ | 9,411 | $ | 16,050 |
| 2014 | 3,410 | 1,423 | 1,852 | 3,275 | 10,235 | |||||
| 2015 | 4,262 | 1,713 | 2,582 | 4,294 | 15,130 | |||||
| 2016 | 6,247 | 3,288 | 1,994 | 5,282 | 20,969 | |||||
| 2017 | 10,450 | 4,796 | 3,180 | 7,976 | 40,703 | |||||
| 2018 | 21,334 | 7,599 | 8,233 | 15,833 | 78,949 | |||||
| 2019 | 22,567 | 9,256 | 2,710 | 11,966 | 89,544 | |||||
| 2020 | 26,730 | 10,437 | 1,040 | 11,478 | 105,887 | |||||
| 2021 | 29,841 | 14,658 | (3,302) | 11,356 | 171,251 | |||||
| 2022 | 43,687 | 18,510 | 421 | 18,930 | 254,765 | |||||
| 2023 | 73,573 | 45,156 | 8,060 | 53,215 | 565,671 | |||||
| 2024 | 5,739 | 4,114 | 974 | 5,086 | 173,900 | |||||
| Subtotal | 256,861 | 124,412 | 33,693 | 158,102 | 1,543,054 | |||||
| Americas Insolvency | ||||||||||
| 1996-2013 | 267 | 37 | 231 | 268 | — | |||||
| 2014 | 64 | 30 | 38 | 68 | — | |||||
| 2015 | 50 | 11 | 28 | 39 | 28 | |||||
| 2016 | 194 | 11 | 186 | 197 | 231 | |||||
| 2017 | 805 | 46 | 1,028 | 1,074 | 1,280 | |||||
| 2018 | 956 | 48 | 17 | 65 | 967 | |||||
| 2019 | 5,719 | 399 | (158) | 240 | 11,825 | |||||
| 2020 | 4,612 | 762 | 672 | 1,434 | 21,843 | |||||
| 2021 | 4,090 | 885 | 193 | 1,079 | 25,851 | |||||
| 2022 | 2,634 | 846 | 130 | 976 | 26,191 | |||||
| 2023 | 5,432 | 2,984 | (1,004) | 1,981 | 80,736 | |||||
| 2024 | 386 | 353 | 19 | 372 | 22,142 | |||||
| Subtotal | 25,209 | 6,412 | 1,380 | 7,793 | 191,094 | |||||
| Total Americas and Australia | 282,070 | 130,824 | 35,073 | 165,895 | 1,734,148 | |||||
| Europe Core | ||||||||||
| 2012-2013 | 281 | — | 281 | 281 | — | |||||
| 2014 | 24,056 | 16,757 | 6,329 | 23,086 | 97,667 | |||||
| 2015 | 7,696 | 3,524 | 1,324 | 4,848 | 68,718 | |||||
| 2016 | 6,809 | 3,351 | 1,410 | 4,762 | 90,482 | |||||
| 2017 | 4,609 | 1,745 | 688 | 2,434 | 70,014 | |||||
| 2018 | 9,554 | 3,534 | (143) | 3,392 | 121,309 | |||||
| 2019 | 17,474 | 5,802 | 2,086 | 7,888 | 225,375 | |||||
| 2020 | 12,662 | 4,951 | 1,190 | 6,141 | 152,642 | |||||
| 2021 | 17,293 | 7,418 | 1,470 | 8,888 | 241,757 | |||||
| 2022 | 18,662 | 7,916 | 273 | 8,190 | 288,841 | |||||
| 2023 | 25,401 | 11,317 | 401 | 11,718 | 354,946 | |||||
| 2024 | 1,436 | 369 | 563 | 932 | 43,288 | |||||
| Subtotal | 145,933 | 66,684 | 15,872 | 82,560 | 1,755,039 | |||||
| Europe Insolvency | ||||||||||
| 2014 | 45 | — | 45 | 45 | — | |||||
| 2015 | 60 | 2 | 31 | 33 | — | |||||
| 2016 | 250 | 36 | 69 | 105 | 278 | |||||
| 2017 | 488 | 42 | 8 | 50 | 1,296 | |||||
| 2018 | 1,080 | 88 | 9 | 97 | 3,393 | |||||
| 2019 | 3,710 | 428 | 316 | 743 | 15,271 | |||||
| 2020 | 6,272 | 847 | (285) | 561 | 32,321 | |||||
| 2021 | 3,485 | 746 | 208 | 954 | 25,897 | |||||
| 2022 | 3,332 | 1,025 | 227 | 1,252 | 34,421 | |||||
| 2023 | 2,760 | 1,315 | 75 | 1,390 | 43,143 | |||||
| 2024 | 33 | 19 | 26 | 45 | 4,988 | |||||
| Subtotal | 21,515 | 4,548 | 729 | 5,275 | 161,008 | |||||
| Total Europe | 167,448 | 71,232 | 16,601 | 87,835 | 1,916,047 | |||||
| Total PRA Group | $ | 449,518 | $ | 202,056 | $ | 51,674 | $ | 253,730 | $ | 3,650,195 |
(1) Includes the nonperforming loan portfolios that were acquired through our business acquisitions.
(2)Non-U.S. amounts are presented using the average exchange rates during the current reporting period.
(3)Non-U.S. amounts are presented at the March 31, 2024 exchange rate.
| Cash Collections by Year, By Year of Purchase (1)<br><br>as of March 31, 2024<br><br>Amounts in millions | ||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash Collections | ||||||||||||||||||||||||||||
| Purchase Period | Purchase Price (2)(3) | 1996-2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | Total | ||||||||||||||
| Americas and Australia Core | ||||||||||||||||||||||||||||
| 1996-2013 | $ | 1,932.7 | $ | 3,618.9 | $ | 660.3 | $ | 474.4 | $ | 299.7 | $ | 197.0 | $ | 140.3 | $ | 99.7 | $ | 64.7 | $ | 46.5 | $ | 36.0 | $ | 28.4 | $ | 9.0 | $ | 5,674.9 |
| 2014 | 404.1 | — | 92.7 | 253.4 | 170.3 | 114.2 | 82.2 | 55.3 | 31.9 | 22.3 | 15.0 | 11.8 | 3.4 | 852.5 | ||||||||||||||
| 2015 | 443.1 | — | — | 117.0 | 228.4 | 185.9 | 126.6 | 83.6 | 57.2 | 34.9 | 19.5 | 14.1 | 4.3 | 871.5 | ||||||||||||||
| 2016 | 455.8 | — | — | — | 138.7 | 256.5 | 194.6 | 140.6 | 105.9 | 74.2 | 38.4 | 24.9 | 6.2 | 980.0 | ||||||||||||||
| 2017 | 532.9 | — | — | — | — | 107.3 | 278.7 | 256.5 | 192.5 | 130.0 | 76.3 | 43.8 | 10.4 | 1095.5 | ||||||||||||||
| 2018 | 654.0 | — | — | — | — | — | 122.7 | 361.9 | 337.7 | 239.9 | 146.1 | 92.9 | 21.3 | 1322.5 | ||||||||||||||
| 2019 | 581.5 | — | — | — | — | — | — | 143.8 | 349.0 | 289.8 | 177.7 | 110.3 | 22.6 | 1093.2 | ||||||||||||||
| 2020 | 435.7 | — | — | — | — | — | — | — | 132.9 | 284.3 | 192.0 | 125.8 | 26.7 | 761.7 | ||||||||||||||
| 2021 | 435.8 | — | — | — | — | — | — | — | — | 85.0 | 177.3 | 136.8 | 29.8 | 428.9 | ||||||||||||||
| 2022 | 406.1 | — | — | — | — | — | — | — | — | — | 67.7 | 195.4 | 43.7 | 306.8 | ||||||||||||||
| 2023 | 622.6 | — | — | — | — | — | — | — | — | — | — | 108.4 | 73.6 | 182.0 | ||||||||||||||
| 2024 | 174.5 | — | — | — | — | — | — | — | — | — | — | — | 5.9 | 5.9 | ||||||||||||||
| Subtotal | 7,078.8 | 3,618.9 | 753.0 | 844.8 | 837.1 | 860.9 | 945.1 | 1,141.4 | 1,271.8 | 1,206.9 | 946.0 | 892.6 | 256.9 | 13,575.4 | ||||||||||||||
| Americas Insolvency | ||||||||||||||||||||||||||||
| 1996-2013 | 1,266.1 | 1,491.4 | 421.4 | 289.9 | 168.7 | 85.5 | 30.3 | 6.8 | 3.6 | 2.2 | 1.6 | 1.1 | 0.3 | 2,502.8 | ||||||||||||||
| 2014 | 148.4 | — | 37.0 | 50.9 | 44.3 | 37.4 | 28.8 | 15.8 | 2.2 | 1.1 | 0.7 | 0.4 | 0.1 | 218.7 | ||||||||||||||
| 2015 | 63.2 | — | — | 3.4 | 17.9 | 20.1 | 19.8 | 16.7 | 7.9 | 1.3 | 0.6 | 0.3 | 0.1 | 88.1 | ||||||||||||||
| 2016 | 91.4 | — | — | — | 18.9 | 30.4 | 25.0 | 19.9 | 14.4 | 7.4 | 1.8 | 0.9 | 0.2 | 118.9 | ||||||||||||||
| 2017 | 275.3 | — | — | — | — | 49.1 | 97.3 | 80.9 | 58.8 | 44.0 | 20.8 | 4.9 | 0.8 | 356.6 | ||||||||||||||
| 2018 | 97.9 | — | — | — | — | — | 6.7 | 27.4 | 30.5 | 31.6 | 24.6 | 12.7 | 1.0 | 134.5 | ||||||||||||||
| 2019 | 123.1 | — | — | — | — | — | — | 13.4 | 31.4 | 39.1 | 37.8 | 28.7 | 5.7 | 156.1 | ||||||||||||||
| 2020 | 62.1 | — | — | — | — | — | — | — | 6.5 | 16.1 | 20.4 | 19.5 | 4.6 | 67.1 | ||||||||||||||
| 2021 | 55.2 | — | — | — | — | — | — | — | — | 4.6 | 17.9 | 17.5 | 4.1 | 44.1 | ||||||||||||||
| 2022 | 33.4 | — | — | — | — | — | — | — | — | — | 3.2 | 9.2 | 2.6 | 15.0 | ||||||||||||||
| 2023 | 91.3 | — | — | — | — | — | — | — | — | — | — | 9.2 | 5.4 | 14.6 | ||||||||||||||
| 2024 | 22.1 | — | — | — | — | — | — | — | — | — | — | — | 0.3 | 0.3 | ||||||||||||||
| Subtotal | 2,329.5 | 1,491.4 | 458.4 | 344.2 | 249.8 | 222.5 | 207.9 | 180.9 | 155.3 | 147.4 | 129.4 | 104.4 | 25.2 | 3,716.8 | ||||||||||||||
| Total Americas and Australia | 9,408.3 | 5,110.3 | 1,211.4 | 1,189.0 | 1,086.9 | 1,083.4 | 1,153.0 | 1,322.3 | 1,427.1 | 1,354.3 | 1,075.4 | 997.0 | 282.1 | 17,292.2 | ||||||||||||||
| Europe Core | ||||||||||||||||||||||||||||
| 2012-2013 | 40.7 | 27.7 | 14.2 | 5.5 | 3.5 | 3.3 | 3.3 | 2.4 | 1.9 | 1.8 | 1.4 | 1.0 | 0.3 | 66.3 | ||||||||||||||
| 2014 | 773.8 | — | 153.2 | 292.0 | 246.4 | 220.8 | 206.3 | 172.9 | 149.8 | 149.2 | 122.2 | 107.6 | 24.1 | 1,844.5 | ||||||||||||||
| 2015 | 411.3 | — | — | 45.8 | 100.3 | 86.2 | 80.9 | 66.1 | 54.3 | 51.4 | 40.7 | 33.8 | 7.7 | 567.2 | ||||||||||||||
| 2016 | 333.1 | — | — | — | 40.4 | 78.9 | 72.6 | 58.0 | 48.3 | 46.7 | 36.9 | 29.7 | 6.8 | 418.3 | ||||||||||||||
| 2017 | 252.2 | — | — | — | — | 17.9 | 56.0 | 44.1 | 36.1 | 34.8 | 25.2 | 20.2 | 4.6 | 238.9 | ||||||||||||||
| 2018 | 341.8 | — | — | — | — | — | 24.3 | 88.7 | 71.3 | 69.1 | 50.7 | 41.6 | 9.6 | 355.3 | ||||||||||||||
| 2019 | 518.6 | — | — | — | — | — | — | 48.0 | 125.7 | 121.4 | 89.8 | 75.1 | 17.5 | 477.5 | ||||||||||||||
| 2020 | 324.1 | — | — | — | — | — | — | — | 32.3 | 91.7 | 69.0 | 56.1 | 12.7 | 261.8 | ||||||||||||||
| 2021 | 412.4 | — | — | — | — | — | — | — | — | 48.5 | 89.9 | 73.0 | 17.3 | 228.7 | ||||||||||||||
| 2022 | 359.4 | — | — | — | — | — | — | — | — | — | 33.9 | 83.8 | 18.7 | 136.4 | ||||||||||||||
| 2023 | 410.6 | — | — | — | — | — | — | — | — | — | — | 50.3 | 25.4 | 75.7 | ||||||||||||||
| 2024 | 43.9 | — | — | — | — | — | — | — | — | — | — | — | 1.2 | 1.2 | ||||||||||||||
| Subtotal | 4,221.9 | 27.7 | 167.4 | 343.3 | 390.6 | 407.1 | 443.4 | 480.2 | 519.7 | 614.6 | 559.7 | 572.2 | 145.9 | 4,671.8 | ||||||||||||||
| Europe Insolvency | ||||||||||||||||||||||||||||
| 2014 | 10.9 | — | — | 4.3 | 3.9 | 3.2 | 2.6 | 1.5 | 0.8 | 0.3 | 0.2 | 0.2 | — | 17.0 | ||||||||||||||
| 2015 | 19.0 | — | — | 3.0 | 4.4 | 5.0 | 4.8 | 3.9 | 2.9 | 1.6 | 0.6 | 0.4 | 0.1 | 26.7 | ||||||||||||||
| 2016 | 39.3 | — | — | — | 6.2 | 12.7 | 12.9 | 10.7 | 7.9 | 6.0 | 2.7 | 1.3 | 0.3 | 60.7 | ||||||||||||||
| 2017 | 39.2 | — | — | — | — | 1.2 | 7.9 | 9.2 | 9.8 | 9.4 | 6.5 | 3.8 | 0.5 | 48.3 | ||||||||||||||
| 2018 | 44.9 | — | — | — | — | — | 0.6 | 8.4 | 10.3 | 11.7 | 9.8 | 7.2 | 1.1 | 49.1 | ||||||||||||||
| 2019 | 77.2 | — | — | — | — | — | — | 5.0 | 21.1 | 23.9 | 21.0 | 17.5 | 3.7 | 92.2 | ||||||||||||||
| 2020 | 105.4 | — | — | — | — | — | — | — | 6.0 | 34.6 | 34.1 | 29.7 | 6.3 | 110.7 | ||||||||||||||
| 2021 | 53.2 | — | — | — | — | — | — | — | — | 5.5 | 14.4 | 14.7 | 3.3 | 37.9 | ||||||||||||||
| 2022 | 44.6 | — | — | — | — | — | — | — | — | — | 4.5 | 12.4 | 3.5 | 20.4 | ||||||||||||||
| 2023 | 46.6 | — | — | — | — | — | — | — | — | — | — | 4.3 | 2.7 | 7.0 | ||||||||||||||
| 2024 | 5.0 | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||
| Subtotal | 485.4 | — | — | 7.3 | 14.5 | 22.1 | 28.8 | 38.7 | 58.8 | 93.0 | 93.8 | 91.5 | 21.5 | 470.0 | ||||||||||||||
| Total Europe | 4,707.3 | 27.7 | 167.4 | 350.6 | 405.1 | 429.2 | 472.2 | 518.9 | 578.5 | 707.6 | 653.5 | 663.7 | 167.4 | 5,141.8 | ||||||||||||||
| Total PRA Group | $ | 14,115.6 | $ | 5,138.0 | $ | 1,378.8 | $ | 1,539.6 | $ | 1,492.0 | $ | 1,512.6 | $ | 1,625.2 | $ | 1,841.2 | $ | 2,005.6 | $ | 2,061.9 | $ | 1,728.9 | $ | 1,660.7 | $ | 449.5 | $ | 22,434.0 |
(1)Non-U.S. amounts are presented using the average exchange rates during the cash collection period.
(2)Includes the acquisition date finance receivables portfolios 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
The Company reports its 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 (or less income tax benefit); 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 impairment of real estate; 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. The Company 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 net income, the most directly comparable financial measure calculated and reported in accordance with GAAP, to Adjusted EBITDA for the last twelve months (LTM) ended March 31, 2024 and for the year ended December 31, 2023. 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, 2024 | December 31, 2023 | ||
| Net income/(loss) attributable to PRA Group, Inc. | $ | (21) | $ | (83) |
| Adjustments: | ||||
| Income tax expense/(benefit) | 5 | (16) | ||
| Foreign exchange gain | (1) | — | ||
| Interest expense, net | 196 | 181 | ||
| Other expense | 2 | 2 | ||
| Depreciation and amortization | 13 | 13 | ||
| Impairment of real estate | 5 | 5 | ||
| Adjustment for net income attributable to noncontrolling interests | 20 | 17 | ||
| Recoveries applied to negative allowance less Changes in expected recoveries | 825 | 888 | ||
| Adjusted EBITDA | $ | 1,044 | $ | 1,007 |
The Company also evaluates its business using certain ratios that use Adjusted EBITDA. Debt to Adjusted EBITDA is calculated by dividing borrowings by Adjusted EBITDA. The following table reflects the Company's Debt to Adjusted EBITDA for the LTM as of March 31, 2024 and for the year ended December 31, 2023 ($ in millions):
| Debt to Adjusted EBITDA | ||||
|---|---|---|---|---|
| LTM | For the Year Ended | |||
| March 31, 2024 | December 31, 2023 | |||
| Borrowings | $ | 2,953 | $ | 2,914 |
| Adjusted EBITDA | 1,044 | 1,007 | ||
| Debt to Adjusted EBITDA | 2.83 | 2.89 |
In addition, the Company uses return on average tangible equity (ROATE), which is a supplemental measure of performance that is not required by, or presented in accordance with, GAAP, to monitor and evaluate operating performance relative to the Company's equity. Management believes ROATE is a useful financial measure for investors in evaluating the effective use of equity, and is an important component of its long-term shareholder return. Average tangible equity ("ATE") is defined as average Total stockholders' equity - PRA Group, Inc. less average goodwill and average other intangible assets. ROATE is calculated by dividing annualized Net income/(loss) attributable to PRA Group, Inc. by ATE. The following table displays the Company's ROATE and provides a reconciliation of Total stockholders' equity - PRA Group, Inc. as reported in accordance with GAAP to ATE for the periods indicated (amounts in thousands, except for ratio data):
| Return on Average Tangible Equity | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Period Ended | Average | Period Ended | Average | |||||||||
| March 31, 2024 | December 31, 2023 | First Quarter 2024 | March 31, 2023 | December 31, 2022 | First Quarter 2023 | |||||||
| Total stockholders' equity - PRA Group, Inc. | $ | 1,129,326 | $ | 1,167,112 | $ | 1,148,219 | $ | 1,158,343 | $ | 1,227,661 | $ | 1,193,002 |
| Less: Goodwill | 411,846 | 431,564 | 421,705 | 420,647 | 435,921 | 428,284 | ||||||
| Less: Other intangible assets | 1,666 | 1,742 | 1,704 | 1,833 | 1,847 | 1,840 | ||||||
| Average tangible equity | $ | 724,810 | $ | 762,878 | ||||||||
| First Quarter 2024 | First Quarter 2023 | |||||||||||
| Net income/(loss) attributable to PRA Group, Inc. | $ | 3,475 | $ | (58,629) | ||||||||
| Return on average tangible equity (1) | 1.9% | (30.7)% |
Investor Contact:
Najim Mostamand, CFA
Vice President, Investor Relations
757-431-7913
IR@PRAGroup.com
News Media Contact:
Elizabeth Kersey
Senior Vice President, Communications and Public Policy
(757) 641-0558
Elizabeth.Kersey@PRAGroup.com
1.Based on annualized Net income/(loss) attributable to PRA Group, Inc.