NORFOLK, Va., Feb. 28, 2019 /PRNewswire/ -- PRA Group
(Nasdaq: PRAA), a global leader in acquiring and collecting nonperforming loans, today reported its financial results for the
fourth quarter and full year of 2018. Net income attributable to PRA Group, Inc. in the fourth quarter of 2018 was
$14.9 million compared to $88.9 million in the fourth quarter of
2017. Diluted earnings per share in the fourth quarter of 2018 were $0.33 compared to
$1.96 in the fourth quarter of 2017. For the year ended December 31,
2018, net income attributable to PRA Group, Inc. was $65.6 million, or $1.44 in diluted earnings per share, compared to $164.3 million, or $3.59 in diluted earnings per share, during the year ended December 31,
2017. Financial performance in the fourth quarter and full year of 2017 was impacted by a net after-tax benefit of
$73.2 million due to the Tax Cuts and Jobs Act.
During the quarter, the Company completed a review of seller contracts in light of recent interpretations of the rules
governing revenue recognition on portfolios that do not qualify for sale accounting. As a result, the Company has
determined that two contracts in Austria did not meet the recent interpretations, and the
Company should have applied different revenue recognition methodology for portfolios acquired under these contracts. The
impact of this change is that the Company should have recognized an additional $5.5 million of
revenue from 2016 to 2018. Of the $5.5 million, $1.2 million
should have been recognized during 2018. These revenue increases were spread over a number of prior years and, although
none were material to any individual year, the impact could have been material had the Company reflected the full change in its
2018 results. The conclusion does not impact the economics of the transactions, only the revenue recognition
methodology. This press release includes reconciliations from previously reported results to results adjusted for the
additional revenue for the three and twelve months ended December 31, 2017. Additionally, all
numbers presented herein reflect adjusted results.
As a result of this analysis, the Company experienced unanticipated delays in completing the year end closing process.
The Company, and as a result, its auditors, have not fully completed the activities required to complete Form 10-K for the fiscal
year ended December 31, 2018. Therefore, the Company is not in a position to file its Form
10-K within the prescribed time period without unreasonable expense and effort. The Company expects to file its Form 10-K within
the 15 day period specified by Rule 12b-25 of the Securities Exchange Act of 1934, as amended.
Fourth Quarter Highlights
- Cash collections of $402.7 million, an increase of 7% compared to the fourth quarter of 2017.
Cash collections on a currency adjusted basis increased 9% compared to the fourth quarter of 2017.
-
- Americas Core cash collections increased 15%, or 16% on a currency adjusted basis.
-
- U.S. legal cash collections increased 24%.
- U.S. call center cash collections increased 12%.
- Europe Core cash collections increased 6%, or 9% on a currency adjusted basis.
- Record quarterly portfolio investment, excluding acquisitions, of $490.9 million driven by
Americas Core and Europe Core.
- Record estimated remaining collections of $6.14 billion which increased $331.5 million from the third quarter of 2018.
- Income recognized on finance receivables of $231.0 million compared to $203.4 million in the fourth quarter of 2017.
Full-Year Highlights
- Expanded North American revolving credit facility to provide significant additional capacity for investment in the United States.
- Completed a strategic partnership with Banco Bradesco, enhancing the Company's position in Latin
America's largest economy, creating additional investment opportunities and maintaining majority ownership of the
revenue generating operation for PRA Group. The Company recognized a gain of $26.6 million
on the sale of the majority stake in the servicing platform during the fourth quarter.
- Record total cash collections of $1.63 billion, driven by record cash collections in Americas
Core, Europe Core and Europe Insolvency.
- Record portfolio investment in Americas Core of $657.1 million, increasing 23% compared to
the previous record in 2017.
"The fourth quarter of 2018 culminated a year of exceptional portfolio investment and record cash collections for PRA
Group. During the fourth quarter, we invested nearly a half billion dollars, with substantial deployments in Americas Core
and in European countries where we have extensive data and operational experience. This increased estimated remaining
collections to an all-time high of $6.14 billion," said Kevin
Stevenson, president and chief executive officer of PRA Group, Inc. "Total cash collections for the year set a
record at $1.63 billion, fueled by growth in Americas Core and Europe Core. U.S call centers
delivered an increase of 16% compared to 2017 and we are seeing U.S. legal collections accelerate after the investment in the
third and fourth quarters."
Cash Collections, Revenues, and Net Allowance Charges
- The following table presents cash collections by quarter and by source on an as reported and currency-adjusted basis:
Cash Collection Source
|
|
2018
|
|
2017
|
($ in thousands)
|
|
Q4
|
Q3
|
Q2
|
Q1
|
|
Q4
|
Americas-Core
|
|
$ 233,937
|
$ 231,253
|
$ 233,752
|
$ 246,237
|
|
$ 204,245
|
Americas-Insolvency
|
|
48,000
|
48,518
|
56,063
|
55,280
|
|
59,103
|
Europe-Core
|
|
113,154
|
102,780
|
109,359
|
118,109
|
|
107,124
|
Europe-Insolvency
|
|
7,618
|
6,731
|
7,460
|
6,954
|
|
5,794
|
Total Cash Collections
|
|
$ 402,709
|
$ 389,282
|
$ 406,634
|
$ 426,580
|
|
$ 376,266
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Collection Source -
|
|
|
|
|
|
|
|
Constant Currency Adjusted
|
|
2018
|
|
|
|
|
2017
|
($ in thousands)
|
|
Q4
|
|
|
|
|
Q4
|
Americas-Core
|
|
$ 233,937
|
|
|
|
|
$ 201,559
|
Americas-Insolvency
|
|
48,000
|
|
|
|
|
59,013
|
Europe-Core
|
|
113,154
|
|
|
|
|
103,442
|
Europe-Insolvency
|
|
7,618
|
|
|
|
|
5,615
|
Total Cash Collections
|
|
$ 402,709
|
|
|
|
|
$ 369,629
|
|
|
|
|
|
|
|
|
- Cash collections in the quarter increased 7%, or 9% on a currency adjusted basis, compared to the fourth quarter of 2017.
The increase was largely due to U.S. legal collections increasing 24% and U.S. call center collections increasing 12%. This was
partially offset by a 14% decrease in Global Insolvency cash collections primarily due to muted portfolio investment in 2018.
For the full year, total cash collections were a record $1.63 billion, an increase of 7% compared
to the full year of 2017.
- For the quarter, cash collections on fully amortized pools were $12.0 million and cash
collections on nonaccrual pools were $4.1 million.
- Income recognized on finance receivables increased 14% compared to the fourth quarter of 2017 due primarily to Americas
Core portfolio investment during 2017 and 2018, Europe Core portfolio investment in 2017 and yield increases in Europe Core.
For the full year of 2018, income recognized on finance receivables increased 12% compared to the full year of 2017.
- Net allowance charges in the quarter were $21.4 million primarily due to allowances incurred
in the 2013, 2014 and 2015 U.S. Core vintages.
- Fee income and other income in the quarter was $5.7 million.
Expenses
- Operating expenses in the quarter increased $32.7 million compared to the fourth quarter of
2017 largely due to increased legal collection expenses, as the Company had more accounts qualifying for the legal collection
channel and increases in compensation and employee services primarily due to expansion in U.S. collection staff. For the twelve
months ended December 31, 2018, operating expenses increased $87.0
million compared to the twelve months ended December 31, 2017.
- During the quarter, the Company recorded $3.0 million in noncash interest expense,
$2.7 million in amortization of debt issuance costs, and $0.9
million in amortization of intangible assets. The Company also recorded a $0.7 million
loss on the change in fair value on interest rate swap agreements.
- The effective tax rate for the full year of 2018 was 15.4%.
Portfolio Acquisitions
- The Company invested $490.9 million in finance receivables in the fourth quarter.
- The Company had in place forward flow commitments as of the end of 2018 for the purchase of nonperforming loans with a
maximum purchase price of $303.7 million.
Portfolio Purchase Source
|
2018
|
|
2017
|
($ in thousands)
|
Q4
|
Q3
|
Q2
|
Q1
|
|
Q4
|
Americas-Core
|
$ 172,511
|
$ 170,426
|
$ 182,768
|
$ 131,427
|
|
$ 160,278
|
Americas-Insolvency
|
52,871
|
17,151
|
16,651
|
13,436
|
|
44,195
|
Europe-Core
|
231,810
|
45,754
|
19,403
|
18,000
|
|
152,417
|
Europe-Insolvency
|
33,661
|
4,159
|
2,577
|
5,392
|
|
17,698
|
Total Portfolio Purchasing
|
$ 490,853
|
$ 237,490
|
$ 221,399
|
$ 168,255
|
|
$ 374,588
|
|
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 877-870-4263 in the U.S. or
412-317-0790 outside the U.S. and ask for the PRA Group conference call. To listen to a replay of the call until
March 07, 2019, call 877-344-7529 in the U.S. or 412-317-0088 outside the U.S. and use access code
10125880.
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 and Europe. With
almost 5,400 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 which 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 but not limited to 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 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
|
(in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
December 31,
|
|
December 31,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
Income recognized on finance receivables
|
$ 231,029
|
|
$ 203,397
|
|
$ 891,899
|
|
$ 795,435
|
Fee income
|
4,686
|
|
6,043
|
|
14,916
|
|
24,916
|
Other revenue
|
1,027
|
|
1,454
|
|
1,441
|
|
7,855
|
Total revenues
|
236,742
|
|
210,894
|
|
908,256
|
|
828,206
|
|
|
|
|
|
|
|
|
Net allowance charges
|
(21,381)
|
|
(2,486)
|
|
(33,425)
|
|
(11,898)
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
Compensation and employee services
|
79,123
|
|
69,253
|
|
319,400
|
|
273,033
|
Legal collection fees
|
11,501
|
|
10,061
|
|
42,941
|
|
43,351
|
Legal collection costs
|
33,281
|
|
18,781
|
|
104,988
|
|
76,047
|
Agency fees
|
9,088
|
|
7,877
|
|
33,854
|
|
35,530
|
Outside fees and services
|
17,068
|
|
15,815
|
|
61,492
|
|
62,792
|
Communication
|
10,645
|
|
8,028
|
|
43,224
|
|
33,132
|
Rent and occupancy
|
4,319
|
|
3,985
|
|
16,906
|
|
14,823
|
Depreciation and amortization
|
5,092
|
|
4,666
|
|
19,322
|
|
19,763
|
Other operating expenses
|
13,030
|
|
12,032
|
|
47,444
|
|
44,103
|
Total operating expenses
|
183,147
|
|
150,498
|
|
689,571
|
|
602,574
|
Income from operations
|
32,214
|
|
57,910
|
|
185,260
|
|
213,734
|
|
|
|
|
|
|
|
|
Other income and (expense):
|
|
|
|
|
|
|
|
Gain on sale of subsidiaries
|
26,575
|
|
-
|
|
26,575
|
|
48,474
|
Interest expense, net
|
(33,549)
|
|
(28,379)
|
|
(121,078)
|
|
(98,041)
|
Foreign exchange (loss)/gain
|
(4,553)
|
|
317
|
|
(944)
|
|
(1,104)
|
Other
|
(381)
|
|
(2,790)
|
|
(316)
|
|
(2,790)
|
Income before income taxes
|
20,306
|
|
27,058
|
|
89,497
|
|
160,273
|
|
|
|
|
|
|
|
|
Income tax expense/(benefit)
|
1,980
|
|
(63,709)
|
|
13,763
|
|
(10,852)
|
Net income
|
18,326
|
|
90,767
|
|
75,734
|
|
171,125
|
Adjustment for net income attributable to noncontrolling
interests
|
3,384
|
|
1,847
|
|
10,171
|
|
6,810
|
Net income attributable to PRA Group, Inc.
|
$ 14,942
|
|
$ 88,920
|
|
$ 65,563
|
|
$ 164,315
|
|
|
|
|
|
|
|
|
Net income per common share attributable to PRA Group, Inc.:
|
|
|
|
|
|
|
|
Basic
|
$ 0.33
|
|
$ 1.97
|
|
$ 1.45
|
|
$ 3.60
|
Diluted
|
$ 0.33
|
|
$ 1.96
|
|
$ 1.44
|
|
$ 3.59
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
45,304
|
|
45,170
|
|
45,280
|
|
45,671
|
Diluted
|
45,394
|
|
45,318
|
|
45,413
|
|
45,823
|
PRA Group, Inc.
|
Consolidated Balance Sheets
|
December 31, 2018 and December 31, 2017
|
(Amounts in thousands)
|
|
(unaudited)
|
|
|
|
December 31,
|
|
December 31,
|
ASSETS
|
2018
|
|
2017
|
|
|
|
|
Cash and cash equivalents
|
$ 98,695
|
|
$ 120,516
|
Investments
|
45,173
|
|
78,290
|
Finance receivables, net
|
3,084,777
|
|
2,776,199
|
Other receivables, net
|
46,157
|
|
15,770
|
Income taxes receivable
|
16,809
|
|
21,686
|
Net deferred tax asset
|
61,453
|
|
56,459
|
Property and equipment, net
|
54,136
|
|
49,311
|
Goodwill
|
464,116
|
|
526,513
|
Intangible assets, net
|
5,522
|
|
23,572
|
Other assets
|
32,721
|
|
32,656
|
|
|
|
|
Total assets
|
$ 3,909,559
|
|
$ 3,700,972
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
Accounts payable
|
$
6,110
|
|
$
4,992
|
Accrued expenses
|
79,396
|
|
85,993
|
Income taxes payable
|
15,080
|
|
10,771
|
Net deferred tax liability
|
114,979
|
|
171,185
|
Interest-bearing deposits
|
82,666
|
|
98,580
|
Borrowings
|
2,473,656
|
|
2,170,182
|
Other liabilities
|
7,370
|
|
9,018
|
|
|
|
|
Total liabilities
|
2,779,257
|
|
2,550,721
|
|
|
|
|
Redeemable noncontrolling interest
|
6,333
|
|
9,534
|
|
|
|
|
Equity:
|
|
|
|
Preferred stock, par value $0.01, authorized shares, 2,000,
|
|
|
|
issued and outstanding shares, 0
|
-
|
|
-
|
Common stock, par value $0.01, 100,000 shares authorized, 45,304
shares
|
|
|
|
issued and outstanding at December 31, 2018; 100,000 shares
authorized,
|
|
|
|
45,189 shares issued and outstanding at December 31,
2017
|
453
|
|
452
|
Additional paid-in capital
|
60,303
|
|
53,870
|
Retained earnings
|
1,276,473
|
|
1,214,840
|
Accumulated other comprehensive loss
|
(242,109)
|
|
(178,607)
|
Total stockholders' equity - PRA Group, Inc.
|
1,095,120
|
|
1,090,555
|
Noncontrolling interests
|
28,849
|
|
50,162
|
Total equity
|
1,123,969
|
|
1,140,717
|
Total liabilities and equity
|
$ 3,909,559
|
|
$ 3,700,972
|
Select Expenses (Income)
|
(in thousands)
|
Three Months Ended
|
|
December 31,
2018
|
September 30,
2018
|
June 30, 2018
|
March 31,
2018
|
December 31,
2017
|
September 30,
2017
|
June 30, 2017
|
March 31,
2017
|
Acquisition/divestiture-related expenses
|
|
-
|
4
|
10
|
-
|
-
|
-
|
2,100
|
Legal costs not associated with normal operations
|
647
|
95
|
231
|
92
|
160
|
218
|
2,615
|
1,024
|
Noncash interest expense - amortization of debt
discount
|
2,986
|
2,958
|
2,904
|
2,877
|
2,823
|
2,796
|
1,809
|
1,155
|
Noncash interest expense - amortization of debt
issuance costs
|
2,723
|
2,524
|
2,532
|
2,553
|
2,501
|
2,505
|
2,635
|
1,928
|
Change in fair value on Interest rate swap
agreements
|
673
|
(504)
|
972
|
(3,673)
|
420
|
(1,025)
|
(1,578)
|
158
|
Amortization of intangibles
|
907
|
994
|
1,133
|
1,222
|
1,016
|
1,037
|
869
|
1,410
|
Share-based compensation expense
|
1,600
|
2,361
|
2,146
|
2,415
|
2,415
|
2,218
|
1,846
|
2,199
|
Purchase Price Mutiples
|
as of December 31, 2018
|
Amounts in thousands
|
|
|
|
|
|
|
|
|
Purchase Period
|
Purchase Price (1)(2)
|
Net Finance
Receivables
Balance(3)
|
ERC-Historical
Period
Exchange
Rates (4)
|
Total Estimated
Collections (5)
|
ERC-Current
Period
Exchange
Rates (6)
|
Current
Estimated
Purchase Price
Multiple
|
Original
Estimated
Purchase Price
Multiple (7)
|
Americas-Core
|
|
|
|
|
|
|
|
1996-2008
|
$ 804,883
|
$ 9,108
|
$ 35,385
|
$ 2,423,212
|
$ 35,385
|
301%
|
236%
|
2009
|
125,153
|
653
|
22,518
|
459,318
|
22,518
|
367%
|
252%
|
2010
|
148,199
|
4,644
|
37,181
|
534,994
|
37,181
|
361%
|
247%
|
2011
|
209,607
|
10,434
|
64,203
|
738,173
|
64,203
|
352%
|
245%
|
2012
|
254,142
|
19,643
|
79,446
|
681,221
|
79,446
|
268%
|
226%
|
2013
|
391,031
|
50,555
|
143,328
|
942,934
|
143,328
|
241%
|
211%
|
2014
|
405,459
|
81,050
|
210,315
|
930,676
|
206,685
|
230%
|
204%
|
2015
|
444,063
|
134,024
|
310,233
|
965,382
|
310,059
|
217%
|
205%
|
2016
|
454,552
|
196,236
|
458,039
|
1,041,655
|
452,225
|
229%
|
201%
|
2017
|
534,410
|
371,366
|
724,197
|
1,112,042
|
720,535
|
208%
|
193%
|
2018
|
658,490
|
630,508
|
1,204,192
|
1,327,453
|
1,201,445
|
202%
|
202%
|
Subtotal
|
4,429,989
|
1,508,221
|
3,289,037
|
11,157,060
|
3,273,010
|
|
|
Americas-Insolvency
|
|
|
|
|
|
|
2004-2008
|
241,465
|
-
|
658
|
365,653
|
658
|
151%
|
155%
|
2009
|
155,988
|
-
|
1,232
|
470,626
|
1,232
|
302%
|
214%
|
2010
|
208,942
|
-
|
2,191
|
547,219
|
2,191
|
262%
|
184%
|
2011
|
180,434
|
-
|
434
|
368,821
|
434
|
204%
|
155%
|
2012
|
251,419
|
-
|
356
|
389,910
|
356
|
155%
|
136%
|
2013
|
227,904
|
-
|
5,820
|
355,738
|
5,820
|
156%
|
133%
|
2014
|
148,712
|
7,493
|
16,938
|
215,568
|
16,896
|
145%
|
124%
|
2015
|
63,184
|
16,234
|
22,790
|
83,989
|
22,790
|
133%
|
125%
|
2016
|
92,285
|
30,580
|
39,669
|
114,088
|
39,516
|
124%
|
123%
|
2017
|
275,293
|
155,609
|
200,144
|
346,550
|
200,144
|
126%
|
125%
|
2018
|
99,386
|
95,194
|
119,444
|
126,142
|
119,444
|
127%
|
127%
|
Subtotal
|
1,945,012
|
305,110
|
409,676
|
3,384,304
|
409,481
|
|
|
Total Americas
|
6,375,001
|
1,813,331
|
3,698,713
|
14,541,364
|
3,682,491
|
|
|
Europe-Core
|
|
|
|
|
|
|
|
2012
|
20,424
|
-
|
1,387
|
39,210
|
1,086
|
192%
|
187%
|
2013
|
20,347
|
100
|
831
|
24,227
|
639
|
119%
|
119%
|
2014
|
796,899
|
240,603
|
921,669
|
2,173,128
|
791,947
|
273%
|
208%
|
2015
|
420,956
|
189,588
|
421,252
|
751,455
|
377,175
|
179%
|
160%
|
2016
|
348,436
|
225,044
|
395,574
|
582,324
|
394,089
|
167%
|
167%
|
2017
|
247,757
|
188,893
|
284,707
|
357,298
|
276,223
|
144%
|
144%
|
2018 (8)
|
346,933
|
325,907
|
488,989
|
513,635
|
484,567
|
148%
|
148%
|
Subtotal
|
2,201,752
|
1,170,135
|
2,514,409
|
4,441,277
|
2,325,726
|
|
|
Europe-Insolvency
|
|
|
|
|
|
|
2014
|
10,876
|
985
|
2,656
|
18,010
|
2,389
|
166%
|
129%
|
2015
|
19,396
|
5,059
|
10,245
|
29,042
|
8,805
|
150%
|
139%
|
2016
|
42,190
|
19,002
|
29,476
|
61,117
|
28,993
|
145%
|
130%
|
2017
|
38,830
|
31,688
|
41,590
|
50,661
|
40,206
|
130%
|
128%
|
2018
|
45,636
|
44,577
|
55,360
|
56,029
|
54,569
|
123%
|
123%
|
Subtotal
|
156,928
|
101,311
|
139,327
|
214,859
|
134,962
|
|
|
Total Europe
|
2,358,680
|
1,271,446
|
2,653,736
|
4,656,136
|
2,460,688
|
|
|
Total PRA Group
|
$ 8,733,681
|
$ 3,084,777
|
$ 6,352,449
|
$ 19,197,500
|
$ 6,143,179
|
|
|
|
(1) The amount reflected in the Purchase Price also includes the
acquisition date finance receivables portfolios that were acquired through our various business acquisitions.
|
(2) For our international amounts, Purchase Price is presented at the
exchange rate at the end of the quarter in which the pool was purchased. In addition, any purchase price adjustments that
occur throughout the life of the pool are presented at the period-end exchange rate for the respective quarter of
purchase.
|
(3) For our international amounts, Net Finance Receivables are presented at
the December 31, 2018 exchange rate.
|
(4) For our international amounts, Estimated Remaining Collections
("ERC")-Historical Period Exchange Rates is presented at the period-end exchange rate for the respective quarter of
purchase.
|
(5) For our international amounts, Total Estimated Collections is presented
at the period-end exchange rate for the respective quarter of purchase.
|
(6) For our international amounts, ERC-Current Period Exchange Rates is
presented at the December 30, 2018 exchange rate.
|
(7) The Original Estimated Purchase Price Multiple represents the purchase
price multiple at the end of the year of acquisition.
|
(8) The Europe-Core purchases include a $34.9 million finance receivables
portfolio addition in the third quarter of 2018 relating to the consolidation of a Polish investment fund.
|
Portfolio Financial Information
|
Year-to-date as of December 31, 2018
|
Amounts in thousands
|
|
|
|
|
|
|
|
|
Purchase Period
|
Purchase
Price (1)(2)
|
Cash
Collections(3)
|
Gross
Revenue(3)
|
Amortization (3)
|
Net Allowance
Charges/
(Reversals)(3)
|
Net Revenue (3)(4)
|
Net Finance
Receivables as of
December 31, 2018 (5)
|
Americas-Core
|
|
|
|
|
|
|
|
1996-2008
|
$ 804,883
|
$ 15,092
|
$ 10,645
|
$ 4,447
|
$ (1,970)
|
$ 12,615
|
$
9,108
|
2009
|
125,153
|
8,180
|
7,899
|
281
|
125
|
7,774
|
653
|
2010
|
148,199
|
11,140
|
9,654
|
1,486
|
(2,625)
|
12,279
|
4,644
|
2011
|
209,607
|
21,622
|
18,912
|
2,710
|
25
|
18,887
|
10,434
|
2012
|
254,142
|
27,797
|
18,251
|
9,546
|
(4,005)
|
22,256
|
19,643
|
2013
|
391,031
|
56,449
|
41,274
|
15,175
|
11,480
|
29,794
|
50,555
|
2014
|
405,459
|
82,244
|
58,426
|
23,818
|
22,395
|
36,031
|
81,050
|
2015
|
444,063
|
126,605
|
74,083
|
52,522
|
4,632
|
69,451
|
134,024
|
2016
|
454,552
|
194,605
|
110,399
|
84,206
|
631
|
109,768
|
196,236
|
2017
|
534,410
|
278,733
|
155,298
|
123,435
|
318
|
154,980
|
371,366
|
2018
|
658,490
|
122,712
|
96,202
|
26,510
|
-
|
96,202
|
630,508
|
Subtotal
|
4,429,989
|
945,179
|
601,043
|
344,136
|
31,006
|
570,037
|
1,508,221
|
Americas-Insolvency
|
|
|
|
|
|
|
2004-2008
|
241,465
|
356
|
356
|
-
|
-
|
356
|
-
|
2009
|
155,988
|
747
|
747
|
-
|
-
|
747
|
-
|
2010
|
208,942
|
1,352
|
1,352
|
-
|
-
|
1,352
|
-
|
2011
|
180,434
|
1,584
|
1,584
|
-
|
-
|
1,584
|
-
|
2012
|
251,419
|
4,284
|
4,284
|
-
|
-
|
4,284
|
-
|
2013
|
227,904
|
21,948
|
14,364
|
7,584
|
-
|
14,364
|
-
|
2014
|
148,712
|
28,759
|
9,433
|
19,326
|
-
|
9,433
|
7,493
|
2015
|
63,184
|
19,769
|
3,793
|
15,976
|
-
|
3,793
|
16,234
|
2016
|
92,285
|
25,047
|
4,209
|
20,838
|
435
|
3,774
|
30,580
|
2017
|
275,293
|
97,315
|
17,518
|
79,797
|
-
|
17,518
|
155,609
|
2018
|
99,386
|
6,700
|
2,509
|
4,191
|
-
|
2,509
|
95,194
|
Subtotal
|
1,945,012
|
207,861
|
60,149
|
147,712
|
435
|
59,714
|
305,110
|
Total Americas
|
6,375,001
|
1,153,040
|
661,192
|
491,848
|
31,441
|
629,751
|
1,813,331
|
Europe-Core
|
|
|
|
|
|
|
|
2012
|
20,424
|
1,996
|
2,000
|
(4)
|
-
|
2,000
|
-
|
2013
|
20,347
|
1,331
|
894
|
437
|
-
|
894
|
100
|
2014
|
796,899
|
206,255
|
131,812
|
74,443
|
(1,393)
|
133,205
|
240,603
|
2015
|
420,956
|
80,858
|
34,556
|
46,302
|
(3,258)
|
37,814
|
189,588
|
2016
|
348,436
|
72,603
|
28,839
|
43,764
|
6,035
|
22,804
|
225,044
|
2017
|
247,757
|
56,033
|
15,027
|
41,006
|
599
|
14,428
|
188,893
|
2018 (6)
|
346,933
|
24,326
|
6,585
|
17,741
|
-
|
6,585
|
325,907
|
Subtotal
|
2,201,752
|
443,402
|
219,713
|
223,689
|
1,983
|
217,730
|
1,170,135
|
Europe-Insolvency
|
|
|
|
|
|
|
2014
|
10,876
|
2,620
|
1,496
|
1,124
|
-
|
1,496
|
985
|
2015
|
19,396
|
4,783
|
1,891
|
2,892
|
(63)
|
1,954
|
5,059
|
2016
|
42,190
|
12,856
|
4,941
|
7,915
|
64
|
4,877
|
19,002
|
2017
|
38,830
|
7,862
|
2,411
|
5,451
|
-
|
2,411
|
31,688
|
2018
|
45,636
|
642
|
255
|
387
|
-
|
255
|
44,577
|
Subtotal
|
156,928
|
28,763
|
10,994
|
17,769
|
1
|
10,993
|
101,311
|
Total Europe
|
2,358,680
|
472,165
|
230,707
|
241,458
|
1,984
|
228,723
|
1,271,446
|
Total PRA Group
|
$ 8,733,681
|
$ 1,625,205
|
$ 891,899
|
$ 733,306
|
$ 33,425
|
$ 858,474
|
$
3,084,777
|
|
(1) The amount reflected in the Purchase Price also includes the
acquisition date finance receivables portfolios that were acquired through our various business acquisitions.
|
(2) For our international amounts, Purchase Price is presented at the
exchange rate at the end of the quarter in which the pool was purchased. In addition, any purchase price adjustments that
occur throughout the life of the pool are presented at the period-end exchange rate for the respective quarter of
purchase.
|
(3) For our international amounts, amounts are presented using the average
exchange rates during the current reporting period.
|
(4) Net Revenue refers to income recognized on finance receivables, net of
allowance charges/(reversals).
|
(5) For our international amounts, Net Finance Receivables are presented at
the December 31, 2018 exchange rate.
|
(6) The Europe-Core purchases include a $34.9 million finance receivables
portfolio addition in the third quarter of 2018 relating to the consolidation of a Polish investment fund.
|
Cash Collections by Year, By Year of
Purchase(1)
|
as of December 31, 2018
|
Amounts in thousands
|
|
|
|
Purchase Period
|
Purchase Price
(2)(3)
|
Cash Collections
|
1996-2008
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
2016
|
2017
|
2018
|
Total
|
Americas-Core
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1996-2008
|
$ 804,883
|
$ 1,366,034
|
$ 240,929
|
$ 200,052
|
$ 169,205
|
$ 132,255
|
$ 95,262
|
$ 66,274
|
$ 46,277
|
$ 29,734
|
$ 19,458
|
$ 15,092
|
$ 2,380,572
|
2009
|
125,153
|
—
|
40,703
|
95,627
|
84,339
|
69,385
|
51,121
|
35,555
|
24,896
|
16,000
|
10,994
|
8,180
|
436,800
|
2010
|
148,199
|
—
|
—
|
47,076
|
113,554
|
109,873
|
82,014
|
55,946
|
38,110
|
24,515
|
15,587
|
11,140
|
497,815
|
2011
|
209,607
|
—
|
—
|
—
|
61,971
|
174,461
|
152,908
|
108,513
|
73,793
|
48,711
|
31,991
|
21,622
|
673,970
|
2012
|
254,142
|
—
|
—
|
—
|
—
|
56,901
|
173,589
|
146,198
|
97,267
|
59,981
|
40,042
|
27,797
|
601,775
|
2013
|
391,031
|
—
|
—
|
—
|
—
|
—
|
101,614
|
247,849
|
194,026
|
120,789
|
78,880
|
56,449
|
799,607
|
2014
|
405,459
|
—
|
—
|
—
|
—
|
—
|
—
|
92,660
|
253,448
|
170,311
|
114,219
|
82,244
|
712,882
|
2015
|
444,063
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
116,951
|
228,432
|
185,898
|
126,605
|
657,886
|
2016
|
454,552
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
138,723
|
256,531
|
194,605
|
589,859
|
2017
|
534,410
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
107,327
|
278,733
|
386,060
|
2018
|
658,490
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
122,712
|
122,712
|
Subtotal
|
4,429,989
|
1,366,034
|
281,632
|
342,755
|
429,069
|
542,875
|
656,508
|
752,995
|
844,768
|
837,196
|
860,927
|
945,179
|
7,859,938
|
Americas-Insolvency
|
|
|
|
|
|
|
|
|
|
|
|
|
2004-2008
|
241,465
|
117,972
|
69,736
|
65,321
|
53,924
|
37,530
|
13,534
|
3,035
|
1,836
|
1,098
|
653
|
356
|
364,995
|
2009
|
155,988
|
—
|
16,635
|
81,780
|
102,780
|
107,888
|
95,725
|
53,945
|
5,781
|
2,531
|
1,581
|
747
|
469,393
|
2010
|
208,942
|
—
|
—
|
39,486
|
104,499
|
125,020
|
121,717
|
101,873
|
43,649
|
5,008
|
2,425
|
1,352
|
545,029
|
2011
|
180,434
|
—
|
—
|
—
|
15,218
|
66,379
|
82,752
|
85,816
|
76,915
|
35,996
|
3,726
|
1,584
|
368,386
|
2012
|
251,419
|
—
|
—
|
—
|
—
|
17,388
|
103,610
|
94,141
|
80,079
|
60,715
|
29,337
|
4,284
|
389,554
|
2013
|
227,904
|
—
|
—
|
—
|
—
|
—
|
52,528
|
82,596
|
81,679
|
63,386
|
47,781
|
21,948
|
349,918
|
2014
|
148,712
|
—
|
—
|
—
|
—
|
—
|
—
|
37,045
|
50,880
|
44,313
|
37,350
|
28,759
|
198,347
|
2015
|
63,184
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
3,395
|
17,892
|
20,143
|
19,769
|
61,199
|
2016
|
92,285
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
18,869
|
30,426
|
25,047
|
74,342
|
2017
|
275,293
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
49,093
|
97,315
|
146,408
|
2018
|
99,386
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
6,700
|
6,700
|
Subtotal
|
1,945,012
|
117,972
|
86,371
|
186,587
|
276,421
|
354,205
|
469,866
|
458,451
|
344,214
|
249,808
|
222,515
|
207,861
|
2,974,271
|
Total Americas
|
6,375,001
|
1,484,006
|
368,003
|
529,342
|
705,490
|
897,080
|
1,126,374
|
1,211,446
|
1,188,982
|
1,087,004
|
1,083,442
|
1,153,040
|
10,834,209
|
Europe-Core
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
20,424
|
—
|
—
|
—
|
—
|
11,604
|
8,995
|
5,641
|
3,175
|
2,198
|
2,038
|
1,996
|
35,647
|
2013
|
20,347
|
—
|
—
|
—
|
—
|
—
|
7,068
|
8,540
|
2,347
|
1,326
|
1,239
|
1,331
|
21,851
|
2014
|
796,899
|
—
|
—
|
—
|
—
|
—
|
—
|
153,180
|
291,980
|
246,365
|
220,765
|
206,255
|
1,118,545
|
2015
|
420,956
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
45,760
|
100,263
|
86,156
|
80,858
|
313,037
|
2016
|
348,436
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
40,368
|
78,915
|
72,603
|
191,886
|
2017
|
247,757
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
17,894
|
56,033
|
73,927
|
2018 (4)
|
346,933
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
24,326
|
24,326
|
Subtotal
|
2,201,752
|
-
|
-
|
-
|
-
|
11,604
|
16,063
|
167,361
|
343,262
|
390,520
|
407,007
|
443,402
|
1,779,219
|
Europe-Insolvency
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
10,876
|
—
|
—
|
—
|
—
|
—
|
—
|
5
|
4,297
|
3,921
|
3,207
|
2,620
|
14,050
|
2015
|
19,396
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
2,954
|
4,366
|
5,013
|
4,783
|
17,116
|
2016
|
42,190
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
6,175
|
12,703
|
12,856
|
31,734
|
2017
|
38,830
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
1,233
|
7,862
|
9,095
|
2018
|
45,636
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
642
|
642
|
Subtotal
|
156,928
|
-
|
-
|
-
|
-
|
-
|
-
|
5
|
7,251
|
14,462
|
22,156
|
28,763
|
72,637
|
Total Europe
|
2,358,680
|
-
|
-
|
-
|
-
|
11,604
|
16,063
|
167,366
|
350,513
|
404,982
|
429,163
|
472,165
|
1,851,856
|
Total PRA Group
|
$ 8,733,681
|
$ 1,484,006
|
$ 368,003
|
$ 529,342
|
$ 705,490
|
$ 908,684
|
$ 1,142,437
|
$ 1,378,812
|
$ 1,539,495
|
$ 1,491,986
|
$ 1,512,605
|
$ 1,625,205
|
$ 12,686,065
|
|
(1) For our international amounts, Cash Collections are presented using the
average exchange rates during the cash collection period.
|
(2) The amount reflected in the Purchase Price also includes the
acquisition date finance receivables portfolios that were acquired through our various business acquisitions.
|
(3) For our international amounts, Purchase Price is presented at the
exchange rate at the end of the quarter in which the portfolio was purchased. In addition, any purchase price adjustments
that occur throughout the life of the pool are presented at the period end exchange rate for the respective quarter of
purchase.
|
(4) The Europe-Core purchases include a $34.9 million finance receivables
portfolio addition in the third quarter of 2018 relating to the consolidation of a Polish investment fund.
|
PRA Group, Inc.
|
Unaudited Consolidated Income Statements
|
(in thousands, except per share amounts)
|
|
|
Three Months Ended December 31, 2017
|
|
Twelve Months Ended December 31, 2017
|
|
As Previously
Reported
|
|
|
|
|
|
As Previously
Reported
|
|
|
|
|
|
|
|
|
As Corrected
|
|
|
|
|
As Corrected
|
|
|
Correction
|
|
|
|
Correction
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Income recognized on finance receivables
|
$ 200,663
|
|
$ 2,734
|
|
$ 203,397
|
|
$ 792,701
|
|
$ 2,734
|
|
$ 795,435
|
Fee income
|
6,043
|
|
-
|
|
6,043
|
|
24,916
|
|
-
|
|
24,916
|
Other revenue
|
1,454
|
|
-
|
|
1,454
|
|
7,855
|
|
-
|
|
7,855
|
Total revenues
|
208,160
|
|
2,734
|
|
210,894
|
|
825,472
|
|
2,734
|
|
828,206
|
|
|
|
|
|
|
|
|
|
|
|
|
Net allowance charges
|
(2,486)
|
|
-
|
|
(2,486)
|
|
(11,898)
|
|
-
|
|
(11,898)
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and employee services
|
69,253
|
|
-
|
|
69,253
|
|
273,033
|
|
-
|
|
273,033
|
Legal collection fees
|
10,061
|
|
-
|
|
10,061
|
|
43,351
|
|
-
|
|
43,351
|
Legal collection costs
|
18,781
|
|
-
|
|
18,781
|
|
76,047
|
|
-
|
|
76,047
|
Agency fees
|
7,877
|
|
-
|
|
7,877
|
|
35,530
|
|
-
|
|
35,530
|
Outside fees and services
|
15,815
|
|
-
|
|
15,815
|
|
62,792
|
|
-
|
|
62,792
|
Communication
|
8,028
|
|
-
|
|
8,028
|
|
33,132
|
|
-
|
|
33,132
|
Rent and occupancy
|
3,985
|
|
-
|
|
3,985
|
|
14,823
|
|
-
|
|
14,823
|
Depreciation and amortization
|
4,666
|
|
-
|
|
4,666
|
|
19,763
|
|
-
|
|
19,763
|
Other operating expenses
|
12,032
|
|
-
|
|
12,032
|
|
44,103
|
|
-
|
|
44,103
|
Total operating expenses
|
150,498
|
|
-
|
|
150,498
|
|
602,574
|
|
-
|
|
602,574
|
Income from operations
|
55,176
|
|
2,734
|
|
57,910
|
|
211,000
|
|
2,734
|
|
213,734
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income and (expense):
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of subsidiaries
|
-
|
|
-
|
|
-
|
|
48,474
|
|
-
|
|
48,474
|
Interest expense, net
|
(28,379)
|
|
-
|
|
(28,379)
|
|
(98,041)
|
|
-
|
|
(98,041)
|
Foreign exchange gain/(loss)
|
317
|
|
-
|
|
317
|
|
(1,104)
|
|
-
|
|
(1,104)
|
Other
|
(2,790)
|
|
-
|
|
(2,790)
|
|
(2,790)
|
|
-
|
|
(2,790)
|
Income before income taxes
|
24,324
|
|
2,734
|
|
27,058
|
|
157,539
|
|
2,734
|
|
160,273
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax (benefit)/expense
|
(64,393)
|
|
684
|
|
(63,709)
|
|
(11,536)
|
|
684
|
|
(10,852)
|
Net income
|
88,717
|
|
2,050
|
|
90,767
|
|
169,075
|
|
2,050
|
|
171,125
|
Adjustment for net income attributable to noncontrolling
interests
|
1,847
|
|
-
|
|
1,847
|
|
6,810
|
|
-
|
|
6,810
|
Net income attributable to PRA Group, Inc.
|
$ 86,870
|
|
$ 2,050
|
|
$ 88,920
|
|
$ 162,265
|
|
$ 2,050
|
|
$ 164,315
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share attributable to PRA Group, Inc.:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$ 1.92
|
|
$ 0.05
|
|
$ 1.97
|
|
$ 3.55
|
|
$ 0.04
|
|
$ 3.60
|
Diluted
|
$ 1.92
|
|
$ 0.05
|
|
$ 1.96
|
|
$ 3.54
|
|
$ 0.04
|
|
$ 3.59
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
45,170
|
|
45,170
|
|
45,170
|
|
45,671
|
|
45,671
|
|
45,671
|
Diluted
|
45,318
|
|
45,318
|
|
45,318
|
|
45,823
|
|
45,823
|
|
45,823
|
Investor Contact:
Darby Schoenfeld, CPA
Vice President, Investor Relations
(757) 431-7913
IR@PRAGroup.com
News Media Contact:
Elizabeth Kersey
Vice President, Communications and Public Policy
(757) 431-3398
Elizabeth.Kersey@PRAGroup.com
View original content:http://www.prnewswire.com/news-releases/pra-group-reports-fourth-quarter-and-full-year-2018-results-300804484.html
SOURCE PRA Group