praa-20220930false2022Q3000118534812/31http://fasb.org/us-gaap/2022#OtherAssetshttp://fasb.org/us-gaap/2022#OtherAssetshttp://fasb.org/us-gaap/2022#OtherLiabilitiesCurrenthttp://fasb.org/us-gaap/2022#OtherLiabilitiesCurrenthttp://fasb.org/us-gaap/2022#OtherAssetshttp://fasb.org/us-gaap/2022#OtherAssetshttp://fasb.org/us-gaap/2022#OtherLiabilitiesCurrenthttp://fasb.org/us-gaap/2022#OtherLiabilitiesCurrentP1YP1Y00011853482022-01-012022-09-3000011853482022-10-31xbrli:shares00011853482022-09-30iso4217:USD00011853482021-12-31iso4217:USDxbrli:shares00011853482022-07-012022-09-3000011853482021-07-012021-09-3000011853482021-01-012021-09-300001185348us-gaap:CommonStockMembersrt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2021-12-310001185348us-gaap:AdditionalPaidInCapitalMembersrt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2021-12-310001185348srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMemberus-gaap:RetainedEarningsMember2021-12-310001185348us-gaap:AccumulatedOtherComprehensiveIncomeMembersrt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2021-12-310001185348us-gaap:NoncontrollingInterestMembersrt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2021-12-310001185348srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2021-12-310001185348us-gaap:RetainedEarningsMember2022-01-012022-03-310001185348us-gaap:NoncontrollingInterestMember2022-01-012022-03-3100011853482022-01-012022-03-310001185348us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310001185348us-gaap:CommonStockMember2022-01-012022-03-310001185348us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310001185348us-gaap:CommonStockMember2022-03-310001185348us-gaap:AdditionalPaidInCapitalMember2022-03-310001185348us-gaap:RetainedEarningsMember2022-03-310001185348us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310001185348us-gaap:NoncontrollingInterestMember2022-03-3100011853482022-03-3100011853482022-04-012022-06-300001185348us-gaap:NoncontrollingInterestMember2022-04-012022-06-300001185348us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-012022-06-300001185348us-gaap:CommonStockMember2022-04-012022-06-300001185348us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-300001185348us-gaap:RetainedEarningsMember2022-04-012022-06-300001185348us-gaap:CommonStockMember2022-06-300001185348us-gaap:AdditionalPaidInCapitalMember2022-06-300001185348us-gaap:RetainedEarningsMember2022-06-300001185348us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-300001185348us-gaap:NoncontrollingInterestMember2022-06-3000011853482022-06-300001185348us-gaap:RetainedEarningsMember2022-07-012022-09-300001185348us-gaap:NoncontrollingInterestMember2022-07-012022-09-300001185348us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-07-012022-09-300001185348us-gaap:CommonStockMember2022-07-012022-09-300001185348us-gaap:AdditionalPaidInCapitalMember2022-07-012022-09-300001185348us-gaap:CommonStockMember2022-09-300001185348us-gaap:AdditionalPaidInCapitalMember2022-09-300001185348us-gaap:RetainedEarningsMember2022-09-300001185348us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-09-300001185348us-gaap:NoncontrollingInterestMember2022-09-300001185348us-gaap:CommonStockMember2020-12-310001185348us-gaap:AdditionalPaidInCapitalMember2020-12-310001185348us-gaap:RetainedEarningsMember2020-12-310001185348us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001185348us-gaap:NoncontrollingInterestMember2020-12-3100011853482020-12-310001185348us-gaap:AdditionalPaidInCapitalMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2020-12-310001185348srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:RetainedEarningsMember2020-12-310001185348srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2020-12-310001185348us-gaap:CommonStockMembersrt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2020-12-310001185348us-gaap:AdditionalPaidInCapitalMembersrt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2020-12-310001185348srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMemberus-gaap:RetainedEarningsMember2020-12-310001185348us-gaap:AccumulatedOtherComprehensiveIncomeMembersrt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2020-12-310001185348us-gaap:NoncontrollingInterestMembersrt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2020-12-310001185348srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2020-12-310001185348us-gaap:RetainedEarningsMember2021-01-012021-03-310001185348us-gaap:NoncontrollingInterestMember2021-01-012021-03-3100011853482021-01-012021-03-310001185348us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310001185348us-gaap:CommonStockMember2021-01-012021-03-310001185348us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310001185348us-gaap:CommonStockMember2021-03-310001185348us-gaap:AdditionalPaidInCapitalMember2021-03-310001185348us-gaap:RetainedEarningsMember2021-03-310001185348us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-310001185348us-gaap:NoncontrollingInterestMember2021-03-3100011853482021-03-310001185348us-gaap:RetainedEarningsMember2021-04-012021-06-300001185348us-gaap:NoncontrollingInterestMember2021-04-012021-06-3000011853482021-04-012021-06-300001185348us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-04-012021-06-300001185348us-gaap:CommonStockMember2021-04-012021-06-300001185348us-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-300001185348us-gaap:CommonStockMember2021-06-300001185348us-gaap:AdditionalPaidInCapitalMember2021-06-300001185348us-gaap:RetainedEarningsMember2021-06-300001185348us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-300001185348us-gaap:NoncontrollingInterestMember2021-06-3000011853482021-06-300001185348us-gaap:RetainedEarningsMember2021-07-012021-09-300001185348us-gaap:NoncontrollingInterestMember2021-07-012021-09-300001185348us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-07-012021-09-300001185348us-gaap:CommonStockMember2021-07-012021-09-300001185348us-gaap:AdditionalPaidInCapitalMember2021-07-012021-09-300001185348us-gaap:CommonStockMember2021-09-300001185348us-gaap:AdditionalPaidInCapitalMember2021-09-300001185348us-gaap:RetainedEarningsMember2021-09-300001185348us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-09-300001185348us-gaap:NoncontrollingInterestMember2021-09-3000011853482021-09-30praa:segment0001185348country:US2022-07-012022-09-300001185348country:US2022-09-300001185348country:US2021-07-012021-09-300001185348country:US2021-09-300001185348country:GB2022-07-012022-09-300001185348country:GB2022-09-300001185348country:GB2021-07-012021-09-300001185348country:GB2021-09-300001185348praa:ForeignCountriesMember2022-07-012022-09-300001185348praa:ForeignCountriesMember2022-09-300001185348praa:ForeignCountriesMember2021-07-012021-09-300001185348praa:ForeignCountriesMember2021-09-300001185348country:US2022-01-012022-09-300001185348country:US2021-01-012021-09-300001185348country:GB2022-01-012022-09-300001185348country:GB2021-01-012021-09-300001185348praa:ForeignCountriesMember2022-01-012022-09-300001185348praa:ForeignCountriesMember2021-01-012021-09-30xbrli:pure0001185348praa:CorePortfolioSegmentMember2022-06-300001185348praa:InsolvencyPortfolioSegmentMember2022-06-300001185348praa:CorePortfolioSegmentMember2022-07-012022-09-300001185348praa:InsolvencyPortfolioSegmentMember2022-07-012022-09-300001185348praa:CorePortfolioSegmentMember2022-09-300001185348praa:InsolvencyPortfolioSegmentMember2022-09-300001185348praa:CorePortfolioSegmentMember2021-06-300001185348praa:InsolvencyPortfolioSegmentMember2021-06-300001185348praa:CorePortfolioSegmentMember2021-07-012021-09-300001185348praa:InsolvencyPortfolioSegmentMember2021-07-012021-09-300001185348praa:CorePortfolioSegmentMember2021-09-300001185348praa:InsolvencyPortfolioSegmentMember2021-09-300001185348praa:CorePortfolioSegmentMember2021-12-310001185348praa:InsolvencyPortfolioSegmentMember2021-12-310001185348praa:CorePortfolioSegmentMember2022-01-012022-09-300001185348praa:InsolvencyPortfolioSegmentMember2022-01-012022-09-300001185348praa:CorePortfolioSegmentMember2020-12-310001185348praa:InsolvencyPortfolioSegmentMember2020-12-310001185348praa:CorePortfolioSegmentMember2021-01-012021-09-300001185348praa:InsolvencyPortfolioSegmentMember2021-01-012021-09-300001185348us-gaap:ExchangeTradedFundsMemberus-gaap:FairValueInputsLevel1Member2022-09-300001185348us-gaap:ExchangeTradedFundsMember2021-12-310001185348us-gaap:PrivateEquityFundsMember2022-09-300001185348us-gaap:PrivateEquityFundsMember2021-12-310001185348us-gaap:MutualFundMember2022-09-300001185348us-gaap:MutualFundMember2021-12-310001185348praa:GovernmentBondsandFixedIncomeFundsMember2022-09-300001185348praa:GovernmentBondsandFixedIncomeFundsMember2021-12-310001185348praa:RCBInvestimentosS.A.Memberpraa:RCBInvestimentosSARCBMember2022-09-300001185348srt:MinimumMember2022-09-300001185348srt:MaximumMember2022-09-300001185348us-gaap:LineOfCreditMemberpraa:AmericasRevolvingCreditFacilityMember2022-09-300001185348us-gaap:LineOfCreditMemberpraa:AmericasRevolvingCreditFacilityMember2021-12-310001185348praa:UKRevolvingCreditMemberus-gaap:LineOfCreditMember2022-09-300001185348praa:UKRevolvingCreditMemberus-gaap:LineOfCreditMember2021-12-310001185348us-gaap:LineOfCreditMemberpraa:EuropeRevolvingCreditFacilityMember2022-09-300001185348us-gaap:LineOfCreditMemberpraa:EuropeRevolvingCreditFacilityMember2021-12-310001185348us-gaap:MediumTermNotesMember2022-09-300001185348us-gaap:MediumTermNotesMember2021-12-310001185348us-gaap:SeniorNotesMember2022-09-300001185348us-gaap:SeniorNotesMember2021-12-310001185348us-gaap:ConvertibleDebtMember2022-09-300001185348us-gaap:ConvertibleDebtMember2021-12-310001185348us-gaap:RevolvingCreditFacilityMemberpraa:ColombianRevolvingCreditFacilityMember2022-09-300001185348us-gaap:RevolvingCreditFacilityMemberpraa:ColombianRevolvingCreditFacilityMember2021-12-310001185348praa:NorthAmericanCreditAgreementMember2022-09-300001185348us-gaap:LineOfCreditMemberus-gaap:LineOfCreditMember2022-09-300001185348us-gaap:RevolvingCreditFacilityMemberpraa:NorthAmericanCreditAgreementMember2022-09-300001185348praa:CanadianRevolvingCreditFacilityMemberpraa:NorthAmericanCreditAgreementMember2022-09-300001185348praa:CreditAgreementMembersrt:MaximumMemberus-gaap:EurodollarMember2022-01-012022-09-300001185348praa:CreditAgreementMembersrt:MinimumMemberus-gaap:EurodollarMember2022-01-012022-09-300001185348praa:CreditAgreementMemberus-gaap:ConvertibleDebtMember2022-09-300001185348us-gaap:InterestRateFloorMember2022-01-012022-09-300001185348praa:CreditAgreementMembersrt:MaximumMember2022-01-012022-09-300001185348praa:CreditAgreementMembersrt:MinimumMember2022-01-012022-09-300001185348praa:CreditAgreementMemberpraa:EligibleCoreAssetPoolMember2022-07-012022-09-300001185348praa:CreditAgreementMemberpraa:EligibleInsolventAssetPoolMember2022-07-012022-09-300001185348praa:CreditAgreementMember2022-09-300001185348praa:CreditAgreementMember2022-07-012022-09-300001185348us-gaap:RevolvingCreditFacilityMemberpraa:UKCreditAgreementMemberus-gaap:LineOfCreditMember2022-09-300001185348srt:MaximumMemberpraa:UKCreditAgreementMemberus-gaap:EurodollarMember2022-01-012022-09-300001185348srt:MinimumMemberus-gaap:RevolvingCreditFacilityMemberpraa:UKCreditAgreementMemberus-gaap:LineOfCreditMember2022-09-300001185348srt:MaximumMemberus-gaap:RevolvingCreditFacilityMemberpraa:UKCreditAgreementMemberus-gaap:LineOfCreditMember2022-01-012022-09-300001185348srt:MinimumMemberus-gaap:RevolvingCreditFacilityMemberpraa:UKCreditAgreementMemberus-gaap:LineOfCreditMember2022-01-012022-09-300001185348praa:UKCreditAgreementMember2022-09-300001185348praa:EligibleCoreAssetPoolMemberpraa:UKCreditAgreementMember2022-07-012022-09-300001185348praa:UKCreditAgreementMemberpraa:EligibleInsolventAssetPoolMember2022-07-012022-09-300001185348us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberpraa:EuropeanRevolvingFacilityandTermLoanMember2022-04-070001185348us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberpraa:EuropeanRevolvingFacilityandTermLoanMember2022-09-300001185348srt:MinimumMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberpraa:EuropeanRevolvingFacilityandTermLoanMemberpraa:InterbankOfferedRateIBORMember2022-01-012022-09-300001185348srt:MaximumMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberpraa:EuropeanRevolvingFacilityandTermLoanMemberpraa:InterbankOfferedRateIBORMember2022-01-012022-09-300001185348us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberpraa:EuropeanRevolvingFacilityandTermLoanMember2022-01-012022-09-300001185348praa:OverdraftFacilityMemberpraa:EuropeanRevolvingFacilityandTermLoanMember2022-09-300001185348praa:OverdraftFacilityMemberpraa:EuropeanRevolvingFacilityandTermLoanMember2022-01-012022-09-300001185348us-gaap:RevolvingCreditFacilityMemberpraa:EuropeanRevolvingFacilityandTermLoanMember2022-09-300001185348praa:EuropeanRevolvingFacilityandTermLoanMember2022-07-012022-09-30iso4217:SEK0001185348praa:A2029NotesMemberus-gaap:SeniorNotesMember2021-09-220001185348praa:A2029NotesMemberpraa:OnOrAfterSeptember12022Memberus-gaap:SeniorNotesMember2021-09-222021-09-220001185348praa:A2029NotesMemberpraa:September12023ToOctober312024Memberus-gaap:SeniorNotesMember2021-09-222021-09-220001185348praa:A2029NotesMemberus-gaap:SeniorNotesMemberpraa:September12024AndThereafterMember2021-09-222021-09-220001185348praa:A2029NotesMemberpraa:OnOrBeforeSeptember12022Memberus-gaap:SeniorNotesMember2021-09-222021-09-220001185348praa:ChangeOfControlEventMemberpraa:A2029NotesMemberpraa:OnOrBeforeSeptember12022Memberus-gaap:SeniorNotesMember2021-09-222021-09-220001185348praa:A2025NotesMemberus-gaap:SeniorNotesMember2020-08-270001185348praa:A2025NotesMemberpraa:OnOrAfterSeptember12022Memberus-gaap:SeniorNotesMember2020-08-272020-08-270001185348praa:A2025NotesMemberpraa:September12023ToOctober312024Memberus-gaap:SeniorNotesMember2020-08-272020-08-270001185348praa:A2025NotesMemberus-gaap:SeniorNotesMemberpraa:September12024AndThereafterMember2020-08-272020-08-270001185348praa:A2025NotesMemberpraa:OnOrBeforeSeptember12022Memberus-gaap:SeniorNotesMember2020-08-272020-08-270001185348praa:ChangeOfControlEventMemberpraa:A2025NotesMemberpraa:OnOrBeforeSeptember12022Memberus-gaap:SeniorNotesMember2020-08-272020-08-270001185348us-gaap:ConvertibleDebtMemberpraa:NoteDue2023Member2017-05-260001185348us-gaap:ConvertibleDebtMemberpraa:NoteDue2023Member2017-05-262017-05-26praa:daypraa:consecutiveTradingDay0001185348us-gaap:ConvertibleDebtMemberpraa:NoteDue2023Member2022-09-300001185348us-gaap:ConvertibleDebtMember2022-07-012022-09-300001185348us-gaap:ConvertibleDebtMember2021-07-012021-09-300001185348us-gaap:ConvertibleDebtMember2022-01-012022-09-300001185348us-gaap:ConvertibleDebtMember2021-01-012021-09-300001185348us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateContractMember2022-09-300001185348us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateContractMember2021-12-310001185348us-gaap:NondesignatedMemberus-gaap:ForeignExchangeContractMember2022-09-300001185348us-gaap:NondesignatedMemberus-gaap:ForeignExchangeContractMember2021-12-310001185348srt:MinimumMember2022-01-012022-09-300001185348srt:MaximumMember2022-01-012022-09-300001185348us-gaap:InterestRateContractMember2022-07-012022-09-300001185348us-gaap:InterestRateContractMember2021-07-012021-09-300001185348us-gaap:InterestRateContractMember2022-01-012022-09-300001185348us-gaap:InterestRateContractMember2021-01-012021-09-300001185348us-gaap:InterestExpenseMemberus-gaap:InterestRateContractMember2022-07-012022-09-300001185348us-gaap:InterestExpenseMemberus-gaap:InterestRateContractMember2021-07-012021-09-300001185348us-gaap:InterestExpenseMemberus-gaap:InterestRateContractMember2022-01-012022-09-300001185348us-gaap:InterestExpenseMemberus-gaap:InterestRateContractMember2021-01-012021-09-300001185348us-gaap:ForeignCurrencyGainLossMemberus-gaap:ForeignExchangeContractMember2022-07-012022-09-300001185348us-gaap:ForeignCurrencyGainLossMemberus-gaap:ForeignExchangeContractMember2021-07-012021-09-300001185348us-gaap:InterestExpenseMemberus-gaap:ForeignExchangeContractMember2022-07-012022-09-300001185348us-gaap:InterestExpenseMemberus-gaap:ForeignExchangeContractMember2021-07-012021-09-300001185348us-gaap:ForeignCurrencyGainLossMemberus-gaap:ForeignExchangeContractMember2022-01-012022-09-300001185348us-gaap:ForeignCurrencyGainLossMemberus-gaap:ForeignExchangeContractMember2021-01-012021-09-300001185348us-gaap:InterestExpenseMemberus-gaap:ForeignExchangeContractMember2022-01-012022-09-300001185348us-gaap:InterestExpenseMemberus-gaap:ForeignExchangeContractMember2021-01-012021-09-300001185348us-gaap:CarryingReportedAmountFairValueDisclosureMember2022-09-300001185348us-gaap:EstimateOfFairValueFairValueDisclosureMember2022-09-300001185348us-gaap:CarryingReportedAmountFairValueDisclosureMember2021-12-310001185348us-gaap:EstimateOfFairValueFairValueDisclosureMember2021-12-310001185348praa:GovernmentBondsMemberus-gaap:FairValueInputsLevel1Member2022-09-300001185348praa:GovernmentBondsMemberus-gaap:FairValueInputsLevel2Member2022-09-300001185348praa:GovernmentBondsMemberus-gaap:FairValueInputsLevel3Member2022-09-300001185348praa:GovernmentBondsMember2022-09-300001185348us-gaap:MutualFundMemberus-gaap:FairValueInputsLevel1Member2022-09-300001185348us-gaap:MutualFundMemberus-gaap:FairValueInputsLevel2Member2022-09-300001185348us-gaap:MutualFundMemberus-gaap:FairValueInputsLevel3Member2022-09-300001185348us-gaap:FairValueInputsLevel1Member2022-09-300001185348us-gaap:FairValueInputsLevel2Member2022-09-300001185348us-gaap:FairValueInputsLevel3Member2022-09-300001185348praa:GovernmentBondsMemberus-gaap:FairValueInputsLevel1Member2021-12-310001185348praa:GovernmentBondsMemberus-gaap:FairValueInputsLevel2Member2021-12-310001185348praa:GovernmentBondsMemberus-gaap:FairValueInputsLevel3Member2021-12-310001185348praa:GovernmentBondsMember2021-12-310001185348us-gaap:ExchangeTradedFundsMemberus-gaap:FairValueInputsLevel2Member2021-12-310001185348us-gaap:ExchangeTradedFundsMemberus-gaap:FairValueInputsLevel3Member2021-12-310001185348us-gaap:MutualFundMemberus-gaap:FairValueInputsLevel1Member2021-12-310001185348us-gaap:MutualFundMemberus-gaap:FairValueInputsLevel2Member2021-12-310001185348us-gaap:MutualFundMemberus-gaap:FairValueInputsLevel3Member2021-12-310001185348us-gaap:FairValueInputsLevel1Member2021-12-310001185348us-gaap:FairValueInputsLevel2Member2021-12-310001185348us-gaap:FairValueInputsLevel3Member2021-12-310001185348srt:MinimumMemberus-gaap:PrivateEquityFundsMember2022-01-012022-09-300001185348srt:MaximumMemberus-gaap:PrivateEquityFundsMember2022-01-012022-09-300001185348us-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2022-07-012022-09-300001185348us-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2021-07-012021-09-300001185348us-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2022-01-012022-09-300001185348us-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2021-01-012021-09-300001185348us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember2022-06-300001185348us-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMember2022-06-300001185348us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2022-06-300001185348us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember2022-07-012022-09-300001185348us-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMember2022-07-012022-09-300001185348us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2022-07-012022-09-300001185348us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember2022-09-300001185348us-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMember2022-09-300001185348us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2022-09-300001185348us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember2021-06-300001185348us-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMember2021-06-300001185348us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2021-06-300001185348us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember2021-07-012021-09-300001185348us-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMember2021-07-012021-09-300001185348us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2021-07-012021-09-300001185348us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember2021-09-300001185348us-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMember2021-09-300001185348us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2021-09-300001185348us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember2021-12-310001185348us-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMember2021-12-310001185348us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2021-12-310001185348us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001185348us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember2022-01-012022-09-300001185348us-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMember2022-01-012022-09-300001185348us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2022-01-012022-09-300001185348us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember2020-12-310001185348us-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMember2020-12-310001185348us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2020-12-310001185348us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember2021-01-012021-09-300001185348us-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMember2021-01-012021-09-300001185348us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2021-01-012021-09-300001185348praa:July2021RepurchaseProgramMember2021-07-290001185348praa:July2021RepurchaseProgramMember2021-10-280001185348praa:July2021RepurchaseProgramMember2022-02-250001185348praa:February2022RepurchaseProgramMember2022-02-250001185348us-gaap:CashFlowHedgingMember2022-03-31
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 2022
☐ Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from ________ to ________
Commission File Number: 000-50058
PRA Group, Inc.
(Exact name of registrant as specified in its charter)
| | | | | | | | | | | | | | |
Delaware | | | | 75-3078675 |
(State or other jurisdiction of incorporation or organization) | | | | (I.R.S. Employer Identification No.) |
120 Corporate Boulevard
Norfolk, Virginia 23502
(Address of principal executive offices)
(888) 772-7326
(Registrant's Telephone No., including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer þ Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ☐ 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. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ
The number of shares of the registrant's common stock outstanding as of October 31, 2022 was 38,976,910.
Table of Contents
| | | | | | | | |
| |
| | |
Item 1. | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Item 2. | | |
Item 3. | | |
Item 4. | | |
| | |
| |
| | |
Item 1. | | |
Item 1A. | | |
Item 2. | | |
Item 3. | | |
Item 4. | | |
Item 5. | | |
Item 6. | | |
| | |
Signatures | | |
Part I. Financial Information
Item 1. Financial Statements (Unaudited)
PRA Group, Inc.
Consolidated Balance Sheets
September 30, 2022 and December 31, 2021
(Amounts in thousands)
| | | | | | | | | | | |
| (unaudited) | | |
| September 30, 2022 | | December 31, 2021 |
Assets | | | |
Cash and cash equivalents | $ | 57,991 | | | $ | 87,584 | |
Investments | 76,171 | | | 92,977 | |
Finance receivables, net | 3,037,360 | | | 3,428,285 | |
Income taxes receivable | 36,420 | | | 41,146 | |
Deferred tax assets, net | 53,949 | | | 67,760 | |
Right-of-use assets | 52,648 | | | 56,713 | |
Property and equipment, net | 52,061 | | | 54,513 | |
Goodwill | 404,474 | | | 480,263 | |
Other assets | 124,256 | | | 57,002 | |
Total assets | $ | 3,895,330 | | | $ | 4,366,243 | |
Liabilities and Equity | | | |
Liabilities: | | | |
Accounts payable | $ | 6,148 | | | $ | 3,821 | |
Accrued expenses | 104,059 | | | 127,802 | |
Income taxes payable | 16,412 | | | 19,276 | |
Deferred tax liabilities, net | 49,248 | | | 36,630 | |
Lease liabilities | 57,376 | | | 61,188 | |
Interest-bearing deposits | 88,155 | | | 124,623 | |
Borrowings | 2,379,614 | | | 2,608,714 | |
Other liabilities | 11,729 | | | 59,352 | |
| | | |
Total liabilities | 2,712,741 | | | 3,041,406 | |
| | | |
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, 38,976 shares issued and outstanding at September 30, 2022; 100,000 shares authorized, 41,008 shares issued and outstanding at December 31, 2021 | 389 | | | 410 | |
Additional paid-in capital | — | | | — | |
Retained earnings | 1,557,066 | | | 1,552,845 | |
Accumulated other comprehensive loss | (426,086) | | | (266,909) | |
Total stockholders' equity - PRA Group, Inc. | 1,131,369 | | | 1,286,346 | |
Noncontrolling interest | 51,220 | | | 38,491 | |
Total equity | 1,182,589 | | | 1,324,837 | |
Total liabilities and equity | $ | 3,895,330 | | | $ | 4,366,243 | |
The accompanying notes are an integral part of these Consolidated Financial Statements.
PRA Group, Inc.
Consolidated Income Statements
For the Three and Nine Months Ended September 30, 2022 and 2021
(unaudited)
(Amounts in thousands, except per share amounts)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended |
| | 2022 | | 2021 | | 2022 | | 2021 |
Revenues: | | | | | | | | |
Portfolio income | | $ | 185,853 | | | $ | 212,905 | | | $ | 587,394 | | | $ | 663,714 | |
Changes in expected recoveries | | 48,336 | | | 43,820 | | | 134,817 | | | 157,504 | |
Total portfolio revenue | | 234,189 | | | 256,725 | | | 722,211 | | | 821,218 | |
Fee income | | 6,122 | | | 6,209 | | | 14,419 | | | 10,843 | |
Other revenue | | 4,496 | | | 764 | | | 7,044 | | | 6,735 | |
Total revenues | | 244,807 | | | 263,698 | | | 743,674 | | | 838,796 | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Operating expenses: | | | | | | | | |
Compensation and employee services | | 70,382 | | | 74,584 | | | 215,615 | | | 228,200 | |
Legal collection fees | | 8,963 | | | 10,993 | | | 29,390 | | | 36,208 | |
Legal collection costs | | 23,391 | | | 21,450 | | | 57,694 | | | 61,231 | |
Agency fees | | 15,160 | | | 15,646 | | | 47,374 | | | 47,145 | |
Outside fees and services | | 24,618 | | | 29,434 | | | 71,489 | | | 71,167 | |
Communication | | 9,951 | | | 9,782 | | | 32,062 | | | 33,039 | |
Rent and occupancy | | 4,669 | | | 4,571 | | | 14,289 | | | 13,694 | |
Depreciation and amortization | | 3,741 | | | 3,724 | | | 11,384 | | | 11,520 | |
Other operating expenses | | 13,144 | | | 15,935 | | | 37,885 | | | 44,045 | |
| | | | | | | | |
Total operating expenses | | 174,019 | | | 186,119 | | | 517,182 | | | 546,249 | |
| | | | | | | | |
Income from operations | | 70,788 | | | 77,579 | | | 226,492 | | | 292,547 | |
Other income and (expense): | | | | | | | | |
| | | | | | | | |
Interest expense, net | | (32,455) | | | (29,599) | | | (95,765) | | | (91,987) | |
Foreign exchange gain, net | | 4 | | | 1,232 | | | 791 | | | 127 | |
Other | | (83) | | | 85 | | | (754) | | | 294 | |
Income before income taxes | | 38,254 | | | 49,297 | | | 130,764 | | | 200,981 | |
Income tax expense | | 11,072 | | | 12,627 | | | 29,828 | | | 41,870 | |
Net income | | 27,182 | | | 36,670 | | | 100,936 | | | 159,111 | |
Adjustment for net income/(loss) attributable to noncontrolling interests | | 2,450 | | | 2,190 | | | (252) | | | 10,229 | |
Net income attributable to PRA Group, Inc. | | $ | 24,732 | | | $ | 34,480 | | | $ | 101,188 | | | $ | 148,882 | |
Net income per common share attributable to PRA Group, Inc.: | | | | | | | | |
Basic | | $ | 0.63 | | | $ | 0.76 | | | $ | 2.54 | | | $ | 3.27 | |
Diluted | | $ | 0.63 | | | $ | 0.76 | | | $ | 2.52 | | | $ | 3.24 | |
Weighted average number of shares outstanding: | | | | | | | | |
Basic | | 39,018 | | | 45,305 | | | 39,858 | | | 45,594 | |
Diluted | | 39,170 | | | 45,656 | | | 40,125 | | | 45,920 | |
The accompanying notes are an integral part of these Consolidated Financial Statements.
PRA Group, Inc.
Consolidated Statements of Comprehensive (Loss)/Income
For the Three and Nine Months Ended September 30, 2022 and 2021
(unaudited)
(Amounts in thousands)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | Nine Months Ended |
| 2022 | | 2021 | | 2022 | | 2021 |
Net income | $ | 27,182 | | | $ | 36,670 | | | $ | 100,936 | | | $ | 159,111 | |
Other comprehensive (loss)/income, net of tax: | | | | | | | |
Currency translation adjustments | (91,390) | | | (38,238) | | | (194,656) | | | (43,682) | |
Cash flow hedges | 19,590 | | | 5,522 | | | 44,007 | | | 19,200 | |
Debt securities available-for-sale | 133 | | | (50) | | | (269) | | | (192) | |
Other comprehensive (loss)/income | (71,667) | | | (32,766) | | | (150,918) | | | (24,674) | |
Total comprehensive (loss)/income | (44,485) | | | 3,904 | | | (49,982) | | | 134,437 | |
Less comprehensive income/(loss) attributable to noncontrolling interests | 9,049 | | | (1,154) | | | 8,008 | | | 4,544 | |
Comprehensive (loss)/income attributable to PRA Group, Inc. | $ | (53,534) | | | $ | 5,058 | | | $ | (57,990) | | | $ | 129,893 | |
The accompanying notes are an integral part of these Consolidated Financial Statements.
PRA Group, Inc.
Consolidated Statements of Changes in Equity
For the Nine Months Ended September 30, 2022
(unaudited)
(Amounts in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Common Stock | | Additional Paid-In | | Retained | | Accumulated Other Comprehensive | | Noncontrolling | | Total | | |
| Shares | | Amount | | Capital | | Earnings | | (Loss)/ Income | | Interest | | Equity | | |
Balance at December 31, 2021 | 41,008 | | | $ | 410 | | | $ | — | | | $ | 1,552,845 | | | $ | (266,909) | | | $ | 38,491 | | | $ | 1,324,837 | | | |
Components of comprehensive income, net of tax: | | | | | | | | | | | | | | | |
Net income | — | | | — | | | — | | | 39,972 | | | — | | | (5,354) | | | 34,618 | | | |
Currency translation adjustments | — | | | — | | | — | | | — | | | 4,780 | | | 7,490 | | | 12,270 | | | |
Cash flow hedges | — | | | — | | | — | | | — | | | 18,580 | | | — | | | 18,580 | | | |
Debt securities available-for-sale | — | | | — | | | — | | | — | | | (160) | | | — | | | (160) | | | |
Vesting of restricted stock | 262 | | | 3 | | | (3) | | | — | | | — | | | — | | | — | | | |
Repurchase and cancellation of common stock | (860) | | | (9) | | | 4,527 | | | (43,972) | | | — | | | — | | | (39,454) | | | |
Share-based compensation expense | — | | | | | 3,891 | | | — | | | — | | | — | | | 3,891 | | | |
Employee stock relinquished for payment of taxes | — | | | — | | | (8,415) | | | — | | | — | | | — | | | (8,415) | | | |
Balance at March 31, 2022 | 40,410 | | | $ | 404 | | | $ | — | | | $ | 1,548,845 | | | $ | (243,709) | | | $ | 40,627 | | | $ | 1,346,167 | | | |
Components of comprehensive income, net of tax: | | | | | | | | | | | | | | | |
Net income | — | | | — | | | — | | | 36,484 | | | — | | | 2,652 | | | 39,136 | | | |
Currency translation adjustments | — | | | — | | | — | | | — | | | (109,707) | | | (5,829) | | | (115,536) | | | |
Cash flow hedges | — | | | — | | | — | | | — | | | 5,837 | | | — | | | 5,837 | | | |
| | | | | | | | | | | | | | | |
Debt securities available-for-sale | — | | | — | | | — | | | — | | | (242) | | | — | | | (242) | | | |
Distributions to noncontrolling interest | — | | | — | | | — | | | — | | | — | | | (3,494) | | | (3,494) | | | |
Contributions from noncontrolling interest | — | | | — | | | — | | | — | | | — | | | 1,599 | | | 1,599 | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Vesting of restricted stock | 37 | | | — | | | — | | | — | | | — | | | — | | | — | | | |
Repurchase and cancellation of common stock | (808) | | | (8) | | | (3,835) | | | (31,092) | | | — | | | — | | | (34,935) | | | |
Share-based compensation expense | — | | | — | | | 3,849 | | | — | | | — | | | — | | | 3,849 | | | |
| | | | | | | | | | | | | | | |
Employee stock relinquished for payment of taxes | — | | | — | | | (14) | | | — | | | — | | | — | | | (14) | | | |
| | | | | | | | | | | | | | | |
Balance at June 30, 2022 | 39,639 | | | $ | 396 | | | $ | — | | | $ | 1,554,237 | | | $ | (347,821) | | | $ | 35,555 | | | $ | 1,242,367 | | | |
Components of comprehensive income, net of tax: | | | | | | | | | | | | | | | |
Net income | — | | | — | | | — | | | 24,732 | | | — | | | 2,450 | | | 27,182 | | | |
Currency translation adjustments | — | | | — | | | — | | | — | | | (97,988) | | | 6,598 | | | (91,390) | | | |
Cash flow hedges | — | | | — | | | — | | | — | | | 19,590 | | | — | | | 19,590 | | | |
Debt securities available-for-sale | — | | | — | | | — | | | — | | | 133 | | | — | | | 133 | | | |
Distributions to noncontrolling interest | — | | | — | | | — | | | — | | | — | | | (1,127) | | | (1,127) | | | |
Contributions from noncontrolling interest | — | | | — | | | — | | | — | | | — | | | 7,744 | | | 7,744 | | | |
| | | | | | | | | | | | | | | |
Repurchase and cancellation of common stock | (663) | | | (7) | | | (3,091) | | | (21,903) | | | — | | | — | | | (25,001) | | | |
Share-based compensation expense | — | | | — | | | 3,101 | | | — | | | — | | | — | | | 3,101 | | | |
Employee stock relinquished for payment of taxes | — | | | — | | | (10) | | | — | | | — | | | — | | | (10) | | | |
Balance at September 30, 2022 | 38,976 | | | $ | 389 | | | $ | — | | | $ | 1,557,066 | | | $ | (426,086) | | | $ | 51,220 | | | $ | 1,182,589 | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
The accompanying notes are an integral part of these Consolidated Financial Statements.
PRA Group, Inc.
Consolidated Statements of Changes in Equity
For the Nine Months Ended September 30, 2021
(unaudited)
(Amounts in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Common Stock | | Additional Paid-In | | Retained | | Accumulated Other Comprehensive | | Noncontrolling | | Total | | |
| Shares | | Amount | | Capital | | Earnings | | (Loss)/ Income | | Interest | | Equity | | |
Balance at December 31, 2020 | 45,585 | | | $ | 456 | | | $ | 75,282 | | | $ | 1,511,970 | | | $ | (245,791) | | | $ | 31,609 | | | $ | 1,373,526 | | | |
Effect of change in accounting principle (1) | — | | | — | | | (26,697) | | | 12,008 | | | — | | | — | | | (14,689) | | | |
Balance at January 1, 2021 | 45,585 | | | $ | 456 | | | $ | 48,585 | | | $ | 1,523,978 | | | $ | (245,791) | | | $ | 31,609 | | | $ | 1,358,837 | | | |
Components of comprehensive income, net of tax: | | | | | | | | | | | | | | | |
Net income | — | | | — | | | — | | | 58,406 | | | — | | | 3,474 | | | 61,880 | | | |
Currency translation adjustments | — | | | — | | | — | | | — | | | (20,108) | | | (4,423) | | | (24,531) | | | |
Cash flow hedges | — | | | — | | | — | | | — | | | 12,323 | | | — | | | 12,323 | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Distributions to noncontrolling interest | — | | | — | | | — | | | — | | | — | | | (3,933) | | | (3,933) | | | |
| | | | | | | | | | | | | | | |
Vesting of restricted stock | 214 | | | 2 | | | (2) | | | — | | | — | | | — | | | — | | | |
| | | | | | | | | | | | | | | |
Share-based compensation expense | — | | | — | | | 4,113 | | | — | | | — | | | — | | | 4,113 | | | |
| | | | | | | | | | | | | | | |
Employee stock relinquished for payment of taxes | — | | | — | | | (5,460) | | | — | | | — | | | — | | | (5,460) | | | |
| | | | | | | | | | | | | | | |
Balance at March 31, 2021 | 45,799 | | | $ | 458 | | | $ | 47,236 | | | $ | 1,582,384 | | | $ | (253,576) | | | $ | 26,727 | | | $ | 1,403,229 | | | |
Components of comprehensive income, net of tax: | | | | | | | | | | | | | | | |
Net income | — | | | — | | | — | | | 55,996 | | | — | | | 4,565 | | | 60,561 | | | |
Currency translation adjustments | — | | | — | | | — | | | — | | | 17,004 | | | 2,083 | | | 19,087 | | | |
Cash flow hedges | — | | | — | | | — | | | — | | | 1,355 | | | — | | | 1,355 | | | |
Debt securities available-for-sale | — | | | — | | | — | | | — | | | (142) | | | — | | | (142) | | | |
Distributions to noncontrolling interest | — | | | — | | | — | | | — | | | — | | | (13,120) | | | (13,120) | | | |
Vesting of restricted stock | 38 | | | — | | | — | | | — | | | — | | | — | | | — | | | |
Share-based compensation expense | — | | | — | | | 4,040 | | | — | | | — | | | — | | | 4,040 | | | |
Employee stock relinquished for payment of taxes | — | | | — | | | (70) | | | — | | | — | | | — | | | (70) | | | |
Balance at June 30, 2021 | 45,837 | | | $ | 458 | | | $ | 51,206 | | | $ | 1,638,380 | | | $ | (235,359) | | | $ | 20,255 | | | $ | 1,474,940 | | | |
Components of comprehensive income, net of tax: | | | | | | | | | | | | | | | |
Net income | — | | | — | | | — | | | 34,480 | | | — | | | 2,190 | | | 36,670 | | | |
Currency translation adjustments | — | | | — | | | — | | | — | | | (34,894) | | | (3,344) | | | (38,238) | | | |
Cash flow hedges | — | | | — | | | — | | | — | | | 5,522 | | | — | | | 5,522 | | | |
Debt securities available-for-sale | — | | | — | | | — | | | — | | | (50) | | | — | | | (50) | | | |
Distributions to noncontrolling interest | — | | | — | | | — | | | — | | | — | | | (3,397) | | | (3,397) | | | |
Contributions from noncontrolling interest | — | | | — | | | — | | | — | | | — | | | 22,743 | | | 22,743 | | | |
Repurchase and cancellation of common stock | (1,797) | | | (18) | | | (55,513) | | | (18,316) | | | — | | | — | | | (73,847) | | | |
Share-based compensation expense | — | | | — | | | 4,317 | | | — | | | — | | | — | | | 4,317 | | | |
Employee stock relinquished for payment of taxes | — | | | — | | | (10) | | | — | | | — | | | — | | | (10) | | | |
Balance at September 30, 2021 | 44,040 | | | $ | 440 | | | $ | — | | | $ | 1,654,544 | | | $ | (264,781) | | | $ | 38,447 | | | $ | 1,428,650 | | | |
(1) Reflects adjustments recorded for the January 1, 2021 adoption of an accounting update. Refer to the Company's 2021 Annual Report on Form 10-K for more information.
The accompanying notes are an integral part of these Consolidated Financial Statements.
PRA Group, Inc.
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2022 and 2021
(unaudited)
(Amounts in thousands)
| | | | | | | | | | | |
| Nine Months Ended |
| 2022 | | 2021 |
Cash flows from operating activities: | | | |
Net income | $ | 100,936 | | | $ | 159,111 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | |
Share-based compensation expense | 10,841 | | | 12,470 | |
Depreciation and amortization | 11,384 | | | 11,520 | |
| | | |
| | | |
Amortization of debt discount and issuance costs | 7,653 | | | 7,053 | |
Changes in expected recoveries | (134,817) | | | (157,504) | |
| | | |
Deferred income taxes | 8,710 | | | (4,235) | |
Net unrealized foreign currency transactions | 21,356 | | | 7,462 | |
Fair value in earnings for equity securities | (175) | | | 92 | |
Other | 159 | | | 91 | |
| | | |
Changes in operating assets and liabilities: | | | |
Other assets | (2,547) | | | 7,779 | |
| | | |
Accounts payable | 3,028 | | | 201 | |
Income taxes payable, net | (155) | | | (9,391) | |
Accrued expenses | (7,655) | | | 3,086 | |
Other liabilities | (22,521) | | | 531 | |
Right of use asset/lease liability | 389 | | | 17 | |
| | | |
Net cash (used)/provided by operating activities | (3,414) | | | 38,283 | |
Cash flows from investing activities: | | | |
Purchases of property and equipment, net | (10,698) | | | (6,772) | |
| | | |
Purchases of finance receivables | (561,901) | | | (770,377) | |
Recoveries applied to negative allowance | 765,732 | | | 934,002 | |
Purchases of investments | (2,292) | | | (74,485) | |
Proceeds from sales and maturities of investments | 4,565 | | | 42,110 | |
Business acquisition, net of cash acquired | — | | | (647) | |
| | | |
| | | |
Net cash provided by investing activities | 195,406 | | | 123,831 | |
Cash flows from financing activities: | | | |
Proceeds from lines of credit | 1,343,434 | | | 426,135 | |
Principal payments on lines of credit | (1,389,371) | | | (908,215) | |
| | | |
Proceeds from senior notes | — | | | 350,000 | |
| | | |
Principal payments on long-term debt | (7,500) | | | (7,500) | |
Repurchases of common stock | (111,371) | | | (73,847) | |
Payments of origination cost and fees | (7,798) | | | (8,835) | |
Tax withholdings related to share-based payments | (8,438) | | | (5,540) | |
Distributions paid to noncontrolling interest | (4,621) | | | (20,450) | |
Contributions from noncontrolling interest | 9,343 | | | 22,743 | |
| | | |
Net (decrease)/increase in interest-bearing deposits | (13,732) | | | 8,847 | |
| | | |
| | | |
Net cash used in financing activities | (190,054) | | | (216,662) | |
Effect of exchange rate on cash | (31,927) | | | (5,202) | |
Net decrease in cash and cash equivalents | (29,989) | | | (59,750) | |
Cash and cash equivalents beginning of period | 89,072 | | | 121,047 | |
Cash and cash equivalents, end of period | $ | 59,083 | | | $ | 61,297 | |
| | | |
Supplemental disclosure of cash flow information: | | | |
Cash paid for interest | $ | 87,912 | | | $ | 88,676 | |
Cash paid for income taxes | 21,086 | | | 55,234 | |
| | | |
Cash, cash equivalents and restricted cash reconciliation: | | | |
Cash and cash equivalents per Consolidated Balance Sheets | $ | 57,991 | | | $ | 56,545 | |
Restricted cash included in Other assets per Consolidated Balance Sheets | 1,092 | | | 4,752 | |
Total cash, cash equivalents and restricted cash | $ | 59,083 | | | $ | 61,297 | |
| | | |
| | | |
| | | |
| | | |
The accompanying notes are an integral part of these Consolidated Financial Statements.
PRA Group, Inc.
Notes to Consolidated Financial Statements
1. Organization and Business:
Nature of operations: As used herein, the terms "PRA Group," the "Company," or similar terms refer to PRA Group, Inc. and its subsidiaries.
PRA Group, Inc., a Delaware corporation, is a global financial and business services company with operations in the Americas, Europe and Australia. The Company's primary business is the purchase, collection and management of portfolios of nonperforming loans. The Company also provides fee-based services on class action claims recoveries and by servicing consumer bankruptcy accounts in the United States ("U.S.").
Basis of presentation: The Consolidated Financial Statements of the Company are prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). The accompanying interim financial statements have been prepared in accordance with the instructions for Quarterly Reports on Form 10-Q and, therefore, do not include all information and Notes to the Consolidated Financial Statements necessary for a complete presentation of financial position, results of operations, comprehensive income/(loss) and cash flows in conformity with GAAP. In the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair presentation of the Company's Consolidated Balance Sheets as of September 30, 2022, its Consolidated Income Statements and Statements of Comprehensive (Loss)/Income for the three and nine months ended September 30, 2022 and 2021, and its Consolidated Statements of Changes in Equity and Statements of Cash Flows for the nine months ended September 30, 2022 and 2021 have been included. The Company's Consolidated Income Statements for the three and nine months ended September 30, 2022 may not be indicative of future results.
These unaudited Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 (the "2021 Form 10-K").
Consolidation: The Consolidated Financial Statements include the accounts of PRA Group and other entities in which the Company has a controlling interest. All significant intercompany accounts and transactions have been eliminated.
Entities in which the Company has a controlling financial interest, through ownership of the majority of the entities’ voting equity interests, or through other contractual rights that give the Company control, consist of entities which purchase and collect on portfolios of nonperforming loans.
Investments in companies in which the Company has significant influence over operating and financing decisions, but does not own a majority of the voting equity interests, are accounted for in accordance with the equity method of accounting, which requires the Company to recognize its proportionate share of the entity’s net earnings. These investments are included in Other assets, with income or loss included in Other revenue.
The Company performs on-going reassessments of whether changes in the facts and circumstances regarding the Company’s involvement with an entity cause the Company’s consolidation conclusion to change.
Segments: The Company has determined that it has two operating segments that meet the aggregation criteria of Accounting Standards Codification ("ASC") 280, Segment Reporting ("ASC 280") and, therefore, it has one reportable segment, accounts receivable management. This conclusion is based on similarities among the operating units, including economic characteristics, the nature of the products and services, the nature of the production processes, the types or class of customer for their products and services, the methods used to distribute their products and services and the nature of the regulatory environment.
The following tables show the amount of revenue generated for the three and nine months ended September 30, 2022 and 2021, and long-lived assets held at September 30, 2022 and 2021, both for the U.S., the Company's country of domicile, and outside of the U.S. (amounts in thousands):
| | | | | | | | | | | | | | | | | | | | | | | |
| As of and for the | | As of and for the |
| Three Months Ended September 30, 2022 | | Three Months Ended September 30, 2021 |
| Revenues (2) | | Long-Lived Assets | | Revenues (2) | | Long-Lived Assets |
United States | $ | 138,398 | | | $ | 80,496 | | | $ | 157,124 | | | $ | 90,980 | |
United Kingdom | 37,032 | | | 10,762 | | | 42,388 | | | 2,040 | |
Other (1) | 69,377 | | | 13,451 | | | 64,186 | | | 12,745 | |
Total | $ | 244,807 | | | $ | 104,709 | | | $ | 263,698 | | | $ | 105,765 | |
PRA Group, Inc.
Notes to Consolidated Financial Statements
| | | | | | | | | | | | | | | | | | | | | | | |
| As of and for the | | As of and for the |
| Nine Months Ended September 30, 2022 | | Nine months ended September 30, 2021 |
| Revenues (2) | | Long-Lived Assets | | Revenues (2) | | Long-Lived Assets |
United States | $ | 426,675 | | | $ | 80,496 | | | $ | 503,994 | | | $ | 90,980 | |
United Kingdom | 126,866 | | | 10,762 | | | 133,024 | | | 2,040 | |
Other (1) | 190,133 | | | 13,451 | | | 201,778 | | | 12,745 | |
Total | $ | 743,674 | | | $ | 104,709 | | | $ | 838,796 | | | $ | 105,765 | |
(1) None of the countries included in "Other" comprise greater than 10% of the Company's consolidated revenues or long-lived assets.(2) Based on the Company’s financial statement information used to produce the Company's general-purpose financial statements, it is impracticable to report further breakdowns of revenues from external customers by product or service.
Revenues are attributed to countries based on the location of the related operations. Long-lived assets consist of net property and equipment and right-of-use assets. The Company reports revenues earned from collection activities on nonperforming loans, fee-based services and investments. For additional information on the Company's investments, see Note 3. 2. Finance Receivables, net:
Finance receivables, net consisted of the following at September 30, 2022 and December 31, 2021 (amounts in thousands):
| | | | | | | | | | | |
| September 30, 2022 | | December 31, 2021 |
Amortized cost | $ | — | | | $ | — | |
Negative allowance for expected recoveries (1) | 3,037,360 | | | 3,428,285 | |
Balance at end of period | $ | 3,037,360 | | | $ | 3,428,285 | |
(1) The negative allowance balance includes certain portfolios of nonperforming loans for which the Company holds a beneficial interest representing approximately 0.8%