PRA Group, Inc.

And welcome to the PRA group conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touchtone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Ms. Lauren Parton, Senior Vice President of Finance and Investor Relations for PRA Group. Please go ahead.

Thank you. Good evening, everyone, and thank you for joining us. With me today are Kevin Stevenson, President and Chief Executive Officer, and Pete Graham, Executive Vice President and Chief Financial Officer. We will make forward-looking statements during this call, which are based on management's current beliefs, projections, assumptions, and expectations. We assume no obligation to revise or update these statements. We caution listeners that these forward-looking statements are subject to risks, uncertainties, assumptions, and other factors that could cause our actual results to differ materially from our expectations. Please refer to the earnings press release and our SEC filings for a detailed discussion of these factors. The earnings release, the slide presentation that we will use during today's call, and our SEC filings can be found on the investor section of our website at www.pragroup.com. Additionally, a replay of this call will be available shortly after its conclusion, and the information needed to listen is in the earnings press release. All comparisons mentioned today will be between Q4 2020 and Q4 2021, unless otherwise noted. And our America's results include Australia. During our call, we will discuss adjusted EBITDA and debt to adjusted EBITDA for the 12 months ended December 31st, 2021 and December 31st, 2020. Please refer to today's earnings release and the appendix of the slide presentation on our website used during this call for a reconciliation of these non-GAAP financial measures to the most directly comparable U.S. GAAP financial measure. I'd now like to turn the call over to Kevin Stevenson, our President and Chief Executive Officer.

Well, thank you, Lauren, and thank you, everyone, for joining us this evening. I do have two comments to make, however, before we begin. You know, over the past few days, we've all watched the situation unfolding in the Ukraine with great concerns. My thoughts are not only with the people of the Ukraine, but also with our team members across Europe and especially Poland. To those members of the PRA family, I am deeply sorry for what you're going through and how you must be feeling right now. And we're determined to support you. And while this is happening, we can't forget that we're two years into a pandemic and it's ever-changing. The beginning of the fourth quarter, we were discussing vaccination rates and returning to office in many of our areas, and then Omicron hit. We continue to keep many of our employees in a work-from-home status while maintaining a strong workplace safety standards in our in-office employees. I'm certainly proud of how our team continues to adapt as the pandemic progresses. And while the pandemic has proven challenging to everyone from a financial perspective, 2021 has been very successful for the company. We achieved record cash collections, record revenue, record cash efficiency, and record net income. In Q4, we collected $474 million globally. This was driven by strong European cash collections, which increased $20 million compared to the fourth quarter of 2020. This brings our year-to-date global cash collections to a record $2.1 billion, 3% ahead of our previous record from 2020. Net income attributable to PRA Group for the quarter was $34 million, and our record $183 million for full year 2021, which was an increase of 23% over last year. Quarterly portfolio purchases were $202 million, bringing the total purchases for the year to $972 million. Our investments in 2021 reflect the importance of our geographic diversification, as the investments were split nearly evenly, between Europe and the Americas. Reflecting on that just for a moment, in 2017, Europe represented about 25 percent of our global buying. Additionally, we've continued to focus on growing our market share, and our European purchases were less weighted towards the U.K. as compared to prior years. And then finally, during the quarter, we repurchased $139 million of our common stock, the $139 million deployment equated to 3 million shares at an average price of around $46. So in total, over the past two quarters, we've returned $213 million to shareholders, repurchasing 11% of our outstanding shares. In previous quarters, I've shared the five strategic objectives that guide our company. Throughout 2021, we build upon our prior success in each of these areas, And these objectives will continue to guide our efforts throughout 2022 and beyond. So first, we continue to expand products and market share. It's been a long-term goal of ours to be geographically diversified. And during 2021, we increased the presence, our presence, in Northern Europe and South America. Our greenfield operation in Australia continues to grow as we've built out our team, locked in forward flows, and successfully collected on the portfolios we purchased. Throughout 2021, we purchased test portfolios of new products in selected markets. We've gained valuable data in this process, which we believe will allow us to make more substantial purchases in the future, thus expanding our addressable market and providing opportunities for growth. As a further driver to expand market share in 2022 and beyond, we will continue to selectively evaluate M&A opportunities. We'll focus on companies that either enhance our existing footprint, give us new skills or capabilities, provide access to new credit originator relationships and data, or allow us to enter a new market. The next two strategic objectives both focus on optimizing our business. We've made great strides to modernize collections with our investments in both digital and data analytics. These improvements allow customers to interact with us using the medium in which they prefer, while at the same time driving efficiency. Operationally, 2021 was a great year for us, as evidenced by our record cash efficiency ratio. In the US, our digital platform continued to drive collections that are a significant part of total collections. Since the first quarter of 2019, our digital collections are up 83%. Domestic call center productivity remained high throughout the year. as we recognize the benefits of recent improvements in scoring and analytics, allowing us to maximize the value of each collector hour. Cash collected per collector hour in Q4 of 2021 increased 14% over Q4 of 2020. Additionally, as more customers have paid digitally, we've had fewer accounts in our legal inventory. In the U.S., we've been executing a multi-year initiative to build out our internal legal capabilities hiring the necessary attorneys, and implementing software to help maximize efficiency. So, for example, in 2019, internal legal placements represented less than a third of our legal placements. In 2021, it represented over half of our placements. This represents a significant savings because we don't have to pay commission to the external attorneys on every dollar collected. In Europe, we continue to benefit from investments in technology. These include investments in digital platforms, cloud-based dialers, infrastructure, robotic process automation, and integration into supporting systems. We now have digital platforms in all countries where we have operations, enabling Q4 digital or European digital cash collections to grow nearly five times since the first quarter of 2019. Globally, we continue to invest in data analytics to support our operational objectives During 2021, we further improved our predictive scoring models used in underwriting. We tested new data sources, developed new machine learning solutions that added efficiency, and approved our legal and outbound calling strategies. The fourth strategic objective is to be recognized as a trusted brand. Over the last few years, we've significantly increased our interactions with regulators and elected officials. making sure that we are in control of our narrative. We've seen tangible success in our work here, allowing us to build relationships, impact legislation, and become valued partners to our industry and trade association colleagues. We've now taken this recipe for success to Europe, where we just hired our first head of government relations to lead our legislative work there. Our fifth strategic objective is fostering a high-performing workforce, I've always valued our employees and always recognized that they are the reason for our success. But I believe this objective is particularly important in today's job market. No company is immune from the great resignation. And while our turnover has increased since 2020, I'm proud to say that our 2021 statistics were better than our pre-pandemic levels. I think this is a tribute to our strong brand and company culture. In 2021, we continue to embrace our DE&I strategy and launched our Be Yourself and Be Your Best campaign. We aspire to create an environment where every employee feels comfortable doing their best work and being themselves. We also introduced an employee staff diversity and inclusion steering committee. We launched our first ever company-wide diversity and engagement survey, and we held our first global inclusion week. Also, we established three new employee resource groups, women in business, mental and emotional well-being, and caregiver allies. On the ESG front, I'm happy to announce we've hired a dedicated internal resource to manage our ESG efforts. During the fourth quarter, we announced the new operational hub at the Halo Enterprise and Innovation Center in Kilmarnock, Scotland. This is the first net zero carbon energy development project in Scotland. powered by renewable energy. This 15-year commitment reinforces PRA's dedication to enduring sustainability as we build career opportunities and prioritize energy efficiency. On to a personal passion of mine, charitable giving. I'm happy to say that PRA donated a record amount in 2021, and that included nearly 100 different nonprofits. We ran programs to keep employees engaged and allowed them to support the nonprofit of their choosing. Most notably, our $250,000 for 25-year campaign allowed employees to nominate the charity of their choice, which resulted in 10 nonprofits around the world being awarded $25,000 each. For those who haven't looked at our ESG tariff sheet, please visit our website and view it. ESG will continue to be an important focus for us. I think it's evidenced by our hire of our first director of ESG, Additionally, in the coming months, we'll be updating our tariff sheet, and we look forward to some enhanced disclosures as well. From an investment perspective, we deployed $202 million in the fourth quarter. Throughout 2021, we invested broadly across the globe, allowing us to deploy $972 million in portfolio purchases, which is an increase of $67 million in 2020. This achievement clearly demonstrates the power of operating a geographically diverse enterprise. Combine that with our strong cash flows, our excellent underwriting, our balance sheet and ample access to funding, we believe we're in a great position to shift capital broadly across our markets where it can be best deployed. In the Americas, we invested $111 million during the quarter. In the U.S., we continue to see similar levels of marketed deals the first three quarters of the year. Many economic indicators are pointing to higher volumes on the horizon. So, for example, According to the Federal Reserve Bank of New York, credit card balances at the end of 2021 increased $52 billion from Q3. This marks the largest quarterly increase observed in the New York Fed's 22-year data history. This, coupled with decreased household savings rates and increased consumer spending, leads us to believe we are moving through a trough in supply in the U.S. We believe the volumes will build by the end of 2022. As we indicated earlier this year, the pipeline in Europe has been healthy. However, we did see competition increase during Q4. Certain markets are experiencing more competitive pricing than others. To discontinue into 2022, we'll stick to our long-term track record of remaining disciplined and only deploy capital returns where returns make sense. In Europe, we invested $90 million during the quarter, bringing the full-year investment to $477 million. 2021 was the second highest year for European portfolio investments since entering the European markets broadly in 2014. We also believe that inflation, rising energy prices, and rising interest rates could possibly be a catalyst for increased supply. Our maximum committed forward flow volume was $651 million at December 31, 2021. This is a meaningful year-end record for the company. It's also a substantial increase over last year. Looking back, we set our prior record of flow under contract as we entered 2021, but the current volume entering 2022 represents an increase of $149 million, or nearly 30%. This includes $247 million in the Americas and $404 million in Europe. And while this number will fluctuate throughout the year based on a number of factors, the thing to focus on is the increase over prior Q4 number. we believe we are well positioned heading into 2022. I'd now like to turn things over to Pete to go through the financial results.