Equibles

8-K

PRA GROUP INC (PRAA)

8-K 2023-02-27 For: 2023-02-27
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Added on April 07, 2026

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): February 27, 2023

PRA Group, Inc.

_________________________________________

(Exact name of registrant as specified in its charter)

Delaware 000-50058 75-3078675
(State or other jurisdiction of incorporation) (Commission File Number) (I.R.S. Employer Identification No.)
120 Corporate Boulevard
Norfolk, Virginia 23502
(Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: (888) 772-7326
--- --- ---

Not Applicable

______________________________________________

Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, $0.01 par value per share PRAA NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐

Item 2.02 Results of Operations and Financial Condition.

On February 27, 2023, PRA Group, Inc. (the “Company”) issued a press release announcing its fourth quarter and full year 2022 results. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K and is incorporated into this Item 2.02 by reference.

Item 7.01 Regulation FD Disclosure.

The slide presentation being used in connection with the Company’s previously announced February 27, 2023 webcast and conference call to discuss its fourth quarter and full year 2022 results is available in the Investor Relations section of the Company’s website at https://ir.pragroup.com/events-and-presentations.

None of the information furnished in Item 2.02, Item 7.01 or Exhibit 99.1 of this Form 8-K shall be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that Section. Unless expressly set forth by specific reference in such filings, none of the information furnished in this Form 8-K shall be incorporated by reference in any filing under the Securities Act of 1933, as amended, whether made before or after the date hereof and regardless of any general incorporation language in such filings.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits
99.1 Press release dated February 27, 2023
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

PRA Group, Inc.
Date: February 27, 2023 By: /s/ Peter M. Graham
Peter M. Graham
Executive Vice President and Chief Financial Officer

Document

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PRA Group Reports Fourth Quarter and Full Year 2022 Results

NORFOLK, Va., February 27, 2023 - PRA Group, Inc. (Nasdaq: PRAA) (the "Company"), a global leader in acquiring and collecting nonperforming loans, today reported its financial results for the fourth quarter ("Q4 2022") and full year of 2022.

Q4 2022 Highlights

•Total portfolio purchases of $288.1 million.

•Total cash collections of $391.7 million.

•Estimated remaining collections (ERC)1 of $5.7 billion (or $6.0 billion on a constant currency-adjusted basis).

•Cash efficiency ratio2 of 58.6%.

•Diluted earnings per share of $0.41.

Full Year 2022 Highlights

•Total portfolio purchases of $850.0 million.

•Total cash collections of $1.7 billion.

•Cash efficiency ratio of 61.0%

•Diluted earnings per share of $2.94.

•Debt to Adjusted EBITDA3 was 2.25x.

•Common stock repurchases4 of $99.4 million, or 2.3 million shares.

•Available capacity under the Company's credit facilities of $1.6 billion; $465.1 million after considering borrowing base restrictions.

Three Months Ended Dec 31, Twelve Months Ended Dec 31,
($ in thousands, except per share amounts) 2022 2021 2022 2021
Net income attributable to PRA Group, Inc. $ 15,959 $ 34,276 $ 117,147 $ 183,158
Diluted earnings per share $ 0.41 $ 0.79 $ 2.94 $ 4.04

“Our performance in 2022 was led by our European operations, which achieved an annual record for cash collections on a constant currency-adjusted basis and purchased portfolios in nearly all of our operational markets. On a global basis, our fourth quarter portfolio purchases of $288 million represented our highest investment level since the third quarter of 2021,” said Kevin Stevenson, president and chief executive officer. "We made significant progress in 2022 executing our key strategic objectives, including growing our digital platform, leveraging our geographic reach to invest in the most attractive markets, and completing our first full year of collections in Australia. Looking ahead, we are seeing U.S. card balances, delinquency rates, charge-off rates, and bank loan loss reserves continue to increase which we believe will lead to more portfolio supply in the coming months. We also expect to continue to purchase at healthy levels in Europe. We are well-positioned to capitalize on this anticipated increased supply due to our funding capacity, global presence, operational efficiency, and experienced team.”

1.Refers to the sum of all future projected cash collections on the Company's nonperforming loan portfolios. Constant currency-adjusted results are calculated based on foreign exchange rates at December 31, 2021.

2.Calculated by dividing cash receipts less operating expenses by cash receipts. Cash receipts refers to cash collections on the Company's nonperforming loan portfolios, fees and revenue recognized from the Company's class action claims recovery services.

3.A reconciliation of net income, the most directly comparable financial measure calculated and reported in accordance with GAAP, to Adjusted EBITDA can be found at the end of this press release.

4.Share repurchases are subject to market conditions and other factors, and the share repurchase program remains subject to the discretion of the Company's Board of Directors.

Cash Collections and Revenues

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

Cash Collection Source 2022 2021
($ in thousands) Q4 Q3 Q2 Q1 Q4
Americas and Australia Core $ 205,619 $ 225,775 $ 244,377 $ 270,284 $ 257,705
Americas Insolvency 27,971 31,911 34,278 35,209 36,851
Europe Core 134,016 132,072 142,470 151,162 155,853
Europe Insolvency 24,051 22,586 22,935 24,325 23,262
Total Cash Collections $ 391,657 $ 412,344 $ 444,060 $ 480,980 $ 473,671
Cash Collection Source -
Constant Currency Adjusted 2022 2021
($ in thousands) Q4 Q4
Americas and Australia Core $ 205,619 $ 257,824
Americas Insolvency 27,971 36,817
Europe Core 134,016 136,203
Europe Insolvency 24,051 20,277
Total Cash Collections $ 391,657 $ 451,121

•Total cash collections in Q4 2022 decreased 17.3%, or 13.2% on a constant currency-adjusted basis, to $391.7 million compared to $473.7 million the fourth quarter of 2021 ("Q4 2021"). A 34.1% decrease in U.S. call center and other cash collections and an 11.8% decrease in Europe cash collections were partially offset by a 27.9% increase in Other Americas and Australia cash collections. For the full year, total cash collections decreased $332.7 million compared to the full year of 2021.

•Total portfolio revenue in Q4 2022 was $219.0 million compared to $252.0 million in Q4 2021. For the full year, total portfolio revenue was $941.2 million compared to $1.1 billion in 2021.

Expenses

•Operating expenses in Q4 2022 decreased $10.9 million, or 6.3%, compared to Q4 2021. The decrease was primarily driven by:

◦a 24.3% decrease in other operating expenses primarily due to lower advertising costs; and

◦a 5.2% decrease in compensation and employee services expenses primarily due to the level and timing of compensation accruals in the prior year and lower collector compensation expenses in the U.S. call centers.

•For the full year, operating expenses decreased $40.0 million to $680.7 million compared to $720.7 million in the same period last year.

•The effective tax rate for the full year was 23.8%.

Portfolio Acquisitions

•The Company purchased $288.1 million in portfolios of nonperforming loans in Q4 2022.

•At the end of Q4 2022, the Company had in place forward flow commitments1 of up to $792.2 million, comprised of $461.1 million in the Americas and Australia and $331.1 million in Europe.

1.Contractual agreements with sellers of nonperforming loans that allow for the purchase of nonperforming portfolios at pre-established prices.

Portfolio Purchase Source 2022 2021
($ in thousands) Q4 Q3 Q2 Q1 Q4
Americas and Australia Core $ 118,581 $ 100,780 $ 99,962 $ 90,639 $ 90,263
Americas Insolvency 8,967 8,988 6,369 9,118 21,183
Europe Core 140,011 59,426 123,814 38,764 60,430
Europe Insolvency 20,535 13,910 1,202 8,929 29,820
Total Portfolio Acquisitions $ 288,094 $ 183,104 $ 231,347 $ 147,450 $ 201,696

Conference Call Information

PRA Group, Inc. will hold a conference call today at 5:00 p.m. ET to discuss results with institutional investors and stock analysts. To listen to a webcast of the call and view the accompanying slides, visit https://ir.pragroup.com/events-and-presentations. To listen by phone, call 844-835-9982 in the U.S. or 412-317-5267 outside the U.S. and ask for the PRA Group conference call. To listen to a replay of the call, either visit the same website until February 27, 2024, or call 877-344-7529 in the U.S. or 412-317-0088 outside the U.S. and use access code 5441424 until March 6, 2023.

About PRA Group

As a global leader in acquiring and collecting nonperforming loans, PRA Group, Inc. returns capital to banks and other creditors to help expand financial services for consumers in the Americas, Europe and Australia. With thousands of employees worldwide, PRA Group, Inc. companies collaborate with customers to help them resolve their debt. For more information, please visit www.pragroup.com.

About Forward-Looking Statements

Statements made herein that are not historical in nature, including PRA Group, Inc.’s or its management's intentions, hopes, beliefs, expectations, representations, projections, plans or predictions of the future, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

The forward-looking statements in this press release are based upon management's current beliefs, estimates, assumptions and expectations of PRA Group, Inc.’s future operations and financial and economic performance, taking into account currently available information. These statements are not statements of historical fact or guarantees of future performance, and there can be no assurance that anticipated events will transpire or that the Company's expectations will prove to be correct. Forward-looking statements involve risks and uncertainties, some of which are not currently known to PRA Group, Inc. Actual events or results may differ materially from those expressed or implied in any such forward-looking statements as a result of various factors, including risk factors and other risks that are described from time to time in PRA Group, Inc.’s filings with the Securities and Exchange Commission, including PRA Group, Inc.’s annual reports on Form 10-K, its quarterly reports on Form 10-Q and its current reports on Form 8-K, which are available through PRA Group, Inc.'s website and contain a detailed discussion of PRA Group, Inc.'s business, including risks and uncertainties that may affect future results.

Due to such uncertainties and risks, you are cautioned not to place undue reliance on such forward-looking statements, which speak only as of today. Information in this press release may be superseded by more recent information or statements, which may be disclosed in later press releases, subsequent filings with the Securities and Exchange Commission or otherwise. Except as required by law, PRA Group, Inc. assumes no obligation to publicly update or revise its forward-looking statements contained herein to reflect any change in PRA Group, Inc.’s expectations with regard thereto or to reflect any change in events, conditions or circumstances on which any such forward-looking statements are based, in whole or in part.

PRA Group, Inc.

Consolidated Income Statements

(Amounts in thousands, except per share amounts)

(unaudited)
Three Months Ended December 31, Year Ended December 31,
2022 2021 2022 2021
Revenues:
Portfolio income $ 184,921 $ 211,613 $ 772,315 $ 875,327
Changes in expected recoveries 34,087 40,400 168,904 197,904
Total portfolio revenue 219,008 252,013 941,219 1,073,231
Other revenue 3,843 4,923 25,305 22,501
Total revenues 222,851 256,936 966,524 1,095,732
Operating expenses:
Compensation and employee services 69,922 73,781 285,537 301,981
Legal collection fees 9,060 10,998 38,450 47,206
Legal collection costs 19,063 17,099 76,757 78,330
Agency fees 16,434 15,995 63,808 63,140
Outside fees and services 20,866 21,448 92,355 92,615
Communication 7,143 9,716 39,205 42,755
Rent and occupancy 4,299 4,682 18,589 18,376
Depreciation and amortization 3,859 3,736 15,243 15,256
Other operating expenses 12,893 17,032 50,778 61,077
Total operating expenses 163,539 174,487 680,722 720,736
Income from operations 59,312 82,449 285,802 374,996
Other income and (expense):
Interest expense, net (34,912) (32,156) (130,677) (124,143)
Foreign exchange gain/(loss) 194 (936) 985 (809)
Other (572) (12) (1,325) 282
Income before income taxes 24,022 49,345 154,785 250,326
Income tax expense 6,960 12,947 36,787 54,817
Net Income 17,062 36,398 117,998 195,509
Adjustment for net income attributable to noncontrolling interests 1,103 2,122 851 12,351
Net income attributable to PRA Group, Inc. $ 15,959 $ 34,276 $ 117,147 $ 183,158
Net income per common share attributable to PRA Group, Inc.:
Basic $ 0.41 $ 0.80 $ 2.96 $ 4.07
Diluted $ 0.41 $ 0.79 $ 2.94 $ 4.04
Weighted average number of shares outstanding:
Basic 38,978 43,056 39,638 44,960
Diluted 39,177 43,562 39,888 45,330

PRA Group, Inc.

Consolidated Balance Sheets

(Amounts in thousands)

December 31, 2022 December 31, 2021
Assets
Cash and cash equivalents $ 83,376 $ 87,584
Investments 79,948 92,977
Finance receivables, net 3,295,008 3,428,285
Income taxes receivable 31,774 41,146
Deferred tax assets, net 56,908 67,760
Right-of-use assets 54,506 56,713
Property and equipment, net 51,645 54,513
Goodwill 435,921 480,263
Other assets 86,588 57,002
Total assets $ 4,175,674 $ 4,366,243
Liabilities and Equity
Liabilities:
Accounts payable $ 7,329 $ 3,821
Accrued expenses 111,395 127,802
Income taxes payable 25,693 19,276
Deferred tax liabilities, net 42,918 36,630
Lease liabilities 59,384 61,188
Interest-bearing deposits 112,992 124,623
Borrowings 2,494,858 2,608,714
Other liabilities 34,355 59,352
Total liabilities 2,888,924 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, 38,980 shares issued and outstanding at December 31, 2022; 100,000 shares authorized, 41,008 shares issued and outstanding at December 31, 2021 390 410
Additional paid-in capital 2,172 —
Retained earnings 1,573,025 1,552,845
Accumulated other comprehensive loss (347,926) (266,909)
Total stockholders' equity - PRA Group, Inc. 1,227,661 1,286,346
Noncontrolling interest 59,089 38,491
Total equity 1,286,750 1,324,837
Total liabilities and equity $ 4,175,674 $ 4,366,243
Select Expenses (Income)<br><br>Amounts in thousands, pre-tax
--- --- --- --- --- --- --- --- ---
Three Months Ended
December 31,<br>2022 September 30,<br>2022 June 30,<br>2022 March 31,<br>2022 December 31,<br>2021 September 30,<br>2021 June 30,<br>2021 March 31,<br>2021
Noncash interest expense - amortization of debt issuance costs 2,444 2,555 2,471 2,627 2,455 2,406 2,391 2,256
Change in fair value of derivatives (3,309) (1,042) 1,525 2,726 3,115 2,982 2,911 3,102
Amortization of intangibles 73 73 77 83 (269) 104 105 181
Stock-based compensation expense 2,206 3,101 3,849 3,891 3,470 4,317 4,040 4,113
Purchase Price Multiples<br><br>as of December 31, 2022<br><br>Amounts in thousands
--- --- --- --- --- --- --- --- ---
Purchase Period Purchase Price (2)(3) Total Estimated Collections (4) Estimated Remaining Collections (5) Current Purchase Price Multiple Original Purchase Price Multiple (6)
Americas and Australia Core
1996-2012 $ 1,541,897 $ 4,798,281 $ 42,398 311% 238%
2013 390,826 905,829 17,025 232% 211%
2014 404,117 872,066 26,384 216% 204%
2015 443,114 905,285 55,162 204% 205%
2016 455,767 1,081,751 93,292 237% 201%
2017 532,851 1,208,081 156,253 227% 193%
2018 653,975 1,464,612 225,935 224% 202%
2019 581,476 1,294,519 288,207 223% 206%
2020 435,668 948,088 337,470 218% 213%
2021 435,846 811,328 553,876 186% 191%
2022 406,082 726,523 659,290 179% 179%
Subtotal 6,281,619 15,016,363 2,455,292
Americas Insolvency
1996-2012 1,038,222 2,146,283 285 207% 165%
2013 227,834 355,578 142 156% 133%
2014 148,420 218,674 392 147% 124%
2015 63,170 87,891 279 139% 125%
2016 91,442 117,449 612 128% 123%
2017 275,257 355,272 4,406 129% 125%
2018 97,879 137,315 16,401 140% 127%
2019 123,077 168,002 46,299 137% 128%
2020 62,130 89,698 46,704 144% 136%
2021 55,187 72,934 50,407 132% 136%
2022 33,442 46,651 43,464 139% 139%
Subtotal 2,216,060 3,795,747 209,391
Total Americas and Australia 8,497,679 18,812,110 2,664,683
Europe Core
2012 20,409 43,718 — 214% 187%
2013 20,334 26,909 — 132% 119%
2014 (1) 773,811 2,365,317 406,593 306% 208%
2015 411,340 728,250 153,190 177% 160%
2016 333,090 567,637 189,769 170% 167%
2017 252,174 358,816 119,854 142% 144%
2018 341,775 540,246 220,787 158% 148%
2019 518,610 798,429 373,658 154% 152%
2020 324,119 557,983 305,148 172% 172%
2021 412,411 699,520 498,755 170% 170%
2022 359,447 660,999 546,522 184% 184%
Subtotal 3,767,520 7,347,824 2,814,276
Europe Insolvency
2014 (1) 10,876 18,611 — 171% 129%
2015 18,973 28,950 125 153% 139%
2016 39,338 56,990 1,500 145% 130%
2017 39,235 50,905 4,673 130% 128%
2018 44,908 52,582 11,526 117% 123%
2019 77,218 110,515 35,296 143% 130%
2020 105,440 153,006 66,106 145% 129%
2021 53,230 71,526 45,007 134% 134%
2022 44,604 61,057 56,551 137% 137%
Subtotal 433,822 604,142 220,784
Total Europe 4,201,342 7,951,966 3,035,060
Total PRA Group $ 12,699,021 $ 26,764,076 $ 5,699,743

(1)Includes finance receivables portfolios that were acquired through the acquisition of Aktiv Kapital AS in 2014.

(2)Includes the acquisition date finance receivables portfolios that were acquired through our business acquisitions.

(3)Non-U.S. amounts are presented at the exchange rate at the end of the year in which the portfolio was purchased. In addition, any purchase price adjustments that occur throughout the life of the portfolio are presented at the year-end exchange rate for the respective year of purchase.

(4)Non-U.S. amounts are presented at the year-end exchange rate for the respective year of purchase.

(5)Non-U.S. amounts are presented at the December 31, 2022 exchange rate.

(6)The Original Purchase Price Multiple represents the purchase price multiple at the end of the year of acquisition.

Portfolio Financial Information<br><br>For the Year Ended December 31, 2022<br><br>Amounts in thousands
Purchase Period Cash<br><br>Collections (2) Portfolio Income (2) Change in Expected Recoveries (2) Total Portfolio Revenue (2) Net Finance Receivables as of December 31, 2022 (3)
Americas and Australia Core
1996-2012 $ 23,470 $ 12,731 $ 10,208 $ 22,939 $ 10,343
2013 12,526 4,728 6,476 11,204 7,438
2014 14,998 6,106 7,433 13,539 10,541
2015 19,542 12,818 (3,411) 9,407 21,250
2016 38,350 28,246 (16,381) 11,865 31,464
2017 76,269 41,197 (4,578) 36,619 68,396
2018 146,106 55,912 49,297 105,209 125,682
2019 177,717 76,857 21,872 98,729 159,586
2020 192,001 88,284 1,918 90,202 195,163
2021 177,340 112,434 (45,560) 66,874 298,645
2022 67,735 44,054 1,401 45,455 381,914
Subtotal 946,054 483,367 28,675 512,042 1,310,422
Americas Insolvency
1996-2012 1,066 572 494 1,066 —
2013 535 232 305 537 —
2014 718 717 (87) 630 46
2015 596 165 354 519 140
2016 1,810 299 932 1,231 481
2017 20,751 2,489 1,941 4,430 3,970
2018 24,627 3,282 3,301 6,583 15,207
2019 37,815 5,933 4,770 10,703 42,207
2020 20,361 5,830 3,386 9,216 39,299
2021 17,904 6,699 (753) 5,946 40,900
2022 3,186 1,778 1,239 3,017 32,797
Subtotal 129,369 27,996 15,882 43,878 175,047
Total Americas and Australia 1,075,423 511,363 44,557 555,920 1,485,469
Europe Core
2012 870 — 871 871 —
2013 481 — 481 481 —
2014 (1) 122,232 73,843 41,828 115,671 114,254
2015 40,701 19,278 7,740 27,018 83,984
2016 36,912 17,962 2,616 20,578 112,355
2017 25,151 8,750 3,081 11,831 82,457
2018 50,702 17,202 8,425 25,627 146,171
2019 89,820 27,307 18,949 46,256 255,401
2020 69,045 26,602 5,300 31,902 188,109
2021 89,938 39,653 2,889 42,542 301,235
2022 33,867 12,051 5,727 17,778 341,819
Subtotal 559,719 242,648 97,907 340,555 1,625,785
Europe Insolvency
2014 (1) 238 14 211 225 —
2015 649 182 (4) 178 104
2016 2,710 634 104 738 1,131
2017 6,499 593 1,371 1,964 4,325
2018 9,828 1,218 863 2,081 10,512
2019 21,020 3,458 7,268 10,726 30,837
2020 34,086 6,011 14,364 20,375 57,627
2021 14,417 4,637 1,312 5,949 36,707
2022 4,452 1,557 951 2,508 42,511
Subtotal 93,899 18,304 26,440 44,744 183,754
Total Europe 653,618 260,952 124,347 385,299 1,809,539
Total PRA Group $ 1,729,041 $ 772,315 $ 168,904 $ 941,219 $ 3,295,008

(1)Includes finance receivables portfolios that were acquired through the acquisition of Aktiv Kapital AS in 2014.

(2)Non-U.S. amounts are presented using the average exchange rates during the current reporting period.

(3)Non-U.S. amounts are presented at the December 31, 2022 exchange rate.

Cash Collections by Year, By Year of Purchase (1)<br><br>as of December 31, 2022<br><br>Amounts in millions
Cash Collections
Purchase Period Purchase Price (3)(4) 1996-2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Total
Americas and Australia Core
1996-2012 $ 1,541.9 $ 2,962.4 $ 554.9 $ 412.5 $ 280.4 $ 179.0 $ 118.0 $ 83.8 $ 62.9 $ 41.5 $ 29.8 $ 23.5 $ 4,748.7
2013 390.8 — 101.6 247.8 194.0 120.8 78.9 56.4 36.9 23.2 16.7 12.5 888.8
2014 404.1 — — 92.7 253.4 170.3 114.2 82.2 55.3 31.9 22.3 15.0 837.3
2015 443.1 — — — 117.0 228.4 185.9 126.6 83.6 57.2 34.9 19.5 853.1
2016 455.8 — — — 138.7 256.5 194.6 140.6 105.9 74.2 38.4 948.9
2017 532.9 — — — — — 107.3 278.7 256.5 192.5 130.0 76.3 1041.3
2018 654.0 — — — — — — 122.7 361.9 337.7 239.9 146.1 1208.3
2019 581.5 — — — — — — — 143.8 349.0 289.8 177.7 960.3
2020 435.7 — — — — — — — — 133.0 284.3 192.0 609.3
2021 435.8 — — — — — — — — — 85.0 177.3 262.3
2022 406.1 — — — — — — — — — — 67.8 67.8
Subtotal 6,281.7 2,962.4 656.5 753.0 844.8 837.2 860.8 945.0 1,141.5 1,271.9 1,206.9 946.1 12,426.1
Americas Insolvency
1996-2012 1,038.2 1,021.6 417.3 338.8 208.3 105.3 37.7 8.3 4.0 2.2 1.4 1.1 2,146.0
2013 227.8 — 52.5 82.6 81.7 63.4 47.8 21.9 2.9 1.3 0.8 0.5 355.4
2014 148.4 — — 37.0 50.9 44.3 37.4 28.8 15.8 2.2 1.1 0.7 218.2
2015 63.2 — — — 3.4 17.9 20.1 19.8 16.7 7.9 1.3 0.6 87.7
2016 91.4 — — — — 18.9 30.4 25.0 19.9 14.4 7.4 1.8 117.8
2017 275.3 — — — — — 49.1 97.3 80.9 58.8 44.0 20.8 350.9
2018 97.9 — — — — — — 6.7 27.4 30.5 31.6 24.6 120.8
2019 123.1 — — — — — — — 13.4 31.4 39.1 37.8 121.7
2020 62.1 — — — — — — — — 6.5 16.1 20.4 43.0
2021 55.2 — — — — — — — — — 4.5 17.9 22.4
2022 33.4 — — — — — — — — — — 3.2 3.2
Subtotal 2,216.0 1,021.6 469.8 458.4 344.3 249.8 222.5 207.8 181.0 155.2 147.3 129.4 3,587.1
Total Americas and Australia 8,497.7 3,984.0 1,126.3 1,211.4 1,189.1 1,087.0 1,083.3 1,152.8 1,322.5 1,427.1 1,354.2 1,075.5 16,013.2
Europe Core
2012 20.4 11.6 9.0 5.6 3.2 2.2 2.0 2.0 1.5 1.2 1.2 0.9 40.4
2013 20.3 — 7.1 8.5 2.3 1.3 1.2 1.3 0.9 0.7 0.7 0.5 24.5
2014 (2) 773.8 — — 153.2 292.0 246.4 220.8 206.3 172.9 149.8 149.2 122.2 1,712.8
2015 411.3 — — — 45.8 100.3 86.2 80.9 66.1 54.3 51.4 40.7 525.7
2016 333.1 — — — — 40.4 78.9 72.6 58.0 48.3 46.7 36.9 381.8
2017 252.2 — — — — — 17.9 56.0 44.1 36.1 34.8 25.2 214.1
2018 341.8 — — — — — — 24.3 88.7 71.2 69.1 50.7 304.0
2019 518.6 — — — — — — — 47.9 125.7 121.4 89.8 384.8
2020 324.1 — — — — — — — — 32.4 91.7 69.0 193.1
2021 412.4 — — — — — — — — — 48.4 89.9 138.3
2022 359.5 — — — — — — — — — — 33.9 33.9
Subtotal 3,767.5 11.6 16.1 167.3 343.3 390.6 407.0 443.4 480.1 519.7 614.6 559.7 3,953.4
Europe Insolvency
2014 (2) 10.9 — — — 4.3 3.9 3.2 2.6 1.5 0.8 0.3 0.3 16.9
2015 19.0 — — — 3.0 4.4 5.0 4.8 3.9 2.9 1.6 0.6 26.2
2016 39.3 — — — — 6.2 12.7 12.9 10.7 7.9 6.0 2.7 59.1
2017 39.2 — — — — — 1.2 7.9 9.2 9.8 9.4 6.5 44.0
2018 44.9 — — — — — — 0.6 8.4 10.3 11.7 9.8 40.8
2019 77.2 — — — — — — — 5.1 21.1 23.9 21.0 71.1
2020 105.4 — — — — — — — — 6.1 34.6 34.1 74.8
2021 53.3 — — — — — — — — — 5.4 14.4 19.8
2022 44.6 — — — — — — — — — — 4.5 4.5
Subtotal 433.8 — — — 7.3 14.5 22.1 28.8 38.8 58.9 92.9 93.9 357.2
Total Europe 4,201.3 11.6 16.1 167.3 350.6 405.1 429.1 472.2 518.9 578.6 707.5 653.6 4,310.6
Total PRA Group $ 12,699.0 $ 3,995.6 $ 1,142.4 $ 1,378.7 $ 1,539.7 $ 1,492.1 $ 1,512.4 $ 1,625.0 $ 1,841.4 $ 2,005.7 $ 2,061.7 $ 1,729.1 $ 20,323.8

(1)Non-U.S. amounts are presented using the average exchange rates during the cash collection period.

(2)Includes finance receivables portfolios that were acquired through the acquisition of Aktiv Kapital AS in 2014.

(3)Includes the nonperforming loan portfolios that were acquired through our acquisitions.

(4)Non-U.S. amounts are presented at the exchange rate at the end of the year in which the portfolio was purchased. In addition, any purchase price adjustments that occur throughout the life of the pool are presented at the year-end exchange rate for the respective year of purchase.

Use of Non-GAAP Financial Measures

PRA Group, Inc. reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management uses certain non-GAAP financial measures, including Adjusted EBITDA, internally to evaluate the Company’s performance and to set performance goals. Adjusted EBITDA is calculated as net income attributable to PRA Group, Inc. plus income tax expense; less foreign exchange gain (or plus foreign exchange loss); plus interest expense, net; plus other expense (or less other income); plus depreciation and amortization; plus adjustment for net income attributable to noncontrolling interests; and plus recoveries applied to negative allowance less changes in expected recoveries. Adjusted EBITDA is a supplemental measure of performance that is not required by, or presented in accordance with, GAAP. PRA Group, Inc. presents Adjusted EBITDA because the Company considers it an important supplemental measure of operations and financial performance. Management believes Adjusted EBITDA helps provide enhanced period-to-period comparability of operations and financial performance and is useful to investors as other companies in the industry report similar financial measures. Adjusted EBITDA should not be considered as an alternative to net income determined in accordance with GAAP. Set forth below is a reconciliation of net income, the most directly comparable financial measure calculated and reported in accordance with GAAP, to Adjusted EBITDA for the years ended December 31, 2022 and 2021. The calculation of Adjusted EBITDA below may not be comparable to the calculation of similarly titled measures reported by other companies.

Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDA for PRA Group ($ in millions) December 31, 2022 December 31, 2021
Net income attributable to PRA Group, Inc. $ 117 $ 183
Adjustments:
Income tax expense 37 55
Foreign exchange (gains)/losses (1) 1
Interest expense, net 131 124
Other expense 1 —
Depreciation and amortization 15 15
Adjustment for net income attributable to noncontrolling interests 1 12
Recoveries applied to negative allowance less Changes in expected recoveries 806 988
Adjusted EBITDA $ 1,107 $ 1,378

Additionally, the Company evaluates its business using certain ratios that use Adjusted EBITDA. Debt to Adjusted EBITDA is calculated by dividing borrowings by Adjusted EBITDA. The following table reflects the Company's Debt to Adjusted EBITDA for the years ended December 31, 2022 and 2021 (amounts in millions):

Debt to Adjusted EBITDA
December 31, 2022 December 31, 2021
Borrowings $ 2,495 $ 2,609
Adjusted EBITDA 1,107 1,378
Debt to Adjusted EBITDA 2.25 1.89

Investor Contact:

Najim Mostamand, CFA

Vice President, Investor Relations

(757) 431-7913

IR@PRAGroup.com

News Media Contact:

Elizabeth Kersey

Senior Vice President, Communications and Public Policy

(757) 431-3398

Elizabeth.Kersey@PRAGroup.com

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