Equibles

8-K

PRA GROUP INC (PRAA)

8-K 2023-11-06 For: 2023-11-06
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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): November 6, 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 November 6, 2023, PRA Group, Inc. (the “Company”) issued a press release announcing its third quarter 2023 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 November 6, 2023 webcast and conference call to discuss its third quarter 2023 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 datedNovember 6, 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: November 6, 2023 By: /s/ Rakesh Sehgal
Rakesh Sehgal
Executive Vice President and Chief Financial Officer

Document

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PRA Group Reports Third Quarter 2023 Results

NORFOLK, Va., November 6, 2023 - PRA Group, Inc. (Nasdaq: PRAA) (the "Company"), a global leader in acquiring and collecting nonperforming loans, today reported its financial results for the third quarter of 2023 ("Q3 2023").

Q3 2023 Highlights

•Total portfolio purchases increased 69.9% year-over-year to $311.2 million; $231.8 million of portfolio purchases in the Americas and Australia, which represents the highest quarterly investment since 2017.

•Total cash collections were $419.6 million.

•Estimated remaining collections (ERC)1 were $6.0 billion, growing for the second consecutive quarter.

•Cash efficiency ratio2 of 58.9%.

•Diluted earnings per share were $(0.31). This includes a $5.0 million, or $0.10 per share, non-cash impairment charge associated with the Company's decision to cease call center operations at one of its owned regional offices in the U.S.

•Debt to Adjusted EBITDA3 for the 12 months ended September 30, 2023 was 2.84x.

•Total availability under the Company's credit facilities as of September 30, 2023 was $1.3 billion, comprised of $277.8 million based on current ERC and $1.1 billion of additional availability subject to debt covenants, including advance rates.

Three Months Ended Sept 30, Nine Months Ended Sept 30,
($ in thousands, except per share amounts) 2023 2022 2023 2022
Net income/(loss) attributable to PRA Group, Inc. $ (12,262) $ 24,732 $ (74,695) $ 101,188
Diluted earnings per share $ (0.31) $ 0.63 $ (1.91) $ 2.52

“I am highly encouraged by the scope and intensity of our initiatives to optimize our U.S. business, which expanded and accelerated through the third quarter,” said Vikram Atal, president and chief executive officer. "Total portfolio purchases of $311 million in the quarter were up 70% year-over-year, representing one of the highest buying quarters in our history, and were accompanied by improved pricing that reflects current market conditions. Cash collections exceeded expectations, led by operational results in Brazil and Europe, as well as modest overperformance in the U.S. In addition, operating expenses remained carefully controlled. These developments, alongside the tailwind of a continuation of increased portfolio supply in the U.S. and our strong and diversified positioning across markets in Europe, provide a strong framework to deliver significantly improved results in 2024."

1.Refers to the sum of all future projected cash collections on the Company's nonperforming loan portfolios.

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

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

Cash Collections and Revenues

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

Cash Collection Source 2023 2022
($ in thousands) Q3 Q2 Q1 Q4 Q3
Americas and Australia Core $ 223,714 $ 220,886 $ 227,960 $ 205,619 $ 225,775
Americas Insolvency 27,809 26,384 25,751 27,971 31,911
Europe Core 144,402 149,324 134,005 134,016 132,072
Europe Insolvency 23,639 22,725 23,568 24,051 22,586
Total Cash Collections $ 419,564 $ 419,319 $ 411,284 $ 391,657 $ 412,344
Cash Collection Source -
Constant Currency-Adjusted 2023 2022
($ in thousands) Q3 Q3
Americas and Australia Core $ 223,714 $ 227,432
Americas Insolvency 27,809 31,900
Europe Core 144,402 140,472
Europe Insolvency 23,639 24,315
Total Cash Collections $ 419,564 $ 424,119

•Total cash collections in Q3 2023 increased 1.8% (or decreased 1.1% on a constant currency-adjusted basis) to $419.6 million compared to $412.3 million in the third quarter of 2022 ("Q3 2022"). The increase was primarily due to an increase in collections in Brazil and Europe. For the nine months ended September 30, 2023, cash collections decreased $87.2 million compared to the same period last year.

•Total portfolio revenue in Q3 2023 was $212.1 million compared to $234.2 million in Q3 2022. For the nine months ended September 30, 2023, total portfolio revenue was $568.9 million compared to $722.2 million in the same period last year due to lower portfolio purchases in 2021 and 2022.

Expenses

•Operating expenses in Q3 2023 decreased by $0.6 million, or 0.4%, to $173.4 million compared to $174.0 million in Q3 2022. This included a $5.0 million non-cash impairment charge associated with the Company's previously announced decision to cease call center operations at one of its owned regional offices in the U.S. Excluding this non-cash impairment charge, operating expenses would have been $168.4 million.

•For the nine months ended September 30, 2023, operating expenses increased by $9.0 million to $526.2 million, compared to $517.2 million in the same period last year.

•The effective tax benefit rate for the nine months ended September 30, 2023 was 20.1%.

Portfolio Acquisitions

•The Company purchased $311.2 million in portfolios of nonperforming loans in Q3 2023, an increase of 69.9% compared to Q3 2022.

•At the end of Q3 2023, the Company had in place maximum forward flow commitments1 of up to $538.0 million, comprised of $356.4 million in the Americas and Australia and $181.6 million in Europe.

1.Contractual agreements with sellers of nonperforming loans that allow for the purchase of nonperforming portfolios at pre-established prices. These amounts are based on sellers' estimates of future forward flow sales and are dependent on actual delivery compared to these estimates. Accordingly, amounts purchased under these agreements may vary and are often less than the maximum amounts.

Portfolio Purchase Source 2023 2022
($ in thousands) Q3 Q2 Q1 Q4 Q3
Americas and Australia Core $ 187,554 $ 171,440 $ 116,867 $ 118,581 $ 100,780
Americas Insolvency 44,279 12,189 15,701 8,967 8,988
Europe Core 60,628 136,834 90,454 140,011 59,426
Europe Insolvency 18,722 7,296 7,203 20,535 13,910
Total Portfolio Acquisitions $ 311,183 $ 327,759 $ 230,225 $ 288,094 $ 183,104

Conference Call Information

PRA Group, Inc. will hold a conference call today at 5:00 p.m. Eastern time to discuss its financial and operational results. To listen to a webcast of the call and view the accompanying slides, visit https://ir.pragroup.com/events-and-presentations. To listen by phone, call 844-835-9982 in the U.S. or 412-317-5267 outside the U.S., and ask the operator for the PRA Group conference call. To listen to a replay of the call, either visit the same website until November 6, 2024, or call 877-344-7529 in the U.S. or 412-317-0088 outside the U.S. and use access code 7678442 until November 13, 2023.

About PRA Group, Inc.

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

About Forward Looking Statements

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

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

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

PRA Group, Inc.

Unaudited Consolidated Income Statements

(Amounts in thousands, except per share amounts)

Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
Revenues:
Portfolio income $ 189,960 $ 185,853 $ 562,492 $ 587,394
Changes in expected recoveries 22,156 48,336 6,380 134,817
Total portfolio revenue 212,116 234,189 568,872 722,211
Other revenue 4,314 10,618 12,264 21,463
Total revenues 216,430 244,807 581,136 743,674
Operating expenses:
Compensation and employee services 69,517 70,382 217,708 215,615
Legal collection fees 9,839 8,963 28,228 29,390
Legal collection costs 20,761 23,391 66,228 57,694
Agency fees 19,436 15,160 54,491 47,374
Outside fees and services 18,858 24,618 62,064 71,489
Communication 9,881 9,951 30,525 32,062
Rent and occupancy 4,426 4,669 13,193 14,289
Depreciation and amortization 3,273 3,741 10,344 11,384
Impairment of real estate 5,037 — 5,037 —
Other operating expenses 12,356 13,144 38,355 37,885
Total operating expenses 173,384 174,019 526,173 517,182
Income from operations 43,046 70,788 54,963 226,492
Other income and (expense):
Interest expense, net (49,473) (32,455) (130,778) (95,765)
Foreign exchange gain, net 564 4 984 791
Other (500) (83) (1,380) (754)
Income/(loss) before income taxes (6,363) 38,254 (76,211) 130,764
Income tax expense/(benefit) 1,788 11,072 (15,317) 29,828
Net income/(loss) (8,151) 27,182 (60,894) 100,936
Adjustment for net income/(loss) attributable to noncontrolling interests 4,111 2,450 13,801 (252)
Net income/(loss) attributable to PRA Group, Inc. $ (12,262) $ 24,732 $ (74,695) $ 101,188
Net income/(loss) per common share attributable to PRA Group, Inc.:
Basic $ (0.31) $ 0.63 $ (1.91) $ 2.54
Diluted $ (0.31) $ 0.63 $ (1.91) $ 2.52
Weighted average number of shares outstanding:
Basic 39,242 39,018 39,155 39,858
Diluted 39,242 39,170 39,155 40,125

PRA Group, Inc.

Consolidated Balance Sheets

(Amounts in thousands)

(unaudited)
September 30,<br>2023 December 31,<br>2022
Assets
Cash and cash equivalents $ 105,172 $ 83,376
Investments 74,729 79,948
Finance receivables, net 3,460,804 3,295,008
Income taxes receivable 38,695 31,774
Deferred tax assets, net 55,493 56,908
Right-of-use assets 47,156 54,506
Property and equipment, net 38,562 51,645
Goodwill 412,513 435,921
Other assets 96,851 86,588
Total assets $ 4,329,975 $ 4,175,674
Liabilities and Equity
Liabilities:
Accounts payable $ 6,159 $ 7,329
Accrued expenses 106,391 111,395
Income taxes payable 15,946 25,693
Deferred tax liabilities, net 14,185 42,918
Lease liabilities 51,658 59,384
Interest-bearing deposits 100,505 112,992
Borrowings 2,832,225 2,494,858
Other liabilities 12,919 34,355
Total liabilities 3,139,988 2,888,924
Equity:
Preferred stock, $0.01 par value, 2,000 shares authorized, 0 shares issued and outstanding — —
Common stock, $0.01 par value, 100,000 shares authorized, 39,243 shares issued and outstanding at September 30, 2023; 100,000 shares authorized, 38,980 shares issued and outstanding at December 31, 2022 392 390
Additional paid-in capital 4,157 2,172
Retained earnings 1,498,330 1,573,025
Accumulated other comprehensive loss (387,289) (347,926)
Total stockholders' equity - PRA Group, Inc. 1,115,590 1,227,661
Noncontrolling interest 74,397 59,089
Total equity 1,189,987 1,286,750
Total liabilities and equity $ 4,329,975 $ 4,175,674
Select Expenses (Income)<br><br>Amounts in thousands, pre-tax
--- --- --- --- --- --- --- --- ---
Three Months Ended
September 30,<br>2023 June 30,<br>2023 March 31,<br>2023 December 31,<br>2022 September 30,<br>2022 June 30,<br>2022 March 31,<br>2022 December 31,<br>2021
Noncash interest expense - amortization of debt issuance costs 2,220 2,384 2,441 2,444 2,555 2,471 2,627 2,455
Change in fair value of derivatives (6,545) (6,960) (5,470) (3,309) (1,042) 1,525 2,726 3,115
Amortization of intangibles 69 68 66 73 73 77 83 (269)
Impairment of real estate 5,037 — — — — — — —
Stock-based compensation expense 1,629 2,715 3,799 2,206 3,101 3,849 3,891 3,470
Purchase Price Multiples<br><br>as of September 30, 2023<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 $ 1,541,896 $ 4,803,591 $ 34,002 312% 238%
2013 390,826 912,127 15,613 233% 211%
2014 404,117 878,252 23,547 217% 204%
2015 443,114 898,799 37,991 203% 205%
2016 455,767 1,075,382 68,523 236% 201%
2017 532,851 1,196,883 110,646 225% 193%
2018 653,975 1,463,965 153,173 224% 202%
2019 581,476 1,291,978 200,551 222% 206%
2020 435,668 947,163 236,196 217% 213%
2021 435,846 774,075 412,428 178% 191%
2022 406,082 709,920 502,071 175% 179%
2023 475,470 902,639 846,139 190% 190%
Subtotal 6,757,088 15,854,774 2,640,880
Americas Insolvency
1996-2012 1,038,223 2,146,670 96 207% 165%
2013 227,834 355,733 45 156% 133%
2014 148,420 218,770 139 147% 124%
2015 63,170 87,980 103 139% 125%
2016 91,442 117,770 270 129% 123%
2017 275,257 356,365 1,423 129% 125%
2018 97,879 136,160 4,288 139% 127%
2019 123,077 168,922 24,524 137% 128%
2020 62,130 90,853 32,652 146% 136%
2021 55,187 73,780 37,820 134% 136%
2022 33,442 46,734 36,834 140% 139%
2023 71,953 100,452 95,705 140% 140%
Subtotal 2,288,014 3,900,189 233,899
Total Americas and Australia 9,045,102 19,754,963 2,874,779
Europe Core
2012 20,409 44,413 — 218% 187%
2013 20,334 27,260 1 134% 119%
2014 (1) 773,811 2,408,574 354,169 311% 208%
2015 411,340 743,660 141,522 181% 160%
2016 333,090 573,894 167,256 172% 167%
2017 252,174 362,855 107,001 144% 144%
2018 341,775 547,194 197,447 160% 148%
2019 518,610 822,604 338,588 159% 152%
2020 324,119 558,705 259,639 172% 172%
2021 412,411 694,192 423,855 168% 170%
2022 359,447 580,738 477,450 162% 162%
2023 281,356 457,931 429,428 163% 163%
Subtotal 4,048,876 7,822,020 2,896,356
Europe Insolvency
2014 (1) 10,876 18,809 — 173% 129%
2015 18,973 29,255 53 154% 139%
2016 39,338 57,698 1,123 147% 130%
2017 39,235 51,677 2,172 132% 128%
2018 44,908 52,473 5,713 117% 123%
2019 77,218 112,312 23,758 145% 130%
2020 105,440 156,926 47,485 149% 129%
2021 53,230 71,526 34,563 134% 134%
2022 44,604 60,714 47,585 136% 137%
2023 32,217 43,946 42,049 136% 136%
Subtotal 466,039 655,336 204,501
Total Europe 4,514,915 8,477,356 3,100,857
Total PRA Group $ 13,560,017 $ 28,232,319 $ 5,975,636

(1)    Includes finance receivables portfolios that were acquired through the acquisition of Aktiv Kapital AS in 2014 (as described in our 2022 Form 10-K).

(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 September 30, 2023 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>Year-to-date as of September 30, 2023<br><br>Amounts in thousands
Purchase Period Cash Collections (2) Portfolio Income (2) Change in Expected Recoveries (2) Total Portfolio Revenue (2) Net Finance Receivables as of September 30, 2023 (3)
Americas and Australia Core
1996-2012 $ 13,706 $ 8,270 $ 3,589 $ 11,859 $ 8,404
2013 7,709 3,013 3,849 6,862 6,588
2014 8,933 3,839 3,743 7,583 9,136
2015 10,697 6,477 (1,262) 5,216 15,758
2016 18,926 12,877 (2,309) 10,568 22,995
2017 34,496 19,670 (6,655) 13,014 46,567
2018 73,748 30,229 5,437 35,666 87,935
2019 87,979 39,193 (1,760) 37,433 109,991
2020 100,608 44,087 (4,707) 39,380 133,793
2021 108,659 61,425 (36,553) 24,872 216,634
2022 150,050 74,546 (3,079) 71,467 306,568
2023 57,049 37,347 5,898 43,243 461,243
Subtotal 672,560 340,973 (33,809) 307,163 1,425,612
Americas Insolvency
1996-2012 576 189 390 579 —
2013 252 97 156 253 —
2014 349 207 96 304 —
2015 266 90 91 182 54
2016 662 105 312 418 236
2017 4,075 380 1,004 1,385 1,279
2018 10,958 975 (1,130) (155) 4,091
2019 22,692 2,604 924 3,529 23,037
2020 15,206 3,326 1,162 4,488 28,574
2021 13,433 3,602 906 4,508 31,907
2022 6,715 2,936 645 3,581 29,333
2023 4,760 2,250 2,348 4,596 71,081
Subtotal 79,944 16,761 6,904 23,668 189,592
Total Americas and Australia 752,504 357,734 (26,905) 330,831 1,615,204
Europe Core
2012 531 — 531 531 —
2013 264 — 264 264 —
2014 (1) 81,467 52,042 14,172 66,214 97,030
2015 25,924 12,437 (502) 11,936 70,420
2016 22,350 11,777 (1,094) 10,682 96,465
2017 15,398 5,698 707 6,405 73,062
2018 31,748 11,528 3,374 14,902 130,556
2019 57,349 18,293 13,923 32,216 229,949
2020 43,153 16,725 1,067 17,793 160,547
2021 55,633 25,087 (6,041) 19,045 255,955
2022 64,593 26,164 (230) 25,934 299,256
2023 29,321 11,082 202 11,284 263,039
Subtotal 427,731 190,833 26,373 217,206 1,676,279
Europe Insolvency
2014 (1) 172 — 172 172 —
2015 331 21 250 270 45
2016 1,105 201 362 563 604
2017 3,279 216 648 865 1,986
2018 5,905 544 (130) 414 5,195
2019 13,786 1,983 1,309 3,292 20,822
2020 23,164 3,681 3,414 7,095 42,445
2021 11,068 2,777 302 3,078 29,247
2022 9,171 3,529 (40) 3,489 37,199
2023 1,951 973 625 1,597 31,778
Subtotal 69,932 13,925 6,912 20,835 169,321
Total Europe 497,663 204,758 33,285 238,041 1,845,600
Total PRA Group $ 1,250,167 $ 562,492 $ 6,380 $ 568,872 $ 3,460,804

(1)    Includes finance receivables portfolios that were acquired through the acquisition of Aktiv Kapital AS in 2014 (as described in our 2022 Form 10-K).

(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 September 30, 2023 exchange rate.

Cash Collections by Year, By Year of Purchase (1)<br><br>as of September 30, 2023<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 2023 Total
Americas and Australia Core
1996-2012 $ 1,541.9 $ 2,962.4 $ 554.9 $ 412.5 $ 280.3 $ 178.9 $ 118.1 $ 83.8 $ 62.9 $ 41.5 $ 29.9 $ 23.5 $ 13.7 $ 4,762.4
2013 390.8 — 101.6 247.8 194.0 120.8 78.9 56.4 36.9 23.2 16.7 12.5 7.7 896.5
2014 404.1 — — 92.7 253.4 170.3 114.2 82.2 55.3 31.9 22.3 15.0 8.9 846.2
2015 443.1 — — — 117.0 228.4 185.9 126.6 83.6 57.2 34.9 19.5 10.7 863.8
2016 455.8 — — — — 138.7 256.5 194.6 140.6 105.9 74.2 38.4 18.9 967.8
2017 532.9 — — — — — 107.3 278.7 256.5 192.5 130.0 76.3 34.5 1075.8
2018 654.0 — — — — — — 122.7 361.9 337.7 239.9 146.1 73.7 1282.0
2019 581.5 — — — — — — — 143.8 349.0 289.8 177.7 88.0 1,048.3
2020 435.7 — — — — — — — — 132.9 284.3 192.0 100.6 709.8
2021 435.8 — — — — — — — — — 85.0 177.3 108.7 371.0
2022 406.2 — — — — — — — — — — 67.7 150.0 217.7
2023 475.5 — — — — — — — — — — — 56.9 56.9
Subtotal 6,757.3 2,962.4 656.5 753.0 844.7 837.1 860.9 945.0 1,141.5 1,271.8 1,207.0 946.0 672.3 13,098.2
Americas Insolvency
1996-2012 1,038.2 1,021.6 417.3 338.8 208.3 105.3 37.7 8.3 3.9 2.3 1.4 1.1 0.6 2,146.6
2013 227.8 — 52.5 82.6 81.7 63.4 47.8 21.9 2.9 1.3 0.8 0.5 0.3 355.7
2014 148.4 — — 37.0 50.9 44.3 37.4 28.8 15.8 2.2 1.1 0.7 0.3 218.5
2015 63.2 — — — 3.4 17.9 20.1 19.8 16.7 7.9 1.3 0.6 0.3 88.0
2016 91.4 — — — — 18.9 30.4 25.0 19.9 14.4 7.4 1.8 0.7 118.5
2017 275.3 — — — — — 49.1 97.3 80.9 58.8 44.0 20.8 4.1 355.0
2018 97.9 — — — — — — 6.7 27.4 30.5 31.6 24.6 11.0 131.8
2019 123.1 — — — — — — — 13.4 31.4 39.1 37.8 22.7 144.4
2020 62.1 — — — — — — — — 6.5 16.1 20.4 15.2 58.2
2021 55.2 — — — — — — — — — 4.6 17.9 13.4 35.9
2022 33.4 — — — — — — — — — — 3.2 6.7 9.9
2023 72.0 — — — — — — — — — — — 4.8 4.8
Subtotal 2,288.0 1,021.6 469.8 458.4 344.3 249.8 222.5 207.8 180.9 155.3 147.4 129.4 80.1 3,667.3
Total Americas and Australia 9,045.3 3,984.0 1,126.3 1,211.4 1,189.0 1,086.9 1,083.4 1,152.8 1,322.4 1,427.1 1,354.4 1,075.4 752.4 16,765.5
Europe Core
2012 20.4 11.6 9.0 5.6 3.2 2.2 2.0 2.0 1.4 1.2 1.2 0.9 0.5 40.8
2013 20.3 — 7.1 8.5 2.3 1.3 1.2 1.3 0.9 0.7 0.7 0.5 0.3 24.8
2014 (2) 773.8 — — 153.2 292.0 246.4 220.8 206.3 172.9 149.8 149.2 122.2 81.5 1,794.3
2015 411.3 — — — 45.8 100.3 86.2 80.9 66.1 54.3 51.4 40.7 25.9 551.6
2016 333.1 — — — — 40.4 78.9 72.6 58.0 48.3 46.7 36.9 22.4 404.2
2017 252.2 — — — — — 17.9 56.0 44.1 36.1 34.8 25.2 15.4 229.5
2018 341.8 — — — — — — 24.3 88.7 71.3 69.1 50.7 31.7 335.8
2019 518.6 — — — — — — — 48.0 125.7 121.4 89.8 57.3 442.2
2020 324.1 — — — — — — — — 32.3 91.7 69.0 43.2 236.2
2021 412.4 — — — — — — — — — 48.5 89.9 55.6 194.0
2022 359.4 — — — — — — — — — — 33.9 64.6 98.5
2023 281.4 — — — — — — — — — — — 29.3 29.3
Subtotal 4,048.8 11.6 16.1 167.3 343.3 390.6 407.0 443.4 480.1 519.7 614.7 559.7 427.7 4,381.2
Europe Insolvency
2014 (2) 10.9 — — — 4.3 3.9 3.2 2.6 1.5 0.8 0.3 0.2 0.2 17.0
2015 19.0 — — — 3.0 4.4 5.0 4.8 3.9 2.9 1.6 0.6 0.3 26.5
2016 39.3 — — — — 6.2 12.7 12.9 10.7 7.9 6.0 2.7 1.1 60.2
2017 39.2 — — — — — 1.2 7.9 9.2 9.8 9.4 6.5 3.3 47.3
2018 44.9 — — — — — — 0.6 8.4 10.3 11.7 9.8 5.9 46.7
2019 77.2 — — — — — — — 5.0 21.1 23.9 21.0 13.8 84.8
2020 105.4 — — — — — — — — 6.0 34.6 34.1 23.2 97.9
2021 53.2 — — — — — — — — — 5.5 14.4 11.1 31.0
2022 44.6 — — — — — — — — — — 4.5 9.2 13.7
2023 32.2 — — — — — — — — — — — 2.0 2.0
Subtotal 465.9 — — — 7.3 14.5 22.1 28.8 38.7 58.8 93.0 93.8 70.1 427.1
Total Europe 4,514.7 11.6 16.1 167.3 350.6 405.1 429.1 472.2 518.8 578.5 707.7 653.5 497.8 4,808.3
Total PRA Group $ 13,560.0 $ 3,995.6 $ 1,142.4 $ 1,378.7 $ 1,539.6 $ 1,492.0 $ 1,512.5 $ 1,625.0 $ 1,841.2 $ 2,005.6 $ 2,062.1 $ 1,728.9 $ 1,250.2 $ 21,573.8

(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 (as described in our 2022 Form 10-K).

(3)Includes the nonperforming loan portfolios that were acquired through our business 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 impairment of real estate; plus adjustment for net income attributable to noncontrolling interests; and plus recoveries applied to negative allowance less changes in expected recoveries. Adjusted EBITDA is a supplemental measure of performance that is not required by, or presented in accordance with, GAAP. 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 last twelve months (LTM) ended September 30, 2023 and for the year ended December 31, 2022. The calculation of Adjusted EBITDA below may not be comparable to the calculation of similarly titled measures reported by other companies.

Reconciliation of Non-GAAP Financial Measures
LTM For the Year Ended
Adjusted EBITDA for PRA Group ($ in millions) September 30, 2023 December 31, 2022
Net income/(loss) attributable to PRA Group, Inc. $ (59) $ 117
Adjustments:
Income tax expense (8) 37
Foreign exchange gains (1) (1)
Interest expense, net 166 131
Other expense 2 1
Depreciation and amortization 14 15
Impairment of real estate 5 —
Adjustment for net income attributable to noncontrolling interests 15 1
Recoveries applied to negative allowance less Changes in expected recoveries 864 806
Adjusted EBITDA $ 998 $ 1,107

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 LTM as of September 30, 2023 and for the year ended December 31, 2022 ($ in millions):

Debt to Adjusted EBITDA
LTM For the Year Ended
September 30, 2023 December 31, 2022
Borrowings $ 2,832 $ 2,495
LTM Adjusted EBITDA 998 1,107
Debt to LTM Adjusted EBITDA 2.84 2.25

Investor Contact:

Najim Mostamand, CFA

Vice President, Investor Relations

757-431-7913

IR@PRAGroup.com

News Media Contact:

Elizabeth Kersey

Senior Vice President, Communications and Public Policy

(757) 641-0558

Elizabeth.Kersey@PRAGroup.com

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