EX-99.1 2 earningreleaseq32022.htm EX-99.1

PRA Group Reports Third Quarter 2022 Results

NORFOLK, Va., November 3, 2022 - 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 2022 ("Q3 2022").

Q3 2022 Highlights

•Total portfolio purchases of $183.1 million.

•Total cash collections were $412.3 million.

•Estimated remaining collections (ERC)1 of $5.3 billion (or $5.9 billion on a constant currency-adjusted basis).

•Cash efficiency ratio2 of 58.4%.

•Diluted earnings per share were $0.63.

•Common stock repurchases3 of $25.0 million, or 0.7 million shares.

•Debt to Adjusted EBITDA4 for the 12 months ended September 30, 2022 was 2.04x.

•Available capacity under the Company's credit facilities of $1.7 billion; $454.6 million after considering borrowing base restrictions.

						Three Months Ended Sept 30,												Nine Months Ended Sept 30,
($ in thousands, except per share amounts)						2022						2021						2022						2021
Net income attributable to PRA Group, Inc.						$	24,732					$	34,480					$	101,188					$	148,882
Diluted earnings per share						$	0.63					$	0.76					$	2.52					$	3.24

“The third quarter was another solid quarter for PRA Group, driven once again by the performance of our European operations” said Kevin Stevenson, president and chief executive officer. “We continued to outperform our expectations. According to the Federal Reserve, U.S. credit card balances now exceed 2019 levels, while delinquency and charge-off rates are continuing to tick up, especially for card issuers that cater to non-prime consumers. This strengthens our conviction that more supply will enter the U.S. market in the coming months. As more of these economic signs point to meaningful supply increases in the near future, we intend to remain disciplined in our underwriting and portfolio purchases, leveraging our deep experience, strong balance sheet and geographic diversity to generate the best possible risk-adjusted returns."

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 September 30, 2021 and at September 30, 2022.

2.Calculated by dividing cash receipts less operating expenses by cash receipts.

3.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.

4.A reconciliation of this non-GAAP financial measure to the most comparable GAAP measure can be found at the end of this press release.

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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)						Q3						Q2						Q1						Q4						Q3
Americas and Australia Core						$	225,775					$	244,377					$	270,284					$	257,705					$	276,691
Americas Insolvency						31,911						34,278						35,209						36,851						37,464
Europe Core						132,072						142,470						151,162						155,853						151,625
Europe Insolvency						22,586						22,935						24,325						23,262						22,574
Total Cash Collections						$	412,344					$	444,060					$	480,980					$	473,671					$	488,354
Cash Collection Source -
Constant Currency-Adjusted						2022																								2021
($ in thousands)						Q3																								Q3
Americas and Australia Core						$	225,775																							$	276,069
Americas Insolvency						31,911																								37,445
Europe Core						132,072																								129,268
Europe Insolvency						22,586																								19,219
Total Cash Collections						$	412,344																							$	462,001

•Total cash collections in Q3 2022 decreased 15.6%, or 10.7% on a constant currency-adjusted basis, to $412.3 million compared to $488.4 million in the third quarter of 2021 ("Q3 2021"). The decrease was driven primarily by a 29.3% decrease in U.S. call center and other collections, which was due to lower levels of portfolio purchases. Europe cash collections decreased by 11.2%; however, on a currency adjusted basis, they increased by 4.2%. For the nine months ended September 30, 2022, total cash collections decreased $250.7 million compared to the same period last year.

•Total portfolio revenue in Q3 2022 was $234.2 million compared to $256.7 million in Q3 2021.

Expenses

•Operating expenses in Q3 2022 decreased by $12.1 million, or 6.5%, compared to Q3 2021. The decrease was primarily driven by:

◦a 16.4% decrease in outside fees and services; and

◦a 5.6% 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 nine months ended September 30, 2022, operating expenses decreased $29.1 million to $517.2 million compared to $546.2 million in the same period last year.

•The effective tax rate for the nine months ended September 30, 2022 was 22.8%.

Portfolio Acquisitions

•The Company purchased $183.1 million in portfolios of nonperforming loans in Q3 2022.

•At the end of Q3 2022, the Company had in place maximum forward flow commitments1 of up to $1.0 billion, comprised of $427.4 million in the Americas and Australia and $607.2 million in Europe.

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

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Portfolio Purchase Source						2022																		2021
($ in thousands)						Q3						Q2						Q1						Q4						Q3
Americas and Australia Core						$	100,780					$	99,962					$	90,639					$	90,263					$	162,451
Americas Insolvency						8,988						6,369						9,118						21,183						9,878
Europe Core						59,426						123,814						38,764						60,430						212,194
Europe Insolvency						13,910						1,202						8,929						29,820						7,424
Total Portfolio Acquisitions						$	183,104					$	231,347					$	147,450					$	201,696					$	391,947

Share Repurchases

•The Company repurchased $25.0 million, or 0.7 million shares, with $67.7 million remaining under its current share repurchase plan as of September 30, 2022.

•At September 30, 2022, the Company has repurchased 16% of its common stock since it began its share repurchases in 2021.

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 3, 2023, or call 877-344-7529 in the U.S. or 412-317-0088 outside the U.S. and use access code 5348695 until November 10, 2022.

The Company plans to report its fourth quarter and full year 2022 results after market close on February 27, 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 our expectations will prove to be correct. Forward-looking statements involve risks and uncertainties, some of which are not currently known to PRA Group, Inc. Actual events or results may differ materially from those expressed or implied in any such forward-looking statements as a result of various factors, including risk factors and other risks that are described from time to time in PRA Group, Inc.’s filings with the Securities and Exchange Commission, including 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.

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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.

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PRA Group, Inc.

Unaudited Consolidated Income Statements

(Amounts in thousands, except per share amounts)

			Three Months Ended September 30,												Nine Months Ended September 30,
			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

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PRA Group, Inc.

Consolidated Balance Sheets

(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, 0 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

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Select Expenses (Income) Amounts in thousands, pre-tax
			Three Months Ended
			September 30, 2022			June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021			December 31, 2020
Noncash interest expense - amortization of debt discount			—			—			—			—			—			—			—			1,959
Noncash interest expense - amortization of debt issuance costs			2,555			2,471			2,627			2,455			2,406			2,391			2,256			2,393
Change in fair value of derivatives			(1,042)			1,525			2,726			3,115			2,982			2,911			3,102			3,875
Amortization of intangibles			73			77			83			(269)			104			105			181			1,792
Stock-based compensation expense			3,101			3,849			3,891			3,470			4,317			4,040			4,113			5,370

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Purchase Price Multiples as of September 30, 2022 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
1996-2011			$	1,287,821		$	4,131,141		$	26,086		321%			240%
2012			254,076			659,669			13,453			260%			226%
2013			390,826			904,736			18,529			231%			211%
2014			404,117			870,923			28,317			216%			204%
2015			443,114			909,486			62,917			205%			205%
2016			455,767			1,095,092			112,073			240%			201%
2017			532,851			1,217,840			179,774			229%			193%
2018			653,975			1,464,063			250,068			224%			202%
2019			581,476			1,287,770			314,269			221%			206%
2020			435,668			948,148			374,739			218%			213%
2021			435,846			819,353			599,229			188%			191%
2022			285,725			509,846			475,780			178%			178%
Subtotal			6,161,262			14,818,067			2,455,234
Americas Insolvency
1996-2011			786,827			1,752,754			367			223%			174%
2012			251,395			393,385			24			156%			136%
2013			227,834			355,528			188			156%			133%
2014			148,420			218,903			774			147%			124%
2015			63,170			87,568			74			139%			125%
2016			91,442			116,938			460			128%			123%
2017			275,257			355,601			7,413			129%			125%
2018			97,879			137,083			21,314			140%			127%
2019			123,077			168,549			55,014			137%			128%
2020			62,130			88,093			50,152			142%			136%
2021			55,187			76,130			58,000			138%			136%
2022			24,475			33,903			32,255			139%			139%
Subtotal			2,207,093			3,784,435			226,035
Total Americas and Australia			8,368,355			18,602,502			2,681,269
Europe Core
2012			20,409			43,461			—			213%			187%
2013			20,334			26,767			—			132%			119%
2014 (1)			773,811			2,344,788			385,634			303%			208%
2015			411,340			726,850			147,316			177%			160%
2016			333,090			565,943			179,084			170%			167%
2017			252,174			357,463			114,430			142%			144%
2018			341,775			533,804			207,082			156%			148%
2019			518,610			781,071			346,028			151%			152%
2020			324,119			556,213			293,408			172%			172%
2021			412,411			702,838			478,614			170%			170%
2022			199,320			364,842			304,229			183%			183%
Subtotal			3,607,393			7,004,040			2,455,825
Europe Insolvency
2014 (1)			10,876			18,558			1			171%			129%
2015			18,973			28,871			196			152%			139%
2016			39,338			56,951			1,811			145%			130%
2017			39,235			50,887			5,447			130%			128%
2018			44,908			52,395			12,644			117%			123%
2019			77,218			102,147			30,380			132%			130%
2020			105,440			142,743			60,582			135%			129%
2021			53,230			71,526			45,048			134%			134%
2022			21,526			29,050			27,043			135%			135%
Subtotal			410,744			553,128			183,152
Total Europe			4,018,137			7,557,168			2,638,977
Total PRA Group			$	12,386,492		$	26,159,670		$	5,320,246

(1)    Includes finance receivables portfolios that were acquired through the acquisition of Aktiv Kapital AS in 2014 (as described in our Annual Report on Form 10-K for the year ended December 31, 2021 ("2021 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, 2022 exchange rate.

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

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Portfolio Financial Information Year-to-date as of September 30, 2022 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, 2022 (3)
Americas and Australia Core
1996-2011			$	13,134		$	7,292		$	4,835		$	12,127		$	5,422
2012			5,724			2,423			3,188			5,611			4,334
2013			9,928			3,523			5,619			9,142			7,975
2014			11,829			4,580			6,521			11,101			11,250
2015			15,857			10,007			(1,342)			8,665			24,192
2016			31,174			22,699			(11,293)			11,406			38,183
2017			62,608			32,415			987			33,402			78,847
2018			118,715			43,169			47,990			91,159			138,982
2019			144,093			60,488			21,204			81,692			175,831
2020			154,569			69,885			(1,727)			68,158			210,540
2021			137,971			87,411			(34,705)			52,706			322,937
2022			34,834			23,347			543			23,890			273,718
Subtotal			740,436			367,239			41,820			409,059			1,292,211
Americas Insolvency
1996-2011			405			423			(18)			405			—
2012			411			43			367			410			—
2013			439			186			255			441			—
2014			565			593			(87)			506			83
2015			478			154			165			319			58
2016			1,449			251			453			704			315
2017			18,072			2,180			2,329			4,509			6,729
2018			19,482			2,688			3,063			5,751			19,525
2019			29,637			4,706			5,303			10,009			49,692
2020			15,307			4,524			2,027			6,551			41,694
2021			13,505			5,179			1,555			6,734			46,112
2022			1,648			930			725			1,655			24,195
Subtotal			101,398			21,857			16,137			37,994			188,403
Total Americas and Australia			841,834			389,096			57,957			447,053			1,480,614
Europe Core
2012			684			—			685			685			—
2013			380			—			380			380			—
2014 (1)			92,922			56,246			30,385			86,631			105,512
2015			31,962			14,986			6,222			21,208			79,865
2016			28,843			13,916			2,215			16,131			105,874
2017			19,486			6,797			1,868			8,665			78,211
2018			39,948			13,343			4,585			17,928			137,042
2019			69,957			21,255			8,356			29,611			237,146
2020			53,882			20,731			4,395			25,126			180,980
2021			69,485			30,813			2,453			33,266			286,915
2022			18,155			6,127			3,791			9,918			190,522
Subtotal			425,704			184,214			65,335			249,549			1,402,067
Europe Insolvency
2014 (1)			192			13			167			180			1
2015			502			163			(66)			97			159
2016			2,218			532			65			597			1,375
2017			5,278			484			1,355			1,839			5,022
2018			7,513			971			691			1,662			11,475
2019			15,806			2,788			914			3,702			26,865
2020			25,557			4,753			6,747			11,500			52,940
2021			10,608			3,626			1,015			4,641			36,157
2022			2,172			754			637			1,391			20,685
Subtotal			69,846			14,084			11,525			25,609			154,679
Total Europe			495,550			198,298			76,860			275,158			1,556,746
Total PRA Group			$	1,337,384		$	587,394		$	134,817		$	722,211		$	3,037,360

(1)    Includes finance receivables portfolios that were acquired through the acquisition of Aktiv Kapital AS in 2014 (as described in our 2021 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, 2022 exchange rate.

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Cash Collections by Year, By Year of Purchase (1) as of September 30, 2022 Amounts in millions
						Cash Collections
Purchase Period			Purchase Price (3)(4)			1996-2011			2012			2013			2014			2015			2016			2017			2018			2019			2020			2021			2022			Total
Americas and Australia Core
1996-2011			$	1,287.8		$	2,419.5		$	486.0		$	381.3		$	266.3		$	183.1		$	119.0		$	78.0		$	56.0		$	45.0		$	29.7		$	20.8		$	13.1		$	4,097.8
2012			254.1			—			56.9			173.6			146.2			97.3			60.0			40.0			27.8			17.9			11.8			9.0			5.7			646.2
2013			390.8			—			—			101.6			247.8			194.0			120.8			78.9			56.4			36.9			23.2			16.7			9.9			886.2
2014			404.1			—			—			—			92.7			253.4			170.3			114.2			82.2			55.3			31.9			22.3			11.8			834.1
2015			443.1			—			—			—			—			117.0			228.4			185.9			126.6			83.6			57.2			34.9			15.9			849.5
2016			455.8			—			—			—			—						138.7			256.5			194.6			140.6			105.9			74.2			31.2			941.7
2017			532.9			—			—			—			—			—			—			107.3			278.7			256.5			192.5			130.0			62.6			1027.6
2018			654.0			—			—			—			—			—			—			—			122.7			361.9			337.7			239.9			118.7			1,180.9
2019			581.5			—			—			—			—			—			—			—			—			143.8			349.0			289.8			144.1			926.7
2020			435.7			—			—			—			—			—			—			—			—			—			133.0			284.3			154.6			571.9
2021			435.8			—			—			—			—			—			—			—			—			—			—			85.0			138.0			223.0
2022			285.7			—			—			—			—			—			—			—			—			—			—			—			34.8			34.8
Subtotal			6,161.3			2,419.5			542.9			656.5			753.0			844.8			837.2			860.8			945.0			1,141.5			1,271.9			1,206.9			740.4			12,220.4
Americas Insolvency
1996-2011			786.8			667.4			336.8			313.7			244.7			128.2			44.6			8.4			4.0			2.1			1.3			0.8			0.4			1,752.4
2012			251.4			—			17.4			103.6			94.1			80.1			60.7			29.3			4.3			1.9			0.9			0.6			0.4			393.3
2013			227.8			—			—			52.5			82.6			81.7			63.4			47.8			21.9			2.9			1.3			0.8			0.4			355.3
2014			148.4			—			—			—			37.0			50.9			44.3			37.4			28.8			15.8			2.2			1.1			0.6			218.1
2015			63.2			—			—			—			—			3.4			17.9			20.1			19.8			16.7			7.9			1.3			0.5			87.6
2016			91.4			—			—			—			—			—			18.9			30.4			25.0			19.9			14.4			7.4			1.4			117.4
2017			275.3			—			—			—			—			—			—			49.1			97.3			80.9			58.8			44.0			18.1			348.2
2018			97.9			—			—			—			—			—			—			—			6.7			27.4			30.5			31.6			19.5			115.7
2019			123.1			—			—			—			—			—			—			—			—			13.4			31.4			39.1			29.7			113.6
2020			62.1			—			—			—			—			—			—			—			—			—			6.5			16.1			15.3			37.9
2021			55.2			—			—			—			—			—			—			—			—			—			—			4.5			13.5			18.0
2022			24.5			—			—			—			—			—			—			—			—			—			—			—			1.6			1.6
Subtotal			2,207.1			667.4			354.2			469.8			458.4			344.3			249.8			222.5			207.8			181.0			155.2			147.3			101.4			3,559.1
Total Americas and Australia			8,368.4			3,086.9			897.1			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			841.8			15,779.5
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			0.7			40.2
2013			20.3			—			—			7.1			8.5			2.3			1.3			1.2			1.3			0.9			0.7			0.7			0.4			24.4
2014 (2)			773.8			—			—			—			153.2			292.0			246.4			220.8			206.3			172.9			149.8			149.2			92.9			1,683.5
2015			411.3			—			—			—			—			45.8			100.3			86.2			80.9			66.1			54.3			51.4			32.0			517.0
2016			333.1			—			—			—			—			—			40.4			78.9			72.6			58.0			48.3			46.7			28.8			373.7
2017			252.2			—			—			—			—			—			—			17.9			56.0			44.1			36.1			34.8			19.5			208.4
2018			341.8			—			—			—			—			—			—			—			24.3			88.7			71.2			69.1			39.9			293.2
2019			518.6			—			—			—			—			—			—			—			—			47.9			125.7			121.4			70.0			365.0
2020			324.1			—			—			—			—			—			—			—			—			—			32.4			91.7			53.9			178.0
2021			412.4			—			—			—			—			—			—			—			—			—			—			48.4			69.5			117.9
2022			199.4			—			—			—			—			—			—			—			—			—			—			—			18.1			18.1
Subtotal			3,607.4			—			11.6			16.1			167.3			343.3			390.6			407.0			443.4			480.1			519.7			614.6			425.7			3,819.4
Europe Insolvency
2014 (2)			10.9			—			—			—			—			4.3			3.9			3.2			2.6			1.5			0.8			0.3			0.2			16.8
2015			19.0			—			—			—			—			3.0			4.4			5.0			4.8			3.9			2.9			1.6			0.5			26.1
2016			39.3			—			—			—			—			—			6.2			12.7			12.9			10.7			7.9			6.0			2.2			58.6
2017			39.2			—			—			—			—			—			—			1.2			7.9			9.2			9.8			9.4			5.3			42.8
2018			44.9			—			—			—			—			—			—			—			0.6			8.4			10.3			11.7			7.5			38.5
2019			77.2			—			—			—			—			—			—			—			—			5.1			21.1			23.9			15.8			65.9
2020			105.4			—			—			—			—			—			—			—			—			—			6.1			34.6			25.6			66.3
2021			53.3			—			—			—			—			—			—			—			—			—			—			5.4			10.6			16.0
2022			21.5			—			—			—			—			—			—			—			—			—			—			—			2.2			2.2
Subtotal			410.7			—			—			—			—			7.3			14.5			22.1			28.8			38.8			58.9			92.9			69.9			333.2
Total Europe			4,018.1			—			11.6			16.1			167.3			350.6			405.1			429.1			472.2			518.9			578.6			707.5			495.6			4,152.6
Total PRA Group			$	12,386.5		$	3,086.9		$	908.7		$	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		$	1,337.4		$	19,932.1

(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 2021 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.

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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 Adjusted EBITDA for the last twelve months (LTM) ended September 30, 2022 and for the year ended December 31, 2021, to net income, the most directly comparable financial measure calculated and reported in accordance with GAAP. 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, 2022			December 31, 2021
Net income attributable to PRA Group, Inc.															$	135		$	183
Adjustments:
Income tax expense															43			55
Foreign exchange losses															—			1
Interest expense, net															128			124
Other expense															1			—
Depreciation and amortization															15			15
Adjustment for net income attributable to noncontrolling interests															2			12
Recoveries applied to negative allowance less Changes in expected recoveries															842			988
Adjusted EBITDA															$	1,167		$	1,378

Additionally, management evaluates the Company's business using certain ratios that use Adjusted EBITDA, including Debt to Adjusted EBITDA, which is calculated by dividing borrowings by Adjusted EBITDA. The following table reflects our Debt to Adjusted EBITDA for LTM as of September 30, 2022 and for the year ended December 31, 2021:

Debt to Adjusted EBITDA
($ in millions)			LTM			For the Year Ended
			September 30, 2022			December 31, 2021
Borrowings			$	2,380		$	2,609
LTM Adjusted EBITDA			1,167			1,378
Debt to LTM Adjusted EBITDA			2.04			1.89

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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