EX-99.1 2 newearningreleaseq42022.htm EX-99.1

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.

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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)						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.

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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.

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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

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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

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Select Expenses (Income) Amounts in thousands, pre-tax
			Three Months Ended
			December 31, 2022			September 30, 2022			June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021			March 31, 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

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Purchase Price Multiples as of December 31, 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
1996-2012			$	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.

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Portfolio Financial Information For the Year Ended December 31, 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 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.

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Cash Collections by Year, By Year of Purchase (1) as of December 31, 2022 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.

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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 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

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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