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Form 8-K PRA GROUP INC For: Aug 08

August 8, 2022 4:09 PM EDT

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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):August 8, 2022
PRA Group, Inc.
_________________________________________
(Exact name of registrant as specified in its charter)
Delaware000-5005875-3078675
(State or other jurisdiction of incorporation)(Commission File Number)(I.R.S. Employer Identification No.)
120 Corporate Boulevard
Norfolk, Virginia23502
(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 classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par value per sharePRAANASDAQ 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 August 8, 2022, PRA Group, Inc. (the “Company”) issued a press release announcing its second quarter 2022 results. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K and is incorporated into this Item 2.02 by reference.

Item 7.01 Regulation FD Disclosure.

The slide presentation being used in connection with the Company’s previously announced August 8, 2022 webcast and conference call to discuss its second quarter 2022 results is available in the Investor Relations section of the Company’s website at https://ir.pragroup.com/events-and-presentations.

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

Item 9.01 Financial Statements and Exhibits
(d)Exhibits
104Cover 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: August 8, 2022By:/s/ Peter M. Graham
Peter M. Graham
Executive Vice President and Chief Financial Officer





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PRA Group Reports Second Quarter 2022 Results

NORFOLK, Va., August 8, 2022 - PRA Group, Inc. (Nasdaq: PRAA) (the "Company"), a global leader in acquiring and collecting nonperforming loans, today reported its financial results for the second quarter of 2022 ("Q2 2022").

Q2 2022 Highlights
Total portfolio purchases of $231.3 million.
Total cash collections were $444.1 million.
Estimated remaining collections (ERC)1 of $5.6 billion.
Cash efficiency ratio2 of 61.3%.
Diluted earnings per share were $0.91.
Common stock repurchases3 of $34.9 million, or 0.8 million shares.
Debt to Adjusted EBITDA4 for the 12 months ended June 30, 2022 was 2.03x.
Available capacity under the Company's credit facilities of $1.6 billion; $452.9 million after considering borrowing base restrictions.

Three Months Ended June 30,Six Months Ended June 30,
($ in thousands, except per share amounts)2022202120222021
Net income attributable to PRA Group, Inc.$36,484 $55,996 $76,456 $114,402 
Diluted earnings per share$0.91 $1.22 $1.88 $2.48 

“We had a solid purchasing quarter, driven by increased portfolio acquisitions in Europe, specifically in Northern Europe,” said Kevin Stevenson, president and chief executive officer. “We continue to see deterioration in consumer savings, higher credit card balances, and rising delinquency rates, which we believe suggests that more supply will be available in the coming months. Our strong balance sheet and geographic diversity provide us with a significant competitive advantage in capitalizing on what appears to be an increasingly favorable purchasing environment, and permit us to be disciplined in our capital allocation strategy. During the quarter, we repurchased nearly $35 million of shares of our common stock, underscoring our commitment to deploy capital in the areas that can generate the highest returns for our shareholders. Looking ahead, we will continue executing this measured strategy, while remaining active in the market and preparing to ramp up our purchasing as supply increases."

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 expense 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 PRA Group, Inc.'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.


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 Source20222021
($ in thousands)Q2Q1Q4Q3Q2
Americas and Australia Core$244,377 $270,284 $257,705 $276,691 $324,845 
Americas Insolvency34,278 35,209 36,851 37,464 37,768 
Europe Core142,470 151,162 155,853 151,625 157,637 
Europe Insolvency22,935 24,325 23,262 22,574 23,579 
Total Cash Collections$444,060 $480,980 $473,671 $488,354 $543,829 
Cash Collection Source -
Constant Currency Adjusted20222021
($ in thousands)Q2Q2
Americas and Australia Core$244,377 $325,895 
Americas Insolvency34,278 37,744 
Europe Core142,470 140,199 
Europe Insolvency22,935 21,227 
Total Cash Collections$444,060 $525,065 

Total cash collections in Q2 2022 decreased 18.3%, or 15.4% on a constant currency adjusted basis, to $444.1 million compared to $543.8 million in the second quarter of 2021 ("Q2 2021"). The decrease was driven primarily by a 32.5% decrease in U.S. call center and other collections, and a 15.8% decrease in U.S. legal collections. The overall decrease in U.S. cash collections was due to excess consumer liquidity in 2021, which generated high levels of collections then, as well as lower levels of portfolio purchases. Europe cash collections decreased by 8.7%; however, on a currency adjusted basis, they increased by 2.5%. For the six months ended June 30, 2022, cash collections decreased $174.7 million compared to the same period last year.
Total portfolio revenue in Q2 2022 was $250.6 million compared to $282.7 million in Q2 2021.

Expenses
Operating expenses in Q2 2022 decreased by $6.9 million, or 3.8%, compared to Q2 2021. The decrease was primarily driven by:
a 6.9% 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; and
a 22.3% decrease in legal collection fees due to lower external legal cash collections, which was partially offset by a 31.1% increase in outside fees and services related to higher corporate legal expenses.
For the six months ended June 30, 2022, operating expenses decreased $17.0 million to $343.2 million compared to $360.1 million in the same period last year.
The effective tax rate for the six months ended June 30, 2022 was 20.3%.

Portfolio Acquisitions
The Company purchased $231.3 million in portfolios of nonperforming loans in Q2 2022.
At the end of Q2 2022, the Company had in place maximum forward flow commitments1 of up to $960.2 million, comprised of $300.9 million in the Americas and Australia and $659.3 million in Europe.

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


Portfolio Purchase Source20222021
($ in thousands)Q2Q1Q4Q3Q2
Americas and Australia Core$99,962 $90,639 $90,263 $162,451 $98,901 
Americas Insolvency6,369 9,118 21,183 9,878 14,642 
Europe Core123,814 38,764 60,430 212,194 106,134 
Europe Insolvency1,202 8,929 29,820 7,424 — 
Total Portfolio Acquisitions$231,347 $147,450 $201,696 $391,947 $219,677 

Share Repurchases
The Company repurchased $34.9 million, or 0.8 million shares, with $92.7 million remaining under its current share repurchase plan as of June 30, 2022.
At June 30, 2022, the Company has repurchased more than 14% 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 August 8, 2023, or call 877-344-7529 in the U.S. or 412-317-0088 outside the U.S. and use access code 6057434 until August 15, 2022.

The Company plans to report its third quarter 2022 results after market close on November 3, 2022.

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.




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 June 30,Six Months Ended June 30,
2022202120222021
Revenues:
Portfolio income$194,009 $219,137 $401,541 $450,809 
Changes in expected recoveries56,567 63,548 86,481 113,684 
Total portfolio revenue250,576 282,685 488,022 564,493 
Fee income6,467 2,453 8,297 4,634 
Other revenue1,219 491 2,548 5,971 
Total revenues258,262 285,629 498,867 575,098 
Operating expenses:
Compensation and employee services74,137 79,632 145,233 153,616 
Legal collection fees9,554 12,289 20,427 25,215 
Legal collection costs17,746 18,469 34,303 39,781 
Agency fees14,826 15,908 32,214 31,499 
Outside fees and services27,493 20,973 46,871 41,733 
Communication9,528 10,594 22,111 23,257 
Rent and occupancy4,633 4,643 9,620 9,123 
Depreciation and amortization3,865 3,815 7,643 7,796 
Other operating expenses12,743 15,092 24,741 28,110 
Total operating expenses174,525 181,415 343,163 360,130 
   Income from operations83,737 104,214 155,704 214,968 
Other income and (expense):
Interest expense, net(31,562)(30,836)(63,310)(62,388)
Foreign exchange gain/(loss)1,319 (1,079)787 (1,105)
Other(181)183 (671)209 
Income before income taxes53,313 72,482 92,510 151,684 
Income tax expense14,177 11,921 18,756 29,243 
Net income39,136 60,561 73,754 122,441 
Adjustment for net income/(loss) attributable to noncontrolling interests2,652 4,565 (2,702)8,039 
Net income attributable to PRA Group, Inc.$36,484 $55,996 $76,456 $114,402 
Net income per common share attributable to PRA Group, Inc.:
Basic$0.92 $1.22 $1.90 $2.50 
Diluted$0.91 $1.22 $1.88 $2.48 
Weighted average number of shares outstanding:
Basic39,779 45,807 40,278 45,738 
Diluted39,900 46,059 40,602 46,051 




PRA Group, Inc.
Consolidated Balance Sheets
(Amounts in thousands)
(unaudited)
June 30, 2022December 31,
2021
Assets
Cash and cash equivalents$67,974 $87,584 
Investments86,386 92,977 
Finance receivables, net3,183,632 3,428,285 
Income taxes receivable42,207 41,146 
Deferred tax assets, net63,810 67,760 
Right-of-use assets55,877 56,713 
Property and equipment, net54,182 54,513 
Goodwill437,032 480,263 
Other assets97,653 57,002 
Total assets$4,088,753 $4,366,243 
Liabilities and Equity
Liabilities:
Accounts payable$4,689 $3,821 
Accrued expenses97,139 127,802 
Income taxes payable15,575 19,276 
Deferred tax liabilities, net44,029 36,630 
Lease liabilities60,681 61,188 
Interest-bearing deposits114,383 124,623 
Borrowings2,481,622 2,608,714 
Other liabilities28,268 59,352 
Total liabilities2,846,386 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, 39,639 shares issued and outstanding at June 30, 2022; 100,000 shares authorized, 41,008 shares issued and outstanding at December 31, 2021396 410 
Additional paid-in capital— — 
Retained earnings1,554,237 1,552,845 
Accumulated other comprehensive loss(347,821)(266,909)
Total stockholders' equity - PRA Group, Inc.1,206,812 1,286,346 
Noncontrolling interest35,555 38,491 
Total equity1,242,367 1,324,837 
Total liabilities and equity$4,088,753 $4,366,243 







Select Expenses (Income)
Amounts in thousands, pre-tax
Three Months Ended
June 30,
2022
March 31,
2022
December 31,
2021
September 30,
2021
June 30,
2021
March 31,
2021
December 31,
2020
September 30,
2020
Noncash interest expense - amortization of debt discount— — — — — — 1,959 2,388 
Noncash interest expense - amortization of debt issuance costs2,471 2,627 2,455 2,406 2,391 2,256 2,393 2,476 
Change in fair value of derivatives1,525 2,726 3,115 2,982 2,911 3,102 3,875 3,701 
Amortization of intangibles77 83 (269)104 105 181 1,792 360 
Stock-based compensation expense3,849 3,891 3,470 4,317 4,040 4,113 5,370 3,097 




Purchase Price Multiples
as of June 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 $4,129,821 $28,610 321%240%
2012254,076 658,792 14,240 259%226%
2013390,826 901,496 18,209 231%211%
2014404,117 867,655 29,052 215%204%
2015443,114 909,063 67,094 205%205%
2016455,767 1,100,432 126,762 241%201%
2017532,851 1,216,134 195,337 228%193%
2018653,975 1,435,326 256,051 219%202%
2019581,476 1,264,852 338,254 218%206%
2020435,668 939,503 412,666 216%213%
2021435,846 823,057 652,069 189%191%
2022189,008 326,906 314,050 173%173%
Subtotal6,064,545 14,573,037 2,452,394 
Americas Insolvency
1996-2011786,827 1,752,738 487 223%174%
2012251,395 393,285 34 156%136%
2013227,834 355,469 241 156%133%
2014148,420 218,894 930 147%124%
201563,170 87,521 188 139%125%
201691,442 116,606 520 128%123%
2017275,257 354,999 11,154 129%125%
201897,879 136,590 26,747 140%127%
2019123,077 166,922 63,023 136%128%
202062,130 86,969 54,366 140%136%
202155,187 75,444 62,017 137%136%
202215,487 21,168 20,497 137%137%
Subtotal2,198,105 3,766,605 240,204 
Total Americas and Australia8,262,650 18,339,642 2,692,598 
Europe Core
201220,409 43,182 — 212%187%
201320,334 26,618 — 131%119%
2014 (1)
773,811 2,326,310 427,901 301%208%
2015411,340 727,139 169,579 177%160%
2016333,090 561,978 200,511 169%167%
2017252,174 358,481 131,223 142%144%
2018341,775 527,914 233,268 154%148%
2019518,610 775,679 392,617 150%152%
2020324,119 555,868 335,393 172%172%
2021412,411 702,825 542,754 170%170%
2022156,018 265,207 243,846 170%170%
Subtotal3,564,091 6,871,201 2,677,092 
Europe Insolvency
2014 (1)
10,876 18,507 170%129%
201518,973 28,867 332 152%139%
201639,338 56,985 2,558 145%130%
201739,235 49,996 6,627 127%128%
201844,908 50,016 13,881 111%123%
201977,218 102,120 38,269 132%130%
2020105,440 142,714 74,518 135%129%
202153,230 71,526 52,846 134%134%
20229,294 12,707 11,946 137%137%
Subtotal398,512 533,438 200,982 
Total Europe3,962,603 7,404,639 2,878,074 
Total PRA Group$12,225,253 $25,744,281 $5,570,672 
(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)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 June 30, 2022 exchange rate.
(6)The Original Purchase Price Multiple represents the purchase price multiple at the end of the year of acquisition.



Portfolio Financial Information
Year-to-date as of June 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 June 30, 2022 (3)
Americas and Australia Core
1996-2011$9,290 $4,850 $4,121 $8,971 $6,112 
20124,060 1,537 2,856 4,393 4,779 
20137,009 2,407 3,267 5,674 7,428 
20148,428 3,112 4,006 7,118 10,827 
201511,397 6,968 (903)6,065 26,081 
201622,959 16,400 (8,667)7,733 42,829 
201745,524 22,712 1,644 24,356 86,986 
201886,025 29,629 38,110 67,739 148,802 
2019103,082 42,796 10,968 53,764 191,387 
2020108,985 49,429 (2,664)46,765 236,150 
202194,843 60,622 (29,540)31,082 347,652 
202213,059 9,735 (382)9,353 184,283 
Subtotal514,661 250,197 22,816 273,013 1,293,316 
Americas Insolvency
1996-2011270 303 (34)269 — 
2012300 33 267 300 — 
2013326 132 195 327 — 
2014402 432 (72)360 101 
2015318 119 118 237 137 
20161,063 193 136 329 326 
201713,729 1,707 1,753 3,460 10,023 
201813,556 1,942 2,566 4,508 24,213 
201920,072 3,306 3,679 6,985 56,306 
20209,970 3,120 908 4,028 44,517 
20218,811 3,556 925 4,481 48,766 
2022670 379 355 734 15,391 
Subtotal69,487 15,222 10,796 26,018 199,780 
Total Americas and Australia584,148 265,419 33,612 299,031 1,493,096 
Europe Core
2012483 — 483 483 — 
2013276 — 276 276 — 
2014 (1)
65,187 39,018 21,507 60,525 115,595 
201522,334 10,469 5,643 16,112 91,262 
201620,077 9,781 193 9,974 118,088 
201713,643 4,750 2,254 7,004 89,349 
201828,166 9,371 2,668 12,039 155,679 
201949,329 14,970 4,040 19,010 268,004 
202037,785 14,558 3,257 17,815 205,856 
202148,978 21,573 2,524 24,097 324,509 
20227,374 1,789 2,808 4,597 153,103 
Subtotal293,632 126,279 45,653 171,932 1,521,445 
Europe Insolvency
2014 (1)
146 12 124 136 
2015386 133 (94)39 261 
20161,676 400 77 477 1,952 
20173,834 360 644 1,004 6,079 
20185,203 721 (1,224)(503)12,571 
201910,823 2,017 570 2,587 33,313 
202017,381 3,341 6,329 9,670 64,336 
20217,025 2,551 590 3,141 41,617 
2022786 308 200 508 8,958 
Subtotal47,260 9,843 7,216 17,059 169,091 
Total Europe340,892 136,122 52,869 188,991 1,690,536 
Total PRA Group$925,040 $401,541 $86,481 $488,022 $3,183,632 
(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 June 30, 2022 exchange rate.










Cash Collections by Year, By Year of Purchase (1)
as of June 30, 2022
Amounts in millions
Cash Collections
Purchase Period
Purchase Price (3)(4)
1996-201120122013201420152016201720182019202020212022Total
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 $9.3 $4,094.0 
2012254.1 — 56.9 173.6 146.2 97.3 60.0 40.0 27.8 17.9 11.8 9.0 4.1 644.6 
2013390.8 — — 101.6 247.8 194.0 120.8 78.9 56.4 36.9 23.2 16.7 7.0 883.3 
2014404.1 — — — 92.7 253.4 170.3 114.2 82.2 55.3 31.9 22.3 8.4 830.7 
2015443.1 — — — — 117.0 228.4 185.9 126.6 83.6 57.2 34.9 11.4 845.0 
2016455.8 — — — — 138.7 256.5 194.6 140.6 105.9 74.2 23.0 933.5 
2017532.9 — — — — — — 107.3 278.7 256.5 192.5 130.0 45.5 1010.5 
2018654.0 — — — — — — — 122.7 361.9 337.7 239.9 86.0 1,148.2 
2019581.5— — — — — — — — 143.8 349.0 289.8 103.1 885.7 
2020435.7 — — — — — — — — — 133.0 284.3 109.0 526.3 
2021435.8 — — — — — — — — — — 85.0 94.8 179.8 
2022189.0 — — — — — — — — — — — 13.1 13.1 
Subtotal6,064.6 2,419.5 542.9 656.5 753.0 844.8 837.2 860.8 945.0 1,141.5 1,271.9 1,206.9 514.7 11,994.7 
Americas Insolvency
1996-2011786.8 667.4 336.8 313.7 244.7 128.2 44.6 8.4 4.0 2.1 1.3 0.8 0.3 1,752.3 
2012251.4 — 17.4 103.6 94.1 80.1 60.7 29.3 4.3 1.9 0.9 0.6 0.3 393.2 
2013227.8 — — 52.5 82.6 81.7 63.4 47.8 21.9 2.9 1.3 0.8 0.3 355.2 
2014148.4 — — — 37.0 50.9 44.3 37.4 28.8 15.8 2.2 1.1 0.4 217.9 
201563.2 — — — — 3.4 17.9 20.1 19.8 16.7 7.9 1.3 0.3 87.4 
201691.4 — — — — — 18.9 30.4 25.0 19.9 14.4 7.4 1.1 117.1 
2017275.3 — — — — — — 49.1 97.3 80.9 58.8 44.0 13.7 343.8 
201897.9 — — — — — — — 6.7 27.4 30.5 31.6 13.6 109.8 
2019123.1 — — — — — — — — 13.4 31.4 39.1 20.0 103.9 
202062.1 — — — — — — — — — 6.5 16.1 10.0 32.6 
202155.2 — — — — — — — — — — 4.5 8.8 13.3 
202215.5 — — — — — — — — — — — 0.7 0.7 
Subtotal2,198.1 667.4 354.2 469.8 458.4 344.3 249.8 222.5 207.8 181.0 155.2 147.3 69.5 3,527.2 
Total Americas and Australia8,262.7 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 1,354.2 584.2 15,521.9 
Europe Core
201220.4 — 11.6 9.0 5.6 3.2 2.2 2.0 2.0 1.5 1.2 1.2 0.5 40.0 
201320.3 — — 7.1 8.5 2.3 1.3 1.2 1.3 0.9 0.7 0.7 0.3 24.3 
2014 (2)
773.8 — — — 153.2 292.0 246.4 220.8 206.3 172.9 149.8 149.2 65.2 1,655.8 
2015411.3 — — — — 45.8 100.3 86.2 80.9 66.1 54.3 51.4 22.3 507.3 
2016333.1 — — — — — 40.4 78.9 72.6 58.0 48.3 46.7 20.1 365.0 
2017252.2 — — — — — — 17.9 56.0 44.1 36.1 34.8 13.6 202.5 
2018341.8 — — — — — — — 24.3 88.7 71.2 69.1 28.2 281.5 
2019518.6 — — — — — — — — 47.9 125.7 121.4 49.2 344.2 
2020324.1 — — — — — — — — — 32.4 91.7 37.8 161.9 
2021412.4 — — — — — — — — — — 48.4 49.0 97.4 
2022156.0 — — — — — — — — — — — 7.4 7.4 
Subtotal3,564.0 — 11.6 16.1 167.3 343.3 390.6 407.0 443.4 480.1 519.7 614.6 293.6 3,687.3 
Europe Insolvency
2014 (2)
10.9 — — — — 4.3 3.9 3.2 2.6 1.5 0.8 0.3 0.1 16.7 
201519.0 — — — — 3.0 4.4 5.0 4.8 3.9 2.9 1.6 0.4 26.0 
201639.3 — — — — — 6.2 12.7 12.9 10.7 7.9 6.0 1.7 58.1 
201739.2 — — — — — — 1.2 7.9 9.2 9.8 9.4 3.8 41.3 
201844.9 — — — — — — — 0.6 8.4 10.3 11.7 5.2 36.2 
201977.2 — — — — — — — — 5.1 21.1 23.9 10.8 60.9 
2020105.4 — — — — — — — — — 6.1 34.6 17.5 58.2 
202153.3 — — — — — — — — — — 5.4 7.0 12.4 
20229.3 — — — — — — — — — — — 0.8 0.8 
Subtotal398.5 — — — — 7.3 14.5 22.1 28.8 38.8 58.9 92.9 47.3 310.6 
Total Europe3,962.5 — 11.6 16.1 167.3 350.6 405.1 429.1 472.2 518.9 578.6 707.5 340.9 3,997.9 
Total PRA Group$12,225.2 $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 $925.1 $19,519.8 
(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 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.








Use of Non-GAAP Financial Measures

PRA Group, Inc. reports 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 June 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
LTMFor the Year Ended
Adjusted EBITDA for PRA Group ($ in millions)June 30, 2022December 31, 2021
Net income attributable to PRA Group, Inc.$145 $183 
Adjustments:
Income tax expense44 55 
Foreign exchange (gains)/losses(1)
Interest expense, net125 124 
Other expense— 
Depreciation and amortization15 15 
Adjustment for net income attributable to noncontrolling interests12 
Recoveries applied to negative allowance less Changes in expected recoveries893 988 
Adjusted EBITDA$1,224 $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 June 30, 2022 and for the year ended December 31, 2021 (amounts in millions):
Debt to Adjusted EBITDA
LTMFor the Year Ended
June 30, 2022December 31, 2021
Borrowings$2,482 $2,609 
LTM Adjusted EBITDA1,224 1,378 
Debt to LTM Adjusted EBITDA2.03 1.89 







Investor Contact:
Najim Mostamand, CFA
Vice President, Investor Relations
757-431-7913
IR@PRAGroup.com

News Media Contact:
Elizabeth Kersey
Senior Vice President, Communications and Public Policy
(757) 431-3398
Elizabeth.Kersey@PRAGroup.com



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