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PRA Group Reports Second Quarter 2023 Results

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PRA Group reports Q2 2023 financial results. Total portfolio purchases increased 41.7% YoY to $327.8 million. Total cash collections were $419.3 million. Diluted earnings per share were $(0.10). Debt to Adjusted EBITDA for the 12 months ended June 30, 2023, was 2.76x. Available capacity under credit facilities of $1.4 billion. Operating expenses decreased by $10.9 million compared to Q2 2022. The Company purchased $327.8 million in portfolios of nonperforming loans in Q2 2023, an increase of 41.7% YoY.
Positive
  • Total portfolio purchases increased 41.7% YoY to $327.8 million.
  • Total cash collections were $419.3 million.
Negative
  • Diluted earnings per share were $(0.10).
  • Operating expenses decreased by $10.9 million compared to Q2 2022.

NORFOLK, Va., Aug. 7, 2023 /PRNewswire/ -- 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 2023 ("Q2 2023").

Q2 2023 Highlights

  • Total portfolio purchases increased 41.7% year-over-year to $327.8 million.
  • Total cash collections were $419.3 million.
  • Estimated remaining collections (ERC)1 of $5.9 billion.
  • Cash efficiency ratio2 of 61.2%.
  • Diluted earnings per share were $(0.10).
  • Debt to Adjusted EBITDA3 for the 12 months ended June 30, 2023 was 2.76x.
  • Available capacity under the Company's credit facilities of $1.4 billion; $332.5 million after considering borrowing base restrictions.

 












Three Months Ended June 30,


Six Months Ended June 30,

($ in thousands, except per share amounts)


2023


2022


2023


2022

Net income/(loss) attributable to PRA Group, Inc.


$          (3,804)


$             36,484


$        (62,433)


$         76,456

Diluted earnings per share


$            (0.10)


$                  0.91


$            (1.60)


$              1.88










"The second quarter was an important and positive step in the right direction, as we remain focused on driving organic growth, optimizing business processes, and further capitalizing on the increase in the supply of portfolios with improved pricing," said Vikram Atal, president and chief executive officer. "Cash collections exceeded our internal expectations, primarily driven by the strength of our European operations. During the quarter, we purchased $328 million of portfolios globally, which represents a record amount for a second quarter in the Company's history. The recent improvements in U.S. supply, pricing, and returns have enabled us to gradually increase our investment levels in that market, while investments in Europe remain healthy. Our balance sheet remains strong, and we have the funding capacity to continue growing ERC. Overall, we believe we are laying the foundation for a stronger,  profitable, and higher performing PRA."

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)


Q2


Q1


Q4


Q3


Q2

Americas and Australia Core


$       220,886


$       227,960


$       205,619


$       225,775


$       244,377

Americas Insolvency


26,384


25,751


27,971


31,911


34,278

Europe Core


149,324


134,005


134,016


132,072


142,470

Europe Insolvency


22,725


23,568


24,051


22,586


22,935

Total Cash Collections


$       419,319


$       411,284


$       391,657


$       412,344


$       444,060


































Cash Collection Source -











Constant Currency-Adjusted


2023








2022

($ in thousands)


Q2








Q2

Americas and Australia Core


$       220,886








$       243,506

Americas Insolvency


26,384








34,253

Europe Core


149,324








141,056

Europe Insolvency


22,725








22,882

Total Cash Collections


$       419,319








$       441,697












 

  • Total cash collections in Q2 2023 decreased 5.6% (or 5.1% on a constant currency-adjusted basis) to $419.3 million, compared to $444.1 million in the second quarter of 2022 ("Q2 2022"). The decrease was primarily due to a 23.9% decrease in U.S. call center and other collections. This decrease was partially offset by a 58.6% increase in Other Americas and Australia Core cash collections. For the six months ended June 30, 2023, cash collections decreased $94.4 million compared to the same period last year.
  • Total portfolio revenue in Q2 2023 was $205.4 million compared to $250.6 million in Q2 2022. For the six months ended June 30, 2023, total portfolio revenue was $356.8 million compared to $488.0 million in the same period last year.

Expenses

  • Operating expenses in Q2 2023 decreased by $10.9 million, or 6.2%, compared to Q2 2022. The decrease was primarily driven by:
    • a $9.2 million decrease in outside fees and services, primarily due to higher corporate legal expenses in the prior year; and
    • an $8.3 million decrease in compensation and employee services, primarily due to lower compensation accruals and lower healthcare expenses compared to the prior year.
  • This decrease was partially offset by:
    • a $3.8 million increase in legal collection costs; and
    • a $2.9 million increase in agency fees, driven by higher cash collections in South America
  • For the six months ended June 30, 2023, operating expenses increased by $9.6 million to $352.8 million, compared to $343.2 million in the same period last year.
  • The effective tax rate for the six months ended June 30, 2023 was 24.5%.

Portfolio Acquisitions

  • The Company purchased $327.8 million in portfolios of nonperforming loans in Q2 2023, an increase of 41.7% compared to Q2 2022.
  • At the end of Q2 2023, the Company had in place maximum forward flow commitments1 of up to $557.7 million, comprised of $398.4 million in the Americas and Australia and $159.3 million in Europe.












Portfolio Purchase Source



2023


2022

($ in thousands)



Q2


Q1


Q4


Q3


Q2

Americas and Australia Core



$       171,440


$         116,867


$         118,581


$         100,780


$           99,962

Americas Insolvency



12,189


15,701


8,967


8,988


6,369

Europe Core



136,834


90,454


140,011


59,426


123,814

Europe Insolvency



7,296


7,203


20,535


13,910


1,202

Total Portfolio Acquisitions



$       327,759


$         230,225


$         288,094


$         183,104


$         231,347















1.

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

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 7, 2024, or call 877-344-7529 in the U.S. or 412-317-0088 outside the U.S. and use access code 5942652 until August 14, 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 June 30,


Six Months Ended June 30,


2023


2022


2023


2022

Revenues:








Portfolio income

$               184,290


$                194,009


$                372,532


$                401,541

Changes in expected recoveries

21,136


56,567


(15,776)


86,481

Total portfolio revenue

205,426


250,576


356,756


488,022

Other revenue

3,810


7,686


7,950


10,845

Total revenues

209,236


258,262


364,706


498,867

Operating expenses:








Compensation and employee services

65,788


74,137


148,191


145,233

Legal collection fees

9,551


9,554


18,389


20,427

Legal collection costs

21,522


17,746


45,467


34,303

Agency fees

17,677


14,826


35,055


32,214

Outside fees and services

18,262


27,493


43,206


46,871

Communication

10,117


9,528


20,644


22,111

Rent and occupancy

4,319


4,633


8,767


9,620

Depreciation and amortization

3,482


3,865


7,071


7,643

Other operating expenses

12,957


12,743


25,999


24,741

Total operating expenses

163,675


174,525


352,789


343,163

   Income from operations

45,561


83,737


11,917


155,704

Other income and (expense):








Interest expense, net

(43,022)


(31,562)


(81,305)


(63,310)

Foreign exchange gain, net

429


1,319


420


787

Other

(230)


(181)


(880)


(671)

Income/(loss) before income taxes

2,738


53,313


(69,848)


92,510

Income tax expense/(benefit)

1,578


14,177


(17,105)


18,756

Net income/(loss)

1,160


39,136


(52,743)


73,754

Adjustment for net income/(loss)

attributable to noncontrolling interests

4,964


2,652


9,690


(2,702)

Net income/(loss) attributable to PRA

Group, Inc.

$                  (3,804)


$                   36,484


$                 (62,433)


$                   76,456

Net income/(loss) per common share attributable to PRA

Group, Inc.:








Basic

$                    (0.10)


$                       0.92


$                     (1.60)


$                       1.90

Diluted

$                    (0.10)


$                       0.91


$                     (1.60)


$                       1.88

Weighted average number of shares outstanding:








Basic

39,190


39,779


39,111


40,278

Diluted

39,190


39,900


39,111


40,602

 

PRA Group, Inc.

Consolidated Balance Sheets

(Amounts in thousands)



(unaudited)




June 30,
2023


December 31,
2022

Assets




Cash and cash equivalents

$                111,375


$                  83,376

Investments

76,169


79,948

Finance receivables, net

3,424,548


3,295,008

Income taxes receivable

36,327


31,774

Deferred tax assets, net

56,758


56,908

Right-of-use assets

51,135


54,506

Property and equipment, net

45,874


51,645

Goodwill

414,905


435,921

Other assets

103,768


86,588

Total assets

$             4,320,859


$             4,175,674

Liabilities and Equity




Liabilities:




Accounts payable

$                     6,345


$                     7,329

Accrued expenses

118,877


111,395

Income taxes payable

18,658


25,693

Deferred tax liabilities, net

18,463


42,918

Lease liabilities

55,723


59,384

Interest-bearing deposits

99,318


112,992

Borrowings

2,739,667


2,494,858

Other liabilities

24,134


34,355

Total liabilities

3,081,185


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, 39,242 shares issued

and outstanding at June 30, 2023; 100,000 shares authorized, 38,980 shares

issued and outstanding at December 31, 2022

392


390

Additional paid-in capital

2,541


2,172

Retained earnings

1,510,592


1,573,025

Accumulated other comprehensive loss

(348,000)


(347,926)

Total stockholders' equity - PRA Group, Inc.

1,165,525


1,227,661

Noncontrolling interest

74,149


59,089

Total equity

1,239,674


1,286,750

Total liabilities and equity

$             4,320,859


$             4,175,674

 

Select Expenses (Income)

Amounts in thousands, pre-tax











Three Months Ended


June 30,
2023

March 31,
2023

December 31,
2022

September 30,
2022

June 30,
2022

March 31,
2022

December 31,
2021

September 30,
2021

Noncash interest

expense -

amortization of debt

issuance costs

2,384

2,441

2,444

2,555

2,471

2,627

2,455

2,406

Change in fair value

of derivatives

(6,960)

(5,470)

(3,309)

(1,042)

1,525

2,726

3,115

2,982

Amortization of

intangibles

68

66

73

73

77

83

(269)

104

Stock-based

compensation

expense

2,715

3,799

2,206

3,101

3,849

3,891

3,470

4,317

 

Purchase Price Multiples

as of June 30, 2023

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

$              4,801,032

$                  35,742

311 %

238 %

2013

390,826

908,961

15,139

233 %

211 %

2014

404,117

875,120

23,495

217 %

204 %

2015

443,114

898,649

41,331

203 %

205 %

2016

455,767

1,075,028

75,099

236 %

201 %

2017

532,851

1,196,768

121,179

225 %

193 %

2018

653,975

1,463,790

175,567

224 %

202 %

2019

581,476

1,292,608

228,655

222 %

206 %

2020

435,668

947,717

266,397

218 %

213 %

2021

435,846

779,861

454,830

179 %

191 %

2022

406,082

717,643

565,409

177 %

179 %

2023

290,363

543,178

521,588

187 %

187 %

Subtotal

6,571,981

15,500,355

2,524,431



Americas Insolvency





1996-2012

1,038,223

2,146,538

141

207 %

165 %

2013

227,834

355,648

71

156 %

133 %

2014

148,420

218,724

198

147 %

124 %

2015

63,170

87,934

144

139 %

125 %

2016

91,442

117,589

300

129 %

123 %

2017

275,257

356,042

2,196

129 %

125 %

2018

97,879

136,240

7,243

139 %

127 %

2019

123,077

168,530

31,391

137 %

128 %

2020

62,130

90,253

37,232

145 %

136 %

2021

55,187

73,503

41,973

133 %

136 %

2022

33,442

46,367

39,066

139 %

139 %

2023

27,890

37,711

36,646

135 %

135 %

Subtotal

2,243,951

3,835,079

196,601



Total Americas

and Australia

8,815,932

19,335,434

2,721,032



Europe Core






2012

20,409

44,201

217 %

187 %

2013

20,334

27,152

1

134 %

119 %

2014 (1)

773,811

2,376,921

364,157

307 %

208 %

2015

411,340

728,356

141,410

177 %

160 %

2016

333,090

569,221

174,415

171 %

167 %

2017

252,174

358,126

111,139

142 %

144 %

2018

341,775

542,585

211,437

159 %

148 %

2019

518,610

811,906

359,355

157 %

152 %

2020

324,119

557,541

280,147

172 %

172 %

2021

412,411

696,596

453,152

169 %

170 %

2022

359,447

579,891

512,047

161 %

162 %

2023

229,639

380,036

367,155

165 %

165 %

Subtotal

3,997,159

7,672,532

2,974,415



Europe Insolvency





2014 (1)

10,876

18,759

172 %

129 %

2015

18,973

29,137

29

154 %

139 %

2016

39,338

57,203

879

145 %

130 %

2017

39,235

51,448

2,859

131 %

128 %

2018

44,908

52,496

7,939

117 %

123 %

2019

77,218

111,099

27,995

144 %

130 %

2020

105,440

156,603

56,480

149 %

129 %

2021

53,230

71,526

39,592

134 %

134 %

2022

44,604

60,962

52,786

137 %

137 %

2023

14,903

20,194

19,764

136 %

136 %

Subtotal

448,725

629,427

208,323



Total Europe

4,445,884

8,301,959

3,182,738



Total PRA Group

$                13,261,816

$            27,637,393

$              5,903,770





(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, 2022 ("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 June 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

Year-to-date as of June 30, 2023

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, 2023 (3)

Americas and Australia Core






1996-2012

$                     9,407

$              5,726

$                      2,165

$                      7,891

$                          8,736

2013

5,018

2,074

1,691

3,765

6,184

2014

6,072

2,647

1,592

4,239

8,721

2015

7,298

4,546

(1,742)

2,804

16,768

2016

12,881

8,924

(2,923)

6,001

24,568

2017

24,012

14,002

(7,329)

6,673

50,764

2018

51,716

21,384

1,099

22,483

96,987

2019

62,005

27,748

(3,330)

24,418

123,803

2020

71,291

31,280

(6,902)

24,378

148,339

2021

76,537

43,081

(28,614)

14,467

240,168

2022

101,232

51,627

959

52,586

339,760

2023

21,377

12,774

3,748

16,522

285,203

Subtotal

448,846

225,813

(39,586)

186,227

1,350,001

Americas Insolvency






1996-2012

400

145

258

403

2013

142

71

71

142

2014

245

148

51

199

2015

178

69

44

113

74

2016

451

82

138

220

249

2017

2,978

291

680

971

1,963

2018

8,083

780

(1,051)

(271)

6,851

2019

15,448

1,902

531

2,433

29,200

2020

10,026

2,334

561

2,895

32,162

2021

9,004

2,508

614

3,122

34,969

2022

4,115

1,997

270

2,267

30,625

2023

1,065

795

300

1,095

27,709

Subtotal

52,135

11,122

2,467

13,589

163,802

Total Americas

and Australia

500,981

236,935

(37,119)

199,816

1,513,803

Europe Core






2012

365

365

365

2013

181

181

181

2014 (1)

55,192

35,710

7,687

43,397

102,679

2015

17,749

8,435

275

8,710

77,966

2016

15,146

7,950

(274)

7,676

102,601

2017

10,432

3,863

(734)

3,129

76,915

2018

21,311

7,788

1,290

9,078

140,472

2019

38,976

12,329

9,440

21,769

246,350

2020

29,367

11,374

(96)

11,278

172,695

2021

37,411

17,015

(4,298)

12,717

273,361

2022

44,445

17,762

(207)

17,555

320,550

2023

12,754

4,091

2,628

6,719

222,815

Subtotal

283,329

126,317

16,257

142,574

1,736,404

Europe Insolvency






2014 (1)

128

128

128

2015

256

18

157

175

26

2016

875

149

214

363

651

2017

2,461

162

491

653

2,663

2018

3,909

397

(82)

315

7,290

2019

9,275

1,401

543

1,944

24,764

2020

15,653

2,559

3,104

5,663

50,125

2021

7,343

1,907

187

2,094

33,095

2022

5,969

2,386

143

2,529

40,826

2023

424

301

201

502

14,901

Subtotal

46,293

9,280

5,086

14,366

174,341

Total Europe

329,622

135,597

21,343

156,940

1,910,745

Total PRA Group

$                 830,603

$          372,532

$                   (15,776)

$                  356,756

$                    3,424,548



(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 June 30, 2023 exchange rate.

 

Cash Collections by Year, By Year of Purchase (1)

as of June 30, 2023

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

$     9.4

$ 4,758.1

2013

390.8

101.6

247.9

194.0

120.8

78.9

56.5

36.9

23.2

16.7

12.5

5.0

894.0

2014

404.1

92.7

253.5

170.3

114.2

82.2

55.3

31.9

22.3

15.0

6.1

843.5

2015

443.1

117.0

228.4

185.9

126.6

83.6

57.2

34.9

19.5

7.3

860.4

2016

455.8

138.7

256.5

194.6

140.6

105.9

74.2

38.4

12.9

961.8

2017

532.9

107.3

278.7

256.5

192.5

130.0

76.3

24.0

1065.3

2018

654.0

122.7

361.9

337.7

239.9

146.1

51.7

1260.0

2019

581.5

143.8

349.0

289.8

177.7

62.0

1,022.3

2020

435.7

132.9

284.3

192.0

71.3

680.5

2021

435.9

85.0

177.3

76.5

338.8

2022

406.1

67.7

101.2

168.9

2023

290.4

21.4

21.4

Subtotal

6,572.2

2,962.4

656.5

753.1

844.8

837.1

860.9

945.1

1,141.5

1,271.8

1,207.0

946.0

448.8

12,875.0

Americas Insolvency














1996-2012

1,038.2

1,021.6

417.3

338.8

208.3

105.4

37.7

8.3

3.9

2.3

1.4

1.1

0.4

2,146.5

2013

227.8

52.5

82.6

81.7

63.4

47.8

22.0

2.9

1.3

0.8

0.5

0.1

355.6

2014

148.4

37.1

50.9

44.3

37.4

28.8

15.8

2.2

1.1

0.7

0.2

218.5

2015

63.2

3.4

17.9

20.1

19.8

16.7

7.9

1.3

0.6

0.2

87.9

2016

91.4

18.9

30.4

25.1

19.9

14.4

7.4

1.8

0.5

118.4

2017

275.3

49.1

97.3

80.9

58.8

44.0

20.8

3.0

353.9

2018

97.9

6.7

27.4

30.5

31.6

24.6

8.1

128.9

2019

123.1

13.5

31.4

39.1

37.8

15.4

137.2

2020

62.1

6.5

16.1

20.4

10.0

53.0

2021

55.2

4.6

17.9

9.0

31.5

2022

33.4

3.2

4.1

7.3

2023

27.9

1.1

1.1

Subtotal

2,243.9

1,021.6

469.8

458.5

344.3

249.9

222.5

208.0

181.0

155.3

147.4

129.4

52.1

3,639.8

Total Americas

and Australia

8,816.1

3,984.0

1,126.3

1,211.6

1,189.1

1,087.0

1,083.4

1,153.1

1,322.5

1,427.1

1,354.4

1,075.4

500.9

16,514.8

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

0.4

40.8

2013

20.3

7.1

8.5

2.4

1.3

1.2

1.3

0.9

0.7

0.7

0.5

0.2

24.8

2014 (2)

773.8

153.2

292.0

246.4

220.8

206.3

172.9

149.8

149.3

122.2

55.2

1,768.1

2015

411.3

45.8

100.3

86.2

80.9

66.1

54.3

51.4

40.7

17.7

543.4

2016

333.1

40.4

78.9

72.6

58.0

48.3

46.7

36.9

15.1

396.9

2017

252.2

17.9

56.0

44.1

36.1

34.8

25.2

10.4

224.5

2018

341.8

24.3

88.7

71.3

69.1

50.7

21.3

325.4

2019

518.6

48.0

125.7

121.4

89.8

39.0

423.9

2020

324.1

32.3

91.7

69.1

29.4

222.5

2021

412.4

48.5

89.9

37.4

175.8

2022

359.5

33.9

44.4

78.3

2023

229.6

12.8

12.8

Subtotal

3,997.1

11.6

16.1

167.3

343.4

390.6

407.0

443.4

480.2

519.7

614.8

559.8

283.3

4,237.2

Europe Insolvency













2014 (2)

10.9

4.3

3.9

3.2

2.6

1.6

0.8

0.3

0.2

0.1

17.0

2015

19.0

3.0

4.4

5.0

4.8

3.9

2.9

1.6

0.7

0.3

26.6

2016

39.3

6.2

12.7

12.9

10.7

8.0

6.0

2.7

0.9

60.1

2017

39.2

1.2

7.9

9.2

9.8

9.4

6.5

2.5

46.5

2018

44.9

0.6

8.4

10.3

11.7

9.8

3.9

44.7

2019

77.2

5.0

21.1

23.9

21.0

9.3

80.3

2020

105.4

6.1

34.7

34.1

15.7

90.6

2021

53.2

5.5

14.4

7.3

27.2

2022

44.6

4.5

6.0

10.5

2023

14.9

0.4

0.4

Subtotal

448.6

7.3

14.5

22.1

28.8

38.8

59.0

93.1

93.9

46.4

403.9

Total Europe

4,445.7

11.6

16.1

167.3

350.7

405.1

429.1

472.2

519.0

578.7

707.9

653.7

329.7

4,641.1

Total PRA Group

$     13,261.8

$  3,995.6

$  1,142.4

$  1,378.9

$  1,539.8

$  1,492.1

$  1,512.5

$  1,625.3

$  1,841.5

$  2,005.8

$  2,062.3

$  1,729.1

$ 830.6

$  21,155.9



(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 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 June 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)

June 30, 2023

December 31, 2022

Net income/(loss) attributable to PRA Group, Inc.

$                                  (22)

$                                  117

Adjustments:







Income tax expense

1

37

Foreign exchange gains

(1)

(1)

Interest expense, net

149

131

Other expense

1

1

Depreciation and amortization

15

15

Adjustment for net income attributable to noncontrolling interests

13

1

Recoveries applied to negative allowance less Changes in expected

recoveries

837

806

Adjusted EBITDA

$                                  993

$                              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 June 30, 2023 and for the year ended December 31, 2022 ($ in millions):

Debt to Adjusted EBITDA


LTM

For the Year Ended


June 30, 2023

December 31, 2022

Borrowings

$                              2,740

$                              2,495

LTM Adjusted EBITDA

993

1,107

Debt to LTM Adjusted EBITDA

2.76

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) 431-3398
Elizabeth.Kersey@PRAGroup.com

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/pra-group-reports-second-quarter-2023-results-301894933.html

SOURCE PRA Group

PRA Group, Inc.

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