PRA Group Reports Fourth Quarter and Full Year 2023 Results

About this update from Pra Group, Inc.

Total Portfolio Purchases of $1.2 billion , up 36% for 2023; U.S. Portfolio Purchases up 84% for 2023 Addressing U.S. Business Underperformance with Urgency; Well-positioned for Meaningful Profitability in 2024 with a Solid Platform for Future Growth NORFOLK, Va. , Feb. 15, 2024 /PRNewswire/ -- 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 2023") and full year of 2023. Q4 2023 Highlights Total portfolio purchases of $284.9 million . Total cash collections of $410.3 million . Estimated remaining collections (ERC)1 of $6.4 billion . Cash efficiency ratio2 of 57.3%. Diluted earnings per share of $(0.22) . Full Year 2023 Highlights Total portfolio purchases of $1.2 billion . Total cash collections of $1.7 billion . Cash efficiency ratio of 58.0%. Diluted earnings per share of $(2.13) . Debt to Adjusted EBITDA3 was 2.89x. Total availability under the Company's credit facilities as of December 31, 2023 was $1.3 billion , comprised of $344.4 million based on current ERC and $938.5 million of additional availability subject to debt covenants, including advance rates. Three Months Ended Dec 31 , Year Ended Dec 31 , ($ in thousands, except per share amounts) 2023 2022 2023 2022 Net income/(loss) attributable to PRA Group, Inc. $ (8,782) $ 15,959 $ (83,477) $ 117,147 Diluted earnings per share $ (0.22) $ 0.41 $ (2.13) $ 2.94 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. "2023 was an important and pivotal transition year for PRA. We delivered strong performance in our European business and worked with speed and intensity to address the shortcomings in our U.S. business," said Vikram Atal , president and chief executive officer. "With growing portfolio supply in the U.S. and a stable investment environment in Europe , we purchased total portfolios of $285 million in the fourth quarter and $1.2 billion in 2023, with the latter representing an increase of 36% and the third highest level in company history. The impact of our cash generating and operational initiatives in our U.S. business—particularly around activity within call centers, post-judgment legal processes, and offshoring—have been highly encouraging, and demonstrate that we are on track to transform PRA into a more robust, efficient, and profitable enterprise. As we continue to grow ERC with discipline, maximize cash collections, and optimize our cost structure by reducing our marginal cost, we believe we are well-positioned to deliver meaningful profitability and shareholder value for full year 2024 with a solid platform for future growth." Cash Collections and Revenues The following table presents cash collections by quarter and by source on an as reported and constant currency-adjusted basis: Cash Collection Source 2023 2022 ($ in thousands) Q4 Q3 Q2 Q1 Q4 Americas and Australia Core $ 220,127 $ 223,714 $ 220,886 $ 227,960 $ 205,619 Americas Insolvency 24,293 27,809 26,384 25,751 27,971 Europe Core 144,361 144,402 149,324 134,005 134,016 Europe Insolvency 21,502 23,639 22,725 23,568 24,051 Total Cash Collections $ 410,283 $ 419,564 $ 419,319 $ 411,284 $ 391,657 Cash Collection Source - Constant Currency Adjusted 2023 2022 ($ in thousands) Q4 Q4 Americas and Australia Core $ 220,127 $ 208,013 Americas Insolvency 24,293 27,970 Europe Core 144,361 140,393 Europe Insolvency 21,502 25,417 Total Cash Collections $ 410,283 $ 401,793 Total cash collections in Q4 2023 increased 4.8%, or 2.1% on a constant currency-adjusted basis, to $410.3 million compared to $391.7 million in the fourth quarter of 2022 ("Q4 2022"). The increase was driven by higher cash collections in Brazil and Europe , which were partially offset by lower cash collections in the U.S. For the full year, total cash collections decreased $68.6 million compared to the full year of 2022, driven primarily by lower cash collections in the U.S. Total portfolio revenue in Q4 2023 was $217.4 million compared to $219.0 million in Q4 2022. For the full year, total portfolio revenue was $786.3 million compared to $941.2 million in 2022. Expenses Operating expenses in Q4 2023 increased $12.4 million , or 7.6%, compared to Q4 2022. The increase was primarily driven by expenses related to growth in the Company's portfolio: a $3.8 million increase in legal collection costs due to a higher volume of accounts placed in the legal channel; a $3.8 million increase in agency fees due to higher cash collections in Brazil ; and a $2.8 million increase in communication expenses due to higher business volumes related to customer contact strategies. For the full year, operating expenses increased $21.4 million , or 3.1%, to $702.1 million compared to $680.7 million in the same period last year. Interest expense, net was $181.7 million in 2023, an increase of $51.0 million , or 39.1%, compared to $130.7 million in 2022, primarily reflecting a higher average debt balance and increased interest rates. The effective tax benefit rate for the full year was 19.5%. Portfolio Acquisitions The Company purchased $284.9 million in portfolios of nonperforming loans in Q4 2023. At the end of Q4 2023, the Company had in place estimated forward flow commitments1 of $550 .0 million over the next 12 months, comprised of $400 .0 million in the Americas and Australia and $150 .0 million in Europe. Portfolio Purchase Source 2023 2022 ($ in thousands) Q4 Q3 Q2 Q1 Q4 Americas and Australia Core $ 143,052 $ 187,554 $ 171,440 $ 116,867 $ 118,581 Americas Insolvency 18,608 44,279 12,189 15,701 8,967 Europe Core 110,780 60,628 136,834 90,454 140,011 Europe Insolvency 12,476 18,722 7,296 7,203 20,535 Total Portfolio Acquisitions $ 284,916 $ 311,183 $ 327,759 $ 230,225 $ 288,094 Conference Call Information PRA Group, Inc. will hold a conference call today at 5:00 p.m. ET 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 646-357-8785 in the U.S. or 1-800-836-8184 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 15, 2025 , or call 646-517-4150 in the U.S. or 1-888-660-6345 outside the U.S. and use access code 01663# until February 22, 2024 . 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. 1. Contractual agreements with sellers of nonperforming loans that allow for the purchase of nonperforming portfolios at pre-established prices. These amounts consider sellers' estimates of future flow sales and our expectations about how the agreements will perform over the next 12 months, and are dependent on actual delivery compared to these estimates. Accordingly, amounts purchased under these agreements may vary significantly. PRA Group, Inc. Consolidated Income Statements (Amounts in thousands, except per share amounts) (unaudited) (unaudited) Three Months Ended December 31 , Year Ended December 31 , 2023 2022 2023 2022 Revenues: Portfolio income $ 194,636 $ 184,921 $ 757,128 $ 772,315 Changes in expected recoveries 22,754 34,087 29,134 168,904 Total portfolio revenue 217,390 219,008 786,262 941,219 Other revenue 4,028 3,843 16,292 25,305 Total revenues 221,418 222,851 802,554 966,524 Operating expenses: Compensation and employee services 71,070 69,922 288,778 285,537 Legal collection fees 9,844 9,060 38,072 38,450 Legal collection costs 22,903 19,063 89,131 76,757 Agency fees 20,208 16,434 74,699 63,808 Outside fees and services 20,555 20,866 82,619 92,355 Communication 9,905 7,143 40,430 39,205 Rent and occupancy 4,126 4,299 17,319 18,589 Depreciation and amortization 3,032 3,859 13,376 15,243 Impairment of real estate 202 — 5,239 — Other operating expenses 14,044 12,893 52,399 50,778 Total operating expenses 175,889 163,539 702,062 680,722 Income from operations 45,529 59,312 100,492 285,802 Other income and (expense): Interest expense, net (50,946) (34,912) (181,724) (130,677) Foreign exchange gain/(loss), net (695) 194 289 985 Other (564) (572) (1,944) (1,325) Income/(loss) before income taxes (6,676) 24,022 (82,887) 154,785 Income tax expense/(benefit) (816) 6,960 (16,133) 36,787 Net income/(loss) (5,860) 17,062 (66,754) 117,998 Adjustment for net incomeattributable to noncontrollinginterests 2,922 1,103 16,723 851 Net income/(loss) attributable to PRA Group, Inc. $ (8,782) $ 15,959 $ (83,477) $ 117,147 Net income/(loss) per common share attributable to PRA Group, Inc. : Basic $ (0.22) $ 0.41 $ (2.13) $ 2.96 Diluted $ (0.22) $ 0.41 $ (2.13) $ 2.94 Weighted average number of shares outstanding: Basic 39,245 38,978 39,177 39,638 Diluted 39,245 39,177 39,177 39,888 PRA Group, Inc. Consolidated Balance Sheets (Amounts in thousands) (unaudited) December 31, 2023 December 31, 2022 Assets Cash and cash equivalents $ 112,528 $ 83,376 Investments 72,404 79,948 Finance receivables, net 3,656,598 3,295,008 Income taxes receivable 27,713 31,774 Deferred tax assets, net 74,694 56,908 Right-of-use assets 45,877 54,506 Property and equipment, net 36,450 51,645 Goodwill 431,564 435,921 Other assets 67,526 86,588 Total assets $ 4,525,354 $ 4,175,674 Liabilities and Equity Liabilities: Accounts payable $ 6,325 $ 7,329 Accrued expenses 131,893 111,395 Income taxes payable 17,912 25,693 Deferred tax liabilities, net 17,051 42,918 Lease liabilities 50,300 59,384 Interest-bearing deposits 115,589 112,992 Borrowings 2,914,270 2,494,858 Other liabilities 32,638 34,355 Total liabilities 3,285,978 2,888,924 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, 39,247 shares issued and outstanding as of December 31, 2023 ; 100,000 shares authorized, 38,980 shares issued and outstanding as of December 31, 2022 392 390 Additional paid-in capital 7,071 2,172 Retained earnings 1,489,548 1,573,025 Accumulated other comprehensive loss (329,899) (347,926) Total stockholders' equity - PRA Group, Inc. 1,167,112 1,227,661 Noncontrolling interests 72,264 59,089 Total equity 1,239,376 1,286,750 Total liabilities and equity $ 4,525,354 $ 4,175,674 Select Expenses (Income) Amounts in thousands, pre-tax Three Months Ended December 31 , 2023 September 30 , 2023 June 30 , 2023 March 31 , 2023 December 31 , 2022 September 30 , 2022 June 30 , 2022 March 31 , 2022 Noncash interest expense - amortization ofdebt issuance costs 2,177 2,220 2,384 2,441 2,444 2,555 2,471 2,627 Change in fair value ofderivatives (6,734) (6,545) (6,960) (5,470) (3,309) (1,042) 1,525 2,726 Amortization ofintangibles 69 69 68 66 73 73 77 83 Impairment of real estate 202 5,037 — — — — — — Stock-based compensation expense 2,952 1,629 2,715 3,799 2,206 3,101 3,849 3,891 Purchase Price Multiples as of December 31, 2023 Amounts in thousands Purchase Period Purchase Price (2)(3) Total Estimated Collections (4) Estimated Remaining Collections (5) Current Purchase Price Multiple Original PurchasePrice Multiple (6) Americas and Australia Core 1996-2013 $ 1,932,722 $ 5,725,248 $ 52,146 296 % 233 % 2014 404,117 884,911 27,461 219 % 204 % 2015 443,114 899,839 35,758 203 % 205 % 2016 455,767 1,078,122 65,679 237 % 201 % 2017 532,851 1,200,599 105,245 225 % 193 % 2018 653,975 1,482,269 152,931 227 % 202 % 2019 581,476 1,294,462 182,487 223 % 206 % 2020 435,668 951,929 216,016 218 % 213 % 2021 435,846 749,966 362,191 172 % 191 % 2022 406,082 708,070 460,475 174 % 179 % 2023 622,583 1,227,985 1,118,683 197 % 197 % Subtotal 6,904,201 16,203,400 2,779,072 Americas Insolvency 1996-2013 1,266,056 2,502,614 91 198 % 159 % 2014 148,420 218,811 98 147 % 124 % 2015 63,170 88,009 73 139 % 125 % 2016 91,442 117,987 256 129 % 123 % 2017 275,257 356,839 1,121 130 % 125 % 2018 97,879 135,530 1,939 138 % 127 % 2019 123,077 168,658 18,261 137 % 128 % 2020 62,130 90,690 28,225 146 % 136 % 2021 55,187 73,803 33,804 134 % 136 % 2022 33,442 46,811 34,461 140 % 139 % 2023 91,282 122,780 113,508 135 % 135 % Subtotal 2,307,342 3,922,532 231,837 Total Americas and Australia 9,211,543 20,125,932 3,010,909 Europe Core 2012-2013 40,742 71,982 1 177 % 153 % 2014 (1) 773,811 2,465,052 394,133 319 % 208 % 2015 411,340 743,591 141,158 181 % 160 % 2016 333,090 567,702 162,940 170 % 167 % 2017 252,174 363,813 107,971 144 % 144 % 2018 341,775 544,970 194,808 159 % 148 % 2019 518,610 838,326 353,219 162 % 152 % 2020 324,119 561,192 262,884 173 % 172 % 2021 412,411 695,544 428,779 169 % 170 % 2022 359,447 582,380 489,333 162 % 162 % 2023 410,593 692,580 640,924 169 % 169 % Subtotal 4,178,112 8,127,132 3,176,150 Europe Insolvency 2014 (1) 10,876 18,882 — 174 % 129 % 2015 18,973 29,301 29 154 % 139 % 2016 39,338 57,673 932 147 % 130 % 2017 39,235 51,995 2,020 133 % 128 % 2018 44,908 52,658 4,862 117 % 123 % 2019 77,218 112,260 20,970 145 % 130 % 2020 105,440 156,670 42,614 149 % 129 % 2021 53,230 72,736 33,441 137 % 134 % 2022 44,604 60,935 46,620 137 % 137 % 2023 46,558 64,411 60,029 138 % 138 % Subtotal 480,380 677,521 211,517 Total Europe 4,658,492 8,804,653 3,387,667 Total PRA Group $ 13,870,035 $ 28,930,585 $ 6,398,576 (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, 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 For the Year Ended December 31, 2023 Amounts in thousands Purchase Period Cash Collections (2) PortfolioIncome (2) Changes in Expected Recoveries (2) Total Portfolio Revenue (2) Net Finance Receivables as of December 31, 2023 (3) Americas and Australia Core 1996-2013 $ 28,414 $ 14,689 $ 11,698 $ 26,387 $ 15,661 2014 11,826 5,085 6,623 11,708 10,416 2015 14,084 8,296 (352) 7,944 15,107 2016 24,898 16,456 (973) 15,483 21,960 2017 43,765 24,863 (5,960) 18,904 43,205 2018 92,931 38,221 13,105 51,326 84,611 2019 110,278 49,393 287 49,681 100,749 2020 125,832 55,634 (3,681) 51,953 121,292 2021 136,807 78,122 (52,274) 25,848 190,907 2022 195,438 95,009 (5,798) 89,211 281,983 2023 108,414 75,234 3,074 78,307 591,032 Subtotal 892,687 461,002 (34,251) 426,752 1,476,923 Americas Insolvency 1996-2013 1,089 336 756 1,092 — 2014 430 249 136 385 — 2015 325 105 121 226 39 2016 893 120 521 641 228 2017 4,852 438 1,457 1,895 1,013 2018 12,677 1,085 (1,751) (667) 1,858 2019 28,698 3,149 651 3,800 17,310 2020 19,470 4,202 1,000 5,202 25,023 2021 17,474 4,590 924 5,515 28,874 2022 9,163 3,831 716 4,547 27,851 2023 9,166 4,998 2,237 7,234 85,331 Subtotal 104,237 23,103 6,768 29,870 187,527 Total Americas and Australia 996,924 484,105 (27,483) 456,622 1,664,450 Europe Core 2012-2013 1,029 1 1,028 1,029 — 2014 (1) 107,571 67,749 24,528 92,277 101,742 2015 33,779 16,091 2,643 18,734 72,591 2016 29,663 15,334 (3,008) 12,326 96,274 2017 20,166 7,471 1,012 8,484 73,646 2018 41,613 15,083 1,326 16,409 128,861 2019 75,074 23,993 23,157 47,150 238,759 2020 56,078 21,772 3,436 25,207 163,027 2021 73,017 32,638 (5,931) 26,707 258,670 2022 83,782 34,199 986 35,185 307,528 2023 50,320 20,129 (1,029) 19,099 377,193 Subtotal 572,092 254,460 48,148 302,607 1,818,291 Europe Insolvency 2014 (1) 235 — 235 235 — 2015 395 26 289 315 27 2016 1,315 248 330 578 429 2017 3,800 259 821 1,080 1,753 2018 7,154 650 39 690 4,417 2019 17,460 2,479 1,266 3,745 18,413 2020 29,687 4,643 3,180 7,823 38,342 2021 14,734 3,556 1,405 4,961 28,669 2022 12,352 4,588 195 4,783 36,875 2023 4,302 2,114 709 2,823 44,932 Subtotal 91,434 18,563 8,469 27,033 173,857 Total Europe 663,526 273,023 56,617 329,640 1,992,148 Total PRA Group $ 1,660,450 $ 757,128 $ 29,134 $ 786,262 $ 3,656,598 (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, 2023 exchange rate. Cash Collections by Year, By Year of Purchase (1) as of December 31, 2023 Amounts in millions Cash Collections Purchase Period PurchasePrice (3)(4) 1996-2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Total Americas and Australia Core 1996-2013 $ 1,932.7 $ 3,618.9 $ 660.3 $ 474.4 $ 299.7 $ 197.0 $ 140.3 $ 99.7 $ 64.7 $ 46.5 $ 36.0 $ 28.4 $ 5,665.9 2014 404.1 — 92.7 253.4 170.3 114.2 82.2 55.3 31.9 22.3 15.0 11.8 849.1 2015 443.1 — — 117.0 228.4 185.9 126.6 83.6 57.2 34.9 19.5 14.1 867.2 2016 455.8 — — — 138.7 256.5 194.6 140.6 105.9 74.2 38.4 24.9 973.8 2017 532.9 — — — — 107.3 278.7 256.5 192.5 130.0 76.3 43.8 1085.1 2018 654.0 — — — — — 122.7 361.9 337.7 239.9 146.1 92.9 1301.2 2019 581.5 — — — — — — 143.8 349.0 289.8 177.7 110.3 1070.6 2020 435.7 — — — — — — — 132.9 284.3 192.0 125.8 735.0 2021 435.8 — — — — — — — — 85.0 177.3 136.8 399.1 2022 406.1 — — — — — — — — — 67.7 195.4 263.1 2023 622.6 — — — — — — — — — — 108.5 108.5 Subtotal 6,904.3 3,618.9 753.0 844.8 837.1 860.9 945.1 1,141.4 1,271.8 1,206.9 946.0 892.7 13,318.6 Americas Insolvency 1996-2013 1,266.1 1,491.4 421.4 289.9 168.7 85.5 30.3 6.8 3.6 2.2 1.6 1.1 2,502.5 2014 148.4 — 37.0 50.9 44.3 37.4 28.8 15.8 2.2 1.1 0.7 0.4 218.6 2015 63.2 — — 3.4 17.9 20.1 19.8 16.7 7.9 1.3 0.6 0.3 88.0 2016 91.4 — — — 18.9 30.4 25.0 19.9 14.4 7.4 1.8 0.9 118.7 2017 275.3 — — — — 49.1 97.3 80.9 58.8 44.0 20.8 4.9 355.8 2018 97.9 — — — — — 6.7 27.4 30.5 31.6 24.6 12.7 133.5 2019 123.1 — — — — — — 13.4 31.4 39.1 37.8 28.7 150.4 2020 62.1 — — — — — — — 6.5 16.1 20.4 19.5 62.5 2021 55.2 — — — — — — — — 4.6 17.9 17.5 40.0 2022 33.4 — — — — — — — — — 3.2 9.2 12.4 2023 91.3 — — — — — — — — — — 9.0 9.0 Subtotal 2,307.4 1,491.4 458.4 344.2 249.8 222.5 207.9 180.9 155.3 147.4 129.4 104.2 3,691.4 Total Americas and Australia 9,211.7 5,110.3 1,211.4 1,189.0 1,086.9 1,083.4 1,153.0 1,322.3 1,427.1 1,354.3 1,075.4 996.9 17,010.0 Europe Core 2012-2013 40.7 27.7 14.2 5.5 3.5 3.3 3.3 2.4 1.9 1.8 1.4 1.0 66.0 2014 (2) 773.8 — 153.2 292.0 246.4 220.8 206.3 172.9 149.8 149.2 122.2 107.6 1,820.4 2015 411.3 — — 45.8 100.3 86.2 80.9 66.1 54.3 51.4 40.7 33.8 559.5 2016 333.1 — — — 40.4 78.9 72.6 58.0 48.3 46.7 36.9 29.7 411.5 2017 252.2 — — — — 17.9 56.0 44.1 36.1 34.8 25.2 20.2 234.3 2018 341.8 — — — — — 24.3 88.7 71.3 69.1 50.7 41.6 345.7 2019 518.6 — — — — — — 48.0 125.7 121.4 89.8 75.1 460.0 2020 324.1 — — — — — — — 32.3 91.7 69.0 56.1 249.1 2021 412.4 — — — — — — — — 48.5 89.9 73.0 211.4 2022 359.4 — — — — — — — — — 33.9 83.8 117.7 2023 410.6 — — — — — — — — — — 50.2 50.2 Subtotal 4,178.0 27.7 167.4 343.3 390.6 407.1 443.4 480.2 519.7 614.6 559.7 572.1 4,525.8 Europe Insolvency 2014 (2) 10.9 — — 4.3 3.9 3.2 2.6 1.5 0.8 0.3 0.2 0.2 17.0 2015 19.0 — — 3.0 4.4 5.0 4.8 3.9 2.9 1.6 0.6 0.4 26.6 2016 39.3 — — — 6.2 12.7 12.9 10.7 7.9 6.0 2.7 1.3 60.4 2017 39.2 — — — — 1.2 7.9 9.2 9.8 9.4 6.5 3.8 47.8 2018 44.9 — — — — — 0.6 8.4 10.3 11.7 9.8 7.2 48.0 2019 77.2 — — — — — — 5.0 21.1 23.9 21.0 17.5 88.5 2020 105.4 — — — — — — — 6.0 34.6 34.1 29.7 104.4 2021 53.2 — — — — — — — — 5.5 14.4 14.7 34.6 2022 44.6 — — — — — — — — — 4.5 12.4 16.9 2023 46.6 — — — — — — — — — — 4.2 4.2 Subtotal 480.3 — — 7.3 14.5 22.1 28.8 38.7 58.8 93.0 93.8 91.4 448.4 Total Europe 4,658.3 27.7 167.4 350.6 405.1 429.2 472.2 518.9 578.5 707.6 653.5 663.5 4,974.2 Total PRA Group $ 13,870.0 $ 5,138.0 $ 1,378.8 $ 1,539.6 $ 1,492.0 $ 1,512.6 $ 1,625.2 $ 1,841.2 $ 2,005.6 $ 2,061.9 $ 1,728.9 $ 1,660.4 $ 21,984.2 (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 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 years ended December 31, 2023 and 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 Adjusted EBITDA for PRA Group ($ in millions) December 31, 2023 December 31, 2022 Net income/(loss) attributable to PRA Group, Inc. $ (83) $ 117 Adjustments: Income tax expense/(benefit) (16) 37 Foreign exchange (gain)/loss, net — (1) Interest expense, net 181 131 Other expense 2 1 Depreciation and amortization 13 15 Impairment of real estate 5 — Adjustment for net income attributable to noncontrolling interests 17 1 Recoveries applied to negative allowance less Changes inexpected recoveries 888 806 Adjusted EBITDA $ 1,007 $ 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 years ended December 31, 2023 and 2022 (amounts in millions): Debt to Adjusted EBITDA December 31, 2023 December 31, 2022 Borrowings $ 2,914 $ 2,495 Adjusted EBITDA 1,007 1,107 Debt to Adjusted EBITDA 2.89 2.25 Investor Contact: Najim Mostamand , CFAVice President, Investor Relations(757) 431-7913 [email protected] News Media Contact: Elizabeth Kersey Senior Vice President, Communications and Public Policy(757) 641-0558 [email protected] View original content to download multimedia: https://www.prnewswire.com/news-releases/pra-group-reports-fourth-quarter-and-full-year-2023-results-302063510.html SOURCE PRA Group, Inc.

View stock analysis, news, and events for Pra Group, Inc.