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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 2022
☐ Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from ________ to ________
Commission File Number: 000-50058
PRA Group, Inc.
(Exact name of registrant as specified in its charter)
Delaware75-3078675
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)

120 Corporate Boulevard
Norfolk, Virginia 23502
(Address of principal executive offices)

(888) 772-7326
(Registrant's Telephone No., including area code)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  þ   No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  þ   No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer  þ   Accelerated filer  ¨   Non-accelerated filer  ¨   Smaller reporting company  ☐ 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. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ☐   No  þ

The number of shares of the registrant's common stock outstanding as of October 31, 2022 was 38,976,910.


Table of Contents

Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
Signatures
2

Part I. Financial Information
Item 1. Financial Statements (Unaudited)
PRA Group, Inc.
Consolidated Balance Sheets
September 30, 2022 and December 31, 2021
(Amounts in thousands)
(unaudited)
September 30,
2022		December 31,
2021
Assets
Cash and cash equivalents$57,991 $87,584 
Investments76,171 92,977 
Finance receivables, net3,037,360 3,428,285 
Income taxes receivable36,420 41,146 
Deferred tax assets, net53,949 67,760 
Right-of-use assets52,648 56,713 
Property and equipment, net52,061 54,513 
Goodwill404,474 480,263 
Other assets124,256 57,002 
Total assets$3,895,330 $4,366,243 
Liabilities and Equity
Liabilities:
Accounts payable$6,148 $3,821 
Accrued expenses104,059 127,802 
Income taxes payable16,412 19,276 
Deferred tax liabilities, net49,248 36,630 
Lease liabilities57,376 61,188 
Interest-bearing deposits88,155 124,623 
Borrowings2,379,614 2,608,714 
Other liabilities11,729 59,352 
Total liabilities2,712,741 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, 38,976 shares issued and outstanding at September 30, 2022; 100,000 shares authorized, 41,008 shares issued and outstanding at December 31, 2021
389 410 
Additional paid-in capital— — 
Retained earnings1,557,066 1,552,845 
Accumulated other comprehensive loss(426,086)(266,909)
Total stockholders' equity - PRA Group, Inc.1,131,369 1,286,346 
Noncontrolling interest51,220 38,491 
Total equity1,182,589 1,324,837 
Total liabilities and equity$3,895,330 $4,366,243 
The accompanying notes are an integral part of these Consolidated Financial Statements.
3

PRA Group, Inc.
Consolidated Income Statements
For the Three and Nine Months Ended September 30, 2022 and 2021
(unaudited)
(Amounts in thousands, except per share amounts)
Three Months EndedNine Months Ended
2022202120222021
Revenues:
Portfolio income$185,853 $212,905 $587,394 $663,714 
Changes in expected recoveries48,336 43,820 134,817 157,504 
Total portfolio revenue234,189 256,725 722,211 821,218 
Fee income6,122 6,209 14,419 10,843 
Other revenue4,496 764 7,044 6,735 
Total revenues244,807 263,698 743,674 838,796 
Operating expenses:
Compensation and employee services70,382 74,584 215,615 228,200 
Legal collection fees8,963 10,993 29,390 36,208 
Legal collection costs23,391 21,450 57,694 61,231 
Agency fees15,160 15,646 47,374 47,145 
Outside fees and services24,618 29,434 71,489 71,167 
Communication9,951 9,782 32,062 33,039 
Rent and occupancy4,669 4,571 14,289 13,694 
Depreciation and amortization3,741 3,724 11,384 11,520 
Other operating expenses13,144 15,935 37,885 44,045 
Total operating expenses174,019 186,119 517,182 546,249 
   Income from operations70,788 77,579 226,492 292,547 
Other income and (expense):
Interest expense, net(32,455)(29,599)(95,765)(91,987)
Foreign exchange gain, net4 1,232 791 127 
Other(83)85 (754)294 
Income before income taxes38,254 49,297 130,764 200,981 
Income tax expense11,072 12,627 29,828 41,870 
Net income27,182 36,670 100,936 159,111 
Adjustment for net income/(loss) attributable to noncontrolling interests2,450 2,190 (252)10,229 
Net income attributable to PRA Group, Inc.$24,732 $34,480 $101,188 $148,882 
Net income per common share attributable to PRA Group, Inc.:
Basic$0.63 $0.76 $2.54 $3.27 
Diluted$0.63 $0.76 $2.52 $3.24 
Weighted average number of shares outstanding:
Basic39,018 45,305 39,858 45,594 
Diluted39,170 45,656 40,125 45,920 
The accompanying notes are an integral part of these Consolidated Financial Statements.
4

PRA Group, Inc.
Consolidated Statements of Comprehensive (Loss)/Income
For the Three and Nine Months Ended September 30, 2022 and 2021
(unaudited)
(Amounts in thousands)
Three Months EndedNine Months Ended
2022202120222021
Net income$27,182 $36,670 $100,936 $159,111 
Other comprehensive (loss)/income, net of tax:
Currency translation adjustments(91,390)(38,238)(194,656)(43,682)
Cash flow hedges19,590 5,522 44,007 19,200 
Debt securities available-for-sale133 (50)(269)(192)
Other comprehensive (loss)/income(71,667)(32,766)(150,918)(24,674)
Total comprehensive (loss)/income(44,485)3,904 (49,982)134,437 
Less comprehensive income/(loss) attributable to noncontrolling interests9,049 (1,154)8,008 4,544 
Comprehensive (loss)/income attributable to PRA Group, Inc.$(53,534)$5,058 $(57,990)$129,893 
The accompanying notes are an integral part of these Consolidated Financial Statements.
5

PRA Group, Inc.
Consolidated Statements of Changes in Equity
For the Nine Months Ended September 30, 2022
(unaudited)
(Amounts in thousands)

Common StockAdditional Paid-InRetainedAccumulated Other ComprehensiveNoncontrollingTotal
SharesAmountCapitalEarnings(Loss)/ IncomeInterestEquity
Balance at December 31, 202141,008 $410 $— $1,552,845 $(266,909)$38,491 $1,324,837 
Components of comprehensive income, net of tax:
Net income— — — 39,972 — (5,354)34,618 
Currency translation adjustments— — — — 4,780 7,490 12,270 
Cash flow hedges— — — — 18,580 — 18,580 
Debt securities available-for-sale— — — — (160)— (160)
Vesting of restricted stock262 3 (3)— — — — 
Repurchase and cancellation of common stock(860)(9)4,527 (43,972)— — (39,454)
Share-based compensation expense— 3,891 — — — 3,891 
Employee stock relinquished for payment of taxes— — (8,415)— — — (8,415)
Balance at March 31, 202240,410 $404 $— $1,548,845 $(243,709)$40,627 $1,346,167 
Components of comprehensive income, net of tax:
Net income— — — 36,484 — 2,652 39,136 
Currency translation adjustments— — — — (109,707)(5,829)(115,536)
Cash flow hedges— — — — 5,837 — 5,837 
Debt securities available-for-sale— — — — (242)— (242)
Distributions to noncontrolling interest— — — — — (3,494)(3,494)
Contributions from noncontrolling interest— — — — — 1,599 1,599 
Vesting of restricted stock37 — — — — — — 
Repurchase and cancellation of common stock(808)(8)(3,835)(31,092)— — (34,935)
Share-based compensation expense— — 3,849 — — — 3,849 
Employee stock relinquished for payment of taxes— — (14)— — — (14)
Balance at June 30, 202239,639 $396 $— $1,554,237 $(347,821)$35,555 $1,242,367 
Components of comprehensive income, net of tax:
Net income— — — 24,732 — 2,450 27,182 
Currency translation adjustments— — — — (97,988)6,598 (91,390)
Cash flow hedges— — — — 19,590 — 19,590 
Debt securities available-for-sale— — — — 133 — 133 
Distributions to noncontrolling interest— — — — — (1,127)(1,127)
Contributions from noncontrolling interest— — — — — 7,744 7,744 
Repurchase and cancellation of common stock(663)(7)(3,091)(21,903)— — (25,001)
Share-based compensation expense— — 3,101 — — — 3,101 
Employee stock relinquished for payment of taxes— — (10)— — — (10)
Balance at September 30, 202238,976 $389 $— $1,557,066 $(426,086)$51,220 $1,182,589 
The accompanying notes are an integral part of these Consolidated Financial Statements.



6

PRA Group, Inc.
Consolidated Statements of Changes in Equity
For the Nine Months Ended September 30, 2021
(unaudited)
(Amounts in thousands)

Common StockAdditional Paid-InRetainedAccumulated Other ComprehensiveNoncontrollingTotal
SharesAmountCapitalEarnings(Loss)/ IncomeInterestEquity
Balance at December 31, 202045,585 $456 $75,282 $1,511,970 $(245,791)$31,609 $1,373,526 
Effect of change in accounting principle (1)
— — (26,697)12,008 — — (14,689)
Balance at January 1, 202145,585 $456 $48,585 $1,523,978 $(245,791)$31,609 $1,358,837 
Components of comprehensive income, net of tax:
Net income— — — 58,406 — 3,474 61,880 
Currency translation adjustments— — — — (20,108)(4,423)(24,531)
Cash flow hedges— — — — 12,323 — 12,323 
Distributions to noncontrolling interest— — — — — (3,933)(3,933)
Vesting of restricted stock214 2 (2)— — — — 
Share-based compensation expense— — 4,113 — — — 4,113 
Employee stock relinquished for payment of taxes— — (5,460)— — — (5,460)
Balance at March 31, 202145,799 $458 $47,236 $1,582,384 $(253,576)$26,727 $1,403,229 
Components of comprehensive income, net of tax:
Net income— — — 55,996 — 4,565 60,561 
Currency translation adjustments— — — — 17,004 2,083 19,087 
Cash flow hedges— — — — 1,355 — 1,355 
Debt securities available-for-sale— — — — (142)— (142)
Distributions to noncontrolling interest— — — — — (13,120)(13,120)
Vesting of restricted stock38 — — — — — — 
Share-based compensation expense— — 4,040 — — — 4,040 
Employee stock relinquished for payment of taxes— — (70)— — — (70)
Balance at June 30, 202145,837 $458 $51,206 $1,638,380 $(235,359)$20,255 $1,474,940 
Components of comprehensive income, net of tax:
Net income— — — 34,480 — 2,190 36,670 
Currency translation adjustments— — — — (34,894)(3,344)(38,238)
Cash flow hedges— — — — 5,522 — 5,522 
Debt securities available-for-sale— — — — (50)— (50)
Distributions to noncontrolling interest— — — — — (3,397)(3,397)
Contributions from noncontrolling interest— — — — — 22,743 22,743 
Repurchase and cancellation of common stock(1,797)(18)(55,513)(18,316)— — (73,847)
Share-based compensation expense— — 4,317 — — — 4,317 
Employee stock relinquished for payment of taxes— — (10)— — — (10)
Balance at September 30, 202144,040 $440 $— $1,654,544 $(264,781)$38,447 $1,428,650 
(1) Reflects adjustments recorded for the January 1, 2021 adoption of an accounting update. Refer to the Company's 2021 Annual Report on Form 10-K for more information.
The accompanying notes are an integral part of these Consolidated Financial Statements.



7

PRA Group, Inc.
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2022 and 2021
(unaudited)
(Amounts in thousands)
Nine Months Ended
20222021
Cash flows from operating activities:
Net income$100,936 $159,111 
Adjustments to reconcile net income to net cash provided by operating activities:
Share-based compensation expense10,841 12,470 
Depreciation and amortization11,384 11,520 
Amortization of debt discount and issuance costs7,653 7,053 
Changes in expected recoveries(134,817)(157,504)
Deferred income taxes8,710 (4,235)
Net unrealized foreign currency transactions21,356 7,462 
Fair value in earnings for equity securities(175)92 
Other159 91 
Changes in operating assets and liabilities:
Other assets(2,547)7,779 
Accounts payable3,028 201 
Income taxes payable, net(155)(9,391)
Accrued expenses(7,655)3,086 
Other liabilities(22,521)531 
Right of use asset/lease liability389 17 
Net cash (used)/provided by operating activities(3,414)38,283 
Cash flows from investing activities:
Purchases of property and equipment, net(10,698)(6,772)
Purchases of finance receivables(561,901)(770,377)
Recoveries applied to negative allowance765,732 934,002 
Purchases of investments(2,292)(74,485)
Proceeds from sales and maturities of investments4,565 42,110 
Business acquisition, net of cash acquired— (647)
Net cash provided by investing activities195,406 123,831 
Cash flows from financing activities:
Proceeds from lines of credit1,343,434 426,135 
Principal payments on lines of credit(1,389,371)(908,215)
Proceeds from senior notes— 350,000 
Principal payments on long-term debt(7,500)(7,500)
Repurchases of common stock(111,371)(73,847)
Payments of origination cost and fees(7,798)(8,835)
Tax withholdings related to share-based payments(8,438)(5,540)
Distributions paid to noncontrolling interest(4,621)(20,450)
Contributions from noncontrolling interest9,343 22,743 
Net (decrease)/increase in interest-bearing deposits(13,732)8,847 
Net cash used in financing activities(190,054)(216,662)
Effect of exchange rate on cash(31,927)(5,202)
Net decrease in cash and cash equivalents(29,989)(59,750)
Cash and cash equivalents beginning of period89,072 121,047 
Cash and cash equivalents, end of period$59,083 $61,297 
Supplemental disclosure of cash flow information:
Cash paid for interest$87,912 $88,676 
Cash paid for income taxes21,086 55,234 
Cash, cash equivalents and restricted cash reconciliation:
Cash and cash equivalents per Consolidated Balance Sheets$57,991 $56,545 
Restricted cash included in Other assets per Consolidated Balance Sheets1,092 4,752 
Total cash, cash equivalents and restricted cash$59,083 $61,297 
The accompanying notes are an integral part of these Consolidated Financial Statements.
8
PRA Group, Inc.
Notes to Consolidated Financial Statements

1. Organization and Business:
Nature of operations: As used herein, the terms "PRA Group," the "Company," or similar terms refer to PRA Group, Inc. and its subsidiaries.
PRA Group, Inc., a Delaware corporation, is a global financial and business services company with operations in the Americas, Europe and Australia. The Company's primary business is the purchase, collection and management of portfolios of nonperforming loans. The Company also provides fee-based services on class action claims recoveries and by servicing consumer bankruptcy accounts in the United States ("U.S.").
Basis of presentation: The Consolidated Financial Statements of the Company are prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). The accompanying interim financial statements have been prepared in accordance with the instructions for Quarterly Reports on Form 10-Q and, therefore, do not include all information and Notes to the Consolidated Financial Statements necessary for a complete presentation of financial position, results of operations, comprehensive income/(loss) and cash flows in conformity with GAAP. In the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair presentation of the Company's Consolidated Balance Sheets as of September 30, 2022, its Consolidated Income Statements and Statements of Comprehensive (Loss)/Income for the three and nine months ended September 30, 2022 and 2021, and its Consolidated Statements of Changes in Equity and Statements of Cash Flows for the nine months ended September 30, 2022 and 2021 have been included. The Company's Consolidated Income Statements for the three and nine months ended September 30, 2022 may not be indicative of future results.
These unaudited Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 (the "2021 Form 10-K").
Consolidation: The Consolidated Financial Statements include the accounts of PRA Group and other entities in which the Company has a controlling interest. All significant intercompany accounts and transactions have been eliminated.
Entities in which the Company has a controlling financial interest, through ownership of the majority of the entities’ voting equity interests, or through other contractual rights that give the Company control, consist of entities which purchase and collect on portfolios of nonperforming loans.
Investments in companies in which the Company has significant influence over operating and financing decisions, but does not own a majority of the voting equity interests, are accounted for in accordance with the equity method of accounting, which requires the Company to recognize its proportionate share of the entity’s net earnings. These investments are included in Other assets, with income or loss included in Other revenue.
The Company performs on-going reassessments of whether changes in the facts and circumstances regarding the Company’s involvement with an entity cause the Company’s consolidation conclusion to change.
Segments: The Company has determined that it has two operating segments that meet the aggregation criteria of Accounting Standards Codification ("ASC") 280, Segment Reporting ("ASC 280") and, therefore, it has one reportable segment, accounts receivable management. This conclusion is based on similarities among the operating units, including economic characteristics, the nature of the products and services, the nature of the production processes, the types or class of customer for their products and services, the methods used to distribute their products and services and the nature of the regulatory environment.
The following tables show the amount of revenue generated for the three and nine months ended September 30, 2022 and 2021, and long-lived assets held at September 30, 2022 and 2021, both for the U.S., the Company's country of domicile, and outside of the U.S. (amounts in thousands):
As of and for theAs of and for the
Three Months Ended September 30, 2022Three Months Ended September 30, 2021
Revenues (2)
Long-Lived Assets
Revenues (2)
Long-Lived Assets
United States$138,398 $80,496 $157,124 $90,980 
United Kingdom37,032 10,762 42,388 2,040 
Other (1)
69,377 13,451 64,186 12,745 
Total$244,807 $104,709 $263,698 $105,765 
9
PRA Group, Inc.
Notes to Consolidated Financial Statements

As of and for theAs of and for the
Nine Months Ended September 30, 2022Nine months ended September 30, 2021
Revenues (2)
Long-Lived Assets
Revenues (2)
Long-Lived Assets
United States$426,675 $80,496 $503,994 $90,980 
United Kingdom126,866 10,762 133,024 2,040 
Other (1)
190,133 13,451 201,778 12,745 
Total$743,674 $104,709 $838,796 $105,765 
(1) None of the countries included in "Other" comprise greater than 10% of the Company's consolidated revenues or long-lived assets.
(2) Based on the Company’s financial statement information used to produce the Company's general-purpose financial statements, it is impracticable to report further breakdowns of revenues from external customers by product or service.
Revenues are attributed to countries based on the location of the related operations. Long-lived assets consist of net property and equipment and right-of-use assets. The Company reports revenues earned from collection activities on nonperforming loans, fee-based services and investments. For additional information on the Company's investments, see Note 3.
2. Finance Receivables, net:
Finance receivables, net consisted of the following at September 30, 2022 and December 31, 2021 (amounts in thousands):
September 30, 2022December 31, 2021
Amortized cost$— $— 
Negative allowance for expected recoveries (1)
3,037,360 3,428,285 
Balance at end of period$3,037,360 $3,428,285 
(1) The negative allowance balance includes certain portfolios of nonperforming loans for which the Company holds a beneficial interest representing approximately 0.8%