PR Newswire | Nov 5, 2020 04:06PM EST

11/05 15:05 CST

PRA Group Reports Third Quarter 2020 Results NORFOLK, Va., Nov. 5, 2020

NORFOLK, Va., Nov. 5, 2020 /PRNewswire/ -- PRA Group, Inc. (Nasdaq: PRAA), a global leader in acquiring and collecting nonperforming loans, today reported its financial results for the third quarter of 2020. Net income attributable to PRA Group, Inc. was $42.5 million compared to $25.0 million in the third quarter of 2019. Diluted earnings per share were $0.92 compared to $0.55 in the third quarter of 2019. For the nine months ended September 30, 2020, net income attributable to PRA Group, Inc. was $119.5 million, or $2.60 per diluted share, compared to $58.8 million, or $1.29 per diluted share, during the same period in 2019.

Third Quarter Highlights

* Record global cash collections of $519.3 million, an increase of 15%, or 14% on a constant currency adjusted basis, compared to the third quarter of 2019. * Total revenues of $267.9 million, an increase of 7% compared to the third quarter of 2019. * Income from operations of $88.7 million, an increase of 37% compared to the third quarter of 2019. * Cash efficiency ratio of 65.6% during the quarter compared to 60.2% in the third quarter of 2019. * Net income of $42.5 million, an increase of 70% compared to the third quarter of 2019. * Diluted earnings per share of $0.92, an increase of 67% compared to the third quarter of 2019. * Debt to Adjusted EBITDA1 for the last twelve months was 1.90x, a decrease from 2.54x at December 31, 2019. * Total portfolio purchases of $177.6 million. * Estimated Remaining Collections (ERC) of $6.3 billion.

"The third quarter of 2020 built upon the trends that we saw during the first half of the year. We produced record quarterly global cash collections driven by growth in both the Americas and Europe. U.S. cash collections continued to be strong and Europe cash collections grew as countries relaxed restrictions and courts returned to more normal operations," said Kevin Stevenson, president and chief executive officer. "Investment levels in Europe were strong in a quarter that is typically seasonally softer as sellers restarted their sales processes. In the U.S., supply was impacted by lower bankruptcy filings and payment deferral programs which depressed charge-off volumes during the quarter. Based on the significant loss provisioning by most financial institutions, we believe that charge-off rates will rise over the next year, increasing supply globally."

Cash Collections and RevenuesThe following table presents cash collections by quarter and by source on an as reported and constant currency adjusted basis:

Cash Collection Source 2020 2019

($ in thousands) Q3 Q2 Q1 Q4 Q3

Americas Core $ $ $ $ $ 336,322 343,269 305,780 276,639 279,902

Americas Insolvency 37,344 38,685 43,210 40,801 45,759

Europe Core 131,702 115,145 131,340 126,649 118,917

Europe Insolvency 13,971 12,841 14,243 12,520 8,639

Total Cash Collections $ $ $ $ $ 519,339 509,940 494,573 456,609 453,217

Cash Collection Source

Constant Currency 2020 2019 Adjusted

($ in thousands) Q3 Q3

Americas Core $ $ 336,322 274,962

Americas Insolvency 37,344 45,756

Europe Core 131,702 123,807

Europe Insolvency 13,971 9,069

Total Cash Collections $ $ 519,339 453,594

* Cash collections in the quarter increased $66.1 million compared to the third quarter of 2019. The increase was primarily due to a 37% increase in U.S. call center and other cash collections and an 11% increase in Europe Core cash collections. This was partially offset by a decrease in Americas Insolvency cash collections where investment levels did not offset the runoff of older portfolios. For the nine months ended September 30, 2020, cash collections increased $139.2 million compared to the same period last year. * Portfolio income was $240.3 million compared to $247.5 million in income recognized on finance receivables in the third quarter of 2019. For the nine months ended September 30, 2020, portfolio income was $750.6 million compared to $735.5 million in income recognized on finance receivables for the same time period in 2019. * Changes in expected recoveries were a net positive of $25.4 million. This reflects $89.0 million in recoveries in excess of forecast from overperformance during the quarter, partially offset by a negative $63.6 million adjustment for changes in expected future recoveries as the Company has assumed the majority of the current quarter overperformance is acceleration of future collections and made cash forecast adjustments deemed appropriate given the current environment in which the Company operates.

Expenses

* Operating expenses in the quarter decreased $2.0 million compared to the third quarter of 2019. The decrease was primarily driven by a reduction in legal collection costs mainly as a result of the Company's decision earlier in the year to temporarily pause moving accounts into a legal eligible status in the U.S. and a shift in collections from the legal channel to the call center and digital channels. In addition, there was a decrease in compensation and employee benefits from a reduction in U.S. call center staff as a result of efficiencies realized through technology and data and analytics. For the nine months ended September 30, 2020, operating expenses decreased $28.5 million compared to the same period in 2019. * Interest expense, net decreased $2.2 million compared to the third quarter of 2019 primarily due to lower average interest rates. For the nine months ended September 30, 2020, interest expense, net was almost flat to the same period in 2019. * The effective tax rate for the nine months ended September 30, 2020 was 15.9%.

Portfolio Acquisitions

* The Company purchased $177.6 million in finance receivables in the third quarter of 2020. * At the end of the third quarter, the Company had in place forward flow commitments of up to $395.6 million with $343.8 million in the Americas and $51.8 million in Europe.

Portfolio Acquisition 2020 2019 Source

($ in Q3 Q2 Q1 Q4 Q3 thousands)

Americas $ 84,139 $ 110,474 $ 172,697 $ 118,153 $ 168,185 Core

Americas 14,328 14,527 20,772 22,650 26,311 Insolvency

Europe Core 74,930 34,247 60,990 218,919 64,728

Europe 4,203 5,251 18,778 42,613 19,772 Insolvency

Total Portfolio $ 177,600 $ 164,499 $ 273,237 $ 402,335 $ 278,996 Acquisitions

Conference Call InformationPRA Group, Inc. will hold a conference call today at 5:00 p.m. ET to discuss results with institutional investors and stock analysts. To listen to a webcast of the call and view the accompanying slides, visit https://ir.pragroup.com/events-and-presentations. To listen by phone, call 844-835-9982 in the U.S. or 412-317-5267 outside the U.S. and ask for the PRA Group conference call. To listen to a replay of the call until Nov. 12, 2020, call 877-344-7529 in the U.S. or 412-317-0088 outside the U.S. and use access code 10148612.

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 and Europe. 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 StatementsStatements 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 but not limited to 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. A reconciliation of this non-GAAP financial measure to the most directly comparable GAAP measure can be found at the end of this press release.

PRA Group, Inc.

Unaudited Consolidated Income Statements

(in thousands, except per share amounts)

Three Months Ended Nine Months Ended

September 30, September 30,

2020 2019 2020 2019

Revenues:

Portfolio income $ 240,250 $ - $ 750,556 $ -

Changes in expected recoveries 25,403 - 32,388 -

Income recognized on finance receivables - 247,471 - 735,526

Fee income 1,978 2,391 6,826 11,472

Other revenue 233 152 1,788 950

Total revenues 267,864 250,014 791,558 747,948

Net allowance charges - (4,136) - (11,427)

Operating expenses:

Compensation and employee services 71,974 75,317 217,617 234,770

Legal collection fees 13,661 14,083 41,975 41,439

Legal collection costs 26,043 31,395 79,997 99,745

Agency fees 14,900 12,788 38,619 39,833

Outside fees and services 22,719 16,733 60,796 48,274

Communication 9,379 10,310 31,702 34,335

Rent and occupancy 4,460 4,414 13,415 13,268

Depreciation and amortization 4,301 4,046 12,494 13,341

Other operating expenses 11,761 12,102 34,457 34,613

Total operating expenses 179,198 181,188 531,072 559,618

Income from operations 88,666 64,690 260,486 176,903

Other income and (expense):

Interest expense, net (33,692) (35,864) (106,319) (105,872)

Foreign exchange gains 61 5,406 3,027 11,359

Other 291 (19) (1,367) (123)

Income before income taxes 55,326 34,213 155,827 82,267

Income tax expense 7,497 6,665 24,734 15,607

Net income 47,829 27,548 131,093 66,660

Adjustment for net income attributable to noncontrolling 5,337 2,577 11,552 7,843interests

Net income attributable to PRA Group, Inc. $ 42,492 $ 24,971 $ 119,541 $ 58,817

Net income per common share attributable to PRA Group, Inc.:

Basic $ 0.93 $ 0.55 $ 2.63 $ 1.30

Diluted $ 0.92 $ 0.55 $ 2.60 $ 1.29

Weighted average number of shares outstanding:

Basic 45,579 45,410 45,526 45,378

Diluted 46,140 45,645 45,971 45,520

PRA Group, Inc.

Consolidated Balance Sheets

(in thousands, except per share amounts)

(Amounts in thousands)

(unaudited)

September 30, December 31,

ASSETS 2020 2019

Cash and cash equivalents $ 92,779 $ 119,774

Investments 37,821 56,176

Finance receivables, net 3,332,748 3,514,165

Other receivables, net 12,575 10,606

Income taxes receivable 27,554 17,918

Deferred tax assets, net 79,121 63,225

Property and equipment, net 57,826 56,501

Right-of-use assets 51,606 68,972

Goodwill 456,308 480,794

Intangible assets, net 3,392 4,497

Other assets 45,519 31,263

Total assets $ 4,197,249 $ 4,423,891

LIABILITIES AND EQUITY

Liabilities:

Accounts payable $ 4,285 $ 4,258

Accrued expenses 81,913 88,925

Income taxes payable 18,885 4,046

Deferred tax liabilities, net 48,144 85,390

Lease liabilities 55,987 73,377

Interest-bearing deposits 119,834 106,246

Borrowings 2,524,429 2,808,425

Other liabilities 71,600 26,211

Total liabilities 2,925,077 3,196,878

Equity:

Preferred stock, par value $0.01, authorized shares, 2,000, - - issued and outstanding shares, 0

Common stock, par value $0.01, 100,000 shares authorized, 45,579 shares issued and outstanding at September 30, 2020; 100,000 shares 456 454authorized, 45,416 shares issued and outstanding at December 31, 2019

Additional paid-in capital 70,036 67,321

Retained earnings 1,482,172 1,362,631

Accumulated other comprehensive loss (313,560) (261,018)

Total stockholders' equity - PRA Group, Inc. 1,239,104 1,169,388

Noncontrolling interests 33,068 57,625

Total equity 1,272,172 1,227,013

Total liabilities and equity $ 4,197,249 $ 4,423,891

Select Expenses (Income)

(in thousands, pre-tax) Three Months Ended

September 30, June 30, March 31, December 31, September 30, June 30, March 31, December 31, 2020 2020 2020 2019 2019 2019 2019 2018

Acquisition/divestiture-related expenses - - - - - 227 223 -

Legal costs not associated with normal - - - - - - - 647operations

Noncash interest expense - amortization of debt 2,388 3,247 3,217 3,157 3,128 3,071 3,042 2,986discount

Noncash interest expense - amortization of debt 2,476 2,743 2,640 2,649 2,649 2,655 2,636 2,723issuance costs

Change in fair value on derivatives 3,701 3,284 2,039 1,247 1,126 1,645 349 673

Amortization of intangibles 360 351 349 407 400 418 347 907

Share-based compensation expense 3,097 3,063 2,857 2,809 2,974 2,620 2,314 1,600

Purchase Price Multiples

as of September 30, 2020

Amounts in thousands

ERC-Historical ERC-Current Current OriginalPurchase Period Purchase Price Period Exchange Total Estimated Period Exchange Estimated Estimated ^(1)(2) Rates ^(3) Collections ^(4) Rates ^(5) Purchase Price Purchase Price Multiple Multiple ^(6)

Americas Core

1996-2009 $ 930,026 $ 23,046 $ 2,877,116 $ 23,046 309% 238%

2010 148,193 14,122 526,052 14,122 355% 247%

2011 209,602 26,186 725,498 26,186 346% 245%

2012 254,076 31,217 660,403 31,217 260% 226%

2013 390,826 57,085 912,068 57,085 233% 211%

2014 404,117 91,301 891,499 89,353 221% 204%

2015 443,114 149,049 933,513 148,585 211% 205%

2016 455,767 273,495 1,101,186 260,392 242% 201%

2017 532,851 406,451 1,209,406 402,103 227% 193%

2018 653,975 587,961 1,348,402 576,414 206% 202%

2019 581,476 812,641 1,234,909 784,614 212% 206%

2020 367,050 688,459 770,975 688,459 210% 210%

Subtotal 5,371,073 3,161,013 13,191,027 3,101,576

Americas Insolvency

1996-2009 397,453 578 835,901 578 210% 178%

2010 208,942 737 546,812 737 262% 184%

2011 180,432 649 370,158 649 205% 155%

2012 251,395 356 392,527 356 156% 136%

2013 227,834 1,093 354,914 1,093 156% 133%

2014 148,420 1,660 217,699 1,649 147% 124%

2015 63,170 2,633 87,590 2,633 139% 125%

2016 91,442 11,549 116,138 11,554 127% 123%

2017 275,257 73,636 347,183 73,636 126% 125%

2018 97,879 73,500 130,542 73,500 133% 127%

2019 123,077 124,052 160,344 123,982 130% 128%

2020 49,626 63,719 68,018 63,719 137% 137%

Subtotal 2,114,927 354,162 3,627,826 354,086

Total Americas 7,486,000 3,515,175 16,818,853 3,455,662

Europe Core

2012 20,409 121 40,963 96 201% 187%

2013 20,334 65 25,294 51 124% 119%

2014 773,811 698,195 2,223,673 628,800 287% 208%

2015 411,340 293,515 733,024 272,301 178% 160%

2016 333,090 288,132 558,471 290,464 168% 167%

2017 252,174 207,615 358,335 195,887 142% 144%

2018 341,775 360,283 527,239 362,163 154% 148%

2019 518,610 632,065 777,563 627,204 150% 152%

2020 172,494 289,657 306,357 289,657 178% 178%

Subtotal 2,844,037 2,769,648 5,550,919 2,666,623

Europe Insolvency

2014 10,876 377 18,190 333 167% 129%

2015 18,973 3,432 29,036 2,996 153% 139%

2016 39,338 11,064 56,719 11,709 144% 130%

2017 39,235 22,247 48,969 21,292 125% 128%

2018 44,908 38,230 54,791 38,778 122% 123%

2019 77,218 80,148 101,336 78,302 131% 130%

2020 28,221 36,180 38,249 36,180 136% 136%

Subtotal 258,769 191,678 347,290 189,590

Total Europe 3,102,806 2,961,326 5,898,209 2,856,213

Total PRA Group $ 10,588,806 $ 6,476,501 $ 22,717,062 $ 6,311,875

(1) Includes the acquisition date finance receivables portfolios that wereacquired through our business acquisitions.

(2) For our non-US amounts, purchase price is presented at the exchange rate atthe end of the year in which the pool was purchased. In addition, any purchaseprice adjustments that occur throughout the life of the pool are presented atthe year-end exchange rate for the respective year of purchase.

(3) For our non-US amounts, ERC-Historical Period Exchange Rates is presentedat the year-end exchange rate for the respective year

of purchase.

(4) For our non-U.S. amounts, Total Estimated Collections is presented at theyear-end exchange rate for the respective year of purchase.

(5) For our non-U.S. amounts, ERC-Current Period Exchange Rates is presented atthe September 30, 2020 exchange rate.

(6) The Original Estimated Purchase Price Multiple represents the purchaseprice multiple at the end of the year of acquisition.

Portfolio Financial Information

Year-to-date as of September 30, 2020

Amounts in thousands

Changes in Net FinancePurchase Cash Portfolio Expected Total Portfolio Receivables as ofPeriod Collections^(1) Income ^(1) Recoveries^(1) Revenue ^(1) (2) September 30, 2020 ^(3)

AmericasCore

1996-2009 $ 10,283 $ 7,623 $ (942) $ 6,681 $ 5,632

2010 4,915 4,815 (1,249) 3,566 2,135

2011 8,705 8,080 (2,493) 5,587 4,587

2012 9,544 8,200 (4,924) 3,276 9,732

2013 18,522 13,507 (8,147) 5,360 20,420

2014 25,834 19,101 (15,624) 3,477 32,450

2015 46,778 27,520 (13,397) 14,123 60,495

2016 84,173 46,641 2,896 49,537 104,052

2017 156,140 72,319 17,633 89,952 174,974

2018 269,287 108,426 14,505 122,931 308,890

2019 268,687 137,243 24,458 161,701 406,209

2020 82,503 46,636 13,745 60,381 344,306

Subtotal 985,371 500,111 26,461 526,572 1,473,882

Americas Insolvency

1996-2009 282 $ 339 (42) 297 -

2010 383 444 (59) 385 -

2011 379 324 57 381 -

2012 746 597 429 1,026 -

2013 1,041 1,050 (7) 1,043 -

2014 1,841 2,193 (850) 1,343 190

2015 7,101 3,572 (538) 3,034 1,708

2016 11,196 2,793 280 3,073 9,292

2017 46,234 12,563 (1,726) 10,837 60,022

2018 22,905 6,801 2,804 9,605 61,150

2019 22,832 8,657 3,103 11,760 102,671

2020 4,299 2,366 (737) 1,629 46,617

Subtotal 119,239 41,699 2,714 44,413 281,650

Total 1,104,610 541,810 29,175 570,985 1,755,532Americas

EuropeCore

2012 920 589 331 920 -

2013 510 281 230 511 -

2014 109,979 80,855 5,230 86,085 165,812

2015 40,402 23,441 (1,084) 22,357 142,366

2016 35,954 20,203 (1,431) 18,772 167,280

2017 26,862 10,270 (2,975) 7,295 135,303

2018 53,388 19,851 4,565 24,416 234,456

2019 93,784 32,805 (5,338) 27,467 414,706

2020 16,388 6,371 2,529 8,900 164,342

Subtotal 378,187 194,666 2,057 196,723 1,424,265

Europe Insolvency

2014 640 434 41 475 141

2015 2,241 1,099 44 1,143 1,887

2016 5,970 2,418 (324) 2,094 8,382

2017 7,207 1,527 357 1,884 18,575

2018 7,436 2,244 (517) 1,727 33,282

2019 15,521 5,059 1,215 6,274 62,948

2020 2,040 1,299 340 1,639 27,736

Subtotal 41,055 14,080 1,156 15,236 152,951

Total 419,242 208,746 3,213 211,959 1,577,216Europe

Total PRA $ 1,523,852 $ 750,556 $ 32,388 $ 782,944 $ 3,332,748Group

(1) For our non-U.S. amounts, amounts are presented using the averageexchange rates during the current reporting period.

(2) Total Portfolio Revenue refers to portfolio income and changes inexpected recoveries combined.

(3) For our non-U.S. amounts, net finance receivables are presented at theSeptember 30, 2020 exchange rate.

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

as of September 30, 2020

Amounts in millions

Purchase Price Cash CollectionsPurchase Period ^(2)(3) 1996-2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total

Americas Core

1996-2009 $ 930.0 $ 1,647.7 $ 295.7 $ 253.5 $ 201.6 $ 146.4 $ 101.8 $ 71.2 $ 45.7 $ 30.5 $ 23.3 $ 19.2 $ 10.3 $ 2,846.9

2010 148.2 - 47.1 113.6 109.9 82.0 55.9 38.1 24.5 15.6 11.1 9.2 4.9 511.9

2011 209.6 - - 62.0 174.5 152.9 108.5 73.8 48.7 32.0 21.6 16.6 8.7 699.3

2012 254.1 - - - 56.9 173.6 146.2 97.3 60.0 40.0 27.8 17.9 9.5 629.2

2013 390.8 - - - - 101.6 247.8 194.0 120.8 78.9 56.4 36.9 18.6 855.0

2014 404.1 - - - - - 92.7 253.4 170.3 114.2 82.2 55.3 25.8 793.9

2015 443.1 - - - - - - 117.0 228.4 185.9 126.6 83.6 46.8 788.3

2016 455.8 - - - - - - - 138.7 256.5 194.6 140.6 84.2 814.6

2017 532.9 - - - - - - - - 107.3 278.7 256.5 156.1 798.6

2018 654.0 - - - - - - - - - 122.7 361.9 269.3 753.9

2019 581.5 - - - - - - - - - - 143.8 268.7 412.5

2020 367.0 - - - - - - - - - - - 82.5 82.5

Subtotal 5,371.1 1,647.7 342.8 429.1 542.9 656.5 752.9 844.8 837.1 860.9 945.0 1,141.5 985.4 $ 9,986.6

Americas Insolvency

1996-2009 397.5 204.3 147.1 156.7 145.4 109.3 57.0 7.6 3.6 2.2 1.1 0.7 0.2 835.2

2010 208.9 - 39.5 104.5 125.0 121.7 101.9 43.6 5.0 2.4 1.4 0.7 0.4 546.1

2011 180.4 - - 15.2 66.4 82.8 85.8 76.9 36.0 3.7 1.6 0.7 0.4 369.5

2012 251.4 - - - 17.4 103.6 94.1 80.1 60.7 29.3 4.3 1.9 0.8 392.2

2013 227.8 - - - - 52.5 82.6 81.7 63.4 47.8 21.9 2.9 1.0 353.8

2014 148.4 - - - - - 37.0 50.9 44.3 37.4 28.8 15.8 1.8 216.0

2015 63.2 - - - - - - 3.4 17.9 20.1 19.8 16.7 7.1 85.0

2016 91.4 - - - - - - - 18.9 30.4 25.0 19.9 11.2 105.4

2017 275.3 - - - - - - - - 49.1 97.3 80.9 46.2 273.5

2018 97.9 - - - - - - - - - 6.7 27.4 22.9 57.0

2019 123.1 - - - - - - - - - - 13.4 22.9 36.3

2020 49.6 - - - - - - - - - - - 4.3 4.3

Subtotal 2,114.9 204.3 186.6 276.4 354.2 469.9 458.4 344.2 249.8 222.4 207.9 181.0 119.2 3,274.3

Total Americas 7,486.0 1,852.0 529.4 705.5 897.1 1,126.4 1,211.3 1,189.0 1,086.9 1,083.3 1,152.9 1,322.5 1,104.6 13,260.9

Europe Core

2012 20.4 - - - 11.6 9.0 5.6 3.2 2.2 2.0 2.0 1.5 0.9 38.0

2013 20.3 - - - - 7.1 8.5 2.3 1.3 1.2 1.3 0.9 0.5 23.1

2014 773.8 - - - - - 153.2 292.0 246.4 220.8 206.3 172.9 109.9 1,401.5

2015 411.3 - - - - - - 45.8 100.3 86.2 80.9 66.1 40.3 419.6

2016 333.1 - - - - - - - 40.4 78.9 72.6 58.0 35.9 285.8

2017 252.2 - - - - - - - - 17.9 56.0 44.1 27.0 145.0

2018 341.8 - - - - - - - - - 24.3 88.7 53.4 166.4

2019 518.6 - - - - - - - - - - 48.0 93.8 141.8

2020 172.5 - - - - - - - - - - - 16.4 16.4

Subtotal 2,844.0 - - - 11.6 16.1 167.3 343.3 390.6 407.0 443.4 480.2 378.1 2,637.6

Europe Insolvency

2014 10.9 - - - - - - 4.3 3.9 3.2 2.6 1.5 0.6 16.1

2015 19.0 - - - - - - 3.0 4.4 5.0 4.8 3.9 2.2 23.3

2016 39.3 - - - - - - - 6.2 12.7 12.9 10.7 6.0 48.5

2017 39.2 - - - - - - - - 1.2 7.9 9.2 7.2 25.5

2018 44.9 - - - - - - - - - 0.6 8.4 7.5 16.5

2019 77.2 - - - - - - - - - - 5.0 15.5 20.5

2020 28.3 - - - - - - - - - - - 2.1 2.1

Subtotal 258.8 - - - - - - 7.3 14.5 22.1 28.8 38.7 41.1 152.5

Total Europe 3,102.8 - - - 11.6 16.1 167.3 350.6 405.1 429.1 472.2 518.9 419.2 2,790.1

Total PRA Group $ 10,588.8 $ 1,852.0 $ 529.4 $ 705.5 $ 908.7 $ 1,142.5 $ 1,378.6 $ 1,539.6 $ 1,492.0 $ 1,512.4 $ 1,625.1 $ 1,841.4 $ 1,523.8 $ 16,051.0

(1) For our non-U.S. amounts, Cash Collections are presented using theaverage exchange rates during the cash collection period.

(2) Includes the acquisition date finance receivables portfolios that wereacquired through our business acquisitions.

(3) For our non-US amounts, purchase price is presented at the exchangerate at the end of the year in which the pool was purchased. In addition,any purchase price adjustments that occur throughout the life of the poolare presented at the year-end exchange rate for the respective year ofpurchase.

Use of Non-GAAP Financial MeasuresPRA 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 interest expense, net and other; plus income tax expense (or less income tax benefit); plus depreciation and amortization; plus recoveries applied to negative allowance; less gain on sale of subsidiaries; less foreign exchange gain (or plus foreign exchange loss); and plus net income attributable to noncontrolling interests. 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 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.

LTM Dec. LTM Sept. 31, 30,

2019 2020

LTM Adjusted EBITDA for PRA Group, Inc.

Net Income attributable to PRA Group, Inc. $86 $147

Income tax expense (benefit) $20 $29

Foreign exchange (gain) loss ($12) ($4)

Interest expense, net and other $142 $144

Depreciation and amortization $17 $17

Adjustment for net income attributable to noncontrolling $12 $15interests

Gain on sale of subsidiaries $0 $0

LTM EBITDA $265 $348

Recoveries applied to negative allowance* $843 $978

LTM Adjusted EBITDA $1,108 $1,326

*Prior to the first quarter of 2020, this represented collections applied toprinciple on finance receivables.

Borrowings $2,808 $2,524

LTM Adjusted EBITDA $1,108 $1,326

Debt to LTM Adjusted EBITDA 2.54x 1.90x

Investor Contact:Darby Schoenfeld, CPAVice President, Investor Relations(757) 431-7913Darby.Schoenfeld@PRAGroup.com

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

View original content: http://www.prnewswire.com/news-releases/pra-group-reports-third-quarter-2020-results-301167344.html

SOURCE PRA Group