PR Newswire | Feb 25, 2021 04:25PM EST

02/25 16:05 CDT

PRA Group Reports Fourth Quarter 2020 Results NORFOLK, Va., Feb. 25, 2021

NORFOLK, Va., Feb. 25, 2021 /PRNewswire/ -- PRA Group, Inc. (Nasdaq: PRAA), a global leader in acquiring and collecting nonperforming loans, today reported its financial results for the fourth quarter and full year of 2020. Net income attributable to PRA Group, Inc. increased $2.5 million, or 9%, to $29.8 million compared to the fourth quarter of 2019. Diluted earnings per share were $0.65 compared to $0.60 in the fourth quarter of 2019. For the year ended December 31, 2020, net income attributable to PRA Group, Inc. increased $63.2 million, or 73%, to $149.3 million, or $3.26 per diluted share, compared to the year ended December 31, 2019.

Fourth Quarter Highlights (compared to the fourth quarter of 2019)

* Total cash collections increased 6% to $481.9 million on a reported basis and a constant currency adjusted basis. * Total revenues increased 2% to $273.9 million. * Income from operations increased 26% to $89.2 million. * Cash efficiency ratio1 of 61.9% during the quarter compared to 59.7% in the fourth quarter of 2019. * Net income attributable to PRA Group, Inc. increased 9% to $29.8 million. * Diluted earnings per share increased 8% to $0.65. * Debt to Adjusted EBITDA2 for the last 12 months decreased to 1.99x from 2.53x at December 31, 2019. * Total portfolio purchases of $289.8 million. * Estimated Remaining Collections (ERC) of $6.5 billion.

Full Year 2020 Highlights (compared to the full year of 2019)

* Record total cash collections which increased 9% to $2.0 billion. * Record total revenues which increased 5% to $1.1 billion. * Record income from operations which increased 41% to $349.7 million. * Record cash efficiency ratio1 of 64.5%.

"Cash collections grew in the quarter driven primarily by increases in nonlegal collections in the U.S. and by Core and Insolvency in Europe. In the U.S., we continue to see customers choosing to voluntarily resolve their debts through the call centers and digital platforms. In Europe, cash collections were driven by record portfolio purchases in 2019, as well as strong investment levels in 2020 at increased underwritten net returns," said Kevin Stevenson, president and chief executive officer. "Looking ahead, we entered 2021 with a similar base of maximum forward flow commitments as 2020, but we expect they will deliver more actual investment volume. We believe that the pipeline for 2021 is strong, particularly in Europe, and we remain optimistic about supply globally."

* Calculated by dividing cash receipts less operating expenses by cash receipts. * 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. 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) Q4 Q3 Q2 Q1 Q4

Americas Core $ 286,524 $ 336,322 $ 343,269 $ 305,780 $ 276,639

Americas Insolvency 36,048 37,344 38,685 43,210 40,801

Europe Core 141,471 131,702 115,145 131,340 126,649

Europe Insolvency 17,830 13,971 12,841 14,243 12,520

Total Cash Collections $ 481,873 $ 519,339 $ 509,940 $ 494,573 $ 456,609

Cash Collection Source

Constant Currency Adjusted 2020 2019

($ in thousands) Q4 Q4

Americas Core $ 286,524 $ 269,231

Americas Insolvency 36,048 40,808

Europe Core 141,471 132,291

Europe Insolvency 17,830 12,960

Total Cash Collections $ 481,873 $ 455,290

* Cash collections in the quarter increased $25.3 million compared to the fourth quarter of 2019. The increase was primarily due to a 22% increase in U.S. call center and other cash collections, a 12% increase in Europe Core cash collections and a 42% increase in Europe Insolvency cash collections. This increase was partially offset by a decrease in U.S. legal and Americas Insolvency cash collections. While cash collections decreased in Other Americas, this was primarily driven by foreign exchange rates. For the full year, cash collections increased $164.5 million compared to the full year of 2019. * Portfolio income was $233.5 million compared to $262.8 million in income recognized on finance receivables in the fourth quarter of 2019. For the full year, portfolio income was $984.0 million compared to $998.4 million in income recognized on finance receivables for the same period in 2019. * Changes in expected recoveries were a net positive of $36.9 million. This amount reflects $66.3 million in recoveries in excess of forecast from overperformance during the quarter, partially offset by a negative $29.4 million adjustment for changes in expected future recoveries. The Company has assumed that a portion of the current quarter overperformance is acceleration of future collections and made cash forecast adjustments deemed appropriate given the current environment.

Expenses

* Operating expenses in the quarter decreased $1.1 million compared to the fourth quarter of 2019. The decrease was primarily driven by a reduction in legal collection costs mainly as a result of a shift in collections from the legal channel to the call centers and digital platforms. This decrease was partially offset by an increase in outside fees and services which was driven by a number of factors, none of which was individually material. For the full year, operating expenses decreased $29.7 million compared to the same period in 2019. * Interest expense, net decreased $0.7 million compared to the fourth quarter of 2019 primarily due to lower average interest rates. For the full year, interest expense, net was almost flat to the same period in 2019. * The effective tax rate for the full year was 19.7%.

Portfolio Acquisitions

* The Company purchased $289.8 million in finance receivables in the fourth quarter of 2020. * At the end of the fourth quarter, the Company had in place forward flow commitments of up to $501.9 million with $324.1 million in the Americas and $177.8 million in Europe.

Portfolio Acquisition Source 2020 2019

($ in thousands) Q4 Q3 Q2 Q1 Q4

Americas Core $ 67,460 $ 84,139 $ 110,474 $ 172,697 $ 118,153

Americas Insolvency 12,504 14,328 14,527 20,772 22,650

Europe Core 137,647 74,930 34,247 60,990 218,919

Europe Insolvency 72,171 4,203 5,251 18,778 42,613

Total Portfolio Acquisitions $ 289,782 $ 177,600 $ 164,499 $ 273,237 $ 402,335

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 Mar. 4, 2021, 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.

PRA Group, Inc.

Unaudited Consolidated Income Statements

(Amounts in thousands, except per share amounts)

Three Months Ended Twelve Months Ended

December 31, December 31,

2020 2019 2020 2019

Revenues:

Portfolio income $ 233,480 $ - $ 984,036 $ -

Changes in expected recoveries 36,909 - 69,297 -

Income recognized on finance receivables - 262,835 - 998,361

Fee income 2,922 4,297 9,748 15,769

Other revenue 545 2,001 2,333 2,951

Total revenues 273,856 269,133 1,065,414 1,017,081

Net allowance charges - (12,598) - (24,025)

Operating expenses:

Compensation and employee services 77,533 75,671 295,150 310,441

Legal collection fees 11,783 13,822 53,758 55,261

Legal collection costs 21,638 34,411 101,635 134,156

Agency fees 17,799 15,979 56,418 55,812

Outside fees and services 23,291 15,239 84,087 63,513

Communication 9,099 9,722 40,801 44,057

Rent and occupancy 4,558 4,586 17,973 17,854

Depreciation and amortization 5,971 4,123 18,465 17,464

Other operating expenses 12,969 12,198 47,426 46,811

Total operating expenses 184,641 185,751 715,713 745,369

Income from operations 89,215 70,784 349,701 247,687

Other income and (expense):

Interest expense, net (35,393) (36,046) (141,712) (141,918)

Foreign exchange (loss)/gain (1,022) 595 2,005 11,954

Other 318 (241) (1,049) (364)

Income before income taxes 53,118 35,092 208,945 117,359

Income tax expense 16,469 4,073 41,203 19,680

Net income 36,649 31,019 167,742 97,679

Adjustment for net income attributable to noncontrolling interests 6,851 3,678 18,403 11,521

Net income attributable to PRA Group, Inc. $ 29,798 $ 27,341 $ 149,339 $ 86,158

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

Basic $ 0.65 $ 0.60 $ 3.28 $ 1.90

Diluted $ 0.65 $ 0.60 $ 3.26 $ 1.89

Weighted average number of shares outstanding:

Basic 45,583 45,413 45,540 45,387

Diluted 45,973 45,748 45,860 45,577

PRA Group, Inc.

Consolidated Balance Sheets

(Amounts in thousands, except per share amounts)

(unaudited)

December 31, December 31,

ASSETS 2020 2019

Cash and cash equivalents $ 108,613 $ 119,774

Restricted cash 12,434 4,033

Investments 55,759 56,176

Finance receivables, net 3,514,788 3,514,165

Other receivables, net 13,194 10,606

Income taxes receivable 21,928 17,918

Deferred tax assets, net 83,205 63,225

Right-of-use assets 52,951 68,972

Property and equipment, net 58,356 56,501

Goodwill 492,989 480,794

Other assets 38,844 31,727

Total assets $ 4,453,061 $ 4,423,891

LIABILITIES AND EQUITY

Liabilities:

Accounts payable $ 5,294 $ 4,258

Accrued expenses 97,320 88,925

Income taxes payable 29,692 4,046

Deferred tax liabilities, net 40,867 85,390

Lease liabilities 57,348 73,377

Interest-bearing deposits 132,739 106,246

Borrowings 2,661,289 2,808,425

Other liabilities 54,986 26,211

Total liabilities 3,079,535 3,196,878

Equity:

Preferred stock, $0.01 par value, 2,000 authorized shares,

no shares issued and outstanding shares - -

Common stock, $0.01 par value, 100,000 shares authorized, 45,585 shares

issued and outstanding at December 31, 2020; 100,000 shares authorized,

45,416 shares issued and outstanding at December 31, 2019 456 454

Additional paid-in capital 75,282 67,321

Retained earnings 1,511,970 1,362,631

Accumulated other comprehensive loss (245,791) (261,018)

Total stockholders' equity - PRA Group, Inc. 1,341,917 1,169,388

Noncontrolling interests 31,609 57,625

Total equity 1,373,526 1,227,013

Total liabilities and equity $ 4,453,061 $ 4,423,891

Select Expenses (Income)

(in thousands, pre-tax) Three Months Ended

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

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

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

Noncash interest expense - amortization of debt discount 1,959 2,388 3,247 3,217 3,157 3,128 3,071 3,042

Noncash interest expense - amortization of debt 2,393 2,476 2,743 2,640 2,649 2,649 2,655 2,636issuance costs

Change in fair value on derivatives 3,875 3,701 3,284 2,039 1,247 1,126 1,645 349

Amortization of intangibles 1,792 360 351 349 407 400 418 347

Share-based compensation expense 5,370 3,097 3,063 2,857 2,809 2,974 2,620 2,314

Purchase Price Multiples

as of December 31, 2020

Amounts in thousands

Current Original Total Estimated Estimated Estimated EstimatedPurchase Period Purchase Price ^(1)(2) Collections ^(3) Remaining Purchase Purchase Price Collections ^(4) Price Multiple ^(5) Multiple

Americas Core

1996-2010 $ 1,078,219 $ 3,398,610 $ 28,969 315% 240%

2011 209,602 720,510 19,048 344% 245%

2012 254,076 653,102 21,655 257% 226%

2013 390,826 896,381 36,759 229% 211%

2014 404,117 866,597 58,983 214% 204%

2015 443,114 927,497 132,263 209% 205%

2016 455,767 1,092,218 230,039 240% 201%

2017 532,851 1,210,475 367,123 227% 193%

2018 653,975 1,362,777 521,466 208% 202%

2019 581,476 1,240,122 717,793 213% 206%

2020 435,668 929,706 796,502 213% 213%

Subtotal 5,439,691 13,297,995 2,930,600

Americas Insolvency

1996-2010 606,395 1,382,682 1,105 228% 180%

2011 180,432 370,180 567 205% 155%

2012 251,395 392,605 256 156% 136%

2013 227,834 354,923 832 156% 133%

2014 148,420 218,485 2,045 147% 124%

2015 63,170 87,254 1,489 138% 125%

2016 91,442 116,918 9,209 128% 123%

2017 275,257 348,732 62,593 127% 125%

2018 97,879 130,683 66,033 134% 127%

2019 123,077 160,804 116,037 131% 128%

2020 62,130 84,622 78,098 136% 136%

Subtotal 2,127,431 3,647,888 338,264

Total Americas 7,567,122 16,945,883 3,268,864

Europe Core

2012 20,409 41,210 - 202% 187%

2013 20,334 25,448 - 125% 119%

2014 773,811 2,229,255 630,934 288% 208%

2015 411,340 734,276 274,714 179% 160%

2016 333,090 556,493 295,560 167% 167%

2017 252,174 353,557 194,165 140% 144%

2018 341,775 524,117 361,355 153% 148%

2019 518,610 778,422 630,040 150% 152%

2020 324,119 557,289 523,089 172% 172%

Subtotal 2,995,662 5,800,067 2,909,857

Europe Insolvency

2014 10,876 18,223 213 168% 129%

2015 18,973 29,023 2,512 153% 139%

2016 39,338 56,801 10,424 144% 130%

2017 39,235 49,142 20,019 125% 128%

2018 44,908 52,955 36,032 118% 123%

2019 77,218 101,891 77,854 132% 130%

2020 105,440 135,890 129,591 129% 129%

Subtotal 335,988 443,925 276,645

Total Europe 3,331,650 6,243,992 3,186,502

Total PRA Group $ 10,898,772 $ 23,189,875 $ 6,455,366

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

For our non-US amounts, purchase price is presented at the exchange rate at the end of the year in which the portfolio was purchased. In addition, any(2) 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.

(3) For our non-US amounts, TEC is presented at the year-end exchange rate for the respective year of purchase.

(4) For our non-U.S. amounts, ERC is presented at the December 31, 2020 exchange rate.

(5) The Original Estimated 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, 2020

Amounts in thousands

Portfolio Changes in Total Portfolio Net FinancePurchase Period Cash Collections^(1) Income ^(1) Expected Revenue ^(1) (2) Receivables as of Recoveries^(1) December 31,2020 ^(3)

Americas Core

1996-2010 $ 18,838 $ 15,419 $ (3,156) $ 12,263 $ 6,140

2011 10,855 10,016 (3,722) 6,294 3,142

2012 11,805 10,055 (7,485) 2,570 6,761

2013 23,161 16,709 (10,833) 5,876 16,290

2014 31,921 23,563 (21,081) 2,482 25,525

2015 57,223 34,339 (14,111) 20,228 56,170

2016 105,905 59,388 796 60,184 93,024

2017 192,524 91,632 25,085 116,717 165,492

2018 337,697 135,689 32,123 167,812 286,204

2019 349,021 175,258 36,325 211,583 380,756

2020 132,945 78,573 18,114 96,687 398,271

Subtotal 1,271,895 650,641 52,055 702,696 1,437,775

Americas Insolvency

1996-2010 844 $ 992 (128) 864 -

2011 483 406 79 485 -

2012 925 697 509 1,206 -

2013 1,311 1,310 11 1,321 -

2014 2,229 2,500 (734) 1,766 224

2015 7,909 4,036 (1,002) 3,034 898

2016 14,362 3,402 970 4,372 7,423

2017 58,826 15,607 (428) 15,179 51,771

2018 30,513 8,762 2,960 11,722 55,653

2019 31,360 11,293 3,480 14,773 97,250

2020 6,525 4,064 (869) 3,195 57,929

Subtotal 155,287 53,069 4,848 57,917 271,148

Total Americas 1,427,182 703,710 56,903 760,613 1,708,923

Europe Core

2012 1,218 687 531 1,218 -

2013 685 333 353 686 -

2014 149,782 106,875 11,173 118,048 168,604

2015 54,252 30,917 (575) 30,342 144,112

2016 48,333 26,722 (2,260) 24,462 172,697

2017 36,084 13,521 (5,500) 8,021 135,149

2018 71,253 26,261 3,519 29,780 235,099

2019 125,712 43,091 (2,837) 40,254 416,812

2020 32,339 12,507 6,199 18,706 309,229

Subtotal 519,658 260,914 10,603 271,517 1,581,702

Europe Insolvency

2014 802 511 69 580 90

2015 2,871 1,367 49 1,416 1,627

2016 7,950 3,047 (204) 2,843 7,583

2017 9,819 1,960 568 2,528 17,602

2018 10,315 2,935 (2,229) 706 31,143

2019 21,082 6,637 1,933 8,570 63,230

2020 6,046 2,955 1,605 4,560 102,888

Subtotal 58,885 19,412 1,791 21,203 224,163

Total Europe 578,543 280,326 12,394 292,720 1,805,865

Total PRA Group $ 2,005,725 $ 984,036 $ 69,297 $ 1,053,333 $ 3,514,788

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

(2) Total Portfolio Revenue refers to Portfolio Income and Changes in Expected Recoveries combined.

(3) For our non-U.S. amounts, Net Finance Receivables are presented at the December 31, 2020 exchange rate.

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

as of December 31, 2020

Amounts in millions

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

Americas Core

1996-2010 $ 1,078.2 $ 1,990.5 $ 367.1 $ 311.5 $ 228.4 $ 157.7 $ 109.3 $ 70.2 $ 46.0 $ 34.4 $ 28.4 $ 18.8 $ 3,362.3

2011 209.6 - 62.0 174.5 152.9 108.5 73.8 48.7 32.0 21.6 16.6 10.9 701.5

2012 254.1 - - 56.9 173.6 146.2 97.3 60.0 40.0 27.8 17.9 11.8 631.5

2013 390.8 - - - 101.6 247.8 194.0 120.8 78.9 56.4 36.9 23.2 859.6

2014 404.1 - - - - 92.7 253.4 170.3 114.2 82.2 55.3 31.9 800.0

2015 443.1 - - - - - 117.0 228.4 185.9 126.6 83.6 57.2 798.7

2016 455.8 - - - - - - 138.7 256.5 194.6 140.6 105.9 836.3

2017 532.9 - - - - - - - 107.3 278.7 256.5 192.5 835.0

2018 654.0 - - - - - - - - 122.7 361.9 337.7 822.3

2019 581.5 - - - - - - - - - 143.8 349.0 492.8

2020 435.7 - - - - - - - - - - 133.0 133.0

Subtotal 5,439.8 1,990.5 429.1 542.9 656.5 752.9 844.8 837.1 860.8 945.0 1,141.5 1,271.9 $ 10,273.0

Americas Insolvency

1996-2010 606.4 390.9 261.2 270.4 231.0 158.9 51.2 8.6 4.6 2.5 1.4 0.8 1,381.5

2011 180.4 - 15.2 66.4 82.8 85.8 76.9 36.0 3.7 1.6 0.7 0.5 369.6

2012 251.4 - - 17.4 103.6 94.1 80.1 60.7 29.3 4.3 1.9 0.9 392.3

2013 227.8 - - - 52.5 82.6 81.7 63.4 47.8 21.9 2.9 1.3 354.1

2014 148.4 - - - - 37.0 50.9 44.3 37.4 28.8 15.8 2.2 216.4

2015 63.2 - - - - - 3.4 17.9 20.1 19.8 16.7 7.9 85.8

2016 91.4 - - - - - - 18.9 30.4 25.0 19.9 14.4 108.6

2017 275.3 - - - - - - - 49.1 97.3 80.9 58.8 286.1

2018 97.9 - - - - - - - - 6.7 27.4 30.5 64.6

2019 123.1 - - - - - - - - - 13.3 31.4 44.7

2020 62.1 - - - - - - - - - - 6.6 6.6

Subtotal 2,127.4 390.9 276.4 354.2 469.9 458.4 344.2 249.8 222.4 207.9 180.9 155.3 3,310.3

Total Americas 7,567.2 2,381.4 705.5 897.1 1,126.4 1,211.3 1,189.0 1,086.9 1,083.2 1,152.9 1,322.4 1,427.2 13,583.3

Europe Core

2012 20.4 - - 11.6 9.0 5.6 3.2 2.2 2.0 2.0 1.5 1.2 38.3

2013 20.3 - - - 7.1 8.5 2.3 1.3 1.2 1.3 0.9 0.7 23.3

2014 773.8 - - - - 153.2 292.0 246.4 220.8 206.3 172.9 149.8 1,441.4

2015 411.3 - - - - - 45.8 100.3 86.2 80.9 66.1 54.3 433.6

2016 333.1 - - - - - - 40.4 78.9 72.6 58.0 48.3 298.2

2017 252.2 - - - - - - - 17.9 56.0 44.1 36.1 154.1

2018 341.8 - - - - - - - - 24.3 88.7 71.2 184.2

2019 518.6 - - - - - - - - - 47.9 125.7 173.6

2020 324.1 - - - - - - - - - - 32.4 32.4

Subtotal 2,995.6 - - 11.6 16.1 167.3 343.3 390.6 407.0 443.4 480.1 519.7 2,779.1

Europe Insolvency

2014 10.9 - - - - - 4.3 3.9 3.2 2.6 1.5 0.8 16.3

2015 19.0 - - - - - 3.0 4.4 5.0 4.8 3.9 2.9 24.0

2016 39.3 - - - - - - 6.2 12.7 12.9 10.7 7.9 50.4

2017 39.2 - - - - - - - 1.2 7.9 9.2 9.8 28.1

2018 44.9 - - - - - - - - 0.6 8.4 10.3 19.3

2019 77.2 - - - - - - - - - 5.1 21.1 26.2

2020 105.4 - - - - - - - - - - 6.1 6.1

Subtotal 335.9 - - - - - 7.3 14.5 22.1 28.8 38.8 58.9 170.4

Total Europe 3,331.5 - - 11.6 16.1 167.3 350.6 405.1 429.1 472.2 518.9 578.6 2,949.5

Total PRA Group $ 10,898.7 $ 2,381.4 $ 705.5 $ 908.7 $ 1,142.5 $ 1,378.6 $ 1,539.6 $ 1,492.0 $ 1,512.3 $ 1,625.1 $ 1,841.3 $ 2,005.8 $ 16,532.8

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

(2) Includes the finance receivables portfolios that were acquired through our business acquisitions.

For our non-US amounts, Purchase Price is presented at the exchange rate at the end of the year in which the portfolio was purchased. In(3) 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 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 Adjusted EBITDA for PRA Group ($ in millions) 12/31/2020 12/31/2019

Net income attributable to PRA Group, Inc. $ 149 $ 86

Income tax expense (benefit) 41 20

Foreign exchange (gain) loss (2) (12)

Interest expense, net and other 143 142

Depreciation and amortization 18 17

Adjustment for net income attributable to noncontrolling interests 18 12

Gain on sale of subsidiaries - -

Recoveries applied to negative allowance less changes in expected in 968 843recoveries*

LTM Adjusted EBITDA $ 1,337 $ 1,108

*Prior to Q1 2020, this included collections applied to principal on financereceivables

Borrowings $ 2,661 $ 2,808

LTM Adjusted EBITDA 1,337 1,108

Debt to LTM Adjusted EBITDA 1.99 2.53

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-fourth-quarter-2020-results-301235957.html

SOURCE PRA Group, Inc.