PR Newswire | Nov 8, 2021 04:06PM EST

11/08 15:05 CST

PRA Group Reports Third Quarter 2021 Results NORFOLK, Va., Nov. 8, 2021

NORFOLK, Va., Nov. 8, 2021 /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 2021. The Company reported net income attributable to PRA Group, Inc. of $34.5 million in the third quarter, compared with $42.5 million in the prior year period. Diluted earnings per share were $0.76 versus $0.92 in the third quarter of 2020. For the nine months ended September 30, 2021, net income attributable to PRA Group, Inc. was $148.9 million, or $3.24 per diluted share, compared with $119.5 million, or $2.60 per diluted share, during the same period in 2020.

Third Quarter Highlights

* Total portfolio purchases of $391.9 million, an increase of $172.3 million, or 78%, from the second quarter of 2021. * Purchases in Europe were $219.6 million, bringing the year to date total to $386.3 million, a record for the first nine months of the year. * Purchases in Americas and Australia were $172.3 million, reflecting strong geographic diversity with substantial deployment in South America.

* Estimated remaining collections (ERC) of $6.1 billion, an increase of $91 million from the second quarter of 2021. * Total cash collections were $488.4 million. * Total revenues were $263.7 million. * Cash efficiency ratio1 of 62.4%. * Diluted earnings per share were $0.76. * Common stock repurchases of $74 million, or 1.8 million shares, at an average price of $41.10. * Debt to Adjusted EBITDA2 for the last 12 months was 1.81x. * $1.4 billion available for portfolio purchases.

"We deployed almost $400 million in the third quarter, making it one of our largest portfolio purchasing quarters. In Europe, we invested $220 million, where we have seen a very healthy pipeline of deals coming to market and we also secured a large multi-year forward flow agreement. We invested $172 million in the Americas and Australia, highlighted by sizeable portfolio spot purchases in South America, which further demonstrates the benefits of our geographic diversification," said Kevin Stevenson, president and chief executive officer. "We also made excellent progress in returning capital to shareholders through the $150 million share repurchase program launched during the third quarter, repurchasing $74 million of our common stock at an average price of $41.10. Our leverage ratios remain well below our target range, despite the strong portfolio purchasing quarter and the utilization of nearly half of our initial share repurchase authorization. On November 1, we announced an $80 million increase to our share repurchase program, raising the total authorization to $230 million."

1. Calculated by dividing cash receipts less operating expense by cash receipts.

2. A reconciliation of this non-GAAP financial measure to the most comparable GAAP measure can be found at the end of this press release.

Cash Collections and Revenues

* The following table presents cash collections by quarter and by source on an as reported and constant currency-adjusted basis:



Cash Collection Source 2021 2020

($ in thousands) Q3 Q2 Q1 Q4 Q3

Americas and Australia Core$276,691$324,845$347,638$286,524$336,322

Americas Insolvency 37,464 37,768 35,253 36,048 37,344

Europe Core 151,625 157,637 149,486 141,471 131,702

Europe Insolvency 22,574 23,579 23,510 17,830 13,971

Total Cash Collections $488,354$543,829$555,887$481,873$519,339







Cash Collection Source -

Constant Currency Adjusted 2021 2020

($ in thousands) Q3 Q3

Americas and Australia Core$276,691 $337,483

Americas Insolvency 37,464 37,373

Europe Core 151,625 136,747

Europe Insolvency 22,574 14,810

Total Cash Collections $488,354 $526,413

* Cash collections in the quarter decreased $31.0 million compared to the third quarter of 2020. The decrease was primarily due to a return to more normal seasonal trends in the U.S., as well as the lower volume of accounts in the U.S. legal channel during 2021. These decreases were partially offset by a 20% increase in Europe cash collections driven by significant levels of portfolio purchases in the last few years. For the nine months ended September 30, 2021, cash collections increased $64.2 million compared to the same period last year. * Total portfolio revenue in the quarter was $256.7 million compared to $265.7 million during the third quarter of 2020. The Company has consistently assumed that the majority of the current quarter overperformance was acceleration of future collections and made adjustments in some geographies to increase near term expected collections, bringing them in line with recent performance and trends in collections, with corresponding reductions later in the forecast period.

Expenses

* Operating expenses in the quarter increased $6.9 million compared to the third quarter of 2020. The increase was primarily driven by: * an increase in compensation and employee services primarily due to changes in benefits and performance based accruals and an increase in the number of employees in Europe; * an increase in outside fees and services primarily due to higher legal expenses; and * an increase in other operating expenses primarily driven by ongoing efforts to enhance our digital and data.

* For the nine months ended September 30, 2021, operating expenses increased $15.2 million compared to the same period last year. * Interest expense, net decreased $4.1 million compared to the third quarter of 2020 primarily due to lower average borrowings this year and a change in accounting for convertible notes. * The effective tax rate for the nine months ended September 30, 2021 was 20.8%.

Portfolio Acquisitions

* The Company purchased $391.9 million in finance receivables in the third quarter of 2021. * At the end of the third quarter, the Company had in place maximum forward flow commitments of up to $873.7 million with $323.1 million in the Americas and Australia and $550.6 million in Europe.



Portfolio Purchase Source 2021 2020

($ in thousands) Q3 Q2 Q1 Q4 Q3

Americas and Australia Core $162,451$98,901 $88,912 $67,460 $84,139

Americas Insolvency 9,878 14,642 9,486 12,504 14,328

Europe Core 212,194 106,134 44,095 137,647 74,930

Europe Insolvency 7,424 - 16,468 72,171 4,203

Total Portfolio Acquisitions$391,947$219,677$158,961$289,782$177,600



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, either visit the same website until November 8, 2022, or call 877-344-7529 in the U.S. or 412-317-0088 outside the U.S. and use access code 10160856 until November 15, 2021.

The Company is also announcing that it currently plans to report fourth quarter 2021 results after market close on February 28, 2022.

About PRA Group, Inc.As a global leader in acquiring and collecting nonperforming loans, PRA Group, Inc. returns capital to banks and other creditors to help expand financial services for consumers in the Americas, Europe and Australia. With thousands of employees worldwide, PRA Group, Inc. companies collaborate with customers to help them resolve their debt. For more information, please visit www.pragroup.com.

About Forward Looking 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 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 Nine Months Ended September 30, September 30,

2021 2020 2021 2020

Revenues:

Portfolio income $212,905$240,250$663,714$750,556

Changes in expected recoveries 43,820 25,403 157,504 32,388

Total portfolio revenue 256,725 265,653 821,218 782,944

Fee income 6,209 1,978 10,843 6,826

Other revenue 764 233 6,735 1,788

Total revenues 263,698 267,864 838,796 791,558

Operating expenses:

Compensation and employee services 74,584 71,974 228,200 217,617

Legal collection fees 10,993 13,661 36,208 41,975

Legal collection costs 21,450 26,043 61,231 79,997

Agency fees 15,646 14,900 47,145 38,619

Outside fees and services 29,434 22,719 71,167 60,796

Communication 9,782 9,379 33,039 31,702

Rent and occupancy 4,571 4,460 13,694 13,415

Depreciation and amortization 3,724 4,301 11,520 12,494

Other operating expenses 15,935 11,761 44,045 34,457

Total operating expenses 186,119 179,198 546,249 531,072

Income from operations 77,579 88,666 292,547 260,486

Other income and (expense):

Interest expense, net (29,599) (33,692) (91,987) (106,319)

Foreign exchange gain 1,232 61 127 3,027

Other 85 291 294 (1,367)

Income before income taxes 49,297 55,326 200,981 155,827

Income tax expense 12,627 7,497 41,870 24,734

Net income 36,670 47,829 159,111 131,093

Adjustment for net income attributable 2,190 5,337 10,229 11,552 to noncontrolling interests

Net income attributable to PRA Group, Inc. $34,480 $42,492 $148,882$119,541

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

Basic $0.76 $0.93 $3.27 $2.63

Diluted $0.76 $0.92 $3.24 $2.60

Weighted average number of shares outstanding:

Basic 45,305 45,579 45,594 45,526

Diluted 45,656 46,140 45,920 45,971

PRA Group, Inc. Consolidated Balance Sheets (Amounts in thousands)



(unaudited)

September 30, 2021December 31, 2020

Assets

Cash and cash equivalents $56,545 $108,613

Restricted cash 4,752 12,434

Investments 85,171 55,759

Finance receivables, net 3,449,939 3,514,788

Other receivables, net 7,065 13,194

Income taxes receivable 21,863 21,928

Deferred tax assets, net 77,213 83,205

Right-of-use assets 51,998 52,951

Property and equipment, net 53,767 58,356

Goodwill 482,479 492,989

Other assets 41,168 38,844

Total assets $4,331,960 $4,453,061

Liabilities and Equity

Liabilities:

Accounts payable $5,379 $5,294

Accrued expenses 100,342 97,320

Income taxes payable 20,719 29,692

Deferred tax liabilities, net 32,604 40,867

Lease liabilities 56,409 57,348

Interest-bearing deposits 132,612 132,739

Borrowings 2,520,903 2,661,289

Other liabilities 34,342 54,986

Total liabilities 2,903,310 3,079,535

Equity:

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

Common stock, $0.01 par value, 100,000 shares authorized, 44,040 shares issued and outstanding at September 30, 2021; 100,000 shares authorized, 440 456 45,585 shares issued and outstanding at December 31, 2020

Additional paid-in capital - 75,282

Retained earnings 1,654,544 1,511,970

Accumulated other comprehensive loss (264,781) (245,791)

Total stockholders' equity - PRA Group, Inc. 1,390,203 1,341,917

Noncontrolling interest 38,447 31,609

Total equity 1,428,650 1,373,526

Total liabilities and equity $4,331,960 $4,453,061

Select Expenses (Income) Amounts in thousands, pre-tax

Three Months Ended

September 30,June 30,March 31,December 31,September 30,June 30,March 31,December 31, 2021 2021 2021 2020 2020 2020 2020 2019



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

Noncash interest expense - amortization 2,406 2,391 2,256 2,393 2,476 2,743 2,640 2,649 of debt issuance costs

Change in fair value of2,982 2,911 3,102 3,875 3,701 3,284 2,039 1,247 derivatives

Amortization of 104 105 181 1,792 360 351 349 407 intangibles

Stock-based 4,317 4,040 4,113 5,370 3,097 3,063 2,857 2,809 compensation expense

Purchase Price Multiples as of September 30, 2021 Amounts in thousands

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

Americas and Australia Core

1996-2010 $ 1,078,219 $ 3,400,695 $ 20,886 315% 240%

2011 209,602 719,844 12,296 343% 245%

2012 254,076 652,359 13,851 257% 226%

2013 390,826 894,134 21,565 229% 211%

2014 404,117 859,487 34,155 213% 204%

2015 443,114 908,490 84,319 205% 205%

2016 455,767 1,112,953 174,608 244% 201%

2017 532,851 1,214,479 263,966 228% 193%

2018 653,975 1,396,690 350,509 214% 202%

2019 581,476 1,249,471 487,764 215% 206%

2020 435,668 931,651 572,004 214% 213%

2021 347,641 672,752 624,805 194% 194%

Subtotal 5,787,332 14,013,005 2,660,728

Americas Insolvency

1996-2010 606,395 1,382,652 604 228% 180%

2011 180,432 370,146 370 205% 155%

2012 251,395 392,933 94 156% 136%

2013 227,834 355,191 453 156% 133%

2014 148,420 219,081 1,760 148% 124%

2015 63,170 87,229 418 138% 125%

2016 91,442 117,105 2,878 128% 123%

2017 275,257 350,845 30,193 127% 125%

2018 97,879 131,527 42,766 134% 127%

2019 123,077 159,298 86,020 129% 128%

2020 62,130 85,128 67,104 137% 136%

2021 34,003 47,105 45,525 139% 139%

Subtotal 2,161,434 3,698,240 278,185

Total Americas and Australia7,948,766 17,711,245 2,938,913

Europe Core

2012 20,409 42,267 - 207% 187%

2013 20,334 26,084 - 128% 119%

2014 773,811 2,240,031 502,932 289% 208%

2015 411,340 723,559 218,870 176% 160%

2016 333,090 561,613 256,468 169% 167%

2017 252,174 353,381 162,591 140% 144%

2018 341,775 527,899 304,855 154% 148%

2019 518,610 775,332 515,554 150% 152%

2020 324,119 554,041 433,847 171% 172%

2021 353,539 599,818 577,137 170% 170%

Subtotal 3,349,201 6,404,025 2,972,254

Europe Insolvency

2014 10,876 18,297 46 168% 129%

2015 18,973 29,009 1,157 153% 139%

2016 39,338 56,850 5,593 145% 130%

2017 39,235 49,180 12,650 125% 128%

2018 44,908 51,977 25,606 116% 123%

2019 77,218 102,011 58,984 132% 130%

2020 105,440 135,893 102,428 129% 129%

2021 23,485 29,676 27,003 126% 126%

Subtotal 359,473 472,893 233,467

Total Europe 3,708,674 6,876,918 3,205,721

Total PRA Group $ 11,657,440 $ 24,588,163 $ 6,144,634

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

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

(3) For our non-U.S. 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 September 30, 2021 exchange rate.

(5) The Original Purchase Price Multiple represents the purchase price multiple at the end of the year of acquisition.

Portfolio Financial Information Year-to-date as of September 30, 2021 Amounts in thousands

Cash Change in ExpectedTotal PortfolioNet Finance Purchase Period Portfolio Income ^(1)Recoveries ^(1) Revenue^ (1) Receivables as of Collections^ (1) September 30, 2021^ (2)

Americas and Australia Core

1996-2010 $10,168 $6,227 $2,465 $8,692 $ 4,657

2011 6,086 3,717 1,223 4,940 1,995

2012 7,061 3,290 1,387 4,677 4,375

2013 12,948 6,289 (1,772) 4,517 7,857

2014 17,717 8,350 (3,773) 4,577 12,105

2015 28,449 15,707 (9,526) 6,181 33,589

2016 60,990 32,106 (115) 31,991 63,980

2017 105,643 48,701 10,228 58,929 118,667

2018 193,699 66,584 31,149 97,733 189,064

2019 232,297 92,750 26,418 119,168 265,681

2020 226,068 97,175 52,411 149,586 322,912

2021 48,048 33,002 (183) 32,819 331,622

Subtotal 949,174 413,898 109,912 523,810 1,356,504

Americas Insolvency

1996-2010 471 501 (15) 486 -

2011 162 196 (33) 163 -

2012 489 161 340 501 -

2013 647 379 268 647 -

2014 881 856 (32) 824 156

2015 1,046 471 (85) 386 238

2016 6,543 1,137 230 1,367 2,247

2017 34,514 6,501 2,351 8,852 26,108

2018 24,111 4,768 1,079 5,847 37,385

2019 28,538 6,855 (1,017) 5,838 74,558

2020 11,501 5,533 903 6,436 52,559

2021 1,582 1,448 229 1,677 33,916

Subtotal 110,485 28,806 4,218 33,024 227,167

Total Americas and Australia1,059,659 442,704 114,130 556,834 1,583,671

Europe Core

2012 901 - 901 901 -

2013 532 - 533 533 -

2014 113,726 73,152 21,097 94,249 142,909

2015 39,404 20,653 (8,937) 11,716 112,919

2016 35,457 18,422 (1,387) 17,035 149,054

2017 27,247 9,083 (2,960) 6,123 111,143

2018 53,130 18,174 5,817 23,991 201,056

2019 93,839 28,871 9,890 38,761 347,599

2020 71,264 27,566 10,664 38,230 263,916

2021 23,248 8,152 3,645 11,797 342,204

Subtotal 458,748 204,073 39,263 243,336 1,670,800

Europe Insolvency

2014 242 97 76 173 21

2015 1,342 544 43 587 853

2016 4,783 1,388 226 1,614 4,301

2017 7,236 1,056 249 1,305 11,426

2018 8,846 1,750 (748) 1,002 22,699

2019 18,390 4,353 1,070 5,423 49,581

2020 26,073 6,845 2,045 8,890 84,688

2021 2,751 904 1,150 2,054 21,899

Subtotal 69,663 16,937 4,111 21,048 195,468

Total Europe 528,411 221,010 43,374 264,384 1,866,268

Total PRA Group $1,588,070 $663,714 $157,504 $821,218 $ 3,449,939

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

(2) For our non-U.S. amounts, Net Finance Receivables are presented at the September 30, 2021 exchange rate.

Cash Collections by Year, By Year of Purchase ^(1) as of September 30, 2021 Amounts in millions

Cash Collections

Purchase Purchase 1996- 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Total Period Price ^(2)(3)2010

Americas and Australia 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 $10.2 $3,372.5

2011 209.6 - 62.0 174.5 152.9 108.5 73.8 48.7 32.0 21.6 16.6 10.9 6.1 707.6

2012 254.1 - - 56.9 173.6 146.2 97.3 60.0 40.0 27.8 17.9 11.8 7.1 638.6

2013 390.8 - - - 101.6 247.8 194.0 120.8 78.9 56.4 36.9 23.2 12.9 872.5

2014 404.1 - - - - 92.7 253.4 170.3 114.2 82.2 55.3 31.9 17.7 817.7

2015 443.1 - - - - - 117.0 228.4 185.9 126.6 83.6 57.2 28.4 827.1

2016 455.8 - - - - - - 138.7 256.5 194.6 140.6 105.9 61.0 897.3

2017 532.9 - - - - - - - 107.3 278.7 256.5 192.5 105.6 940.6

2018 654.0 - - - - - - - - 122.7 361.9 337.7 193.7 1016.0

2019 581.5 - - - - - - - - - 143.8 349.0 232.3 725.1

2020 435.7 - - - - - - - - - - 133.0 226.1 359.1

2021 347.6 - - - - - - - - - - - 48.1 48.1

Subtotal 5,787.4 1,990.5 429.1 542.9 656.5 752.9 844.8 837.1 860.8 945.0 1,141.5 1,271.9 949.2 11,222.2

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 0.5 1,382.0

2011 180.4 - 15.2 66.4 82.8 85.8 76.9 36.0 3.7 1.6 0.7 0.5 0.2 369.8

2012 251.4 - - 17.4 103.6 94.1 80.1 60.7 29.3 4.3 1.9 0.9 0.5 392.8

2013 227.8 - - - 52.5 82.6 81.7 63.4 47.8 21.9 2.9 1.3 0.6 354.7

2014 148.4 - - - - 37.0 50.9 44.3 37.4 28.8 15.8 2.2 0.9 217.3

2015 63.2 - - - - - 3.4 17.9 20.1 19.8 16.7 7.9 1.0 86.8

2016 91.4 - - - - - - 18.9 30.4 25.0 19.9 14.4 6.5 115.1

2017 275.3 - - - - - - - 49.1 97.3 80.9 58.8 34.5 320.6

2018 97.9 - - - - - - - - 6.7 27.4 30.5 24.1 88.7

2019 123.1 - - - - - - - - - 13.3 31.4 28.5 73.2

2020 62.1 - - - - - - - - - - 6.6 11.5 18.1

2021 34.0 - - - - - - - - - - - 1.7 1.7

Subtotal 2,161.4 390.9 276.4 354.2 469.9 458.4 344.2 249.8 222.4 207.9 180.9 155.3 110.5 3,420.8

Total Americas and Australia7,948.8 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 1,059.7 14,643.0

Europe Core

2012 20.4 - - 11.6 9.0 5.6 3.2 2.2 2.0 2.0 1.5 1.2 0.9 39.2

2013 20.3 - - - 7.1 8.5 2.3 1.3 1.2 1.3 0.9 0.7 0.5 23.8

2014 773.8 - - - - 153.2 292.0 246.4 220.8 206.3 172.9 149.8 113.7 1,555.1

2015 411.3 - - - - - 45.8 100.3 86.2 80.9 66.1 54.3 39.4 473.0

2016 333.1 - - - - - - 40.4 78.9 72.6 58.0 48.3 35.5 333.7

2017 252.2 - - - - - - - 17.9 56.0 44.1 36.1 27.2 181.3

2018 341.8 - - - - - - - - 24.3 88.7 71.2 53.1 237.3

2019 518.6 - - - - - - - - - 47.9 125.7 93.8 267.4

2020 324.1 - - - - - - - - - - 32.4 71.3 103.7

2021 353.6 - - - - - - - - - - - 23.3 23.3

Subtotal 3,349.2 - - 11.6 16.1 167.3 343.3 390.6 407.0 443.4 480.1 519.7 458.7 3,237.8

Europe Insolvency

2014 10.9 - - - - - 4.3 3.9 3.2 2.6 1.5 0.8 0.2 16.5

2015 19.0 - - - - - 3.0 4.4 5.0 4.8 3.9 2.9 1.3 25.3

2016 39.3 - - - - - - 6.2 12.7 12.9 10.7 7.9 4.8 55.2

2017 39.2 - - - - - - - 1.2 7.9 9.2 9.8 7.2 35.3

2018 44.9 - - - - - - - - 0.6 8.4 10.3 8.8 28.1

2019 77.2 - - - - - - - - - 5.1 21.1 18.4 44.6

2020 105.4 - - - - - - - - - - 6.1 26.1 32.2

2021 23.5 - - - - - - - - - - - 2.8 2.8

Subtotal 359.4 - - - - - 7.3 14.5 22.1 28.8 38.8 58.9 69.6 240.0

Total Europe 3,708.6 - - 11.6 16.1 167.3 350.6 405.1 429.1 472.2 518.9 578.6 528.3 3,477.8

Total PRA Group $11,657.4 $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$1,588.0$18,120.8

(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-U.S. amounts, purchase price is presented at the exchange rate at the end of the year in which the portfolio was purchased. In addition,(3) 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 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; 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 Adjusted EBITDA for the last twelve months (LTM) ended September 30, 2021 and for the year ended December 31, 2020, 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.

Reconciliation of Non-GAAP Financial Measures

LTM For the Year Ended

Adjusted EBITDA for PRA Group ($ in millions) September 30, 2021December 31, 2020

Net income attributable to PRA Group, Inc. $ 179 $ 149

Adjustments:

Income tax expense 58 41

Foreign exchange losses/(gains) 1 (2)

Interest expense, net 127 142

Other expense (1) 1

Depreciation and amortization 17 18

Adjustment for net income attributable to noncontrolling interests 17 18

Recoveries applied to negative allowance less Changes in expected recoveries 993 968

Adjusted EBITDA $ 1,392 $ 1,337

Additionally, management evaluates the Company's business using certain ratios that use Adjusted EBITDA, including Debt to Adjusted EBITDA, which is calculated by dividing borrowings by Adjusted EBITDA. The following table reflects our Debt to Adjusted EBITDA for LTM as of September 30, 2021 and for the year ended December 31, 2020 (amounts in millions):

Debt to Adjusted EBITDA

LTM For the Year Ended

September 30, 2021December 31, 2020

Borrowings $ 2,521 $ 2,661

LTM Adjusted EBITDA 1,392 1,337

Debt to LTM Adjusted EBITDA1.81 1.99

Investor Contact:Pete GrahamExecutive Vice President and Chief Financial Officer(757) 431-7913IR@PRAGroup.com

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

View original content: https://www.prnewswire.com/news-releases/pra-group-reports-third-quarter-2021-results-301418783.html

SOURCE PRA Group