false000118534800011853482021-05-062021-05-06

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported):			May 6, 2021

PRA Group, Inc.

_________________________________________

(Exact name of registrant as specified in its charter)

Delaware

000-50058

75-3078675

(State or other jurisdiction of incorporation)

(Commission File Number)

(I.R.S. Employer Identification No.)

120 Corporate Boulevard

Norfolk,

Virginia

23502

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code:						(888)			772-7326

Not Applicable

______________________________________________

Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class			Trading Symbol(s)			Name of each exchange on which registered
Common Stock, $0.01 par value per share			PRAA			NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

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.☐

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Item 2.02 Results of Operations and Financial Condition.

On May 6, 2021, PRA Group, Inc. (the “Company”) issued a press release announcing its first quarter 2021 results. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K and is incorporated into this Item 2.02 by reference.

Item 7.01 Regulation FD Disclosure.

The slide presentation being used in connection with the Company’s previously announced May 6, 2021 webcast and conference call to discuss its first quarter 2021 results is available in the Investor Relations section of the Company’s website at https://ir.pragroup.com/events-and-presentations.

None of the information furnished in Item 2.02, Item 7.01 or Exhibit 99.1 of this Form 8-K shall be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that Section. Unless expressly set forth by specific reference in such filings, none of the information furnished in this Form 8-K shall be incorporated by reference in any filing under the Securities Act of 1933, as amended, whether made before or after the date hereof and regardless of any general incorporation language in such filings.

Item 9.01 Financial Statements and Exhibits

(d)			Exhibits
			99.1			Press release dated May 6, 2021
			104			Cover Page Interactive Data File (embedded within the Inline XBRL document)

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SIGNATURE

    Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

			PRA Group, Inc.
Date: May 6, 2021			By:			/s/ Peter M. Graham
						Peter M. Graham
						Executive Vice President and Chief Financial Officer

PRA Group Reports First Quarter 2021 Results

NORFOLK, Va., May 06, 2021 - PRA Group (Nasdaq: PRAA), a global leader in acquiring and collecting nonperforming loans, today reported its financial results for the first quarter of 2021. The Company reported net income attributable to PRA Group Inc. of $58.4 million in the first quarter, compared with $19.1 million in the prior year period. Diluted earnings per share were $1.27 versus $0.42 in the first quarter of 2020.

First Quarter Highlights (compared to the first quarter of 2020, unless otherwise indicated)

•Record total cash collections which increased 12% to $555.9 million.

•Record total revenues which increased 15% to $289.5 million.

•Income from operations increased 83% to $110.8 million.

•Cash efficiency ratio1 of 68.0% during the quarter compared to 61.5% in the first quarter of 2020.

•Net income attributable to PRA Group, Inc. increased 205% to $58.4 million.

•Diluted earnings per share increased 202% to $1.27.

•Debt to Adjusted EBITDA2 for the last 12 months decreased to 1.77x from 1.99x at December 31, 2020.

•Total portfolio purchases of $159.0 million.

•Estimated remaining collections (ERC) of $6.1 billion.

•$1.2 billion available for portfolio purchases.

“PRA started 2021 with another record setting quarter. We collected record levels of cash globally and had record revenues. In Europe, solid portfolio purchases in 2020 drove record collections. In the U.S., we continued to see strong collections particularly in our call centers and digital platform. These results combined with increases in productivity helped to produce a near record cash efficiency ratio for the quarter,” said Kevin Stevenson, president and chief executive officer. “Portfolio purchases during the quarter increased sequentially in the U.S. The market remains stable with little change in seller behavior; however, lower charge off rates are pushing forward flow volumes to the lower end of the contracted range. In Europe, we were pleased with our investment volume in what is normally a seasonally slower quarter. We have solid volumes of forward flows secured, believe the pipeline in Europe is larger than what 2020 offered, and were awarded our first portfolio, a forward flow, in Australia.”

Cash Collections and Revenues

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

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.

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Cash Collection Source						2021						2020
($ in thousands)						Q1						Q4						Q3						Q2						Q1
Americas and Australia Core						$	347,638					$	286,524					$	336,322					$	343,269					$	305,780
Americas Insolvency						35,253						36,048						37,344						38,685						43,210
Europe Core						149,486						141,471						131,702						115,145						131,340
Europe Insolvency						23,510						17,830						13,971						12,841						14,243
Total Cash Collections						$	555,887					$	481,873					$	519,339					$	509,940					$	494,573
Cash Collection Source -
Constant Currency Adjusted						2021																								2020
($ in thousands)						Q1																								Q1
Americas and Australia Core						$	347,638																							$	301,696
Americas Insolvency						35,253																								43,239
Europe Core						149,486																								142,004
Europe Insolvency						23,510																								15,366
Total Cash Collections						$	555,887																							$	502,305

•Cash collections in the quarter increased $61.3 million compared to the first quarter of 2020. The increase was primarily due to a 32% increase in U.S. call center and other cash collections and a 19% increase in Europe 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 Core, this decrease was primarily driven by foreign exchange rates.

•Portfolio income was $231.7 million compared to $262.0 million in the first quarter of 2020. This decrease was primarily driven by the Company's assumption that the significant cash overperformance in 2020 was largely acceleration versus an increase in total estimated collections, combined with recent purchases not offsetting runoff, primarily in Americas Insolvency and Other Americas.

•Changes in expected recoveries were a net positive of $50.1 million. This amount reflects $103.0 million in recoveries received in excess of forecast from overperformance during the quarter, partially offset by a negative $52.9 million adjustment for changes in expected future recoveries. The Company has assumed that the majority 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 $12.5 million compared to the first quarter of 2020. 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 agency fees primarily outside of the U.S.

•Interest expense, net decreased $5.7 million compared to the first quarter of 2020 primarily due to the Company's early adoption of the new accounting for convertible debt as well as lower outstanding balances.

•The effective tax rate for the first quarter of 2021 was 21.9%.

Portfolio Acquisitions

•The Company purchased $159.0 million in finance receivables in the first quarter of 2021.

•At the end of the first quarter, the Company had in place forward flow commitments of up to $640.7 million with $452.7 million in the Americas and Australia and $188.0 million in Europe.

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Portfolio Purchase Source						2021						2020
($ in thousands)						Q1						Q4						Q3						Q2						Q1
Americas and Australia Core						$	88,912					$	67,460					$	84,139					$	110,474					$	172,697
Americas Insolvency						9,486						12,504						14,328						14,527						20,772
Europe Core						44,095						137,647						74,930						34,247						60,990
Europe Insolvency						16,468						72,171						4,203						5,251						18,778
Total Portfolio Acquisitions						$	158,961					$	289,782					$	177,600					$	164,499					$	273,237

Conference Call Information

PRA 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 May 6, 2022, or call 877-344-7529 in the U.S. or 412-317-0088 outside the U.S. and use access code 10155063 until May 13, 2021.

About PRA Group

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

About Forward Looking Statements

Statements made herein that are not historical in nature, including PRA Group, Inc.’s or its management's intentions, hopes, beliefs, expectations, representations, projections, plans or predictions of the future, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

The forward-looking statements in this press release are based upon management's current beliefs, estimates, assumptions and expectations of PRA Group, Inc.’s future operations and financial and economic performance, taking into account currently available information. These statements are not statements of historical fact or guarantees of future performance, and there can be no assurance that anticipated events will transpire or that 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.

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PRA Group, Inc.

Unaudited Consolidated Income Statements

(Amounts in thousands, except per share amounts)

									Three Months Ended March 31,
															2021						2020
Revenues:
Portfolio income															$	231,672					$	262,022
Changes in expected recoveries															50,136						(12,816)
Fee income															2,181						2,209
Other revenue															5,480						369
Total revenues															289,469						251,784
Operating expenses:
Compensation and employee services															73,984						75,171
Legal collection fees															12,926						14,572
Legal collection costs															21,312						34,447
Agency fees															15,591						13,376
Outside fees and services															20,760						19,394
Communication															12,663						13,511
Rent and occupancy															4,480						4,484
Depreciation and amortization															3,981						4,084
Other operating expenses															13,018						12,205
Total operating expenses															178,715						191,244
Income from operations															110,754						60,540
Other income and (expense):
Interest expense, net															(31,552)						(37,211)
Foreign exchange (loss)/gain															(26)						2,283
Other															26						(76)
Income before income taxes															79,202						25,536
Income tax expense															17,322						3,100
Net income															61,880						22,436
Adjustment for net income attributable to noncontrolling interests															3,474						3,301
Net income attributable to PRA Group, Inc.															$	58,406					$	19,135
Net income per common share attributable to PRA Group, Inc.:
Basic															$	1.28					$	0.42
Diluted															$	1.27					$	0.42
Weighted average number of shares outstanding:
Basic															45,669						45,452
Diluted															46,045						45,784

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PRA Group, Inc.

Consolidated Balance Sheets

(Amounts in thousands)

			(unaudited)
			March 31, 2021						December 31, 2020
Assets
Cash and cash equivalents			$	92,798					$	108,613
Restricted cash			16,057						12,434
Investments			54,682						55,759
Finance receivables, net			3,372,666						3,514,788
Other receivables, net			3,223						13,194
Income taxes receivable			27,246						21,928
Deferred tax assets, net			72,523						83,205
Right-of-use assets			50,839						52,951
Property and equipment, net			56,825						58,356
Goodwill			492,751						492,989
Other assets			38,920						38,844
Total assets			$	4,278,530					$	4,453,061
Liabilities and Equity
Liabilities:
Accounts payable			$	4,817					$	5,294
Accrued expenses			76,684						97,320
Income taxes payable			31,853						29,692
Deferred tax liabilities, net			39,739						40,867
Lease liabilities			55,322						57,348
Interest-bearing deposits			124,998						132,739
Borrowings			2,501,133						2,661,289
Other liabilities			40,755						54,986
Total liabilities			2,875,301						3,079,535
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, 45,799 shares issued and outstanding at March 31, 2021; 100,000 shares authorized, 45,585 shares issued and outstanding at December 31, 2020			458						456
Additional paid-in capital			47,236						75,282
Retained earnings			1,582,384						1,511,970
Accumulated other comprehensive loss			(253,576)						(245,791)
Total stockholders' equity - PRA Group, Inc.			1,376,502						1,341,917
Noncontrolling interest			26,727						31,609
Total equity			1,403,229						1,373,526
Total liabilities and equity			$	4,278,530					$	4,453,061

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Select Expenses (Income) Amounts in thousands, pre-tax
			Three Months Ended
			March 31, 2021			December 31, 2020			September 30, 2020			June 30, 2020			March 31, 2020			December 31, 2019			September 30, 2019			June 30, 2019
Acquisition/divestiture-related expenses			—			—			—			—			—			—			—			227
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
Noncash interest expense - amortization of debt issuance costs			2,256			2,393			2,476			2,743			2,640			2,649			2,649			2,655
Change in fair value of derivatives			3,102			3,875			3,701			3,284			2,039			1,247			1,126			1,645
Amortization of intangibles			181			1,792			360			351			349			407			400			418
Stock-based compensation expense			4,113			5,370			3,097			3,063			2,857			2,809			2,974			2,620

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Purchase Price Multiples as of March 31, 2021 Amounts in thousands
Purchase Period			Purchase Price (1)(2)			Total Estimated Collections (3)			Estimated Remaining Collections (4)			Current Estimated Purchase Price Multiple			Original Estimated Purchase Price Multiple (5)
Americas and Australia Core
1996-2010			$	1,078,219		$	3,397,952		$	24,585		315%			240%
2011			209,602			719,618			15,897			343%			245%
2012			254,076			652,293			18,061			257%			226%
2013			390,826			894,640			30,051			229%			211%
2014			404,117			859,775			45,345			213%			204%
2015			443,114			913,857			106,551			206%			205%
2016			455,767			1,098,295			207,608			241%			201%
2017			532,851			1,211,584			325,675			227%			193%
2018			653,975			1,368,879			447,682			209%			202%
2019			581,476			1,239,777			622,713			213%			206%
2020			435,668			931,493			717,342			214%			213%
2021			88,822			188,644			184,196			212%			212%
Subtotal			5,528,513			13,476,807			2,745,706
Americas Insolvency
1996-2010			606,395			1,382,677			920			228%			180%
2011			180,432			370,183			493			205%			155%
2012			251,395			392,723			184			156%			136%
2013			227,834			354,943			651			156%			133%
2014			148,420			218,432			1,695			147%			124%
2015			63,170			87,087			876			138%			125%
2016			91,442			117,159			6,736			128%			123%
2017			275,257			349,209			51,318			127%			125%
2018			97,879			131,461			58,999			134%			127%
2019			123,077			158,692			105,361			129%			128%
2020			62,130			84,972			75,489			137%			136%
2021			9,486			13,185			13,168			139%			139%
Subtotal			2,136,917			3,660,723			315,890
Total Americas and Australia			7,665,430			17,137,530			3,061,596
Europe Core
2012			20,409			41,543			—			204%			187%
2013			20,334			25,653			—			126%			119%
2014			773,811			2,240,653			586,113			290%			208%
2015			411,340			725,713			250,732			176%			160%
2016			333,090			562,194			285,405			169%			167%
2017			252,174			354,024			184,108			140%			144%
2018			341,775			529,154			346,370			155%			148%
2019			518,610			776,604			587,133			150%			152%
2020			324,119			557,506			491,301			172%			172%
2021			43,635			77,780			76,397			178%			178%
Subtotal			3,039,297			5,890,824			2,807,559
Europe Insolvency
2014			10,876			18,228			130			168%			129%
2015			18,973			29,018			1,997			153%			139%
2016			39,338			56,926			8,784			145%			130%
2017			39,235			49,255			17,707			126%			128%
2018			44,908			52,080			32,060			116%			123%
2019			77,218			101,866			72,242			132%			130%
2020			105,440			135,896			121,891			129%			129%
2021			16,621			20,786			20,151			125%			125%
Subtotal			352,609			464,055			274,962
Total Europe			3,391,906			6,354,879			3,082,521
Total PRA Group			$	11,057,336		$	23,492,409		$	6,144,117

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

(2)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, 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 March 31, 2021 exchange rate.

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

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Portfolio Financial Information Year-to-date as of March 31, 2021 Amounts in thousands
Purchase Period			Cash Collections (1)			Portfolio Income (1)			Change in Expected Recoveries (1)			Total Portfolio Revenue (1)(2)			Net Finance Receivables as of March 31, 2021 (3)
Americas and Australia Core
1996-2010			$	3,726		$	2,319		$	447		$	2,766		$	5,178
2011			2,259			1,405			309			1,714			2,596
2012			2,786			1,286			375			1,661			5,638
2013			4,968			2,526			(351)			2,175			13,495
2014			6,937			3,494			(2,154)			1,340			19,677
2015			11,958			6,355			(4,961)			1,394			45,306
2016			24,893			11,990			3,908			15,898			84,015
2017			41,722			18,236			3,937			22,173			145,799
2018			75,462			25,404			10,591			35,995			245,467
2019			88,246			35,129			6,417			41,546			331,169
2020			80,231			35,446			16,613			52,059			369,418
2021			4,450			2,728			838			3,566			87,902
Subtotal			347,638			146,318			35,969			182,287			1,355,660
Americas Insolvency
1996-2010			181			186			(5)			181			—
2011			76			73			3			76			—
2012			190			72			120			192			—
2013			201			181			20			201			—
2014			298			355			(90)			265			190
2015			446			247			(202)			45			497
2016			2,727			491			241			732			5,429
2017			11,752			2,621			468			3,089			43,107
2018			7,812			1,778			751			2,529			50,368
2019			8,594			2,488			(1,786)			702			89,380
2020			2,960			1,897			535			2,432			57,174
2021			16			101			(14)			87			9,553
Subtotal			35,253			10,490			41			10,531			255,698
Total Americas and Australia			382,891			156,808			36,010			192,818			1,611,358
Europe Core
2012			283			—			283			283			—
2013			171			—			171			171			—
2014			37,843			25,589			7,184			32,773			159,401
2015			13,464			7,427			(6,091)			1,336			130,541
2016			11,956			6,431			(649)			5,782			164,228
2017			9,565			3,191			(1,076)			2,115			127,233
2018			18,365			6,289			4,576			10,865			226,773
2019			32,020			10,111			2,450			12,561			390,892
2020			24,425			9,595			4,578			14,173			293,315
2021			1,394			210			1,015			1,225			43,431
Subtotal			149,486			68,843			12,441			81,284			1,535,814
Europe Insolvency
2014			88			48			6			54			55
2015			530			225			5			230			1,335
2016			1,762			546			118			664			6,487
2017			2,484			398			140			538			15,696
2018			2,967			640			(764)			(124)			27,919
2019			6,222			1,554			183			1,737			59,244
2020			8,817			2,410			850			3,260			98,227
2021			640			200			1,147			1,347			16,531
Subtotal			23,510			6,021			1,685			7,706			225,494
Total Europe			172,996			74,864			14,126			88,990			1,761,308
Total PRA Group			$	555,887		$	231,672		$	50,136		$	281,808		$	3,372,666

(1)For our non-U.S. amounts, 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 March 31, 2021 exchange rate.

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Cash Collections by Year, By Year of Purchase (1) as of March 31, 2021 Amounts in millions
						Cash Collections
Purchase Period			Purchase Price (2)(3)			1996-2010			2011			2012			2013			2014			2015			2016			2017			2018			2019			2020			2021			Total
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		$	3.7		$	3,366.0
2011			209.6			—			62.0			174.5			152.9			108.5			73.8			48.7			32.0			21.6			16.6			10.9			2.3			703.8
2012			254.1			—			—			56.9			173.6			146.2			97.3			60.0			40.0			27.8			17.9			11.8			2.8			634.3
2013			390.8			—			—			—			101.6			247.8			194.0			120.8			78.9			56.4			36.9			23.2			5.0			864.6
2014			404.1			—			—			—			—			92.7			253.4			170.3			114.2			82.2			55.3			31.9			6.9			806.9
2015			443.1			—			—			—			—			—			117.0			228.4			185.9			126.6			83.6			57.2			12.0			810.7
2016			455.8			—			—			—			—			—			—			138.7			256.5			194.6			140.6			105.9			24.9			861.2
2017			532.9			—			—			—			—			—			—			—			107.3			278.7			256.5			192.5			41.7			876.7
2018			654.0			—			—			—			—			—			—			—			—			122.7			361.9			337.7			75.5			897.8
2019			581.5			—			—			—			—			—			—			—			—			—			143.8			349.0			88.2			581.0
2020			435.7			—			—			—			—			—			—			—			—			—			—			133.0			80.2			213.2
2021			88.8			—			—			—			—			—			—			—			—			—			—			—			4.4			4.4
Subtotal			5,528.6			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			347.6			10,620.6
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			0.2			1,381.7
2011			180.4			—			15.2			66.4			82.8			85.8			76.9			36.0			3.7			1.6			0.7			0.5			0.1			369.7
2012			251.4			—			—			17.4			103.6			94.1			80.1			60.7			29.3			4.3			1.9			0.9			0.2			392.5
2013			227.8			—			—			—			52.5			82.6			81.7			63.4			47.8			21.9			2.9			1.3			0.2			354.3
2014			148.4			—			—			—			—			37.0			50.9			44.3			37.4			28.8			15.8			2.2			0.3			216.7
2015			63.2			—			—			—			—			—			3.4			17.9			20.1			19.8			16.7			7.9			0.4			86.2
2016			91.4			—			—			—			—			—			—			18.9			30.4			25.0			19.9			14.4			2.7			111.3
2017			275.3			—			—			—			—			—			—			—			49.1			97.3			80.9			58.8			11.8			297.9
2018			97.9			—			—			—			—			—			—			—			—			6.7			27.4			30.5			7.8			72.4
2019			123.1			—			—			—			—			—			—			—			—			—			13.3			31.4			8.6			53.3
2020			62.1			—			—			—			—			—			—			—			—			—			—			6.6			3.0			9.6
2021			9.5			—			—			—			—			—			—			—			—			—			—			—			—			—
Subtotal			2,136.9			390.9			276.4			354.2			469.9			458.4			344.2			249.8			222.4			207.9			180.9			155.3			35.3			3,345.6
Total Americas and Australia			7,665.5			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			382.9			13,966.2
Europe Core
2012			20.4			—			—			11.6			9.0			5.6			3.2			2.2			2.0			2.0			1.5			1.2			0.3			38.6
2013			20.3			—			—			—			7.1			8.5			2.3			1.3			1.2			1.3			0.9			0.7			0.2			23.5
2014			773.8			—			—			—			—			153.2			292.0			246.4			220.8			206.3			172.9			149.8			37.8			1,479.2
2015			411.3			—			—			—			—			—			45.8			100.3			86.2			80.9			66.1			54.3			13.4			447.0
2016			333.1			—			—			—			—			—			—			40.4			78.9			72.6			58.0			48.3			12.0			310.2
2017			252.2			—			—			—			—			—			—			—			17.9			56.0			44.1			36.1			9.6			163.7
2018			341.8			—			—			—			—			—			—			—			—			24.3			88.7			71.2			18.4			202.6
2019			518.6			—			—			—			—			—			—			—			—			—			47.9			125.7			32.0			205.6
2020			324.1			—			—			—			—			—			—			—			—			—			—			32.4			24.4			56.8
2021			43.6			—			—			—			—			—			—			—			—			—			—			—			1.4			1.4
Subtotal			3,039.2			—			—			11.6			16.1			167.3			343.3			390.6			407.0			443.4			480.1			519.7			149.5			2,928.6
Europe Insolvency
2014			10.9			—			—			—			—			—			4.3			3.9			3.2			2.6			1.5			0.8			0.1			16.4
2015			19.0			—			—			—			—			—			3.0			4.4			5.0			4.8			3.9			2.9			0.5			24.5
2016			39.3			—			—			—			—			—			—			6.2			12.7			12.9			10.7			7.9			1.8			52.2
2017			39.2			—			—			—			—			—			—			—			1.2			7.9			9.2			9.8			2.5			30.6
2018			44.9			—			—			—			—			—			—			—			—			0.6			8.4			10.3			3.0			22.3
2019			77.2			—			—			—			—			—			—			—			—			—			5.1			21.1			6.2			32.4
2020			105.4			—			—			—			—			—			—			—			—			—			—			6.1			8.8			14.9
2021			16.7			—			—			—			—			—			—			—			—			—			—			—			0.6			0.6
Subtotal			352.6			—			—			—			—			—			7.3			14.5			22.1			28.8			38.8			58.9			23.5			193.9
Total Europe			3,391.8			—			—			11.6			16.1			167.3			350.6			405.1			429.1			472.2			518.9			578.6			173.0			3,122.5
Total PRA Group			$	11,057.3		$	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		$	555.9		$	17,088.7

(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.

(3)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, 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.

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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 March 31, 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)															March 31, 2021			December 31, 2020
Net income attributable to PRA Group, Inc.															$	189		$	149
Adjustments:
Income tax expense															55			41
Foreign exchange losses/(gains)															—			(2)
Interest expense, net															136			142
Other expense															1			1
Depreciation and amortization															18			18
Adjustment for net income attributable to noncontrolling interests															19			18
Recoveries applied to negative allowance less Changes in expected recoveries															997			968
Adjusted EBITDA															$	1,416		$	1,337

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

Debt to Adjusted EBITDA
			LTM			For the Year Ended
			March 31, 2021			December 31, 2020
Borrowings			$	2,501		$	2,661
LTM Adjusted EBITDA			1,416			1,337
Debt to LTM Adjusted EBITDA			1.77			1.99

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Investor Contact:

Darby Schoenfeld

Vice President, Investor Relations

(757) 431-7913

[email protected]

News Media Contact:

Elizabeth Kersey

Vice President, Communications and Public Policy

(757) 431-3398

[email protected]