false000118534800011853482021-08-052021-08-05

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):			August 5, 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 August 5, 2021, PRA Group, Inc. (the “Company”) issued a press release announcing its second 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 August 5, 2021 webcast and conference call to discuss its second 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 August 5, 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: August 5, 2021			By:			/s/ Peter M. Graham
						Peter M. Graham
						Executive Vice President and Chief Financial Officer

PRA Group Reports Second Quarter 2021 Results

NORFOLK, Va., August 5, 2021 - PRA Group, Inc. (Nasdaq: PRAA), a global leader in acquiring and collecting nonperforming loans, today reported its financial results for the second quarter of 2021. The Company reported net income attributable to PRA Group, Inc. of $56.0 million in the second quarter, compared with $57.9 million in the prior year period. Diluted earnings per share were $1.22 versus $1.26 in the second quarter of 2020. For the six months ended June 30, 2021, net income attributable to PRA Group, Inc. was $114.4 million, or $2.48 per diluted share, compared with $77.0 million, or $1.68 per diluted share, during the same period in 2020.

Second Quarter Highlights (compared to the second quarter of 2020, unless otherwise indicated)

•Total cash collections increased 7% to $543.8 million.

•Total revenues increased 5% to $285.6 million.

•Cash efficiency ratio1 of 66.8%.

•Diluted earnings per share were $1.22.

•Debt to Adjusted EBITDA2 for the last 12 months improved to 1.69x from 1.99x at December 31, 2020.

•Total portfolio purchases of $219.7 million, an increase of $61 million, or 38%, from the first quarter of 2021.

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

•$1.2 billion available for portfolio purchases.

“This quarter's strong performance is yet another in a line of outstanding results that we have delivered in the past year and a half. Global cash collections were only $12 million behind our record setting first quarter and Europe delivered the largest quarter ever. Portfolio purchases during the quarter increased on a sequential basis, with the Americas registering its largest quarter since the second quarter of 2020, and Europe recording its second best Q2 since PRA became a global enterprise in July 2014,” said Kevin Stevenson, president and chief executive officer. “Based on our strong results and capital position, the Board of Directors approved a $150 million share repurchase program.”

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)						Q2						Q1						Q4						Q3						Q2
Americas and Australia Core						$	324,845					$	347,638					$	286,524					$	336,322					$	343,269
Americas Insolvency						37,768						35,253						36,048						37,344						38,685
Europe Core						157,637						149,486						141,471						131,702						115,145
Europe Insolvency						23,579						23,510						17,830						13,971						12,841
Total Cash Collections						$	543,829					$	555,887					$	481,873					$	519,339					$	509,940
Cash Collection Source -
Constant Currency Adjusted						2021																								2020
($ in thousands)						Q2																								Q2
Americas and Australia Core						$	324,845																							$	344,539
Americas Insolvency						37,768																								38,732
Europe Core						157,637																								128,859
Europe Insolvency						23,579																								14,393
Total Cash Collections						$	543,829																							$	526,523

•Cash collections in the quarter increased $33.9 million compared to the second quarter of 2020. The increase was primarily due to a 42% increase in Europe cash collections and a 20% increase in Other Americas & Australia Core cash collections. This increase was partially offset by a decrease in U.S. call centers and U.S. legal cash collections. For the six months ended June 30, 2021, cash collections increased $95.2 million compared to the same period last year.

•Total portfolio revenue was $282.7 million, an increase of $14.6 million, compared to $268.1 million during the second quarter of 2020. The Company has 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 the corresponding reductions later in the forecast period.

Expenses

•Operating expenses in the quarter increased $20.8 million compared to the second quarter of 2020. The increase is primarily driven by:

◦an increase in compensation and employee services primarily due to medical benefits, unfavorable foreign exchange and the timing of performance based compensation accruals;

◦an increase in agency fees due to increased fees outside the U.S.; and

◦an increase in other operating expenses primarily due to investments in digital and data.

•For the six months ended June 30, 2021, operating expenses increased $8.3 million compared to the same period last year.

•Interest expense, net decreased $4.6 million compared to the second 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 six months ended June 30, 2021 was 19.3%.

Portfolio Acquisitions

•The Company purchased $219.7 million in finance receivables in the second quarter of 2021.

•At the end of the second quarter, the Company had in place forward flow commitments of up to $521.1 million with $377.2 million in the Americas and Australia and $143.9 million in Europe.

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Portfolio Purchase Source						2021												2020
($ in thousands)						Q2						Q1						Q4						Q3						Q2
Americas and Australia Core						$	98,901					$	88,912					$	67,460					$	84,139					$	110,474
Americas Insolvency						14,642						9,486						12,504						14,328						14,527
Europe Core						106,134						44,095						137,647						74,930						34,247
Europe Insolvency						—						16,468						72,171						4,203						5,251
Total Portfolio Acquisitions						$	219,677					$	158,961					$	289,782					$	177,600					$	164,499

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 August 5, 2022, or call 877-344-7529 in the U.S. or 412-317-0088 outside the U.S. and use access code 10158082 until August 12, 2021.

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 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 June 30,												Six Months Ended June 30,
			2021						2020						2021						2020
Revenues:
Portfolio income			$	219,137					$	248,284					$	450,809					$	510,306
Changes in expected recoveries			63,548						19,801						113,684						6,985
Total portfolio revenue			282,685						268,085						564,493						517,291
Fee income			2,453						2,639						4,634						4,848
Other revenue			491						1,186						5,971						1,555
Total revenues			285,629						271,910						575,098						523,694
Operating expenses:
Compensation and employee services			79,632						70,472						153,616						145,643
Legal collection fees			12,289						13,742						25,215						28,314
Legal collection costs			18,469						19,507						39,781						53,954
Agency fees			15,908						10,343						31,499						23,719
Outside fees and services			20,973						18,683						41,733						38,077
Communication			10,594						8,812						23,257						22,323
Rent and occupancy			4,643						4,471						9,123						8,955
Depreciation and amortization			3,815						4,109						7,796						8,193
Other operating expenses			15,092						10,491						28,110						22,696
Total operating expenses			181,415						160,630						360,130						351,874
Income from operations			104,214						111,280						214,968						171,820
Other income and (expense):
Interest expense, net			(30,836)						(35,416)						(62,388)						(72,627)
Foreign exchange (loss)/gain			(1,079)						683						(1,105)						2,966
Other			183						(1,582)						209						(1,658)
Income before income taxes			72,482						74,965						151,684						100,501
Income tax expense			11,921						14,137						29,243						17,237
Net income			60,561						60,828						122,441						83,264
Adjustment for net income attributable to noncontrolling interests			4,565						2,914						8,039						6,215
Net income attributable to PRA Group, Inc.			$	55,996					$	57,914					$	114,402					$	77,049
Net income per common share attributable to PRA Group, Inc.:
Basic			$	1.22					$	1.27					$	2.50					$	1.69
Diluted			$	1.22					$	1.26					$	2.48					$	1.68
Weighted average number of shares outstanding:
Basic			45,807						45,548						45,738						45,500
Diluted			46,059						45,987						46,051						45,886

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PRA Group, Inc.

Consolidated Balance Sheets

(Amounts in thousands)

			(unaudited)
			June 30, 2021						December 31, 2020
Assets
Cash and cash equivalents			$	76,013					$	108,613
Restricted cash			4,631						12,434
Investments			87,631						55,759
Finance receivables, net			3,349,038						3,514,788
Other receivables, net			7,096						13,194
Income taxes receivable			21,366						21,928
Deferred tax assets, net			78,935						83,205
Right-of-use assets			50,068						52,951
Property and equipment, net			54,895						58,356
Goodwill			492,843						492,989
Other assets			38,777						38,844
Total assets			$	4,261,293					$	4,453,061
Liabilities and Equity
Liabilities:
Accounts payable			$	5,229					$	5,294
Accrued expenses			86,634						97,320
Income taxes payable			27,872						29,692
Deferred tax liabilities, net			35,682						40,867
Lease liabilities			54,506						57,348
Interest-bearing deposits			131,221						132,739
Borrowings			2,408,875						2,661,289
Other liabilities			36,334						54,986
Total liabilities			2,786,353						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, 45,837 shares issued and outstanding at June 30, 2021; 100,000 shares authorized, 45,585 shares issued and outstanding at December 31, 2020			458						456
Additional paid-in capital			51,206						75,282
Retained earnings			1,638,380						1,511,970
Accumulated other comprehensive loss			(235,359)						(245,791)
Total stockholders' equity - PRA Group, Inc.			1,454,685						1,341,917
Noncontrolling interest			20,255						31,609
Total equity			1,474,940						1,373,526
Total liabilities and equity			$	4,261,293					$	4,453,061

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Select Expenses (Income) Amounts in thousands, pre-tax
			Three Months Ended
			June 30, 2021			March 31, 2021			December 31, 2020			September 30, 2020			June 30, 2020			March 31, 2020			December 31, 2019			September 30, 2019
Acquisition/divestiture-related expenses			—			—			—			—			—			—			—			—
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
Noncash interest expense - amortization of debt issuance costs			2,391			2,256			2,393			2,476			2,743			2,640			2,649			2,649
Change in fair value of derivatives			2,911			3,102			3,875			3,701			3,284			2,039			1,247			1,126
Amortization of intangibles			105			181			1,792			360			351			349			407			400
Stock-based compensation expense			4,040			4,113			5,370			3,097			3,063			2,857			2,809			2,974

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Purchase Price Multiples as of June 30, 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		$	3,399,742		$	22,911		315%			240%
2011			209,602			719,746			13,914			343%			245%
2012			254,076			652,359			15,602			257%			226%
2013			390,826			894,134			24,948			229%			211%
2014			404,117			859,490			39,040			213%			204%
2015			443,114			908,215			90,848			205%			205%
2016			455,767			1,101,515			185,065			242%			201%
2017			532,851			1,213,368			292,041			228%			193%
2018			653,975			1,405,115			413,129			215%			202%
2019			581,476			1,245,056			555,835			214%			206%
2020			435,668			931,600			639,764			214%			213%
2021			187,751			372,447			351,984			198%			198%
Subtotal			5,627,442			13,702,787			2,645,081
Americas Insolvency
1996-2010			606,395			1,382,687			753			228%			180%
2011			180,432			370,168			428			205%			155%
2012			251,395			392,828			132			156%			136%
2013			227,834			355,056			545			156%			133%
2014			148,420			218,441			1,370			147%			124%
2015			63,170			87,122			562			138%			125%
2016			91,442			117,355			4,647			128%			123%
2017			275,257			349,729			40,051			127%			125%
2018			97,879			131,541			50,765			134%			127%
2019			123,077			158,965			95,913			129%			128%
2020			62,130			84,971			71,527			137%			136%
2021			24,133			33,183			32,819			138%			138%
Subtotal			2,151,564			3,682,046			299,512
Total Americas and Australia			7,779,006			17,384,833			2,944,593
Europe Core
2012			20,409			41,917			—			205%			187%
2013			20,334			25,881			—			127%			119%
2014			773,811			2,240,702			552,490			290%			208%
2015			411,340			724,135			238,174			176%			160%
2016			333,090			561,788			274,769			169%			167%
2017			252,174			353,405			175,394			140%			144%
2018			341,775			528,763			331,552			155%			148%
2019			518,610			775,304			560,752			149%			152%
2020			324,119			554,083			468,618			171%			172%
2021			148,907			262,529			254,428			176%			176%
Subtotal			3,144,569			6,068,507			2,856,177
Europe Insolvency
2014			10,876			18,258			79			168%			129%
2015			18,973			29,005			1,539			153%			139%
2016			39,338			56,883			7,124			145%			130%
2017			39,235			49,255			15,447			126%			128%
2018			44,908			52,080			29,309			116%			123%
2019			77,218			101,982			66,492			132%			130%
2020			105,440			135,895			113,782			129%			129%
2021			16,705			20,633			19,137			124%			124%
Subtotal			352,693			463,991			252,909
Total Europe			3,497,262			6,532,498			3,109,086
Total PRA Group			$	11,276,268		$	23,917,331		$	6,053,679

(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 June 30, 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 June 30, 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 June 30, 2021 (3)
Americas and Australia Core
1996-2010			$	7,190		$	4,282		$	1,944		$	6,226		$	5,173
2011			4,371			2,586			1,146			3,732			2,503
2012			5,310			2,364			1,042			3,406			4,857
2013			9,565			4,580			(493)			4,087			10,810
2014			13,130			6,135			(2,361)			3,774			15,970
2015			21,951			11,424			(8,717)			2,707			36,653
2016			45,983			22,459			3,354			25,813			72,898
2017			77,310			34,297			7,802			42,099			130,286
2018			141,054			47,049			24,688			71,737			216,883
2019			166,716			65,539			18,558			84,097			299,328
2020			159,431			67,614			35,441			103,055			341,846
2021			20,472			13,641			148			13,789			180,575
Subtotal			672,483			281,970			82,552			364,522			1,317,782
Americas Insolvency
1996-2010			357			352			5			357			—
2011			126			138			(12)			126			—
2012			347			124			225			349			—
2013			421			287			134			421			—
2014			633			652			(117)			535			125
2015			795			383			(167)			216			319
2016			5,031			867			447			1,314			3,707
2017			23,539			4,792			1,113			5,905			34,136
2018			16,125			3,380			932			4,312			43,837
2019			18,361			4,768			(1,467)			3,301			82,243
2020			6,920			3,755			637			4,392			55,112
2021			366			566			(92)			474			24,153
Subtotal			73,021			20,064			1,638			21,702			243,632
Total Americas and Australia			745,504			302,034			84,190			386,224			1,561,414
Europe Core
2012			604			—			604			604			—
2013			363			—			363			363			—
2014			77,988			50,288			15,601			65,889			153,921
2015			26,926			14,276			(7,091)			7,185			124,109
2016			24,620			12,632			(597)			12,035			158,984
2017			18,839			6,259			(3,049)			3,210			119,645
2018			36,684			12,439			5,101			17,540			217,182
2019			63,968			19,814			7,106			26,920			376,028
2020			48,947			18,892			6,322			25,214			282,525
2021			8,184			2,474			1,680			4,154			144,787
Subtotal			307,123			137,074			26,040			163,114			1,577,181
Europe Insolvency
2014			171			79			36			115			34
2015			989			406			64			470			1,115
2016			3,449			1,012			295			1,307			5,454
2017			4,874			754			298			1,052			13,865
2018			5,962			1,224			(655)			569			25,789
2019			12,523			3,017			880			3,897			55,338
2020			17,618			4,713			1,545			6,258			92,948
2021			1,503			496			991			1,487			15,900
Subtotal			47,089			11,701			3,454			15,155			210,443
Total Europe			354,212			148,775			29,494			178,269			1,787,624
Total PRA Group			$	1,099,716		$	450,809		$	113,684		$	564,493		$	3,349,038

(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 June 30, 2021 exchange rate.

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Cash Collections by Year, By Year of Purchase (1) as of June 30, 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		$	7.2		$	3,369.5
2011			209.6			—			62.0			174.5			152.9			108.5			73.8			48.7			32.0			21.6			16.6			10.9			4.4			705.9
2012			254.1			—			—			56.9			173.6			146.2			97.3			60.0			40.0			27.8			17.9			11.8			5.3			636.8
2013			390.8			—			—			—			101.6			247.8			194.0			120.8			78.9			56.4			36.9			23.2			9.6			869.2
2014			404.1			—			—			—			—			92.7			253.4			170.3			114.2			82.2			55.3			31.9			13.1			813.1
2015			443.1			—			—			—			—			—			117.0			228.4			185.9			126.6			83.6			57.2			22.0			820.7
2016			455.8			—			—			—			—			—			—			138.7			256.5			194.6			140.6			105.9			46.0			882.3
2017			532.9			—			—			—			—			—			—			—			107.3			278.7			256.5			192.5			77.3			912.3
2018			654.0			—			—			—			—			—			—			—			—			122.7			361.9			337.7			141.1			963.4
2019			581.5			—			—			—			—			—			—			—			—			—			143.8			349.0			166.7			659.5
2020			435.7			—			—			—			—			—			—			—			—			—			—			133.0			159.4			292.4
2021			187.8			—			—			—			—			—			—			—			—			—			—			—			20.4			20.4
Subtotal			5,627.6			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			672.5			10,945.5
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			0.4			1,381.9
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			0.3			392.6
2013			227.8			—			—			—			52.5			82.6			81.7			63.4			47.8			21.9			2.9			1.3			0.4			354.5
2014			148.4			—			—			—			—			37.0			50.9			44.3			37.4			28.8			15.8			2.2			0.6			217.0
2015			63.2			—			—			—			—			—			3.4			17.9			20.1			19.8			16.7			7.9			0.8			86.6
2016			91.4			—			—			—			—			—			—			18.9			30.4			25.0			19.9			14.4			5.0			113.6
2017			275.3			—			—			—			—			—			—			—			49.1			97.3			80.9			58.8			23.6			309.7
2018			97.9			—			—			—			—			—			—			—			—			6.7			27.4			30.5			16.1			80.7
2019			123.1			—			—			—			—			—			—			—			—			—			13.3			31.4			18.4			63.1
2020			62.1			—			—			—			—			—			—			—			—			—			—			6.6			6.9			13.5
2021			24.1			—			—			—			—			—			—			—			—			—			—			—			0.4			0.4
Subtotal			2,151.5			390.9			276.4			354.2			469.9			458.4			344.2			249.8			222.4			207.9			180.9			155.3			73.0			3,383.3
Total Americas and Australia			7,779.1			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			745.5			14,328.8
Europe Core
2012			20.4			—			—			11.6			9.0			5.6			3.2			2.2			2.0			2.0			1.5			1.2			0.6			38.9
2013			20.3			—			—			—			7.1			8.5			2.3			1.3			1.2			1.3			0.9			0.7			0.4			23.7
2014			773.8			—			—			—			—			153.2			292.0			246.4			220.8			206.3			172.9			149.8			78.0			1,519.4
2015			411.3			—			—			—			—			—			45.8			100.3			86.2			80.9			66.1			54.3			26.9			460.5
2016			333.1			—			—			—			—			—			—			40.4			78.9			72.6			58.0			48.3			24.6			322.8
2017			252.2			—			—			—			—			—			—			—			17.9			56.0			44.1			36.1			18.8			172.9
2018			341.8			—			—			—			—			—			—			—			—			24.3			88.7			71.2			36.7			220.9
2019			518.6			—			—			—			—			—			—			—			—			—			47.9			125.7			64.0			237.6
2020			324.1			—			—			—			—			—			—			—			—			—			—			32.4			48.9			81.3
2021			148.9			—			—			—			—			—			—			—			—			—			—			—			8.2			8.2
Subtotal			3,144.5			—			—			11.6			16.1			167.3			343.3			390.6			407.0			443.4			480.1			519.7			307.1			3,086.2
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			1.0			25.0
2016			39.3			—			—			—			—			—			—			6.2			12.7			12.9			10.7			7.9			3.4			53.8
2017			39.2			—			—			—			—			—			—			—			1.2			7.9			9.2			9.8			4.9			33.0
2018			44.9			—			—			—			—			—			—			—			—			0.6			8.4			10.3			6.0			25.3
2019			77.2			—			—			—			—			—			—			—			—			—			5.1			21.1			12.5			38.7
2020			105.4			—			—			—			—			—			—			—			—			—			—			6.1			17.6			23.7
2021			16.7			—			—			—			—			—			—			—			—			—			—			—			1.5			1.5
Subtotal			352.6			—			—			—			—			—			7.3			14.5			22.1			28.8			38.8			58.9			47.1			217.5
Total Europe			3,497.1			—			—			11.6			16.1			167.3			350.6			405.1			429.1			472.2			518.9			578.6			354.2			3,303.7
Total PRA Group			$	11,276.2		$	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		$	1,099.7		$	17,632.5

(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 June 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)															June 30, 2021			December 31, 2020
Net income attributable to PRA Group, Inc.															$	187		$	149
Adjustments:
Income tax expense															53			41
Foreign exchange losses/(gains)															2			(2)
Interest expense, net															131			142
Other expense															(1)			1
Depreciation and amortization															18			18
Adjustment for net income attributable to noncontrolling interests															20			18
Recoveries applied to negative allowance less Changes in expected recoveries															1,017			968
Adjusted EBITDA															$	1,428		$	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 June 30, 2021 and for the year ended December 31, 2020 (amounts in millions):

Debt to Adjusted EBITDA
			LTM			For the Year Ended
			June 30, 2021			December 31, 2020
Borrowings			$	2,409		$	2,661
LTM Adjusted EBITDA			1,428			1,337
Debt to LTM Adjusted EBITDA			1.69			1.99

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Investor Contact:

Darby Schoenfeld, CPA

Vice President, Investor Relations

(757) 431-7913

[email protected]

News Media Contact:

Elizabeth Kersey

Senior Vice President, Communications and Public Policy

(757) 431-3398

[email protected]