EX-99.1 2 earningreleaseq32021.htm EX-99.1

PRA Group Reports Third Quarter 2021 Results

NORFOLK, Va., November 8, 2021 - 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."

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)						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.

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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 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 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 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

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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 September 30,												Nine Months Ended 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 to noncontrolling interests			2,190						5,337						10,229						11,552
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

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PRA Group, Inc.

Consolidated Balance Sheets

(Amounts in thousands)

			(unaudited)
			September 30, 2021						December 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, 45,585 shares issued and outstanding at December 31, 2020			440						456
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

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Select Expenses (Income) Amounts in thousands, pre-tax
			Three Months Ended
			September 30, 2021			June 30, 2021			March 31, 2021			December 31, 2020			September 30, 2020			June 30, 2020			March 31, 2020			December 31, 2019
Noncash interest expense - amortization of debt discount			—			—			—			1,959			2,388			3,247			3,217			3,157
Noncash interest expense - amortization of debt issuance costs			2,406			2,391			2,256			2,393			2,476			2,743			2,640			2,649
Change in fair value of derivatives			2,982			2,911			3,102			3,875			3,701			3,284			2,039			1,247
Amortization of intangibles			104			105			181			1,792			360			351			349			407
Stock-based compensation expense			4,317			4,040			4,113			5,370			3,097			3,063			2,857			2,809

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Purchase Price Multiples as of September 30, 2021 Amounts in thousands
Purchase Period			Purchase Price (1)(2)			Total Estimated Collections (3)			Estimated Remaining Collections (4)			Current Purchase Price Multiple			Original Purchase Price Multiple (5)
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 Australia			7,948,766			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.

(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 September 30, 2021 exchange rate.

(5)The Original 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 September 30, 2021 Amounts in thousands
Purchase Period			Cash Collections (1)			Portfolio Income (1)			Change in Expected Recoveries (1)			Total Portfolio Revenue (1)			Net Finance Receivables as of 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 Australia			1,059,659			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.

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Cash Collections by Year, By Year of Purchase (1) as of September 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		$	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 Australia			7,948.8			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.

(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 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, 2021			December 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, 2021			December 31, 2020
Borrowings			$	2,521		$	2,661
LTM Adjusted EBITDA			1,392			1,337
Debt to LTM Adjusted EBITDA			1.81			1.99

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Investor Contact:

Pete Graham

Executive Vice President and Chief Financial Officer

(757) 431-7913

IR@PRAGroup.com

News Media Contact:

Elizabeth Kersey

Senior Vice President, Communications and Public Policy

(757) 431-3398

Elizabeth.Kersey@PRAGroup.com