PRA Group Reports Fourth Quarter 2021 Results

NORFOLK, Va., February 28, 2022 - PRA Group, Inc. (Nasdaq: PRAA), a global leader in acquiring and collecting nonperforming loans, today reported its financial results for the fourth quarter and full year of 2021. Net income attributable to PRA Group, Inc. increased $4.5 million, or 15%, to $34.3 million compared to the fourth quarter of 2020. Diluted earnings per share were $0.79 compared to $0.65 in the fourth quarter of 2020. For the year ended December 31, 2021, net income attributable to PRA Group, Inc. increased $33.8 million, or 23%, to $183.2 million, or $4.04 per diluted share, compared to the year ended December 31, 2020.

Fourth Quarter Highlights

•Total cash collections were $473.7 million.

•Total revenues were $256.9 million.

•Cash efficiency ratio1 of 63.5%.

•Diluted earnings per share increased 22% to $0.79.

•Common stock repurchases of $139 million, or 3.0 million shares, at an average price of $45.66 per share.

•Debt to Adjusted EBITDA2 decreased to 1.89x from 1.99x at December 31, 2020.

•$1.4 billion available for portfolio purchases.

•Total portfolio purchases of $201.7 million.

•Estimated remaining collections (ERC) of $6.0 billion.

Full Year Highlights

•Record total cash collections were $2.1 billion.

•Record total revenues were $1.1 billion.

•Record cash efficiency ratio1 of 65.3%.

•Record net income attributable to PRA Group, Inc. of $183.2 million.

•Total portfolio purchases of $972.3 million.

•Common stock repurchases of $212.9 million, or 4.8 million shares, at an average price of $43.97 per share.

“The fourth quarter culminated an excellent year for PRA. We collected record levels of cash globally and had record revenues and net income. In Europe, strong portfolio purchases over the last two years drove robust collections. The increase in cash collections, coupled with efficiencies achieved in our operations, produced a record cash efficiency ratio for the year,” said Kevin Stevenson, president and chief executive officer. “Entering 2022, we had maximum forward flow commitments that were $149 million higher than the commitments we had entering 2021. Despite increased competition and pricing pressure, we believe the European pipeline is strong and economic indicators point to an increasing pipeline in the U.S. by the end of 2022. We believe our strong balance sheet will allow us to capitalize on these opportunities.”

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.

Cash Collection Source	2021								2020
($ in thousands)	Q4		Q3		Q2		Q1		Q4
Americas and Australia Core	$	257,705	$	276,691	$	324,845	$	347,638	$	286,524
Americas Insolvency	36,851		37,464		37,768		35,253		36,048
Europe Core	155,853		151,625		157,637		149,486		141,471
Europe Insolvency	23,262		22,574		23,579		23,510		17,830
Total Cash Collections	$	473,671	$	488,354	$	543,829	$	555,887	$	481,873
Cash Collection Source -
Constant Currency Adjusted	2021								2020
($ in thousands)	Q4								Q4
Americas and Australia Core	$	257,705							$	285,712
Americas Insolvency	36,851								36,072
Europe Core	155,853								140,570
Europe Insolvency	23,262								18,022
Total Cash Collections	$	473,671							$	480,376

•Total cash collections in the quarter decreased $8.2 million compared to the fourth quarter of 2020. A 12% increase in Europe cash collections was more than offset by an 11% decrease in U.S. call center and other cash collections and a 29% decrease in Brazil cash collections. For the full year, cash collections increased $55.9 million compared to the full year of 2020.

•Total portfolio revenue in the quarter was $252.0 million compared to $270.4 million in the fourth quarter of 2020. The Company assumed that the majority of the fourth quarter 2021 overperformance was acceleration of future collections, consistent with its assumptions during prior periods. The Company also increased near-term expected collections in certain geographies to reflect recent performance and trends in collections, and made corresponding reductions later in the forecast period. For the full year, total portfolio revenue increased $19.9 million compared to the full year 2020.

Expenses

•Operating expenses in the quarter decreased $10.2 million compared to the fourth quarter of 2020. The decrease was primarily driven by a reduction in legal collection costs due to fewer accounts being placed into the Company's legal channel as a result of a shift in collections from the legal channel to the call centers and digital platforms and lower levels of portfolio acquisitions in the U.S. This decrease was partially offset by an increase in other operating expenses. For the full year, operating expenses increased $5.0 million compared to the same period in 2020.

•Interest expense, net decreased $3.2 million compared to the fourth quarter of 2020 primarily due to the Company's early adoption of the new accounting for convertible debt as well as lower outstanding balances. For the full year, interest expense, net decreased $17.6 million compared to the same period in 2020.

•The effective tax rate for the full year was 21.9% compared to 19.7% in 2020.

Portfolio Acquisitions

•The Company purchased $201.7 million in nonperforming loan portfolios in the fourth quarter of 2021.

•At the end of the fourth quarter, the Company had in place forward flow commitments of up to $650.6 million with $246.7 million in the Americas and Australia and $403.9 million in Europe.

Portfolio Purchase Source	2021								2020
($ in thousands)	Q4		Q3		Q2		Q1		Q4
Americas and Australia Core	$	90,263	$	162,451	$	98,901	$	88,912	$	67,460
Americas Insolvency	21,183		9,878		14,642		9,486		12,504
Europe Core	60,430		212,194		106,134		44,095		137,647
Europe Insolvency	29,820		7,424		—		16,468		72,171
Total Portfolio Acquisitions	$	201,696	$	391,947	$	219,677	$	158,961	$	289,782

Share Repurchases

During 2021, the Company executed the majority of its $230 million share repurchase program:

•During the fourth quarter, the Company purchased 3.0 million shares at an average price of $45.66 per share.

•For the full year of 2021, the Company purchased 4.8 million shares at an average price of $43.97 per share.

•On February 25, 2022, the Company’s board of directors authorized a new $150 million program upon completion of the previous program.

The new share repurchase program has no stated expiration date and repurchases may be made through open market purchases or other available means at the Company’s discretion, subject to applicable regulatory requirements. Repurchases are subject to market conditions and other factors, and the new share repurchase program remains subject to the discretion of the Company’s board of directors.

“Our strong cash and financial performance and conservative capital structure provide considerable flexibility for balanced capital deployment across portfolio acquisitions, share repurchases and other growth initiatives,” said Pete Graham, executive vice president and chief financial officer.

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 February 28, 2023, or call 877-344-7529 in the U.S. or 412-317-0088 outside the U.S. and use access code 8916228 until March 7, 2022.

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 the Company's expectations will prove to be correct. Forward-

looking statements involve risks and uncertainties, some of which are not currently known to PRA Group, Inc. Actual events or results may differ materially from those expressed or implied in any such forward-looking statements as a result of various factors, including risk factors and other risks that are described from time to time in PRA Group, Inc.’s filings with the Securities and Exchange Commission, including PRA Group, Inc.’s annual reports on Form 10-K, its quarterly reports on Form 10-Q and its current reports on Form 8-K, which are available through PRA Group, Inc.'s website and contain a detailed discussion of PRA Group, Inc.'s business, including risks and uncertainties that may affect future results.

Due to such uncertainties and risks, you are cautioned not to place undue reliance on such forward-looking statements, which speak only as of today. Information in this press release may be superseded by more recent information or statements, which may be disclosed in later press releases, subsequent filings with the Securities and Exchange Commission or otherwise. Except as required by law, PRA Group, Inc. assumes no obligation to publicly update or revise its forward-looking statements contained herein to reflect any change in PRA Group, Inc.’s expectations with regard thereto or to reflect any change in events, conditions or circumstances on which any such forward-looking statements are based, in whole or in part.

PRA Group, Inc.

Consolidated Income Statements

(Amounts in thousands, except per share amounts)

	(unaudited)
	Three Months Ended December 31,				Twelve Months Ended December 31,
	2021		2020		2021		2020
Revenues:
Portfolio income	$	211,613	$	233,480	$	875,327	$	984,036
Changes in expected recoveries	40,400		36,909		197,904		69,297
Total portfolio revenue	252,013		270,389		1,073,231		1,053,333
Fee income	3,856		2,922		14,699		9,748
Other revenue	1,067		545		7,802		2,333
Total revenues	256,936		273,856		1,095,732		1,065,414
Operating expenses:
Compensation and employee services	73,781		77,533		301,981		295,150
Legal collection fees	10,998		11,783		47,206		53,758
Legal collection costs	17,099		21,638		78,330		101,635
Agency fees	15,995		17,799		63,140		56,418
Outside fees and services	21,448		23,291		92,615		84,087
Communication	9,716		9,099		42,755		40,801
Rent and occupancy	4,682		4,558		18,376		17,973
Depreciation and amortization	3,736		5,971		15,256		18,465
Other operating expenses	17,032		12,969		61,077		47,426
Total operating expenses	174,487		184,641		720,736		715,713
Income from operations	82,449		89,215		374,996		349,701
Other income and (expense):
Interest expense, net	(32,156)		(35,393)		(124,143)		(141,712)
Foreign exchange (loss)/gain	(936)		(1,022)		(809)		2,005
Other	(12)		318		282		(1,049)
Income before income taxes	49,345		53,118		250,326		208,945
Income tax expense	12,947		16,469		54,817		41,203
Net Income	36,398		36,649		195,509		167,742
Adjustment for net income attributable to noncontrolling interests	2,122		6,851		12,351		18,403
Net income attributable to PRA Group, Inc.	$	34,276	$	29,798	$	183,158	$	149,339
Net income per common share attributable to PRA Group, Inc.:
Basic	$	0.80	$	0.65	$	4.07	$	3.28
Diluted	$	0.79	$	0.65	$	4.04	$	3.26
Weighted average number of shares outstanding:
Basic	43,056		45,583		44,960		45,540
Diluted	43,562		45,973		45,330		45,860

PRA Group, Inc.

Consolidated Balance Sheets

(Amounts in thousands)

	December 31, 2021		December 31, 2020
Assets
Cash and cash equivalents	$	87,584	$	108,613
Investments	92,977		55,759
Finance receivables, net	3,428,285		3,514,788
Income taxes receivable	41,146		21,928
Deferred tax assets, net	67,760		83,205
Right-of-use assets	56,713		52,951
Property and equipment, net	54,513		58,356
Goodwill	480,263		492,989
Other assets	57,002		64,472
Total assets	$	4,366,243	$	4,453,061
Liabilities and Equity
Liabilities:
Accounts payable	$	3,821	$	5,294
Accrued expenses	127,802		97,320
Income taxes payable	19,276		29,692
Deferred tax liabilities, net	36,630		40,867
Lease liabilities	61,188		57,348
Interest-bearing deposits	124,623		132,739
Borrowings	2,608,714		2,661,289
Other liabilities	59,352		54,986
Total liabilities	3,041,406		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, 41,008 shares issued and outstanding at December 31, 2021; 100,000 shares authorized, 45,585 shares issued and outstanding at December 31, 2020	410		456
Additional paid-in capital	—		75,282
Retained earnings	1,552,845		1,511,970
Accumulated other comprehensive loss	(266,909)		(245,791)
Total stockholders' equity - PRA Group, Inc.	1,286,346		1,341,917
Noncontrolling interest	38,491		31,609
Total equity	1,324,837		1,373,526
Total liabilities and equity	$	4,366,243	$	4,453,061

Select Expenses (Income) Amounts in thousands, pre-tax
	Three Months Ended
	December 31, 2021	September 30, 2021	June 30, 2021	March 31, 2021	December 31, 2020	September 30, 2020	June 30, 2020	March 31, 2020
Noncash interest expense - amortization of debt discount	—	—	—	—	1,959	2,388	3,247	3,217
Noncash interest expense - amortization of debt issuance costs	2,455	2,406	2,391	2,256	2,393	2,476	2,743	2,640
Change in fair value of derivatives	3,115	2,982	2,911	3,102	3,875	3,701	3,284	2,039
Amortization of intangibles	(269)	104	105	181	1,792	360	351	349
Stock-based compensation expense	3,470	4,317	4,040	4,113	5,370	3,097	3,063	2,857

Purchase Price Multiples as of December 31, 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
1996-2011	$	1,287,821	$	4,119,794	$	27,874	320%	240%
2012	254,076		652,359		11,867		257%	226%
2013	390,826		894,234		17,955		229%	211%
2014	404,117		859,555		29,634		213%	204%
2015	443,114		910,077		79,134		205%	205%
2016	455,767		1,117,255		163,295		245%	201%
2017	532,851		1,215,524		240,172		228%	193%
2018	653,975		1,394,839		301,952		213%	202%
2019	581,476		1,257,641		434,423		216%	206%
2020	435,668		940,982		522,918		216%	213%
2021	435,846		833,624		748,852		191%	191%
Subtotal	5,875,537		14,195,884		2,578,076
Americas Insolvency
1996-2011	786,827		1,752,771		790		223%	174%
2012	251,395		393,018		67		156%	136%
2013	227,834		355,274		373		156%	133%
2014	148,420		219,141		1,583		148%	124%
2015	63,170		87,377		361		138%	125%
2016	91,442		116,498		1,468		127%	123%
2017	275,257		353,296		23,180		128%	125%
2018	97,879		134,417		38,130		137%	127%
2019	123,077		163,200		79,392		133%	128%
2020	62,130		86,107		63,473		139%	136%
2021	55,187		74,931		70,317		136%	136%
Subtotal	2,182,618		3,736,030		279,134
Total Americas and Australia	8,058,155		17,931,914		2,857,210
Europe Core
2012	20,409		42,579		—		209%	187%
2013	20,334		26,267		—		129%	119%
2014	773,811		2,239,932		460,391		289%	208%
2015	411,340		720,559		203,212		175%	160%
2016	333,090		561,569		243,437		169%	167%
2017	252,174		353,450		154,560		140%	144%
2018	341,775		527,012		287,725		154%	148%
2019	518,610		775,332		485,171		150%	152%
2020	324,119		553,951		410,322		171%	172%
2021	412,411		699,959		652,200		170%	170%
Subtotal	3,408,073		6,500,610		2,897,018
Europe Insolvency
2014	10,876		18,370		28		169%	129%
2015	18,973		29,002		892		153%	139%
2016	39,338		56,831		4,398		144%	130%
2017	39,235		49,287		10,641		126%	128%
2018	44,908		51,499		22,265		115%	123%
2019	77,218		102,095		53,796		132%	130%
2020	105,440		135,907		94,242		129%	129%
2021	53,230		71,526		66,095		134%	134%
Subtotal	389,218		514,517		252,357
Total Europe	3,797,291		7,015,127		3,149,375
Total PRA Group	$	11,855,446	$	24,947,041	$	6,006,585

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

(2)For the Company's 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 the Company's non-U.S. amounts, TEC is presented at the year-end exchange rate for the respective year of purchase.

(4)For the Company's non-U.S. amounts, ERC is presented at the December 31, 2021 exchange rate.

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

Portfolio Financial Information For the Year Ended December 31, 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 December 31, 2021 (2)
Americas and Australia Core
1996-2011	$	20,819	$	12,632	$	5,346	$	17,978	$	6,433
2012	9,046		4,123		2,610		6,733		4,446
2013	16,657		7,520		1,613		9,133		8,763
2014	22,323		10,040		(742)		9,298		12,225
2015	34,938		19,582		(9,082)		10,500		31,412
2016	74,206		40,717		(1,395)		39,322		58,086
2017	129,962		61,776		11,275		73,051		108,433
2018	239,862		83,566		38,960		122,526		167,343
2019	289,779		117,189		34,744		151,933		240,112
2020	284,284		125,173		46,195		171,368		299,290
2021	85,003		61,842		(4,866)		56,976		408,212
Subtotal	1,206,879		544,160		124,658		668,818		1,344,755
Americas Insolvency
1996-2011	792		882		(73)		809		—
2012	601		188		425		613		—
2013	811		459		363		822		—
2014	1,118		1,108		(44)		1,064		148
2015	1,250		538		32		570		218
2016	7,352		1,321		(332)		989		1,060
2017	43,978		7,795		4,718		12,513		20,304
2018	31,637		5,944		3,757		9,701		33,715
2019	39,073		8,739		2,590		11,329		69,514
2020	16,108		7,220		1,885		9,105		50,482
2021	4,616		2,799		804		3,603		53,837
Subtotal	147,336		36,993		14,125		51,118		229,278
Total Americas and Australia	1,354,215		581,153		138,783		719,936		1,574,033
Europe Core
2012	1,160		—		1,160		1,160		—
2013	680		—		681		681		—
2014	149,246		94,750		25,771		120,521		131,950
2015	51,397		26,474		(7,320)		19,154		107,415
2016	46,702		23,859		(1,569)		22,290		141,981
2017	34,800		11,718		(2,815)		8,903		106,026
2018	69,106		23,502		5,352		28,854		189,813
2019	121,385		37,266		12,333		49,599		328,709
2020	91,672		35,697		13,610		49,307		250,434
2021	48,453		18,809		6,159		24,968		388,850
Subtotal	614,601		272,075		53,362		325,437		1,645,178
Europe Insolvency
2014	328		109		144		253		14
2015	1,605		647		3		650		653
2016	5,951		1,685		208		1,893		3,398
2017	9,366		1,301		379		1,680		9,673
2018	11,678		2,212		(1,153)		1,059		19,877
2019	23,867		5,552		1,307		6,859		45,649
2020	34,647		8,791		3,067		11,858		79,363
2021	5,483		1,802		1,804		3,606		50,447
Subtotal	92,925		22,099		5,759		27,858		209,074
Total Europe	707,526		294,174		59,121		353,295		1,854,252
Total PRA Group	$	2,061,741	$	875,327	$	197,904	$	1,073,231	$	3,428,285

(1)Non-U.S. amounts are presented using the average exchange rates during the reporting period.

(2)For non-U.S. amounts, net finance receivables are presented at the December 31, 2021 exchange rate.

Cash Collections by Year, By Year of Purchase (1) as of December 31, 2021 Amounts in millions
			Cash Collections
Purchase Period	Purchase Price (2)(3)		1996-2011		2012		2013		2014		2015		2016		2017		2018		2019		2020		2021		Total
Americas and Australia Core
1996-2011	$	1,287.8	$	2,419.5	$	486.0	$	381.3	$	266.3	$	183.1	$	119.0	$	78.0	$	56.0	$	45.0	$	29.7	$	20.8	$	4,084.7
2012	254.1		—		56.9		173.6		146.2		97.3		60.0		40.0		27.8		17.9		11.8		9.0		640.5
2013	390.8		—		—		101.6		247.8		194.0		120.8		78.9		56.4		36.9		23.2		16.7		876.3
2014	404.1		—		—		—		92.7		253.4		170.3		114.2		82.2		55.3		31.9		22.3		822.3
2015	443.1		—		—		—		—		117.0		228.4		185.9		126.6		83.6		57.2		34.9		833.6
2016	455.8		—		—		—		—				138.7		256.5		194.6		140.6		105.9		74.2		910.5
2017	532.9		—		—		—		—		—		—		107.3		278.7		256.5		192.5		130.0		965.0
2018	654.0		—		—		—		—		—		—		—		122.7		361.9		337.7		239.9		1062.2
2019	581.5		—		—		—		—		—		—		—		—		143.8		349.0		289.8		782.6
2020	435.7		—		—		—		—		—		—		—		—		—		133.0		284.3		417.3
2021	435.8		—		—		—		—		—		—		—		—		—		—		85.0		85.0
Subtotal	5,875.6		2,419.5		542.9		656.5		753.0		844.8		837.2		860.8		945.0		1,141.5		1,271.9		1,206.9		11,480.0
Americas Insolvency
1996-2011	786.8		667.4		336.8		313.7		244.7		128.2		44.6		8.4		4.0		2.1		1.3		0.8		1,752.0
2012	251.4		—		17.4		103.6		94.1		80.1		60.7		29.3		4.3		1.9		0.9		0.6		392.9
2013	227.8		—		—		52.5		82.6		81.7		63.4		47.8		21.9		2.9		1.3		0.8		354.9
2014	148.4		—		—		—		37.0		50.9		44.3		37.4		28.8		15.8		2.2		1.1		217.5
2015	63.2		—		—		—		—		3.4		17.9		20.1		19.8		16.7		7.9		1.3		87.1
2016	91.4		—		—		—		—		—		18.9		30.4		25.0		19.9		14.4		7.4		116.0
2017	275.3		—		—		—		—		—		—		49.1		97.3		80.9		58.8		44.0		330.1
2018	97.9		—		—		—		—		—		—		—		6.7		27.4		30.5		31.6		96.2
2019	123.1		—		—		—		—		—		—		—		—		13.4		31.4		39.1		83.9
2020	62.1		—		—		—		—		—		—		—		—		—		6.5		16.1		22.6
2021	55.2		—		—		—		—		—		—		—		—		—		—		4.5		4.5
Subtotal	2,182.6		667.4		354.2		469.8		458.4		344.3		249.8		222.5		207.8		181.0		155.2		147.3		3,457.7
Total Americas and Australia	8,058.2		3,086.9		897.1		1,126.3		1,211.4		1,189.1		1,087.0		1,083.3		1,152.8		1,322.5		1,427.1		1,354.2		14,937.7
Europe Core
2012	20.4		—		11.6		9.0		5.6		3.2		2.2		2.0		2.0		1.5		1.2		1.2		39.5
2013	20.3		—		—		7.1		8.5		2.3		1.3		1.2		1.3		0.9		0.7		0.7		24.0
2014	773.8		—		—		—		153.2		292.0		246.4		220.8		206.3		172.9		149.8		149.2		1,590.6
2015	411.3		—		—		—		—		45.8		100.3		86.2		80.9		66.1		54.3		51.4		485.0
2016	333.1		—		—		—		—		—		40.4		78.9		72.6		58.0		48.3		46.7		344.9
2017	252.2		—		—		—		—		—		—		17.9		56.0		44.1		36.1		34.8		188.9
2018	341.8		—		—		—		—		—		—		—		24.3		88.7		71.2		69.1		253.3
2019	518.6		—		—		—		—		—		—		—		—		47.9		125.7		121.4		295.0
2020	324.1		—		—		—		—		—		—		—		—		—		32.4		91.7		124.1
2021	412.4		—		—		—		—		—		—		—		—		—		—		48.4		48.4
Subtotal	3,408.0		—		11.6		16.1		167.3		343.3		390.6		407.0		443.4		480.1		519.7		614.6		3,393.7
Europe Insolvency
2014	10.9		—		—		—		—		4.3		3.9		3.2		2.6		1.5		0.8		0.3		16.6
2015	19.0		—		—		—		—		3.0		4.4		5.0		4.8		3.9		2.9		1.6		25.6
2016	39.3		—		—		—		—		—		6.2		12.7		12.9		10.7		7.9		6.0		56.4
2017	39.2		—		—		—		—		—		—		1.2		7.9		9.2		9.8		9.4		37.5
2018	44.9		—		—		—		—		—		—		—		0.6		8.4		10.3		11.7		31.0
2019	77.2		—		—		—		—		—		—		—		—		5.1		21.1		23.9		50.1
2020	105.4		—		—		—		—		—		—		—		—		—		6.1		34.6		40.7
2021	53.3		—		—		—		—		—		—		—		—		—		—		5.4		5.4
Subtotal	389.2		—		—		—		—		7.3		14.5		22.1		28.8		38.8		58.9		92.9		263.3
Total Europe	3,797.2		—		11.6		16.1		167.3		350.6		405.1		429.1		472.2		518.9		578.6		707.5		3,657.0
Total PRA Group	$	11,855.4	$	3,086.9	$	908.7	$	1,142.4	$	1,378.7	$	1,539.7	$	1,492.1	$	1,512.4	$	1,625.0	$	1,841.4	$	2,005.7	$	2,061.7	$	18,594.7

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

(2)Includes the nonperforming loan portfolios that were acquired through the Company's business acquisitions.

(3)For the Company's 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.

Use of Non-GAAP Financial Measures

PRA Group, Inc. reports its 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 (or less other income); 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 years ended December 31, 2021 and 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 Adjusted EBITDA for PRA Group ($ in millions)	December 31, 2021		December 31, 2020
Net income attributable to PRA Group, Inc.	$	183	$	149
Adjustments:
Income tax expense	55		41
Foreign exchange (gains)/losses	1		(2)
Interest expense, net	124		142
Other (income)/expense	—		1
Depreciation and amortization	15		18
Adjustment for net income attributable to noncontrolling interests	12		18
Recoveries applied to negative allowance less Changes in expected recoveries	988		968
LTM Adjusted EBITDA	$	1,378	$	1,337

Additionally, the Company evaluates its business using certain ratios that use Adjusted EBITDA. Debt to Adjusted EBITDA is calculated by dividing borrowings by Adjusted EBITDA. The following table reflects the Company's Debt to Adjusted EBITDA for the years ended December 31, 2021 and 2020 (amounts in millions):

Debt to Adjusted EBITDA
	December 31, 2021		December 31, 2020
Borrowings	$	2,609	$	2,661
LTM Adjusted EBITDA	1,378		1,337
Debt to LTM Adjusted EBITDA	1.89		1.99

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