Q4 2019 CONFERENCE CALL PRESENTATION 1
Statements herein, other than statements of historical fact, are forward-looking statements, which are based on our current beliefs, projections, assumptions and expectations concerning future operations and financial performance. Such statements involve uncertainties and risks, some of which are not currently known to us, and may be superseded by future events that could cause actual results to differ materially from those expressed or implied herein. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of today, and are qualified in their entirety by these cautionary statements. Information regarding risk factors and other information that could change our projections or impact our actual results can be found in our most recent Annual Report on Form 10-K and in subsequent public filings, and should be considered in evaluating the forward looking statements herein. Except as required by law, we assume no obligation to update or revise these statements to reflect changes in events, conditions or circumstances on which any such forward-looking statements are based, in whole or in part. 2
LONG-TERM FOCUS AND DISCIPLINE DELIVERS A RECORD YEAR Record portfolio purchases * of $1.2 billion Record global cash collections of $1.8 billion Record revenue surpassing $1.0 billion for the first time Record estimated remaining collections of $6.8 billion *Portfolio purchases exclude finance receivables portfolios that were acquired through business acquisitions 3
AMERICAS Q4 2019 RESULTS Cash collections of $317 million Invested $141 million in Americas Core and Insolvency Stable trends in supply and returns 4
EUROPE Q4 2019 RESULTS Record cash collections in Europe Invested $262 million and purchased portfolios in all nine operating markets in 2019 Increasing supply 5
FINANCIAL RESULTS ($ in millions, except per share results) Q4 2018 Q4 2019 $456.6 $402.7 Cash Collections $269.1 $236.7 Total Revenues $12.6 $21.4 Net Allowance Charges $185.8 $183.1 Operating Expenses $27.3 $14.9 Net Income Attributable to PRA Group, Inc. $0.60 $0.33 Diluted EPS 6
CASH COLLECTIONS ($ in millions) Fourth Quarter 2019 Full Year 2019 Global Global Insolvency, Insolvency, $53.3 $219.7 Europe Core, Europe Core, $480.1 $126.6 Americas Core, Americas Core, $276.6 $1,141.5 7
Q4 2019 CASH EFFICIENCY RATIO OF 59.7%, 59.9% FULL YEAR ($ in millions, Cash efficiency ratio = (cash receipts – operating expenses)/cash receipts) $2,000 70% $1,857 $1,800 60% $1,640 $1,604 $1,569 $1,538 $1,600 $1,444 50% $1,400 $1,214 $1,200 40% $971 $1,000 30% $762 $800 $592 $600 20% $433 $383 $400 $298 10% $200 $- 0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Cash Receipts Cash Efficiency Ratio Insolvency as a % of Cash Collections 8
ESTIMATED REMAINING COLLECTIONS AND AVAILABLE CAPITAL as of December 31, 2019 ($ in millions) Estimated Remaining Collections United States - $3,438 United Kingdom - $1,529 Central Europe - $726 Northern Europe - $458 Other Americas - $386 Southern Europe - $218 $554 Million Available for Portfolio Acquisitions 9
THE IMPACT OF CECL ON THE FINANCIAL STATEMENTS Remaining the Same Changing Revenue will now be titled Portfolio Income Upon completion of initial booking, net finance Effective interest rate will not change regardless of receivables will still reflect purchase price performance Use purchase price and total estimated collections Changes in ERC will be recognized in the current to solve for effective interest rate quarter through an income statement line titled Revenue will still be calculated by net finance “Changes in Estimated Recoveries” receivables multiplied by effective interest rate Cash collections above or below what was expected in the current quarter will also be recognized in “Changes in Estimated Recoveries” Present value of the change in ERC will be recorded as an increase or decrease to net finance receivables 10
PRA GROUP IS IN A STRONG COMPETITIVE POSITION Industry trends are promising Efficient operations Significant capital and cash generation to invest in portfolios Favorable capital positions 11
Q4 2019 Q&A 12
Q1 2 2020 E ESTIMATED ED R REVEN EVENUE E MOD ODEL EL - $ IN T THOUSAND SANDS 13
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