Pra Group, Inc. (NASDAQ:PRAA) Q2 2021 Earnings Conference Call August 5, 2021 5:00 PM ET Company Participants Darby Schoenfeld – Vice President-Investor Relations Kevin Stevenson – President and Chief Executive Officer Pete Graham – Executive Vice President and Chief Financial Officer Conference Call Participants Bob Napoli – William Blair Mark Hughes – Truist Robert Dodd – Raymond James Operator Good afternoon, and welcome to the PRA Group Conference Call. [Operator Instructions] Please note, this event is ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2021 ☐ Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ________ to ________ Commission File Number: 000-50058 PRA Group, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation o ...

Financial Performance - Global cash collections reached a record of $556 million in Q1 2021[4] - Net income attributable to PRA Group was $58 million in Q1 2021[4], a 205% increase compared to $19 million in Q1 2020[12] - Total revenues increased by 15% from $252 million in Q1 2020 to $289 million in Q1 2021[11] - Operating expenses decreased by 7% from $191 million in Q1 2020 to $179 million in Q1 2021[13] - Diluted earnings per share increased by 202% from $0.42 in Q1 2020 to $1.27 in Q1 2021[14] Portfolio and Market - Portfolio purchases totaled $159 million in Q1 2021[4,7], including the first Australian portfolio[7] - Estimated remaining collections (ERC) are $6.1 billion[4] - Americas and Australia Core cash collections were $348 million, while Europe Core cash collections were $149 million in Q1 2021[15] Efficiency and Leverage - The cash efficiency ratio for Q1 2021 was 68%[16] - Total borrowings were $2501 million as of March 31, 2021[22], with a debt to adjusted EBITDA ratio of 1.77x[22] - $1.2 billion is available for portfolio acquisitions[23]

Perdoceo Education Corporation (PRDO) Q1 2021 Earnings Conference Call May 6, 2021 5:30 PM ET Company Participants Wyatt Turk - IR Todd Nelson - President and CEO Ashish Ghia - SVP and CFO Conference Call Participants Alexander Paris - Barrington Research Brendan Popson - CJS Securities Gregory Pendy - Sidoti & Company Operator Hello, and welcome to the Q1 2021 Perdoceo Education Corporation Earnings Conference Call and Webcast. All participants will be in a listen-only mode. [Operator Instructions] Please ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q For the quarterly period ended March 31, 2021 ☐ Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ________ to ________ Commission File Number: 000-50058 PRA Group, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) Delaware 75-3078675 (I.R.S. Employer Identification No.) 120 Corporate Bo ...

Financial Data and Key Metrics Changes - In Q4 2020, global cash collections reached $482 million, an increase of $25 million or 6% compared to Q4 2019, leading to total revenues of $274 million, up $17 million or 7% on an adjusted basis [26][34] - Net income for the quarter was $30 million, resulting in diluted earnings per share of $0.65 [28] - The cash efficiency ratio improved to 61.9% for the quarter, with a full-year ratio of 64.5%, marking a 460 basis point improvement [31][34] Business Line Data and Key Metrics Changes - U.S. core collections saw a record Q4 with cash collections of $323 million, driven by a 22% increase in non-legal collections, while legal collections decreased by 16% due to consumer-friendly practices [18][28] - European cash collections were a record $159 million, growing $20 million or 14%, primarily driven by strong portfolio purchases made in previous years [21][30] - Total portfolio purchases in the Americas during the quarter were $80 million, slightly depressed due to decreased charge-off rates and bankruptcy filings [19] Market Data and Key Metrics Changes - Estimated remaining collections (ERC) ended the quarter at $6.5 billion, with 46% in the U.S. and 49% in Europe, marking the first time ERC in Europe exceeded that of the U.S. [33] - The competitive environment in Europe has shifted favorably, allowing for increased volume and market share [14] Company Strategy and Development Direction - The company aims to focus on purchasing non-performing loans (NPLs) as its primary capital deployment strategy, with expectations for increased supply later in 2021 [47][49] - The management is cautious about M&A, preferring to maintain a strong balance sheet and only considering acquisitions that add tangible value [48] - The company is committed to enhancing customer-friendly practices and maintaining operational efficiency, especially in light of the ongoing pandemic [20][36] Management's Comments on Operating Environment and Future Outlook - Management expressed pride in the company's ability to adapt and thrive during the pandemic, emphasizing the importance of employee welfare and customer treatment [16][36] - The company anticipates that the current market conditions will persist in the early part of 2021, but expects increased supply as government forbearance programs expire [19][20] Other Important Information - The company has made significant investments in technology and digital initiatives to enhance operations and improve customer engagement [15][34] - The effective tax rate for the full year was 19.7%, with expectations for a rate in the low-20% range for 2021 [32] Q&A Session Summary Question: Thoughts on capital utilization and potential acquisitions - Management indicated that the primary focus is on purchasing NPLs, with M&A considered only if it adds value without increasing goodwill [47][48] Question: Competitive environment in Europe - Management noted that while some competitors are still deleveraging, the company has maintained a strong position and is optimistic about future opportunities [60][65] Question: Legal channel's future in the industry - Management expressed a desire for the legal channel to diminish but acknowledged that it may still be necessary depending on customer engagement levels post-pandemic [70][71] Question: Insights on European purchase volume and insolvency activity - Management stated that while they appreciate the current activity in insolvency, they do not expect it to be a consistent trend [76][77] Question: Non-controlling interest impact on earnings - The CFO explained that the non-controlling interest was driven by strong performance in Brazil and is expected to grow as the South American business expands [84][86] Question: Buy now, pay later market considerations - Management is open to exploring the buy now, pay later asset class, provided it meets regulatory standards and is beneficial for consumers [88][90]

Part I [Business Overview](index=6&type=section&id=Item%201.%20Business) PRA Group is a global financial services company specializing in purchasing, collecting, and managing nonperforming loan portfolios - PRA Group's primary business is the purchase, collection, and management of portfolios of nonperforming loans[17](index=17&type=chunk) - The company operates globally in the Americas, Europe, and Australia, with one reportable segment[16](index=16&type=chunk)[19](index=19&type=chunk) - Loan portfolios are categorized into Core (nonperforming loans not in insolvent status) and Insolvency (accounts in bankruptcy/insolvency proceedings)[17](index=17&type=chunk) - Fee-based services include class action claims recoveries and servicing consumer bankruptcy accounts in the U.S[17](index=17&type=chunk)[29](index=29&type=chunk) - As of December 31, 2020, PRA Group employed **3,820 full-time equivalents globally**[37](index=37&type=chunk) [Risk Factors](index=12&type=section&id=Item%201A.%20Risk%20Factors) The company faces operational, economic, regulatory, and financial risks, including pandemic impacts and debt leverage - The COVID-19 pandemic could adversely affect business, operations, and financial results through economic disruption and consumers' inability to pay[14](index=14&type=chunk)[44](index=44&type=chunk)[47](index=47&type=chunk) - Deterioration in economic or inflationary environments could increase personal bankruptcy filings and adversely impact collections[45](index=45&type=chunk) - Inability to continually replace nonperforming loan portfolios at appropriate prices could lead to reduced profitability and operational inefficiencies[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk) - International operations expose the company to risks including adverse economic/political conditions, currency fluctuations, and compliance with diverse international laws[60](index=60&type=chunk)[62](index=62&type=chunk)[64](index=64&type=chunk) - The UK's exit from the EU (Brexit) creates uncertainty regarding taxes, foreign currency, and regulatory conditions, potentially impacting the company's UK portfolios (**26% of consolidated ERC as of Dec 31, 2020**)[65](index=65&type=chunk)[66](index=66&type=chunk) - Compliance failures with federal, state, and international collection laws could result in enforcement actions, fines, penalties, and reputational damage[33](index=33&type=chunk)[34](index=34&type=chunk)[42](index=42&type=chunk)[69](index=69&type=chunk)[70](index=70&type=chunk) - The company is subject to investigations by governmental authorities like the CFPB and multi-state Attorneys General, which could lead to business practice changes, fines, or litigation[76](index=76&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk) - Substantial debt leverage (total consolidated indebtedness of approximately **$2.7 billion as of Dec 31, 2020**) could make it difficult to satisfy obligations and limit financing options[81](index=81&type=chunk)[82](index=82&type=chunk) - Cybersecurity incidents or failures of information technology infrastructure could disrupt operations, compromise confidential information, and damage reputation[87](index=87&type=chunk)[88](index=88&type=chunk)[89](index=89&type=chunk)[90](index=90&type=chunk) [Unresolved Staff Comments](index=20&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There are no unresolved staff comments from the SEC - No unresolved staff comments[91](index=91&type=chunk) [Properties](index=21&type=section&id=Item%202.%20Properties) PRA Group's corporate headquarters are in Norfolk, Virginia, with operational centers across the Americas, Europe, and Australia - Corporate headquarters and primary domestic operations facilities are in Norfolk, Virginia[92](index=92&type=chunk) - As of December 31, 2020, operational centers included **12 leased and 3 owned facilities in the Americas**, **11 leased facilities in Europe**, and **one leased facility in Australia**[92](index=92&type=chunk) [Legal Proceedings](index=21&type=section&id=Item%203.%20Legal%20Proceedings) PRA Group is routinely involved in legal and regulatory claims, accruing for probable liabilities, with no material excess losses as of December 31, 2020 - The company is subject to routine legal and regulatory claims, inquiries, and proceedings, including lawsuits and counterclaims from customers[93](index=93&type=chunk) - Accruals are established for potential liabilities when a loss is probable and estimable[58](index=58&type=chunk)[456](index=456&type=chunk) - The estimated aggregate range of reasonably possible losses in excess of accrued amounts for legal proceedings was not material as of December 31, 2020[457](index=457&type=chunk) [Mine Safety Disclosure](index=21&type=section&id=Item%204.%20Mine%20Safety%20Disclosure) This item is not applicable to PRA Group, Inc - Not applicable[95](index=95&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=22&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) PRA Group's common stock trades on Nasdaq, with no regular dividends paid in the last three years and no recent share repurchases - Common stock is traded on the Nasdaq Global Select Market under the symbol "**PRAA**"[3](index=3&type=chunk) - The company did not pay regular dividends on its common stock in the three years ended December 31, 2020[102](index=102&type=chunk) - No recent sales of unregistered securities or share repurchase programs were reported[103](index=103&type=chunk)[105](index=105&type=chunk) Stock Performance (December 31, 2015 to December 31, 2020) | Ticker | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | PRA Group, Inc. (PRAA) | $100 | $113 | $96 | $70 | $105 | $114 | | Nasdaq Financial 100 (IXF) | $100 | $126 | $146 | $134 | $173 | $179 | | Nasdaq Global Market Composite Index (NQGM) | $100 | $96 | $120 | $112 | $155 | $255 | [Selected Financial Data](index=23&type=section&id=Item%206.%20Selected%20Financial%20Data) No selected financial data is presented in this item - No selected financial data is provided in this item[106](index=106&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes PRA Group's financial condition and operations, including COVID-19 impacts, revenue trends, liquidity, and cash flow [Overview](index=24&type=section&id=Overview) PRA Group Inc. is a global financial and business services company focused on purchasing, collecting, and managing nonperforming loans - PRA Group is a global financial and business services company with operations in the Americas, Europe, and Australia[108](index=108&type=chunk) - The company's primary business is the purchase, collection, and management of portfolios of nonperforming loans[108](index=108&type=chunk) [COVID-19 Impact](index=24&type=section&id=COVID-19) The COVID-19 pandemic impacted PRA Group's operations in 2020, affecting staffing, collections, legal costs, and portfolio purchases - U.S. staffing was reduced in mid-March 2020 but returned to near normal levels by the end of April[111](index=111&type=chunk) - U.S. Core cash collections increased, believed to be due to consumers having additional discretionary funds and willingness to resolve debts[111](index=111&type=chunk) - Legal collection costs decreased due to a temporary pause in transitioning U.S. accounts to legal status and the closure of courts in many European countries[111](index=111&type=chunk) - Portfolio purchases decreased due to deferrals by sellers and lower levels of bankruptcy filings and charge-offs[111](index=111&type=chunk) - Funds from operations, cash collections, existing cash, and available borrowings were sufficient to finance operations and commitments during the pandemic[111](index=111&type=chunk) [Frequently Used Terms](index=24&type=section&id=Frequently%20Used%20Terms) This section defines key terminology used in the Form 10-K to ensure clear understanding of financial and operational reporting - Provides definitions for key financial and operational terms used in the Form 10-K, including 'Cash collections', 'Core' and 'Insolvency' portfolios, and 'Estimated remaining collections (ERC)'[115](index=115&type=chunk) - Clarifies revenue recognition terms such as 'Portfolio income' and 'Changes in expected recoveries' under the new accounting standards[115](index=115&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) In 2020, total revenues increased by 4.7% to $1,065.4 million, with net income surging by 73.3% to $149.3 million Consolidated Income

Financial Performance - Global cash collections reached $482 million[5], a 6% increase compared to $457 million in Q4 2019[10] - Net income attributable to PRA Group grew by 9% to $30 million in Q4 2020, up from $27 million in Q4 2019[13] - Diluted earnings per share increased by 8% to $0.65 in Q4 2020, compared to $0.60 in Q4 2019[14] - The company's cash efficiency ratio for 2020 was a record 64.5%[20] Portfolio and Investments - Portfolio purchases amounted to $290 million[5] - The estimated remaining collections (ERC) stand at $6.5 billion[5] - Investments in Europe totaled $210 million[8] - Americas saw investments of $80 million[7] Regional Performance - Americas generated cash collections of $323 million[7] - Europe achieved record cash collections of $159 million in Q4[8] - Europe Core cash collections were $141.5 million, while Americas Core collections were $286.5 million[19] Debt and Leverage - The company has $983 million available for portfolio acquisitions[38] - Debt to Adjusted EBITDA ratio decreased to 1.99x as of December 31, 2020, compared to 2.53x as of December 31, 2019[37]

Financial Data and Key Metrics Changes - Global cash collections reached a record $519 million, an increase of $66 million or 15% compared to the same quarter last year [17] - Total revenues for the quarter were $268 million, up $22 million or 9% year-over-year, primarily due to significant overperformance in collections [17] - Net income was $42 million, resulting in diluted earnings per share of $0.92 [19] - Operating expenses decreased to $179 million, a $2 million reduction from the previous year [19] - The debt to trailing 12-month adjusted EBITDA ratio improved to 1.9 times from over 2.5 times at the end of 2019 [25] Business Line Data and Key Metrics Changes - U.S. non-legal collections increased by 37%, contributing significantly to the overall cash collections growth [19] - Cash collections in the Americas (excluding the U.S.) grew by $6 million or 21%, led by Brazil [19] - Legal cash collections in the U.S. decreased by 6%, while insolvency collections in the Americas fell by 18% [20] - European cash collections grew by $18 million or 14%, driven by record portfolio purchases in 2019 [20] Market Data and Key Metrics Changes - Estimated remaining collections (ERC) at the end of the quarter were $6.3 billion, with 50% in the U.S. and 45% in Europe [23] - Portfolio purchases in the Americas totaled $178 million, with a slight decrease in volume due to lower charge-off rates and bankruptcy filings [10][13] - European portfolio purchases were $79 million, marking the third highest Q3 in the company's history [15] Company Strategy and Development Direction - The company aims to maintain a strong capital position with over $1 billion available for portfolio investment, preparing for anticipated higher purchasing volumes in 2021 [26] - Management believes that the current operational structure allows for flexibility and capacity to raise additional capital if needed [30] - The company is focused on fair treatment of consumers and is adapting to new regulations under the Fair Debt Collection Practices Act [6][8] Management's Comments on Operating Environment and Future Outlook - Management anticipates a significant increase in charge-off rates, which could lead to more portfolio sales from banks [27] - The company expects strong volumes in both the U.S. and Europe in 2021, driven by increased charge-offs and provisioning by banks [34] - Management remains cautious about the sustainability of current collection performance, treating it as acceleration rather than a permanent improvement [21][46] Other Important Information - The company completed its first unsecured notes offering in the U.S. for its sector, receiving strong ratings from Moody's and Fitch [23] - The company retired $288 million of convertible notes that matured in August and amended its North American credit facility [23] Q&A Session Summary Question: Insights on the resurgence of volumes in Europe - Management indicated that the increase in volumes was largely due to portfolios that were paused earlier in the year, with expectations for strong volumes in 2021 [34] Question: Qualitative feedback from sellers regarding charge-offs - Management noted that there is an expectation of significant charge-off increases, with sellers trying to time their sales accordingly [37] Question: Legal expenses and their future trajectory - Management explained that the current lower legal expenses are a result of increased voluntary payments, which may lead to fewer accounts entering the legal process [39] Question: Changes in collections trajectory through the quarter - Management observed expected seasonal degradation in contact rates but noted that overall performance was significantly higher than the previous year [43] Question: Dynamics between U.S. and Europe regarding charge-offs - Management expressed optimism about both markets, indicating that Europe may recognize charge-offs sooner than the U.S. due to structural differences [54]

Financial Performance - Global cash collections reached a record of $519 million[3], a 15% increase compared to $453 million in Q3 2019[8] - Net income increased by 70% from $25 million in Q3 2019 to $42 million in Q3 2020[11] - Diluted earnings per share increased by 67% from $0.55 in Q3 2019 to $0.92 in Q3 2020[11] - The company's YTD cash efficiency ratio is 65.3%[17] Investments and Portfolio - Portfolio purchases amounted to $178 million[3] - The company estimates remaining collections of $6.3 billion[3] - The company invested $98 million in the Americas[5] and $79 million in Europe[6] Regional Performance - Cash collections in the Americas were $374 million[5] - Europe achieved record cash collections of $146 million[6] Debt and Leverage - The company has $1 billion available for portfolio acquisitions[35] - Total borrowings decreased from $2.808 billion to $2.524 billion[34] - Debt to adjusted EBITDA decreased from 2.54x to 1.90x[34]