U.S. Distressed Debt Market Update

N A O M I M U E L L N E R

V P P o r t f o l i o A c q u i s i t i o n s & I n s o l v e n c y I n v e s t m e n t S e r v i c e s

P R A G r o u p , I n c . , U n i t e d S t a t e s

P r e s e n t a t i o n f o r t h e

2 0 1 4 S C O R E 1 2 t h A n n u a l D e b t C o n f e r e n c e

N o v e m b e r 1 8 , 2 0 1 4

T o r o n t o , O N

Overview of Today’s Presentation

U.S. Macroeconomic Conditions

Unemployment

Consumer Credit and Debt Levels

Outlook

Headlines and Major Trends

Current US Debt Sale Market

US Public Debt companies

US Regulatory Environment

Outlook

Unemployment in the U.S.

The unemployment rate fell to 5.8% in October 2014, from 5.9% in September 2014, a six-year low

Income Levels Historical Trend

Personal and Disposable income levels have increased as a general trend

What does this mean for economic growth in the U.S.?

2014 Profile

U.S. household consumer debt(indebted households) profile:

Average credit card debt: $15,593

Average mortgage debt: $153,184

Average student loan debt: $32,511

In total, American consumers owe:

$11.62 trillion in debt

An increase of 3.4% from last year

$880.3 billion in credit card debt

$8.05 trillion in mortgages

$1,122.7 billion in student loans

An increase of 10.5% from last year

Credit Card Debt

Total CC Debt

Avg Household CC Debt

Avg Indebted Household Debt

August 2014 $880.3 Billion $7,274 $15,593

Change from July

-0.02% -0.09% -0.09%

Change from August 2013

3.19% 2.36% 2.36%

Change from July, annualized

-0.28% -1.09% -1.09%

Source: Federal Reserve Bank of New York

Credit Card Debt

Credit card debt is holding fairly steady

What does lower credit card debt mean for the economy?

Falling indebtedness is largely due to defaults rather than repayment

Source: Federal Reserve Bank of New York

Consumer Debt Outstanding

Percent of Balance 90+ Days Delinquent by Loan Type

Credit Card Charge off Rates

Consumer Bankruptcy Filings

0

250

500

750

1,000

1,250

1,500

1,750

2,000

2,250

Th

ou

sa

nd

s

CH 13s CH 7s

2014 – BK filings – expected down 16%; declining significantly for 4th year in a row 2015 – flat at best

Outlook

Continued slow recovery

Unemployment down to six-year low

U.S. credit card spending down, but falling indebtedness is largely due to defaults rather than repayment, and student loan debt still continues to increase.

Lack of traditional supply of distressed & bankruptcy consumer receivables.

Public Debt Buyers

0

400

800

1200

PRA Group Encore Capital

2008

2009

2010

2011

2012

2013

2014 YTD

Net Financial Receivables Purchased ($ in millions)

Public Debt Buyers

Source: FinViz

Headwinds

Regulatory uncertainty

Reduced charge-off volumes

Highly competitive pricing

Current U.S. Market

Tailwinds • Industry & Regulators – engaged &

communicating

• Regulatory influence creating significant barriers to entry

• US consumer lending thawing

14

Regulatory Environment

Approach to Global Debt Buying

High Price Pricing confidence, efficient operations, low cost of funds

Preserve their reputation No resale, compliant operations, trustworthiness

Be there when they need us Responsiveness, quick turnaround on proposals

Maintain large financial capacity Significant free cash flow and large credit line capacity

Be reasonable with contracts Fair negotiation, fulfillment upon obligations

Provide excellent post sale support Responsiveness, follow up, good communication

What Sellers Want What Buyers Must Deliver

N A O M I M U E L L N E R , V P P O R T F O L I O A C Q U I S I T I O N S ,

P R A G R O U P , I N C .

Recap and Questions

Fast Facts Our Business

A Specialized Financial and Business Services Company

Headquartered in Norfolk, Virginia

PRA was founded in 1996 and has been public since 2002. Its shares are publicly traded on the NASDAQ Global Select Market under the ticker symbol “PRAA.”

The company is distinguished by its strong customer focus, continuous innovation, and culture of integrity and compliance. The only debt buyer with true U.S., Canadian and European coverage.

PRA Group, Inc.