Portfolio Recovery Associates Reports Third Quarter 2012 Results

Portfolio Recovery Associates Reports Third Quarter 2012 Results

NORFOLK, Va., Oct. 30, 2012 (GLOBE NEWSWIRE) -- Portfolio Recovery Associates,
Inc. (Nasdaq:PRAA), a specialized financial and business services company,
today reported its third quarter 2012 results.

Third Quarter Highlights

  *Cash collections of $229 million, up 26% from the third quarter of 2011.
  *Revenue of $151 million, up 32% from the year-earlier quarter.
  *Net income of $33 million, an increase of 31% over the third quarter of
    2011.
  *Diluted EPS of $1.96, compared with $1.48 in the third quarter of 2011.
  *Annualized return on average equity of 20.3%.

"As the US economy slowly recovers, more and more consumers are paying down
their debt, resulting in strong, year-over-year growth in cash collections, as
well as record revenue and net income for PRA," said Steve Fredrickson,
chairman, president and chief executive officer. "Our business model of
diversified purchases and cash collections from both bankrupt and non-bankrupt
portfolios of debt, combined with domestic-led call centers and fees earned
from our business services, continued to drive our record results."

             FINANCIAL AND OPERATING REVIEW – THIRD QUARTER 2012

Revenues

  *Revenues were $150.5 million for the quarter, up 32% from a year ago.This
    was driven by cash receipts of $243.8 million, up 26% from $193.6 million
    in Q3 2011.PRA defines cash receipts as the total of cash collections and
    fee income.

Finance Receivables Income and Cash Collections

  *Finance receivables income, driven by cash collections from finance
    receivables, increased 32% to $135.8 million in Q3 2012 from $102.9
    million in the year-ago period.Cash collections from finance receivables
    advanced 26% over Q3 2011, led by increases in Core portfolio legal
    collections as well as collections on bankruptcy portfolios.Core
    portfolio legal collections increased 50% in Q3 2012 from a year ago, due
    in part to the company's expanded focus on collections from those who can,
    but won't, pay back their debt.Bankruptcy portfolio collections increased
    22%.

Cash Collection Source  Q32012     Q22012     Q12012     Q42011     Q32011
($ in thousands)
Call Center & Other     $72,394  $73,582  $79,805  $61,227  $63,967
Collections
External Legal          39,913    41,464    34,852    26,316    27,245
Collections
Internal Legal          25,650    25,361    23,345    17,615    16,444
Collections
Purchased Bankruptcy    91,095    92,018    79,994    75,166    74,512
Collections
Total Cash Collections  $229,052 $232,425 $217,996 $180,324 $182,168
                                                               

  *In Q3 2012, principal amortization of finance receivables as a percentage
    of cash collections was 40.7%, compared with 43.5% in the year-earlier
    quarter.Principal amortization includes net allowance charges of $1.6
    million against certain pools of finance receivables accounts recorded in
    the quarter, compared with $0.7 million recorded in Q3 2011.

Fee Income

  *PRA's businesses services companies generated Q3 2012 fee income of $14.8
    million, compared with $11.4 million in the same period a year ago.This
    increase was due primarily to income generated from our UK business
    acquired in January 2012.Together, the fee-based businesses accounted for
    10% of PRA's total revenues this quarter and in Q3 2011.

Operating Expenses and Income

  *Q3 2012 operating expenses were $93.5 million, up $23.0 million or 33%
    from the year-earlier quarter.The increase was due in large part to costs
    associated with business growth, including an $8.8 million increase in
    legal costs and fees related to PRA's expanded focus on legal collections,
    and the inclusion of the operating expenses of PRA's U.K. business
    acquired in January 2012.
  *Q3 2012 operating income was $57.1 million, compared with $43.8 million in
    Q3 2011, an increase of 30%.The operating margin decreased slightly from
    38.4% in the year-earlier quarter to 37.9% in the recently completed
    quarter.

Balance Sheet

  *PRA purchased $1.0 billion of domestic portfolio face-value finance
    receivables in Q3 2012 for $94.0 million.These receivables were acquired
    in 95 defaulted portfolios from 12 different sellers.
  *Cash balances were $31.5 million as of September 30, 2012.
  *As of September 30, 2012, the balance on PRA's line of credit was $250
    million, with remaining borrowing availability, subject to normal
    borrowing and collateral provisions, under the line of $214.5 million.

Conference Call Information

The company will hold a conference call today with investors at 5:30 p.m. ET
to discuss its Q3 2012 results.Investors may access the call by dialing
888-695-7639 in the U.S. or 970-315-0482 outside the U.S. The conference ID is
38849567.A replay will be available approximately one hour after the call
ends and will remain available until November 6, 2012. Investors may access
the replay of the call by dialing 855-859-2056 in the U.S. or 404-537-3406
outside the U.S.To access the replay, use the conference ID 38849567.
Investors also may listen to the conference call via webcast, both live and
archived at http://ir.PortfolioRecovery.com/events.cfm.

About Portfolio Recovery Associates

Portfolio Recovery Associates, Inc. (PRA) is a specialized financial and
business services company. A market leader in the consumer debt purchase and
collection industry, PRA has a longstanding culture of compliance, engaging
collaboratively with its customers to create realistic, affordable repayment
plans. The company provides a broad range of business services to local
government, auto lenders, law enforcement, institutional investors,
manufacturers and retailers, and U.K. banks and creditors. PRA was recognized
as one ofFortune's100 Fastest Growing Companies in 2012. The company also
was named one of Forbes'Top 25 Best Small Companies in America in 2012, and
has been annually ranked as one of Forbes' 100 Best Small Companies since
2007. For more information, please visit www.PortfolioRecovery.com.

The Portfolio Recovery Associates logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=13727

About Forward-Looking Statements

Statements herein which are not historical, including Portfolio Recovery
Associates' or management's intentions, hopes, beliefs, expectations,
representations, projections, plans or predictions of the future, including
future revenue and earnings growth, statements with respect to future
contributions of its subsidiaries to earnings and future portfolio-purchase
opportunities, 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.Forward-looking statements
include references to Portfolio Recovery Associates' presentations and web
casts. The forward-looking statements in this press release are based upon
management's beliefs, assumptions and expectations of the Company's future
operations and economic performance, taking into account currently available
information. These statements are not statements of historical
fact.Forward-looking statements involve risks and uncertainties, some of
which are not currently known to us. Actual events or results may differ from
those expressed or implied in any such forward-looking statements as a result
of various factors, including the risk factors and other risks that are
described from time to time in the Company's filings with the Securities and
Exchange Commission including but not limited to its annual reports on Form
10-K, its quarterly reports on Form 10-Q and its current reports on Form 8-K,
filed with the Securities and Exchange Commission and available through the
Company's website, which contain a more detailed discussion of the Company's
business, including risks and uncertainties that may affect future results.
Due to such uncertainties and risks, readers are cautioned not to place undue
reliance on such forward-looking statements, which speak only as of the date
hereof.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.
The Company expressly disclaims any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statements contained
herein to reflect any change in the Company'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.

Portfolio Recovery Associates, Inc.
Unaudited Consolidated Income Statements
(in thousands, except per share amounts)
                                                               
                          Three Months  Three Months  Nine Months Nine Months
                          Ended         Ended         Ended       Ended
                          September 30, September 30, September   September
                                                       30,         30,
                          2012          2011          2012        2011
                                                               
Revenues:                                                       
Income recognized on       $135,754     $102,875     $392,566   $299,152
finance receivables, net
Fee income                 14,765        11,401        45,983      41,696
                                                               
Total revenues             150,519       114,276       438,549     340,848
                                                               
Operating expenses:                                             
Compensation and employee  41,334        33,475        123,508     102,443
services
Legal collection fees      8,635         5,962         25,241      17,681
Legal collection costs     15,810        9,731         57,705      28,949
Agent fees                 1,545         1,643         4,495       6,005
Outside fees and services  10,131        6,222         21,575      13,702
Communications             6,777         5,865         22,037      17,884
Rent and occupancy         1,786         1,517         5,053       4,353
Depreciation and           3,623         3,223         10,833      9,755
amortization
Other operating expenses   3,820         2,808         12,027      9,161
                                                               
Total operating expenses   93,461        70,446        282,474     209,933
                                                               
Gain on sale of property   --            --            --          1,157
                                                               
Income from operations     57,058        43,830        156,075     132,072
                                                               
Other income and                                                
(expense):
Interest income            --            7             8           7
Interest expense           (2,189)       (2,555)       (7,223)     (8,057)
                                                               
Income before income taxes 54,869        41,282        148,860     124,022
                                                               
Provision for income taxes 21,742        16,089        58,493      49,544
                                                               
Net income                 $33,127      $25,193      $90,367    $74,478
                                                               
Adjustment for
(loss)/income attributable (187)         (313)         (424)       277
to redeemable
noncontrolling interest
                                                               
Net income attributable to
Portfolio Recovery         $33,314      $25,506      $90,791    $74,201
Associates, Inc.
                                                               
                                                               
                                                               
Net income per common
share attributable to                                           
Portfolio Recovery
Associates, Inc.:
Basic                      $1.97       $1.49       $5.33     $4.34
Diluted                    $1.96       $1.48       $5.30     $4.31
                                                               
Weighted average number of                                      
shares outstanding:
Basic                      16,881        17,117        17,034      17,106
Diluted                    17,022        17,228        17,140      17,218

Portfolio Recovery Associates, Inc.
Unaudited Condensed Consolidated Balance Sheets
(in thousands, except per share amounts)
                                                                
                                                   September 30, December 31,
ASSETS                                              2012          2011
                                                                
Cash and cash equivalents                           $31,488      $26,697
Finance receivables, net                            973,594       926,734
Accounts receivable, net                            8,417         7,862
Property and equipment, net                         25,506        25,727
Goodwill                                            100,456       61,678
Intangible assets, net                              21,167        14,596
Other assets                                        9,070         7,829
                                                                
Total assets                                        $1,169,698   $1,071,123
                                                                
LIABILITIES AND EQUITY                                           
                                                                
Liabilities:                                                     
Accounts payable and accrued liabilities            $42,031      $42,660
Net deferred tax liability                          186,506       193,898
Line of credit                                      250,000       220,000
Long-term debt                                      674           1,246
                                                                
Total liabilities                                   479,211       457,804
Redeemable noncontrolling Interest                  19,998        17,831
                                                                
Stockholders' equity:                                            
                                                                
Preferred stock, par value $0.01, authorized        --            --
shares, 2,000, issued and outstanding shares - 0
Common stock, par value $0.01, 60,000 authorized
shares, 16,881 issued and outstanding shares at     169           171
September 30, 2012, and 17,134 issued and
outstanding shares at December 31, 2011
Additional paid-in capital                          149,818       167,719
Retained earnings                                   518,389       427,598
Accumulated other comprehensive income              2,113         --
Total stockholders' equity                          670,489       595,488
                                                                
Total liabilities and equity                       $1,169,698   $1,071,123


Portfolio Recovery Associates, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
                                                               
                                                  Nine Months   Nine Months
                                                  Ended         Ended
                                                  September 30, September 30,
                                                  2012          2011
Cash flows from operating activities:                           
Net income                                        $90,367      $74,478
Adjustments to reconcile net income to net cash                
provided by operating activities:
Amortization of share-based compensation           8,361         6,110
Depreciation and amortization                     10,833        9,755
Deferred tax (benefit)/expense                    (7,377)       27,327
Gain on sale of property                          --            (1,157)
Changes in operating assets and liabilities:                   
Other assets                                      (353)         (953)
Accounts receivable                               1,579         2,470
Accounts payable and accrued liabilities          (9,748)       5,141
                                                               
Net cash provided by operating activities          93,662        123,171
                                                               
Cash flows from investing activities:                           
Purchases of property and equipment                (5,362)       (4,851)
Proceeds from sale of property                     --            1,267
Acquisition of finance receivables, net of         (329,444)     (314,162)
buybacks
Collections applied to principal on finance        286,907       226,014
receivables
Business acquisitions, net of cash acquired        (48,653)      --
                                                               
Net cash used in investing activities              (96,552)      (91,732)
                                                               
Cash flows from financing activities:                           
Proceeds from exercise of options                  --            150
Income tax benefit from share-based compensation   1,484         503
Proceeds from line of credit                       160,000       27,000
Principal payments on line of credit               (130,000)     (67,000)
Repurchases of common stock                        (22,726)      --
Distributions paid to noncontrolling interest      --            (2,308)
Principal payments on long-term debt               (572)         (843)
                                                               
Net cash provided by/(used in) financing           8,186         (42,498)
activities
                                                               
Effect of exchange rate on cash                    (505)         --
                                                               
Net increase/(decrease) in cash and cash           4,791         (11,059)
equivalents
                                                               
Cash and cash equivalents, beginning of year       26,697        41,094
                                                               
Cash and cash equivalents, end of period           $31,488      $30,035
                                                               
Supplemental disclosure of cash flow information:               
Cash paid for interest                             $7,577       $7,771
Cash paid for income taxes                         71,521       19,058
                                                               
Noncash investing and financing activities:                     
Adjustment of the noncontrolling interest          $(2,852)     $(3,175)
measurement amount
Distributions payable relating to noncontrolling   261          --
interest
Employee stock relinquished for payment of taxes   (2,170)      --


FINANCIAL HIGHLIGHTS
              Three Months Ended              Nine Months Ended         
              September 30,             %      September 30,             %
              2012         2011         Change 2012         2011         Change
EARNINGS (in                                                         
thousands)
Income
recognized on
finance        $135,754   $102,875   32%    $392,566   $299,152   31%
receivables,
net
Fee income     14,765      11,401      30%    45,983      41,696      10%
Total revenues 150,519     114,276     32%    438,549     340,848     29%
Operating      93,461      70,446      33%    282,474     209,933     35%
expenses
Income from    57,058      43,830      30%    156,075     132,072     18%
operations
Net interest   2,189       2,548       -14%   7,215       8,050       -10%
expense
Net income     33,127      25,193      31%    90,367      74,478      21%
Net income
attributable
to Portfolio   33,314      25,506      31%    90,791      74,201      22%
Recovery
Associates,
Inc.
                                                                    
PERIOD-END
BALANCES (in                                                         
thousands)
Cash and cash  $31,488    $30,035    5%     $31,488    $30,035    5%
equivalents
Finance
receivables,   973,594     919,478     6%     973,594     919,478     6%
net
Goodwill and
intangible     121,623     76,426      59%    121,623     76,426      59%
assets, net
Total assets   1,169,698   1,064,104   10%    1,169,698   1,064,104   10%
Line of credit 250,000     260,000     -4%    250,000     260,000     -4%
Total          479,211     478,915     0%     479,211     478,915     0%
liabilities
Total equity   670,489     568,305     18%    670,489     568,305     18%
                                                                    
FINANCE
RECEIVABLE
COLLECTIONS                                                          
(dollars in
thousands)
Cash           $229,053   $182,168   26%    $679,473   $525,166   29%
collections
Principal
amortization
without        91,736      78,552      17%    282,646     218,950     29%
allowance
charges
Principal
amortization   93,299      79,293      18%    286,907     226,014     27%
with allowance
charges
Principal
amortization
w/ allowance                                                         
charges as %
of cash
collections:
Including
fully          40.7%        43.5%        -6%    42.2%        43.0%        -2%
amortized
pools
Excluding
fully          42.0%        45.7%        -8%    43.7%        45.6%        -4%
amortized
pools
                                                                    
ALLOWANCE FOR
FINANCE
RECEIVABLES                                                          
(dollars in
thousands)
Balance at     $90,832    $83,471    9%     $90,832    $83,471    9%
period-end
Allowance      1,563       741         111%   4,261       7,064       -40%
charge
Allowance
charge to
period-end net 0.16%        0.08%        99%    0.44%        0.77%        -43%
finance
receivables
Allowance
charge to net
finance        1.15%        0.72%        60%    1.09%        2.36%        -54%
receivable
income
Allowance
charge to cash 0.68%        0.41%        68%    0.63%        1.35%        -53%
collections
                                                                    
PURCHASES OF
FINANCE
RECEIVABLES                                                          
(1) (dollars
in thousands)
Purchase price $52,703    $57,240    -8%    $174,319   $170,857   2%
- core
Face value -   674,135     5,027,874   -87%   2,679,734   7,071,530   -62%
core
Purchase price 41,277      64,848      -36%   151,629     148,659     2%
- bankruptcy
Face value -   341,359     654,508     -48%   1,158,050   1,515,501   -24%
bankruptcy
Purchase price 93,980      122,088     -23%   325,948     319,516     2%
- total
Face value -   1,015,494   5,682,382   -82%   3,837,784   8,587,031   -55%
total
Number of
portfolios -   95           95           0%     282          250          13%
total
ESTIMATED
REMAINING
COLLECTIONS                                                          
(1) (in
thousands)
Estimated
remaining      $1,323,134 $1,154,406 15%    $1,323,134 $1,154,406 15%
collections -
core
Estimated
remaining      791,018     770,886     3%     791,018     770,886     3%
collections -
bankruptcy
Estimated
remaining      2,114,152   1,925,292   10%    2,114,152   1,925,292   10%
collections -
total
                                                                    
SHARE DATA
(share amounts                                                       
in thousands)
Net income per
common share - $1.96      $1.48      32%    $5.30      $4.31      23%
diluted
Weighted
average number
of shares      17,022      17,228      -1%    17,140      17,218      0%
outstanding -
diluted
Shares         --          --          100%   331,449     --          100%
repurchased
Average price
paid per share
repurchased    $--       --          100%   $68.56     --          100%
(including
acquisitions
costs)
Closing market $104.43    $62.22     68%    $104.43    $62.22     68%
price
                                                                    
RATIOS AND
OTHER DATA                                                           
(dollars in
thousands)
Return on
average equity 20.29%       18.27%       11%    19.15%       18.57%       3%
(2)
Return on      22.01%       22.05%       0%     20.61%       21.85%       -6%
revenue (3)
Operating      37.91%       38.35%       -1%    35.59%       38.75%       -8%
margin (4)
Operating
expense to     38.33%       36.39%       5%     38.94%       37.03%       5%
cash receipts
(5)
Debt to equity 37.39%       46.02%       -19%   37.39%       46.02%       -19%
(6)
Number of      1,992        1,520        31%    1,992        1,520        31%
collectors
Number of      3,103        2,504        24%    3,103        2,504        24%
employees
Cash receipts  $243,818   $193,569   26%    $725,456   $566,862   28%
(5)
Line of credit
- unused       214,450     147,500     45%    214,450     147,500     45%
portion at
period end
(1)Domestic                                                         
portfolio only
(2)Calculated as
annualized net income                                                 
divided by average equity
for the period
(3)Calculated
as net income                                                        
divided by
total revenues
(4)Calculated
as income from
operations                                                           
divided by
total revenues
(5)"Cash
receipts" is
defined as
cash                                                                 
collections
plus fee
income
(6)For purposes of this
ratio, "debt" equals the                                              
line of credit balance plus
long-term debt

                                                                               
FINANCIAL HIGHLIGHTS                                                            
              For the Quarter Ended
              September 30 June 30      March 31     December 31  September 30
              2012         2012         2012         2011         2011
EARNINGS (in                                                   
thousands)
Income
recognized on
finance        $135,754   $132,587   $124,226   $102,743   $102,875
receivables,
net
Fee income     14,765      15,298      15,920      15,344      11,401
Total revenues 150,519     147,885     140,146     118,087     114,276
Operating      93,461      93,289      95,725      72,134      70,446
expenses
Income from    57,058      54,596      44,421      45,953      43,830
operations
Net interest   2,189       2,374       2,652       2,512       2,548
expense
Net income     33,127      32,051      25,189      26,666      25,193
Net income
attributable
to Portfolio   33,314      32,015      25,462      26,590      25,506
Recovery
Associates,
Inc.
                                                              
PERIOD-END
BALANCES (in                                                   
thousands)
Cash and cash  $31,488    $42,621    $28,068    $26,697    $30,035
equivalents
Finance
receivables,   973,594     966,508     945,242     926,734     919,478
net
Goodwill and
intangible     121,623     121,748     124,659     76,274      76,426
assets, net
Total assets   1,169,698   1,173,738   1,142,026   1,071,123   1,064,104
Line of credit 250,000     292,000     265,000     220,000     260,000
Total          479,211     520,911     502,531     457,804     478,915
liabilities
Total equity   670,489     633,446     620,712     595,488     568,305
                                                              
FINANCE
RECEIVABLE
COLLECTIONS                                                    
(dollars in
thousands)
Cash           $229,053   $232,425   $217,996   $180,324   $182,168
collections
Principal
amortization
without        91,736      97,634      93,276      74,481      78,552
allowance
charges
Principal
amortization   93,299      99,838      93,770      77,581      79,293
with allowance
charges
Principal
amortization
w/ allowance                                                   
charges as %
of cash
collections:
Including
fully          40.7%        43.0%        43.0%        43.0%        43.5%
amortized
pools
Excluding
fully          42.0%        44.4%        44.8%        44.9%        45.7%
amortized
pools
                                                              
ALLOWANCE FOR
FINANCE
RECEIVABLES                                                    
(dollars in
thousands)
Balance at     $90,832    $89,269    $87,065    $86,571    $83,471
period-end
Allowance      1,563       2,204       494         3,100       741
charge
Allowance
charge to
period-end net 0.16%        0.23%        0.05%        0.33%        0.08%
finance
receivables
Allowance
charge to net
finance        1.15%        1.66%        0.40%        3.02%        0.72%
receivable
income
Allowance
charge to cash 0.68%        0.95%        0.23%        1.72%        0.41%
collections
                                                              
PURCHASES OF
FINANCE
RECEIVABLES                                                    
(1) (dollars
in thousands)
Purchase price $52,703    $69,512    $52,104    $42,532    $57,240
- core
Face value -   674,135     1,033,331   972,268     829,232     5,027,874
core
Purchase price 41,277      53,460      56,892      46,360      64,848
- bankruptcy
Face value -   341,359     448,244     368,447     376,094     654,508
bankruptcy
Purchase price 93,980      122,972     108,996     88,892      122,088
- total
Face value -   1,015,494   1,481,575   1,340,715   1,205,326   5,682,382
total
Number of
portfolios -   95           105          82           83           95
total
ESTIMATED
REMAINING
COLLECTIONS                                                    
(1) (in
thousands)
Estimated
remaining      $1,323,134 $1,305,641 $1,226,292 $1,159,086 $1,154,406
collections -
core
Estimated
remaining      791,018     802,353     796,161     794,262     770,886
collections -
bankruptcy
Estimated
remaining      2,114,152   2,107,994   2,022,453   1,953,348   1,925,292
collections -
total
                                                              
SHARE DATA
(share amounts                                                 
in thousands)
Net income per
common share - $1.96      $1.87      $1.47      $1.54      $1.48
diluted
Weighted
average number
of shares      17,022      17,133      17,267      17,269      17,228
outstanding -
diluted
Shares         --          300,849     30,600      --          --
repurchased
Average price
paid per share
repurchased    $--       $68.62     $68.02     --          --
(including
acquisitions
costs)
Closing market $104.43    $91.26     $71.72     $67.52     $62.22
price
                                                              
RATIOS AND
OTHER DATA                                                     
(dollars in
thousands)
Return on
average equity 20.29%       20.34%       16.70%       18.18%       18.27%
(2)
Return on      22.01%       21.67%       17.97%       22.58%       22.05%
revenue (3)
Operating      37.91%       36.92%       31.70%       38.91%       38.35%
margin (4)
Operating
expense to     38.33%       37.66%       40.92%       36.87%       36.39%
cash receipts
(5)
Debt to equity 37.39%       46.33%       42.84%       37.15%       46.02%
(6)
Number of      1,992        1,952        1,934        1,658        1,520
collectors
Number of      3,103        3,032        3,014        2,641        2,504
employees
Cash receipts  $243,818   $247,723   $233,916   $195,668   $193,569
(5)
Line of credit
- unused       214,450     166,450     142,500     187,500     147,500
portion at
period end
(1)Domestic                                                   
portfolio only
(2)Calculated as
annualized net income                                                       
divided by average equity
for the period
(3)Calculated
as net income                                                  
divided by
total revenues
(4)Calculated
as income from
operations                                                     
divided by
total revenues
(5)"Cash
receipts" is
defined as
cash                                                           
collections
plus fee
income
(6)For purposes of this
ratio, "debt" equals the                                                    
line of credit balance plus
long-term debt

Purchase Price Multiples at September 30, 2012, Entire Domestic Portfolio
($ in thousands)                                                     
                                            Actual Cash             
                     Total        Net Finance Collections  Estimated   Total
                                                                         Estimated
Purchase  Purchase     Estimated    Receivables Including    Remaining  Collections
                                                Cash                     to
Period    Price        Collections  Balance     Sales        Collections Purchase
                                                                         Price
1996      $3,080     $10,214    $--      $10,171    $43       332%
1997      7,685       25,534      --        25,387      147        332%
1998      11,089      37,585      --        37,130      455        339%
1999      18,898      69,748      --        68,715      1,033      369%
2000      25,020      117,469     --        114,900     2,569      470%
2001      33,481      176,653     --        172,937     3,716      528%
2002      42,325      201,333     --        194,041     7,292      476%
2003      61,448      271,159     --        258,244     12,915     441%
2004      59,176      204,729     --        192,361     12,368     346%
2005      143,168     314,232     8,853      298,170     16,062     219%
2006      107,673     215,261     10,496     197,088     18,173     200%
2007      258,379     508,637     38,359     440,216     68,421     197%
2008      275,148     526,639     67,272     415,563     111,076    191%
2009      281,438     820,543     85,138     558,585     261,958    292%
2010      358,149     895,607     154,974    484,149     411,458    250%
2011      394,261     869,129     283,307    258,182     610,947    220%
2012      324,627     615,027     311,561    39,508      575,519    189%
Total     $2,405,045 $5,879,499 $959,960  $3,765,347 $          244%
                                                             2,114,152
                                                                   
Purchase Price Multiples at September 30, 2012, Purchased Bankruptcy Portfolio
($ in thousands)                                                     
                                            Actual Cash             
                     Total        Net Finance Collections  Estimated   Total
                                                                         Estimated
Purchase  Purchase     Estimated    Receivables Including    Remaining  Collections
                                                Cash                     to
Period    Price        Collections  Balance     Sales        Collections Purchase
                                                                         Price
1996-2003 $--       $--       $--      $--       $--      0%
2004      7,468       14,462      --        14,378      84         194%
2005      29,301      43,492      38         43,418      74         148%
2006      17,630      31,458      70         31,011      447        178%
2007      78,544      105,590     2,918      102,050     3,540      134%
2008      108,607     181,980     27,141     146,362     35,618     168%
2009      156,054     414,562     53,167     282,968     131,594    266%
2010      209,224     427,223     99,242     237,297     189,926    204%
2011      182,180     289,553     151,416    63,270      226,283    159%
2012      149,633     213,156     146,410    9,704       203,452    142%
Total     $938,641   $1,721,476 $480,402  $930,458   $791,018  183%
                                                                   
Purchase Price Multiples at September 30, 2012, Core Portfolio
($ in thousands)                                                     
                                            Actual Cash             
                     Total        Net Finance Collections  Estimated   Total
                                                                         Estimated
Purchase  Purchase     Estimated    Receivables Including    Remaining  Collections
                                                Cash                     to
Period    Price        Collections  Balance     Sales        Collections Purchase
                                                                         Price
1996      $3,080     $10,214    $--      $10,171    $43       332%
1997      7,685       25,534      --        25,387      147        332%
1998      11,089      37,585      --        37,130      455        339%
1999      18,898      69,748      --        68,715      1,033      369%
2000      25,020      117,469     --        114,900     2,569      470%
2001      33,481      176,653     --        172,937     3,716      528%
2002      42,325      201,333     --        194,041     7,292      476%
2003      61,448      271,159     --        258,244     12,915     441%
2004      51,708      190,267     --        177,983     12,284     368%
2005      113,867     270,740     8,815      254,752     15,988     238%
2006      90,043      183,803     10,426     166,077     17,726     204%
2007      179,835     403,047     35,441     338,166     64,881     224%
2008      166,541     344,659     40,131     269,201     75,458     207%
2009      125,384     405,981     31,971     275,617     130,364    324%
2010      148,925     468,384     55,732     246,852     221,532    315%
2011      212,081     579,576     131,891    194,912     384,664    273%
2012      174,994     401,871     165,151    29,804      372,067    230%
Total     $1,466,404 $4,158,023 $479,558  $2,834,889 $          284%
                                                             1,323,134

CONTACT: Rick Goulart
         Vice President, Corporate Communications
         (757) 961-3525
         RickGoulart@PortfolioRecovery.com

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