PRA GROUP INC

Previous wording

We are a global financial services company with operations in the Americas, Europe and Australia. Our primary business is the purchase, collection and management of portfolios of nonperforming loans.

Current wording

We are a global financial services company with operations in the Americas, Europe and Australia. Our primary business is the purchase, collection and management of portfolios of nonperforming loans. Our Core operation specializes in purchasing and collecting nonperforming loans, which are sold by credit originators when they choose not to pursue, or have been unsuccessful in, collecting the full balance owed. Our Insolvency operation consists primarily of purchasing and collecting on nonperforming loans where the customer is involved in a bankruptcy or similar proceeding. Our global investment team leverages our deep seller relationships to identify purchasing opportunities, and we make purchasing offers based upon proprietary models backed by over 25 years of data. We develop collections strategies and execute on collections activity via call center, digital, and legal channels (where appropriate) and single payment or payment plans (short duration, long duration or hardship accommodation).

Previous wording

Three months ended March 31, 2025 ("First Quarter 2025" or "Q1 2025") compared to three months ended March 31, 2024 ("First Quarter 2024" or "Q1 2024").

Current wording

Three months ended June 30, 2025 ("Second Quarter 2025" or "Q2 2025") compared to three months ended June 30, 2024 ("Second Quarter 2024" or "Q2 2024"); and six months ended June 30, 2025 ("Year-to-Date 2025") compared to six months ended June 30, 2024 ("Year-to-Date 2024").

Previous wording

Total portfolio purchases were $291.7 million in Q1 2025, an increase of $45.9 million, or 18.7%, compared to $245.8 million in Q1 2024. The increase in Europe portfolio purchases of $64.2 million was partially offset by the decrease in Americas and Australia purchases of $18.4 million. Our portfolio purchases reflect our global framework that seeks to optimize our deployment of capital to achieve appropriate returns and take advantage of opportunities in our markets.

Current wording

Total year-to-date portfolio purchases were $638.2 million in 2025, an increase of $13.0 million, or 2.1%, compared to $625.2 million in 2024. An increase in Europe portfolio purchases of $57.5 million was partially offset by a decrease in Americas and Australia purchases of $44.5 million. Our portfolio purchases reflect our global framework that seeks to optimize our deployment of capital to achieve appropriate returns and take advantage of opportunities in our markets.

Previous wording

Total cash collections were $497.4 million in Q1 2025, an increase of $47.9 million, or 10.7%, compared to $449.5 million in Q1 2024. The increase was primarily due to an increase in U.S. Core cash collections of $39.6 million, mainly due to higher volumes in our legal collections channel, as well as an increase in collections from our non-legal channels due to higher recent purchasing levels. In Europe, higher recent purchasing levels helped drive increased cash collections of $18.1 million, spread broadly across most of our markets. These increases were partially offset by a $10.6 million decrease in cash collections in Brazil, due in large part to variation in the foreign exchange rate and lower recent purchasing levels.

Current wording

Total cash collections were $536.3 million in Q2 2025, an increase of $62.4 million, or 13.2%, compared to $473.9 million in Q2 2024. The increase was primarily due to an increase in U.S. and Europe Core cash collections, mainly due to higher recent purchasing levels. U.S. Core collections increased $40.9 million. Europe Core collections increased $28.9 million, spread broadly across most of our markets. These increases were partially offset by an $8.2 million decrease in cash collections in Brazil, due in large part to variation in the foreign exchange rate and lower recent purchasing levels.

Previous wording

Total portfolio revenue was $268.9 million in Q1 2025, an increase of $15.2 million, or 6.0%, compared to $253.7 million in Q1 2024. Portfolio income increased $38.9 million, or 19.3%, driven largely by the impact of higher purchasing and improved pricing in the U.S. beginning in 2023, while changes in expected recoveries decreased $23.8 million. Recoveries collected in excess of forecast decreased $19.3 million due primarily to cash collections underperformance on our 2019-2023 U.S. Core pools in Q1 2025, compared to overperformance on most U.S. Core pools in Q1 2024. This decrease was partially offset by higher cash collections overperformance on our European pools. Changes in expected future recoveries decreased $4.4 million due largely to a lower net increase in the collections forecast on our Americas pools compared to Q1 2024.

Current wording

Total portfolio revenue was $284.2 million in Q2 2025, an increase of $1.6 million, or 0.6%, compared to $282.6 million in Q2 2024. Portfolio income increased $41.6 million, or 19.9%, driven largely by the impact of higher purchasing and improved pricing in the U.S. beginning in 2023, while changes in expected recoveries decreased $40.0 million. Recoveries collected in excess of forecast decreased $14.0 million due primarily to lower overperformance in Q2 2025 on most U.S. Core pools compared to Q2 2024. This decrease was partially offset by higher overperformance on our European pools. Changes in expected future recoveries decreased $26.1 million due largely to a decrease to the collections forecast on the 2023 U.S. Core pool.

Previous wording

Legal collection costs consist primarily of costs paid to courts where a lawsuit is filed for the purpose of attempting to collect on an account. Q1 2025 costs increased $6.7 million, or 25.1%, compared to Q1 2024, primarily due to increased activity in our U.S. legal collections channel.

Current wording

Legal collection costs consist primarily of costs paid to courts where a lawsuit is filed for the purpose of attempting to collect on an account. Q2 2025 legal collection costs increased $2.3 million, or 6.5%, compared to Q2 2024, primarily due to increased activity in our U.S. legal collections channel. The growth of legal collections activity in the U.S. also drove the $9.0 million, or 14.5%, increase for the year-to-date 2025 period.

Previous wording

Legal collection fees represent contingent fees incurred for cash collections generated by our third-party attorney network. Q1 2025 fees increased $3.1 million, or 25.7%, compared to Q1 2024, mainly reflecting higher external legal collections within our U.S. Core portfolio.

Current wording

Legal collection fees represent contingent fees incurred for cash collections generated by our third-party attorney network. Q2 2025 fees increased $1.9 million, or 13.5%, compared to Q2 2024, mainly reflecting higher external legal collections within our U.S. Core portfolio. Increased external legal collections in the U.S. were also the primary driver of the $5.0 million, or 19.3%, increase for the year-to-date 2025 period.

Previous wording

Agency fees primarily represent third-party collection fees. Q1 2025 fees increased $1.6 million, or 8.3%, compared to Q1 2024, mainly due to higher fees paid to third-party debt collection agencies in the U.S.

Current wording

Agency fees primarily represent third-party collection fees. Higher fees paid to third-party debt collection agencies in the U.S. and Europe drove both the Q2 2025 increase of $1.7 million, or 8.0%, compared to Q2 2024, and the year-to-date 2025 increase of $3.3 million, or 8.2%.

Previous wording

Communication expense relates mainly to correspondence, network and calling costs associated with our collection efforts. Q1 2025 expense decreased $2.1 million, or 16.7%, compared to Q1 2024, primarily due to a mix of lower-cost communications strategies utilized in our U.S. business in Q1 2025.

Current wording

Communication expense relates mainly to correspondence, network and calling costs associated with our collection efforts. Q2 2025 communication expense decreased $2.2 million, or 18.7%, compared to Q2 2024, primarily due to a mix of lower-cost communications strategies utilized in our U.S. business. The use of lower-cost communications strategies utilized in our U.S. business was also primarily responsible for the decrease of $4.3 million, or 17.6% in the year-to-date 2025 period.

Previous wording

Interest expense, net was $61.0 million in Q1 2025, an increase of $8.7 million, or 16.6%, compared to Q1 2024. The increase was primarily due to a higher average debt balance in the current year period to support higher levels of portfolio investments.

Current wording

Interest expense, net was $62.4 million in Q2 2025, an increase of $7.0 million, or 12.7%, compared to Q2 2024. Year-to-date 2025 interest expense, net increased 14.6% to $123.3 million. The increases in both the quarterly and year-to-date periods were primarily due to a higher average debt balance in the current year period to support higher levels of portfolio investments.

Previous wording

Income tax expense was $4.3 million in Q1 2025, an increase of $1.9 million, or 80.7%, compared to Q1 2024. The effective tax rate in Q1 2025 was 32.2% compared to 16.9% in Q1 2024. The increase was primarily due to changes in the mix of income from different taxing jurisdictions and the timing and amount of discrete items.

Current wording

Income tax expense was $15.4 million in Q2 2025, an increase of $6.7 million, or 77.1%, compared to Q2 2024. The effective tax rate in Q2 2025 was 25.2% compared to 25.7% in Q2 2024. Year-to-date 2025 income tax expense increased 77.9% to $19.7 million. The changes in the effective tax rates in both the quarterly and year-to-date periods were primarily due to changes in the mix of income from different taxing jurisdictions and the timing and amount of discrete items.

Previous wording

Finance receivables, net were $4.3 billion as of March 31, 2025, an increase of $167.6 million, or 4.0%, compared to $4.1 billion as of December 31, 2024, driven largely by portfolio acquisitions of $291.7 million and foreign currency translation adjustments of $113.1 million, partially offset by recoveries collected and applied to Finance receivables, net of $265.1 million.

Current wording

Finance receivables, net were $4.6 billion as of June 30, 2025, an increase of $421.8 million, or 10.2%, compared to $4.1 billion as of December 31, 2024, driven largely by portfolio acquisitions of $638.2 million and foreign currency translation adjustments of $277.1 million, partially offset by recoveries collected and applied to Finance receivables, net of $554.7 million.

Previous wording

Goodwill was $420.7 million as of March 31, 2025, an increase of $24.3 million, or 6.1%, compared to $396.4 million as of December 31, 2024, due to foreign currency translation adjustments. As of March 31, 2025, goodwill consists primarily of $393.8 million in our Debt Buying and Collection ("DBC") reporting unit. We performed our most recent annual impairment review of the DBC reporting unit as of October 1, 2024, and concluded that goodwill was not impaired. As of March 31, 2025, our quarterly assessment did not identify the occurrence of any triggering events, and we determined our goodwill was not more-likely-than-not impaired. However, consistent with our most recent annual review, the DBC reporting unit may be at-risk for future impairment if our cash flow projections are not met or if market factors utilized in the impairment test were to deteriorate, including adverse changes in the debt sales market that impact our estimated purchasing volumes and purchase price multiples, an increase in the discount rate, or a sustained decline in our stock price.

Current wording

Goodwill was $439.4 million as of June 30, 2025, an increase of $43.1 million, or 10.9%, compared to $396.4 million as of December 31, 2024, due to foreign currency translation adjustments. As of June 30, 2025, goodwill consisted primarily of $412.6 million in our Debt Buying and Collection ("DBC") reporting unit. We performed our most recent annual impairment review of the DBC reporting unit as of October 1, 2024, and concluded that goodwill was not impaired. As of June 30, 2025, we did not identify the occurrence of any triggering events requiring us to perform an interim assessment of goodwill. However, consistent with our most recent annual assessment, the goodwill in our DBC reporting unit may be at-risk for future impairment. If our stock price does not return to higher levels on a sustained basis, this market indicator could be a triggering event indicating possible impairment. Additionally, if our cash flow projections are not met or if other market factors utilized in the impairment test were to deteriorate, including adverse changes in the debt sales market that impact our estimated purchasing volumes and purchase price multiples and an increase in the discount rate, this reporting unit could become impaired.

Previous wording

Borrowings were $3.5 billion as of March 31, 2025, an increase of $139.5 million, or 4.2%, compared to $3.3 billion as of December 31, 2024. The increase was primarily due to incremental net borrowings under our North American and European revolving credit facilities of $102.0 million and $59.4 million, respectively, offset by net payments of $20.1 million on our United Kingdom ("UK") revolving credit facility.

Current wording

Borrowings were $3.6 billion as of June 30, 2025, an increase of $287.6 million, or 8.6%, compared to $3.3 billion as of December 31, 2024. The increase was primarily due to incremental net borrowings under our North American and European revolving credit facilities of $147.4 million and $157.8 million, respectively, offset by net payments of $14.9 million on our United Kingdom ("UK") revolving credit facility.

Previous wording

•Adjusted EBITDA, to evaluate our performance and to set performance goals; and

Current wording

•Adjusted EBITDA, to evaluate our performance and to set performance goals;

Previous wording

•ROATE, as a measure to monitor and evaluate operating performance relative to our equity.

Current wording

•ROATE, to monitor and evaluate operating performance relative to our equity; and

Previous wording

We present Adjusted EBITDA because we consider it an important supplemental measure of our operational and financial performance. Our management believes Adjusted EBITDA helps provide enhanced period-to-period comparability of our operational and financial performance, as it excludes certain items whose fluctuations from period-to-period do not necessarily correspond to changes in the operations of our business, 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. In addition, our calculation of Adjusted EBITDA may not be comparable to the calculation of similarly titled measures presented by other companies. Adjusted EBITDA is calculated starting with our GAAP financial measure, Net income attributable to PRA Group, Inc. and is adjusted for:

Current wording

We present Adjusted EBITDA because we consider it an important supplemental measure of our operational and financial performance. Management believes Adjusted EBITDA helps provide enhanced period-to-period comparability of our operational and financial performance, as it excludes certain items whose fluctuations from period-to-period do not necessarily correspond to changes in the operations of our business, 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. In addition, our calculation of Adjusted EBITDA may not be comparable to the calculation of similarly titled measures presented by other companies. Adjusted EBITDA is calculated starting with our GAAP financial measure, Net income attributable to PRA Group, Inc. and is adjusted for:

Previous wording

•net income attributable to noncontrolling interests; and

Current wording

•net income attributable to noncontrolling interests;

Previous wording

The following table provides a reconciliation of Total stockholders' equity - PRA Group, Inc. as reported in accordance with GAAP to average tangible equity and displays our ROATE for the periods indicated (in thousands, except for ratio data):

Current wording

The following table provides a reconciliation of Total stockholders' equity - PRA Group, Inc. as reported in accordance with GAAP to average tangible equity. The table also provides a reconciliation of Net income attributable to PRA Group, Inc. to Adjusted net income attributable to PRA Group, Inc. and provides our ROATE and Adjusted ROATE for the periods indicated (in thousands, except for ratio data):

Previous wording

•Core cash collections separated between call center and other collections and legal collections, and constant currency adjusted cash collections;

Current wording

•Core cash collections separated between call center and other collections and legal collections, and constant currency adjusted cash collections; and

Previous wording

•nonperforming loan portfolios and collections by geography, portfolio type and year of purchase; and

Current wording

•nonperforming loan portfolios and collections by geography, portfolio type and year of purchase.

Previous wording

The collections data presented reflects gross cash collections and does not reflect any costs to collect; therefore, it may not present relative profitability. The past performance of pools within certain geographies and portfolio types may not be comparable with other locations and portfolio types or indicative of future results. Customer payment patterns in all of the countries in which we operate can be affected by various factors, including general business and economic conditions, seasonal employment trends, income tax refunds and holiday spending habits.

Current wording

The collections data presented reflects gross cash collections and does not reflect any costs to collect; therefore, it may not represent relative profitability. The past performance of pools within certain geographies and portfolio types may not be comparable with other locations and portfolio types or indicative of future results. Customer payment patterns in all of the countries in which we operate can be affected by various factors, including general business and economic conditions, seasonal employment trends, income tax refunds and holiday spending habits.

Previous wording

(1)Reflects ERC of $3.5 billion for the U.S. and $491.6 million for other Americas and Australia.

Current wording

(1)Reflects ERC of $3.5 billion for the U.S. and $513.4 million for other Americas and Australia.

Previous wording

(2)Reflects ERC of $1.6 billion for the UK, $990.2 million for Central Europe, $870.7 million for Northern Europe and $392.0 million for Southern Europe.

Current wording

(2)Reflects ERC of $1.7 billion for the UK, $1,079.9 million for Central Europe, $950.8 million for Northern Europe and $509.6 million for Southern Europe.

Previous wording

As of March 31, 2025, cash and cash equivalents totaled $128.7 million, of which $118.4 million was held by international operations with indefinitely reinvested earnings. For additional information about the unremitted earnings of our international subsidiaries, refer to Note 13 to our Consolidated Financial Statements in the 2024 Form 10-K.

Current wording

As of June 30, 2025, cash and cash equivalents totaled $131.6 million, of which $117.4 million was held by international operations with indefinitely reinvested earnings. For additional information about the unremitted earnings of our international subsidiaries, refer to Note 13 to our Consolidated Financial Statements in the 2024 Form 10-K.

Previous wording

As of March 31, 2025, interest-bearing deposits totaled $187.7 million. Under our European revolving credit facility, our interest-bearing deposit funding is limited to SEK 2.2 billion (the equivalent of $219.3 million in U.S. dollars as of March 31, 2025).

Current wording

As of June 30, 2025, interest-bearing deposits totaled $168.7 million. Under our European revolving credit facility, our interest-bearing deposit funding is limited to SEK 2.2 billion (the equivalent of $233.0 million in U.S. dollars as of June 30, 2025).

Previous wording

Market conditions permitting, as we deem appropriate, we may seek to access the debt or equity capital markets or other sources of funding, and it may be necessary to raise additional funds to achieve our business objectives. Business acquisitions or higher than expected levels of portfolio purchasing could require additional financing. We may also from time-to-time repurchase senior notes in the open market or otherwise. We also have the ability to slow the purchase of nonperforming loans without significantly impacting current year collections.

Current wording

Market conditions permitting, as we deem appropriate, we may seek to access the debt or equity capital markets or other sources of funding, and it may be necessary to raise additional funds to achieve our business objectives. Business acquisitions or higher than expected levels of portfolio purchasing could require additional financing. We may also from time-to-time repurchase common stock in the open market or otherwise. We also have the ability to slow the purchase of nonperforming loans without significantly impacting current year collections.

Previous wording

As of March 31, 2025, we had forward flow agreements in place with an estimated purchase price of approximately $347.0 million over the next 12 months. This total can vary significantly based on the remaining terms and renewal dates of the agreements and is comprised of $258.0 million for the Americas and Australia and $89.0 million for Europe. These amounts represent our estimated forward flow purchases over the next 12 months under the agreements in place based on projections and other factors, including sellers' estimates of future forward flow sales, and are dependent on actual delivery by the sellers and, in some cases, the impact of foreign exchange rate fluctuations. Accordingly, amounts purchased under these agreements may vary significantly. In addition to these agreements, we may also enter into new or renewed forward flow commitments and/or close on spot purchase transactions.

Current wording

As of June 30, 2025, we had forward flow agreements in place with an estimated purchase price of approximately $311.2 million over the next 12 months. This total can vary significantly based on the remaining terms and renewal dates of the agreements and is comprised of $210.6 million for the Americas and Australia and $100.5 million for Europe. These amounts represent our estimated forward flow purchases over the next 12 months under the agreements in place based on projections and other factors, including sellers' estimates of future forward flow sales, and are dependent on actual delivery by the sellers and, in some cases, the impact of foreign exchange rate fluctuations. Accordingly, amounts purchased under these agreements may vary significantly. In addition to these agreements, we may also enter into new or renewed forward flow commitments and/or close on spot purchase transactions.

Previous wording

As of March 31, 2025, we had $3.5 billion in outstanding borr owings. The estimated interest, unused fees and principal payments for the next 12 months are $240.3 million, of which $10.0 million relatesto principal on our term loan. After 12 months, principal payments on our debt are due from between one and five years. Many of our financing arrangements include covenants with which we must comply, and as of March 31, 2025, we were in compliance with these covenants.

Current wording

As of June 30, 2025, we had $3.6 billion in outstanding borr owings. The estimated interest, unused fees and principal payments for the next 12 months are $249.3 million. After 12 months, principal payments on our debt are due from between one and five years. Many of our financing arrangements include covenants with which we must comply, and as of June 30, 2025, we were in compliance with these covenants.

Previous wording

Repurchases may be made from time-to-time in open market transactions, through privately negotiated transactions, in block transactions, through purchases made in accordance with trading plans adopted under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or other methods, subject to market and/or other conditions and applicable regulatory requirements. There were no repurchases during the first quarter of 2025, and as of March 31, 2025, we had $67.7 million remaining for share repurchases under the program. Repurchases are also subject to restrictive covenants contained in our credit facilities and the indentures that govern our senior notes.

Current wording

Repurchases may be made from time-to-time in open market transactions, through privately negotiated transactions, in block transactions, through purchases made in accordance with trading plans adopted under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or other methods, subject to market and/or other conditions and applicable regulatory requirements. During the second quarter of 2025, we repurchased 660,395 shares of our common stock for an aggregate cost of approximately $10.0 million at an average price of $15.14 per share. As of June 30, 2025, we had $57.7 million remaining for share repurchases under the program. Repurchases are also subject to restrictive covenants contained in our credit facilities and the indentures that govern our senior notes.

Previous wording

Our leases have remaining terms from one to 8 years. As of March 31, 2025, we had $30.9 million in lease liabilities, of which $7.8 million is due within the next 12 months. For additional information, refer to Note 5 to our Consolidated Financial Statements in the 2024 Form 10-K.

Current wording

Our leases have remaining terms from one to 8 years. As of June 30, 2025, we had $29.5 million in lease liabilities, of which $7.5 million is due within the next 12 months. For additional information, refer to Note 5 to our Consolidated Financial Statements in the 2024 Form 10-K.

Previous wording

We enter into derivative financial instruments to reduce our exposure to fluctuations in interest rates on variable rate debt and foreign currency exchange rates. As of March 31, 2025, we had $5.9 million of derivative liabilities, of which $0.2 million matures within the next 12 months. The remaining$5.7 million matures in 2028. For additional information, refer to Note 6 to our Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report.

Current wording

We enter into derivative financial instruments to reduce our exposure to fluctuations in interest rates on variable rate debt and foreign currency exchange rates. As of June 30, 2025, we had $14.1 million of derivative liabilities, of which $3.2 million matures within the next 12 months. The remaining$10.9 million matures in 2028 and later. For additional information, refer to Note 6 to our Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report.

Previous wording

As of March 31, 2025, we held $60.7 million in Swedish treasury securities to meet the liquidity requirements of the Swedish Financial Services Authority for our banking subsidiary, AK Nordic AB.

Current wording

As of June 30, 2025, we held $64.8 million in Swedish treasury securities to meet the liquidity requirements of the Swedish Financial Services Authority for our banking subsidiary, AK Nordic AB.

Previous wording

Net cash used in operating activities mainly reflects the portion of our cash collections recognized as revenue and cash paid for operating expenses, interest and income taxes. It does not include cash collections applied to the negative allowance, which are classified as cash flows provided by investing activities. Net cash used in operating activities decreased $20.4 million compared to the prior year period, primarily due to higher cash collections recognized as income and a lower impact from foreign currency transactions, partially offset by higher cash paid for operating expenses and interest.

Current wording

Net cash used in operating activities mainly reflects the portion of our cash collections recognized as revenue and cash paid for operating expenses, interest and income taxes. It does not include cash collections applied to the negative allowance, which are classified as cash flows provided by investing activities. Net cash used in operating activities decreased $37.0 million compared to the prior year period, primarily due to higher cash collections recognized as income and a positive impact from foreign currency exchange rates, partially offset by higher cash paid for operating expenses and interest.

Previous wording

Net cash used in investing activities increased $39.6 million compared to the prior year period. The increase was primarily due to an increase of $43.8 million in purchases of nonperforming loan portfolios and an $8.9 million decrease in net cash flows from purchases and disposals of investments, partially offset by an increase of $13.5 million in recoveries collected and applied to Finance receivables, net.

Current wording

Net cash used in investing activities decreased $62.8 million compared to the prior year period. The decrease was primarily due to an increase of $33.8 million in recoveries collected and applied to Finance receivables, net. This was partially offset by an increase of $8.1 million in purchases of nonperforming loan portfolios and an $8.7 million decrease in net cash flows from purchases and disposals of investments.

Previous wording

Net cash provided by financing activities increased $32.8 million compared to the prior year period. The increase was primarily due to a $24.2 million increase in net proceeds from lines of credit, $4.1 million decrease in distributions to noncontrolling interests and $3.2 million increase in interest-bearing deposits.

Current wording

Net cash provided by financing activities decreased $97.9 million compared to the prior year period. The decrease was primarily due to the $400.0 million of senior notes issued during the 2024 period and a $28.0 million increase in interest-bearing deposits. These amounts were partially offset by a $331.4 million increase in net proceeds from (payments on) lines of credit.

Previous wording

The net effect of exchange rates on cash increased $13.4 million compared to the prior year period. The increase was primarily due to the impact of U.S. dollar devaluation in Q1 2025 on our foreign currency denominated borrowings and intercompany balances.

Current wording

The net effect of exchange rates on cash increased $19.8 million compared to the prior year period. The increase was primarily due to the impact of a weakening of the U.S. dollar relative to other currencies on our foreign currency denominated borrowings and intercompany balances.

Previous wording

•"Portfolio income" reflects revenue recorded due to the passage of time using the effective interest rate calculated based on the purchase price of nonperforming loan portfolios and estimated remaining collections.

Current wording

•"Portfolio income" reflects revenue recorded due to the passage of time using the effective interest rate calculated based on the purchase price and estimated remaining collections of nonperforming loan portfolios.