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. 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).

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. We also purchase and provide fee-based services for class action claims recoveries in the U.S.

Previous wording

(1)Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") is a non-GAAP financial measure. Refer to section"Non-GAAP Financial Measures" for a reconciliation of Net income attributable to PRA Group, Inc., the most directly comparable financial measure calculated and reported in accordance with GAAP, to Adjusted EBITDA.

Current wording

(1)Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") is a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" for a reconciliation of Net (loss)/income attributable to PRA Group, Inc., the most directly comparable financial measure calculated and reported in accordance with GAAP, to Adjusted EBITDA.

Previous wording

(3)Calculated by dividing annualized Net income attributable to PRA Group, Inc., by average Total stockholders' equity - PRA Group, Inc. for the period.

Current wording

(4)Calculated by dividing annualized Net (loss)/income attributable to PRA Group, Inc., by average Total stockholders' equity - PRA Group, Inc. for the period.

Previous wording

(4)Return on average tangible equity ("ROATE") is a non-GAAP financial measure. Average tangible equity is also a non-GAAP financial measure. Refer to section"Non-GAAP Financial Measures" for a reconciliation of Total stockholders' equity - PRA Group, Inc., the most directly comparable financial measure calculated and reported in accordance with GAAP, to average tangible equity.

Current wording

(5)ROATE is a non-GAAP financial measure. Average tangible equity is also a non-GAAP financial measure. Refer to section "Non-GAAP Financial Measures" for a reconciliation of Total stockholders' equity - PRA Group, Inc., the most directly comparable financial measure calculated and reported in accordance with GAAP, to average tangible equity.

Previous 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").

Current wording

Three months ended September 30, 2025 ("Third Quarter 2025" or "Q3 2025") compared to three months ended September 30, 2024 ("Third Quarter 2024" or "Q3 2024"); and nine months ended September 30, 2025 ("Year-to-Date 2025") compared to nine months ended September 30, 2024 ("Year-to-Date 2024").

Previous 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.

Current wording

Our portfolio purchases reflect a global framework that seeks to optimize our deployment of capital to achieve appropriate returns and take advantage of the opportunities in our markets.

Previous 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.

Current wording

Total cash collections were $542.2 million in Q3 2025, an increase of $65.1 million, or 13.7%, compared to $477.1 million in Q3 2024. U.S. Core collections increased $44.7 million, which included a $26.4 million increase in legal collections, driven in large part by higher volumes resulting from the expansion of our U.S. legal collections activity. Europe Core collections increased $27.7 million, spread broadly across most of our markets and due, in part, to favorable foreign exchange variation. These increases were partially offset by a $4.3 million decrease in cash collections in South America, due primarily to lower recent purchasing levels.

Previous wording

Total year-to-date cash collections were $1.03 billion in 2025, an increase of $110.3 million, or 11.9%, compared to $923.4 million in 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 $80.5 million. Europe Core collections increased $47.4 million, spread broadly across most of our markets. These increases were partially offset by an $18.8 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 year-to-date cash collections were $1.6 billion in 2025, an increase of $175.5 million, or 12.5%, compared to $1.4 billion in 2024. U.S. Core collections increased $125.2 million, which included a $77.0 million increase in legal collections, driven in large part by higher volumes resulting from the expansion of our U.S. legal collections activity. Europe Core collections increased $75.0 million, spread broadly across most of our markets and due, in part, to favorable foreign exchange rate variation. These increases were partially offset by a $19.2 million decrease in cash collections in South America, due primarily to lower recent purchasing levels and unfavorable foreign exchange rate variation.

Previous wording

Total year-to-date portfolio revenue was $553.1 million in 2025, an increase of $16.8 million, or 3.1%, compared to $536.3 million in 2024. Portfolio income increased $80.5 million, or 19.6%, driven largely by the impact of higher purchasing and improved pricing in the U.S. beginning in 2023, while changes in expected recoveries decreased $63.8 million. Recoveries collected in excess of forecast decreased $33.3 million due primarily to lower overperformance in 2025 on most U.S. Core pools compared to 2024. This decrease was partially offset by higher overperformance on our European pools. Changes in expected future recoveries decreased $30.5 million due largely to decreases to our collections forecasts on certain U.S. Core pools.

Current wording

Total portfolio revenue was $309.9 million in Q3 2025, an increase of $33.2 million, or 12.0%, compared to $276.7 million in Q3 2024. Portfolio income increased $42.4 million, or 19.6%, driven largely by the impact of higher recent purchasing and improved pricing. Changes in expected recoveries decreased $9.3 million, or 15.3%. Recoveries collected in excess of forecast decreased $6.8 million due largely to a one-time payment of $15.0 million to a seller in Q3 2025 to allow for the increased use of legal collections on certain previously purchased U.S. Core portfolios, partially offset by higher overperformance on our South American pools. Changes in expected future recoveries, which included the increase in estimated remaining collections resulting from the one-time payment in the U.S., decreased $2.4 million due primarily to a lower net increase in the collections forecasts on certain U.S. Core pools. These decreases were partially offset by a net increase in the collections forecasts on our South American pools in Q3 2025 compared to a net decrease in Q3 2024.

Previous wording

During the second quarter, we completed the previously announced sale of our 11.7% interest in RCB Investimentos S.A. ("RCB"), a servicing company for nonperforming loans in Brazil, for a pre-tax gain on the sale of $38.4 million. The proceeds were used for portfolio purchases and general corporate needs. The sale does not impact our ownership of existing portfolio investments in Brazil, nor our existing operations or future portfolio investments in Brazil.

Current wording

In April 2025, we sold our 11.7% interest in RCB Investimentos S.A., a servicing company for nonperforming loans in Brazil, and recorded a gain of $38.4 million in our Consolidated Financial Statements for the second quarter of 2025. The sale did not impact the ownership of our portfolio investments in Brazil or our existing operations and expected future portfolio investments.

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. 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.

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. Q3 2025 legal collection costs increased $18.0 million, or 62.5%, compared to Q3 2024, while the year-to-date costs increased $27.0 million, or 29.7%. These increases were driven by an expansion in activity in our U.S. legal collections channel resulting, in large part, from our cash generating initiatives.

Previous 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.

Current wording

Legal collection fees represent contingent fees incurred for cash collections generated by our third-party attorney network. Q3 2025 fees increased $2.1 million, or 14.4%, compared to Q3 2024, while year-to-date fees increased $7.1 million, or 17.5%. These increases mainly reflected higher external legal collections within our U.S. Core portfolio resulting, in large part, from the expansion in activity in our U.S. legal collections channel.

Previous 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%.

Current wording

Agency fees primarily represent third-party collection fees. Q3 2025 fees increased $3.5 million, or 16.8%, compared to Q3 2024, while year-to-date fees increased $6.9 million, or 11.1%. Higher collection fees in Brazil and increased outsourcing in certain European markets drove the increase for the quarterly period. The increase for the year-to-date period was primarily due to additional fees paid to debt collection agencies in the U.S. and increased outsourcing in Europe.

Previous 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.

Current wording

Communication expense relates mainly to correspondence, network and calling costs associated with our collection efforts. Q3 2025 communication expense decreased $1.7 million, or 16.6%, compared to Q3 2024, while year-to-date expense decreased $5.9 million, or 17.3%. These decreases were primarily due to a mix of lower-cost communications strategies utilized across our U.S. Core operation.

Previous 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.

Current wording

Income tax expense was $24.4 million in Q3 2025, an increase of $25.0 million compared to an income tax benefit of $0.7 million in Q3 2024, while year-to-date expense increased $33.7 million to $44.1 million. The effective tax rate in Q3 2025 was (6.4)% compared to an effective tax benefit rate of (2.4)% in Q3 2024. Our effective tax rate depends on the mix of income from different taxing jurisdictions and the timing and amount of discrete items. The change in the effective tax rate for both the quarterly and year-to-date periods was due largely to the goodwill impairment charge in the current year and a $7.7 million prior year reduction in tax expense due to the reversal of a valuation allowance associated with the resolution of a tax matter in Europe.

Previous 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.

Current wording

Finance receivables, net were $4.6 billion as of September 30, 2025, an increase of $431.4 million, or 10.4%, compared to $4.1 billion as of December 31, 2024, driven largely by portfolio acquisitions of $893.7 million, foreign currency translation adjustments of $252.3 million and Changes in expected recoveries of $112.6 million, partially offset by recoveries collected and applied to Finance receivables, net of $827.2 million.

Previous 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.

Current wording

Borrowings were $3.6 billion as of September 30, 2025, an increase of $280.4 million, or 8.4%, compared to $3.3 billion as of December 31, 2024. On September 30, 2025, we completed the issuance of €300.0 million ($352.0 million) in aggregate principal amount of our 2032 senior notes and initially paid down approximately $172.0 million principal amount of outstanding borrowings under each of our North American and European revolving credit facilities with the net proceeds. Issuance of the 2032 senior notes drove an increase of $352.0 million in borrowings under senior notes, which was partially offset by net payments of $53.3 million on our United Kingdom revolving credit facility.

Previous 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:

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 (loss)/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 (loss)/income attributable to PRA Group, Inc. and is adjusted for:

Previous wording

The following table provides a reconciliation of Net income attributable to PRA Group, Inc. as reported in accordance with GAAP to Adjusted EBITDA for the periods indicated (in thousands):

Current wording

The following table provides a reconciliation of Net (loss)/income attributable to PRA Group, Inc. as reported in accordance with GAAP to Adjusted EBITDA for the periods indicated (in thousands):

Previous wording

We use ROATE, which is a supplemental measure of performance that is not required by, or presented in accordance with, GAAP, to monitor and evaluate operating performance relative to our equity. Management believes ROATE is a useful financial measure for investors in evaluating the effective use of equity, and is an important component of our long-term shareholder return. Average tangible equity is defined as average Total stockholders' equity - PRA Group, Inc. less average goodwill and average other intangible assets. ROATE is calculated by dividing Net income attributable to PRA Group, Inc. by average tangible equity.

Current wording

We use ROATE, which is a supplemental measure of performance that is not required by, or presented in accordance with, GAAP, to monitor and evaluate operating performance relative to our equity. Management believes ROATE is a useful financial measure for investors in evaluating the effective use of equity, and is an important component of our long-term stockholder return. Average tangible equity is defined as average Total stockholders' equity - PRA Group, Inc. less average goodwill and average other intangible assets. ROATE is calculated by dividing annualized Net (loss)/income attributable to PRA Group, Inc. by average tangible equity.

Previous wording

ROATE may include certain items that are not indicative of the operating results of our portfolios of nonperforming loans. Accordingly, management believes that Adjusted ROATE is a useful financial measure for investors because it excludes the impact of gains/losses that are not indicative of the operating results of our portfolios of nonperforming loans.

Current wording

ROATE may include certain items that are not indicative of the ongoing operating results of our business. Accordingly, management also uses Adjusted ROATE to monitor and evaluate operating performance relative to our equity. Management believes Adjusted ROATE is a useful financial measure for investors because it excludes the impact of certain transactions that are either unusual or infrequent in nature, or both. Adjusted ROATE is calculated by dividing Adjusted net income attributable to PRA Group, Inc. by average tangible equity.

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. 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):

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 and a reconciliation of Net (loss)/income attributable to PRA Group, Inc. to Adjusted net income attributable to PRA Group, Inc., and presents our ROATE and Adjusted ROATE for the periods indicated (in thousands, except for ratio data):

Previous wording

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

Current wording

(1)Reflects ERC of $3.6 billion for the U.S. and $515.8 million for other Americas and Australia.

Previous 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.

Current wording

(2)Reflects ERC of $1.64 billion for the UK, $1.06 billion for Central Europe, $964.5 million for Northern Europe and $567.7 million for Southern Europe.

Previous wording

(3)Non-U.S. amounts are presented at the exchange rate at the end of the period in which the portfolio was purchased. In addition, any purchase price adjustments that occur throughout the life of the pool are presented at the period-end exchange rate for the respective period of purchase.

Current wording

(3)Non-U.S. amounts are presented at the exchange rate at the end of the period in which the portfolio was purchased. Purchase price adjustments that occur throughout the life of the pool are presented at the period-end exchange rate for the respective period of purchase.

Previous 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.

Current wording

As of September 30, 2025, cash and cash equivalents totaled $107.5 million, of which $96.3 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 June 30, 2025, we had the following committed amounts, borrowings and availability under our financing arrangements (in thousands):

Current wording

As of September 30, 2025, we had the following committed amounts, outstanding borrowings and availability under our financing arrangements (in thousands):

Previous 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).

Current wording

As of September 30, 2025, interest-bearing deposits totaled $139.7 million. Under our European revolving credit facility, our interest-bearing deposit funding is limited to SEK 2.2 billion (the equivalent of $233.9 million in U.S. dollars as of September 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 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.

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 or 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.

Previous 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.

Current wording

As of September 30, 2025, we had forward flow agreements in place with an estimated purchase price of approximately $297.8 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 $235.4 million for the Americas and Australia and $62.4 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 make spot purchases of nonperforming loan portfolios.

Previous 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.

Current wording

As of September 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 $249.8 million. After 12 months, principal payments on our debt are due from between one and seven years. Our financing arrangements include covenants with which we must comply, and as of September 30, 2025, we were in compliance with these covenants. On September 30, 2025, we completed the private offering of our 2032 senior notes.

Previous wording

On February 25, 2022, our Board of Directors approved a share repurchase program under which we are authorized to repurchase up to $150.0 million of our outstanding common stock. The share repurchase program has no stated expiration date and does not obligate us to repurchase any specified amount of shares, remains subject to the discretion of our Board of Directors and, subject to compliance with applicable laws, may be modified, suspended or discontinued at any time.

Current wording

On February 25, 2022, our Board of Directors approved a share repurchase program under which we are authorized to repurchase up to $150.0 million of our outstanding common stock. The share repurchase program has no stated expiration date and does not obligate us to repurchase any specified amount of shares, remains subject to the discretion of our Board of Directors and, subject to compliance with applicable laws, may be modified, suspended or discontinued at any time. Repurchases are also subject to restrictive covenants contained in our credit facilities and the indentures that govern our senior notes.

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. 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.

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. There were no repurchases during the third quarter of 2025, and as of September 30, 2025, we had $57.7 million remaining for share repurchases under the program, subject to the restrictive covenants discussed above.

Previous 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.

Current wording

Our leases have remaining terms from one to 7 years. As of September 30, 2025, we had $31.2 million in lease liabilities, of which $7.2 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 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.

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 September 30, 2025, we had $9.1 million of derivative liabilities, of which $1.5 million matures within the next 12 months. The remaining$7.5 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 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.

Current wording

As of September 30, 2025, we held $63.2 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 $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.

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 $61.9 million compared to the prior year period, primarily due to higher cash collections recognized as income, partially offset by higher cash paid for interest and taxes.

Previous 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.

Current wording

Net cash used in investing activities decreased $166.9 million compared to the prior year period. The decrease was primarily due to a decrease of $84.9 million in purchases of nonperforming loan portfolios, an increase of $49.2 million in proceeds from sales and maturities of investments and an increase of $42.9 million in recoveries collected and applied to Finance receivables.

Previous 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.

Current wording

Net cash provided by financing activities decreased $272.5 million compared to the prior year period. The decrease was primarily due to a $441.6 million decrease in net proceeds from lines of credit and a $65.7 million decrease related to interest-bearing deposits activity, partially offset by a $250.0 million increase in net proceeds from the issuance and retirement of senior notes. Additionally, we repurchased $10.0 million of our common stock year-to-date 2025 compared to no repurchases during the prior year period.

Previous 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.

Current wording

The net effect of exchange rates on cash increased $18.4 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.