PRA GROUP INC

4. Goodwill

Changes in goodwill for the years ended December 31, 2025 and 2024, were as follows (in thousands):

The Company performs an annual impairment test of goodwill as of October 1 of each year, or more frequently if indicators of impairment exist. As part of the Company’s September 30, 2025 interim impairment assessment, based on a sustained decrease in its stock price and market capitalization, the Company determined there to be an indicator of potential goodwill impairment in its Debt Buying and Collection (“DBC”) reporting unit. As a result, the Company performed a quantitative impairment test using the income approach and also compared the estimated fair value of the reporting unit to the Company’s market capitalization.

The Company estimated the fair value of the DBC reporting unit based on the present value of estimated future cash flows and a residual terminal value. Forecasted financial results were developed considering several inputs and assumptions, including portfolio purchasing volume, purchase price multiples, ERC growth rate, terminal value and operating expenses. Based on the quantitative impairment test performed, driven in large part by the comparison of estimated fair value to market capitalization and the impact on fair value of a decrease in the terminal value assumption and an increase in the discount rate assumption since the most recent annual impairment test, the Company determined that the goodwill in its DBC reporting unit was fully impaired. This resulted in a goodwill impairment charge of $412.6 million in the Consolidated Income Statement for the year ended December 31, 2025.

As of December 31, 2025, the remaining goodwill balance of $26.9 million was related to the Company's class action claims recoveries reporting unit.

5. Leases

The Company's operating lease portfolio is comprised mainly of corporate offices and call centers with remaining lease terms ranging fromone toseven years. Some of the leases include extension and/or termination options in accordance with specified notice periods. The longest period recognized by the Company under a renewal option wasfive years. The components of lease expense for the years ended December 31, 2025 and 2024, were as follows (in thousands):

Supplemental cash flow information and non-cash activity related to leases for the years ended December 31, 2025 and 2024, were as follows (in thousands):

(1)Includes the impact of new leases as well as remeasurements and modifications of existing leases.

Lease term and discount rate information related to operating leases were as follows:

Maturities of lease liabilities as of December 31, 2025, were as follows for the years ending December 31, (in thousands):