false 2023 Q3 0001185348 12/31 P1Y http://fasb.org/us-gaap/2023#OtherAssets http://fasb.org/us-gaap/2023#OtherAssets http://fasb.org/us-gaap/2023#OtherLiabilitiesCurrent http://fasb.org/us-gaap/2023#OtherLiabilitiesCurrent http://fasb.org/us-gaap/2023#OtherAssets http://fasb.org/us-gaap/2023#OtherAssets http://fasb.org/us-gaap/2023#OtherLiabilitiesCurrent http://fasb.org/us-gaap/2023#OtherLiabilitiesCurrent 0001185348 2023-01-01 2023-09-30 0001185348 2023-10-31 xbrli:shares 0001185348 2023-09-30 iso4217:USD 0001185348 2022-12-31 iso4217:USD xbrli:shares 0001185348 2023-07-01 2023-09-30 0001185348 2022-07-01 2022-09-30 0001185348 2022-01-01 2022-09-30 0001185348 srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember us-gaap:CommonStockMember 2022-12-31 0001185348 srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember us-gaap:AdditionalPaidInCapitalMember 2022-12-31 0001185348 srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember us-gaap:RetainedEarningsMember 2022-12-31 0001185348 srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-12-31 0001185348 srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember us-gaap:NoncontrollingInterestMember 2022-12-31 0001185348 srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember 2022-12-31 0001185348 us-gaap:RetainedEarningsMember 2023-01-01 2023-03-31 0001185348 us-gaap:NoncontrollingInterestMember 2023-01-01 2023-03-31 0001185348 2023-01-01 2023-03-31 0001185348 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-01-01 2023-03-31 0001185348 us-gaap:CommonStockMember 2023-01-01 2023-03-31 0001185348 us-gaap:AdditionalPaidInCapitalMember 2023-01-01 2023-03-31 0001185348 srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember us-gaap:CommonStockMember 2023-03-31 0001185348 srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember us-gaap:AdditionalPaidInCapitalMember 2023-03-31 0001185348 srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember us-gaap:RetainedEarningsMember 2023-03-31 0001185348 srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-03-31 0001185348 srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember us-gaap:NoncontrollingInterestMember 2023-03-31 0001185348 srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember 2023-03-31 0001185348 us-gaap:RetainedEarningsMember 2023-04-01 2023-06-30 0001185348 us-gaap:NoncontrollingInterestMember 2023-04-01 2023-06-30 0001185348 2023-04-01 2023-06-30 0001185348 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-04-01 2023-06-30 0001185348 us-gaap:CommonStockMember 2023-04-01 2023-06-30 0001185348 us-gaap:AdditionalPaidInCapitalMember 2023-04-01 2023-06-30 0001185348 srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember us-gaap:CommonStockMember 2023-06-30 0001185348 srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember us-gaap:AdditionalPaidInCapitalMember 2023-06-30 0001185348 srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember us-gaap:RetainedEarningsMember 2023-06-30 0001185348 srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-06-30 0001185348 srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember us-gaap:NoncontrollingInterestMember 2023-06-30 0001185348 srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember 2023-06-30 0001185348 us-gaap:RetainedEarningsMember 2023-07-01 2023-09-30 0001185348 us-gaap:NoncontrollingInterestMember 2023-07-01 2023-09-30 0001185348 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-07-01 2023-09-30 0001185348 us-gaap:CommonStockMember 2023-07-01 2023-09-30 0001185348 us-gaap:AdditionalPaidInCapitalMember 2023-07-01 2023-09-30 0001185348 srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember us-gaap:CommonStockMember 2023-09-30 0001185348 srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember us-gaap:AdditionalPaidInCapitalMember 2023-09-30 0001185348 srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember us-gaap:RetainedEarningsMember 2023-09-30 0001185348 srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-09-30 0001185348 srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember us-gaap:NoncontrollingInterestMember 2023-09-30 0001185348 srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember 2023-09-30 0001185348 us-gaap:CommonStockMember 2021-12-31 0001185348 us-gaap:AdditionalPaidInCapitalMember 2021-12-31 0001185348 us-gaap:RetainedEarningsMember 2021-12-31 0001185348 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-12-31 0001185348 us-gaap:NoncontrollingInterestMember 2021-12-31 0001185348 2021-12-31 0001185348 us-gaap:RetainedEarningsMember 2022-01-01 2022-03-31 0001185348 us-gaap:NoncontrollingInterestMember 2022-01-01 2022-03-31 0001185348 2022-01-01 2022-03-31 0001185348 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-01-01 2022-03-31 0001185348 us-gaap:CommonStockMember 2022-01-01 2022-03-31 0001185348 us-gaap:AdditionalPaidInCapitalMember 2022-01-01 2022-03-31 0001185348 us-gaap:CommonStockMember 2022-03-31 0001185348 us-gaap:AdditionalPaidInCapitalMember 2022-03-31 0001185348 us-gaap:RetainedEarningsMember 2022-03-31 0001185348 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-03-31 0001185348 us-gaap:NoncontrollingInterestMember 2022-03-31 0001185348 2022-03-31 0001185348 us-gaap:RetainedEarningsMember 2022-04-01 2022-06-30 0001185348 us-gaap:NoncontrollingInterestMember 2022-04-01 2022-06-30 0001185348 2022-04-01 2022-06-30 0001185348 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-04-01 2022-06-30 0001185348 us-gaap:CommonStockMember 2022-04-01 2022-06-30 0001185348 us-gaap:AdditionalPaidInCapitalMember 2022-04-01 2022-06-30 0001185348 us-gaap:CommonStockMember 2022-06-30 0001185348 us-gaap:AdditionalPaidInCapitalMember 2022-06-30 0001185348 us-gaap:RetainedEarningsMember 2022-06-30 0001185348 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-06-30 0001185348 us-gaap:NoncontrollingInterestMember 2022-06-30 0001185348 2022-06-30 0001185348 us-gaap:RetainedEarningsMember 2022-07-01 2022-09-30 0001185348 us-gaap:NoncontrollingInterestMember 2022-07-01 2022-09-30 0001185348 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-07-01 2022-09-30 0001185348 us-gaap:CommonStockMember 2022-07-01 2022-09-30 0001185348 us-gaap:AdditionalPaidInCapitalMember 2022-07-01 2022-09-30 0001185348 us-gaap:CommonStockMember 2022-09-30 0001185348 us-gaap:AdditionalPaidInCapitalMember 2022-09-30 0001185348 us-gaap:RetainedEarningsMember 2022-09-30 0001185348 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-09-30 0001185348 us-gaap:NoncontrollingInterestMember 2022-09-30 0001185348 2022-09-30 praa:segment 0001185348 country:US 2023-07-01 2023-09-30 0001185348 country:US 2023-09-30 0001185348 country:US 2022-07-01 2022-09-30 0001185348 country:US 2022-09-30 0001185348 country:GB 2023-07-01 2023-09-30 0001185348 country:GB 2023-09-30 0001185348 country:GB 2022-07-01 2022-09-30 0001185348 country:GB 2022-09-30 0001185348 country:BR 2023-07-01 2023-09-30 0001185348 country:BR 2023-09-30 0001185348 country:BR 2022-07-01 2022-09-30 0001185348 country:BR 2022-09-30 0001185348 praa:ForeignCountriesMember 2023-07-01 2023-09-30 0001185348 praa:ForeignCountriesMember 2023-09-30 0001185348 praa:ForeignCountriesMember 2022-07-01 2022-09-30 0001185348 praa:ForeignCountriesMember 2022-09-30 0001185348 country:US 2023-01-01 2023-09-30 0001185348 country:US 2022-01-01 2022-09-30 0001185348 country:GB 2023-01-01 2023-09-30 0001185348 country:GB 2022-01-01 2022-09-30 0001185348 country:BR 2023-01-01 2023-09-30 0001185348 country:BR 2022-01-01 2022-09-30 0001185348 praa:ForeignCountriesMember 2023-01-01 2023-09-30 0001185348 praa:ForeignCountriesMember 2022-01-01 2022-09-30 0001185348 praa:CorePortfolioSegmentMember 2023-06-30 0001185348 praa:InsolvencyPortfolioSegmentMember 2023-06-30 0001185348 2023-06-30 0001185348 praa:CorePortfolioSegmentMember 2023-07-01 2023-09-30 0001185348 praa:InsolvencyPortfolioSegmentMember 2023-07-01 2023-09-30 0001185348 praa:CorePortfolioSegmentMember 2023-09-30 0001185348 praa:InsolvencyPortfolioSegmentMember 2023-09-30 0001185348 praa:CorePortfolioSegmentMember 2022-06-30 0001185348 praa:InsolvencyPortfolioSegmentMember 2022-06-30 0001185348 praa:CorePortfolioSegmentMember 2022-07-01 2022-09-30 0001185348 praa:InsolvencyPortfolioSegmentMember 2022-07-01 2022-09-30 0001185348 praa:CorePortfolioSegmentMember 2022-09-30 0001185348 praa:InsolvencyPortfolioSegmentMember 2022-09-30 0001185348 praa:CorePortfolioSegmentMember 2022-12-31 0001185348 praa:InsolvencyPortfolioSegmentMember 2022-12-31 0001185348 praa:CorePortfolioSegmentMember 2023-01-01 2023-09-30 0001185348 praa:InsolvencyPortfolioSegmentMember 2023-01-01 2023-09-30 0001185348 praa:CorePortfolioSegmentMember 2021-12-31 0001185348 praa:InsolvencyPortfolioSegmentMember 2021-12-31 0001185348 praa:CorePortfolioSegmentMember 2022-01-01 2022-09-30 0001185348 praa:InsolvencyPortfolioSegmentMember 2022-01-01 2022-09-30 0001185348 us-gaap:PrivateEquityFundsMember 2023-09-30 0001185348 us-gaap:PrivateEquityFundsMember 2022-12-31 0001185348 praa:GovernmentBondsandFixedIncomeFundsMember 2023-09-30 0001185348 praa:GovernmentBondsandFixedIncomeFundsMember 2022-12-31 xbrli:pure 0001185348 praa:RCBInvestimentosSARCBMember praa:RCBInvestimentosS.A.Member 2023-09-30 0001185348 srt:MinimumMember 2023-09-30 0001185348 srt:MaximumMember 2023-09-30 0001185348 praa:AmericasRevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2023-09-30 0001185348 praa:AmericasRevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2022-12-31 0001185348 praa:UKRevolvingCreditMember us-gaap:LineOfCreditMember 2023-09-30 0001185348 praa:UKRevolvingCreditMember us-gaap:LineOfCreditMember 2022-12-31 0001185348 praa:EuropeRevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2023-09-30 0001185348 praa:EuropeRevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2022-12-31 0001185348 us-gaap:MediumTermNotesMember 2023-09-30 0001185348 us-gaap:MediumTermNotesMember 2022-12-31 0001185348 us-gaap:SeniorNotesMember 2023-09-30 0001185348 us-gaap:SeniorNotesMember 2022-12-31 0001185348 us-gaap:ConvertibleDebtMember 2023-09-30 0001185348 us-gaap:ConvertibleDebtMember 2022-12-31 0001185348 praa:ColombianRevolvingCreditFacilityMember us-gaap:RevolvingCreditFacilityMember 2023-09-30 0001185348 praa:ColombianRevolvingCreditFacilityMember us-gaap:RevolvingCreditFacilityMember 2022-12-31 0001185348 praa:NorthAmericanCreditAgreementMember 2023-09-30 0001185348 us-gaap:LineOfCreditMember us-gaap:LineOfCreditMember 2023-09-30 0001185348 praa:NorthAmericanCreditAgreementMember us-gaap:RevolvingCreditFacilityMember 2023-09-30 0001185348 praa:NorthAmericanCreditAgreementMember praa:CanadianRevolvingCreditFacilityMember 2023-09-30 0001185348 srt:MaximumMember us-gaap:EurodollarMember praa:CreditAgreementMember 2023-01-01 2023-09-30 0001185348 us-gaap:EurodollarMember praa:CreditAgreementMember srt:MinimumMember 2023-01-01 2023-09-30 0001185348 us-gaap:ConvertibleDebtMember praa:CreditAgreementMember 2023-09-30 0001185348 us-gaap:InterestRateFloorMember 2023-01-01 2023-09-30 0001185348 srt:MaximumMember praa:CreditAgreementMember 2023-01-01 2023-09-30 0001185348 praa:CreditAgreementMember srt:MinimumMember 2023-01-01 2023-09-30 0001185348 praa:CreditAgreementMember praa:EligibleCoreAssetPoolMember 2023-07-01 2023-09-30 0001185348 praa:EligibleInsolventAssetPoolMember praa:CreditAgreementMember 2023-07-01 2023-09-30 0001185348 praa:CreditAgreementMember 2023-09-30 0001185348 praa:CreditAgreementMember 2023-07-01 2023-09-30 0001185348 praa:UKCreditAgreementMember us-gaap:LineOfCreditMember us-gaap:RevolvingCreditFacilityMember 2023-09-30 0001185348 praa:UKCreditAgreementMember srt:MaximumMember us-gaap:LineOfCreditMember us-gaap:RevolvingCreditFacilityMember 2023-01-01 2023-09-30 0001185348 praa:UKCreditAgreementMember srt:MaximumMember us-gaap:EurodollarMember 2023-01-01 2023-09-30 0001185348 praa:UKCreditAgreementMember srt:MinimumMember us-gaap:LineOfCreditMember us-gaap:RevolvingCreditFacilityMember 2023-09-30 0001185348 praa:UKCreditAgreementMember srt:MinimumMember us-gaap:LineOfCreditMember us-gaap:RevolvingCreditFacilityMember 2023-01-01 2023-09-30 0001185348 praa:UKCreditAgreementMember 2023-09-30 0001185348 praa:UKCreditAgreementMember praa:EligibleCoreAssetPoolMember 2023-07-01 2023-09-30 0001185348 praa:UKCreditAgreementMember praa:EligibleInsolventAssetPoolMember 2023-07-01 2023-09-30 0001185348 praa:EuropeanRevolvingFacilityandTermLoanMember us-gaap:LineOfCreditMember us-gaap:RevolvingCreditFacilityMember 2023-09-30 iso4217:EUR 0001185348 praa:EuropeanRevolvingFacilityandTermLoanMember srt:MinimumMember us-gaap:LineOfCreditMember praa:InterbankOfferedRateIBORMember us-gaap:RevolvingCreditFacilityMember 2023-01-01 2023-09-30 0001185348 praa:EuropeanRevolvingFacilityandTermLoanMember srt:MaximumMember us-gaap:LineOfCreditMember praa:InterbankOfferedRateIBORMember us-gaap:RevolvingCreditFacilityMember 2023-01-01 2023-09-30 0001185348 praa:EuropeanRevolvingFacilityandTermLoanMember us-gaap:LineOfCreditMember us-gaap:RevolvingCreditFacilityMember 2023-01-01 2023-09-30 0001185348 praa:EuropeanRevolvingFacilityandTermLoanMember praa:OverdraftFacilityMember 2023-09-30 0001185348 praa:EuropeanRevolvingFacilityandTermLoanMember praa:OverdraftFacilityMember 2023-01-01 2023-09-30 0001185348 praa:EuropeanRevolvingFacilityandTermLoanMember us-gaap:RevolvingCreditFacilityMember 2023-09-30 0001185348 praa:EuropeanRevolvingFacilityandTermLoanMember us-gaap:RevolvingCreditFacilityMember 2023-01-01 2023-09-30 iso4217:SEK 0001185348 us-gaap:SeniorNotesMember praa:A2029NotesMember 2021-09-22 0001185348 us-gaap:SeniorNotesMember praa:OnOrBeforeSeptember12022Member praa:A2029NotesMember 2021-09-22 2021-09-22 0001185348 us-gaap:SeniorNotesMember praa:OnOrAfterSeptember12022Member praa:A2029NotesMember 2021-09-22 2021-09-22 0001185348 us-gaap:SeniorNotesMember praa:September12023ToOctober312024Member praa:A2029NotesMember 2021-09-22 2021-09-22 0001185348 us-gaap:SeniorNotesMember praa:September12024AndThereafterMember praa:A2029NotesMember 2021-09-22 2021-09-22 0001185348 praa:ChangeOfControlEventMember us-gaap:SeniorNotesMember praa:OnOrBeforeSeptember12022Member praa:A2029NotesMember 2021-09-22 2021-09-22 0001185348 us-gaap:SeniorNotesMember praa:A2028NotesMember 2023-02-06 0001185348 us-gaap:SeniorNotesMember praa:A2028NotesMember praa:OnOrBeforeFebruary12025Member 2023-02-06 2023-02-06 0001185348 us-gaap:SeniorNotesMember praa:A2028NotesMember praa:OnOrAfterSeptember12022Member 2023-02-06 2023-02-06 0001185348 us-gaap:SeniorNotesMember praa:A2028NotesMember praa:February12023ToJanuary312024Member 2023-02-06 2023-02-06 0001185348 praa:ChangeOfControlEventMember us-gaap:SeniorNotesMember praa:A2028NotesMember praa:OnOrBeforeFebruary12025Member 2023-02-06 2023-02-06 0001185348 us-gaap:SeniorNotesMember praa:A2028NotesMember praa:February12025AndThereafterMember 2023-02-06 2023-02-06 0001185348 praa:A2028NotesMember 2023-09-30 0001185348 us-gaap:SeniorNotesMember praa:A2025NotesMember 2020-08-27 0001185348 us-gaap:SeniorNotesMember praa:OnOrAfterSeptember12022Member praa:A2025NotesMember 2020-08-27 2020-08-27 0001185348 us-gaap:SeniorNotesMember praa:September12023ToOctober312024Member praa:A2025NotesMember 2020-08-27 2020-08-27 0001185348 us-gaap:SeniorNotesMember praa:A2025NotesMember praa:September12024AndThereafterMember 2020-08-27 2020-08-27 0001185348 praa:ChangeOfControlEventMember us-gaap:SeniorNotesMember praa:OnOrBeforeSeptember12022Member praa:A2025NotesMember 2020-08-27 2020-08-27 0001185348 praa:A2025NotesMember 2023-09-30 0001185348 us-gaap:ConvertibleDebtMember praa:NoteDue2023Member 2017-05-26 0001185348 us-gaap:ConvertibleDebtMember praa:NoteDue2023Member 2023-09-30 0001185348 us-gaap:ConvertibleDebtMember 2023-07-01 2023-09-30 0001185348 us-gaap:ConvertibleDebtMember 2022-07-01 2022-09-30 0001185348 us-gaap:ConvertibleDebtMember 2023-01-01 2023-09-30 0001185348 us-gaap:ConvertibleDebtMember 2022-01-01 2022-09-30 0001185348 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:InterestRateContractMember 2023-09-30 0001185348 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:InterestRateContractMember 2022-12-31 0001185348 us-gaap:ForeignExchangeContractMember us-gaap:NondesignatedMember 2023-09-30 0001185348 us-gaap:ForeignExchangeContractMember us-gaap:NondesignatedMember 2022-12-31 0001185348 srt:MinimumMember 2023-01-01 2023-09-30 0001185348 srt:MaximumMember 2023-01-01 2023-09-30 0001185348 us-gaap:InterestRateContractMember 2023-07-01 2023-09-30 0001185348 us-gaap:InterestRateContractMember 2022-07-01 2022-09-30 0001185348 us-gaap:InterestRateContractMember 2023-01-01 2023-09-30 0001185348 us-gaap:InterestRateContractMember 2022-01-01 2022-09-30 0001185348 us-gaap:InterestRateContractMember us-gaap:InterestExpenseMember 2023-07-01 2023-09-30 0001185348 us-gaap:InterestRateContractMember us-gaap:InterestExpenseMember 2022-07-01 2022-09-30 0001185348 us-gaap:InterestRateContractMember us-gaap:InterestExpenseMember 2023-01-01 2023-09-30 0001185348 us-gaap:InterestRateContractMember us-gaap:InterestExpenseMember 2022-01-01 2022-09-30 0001185348 us-gaap:ForeignCurrencyGainLossMember us-gaap:ForeignExchangeContractMember 2023-07-01 2023-09-30 0001185348 us-gaap:ForeignCurrencyGainLossMember us-gaap:ForeignExchangeContractMember 2022-07-01 2022-09-30 0001185348 us-gaap:ForeignExchangeContractMember us-gaap:InterestExpenseMember 2023-07-01 2023-09-30 0001185348 us-gaap:ForeignExchangeContractMember us-gaap:InterestExpenseMember 2022-07-01 2022-09-30 0001185348 us-gaap:ForeignCurrencyGainLossMember us-gaap:ForeignExchangeContractMember 2023-01-01 2023-09-30 0001185348 us-gaap:ForeignCurrencyGainLossMember us-gaap:ForeignExchangeContractMember 2022-01-01 2022-09-30 0001185348 us-gaap:ForeignExchangeContractMember us-gaap:InterestExpenseMember 2023-01-01 2023-09-30 0001185348 us-gaap:ForeignExchangeContractMember us-gaap:InterestExpenseMember 2022-01-01 2022-09-30 0001185348 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2023-09-30 0001185348 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2023-09-30 0001185348 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2022-12-31 0001185348 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2022-12-31 0001185348 praa:GovernmentBondsMember us-gaap:FairValueInputsLevel1Member 2023-09-30 0001185348 us-gaap:FairValueInputsLevel2Member praa:GovernmentBondsMember 2023-09-30 0001185348 praa:GovernmentBondsMember us-gaap:FairValueInputsLevel3Member 2023-09-30 0001185348 praa:GovernmentBondsMember 2023-09-30 0001185348 us-gaap:FairValueInputsLevel1Member 2023-09-30 0001185348 us-gaap:FairValueInputsLevel2Member 2023-09-30 0001185348 us-gaap:FairValueInputsLevel3Member 2023-09-30 0001185348 praa:GovernmentBondsMember us-gaap:FairValueInputsLevel1Member 2022-12-31 0001185348 us-gaap:FairValueInputsLevel2Member praa:GovernmentBondsMember 2022-12-31 0001185348 praa:GovernmentBondsMember us-gaap:FairValueInputsLevel3Member 2022-12-31 0001185348 praa:GovernmentBondsMember 2022-12-31 0001185348 us-gaap:FairValueInputsLevel1Member 2022-12-31 0001185348 us-gaap:FairValueInputsLevel2Member 2022-12-31 0001185348 us-gaap:FairValueInputsLevel3Member 2022-12-31 0001185348 us-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMember us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember 2023-07-01 2023-09-30 0001185348 us-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMember us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember 2022-07-01 2022-09-30 0001185348 us-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMember us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember 2023-01-01 2023-09-30 0001185348 us-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMember us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember 2022-01-01 2022-09-30 0001185348 us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember 2023-06-30 0001185348 us-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMember 2023-06-30 0001185348 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2023-06-30 0001185348 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-06-30 0001185348 us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember 2023-07-01 2023-09-30 0001185348 us-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMember 2023-07-01 2023-09-30 0001185348 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2023-07-01 2023-09-30 0001185348 us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember 2023-09-30 0001185348 us-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMember 2023-09-30 0001185348 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2023-09-30 0001185348 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-09-30 0001185348 us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember 2022-06-30 0001185348 us-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMember 2022-06-30 0001185348 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2022-06-30 0001185348 us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember 2022-07-01 2022-09-30 0001185348 us-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMember 2022-07-01 2022-09-30 0001185348 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2022-07-01 2022-09-30 0001185348 us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember 2022-09-30 0001185348 us-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMember 2022-09-30 0001185348 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2022-09-30 0001185348 us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember 2022-12-31 0001185348 us-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMember 2022-12-31 0001185348 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2022-12-31 0001185348 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-12-31 0001185348 us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember 2023-01-01 2023-09-30 0001185348 us-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMember 2023-01-01 2023-09-30 0001185348 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2023-01-01 2023-09-30 0001185348 us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember 2021-12-31 0001185348 us-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMember 2021-12-31 0001185348 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2021-12-31 0001185348 us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember 2022-01-01 2022-09-30 0001185348 us-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMember 2022-01-01 2022-09-30 0001185348 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2022-01-01 2022-09-30 0001185348 praa:February2022RepurchaseProgramMember 2023-09-30
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 2023
☐ Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from ________ to ________
Commission File Number: 000-50058

PRA Group, Inc.
(Exact name of registrant as specified in its charter)

Delaware |  |  |  | 75-3078675
(State or other jurisdiction of incorporation or organization) |  |  |  | (I.R.S. Employer Identification No.)

120 Corporate Boulevard
Norfolk, Virginia 23502
(Address of principal executive offices)
(888) 772-7326
(Registrant's Telephone No., including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:

Title of each class | Trading Symbol(s) | Name of each exchange on which registered
Common Stock, $0.01 par value per share | PRAA | NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer þ Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ☐ Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ
The number of shares of the registrant's common stock outstanding as of October 31, 2023 was 39,244,145.

Table of Contents

Part I. Financial Information |
Item 1. | Financial Statements (Unaudited) | 3
| Consolidated Balance Sheets | 3
| Consolidated Income Statements | 4
| Consolidated Statements of Comprehensive Income | 5
| Consolidated Statements of Changes in Equity | 6
| Consolidated Statements of Cash Flows | 8
| Notes to Consolidated Financial Statements | 9
| 1. Organization and Business | 9
| 2. Finance Receivables, net | 10
| 3. Investments | 15
| 4. Goodwill | 16
| 5. Leases | 16
| 6. Borrowings | 17
| 7. Derivatives | 21
| 8. Fair Value | 22
| 9. Accumulated Other Comprehensive Loss | 24
| 10. Earnings per Share | 26
| 11. Income Taxes | 27
| 12. Commitments and Contingencies | 27
| 13. Recently Issued Accounting Standards | 28
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 29
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 52
Item 4. | Controls and Procedures | 53
Part II. Other Information |
Item 1. | Legal Proceedings | 54
Item 1A. | Risk Factors | 54
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 54
Item 3. | Defaults Upon Senior Securities | 54
Item 4. | Mine Safety Disclosures | 54
Item 5. | Other Information | 54
Item 6. | Exhibits | 54
Signatures |  | 56

2

Part I. Financial Information
Item 1. Financial Statements (Unaudited)

PRA Group, Inc.
Consolidated Balance Sheets
September 30, 2023 and December 31, 2022
(Amounts in thousands)

| (unaudited) |  |
| September 30, 2023 |  | December 31, 2022
Assets |  |  |
Cash and cash equivalents | $ | 105,172 |  |  | $ | 83,376 |
Investments | 74,729 |  |  | 79,948 |
Finance receivables, net | 3,460,804 |  |  | 3,295,008 |
Income taxes receivable | 38,695 |  |  | 31,774 |
Deferred tax assets, net | 55,493 |  |  | 56,908 |
Right-of-use assets | 47,156 |  |  | 54,506 |
Property and equipment, net | 38,562 |  |  | 51,645 |
Goodwill | 412,513 |  |  | 435,921 |
Other assets | 96,851 |  |  | 86,588 |
Total assets | $ | 4,329,975 |  |  | $ | 4,175,674 |
Liabilities and Equity |  |  |
Liabilities: |  |  |
Accounts payable | $ | 6,159 |  |  | $ | 7,329 |
Accrued expenses | 106,391 |  |  | 111,395 |
Income taxes payable | 15,946 |  |  | 25,693 |
Deferred tax liabilities, net | 14,185 |  |  | 42,918 |
Lease liabilities | 51,658 |  |  | 59,384 |
Interest-bearing deposits | 100,505 |  |  | 112,992 |
Borrowings | 2,832,225 |  |  | 2,494,858 |
Other liabilities | 12,919 |  |  | 34,355 |
Total liabilities | 3,139,988 |  |  | 2,888,924 |
Equity: |  |  |
Preferred stock, $0.01 par value, 2,000 shares authorized, no shares issued and outstanding | — |  |  | — |
Common stock, $0.01 par value; 100,000 shares authorize d, 39,243 sh ares issued and outstanding at September 30, 2023; 100,000 shares authorized, 38,980 shares issued and outstanding at December 31, 2022 | 392 |  |  | 390 |
Additional paid-in capital | 4,157 |  |  | 2,172 |
Retained earnings | 1,498,330 |  |  | 1,573,025 |
Accumulated other comprehensive loss | (387,289) |  |  | (347,926) |
Total stockholders' equity - PRA Group, Inc. | 1,115,590 |  |  | 1,227,661 |
Noncontrolling interest | 74,397 |  |  | 59,089 |
Total equity | 1,189,987 |  |  | 1,286,750 |
Total liabilities and equity | $ | 4,329,975 |  |  | $ | 4,175,674 |

The accompanying notes are an integral part of these Consolidated Financial Statements.
3

PRA Group, Inc.
Consolidated Income Statements
For the Three and Nine Months Ended September 30, 2023 and 2022
(unaudited)
(Amounts in thousands, except per share amounts)

|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2023 |  | 2022 |  | 2023 |  | 2022
Revenues: |  |  |  |  |  |  |  |
Portfolio income |  | $ | 189,960 |  |  | $ | 185,853 |  |  | $ | 562,492 |  |  | $ | 587,394 |
Changes in expected recoveries |  | 22,156 |  |  | 48,336 |  |  | 6,380 |  |  | 134,817 |
Total portfolio revenue |  | 212,116 |  |  | 234,189 |  |  | 568,872 |  |  | 722,211 |
Other revenue |  | 4,314 |  |  | 10,618 |  |  | 12,264 |  |  | 21,463 |
Total revenues |  | 216,430 |  |  | 244,807 |  |  | 581,136 |  |  | 743,674 |
Operating expenses: |  |  |  |  |  |  |  |
Compensation and employee services |  | 69,517 |  |  | 70,382 |  |  | 217,708 |  |  | 215,615 |
Legal collection fees |  | 9,839 |  |  | 8,963 |  |  | 28,228 |  |  | 29,390 |
Legal collection costs |  | 20,761 |  |  | 23,391 |  |  | 66,228 |  |  | 57,694 |
Agency fees |  | 19,436 |  |  | 15,160 |  |  | 54,491 |  |  | 47,374 |
Outside fees and services |  | 18,858 |  |  | 24,618 |  |  | 62,064 |  |  | 71,489 |
Communication |  | 9,881 |  |  | 9,951 |  |  | 30,525 |  |  | 32,062 |
Rent and occupancy |  | 4,426 |  |  | 4,669 |  |  | 13,193 |  |  | 14,289 |
Depreciation and amortization |  | 3,273 |  |  | 3,741 |  |  | 10,344 |  |  | 11,384 |
Impairment of real estate |  | 5,037 |  |  | — |  |  | 5,037 |  |  | — |
Other operating expenses |  | 12,356 |  |  | 13,144 |  |  | 38,355 |  |  | 37,885 |
Total operating expenses |  | 173,384 |  |  | 174,019 |  |  | 526,173 |  |  | 517,182 |
Income from operations |  | 43,046 |  |  | 70,788 |  |  | 54,963 |  |  | 226,492 |
Other income and (expense): |  |  |  |  |  |  |  |
Interest expense, net |  | (49,473) |  |  | (32,455) |  |  | (130,778) |  |  | (95,765) |
Foreign exchange gain, net |  | 564 |  |  | 4 |  |  | 984 |  |  | 791 |
Other |  | (500) |  |  | (83) |  |  | (1,380) |  |  | (754) |
Income/(loss) before income taxes |  | (6,363) |  |  | 38,254 |  |  | (76,211) |  |  | 130,764 |
Income tax expense/(benefit) |  | 1,788 |  |  | 11,072 |  |  | (15,317) |  |  | 29,828 |
Net income/(loss) |  | (8,151) |  |  | 27,182 |  |  | (60,894) |  |  | 100,936 |
Adjustment for net income/(loss) attributable to noncontrolling interests |  | 4,111 |  |  | 2,450 |  |  | 13,801 |  |  | (252) |
Net income/(loss) attributable to PRA Group, Inc. |  | $ | (12,262) |  |  | $ | 24,732 |  |  | $ | (74,695) |  |  | $ | 101,188 |
Net income/(loss) per common share attributable to PRA Group, Inc.: |  |  |  |  |  |  |  |
Basic |  | $ | (0.31) |  |  | $ | 0.63 |  |  | $ | (1.91) |  |  | $ | 2.54 |
Diluted |  | $ | (0.31) |  |  | $ | 0.63 |  |  | $ | (1.91) |  |  | $ | 2.52 |
Weighted average number of shares outstanding: |  |  |  |  |  |  |  |
Basic |  | 39,242 |  |  | 39,018 |  |  | 39,155 |  |  | 39,858 |
Diluted |  | 39,242 |  |  | 39,170 |  |  | 39,155 |  |  | 40,125 |

The accompanying notes are an integral part of these Consolidated Financial Statements.
4

PRA Group, Inc.
Consolidated Statements of Comprehensive Income
For the Three and Nine Months Ended September 30, 2023 and 2022
(unaudited)
(Amounts in thousands)

| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
Net income/(loss) | $ | (8,151) |  |  | $ | 27,182 |  |  | $ | (60,894) |  |  | $ | 100,936 |
Other comprehensive loss, net of tax |  |  |  |  |  |  |
Currency translation adjustments | (34,279) |  |  | (91,390) |  |  | (28,746) |  |  | (194,656) |
Cash flow hedges | (7,660) |  |  | 19,590 |  |  | (6,772) |  |  | 44,007 |
Debt securities available-for-sale | (26) |  |  | 133 |  |  | 22 |  |  | (269) |
Other comprehensive loss | (41,965) |  |  | (71,667) |  |  | (35,496) |  |  | (150,918) |
Total comprehensive loss | (50,116) |  |  | (44,485) |  |  | (96,390) |  |  | (49,982) |
Less comprehensive income attributable to noncontrolling interests | 1,436 |  |  | 9,049 |  |  | 17,668 |  |  | 8,008 |
Comprehensive loss attributable to PRA Group, Inc. | $ | (51,552) |  |  | $ | (53,534) |  |  | $ | (114,058) |  |  | $ | (57,990) |

The accompanying notes are an integral part of these Consolidated Financial Statements.
5

PRA Group, Inc.
Consolidated Statements of Changes in Equity
For the Nine Months Ended September 30, 2023
(unaudited)
(Amounts in thousands)

| Common Stock |  | Additional Paid-In |  | Retained |  | Accumulated Other Comprehensive |  | Noncontrolling |  | Total |  |
| Shares |  | Amount |  | Capital |  | Earnings |  | Income/(Loss) |  | Interest |  | Equity |  |
Balance at December 31, 2022 | 38,980 |  |  | $ | 390 |  |  | $ | 2,172 |  |  | $ | 1,573,025 |  |  | $ | (347,926) |  |  | $ | 59,089 |  |  | $ | 1,286,750 |  |  |
Components of comprehensive income, net of tax: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income/(loss) | — |  |  | — |  |  | — |  |  | (58,629) |  |  | — |  |  | 4,726 |  |  | (53,903) |  |  |
Currency translation adjustments | — |  |  | — |  |  | — |  |  | — |  |  | (4,101) |  |  | 2,551 |  |  | (1,550) |  |  |
Cash flow hedges | — |  |  | — |  |  | — |  |  | — |  |  | (4,831) |  |  | — |  |  | (4,831) |  |  |
Debt securities available-for-sale | — |  |  | — |  |  | — |  |  | — |  |  | 128 |  |  | — |  |  | 128 |  |  |
Vesting of restricted stock | 190 |  |  | 2 |  |  | (2) |  |  | — |  |  | — |  |  | — |  |  | — |  |  |
Share-based compensation expense | — |  |  | — |  |  | 3,799 |  |  | — |  |  | — |  |  | — |  |  | 3,799 |  |  |
Employee stock relinquished for payment of taxes | — |  |  | — |  |  | (5,684) |  |  | — |  |  | — |  |  | — |  |  | (5,684) |  |  |
Balance at March 31, 2023 | 39,170 |  |  | $ | 392 |  |  | $ | 285 |  |  | $ | 1,514,396 |  |  | $ | (356,730) |  |  | $ | 66,366 |  |  | $ | 1,224,709 |  |  |
Components of comprehensive income, net of tax: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income/(loss) | — |  |  | — |  |  | — |  |  | (3,804) |  |  | — |  |  | 4,964 |  |  | 1,160 |  |  |
Currency translation adjustments | — |  |  | — |  |  | — |  |  | — |  |  | 3,091 |  |  | 3,992 |  |  | 7,083 |  |  |
Cash flow hedges | — |  |  | — |  |  | — |  |  | — |  |  | 5,719 |  |  | — |  |  | 5,719 |  |  |
Debt securities available-for-sale | — |  |  | — |  |  | — |  |  | — |  |  | (80) |  |  | — |  |  | (80) |  |  |
Distributions to noncontrolling interest | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (1,173) |  |  | (1,173) |  |  |
Vesting of restricted stock | 72 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |
Share-based compensation expense | — |  |  | — |  |  | 2,715 |  |  | — |  |  | — |  |  | — |  |  | 2,715 |  |  |
Employee stock relinquished for payment of taxes | — |  |  | — |  |  | (459) |  |  | — |  |  | — |  |  | — |  |  | (459) |  |  |
Balance at June 30, 2023 | 39,242 |  |  | $ | 392 |  |  | $ | 2,541 |  |  | $ | 1,510,592 |  |  | $ | (348,000) |  |  | $ | 74,149 |  |  | $ | 1,239,674 |  |  |
Components of comprehensive income, net of tax: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income/(loss) | — |  |  | — |  |  | — |  |  | (12,262) |  |  | — |  |  | 4,111 |  |  | (8,151) |  |  |
Currency translation adjustments | — |  |  | — |  |  | — |  |  | — |  |  | (31,603) |  |  | (2,676) |  |  | (34,279) |  |  |
Cash flow hedges | — |  |  | — |  |  | — |  |  | — |  |  | (7,660) |  |  | — |  |  | (7,660) |  |  |
Debt securities available-for-sale | — |  |  | — |  |  | — |  |  | — |  |  | (26) |  |  | — |  |  | (26) |  |  |
Distributions to noncontrolling interest | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (1,187) |  |  | (1,187) |  |  |
Vesting of restricted stock | 1 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |
Share-based compensation expense | — |  |  | — |  |  | 1,629 |  |  | — |  |  | — |  |  | — |  |  | 1,629 |  |  |
Employee stock relinquished for payment of taxes | — |  |  | — |  |  | (13) |  |  | — |  |  | — |  |  | — |  |  | (13) |  |  |
Balance at September 30, 2023 | 39,243 |  |  | $ | 392 |  |  | $ | 4,157 |  |  | $ | 1,498,330 |  |  | $ | (387,289) |  |  | $ | 74,397 |  |  | $ | 1,189,987 |  |  |

The accompanying notes are an integral part of these Consolidated Financial Statements.
6

PRA Group, Inc.
Consolidated Statements of Changes in Equity
For the Nine Months Ended September 30, 2022
(unaudited)
(Amounts in thousands)

| Common Stock |  | Additional Paid-In |  | Retained |  | Accumulated Other Comprehensive |  | Noncontrolling |  | Total |  |
| Shares |  | Amount |  | Capital |  | Earnings |  | Income/(Loss) |  | Interest |  | Equity |  |
Balance at December 31, 2021 | 41,008 |  |  | $ | 410 |  |  | $ | — |  |  | $ | 1,552,845 |  |  | $ | (266,909) |  |  | $ | 38,491 |  |  | $ | 1,324,837 |  |  |
Components of comprehensive income, net of tax: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income/(loss) | — |  |  | — |  |  | — |  |  | 39,972 |  |  | — |  |  | (5,354) |  |  | 34,618 |  |  |
Currency translation adjustments | — |  |  | — |  |  | — |  |  | — |  |  | 4,780 |  |  | 7,490 |  |  | 12,270 |  |  |
Cash flow hedges | — |  |  | — |  |  | — |  |  | — |  |  | 18,580 |  |  | — |  |  | 18,580 |  |  |
Debt securities available-for-sale | — |  |  | — |  |  | — |  |  | — |  |  | (160) |  |  | — |  |  | (160) |  |  |
Vesting of restricted stock | 262 |  |  | 3 |  |  | (3) |  |  | — |  |  | — |  |  | — |  |  | — |  |  |
Repurchase and cancellation of common stock | (860) |  |  | (9) |  |  | 4,527 |  |  | (43,972) |  |  | — |  |  | — |  |  | (39,454) |  |  |
Share-based compensation expense | — |  |  |  |  | 3,891 |  |  | — |  |  | — |  |  | — |  |  | 3,891 |  |  |
Employee stock relinquished for payment of taxes | — |  |  | — |  |  | (8,415) |  |  | — |  |  | — |  |  | — |  |  | (8,415) |  |  |
Balance at March 31, 2022 | 40,410 |  |  | $ | 404 |  |  | $ | — |  |  | $ | 1,548,845 |  |  | $ | (243,709) |  |  | $ | 40,627 |  |  | $ | 1,346,167 |  |  |
Components of comprehensive income, net of tax: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income/(loss) | — |  |  | — |  |  | — |  |  | 36,484 |  |  | — |  |  | 2,652 |  |  | 39,136 |  |  |
Currency translation adjustments | — |  |  | — |  |  | — |  |  | — |  |  | (109,707) |  |  | (5,829) |  |  | (115,536) |  |  |
Cash flow hedges | — |  |  | — |  |  | — |  |  | — |  |  | 5,837 |  |  | — |  |  | 5,837 |  |  |
Debt securities available-for-sale | — |  |  | — |  |  | — |  |  | — |  |  | (242) |  |  | — |  |  | (242) |  |  |
Distributions to noncontrolling interest | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (3,494) |  |  | (3,494) |  |  |
Contributions from noncontrolling interest | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,599 |  |  | 1,599 |  |  |
Vesting of restricted stock | 37 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |
Repurchase and cancellation of common stock | (808) |  |  | (8) |  |  | (3,835) |  |  | (31,092) |  |  | — |  |  | — |  |  | (34,935) |  |  |
Share-based compensation expense | — |  |  | — |  |  | 3,849 |  |  | — |  |  | — |  |  | — |  |  | 3,849 |  |  |
Employee stock relinquished for payment of taxes | — |  |  | — |  |  | (14) |  |  | — |  |  | — |  |  | — |  |  | (14) |  |  |
Balance at June 30, 2022 | 39,639 |  |  | $ | 396 |  |  | $ | — |  |  | $ | 1,554,237 |  |  | $ | (347,821) |  |  | $ | 35,555 |  |  | $ | 1,242,367 |  |  |
Components of comprehensive income, net of tax: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income/(loss) | — |  |  | — |  |  | — |  |  | 24,732 |  |  | — |  |  | 2,450 |  |  | 27,182 |  |  |
Currency translation adjustments | — |  |  | — |  |  | — |  |  | — |  |  | (97,988) |  |  | 6,598 |  |  | (91,390) |  |  |
Cash flow hedges | — |  |  | — |  |  | — |  |  | — |  |  | 19,590 |  |  | — |  |  | 19,590 |  |  |
Debt securities available-for-sale | — |  |  | — |  |  | — |  |  | — |  |  | 133 |  |  | — |  |  | 133 |  |  |
Distributions to noncontrolling interest | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (1,127) |  |  | (1,127) |  |  |
Contributions from noncontrolling interest | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 7,744 |  |  | 7,744 |  |  |
Repurchase and cancellation of common stock | (663) |  |  | (7) |  |  | (3,091) |  |  | (21,903) |  |  | — |  |  | — |  |  | (25,001) |  |  |
Share-based compensation expense | — |  |  | — |  |  | 3,101 |  |  | — |  |  | — |  |  | — |  |  | 3,101 |  |  |
Employee stock relinquished for payment of taxes | — |  |  | — |  |  | (10) |  |  | — |  |  | — |  |  | — |  |  | (10) |  |  |
Balance at September 30, 2022 | 38,976 |  |  | $ | 389 |  |  | $ | — |  |  | $ | 1,557,066 |  |  | $ | (426,086) |  |  | $ | 51,220 |  |  | $ | 1,182,589 |  |  |

The accompanying notes are an integral part of these Consolidated Financial Statements.
7

PRA Group, Inc.
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2023 and 2022
(unaudited)
(Amounts in thousands)

| Nine Months Ended September 30,
| 2023 |  | 2022
Cash flows from operating activities: |  |  |
Net income/(loss) | $ | (60,894) |  |  | $ | 100,936 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
Share-based compensation expense | 8,143 |  |  | 10,841 |
Depreciation, amortization and impairment | 15,381 |  |  | 11,384 |
Gain on extinguishment of debt | (343) |  |  | — |
Amortization of debt discount and issuance costs | 7,045 |  |  | 7,653 |
Changes in expected recoveries | (6,380) |  |  | (134,817) |
Deferred income taxes | (26,276) |  |  | 8,710 |
Net unrealized foreign currency transactions | (31,783) |  |  | 21,356 |
Fair value in earnings for equity securities | 1,094 |  |  | (175) |
Other | (1,318) |  |  | 159 |
Changes in operating assets and liabilities: |  |  |
Other assets | 1,111 |  |  | (2,547) |
Accounts payable | (1,123) |  |  | 3,028 |
Income taxes payable, net | (18,259) |  |  | (155) |
Accrued expenses | (4,685) |  |  | (7,655) |
Other liabilities | 385 |  |  | (22,521) |
Right-of-use asset/lease liability | (370) |  |  | 389 |
Net cash used in operating activities | (118,272) |  |  | (3,414) |
Cash flows from investing activities: |  |  |
Purchases of property and equipment, net | (2,306) |  |  | (10,698) |
Purchases of finance receivables | (875,373) |  |  | (561,901) |
Recoveries applied to negative allowance | 695,386 |  |  | 765,732 |
Purchases of investments | (60,058) |  |  | (2,292) |
Proceeds from sales and maturities of investments | 62,762 |  |  | 4,565 |
Net cash provided by/(used in) investing activities | (179,589) |  |  | 195,406 |
Cash flows from financing activities: |  |  |
Proceeds from lines of credit | 695,651 |  |  | 1,343,434 |
Principal payments on lines of credit | (389,658) |  |  | (1,389,371) |
Retirement of Convertible Senior Notes due 2023 | (345,000) |  |  | — |
Proceeds from issuance of Senior Notes due 2028 | 400,000 |  |  | — |
Principal payments on long-term debt | (7,500) |  |  | (7,500) |
Repurchases of senior notes | (3,657) |  |  | — |
Repurchases of common stock | — |  |  | (111,371) |
Payments of origination cost and fees | (5,323) |  |  | (7,798) |
Tax withholdings related to share-based payments | (6,155) |  |  | (8,438) |
Distributions paid to noncontrolling interest | (2,360) |  |  | (4,621) |
Contributions from noncontrolling interest | — |  |  | 9,343 |
Net decrease in interest-bearing deposits | (7,747) |  |  | (13,732) |
Net cash provided by/(used in) financing activities | 328,251 |  |  | (190,054) |
Effect of exchange rate on cash | 3,270 |  |  | (31,927) |
Net increase/(decrease) in cash and cash equivalents | 33,660 |  |  | (29,989) |
Cash and cash equivalents, beginning of period | 84,758 |  |  | 89,072 |
Cash and cash equivalents, end of period | $ | 118,418 |  |  | $ | 59,083 |
Supplemental disclosure of cash flow information: |  |  |
Cash paid for interest | $ | 111,344 |  |  | $ | 87,912 |
Cash paid for income taxes | 28,479 |  |  | 21,086 |
Cash, cash equivalents and restricted cash reconciliation: |  |  |
Cash and cash equivalents per Consolidated Balance Sheets | $ | 105,172 |  |  | $ | 57,991 |
Restricted cash included in Other assets per Consolidated Balance Sheets | 13,246 |  |  | 1,092 |
Total cash, cash equivalents and restricted cash | $ | 118,418 |  |  | $ | 59,083 |

The accompanying notes are an integral part of these Consolidated Financial Statements.
8

PRA Group, Inc.
Notes to Consolidated Financial Statements
1. Organization and Business:
Nature of operations: As used herein, the terms "PRA Group," the "Company," or similar terms refer to PRA Group, Inc. and its subsidiaries.
PRA Group, Inc., a Delaware corporation, is a global financial and business services company with operations in the Americas, Europe and Australia. The Company's primary business is the purchase, collection and management of portfolios of nonperforming loans. The Company also provides fee-based services on class action claims recoveries and by servicing consumer bankruptcy accounts in the United States ("U.S.").
Basis of presentation: The Consolidated Financial Statements of the Company are prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). The accompanying interim financial statements have been prepared in accordance with the instructions for Quarterly Reports on Form 10-Q and, therefore, do not include all information and Notes to the Consolidated Financial Statements necessary for a complete presentation of financial position, results of operations, comprehensive income/(loss) and cash flows in conformity with GAAP. In the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair presentation of the Company's Consolidated Balance Sheets as of September 30, 2023, its Consolidated Income Statements and Statements of Comprehensive Income for the three and nine months ended September 30, 2023 and 2022, and its Consolidated Statements of Changes in Equity and Statements of Cash Flows for the nine months ended September 30, 2023 and 2022, have been included. The Company's Consolidated Income Statements for the three and nine months ended September 30, 2023 may not be indicative of future results.
These unaudited Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022 (the "2022 Form 10-K").
Reclassification of prior year presentation: Certain prior year amounts have been reclassified for consistency with the current year presentation. Fee income is now included within Other revenue on the Consolidated Income Statements.
Consolidation: The Consolidated Financial Statements include the accounts of PRA Group and other entities in which the Company has a controlling interest. All significant intercompany accounts and transactions have been eliminated.
Entities in which the Company has a controlling financial interest, through ownership of the majority of the entities’ voting equity interests, or through other contractual rights that give the Company control, consist of entities which purchase and collect on portfolios of nonperforming loans.
Investments in companies in which the Company has significant influence over operating and financing decisions, but does not own a majority of the voting equity interests or exercise control, are accounted for in accordance with the equity method of accounting, which requires the Company to recognize its proportionate share of the entity's net earnings. Income or loss from these investments is included in Other revenue.
The Company performs on-going reassessments of whether changes in facts and circumstances regarding the Company’s involvement with an entity would cause the Company’s consolidation conclusions to change.
Segments: The Company has determined that it has two operating segments that meet the aggregation criteria of Accounting Standards Codification ("ASC") 280, Segment Reporting ("ASC 280") and, therefore, it has one reportable segment; accounts receivable management. This conclusion is based on similarities among the operating units, including economic characteristics, the nature of the products and services, the nature of the production processes, the types or class of customer for their products and services, the methods used to distribute their products and services and the nature of the regulatory environment.
9

PRA Group, Inc.
Notes to Consolidated Financial Statements
Revenues and long-lived assets by geographical location: Revenues for the three and nine months ended September 30, 2023 and 2022, and long-lived assets held as of September 30, 2023 and 2022, both for the U.S., the Company's country of domicile, and outside of the U.S., were as follows (amounts in thousands):

| As of and for the |  | As of and for the
| Three Months Ended September 30, 2023 |  | Three Months Ended September 30, 2022
| Revenues (2) |  | Long-Lived Assets |  | Revenues (2) |  | Long-Lived Assets
U.S. | $ | 105,456 |  |  | $ | 61,788 |  |  | $ | 138,398 |  |  | $ | 80,496 |
United Kingdom | 30,978 |  |  | 11,233 |  |  | 37,032 |  |  | 10,762 |
Brazil | 24,749 |  |  | 3 |  |  | 14,293 |  |  | 3 |
Other (1) | 55,247 |  |  | 12,694 |  |  | 55,084 |  |  | 13,448 |
Total | $ | 216,430 |  |  | $ | 85,718 |  |  | $ | 244,807 |  |  | $ | 104,709 |

| As of and for the |  | As of and for the
| Nine Months Ended September 30, 2023 |  | Nine Months Ended September 30, 2022
| Revenues (2) |  | Long-Lived Assets |  | Revenues (2) |  | Long-Lived Assets
U.S. | $ | 258,848 |  |  | $ | 61,788 |  |  | $ | 426,675 |  |  | $ | 80,496 |
United Kingdom | 99,547 |  |  | 11,233 |  |  | 126,866 |  |  | 10,762 |
Brazil | 69,383 |  |  | 3 |  |  | 22,629 |  |  | 3 |
Other (1) | 153,358 |  |  | 12,694 |  |  | 167,504 |  |  | 13,448 |
Total | $ | 581,136 |  |  | $ | 85,718 |  |  | $ | 743,674 |  |  | $ | 104,709 |

(1) None of the countries included in "Other" comprise greater than 10% of the Company's consolidated revenues or long-lived assets.
(2) Based on the Company’s financial statement information used to produce the Company's general-purpose financial statements, it is impracticable to report further breakdowns of revenues from external customers by product or service.
Revenues are attributed to countries based on the location of the related operations. The Company reports revenues earned from collection activities on nonperforming loans, fee-based services and investments. Long-lived assets consist of Property and equipment, net and Right-of-use ("ROU") assets.
2. Finance Receivables, net:
Finance receivables, net consisted of the following at September 30, 2023 and December 31, 2022 (amounts in thousands):

| September 30, 2023 |  | December 31, 2022
Amortized cost | $ | — |  |  | $ | — |
Negative allowance for expected recoveries | 3,460,804 |  |  | 3,295,008 |
Balance at end of period | $ | 3,460,804 |  |  | $ | 3,295,008 |

Three Months Ended September 30, 2023 and 2022
Changes in the negative allowance for expected recoveries by portfolio segment for the three months ended September 30, 2023 and 2022 were as follows (amounts in thousands):

| Three Months Ended September 30, 2023
| Core |  | Insolvency |  | Total
Balance at beginning of period | $ | 3,086,405 |  |  | $ | 338,143 |  |  | $ | 3,424,548 |
Initial negative allowance for expected recoveries - portfolio acquisitions (1) | 248,181 |  |  | 63,002 |  |  | 311,183 |
Foreign currency translation adjustment | (58,878) |  |  | (6,786) |  |  | (65,664) |
Recoveries applied to negative allowance (2) | (189,710) |  |  | (41,709) |  |  | (231,419) |
Changes in expected recoveries (3) | 15,894 |  |  | 6,262 |  |  | 22,156 |
Balance at end of period | $ | 3,101,892 |  |  | $ | 358,912 |  |  | $ | 3,460,804 |

10

PRA Group, Inc.
Notes to Consolidated Financial Statements

| Three Months Ended September 30, 2022
| Core |  | Insolvency |  | Total
Balance at beginning of period | $ | 2,814,761 |  |  | $ | 368,871 |  |  | $ | 3,183,632 |
Initial negative allowance for expected recoveries - portfolio acquisitions (1) | 160,206 |  |  | 22,898 |  |  | 183,104 |
Foreign currency translation adjustment | (133,263) |  |  | (14,254) |  |  | (147,517) |
Recoveries applied to negative allowance (2) | (186,112) |  |  | (44,083) |  |  | (230,195) |
Changes in expected recoveries (3) | 38,686 |  |  | 9,650 |  |  | 48,336 |
Balance at end of period | $ | 2,694,278 |  |  | $ | 343,082 |  |  | $ | 3,037,360 |

(1) Initial negative allowance for expected recoveries - portfolio acquisitions
Portfolio acquisitions for the three months ended September 30, 2023 and 2022 were as follows (amounts in thousands):

| Three Months Ended September 30, 2023
| Core |  | Insolvency |  | Total
Face value | $ | 1,992,448 |  |  | $ | 382,363 |  |  | $ | 2,374,811 |
Noncredit discount | (209,131) |  |  | (23,837) |  |  | (232,968) |
Allowance for credit losses at acquisition | (1,535,136) |  |  | (295,524) |  |  | (1,830,660) |
Purchase price | $ | 248,181 |  |  | $ | 63,002 |  |  | $ | 311,183 |

| Three Months Ended September 30, 2022
| Core |  | Insolvency |  | Total
Face value | $ | 1,482,758 |  |  | $ | 123,369 |  |  | $ | 1,606,127 |
Noncredit discount | (126,205) |  |  | (7,874) |  |  | (134,079) |
Allowance for credit losses at acquisition | (1,196,347) |  |  | (92,597) |  |  | (1,288,944) |
Purchase price | $ | 160,206 |  |  | $ | 22,898 |  |  | $ | 183,104 |

The initial negative allowance recorded on portfolio acquisitions for the three months ended September 30, 2023 and 2022 was as follows (amounts in thousands):

| Three Months Ended September 30, 2023
| Core |  | Insolvency |  | Total
Allowance for credit losses at acquisition | $ | (1,535,136) |  |  | $ | (295,524) |  |  | $ | (1,830,660) |
Writeoffs, net | 1,535,136 |  |  | 295,524 |  |  | 1,830,660 |
Expected recoveries | 248,181 |  |  | 63,002 |  |  | 311,183 |
Initial negative allowance for expected recoveries | $ | 248,181 |  |  | $ | 63,002 |  |  | $ | 311,183 |

| Three Months Ended September 30, 2022
| Core |  | Insolvency |  | Total
Allowance for credit losses at acquisition | $ | (1,196,347) |  |  | $ | (92,597) |  |  | $ | (1,288,944) |
Writeoffs, net | 1,196,347 |  |  | 92,597 |  |  | 1,288,944 |
Expected recoveries | 160,206 |  |  | 22,898 |  |  | 183,104 |
Initial negative allowance for expected recoveries | $ | 160,206 |  |  | $ | 22,898 |  |  | $ | 183,104 |

11

PRA Group, Inc.
Notes to Consolidated Financial Statements
(2) Recoveries applied to negative allowance
Recoveries applied to the negative allowance for the three months ended September 30, 2023 and 2022 were as follows (amounts in thousands):

| Three Months Ended September 30, 2023
| Core |  | Insolvency |  | Total
Recoveries (a) | $ | 369,385 |  |  | $ | 51,994 |  |  | $ | 421,379 |
Less - amounts reclassified to portfolio income | 179,675 |  |  | 10,285 |  |  | 189,960 |
Recoveries applied to negative allowance | $ | 189,710 |  |  | $ | 41,709 |  |  | $ | 231,419 |

| Three Months Ended September 30, 2022
| Core |  | Insolvency |  | Total
Recoveries (a) | $ | 361,089 |  |  | $ | 54,959 |  |  | $ | 416,048 |
Less - amounts reclassified to portfolio income | 174,977 |  |  | 10,876 |  |  | 185,853 |
Recoveries applied to negative allowance | $ | 186,112 |  |  | $ | 44,083 |  |  | $ | 230,195 |

(a) Recoveries include cash collections, buybacks and other cash-based adjustments.
(3) Changes in expected recoveries
Changes in expected recoveries for the three months ended September 30, 2023 and 2022 were as follows (amounts in thousands):

| Three Months Ended September 30, 2023
| Core |  | Insolvency |  | Total
Changes in expected future recoveries | $ | 4,234 |  |  | $ | (168) |  |  | $ | 4,066 |
Recoveries received in excess of forecast | 11,660 |  |  | 6,430 |  |  | 18,090 |
Changes in expected recoveries | $ | 15,894 |  |  | $ | 6,262 |  |  | $ | 22,156 |

| Three Months Ended September 30, 2022
| Core |  | Insolvency |  | Total
Changes in expected future recoveries | $ | 17,851 |  |  | $ | 2,361 |  |  | $ | 20,212 |
Recoveries received in excess of forecast | 20,835 |  |  | 7,289 |  |  | 28,124 |
Changes in expected recoveries | $ | 38,686 |  |  | $ | 9,650 |  |  | $ | 48,336 |

In order to estimate future cash collections, the Company considers historical performance and current economic forecasts, as well as expectations for short-term and long-term growth and consumer habits in the various geographies in which the Company operates. The Company considers recent collection activity in its determination to adjust assumptions related to estimated remaining collections ("ERC") for certain pools. Based on these considerations, the Company’s estimates of ERC incorporate changes in both amounts and in the timing of expected cash collections over the forecast period.
Changes in expected recoveries for the three months ended September 30, 2023 were a net positive $22.2 million. This includes $18.1 million in recoveries received in excess of forecast (cash collections overperformance) and a $4.1 million positive adjustment to changes in expected future recoveries. The $18.1 million in recoveries received in excess of forecast reflected overperformance in Europe and the Americas.
Changes in expected recoveries for the three months ended September 30, 2022 were a net positive $48.3 million. This reflected $28.1 million in recoveries received in excess of forecast reflecting cash collections overperformance and a $20.2 million positive adjustment to changes in expected future recoveries. The changes in expected future recoveries reflected the Company's assessment of certain pools, where continued strong performance resulted in an increase to the Company's ERC.
12

PRA Group, Inc.
Notes to Consolidated Financial Statements
Nine Months Ended September 30, 2023 and 2022
Changes in the negative allowance for expected recoveries by portfolio segment for the nine months ended September 30, 2023 and 2022 were as follows (amounts in thousands):

| Nine Months Ended September 30, 2023
| Core |  | Insolvency |  | Total
Balance at beginning of period | $ | 2,936,207 |  |  | $ | 358,801 |  |  | $ | 3,295,008 |
Initial negative allowance for expected recoveries - portfolio acquisitions (1) | 763,776 |  |  | 105,391 |  |  | 869,167 |
Foreign currency translation adjustment | (15,662) |  |  | 1,296 |  |  | (14,366) |
Recoveries applied to negative allowance (2) | (574,993) |  |  | (120,392) |  |  | (695,385) |
Changes in expected recoveries (3) | (7,436) |  |  | 13,816 |  |  | 6,380 |
Balance at end of period | $ | 3,101,892 |  |  | $ | 358,912 |  |  | $ | 3,460,804 |

| Nine Months Ended September 30, 2022
| Core |  | Insolvency |  | Total
Balance at beginning of period | $ | 2,989,932 |  |  | $ | 438,353 |  |  | $ | 3,428,285 |
Initial negative allowance for expected recoveries - portfolio acquisitions (1) | 513,385 |  |  | 48,516 |  |  | 561,901 |
Foreign currency translation adjustment | (287,901) |  |  | (34,010) |  |  | (321,911) |
Recoveries applied to negative allowance (2) | (628,293) |  |  | (137,439) |  |  | (765,732) |
Changes in expected recoveries (3) | 107,155 |  |  | 27,662 |  |  | 134,817 |
Balance at end of period | $ | 2,694,278 |  |  | $ | 343,082 |  |  | $ | 3,037,360 |

(1) Initial negative allowance for expected recoveries - portfolio acquisitions
Portfolio acquisitions for the nine months ended September 30, 2023 and 2022 were as follows (amounts in thousands):

| Nine Months Ended September 30, 2023
| Core |  | Insolvency |  | Total
Face value | $ | 5,717,674 |  |  | $ | 579,113 |  |  | $ | 6,296,787 |
Noncredit discount | (600,174) |  |  | (38,621) |  |  | (638,795) |
Allowance for credit losses at acquisition | (4,353,724) |  |  | (435,101) |  |  | (4,788,825) |
Purchase price | $ | 763,776 |  |  | $ | 105,391 |  |  | $ | 869,167 |

| Nine Months Ended September 30, 2022
| Core |  | Insolvency |  | Total
Face value | $ | 3,539,705 |  |  | $ | 256,528 |  |  | $ | 3,796,233 |
Noncredit discount | (363,138) |  |  | (16,976) |  |  | (380,114) |
Allowance for credit losses at acquisition | (2,663,182) |  |  | (191,036) |  |  | (2,854,218) |
Purchase price | $ | 513,385 |  |  | $ | 48,516 |  |  | $ | 561,901 |

13

PRA Group, Inc.
Notes to Consolidated Financial Statements
The initial negative allowance recorded on portfolio acquisitions for the nine months ended September 30, 2023 and 2022 was as follows (amounts in thousands):

| Nine Months Ended September 30, 2023
| Core |  | Insolvency |  | Total
Allowance for credit losses at acquisition | $ | (4,353,724) |  |  | $ | (435,101) |  |  | $ | (4,788,825) |
Writeoffs, net | 4,353,724 |  |  | 435,101 |  |  | 4,788,825 |
Expected recoveries | 763,776 |  |  | 105,391 |  |  | 869,167 |
Initial negative allowance for expected recoveries | $ | 763,776 |  |  | $ | 105,391 |  |  | $ | 869,167 |

| Nine Months Ended September 30, 2022
| Core |  | Insolvency |  | Total
Allowance for credit losses at acquisition | $ | (2,663,182) |  |  | $ | (191,036) |  |  | $ | (2,854,218) |
Writeoffs, net | 2,663,182 |  |  | 191,036 |  |  | 2,854,218 |
Expected recoveries | 513,385 |  |  | 48,516 |  |  | 561,901 |
Initial negative allowance for expected recoveries | $ | 513,385 |  |  | $ | 48,516 |  |  | $ | 561,901 |

(2) Recoveries applied to negative allowance
Recoveries applied to the negative allowance for the nine months ended September 30, 2023 and 2022 were as follows (amounts in thousands):

| Nine Months Ended September 30, 2023
| Core |  | Insolvency |  | Total
Recoveries (a) | $ | 1,106,799 |  |  | $ | 151,078 |  |  | $ | 1,257,877 |
Less - amounts reclassified to portfolio income | 531,806 |  |  | 30,686 |  |  | 562,492 |
Recoveries applied to negative allowance | $ | 574,993 |  |  | $ | 120,392 |  |  | $ | 695,385 |

| Nine Months Ended September 30, 2022
| Core |  | Insolvency |  | Total
Recoveries (a) | $ | 1,179,746 |  |  | $ | 173,380 |  |  | $ | 1,353,126 |
Less - amounts reclassified to portfolio income | 551,453 |  |  | 35,941 |  |  | 587,394 |
Recoveries applied to negative allowance | $ | 628,293 |  |  | $ | 137,439 |  |  | $ | 765,732 |

(a) Recoveries include cash collections, buybacks and other cash-based adjustments.
(3) Changes in expected recoveries
Changes in expected recoveries for the nine months ended September 30, 2023 and 2022 were as follows (amounts in thousands):

| Nine Months Ended September 30, 2023
| Core |  | Insolvency |  | Total
Changes in expected future recoveries | $ | (40,919) |  |  | $ | 23 |  |  | $ | (40,896) |
Recoveries received in excess of forecast | 33,483 |  |  | 13,793 |  |  | 47,276 |
Changes in expected recoveries | $ | (7,436) |  |  | $ | 13,816 |  |  | $ | 6,380 |

| Nine Months Ended September 30, 2022
| Core |  | Insolvency |  | Total
Changes in expected future recoveries | $ | 43,262 |  |  | $ | 3,894 |  |  | $ | 47,156 |
Recoveries received in excess of forecast | 63,893 |  |  | 23,768 |  |  | 87,661 |
Changes in expected recoveries | $ | 107,155 |  |  | $ | 27,662 |  |  | $ | 134,817 |

14

PRA Group, Inc.
Notes to Consolidated Financial Statements
Changes in expected recoveries for the nine months ended September 30, 2023 were a net positive $6.4 million. This includes $47.3 million in recoveries received in excess of forecast (cash collections overperformance), primarily due to continued strong performance in Europe and South America, and a $40.9 million negative adjustment to changes in expected future recoveries. The changes in expected future recoveries reflected the Company's assessment of certain pools, which resulted in a reduction of expected cash flows due largely to collections performance in the U.S.
Changes in expected recoveries for the nine months ended September 30, 2022 were a net positive $134.8 million. This reflected $87.7 million in recoveries received in excess of forecast reflecting cash collections overperformance and a $47.2 million net positive adjustment to changes in expected future recoveries. The changes in expected future recoveries reflected the Company's assessment of certain pools, where continued strong performance resulted in a net increase to the Company's ERC. The Company continued to believe that the majority of the overperformance in its more recent pools was due to acceleration in the timing of cash collections rather than an increase in total expected collections. The change in expected recoveries also included a $20.5 million write down during the first quarter in 2022 on one portfolio in Brazil.
3. Investments:
Investments consisted of the following at September 30, 2023 and December 31, 2022 (amounts in thousands):

| September 30, 2023 |  | December 31, 2022
Debt securities |  |  |
Available-for-sale | $ | 62,755 |  |  | $ | 66,813 |
Equity securities |  |  |
Private equity funds | 2,911 |  |  | 4,373 |
Equity method investments | 9,063 |  |  | 8,762 |
Total investments | $ | 74,729 |  |  | $ | 79,948 |

Debt Securities
Available-for-sale
Government securities: The Company's investments in government instruments, including Norwegian bonds and Swedish treasury s ecurities, are classified as available-for-sale and stated at fair value. At September 30, 2023, maturities for these securities were $58.8 million due within one year and $3.9 million due within one to two years.
The amortized cost and fair value of investments in debt securities at September 30, 2023 and December 31, 2022 was as follows (amounts in thousands):

| September 30, 2023
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized (Losses) |  | Aggregate Fair Value
Available-for-sale |  |  |  |  |  |  |
Government securities | $ | 62,969 |  |  | $ | 36 |  |  | $ | (250) |  |  | $ | 62,755 |
| December 31, 2022
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized (Losses) |  | Aggregate Fair Value
Available-for-sale |  |  |  |  |  |  |
Government securities | $ | 67,049 |  |  | $ | 1 |  |  | $ | (237) |  |  | $ | 66,813 |

Equity Securities
Private equity funds: Investments in private equity funds represent limited partnerships in which the Company has less tha n a 1% interest.
Equity Method Investments
The Company ha s an 11.7% interest in RC B Investimentos S.A. ("RCB"), a servicing platform for nonperforming loans in Brazil. This investment is accounted for under the equity method because the Company exercises significant influence over RCB’s operating and financial activities. Accordingly, the Company’s investment in RCB is adjusted for the Company’s proportionate share of RCB’s earnings or losses, capital contributions made and distributions received.
15

PRA Group, Inc.
Notes to Consolidated Financial Statements
4. Goodwill:
The Company performs an annual review of goodwill as of October 1 of each year or more frequently if indicators of impairment exist. The Company performed its most recent annual review as of October 1, 2022 and concluded that goodwill was not impaired. The Company performed a quarterly impairment assessment by evaluating whether any triggering events had occurred, which included considering current market conditions, and determined that goodwill was not more likely than not impaired as of September 30, 2023.
Changes in goodwill for the three and nine months ended September 30, 2023 and 2022, were as follows (amounts in thousands):

| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
Balance at beginning of period | $ | 414,905 |  |  | $ | 437,032 |  |  | $ | 435,921 |  |  | $ | 480,263 |
Change in foreign currency translation adjustment | (2,392) |  |  | (32,558) |  |  | (23,408) |  |  | (75,789) |
Balance at end of period | $ | 412,513 |  |  | $ | 404,474 |  |  | $ | 412,513 |  |  | $ | 404,474 |

5. Leases:
The Company's operating lease portfolio primarily includes corporate offices and call centers. The majority of its leases have remaining lease terms of one to 11 years, so me of which include options to extend the leases for up to five years, and others include options to terminate the leases within one year. Exercises of lease renewal options are typically at the Company's sole discretion, with renewal periods included in ROU assets and lease liabilities based upon whether the Company is reasonably certain of exercising the renewal options. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.
As most of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments.
The components of lease expense for the three and nine months ended September 30, 2023 and 2022, were as follows (amounts in thousands):

| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
Operating lease expense | $ | 2,617 |  |  | $ | 2,775 |  |  | $ | 8,132 |  |  | $ | 9,095 |
Short-term lease expense | 526 |  |  | 775 |  |  | 1,553 |  |  | 1,874 |
Sublease income | (21) |  |  | (118) |  |  | (296) |  |  | (348) |
Total lease expense | $ | 3,122 |  |  | $ | 3,432 |  |  | $ | 9,389 |  |  | $ | 10,621 |

Supplemental cash flow information and non-cash activity related to leases for the nine months ended September 30, 2023 and 2022 was as follows (amounts in thousands):

| Nine Months Ended September 30,
| 2023 |  | 2022
Cash paid for amounts included in the measurement of operating lease liabilities | $ | 8,806 |  |  | $ | 8,923 |
ROU assets obtained in exchange for operating lease obligations (1) | 2,663 |  |  | 5,910 |

(1) Includes the impact of new leases as well as remeasurements and modifications to existing leases.
16

PRA Group, Inc.
Notes to Consolidated Financial Statements
Lease term and discount rate information related to operating leases was as follows:

| Nine Months Ended September 30,
| 2023 |  | 2022
Weighted-average remaining lease term (years) | 7.1 |  | 8.2
Weighted-average discount rate | 4.65 | % |  | 4.48 | %

Maturities of lease liabilities at September 30, 2023 were as follows for the following periods (amounts in thousands):

| Operating Leases |  |
For the three months ending December 31, 2023 | $ | 2,600 |  |  |
For the year ending December 31, 2024 | 9,879 |  |  |
For the year ending December 31, 2025 | 9,608 |  |  |
For the year ending December 31, 2026 | 8,490 |  |  |
For the year ending December 31, 2027 | 5,724 |  |  |
Thereafter | 25,391 |  |  |
Total lease payments | 61,692 |  |  |
Less: imputed interest | (10,034) |  |  |
Total present value of lease liabilities | $ | 51,658 |  |  |

6. Borrowings:
The Company's borrowings consisted of the following as of September 30, 2023 and December 31, 2022 (amounts in thousands):

| September 30, 2023 |  | December 31, 2022
Americas revolving credit (1) | $ | 382,351 |  |  | $ | 186,867 |
UK revolving credit | 500,257 |  |  | 453,528 |
Europe revolving credit | 473,873 |  |  | 419,856 |
Term loan | 442,500 |  |  | 450,000 |
Senior notes | 1,046,000 |  |  | 650,000 |
Convertible notes | — |  |  | 345,000 |
| 2,844,981 |  |  | 2,505,251 |
Less: Debt discount and issuance costs | (12,756) |  |  | (10,393) |
Total | $ | 2,832,225 |  |  | $ | 2,494,858 |

(1) Includes the North American revolving credit facility and an unsecured credit agreement with Banco de Occidente (the "Colombian Revolving Credit Facility"). As of September 30, 2023, no amounts were outstanding under the Colombian Revolving Credit Facility ($0.5 million was outstanding as of December 31, 2022).
The following principal payments are due on the Company's borrowings as of September 30, 2023 for the 12-month periods ending September 30, (amounts in thousands):

2024 | $ | 10,000 |
2025 | 308,000 |
2026 | 1,305,108 |
2027 | — |
2028 | 871,873 |
Thereafter | 350,000 |
Total | $ | 2,844,981 |

During the nine months ended September 30, 2023, the Company repurchased a total of $4.0 million in aggregate principal amount of the senior notes.
17

PRA Group, Inc.
Notes to Consolidated Financial Statements
The Company determined that it was in compliance with the covenants of its financing arrangements as of September 30, 2023.
North American Revolving Credit and Term Loan
The Company has a credit agreement with Bank of America, N.A., as administrative agent, Bank of America, National Association, acting through its Canada branch, as the Canadian Administrative Agent, and a syndicate of lenders named therein (the "North American Credit Agreement"). The total credit facility under the North American Credit Agreement includes an aggregate principal amount of $1.5 billion (subject to compliance with a borrowing base and applicable debt covenants), which consists of (i) a fully-funded $442.5 million term loan, (ii) a $1.0 billion domestic revolving credit facility, and (iii) a $75.0 million Canadian revolving credit facility. The facility includes an accordion feature for up to $500.0 million in additional commitments (at the option of the lenders) and also provides for up to $25.0 million of letters of credit and a $25.0 million swingline loan sub-limit that would reduce amounts available for borrowin g. With the official discontinuation of the London Interbank Offered Rate ("LIBOR") on June 30, 2023, the Company executed an amendment to its North American Credit Agreement to allow for previously outstanding LIBOR borrowings and subsequent borrowings to use the Secured Overnight Financing Rate ("SOFR"). The term and revolving loans accrue interest, at the option of the Company, at either the base rate, Canadian dollar offered rate or SOFR for the applicable term, plus 2.25% plus a 0.10% credit adjustment spread, or 2.00% plus a 0.10% credit adjustment spread if the consolidated senior secured leverage ratio is less than or equal to 1.60 to 1.0. The revolving loans within the credit facility are subject to a 0% floor. The revolving credit facilities also bear an unused line fee of 0.35% per annum, or 0.30% if the consolidated senior secured leverage ratio is less than or equal to 1.60 to 1.0, payable quarterly in arrears a nd matures July 30, 2026. As of September 30, 2023, total availability under the North American Credit Agreement was $692.6 million, which was comprised of $70.3 million based on current ERC, and $622.3 million additional availability subject to debt covenants, including advance rates.
Borrowings under the North American Credit Agreement are guaranteed by the Company's U.S. and Canadian subsidiaries (provided that the Canadian subsidiaries only guarantee borrowings under the Canadian revolving credit facility) and are secured by a first priority lien on substantially all of the Company's assets. The North American Credit Agreement contains events of default and restrictive covenants, including the following:
•the ERC borrowing base is 35% for all eligible core asset pools and 55% for all insolvency eligible asset pools;
•the Company's consolidated total leverage ratio cannot exceed 3.50 to 1.0 as of the end of any fiscal quarter;
•the Company's consolidated senior secured leverage ratio cannot exceed 2.25 to 1.0 as of the end of any fiscal quarter;
•subject to no default or event of default, cash dividends and distributions during any fiscal year cannot exceed $20.0 million; and
•the Company must maintain positive consolidated income from operations during any fiscal quarter (other than for the quarter ended March 31, 2023).
United Kingdom ("UK") Revolving Credit Facility
PRA Group Europe Holding I S.a.r.l ("PRA Group Europe"), a wholly owned subsidiary of the Company, along with PRA Group UK Limited ("PRA UK") and the Company, as guarantors, are parties to a credit agreement (the "UK Credit Agreement") with the lenders party thereto and MUFG Bank, Ltd., London Branch, as the administrative agent (the "Administrative Agent").
The UK Credit Agreement consists of an $800.0 million revolving credit facility (subject to a borrowing base), and an accordion feature for up to $200.0 million in additional commitments, subject to certain conditions. Borrowings, which are available in U.S. dollars, euro and pounds sterling accrue interest for the applicable term at SOFR, Sterling Overnight Index Average ("SONIA") or, in the case of euro borrowings, the Euro Interbank Offered Rate ("Euribor") plus an applicable margin of 2.75% per annum plus a 0.10% credit adjustment spread, or 2.50% plus a 0.10% credit adjustment spread if the consolidated senior secured leverage ratio is less than 1.60 to 1.0. The UK Credit Agreement also has a commitment fee of 0.30% per annum, payable quarterly in arrears. If the consolidated senior secured leverage ratio is greater than 1.60 to 1.0, the commitment fee increases to 0.35% per annum. The UK Credit Agreement matures on July 30, 2026. As of September 30, 2023, total availability under the UK Credit Agreement was $299.7 million, which was comprised of $57.4 million based on current ERC, and $242.3 million additional availability subject to debt covenants, including advance rates.
The UK Credit Agreement is secured by substantially all of the assets of PRA UK, all of the equity interests in PRA UK and certain equity interests of PRA Group Europe, certain bank accounts of PRA Group Europe and certain intercompany loans extended by PRA Group Europe to PRA UK. The UK Credit Agreement contains events of default and restrictive covenants, including the following:
18

PRA Group, Inc.
Notes to Consolidated Financial Statements
•the borrowing base equals the sum of up to: (i) 35% of the ERC of PRA UK’s eligible asset pools; plus (ii) 55% of PRA UK’s insolvency eligible asset pools; minus (iii) certain reserves to be established by the Administrative Agent;
•the Company's consolidated leverage ratio cannot exceed 3.50 to 1.0 as of the end of any fiscal quarter;
•the Company's consolidated senior secured leverage ratio cannot exceed 2.25 to 1.0 as of the end of any fiscal quarter; and
•the Company must maintain positive consolidated income from operations during any fiscal quarter (other than for the quarter ended March 31, 2023).
European Revolving Credit Facility
The Company's wholly-owned subsidiary, PRA Group Europe Holding S.a.r.l. ("PRA Group Europe Holding"), and its Swiss Branch, PRA Group Europe Holding S.a.r.l. ("PRA Group Holding"), Luxembourg, Zug Branch (together, the "Borrowers"), along with certain of its affiliates and the Company, as guarantors, are parties to a credit agreement (the "European Credit Agreement") with the lenders party thereto and DNB Bank ASA as facility agent and security agent (the "Agent").
The European Credit Agreement provides borrowings for an aggregate amount of approximately €730.0 million (subject to the borrowing base) and an uncommitted accordion feature for up to €500.0 million, subject to certain conditions. Borrowings, which are available in euro, Norwegian krone, Danish krone, Swedish krona, and Polish zloty, accrue interest at the Interbank Offered Rate plus 2.80% - 3.80% (as determined by the estimated remaining collections ratio ("ERC Ratio") as defined in the European Credit Agreement), bear an unused line fee, currently 1.085% per annum, or 35% of the margin, are subject to a 0% floor, are payable monthly in arrears and mature November 23, 2027. Additionally, the Company has a separate agreement with the Agent for an overdraft facility in the aggregate amount of $40.0 million (subject to the borrowing base), which accrues interest (per currency) at the daily rates as published by the Agent, bears a facility line fee of 0.125% per quarter, payable quarterly in arrears and matures November 23, 2027. As of September 30, 2023, total availability under the European Credit Agreement (including the overdraft facility) was $337.9 million, which was comprised of $150.1 million based on current ERC, and $187.8 million additional availability subject to debt covenants, including advance rates.
The European Credit Agreemen t is secured by a first perfected security interest in all of the equity interests in certain operating subsidiaries of the Borrowers, certain intercompany loans and certain shareholder loans extended by the Company to the Borrowers. Further, the Company guarantees all obligations and liabilities under the European Credit Agreement. The European Credit Agreement contains event of default and restrictive covenants including the following:
•the ERC Ratio cannot exceed 45%;
•the Company's consolidated total leverage ratio cannot exceed 3.50 to 1.0 as of the end of any fiscal quarter;
•the Company's consolidated senior secured leverage ratio cannot exceed 2.25 to 1.0 as of the end of any fiscal quarter;
•the Company must maintain positive consolidated income from operations at the end of any fiscal quarter (other than for the quarter ended March 31, 2023);
•interest bearing deposits in AK Nordic AB cannot exceed SEK 1.2 billion; and
•PRA Europe's cash collections must meet certain thresholds, measured on a quarterly basis.
Senior Notes due 2029
On September 22, 2021, the Company completed the private offering of $350.0 million in aggregate principal amount of its 5.00% Senior Notes due October 1, 2029 (the "2029 Notes"). The 2029 Notes were issued pursuant to an Indenture dated September 22, 2021 (the "2021 Indenture"), between the Company and Regions Bank, as trustee. The 2021 Indenture contains customary terms and covenants, including certain events of default after which the 2029 Notes may be due and payable immediately. The 2029 Notes are senior unsecured obligations of the Company and are guaranteed on a senior unsecured basis by all of the Company's existing and future domestic restricted subsidiaries that guarantee the North American Credit Agreement, subject to certain exceptions. Interest on the 2029 Notes is payable semi-annually, in arrears, on October 1 and April 1 of each year.
On or before October 1, 2024, the Company may redeem up to 40% of the aggregate principal amount of the 2029 Notes at a redemption price of 105.00% plus accrued and unpaid interest with the net cash proceeds of a public offering of common stock of the Company provided, that at least 60% in aggregate principal amount of the 2029 Notes remains outstanding immediately after the occurrence of such redemption and that such redemption will occur within 90 days of the date of the closing of such public offering.
19

PRA Group, Inc.
Notes to Consolidated Financial Statements
In ad dition, on or after October 1, 2024, the 2029 Notes may be redeemed, at the Company's option, in whole or in part at a price equal to 102.50% of the aggregate principal amount of the 2029 Notes being redeemed. The applicable redemption price changes if redeemed during the 12 months beginning October 1 of each year to 101.25% for 2025 and then 100% for 2026 and thereafter.
In the event of a change of control, each holder will have the right to require the Company to repurchase all or any part of such holder's 2029 Notes at an offer price equal to 101% of the aggregate principal amount plus accrued and unpaid interest. If the Company sells assets under certain circumstances and does not use the proceeds for specified purposes, the Company will be required to make an offer to repurchase the 2029 Notes at 100% of their principal amount plus accrued and unpaid interest.
Senior Notes due 2028
On February 6, 2023, the Company completed the private offering of $400.0 million aggregate principal amount of its 8.375% Senior Notes due 2028 ("2028 Notes"). The 2028 Notes were issued pursuant to an Indenture dated February 6, 2023 (the "2023 Indenture"), between the Company and Regions Bank, as trustee. The 2023 Indenture contains customary terms and covenants, including certain events of default after which the 2028 Notes may be due and payable immediately. The 2028 Notes are senior unsecured obligations of the Company and are guaranteed on a senior unsecured basis by all of the Company's e xisting and future domestic restricted subsidiaries that guarantee the North American Credit Agreement, subject to certain exceptions. Interest on the 2028 Notes is payable semi-annually, in arrears, on February 1 and August 1 of each year. Substantially all of the net proceeds received from the 2028 Notes were used to retire the 2023 Notes (as defined below). The Company used the remainder of the net proceeds to repay a portion of its outstanding borrowings under the domestic revolving credit facility under the North America Credit Agreement.
On or before February 1, 2025, the Company may redeem up to an aggregate of 40% of the aggregate principal amount of the 2028 Notes at a redemption price of 108.375% plus accrued and unpaid interest with the net cash proceeds of a public offering of common stock of the Company, provided that at least 60% in aggregate principal amount of the 2028 Notes remains outstanding immediately after the occurrence of such redemption and that such redemption will occur within 90 days of the date of the closing of such public offering.
In addition, on or after February 1, 2025, t he 2028 Notes may be redeemed at the Company's option in whole or in part at a price equal to 104.188% of the aggregate principal amount of the 2028 Notes being redeemed. The applicable redemption price changes if redeemed during the 12 months beginning February 1 of each year to 102.094% for 2026 and then 100% for 2027 and thereafter.
In the event of a change of control, each holder will have the right to require the Company to repurchase all or any part of such holder's 2028 Notes at an offer price equal to 101% of the aggregate principal amount plus accrued and unpaid interest. If the Company sells assets under certain circumstances and does not use the proceeds for specified purposes, the Company will be required to make an offer to repurchase the 2028 Notes at 100% of their principal amount plus accrued and unpaid interest.
During the nine months ended September 30, 2023, the Company repurchased $2.0 million in aggregate principal amount of the 2028 Notes.
Senior Notes due 2025
On August 27, 2020, the Company completed the private offering of $300.0 million in aggregate principal amount of its 7.375% Senior Notes due September 1, 2025 (the "2025 Notes" and, together with the 2029 Notes and the 2028 Notes, the "Senior Notes"). The 2025 Notes were issued pursuant to an Indenture dated August 27, 2020 (the "2020 Indenture"), between the Company and Regions Bank, as trustee. The 2020 Indenture contains customary terms and covenants, including certain events of default after which the 2025 Notes may be due and payable immediately. The 2025 Notes are senior unsecured obligations of the Company and are guaranteed on a senior unsecured basis by all of the Company's existing and future domestic restricted subsidiaries that guarantee the North American Credit Agreement, subject to certain exceptions. Interest on the 2025 Notes is payable semi-annually, in arrears, on March 1 and September 1 of each year.
The 2025 Notes may be redeemed, at the Company's option, in whole or in part, at a price equal to 103.688% of the aggregate principal amount of the 2025 Notes being redeemed. The applicable redemption price changes if redeemed during the 12 months beginning September 1 of each year to 101.844% for 2023 and then 100% for 2024 and thereafter.
In the event of a change of control, each holder will have the right to require the Company to repurchase all or any part of such holder's 2025 Notes at a price equal to 101% of their aggregate principal amount, plus accrued and unpaid interest. If the Company sells assets under certain circumstances and does not use the proceeds for specified purposes, the Company will be required to make an offer to repurchase the 2025 Notes at 100% of their principal amount plus accrued and unpaid interest.
20

PRA Group, Inc.
Notes to Consolidated Financial Statements
During the nine months ended September 30, 2023, the Company repurchased $2.0 million in aggregate principal amount of the 2025 Notes.
Convertible Senior Notes due 2023
The Company used substantially all of the net proceeds from the issuance of the 2028 Notes to retire the $345.0 million aggregate principal amount of its 3.50% Convertible Senior Notes at their maturity on June 1, 2023 (the "2023 Notes"). Interest expense on the 2023 Notes was recognized using an effective interest rate of 4.00%, and for the three and nine months ended September 30, 2023 and 2022, was as follows (amounts in thousands):

|  | Three Months Ended September 30, |  | Nine Months Ended September 30, |
|  | 2023 |  | 2022 |  | 2023 |  | 2022 |
Interest expense - stated coupon rate |  | $ | — |  |  | $ | 3,019 |  |  | $ | 5,032 |  |  | $ | 9,057 |  |
Interest expense - amortization of debt issuance costs |  | — |  |  | 429 |  |  | 748 |  |  | 1,284 |  |
Total interest expense - convertible notes |  | $ | — |  |  | $ | 3,448 |  |  | $ | 5,780 |  |  | $ | 10,341 |  |

7. Derivatives:
The Company periodically enters into derivative financial instruments; typically interest rate swaps, interest rate caps and foreign currency contracts, to reduce its exposure to fluctuations in interest rates on variable-rate debt and foreign currency exchange rates. The Company does not utilize derivative financial instruments with a level of complexity or with a risk greater than the exposure to be managed, nor does it enter into or hold derivatives for trading or speculative purposes. The Company periodically reviews the creditworthiness of the counterparty to assess the counterparty's ability to honor its obligations. Counterparty default would expose the Company to fluctuations in interest and currency rates. Derivative financial instruments are recognized at fair value in the Company's Consolidated Balance Sheets.
The following table summarizes the fair value of derivative instruments as of September 30, 2023 and December 31, 2022 (amounts in thousands):

|  | September 30, 2023 |  | December 31, 2022
|  | Balance Sheet Location |  | Fair Value |  | Balance Sheet Location |  | Fair Value
Derivatives designated as hedging instruments: |  |  |  |  |  |  |  |
Interest rate contracts |  | Other assets |  | $ | 32,482 |  |  | Other assets |  | $ | 37,305 |
Interest rate contracts |  | Other liabilities |  | 3,195 |  |  | Other liabilities |  | — |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |
Foreign currency contracts |  | Other assets |  | 10,380 |  |  | Other assets |  | 487 |
Foreign currency contracts |  | Other liabilities |  | 206 |  |  | Other liabilities |  | 19,120 |

Derivatives Designated as Hedging Instruments:
Changes in fair value of derivative contracts designated as cash flow hedging instruments are recognized in other comprehensive income ("OCI"). As of September 30, 2023 and December 31, 2022, the notional amount of interest rate contracts designated as cash flow hedging instruments w as $878.2 million and $719.7 million, respectively. Derivatives designated as cash flow hedging instruments were evaluated and remained highly effective at September 30, 2023 and have remaining terms of three months to five years. The Co mpany estimates that approxi mately $16.6 million of net derivative gains included in OCI w ill be reclassified into earnings within the next 12 months.
21

PRA Group, Inc.
Notes to Consolidated Financial Statements
The following tables summarize the effects of derivatives designated as cash flow hedging instruments on the Company's Consolidated Financial Statements for the three and nine months ended September 30, 2023 and 2022 (amounts in thousands):

|  | Gain/(loss) recognized in OCI, net of tax
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
Derivatives designated as cash flow hedging instruments |  | 2023 |  | 2022 |  | 2023 |  | 2022
Interest rate contracts |  | $ | (2,712) |  |  | $ | 19,983 |  |  | $ | 7,430 |  |  | $ | 41,106 |
|  | Gain/(loss) reclassified from OCI into income
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
Location of gain/(loss) reclassified from OCI into income |  | 2023 |  | 2022 |  | 2023 |  | 2022
Interest expense, net |  | $ | 6,498 |  |  | $ | 383 |  |  | $ | 18,666 |  |  | $ | (3,819) |

During the three months ended September 30, 2023, with the discontinuation of LIBOR on June 30, 2023, and transition of the Company's interest rate swaps from LIBOR to SOFR, the Company discontinued the prior elections under ASU 2021-01, "Reference Rate Reform (Topic 848): Overall" ("ASU 2021-01").
Derivatives Not Designated as Hedging Instruments:
The Company enters into foreign currency contracts to economically hedge foreign currency re-measurement exposure related to certain balances denominated in currencies other than the functional currency of the entity. Changes in fair value of derivative contracts not designated as hedging instruments are recognized in earnings. As of September 30, 2023 and December 31, 2022, the notional amount of foreign currency contracts w as $412.0 million and $460.8 million, respectively.
The following table summarizes the effects of derivatives not designated as hedging instruments on the Company's Consolidated Income Statements for the three and nine months ended September 30, 2023 and 2022 (amounts in thousands):

|  |  |  | Gain/(loss) recognized in income
|  |  |  | Three Months Ended September 30,
Derivatives not designated as hedging instruments |  | Location of gain/(loss) recognized in income |  | 2023 |  | 2022
Foreign currency contracts |  | Foreign exchange gain, net |  | $ | 8,137 |  |  | $ | 33,019 |
Foreign currency contracts |  | Interest expense, net |  | 204 |  |  | 313 |
|  |  |  | Gain/(loss) recognized in income
|  |  |  | Nine Months Ended September 30,
Derivatives not designated as hedging instruments |  | Location of gain/(loss) recognized in income |  | 2023 |  | 2022
Foreign currency contracts |  | Foreign exchange gain/(loss), net |  | $ | (7,149) |  |  | $ | 72,371 |
Foreign currency contracts |  | Interest expense, net |  | 1,357 |  |  | (638) |

8. Fair Value:
As defined by ASC Topic 820, "Fair Value Measurement and Disclosures" ("ASC 820"), fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 requires the consideration of different input levels in the determination of fair value, as follows:
•Level 1: Quoted prices in active markets for identical assets and liabilities.
•Level 2: Observable inputs other than Level 1 quoted prices, such as quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.
•Level 3: Unobservable inputs that are supported by little or no market activity. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.
The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety.
22

PRA Group, Inc.
Notes to Consolidated Financial Statements
Financial Instruments Not Carried at Fair Value
In accordance with the disclosure requirements of ASC Topic 825, "Financial Instruments" ("ASC 825"), the table below summarizes fair value estimates for the Company's financial instruments that are not carried at fair value. The total of the fair values presented does not represent, and should not be construed to represent, the underlying value of the Company.
The carrying amounts in the table below were recorded in the Company's Consolidated Balance Sheets at September 30, 2023 and December 31, 2022 (amounts in thousands):

| September 30, 2023 |  | December 31, 2022
| Carrying Amount |  | Estimated Fair Value |  | Carrying Amount |  | Estimated Fair Value
Financial assets: |  |  |  |  |  |  |
Cash and cash equivalents | $ | 105,172 |  |  | $ | 105,172 |  |  | $ | 83,376 |  |  | $ | 83,376 |
Finance receivables, net | 3,460,804 |  |  | 3,005,033 |  |  | 3,295,008 |  |  | 3,167,813 |
Financial liabilities: |  |  |  |  |  |  |
Interest-bearing deposits | 100,505 |  |  | 100,505 |  |  | 112,992 |  |  | 112,992 |
Revolving lines of credit | 1,356,481 |  |  | 1,356,481 |  |  | 1,060,251 |  |  | 1,060,251 |
Term loan | 442,500 |  |  | 442,500 |  |  | 450,000 |  |  | 450,000 |
Senior notes | 1,046,000 |  |  | 923,125 |  |  | 650,000 |  |  | 580,433 |
Convertible notes | — |  |  | — |  |  | 345,000 |  |  | 341,926 |

Disclosure of the estimated fair values of financial instruments often requires the use of estimates. The carrying amount and estimates of the fair value of the Company's debt obligations outlined above do not include any related debt issuance costs associated with the debt obligations. The Company uses the following methods and assumptions to estimate the fair value of financial instruments:
Cash equivalents: The carrying amount approximates fair value due to the short-term nature of the instruments and the observable quoted prices for identical assets in active markets. Accordingly, the Company uses Level 1 inputs for its fair value estimates.
Finance receivables, net: The Company estimates the fair value of these receivables using proprietary pricing models that the Company utilizes to make portfolio acquisition decisions. Accordingly, the Company's fair value estimates use Level 3 inputs as there is little observable market data available and management is required to use significant judgment in its estimates.
Interest-bearing deposits: The carrying amount approximates fair value due to the short-term nature of the deposits and the observable quoted prices for similar instruments in active markets. Accordingly, the Company uses Level 2 inputs for its fair value estimates.
Revolving lines of credit: The carrying amount approximates fair value due to the short-term nature of the interest rate periods and the observable quoted prices for similar instruments in active markets. Accordingly, the Company uses Level 2 inputs for its fair value estimate.
Term loan: The carrying amount approximates fair value due to the short-term nature of the interest rate periods and the observable quoted prices for similar instruments in active markets. Accordingly, the Company uses Level 2 inputs for its fair value estimate.
Senior notes and Convertible notes: The fair value estimates for the Senior notes and Convertible notes incorporate quoted market prices obtained from secondary market broker quotes, which were derived from a variety of inputs including client orders, information from their pricing vendors, modeling software and actual trading prices when they occur. Accordingly, the Company uses Level 2 inputs for its fair value estimates.
23

PRA Group, Inc.
Notes to Consolidated Financial Statements
Financial Instruments Carried at Fair Value
The carrying amounts in the following tables were measured at fair value on a recurring basis in the Company's Consolidated Balance Sheets at September 30, 2023 and December 31, 2022 (amounts in thousands):

| Fair Value Measurements as of September 30, 2023
| Level 1 |  | Level 2 |  | Level 3 |  | Total
Assets: |  |  |  |  |  |  |
Government securities | $ | 62,755 |  |  | $ | — |  |  | $ | — |  |  | $ | 62,755 |
Derivative contracts (recorded in Other assets) | — |  |  | 42,862 |  |  | — |  |  | 42,862 |
Liabilities: |  |  |  |  |  |  |
Derivative contracts (recorded in Other liabilities) | — |  |  | 3,401 |  |  | — |  |  | 3,401 |
| Fair Value Measurements as of December 31, 2022
| Level 1 |  | Level 2 |  | Level 3 |  | Total
Assets: |  |  |  |  |  |  |
Government securities | $ | 66,813 |  |  | $ | — |  |  | $ | — |  |  | $ | 66,813 |
Derivative contracts (recorded in Other assets) | — |  |  | 37,792 |  |  | — |  |  | 37,792 |
Liabilities: |  |  |  |  |  |  |
Derivative contracts (recorded in Other liabilities) | — |  |  | 19,120 |  |  | — |  |  | 19,120 |

Government securities: Fair value of the Company's investments in government securities is estimated using quoted market prices. Accordingly, the Company uses Level 1 inputs.
Derivative contracts: Fair value of derivative contracts is estimated using industry standard valuation models. These models project future cash flows and discount the future amounts to a present value using market-based observable inputs, including interest rate curves and other factors. Accordingly, the Company uses Level 2 inputs for its fair value estimates.
Investments Measured Using Net Asset Value ("NAV")
Private equity funds: This class of investments consists of private equity funds that invest primarily in loans and securities, including single-family residential debt; corporate debt products; and financially-oriented, real-estate-rich and other operating companies in the Americas, Western Europe and Japan. These investments are subject to certain restrictions regarding transfers and withdrawals. The investments cannot be redeemed with the funds. Instead, the nature of the investments in this class is that distributions are received through the liquidation of the underlying assets of the fund. The investments are expected to be returned through distributions as a result of liquidation of the funds' un derlying assets over one to five years. The fair value of these private equity funds following the application of the NAV practical expedient was $2.9 million an d $4.4 million as of September 30, 2023 and December 31, 2022, respectively.
Impairment of Real Estate
During the three months ended September 30, 2023, the Company determined that it would cease call center operations at one of its owned regional offices in the U.S. As a result, the Company recorded a pre-tax impairment charge of $5.0 million on the associated building and improvements. The impairment was determined by comparing the fair value of the building and improvements to carrying value, as required under ASC Topic 360, "Property, Plant, and Equipment". Fair value was based on an appraisal performed by a third-party valuation specialist, which considered Level 2 inputs in the form of prices paid for comparable properties in the same market.
24

PRA Group, Inc.
Notes to Consolidated Financial Statements
9. Accumulated Other Comprehensive Loss:
Reclassifications out of accumulated other comprehensive loss for the three and nine months ended September 30, 2023 and 2022, were as follows (amounts in thousands):

|  | Three Months Ended September 30, |  |  |  |
Gains/(losses) on cash flow hedges |  | 2023 |  | 2022 |  |  |  |  |  | Location in the Consolidated Income Statement
Interest rate swaps |  | $ | 6,498 |  |  | $ | 383 |  |  |  |  |  |  | Interest expense, net
Income tax effect of item above |  | (1,550) |  |  | 10 |  |  |  |  |  |  | Income tax expense/(benefit)
Total gains on cash flow hedges |  | $ | 4,948 |  |  | $ | 393 |  |  |  |  |  |  |
|  | Nine Months Ended September 30, |  |  |  |  |  |
Gains/(losses) on cash flow hedges |  | 2023 |  | 2022 |  |  |  |  |  | Location in the Consolidated Income Statement
Interest rate swaps |  | $ | 18,666 |  |  | $ | (3,819) |  |  |  |  |  |  | Interest expense, net
Income tax effect of item above |  | (4,464) |  |  | 918 |  |  |  |  |  |  | Income tax expense/(benefit)
Total gains/(losses) on cash flow hedges |  | $ | 14,202 |  |  | $ | (2,901) |  |  |  |  |  |  |

The following tables represent the changes in accumulated other comprehensive loss by component, after tax, for the three and nine months ended September 30, 2023 and 2022 (amounts in thousands):

|  | Three Months Ended September 30, 2023
|  | Debt Securities |  | Cash Flow |  | Currency Translation |  | Accumulated Other
|  | Available-for-sale |  | Hedges |  | Adjustments |  | Comprehensive Loss (1)
Balance at beginning of period |  | $ | (189) |  |  | $ | 28,692 |  |  | $ | (376,503) |  |  | $ | (348,000) |
Other comprehensive loss before reclassifications |  | (26) |  |  | (2,712) |  |  | (31,603) |  |  | (34,341) |
Reclassifications, net |  | — |  |  | (4,948) |  |  | — |  |  | (4,948) |
Net current period other comprehensive loss |  | (26) |  |  | (7,660) |  |  | (31,603) |  |  | (39,289) |
Balance at end of period |  | $ | (215) |  |  | $ | 21,032 |  |  | $ | (408,106) |  |  | $ | (387,289) |
|  | Three Months Ended September 30, 2022
|  | Debt Securities |  | Cash Flow |  | Currency Translation |  | Accumulated Other
|  | Available-for-sale |  | Hedges |  | Adjustments |  | Comprehensive Loss (1)
Balance at beginning of period |  | $ | (623) |  |  | $ | 19,046 |  |  | $ | (366,244) |  |  | $ | (347,821) |
Other comprehensive gain/(loss) before reclassifications |  | 133 |  |  | 19,983 |  |  | (97,988) |  |  | (77,872) |
Reclassifications, net |  | — |  |  | (393) |  |  | — |  |  | (393) |
Net current period other comprehensive gain/(loss) |  | 133 |  |  | 19,590 |  |  | (97,988) |  |  | (78,265) |
Balance at end of period |  | $ | (490) |  |  | $ | 38,636 |  |  | $ | (464,232) |  |  | $ | (426,086) |

(1) Net of deferred taxes for unre alized (gains)/losses from cash flow hedges of $2.5 million and $(3.5) million for the three months ended September 30, 2023 and 2022, respectively.
25

PRA Group, Inc.
Notes to Consolidated Financial Statements

|  | Nine Months Ended September 30, 2023
|  | Debt Securities |  | Cash Flow |  | Currency Translation |  | Accumulated Other
|  | Available-for-sale |  | Hedges |  | Adjustments |  | Comprehensive Loss (1)
Balance at beginning of period |  | $ | (237) |  |  | $ | 27,804 |  |  | $ | (375,493) |  |  | $ | (347,926) |
Other comprehensive gain/(loss) before reclassifications |  | 22 |  |  | 7,430 |  |  | (32,613) |  |  | (25,161) |
Reclassifications, net |  | — |  |  | (14,202) |  |  | — |  |  | (14,202) |
Net current period other comprehensive gain/(loss) |  | 22 |  |  | (6,772) |  |  | (32,613) |  |  | (39,363) |
Balance at end of period |  | $ | (215) |  |  | $ | 21,032 |  |  | $ | (408,106) |  |  | $ | (387,289) |
|  | Nine Months Ended September 30, 2022
|  | Debt Securities |  | Cash Flow |  | Currency Translation |  | Accumulated Other
|  | Available-for-sale |  | Hedges |  | Adjustments |  | Comprehensive Loss (1)
Balance at beginning of period |  | $ | (221) |  |  | $ | (5,371) |  |  | $ | (261,317) |  |  | $ | (266,909) |
Other comprehensive gain/(loss) before reclassifications |  | (269) |  |  | 41,106 |  |  | (202,915) |  |  | (162,078) |
Reclassifications, net |  | — |  |  | 2,901 |  |  | — |  |  | 2,901 |
Net current period other comprehensive gain/(loss) |  | (269) |  |  | 44,007 |  |  | (202,915) |  |  | (159,177) |
Balance at end of period |  | $ | (490) |  |  | $ | 38,636 |  |  | $ | (464,232) |  |  | $ | (426,086) |

(1) Net of deferred taxes for unr ealized gains from cash flow hedges of $(7.0) million and $(6.1) million for the nine months ended September 30, 2023 and 2022, respectively.
10. Earnings per Share:
Basic EPS is computed by dividing net income available to common stockholders of PRA Group, Inc. by weighted average common shares outstanding. Diluted EPS is computed using the same components as basic EPS, with the denominator adjusted for the dilutive effect of the conversion spread of the Convertible Notes and nonvested share awards, if they are dilutive. There were no dilutive effects caused by the Convertible Notes since issuance through their retirement on June 1, 2023. Share-based awards that are contingent upon the attainment of performance goals are included in the computation of diluted EPS if the effect is dilutive. The dilutive effect of nonvested shares is computed using the treasury stock method, which assumes any proceeds that could be obtained upon the vesting of nonvested shares would be used to purchase common shares at the average market price for the period.
On February 25, 2022, the Company's Board of Directors approved a share repurchase program under which the Company is authorized to repurchase up to $150.0 million of its common stock. A s of September 30, 2023, the Company had $67.7 million remaining for share repurchases, which is subject to restrictive covenants contained in our credit facilities and senior note indentures. Considering these covenants, we did not repurchase any common stock during the nine months ended September 30, 2023.
26

PRA Group, Inc.
Notes to Consolidated Financial Statements
The following table provides a reconciliation between the computation of basic E PS and diluted EPS for the three and nine months ended September 30, 2023 and 2022 (amounts in thousands, except per share amounts):

| Three Months Ended September 30,
| 2023 |  | 2022
| Net Loss Attributable to PRA Group, Inc. |  | Weighted Average Common Shares |  | EPS |  | Net Income Attributable to PRA Group, Inc. |  | Weighted Average Common Shares |  | EPS
Basic EPS | $ | (12,262) |  |  | 39,242 |  |  | $ | (0.31) |  |  | $ | 24,732 |  |  | 39,018 |  |  | $ | 0.63 |
Dilutive effect of nonvested share awards |  |  | — |  |  | — |  |  |  |  | 152 |  |  | — |
Diluted EPS | $ | (12,262) |  |  | 39,242 |  |  | $ | (0.31) |  |  | $ | 24,732 |  |  | 39,170 |  |  | $ | 0.63 |
| Nine Months Ended September 30,
| 2023 |  | 2022
| Net Loss Attributable to PRA Group, Inc. |  | Weighted Average Common Shares |  | EPS |  | Net Income Attributable to PRA Group, Inc. |  | Weighted Average Common Shares |  | EPS
Basic EPS | $ | (74,695) |  |  | 39,155 |  |  | $ | (1.91) |  |  | $ | 101,188 |  |  | 39,858 |  |  | $ | 2.54 |
Dilutive effect of nonvested share awards |  |  | — |  |  | — |  |  |  |  | 267 |  |  | (0.02) |
Diluted EPS | $ | (74,695) |  |  | 39,155 |  |  | $ | (1.91) |  |  | $ | 101,188 |  |  | 40,125 |  |  | $ | 2.52 |

There were no options outstanding, antidilutive or otherwise, as of September 30, 2023 and 2022.
11. Income Taxes:
The Company accounts for income taxes in accordance with Financial Accounting Standards Board ("FASB") ASC Topic 740 "Income Taxes" ("ASC 740") as it relates to the provision for income taxes and uncertainty in income taxes. The guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.
As of September 30, 2023, the tax years subject to examination by the major federal, state and international taxing jurisdictions ar e 2014 an d subsequent years.
The Company intends for predominantly all international earnings to be indefinitely reinvested in its international operations; therefore, recording deferred tax liabilities for such unremitted earnings is not required. If international earnings were repatriated or deemed repatriated due to intercompany loans, the Company may need to accrue and pay taxes, although foreign tax credits and exemptions may be available to partially reduce or eliminate income and withholding taxes. Any deemed repatriations from additional intercompany loans would be expected to have little or no tax impact. The amount of cash on hand related to international operations with indefinitely reinvested earnings was $88.8 million and $75.3 million as of September 30, 2023 and December 31, 2022, respectively.
12. Commitments and Contingencies:
Employment Agreements:
The Company has entered into employment agreements with certain of its current and former U.S. executive officers. Such agreements provide for base salary payments as well as potential discretionary bonuses that consider the Company’s overall performance against its short and long-term financial and strategic objectives. The agreements also contain customary confidentiality and non-compete provisions. As of September 30, 2023, estima ted future compensation under these agreements was $4.3 million. Outside the U.S., the Company has entered into employment agreements with certain employees pursuant to local country regulations. Generally, these agreements do not have expiration dates. As a result, it is impractical to estimate the amount of future compensation under these agreements. Accordingly, the future compensation under these agreements is not included in the $4.3 million to tal a bove.
27

PRA Group, Inc.
Notes to Consolidated Financial Statements
Forward Flow Agreements:
The Company is party to several forward flow agreements for the purchase of nonperforming loans at pre-established prices. As of September 30, 2023, the maximum amount the Compa ny could be oblig ated to purchase under forward flow agreements was $538.0 million. This amount is based on sellers' estimates of future flow sales and is dependent on actual delivery compared to these estimates. Accordingly, amounts purchased under these agreements may vary and are often less than the maximum amounts.
Finance Receivables:
Certain agreements for the purchase of finance receivables portfolios contain provisions that may, in limited circumstances, require the Company to refund a portion or all of the collections subsequently received by the Company on particular accounts. The potential refunds as of the balance sheet date are not considered to be significant.
Litigation and Regulatory Matters:
The Company and its subsidiaries are from time to time subject to a variety of routine legal and regulatory claims, inquiries and proceedings and regulatory matters, most of which are incidental to the ordinary course of its business. The Company initiates lawsuits against customers and is occasionally countersued by them in such actions. Also, customers, either individually, as members of a class action, or through a governmental entity on behalf of customers, may initiate litigation against the Company in which they allege that the Company has violated a state or federal law in the process of collecting on an account. From time to time, other types of lawsuits are brought against the Company. Additionally, the Company receives subpoenas and other requests or demands for information from regulators or governmental authorities who are investigating the Company's debt collection activities.
The Company accrues for potential liability arising from legal proceedings and regulatory matters when it is probable that such liability has been incurred and the amount of the loss can be reasonably estimated. This determination is based upon currently available information for those proceedings in which the Company is involved, taking into account the Company's best estimate of such losses for those cases for which such estimates can be made. The Company's estimate involves significant judgment given the varying stages of the proceedings (including the fact that many of them are currently in preliminary stages), the number of unresolved issues in many of the proceedings (including issues regarding class certification and the scope of many of the claims), and the related uncertainty of the potential outcomes of these proceedings. In making determinations of the likely outcome of pending litigation, the Company considers many factors, including, but not limited to, the nature of the claim, the Company's experience with similar types of claims, the jurisdiction in which the matter is filed, input from outside legal counsel, the likelihood of resolving the matter through alternative mechanisms, the matter's current status and the damages sought or demands made. Accordingly, the Company's estimate will change from time to time, and actual losses could be more than the current estimate.
The Company believes that the estimate of the aggregate range of reasonably possible losses in excess of the amount accrued for its legal proceedings outstanding at September 30, 2023, where the range of loss can be estimated, was not material.
In certain legal proceedings, the Company may have recourse to insurance or third-party contractual indemnities to cover all or portions of its litigation expenses, judgments, or settlements. Loss estimates and accruals for potential liability related to legal proceedings are typically exclusive of potential recoveries, if any, under the Company's insurance policies or third-party indemnities.
As of September 30, 2023, there were no material developments in any of the legal proceedings disclosed in the Company's 2022 Form 10-K, except as described in the Company's March 31, 2023 Quarterly Report on Form 10-Q, and there were no new material legal proceedings during the three months ended September 30, 2023.
13. Recently Issued Accounting Standards:
Recently issued accounting standards not yet adopted:
The Company does not expect that any recently issued accounting pronouncements will have a material effect on its Consolidated Financial Statements.
28

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
All references in this Quarterly Report on Form 10-Q (this "Quarterly Report") to "PRA Group," "we," "our," "us," "the Company" or similar terms are to PRA Group, Inc. and its subsidiaries.
Forward-Looking Statements:
This Quarterly Report contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical fact are forward-looking statements, including statements regarding overall cash collection trends, operating cost trends, liquidity and capital needs and other statements of expectations, beliefs, future plans, strategies and anticipated events or trends. Our results could differ materially from those expressed or implied by such forward-looking statements, or our forward-looking statements could be wrong, as a result of risks, uncertainties and assumptions, including the following:
•a deterioration in the economic or inflationary environment in the markets in which we operate;
•our inability to replace our portfolios of nonperforming loans with additional portfolios sufficient to operate efficiently and profitably and/or purchase nonperforming loans at appropriate prices;
•our inability to collect sufficient amounts on our nonperforming loans to fund our operations, including as a result of restrictions imposed by local, state, federal and international laws and regulations;
•changes in accounting standards and their interpretations;
•the recognition of significant decreases in our estimate of future recoveries on nonperforming loans;
•the impact of a disease outbreak, such as the COVID-19 pandemic, on the markets in which we operate and our inability to successfully manage the challenges associated with a disease outbreak, including epidemics, pandemics or similar widespread public health concerns;
•the occurrence of goodwill impairment charges;
•loss contingency accruals that are inadequate to cover actual losses;
•our inability to manage risks associated with our international operations;
•changes in local, state, federal or international laws or the interpretation of these laws, including tax, bankruptcy and collection laws;
•changes in the administrative practices of various bankruptcy courts;
•our inability to comply with existing and new regulations of the collection industry;
•investigations, reviews, or enforcement actions by governmental authorities, including the Consumer Financial Protection Bureau ("CFPB");
•our inability to comply with data privacy regulations such as the General Data Protection Regulation ("GDPR");
•adverse outcomes in pending litigation or administrative proceedings;
•our inability to retain, expand, renegotiate or replace our credit facilities and our inability to comply with the covenants under our financing arrangements;
•our inability to manage effectively our capital and liquidity needs, including as a result of changes in credit or capital markets;
•changes in interest or exchange rates;
•default by or failure of one or more of our counterparty financial institutions;
•disruptions of business operations caused by cybersecurity incidents or the underperformance or failure of information technology infrastructure, networks or communication systems; and
•the "Risk Factors" in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022 ("2022 Form 10-K") and in other filings with the Securities and Exchange Commission.
You should assume that the information appearing in this Quarterly Report is accurate only as of the date it was issued. Our business, financial condition, results of operations and prospects may have changed since that date. Except as required by law, we assume no obligation to publicly update or revise our forward-looking statements after the date of this Quarterly Report and you should not expect us to do so.
29

Frequently Used Terms
We may use the following terminology throughout this Quarterly Report:
•"Buybacks" refers to purchase price refunded by the seller due to the return of ineligible accounts.
•"Cash collections" refers to collections on our nonperforming loan portfolios.
•"Cash receipts" refers to cash collections on our nonperforming loan portfolios, fees and revenue recognized from our class action claims recovery service.
•"Change in expected recoveries" refers to the differences of actual recoveries received when compared to expected recoveries and the net present value of changes in estimated remaining collections.
•"Core" accounts or portfolios refer to accounts or portfolios that are nonperforming loans and are not in an insolvent status upon acquisition. These accounts are aggregated separately from insolvency accounts.
•"Estimated remaining collections" or "ERC" refers to the sum of all future projected cash collections on our nonperforming loan portfolios.
•"Finance receivables" or "receivables" refers to the negative allowance for expected recoveries recorded on our balance sheet as an asset.
•"Insolvency" accounts or portfolios refer to accounts or portfolios of nonperforming loans that are in an insolvent status when we purchase them and, as such, are purchased as a pool of insolvent accounts. These accounts include IVAs, Trust Deeds in the UK, Consumer Proposals in Canada and bankruptcy accounts in the U.S., Canada, Germany and the UK.
•"Negative allowance" refers to the present value of cash flows expected to be collected on our finance receivables.
•"Portfolio acquisitions" refers to all nonperforming loan portfolios added as a result of a purchase, but also includes portfolios added as a result of a business acquisition.
•"Portfolio purchases" refers to all nonperforming loan portfolios purchased in the normal course of business and excludes those added as a result of business acquisitions.
•"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.
•"Purchase price" refers to the cash paid to a seller to acquire nonperforming loans.
•"Purchase price multiple" refers to the total estimated collections (as defined below) on our nonperforming loan portfolios divided by purchase price.
•"Recoveries" refers to cash collections plus buybacks and other adjustments.
•"Total estimated collections" or "TEC" refers to actual cash collections plus estimated remaining collections on our nonperforming loan portfolios.
30

Overview
We are a global financial and business 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 are headquartered in Norfolk, Virginia, and as of September 30, 2023, emplo yed 3,134 full-tim e equivalents. Our shares of common stock are traded on the NASDAQ Global Select Market under the symbol "PRAA".
Executive Overview
For the three months ended September 30, 2023, we had:
•Total portfolio purchases of $311.2 million.
•Total cash collections of $419.6 million.
•Cash efficiency ratio of 58.9%.
•Diluted earnings per share of $(0.31).
For the nine months ended September 30, 2023, we had:
•Total portfolio purchases of $869.2 million.
•Total cash collections of $1,250.2 million.
•Cash efficiency ratio of 58.2%.
•Diluted earnings per share of $(1.91).
As of September 30, 2023, we had estimated remaining collections of $6.0 billion.
We believe our cash forecast curves are appropriate given the information we have as of the date of this Quarterly Report. However, we continue to operate in an economic environment that includes elevated levels of inflation, rising interest rates, foreign exchange rate fluctuations, and concerns of a global recession. Given the continued weak economic conditions, we have experienced near-term pressure on cash collections in certain markets. Note that factors that can cause near-term collections pressure are also typically the same factors that historically have led to more portfolio supply, as consumers struggle to manage and pay down their debt. Volumes and pricing in the U.S. market are improving, and we increased our U.S. investment level for the fourth consecutive quarter. While the European market continues to be competitive, our European business continues to capitalize on stable investment volumes. We cannot predict the full extent to which these items will impact our business, results of operations and financial condition.
31

Results of Operations
The results of operations include the financial results of the Company and all of our subsidiarie s. Certain prior year amounts have been reclassified for consistency with the current year presentation. The following t able sets forth our Consolidated Income Statement amounts as a percentage of Total revenues for the periods indicated (dollars in thousands):

| For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Portfolio income | $ | 189,960 |  |  | 87.8 | % |  | $ | 185,853 |  |  | 75.9 | % |  | $ | 562,492 |  |  | 96.8 | % |  | $ | 587,394 |  |  | 79.0 | %
Changes in expected recoveries | 22,156 |  |  | 10.2 |  |  | 48,336 |  |  | 19.8 |  |  | 6,380 |  |  | 1.1 |  |  | 134,817 |  |  | 18.1 |
Total portfolio revenue | 212,116 |  |  | 98.0 |  |  | 234,189 |  |  | 95.7 |  |  | 568,872 |  |  | 97.9 |  |  | 722,211 |  |  | 97.1 |
Other revenue | 4,314 |  |  | 2.0 |  |  | 10,618 |  |  | 4.3 |  |  | 12,264 |  |  | 2.1 |  |  | 21,463 |  |  | 2.9 |
Total revenues | 216,430 |  |  | 100.0 |  |  | 244,807 |  |  | 100.0 |  |  | 581,136 |  |  | 100.0 |  |  | 743,674 |  |  | 100.0 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Compensation and employee services | 69,517 |  |  | 32.1 |  |  | 70,382 |  |  | 28.8 |  |  | 217,708 |  |  | 37.5 |  |  | 215,615 |  |  | 29.0 |
Legal collection fees | 9,839 |  |  | 4.5 |  |  | 8,963 |  |  | 3.7 |  |  | 28,228 |  |  | 4.9 |  |  | 29,390 |  |  | 4.0 |
Legal collection costs | 20,761 |  |  | 9.6 |  |  | 23,391 |  |  | 9.5 |  |  | 66,228 |  |  | 11.4 |  |  | 57,694 |  |  | 7.8 |
Agency fees | 19,436 |  |  | 9.0 |  |  | 15,160 |  |  | 6.2 |  |  | 54,491 |  |  | 9.4 |  |  | 47,374 |  |  | 6.4 |
Outside fees and services | 18,858 |  |  | 8.7 |  |  | 24,618 |  |  | 10.0 |  |  | 62,064 |  |  | 10.7 |  |  | 71,489 |  |  | 9.6 |
Communication | 9,881 |  |  | 4.6 |  |  | 9,951 |  |  | 4.1 |  |  | 30,525 |  |  | 5.3 |  |  | 32,062 |  |  | 4.3 |
Rent and occupancy | 4,426 |  |  | 2.0 |  |  | 4,669 |  |  | 1.9 |  |  | 13,193 |  |  | 2.3 |  |  | 14,289 |  |  | 1.9 |
Depreciation and amortization | 3,273 |  |  | 1.5 |  |  | 3,741 |  |  | 1.5 |  |  | 10,344 |  |  | 1.8 |  |  | 11,384 |  |  | 1.5 |
Impairment of real estate | 5,037 |  |  | 2.3 |  |  | — |  |  | — |  |  | 5,037 |  |  | 0.9 |  |  | — |  |  | — |
Other operating expenses | 12,356 |  |  | 5.7 |  |  | 13,144 |  |  | 5.4 |  |  | 38,355 |  |  | 6.6 |  |  | 37,885 |  |  | 5.1 |
Total operating expenses | 173,384 |  |  | 80.0 |  |  | 174,019 |  |  | 71.1 |  |  | 526,173 |  |  | 90.8 |  |  | 517,182 |  |  | 69.6 |
Income from operations | 43,046 |  |  | 20.0 |  |  | 70,788 |  |  | 28.9 |  |  | 54,963 |  |  | 9.2 |  |  | 226,492 |  |  | 30.4 |
Other income and (expense): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest expense, net | (49,473) |  |  | (22.9) |  |  | (32,455) |  |  | (13.3) |  |  | (130,778) |  |  | (22.5) |  |  | (95,765) |  |  | (12.9) |
Foreign exchange gain, net | 564 |  |  | 0.3 |  |  | 4 |  |  | — |  |  | 984 |  |  | 0.2 |  |  | 791 |  |  | 0.1 |
Other | (500) |  |  | (0.2) |  |  | (83) |  |  | — |  |  | (1,380) |  |  | (0.2) |  |  | (754) |  |  | (0.1) |
Income/(loss) before income taxes | (6,363) |  |  | (2.8) |  |  | 38,254 |  |  | 15.6 |  |  | (76,211) |  |  | (13.3) |  |  | 130,764 |  |  | 17.5 |
Income tax expense/(benefit) | 1,788 |  |  | 0.8 |  |  | 11,072 |  |  | 4.5 |  |  | (15,317) |  |  | (2.6) |  |  | 29,828 |  |  | 3.9 |
Net income/(loss) | (8,151) |  |  | (3.6) |  |  | 27,182 |  |  | 11.1 |  |  | (60,894) |  |  | (10.7) |  |  | 100,936 |  |  | 13.6 |
Adjustment for net income/(loss) attributable to noncontrolling interests | 4,111 |  |  | 1.9 |  |  | 2,450 |  |  | 1.0 |  |  | 13,801 |  |  | 2.4 |  |  | (252) |  |  | — |
Net income/(loss) attributable to PRA Group, Inc. | $ | (12,262) |  |  | (5.5) | % |  | $ | 24,732 |  |  | 10.1 | % |  | $ | (74,695) |  |  | (13.1) | % |  | $ | 101,188 |  |  | 13.6 | %

32

Three Months Ended September 30, 2023 Compared To Three Months Ended September 30, 2022
Cash Collections
Cash collections for the periods indicated were as follows (amounts in thousands):

| For the Three Months Ended September 30, |  |  |
| 2023 |  | 2022 |  | $ Change |  | % Change |  |  |
Americas and Australia Core | $ | 223,714 |  |  | $ | 225,775 |  |  | $ | (2,061) |  |  | (0.9) | % |  |  |
Americas Insolvency | 27,809 |  |  | 31,911 |  |  | (4,102) |  |  | (12.9) |  |  |  |
Europe Core | 144,402 |  |  | 132,072 |  |  | 12,330 |  |  | 9.3 |  |  |  |
Europe Insolvency | 23,639 |  |  | 22,586 |  |  | 1,053 |  |  | 4.7 |  |  |  |
Total cash collections | $ | 419,564 |  |  | $ | 412,344 |  |  | $ | 7,220 |  |  | 1.8 | % |  |  |
Cash collections adjusted (1) | $ | 419,564 |  |  | $ | 424,119 |  |  | $ | (4,555) |  |  | (1.1) | % |  |  |

(1) Cash collections adjusted refers to 2022 foreign currency cash collections remeasured at 2023 average U.S. dollar exchange rates.
Cash collections were $419.6 million for the three months ended September 30, 2023, an increase of $7.3 million, or 1.8%, compared to $412.3 million for the three months ended September 30, 2022. The increase was primarily due to higher cash collections of $20.9 million, or 87.8%, in Brazil, and higher cash collections of $13.4 million, or 8.7%, in Europe, both driven by higher levels of purchasing in recent years. These increases were partially offset by lower cash collections of $16.9 million, or 14.0%, in U.S. call center and other collections, and lower cash collections of $4.1 million, or 12.9%, in Americas Insolvency cash collections, both largely due to lower purchasing levels in recent years. U.S. legal cash collections decreased $6.1 million, or 8.5%, reflecting lower volumes of accounts placed in the legal channel due to lower purchasing levels in recent years.
Revenues
Revenue generation for the periods indicated was as follows (amounts in thousands):

| For the Three Months Ended September 30,
| 2023 |  | 2022 |  | $ Change |  | % Change
Portfolio income | $ | 189,960 |  |  | $ | 185,853 |  |  | $ | 4,107 |  |  | 2.2 | %
Changes in expected recoveries | 22,156 |  |  | 48,336 |  |  | (26,180) |  |  | (54.2) |
Total portfolio revenue | 212,116 |  |  | 234,189 |  |  | (22,073) |  |  | (9.4) |
Other revenue | 4,314 |  |  | 10,618 |  |  | (6,304) |  |  | (59.4) |
Total revenues | $ | 216,430 |  |  | $ | 244,807 |  |  | $ | (28,377) |  |  | (11.6) | %

Total Portfolio Revenue
Total portfolio revenue was $212.1 million for the three months ended September 30, 2023, a decrease of $22.1 million, or 9.4%, compared to $234.2 million for the three months ended September 30, 2022. The decrease was largely driven by lower levels of cash overperformance and an increase to the ERC of certain older pools during the three months ended September 30, 2022, that did not recur during the three months ended September 30, 2023, partially offset by higher revenue from the impact of increased purchasing in South America and Europe.
Other Revenue
Other revenue was $4.3 million for the three months ended September 30, 2023, a decrease of $6.3 million, or 59.4%, compared to $10.6 million for the three months ended September 30, 2022. The decrease was primarily due to the timing of settlements in our claims processing company, Claims Compensation Bureau, LLC ("CCB").
Operating Expenses
Total operating expenses were $173.4 million for the three months ended September 30, 2023, a decrease of $0.6 million, or 0.4%, compared to $174.0 million for the three months ended September 30, 2022.
33

Legal Collection Costs
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. These costs were $20.8 million for the three months ended September 30, 2023, a decrease of $2.6 million, or 11.1%, compared to $23.4 million for the three months ended September 30, 2022. The decrease was primarily due to lower volumes of accounts placed in the legal channel in the U.S. compared to the three months ended September 30, 2022.
Agency Fees
Agency fees were $19.4 million for the three months ended September 30, 2023, an increase of $4.2 million, or 27.6%, compared to $15.2 million for the three months ended September 30, 2022. The increase was primarily due to the increase in cash collections in Brazil.
Outside Fees and Services
Outside fees and services expenses were $18.9 million for the three months ended September 30, 2023, a decrease of $5.7 million, or 23.2%, compared to $24.6 million for the three months ended September 30, 2022. The decrease was primarily due to higher corporate legal fees during the three months ended September 30, 2022.
Impairment of Real Estate
Impairment of real estate was $5.0 million for the three months ended September 30, 2023, due to an impairment charge associated with our decision to cease call center operations at one of our owned regional offices in the U.S. No impairment was recorded for the three months ended September 30, 2022. The property is being marketed for sale or lease.
Interest Expense, Net
Interest expense, net was $49.5 million for the three months ended September 30, 2023, an increase of $17.0 million, or 52.4%, compared to $32.5 million for the three months ended September 30, 2022, primarily reflecting a higher average debt balance and higher interest rates.
Interest expense, net consisted of the following (amounts in thousands):

| For the Three Months Ended September 30,
| 2023 |  | 2022 |  | $ Change |  | % Change
Interest on debt obligations and unused line fees | $ | 31,161 |  |  | $ | 17,635 |  |  | $ | 13,526 |  |  | 76.7 | %
Interest on senior notes | 18,433 |  |  | 9,906 |  |  | 8,527 |  |  | 86.1 |
Coupon interest on convertible notes | — |  |  | 3,019 |  |  | (3,019) |  |  | (100.0) |
Amortization of loan fees and other loan costs | 2,220 |  |  | 2,555 |  |  | (335) |  |  | (13.1) |
Interest income | (2,341) |  |  | (660) |  |  | (1,681) |  |  | 254.7 |
Interest expense, net | $ | 49,473 |  |  | $ | 32,455 |  |  | $ | 17,018 |  |  | 52.4 | %

Income Tax Expense/(Benefit)
Income tax expense was $1.8 million for the three months ended September 30, 2023, a decrease of $9.3 million, or 83.8%, compared to $11.1 million for the three months ended September 30, 2022. We recorded income tax expense for the period despite incurring a quarterly pre-tax loss due to changes in our projected mix of income from different taxing jurisdictions. Tax expense was recorded during the period to reflect an estimated annual effective tax benefit rate. The decrease in income tax expense was primarily due to lower income before taxes during 2023 when compared to 2022. During the three months ended September 30, 2023, our effective tax benefit rate was 28.1%, compared to an effective tax rate of 28.9% for the three months ended September 30, 2022. The decrease in our effective tax rate was primarily due to changes in the mix of income from different taxing jurisdictions.
34

Nine Months Ended September 30, 2023 Compared To Nine Months Ended September 30, 2022
Cash Collections
Cash collections for the periods indicated were as follows (amounts in thousands):

| For the Nine Months Ended September 30,
| 2023 |  | 2022 |  | $ Change |  | % Change
Americas and Australia Core | $ | 672,560 |  |  | $ | 740,436 |  |  | $ | (67,876) |  |  | (9.2) | %
Americas Insolvency | 79,944 |  |  | 101,398 |  |  | (21,454) |  |  | (21.2) |
Europe Core | 427,731 |  |  | 425,704 |  |  | 2,027 |  |  | 0.5 |
Europe Insolvency | 69,932 |  |  | 69,846 |  |  | 86 |  |  | 0.1 |
Total cash collections | $ | 1,250,167 |  |  | $ | 1,337,384 |  |  | $ | (87,217) |  |  | (6.5) |
Cash collections adjusted (1) | $ | 1,250,167 |  |  | $ | 1,331,098 |  |  | $ | (80,931) |  |  | (6.1) | %

(1) Cash collections adjusted refers to 2022 foreign currency cash collections remeasured at 2023 U.S. dollar exchange rates.
Cash collections were $1,250.2 million for the nine months ended September 30, 2023, a decrease of $87.2 million, or 6.5%, compared to $1,337.4 million for the nine months ended September 30, 2022. The decrease was primarily due to a decline of $98.7 million, or 23.5%, in U.S. call center and other cash collections, and lower cash collections of $21.4 million, or 21.2%, in Americas Insolvency collections, both largely due to lower purchasing levels in recent years. U.S. legal cash collections decreased $28.5 million, or 12.6%, reflecting lower volumes of accounts placed in the legal channel due to lower purchasing levels in recent years. These decreases were partially offset by higher cash collections in South America of $59.6 million, or 83.6%, due mainly to higher recent purchases.
Revenues
Revenue generation for the periods indicated was as follows (amounts in thousands):

| For the Nine Months Ended September 30,
| 2023 |  | 2022 |  | $ Change |  | % Change
Portfolio income | $ | 562,492 |  |  | $ | 587,394 |  |  | $ | (24,902) |  |  | (4.2) | %
Changes in expected recoveries | 6,380 |  |  | 134,817 |  |  | (128,437) |  |  | (95.3) |
Total portfolio revenue | 568,872 |  |  | 722,211 |  |  | (153,339) |  |  | (21.2) |
Other revenue | 12,264 |  |  | 21,463 |  |  | (9,199) |  |  | (42.9) |
Total revenues | $ | 581,136 |  |  | $ | 743,674 |  |  | $ | (162,538) |  |  | (21.9) | %

Total Portfolio Revenue
Total portfolio revenue was $568.9 million for the nine months ended September 30, 2023, a decrease of $153.3 million, or 21.2%, compared to $722.2 million for the nine months ended September 30, 2022. The decrease was largely driven by lower purchasing, lower levels of cash overperformance and an increase to the ERC of certain pools during the nine months ended September 30, 2022, that did not recur during the nine months ended September 30, 2023. Additionally, and primarily impacting the first quarter of 2023, we experienced a softer tax season than we had anticipated, with U.S. collections lower than our expectations, which then prompted a reduction in ERC. This resulted in a negative $25.6 million net present value adjustment for our U.S. Core portfolio, with more than half of this adjustment related to the 2021 U.S. Core vintage.
Other revenue
Other revenue was $12.3 million for the nine months ended September 30, 2023, a decrease of $9.2 million, or 42.9%, compared to $21.5 million for the nine months ended September 30, 2022. The decrease was primarily due to the timing of settlements in CCB.
35

Operating Expenses
Operating expenses were $526.2 million for the nine months ended September 30, 2023, an increase of $9.0 million, or 1.7%, compared to $517.2 million for the nine months ended September 30, 2022.
Compensation and Employee Services
Compensation and employee services expenses were $217.7 million for the nine months ended September 30, 2023, an increase of $2.1 million, or 1.0%, compared to $215.6 million for the nine months ended September 30, 2022. The increase mainly reflects higher severance expenses of $8.6 million, partially offset by decreases in temporary labor and healthcare and other benefit expenses.
Legal Collection Costs
Legal collection costs were $66.2 million for the nine months ended September 30, 2023, an increase of $8.5 million, or 14.7%, compared to $57.7 million for the nine months ended September 30, 2022. The increase primarily reflects higher volumes of accounts placed in the legal channel in the U.S.
Agency Fees
Agency fees were $54.5 million for the nine months ended September 30, 2023, an increase of $7.1 million, or 15.0%, compared to $47.4 million for the nine months ended September 30, 2022. The increase was primarily due to the increase in cash collections in Brazil.
Outside Fees and Services
Outside fees and services expenses were $62.1 million for the nine months ended September 30, 2023, a decrease of $9.4 million, or 13.1%, compared to $71.5 million for the nine months ended September 30, 2022. The decrease reflects lower corporate legal costs and consulting fees.
Impairment of Real Estate
Impairment of real estate was $5.0 million for the nine months ended September 30, 2023, due to an impairment charge associated with our decision to cease call center operations at one of our owned regional offices in the U.S. No impairment was recorded for the nine months ended September 30, 2022. The property is being marketed for sale or lease.
Interest Expense, Net
Interest expense, net was $130.8 million for the nine months ended September 30, 2023, an increase of $35.0 million, or 36.6%, compared to $95.8 million for the nine months ended September 30, 2022, primarily reflecting a higher average debt balance and increased interest rates. Interest income increased $9.3 million primarily due to the cash we received and invested from the issuance of our Senior Notes due 2028 ("2028 Notes"), in the first quarter of 2023, substantially all of the net proceeds of which we used to retire our Convertible Senior Notes due 2023 ("2023 Notes") in the second quarter of 2023, in addition to higher interest rates earned on our bank account balances.
Interest expense, net consisted of the following (amounts in thousands):

| For the Nine Months Ended September 30,
| 2023 |  | 2022 |  | $ Change |  | % Change
Interest on debt obligations and unused line fees | $ | 78,139 |  |  | $ | 51,150 |  |  | $ | 26,989 |  |  | 52.8 | %
Interest on senior notes | 51,672 |  |  | 29,719 |  |  | 21,953 |  |  | 73.9 |
Coupon interest on convertible notes | 5,031 |  |  | 9,057 |  |  | (4,026) |  |  | (44.5) |
Amortization of loan fees and other loan costs | 7,045 |  |  | 7,653 |  |  | (608) |  |  | (7.9) |
Interest income | (11,109) |  |  | (1,814) |  |  | (9,295) |  |  | 512.4 |
Interest expense, net | $ | 130,778 |  |  | $ | 95,765 |  |  | $ | 35,013 |  |  | 36.6 | %

Income Tax Expense/(Benefit)
Income tax benefit was $15.3 million for the nine months ended September 30, 2023, a decrease of $45.1 million, or 151.2%, compared to income tax expense of $29.8 million for the nine months ended September 30, 2022. The decrease in income tax expense was primarily due to lower income before taxes during the nine months ended September 30, 2023, which
36

decreased $207.0 million, or 158.3%. During the nine months ended September 30, 2023, our effective tax benefit rate was 20.1%, compared to an effective tax rate of 22.8% for the nine months ended September 30, 2022. The decrease in our effective tax rate was mainly due to the timing of discrete items and changes in the mix of income from different taxing jurisdictions.
37

Supplemental Performance Data
Finance Receivables Portfolio Performance
We purchase portfolios of nonperforming loans from a variety of credit originators or acquire portfolios through business acquisitions and segregate them into two main portfolio segments; Core or Insolvency, based on the status of the account upon acquisition. In addition, the accounts are segregated into geographical regions based upon where the account was acquired. Ultimately, accounts are aggregated into annual pools based on portfolio segment, geography, and year of acquisition. Portfolios of accounts that were in an insolvency status at the time of acquisition are represented in the Insolvency tables below. All other acquisitions of portfolios of accounts are included in our Core portfolio tables as represented below. Once an account is initially segregated, it is not later transferred from an Insolvency pool to a Core pool or vice versa, and the account continues to be accounted for as originally segregated regardless of any future changes in operational status. Specifically, if a Core account files for bankruptcy or insolvency protection after acquisition, we adjust our collection practices to comply with any respective bankruptcy or insolvency rules or policies; however, the account remains in the Core pool. In the event an insolvency account is dismissed from its bankruptcy or insolvency status whether voluntarily or involuntarily, we are typically free to pursue alternative collection activities; however, the account remains in the Insolvency pool.
The purchase price multiple represents our estimate of total cash collections over the original purchase price of the portfolio. Purchase price multiples can vary over time due to a variety of factors, including pricing competition, supply levels, paper type, age of the accounts acquired, mix of portfolios purchased, costs to collect, expected returns and changes in operational efficiency. For example, increased pricing due to elevated levels of competition or supply constraints negatively impacts purchase price multiples as we pay more to buy similar portfolios of nonperforming loans.
Further, there is a direct relationship between the price we pay for a portfolio, the purchase price multiple and the effective interest rate of the pool. When we pay more for a portfolio, the purchase price multiple and effective interest rates are generally lower. The opposite tends to occur when we pay less for a portfolio. Certain types of accounts have lower collection costs, and we generally pay more for these types of accounts, resulting in a lower purchase price multiple, while realizing similar net income margins when compared with other portfolio purchases. Within a given portfolio type, to the extent that lower purchase price multiples are the result of more competitive pricing, this will generally lead to lower profitability. As portfolio pricing becomes more favorable on a relative basis, our profitability will tend to increase. Profitability within given Core portfolio types may also be impacted by the age and quality of the accounts, which impact the cost to collect those accounts. Fresher accounts, for example, typically carry lower associated collection costs, while older accounts and lower balance accounts typically carry higher costs and, as a result, require higher purchase price multiples to achieve the same net profitability as fresher paper.
Revenue recognition is driven by estimates of the amount and timing of future cash collections. We record new portfolio acquisitions at the purchase price, which reflects the amount we expect to collect discounted at an effective interest rate. During the year of acquisition, portfolios are aggregated into annual pools, and the blended effective interest rate will change to reflect new buying and new cash flow estimates until the end of the year. At that time, the purchase price amount is fixed at the aggregated amounts paid to acquire the portfolio, the effective interest rate is fixed at the amount we expect to collect, discounted at the rate to equate purchase price to the recovery estimate, and the currency rates are fixed for purposes of comparability in future periods. Depending on the level of performance and expected future impacts from our operations, we may update ERC and TEC levels based on the results of our cash forecasting with the correlating adjustment to the purchase price multiple. We follow an established process to evaluate ERC. During the first year following purchase, we typically do not adjust our purchase price multiples. Following the initial years, as we gain collection experience and confidence with a pool of accounts, we may begin to adjust ERC and TEC. Over time, our TEC has often increased as pools have aged resulting in the ratio of TEC to purchase price for any given year of buying to gradually increase. Thus, all factors being equal in terms of pricing, one would typically tend to see a higher collection to purchase price ratio from a pool of accounts that was six years from acquisition than a pool that was just two years from acquisition.
The numbers presented in the following tables represent gross cash collections and do not reflect any costs to collect; therefore, they may not represent relative profitability. Due to all of the factors described above, readers should be cautious when making comparisons of purchase price multiples among periods and between types of categories of portfolio segments and related geographies.
38

Purchase Price Multiples as of September 30, 2023 Amounts in thousands
Purchase Period | Purchase Price (2)(3) |  |  | Total Estimated Collections (4) | Estimated Remaining Collections (5) | Current Purchase Price Multiple | Original Purchase Price Multiple (6)
Americas and Australia Core |  |  |  |  |  |
1996-2012 | $ | 1,541,896 |  |  |  | $ | 4,803,591 |  | $ | 34,002 |  | 312% | 238%
2013 | 390,826 |  |  |  | 912,127 |  | 15,613 |  | 233% | 211%
2014 | 404,117 |  |  |  | 878,252 |  | 23,547 |  | 217% | 204%
2015 | 443,114 |  |  |  | 898,799 |  | 37,991 |  | 203% | 205%
2016 | 455,767 |  |  |  | 1,075,382 |  | 68,523 |  | 236% | 201%
2017 | 532,851 |  |  |  | 1,196,883 |  | 110,646 |  | 225% | 193%
2018 | 653,975 |  |  |  | 1,463,965 |  | 153,173 |  | 224% | 202%
2019 | 581,476 |  |  |  | 1,291,978 |  | 200,551 |  | 222% | 206%
2020 | 435,668 |  |  |  | 947,163 |  | 236,196 |  | 217% | 213%
2021 | 435,846 |  |  |  | 774,075 |  | 412,428 |  | 178% | 191%
2022 | 406,082 |  |  |  | 709,920 |  | 502,071 |  | 175% | 179%
2023 | 475,470 |  |  |  | 902,639 |  | 846,139 |  | 190% | 190%
Subtotal | 6,757,088 |  |  |  | 15,854,774 |  | 2,640,880 |  |  |
Americas Insolvency |  |  |  |  |  |
1996-2012 | 1,038,223 |  |  |  | 2,146,670 |  | 96 |  | 207% | 165%
2013 | 227,834 |  |  |  | 355,733 |  | 45 |  | 156% | 133%
2014 | 148,420 |  |  |  | 218,770 |  | 139 |  | 147% | 124%
2015 | 63,170 |  |  |  | 87,980 |  | 103 |  | 139% | 125%
2016 | 91,442 |  |  |  | 117,770 |  | 270 |  | 129% | 123%
2017 | 275,257 |  |  |  | 356,365 |  | 1,423 |  | 129% | 125%
2018 | 97,879 |  |  |  | 136,160 |  | 4,288 |  | 139% | 127%
2019 | 123,077 |  |  |  | 168,922 |  | 24,524 |  | 137% | 128%
2020 | 62,130 |  |  |  | 90,853 |  | 32,652 |  | 146% | 136%
2021 | 55,187 |  |  |  | 73,780 |  | 37,820 |  | 134% | 136%
2022 | 33,442 |  |  |  | 46,734 |  | 36,834 |  | 140% | 139%
2023 | 71,953 |  |  |  | 100,452 |  | 95,705 |  | 140% | 140%
Subtotal | 2,288,014 |  |  |  | 3,900,189 |  | 233,899 |  |  |
Total Americas and Australia | 9,045,102 |  |  |  | 19,754,963 |  | 2,874,779 |  |  |
Europe Core |  |  |  |  |  |  |
2012 | 20,409 |  |  |  | 44,413 |  | — |  | 218% | 187%
2013 | 20,334 |  |  |  | 27,260 |  | 1 |  | 134% | 119%
2014 (1) | 773,811 |  |  |  | 2,408,574 |  | 354,169 |  | 311% | 208%
2015 | 411,340 |  |  |  | 743,660 |  | 141,522 |  | 181% | 160%
2016 | 333,090 |  |  |  | 573,894 |  | 167,256 |  | 172% | 167%
2017 | 252,174 |  |  |  | 362,855 |  | 107,001 |  | 144% | 144%
2018 | 341,775 |  |  |  | 547,194 |  | 197,447 |  | 160% | 148%
2019 | 518,610 |  |  |  | 822,604 |  | 338,588 |  | 159% | 152%
2020 | 324,119 |  |  |  | 558,705 |  | 259,639 |  | 172% | 172%
2021 | 412,411 |  |  |  | 694,192 |  | 423,855 |  | 168% | 170%
2022 | 359,447 |  |  |  | 580,738 |  | 477,450 |  | 162% | 162%
2023 | 281,356 |  |  |  | 457,931 |  | 429,428 |  | 163% | 163%
Subtotal | 4,048,876 |  |  |  | 7,822,020 |  | 2,896,356 |  |  |
Europe Insolvency |  |  |  |  |  |
2014 (1) | 10,876 |  |  |  | 18,809 |  | — |  | 173% | 129%
2015 | 18,973 |  |  |  | 29,255 |  | 53 |  | 154% | 139%
2016 | 39,338 |  |  |  | 57,698 |  | 1,123 |  | 147% | 130%
2017 | 39,235 |  |  |  | 51,677 |  | 2,172 |  | 132% | 128%
2018 | 44,908 |  |  |  | 52,473 |  | 5,713 |  | 117% | 123%
2019 | 77,218 |  |  |  | 112,312 |  | 23,758 |  | 145% | 130%
2020 | 105,440 |  |  |  | 156,926 |  | 47,485 |  | 149% | 129%
2021 | 53,230 |  |  |  | 71,526 |  | 34,563 |  | 134% | 134%
2022 | 44,604 |  |  |  | 60,714 |  | 47,585 |  | 136% | 137%
2023 | 32,217 |  |  |  | 43,946 |  | 42,049 |  | 136% | 136%
Subtotal | 466,039 |  |  |  | 655,336 |  | 204,501 |  |  |
Total Europe | 4,514,915 |  |  |  | 8,477,356 |  | 3,100,857 |  |  |
Total PRA Group | $ | 13,560,017 |  |  |  | $ | 28,232,319 |  | $ | 5,975,636 |  |  |

(1) Includes finance receivables portfolios that were acquired through the acquisition of Aktiv Kapital AS in 2014 (as described in our 2022 Form 10-K).
(2)Includes the acquisition date finance receivables portfolios that were acquired through our business acquisitions.
(3)Non-U.S. amounts are presented at the exchange rate at the end of the year in which the portfolio was purchased. In addition, any purchase price adjustments that occur throughout the life of the portfolio are presented at the year-end exchange rate for the respective year of purchase.
(4)Non-U.S. amounts are presented at the year-end exchange rate for the respective year of purchase.
(5)Non-U.S. amounts are presented at the September 30, 2023 exchange rate.
(6)The Original Purchase Price Multiple represents the purchase price multiple at the end of the year of acquisition.
39

Portfolio Financial Information Year-to-date as of September 30, 2023 Amounts in thousands
Purchase Period | Cash Collections (2) | Portfolio Income (2) | Changes in Expected Recoveries (2) | Total Portfolio Revenue (2) | Net Finance Receivables as of September 30, 2023 (3)
Americas and Australia Core |  |  |  |  |
1996-2012 | $ | 13,706 |  | $ | 8,270 |  | $ | 3,589 |  | $ | 11,859 |  | $ | 8,404 |
2013 | 7,709 |  | 3,013 |  | 3,849 |  | 6,862 |  | 6,588 |
2014 | 8,933 |  | 3,839 |  | 3,743 |  | 7,583 |  | 9,136 |
2015 | 10,697 |  | 6,477 |  | (1,262) |  | 5,216 |  | 15,758 |
2016 | 18,926 |  | 12,877 |  | (2,309) |  | 10,568 |  | 22,995 |
2017 | 34,496 |  | 19,670 |  | (6,655) |  | 13,014 |  | 46,567 |
2018 | 73,748 |  | 30,229 |  | 5,437 |  | 35,666 |  | 87,935 |
2019 | 87,979 |  | 39,193 |  | (1,760) |  | 37,433 |  | 109,991 |
2020 | 100,608 |  | 44,087 |  | (4,707) |  | 39,380 |  | 133,793 |
2021 | 108,659 |  | 61,425 |  | (36,553) |  | 24,872 |  | 216,634 |
2022 | 150,050 |  | 74,546 |  | (3,079) |  | 71,467 |  | 306,568 |
2023 | 57,049 |  | 37,347 |  | 5,898 |  | 43,243 |  | 461,243 |
Subtotal | 672,560 |  | 340,973 |  | (33,809) |  | 307,163 |  | 1,425,612 |
Americas Insolvency |  |  |  |  |
1996-2012 | 576 |  | 189 |  | 390 |  | 579 |  | — |
2013 | 252 |  | 97 |  | 156 |  | 253 |  | — |
2014 | 349 |  | 207 |  | 96 |  | 304 |  | — |
2015 | 266 |  | 90 |  | 91 |  | 182 |  | 54 |
2016 | 662 |  | 105 |  | 312 |  | 418 |  | 236 |
2017 | 4,075 |  | 380 |  | 1,004 |  | 1,385 |  | 1,279 |
2018 | 10,958 |  | 975 |  | (1,130) |  | (155) |  | 4,091 |
2019 | 22,692 |  | 2,604 |  | 924 |  | 3,529 |  | 23,037 |
2020 | 15,206 |  | 3,326 |  | 1,162 |  | 4,488 |  | 28,574 |
2021 | 13,433 |  | 3,602 |  | 906 |  | 4,508 |  | 31,907 |
2022 | 6,715 |  | 2,936 |  | 645 |  | 3,581 |  | 29,333 |
2023 | 4,760 |  | 2,250 |  | 2,348 |  | 4,596 |  | 71,081 |
Subtotal | 79,944 |  | 16,761 |  | 6,904 |  | 23,668 |  | 189,592 |
Total Americas and Australia | 752,504 |  | 357,734 |  | (26,905) |  | 330,831 |  | 1,615,204 |
Europe Core |  |  |  |  |
2012 | 531 |  | — |  | 531 |  | 531 |  | — |
2013 | 264 |  | — |  | 264 |  | 264 |  | — |
2014 (1) | 81,467 |  | 52,042 |  | 14,172 |  | 66,214 |  | 97,030 |
2015 | 25,924 |  | 12,437 |  | (502) |  | 11,936 |  | 70,420 |
2016 | 22,350 |  | 11,777 |  | (1,094) |  | 10,682 |  | 96,465 |
2017 | 15,398 |  | 5,698 |  | 707 |  | 6,405 |  | 73,062 |
2018 | 31,748 |  | 11,528 |  | 3,374 |  | 14,902 |  | 130,556 |
2019 | 57,349 |  | 18,293 |  | 13,923 |  | 32,216 |  | 229,949 |
2020 | 43,153 |  | 16,725 |  | 1,067 |  | 17,793 |  | 160,547 |
2021 | 55,633 |  | 25,087 |  | (6,041) |  | 19,045 |  | 255,955 |
2022 | 64,593 |  | 26,164 |  | (230) |  | 25,934 |  | 299,256 |
2023 | 29,321 |  | 11,082 |  | 202 |  | 11,284 |  | 263,039 |
Subtotal | 427,731 |  | 190,833 |  | 26,373 |  | 217,206 |  | 1,676,279 |
Europe Insolvency |  |  |  |  |
2014 (1) | 172 |  | — |  | 172 |  | 172 |  | — |
2015 | 331 |  | 21 |  | 250 |  | 270 |  | 45 |
2016 | 1,105 |  | 201 |  | 362 |  | 563 |  | 604 |
2017 | 3,279 |  | 216 |  | 648 |  | 865 |  | 1,986 |
2018 | 5,905 |  | 544 |  | (130) |  | 414 |  | 5,195 |
2019 | 13,786 |  | 1,983 |  | 1,309 |  | 3,292 |  | 20,822 |
2020 | 23,164 |  | 3,681 |  | 3,414 |  | 7,095 |  | 42,445 |
2021 | 11,068 |  | 2,777 |  | 302 |  | 3,078 |  | 29,247 |
2022 | 9,171 |  | 3,529 |  | (40) |  | 3,489 |  | 37,199 |
2023 | 1,951 |  | 973 |  | 625 |  | 1,597 |  | 31,778 |
Subtotal | 69,932 |  | 13,925 |  | 6,912 |  | 20,835 |  | 169,321 |
Total Europe | 497,663 |  | 204,758 |  | 33,285 |  | 238,041 |  | 1,845,600 |
Total PRA Group | $ | 1,250,167 |  | $ | 562,492 |  | $ | 6,380 |  | $ | 568,872 |  | $ | 3,460,804 |

(1) Includes finance receivables portfolios that were acquired through the acquisition of Aktiv Kapital AS in 2014 (as described in our 2022 Form 10-K).
(2)Non-U.S. amounts are presented using the average exchange rates during the current reporting period.
(3)Non-U.S. amounts are presented at the September 30, 2023 exchange rate.
40

Cash Collections by Year, By Year of Purchase (1) Year-to-date as of September 30, 2023 Amounts in millions
|  | Cash Collections |
Purchase Period | Purchase Price (3)(4) | 1996-2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | Total |
Americas and Australia Core |  |  |  |  |  |  |  |  |  |  |  |  |
1996-2012 | $ | 1,541.9 |  | $ | 2,962.4 |  | $ | 554.9 |  | $ | 412.5 |  | $ | 280.3 |  | $ | 178.9 |  | $ | 118.1 |  | $ | 83.8 |  | $ | 62.9 |  | $ | 41.5 |  | $ | 29.9 |  | $ | 23.5 |  | $ | 13.7 |  | $ | 4,762.4 |  |
2013 | 390.8 |  | — |  | 101.6 |  | 247.8 |  | 194.0 |  | 120.8 |  | 78.9 |  | 56.4 |  | 36.9 |  | 23.2 |  | 16.7 |  | 12.5 |  | 7.7 |  | 896.5 |  |
2014 | 404.1 |  | — |  | — |  | 92.7 |  | 253.4 |  | 170.3 |  | 114.2 |  | 82.2 |  | 55.3 |  | 31.9 |  | 22.3 |  | 15.0 |  | 8.9 |  | 846.2 |  |
2015 | 443.1 |  | — |  | — |  | — |  | 117.0 |  | 228.4 |  | 185.9 |  | 126.6 |  | 83.6 |  | 57.2 |  | 34.9 |  | 19.5 |  | 10.7 |  | 863.8 |  |
2016 | 455.8 |  | — |  | — |  | — |  | — |  | 138.7 |  | 256.5 |  | 194.6 |  | 140.6 |  | 105.9 |  | 74.2 |  | 38.4 |  | 18.9 |  | 967.8 |  |
2017 | 532.9 |  | — |  | — |  | — |  | — |  | — |  | 107.3 |  | 278.7 |  | 256.5 |  | 192.5 |  | 130.0 |  | 76.3 |  | 34.5 |  | 1,075.8 |  |
2018 | 654.0 |  | — |  | — |  | — |  | — |  | — |  | — |  | 122.7 |  | 361.9 |  | 337.7 |  | 239.9 |  | 146.1 |  | 73.7 |  | 1,282.0 |  |
2019 | 581.5 |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | 143.8 |  | 349.0 |  | 289.8 |  | 177.7 |  | 88.0 |  | 1,048.3 |  |
2020 | 435.7 |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | 132.9 |  | 284.3 |  | 192.0 |  | 100.6 |  | 709.8 |  |
2021 | 435.8 |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | 85.0 |  | 177.3 |  | 108.7 |  | 371.0 |  |
2022 | 406.2 |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | 67.7 |  | 150.0 |  | 217.7 |  |
2023 | 475.5 |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | 56.9 |  | 56.9 |  |
Subtotal | 6,757.3 |  | 2,962.4 |  | 656.5 |  | 753.0 |  | 844.7 |  | 837.1 |  | 860.9 |  | 945.0 |  | 1,141.5 |  | 1,271.8 |  | 1,207.0 |  | 946.0 |  | 672.3 |  | 13,098.2 |  |
Americas Insolvency |  |  |  |  |  |  |  |  |  |  |  |  |
1996-2012 | 1,038.2 |  | 1,021.6 |  | 417.3 |  | 338.8 |  | 208.3 |  | 105.3 |  | 37.7 |  | 8.3 |  | 3.9 |  | 2.3 |  | 1.4 |  | 1.1 |  | 0.6 |  | 2,146.6 |  |
2013 | 227.8 |  | — |  | 52.5 |  | 82.6 |  | 81.7 |  | 63.4 |  | 47.8 |  | 21.9 |  | 2.9 |  | 1.3 |  | 0.8 |  | 0.5 |  | 0.3 |  | 355.7 |  |
2014 | 148.4 |  | — |  | — |  | 37.0 |  | 50.9 |  | 44.3 |  | 37.4 |  | 28.8 |  | 15.8 |  | 2.2 |  | 1.1 |  | 0.7 |  | 0.3 |  | 218.5 |  |
2015 | 63.2 |  | — |  | — |  | — |  | 3.4 |  | 17.9 |  | 20.1 |  | 19.8 |  | 16.7 |  | 7.9 |  | 1.3 |  | 0.6 |  | 0.3 |  | 88.0 |  |
2016 | 91.4 |  | — |  | — |  | — |  | — |  | 18.9 |  | 30.4 |  | 25.0 |  | 19.9 |  | 14.4 |  | 7.4 |  | 1.8 |  | 0.7 |  | 118.5 |  |
2017 | 275.3 |  | — |  | — |  | — |  | — |  | — |  | 49.1 |  | 97.3 |  | 80.9 |  | 58.8 |  | 44.0 |  | 20.8 |  | 4.1 |  | 355.0 |  |
2018 | 97.9 |  | — |  | — |  | — |  | — |  | — |  | — |  | 6.7 |  | 27.4 |  | 30.5 |  | 31.6 |  | 24.6 |  | 11.0 |  | 131.8 |  |
2019 | 123.1 |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | 13.4 |  | 31.4 |  | 39.1 |  | 37.8 |  | 22.7 |  | 144.4 |  |
2020 | 62.1 |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | 6.5 |  | 16.1 |  | 20.4 |  | 15.2 |  | 58.2 |  |
2021 | 55.2 |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | 4.6 |  | 17.9 |  | 13.4 |  | 35.9 |  |
2022 | 33.4 |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | 3.2 |  | 6.7 |  | 9.9 |  |
2023 | 72.0 |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | 4.8 |  | 4.8 |  |
Subtotal | 2,288.0 |  | 1,021.6 |  | 469.8 |  | 458.4 |  | 344.3 |  | 249.8 |  | 222.5 |  | 207.8 |  | 180.9 |  | 155.3 |  | 147.4 |  | 129.4 |  | 80.1 |  | 3,667.3 |  |
Total Americas and Australia | 9,045.3 |  | 3,984.0 |  | 1,126.3 |  | 1,211.4 |  | 1,189.0 |  | 1,086.9 |  | 1,083.4 |  | 1,152.8 |  | 1,322.4 |  | 1,427.1 |  | 1,354.4 |  | 1,075.4 |  | 752.4 |  | 16,765.5 |  |
Europe Core |  |  |  |  |  |  |  |  |  |  |  |  |  |
2012 | 20.4 |  | 11.6 |  | 9.0 |  | 5.6 |  | 3.2 |  | 2.2 |  | 2.0 |  | 2.0 |  | 1.4 |  | 1.2 |  | 1.2 |  | 0.9 |  | 0.5 |  | 40.8 |  |
2013 | 20.3 |  | — |  | 7.1 |  | 8.5 |  | 2.3 |  | 1.3 |  | 1.2 |  | 1.3 |  | 0.9 |  | 0.7 |  | 0.7 |  | 0.5 |  | 0.3 |  | 24.8 |  |
2014 (2) | 773.8 |  | — |  | — |  | 153.2 |  | 292.0 |  | 246.4 |  | 220.8 |  | 206.3 |  | 172.9 |  | 149.8 |  | 149.2 |  | 122.2 |  | 81.5 |  | 1,794.3 |  |
2015 | 411.3 |  | — |  | — |  | — |  | 45.8 |  | 100.3 |  | 86.2 |  | 80.9 |  | 66.1 |  | 54.3 |  | 51.4 |  | 40.7 |  | 25.9 |  | 551.6 |  |
2016 | 333.1 |  | — |  | — |  | — |  | — |  | 40.4 |  | 78.9 |  | 72.6 |  | 58.0 |  | 48.3 |  | 46.7 |  | 36.9 |  | 22.4 |  | 404.2 |  |
2017 | 252.2 |  | — |  | — |  | — |  | — |  | — |  | 17.9 |  | 56.0 |  | 44.1 |  | 36.1 |  | 34.8 |  | 25.2 |  | 15.4 |  | 229.5 |  |
2018 | 341.8 |  | — |  | — |  | — |  | — |  | — |  | — |  | 24.3 |  | 88.7 |  | 71.3 |  | 69.1 |  | 50.7 |  | 31.7 |  | 335.8 |  |
2019 | 518.6 |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | 48.0 |  | 125.7 |  | 121.4 |  | 89.8 |  | 57.3 |  | 442.2 |  |
2020 | 324.1 |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | 32.3 |  | 91.7 |  | 69.0 |  | 43.2 |  | 236.2 |  |
2021 | 412.4 |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | 48.5 |  | 89.9 |  | 55.6 |  | 194.0 |  |
2022 | 359.4 |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | 33.9 |  | 64.6 |  | 98.5 |  |
2023 | 281.4 |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | 29.3 |  | 29.3 |  |
Subtotal | 4,048.8 |  | 11.6 |  | 16.1 |  | 167.3 |  | 343.3 |  | 390.6 |  | 407.0 |  | 443.4 |  | 480.1 |  | 519.7 |  | 614.7 |  | 559.7 |  | 427.7 |  | 4,381.2 |  |
Europe Insolvency |  |  |  |  |  |  |  |  |  |  |  |  |
2014 (2) | 10.9 |  | — |  | — |  | — |  | 4.3 |  | 3.9 |  | 3.2 |  | 2.6 |  | 1.5 |  | 0.8 |  | 0.3 |  | 0.2 |  | 0.2 |  | 17.0 |  |
2015 | 19.0 |  | — |  | — |  | — |  | 3.0 |  | 4.4 |  | 5.0 |  | 4.8 |  | 3.9 |  | 2.9 |  | 1.6 |  | 0.6 |  | 0.3 |  | 26.5 |  |
2016 | 39.3 |  | — |  | — |  | — |  | — |  | 6.2 |  | 12.7 |  | 12.9 |  | 10.7 |  | 7.9 |  | 6.0 |  | 2.7 |  | 1.1 |  | 60.2 |  |
2017 | 39.2 |  | — |  | — |  | — |  | — |  | — |  | 1.2 |  | 7.9 |  | 9.2 |  | 9.8 |  | 9.4 |  | 6.5 |  | 3.3 |  | 47.3 |  |
2018 | 44.9 |  | — |  | — |  | — |  | — |  | — |  | — |  | 0.6 |  | 8.4 |  | 10.3 |  | 11.7 |  | 9.8 |  | 5.9 |  | 46.7 |  |
2019 | 77.2 |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | 5.0 |  | 21.1 |  | 23.9 |  | 21.0 |  | 13.8 |  | 84.8 |  |
2020 | 105.4 |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | 6.0 |  | 34.6 |  | 34.1 |  | 23.2 |  | 97.9 |  |
2021 | 53.2 |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | 5.5 |  | 14.4 |  | 11.1 |  | 31.0 |  |
2022 | 44.6 |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | 4.5 |  | 9.2 |  | 13.7 |  |
2023 | 32.2 |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | 2.0 |  | 2.0 |  |
Subtotal | 465.9 |  | — |  | — |  | — |  | 7.3 |  | 14.5 |  | 22.1 |  | 28.8 |  | 38.7 |  | 58.8 |  | 93.0 |  | 93.8 |  | 70.1 |  | 427.1 |  |
Total Europe | 4,514.7 |  | 11.6 |  | 16.1 |  | 167.3 |  | 350.6 |  | 405.1 |  | 429.1 |  | 472.2 |  | 518.8 |  | 578.5 |  | 707.7 |  | 653.5 |  | 497.8 |  | 4,808.3 |  |
Total PRA Group | $ | 13,560.0 |  | $ | 3,995.6 |  | $ | 1,142.4 |  | $ | 1,378.7 |  | $ | 1,539.6 |  | $ | 1,492.0 |  | $ | 1,512.5 |  | $ | 1,625.0 |  | $ | 1,841.2 |  | $ | 2,005.6 |  | $ | 2,062.1 |  | $ | 1,728.9 |  | $ | 1,250.2 |  | $ | 21,573.8 |  |

(1)Non-U.S. amounts are presented using the average exchange rates during the cash collection period.
(2)Includes finance receivables portfolios that were acquired through the acquisition of Aktiv Kapital AS in 2014 (as described in our 2022 Form 10-K).
(3)Includes the nonperforming loan portfolios that were acquired through our business acquisitions.
(4)Non-U.S. amounts are presented at the exchange rate at the end of the year in which the portfolio was purchased. In addition, any purchase price adjustments that occur throughout the life of the pool are presented at the year-end exchange rate for the respective year of purchase.
41

Estimated Remaining Collections
The following chart shows our ERC of $5,975.6 million at September 30, 2023 by geographical region (amounts in millions).
The following chart shows our ERC by year for the 12 month periods ending September 30, in each of the years presented below. The forecast amounts reflect our estimate at September 30, 2023 of how much we expect to collect on our portfolios. These estimates are translated to U.S. dollars at the September 30, 2023 exchange rate.
42

The following table displays our ERC by year for the 12 month periods ending September 30, in each of the years presented below, by year, by geography as of September 30, 2023 (amounts in thousands):

ERC By Year, By Geography
| Americas and Australia Core |  | Americas Insolvency |  | Europe Core |  | Europe Insolvency |  | Total
2024 | $ | 822,339 |  |  | $ | 91,387 |  |  | $ | 486,862 |  |  | $ | 73,933 |  |  | $ | 1,474,521 |
2025 | 619,564 |  |  | 63,982 |  |  | 403,236 |  |  | 54,610 |  |  | 1,141,392 |
2026 | 395,861 |  |  | 41,450 |  |  | 336,278 |  |  | 35,663 |  |  | 809,252 |
2027 | 267,561 |  |  | 24,358 |  |  | 285,499 |  |  | 21,302 |  |  | 598,720 |
2028 | 184,126 |  |  | 11,178 |  |  | 244,246 |  |  | 11,145 |  |  | 450,695 |
2029 | 127,526 |  |  | 1,520 |  |  | 210,481 |  |  | 4,575 |  |  | 344,102 |
2030 | 90,123 |  |  | 24 |  |  | 181,901 |  |  | 1,295 |  |  | 273,343 |
2031 | 62,898 |  |  | — |  |  | 158,164 |  |  | 560 |  |  | 221,622 |
2032 | 43,285 |  |  | — |  |  | 137,967 |  |  | 477 |  |  | 181,729 |
2033 | 25,882 |  |  | — |  |  | 119,267 |  |  | 399 |  |  | 145,548 |
Thereafter | 1,715 |  |  | — |  |  | 332,455 |  |  | 542 |  |  | 334,712 |
| $ | 2,640,880 |  |  | $ | 233,899 |  |  | $ | 2,896,356 |  |  | $ | 204,501 |  |  | $ | 5,975,636 |

Seasonality
Customer payment patterns in all of the countries in which we operate can be affected by seasonal employment trends, income tax refunds, and holiday spending habits.
Cash Collections
The following table displays our quarterly cash collections by geography and portfolio type for the periods indicated (amounts in thousands):

Cash Collections by Geography and Type
| 2023 |  | 2022 |  | 2021
| Q3 |  | Q2 |  | Q1 |  | Q4 |  | Q3 |  | Q2 |  | Q1 |  | Q4
Americas and Australia Core | $ | 223,714 |  |  | $ | 220,886 |  |  | $ | 227,960 |  |  | $ | 205,619 |  |  | $ | 225,775 |  |  | $ | 244,377 |  |  | $ | 270,284 |  |  | $ | 257,705 |
Americas Insolvency | 27,809 |  |  | 26,384 |  |  | 25,751 |  |  | 27,971 |  |  | 31,911 |  |  | 34,278 |  |  | 35,209 |  |  | 36,851 |
Europe Core | 144,402 |  |  | 149,324 |  |  | 134,005 |  |  | 134,016 |  |  | 132,072 |  |  | 142,470 |  |  | 151,162 |  |  | 155,853 |
Europe Insolvency | 23,639 |  |  | 22,725 |  |  | 23,568 |  |  | 24,051 |  |  | 22,586 |  |  | 22,935 |  |  | 24,325 |  |  | 23,262 |
Total Cash Collections | $ | 419,564 |  |  | $ | 419,319 |  |  | $ | 411,284 |  |  | $ | 391,657 |  |  | $ | 412,344 |  |  | $ | 444,060 |  |  | $ | 480,980 |  |  | $ | 473,671 |

The following table provides additional details on the composition of our Core cash collections for the periods indicated (amounts in thousands):

Cash Collections by Source - Core Portfolios Only
| 2023 |  | 2022 |  | 2021
| Q3 |  | Q2 |  | Q1 |  | Q4 |  | Q3 |  | Q2 |  | Q1 |  | Q4
Call Center and Other Collections | $ | 232,054 |  |  | $ | 231,183 |  |  | $ | 236,415 |  |  | $ | 216,182 |  |  | $ | 235,832 |  |  | $ | 260,764 |  |  | $ | 291,266 |  |  | $ | 283,606 |
External Legal Collections | 53,792 |  |  | 53,439 |  |  | 54,934 |  |  | 48,925 |  |  | 49,243 |  |  | 50,996 |  |  | 55,179 |  |  | 55,760 |
Internal Legal Collections | 82,270 |  |  | 85,588 |  |  | 70,616 |  |  | 74,528 |  |  | 72,772 |  |  | 75,087 |  |  | 75,001 |  |  | 74,192 |
Total Core Cash Collections | $ | 368,116 |  |  | $ | 370,210 |  |  | $ | 361,965 |  |  | $ | 339,635 |  |  | $ | 357,847 |  |  | $ | 386,847 |  |  | $ | 421,446 |  |  | $ | 413,558 |

43

Collections Productivity (U.S. Portfolio)
The following table displays a collections productivity measure for our U.S. Portfolios for the periods indicated:

Cash Collections per Collector Hour Paid U.S. Portfolio
| Call center and other cash collections (1)
| 2023 |  | 2022 |  | 2021 |  | 2020 |  | 2019
First Quarter | $ | 207 |  |  | $ | 261 |  |  | $ | 279 |  |  | $ | 172 |  |  | $ | 139 |
Second Quarter | 199 |  |  | 226 |  |  | 270 |  |  | 263 |  |  | 139 |
Third Quarter | 200 |  |  | 210 |  |  | 242 |  |  | 246 |  |  | 124 |
Fourth Quarter | — |  |  | 186 |  |  | 232 |  |  | 204 |  |  | 128 |

(1)Represents total cash collections less internal legal cash collections, external legal cash collections, and insolvency cash collections from trustee-administered accounts.
Cash Efficiency Ratio
The following table displays our cash efficiency ratio for the periods indicated:

Cash Efficiency Ratio (1)
| 2023 |  | 2022 |  | 2021 |  | 2020 |  | 2019
First Quarter | 54.3% |  | 65.1% |  | 68.0% |  | 61.5% |  | 59.2%
Second Quarter | 61.2 |  | 61.3 |  | 66.8 |  | 68.7 |  | 60.4
Third Quarter | 58.9 |  | 58.4 |  | 62.4 |  | 65.6 |  | 60.2
Fourth Quarter | — |  | 58.6 |  | 63.5 |  | 61.9 |  | 59.7
Full Year | — |  | 61.0 |  | 65.3 |  | 64.5 |  | 59.9

(1) Calculated by dividing cash receipts less operating expenses by cash receipts.
Portfolio Acquisitions
The following graph shows the purchase price of our portfolios by year since 2013. It also includes the acquisition date of nonperforming loan portfolios that were acquired through our business acquisitions. The 2023 total represents portfolio acquisitions through the nine months ended September 30, 2023, while the prior year totals are for the full year.
* 2014 includes portfolios acquired in connection with the acquisition of Aktiv Kapital AS in 2014 (as described in our 2022 Form 10-K).
44

The following table displays our quarterly portfolio acquisitions for the periods indicated (amounts in thousands):

Portfolio Acquisitions by Geography and Type
| 2023 |  | 2022 |  | 2021
| Q3 |  | Q2 |  | Q1 |  | Q4 |  | Q3 |  | Q2 |  | Q1 |  | Q4
Americas & Australia Core | $ | 187,554 |  |  | $ | 171,440 |  |  | $ | 116,867 |  |  | $ | 118,581 |  |  | $ | 100,780 |  |  | $ | 99,962 |  |  | $ | 90,639 |  |  | $ | 90,263 |
Americas Insolvency | 44,279 |  |  | 12,189 |  |  | 15,701 |  |  | 8,967 |  |  | 8,988 |  |  | 6,369 |  |  | 9,118 |  |  | 21,183 |
Europe Core | 60,628 |  |  | 136,834 |  |  | 90,454 |  |  | 140,011 |  |  | 59,426 |  |  | 123,814 |  |  | 38,764 |  |  | 60,430 |
Europe Insolvency | 18,722 |  |  | 7,296 |  |  | 7,203 |  |  | 20,535 |  |  | 13,910 |  |  | 1,202 |  |  | 8,929 |  |  | 29,820 |
Total Portfolio Acquisitions | $ | 311,183 |  |  | $ | 327,759 |  |  | $ | 230,225 |  |  | $ | 288,094 |  |  | $ | 183,104 |  |  | $ | 231,347 |  |  | $ | 147,450 |  |  | $ | 201,696 |

Portfolio Acquisitions by Stratification (U.S. Only)
The following table categorizes our quarterly U.S. portfolio acquisitions for the periods indicated into major asset type and delinquency category. Since our inception in 1996, we have acquired nearly 62 million customer accounts i n the U.S. (amounts in thousands).

U.S Portfolio Acquisitions by Major Asset Type
| 2023 |  | 2022
| Q3 |  | Q2 |  | Q1 |  | Q4 |  | Q3
Major Credit Cards | $ | 57,045 |  | 33.2 | % |  | $ | 41,605 |  | 28.5 | % |  | $ | 13,234 |  | 12.1 | % |  | $ | 10,242 |  | 11.7 | % |  | $ | 10,236 |  | 15.8 | %
Private Label Credit Cards | 87,057 |  | 50.7 |  |  | 76,306 |  | 52.4 |  |  | 66,652 |  | 60.9 |  |  | 60,380 |  | 69.0 |  |  | 44,727 |  | 68.8 |
Consumer Finance | 17,616 |  | 10.3 |  |  | 26,809 |  | 18.4 |  |  | 28,051 |  | 25.6 |  |  | 16,366 |  | 18.7 |  |  | 9,396 |  | 14.4 |
Auto Related | 9,947 |  | 5.8 |  |  | 1,012 |  | 0.7 |  |  | 1,481 |  | 1.4 |  |  | 515 |  | 0.6 |  |  | 630 |  | 1.0 |
Total | $ | 171,665 |  | 100.0 | % |  | $ | 145,732 |  | 100.0 | % |  | $ | 109,418 |  | 100.0 | % |  | $ | 87,503 |  | 100.0 | % |  | $ | 64,989 |  | 100.0 | %

U.S. Portfolio Acquisitions by Delinquency Category
| 2023 |  | 2022
| Q3 |  | Q2 |  | Q1 |  | Q4 |  | Q3
Fresh (1) | $ | 103,432 |  | 66.0 | % |  | $ | 89,767 |  | 67.2 | % |  | $ | 70,053 |  | 74.8 | % |  | $ | 55,117 |  | 70.2 | % |  | $ | 30,510 |  | 54.5 | %
Primary (2) | 3,405 |  | 2.2 |  |  | 5,378 |  | 4.0 |  |  | 3,863 |  | 4.1 |  |  | 511 |  | 0.7 |  |  | 587 |  | 1.0 |
Secondary (3) | 40,294 |  | 25.7 |  |  | 25,800 |  | 19.3 |  |  | 17,789 |  | 19.0 |  |  | 21,620 |  | 27.5 |  |  | 19,886 |  | 35.5 |
Other (4) | 9,615 |  | 6.1 |  |  | 12,598 |  | 9.5 |  |  | 2,012 |  | 2.1 |  |  | 1,288 |  | 1.6 |  |  | 5,018 |  | 9.0 |
Total Core | 156,746 |  | 100.0 | % |  | 133,543 |  | 100.0 | % |  | 93,717 |  | 100.0 | % |  | 78,536 |  | 100.0 | % |  | 56,001 |  | 100.0 | %
Insolvency | 14,919 |  |  |  | 12,189 |  |  |  | 15,701 |  |  |  | 8,967 |  |  |  | 8,988 |  |
Total | $ | 171,665 |  |  |  | $ | 145,732 |  |  |  | $ | 109,418 |  |  |  | $ | 87,503 |  |  |  | $ | 64,989 |  |

(1)Fresh accounts are typically past due 120 to 270 days, charged-off by the credit originator and sold prior to any post-charge-off collection activity.
(2)Primary accounts are typically 240 to 450 days past due, charged-off and have been previously placed with one contingent fee servicer.
(3)Secondary accounts are typically 360 to 630 days past due, charged-off and have been previously placed with two contingent fee servicers.
(4)Other accounts are 480 days or more past due, charged-off and have previously been worked by three or more contingent fee servicers.
Non-GAAP Financial Measures
We report our financial results in accordance with U.S. generally accepted accounting principles ("GAAP"). However, our management uses certain non-GAAP financial measures, including adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"), to evaluate our operating and financial performance as well as to set performance goals. We present Adjusted EBITDA because we consider it an important supplemental measure of operations and financial performance. Our management believes Adjusted EBITDA helps provide enhanced period-to-period comparability of operations 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
45

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:
•income tax expense (or less income tax benefit);
•foreign exchange loss (or less foreign exchange gain);
•interest expense, net (or less interest income, net);
•other expense (or less other income);
•depreciation and amortization;
•impairment of real estate;
•net income attributable to noncontrolling interests; and
•recoveries applied to negative allowance less changes in expected recoveries.
The following table is a reconciliation of net income as reported in accordance with GAAP to Adjusted EBITDA for the last 12 months ("LTM") as of September 30, 2023 and for the year ended December 31, 2022 (amounts in thousands):

Reconciliation of Non-GAAP Financial Measures
| LTM |  | For the Year Ended
| September 30, 2023 |  | December 31, 2022
Net income/(loss) attributable to PRA Group, Inc. | $ | (58,736) |  |  | $ | 117,147 |
Adjustments: |  |  |
Income tax expense | (8,358) |  |  | 36,787 |
Foreign exchange gains | (1,178) |  |  | (985) |
Interest expense, net | 165,690 |  |  | 130,677 |
Other expense (1) | 1,951 |  |  | 1,325 |
Depreciation and amortization | 14,203 |  |  | 15,243 |
Impairment of real estate | 5,037 |  |  | — |
Adjustment for net income attributable to noncontrolling interests | 14,904 |  |  | 851 |
Recoveries applied to negative allowance less Changes in expected recoveries | 864,032 |  |  | 805,942 |
Adjusted EBITDA | $ | 997,545 |  |  | $ | 1,106,987 |

(1) Other expense reflects non-operating related activity.
Additionally, we evaluate our business using certain ratios that use Adjusted EBITDA, including Debt to Adjusted EBITDA, which is calculated by dividing borrowings by Adjusted EBITDA. The following table reflects our ratios of Debt to Adjusted EBITDA for the LTM as of September 30, 2023 and for the year ended December 31, 2022 (amounts in thousands):

Debt to Adjusted EBITDA
| LTM |  | For the Year Ended
| September 30, 2023 |  |  | December 31, 2022 |
Borrowings | $ | 2,832,225 |  |  |  | $ | 2,494,858 |  |
Adjusted EBITDA | 997,545 |  |  |  | 1,106,987 |  |
Debt to Adjusted EBITDA | 2.84 | x |  | 2.25 | x

46

Liquidity and Capital Resources
We actively manage our liquidity to help provide access to sufficient funding to meet our business needs and financial obligations.
Sources of Liquidity
Cash and cash equivalents. As of September 30, 2023, cash and cash equivalents totaled $105.2 million, of which $88.8 million consisted of cash on hand related to international operations with indefinitely reinvested earnings. See the "Undistributed Earnings of International Subsidiaries" section below for more information.
Borrowings. At September 30, 2023, we had the following committed amounts, amounts outstanding and availability under our credit facilities (amounts in thousands):

|  |  |  |  |  | Availability
|  | Committed Amount |  | Amount Outstanding |  | Availability Based on Current ERC (1) |  | Additional Availability (3) |  | Total Availability
Americas revolving credit (2) |  | $ | 1,075,000 |  |  | $ | 382,351 |  |  | $ | 70,319 |  |  | $ | 622,330 |  |  | $ | 692,649 |
UK revolving credit |  | 800,000 |  |  | 500,257 |  |  | 57,380 |  |  | 242,363 |  |  | 299,743 |
European revolving credit |  | 811,815 |  |  | 473,873 |  |  | 150,127 |  |  | 187,815 |  |  | 337,942 |
Term loan |  | 442,500 |  |  | 442,500 |  |  | — |  |  | — |  |  | — |
Senior notes |  | 1,046,000 |  |  | 1,046,000 |  |  | — |  |  | — |  |  | — |
Less: Debt discounts and issuance costs |  | — |  |  | (12,756) |  |  | — |  |  | — |  |  | — |
Total |  | $ | 4,175,315 |  |  | $ | 2,832,225 |  |  | $ | 277,826 |  |  | $ | 1,052,508 |  |  | $ | 1,330,334 |

(1) Available borrowings after calculation of current borrowing base, which may be used for general corporate purposes, including portfolio purchases.
(2) Includes North American and Colombian revolving credit facilities.
(3) Subject to debt covenants, including advance rates ranging from 35-55% of applicable ERC.
On June 1, 2023, we used substantially all of the net proceeds received from the 2028 Notes to retire the 2023 Notes. We used the remainder of the net proceeds to repay a portion of the outstanding borrowings under the domestic revolving credit facility under our North America Credit Agreement.
Interest-bearing deposits. Per the terms of our European credit facility, we are permitted to obtain interest-bearing deposit funding of up to SEK 1.2 billion (the equivalent of approximately $109.8 million as of September 30, 2023). Interest-bearing deposits as of September 30, 2023 w ere $100.5 million.
Furthermore, we have the ability to slow the purchase of nonperforming loans if necessary, and use the net cash flow generated from our cash collections from our portfolio of existing nonperforming loans to temporarily service our debt and fund existing operat ions. For example, we invested $850.0 million in portfolio acquisitions in 2022. The portfolios acquired in 2022 generated $109.4 million of cash collections, representing only 6.3% of 2022 cash collections.
Uses of Liquidity and Material Cash Requirements
Forward Flows. Contractual obligations over the next year are primarily related to portfolio purchase commitments. As of September 30, 2023, we have forward flow commitments in place for the purchase of nonperforming loans with a maximum purchase pri ce of $538.0 million, comprised of $356.4 million for the Americas and Australia and $181.6 million for Europe. These amounts are based on sellers' estimates of future forward flow sales and are dependent on actual delivery compared to these estimates. Accordingly, amounts purchased under these agreements may vary and are often less than the maximum amounts. W e may also enter into new or renewed forward flow commitments and/or close on spot purchase transactions in addition to the current forward flow agreements.
Borrowings. Of our $2.8 billion in borr owings at September 30, 2023, estimated interest, unused fees and principal payments for the next 12 months are $193.8 million, of which, $10.0 million rel ates to principal on the term loan under our North American Credit Agreement. Beyond 12 months, our principal payment obligations rela ted to debt maturities occur betwe en one and six years. Many of our financing arrangements include covenants wit h which we must comply. As of September 30, 2023, we determined that we were in compliance with these covenants.
47

Share Repurchases. On February 25, 2022, we completed our $230.0 million share repurchase program. Also on February 25, 2022, our Board of Directors approved a new share repurchase program under which we are authorized to repurchase up to $150.0 million of our outstanding common stock. 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. The new 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. As of September 30, 2023, we had $67.7 million remaining for share repurchases under the new program, which is subject to restrictive covenants contained in our credit facilities and senior note indentures. Considering these covenants, we did not repurchase any common stock during the three months ended September 30, 2023. For more information, see Item 2 included in Part II of this Quarterly Report.
Leases. Our leases have remaining lease terms of one to 11 years. As of September 30, 2023, we had $51.7 million in lease liabilities, of which approxim ately $10.0 million matures within the next 12 months. For more information, see Note 5 to our Consolidated Financial Statements included in Part I, Ite m 1 of this Quarterly Report.
Derivatives. Derivative financial instruments are entered into to reduce our exposure to fluctuations in interest rates on variable rate debt and foreign currency exchange rates. As of September 30, 2023, we h ad $3.4 million of de rivative liabilities, all of which mature within the next 12 months. For more information, see Note 7 to our Consolidated Financial Statements i ncluded in Part I, Item 1 of this Quarterly Report.
We believe that funds generated from operations and from cash collections on nonperforming loan portfolios, together with existing cash, available borrowings under our revolving credit facilities and access to the capital markets will be sufficient to finance our operations, planned capital expenditures, forward flow purchase commitments, debt maturities and additional portfolio purchases during the next 12 months and beyond. We may seek to access the debt or equity capital markets as we deem appropriate, market conditions permitting. Business acquisitions or higher than expected levels of portfolio purchasing could require additional financing from other sources.
Cash Flow Analysis
The following table summarizes our cash flow activity for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 (amounts in thousands):

| Nine Months Ended September 30,
| 2023 |  | 2022 |  | $ Change |  |
Net cash provided by/(used in): |  |  |  |  |  |  |
Operating activities | $ | (118,272) |  |  | $ | (3,414) |  |  | $ | (114,858) |  |  |
Investing activities | (179,589) |  |  | 195,406 |  |  | (374,995) |  |  |
Financing activities | 328,251 |  |  | (190,054) |  |  | 518,305 |  |  |
Effect of exchange rate on cash | 3,270 |  |  | (31,927) |  |  | 35,197 |  |  |
Net increase/(decrease) in cash and cash equivalents | $ | 33,660 |  |  | $ | (29,989) |  |  | $ | 63,649 |  |  |

Operating Activities
Net cash provided by/(used in) operating activities mainly reflects cash collections recognized as revenue and cash paid for operating expenses, interest and income taxes. To calculate net cash provided by/(used in) operating activities, net income/(loss) was adjusted for (i) non-cash items included in net income such as provisions for unrealized gains and losses, changes in expected recoveries, depreciation and amortization, deferred taxes, fair value changes in equity securities, and stock-based compensation as well as (ii) changes in the balances of operating assets and liabilities, which can vary significantly in the normal course of business due to the amount and timing of payments.
Net cash used in operating activities of $118.3 million for the nine months ended September 30, 2023 increased $114.9 million from net cash used in operating activities of $3.4 million for the nine months ended September 30, 2022. The increase was primarily driven by the impact of unrealized foreign currency transactions; higher cash paid for operating expenses, interest and taxes; and lower cash collections recognized as income.
48

Investing Activities
Cash provided by investing activities is primarily driven by recoveries applied to our negative allowance. Cash used in investing activities primarily relates to acquisitions of nonperforming loans and net investment activity.
Net cash provided by/(used in) investing activities decreased $375.0 million for the nine months ended September 30, 2023, primarily driven by an increase of $313.5 million in purchases of finance receivables, an increase of $57.8 million in purchases of investments and a decrease of $70.3 million in recoveries applied to the negative allowance. These items were partially offset by an increase of $58.2 million in proceeds from sales and maturities of investments.
Financing Activities
Cash provided by financing activities is normally provided by draws on our lines of credit and proceeds from debt offerings. Cash used in financing activities is primarily driven by principal payments on our lines of credit and long-term debt.
Net cash provided by/(used in) financing activities increased $518.3 million during the nine months ended September 30, 2023, primarily driven by proceeds from the issuance of our 2028 Notes of $400.0 million, a $351.9 million increase from net payments on our lines of credit in the prior year to net draws on our lines of credit in the current year and a decrease in our purchases of common stock of $111.4 million. These items were partially offset by the retirement of our 2023 Notes in the amount of $345.0 million.
Undistributed Earnings of International Subsidiaries
We intend to use predominantly all of our accumulated and future undistributed earnings of international subsidiaries to expand operations outside the U.S.; therefore, such undistributed earnings of international subsidiaries are considered to be indefinitely reinvested outside the U.S. Accordingly, no provision for income tax and withholding tax has been provided thereon. If management's intentions change and eligible undistributed earnings of international subsidiaries are repatriated or deemed repatriated due to intercompany loans, we could be subject to additional income taxes and withholding taxes. This could result in a higher effective tax rate in the period in which such a decision is made to repatriate accumulated or future undistributed international earnings. Changes in intercompany loan balances are expected to have little or no tax impact. The amount of cash on hand related to international operations with indefinitely reinvested earning s was $88.8 million a nd $75.3 million as of September 30, 2023 and December 31, 2022, respectively. Refer to Note 11 to our Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report for further information related to our income taxes and undistributed international earnings.
Recent Accounting Pronouncements
For a summary of recent accounting pronouncements and the anticipated effects on our Consolidated Financial Statements see Note 13 to our Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report.
Critical Accounting Estimates
Our Consolidated Financial Statements have been prepared in accordance with GAAP. Some of our significant accounting policies require that we use estimates, assumptions and judgments that affect the reported amounts of revenues, expenses, assets and liabilities. For a discussion of our significant accounting policies, refer to Note 1 to our Consolidated Financial Statements included in Item 8 of our 2022 Form 10-K.
We consider accounting estimates to be critical if (1) the accounting estimates made involve a significant level of estimation uncertainty and (2) have had or are reasonably likely to have a material impact on our financial condition or results of operations. We base our estimates on historical experience, current trends and various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. If these estimates differ significantly from actual results, the impact on our Consolidated Financial Statements may be material.
We have determined that the following accounting policies involve critical estimates:
Revenue Recognition - Finance Receivables
Revenue recognition for finance receivables involves the use of estimates and the exercise of judgment on the part of management. These estimates include projections of the amount and timing of cash collections we expect to receive from our
49

pools of accounts. We review individual pools for trends, actual performance versus projections and curve shape (a graphical depiction of the amount and timing of cash collections). We then project ERC and then apply a discounted cash flow methodology to our ERC. Adjustments to ERC may include adjustments reflecting recent collection trends, our view of current and future economic conditions, changes in collection assumptions or other timing related adjustments that could impact TEC.
Significant changes in our cash flow estimates could result in increased or decreased revenue as we immediately recognize the discounted value of such changes using the constant effective interest rate of the pool. Generally, adjustments to estimated cash forecasts for performance experienced in the current period result in an adjustment to revenue at an amount less than the impact of the performance in the period due to the effects of discounting. Additionally, cash collection forecast increases will generally result in more revenue being recognized and cash collection forecast decreases in less revenue being recognized over the life of the pool.
Valuation of Goodwill
In accordance with FASB ASC Topic 350, "Intangibles-Goodwill and Other" ("ASC 350"), we evaluate goodwill for impairment annually and more frequently if indicators of potential impairment exist. Goodwill is reviewed for potential impairment at the reporting unit level.
Goodwill is evaluated for impairment either under the qualitative assessment option or using a quantitative approach depending on facts and circumstances of a reporting unit, including the excess of fair value over carrying amount in the last valuation, changes in the business environment and changes of the reporting unit or its composition. If upon evaluation of the qualitative factors, we determine it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then we are required to determine the reporting unit’s fair value and record as an impairment loss the amount the carrying value e xceeds fair value, not to exceed the total amount of goodwill allocated to the respective reporting unit.
We determine the fair value of a reporting unit by applying the approaches prescribed under ASC Topic 820 "Fair Value Measurements and Disclosures": the income approach and the market approach. Depending on the availability of public data and suitable comparable transaction data, we may or may not use the market approach or we may emphasize the results from the approach differently. Under the income approach, we estimate the fair value of a reporting unit based on the present value of estimated future cash flows and a residual terminal value. Cash flow projections are based on management's estimates of growth rates, operating margins, necessary working capital and capital expenditure requirements, taking into consideration industry and market conditions. The discount rate used is based on the weighted-average cost of capital adjusted for the relevant risk associated with business-specific characteristics and the uncertainty related to the reporting unit's ability to execute on the projected cash flows. Under the market approach, we estimate fair value based on prices and other relevant market transactions involving comparable publicly traded companies with operating and investment characteristics similar to the reporting unit.
As of September 30, 2023, we had goodwill of $412.5 million, consisting primarily of $385.6 million in our Debt Buying and Collection ("DBC") reporting unit.
We performed our most recent annual review, using a qualitative assessment, as of October 1, 2022, and concluded that goodwill was not impaired. At that time, we estimated that our DBC reporting unit's fair value exceeded its carrying value by a substantial margin. As of September 30, 2023, our quarterly impairment assessment did not identify the occurrence of any triggering events, and we determined our goodwill was not more-likely-than-not impaired. The Company will perform a quantitative goodwill impairment test of the reporting unit as of October 1, 2023, our next annual testing date.
While we concluded goodwill was not more-likely-than-not impaired as of September 30, 2023, we did identify a heightened risk for future impairment of the goodwill allocated to our DBC reporting unit, considering macroeconomic conditions, higher interest rates and their impact on discount rates, recent financial performance, and the recent decline in our stock price. Should these factors worsen, they could adversely impact the fair value of the reporting unit, and we may have to record impairment charges in future periods.
Income Taxes
We are subject to income taxes throughout the U.S. and in numerous international jurisdictions. These tax laws are complex and are subject to different interpretations by the taxpayer and the relevant government taxing authorities. When determining our domestic and non-U.S. income tax expense, we make judgments about the application of these inherently complex laws.
We record a tax provision for the anticipated tax consequences of the reported results of operations. The provision for income taxes is estimated using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and
50

liabilities, and for operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets are expected to be realized or settled.
We exercise significant judgment in estimating the potential exposure to unresolved tax matters and apply a more likely than not criteria approach for recording tax benefits related to uncertain tax positions in the application of the complex tax laws. While actual results could vary, we believe we have adequate tax accruals with respect to the ultimate outcome of such unresolved tax matters. We record interest and penalties related to unresolved tax matters as a component of income tax expense when the more likely than not standards are met.
If all or part of the deferred tax assets are determined not to be realizable in the future, we would establish a valuation allowance and charge to earnings the impact in the period such a determination is made. If we subsequently realize deferred tax assets that were previously determined to be unrealizable, the respective valuation allowance would be reversed, resulting in a positive adjustment to earnings. The establishment or release of a valuation allowance does not have an impact on cash, nor does such an allowance preclude the use of loss carryforwards or other deferred tax assets in future periods. The calculation of tax liabilities involves significant judgment in estimating the impact of uncertainties in the application of complex tax laws. Resolution of these uncertainties in a manner inconsistent with our expectations could have a material impact on our results of operations and financial position. For further information regarding our uncertain tax positions, refer to Note 13 to our Consolidated Financial Statements included in Item 8 of our 2022 Form 10-K.
51

Item 3. Quantitative and Qualitative Disclosures About Market Risk
Our activities are subject to various financial risks, including market risk, currency and interest rate risk, credit risk, liquidity risk and cash flow risk. Our financial risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on our financial performance. We may periodically enter into derivative financial instruments, typically interest rate and currency derivatives, to reduce our exposure to fluctuations in interest rates on variable rate debt, fluctuations in currency rates and their impact on earnings and cash flows. We do not utilize derivative financial instruments with a level of complexity or with a risk greater than the exposure to be managed, nor do we enter into or hold derivatives for trading or speculative purposes. Derivative instruments involve, to varying degrees, elements of non-performance, or credit risk. We do not believe that we currently face a significant risk of loss in the event of non-performance by the counterparties associated with these instruments, as these transactions were executed with a diversified group of major financial institutions with an investment-grade credit rating. Our intention is to spread our counterparty credit risk across a number of counterparties so that exposure to a single counterparty is minimized.
Interest Rate Risk
We are subject to interest rate risk from outstanding borrowings on our variable rate credit facilities. As such, our consolidated financial results are subject to fluctuations due to changes in the market rate of interest. We assess this interest rate risk by estimating the increase or decrease in interest expense that would occur due to a change in short-term interest rates. The borrowings on our variable rate credit facilities were a pproximately $1.8 billion as o f September 30, 2023. Based on our debt structure at September 30, 2023, assuming a 50 basis point decrease in interest rates, interest expense over the following 12 months would decrease by an estimated $5.1 million. Assuming a 50 basis point increase in interest rates, interest expense over the following 12 months would increase by an estimated $5.1 million.
To reduce the exposure to changes in the market rate of interest and to comply with the terms of our European revolving credit facility, we have entered into interest rate derivative contracts for a portion of our borrowings under our floating rate financing arrangements. Considering these contracts in addition to our fixed rate borrowings, as of September 30, 2023, we were 66% hedged on a notional basis. We apply hedge accounting to all of our interest rate derivative contracts. By applying hedge accounting, changes in market value are reflected as adjustments in Other comprehensive (loss)/income. All derivatives to which we have applied hedge accounting were evaluated and remained highly effective at September 30, 2023. Terms of the interest rate derivative contracts require us to receive a variable interest rate and pay a fixed interest rate. The sensitivity calculations above consider the impact of our interest rate derivative contracts and zero interest rate floors on revolving loans under our North America, UK and European credit facilities.
Currency Exchange Risk
We operate internationally and enter into transactions denominated in various foreign currencies. During the three months ended September 30, 2023, we gen era ted $111.0 million of re ven ues from operations outside the U.S. and used 12 functional currencies, excluding the U.S. dollar. Weakness in one particular currency might be offset by strength in other currencies over time.
As a result of our international operations, fluctuations in foreign currencies could cause us to incur foreign currency exchange gains and losses, and could adversely affect our comprehensive income and stockholders' equity. Additionally, our reported financial results could change from period to period due solely to fluctuations between currencies.
Foreign currency gains and losses are primarily the result of the re-measurement of transactions in certain other currencies into an entity's functional currency. Foreign currency gains and losses are included as a component of other income and (expense) in our Consolidated Income Statements. From time to time, we may elect to enter into foreign exchange derivative contracts to reduce these variations in our Consolidated Income Statements.
When an entity's functional currency is different than the reporting currency of its parent, foreign currency translation adjustments may occur. Foreign currency translation adjustments are included as a component of other comprehensive (loss)/income in our Consolidated Statements of Comprehensive Income and as a component of equity in our Consolidated Balance Sheets.
We have taken measures to mitigate the impact of foreign currency fluctuations. We have organized our European operations such that portfolio ownership and collections generally occur within the same entity. Our UK and European credit facilities are multi-currency facilities, allowing us to better match funding and portfolio acquisitions by currency. We actively monitor the value of our finance receivables by currency. In the event adjustments are required to our liability composition by currency, we may, from time to time, execute re-balancing foreign exchange contracts to more closely align funding and portfolio acquisitions by currency.
52

Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures. We maintain disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. We conducted an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report. Based on this evaluation, the principal executive officer and principal financial officer have concluded that, as of September 30, 2023, our disclosure controls and procedures were effective.
Changes in Internal Control over Financial Reporting. There was no change in our internal control over financial reporting that occurred during the quarter ended September 30, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
53

Part II. Other Information
Item 1. Legal Proceedings
For information regarding legal proceedings as of September 30, 2023, refer to Note 12 to our Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report.
Item 1A. Risk Factors
There have been no material changes in our risk factors from those disclosed in Part I, Item 1A, of our 2022 Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Share Repurchase Programs
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. For more information, see Part I, Item 2 "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources" in this Quarterly Report. We did not repurchase any common stock during the quarter ended September 30, 2023.
We do not currently pay regular dividends on our common stock and did not pay dividends during the three months ended September 30, 2023; however, our Board of Directors may determine in the future to declare or pay dividends on our common stock. Our credit facilities and the indentures governing our senior notes contain financial and other restrictive covenants, including how we operate our business and our ability to pay dividends to our stockholders and repurchase our common stock.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None of the Company's directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or non-rule 10b5-1 trading arrangement during the three months ended September 30, 2023.
Item 6. Exhibits

3.1 | Fifth Amended and Restated Certificate of Incorporation of PRA Group, Inc. (Incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K filed June 17, 2020 (File No. 000-50058)).
3.2 | Amended and Restated By-Laws of PRA Group, Inc. (Incorporated by reference to Exhibit 3.2 of the Current Report on Form 8-K filed June 17, 2020 (File No. 000-50058)).
4.1 | Form of Common Stock Certificate (Incorporated by reference to Exhibit 4.1 of Amendment No. 1 to the Registration Statement on Form S-1 filed October 15, 2002 (Registration No. 333-99225)).
4.2 | Form of Warrant (Incorporated by reference to Exhibit 4.2 of Amendment No. 2 to the Registration Statement on Form S-1 filed October 30, 2002 (Registration No. 333-99225)).
4.3 | Indenture, dated May 26, 2017 between PRA Group, Inc. and Regions Bank, as trustee (Incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K filed May 26, 2017 (File No. 000-50058)).
4.4 | First Supplemental Indenture, dated as of March 31, 2021 between PRA Group, Inc. and Regions Bank, as trustee (Incorporated by reference to Exhibit 4.4 of the Quarterly Report on Form 10-Q filed August 05, 2021 (File No. 000-50058)).
4.5 | Indenture, dated as of August 27, 2020 among PRA Group Inc., the domestic subsidiaries of PRA Group Inc., party thereto and Regions Bank as trustee (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed September 1, 2020 (File No. 000-50058)).
4.6 | Indenture, dated as of September 22, 2021 among PRA Group Inc., the domestic subsidiaries of PRA Group Inc., party thereto and Regions Banks, as trustee (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed September 24, 2021 (File No. 000-50058)).
4.7 | Indenture, dated as of February 6, 2023, among PRA Group, Inc., the domestic subsidiaries of PRA Group, Inc., party thereto and Regions Bank, as trustee (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed February 6, 2023 (File No. 000-50058)).
4.8 | Description of the Registrant's Securities Registered pursuant to Section 12 of the Securities Exchange Act of 1934 (Incorporated by reference to Exhibit 4.3 of the Annual Report on Form 10-K filed February 26, 2021 (File No. 000-50058)).

54

10.1* | Separation and Transition Services Agreement dated as of July 31, 2023, between Registrant and Laura B. White.
31.1 | Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (filed herewith).
31.2 | Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (filed herewith).
32.1 | Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002 (filed herewith).
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH | XBRL Taxonomy Extension Schema Document
101.CAL | XBRL Taxonomy Extension Calculation Linkable Document
101.LAB | XBRL Taxonomy Extension Label Linkable Document
101.PRE | XBRL Taxonomy Extension Presentation Linkable Document
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
* | Denotes management contract or compensatory plan or arrangement in which directors or executive officers are eligible to participate.

55

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

| PRA Group, Inc.
| (Registrant)
November 6, 2023 | By: |  | /s/ Vikram A. Atal
|  |  | Vikram A. Atal
|  |  | President and Chief Executive Officer
|  |  | (Principal Executive Officer)

November 6, 2023 | By: |  | /s/ Rakesh Sehgal
|  |  | Rakesh Sehgal
|  |  | Executive Vice President and Chief Financial Officer
|  |  | (Principal Financial and Accounting Officer)

56