Pra Group (PRAA) risk factors, FY2024 10-K

OPERATIONAL AND INDUSTRY RISKS

1. 01Volatility and uncertainty in general business and economic conditions or financial markets could adversely impact our business, financial performance, results of operations and cash flow
2. 02We may not be able to purchase a sufficient volume of nonperforming loans at favorable pricing, which could adversely impact our profitability
3. 03Changes in the financial or credit markets may cause a forward flow agreement to fail to meet our return thresholds, since we have agreed to purchase portfolios at a negotiated price for a specified term, and may end up paying higher prices for portfolios than we would have otherwise agreed to pay for a spot purchase
4. 04We may not be able to collect sufficient amounts to fund our operations due to the purchase of nonperforming loans that ultimately prove to be unprofitable
5. 05We outsource and offshore certain activities related to our business to third parties. Any disruption or failure of these third parties to provide these services could adversely affect our business operations, financial condition and reputation
6. 06We may not achieve the expected benefits of offshoring a portion of our collection activities, which could adversely affect our business, financial condition and results of operations
7. 07We may not be successful in implementing or realizing the expected benefits from our cash generating and cost savings initiatives in our U.S. business, which could have an adverse impact on our business and results of operations
8. 08A cybersecurity incident could damage our reputation and adversely impact our business and financial results
9. 09The failure of our IT or telecommunication systems could result in a loss in productivity, loss of competitive advantage or business disruption
10. 10We may not effectively utilize AI, or effectively work with other companies that use AI, which could adversely impact our results of operations and result in a loss of competitive advantage or business disruption
11. 11We have a significant amount of goodwill which, if impaired in the future, would adversely impact our results of operations
12. 12Our goodwill impairment testing involves the use of estimates and the exercise of judgment, including judgments regarding expected future business performance and market conditions
13. 13Our loss contingency accruals may not be adequate to cover actual losses

INTERNATIONAL OPERATIONS RISKS

1. 14Our international operations expose us to risks, which could harm our business, results of operations and financial condition
2. 15Compliance with complex and evolving international and U.S. laws and regulations governing our international operations could increase our cost of doing business in international jurisdictions

LEGAL AND REGULATORY RISKS

1. 16Our ability to collect and enforce our nonperforming loans may be limited under federal, state and international laws, regulations and policies
2. 17Failure to comply with government regulation of the collections industry could result in penalties, fines, litigation, damage to our reputation or the suspension or termination of our ability to conduct our business
3. 18After the recent change in presidential administration, there have been some indications that the regulatory and enforcement activities of the CFPB may change, but the extent to which these or other future developments may impact our business remains uncertain
4. 19Changes in tax provisions or exposures to additional tax liabilities could have an adverse effect on our financial condition

FINANCIAL RISKS

1. 20We expect to continue to use leverage in executing our business strategy, which may have adverse consequences
2. 21We may not be able to generate sufficient cash flow or complete alternative financing plans, including raising additional capital, to meet our debt service obligations
3. 22The agreements governing our indebtedness include provisions that may restrict our financial and business operations
4. 23Adverse changes in our credit ratings could have a negative impact on our business, results of operations and financial condition