PRA Group Reports Second Quarter 2016 Results

NORFOLK, Va., Aug. 08, 2016 -- PRA Group, Inc. (Nasdaq:PRAA), a global leader in acquiring and collecting nonperforming loans, today reported its financial results for the second quarter of 2016. The company reported diluted earnings per share of $0.79 versus $1.06 in the second quarter of 2015 and non-GAAP diluted earnings per share of $0.83 for the second quarter of 2016 compared to $1.08 for the year-ago quarter. Non-GAAP financial results are presented in constant currency with the second quarter of 2015 and exclude items unrelated to normal operations. A reconciliation of all non-GAAP financial measures to the most directly comparable GAAP financial measure can be found at the end of this press release.

Second Quarter Highlights

Estimated remaining collections of $5.3 billion.
Cash collections of $387.2 million, currency adjusted cash collections of $391.3 million.
Total revenues of $228.5 million, currency adjusted revenues of $230.0 million.
Income from operations of $72.8 million, non-GAAP income from operations of $75.1 million.
Net income of $36.5 million, non-GAAP net income of $38.3 million.
Return on average equity, annualized, of 16.4%, non-GAAP return on average equity, annualized, of 17.3%.
$249.5 million in investments.

"Second quarter global investment was solid at $250 million helping to increase estimated remaining collections to $5.33 billion. Our fee-based businesses in the U.S. delivered a good quarter, as both revenue and net operating income increased substantially," said Steve Fredrickson, chairman and chief executive officer, PRA Group. "We are beginning to see signs that may indicate the credit cycle is turning which could ultimately increase the supply of nonperforming loans in the U.S. In Europe, we see a strong acquisition pipeline and strong cash collections in most markets. Global sellers are increasingly looking for buying partners that offer competitive pricing, a strong compliance system, and a reputation for treating customers respectfully. Given this view, we believe PRA Group is competitively advantaged as a buyer of choice."

REVENUES AND CASH COLLECTIONS

Total revenues of $228.5 million in the second quarter included finance receivables income net of principal amortization and net allowance charges versus $237.2 million in the prior year period. For the six months ended June 30, 2016, total revenues were $453.3 million versus $482.4 million in the prior year period.
Cash collections were $387.2 million versus $389.6 million in the prior year period. Cash collections for the first six months of 2016 were $771.5 million versus $789.4 million in the prior year period. Both GAAP and currency adjusted cash collections are reported below and included collections from these finance receivables sources:


Cash Collection Source		2016				2015
($ in thousands)	Q2		Q1		Q4		Q3		Q2
Americas-Core	$	213,741	$	219,571	$	195,834	$	210,725	$	218,838
Americas-Insolvency		67,745		68,646		73,843		81,865		92,974
Europe-Core		102,972		94,091		97,149		85,635		76,602
Europe-Insolvency		2,744		2,025		2,545		2,528		1,210
Total Cash Collections	$	387,202	$	384,333	$	369,371	$	380,753	$	389,624

Cash Collection Source -
Constant Currency Adjusted		2016								2015
($ in thousands)	Q2								Q2
Americas-Core	$	216,074							$	218,838
Americas-Insolvency		67,808								92,974
Europe-Core		104,605								76,602
Europe-Insolvency		2,823								1,210
Total Cash Collections	$	391,310							$	389,624

Principal amortization of finance receivables in the second quarter was $183.2 million or 47.3% of cash collections, compared with $169.6 million or 43.5% in the prior year period. Principal amortization included a net allowance charge of $12.9 million recorded against certain pools of finance receivables in the quarter, compared with a net allowance charge of $4.9 million recorded in the prior year period. Principal amortization of finance receivables for the first six months of 2016 was $361.0 million or 46.8% of cash collections, including a net allowance charge of $22.8 million compared with $340.9 million or 43.2%, including a net allowance charge of $6.5 million in the prior year period.
Revenues for the second quarter were negatively impacted by two portfolios in Italy being on non-accrual which applied all cash collections of $6.7 million to principal amortization.
Revenues in the second quarter also included income from PRA Group's fee-based businesses of $22.3 million, compared with $13.9 million in the prior year period, and other income of $2.1 million compared with $3.3 million in the prior year period. For the first six months of 2016, fee income was $38.6 million compared with $26.9 million in the prior year period and other income was $4.2 million compared with $7.0 million in the prior year period.

EXPENSES AND OPERATING INCOME

Operating expenses were $155.7 million in the second quarter, compared with $148.3 million in the prior year period. For the first six months of 2016, operating expenses were $309.7 million, compared with $297.4 million in the prior year period.
Operating income in the second quarter was $72.8 million, compared with $88.9 million in the prior year period. For the first six months of 2016, operating income was $143.7 million versus $185.0 million in the prior year period. The operating margin was 31.8% in the second quarter and 31.7% for the first six months of 2016.
The provision for income taxes was $17.3 million in the second quarter compared to $27.6 million in the prior year period. PRA Group's provision for income taxes was 32.0% of income before taxes in the second quarter, compared with 34.9% in the prior year period. For the first six months of 2016, the provision for income taxes was $33.6 million or 32.5% of income before taxes compared to $57.6 million in the prior year period.

NET INCOME AND EPS

Net income was $36.5 million in the second quarter, compared with $51.4 million in the prior year period. The net income margin in the second quarter of 2016 was 16.1%. For the first six months of 2016, net income was $68.4 million, compared with $109.6 million in the prior year period. The net income margin for the first six months of 2016 was 15.4% compared with 22.7% in the prior year period.
Earnings per diluted share in the second quarter were $0.79, compared with $1.06 in the prior year period. For the first six months of 2016, earnings per diluted share were $1.48 million versus $2.25 in the prior year period.

PORTFOLIO ACQUISITIONS

PRA Group invested $249.5 million in new finance receivables in the second quarter of 2016.


Portfolio Purchase Source		2016				2015
($ in thousands)	Q2		Q1		Q4		Q3		Q2
Americas-Core	$	130,529	$	136,057	$	120,554	$	90,912	$	98,317
Americas-Insolvency		33,723		22,952		20,589		9,300		19,111
Europe-Core		68,835		171,038		79,735		240,385		88,499
Europe-Insolvency		16,410		6,731		4,976		3,959		2,450
Total Portfolio Purchasing	$	249,497	$	336,778	$	225,854	$	344,556	$	208,377

BALANCE SHEET

Cash and cash equivalents were $117.1 million as of June 30, 2016, compared with $56.8 million as of June 30, 2015.
Net deferred tax liabilities were $276.4 million as of June 30, 2016, compared with $252.6 million as of June 30, 2015.
Borrowings totaled $1.91 billion as of June 30, 2016, compared with $1.50 billion as of June 30, 2015.
Equity attributable to PRA Group, Inc. was $886.1 million as of June 30, 2016, compared with $897.9 million as of June 30, 2015.

Conference Call Information
PRA Group will hold a conference call today at 5:00 p.m. ET to discuss the company's second quarter results. To listen to a webcast of the call, visit http://ir.pragroup.com/events.cfm. To listen by phone, call 888-695-7639 in the U.S. or 970-315-0482 outside the U.S. The conference ID is 55478474. To listen to a replay of the call until August 15, 2016, call 855-859-2056 in the U.S. or 404-537-3406 outside the U.S. and use conference ID 55478474.

About PRA Group
As a global leader in acquiring and collecting nonperforming loans, PRA Group (Nasdaq:PRAA) returns capital to banks and other creditors to help expand financial services for consumers in the Americas and Europe. With almost 4,000 employees worldwide, PRA Group companies collaborate with customers to help them resolve their debt and provide a broad range of additional revenue and recovery services to business and government clients. For more information, please visit www.pragroup.com.

About Forward Looking Statements
Statements made herein which are not historical in nature, including PRA Group's or its management's intentions, beliefs, expectations, projections, plans or predictions of the future, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

The forward-looking statements in this press release are based upon management's current beliefs, estimates, assumptions and expectations of PRA Group's future operations and financial and economic performance, taking into account currently available information. These statements are not statements of historical fact or guarantees of future performance, and there can be no assurance that anticipated events will transpire or that our expectations will prove to be correct. Forward-looking statements involve risks and uncertainties, some of which are not currently known to PRA Group. Actual events or results may differ materially from those expressed or implied in any such forward-looking statements as a result of various factors, including risk factors and other risks that are described from time to time in PRA Group's filings with the Securities and Exchange Commission including but not limited to PRA Group's annual reports on Form 10-K, its quarterly reports on Form 10-Q and its current reports on Form 8-K, which are available through PRA Group's website and contain a detailed discussion of PRA Group's business, including risks and uncertainties that may affect future results.

Due to such uncertainties and risks, you are cautioned not to place undue reliance on such forward-looking statements, which speak only as of today. Information in this press release may be superseded by recent information or statements, which may be disclosed in later press releases, subsequent filings with the Securities and Exchange Commission or otherwise. Except as required by law, PRA assumes no obligation to publicly update or revise its forward-looking statements contained herein to reflect any change in PRA Group's expectations with regard thereto or to reflect any change in events, conditions or circumstances on which any such forward-looking statements are based, in whole or in part.


PRA Group, Inc.
Unaudited Consolidated Income Statements
(in thousands, except per share amounts)

				Three Months Ended						Six Months Ended
				June 30,						June 30,
					2016			2015			2016			2015

Revenues:
	Income recognized on finance receivables, net			$	204,008			220,064		$	410,515		$	448,467
	Fee income				22,347			13,878			38,613			26,931
	Other revenue				2,101			3,255			4,210			7,005
		Total revenues			228,456			237,197			453,338			482,403

Operating expenses:
	Compensation and employee services				64,793			68,320			131,558			133,591
	Legal collection fees				15,098			14,114			28,048			27,805
	Legal collection costs				18,799			19,556			35,981			40,410
	Agency fees				11,309			7,784			22,193			16,045
	Outside fees and services				15,876			12,466			31,684			25,263
	Communication				8,423			8,073			18,305			18,491
	Rent and occupancy				4,038			3,479			7,834			7,039
	Depreciation and amortization				6,085			4,916			12,155			9,526
	Other operating expenses				11,279			9,610			21,930			19,188
		Total operating expenses			155,700			148,318			309,688			297,358
		Income from operations			72,756			88,879			143,650			185,045

Other income and (expense):
	Interest expense				(20,569	)		(13,452	)		(40,528	)		(28,228	)
	Foreign exchange gain				2,029			3,584			179			10,373
		Income before income taxes			54,216			79,011			103,301			167,190

		Provision for income taxes			17,348			27,586			33,580			57,630
		Net income		$	36,868		$	51,425		$	69,721		$	109,560
			Adjustment for net income attributable to noncontrolling interest		412			-			1,282			-
		Net income attributable to PRA Group, Inc.		$	36,456		$	51,425		$	68,439		$	109,560

Net income per common share attributable to PRA Group, Inc.:
	Basic			$	0.79		$	1.06		$	1.48		$	2.26
	Diluted			$	0.79		$	1.06		$	1.48		$	2.25

Weighted average number of shares outstanding:
	Basic				46,333			48,325			46,288			48,525
	Diluted				46,402			48,529			46,387			48,790

PRA Group, Inc.
Unaudited Consolidated Balance Sheets
(in thousands)

						June 30,			December 31,
ASSETS							2016			2015

Cash and cash equivalents						$	117,071		$	71,372
Investments							66,560			73,799
Finance receivables, net							2,399,949			2,202,113
Other receivables, net							30,079			30,771
Income taxes receivable							13,871			1,717
Net deferred tax asset							15,713			13,068
Property and equipment, net							46,852			45,394
Goodwill							544,337			495,156
Intangible assets, net							32,655			23,788
Other assets							38,509			33,389

					Total assets	$	3,305,596		$	2,990,567

LIABILITIES AND EQUITY

Liabilities:
	Accounts payable					$	3,719		$	4,190
	Accrued expenses						79,202			95,380
	Income taxes payable						20,888			21,236
	Net deferred tax liability						276,360			261,498
	Interest-bearing deposits						58,041			46,991
	Borrowings						1,912,283			1,717,129
	Other liabilities						19,922			4,396

					Total liabilities		2,370,415			2,150,820

Equity:
		Preferred stock, par value $0.01, authorized shares, 2,000,
			issued and outstanding shares, 0				-			-
		Common stock, par value $0.01, authorized shares, 100,000, issued
			and outstanding shares, 46,341 at June 30, 2016; 100,000
			authorized shares, 46,173 issued and outstanding shares at
			December 31, 2015				463			462
		Additional paid-in capital					66,838			64,622
		Retained earnings					1,032,709			964,270
		Accumulated other comprehensive loss					(213,933	)		(228,861	)
			Total stockholders' equity - PRA Group, Inc.				886,077			800,493
				Noncontrolling interest			49,104			39,254
				Total equity			935,181			839,747
					Total liabilities and total equity	$	3,305,596		$	2,990,567

PRA Group, Inc.
FINANCIAL HIGHLIGHTS
	As of and for the									As of and for the
	Three Months Ended June 30,									Six Months Ended June 30,
		2016			2015		Change				2016			2015		Change
EARNINGS (in thousands)
Income recognized on finance receivables, net	$	204,008		$	220,064			-7	%	$	410,515		$	448,467			-8	%
Fee income		22,347			13,878			61	%		38,613			26,931			43	%
Other revenue		2,101			3,255			-35	%		4,210			7,005			-40	%
Total revenues		228,456			237,197			-4	%		453,338			482,403			-6	%
Operating expenses		155,700			148,318			5	%		309,688			297,358			4	%
Income from operations		72,756			88,879			-18	%		143,650			185,045			-22	%
Net interest expense		20,569			13,452			53	%		40,528			28,228			44	%
Net income		36,868			51,425			-28	%		69,721			109,560			-36	%
Net income attributable to PRA Group, Inc.		36,456			51,425			-29	%		68,439			109,560			-38	%

PERIOD-END BALANCES (in thousands)
Cash and cash equivalents	$	117,071		$	56,811			106	%	$	117,071		$	56,811			106	%
Finance receivables, net		2,399,949			2,012,552			19	%		2,399,949			2,012,552			19	%
Goodwill and intangible assets, net		576,992			512,451			13	%		576,992			512,451			13	%
Total assets		3,305,596			2,783,756			19	%		3,305,596			2,783,756			19	%
Borrowings		1,912,283			1,503,363			27	%		1,912,283			1,503,363			27	%
Total liabilities		2,370,415			1,885,880			26	%		2,370,415			1,885,880			26	%
Total equity - PRA Group, Inc.		886,077			897,876			-1	%		886,077			897,876			-1	%

FINANCE RECEIVABLE INCOME (dollars in thousands)
Cash collections	$	387,202		$	389,624			-1	%	$	771,535		$	789,371			-2	%
Cash collections on fully amortized pools		8,124			15,162			-46	%		17,400			32,167			-46	%
Principal amortization without allowance (reversals)/charges		170,274			164,675			3	%		338,202			334,389			1	%
Allowance (reversal)/charge		12,920			4,885			164	%		22,818			6,515			250	%
Principal amortization with allowance (reversals)/charges		183,194			169,560			8	%		361,020			340,904			6	%
Principal amortization w/ allowance charges as % of cash collections:
Including fully amortized pools		47.3	%		43.5	%		9	%		46.8	%		43.2	%		8	%
Excluding fully amortized pools		48.3	%		45.3	%		7	%		47.9	%		45.0	%		6	%
Allowance (reversal)/charge to period-end net finance receivables		0.5	%		0.2	%		122	%		1.0	%		0.3	%		194	%

PURCHASES OF FINANCE RECEIVABLES (dollars in thousands)
Purchase price - Americas core	$	130,529		$	98,317			33	%	$	266,586		$	236,815			13	%
Purchase price - Americas insolvency		33,723			19,111			76	%		56,675			35,548			59	%
Purchase price - Europe core		68,835			88,499			-22	%		239,873			110,078			118	%
Purchase price - Europe insolvency		16,410			2,450			570	%		23,141			10,960			111	%
Purchase price - total		249,497			208,377			20	%		586,275			393,401			49	%
Number of portfolios - total		136			136			0	%		275			275			0	%
ESTIMATED REMAINING COLLECTIONS (in thousands)
Estimated remaining collections - Americas core	$	2,705,781		$	2,384,698			13	%	$	2,705,781		$	2,384,698			13	%
Estimated remaining collections - Americas insolvency		396,667			529,892			-25	%		396,667			529,892			-25	%
Estimated remaining collections - Europe core		2,171,542			1,685,694			29	%		2,171,542			1,685,694			29	%
Estimated remaining collections - Europe insolvency		59,107			26,807			120	%		59,107			26,807			120	%
Estimated remaining collections - total		5,333,097			4,627,091			15	%		5,333,097			4,627,091			15	%
Adjusted estimated remaining collections (7)		5,430,192			4,747,552			14	%		5,430,192			4,747,552			14	%

SHARE DATA (share amounts in thousands)
Net income per common share - diluted	$	0.79		$	1.06			-26	%	$	1.50		$	2.25			-33	%
Weighted average number of shares outstanding - diluted		46,402			48,529			-4	%		46,387			48,790			-5	%
Shares repurchased		-			-			0	%		-			1,478			-100	%
Average price paid per share repurchased (including acquisitions costs)	$	-		$	-			0	%	$	-			52.65			-100	%
Closing market price	$	24.14		$	62.31			-61	%	$	24.14		$	62.31			-61	%

RATIOS AND OTHER DATA (dollars in thousands)
Return on average equity (1)		16.4	%		23.5	%		-30	%		15.9	%		26.6	%		-40	%
Return on revenue (2)		16.1	%		21.7	%		-26	%		15.4	%		22.7	%		-32	%
Return on average assets (3)		4.4	%		7.4	%		-40	%		4.2	%		8.0	%		-48	%
Operating margin (4)		31.8	%		37.5	%		-15	%		31.7	%		38.4	%		-17	%
Operating expense to cash receipts (5)		38.0	%		36.8	%		3	%		38.2	%		36.4	%		5	%
Debt to stockholders' equity (6)		215.8	%		167.4	%		29	%		215.8	%		167.4	%		29	%
Number of full-time equivalent collectors		2,023			2,317			-13	%		2,023			2,317			-13	%
Number of full-time equivalent employees		3,816			3,820			0	%		3,816			3,820			0	%
Cash receipts (5)	$	409,549		$	403,502			1	%	$	810,148		$	816,302			-1	%
Lines of credit - unused portion at period end		430,651			547,017			-21	%		430,651			547,017			-21	%

(1) Calculated as annualized net income divided by average equity for the period
(2) Calculated as net income divided by total revenues
(3) Calculated as annualized net income divided by average assets for the period
(4) Calculated as income from operations divided by total revenues
(5) "Cash receipts" is defined as cash collections plus fee income
(6) For purposes of this ratio, "debt" equals borrowings
(7) Equals total estimated remaining collections on our owned finance receivable
portfolios plus the estimated remaining collections on certain of our other investments.

PRA Group, Inc.
FINANCIAL HIGHLIGHTS
	For the Quarter Ended
	June 30			March 31			December 31			September 30			June 30
		2016			2016			2015			2015			2015
EARNINGS (in thousands)
Income recognized on finance receivables, net	$	204,008		$	206,507		$	208,471		$	208,184		$	220,064
Fee income		22,347			16,266			19,649			17,803			13,878
Other revenue		2,101			2,109			2,065			3,443			3,255
Total revenues		228,456			224,882			230,185			229,430			237,197
Operating expenses		155,700			153,988			159,013			175,303			148,318
Income from operations		72,756			70,894			71,172			54,127			88,879
Net interest expense		20,569			19,959			15,321			16,787			13,452
Net income		36,868			32,853			40,988			17,583			51,425
Net income attributable to PRA Group, Inc.		36,456			31,983			40,970			17,396			51,425

PERIOD-END BALANCES (in thousands)
Cash and cash equivalents	$	117,071		$	79,442		$	71,372		$	69,111		$	56,811
Finance receivables, net		2,399,949			2,377,077			2,202,113			2,167,178			2,012,552
Goodwill and intangible assets, net		576,992			557,024			518,944			526,841			512,451
Total assets		3,305,596			3,268,833			2,990,567			2,984,550			2,783,756
Borrowings		1,912,283			1,896,424			1,717,129			1,654,457			1,503,363
Total liabilities		2,370,415			2,360,091			2,150,820			2,083,131			1,885,880
Total equity - PRA Group, Inc.		886,077			864,868			800,493			863,517			897,876

FINANCE RECEIVABLE COLLECTIONS (dollars in thousands)
Cash collections	$	387,202		$	384,333		$	369,371		$	380,753		$	389,624
Cash collections on fully amortized pools		8,124			9,276			8,280			11,453			15,162
Principal amortization without allowance (reversals)/charges		170,274			167,928			149,381			161,234			164,675
Allowance (reversal)/charge		12,920			9,898			11,519			11,335			4,885
Principal amortization with allowance (reversals)/charges		183,194			177,826			160,900			172,569			169,560
Principal amortization w/ allowance charges as % of cash collections:
Including fully amortized pools		47.3	%		46.3	%		43.6	%		45.3	%		43.5	%
Excluding fully amortized pools		48.3	%		47.4	%		44.6	%		46.7	%		45.3	%
Allowance (reversal)/charge to period-end net finance receivables		0.5	%		0.4	%		0.5	%		0.5	%		0.2	%

PURCHASES OF FINANCE RECEIVABLES (dollars in thousands)
Purchase price - North America core	$	130,529		$	136,057		$	120,554		$	90,912		$	98,317
Purchase price - North America insolvency		33,723			22,952			20,589			9,300			19,111
Purchase price - Europe core		68,835			171,038			79,735			240,385			88,499
Purchase price - Europe insolvency		16,410			6,731			4,976			3,959			2,450
Purchase price - total		249,497			336,778			225,854			344,556			208,377
Number of portfolios - total		136			139			139			128			136
ESTIMATED REMAINING COLLECTIONS (in thousands)
Estimated remaining collections - Americas core	$	2,705,781		$	2,643,410		$	2,558,529		$	2,421,506		$	2,384,698
Estimated remaining collections - Americas insolvency		396,667			421,866			448,652			474,097			529,892
Estimated remaining collections - Europe core		2,171,542			2,152,403			1,964,763			1,903,226			1,685,694
Estimated remaining collections - Europe insolvency		59,107			40,938			34,878			30,081			26,807
Estimated remaining collections - total		5,333,097			5,258,617			5,006,822			4,828,910			4,627,091
Adjusted estimated remaining collections (7)		5,430,192			5,366,417			5,114,923			4,945,609			4,747,552

SHARE DATA (share amounts in thousands)
Net income per common share - diluted	$	0.79		$	0.69		$	0.86		$	0.36		$	1.06
Weighted average number of shares outstanding - diluted		46,402			46,372			47,539			48,498			48,529
Shares repurchased		-			-			2,072			133			-
Average price paid per share repurchased (including acquisitions costs)	$	-		$	-		$	38.60		$	58.08		$	-
Closing market price	$	24.14		$	29.39		$	34.69		$	52.92		$	62.31

RATIOS AND OTHER DATA (dollars in thousands)
Return on average equity (1)		16.4	%		15.4	%		19.8	%		7.8	%		23.5	%
Return on revenue (2)		16.1	%		14.6	%		17.8	%		7.7	%		21.7	%
Return on average assets (3)		4.4	%		4.1	%		5.5	%		2.3	%		7.4	%
Operating margin (4)		31.8	%		31.5	%		30.9	%		23.6	%		37.5	%
Operating expense to cash receipts (5)		38.0	%		38.4	%		40.9	%		44.0	%		36.8	%
Debt to stockholders'equity (6)		215.8	%		219.3	%		214.5	%		191.6	%		167.4	%
Number of collectors		2,023			2,103			2,173			2,159			2,317
Number of full-time equivalent employees		3,816			3,748			3,799			3,715			3,820
Cash receipts (5)	$	409,549		$	400,599		$	389,020		$	398,556		$	403,502
Lines of credit - unused portion at period end		430,651			435,709			446,769			393,246			547,017

(1) Calculated as annualized net income divided by average equity for the period
(2) Calculated as net income divided by total revenues
(3) Calculated as annualized net income divided by average assets for the period
(4) Calculated as income from operations divided by total revenues
(5) "Cash receipts" is defined as cash collections plus fee income
(6) For purposes of this ratio, "debt" equals borrowings
(7) Equals total estimated remaining collections on our owned finance receivable
portfolios plus the estimated remaining collections on certain of our other investments.

Use of Non-GAAP Financial Measures
PRA Group, Inc. reports financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, the Company believes certain non-GAAP performance measures and ratios, which exclude penalty and redress associated with the Consumer Financial Protection Bureau consent order, expenses associated with acquisitions, legal costs not associated with normal operations, and constant currency adjustments, improve comparability between current year results and prior periods and better reflect the company's operational performance. Management uses non-GAAP measures internally to evaluate the company's performance and to set performance goals. Reconciliations from non-GAAP to the most directly comparable GAAP financial measures are provided below. These non-GAAP financial measures should be viewed in addition to, not as an alternative for reported GAAP results.

The constant currency results assume that foreign revenues and expenses are translated from foreign currencies to the U.S. dollar at rates consistent with the prior year, and that any benefit or loss caused by foreign currency fluctuations would be consistent with the prior year. To do this the Company translates the current year's income statements into U.S. dollars using the prior year's average exchange rates and then replaces the foreign exchange gain or loss for the current year with the balance from the prior year. Finally, the Company calculates the tax impact of the constant currency results to reflect the current effective tax rate of the reporting period.


Three Months Ended June 30, 2016
	Net Income		Average Equity		Return on Average Equity, Annualized
As Reported	$	36,456	$	887,656		16.4	%
Adjustments		1,872		624		0.9	%
As Adjusted		38,328		888,280		17.3	%

Six Months Ended June 30, 2016
	Net Income		Average Equity		Return on Average Equity, Annualized
As Reported	$	68,439	$	859,479		15.9	%
Adjustments		9,387		1,564		2.2	%
As Adjusted		77,826		861,043		18.1	%

Three Months Ended June 30, 2015
	Net Income		Average Equity		Return on Average Equity, Annualized
As Reported	$	51,425	$	876,426		23.5	%
Adjustments		810		270		0.3	%
As Adjusted		52,235		876,696		23.8	%

Six Months Ended June 30, 2015
	Net Income		Average Equity		Return on Average Equity, Annualized
As Reported	$	109,560	$	824,381		26.6	%
Adjustments		2,612		435		0.6	%
As Adjusted		112,172		824,816		27.2	%

Three Months Ended June 30, 2016
	Total Revenues		Total Operating Expenses			Income from Operations		Net Income attributable to PRA Group, Inc.		Diluted EPS
As Reported	$	228,456	$	155,700		$	72,756	$	36,456	$	0.79
Adjustments:
CFPB expenses including penalty and redress		-		(21	)		21		13		-
Acquisition-related expenses		-		(557	)		557		354		0.01
Legal costs not associated with normal operations		-		(1,623	)		1,623		1,031		0.02
Constant currency adjustments		1,576		1,398			178		474		0.01
Subtotal of adjustments		1,576		(803	)		2,379		1,872		0.04
As Adjusted		230,032		154,897			75,135		38,328		0.83

Six Months Ended June 30, 2016
	Total Revenues		Total Operating Expenses			Income from Operations		Net Income attributable to PRA Group, Inc.		Diluted EPS
As Reported	$	453,338	$	309,688		$	143,650	$	68,439	$	1.48
Adjustments:
CFPB expenses including penalty and redress		-		(73	)		73		47		-
Acquisition-related expenses		-		(1,591	)		1,591		1,025		0.02
Legal costs not associated with normal operations		-		(2,058	)		2,058		1,326		0.03
Constant currency adjustments		5,271		3,129			2,142		6,989		0.15
Subtotal of adjustments		5,271		(593	)		5,864		9,387		0.20
As Adjusted		458,609		309,095			149,514		77,826		1.68

Three Months Ended June 30, 2015
	Total Revenues		Total Operating Expenses			Income from Operations		Net Income attributable to PRA Group, Inc.		Diluted EPS
As Reported	$	237,197	$	148,318		$	88,879	$	51,425	$	1.06
Adjustments:
Acquisition-related expenses		-		(943	)		943		624		0.02
Legal costs not associated with normal operations		-		(282	)		282		186		-
Subtotal of adjustments		-		(1,225	)		1,225		810		0.02
As Adjusted		237,197		147,093			90,104		52,235		1.08

Six Months Ended June 30, 2015
	Total Revenues		Total Operating Expenses			Income from Operations		Net Income attributable to PRA Group, Inc.		Diluted EPS
As Reported	$	482,403	$	297,358		$	185,045	$	109,560	$	2.25
Adjustments:
Acquisition-related expenses		-		(3,186	)		3,186		2,316		0.05
Legal costs not associated with normal operations		-		(407	)		407		296		-
Subtotal of adjustments		-		(3,593	)		3,593		2,612		0.05
As Adjusted		482,403		293,765			188,638		112,172		2.30

Investor Contact:
Darby Schoenfeld
Director of Investor Relations
(757) 431-7913
DCSchoenfeld@PRAGroup.com

News Media Contact:
Nancy Porter
Vice President, Corporate Communications
(757) 431-7950
NAPorter@PRAGroup.com