PRA Group Reports Fourth Quarter and Full Year 2016 Results

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Releases

PRA Investorroom

NORFOLK, Va., Feb. 28, 2017 -- PRA Group, Inc. (Nasdaq:PRAA), a global leader in acquiring and collecting nonperforming loans, today reported its financial results for the fourth quarter and full year of 2016. The company reported a net loss per share of $0.38. For the full year, the company reported diluted earnings per share of $1.83. Non-GAAP financial results are presented in constant currency with the corresponding period 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.

Fourth Quarter Highlights

Estimated remaining collections of $5.05 billion.
Cash collections of $348.8 million.
$199.8 million in investments.

Full Year 2016 Highlights

Cash collections of $1.5 billion.
Total revenues of $830.6 million.
$947.3 million in investments.

"While our fourth quarter GAAP earnings reflect a non-cash allowance charge, our economic performance remained solid and we made substantial progress resolving operational and regulatory challenges. PRA Group spent much of 2016 preparing for, and to the extent possible, attempting to influence, a number of evolving forces that we believe could ultimately be beneficial to our shareholders," said Steve Fredrickson, chairman and chief executive officer, PRA Group. "Relief from the antiquated interpretation of the Telephone Consumer Protection Act (TCPA), potential increases in domestic supply of nonperforming loans, the prospect of consolidating competition in Europe, and possible clarification of collection regulations are several of these potential tailwinds. We stand ready and waiting to capitalize on any of these events and are excited about what the future holds for PRA Group."

REVENUES AND CASH COLLECTIONS

Total revenues of $155.3 million in the fourth quarter included finance receivables income net of principal amortization and net allowance charges versus $230.2 million in the prior year period. For the year ended December 31, 2016, total revenues were $830.6 million versus $942.0 million in the prior year period.
Cash collections in the fourth quarter were $348.8 million versus $369.4 million in the prior year period. Cash collections for the full year of 2016 were $1.49 billion versus $1.54 billion in the prior year period. Both GAAP and currency adjusted cash collections are reported below and were comprised of collections from these finance receivables sources:


Cash Collection Source		2016								2015
($ in thousands)	Q4		Q3		Q2		Q1		Q4
Americas-Core	$	193,360	$	210,524	$	213,741	$	219,571	$	195,834
Americas-Insolvency		52,988		60,429		67,745		68,646		73,843
Europe-Core		97,429		96,028		102,972		94,091		97,149
Europe-Insolvency		4,974		4,719		2,744		2,025		2,545
Total Cash Collections	$	348,751	$	371,700	$	387,202	$	384,333	$	369,371

Cash Collection Source -
Constant Currency Adjusted		2016								2015
($ in thousands)	Q4								Q4
Americas-Core	$	190,534							$	195,834
Americas-Insolvency		52,997								73,843
Europe-Core		106,573								97,149
Europe-Insolvency		5,714								2,545
Total Cash Collections	$	355,818							$	369,371

Principal amortization of finance receivables in the fourth quarter was $216.8 million or 62.2% of cash collections, compared with $160.9 million or 43.6% in the prior year period. Principal amortization included a net allowance charge of $62.5 million recorded against certain pools of finance receivables in the quarter, compared with a net allowance charge of $11.5 million recorded in the prior year period. During the quarter, the Company made a change to its accounting estimates which generated an outsized allowance charge. Principal amortization of finance receivables for the full year of 2016 was $746.9 million or 50.1% of cash collections, including a net allowance charge of $98.5 million compared with $674.4 million or 43.8%, including a net allowance charge of $29.4 million in 2015.
Revenues in the fourth quarter also included income from PRA Group's fee-based businesses of $21.2 million, compared with $19.6 million in the prior year period, and other income of $2.1 million, in-line with the prior year period. For the full year of 2016, fee income was $77.4 million compared with $64.4 million in 2015 and other income was $8.1 million compared with $12.5 million in 2015.

EXPENSES AND OPERATING INCOME

Operating expenses were $148.2 million in the fourth quarter, compared with $159.0 million in the prior year period. Operating expenses include an accrual to reflect the fact that the company has reached an agreement in principle with the opposing party in the Mejia case. The fourth quarter of 2015 included an accrual for the settlement of the TCPA lawsuit. For the full year of 2016, operating expenses were $612.4 million, compared with $631.7 million in the prior year. The full year of 2015 included the settlement with the CFPB and an accrual for the settlement of the TCPA lawsuit.
Operating income in the fourth quarter was $7.1 million, compared with $71.2 million in the prior year period. For the full year of 2016, operating income was $218.2 million versus $310.3 million in 2015. The operating margin was 26.3% for the full year of 2016.
The provision for income taxes was $43.2 million for the full year of 2016, or 32.2% of income before taxes, compared to $89.4 million, or 34.7% of income before taxes, in 2015.

NET INCOME AND EPS

Net loss was $17.6 million in the fourth quarter, compared with net income of $41.0 million in the prior year period. For the full year of 2016, net income was $85.1 million, compared with $167.9 million in 2015. The net income margin for the full year of 2016 was 10.9%.
Loss per share in the fourth quarter was $0.38, compared with earnings per diluted share of $0.86 in the prior year period. For the full year of 2016, earnings per diluted share were $1.83 versus $3.47 in the prior year period.

PORTFOLIO ACQUISITIONS

PRA Group invested $199.8 million in new finance receivables in the fourth quarter of 2016. For the full year of 2016, PRA Group invested $947.3 million in new finance receivables.


Portfolio Purchase Source		2016								2015
($ in thousands)	Q4		Q3		Q2		Q1		Q4
Americas-Core	$	91,800	$	95,452	$	130,529	$	136,057	$	120,554
Americas-Insolvency		20,929		16,760		33,723		22,952		20,589
Europe-Core		80,129		34,240		68,835		171,038		79,735
Europe-Insolvency		6,943		14,803		16,410		6,731		4,976
Total Portfolio Purchasing	$	199,801	$	161,255	$	249,497	$	336,778	$	225,854

BALANCE SHEET

Cash and cash equivalents were $94.3 million as of December 31, 2016, compared with $71.4 million as of December 31, 2015.
Net deferred tax liabilities were $258.3 million as of December 31, 2016, compared with $261.5 million as of December 31, 2015.
Borrowings totaled $1.78 billion as of December 31, 2016, compared with $1.72 billion as of December 31, 2015.
Equity attributable to PRA Group, Inc. was $864.3 million as of December 31, 2016, compared with $800.5 million as of December 31, 2015.

Conference Call Information
PRA Group will hold a conference call today at 5:00 p.m. ET to discuss the company's fourth quarter and full year 2016 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 58396415. To listen to a replay of the call until March 7, 2017, call 855-859-2056 in the U.S. or 404-537-3406 outside the U.S. and use conference ID 58396415.

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 over 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 businesses. 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 Group 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						Twelve Months Ended
				December 31,						December 31,
					2016			2015			2016			2015

Revenues:
	Income recognized on finance receivables, net			$	131,965			208,471		$	745,119		$	865,122
	Fee income				21,171			19,649			77,381			64,383
	Other revenue				2,122			2,065			8,080			12,513
		Total revenues			155,258			230,185			830,580			942,018

Operating expenses:
	Compensation and employee services				61,390			68,670			258,846			268,345
	Legal collection expenses				34,726			28,647			132,202			129,456
	Agency fees				10,695			8,182			44,922			32,188
	Outside fees and services				16,683			27,309			63,098			65,155
	Communication				7,652			6,601			33,771			33,113
	Rent and occupancy				4,001			3,991			15,710			14,714
	Depreciation and amortization				6,020			4,935			24,359			19,874
	Other operating expenses				7,023			10,678			39,466			68,829
		Total operating expenses			148,190			159,013			612,374			631,674
		Income from operations			7,068			71,172			218,206			310,344

Other income and (expense):
	Interest expense				(21,026	)		(15,321	)		(80,864	)		(60,336	)
	Impairment of investments				(5,823	)		-			(5,823	)		-
	Foreign exchange (loss)/gain				(2,619	)		301			2,564			7,514
		(Loss)/Income before income taxes			(22,400	)		56,152			134,083			257,522

		Provision for income taxes			(7,053	)		15,164			43,191			89,391
		Net (loss)/income		$	(15,347	)	$	40,988		$	90,892		$	168,131
			Adjustment for net income attributable to noncontrolling interests		2,301			18			5,795			205
		Net (loss)/income attributable to PRA Group, Inc.		$	(17,648	)	$	40,970		$	85,097		$	167,926

Net (loss)/income per common share attributable to PRA Group, Inc.:
	Basic			$	(0.38	)	$	0.87		$	1.84		$	3.49
	Diluted			$	(0.38	)	$	0.86		$	1.83		$	3.47

Weighted average number of shares outstanding:
	Basic				46,346			47,197			46,316			48,128
	Diluted				46,346			47,539			46,388			48,405

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

						December 31,			December 31,
ASSETS							2016			2015

Cash and cash equivalents						$	94,287		$	71,372
Investments							68,543			73,799
Finance receivables, net							2,307,969			2,202,113
Other receivables, net							11,650			30,771
Income taxes receivable							9,427			1,717
Net deferred tax asset							28,482			13,068
Property and equipment, net							38,744			45,394
Goodwill							499,911			495,156
Intangible assets, net							27,935			23,788
Other assets							33,808			33,389
Assets held for sale							43,243			-

					Total assets	$	3,163,999		$	2,990,567

LIABILITIES AND EQUITY

Liabilities:
	Accounts payable					$	2,459		$	4,190
	Accrued expenses						82,699			95,380
	Income taxes payable						19,631			21,236
	Net deferred tax liability						258,344			261,498
	Interest-bearing deposits						76,113			46,991
	Borrowings						1,784,101			1,717,129
	Other liabilities						10,821			4,396
	Liabilities held for sale						4,220			-

					Total liabilities		2,238,388			2,150,820

Redeemable noncontrolling interest							8,448			-

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, 46,356 at December 31, 2016; 100,000
			authorized shares, 46,173 issued and outstanding shares at				464			462
			December 31, 2015
		Additional paid-in capital					66,414			64,622
		Retained earnings					1,049,367			964,270
		Accumulated other comprehensive loss					(251,944	)		(228,861	)
			Total stockholders' equity - PRA Group, Inc.				864,301			800,493
				Noncontrolling interest			52,862			39,254
				Total equity			917,163			839,747
					Total liabilities and equity	$	3,163,999		$	2,990,567

PRA Group, Inc.
Financial Highlights
	As of and for the								As of and for the
	Three Months Ended December 31,								Twelve Months Ended December 31,
		2016			2015		Change			2016			2015		Change
EARNINGS (in thousands)
Income recognized on finance receivables, net	$	131,965		$	208,471		-37	%	$	745,119		$	865,122		-14	%
Fee income		21,171			19,649		8	%		77,381			64,383		20	%
Other revenue		2,122			2,065		3	%		8,080			12,513		-35	%
Total revenues		155,258			230,185		-33	%		830,580			942,018		-12	%
Operating expenses		148,190			159,013		-7	%		612,374			631,674		-3	%
Income from operations		7,068			71,172		-90	%		218,206			310,344		-30	%
Net interest expense		21,026			15,321		37	%		80,864			60,336		34	%
Net (loss)/income		(15,347	)		40,988		-137	%		90,892			168,131		-46	%
Net (loss)/income attributable to PRA Group, Inc.		(17,648	)		40,970		-143	%		85,097			167,926		-49	%

PERIOD-END BALANCES (in thousands)
Cash and cash equivalents	$	94,287		$	71,372		32	%	$	94,287		$	71,372		32	%
Finance receivables, net		2,307,969			2,202,113		5	%		2,307,969			2,202,113		5	%
Goodwill and intangible assets, net		527,846			518,944		2	%		527,846			518,944		2	%
Total assets		3,163,999			2,990,567		6	%		3,163,999			2,990,567		6	%
Borrowings		1,784,101			1,717,129		4	%		1,784,101			1,717,129		4	%
Total liabilities		2,238,388			2,150,820		4	%		2,238,388			2,150,820		4	%
Total equity - PRA Group, Inc.		864,301			800,493		8	%		864,301			800,493		8	%

FINANCE RECEIVABLE INCOME (dollars in thousands)
Cash collections	$	348,751		$	369,371		-6	%	$	1,491,986		$	1,539,495		-3	%
Cash collections on fully amortized pools		9,041			8,280		9	%		34,185			51,900		-34	%
Principal amortization without allowance charges		154,271			149,381		3	%		648,388			645,004		1	%
Allowance charges		62,515			11,519		443	%		98,479			29,369		235	%
Principal amortization with allowance charges		216,786			160,900		35	%		746,867			674,373		11	%
Principal amortization w/ allowance charges as % of cash collections:
Including fully amortized pools		62.2	%		43.6	%	43	%		50.1	%		43.8	%	14	%
Excluding fully amortized pools		63.8	%		44.6	%	43	%		51.2	%		45.3	%	13	%
Allowance charges to period-end net finance receivables		2.7	%		0.5	%	418	%		4.3	%		1.3	%	220	%

PURCHASES OF FINANCE RECEIVABLES (dollars in thousands)
Purchase price - Americas core	$	91,800		$	120,554		-24	%	$	453,838		$	448,281		1	%
Purchase price - Americas insolvency		20,929			20,589		2	%		94,364			65,437		44	%
Purchase price - Europe core		80,129			79,735		0	%		354,242			430,198		-18	%
Purchase price - Europe insolvency		6,943			4,976		40	%		44,887			19,895		126	%
Purchase price - total		199,801			225,854		-12	%		947,331			963,811		-2	%
Number of portfolios - total		126			139		-9	%		523			542		-4	%

ESTIMATED REMAINING COLLECTIONS (in thousands)
Estimated remaining collections - Americas core	$	2,571,887		$	2,558,529		1	%	$	2,571,887		$	2,558,529		1	%
Estimated remaining collections - Americas insolvency		331,371			448,652		-26	%		331,371			448,652		-26	%
Estimated remaining collections - Europe core		2,072,936			1,964,763		6	%		2,072,936			1,964,763		6	%
Estimated remaining collections - Europe insolvency		71,810			34,878		106	%		71,810			34,878		106	%
Estimated remaining collections - total		5,048,004			5,006,822		1	%		5,048,004			5,006,822		1	%
Adjusted estimated remaining collections (7)		5,109,404			5,114,923		0	%		5,109,404			5,114,923		0	%

SHARE DATA (share amounts in thousands)
Net (loss)/income per common share - diluted	$	(0.38	)	$	0.86		-144	%	$	1.83		$	3.47		-47	%
Weighted average number of shares outstanding - diluted		46,346			47,539		-3	%		46,388			48,405		-4	%
Shares repurchased		-			2,072		-100	%		-			3,683		-100	%
Average price paid per share repurchased (including acquisitions costs)	$	-			38.60		-100	%		-			44.94		-100	%
Closing market price	$	39.10		$	34.69		13	%	$	39.10		$	34.69		13	%

RATIOS AND OTHER DATA (dollars in thousands)
Return on average equity (1)		-7.9	%		19.8	%	-140	%		9.7	%		19.9	%	-51	%
Return on revenue (2)		-9.9	%		17.8	%	-156	%		10.9	%		17.8	%	-39	%
Return on average assets (3)		-2.2	%		5.5	%	-140	%		2.6	%		5.9	%	-56	%
Operating margin (4)		4.6	%		30.9	%	-85	%		26.3	%		32.9	%	-20	%
Operating expense to cash receipts (5)		40.1	%		40.9	%	-2	%		39.0	%		39.4	%	-1	%
Debt to total equity - PRA Group, Inc. (6)		206.4	%		214.5	%	-4	%		206.4	%		214.5	%	-4	%
Number of full-time equivalent collectors		1,906			2,029		-6	%		1,906			2,029		-6	%
Number of full-time equivalent employees		4,019			3,799		6	%		4,019			3,799		6	%
Cash receipts (5)	$	369,922		$	389,020		-5	%	$	1,569,367		$	1,603,878		-2	%
Lines of credit - unused portion at period end		641,132			446,769		44	%		641,132			446,769		44	%

(1) Calculated as annualized or annual net income divided by average equity for the period
(2) Calculated as net income divided by total revenues
(3) Calculated as annualized or annual 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
	December 31			September 30			June 30			March 31			December 31
		2016			2016			2016			2016			2015
EARNINGS (in thousands)
Income recognized on finance receivables, net	$	131,965		$	202,639		$	204,008		$	206,507		$	208,471
Fee income		21,171			17,597			22,347			16,266			19,649
Other revenue		2,122			1,748			2,101			2,109			2,065
Total revenues		155,258			221,984			228,456			224,882			230,185
Operating expenses		148,190			154,496			155,700			153,988			159,013
Income from operations		7,068			67,488			72,756			70,894			71,172
Net interest expense		21,026			19,310			20,569			19,959			15,321
Net (loss)/income		(15,347	)		36,518			36,868			32,853			40,988
Net (loss)/income attributable to PRA Group, Inc.		(17,648	)		34,306			36,456			31,983			40,970

PERIOD-END BALANCES (in thousands)
Cash and cash equivalents	$	94,287		$	91,791		$	117,071		$	79,442		$	71,372
Finance receivables, net		2,307,969			2,392,408			2,399,949			2,377,077			2,202,113
Goodwill and intangible assets, net		527,846			592,044			576,992			557,024			518,944
Total assets		3,163,999			3,279,347			3,305,596			3,268,833			2,990,567
Borrowings		1,784,101			1,816,600			1,912,283			1,896,424			1,717,129
Total liabilities		2,238,388			2,291,369			2,370,415			2,360,091			2,150,820
Total equity - PRA Group, Inc.		864,301			937,702			886,077			864,868			800,493

FINANCE RECEIVABLE COLLECTIONS (dollars in thousands)
Cash collections	$	348,751		$	371,700		$	387,202		$	384,333		$	369,371
Cash collections on fully amortized pools		9,041			7,744			8,124			9,276			8,280
Principal amortization without allowance charges		154,271			155,915			170,274			167,928			149,381
Allowance charges		62,515			13,146			12,920			9,898			11,519
Principal amortization with allowance charges		216,786			169,061			183,194			177,826			160,900
Principal amortization w/ allowance charges as % of cash collections:
Including fully amortized pools		62.2	%		45.5	%		47.3	%		46.3	%		43.6	%
Excluding fully amortized pools		63.8	%		46.5	%		48.3	%		47.4	%		44.6	%
Allowance charges to period-end net finance receivables		2.7	%		0.5	%		0.5	%		0.4	%		0.5	%

PURCHASES OF FINANCE RECEIVABLES (dollars in thousands)
Purchase price - North America core	$	91,800		$	95,452		$	130,529		$	136,057		$	120,554
Purchase price - North America insolvency		20,929			16,760			33,723			22,952			20,589
Purchase price - Europe core		80,129			34,240			68,835			171,038			79,735
Purchase price - Europe insolvency		6,943			14,803			16,410			6,731			4,976
Purchase price - total		199,801			161,255			249,497			336,778			225,854
Number of portfolios - total		126			122			136			139			139

ESTIMATED REMAINING COLLECTIONS (in thousands)
Estimated remaining collections - Americas core	$	2,571,887		$	2,672,427		$	2,705,781		$	2,643,410		$	2,558,529
Estimated remaining collections - Americas insolvency		331,371			356,363			396,667			421,866			448,652
Estimated remaining collections - Europe core		2,072,936			2,148,230			2,171,542			2,152,403			1,964,763
Estimated remaining collections - Europe insolvency		71,810			72,919			59,107			40,938			34,878
Estimated remaining collections - total		5,048,004			5,249,939			5,333,097			5,258,617			5,006,822
Adjusted estimated remaining collections (7)		5,109,404			5,345,657			5,430,192			5,366,417			5,114,923

SHARE DATA (share amounts in thousands)
Net (loss)/income per common share - diluted	$	(0.38	)	$	0.74		$	0.79		$	0.69		$	0.86
Weighted average number of shares outstanding - diluted		46,346			46,434			46,402			46,372			47,539
Shares repurchased		-			-			-			-			2,072
Average price paid per share repurchased (including acquisitions costs)	$	-		$	-		$	-		$	-		$	38.60
Closing market price	$	39.10		$	34.54		$	24.14		$	29.39		$	34.69

RATIOS AND OTHER DATA (dollars in thousands)
Return on average equity (1)		-7.9	%		15.1	%		16.4	%		15.4	%		19.8	%
Return on revenue (2)		-9.9	%		16.5	%		16.1	%		14.6	%		17.8	%
Return on average assets (3)		-2.2	%		4.2	%		4.4	%		4.1	%		5.5	%
Operating margin (4)		4.6	%		30.4	%		31.8	%		31.5	%		30.9	%
Operating expense to cash receipts (5)		40.1	%		39.7	%		38.0	%		38.4	%		40.9	%
Debt to total equity - PRA Group, Inc. (6)		206.4	%		193.7	%		215.8	%		219.3	%		214.5	%
Number of full-time equivalent collectors		1,906			1,859			1,804			1,881			2,029
Number of full-time equivalent employees		4,019			3,859			3,816			3,748			3,799
Cash receipts (5)	$	369,922		$	389,297		$	409,549		$	400,599		$	389,020
Lines of credit - unused portion at period end		641,132			630,775			430,651			435,709			446,769

(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 financial 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, one-time tax items and constant currency adjustments, improve comparability between current year results and prior periods and better reflect the Company's operational performance. In all periods presented, the Company adjusted the income tax provision by excluding the tax impact of the non-GAAP adjustments discussed above in non-GAAP financial measures. Management uses non-GAAP financial 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 December 31, 2016
	Net (Loss)			Average Equity		Return on Average Equity, Annualized
As Reported	$	(17,648	)	$	894,821	-7.9	%
Adjustments		2,210			738	1.0	%
As Adjusted		(15,438	)		895,559	-6.9	%

Twelve Months Ended December 31, 2016
	Net Income			Average Equity		Return on Average Equity
As Reported	$	85,097		$	880,394	9.7	%
Adjustments		8,900			745	1.0	%
As Adjusted		93,997			881,139	10.7	%

Three Months Ended December 31, 2015
	Net Income			Average Equity		Return on Average Equity, Annualized
As Reported	$	40,970		$	826,853	19.8	%
Adjustments		8,455			2,818	4.0	%
As Adjusted		49,425			829,671	23.8	%

Twelve Months Ended December 31, 2015
	Net Income			Average Equity		Return on Average Equity
As Reported	$	167,926		$	843,164	19.9	%
Adjustments		34,930			2,926	4.1	%
As Adjusted		202,856			846,090	24.0	%

Three Months Ended December 31, 2016
	Total Revenues		Total Operating Expenses			Income from Operations		Provision for Income Taxes			Net Loss attributable to PRA Group, Inc.			Diluted EPS
As Reported	$	155,258	$	148,190		$	7,068	$	(7,053	)	$	(17,648	)	$	(0.38	)
Adjustments:
Acquisition-related expenses		-		(458	)		458		168			290			0.01
One-time tax items		-		-			-		(461	)		461			0.01
Legal costs not associated with normal operations		-		(3,741	)		3,741		1,459			2,282			0.05
Constant currency adjustments		1,998		1,941			57		706			(823	)		(0.02	)
Subtotal of adjustments		1,998		(2,258	)		4,256		1,872			2,210			0.05
As Adjusted		157,256		145,932			11,324		(5,181	)		(15,438	)		(0.33	)

Twelve Months Ended December 31, 2016
	Total Revenues		Total Operating Expenses			Income from Operations		Provision for Income Taxes			Net Income attributable to PRA Group, Inc.			Diluted EPS
As Reported	$	830,580	$	612,374		$	218,206	$	43,191		$	85,097		$	1.83
Adjustments:
CFPB expenses including penalty and redress		-		(93	)		93		35			58			0.00
Acquisition-related expenses		-		(2,265	)		2,265		850			1,415			0.03
One-time tax items		-		-			-		(1,844	)		1,844			0.04
Legal costs not associated with normal operations		-		(7,310	)		7,310		2,742			4,568			0.10
Constant currency adjustments		9,485		6,698			2,787		(272	)		1,015			0.03
Subtotal of adjustments		9,485		(2,970	)		12,455		1,511			8,900			0.20
As Adjusted		840,065		609,404			230,661		44,702			93,997			2.03

Three Months Ended December 31, 2015
	Total Revenues		Total Operating Expenses			Income from Operations		Provision for Income Taxes			Net Income attributable to PRA Group, Inc.			Diluted EPS
As Reported	$	230,185	$	159,013		$	71,172	$	15,164		$	40,970		$	0.86
Adjustments:
CFPB expenses including penalty and redress		-		(111	)		111		43			68			0.00
Acquisition-related expenses		-		(1,639	)		1,639		634			1,005			0.02
Legal costs not associated with normal operations		-		(12,045	)		12,045		4,663			7,382			0.16
Subtotal of adjustments		-		(13,795	)		13,795		5,340			8,455			0.18
As Adjusted		230,185		145,218			84,967		20,504			49,425			1.04


Twelve Months Ended December 31, 2015
	Total Revenues		Total Operating Expenses			Income from Operations		Provision for Income Taxes			Net Income attributable to PRA Group, Inc.			Diluted EPS
As Reported	$	942,018	$	631,674		$	310,344	$	89,391		$	167,926		$	3.47
Adjustments:
CFPB expenses including penalty and redress		-		(28,917	)		28,917		8,158			20,759			0.43
Acquisition-related expenses		-		(5,627	)		5,627		1,668			3,959			0.08
One-time tax items		-		-			-		(1,846	)		1,846			0.04
Legal costs not associated with normal operations		-		(13,714	)		13,714		5,348			8,366			0.17
Subtotal of adjustments		-		(48,258	)		48,258		13,328			34,930			0.72
As Adjusted		942,018		583,416			358,602		102,719			202,856			4.19

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