PRA Group Reports Fourth Quarter and Full Year 2016 Results

NORFOLK, Va., Feb. 28, 2017 (GLOBE NEWSWIRE) -- 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) Q4Q3Q2Q1 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) Q4Q3Q2Q1 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 31September 30June 30March 31December 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

Source:PRA Group, Inc.