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 PRA Group Reports Fourth Quarter and Full Year 2015 Results
   Thursday, February 25, 2016 4:06:40 PM ET

PRA Group (PRAA ), a global leader in acquiring and collecting nonperforming loans, today reported its financial results for the fourth quarter and full year of 2015. The company reported diluted earnings per share of $0.86 and non-GAAP diluted earnings per share of $1.03 for the fourth quarter of 2015. For the full year, the company reported diluted earnings per share of $3.47 and non-GAAP diluted earnings per share of $4.30. Non-GAAP financial results are presented in constant currency with the third and fourth quarter of 2014 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.

The company also announced the acquisition of certain assets of Recovery Management Systems Corporation (RMSC). The transaction also includes the hiring of most RMSC employees. Mike Petit, president of PRA Insolvency Investment Services, said, "We are extremely impressed with RMSC’s technology platform supporting its bankrupt account processing and recovery management business. This acquisition strengthens and broadens our ability to offer bankruptcy processing services to our clients and complements our existing Insolvency business."

Fourth Quarter Highlights

-- Cash collections of $369.4 million, non-GAAP cash collections of $380.3 million.

-- Revenues of $230.2 million, non-GAAP revenues of $236.7 million.

-- Income from operations of $71.2 million, non-GAAP income from operations of $87.4 million.

-- Net income of $41.0 million, non-GAAP net income of $49.0 million.

-- Return on average equity, annualized, of 19.8%, non-GAAP return on average equity, annualized, of 27.5%.

-- $225.9 million in investments.

Full Year Highlights

-- Cash collections of $1.54 billion, non-GAAP cash collections of $1.56 billion.

-- Revenues of $942.0 million, non-GAAP revenues of $954.4 million.

-- Income from operations of $310.3 million, non-GAAP income from operations of $363.0 million.

-- Net income of $167.9 million, non-GAAP net income of $207.9 million.

-- Return on average equity of 19.9%, non-GAAP return on average equity of 24.6%.

-- $963.8 million in investments.

"One thing remains evident for our future long term results, the industry consolidation in the U.S. Core market remains a critical positive for us," said Steve Fredrickson, chairman and chief executive officer, PRA Group. "When any of the events decreasing supply in the U.S. change, PRA will be there to win our fair share and our results should begin to show the effects soon thereafter. We feel confident that with our industry low leverage, we will be ready and able to purchase portfolios that are within our return profile both now and when volume inevitably picks up. In the meantime, we are highly profitable, producing strong results for shareholders, while we grow rapidly in Europe and South America, and improve our operating effectiveness consistently."

REVENUES AND CASH COLLECTIONS

-- Total revenues of $230.2 million in the fourth quarter included finance receivables income net of principal amortization and net allowance charges. Non-GAAP total revenues for the quarter were $236.7 million versus $250.7 million in year-ago quarter. For the full year, total revenues were $942.0 million. Non-GAAP total revenues for the full year were $954.4 million versus $881.0 million in 2014.

-- Cash collections were $369.4 million. Non-GAAP cash collections were $380.3 million, an increase of 2% over the year-ago quarter. Cash collections for the year were $1.54 billion and non-GAAP cash collections were $1.56 billion. Both GAAP and non-GAAP cash collections are reported below and included collections from these finance receivables sources:

Cash Collection Source ($ in thousands)             Q4-2015     Q3-2015       Q2-2015     Q1-2015     Q4-2014
Americas-Core                                       $  195,834  $  210,725    $  218,838  $  219,371  $  185,921
Americas-Insolvency                                    73,843      81,865        92,974      95,533      103,104
Europe-Core                                            97,149      85,635        76,602      83,876      84,398
Europe-Insolvency                                      2,545       2,528         1,210       967         5
Total Cash Collections                              $  369,371  $  380,753    $  389,624  $  399,747  $  373,428
Cash Collection Source - Constant Currency Adjusted Q4-2015     YTD-2015                  Q4-2014     YTD-2014
($ in thousands)
Americas-Core                                       $  196,967  $  846,703                $  185,921  $  752,995
Americas-Insolvency                                    73,843      344,215                   103,104     458,451
Europe-Core                                            106,899     363,557                   84,398      167,361
Europe-Insolvency                                      2,546       7,252                     5           5
Total Cash Collections                              $  380,255  $  1,561,727              $  373,428  $  1,378,812

-- Principal amortization of finance receivables in the fourth quarter was $160.9 million or 43.6% of cash collections, compared with 40.4% in the year-ago quarter. Principal amortization included a net allowance charge of $11.5 million recorded against certain pools of finance receivables in the quarter, compared with a net allowance charge of $1.0 million recorded in the year-ago quarter. Non-GAAP principal amortization was $166.5 million in the fourth quarter of 2015. Full year principal amortization of finance receivables was $674.4 million or 43.8% of cash collections, including a net allowance charge of $29.4 million. Non-GAAP principal amortization for the full year was $685.4 million.

-- Revenues in the fourth quarter also included income from PRA Group’s fee-based businesses of $19.6 million, compared with $22.8 million in the year-ago quarter, and other income of $2.1 million compared with $5.3 million in the year-ago quarter. For the full year, fee revenue was $64.4 million and other income was $12.5 million.

EXPENSES AND OPERATING INCOME

-- Operating expenses were $159.0 million in the fourth quarter, compared with $140.9 million a year ago. Operating expenses include an accrual to reflect the fact that the company has signed an agreement in principle with the opposing parties in its TCPA lawsuit and is seeking final judicial approvals. Non-GAAP operating expenses were $149.4 million versus $137.8 million a year ago. For the full year, operating expenses were $631.7 million, compared with $538.9 million in 2014. Non-GAAP operating expenses for the full year were $591.5 million versus $520.6 million in 2014.

-- Operating income in the fourth quarter was $71.2 million, compared with $109.9 million in the year-ago quarter. Non-GAAP operating income was $87.4 million in the fourth quarter versus $112.9 million a year ago. For the full year, operating income was $310.3 million versus $342.1 million in 2014. Non-GAAP operating income for the full year was $363.0 million versus $360.4 million in 2014. The operating margin was 30.9% in the fourth quarter and the non-GAAP operating margin was 36.9%. For the full year, the operating margin was 32.9% and the non-GAAP operating margin was 38.0%.

-- The provision for income taxes was $15.2 million in the fourth quarter compared to $46.5 million in the year-ago quarter. PRA Group’s provision for income taxes was 27.0% of income before taxes in the fourth quarter, compared with 49.7% in the year-ago quarter. Non-GAAP provision for income taxes in the fourth quarter was $20.3 million versus $47.5 million a year ago. For the full year, the provision for income taxes was $89.4 million or 34.7% of income before taxes. Non-GAAP provision for income taxes for the full year was $105.2 million or 33.6% of income before taxes.

PORTFOLIO ACQUISITIONS

-- PRA Group invested $225.9 million in new finance receivables in the fourth quarter.

Portfolio Purchase Source  Q42015                   Q32015                   Q22015                   Q12015                   Q42014
($ in thousands)
Americas-Core              $           120,554      $           90,912       $           98,317       $           138,498      $           119,714
Americas-Insolvency                    20,589                   9,300                    19,111                   16,437                   24,949
Europe-Core                            79,735                   240,385                  88,499                   21,579                   123,194
Europe-Insolvency                      4,976                    3,959                    2,450                    8,510                    11,625
Total Portfolio Purchasing $           225,854      $           344,556      $           208,377      $           185,024      $           279,482
(1)  Excludes the $27.9 million and $34.7 million investment in the securitized fund in Poland during the three months ended March 31, 2015 and December 31, 2014, respectively.

BALANCE SHEET

-- Borrowings totaled $1,723.3 million as of December 31, 2015, consisting of $541.8 million drawn on the domestic and Canadian revolver, $576.4 million drawn on the multi-currency revolver, $265.1 million in convertible senior notes, $170.0 million in other long-term debt and $169.9 million in notes payable. Total borrowings were $1,482.5 million as of December 31, 2014.

-- Cash and cash equivalents were $71.4 million as of December 31, 2015, compared with $39.7 million as of December 31, 2014.

-- Net deferred tax liabilities were $261.5 million as of December 31, 2015, compared with $255.6 million as of December 31, 2014.

-- Equity was $800.5 million as of December 31, 2015, compared with $902.2 million as of December 31, 2014.

Conference Call Information

PRA Group will hold a conference call today at 5:00 p.m. ET to discuss results with institutional investors and stock analysts. 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 50970357. A question-and-answer session on the call will be open only to analysts or investors. To listen to a replay of the call until March 3, 2016, call 855-859-2056 in the U.S. or 404-537-3406 outside the U.S. and use conference ID 50970357.

About PRA Group

As a global leader in acquiring and collecting nonperforming loans, PRA Group (PRAA ) returns capital to banks and other creditors to help expand financial services for consumers in the Americas and Europe. 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.

PRA has been recognized as one of Fortune’s 100 Fastest-Growing Companies for three years and one of Forbes’ Best Small Companies in America for eight consecutive years since 2007. 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, hopes, beliefs, expectations, representations, 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 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, filed with the Securities and Exchange Commission and available through PRA Group’s website, which 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              Twelve Months Ended
                                                                  December 31,                    December 31,
                                                                      2015            2014            2015            2014
Revenues:
Income recognized on finance receivables, net                     $   208,471     $   222,660     $   865,122     $   807,474
Fee income                                                            19,649          22,800          64,383          65,675
Other revenue                                                         2,065           5,271           12,513          7,820
Total revenues                                                        230,185         250,731         942,018         880,969
Operating expenses:
Compensation and employee services                                    68,670          65,448          268,345         234,531
Legal collection fees                                                 11,873          15,125          53,393          51,107
Legal collection costs                                                16,774          15,725          76,063          88,054
Agency fees                                                           8,182           7,497           32,188          16,399
Outside fees and services                                             27,309          15,707          65,155          55,821
Communication                                                         6,601           7,715           33,113          33,085
Rent and occupancy                                                    3,991           3,477           14,714          11,509
Depreciation and amortization                                         4,935           5,307           19,874          18,414
Other operating expenses                                              10,678          4,870           68,829          29,981
Total operating expenses                                              159,013         140,871         631,674         538,901
Income from operations                                                71,172          109,860         310,344         342,068
Other income and (expense):
Interest expense                                                      (15,321 )       (13,493 )       (60,336 )       (35,226 )
Foreign exchange gain/(loss)                                          301             (2,898  )       7,514           (5,829  )
Income before income taxes                                            56,152          93,469          257,522         301,013
Provision for income taxes                                            15,164          46,478          89,391          124,508
Net income                                                        $   40,988      $   46,991      $   168,131     $   176,505
Adjustment for net income attributable to noncontrolling interest     18              -               205             -
Net income attributable to PRA Group, Inc.                        $   40,970      $   46,991      $   167,926     $   176,505
Net income per common share attributable to PRA Group, Inc.:
Basic                                                             $   0.87        $   0.94        $   3.49        $   3.53
Diluted                                                           $   0.86        $   0.93        $   3.47        $   3.50
Weighted average number of shares outstanding:
Basic                                                                 47,197          49,892          48,128          49,990
Diluted                                                               47,539          50,444          48,405          50,421
PRA Group, Inc.
Unaudited Consolidated Balance Sheets
(in thousands)
                                                                                                                                                                                                            December 31,
ASSETS                                                                                                                                                                                                            2015          2014
Cash and cash equivalents                                                                                                                                                                                   $     71,372      $ 39,661
Investments                                                                                                                                                                                                       73,799        89,703
Finance receivables, net                                                                                                                                                                                          2,202,113     2,001,790
Other receivables, net                                                                                                                                                                                            30,771        12,959
Income taxes receivable                                                                                                                                                                                           1,717         -
Net deferred tax asset                                                                                                                                                                                            13,068        6,126
Property and equipment, net                                                                                                                                                                                       45,394        48,258
Goodwill                                                                                                                                                                                                          495,156       527,445
Intangible assets, net                                                                                                                                                                                            23,788        10,933
Other assets                                                                                                                                                                                                      39,528        41,876
Total assets                                                                                                                                                                                                $     2,996,706   $ 2,778,751
LIABILITIES AND EQUITY
Liabilities:
Accounts payable                                                                                                                                                                                            $     4,190       $ 4,446
Accrued expenses                                                                                                                                                                                                  95,380        89,361
Income taxes payable                                                                                                                                                                                              21,236        11,020
Net deferred tax liability                                                                                                                                                                                        261,498       255,587
Interest-bearing deposits                                                                                                                                                                                         46,991        27,704
Borrowings                                                                                                                                                                                                        1,723,268     1,482,456
Other liabilities                                                                                                                                                                                                 4,396         5,962
Total liabilities                                                                                                                                                                                                 2,156,959     1,876,536
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, 46,173 at December 31, 2015; 100,000 authorized shares, 49,577 issued and outstanding shares at December 31, 2014       462           496
Additional paid-in capital                                                                                                                                                                                        64,622        111,659
Retained earnings                                                                                                                                                                                                 964,270       906,010
Accumulated other comprehensive loss                                                                                                                                                                              (228,861  )   (115,950  )
Total stockholders’ equity - PRA Group, Inc.                                                                                                                                                                      800,493       902,215
Noncontrolling interest                                                                                                                                                                                           39,254        -
Total equity                                                                                                                                                                                                      839,747       902,215
Total liabilities and total equity                                                                                                                                                                          $     2,996,706   $ 2,778,751
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,
                                                                                 2015          2014        Change                       2015          2014               Change
EARNINGS (in thousands)
Income recognized on finance receivables, net                           $        208,471     $ 222,660              -6       % $        865,122     $ 807,474                     7        %
Fee income                                                                       19,649        22,800               -14      %          64,383        65,675                      -2       %
Other revenue                                                                    2,065         5,271                -61      %          12,513        7,820                       60       %
Total revenues                                                                   230,185       250,731              -8       %          942,018       880,969                     7        %
Operating expenses                                                               159,013       140,871              13       %          631,674       538,901                     17       %
Income from operations                                                           71,172        109,860              -35      %          310,344       342,068                     -9       %
Net interest expense                                                             15,321        13,493               14       %          60,336        35,226                      71       %
Net income                                                                       40,988        46,991               -13      %          168,131       176,505                     -5       %
Net income attributable to PRA Group, Inc.                                       40,970        46,991               -13      %          167,926       176,505                     -5       %
PERIOD-END BALANCES (in thousands)
Cash and cash equivalents                                               $        71,372      $ 39,661               80       % $        71,372      $ 39,661                      80       %
Finance receivables, net                                                         2,202,113     2,001,790            10       %          2,202,113     2,001,790                   10       %
Goodwill and intangible assets, net                                              518,944       538,378              -4       %          518,944       538,378                     -4       %
Total assets                                                                     2,996,706     2,778,751            8        %          2,996,706     2,778,751                   8        %
Borrowings                                                                       1,723,268     1,482,456            16       %          1,723,268     1,482,456                   16       %
Total liabilities                                                                2,156,959     1,876,536            15       %          2,156,959     1,876,536                   15       %
Total equity - PRA Group, Inc.                                                   800,493       902,215              -11      %          800,493       902,215                     -11      %
FINANCE RECEIVABLE INCOME (dollars in thousands)
Cash collections                                                        $        369,371     $ 373,428              -1       % $        1,539,495   $ 1,378,812                   12       %
Cash collections on fully amortized pools                                        8,280         17,785               -53      %          52,202        68,349                      -24      %
Principal amortization without allowance (reversals)/charges                     149,381       149,753              0        %          645,004       576,273                     12       %
Allowance (reversal)/charge                                                      11,519        1,015                1035     %          29,369        (4,935    )                 -695     %
Principal amortization with allowance (reversals)/charges                        160,900       150,768              7        %          674,373       571,338                     18       %
Principal amortization w/ allowance charges as % of cash collections:
Including fully amortized pools                                                  43.6      %   40.4      %          8        %          43.8      %   41.4      %                 6        %
Excluding fully amortized pools                                                  44.6      %   42.4      %          5        %          45.3      %   43.6      %                 4        %
Allowance (reversal)/charge to period-end net finance receivables                0.5       %   0.1       %          932      %          1.3       %   (0.2      %)                -641     %
PURCHASES OF FINANCE RECEIVABLES (dollars in thousands)
Purchase price - Americas core                                          $        120,554     $ 119,714              1        % $        448,281     $ 408,721                     10       %
Purchase price - Americas insolvency                                             20,589        24,949               -17      %          65,437        151,674                     -57      %
Purchase price - Europe core                                                     79,735        123,194              -35      %          430,198       860,744                     -50      %
Purchase price - Europe insolvency                                               4,976         11,625               -57      %          19,895        11,625                      71       %
Purchase price - total                                                           225,854       279,482              -19      %          963,811       1,432,764                   -33      %
Number of portfolios - total                                                     139           142                  -2       %          542           456                         19       %
ESTIMATED REMAINING COLLECTIONS (in thousands)
Estimated remaining collections - Americas core                         $        2,558,529   $ 2,229,403            15       % $        2,558,529   $ 2,229,403                   15       %
Estimated remaining collections - Americas insolvency                            448,652       642,552              -30      %          448,652       642,552                     -30      %
Estimated remaining collections - Europe core                                    1,964,763     1,478,738            33       %          1,964,763     1,478,738                   33       %
Estimated remaining collections - Europe insolvency                              34,878        15,021               132      %          34,878        15,021                      132      %
Estimated remaining collections - total                                          5,006,822     4,365,714            15       %          5,006,822     4,365,714                   15       %
Adjusted estimated remaining collections (7)                                     5,114,923     4,437,264            15       %          5,114,923     4,437,264                   15       %
SHARE DATA (share amounts in thousands)
Net income per common share - diluted                                   $        0.86        $ 0.93                 -7       % $        3.47        $ 3.50                        -1       %
Weighted average number of shares outstanding - diluted                          47,539        50,444               -6       %          48,405        50,421                      -4       %
Shares repurchased                                                               2,072         574                  261      %          3,683         574                         542      %
Average price paid per share repurchased (including acquisitions costs) $        38.60       $ 57.79                -33      % $        44.94         57.79                       -22      %
Closing market price                                                    $        34.69       $ 57.93                -40      % $        34.69       $ 57.93                       -40      %
RATIOS AND OTHER DATA (dollars in thousands)
Return on average equity (1)                                                     19.8      %   20.2      %          -2       %          19.9      %   18.9      %                 5        %
Return on revenue (2)                                                            17.8      %   18.7      %          -5       %          17.8      %   20.0      %                 -11      %
Return on average assets (3)                                                     5.5       %   6.9       %          -20      %          5.9       %   8.0       %                 -26      %
Operating margin (4)                                                             30.9      %   43.8      %          -29      %          32.9      %   38.8      %                 -15      %
Operating expense to cash receipts (5)                                           40.9      %   35.6      %          15       %          39.4      %   37.3      %                 6        %
Debt to stockholders’equity (6)                                                  215.3     %   164.3     %          31       %          215.3     %   164.3     %                 31       %
Number of full-time equivalent collectors                                        2,173         2,457                -12      %          2,173         2,457                       -12      %
Number of full-time equivalent employees                                         3,799         3,880                -2       %          3,799         3,880                       -2       %
Cash receipts (5)                                                       $        389,020     $ 396,228              -2       % $        1,603,878   $ 1,444,487                   11       %
Line of credit - unused portion at period end                                    446,769       352,926              27       %          446,769       352,926                     27       %
(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
                                                                        December 31             September 30            June 30                 March 31                December 31
                                                                                   2015                    2015                    2015                    2015                    2014
EARNINGS (in thousands)
Income recognized on finance receivables, net                           $          208,471      $          208,184      $          220,064      $          228,403      $          222,660
Fee income                                                                         19,649                  17,803                  13,878                  13,053                  22,800
Other revenue                                                                      2,065                   3,443                   3,255                   3,750                   5,271
Total revenues                                                                     230,185                 229,430                 237,197                 245,206                 250,731
Operating expenses                                                                 159,013                 175,303                 148,318                 149,040                 140,871
Income from operations                                                             71,172                  54,127                  88,879                  96,166                  109,860
Net interest expense                                                               15,321                  16,787                  13,452                  14,776                  13,493
Net income                                                                         40,988                  17,583                  51,425                  58,135                  46,991
Net income attributable to PRA Group, Inc.                                         40,970                  17,396                  51,425                  58,135                  46,991
PERIOD-END BALANCES (in thousands)
Cash and cash equivalents                                               $          71,372       $          69,111       $          56,811       $          40,542       $          39,661
Finance receivables, net                                                           2,202,113               2,167,178               2,012,552               1,954,772               2,001,790
Goodwill and intangible assets, net                                                518,944                 526,841                 512,451                 506,695                 538,378
Total assets                                                                       2,996,706               2,984,550               2,783,756               2,700,613               2,778,751
Borrowings                                                                         1,723,268               1,654,457               1,503,363               1,479,262               1,482,456
Total liabilities                                                                  2,156,959               2,083,131               1,885,880               1,883,295               1,876,536
Total equity - PRA Group, Inc.                                                     800,493                 863,517                 897,876                 817,318                 902,215
FINANCE RECEIVABLE COLLECTIONS (dollars in thousands)
Cash collections                                                        $          369,371      $          380,753      $          389,624      $          399,747      $          373,428
Cash collections on fully amortized pools                                          8,280                   11,453                  15,162                  17,307                  17,785
Principal amortization without allowance (reversals)/charges                       149,381                 161,234                 164,675                 169,714                 149,753
Allowance (reversal)/charge                                                        11,519                  11,335                  4,885                   1,630                   1,015
Principal amortization with allowance (reversals)/charges                          160,900                 172,569                 169,560                 171,344                 150,768
Principal amortization w/ allowance charges as % of cash collections:
Including fully amortized pools                                                    43.6       %            45.3       %            43.5       %            42.9       %            40.4       %
Excluding fully amortized pools                                                    44.6       %            46.7       %            45.3       %            44.8       %            42.4       %
Allowance (reversal)/charge to period-end net finance receivables                  0.5        %            0.5        %            0.2        %            0.1        %            0.1        %
PURCHASES OF FINANCE RECEIVABLES (dollars in thousands)
Purchase price - North America core                                     $          120,554      $          90,912       $          98,317       $          138,498      $          119,714
Purchase price - North America insolvency                                          20,589                  9,300                   19,111                  16,437                  24,949
Purchase price - Europe core                                                       79,735                  240,385                 88,499                  21,579                  123,194
Purchase price - Europe insolvency                                                 4,976                   3,959                   2,450                   8,510                   11,625
Purchase price - total                                                             225,854                 344,556                 208,377                 185,024                 279,482
Number of portfolios - total                                                       139                     128                     136                     139                     142
ESTIMATED REMAINING COLLECTIONS (in thousands)
Estimated remaining collections - Americas core                         $          2,558,529    $          2,421,506    $          2,384,698    $          2,370,086    $          2,229,403
Estimated remaining collections - Americas insolvency                              448,652                 474,097                 529,892                 577,319                 642,552
Estimated remaining collections - Europe core                                      1,964,763               1,903,226               1,685,694               1,619,454               1,478,738
Estimated remaining collections - Europe insolvency                                34,878                  30,081                  26,807                  24,838                  15,021
Estimated remaining collections - total                                            5,006,822               4,828,910               4,627,091               4,591,697               4,365,714
Adjusted estimated remaining collections (7)                                       5,114,923               4,945,609               4,747,552               4,716,230               4,437,264
SHARE DATA (share amounts in thousands)
Net income per common share - diluted                                   $          0.86         $          0.36         $          1.06         $          1.19         $          0.93
Weighted average number of shares outstanding - diluted                            47,539                  48,498                  48,529                  49,052                  50,444
Shares repurchased                                                                 2,072                   133                     -                       1,478                   574
Average price paid per share repurchased (including acquisitions costs) $          38.60        $          58.08        $          -            $          52.65        $          57.79
Closing market price                                                    $          34.69        $          52.92        $          62.31        $          54.32        $          57.93
RATIOS AND OTHER DATA (dollars in thousands)
Return on average equity (1)                                                       19.8       %            7.8        %            23.5       %            30.1       %            20.2       %
Return on revenue (2)                                                              17.8       %            7.7        %            21.7       %            23.7       %            18.7       %
Return on average assets (3)                                                       5.5        %            2.3        %            7.4        %            8.7        %            6.9        %
Operating margin (4)                                                               30.9       %            23.6       %            37.5       %            39.2       %            43.8       %
Operating expense to cash receipts (5)                                             40.9       %            44.0       %            36.8       %            36.1       %            35.6       %
Debt to stockholders’equity (6)                                                    215.3      %            191.6      %            167.4      %            181.0      %            164.3      %
Number of collectors                                                               2,173                   2,159                   2,317                   2,395                   2,457
Number of full-time equivalent employees                                           3,799                   3,715                   3,820                   3,847                   3,880
Cash receipts (5)                                                       $          389,020      $          398,556      $          403,502      $          412,800      $          396,228
Line of credit - unused portion at period end                                      446,769                 393,246                 547,017                 323,812                 352,926
(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 fees associated with the CFPB consent order, expenses associated with acquisitions, one-time tax items, legal costs not associated with normal operations, and constant currency adjustments may provide additional meaningful comparisons between current year results and prior periods. 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, 2015
                                                  Cash           Amortization  Income        Fee        Other      Total       Expenses      Income       Income        Net           Diluted
                                                  Collections                  Recognized on Income     Income     Revenues                  from         before        Income        EPS
                                                                               Finance                                                       Operations   Taxes
                                                                               Receivables
As Reported                                       $   369,371    $    160,900  $    208,471  $  19,649  $  2,065   $  230,185  $  159,013    $   71,172   $  56,152     $  40,970     $  0.86
Adjustments:
CFPB expenses including penalty and redress           -               -             -           -          -          -           (111    )      111         111           68            -
Acquisition and other expenses                        -               -             -           -          -          -           (1,639  )      1,639       1,639         1,005         0.02
Legal costs not associated with normal operations     -               -             -           -          -          -           (12,045 )      12,045      12,045        7,383         0.16
Constant currency adjustments                         10,884          5,603         5,281       558        725        6,564       4,143          2,421       (596    )     (439    )     (0.01 )
Subtotal of adjustments                               10,884          5,603         5,281       558        725        6,564       (9,652  )      16,216      13,199        8,016         0.17
As Adjusted                                           380,255         166,503       213,752     20,207     2,790      236,749     149,361        87,388      69,351        48,986        1.03
Twelve Months Ended December 31, 2015
                                                  Cash           Amortization  Income        Fee        Other      Total       Expenses      Income       Income        Net           Diluted
                                                  Collections                  Recognized on Income     Income     Revenues                  from         before        Income        EPS
                                                                               Finance                                                       Operations   Taxes
                                                                               Receivables
As Reported                                       $   1,539,495  $    674,373  $    865,122  $  64,383  $  12,513  $  942,018  $  631,674    $   310,344  $  257,522    $  167,926    $  3.47
Adjustments:
CFPB expenses including penalty and redress           -               -             -           -          -          -           (28,807 )      28,807      28,807        19,641        0.41
Acquisition and other expenses                        -               -             -           -          -          -           (5,628  )      5,628       5,628         3,837         0.08
One-time tax items                                    -               -             -           -          -          -           -              -           -             2,026         0.04
Legal costs not associated with normal operations     -               -             -           -          -          -           (13,824 )      13,824      13,824        9,426         0.19
Constant currency adjustments                         22,232          10,984        11,248      759        424        12,431      8,038          4,393       7,323         5,078         0.10
Subtotal of adjustments                               22,232          10,984        11,248      759        424        12,431      (40,221 )      52,652      55,582        40,008        0.83
As Adjusted                                           1,561,727       685,357       876,370     65,142     12,937     954,449     591,453        362,996     313,104       207,934       4.30
Three Months Ended December 31, 2014
                                                  Cash           Amortization  Income        Fee        Other      Total       Expenses      Income       Income        Net           Diluted
                                                  Collections                  Recognized on Income     Income     Revenues                  from         before        Income        EPS
                                                                               Finance                                                       Operations   Taxes
                                                                               Receivables
As Reported                                       $   373,428    $    150,768  $    222,660  $  22,800  $  5,271   $  250,731  $  140,871    $   109,860  $  93,469     $  46,991     $  0.93
Adjustments:
Acquisition and other expenses                        -               -             -           -          -          -           (3,040  )      3,040       3,040         2,049         0.04
Legal costs not associated with normal operations     -               -             -           -          -          -           (15     )      15          15            10            -
Subtotal of adjustments                               -               -             -           -          -          -           (3,055  )      3,055       3,055         2,059         0.04
As Adjusted                                           373,428         150,768       222,660     22,800     5,271      250,731     137,816        112,915     96,524        49,050        0.97
Twelve Months Ended December 31, 2014
                                                  Cash           Amortization  Income        Fee        Other      Total       Expenses      Income       Income        Net           Diluted
                                                  Collections                  Recognized on Income     Income     Revenues                  from         before        Income        EPS
                                                                               Finance                                                       Operations   Taxes
                                                                               Receivables
As Reported                                       $   1,378,812  $    571,338  $    807,474  $  65,675  $  7,820   $  880,969  $  538,901    $   342,068  $  301,013    $  176,505    $  3.50
Adjustments:
Acquisition and other expenses                        -               -             -           -          -          -           (17,905 )      17,905      17,905        11,094        0.22
One-time tax items                                    -               -             -           -          -          -           -              -           -             (1,232  )     (0.02 )
Loss on foreign currency exchange contracts           -               -             -           -          -          -           -              -           8,240         5,105         0.10
Legal costs not associated with normal operations     -               -             -           -          -          -           (426    )      426         426           264           0.01
Subtotal of adjustments                               -               -             -           -          -          -           (18,331 )      18,331      26,571        15,231        0.30
As Adjusted                                           1,378,812       571,338       807,474     65,675     7,820      880,969     520,570        360,399     327,584       191,736       3.80
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

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