##### 



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
      Form 10-K
  ANNUAL REPORT
    PURSUANT TO SECTION 13 OR 15(d)  OF THE SECURITIES EXCHANGE
    ACT OF 1934
  For the fiscal year ended December 31, 2005
  Commission file
    number:  000-51029
      PRA INTERNATIONAL
 (Exact name of Registrant as
    Specified in Its Charter)
  Delaware

54-2040171(State or Other Jurisdiction
    of
    Incorporation)

(I.R.S. Employer
    Identification No.)   12120 Sunset Hills Road
    Suite 600
    Reston, Virginia 20190
 (Address of principal executive
    offices)
  (703) 464-6300 (Registrants telephone
    number, including area code)
  Securities registered pursuant to Section 12(b) of the
    Act:
    None
  Securities registered pursuant to Section 12(g) of the
    Act:
    Common Stock, $0.01 par value per share
      o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
 Large
    accelerated filer o
    Accelerated
    filer þ
    Non-accelerated
    filer o  Rule 12b-2 o þ




---



##### 



PRA
    INTERNATIONAL
  FORM 10-K
    ANNUAL REPORT
  FOR THE
    YEAR ENDED DECEMBER 31, 2005
  TABLE OF
    CONTENTS
  PagePART IItem 1.

Business


3Item 1B.

Unresolved Staff
    Comments


25Item 2.

Description of
    Properties


26Item 3.

Legal
    Proceedings


26Item 4.

Submission of
    Matters to a Vote of Security Holders


26PART IIItem 5.

Market for
    Registrants Common Equity and Related Stockholder
    Matters


26Item 6.

Selected
    Consolidated Financial Data


29Item 7.

Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


31Item 7A.

Quantitative and
    Qualitative Disclosures About Market Risk


43Item 8.

Index to
    Consolidated Financial Statements


45Item 9.

Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


46Item 9A.

Controls and
    Procedures


46PART IIIItem 10.

Directors and
    Executive Officers of the Registrant


48Item 11.

Executive
    Compensation


51Item 12.

Security Ownership
    of Certain Beneficial Owners and Management


60Item 13.

Certain
    Relationships and Related Transactions


62Item 14.

Principal
    Accountant Fees and Services


63PART IVItem 15.

Exhibits, Financial
    Statement Schedules, and Reports on
    Form 8-K


64   SPECIAL
    NOTE REGARDING FORWARD-LOOKING STATEMENTS
        2




---



##### 



PART I  ITEM 1.
    BUSINESS  Overview
        
    creating drug development and regulatory strategy plans;
    executing Phase I clinical trials;
    performing Phase II through IV multi-center,
    international clinical trials;
    developing and analyzing integrated global clinical databases;
    preparing and submitting regulatory filings around the
    world; and
    managing long-term drug safety programs.    CRO
    Industry
  Overview
   3




---



##### 



Global
    Drug Approval Process
    U.S. Approval Process.
  EU Approval Process.
 4




---



##### 



Japan Approval Process.
  Drug
    Development Cycle
    
    Phase I.  Phase I trials are
    conducted in healthy individuals and usually involve 20 to 80
    subjects and typically range from six to 12 months. These
    trials are designed to establish the basic safety, dose
    tolerance, and metabolism of the clinical product candidate. If
    the trial establishes basic safety and metabolism of the
    clinical product candidate, Phase II trials begin.
    Phase II.  Phase II trials are
    conducted in patients who have the disorder a molecule is
    designed to treat, typically test 100 to 300 patients, and
    last on average for 12 to 18 months. Phase II trials
    are typically designed to identify possible adverse effects and
    safety risks, to determine the efficacy of the clinical product
    candidate, and to determine dose tolerance. If the molecule
    appears safe and effective, Phase III trials begin.
    Phase III.  Phase III trials involve
    significantly larger and more diverse populations than
    Phase I and II trials and are conducted at multiple sites.
    On average, this phase lasts from one to three years. Depending
    on the size and complexity, Phase III CRO contracts can
    exceed $10 million in some cases. During this phase, the
    drugs safety and effectiveness are further examined and
    evaluated.    
    Post-Approval/Phase IV.  During the course
    of the review process, various regulatory authorities may
    approve a drug for marketing and sale, provided that additional
    clinical trials be conducted. Usually referred to as
    post-approval or Phase IV trials, these trials may either
    be for submission of additional data to regulatory authorities
    or for non-registration purposes, such as additional marketing
    information. These trials are intended to monitor the
    drugs long-term risks and benefits, to analyze different
    dosage levels, to 5




---



##### 



evaluate different safety and efficacy parameters in target
    populations, or to substantiate marketing claims. Phase IV
    trials typically enroll thousands of patients and last from six
    to 24 months.  CRO
    Industry Trends
    Globalization of Drug Development.
  Increased Number of Products Entering
    Development.
  Biotechnology Industry Growth.
    Increased Regulatory Scrutiny.
  Need for Quick, Efficient, and Cost-Effective Drug
    Development.
 6




---



##### 



Our
    Competitive Strengths
  Therapeutic Expertise and Scientific
    Depth.
  Global Leadership Position.
  Attractive Customer Base.
  Proven and Incentivized Management Team and
    Workforce.
   7




---



##### 



Our
    Strategy
    Continue to Leverage and Build Our Expertise in Key
    Therapeutic Areas.
  Expand the Breadth and Depth of Our Service
    Offering. first-in-man
  Leverage Our Infrastructure to Improve Operational
    Efficiencies. ®
  Augment Our Geographic Reach in Latin America and
    Asia.
 8




---



##### 



Continue to Pursue a Disciplined Acquisition
    Strategy.
  Description
    of Service Offerings
    Clinical
    Trials Management Services
    
    clinical program review and consultation;
    protocol and case report form, or CRF, design;
    feasibility studies for investigator interest and patient
    availability;
    project management;
    investigator site selection and qualification;
    investigational site support and clinical monitoring;
    data management;
    analysis and reporting;
    investigator handbook and meetings;
    medical and scientific publications; and
    regulatory filings.   9




---



##### 



Therapeutic Areas:

Specific Areas of
    Expertise:Analgesics

Acute and chronic pain (including
    headaches, osteoarthritis)Cardiovascular disease

Atrial fibrillation, hypertension,
    coronary artery disease, heart failure, hyperlipidemia,
    peripheral arterial disease, pulmonary arterial hypertension,
    stroke, venous thromboembolismCentral nervous system

Alzheimers and other
    dementias, attention deficit hyperactivity disorder,
    Parkinsons disease and other movement disorders,
    schizophrenia, depression, epilepsy, anxiety,
    obsessive-compulsive disorders, panic disorders, insomnia,
    multiple sclerosisCritical care

ARDS (acute respiratory distress
    syndrome), sepsisDermatology

Wound healing, acne, hair loss,
    psoriasisGastroenterology

Duodenal and gastric ulcer,
    gastroesophogeal reflux disease, H.pylori eradication,
    inflammatory bowel disease (Crohns disease, ulcerative
    colitis), irritable bowel syndromeGenitourinary

Incontinence, sexual dysfunction,
    overactive bladder, benign prostate hyperplasiaHIV/AIDS

Primary disease and
    treatment/prophylaxis of opportunistic infectionsInfectious disease/virology

Pneumonia, sinusitis, chronic
    bronchitis, childhood and adult vaccines, herpes simplex,
    hepatitis B and C, genital herpes, respiratory syncytial virus,
    influenza, fungal infectionsMetabolic/Endocrine disease

Diabetes mellitus, growth
    retardationOncology

Pancreatic, prostate, colorectal,
    breast, renal cell, lung, other solid cancers, all hematologic
    malignanciesRespiratory/Allergy/Pulmonary

Asthma, allergic rhinitis, COPD
    (chronic obstructive pulmonary disease), cystic fibrosisRheumatology

Rheumatoid arthritis,
    osteoarthritis, lupus erythematodesWomens health

Osteoporosis, hormone replacement
    therapy   Global
    Scientific and Medical Affairs
    Global Product Development Services.
  
    assess pre-clinical and clinical data, products, and programs
    analyze markets and competition
    prepare clinical and regulatory approval strategy plans 10




---



##### 




    design clinical studies or programs
    identify and form scientific advisory boards
    provide high-level consultation on specific scientific and
    clinical issues
    provide program planning, management, and oversight from IND
    application submission to product registration and launch.  Global Medical and Safety Services. set-up
    
    design and evaluation of feasibility studies
    responding to investigator questions regarding a study protocol
    review of clinical study data and reports
    processing and reporting of serious adverse events in clinical
    trials;
    processing and reporting of adverse drug reactions for marketed
    products;
    set-up and
    maintenance of the safety databases
    annual and other periodic safety update reports for drugs in
    development and marketed products;
    coding of clinical data (diseases, medication, adverse events
    and procedures)
    design, conduct and analyses of safety and
    pharmaco-epidemiological studies;
    integration of multiple clinical studies
    generation of integrated summaries of efficacy and safety
    set-up and
    support of Independent Data Monitoring Committees
    investigations of safety issues and benefit risk assessments
    generation of risk management plans
    implementation and evaluation of risk management programs
    system analysis and design of safety departments including SOPs
    audits and preparations of regulatory inspections.  Global Regulatory Affairs.
 11




---



##### 




    strategic regulatory consultation
    support of clinical trials applications and application
    maintenance
    preparation and support for agency interactions
    comprehensive support for marketing authorizations
    electronic document management in support of global regulatory
    submissions.        Clinical
    Pharmacology Center (Phase I)
  first-in-man,
  Project
    Assurance
     12




---



##### 




    Clinical Trial Management System, or
    CTMS.  CTMS is a company-wide system used to track
    and report on the information associated with managing a
    clinical trial, from initiation through closeout. The system is
    based upon Siebels eClinical product, and allows any
    authorized user to access data about any clinical trial from
    anywhere in the world. We believe that this system is critical
    to our ability to successfully conduct global clinical programs.
    PRA Estimator.  PRA Estimator is our
    proprietary comprehensive bid development tool which analyzes
    every customer specification and request along with therapeutic
    and patient recruitment requirements, using a set of complex
    algorithms to develop a number of comprehensive bid response
    scenarios.
    Electronic Trial Master File, or
    e-TMF®.e-TMF
    is a company-wide document management system that enables all
    documents to be scanned, indexed, and warehoused electronically.
    The system, which is built on a Documentum platform, allows
    access to documents by any authorized user in any of our
    offices. We believe the benefits of this system include enhanced
    global project coordination, work-sharing across locations,
    increased document accountability and tracking ability,
    increased security of documents, return of all clinical trial
    study documents to clients in electronic form, and facilitation
    of electronic regulatory submissions.
    Electronic Regulatory Submissions.  Our
    electronic regulatory submissions capability is based on
    CoreDossier, an industry-accepted software system. This system
    allows documents to be created, indexed, and cross-referenced
    electronically for ease of editing while in production and for
    ease of review by the appropriate regulatory authorities.
    Electronic submissions can be used at the IND and the NDA
    submission stages.
    PRA Clinical Data
    Manager®
    and Oracle Clinical.  We offer these
    state-of-the-art
    data management systems which we believe provide added
    flexibility and ease of data transfer for our clients and
    ultimately timely submissions to the appropriate regulatory
    authority.
    Electronic Data Capture, or EDC.  We believe
    electronic data capture, which involves direct entry of clinical
    trials data by investigational sites, is gaining acceptance by
    clients worldwide. EDC permits more rapid data acquisition and
    locking of final databases. We believe that many pharmaceutical
    and biotechnology companies will use EDC for their trials at
    some point in the near future. EDC technology continues to
    advance and standards are constantly being upgraded. Therefore,
    we are developing, in conjunction with DataLabs, a hybrid data
    management system. This EDC based system includes a paper double
    data entry module and a data clarification form management
    module. We will be able to support both EDC studies and
    paper-CRF studies as well as EDC/paper hybrid studies.
    Nevertheless, we continue to have seemless integration software
    for electronic data transfer to our two data management systems
    previously mentioned. To date, we have completed 49 EDC studies
    involving nearly 21,000 patients.
    Customer Relationship Management, or CRM.  This
    is a company-wide system based on the system suite from Siebel
    designed to manage customer relationships and new business
    activities. This system allows customer contacts and new
    business opportunities to be tracked and shared worldwide to
    ensure consistent customer interactions.
    Oracle AERS.  Our web-based safety system
    provides progressive and complete safety database functionality
    allowing us to provide a comprehensive suite of safety
    management services to our clients. This provides one global
    platform to track all safety activities and clinical trial and
    post marketing case management processing for our clients.  Customers
    and Suppliers
   13




---



##### 



Sales and
    Marketing
      Competition
       14




---



##### 




    the cost and experience necessary to develop broad therapeutic
    expertise;
    the ability to manage large, complex international clinical
    programs;
    the ability to deliver high-quality services consistently for
    large drug development projects;
    the experience to prepare regulatory submissions throughout the
    world; and
    the infrastructure and knowledge to respond to the global needs
    of clients.    Backlog
      Intellectual
    Property
    
    PRA®
    (including a design);
    PRA
    International®;
    PRA Clinical Data
    Manager®;
    PRA
    e-TMF®; and
    Project
    Assurance®  Government
    Regulation
   15




---



##### 




    comply with specific requirements governing the selection of
    qualified investigators;
    obtain specific written commitments from the investigators;
    obtain IRB review and approval of the clinical trial;
    verify that appropriate patient informed consent is obtained
    before the patient participates in a clinical trial;
    ensure adverse drug reactions resulting from the administration
    of a drug or biologic during a clinical trial are medically
    evaluated and reported in a timely manner;
    monitor the validity and accuracy of data;
    verify drug or device accountability;
    instruct investigators and studies staff to maintain records and
    reports; and
    permit appropriate governmental authorities access to data for
    their review.       16




---



##### 



Employees
    Liability
    and Insurance
     17




---



##### 



Environmental
    Regulation and Liability
    ITEM 1A.  RISK
    FACTORS
    Risks
    Related to Our Business
  Our
    contracts are generally terminable on little or no notice.
    Termination of a large contract for services or multiple
    contracts for services could adversely affect our revenue and
    profitability.
      
    the failure of the product being tested to satisfy safety or
    efficacy requirements;
    unexpected or undesired clinical results of the product; and
    the clients decision to forego a particular study.    
    insufficient patient enrollment or investigator recruitment;
    the clients decision to downsize its product development
    portfolios; 18




---



##### 




    the clients dissatisfaction with our performance,
    including the quality of data provided and our ability to meet
    agreed upon schedules; and
    production problems resulting in shortages of the drug or
    required clinical supplies.    Our
    quarterly operating results may vary, which could negatively
    affect the market price of our common stock.
  start-up
  We
    depend on a limited number of clients and a loss of or
    significant decrease in business from them could affect our
    business.
    Because
    most of our clinical development service revenue is from
    long-term fixed-fee contracts, we would lose money in performing
    these contracts if our costs of performing them were to exceed
    the fixed fees payable to us.
    Our
    business depends on our senior management team, and the loss of
    any member of the team may harm our business.
   19




---



##### 



If we
    are unable to recruit and retain qualified personnel, we may not
    be able to expand our business or remain
    competitive.
    Our
    business could be harmed if we are unable to manage our growth
    effectively.
    Our
    exposure to exchange rate fluctuations could negatively impact
    our results of operations.
        We are
    subject to certain risks associated with our foreign
    operations.
      
    tax rates in certain foreign countries may exceed those in the
    United States and foreign earnings may be subject to withholding
    requirements or the imposition of tariffs, exchange controls, or
    other restrictions, including restrictions on
    repatriation; and
    general economic and political conditions in countries where we
    operate may have an adverse effect on our operations in those
    countries. 20




---



##### 




    foreign customers may have longer payment cycles than customers
    in the United States;
    we may have difficulty complying with a variety of foreign laws
    and regulations, some of which may conflict with United States
    law;
    the difficulty of enforcing agreements and collecting
    receivables through certain foreign legal systems; and
    the difficulties associated with managing a large organization
    spread throughout various countries.      We
    provide services to emerging companies which may be unable to
    pay us.
    We
    have a significant amount of goodwill on our balance sheet, and
    a downturn in our business or industry could require us to take
    a charge to earnings, which may negatively affect the market
    price of our common stock.
    Our
    business depends significantly on the continued effectiveness of
    our information technology infrastructure, and failures of such
    technology could harm our operations.
    Our
    business could be harmed if we cannot successfully integrate
    future acquisitions.
   21




---



##### 



We
    compete in a highly competitive market and if we do not compete
    successfully our business could be harmed.
    Risks
    Related to Our Industry
  Our
    business could be harmed if the companies in the pharmaceutical
    and biotechnology industries to whom we offer our services
    reduce their research and development activities or reduce the
    extent to which they outsource clinical
    development.
    Our
    business and the businesses of our customers are subject to
    extensive regulation, and our results of operations could be
    harmed if regulatory standards change significantly or if we
    fail to maintain compliance with evolving, complex
    regulations.
   22




---



##### 



Circumstances
    beyond our control could cause the CRO industry to suffer
    reputational or other harm that could result in an industry-wide
    reduction in demand for CRO services, which could harm our
    business.
    If we
    incur liability for hazardous material contamination, our
    business would be harmed.
    Our
    services are subject to evolving industry standards and rapid
    technological changes.
   23




---



##### 



Our
    clinical research services create a risk of liability and, if we
    are required to pay damages or to bear the costs of defending
    any claim not covered by contractual indemnity or insurance,
    this could cause material harm to our business.
    Health
    care industry reform could reduce or eliminate our business
    opportunities.
    Risks
    Related to Our Common Stock
  The
    price of our common stock may fluctuate significantly, and you
    could lose all or part of your investment.
    The
    sale of a substantial number of our shares of common stock in
    the public market could reduce the market price of our shares,
    which in turn could negatively impact your investment in
    us.
   24




---



##### 















We
    have implemented certain provisions that could make any change
    in our board of directors or in control of our company more
    difficult.








Our
    largest stockholders continue to have significant influence over
    us, and they may make decisions with which you
    disagree.








Because
    we typically have not paid dividends and do not anticipate
    paying dividends on our common stock for the indefinite future,
    you should not expect to receive dividends on shares of our
    common stock.








ITEM 1B.  UNRESOLVED
    STAFF COMMENTS






25



---



##### 



ITEM 2.
    DESCRIPTION
    OF PROPERTIES    ITEM 3.
    LEGAL
    PROCEEDINGS      ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   PART II  ITEM 5.
    MARKET
    FOR THE REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER
    MATTERS        High


LowCalendar Year 2004First Quarter


N/A



N/ASecond Quarter


N/A



N/AThird Quarter


N/A



N/AFourth Quarter

$
24.95


$
19.00   High


LowCalendar Year 2005First Quarter

$
28.30


$
22.26Second Quarter

$
27.43


$
23.15Third Quarter

$
31.25


$
25.38Fourth Quarter

$
30.43


$
25.48    26




---



##### 



Dividend
    Policy
      Securities
    Authorized for Issuance Under Equity Compensation
    Plans
    Number ofSecuritiesRemaining AvailableNumber of





for Future IssuanceSecurities to be





Under EquityIssued Upon


Weighted-Average


Compensation PlansExercise of


Exercise Price of


(ExcludingOutstanding


Outstanding


SecuritiesOptions, Warrants


Options, Warrants


Reflected In ColumnPlan Category

and Rights


and Rights


(a))(a)


(b)


(c)Equity compensation plans approved
    by security holders


3,149,373


$
11.60



1,735,275Equity compensation plans not
    approved by security holders


0



0



0Total


3,149,373


$
11.60



1,735,275   Recent
    Sales of Unregistered Securities
         27




---



##### 



Use of
    Proceeds from Initial Public Offering
  No. 333-116424)
    Aggregate PriceNumber of


of Offering





AggregateShares


Amount


Number of


Offering PriceRegistered


Registered


Shares Sold


of Shares SoldCommon stock sold by us


3,872,834


$
73,583,846



3,872,834


$
73,583,846Common stock sold by selling
    stockholders


3,027,166


$
57,516,154



3,027,166


$
57,516,1546,900,000


$
131,100,000



6,900,000


$
131,100,000     Underwriting Discounts



Underwriters




Total Companyand Commissions

Finders Fees

Expenses

Other Expenses


Expenses$5,150,869.22

$

$

$
1,413,056


$
6,563,925    28




---



##### 



ITEM 6.
    SELECTED
    CONSOLIDATED FINANCIAL DATA    Predecessor



SuccessorPeriod from



Period fromJanuary 1, 2001 to



June 28, 2001June 27,



to December 31,


Year Ended
    December 31,2001



2001


2002


2003


2004


2005RevenueService revenue

$
55,477



$
59,600


$
176,365


$
247,888


$
277,479



294,739Reimbursement revenue


7,491




8,316



24,648



42,109



30,165



31,505Total revenue

$
62,968



$
67,916


$
201,013


$
289,997


$
307,644



326,244Operating expensesDirect costs


29,078




31,008



94,761



126,501



134,067



136,572Reimbursable
    out-of-pocket
    costs


7,491




8,316



24,648



42,109



30,165



31,505Selling, general, and administrative


19,548




19,903



57,897



80,585



90,139



95,827Depreciation and amortization


2,244




5,016



6,956



8,967



9,691



11,156Merger costs(1)


1,000




















Management fee







396



800



800



704



Option repurchase(2)



















3,713



Vested option bonus(2)



















2,738



Income from operations


3,607




3,277



15,951



31,035



36,427



51,184Interest (expense) income, net


(158
)



(2,279
)


(4,100
)


(6,856
)


(3,643
)


1,181Other income (expenses), net


53




13



(721
)


(4,023
)


(38
)


(1,137
)Income before income taxes


3,502




1,011



11,130



20,156



32,746



51,228Provision for income taxes


1,751




1,139



5,493



6,909



11,997



19,005Net income (loss)

$
1,751



$
(128
)

$
5,637


$
13,247


$
20,749


$
32,223Net income (loss) per
    shareBasic

$
0.25



$
(0.01
)

$
0.37


$
0.83


$
1.13


$
1.43Diluted

$
0.21



$
(0.01
)

$
0.32


$
0.71


$
1.02


$
1.32Shares used to compute net income
    (loss) per share(3)(4):Basic


3,301,574




13,965,364



15,204,232



15,965,408



18,442,313



22,527,108Diluted


3,968,335




13,965,364



17,557,632



18,666,012



20,329,852



24,389,592Other Financial Data:Net cash provided (used in) by
    operating activities

$
5,394



$
21,332


$
28,442


$
2,058


$
71,636


$
(1,477
)Net cash (used in) provided by
    investing activities


(3,238
)



(2,721
)


(24,625
)


(9,599
)


(32,350
)


4,016Net cash (used in) provided by
    financing activities


128




(995
)


(14,581
)


26,028



(6,430
)


5,441Non-GAAP Data:Adjusted EBITDA(5)

$
5,904



$
8,306


$
22,186


$
35,979


$
52,531


$
61,203Adjusted EBITDA as a % of service
    revenue


10.6
%



13.9
%


12.6
%


14.5
%


18.9
%


20.8
%EBITDA(5)

$
5,904



$
8,306


$
22,186


$
35,979


$
46,080


$
61,203EBITDA as a % of service revenue


10.6
%



13.9
%


12.6
%


14.5
%


16.6
%


20.8
%   29




---



##### 



As of
    December 31,2001


2002


2003


2004


2005(Dollars in thousands)Consolidated Balance Sheet
    Data:Cash and cash equivalents

$
23,712


$
13,798


$
32,328


$
65,888


$
73,640Marketable securities














24,500



Working capital


(5,279
)


(43,429
)


(8,449
)


11,478



41,760Total assets


180,261



254,547



298,558



337,344



329,364Long  term debt
    and capital leases, less current maturities


44,437



32,509



57,810



75



9Stockholders equity


43,253



59,088



74,565



150,379



188,866     (1)
    
    Comprises payments to management in connection with our June
    2001 recapitalization.(2)
    
    Includes a $3.7 million charge for the repurchase of
    options, predominantly from former employees, and a
    $2.7 million charge for a per-vested-option bonus paid to
    all employee option holders, both of which were executed in
    connection with the culmination of the January 2004 tender
    process.(3)
    
    Net income (loss) per share and shares used to compute net
    income (loss) per share amounts for 2001 is presented on an
    unaudited basis. Net income (loss) per share includes
    $0.9 million for the period from January 1, 2001 to
    June 27, 2001 for dividends and accretion on preferred
    stock, which reduces net income available to common stockholders.(4)
    
    Net income (loss) per share and shares used to compute net
    income (loss) per share for all periods following the
    predecessor period gives effect to a
    four-for-one
    stock split of our common stock effected prior to completion of
    the offering.(5)
    
    Adjusted EBITDA and EBITDA are not substitutes for operating
    income, net income, or cash flow from operating activities as
    determined in accordance with GAAP as measures of performance or
    liquidity. See Managements Discussion and Analysis
    of Financial Condition and Results of
    Operations  Non-GAAP Financial
    Measures. For each of the periods indicated, the following
    table sets forth a reconciliation of EBITDA and Adjusted EBITDA
    to net cash provided by (used in) operating activities and to
    net income (loss).  30




---



##### 



Predecessor



SuccessorPeriod from



Period fromJanuary 1, 2001



June 28, 2001to June 27,



to December 31,


Year Ended
    December 31,2001



2001


2002


2003


2004


2005(Dollars in thousands)Adjusted EBITDA

$
5,904



$
8,306


$
22,186


$
35,979


$
52,531


$
61,203Option repurchase



















(3,713
)


Vested option bonus



















(2,738
)


EBITDA


5,904




8,306



22,186



35,979



46,080



61,203Depreciation and amortization


(2,244
)



(5,016
)


(6,956
)


(8,967
)


(9,691
)


(11,156
)Interest expense, net


(158
)



(2,279
)


(4,100
)


(6,856
)


(3,643
)


1,181Provision for income taxes


(1,751
)



(1,139
)


(5,493
)


(6,909
)


(11,997
)


(19,005
)Net income (loss)


1,751




(128
)


5,637



13,247



20,749



32,223Depreciation and amortization


2,244




5,016



6,956



8,967



9,691



11,156Provision for doubtful receivables


250




76



1,888



4,851



1,914



(123
)Amortization of debt discount







126



379



1,642







Stock-based compensation























Provision for deferred income taxes


612




(2,672
)


(1,228
)


(3,997
)


2,606



2,354Debt issuance costs write-off















750



1,241



Changes in assets and liabilities:Accounts receivable and unbilled
    services


5,794




(8,711
)


(29,251
)


(18,538
)


15,373



(3,057
)Prepaid expenses and other assets


(5,187
)



2,934



1,444



408



1,226



(2,465
)Accounts payable and accrued
    expenses


4,330




452



3,481



(4,873
)


7,793



11,022Income taxes


(1,605
)



434



989



(481
)


12,150



(3,677
)Advance billings


(2,795
)



23,805



38,147



82



(1,107
)


(48,910
)Net cash provided by operating
    activities

$
5,394



$
21,332


$
28,442


$
2,058


$
71,636


$
(1,477
)   ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS    Overview
   31




---



##### 



32




---



##### 



Service
    Revenue
      Reimbursement
    Revenue and Reimbursable
    Out-of-Pocket
    Costs
  out-of-pocket out-of-pocket out-of-pocket out-of-pocket
  Direct
    Costs
   33




---



##### 



Selling,
    General, and Administrative Expenses
    Depreciation
    and Amortization
    Exchange
    Rate Fluctuations
    Year2003


2004


2005U.S. Dollars per:Euro


1.1378



1.2466



1.2371Pound Sterling


1.6431



1.8362



1.8126Canadian Dollar


0.7181



0.7716



0.8279  34




---



##### 



Results
    of Operations
      Year Ended
    December 31,2003


2004


2005Service revenue


100.0
%


100.0
%


100.0
%Direct costs


51.0



48.3



46.3Selling, general, and
    administrative


32.5



32.5



32.5Depreciation and amortization


3.6



3.5



3.8Management fee


0.3



0.3



Option repurchase






1.3



Vested option bonus






0.9



Income from operations


12.5



13.1



17.4Interest expense


(2.9
)


(1.4
)


(0.2
)Interest income


0.1



0.1



0.6Other income (expenses), net


(1.6
)






(0.4
)Income before income taxes


8.1



11.8



17.4Provision for income taxes


2.8



4.3



6.4Net income (loss)


5.3
%


7.5
%


10.9
%   Year
    Ended December 31, 2005 Compared to Year Ended
    December 31, 2004
       35




---



##### 



Year
    Ended December 31, 2004 Compared to Year Ended
    December 31, 2003
       36




---



##### 



Variation
    in Quarterly Operating Results
    Liquidity
    and Capital Resources
       37




---



##### 



38




---



##### 



Form 8-K
           39




---



##### 



Contractual
    Obligations and Commercial Commitments
    Payments Due by PeriodLess Than








More ThanOne Year


1-3 Years


3-5 Years


5 Years


Total(Dollars in thousands)Long-term debt, including interest
    payments

$



$



$



$



$
Service purchase commitments


4,483



2,754



1,000







8,237Capital lease, including interest
    payments


9



51











60Operating leases


16,965



29,371



27,644



56,294



130,274Less: sublease income


(1,501
)


(1,181
)


(1,106
)






(3,788
)Total

$
19,956


$
30,995


$
27,538


$
56,294


$
134,783   15-year
  Off-Balance
    Sheet Arrangements
    Non-GAAP Financial
    Measures
       40




---



##### 



Critical
    Accounting Policies and Estimates
    Revenue
    Recognition
   41




---



##### 



Allowance
    for Doubtful Accounts
    Tax
    Valuation Allowance
      Stock-Based
    Compensation
         42




---



##### 



Long-Lived
    Assets
    Goodwill
    and Indefinite-Lived Intangible Assets
      Inflation
    Potential
    Liability and Insurance
    ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  Interest
    Rate Risk
    Foreign
    Exchange Risk
   43




---



##### 



Foreign
    Currency Hedges
   44




---



##### 



ITEM 8.
    INDEX
    TO CONSOLIDATED FINANCIAL STATEMENTS  PageReport of Independent Registered
    Public Accounting Firm


66Consolidated Balance Sheets as of
    December 31, 2004 and 2005


68Consolidated Statements of
    Operations for the years ended December 31, 2003,
    December 31, 2004 and December 31, 2005


69Consolidated Statements of Changes
    in Stockholders Equity for the years ended
    December 31, 2003, December 31, 2004 and
    December 31, 2005


70Consolidated Statements of Cash
    Flows for the years ended December 31, 2003,
    December 31, 2004 and December 31, 2005


71Notes to Consolidated Financial
    Statements


72  45




---



##### 



ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE  None.
  ITEM 9A 
    CONTROLS
    AND PROCEDURES  Evaluation
    of Disclosure Controls and Procedures
  Rule 13a-15
    Managements
    Report on Internal Control Over Financial Reporting
      
    pertain to the maintenance of records that in reasonable detail
    accurately and fairly reflect the transactions and dispositions
    of our assets;
    provide reasonable assurance that transactions are recorded as
    necessary to permit preparation of financial statements in
    accordance with generally accepted accounting principles, and
    that our receipts and expenditures are being made only in
    accordance with authorizations of our management and members of
    our board of directors; and
    provide reasonable assurance regarding prevention or timely
    detection of unauthorized acquisition, use, or disposition of
    our assets that could have a material effect on our financial
    statements.   46




---



##### 



Changes
    in Internal Control over Financial Reporting
   47




---



##### 



PART III  ITEM 10.
    DIRECTORS
    AND EXECUTIVE OFFICERS OF THE REGISTRANT    Class I

Class II

Class III(Term Expiring 2008)

(Term Expiring 2006)

(Term Expiring 2007)Patrick K. Donnelly

Jean-Pierre L. Conte

Melvin D. BoothJudith A. Hemberger

Armin Kessler

Robert E. ConwayRobert J. Weltman     First YearElectedName

Age

Director

PositionCLASS IPatrick K. Donnelly


47



1994


President, Chief Executive
    Officer, and DirectorJudith A. Hemberger


58



2005


DirectorRobert J. Weltman


40



2001


DirectorCLASS IIJean-Pierre L. Conte


42



2001


ChairmanArmin Kessler


67



2005


DirectorCLASS IIIMelvin D. Booth


60



2004


DirectorRobert E. Conway


52



2004


Director   Melvin D. Booth, Director.
  Jean-Pierre L. Conte, Chairman.
  Robert E. Conway, Director.
 48




---



##### 



Patrick K. Donnelly, President, Chief Executive Officer, and
    Director.
  Judith A. Hemberger, Ph.D.
  Armin Kessler, Director.
  Robert J. Weltman, Director.
 Executive
    Officers    J.
    Matthew Bond, Executive Vice President, Chief Financial Officer,
    Assistant Treasurer, and Assistant Secretary
   49




---



##### 



David
    W. Dockhorn, Ph.D., Executive Vice President of Global
    Clinical Operations
    Monika
    Pietrek, M.D., Ph.D., Executive Vice President of
    Global Scientific and Medical Affairs
    James
    C. Powers, Executive Vice President of Business Development and
    Secretary
    Bruce
    A. Teplitzky, Executive Vice President of Business
    Development
    William
    (Bucky) Walsh, III, Executive Vice President of Corporate
    Development
    Gail
    OMullan, Senior Vice President of Talent
    Management
   50




---



##### 



Section 16(a)
    Beneficial Ownership Reporting Compliance
    ITEM 11.
    EXECUTIVE
    COMPENSATION  Board of
    Directors Compensation
    Annual
    retainer  $35,000Meeting attendance fee (board or
    audit committee)attendance in
    person  $2,000attendance by
    telephone  $1,000Meeting attendance fee
    (compensation or nominating and corporate governance committee)attendance in
    person  $1,500attendance by
    telephone  $750Audit committee chairman
    fee  $20,000Other committee chairman
    fee  $10,000     Regulation S-K.
  Form 8-K.
 51




---



##### 



Executive
    Compensation
  Summary
    Compensation
    SUMMARY
    COMPENSATION TABLE
  Long TermCompensationAnnual Compensation

AwardsOther Annual

SecuritiesSalary

Bonus

Compensation

UnderlyingName and Principal
    Position

Year

($)

($)

($)

Options (#)Patrick K. Donnelly


2005



355,125



56,250
(1)


19,520
(6)


President, Chief Executive Officer,


2004



315,000



217,757



472,261
(5)(7)


90,000and Director


2003



243,333



181,250



16,893
(8)


David W. Dockhorn


2005



255,625



31,250
(2)


20,791
(9)


Executive Vice President of Global


2004



222,500



84,870



195,967
(5)(10)


50,000Clinical Operations


2003



204,375



75,000



20,173
(11)Erich Mohr(12)


2005



321,151







20,707
(13)


Executive Vice President and Chief


2004



284,266



118,291



78,442
(5)(14)


50,000Scientific Officer


2003



240,539



109,776



16,911
(15)


James C. Powers


2005



221,875



36,000
(3)


32,511
(16)


Executive Vice President of


2004



199,375



128,421



283,345
(5)(17)


50,000Business Development and Secretary


2003



194,458



75,000



32,348
(18)


Bruce A. Teplitzky


2005



200,972



55,000
(4)


25,489
(19)


25,000Senior Vice President of


2004



194,375



178,673



172,227
(5)(20)


25,000Business Development


2003



189,166



56,250



26,348
(21)


     (1)
    
    Includes $18,563 of deferred bonus.(2)
    
    Includes $3,125 of deferred bonus.(3)
    
    Includes $11,881 of deferred bonus.(4)
    
    Includes $0 of deferred bonus.(5)
    
    Includes payments, in the amounts specified below, made to all
    of our employee option holders at the rate of $0.94 per
    option in connection with a tender offer transaction in January
    2004. We refer to these as option payments.(6)
    
    Represents car allowance of $10,800, company contributions to
    health insurance of $4,344, company contributions to 401(k) of
    $2,194, and other benefits of $4,982.(7)
    
    Represents option payment of $445,554, car allowance of $10,800,
    company contributions to health insurance of $9,022, company
    contributions to 401(k) of $5,001, and other benefits of $1,884.(8)
    
    Represents car allowance of $10,800, company contributions to
    health insurance of $1,780, company contributions to 401(k) of
    $2,369, and other benefits of $1,944.(9)
    
    Represents car allowance of $10,800, company contributions to
    health insurance of $7,905 and other benefits of $2,086.(10)
    
    Represents option payment of $177,190, car allowance of $10,800,
    company contributions to health insurance of $6,093, and other
    benefits of $1,884.(11)
    
    Represents car allowance of $10,800, company contributions to
    health insurance of $6,363,company contributions to 401(k) of
    $1,066, and other benefits of $1,944. 52




---



##### 



(12)
    
    Erich Mohr was compensated in Canadian dollars. All amounts
    related to his compensation have been converted from Canadian
    dollars to U.S. dollars using the average exchange rate for
    fiscal year 2005 of Cdn $1.2078 per US$1.00 and
    Cdn $1.3015 for fiscal year 2004. Dr. Mohr resigned
    from the Company effective December 31, 2005.(13)
    
    Represents car allowance of $10,557, company contributions to
    health insurance of $1,178, and other benefits of $8,972.(14)
    
    Represents option payment of $60,320, car allowance of $9,797,
    and other benefits of $8,325.(15)
    
    Represents car allowance of $9,155 and other benefits of $7,756.(16)
    
    Represents car allowance of $10,800, company contributions to
    health insurance of $12,659, company contributions to 401(k) of
    $7,000, and other benefits of $2,052.(17)
    
    Represents option payment of $248,820, car allowance of $10,800,
    company contributions to health insurance of $15,341, company
    contributions to 401(k) of $6,500, and other benefits of $1,884.(18)
    
    Represents car allowance of $10,800, company contributions to
    health insurance of $13,604, company contributions to 401(k) of
    $6,000, and other benefits of $1,944.(19)
    
    Represents car allowance of $10,800, company contributions to
    health insurance of $12,659 and other benefits of $2,030.(20)
    
    Represents option payment of $144,202, car allowance of $10,800,
    company contributions to health insurance of $15,341, and other
    benefits of $1,884.(21)
    
    Represents car allowance of $10,800, company contributions to
    health insurance of $13,604, and other benefits $1,944.  Stock
    Option Grants
    OPTION
    GRANTS IN 2005
  Individual GrantsPercent of








Potential RealizableNumber of


Total








Value at AssumedSecurities


Options








Annual Rates of StockUnderlying


Granted to


Exercise of





Price Appreciation forOptions


Employees in


Base Price





Option TermName

Granted (#)


Fiscal Year(1)


($/Sh)


Expiration Date


5% ($)


10% ( $)Bruce A. Teplitzky


50,000



12.9
%


30.31



9/30/2012



515,415



1,169,301     (1)
    
    The figures representing percentages of total options granted to
    employees in 2005 are based on a total, net of options granted
    and forfeited within 2005, of 387,500 common shares underlying
    stock options granted to our employees during 2005. 53




---



##### 



(2)
    
    The amounts shown in the table above as potential realizable
    value represent hypothetical gains that could be achieved for
    the respective stock options if exercised at the end of the
    option term. These amounts represent assumed rates of
    appreciation in the value of our common stock from the fair
    market value on the date of grant. Potential realizable values
    in the table above are calculated by:  
    multiplying the number of shares of common stock subject to the
    stock option by the price of $30.31 per share;
    assuming that the aggregate share value derived from that
    calculation compounds at the annual 5% or 10% rates shown in the
    table for the balance of the term of the option; and
    subtracting from that result the total option exercise price.    Aggregated
    Option/ SAR Exercises In 2005 and FY-End Option/ SAR
    Values
  in-the-money
  Number of SecuritiesUnderlying Unexercised


Value of UnexercisedShares


Value


Options at


In-the-Money
    Options atAcquired on


Realized


December 31, 2005
    (#)


December 31, 2005
    ($)Exercise (#)


($)


Exercisable


Unexercisable


Exercisable


UnexercisablePatrick K. Donnelly


56,736



1,450,740



426,500



79,500



9,977,441



876,675David W. Dockhorn


0



0



185,026



73,500



4,193,712



998,400Erich Mohr


68,500



1,292,055



0



0



0



0James C. Powers


0



0



268,500



41,500



6,297,160



515,825Bruce A. Teplitzky


0



0



120,221



74,750



2,753,781



301,088   Employment
    Agreements
   54




---



##### 



55




---



##### 



56




---



##### 



Performance
    Graph
    Comparison
    of Five-Year Cumulative Total Returns
    Performance Graph for
    P R A INTERNATIONAL
  Produced
    on 02/22/2006 including data to 12/30/2005
  
  Symbol



CRSP Total Returns
    Index:

11/17/2004

12/31/2004

6/30/2005

12/31/2005n

PRA International


100.0



130.4



140.9



148.2               

«

Nasdaq Stock Market (US Companies)


100.0



103.7



98.5



105.9.........................

5

Nasdaq Stocks (SIC 8000-8099
    US Companies)


100.0



107.5



129.2



149.9Health servicesNotes:A. The lines represent monthly
    index levels derived from compounded daily returns that include
    all dividends.B. The indexes are reweighted
    daily using the market capitalization on the previous trading
    day.C. If the monthly interval,
    based on the fiscal year-end, is not a trading day, the
    preceding trading day is used.D. The index level for all
    series was set to $100.0 on 11/17/2004.E. IPO price of $19.00 on
    11/17/2004 was used for the base value.     Compensation
    Committee Report
   57




---



##### 



Committee
    Meetings and Deliberations
              Internal
    Pay Equity
     58




---



##### 



Review
    of CEO Compensation Components
  change-in-control
  The
    Committees Conclusion
  change-in-control
  Policy
    Regarding 162(m)
            Compensation
    Committee Interlocks and Insider Participation
   59




---



##### 



ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
    MANAGEMENT  Security
    Ownership of Directors and Executive Officers
    SharesBeneficiallyOwned(1)


Percent(2)Named Executive
    OfficersPatrick K. Donnelly(3)


680,262



2.75%David W. Dockhorn(4)


317,626



1.28%Erich Mohr(5)


489,623



1.98%James C. Powers(6)


501,899



2.02%Bruce A. Teplitzky(7)


197,353



0.80%DirectorsJean-Pierre L. Conte(8)


3,139,361



12.67%Melvin D. Booth(9)


10,000



0.04%Robert E. Conway(10)


10,000



0.04%Judith A. Hemberger


0



0.00%Armin Kessler(11)


10,000



0.04%Robert J. Weltman(12)


0



0.00%All Directors and Executive
    Officers as a Group (15 persons)


5,724,137



23.10%Beneficial Owners of 5% or More
    of the Outstanding Common Stock of PRA InternationalGenstar Capital III, L.P.(13)


3,139,361



12.70%Baron Capital Group, Inc.(14)


2,104,600



9.20%Wasatch Advisors, Inc.(15)


1,431,160



6.30%FMR Corporation(16)


1,431,030



6.28%Artisan Investment Corporation (17)


1,227,600



5.40%Waddell & Reed Financial
    (18)


1,181,700



5.20%     (1)
    
    Beneficial ownership of shares is determined in accordance with
    the rules of the Securities and Exchange Commission and
    generally includes any shares over which a person exercises sole
    or shared voting or investment power. Except as indicated by
    footnote, and subject to applicable community property laws, to
    our knowledge, each stockholder identified in the table
    possesses sole voting and investment power with respect to all
    shares of common stock shown as beneficially owned by the
    stockholder. The number of shares beneficially owned by a person
    includes shares of common stock subject to options and warrants
    held by that person that are currently exercisable or
    exercisable within 60 days of January 31, 2006, and
    not subject to repurchase as of that date. Shares issuable
    pursuant to options and warrants are deemed outstanding for
    calculating the percentage ownership of the person holding the
    options and warrants but are not deemed outstanding for the
    purposes of calculating the percentage ownership of any other
    person.(2)
    
    For purposes of this table, the number of shares of common stock
    outstanding as of January 31, 2006, is deemed to be
    22,934,871. 60




---



##### 



(3)
    
    Includes options exercisable for 426,500 shares.(4)
    
    Includes options exercisable for 195,026 shares.(5)
    
    Includes 144,713 shares owned by Shelley Mohr,
    Dr. Mohrs spouse. Dr. Mohr resigned from the
    Company effective December 31, 2005.(6)
    
    Includes options exercisable for 268,500 shares.(7)
    
    Includes options exercisable for 120,221 shares.(8)
    
    Includes 3,030,526 shares owned by Genstar Capital
    Partners III, L.P. and 108,835 shares owned by
    Stargen III, L.P. Mr. Conte is the chairman, a managing
    director, and a limited partner of Genstar. Capital, L.P., the
    manager of Genstar Capital Partners III, L.P.
    Mr. Conte is a limited partner of Stargen III, L.P.
    Mr. Conte is a managing member of Genstar III GP LLC, which
    is the sole general partner of Genstar Capital III, L.P.,
    which is the sole general partner of each of Genstar Capital
    Partners III, L.P. and Stargen III, L.P. In such
    capacity, Mr. Conte may be deemed to beneficially own
    shares beneficially held by Genstar Capital Partners III,
    L.P. and Stargen III, L.P., but disclaims such beneficial
    ownership.(9)
    
    Includes options exercisable for 10,000 shares.(10)
    
    Includes options exercisable for 10,000 shares.(11)
    
    Includes options exercisable for 10,000 shares.(12)
    
    Mr. Weltman is a limited partner of Genstar
    Capital III, L.P., which is the sole general partner of
    each of Genstar Capital Partners III, L.P. and
    Stargen III, L.P. Mr. Weltman is a limited partner of
    Stargen III, L.P. Mr. Weltman does not directly or
    indirectly have or share voting or investment power over the
    shares beneficially held by Genstar Capital Partners III,
    L.P. or Stargen III, L.P.(13)
    
    Includes 3,030,526 shares owned by Genstar Capital
    Partners III, L.P., of which Genstar Capital III, L.P.
    is the sole general partner, and 108,835 shares owned by
    Stargen III, L.P., of which Genstar Capital III, L.P.
    is the sole general partner. The address of these stockholders
    is
    c/o Genstar
    Capital, L.P., Four Embarcadero Center, 19th Floor,
    San Francisco, CA. The natural persons who have investment
    or voting power for the shares owned by Genstar
    Capital III, L.P. are Jean-Pierre L. Conte, Richard D.
    Paterson, and Richard F. Hoskins.(14)
    
    Includes 2,026,000 shares owned by BAMCO, Inc. and 78,600
    owned by Baron Capital Management, Inc. Each are subsidiaries Of
    Baron Capital Group, Inc. The address of these stockholders is
    767 Fifth Avenue , New York, NY10153. Ronald Baron holds a
    controlling interest in Baron Capital Group, Inc.(15)
    
    The address of this stockholder is 150 Social Hall Avenue, Salt
    Lake City, UT 84111.(16)
    
    Includes 1,175,719 shares owned by Fidelity
    Management & Research Company and 75,100 shares
    owned by Fidelity Management Trust Company, each of which is a
    wholly-owned subsidiary of FMR Corporation. Also includes
    180,211 shares held by Fidelity International Limited.
    Pursuant to a Schedule 13G filed on February 14, 2006,
    the signatories to such Schedule 13G state that although they
    believe that FMR Corporation and Fidelity International limited
    are not acting as a group for purposes of
    Section 13(d) of the Securities and Exchange Act of 1934,
    they have reported their beneficial ownership on a voluntary
    basis. The address for these stockholders is 82 Devonshire
    Street, Boston, MA 02109. Edward C. Johnson 3d controls the
    voting power of FMR Corporation by holding 49% of its common
    stock and pursuant to a voting agreement. A partnership
    controlled by Mr. Johnson controls 38% of the total voting
    stock of Fidelity International Limited.(17)
    
    Includes 1,227,600 shares owned by Artisan Partners Limited
    Partnership, of which Artisan Investment Corporation is the
    general partner. Andrew and Caroline Ziegler are principal
    shareholders of Artisan Investment Corporation. The address of
    this stockholder is 875 E. Wisconsin Street,
    Milwaukee, WI 53202.(18)
    
    Includes 1,067,000 shares owned by Waddell & Reed
    Investment Management Company and 114,000 shares owned by
    Ivy Investment Management Company. Each are indirect
    subsidiaries wholly-owned by Waddell & Reed Financial.
    The address of these stockholders is 6300 Lamar Avenue, Overland
    Park, KS 66202. 61




---



##### 



Securities
    Authorized for Issuance Under Equity Compensation
    Plans
    Number of SecuritiesNumber of Securities

Weighted-Average

Remaining Available for Future
    Issuanceto be Issued Upon

Exercise Price of

Under Equity Compensation
    PlansExercise of Outstanding
    Options,

Outstanding Options,

(Excluding SecuritiesWarrants and Rights(a)

Warrants and Rights(b)

Reflected in
    Column(a))(c)3,149,373

$11.60 per share

1,735,275   ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS  Pharma
    market, LLC
    Leased
    Facilities from Dockhorn Properties, LLC
    Registration
    Rights Agreement
    Stockholders
    Agreements
    Nomination
    of Directors
   62




---



##### 



Employment
    Agreements
    ITEM 14.
    PRINCIPAL
    ACCOUNTING FEES AND SERVICES  Fees Paid
    to the Independent Auditors
    2004


2005Audit Fees

$
393,845


$
839,503Audit-Related Fees

$
575,000


$
94,573Tax Fees

$
13,900


$
All Other Fees






Total

$
982,745


$
934,076   Rule 2-01 Regulation S-X. Form 10-Q Form S-1
   63




---



##### 



PART IV  ITEM 15.
    EXHIBITS,
    FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
    FORM 8-K  Allowance for Doubtful
    AccountsBalance at December 31,
    2002

$
2,948Provisions


4,851Write-offs/Recoveries


(3,219
)Balance at December 31,
    2003


4,580Provisions


1,914Write-offs/Recoveries


(1,597
)Balance at December 31,
    2004


4,897Provisions


(123
)Write-offs/Recoveries


(78
)Balance at December 31,
    2005

$
4,696Income Tax Valuation
    AllowanceBalance at December 31,
    2002


3,496Provisions


7,117Releases


(2,344
)Balance at December 31,
    2003


8,269Provisions


569Releases


(2,539
)Balance at December 31,
    2004


6,299Provisions


Releases


(5,458
)Balance at December 31,
    2005

$
841  64




---



##### 



PRA
    INTERNATIONAL AND SUBSIDIARIES
  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
  Consolidated Financial
    Statements of PRA InternationalReport of
    Independent Registered Public Accounting Firm,
    PricewaterhouseCoopers LLP


66Consolidated
    Balance Sheets


68Consolidated
    Statements of Operations


69Consolidated
    Statements of Changes in Stockholders Equity and Other
    Comprehensive Income


70Consolidated
    Statements of Cash Flows


71Notes to
    Consolidated Financial Statements


72  65




---



##### 



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM      Consolidated
    financial statements and financial statement schedules
    Internal
    control over financial reporting
  Internal Control  Integrated Framework Internal Control  Integrated Framework
   66




---



##### 



/s/ PricewaterhouseCoopers LLP
     67




---



##### 



PRA
    INTERNATIONAL AND SUBSIDIARIES
  CONSOLIDATED BALANCE SHEETS
  As of
    December 31,2004


2005(Dollars in thousands, except
    per share amounts)ASSETSCurrent assetsCash and cash equivalents

$
65,888


$
73,640Marketable securities


24,500



Accounts receivable and unbilled
    services, net


84,480



85,426Prepaid expenses and other current
    assets


5,844



8,678Deferred tax assets


5,069



663Total current assets


185,781



168,407Fixed assets, net


21,661



26,906Goodwill


101,340



106,748Other intangibles, net of
    accumulated amortization of $5,234 and $6,307 as of
    December 31, 2004, and 2005, respectively


25,409



24,530Other assets


3,153



2,773Total assets

$
337,344


$
329,364LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payable

$
15,040


$
21,640Accrued expenses


32,437



34,523Income taxes payable


11,875



7,782Advance billings


114,801



62,651Capital leases, current portion


150



51Total current liabilities


174,303



126,647Deferred tax liability


9,349



7,499Other liabilities


3,238



6,343Capital leases


75



9Total liabilities


186,965



140,498Commitments and contingencies
    (Note 12)Stockholders equityCommon stock $0.01 par value;
    36,000,000 shares authorized as of December 31, 2004
    and 2005; 22,337,822 and 22,915,896 shares issued and
    outstanding as of December 31, 2004 and 2005, respectively


223



229Treasury stock


(93
)


(93
)Additional paid-in
    capital  common stock


124,737



130,338Accumulated other comprehensive
    income


2,858



3,515Retained earnings


22,654



54,877Total stockholders equity


150,379



188,866Total liabilities and
    stockholders equity

$
337,344


$
329,364    68




---



##### 



PRA
    INTERNATIONAL AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF OPERATIONS
  Year Ended
    December 31,2003


2004


2005(Dollars in thousands, except
    per share amounts)RevenueService revenue

$
247,888


$
277,479


$
294,739Reimbursement revenue


42,109



30,165



31,505Total revenue


289,997



307,644



326,244Operating expensesDirect costs


126,501



134,067



136,572Reimbursable
    out-of-pocket
    costs


42,109



30,165



31,505Selling, general, and
    administrative


80,585



90,139



95,827Option purchase






3,713



Employee per option bonus related
    to tender






2,738



Depreciation and amortization


8,967



9,691



11,156Management fee


800



704



Income from operations


31,035



36,427



51,184Interest expense


(7,190
)


(4,023
)


(467
)Interest income


334



380



1,648Other expenses, net


(4,023
)


(38
)


(1,137
)Income before income taxes


20,156



32,746



51,228Provision for income taxes


6,909



11,997



19,005Net income

$
13,247


$
20,749


$
32,223Net income per shareBasic

$
0.83


$
1.13


$
1.43Diluted

$
0.71


$
1.02


$
1.32    69




---



##### 



CONSOLIDATED
    STATEMENTS OF CHANGES IN STOCKHOLDERSEQUITY AND OTHER COMPREHENSIVE INCOME
   Additional


AdditionalPaid-In


Paid-In


Notes


Accumulated


Retained





OtherCapital 


Capital 


Receivable


Other


Earnings/





ComprehensiveCommon Stock


Exchangeable Shares


Treasury Stock


Common


Exchangeable


from


Comprehensive


(Accumulated





Income/Shares


Amount


Shares


Amount


Shares


Amount


Stock


Shares


Stockholders


Income/(Loss)


Deficit)


Total


(Loss)Balance as of December 31, 2002


14,757,932



148



1,115,796



11











46,096



7,102



(401
)


623



5,509



59,088Issuance of common stock in
    connection with purchase business combination


156,824



2



















1,174



















1,176Exercise of common stock options


115,088



1



















36



















37Exercise of warrants


243,200



2







































2Net income










































13,247



13,247


$
13,247Other comprehensive incomeForeign currency translation
    adjustment, net of tax






































908







908



908Fair market value adjustments on
    interest rate agreement, net of tax






































107







107



107Comprehensive income

















































$
14,262Balance as of December 31, 2003


15,273,044


$
153



1,115,796


$
11






$



$
47,306


$
7,102


$
(401
)

$
1,638


$
18,756


$
74,565Issuance of common stock for cash
    and stock


14,116























150



















150Exercise of common stock options


1,212,174



12



















2,766







(1,777
)










1,001Exercise of warrants


729,596



7



















(6
)


















1Purchase of treasury stock


(14,216
)














14,216



(93
)






















(93
)Declaration of dividends










































(16,851
)


(16,851
)Net income










































20,749



20,749


$
20,749Interest on notes receivable from
    stockholders


































(113
)










(113
)Payment on notes receivable from
    stockholders


































2,291











2,291Issuance of common stock in
    connection with initial public offering, net of $6,564 in fees


4,007,312



40



















67,419



















67,459Transfer of exchangeable shares


1,115,796



11



(1,115,796
)


(11
)










7,102



(7,102
)














Other comprehensive incomeForeign currency translation
    adjustment, net of tax






































1,175







1,175



1,175Fair market value adjustments on
    interest rate agreement, net of tax






































45







45



45Comprehensive income

















































$
21,969Balance as of December 31, 2004


22,337,822


$
223






$




14,216


$
(93
)

$
124,737


$



$



$
2,858


$
22,654


$
150,379Exercise of common stock options


578,074



6



















3,215



















3,221Net income










































32,223



32,223


$
32,223Issuance costs related to public
    offerings


























(600
)


















(600
)Stock option tax benefit


























2,986



















2,986Other comprehensive incomeForeign currency translation
    adjustment, net of tax






































687







687



687Fair market value adjustments on
    interest rate agreement, net of tax






































(30
)






(30
)


(30
)Comprehensive income

















































$
32,880Balance as of December 31, 2005


22,915,896


$
229


$



$




14,216


$
(93
)

$
130,338


$



$



$
3,515


$
54,877


$
188,866    70




---



##### 



PRA
    INTERNATIONAL AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF CASH FLOWS
  Year Ended
    December 31,2003


2004


2005(Dollars in thousands)Cash flow from operating
    activitiesNet income

$
13,247


$
20,749


$
32,223Adjustments to reconcile net
    income to net cash provided by operating activities:Depreciation and amortization


8,967



9,691



11,156Provision for doubtful receivables


4,851



1,914



(123
)Amortization of debt discount


1,642







Provision for deferred income taxes


(3,997
)


2,606



2,354Debt issuance costs write-off


750



1,241



Changes in assets and liabilities:Accounts receivable and unbilled
    services


(18,538
)


15,373



(3,057
)Prepaid expenses and other assets


408



1,226



(2,465
)Accounts payable and accrued
    expenses


(4,873
)


7,793



11,022Income taxes


(481
)


12,150



(3,677
)Advance billings


82



(1,107
)


(48,910
)Net cash provided by (used in)
    operating activities


2,058



71,636



(1,477
)Cash flow from investing
    activitiesPurchase of fixed assets


(8,140
)


(8,781
)


(13,349
)Disposal of fixed assets


540



1,131



196Purchase of marketable securities






(24,500
)


(22,375
)Proceeds from sale of marketable
    securities










46,875Cash paid for acquisitions, net of
    cash acquired


(1,999
)


(200
)


(7,331
)Net cash (used in) provided by
    investing activities


(9,599
)


(32,350
)


4,016Cash flow from financing
    activitiesProceeds from issuance of debt


69,700



5,000



Repayment of debt and capital
    leases


(43,710
)


(65,275
)


(166
)Proceeds from initial public
    offering, net of issuance costs






67,020



Issuance costs related to public
    offerings










(600
)Issuance of stockholder notes
    receivable






(1,777
)


Stockholder receivable payment






2,178



Payment of dividends






(16,852
)


Purchase of treasury stock






(93
)


Stock option tax benefit










2,986Proceeds from stock option and
    warrant exercises


38



3,369



3,221Net cash provided by (used in)
    financing activities


26,028



(6,430
)


5,441Effect of exchange rate on cash
    and cash equivalents


43



704



(228
)Increase in cash and cash
    equivalents


18,530



33,560



7,752Cash and cash equivalents at
    beginning of period


13,798



32,328



65,888Cash and cash equivalents at end
    of period

$
32,328


$
65,888


$
73,640    71




---



##### 



PRA
    INTERNATIONAL AND SUBSIDIARIES
  NOTES
    TO CONSOLIDATED FINANCIAL STATEMENTS
  (1)
    Summary
    of Operations and Significant Accounting Policies  Nature
    of Operations
    four-for-one four-for-one
      Principles
    of Consolidation
    Risks
    and Other Factors
      Use of
    Estimates
   72




---



##### 



PRA
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED
    FINANCIAL STATEMENTS  (Continued)
   Cash
    Equivalents
    Unbilled
    Services
    Fixed
    Assets
    Furniture, fixtures, and equipment


5-7 yearsComputer hardware and software


3-7 yearsLeasehold improvements


Ten years or the life of the lease   Fair
    Value of Financial Instruments
    Impairment
    of Long-Lived Assets
    Goodwill
    and Other Intangibles
    Advance
    Billings
   73




---



##### 



PRA
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED
    FINANCIAL STATEMENTS  (Continued)
   Revenue
    Recognition
        Reimbursement
    Revenue and Reimbursable
    Out-of-Pocket
    Costs
  out-of-pocket EITF 01-14, Out-of-Pocket out-of-pocket out-of-pocket
    Significant
    Customers
    Year EndedDecember 31,2003


2004


2005Customer A


11%



16%



15%Customer B


10%



12%



10%     Concentration
    of Credit Risk
   74




---



##### 



PRA
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED
    FINANCIAL STATEMENTS  (Continued)
    As ofDecember 31,2004


2005Customer A


14%



16%Customer B


13%



*Customer C


*



11%     *
    
    Less than 10% of consolidated accounts receivable and unbilled
    services as of the end of each period.    Foreign
    Currency Translation
    Comprehensive
    Income (Loss)
    Income
    Taxes
    Stock-Based
    Compensation
   75




---



##### 



PRA
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED
    FINANCIAL STATEMENTS  (Continued)
    Year Ended
    December 31,2003


2004


2005(Dollars in thousands, except
    per share amounts)Net income, as reported

$
13,247


$
20,749


$
32,223Deduct: Total stock-based employee
    compensation expense determined under fair value based method
    for all awards, net of tax


(470
)


(637
)


(1,909
)FAS No. 123 pro forma
    net income

$
12,777


$
20,112


$
30,314Basic net income per share, as
    reported

$
0.83


$
1.13


$
1.43Basic net income per share, pro
    forma

$
0.80


$
1.09


$
1.35Diluted net income per share, as
    reported

$
0.71


$
1.02


$
1.32Diluted net income per share, pro
    forma

$
0.68


$
0.99


$
1.24       Year Ended
    December 31,2003


2004


2005Weighted-average fair value of
    options granted

$
0.75


$
5.29


$
10.91Risk-free rate


2.54



3.25
%


3.96
%Expected life, in years


4.0



4.6



5.0Dividend yield


0
%


0
%


0
%Volatility


0
%


25.23
%


39.6
%   Debt
    Issuance Costs
    Net
    income per share
     76




---



##### 



PRA
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED
    FINANCIAL STATEMENTS  (Continued)
   Supplemental
    Cash Flow Information
    2003


2004


2005(Dollars in thousands)Cash paid for taxes

$
11,666


$
3,890


$
17,989Cash paid for interest

$
4,980


$
2,630


$
213     Derivatives
    Recent
    Accounting Pronouncements
     77




---



##### 



PRA
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED
    FINANCIAL STATEMENTS  (Continued)
    Reclassification
    (2)
    Acquisitions    (3)
    Marketable
    securities  available-for-sale
  (4)
    Accounts
    receivable and unbilled services    As of
    December 31,2004


2005Accounts receivable

$
59,384


$
45,933Unbilled services


29,993



44,18989,377



90,122Less: Allowance for doubtful
    accounts


(4,897
)


(4,696
)$
84,480


$
85,426   (5)
    Fixed
    assets    As of
    December 31,2004


2005Leasehold improvements

$
4,714


$
4,449Computer hardware and software


30,473



37,080Furniture and equipment


9,856



10,308Less: Accumulated depreciation and
    amortization


(23,382
)


(24,931
)$
21,661


$
26,906  78




---



##### 



PRA
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED
    FINANCIAL STATEMENTS  (Continued)
     (6)
    Goodwill
    and Other Intangibles    Carrying amount as of
    December 31, 2003

$
100,937Foreign currency exchange rate
    changes


403Carrying amount as of
    December 31, 2004


101,340Acquisitions


5,866Foreign currency exchange rate
    changes


(458
)Carrying amount as of
    December 31, 2005

$
106,748     WeightedAverage


As of December 31,
    2004


As of December 31,
    2005Amortization


Gross





Net


Gross





NetPeriod


Carrying


Accumulated


Carrying


Carrying


Accumulated


Carrying(In Years)


Amount


Amortization


Amount


Amount


Amortization


AmountNon-compete and other agreements


2


$
2,776


$
2,442


$
334


$
2,504


$
2,413


$
91Customer relationships


10



7,897



2,319



5,578



8,492



3,420



5,072Trade names


Indefinite



19,970



473



19,497



19,841



474



19,367$
30,643


$
5,234


$
25,409


$
30,837


$
6,307


$
24,530     (7)
    Accrued
    expenses    As of
    December 31,2004


2005Accrued payroll and related
    expenses

$
20,503


$
20,909Accrued expenses


15,172



19,95735,675



40,866Less current portion of accrued
    expenses


(32,437
)


(34,523
)$
3,238


$
6,343  79




---



##### 



PRA
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED
    FINANCIAL STATEMENTS  (Continued)
   (8)
    Capital
    Leases    As of
    December 31,2004


2005Obligations under capital leases

$
225


$
60Less current portion


(150
)


(51
)$
75


$
9   Credit
    Agreement
     80




---



##### 



PRA
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED
    FINANCIAL STATEMENTS  (Continued)
   (9)
    Income
    Taxes    Year Ended
    December 31,2003


2004


2005Current:Federal

$
6,201


$
6,303


$
8,885State


1,390



2,086



1,325Foreign


3,315



1,215



7,472Total current


10,906



9,604



17,682Deferred:Federal


(3,344
)


5,973



1,231State


(554
)


68



181Foreign


255



(1,678
)


1,144Valuation allowance


(354
)


(1,970
)


(1,233
)Total deferred


(3,997
)


2,393



1,323$
6,909


$
11,997


$
19,005        81




---



##### 



PRA
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED
    FINANCIAL STATEMENTS  (Continued)
     Year EndedDecember 31,2003


2004


2005Statutory federal income tax rate


35.0
%


35.0
%


35.0
%State income taxes


4.2



4.4



2.0Nondeductible expenses


1.9



1.0



1.0Changes in valuation allowance for
    foreign net operating losses, net


(3.1
)


(4.2
)


(2.7
)Other


(3.7
)


0.4



1.8Effective income tax rate


34.3
%


36.6
%


37.1
%     December 31,2004


2005Foreign operating loss carry
    forwards

$
6,299


$
1,137Prepaid items


(557
)


(960
)Accruals and reserves


5,957



6,263Identified intangibles


(8,328
)


(8,617
)Depreciation


(2,869
)


(505
)Deferred revenue


1,600



(3,313
)Valuation allowance


(6,299
)


(841
)Net deferred tax liability

$
(4,197
)

$
(6,836
)     (10)
    Stockholders
    Equity  Authorized
    Shares
    Common
    Stock Warrants
   82




---



##### 



PRA
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED
    FINANCIAL STATEMENTS  (Continued)
    Initial
    Public Offering
    Secondary
    Offering
    Stockholders
    Agreement
    Employee
    Stock Purchase Plan
      Management
    Stock Purchase Plan
   83




---



##### 



PRA
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED
    FINANCIAL STATEMENTS  (Continued)
    Stock
    and Option Repurchase and Dividend and Bonus
    Payment
      (11)
    Stock
    Options        Number of


Weighted AverageShares


Exercise PriceOutstanding at December 31,
    2003


5,106,024


$
3.69Granted


1,102,500



16.50Exercised


(1,346,647
)


2.40Repurchased


(843,260
)


2.25Expired/forfeited


(619,636
)


4.24Outstanding at December 31,
    2004


3,398,981



8.46Granted


537,500



26.85Exercised


(578,074
)


5.57Expired/forfeited


(209,034
)


16.19Outstanding at December 31,
    2005


3,149,373


$
11.60  84




---



##### 



PRA
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED
    FINANCIAL STATEMENTS  (Continued)
     Options OutstandingWeighted-





Options ExercisableNumber


Average


Weighted-


Number


Weighted-Outstanding as


Remaining


Average


Exercisable as


Averageof December 31,


Contractual


Exercise


of December 31,


ExerciseRange of Exercise
    Price

2005


Life in Years


Price


2005


Price$ 0.19 - $ 3.03


114,211



2.06


$
1.85



114,211


$
1.853.04 -  6.06


885,592



2.41



3.30



877,592



3.296.07 -  9.09


769,419



3.89



7.02



542,419



6.839.10 - 12.12


148,900



5.10



10.63



28,900



10.6312.13 - 15.16


155,000



5.38



13.13



20,000



13.0615.17 - 21.22


588,751



5.88



19.00



142,482



19.0021.23 - 24.25


177,500



6.09



24.21







24.26 - 27.28


97,500



6.69



25.78







27.29 - 30.31


212,500



6.78



30.09







3,149,373



4.32


$
11.60



1,725,604


$
5.84     Year Ended
    December 31,2003


2004


2005Weighted-average common shares
    outstanding  basic


15,965,408



18,442,313



22,527,108Effect of stock options and
    warrants


2,700,604



1,887,539



1,862,484Weighted-average common shares
    outstanding  diluted


18,666,012



20,329,852



24,389,592     (12)
    Commitments
    and Contingencies  Operating
    Leases
       85




---



##### 



PRA
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED
    FINANCIAL STATEMENTS  (Continued)
     SubleaseRelated





RentalYear Ending
    December 31,

Party


Other


Income


Net Total2006

$
434


$
16,531


$
(1,501
)

$
15,4642007


446



14,534



(628
)


14,3522008


458



13,933



(553
)


13,8382009


470



13,424



(553
)


13,3412010






13,750



(553
)


13,197Thereafter






56,294







56,294$
1,808


$
128,466


$
(3,788
)

$
126,486   Employment
    Agreements
    Legal
    Proceedings
      Insurance
    Employee
    Health Insurance
   86




---



##### 



PRA
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED
    FINANCIAL STATEMENTS  (Continued)
    (13)
    Employee
    Benefit Plan    (14)
    Lease
    Termination      (15)
    Related-Party
    Transactions        (16)
    Segment
    Reporting  Operations by Geographic
    Area    Year Ended
    December 31,2003


2004


2005Service revenueNorth America

$
191,977


$
200,409


$
199,323Europe


52,101



70,715



86,487Other


3,810



6,355



8,929$
247,888


$
277,479


$
294,739Long-lived assetsNorth America

$
135,140


$
133,738


$
143,298Europe


16,280



16,512



16,448Other


1,222



1,313



1,211$
152,642


$
151,563


$
160,957  87




---



##### 



PRA
    INTERNATIONAL AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED
    FINANCIAL STATEMENTS  (Continued)
   (17)
    Quarterly
    Financial Data    Three Months EndedMarch 31,


June 30,


September 30,


December 31,2004


2004


2004


2004Service revenue

$
66,830


$
69,130


$
70,311


$
71,208Direct costs


32,771



33,304



32,814



35,178Selling, general, and
    administrative


21,993



21,811



23,576



22,759Depreciation and amortization


2,337



2,358



2,355



2,641Income from operations


4,265



11,136



10,964



10,062Net income (loss)


2,357



7,534



5,967



4,891Net income (loss) per share:Basic

$
0.13


$
0.42


$
0.33


$
.25Diluted

$
0.12


$
0.37


$
0.29


$
.22FTEs(1)


2,211



2,229



2,274



2,299   March 31,


June 30,


September 30,


December 31,2005


2005


2005


2005Service revenue

$
73,592


$
76,031


$
75,567


$
69,548Direct costs


35,277



34,159



34,537



32,599Selling, general, and
    administrative


24,380



25,290



24,654



21,503Depreciation and amortization


2,776



2,847



2,856



2,677Income from operations


11,159



13,735



13,520



12,770Net income


6,958



8,555



9,209



7,501Net income per share:Basic

$
0.31


$
0.38


$
0.41


$
.33Diluted

$
0.28


$
0.35


$
0.38


$
.31FTEs(1)


2,309



2,286



2,281



2,314     (1)
    
    Represents the average or mathematical number of full time
    equivalent employees for the stated period. 88




---



##### 



SIGNATURES
      By:
    /s/  Patrick K. Donnelly          Signature

Title

Date/s/  Patrick K.
    DonnellyPatrick
    K. Donnelly

President and Chief Executive
    Officer

March 3, 2006/s/  J. Matthew BondJ.
    Matthew Bond

Executive Vice President and Chief
    Financial Officer, Assistant
    Treasurer and Assistant Secretary

March 3, 2006/s/  David G.
    Mathews, IIIDavid
    G. Mathews, III

Vice President and Controller

March 3, 2006/s/  Jean-Pierre L.
    ConteJean-Pierre
    L. Conte

Director

March 3, 2006/s/  Melvin D. BoothMelvin
    D. Booth

Director

March 3, 2006/s/  Robert E. ConwayRobert
    E. Conway

Director

March 3, 2006/s/  Judith A.
    HembergerJudith
    A. Hemberger

Director

March 3, 2006/s/  Armin KesslerArmin
    Kessler

Director

March 3, 2006/s/  Robert J.
    WeltmanRobert
    J. Weltman

Director

March 3, 2006  89




---



##### 



Exhibit Index
  Exhibit No

Description of Exhibit3
.1(1)

Second Amended and Restated
    Certificate of Incorporation of PRA International3
.2(1)

Amended and Restated Bylaws of PRA
    International4
.1(1)

2001 Stock Option Plan4
.2(1)

1997 Stock Option Plan4
.3(1)

1993 Stock Option Plan, as amended
    and restated4
.4(2)

PRA International 2005 Employee
    Stock Purchase Plan4
.5(3)

2004 Incentive Award Plan10
.1(4)

Credit Agreement by and among PRA
    International, its affiliates and the lenders party thereto10
.2(1)

Registration Rights Agreement by
    and among PRA International and the parties identified therein10
.3(1)

Stockholders Agreement by and
    among PRA International and the parties identified therein10
.4(1)

Form of Stockholder Agreement10
.5(5)

Employment Agreement dated
    February 3, 2006 between PRA International and Patrick K.
    Donnelly*10
.6(5)

Employment Agreement dated
    February 3, 2006 between PRA International and David W.
    Dockhorn*10
.7(5)

Employment Agreement dated
    February 3, 2006 between PRA Internationl and Monika
    Pietrek*10
.8(5)

Employment Agreement dated
    February 3, 2006 between PRA International and James C.
    Powers*10
.9(5)

Employment Agreement dated
    February 3, 2006 between PRA Interational and Bruce A.
    Teplitzky*10
.10(1)

Securities Purchase Agreement by
    and among Genstar Capital Partners III, L.P., Sta
    rgen III, L.P. and PRA International10
.11(6)

Form of Option Agreement21
.1

Subsidiaries of PRA International23
.1

Consent of PricewaterhouseCoopers
    LLP31
.1

Certifications of Chief Executive
    Officer Pursuant to Section 302 of the Sarbanes-Oxley Act
    of 200231
.2

Certifications of Chief Financial
    Officer Pursuant to Section 302 of the Sarbanes-Oxley Act
    of 200232
.1

Certifications of Chief Executive
    Officer Pursuant to Section 906 of the Sarbanes-Oxley Act
    of 200232
.2

Certifications of Chief Financial
    Officer Pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002     (1)
    
    Incorporated by reference to Registration Statement on
    Form S-1
    filed on June 14, 2004 (File
    No. 333-116424),
    as amended by Amendment No. 1 filed on July 29, 2004,
    by Amendment No. 2 filed on September 21, 2004, by
    Amendment No. 3 filed on October 22, 2004, by
    Amendment No. 4 filed on October 28, 2004 and by
    Amendment No. 5 filed on November 16, 2004(2)
    
    Incorporated by reference to Registration Statement on
    Form S-8
    filed on August 23, 2005 (File
    No. 333-127782)(3)
    
    Incorporated by reference to
    Form 10-K
    filed on March 18, 2005 (File No.
    000-51029)(4)
    
    Incorporated by reference to
    Form 8-K
    filed on December 29, 2004 (File
    No. 000-51029)(5)
    
    Incorporated by reference to
    Form 8-K
    filed on February 3, 2006 (File
    No. 000-51029)(6)
    
    Incorporated by reference to
    Form 8-K
    filed on February 2, 2005 (File No.
    000-51029)  *
    
    Indicates a management contract or compensatory plan or
    arrangement 90