diff --git a/capirca/lib/paloaltofw.py b/capirca/lib/paloaltofw.py
index 00ec3054..627ee6ac 100644
--- a/capirca/lib/paloaltofw.py
+++ b/capirca/lib/paloaltofw.py
@@ -475,6 +475,12 @@ def _TranslatePolicy(self, pol, exp_info):
           term.destination_address = nacaddr.RemoveAddressFromList(
               term.destination_address, i)
 
+        # note: CollapseAddrList must be called after above exclusions.
+        if len(term.source_address) > 1:
+          term.source_address = nacaddr.CollapseAddrList(term.source_address)
+        if len(term.destination_address) > 1:
+          term.destination_address = nacaddr.CollapseAddrList(term.destination_address)
+
         # Count the number of occurencies of a particular version of the
         # address family, i.e. v4/v6 in source and destination IP addresses.
         afc = {