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ANNUAL REPORT 2015
CASH AMERICA INTERNATIONAL, INC.
On Form 10-K

Table of contents

  • Page 1
    ANNUAL REPORT 2015 On Form 10- K CASH AMERICA INTERNATIONAL, INC.

  • Page 2
    ...% of Enova's common stock to our shareholders in November 2014. For additional information, see the Company's Annual Report on Form 10-K for the year ended December 31, 2015. (b) Returns based on the net income attributable to Cash America International, Inc., divided by monthly average total assets...

  • Page 3
    ...offices) 1600 West 7th Street Fort Worth, Texas (I.R.S. Employer Identification No.) 75-2018239 76102 - 2599 (Zip Code) Registrant's telephone number, including area code: (817) 335-1100 Securities Registered Pursuant to Section 12(b) of the Act: Name of Each Exchange on Which Registered Title...

  • Page 4
    ...SIGNATURES Directors, Executive Officers and Corporate Governance Executive Compensation Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters Certain Relationships and Related Transactions, and Director Independence Principal Accounting Fees and Services 126...

  • Page 5
    ... the Company's ability to open new locations in accordance with plans or to successfully integrate newly acquired businesses into its operations; • risks related to the spin-off of the Company's former online lending business that comprised its e-commerce division, Enova International, Inc...

  • Page 6
    ... 31, 2015, 2014 and 2013, respectively. Short-term consumer loan products that the Company offers include unsecured short-term loans written by the Company or by a third-party lender through the Company's credit services organization and credit access business programs ("CSO programs"). Installment...

  • Page 7
    ... 2014 and 2013. For additional information, see "Item 8. Financial Statements and Supplementary Data-Note 2." Locations The following table sets forth, as of December 31, 2015, 2014 and 2013, the number of Company-operated locations that offered pawn lending, consumer lending, and other services, in...

  • Page 8
    ... 31, 2014, the Company closed or sold 62 locations, including the sale of 47 and five locations upon the exit of the non-strategic markets of Mexico and Colorado, respectively. In addition, the Company eliminated the consumer loan product in 302 of its pawn lending locations during the year ended...

  • Page 9
    ... to the customer on the pawn transaction agreement, commonly referred to as a pawn ticket. These pawn loan fees and service charges contributed 31%, 30% and 30% of the Company's total revenue for the years ended December 31, 2015, 2014 and 2013, respectively. In the Company's pawn lending operations...

  • Page 10
    ... customers can receive a replacement item of comparable value or store credit. Consumer Loan Activities In addition to pawn loans, the Company also offers or arranges certain consumer loans, including shortterm loans and installment loans, in some of its locations. Consumer loan fees include revenue...

  • Page 11
    ... and high transaction costs of serving the Company's customer segment, the fees the Company charges are generally higher than the fees charged to customers with top-tier credit histories by commercial banks and similar lenders. Unsecured installment loans that the Company guarantees have terms of up...

  • Page 12
    ... Financial Officer Executive Vice President - General Counsel and Secretary Executive Vice President - Chief Marketing and Technology Officer Executive Vice President - Chief Human Resources Officer T. Brent Stuart has been the Company's President and Chief Executive Officer since November 2015. Mr...

  • Page 13
    ...world in terms of pawn loan balances and number of pawn lending locations. The three largest domestic publicly-traded pawnshop companies, First Cash Financial Services, Inc., EZCORP, Inc., and the Company, operated approximately 1,600 total pawnshops in the United States in 2015. Management believes...

  • Page 14
    ... regulate the Company's consumer loan products and services typically limit the principal amount of a consumer loan and set maximum fees or interest rates that customers may be charged. Most states also limit a customer's ability to renew a short-term consumer loan and require various disclosures...

  • Page 15
    ...'s consumer loan products and services or the profitability of the loan products and services has been introduced or adopted in a number of states. The Company has de-emphasized its consumer loan business over the last few years. See "Item 1 -Overview-General-Locations" for additional information...

  • Page 16
    ...by checking the Department of Defense's database or a database of a national credit reporting agency that provides military status information. As to the Company's pawn loan and longer-term credit products, compliance with the new rule is required by October 3, 2016. Compliance with the new rule and...

  • Page 17
    ... a consumers' bank account in ways that tend to rack up excessive fees." The CFPB has indicated that such rules would apply to payday loans, vehicle title loans and high-cost installment loans, among other consumer loans, and may impose certain limitations on these types of loans, such as requiring...

  • Page 18
    ...its products and services. See Item 1A. Risk Factors-Risks Related to the Company's Business and Industry" for additional information. Company and Website Information The Company's principal executive offices are located at 1600 West 7th Street, Fort Worth, Texas 76102-2599, and its telephone number...

  • Page 19
    ... Prevention Act, Title X of the Dodd-Frank Act, and the Fair Debt Collection Practices Act with respect to the Company's CSO programs, among other laws. In addition, the Company's marketing efforts and the representations made about its products and services are subject to federal and state unfair...

  • Page 20
    ...by the CFPB from its 2012 review of the Company's consumer loan business, to pay a civil money penalty of $5 million. The Company also agreed to set aside $8 million for a period of 180 days to fund any further payments to eligible Ohio customers in connection with the Company's voluntary program to...

  • Page 21
    ...by checking the Department of Defense's database or a database of a national credit reporting agency that provides military status information. As to the Company's pawn loan and longer-term credit products, compliance with the new rule is required by October 3, 2016. Compliance with the new rule and...

  • Page 22
    ... gold prices could result in decreases in the value of collateral securing outstanding pawn loans, in the balance of pawn loans secured by gold jewelry, in inventory valuations, and in commercial merchandise sales. A significant portion, or 63.3% as of December 31, 2015, of the Company's pawn loans...

  • Page 23
    ... in gold prices could result in decreases in the value of collateral securing outstanding pawn loans, in the balance of pawn loans secured by gold jewelry, in inventory valuations, and in commercial merchandise sales and could have a Material Adverse Effect. Negative public perception of the Company...

  • Page 24
    ..., 2013, that governs the 2018 Senior Notes, among the Company, the guarantors party thereto and the Trustee (the "2018 Senior Notes Indenture"), filed a lawsuit against the Company in the United States District Court for the Southern District of New York. The lawsuit alleges that the Enova Spin-off...

  • Page 25
    attention of the Company's management and could require the expenditure of significant amounts for legal fees and other related costs. The Company is also subject to regulatory proceedings, and the Company could suffer losses from interpretations of applicable laws, rules and regulations in those ...

  • Page 26
    ..., other pawn shops, rent-to-own businesses, thrift shops, internet retailers, internet auction sites and other similar sites. Increased competition or aggressive marketing and pricing practices by these competitors could result in decreased revenue, margins and turnover rates in the Company's retail...

  • Page 27
    ... 2013, the Company closed 36 retail services locations in Texas that offered consumer loans as their primary source of revenue, mainly as a result of restrictive city ordinances that had been passed since 2011 that had the effect of reducing the profitability and the volume of short-term consumer...

  • Page 28
    ... to conduct business, including causing damage to merchandise or collateral that it holds in any of its retail services locations and causing multiple pawn lending locations to shut down or have limited operations, and the Company's insurance coverage may be insufficient to compensate for losses...

  • Page 29
    ...related revenue from those products or services. For example, the Company's consumer loan revenue depends in part on the willingness and ability of unaffiliated third-party lenders, through the CSO programs, to make loans to customers and other third parties to provide services to facilitate lending...

  • Page 30
    ... condition. Adverse real estate market fluctuations could affect the Company's profitability. The Company leases most of its locations. A significant rise in real estate prices or real property taxes could result in an increase in store lease costs as the Company opens new locations and renews...

  • Page 31
    ... 355(a)(1)(D)(ii) of the Internal Revenue Code. The private letter ruling does not address any other tax issues related to the Enova Spin-off. Notwithstanding the private letter ruling, the Internal Revenue Service could determine on audit that the retention of the Enova stock was in pursuant to...

  • Page 32
    ... Company under Section 355(e) of the Internal Revenue Code if the Enova Spin-off is treated as part of a plan or series of related transactions for one or more persons to acquire a fifty percent (50%) or greater interest (measured by vote or value) in the stock of the Company. Current law generally...

  • Page 33
    ... where the liabilities of Enova may become the Company's obligations. For example, under the Internal Revenue Code and the related rules and regulations, each corporation that was a member of the Company's consolidated U.S. federal income tax reporting group during any taxable period or portion of...

  • Page 34
    ... affecting the Company's operations; the Enova Spin-off; fluctuations in commodity prices; general trends in the industry; market conditions; analysts' estimates; and perceptions of, and other events related to, the pawn or consumer loan industry. The market price for the Company's common stock has...

  • Page 35
    ... PROPERTIES The Company's principal locations are as follows A corporate headquarters building in Fort Worth, Texas that is owned by the Company; Corporate locations leased for the Company in Fort Worth, Texas and Cincinnati, Ohio; and Pawn lending and/or consumer lending locations, as set forth...

  • Page 36
    ... matters is not expected to have a material adverse effect on the Company's financial position, results of operations or liquidity. In addition, see "Debt Agreement Compliance" under "Item 8. Financial Statements and Supplementary Data-Note 11." ITEM 4. MINE SAFETY DISCLOSURES Not Applicable. 32

  • Page 37
    ... stock prices presented below have been adjusted from original historical prices based on the method used by the New York Stock Exchange to reflect the impact on the Company's stock price as a result of the Enova Spin-off, which was completed on November 13, 2014. First Quarter 2015 High Low Cash...

  • Page 38
    ... indicative of future performance. Total Return Performance 200 175 150 Index Value 125 100 75 50 12/31/10 12/31/11 12/31/12 12/31/13 S&P 500 12/31/14 12/31/15 Cash America International, Inc. Russell 2000 CSH Peer Group 2015 Index (a) Period Ending Index Cash America International, Inc...

  • Page 39
    ...Purchases of Equity Securities The following table provides the information with respect to purchases made by the Company of shares of its common stock during each of the months in 2015: Total Number of Shares Purchased as Part of Publicly Announced Plans(b) - 726,400 421,600 326,800 857,430 - - 538...

  • Page 40
    ... 2015 income and expense items that affected the Company's income from operations, income from continuing operations before income taxes, net income (loss) and net income (loss) per share from continuing operations. As a result of the Enova Spin-off, the Company has presented financial information...

  • Page 41
    ... 31, 2015, 2014 and 2013, respectively. Short-term consumer loan products that the Company offers include unsecured short-term loans written by the Company or by a third-party lender through the Company's credit services organization and credit access business programs ("CSO programs"). Installment...

  • Page 42
    ... additional information, see "Item 8. Financial Statements and Supplementary Data-Note 2." Locations See "Item 1. Business-Overview-General" for details of the Company's owned and franchised locations offering pawn lending, consumer lending and other services as of December 31, 2015, 2014 and 2013...

  • Page 43
    ... closures and sale of certain lending locations that offered consumer loans and the Company's strategic decision to deemphasize and eliminate short-term consumer lending activities in many of its locations. Domestic pawn loan fees and service charges decreased $5.4 million, or 1.6%, in 2015 compared...

  • Page 44
    ... of 36 locations in Texas in 2013 that offered consumer loans as their primary source of revenue (the "Texas Consumer Loan Store Closures"); the adjustments for a penalty paid to the Consumer Financial Protection Bureau (the "CFPB") in connection with the issuance of a consent order by the CFPB in...

  • Page 45
    ...Reorganization - Loss on divestitures - 2013 Litigation Settlement - Texas Consumer Loan Store Closures - Regulatory Penalty Ohio Adjustment for the Ohio Reimbursement Program - Tax benefit related to Creazione Deduction - Adjusted net income and adjusted diluted net income per share from continuing...

  • Page 46
    ... Tax tax 2015 Pre-tax Loss on early debt extinguishment Gain on disposition of equity securities Reorganization Loss on divestitures 2013 Litigation Settlement Texas Consumer Loan Store Closures Regulatory Penalty Ohio Adjustment for the Ohio Reimbursement Program Tax benefit related to Creazione...

  • Page 47
    ..., partly due to a $3.2 million decrease in the average balance outstanding related to the Company's Mexico-based pawn operations, which were sold in August 2014. In addition, consolidated pawn loan fees and services charges decreased $10.4 million, or 3.2%, in 2015 compared to 2014, partly due to...

  • Page 48
    .... Management separates proceeds from disposition of merchandise and gross profit on disposition of merchandise into two groups, retail sales and commercial sales. Retail sales include the sale of jewelry and general merchandise primarily to consumers through the Company's locations. Commercial sales...

  • Page 49
    ... of aggregate gross profit from disposition activities. Management expects commercial sales to continue to be a less meaningful aspect of the business as the Company focuses its efforts on the successful disposition of merchandise through its pawn lending locations. In 2015, management continued to...

  • Page 50
    ... loans secured by a customer's vehicle, which the Company ceased offering in 2015. The decrease in consumer loan fees was partially offset by an increase in fees from an unsecured installment loan product offering that was expanded into some of the Company's lending locations during 2015. In line...

  • Page 51
    ... and sale of certain store locations and the Company's strategic decision to deemphasize and eliminate short-term consumer lending activities in many of its locations, as well as an improvement in short-term loan portfolio performance in remaining locations and decreased charge-offs in 2015 compared...

  • Page 52
    ...additional information related to each of the Company's consumer loan products as of and for the years ended December 31, 2015 and 2014 (dollars in thousands): Year Ended December 31, 2015 Short-term loans Installment loans Total Short-term loans 2014 Installment loans Total Consumer loans written...

  • Page 53
    ... Company's storefront locations, the operations management for each operating district and region, the Company's centralized jewelry processing center and the Company's call centers for customer service and collections. Administration expenses include expenses related to corporate service functions...

  • Page 54
    ... $4.7 million in 2015 compared to 2014, primarily due to a reduced number of domestic pawn and consumer lending locations as a result of the closure and sale of certain store locations, as well as reduced depreciation expenses as a result of the sale of the Company's Mexico-based pawn operations in...

  • Page 55
    ... of vested restricted stock unit awards that are payable in shares of the Company and in Enova common stock, as well as the sale of shares of Enova common stock that were withheld to pay taxes for issued awards. See "Item 8. Financial Statements and Supplementary Information-Note 9" for additional...

  • Page 56
    ...effective tax rate for 2015 as compared to 2014 is primarily due to the pre-tax loss incurred in 2014 and the tax impact of other permanently non-deductible items. Net Income from Discontinued Operations As a result of the Enova Spin-off, the financial results of Enova are presented as discontinued...

  • Page 57
    ... % - Excludes amounts related to the Company's Mexico-based pawn operations, which were sold in August 2014. For the years ended December 31, 2014 and 2013, Mexico-based pawn operations had pawn loan fees and service charges of $5,031 and $7,288, an average pawn loan balance outstanding of $3,243...

  • Page 58
    ... jewelry sales in its storefront locations and placed less reliance on the commercial disposition of jewelry due to the prevailing lower market price for gold. The Company's merchandise turnover ratio remained flat at 2.3 times in both 2013 and 2014. Gross profit on disposition for domestic pawn...

  • Page 59
    ... to 2013, primarily due to a $15.5 million, or 13.7%, decrease in consumer loan fees. The decrease in consumer loan fees was primarily due to the closure and sale of certain store locations and the Company's strategic decision to deemphasize and eliminate its short-term consumer lending activities...

  • Page 60
    ... and sale of certain store locations and the Company's strategic decision to deemphasize and eliminate short-term consumer lending activities in many of its locations. The consumer loan loss provision as a percentage of consumer loan fees increased to 31.7% in 2014 from 29.5% in 2013, primarily...

  • Page 61
    ... information related to each of the Company's consumer loan products as of and for the years ended December 31, 2014 and 2013 (dollars in thousands): Year Ended December 31, Shortterm loans Consumer loans written and renewed(a) Company owned Guaranteed by the Company Combined consumer loans...

  • Page 62
    ... sale of the Company's Mexico-based operations in August 2014. Personnel expenses increased $34.4 million in 2014 compared to 2013, primarily due to severance costs and other employee-related expenses related to the Reorganization, the addition of retail services locations through acquisitions made...

  • Page 63
    ... on the sale of all five of the Company's Colorado pawn lending locations. Interest Expense and Interest Income Following the Enova Spin-off and the reclassification of the financial results of Enova to discontinued operations, interest expense from continuing operations for 2014 and 2013 excludes...

  • Page 64
    ... revenue from Enova's domestic and foreign line of credit account and installment loan portfolios and lower consumer loan loss rates across Enova's entire consumer loan portfolio, including short-term loans, line of credit accounts and installment loans. Enova's effective tax rate for 2014 and 2013...

  • Page 65
    ... the internal and external capital resources available. Longer-term financing risk is managed by staggering the Company's debt maturities and issuing new long-term debt securities from time to time as market conditions permit. The Company has historically generated significant cash flow through...

  • Page 66
    ... as follows (dollars in thousands): Year Ended December 31, Net cash provided by continuing operating activities Pawn activities, net Consumer loan activities, net Acquisitions, net of cash acquired Purchases of property and equipment Proceeds from disposition of marketable equity securities...

  • Page 67
    ... restricted cash fund in 2013 in connection with the Company's Consent Order issued by the CFPB. In 2014, the Company reclassified a majority of the cash previously held in "Restricted cash" to "Cash and cash equivalents" in connection with the release of restrictions on the accrued funds. Net cash...

  • Page 68
    ... from the Internal Revenue Service, to dispose of its Enova shares (other than shares retained for delivery under the Company's long-term incentive plans) within two years following the Enova Spin-off, which will increase cash flows from continuing investing activities when sold. At the time of the...

  • Page 69
    ... See "Item 8. Financial Statements and Supplementary Information-Note 11" for additional information regarding the Company's debt instruments, including the Line of Credit. As of December 31, 2015, 2014 and 2013, the Company believes it was in compliance with all covenants and other requirements set...

  • Page 70
    ... 2013. Contractual Obligations and Commitments The table below summarizes the Company's contractual obligations as of December 31, 2015, and the effect such obligations are expected to have on its liquidity and cash flow in future periods (dollars in thousands): 2016 Bank line of credit Long-term...

  • Page 71
    ... expenses during the reporting periods. On an on-going basis, management evaluates its estimates and judgments, including those related to revenue recognition on pawn loan fees and service charges, allowance for losses on merchandise held for disposition and consumer loans, goodwill, long-lived and...

  • Page 72
    ... of the transaction, as permitted by applicable laws. Other fees, such as origination fees, storage fees and lost ticket fees are generally a fixed amount per pawn loan. Pawn loan fees and service charges revenue and the related pawn loan fees and service charges receivable are accrued ratably over...

  • Page 73
    ... third parties, are credited to the allowance when collected or when sold to a third party. As of December 31, 2015, the allowance for losses on consumer loans was $2.9 million, and the liability for estimated losses on third-party lender-owned consumer loans guaranteed by the Company was...

  • Page 74
    ...held constant, a one percentage point increase in the weighted average cost of capital would have decreased the estimated fair value of the reporting unit as of June 30, 2015 to approximately $28.9 million below the carrying value, which would have required the Company to perform additional analysis...

  • Page 75
    ...-Equity Method and Joint Ventures, and ASC 325, Investments-Other- Cost Method Investments, respectively. The Company holds marketable equity securities in its Nonqualified Savings Plan for certain employees. See "Item 8. Financial Statements and Supplementary Data-Note 15" for a description of...

  • Page 76
    ...connection with the sale of CA Empeños Mexico, S. de R.L. de C.V. ("Empeños"). In 2013, the Company released a $9.3 million valuation allowance related to the deferred tax asset associated with the Company's excess tax basis over its basis for financial reporting purposes in the stock of Creazione...

  • Page 77
    ... balance of pawn loans outstanding for the Company. Investment in Enova Equity risk is the risk that the Company may incur a reduction in future earnings, cash flows or fair value of assets due to adverse changes in the market price of equity securities held by the Company. The Company is exposed...

  • Page 78
    ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Index to Consolidated Financial Statements Reports of Independent Registered Public Accounting Firms Consolidated Balance Sheets - December 31, 2015 and 2014 Consolidated Statements of Income - Years Ended December 31, 2015, 2014 and 2013 ...

  • Page 79
    ... Public Accounting Firm To the Board of Directors and Shareholders of Cash America International, Inc.: We have audited the accompanying consolidated balance sheet of Cash America International, Inc. and subsidiaries (the "Company") as of December 31, 2015, and the related consolidated statements...

  • Page 80
    ...Public Accounting Firm To the Board of Directors and Shareholders of Cash America International, Inc.: We have audited the internal control over financial reporting of Cash America International, Inc. and subsidiaries (the "Company") as of December 31, 2015, based on criteria established in the 2013...

  • Page 81
    ... and the related consolidated statements of income, comprehensive income, equity, and cash flows for each of two years in the period ended December 31, 2014 present fairly, in all material respects, the financial position of Cash America International, Inc. and its subsidiaries (the "Company") at...

  • Page 82
    CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (dollars in thousands, except per share data) December 31, 2015 Assets Current assets: Cash and cash equivalents Pawn loans Merchandise held for disposition, net Pawn loan fees and service charges receivable Consumer loans...

  • Page 83
    ...Inc. Diluted Earnings Per Share Net Income (Loss) from Continuing Operations Net Income from Discontinued Operations Net Income Attributable to Cash America International, Inc. Weighted average common shares outstanding: Basic Diluted Dividends declared per common share 2015 $ 2013 311,799 595,439...

  • Page 84
    CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (dollars in thousands) Year Ended December 31, 2015 2014 27,566 $ 98,638 $ (57,117) - (57,117) (29,551) $ - - - (29,551) $ 71,959 (7,255) 64,704 163,342 $ - - - 163,342 $ Net income including ...

  • Page 85
    ... to Cash America International, Inc. Dividends paid Foreign currency translation loss, net of tax Marketable equity securities gain, net of tax Purchases of treasury shares Spin-off of Enova Balance as of December 31, 2014 Shares issued under stock-based plans Stock-based compensation expense...

  • Page 86
    ... activities Net cash (used in) provided by investing activities Cash Flows from Financing Activities Net proceeds (payments) under bank lines of credit Issuance of long-term debt Debt issuance costs paid Payments on/repurchases of notes payable Excess income tax benefit from stock-based compensation...

  • Page 87
    ... its storefront lending locations and franchised check cashing centers. The Company has one reportable operating segment. The Company's primary line of business is pawn lending. Pawn loans are short-term loans made on the pledge of tangible personal property. Pawn loan fees and service charges are...

  • Page 88
    ... expenses during the reporting periods presented. On an on-going basis, management evaluates its estimates and judgments, including those related to revenue recognition on pawn loan fees and service charges, allowance for losses on consumer loans, certain equity securities, goodwill, long-lived and...

  • Page 89
    ... operating locations, deposits in banks and short-term investments with original maturities of 90 days or less as cash and cash equivalents. Restricted Cash Restricted cash represents the amount mandated by the Consumer Financial Protection Bureau ("CFPB") through its November 20, 2013 Consent Order...

  • Page 90
    ... credit services organization or credit access business on behalf of consumers in accordance with applicable state laws. Services offered under the CSO programs include creditrelated services such as arranging loans with third-party lenders ("CSO loans"). In addition, the Company guarantees consumer...

  • Page 91
    ... cost of sales, which is either the Company's cost basis in the loan (the amount loaned) or the amount paid for purchased merchandise. Customers may purchase merchandise on a layaway plan under which the customer agrees to pay the purchase price for the item plus a layaway fee, makes an initial cash...

  • Page 92
    CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) In addition, the Company provides an allowance for returns based on historical return rates. Customers can return merchandise and receive a full refund, a replacement item of comparable value or...

  • Page 93
    ... periods. The Company is considered to be at risk for a future impairment of its goodwill in the event of a decline in general economic, market or business conditions, or if there are any significant unfavorable changes in the Company's forecasted revenue, expenses, cash flows, weighted-average cost...

  • Page 94
    ... the Enova Spin-off and the sale of its Mexicobased pawn operations. The Company may periodically enter into forward sale contracts with a major gold bullion bank to sell refined gold that is acquired in the normal course of business from the Company's liquidation of forfeited gold merchandise...

  • Page 95
    CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) and the Company's call centers for customer service and collections. Administration expenses include expenses related to corporate service functions. Operations and administration expenses ...

  • Page 96
    ... 31, 2015, 2014 and 2013 (dollars and shares in thousands, except per share amounts): 2015 Numerator: Net Income (Loss) from Continuing Operations Net Income from Discontinued Operations, Net of Tax Net Income Attributable to Cash America International, Inc. Denominator: Total Weighted Average Basic...

  • Page 97
    .... The correction had no impact on previously-reported net income available to Cash America International, Inc. or shareholders' equity. Accounting Standards to be Adopted in Future Periods In January 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-01, Financial Instruments...

  • Page 98
    CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) arrangement. ASU 2015-03 and ASU 2015-15 apply to all business entities and are effective for public business entities for annual periods, and interim periods within those annual periods, ...

  • Page 99
    ... 2014 and 2013 were made by Cash America. 3. Acquisitions and Divestitures Acquisitions Goodwill arising from the acquisitions discussed below consists largely of the synergies and economies of scale expected from combining the operations of the Company and the pawn lending locations acquired. All...

  • Page 100
    CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Acquisition of 34 Pawn Lending Locations in Georgia and North Carolina In December 2013, the Company completed the acquisition of substantially all of the assets of a 34-store chain of pawn ...

  • Page 101
    CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The allocation of the purchase price for this acquisition is as follows (dollars in thousands): Pawn loans Merchandise acquired Pawn loan fees and service charges receivable Property and ...

  • Page 102
    CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 4. Credit Quality Information on Pawn Loans In its pawn loan portfolio, the Company monitors the type and adequacy of collateral compared to historical forfeiture rates, average loan amounts and...

  • Page 103
    CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 5. Consumer Loans, Credit Quality Information on Consumer Loans, Allowance and Liability for Estimated Losses on Consumer Loans and Guarantees of Consumer Loans The components of Company-owned ...

  • Page 104
    ...programs, the Company guarantees consumer loan payment obligations to unrelated third-party lenders for short-term loans, unsecured installment loans and the remaining outstanding installment loans that are secured by a customer's vehicle, which the Company ceased offering in the latter half of 2015...

  • Page 105
    CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 6. Prepaid Expenses and Other Assets Prepaid expenses and other assets as of December 31, 2015 and 2014 were as follows (dollars in thousands): As of December 31, 2015 2014 10,576 $ 12,838 4,...

  • Page 106
    ...,378) $ $ Net 5,328 25,364 135 30,827 Acquired intangible assets subject to amortization are amortized on a straight-line basis. Non-competition agreements are amortized over the applicable terms of the contract, typically from two to ten years. Customer relationships are generally amortized over...

  • Page 107
    ...'s long-term incentive plans (the "LTIPs") as described below) no later than two years after the date of the Enova Spin-off. At the time of the private letter ruling, Company management believed that the Company's shares of Enova common stock would be registered with the Securities and Exchange...

  • Page 108
    CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) agreements. The delivery of the Enova shares of common stock will occur periodically based on the vesting or deferral terms that are applicable to the RSU awards or Director Deferred Shares. In ...

  • Page 109
    CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 11. Long-Term Debt The Company's long-term debt instruments and balances outstanding as of December 31, 2015 and 2014, were as follows (dollars in thousands): As of December 31, 2014 2015 Line ...

  • Page 110
    ...Wells Fargo Bank, National Association or (b) the maximum rate of interest permissible under applicable laws. The LC Agreement also requires the Company to pay quarterly fees equal to the applicable margin set forth in the LC Agreement on the undrawn amount of the credit outstanding. The Company had...

  • Page 111
    CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) For each of the five years after December 31, 2015, required principal payments under the terms of the long-term debt, including the Company's Line of Credit, are as follows (dollars in ...

  • Page 112
    CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Private Placement Notes On May 9, 2014, the Company and its domestic subsidiaries, as guarantors, entered into an Omnibus Waiver, Consent and Amendment Agreement (the "Waiver and Amendment") with...

  • Page 113
    CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 12. Income Taxes The components of the Company's deferred tax assets and liabilities as of December 31, 2015 and 2014 were as follows (dollars in thousands): As of December 31, 2015 2014 $ 226 ...

  • Page 114
    ...(the "Creazione Deduction"). The Company believes that it met the requirements for this deduction and that it should be treated as an ordinary loss, which reduced the Company's cash taxes paid in 2013. The Company obtained a private letter ruling from the Internal Revenue Service with respect to one...

  • Page 115
    CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) A reconciliation of income taxes for continuing operations with amounts computed at the statutory federal rate is as follows (dollars in thousands): Year Ended December 31, 2015 2014 2013 15,063 ...

  • Page 116
    ... lawsuit in the State Court of Cobb County, Georgia against Georgia Cash America, Inc., Cash America International, Inc. (together with Georgia Cash America, Inc., "Cash America"), Daniel R. Feehan (the Company's chief executive officer at that time), and several unnamed officers, directors, owners...

  • Page 117
    .... Consumer Financial Protection Bureau On November 20, 2013, the Company consented to the issuance of a Consent Order by the CFPB pursuant to which it agreed, without admitting or denying any of the facts or conclusions made by the CFPB from its 2012 review of the Company, to pay a civil money...

  • Page 118
    CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Voluntary Reimbursements to Ohio Customers On December 4, 2012, the Company announced the Ohio Reimbursement Program. As of December 31, 2012, based on Company information and third-party ...

  • Page 119
    CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) financial institution an additional 145,436 shares as determined by the average daily volume weighted average price, less an agreed upon discount, of the Company's common stock during the ...

  • Page 120
    ...Executive Retirement Plan ("SERP") for its officers in 2003. Under this defined contribution plan, the Company makes an annual supplemental cash contribution to the SERP based on the objectives of the plan as approved by the Management Development and Compensation Committee of the Board of Directors...

  • Page 121
    ... prior to the Enova Spin-off, the Company's closing stock price used to measure the grant date fair value has not been adjusted for the Enova Spin-off. For RSU awards granted before 2015 to executive officers of the Company, a portion of these annual RSU grants vests over time, and another portion...

  • Page 122
    ... withheld Enova shares are sold immediately by the Company pursuant to the requirements of the Private Letter Ruling obtained from the Internal Revenue Service in connection with the Enova Spin-off. For the year ended December 31, 2015, the Company distributed 90,052 shares of Enova common stock in...

  • Page 123
    ..., 2015 2014 2013 Cash paid during the year for: Interest Income taxes Non-cash investing and financing activities: Pawn loans forfeited and transferred to merchandise held for disposition Pawn loans renewed Consumer loans renewed Shares of Enova common stock distributed under stock-based plans (See...

  • Page 124
    ... Plan-related assets include marketable equity securities, which are classified as Level 1 and based on net asset values. As of December 31, 2015 and 2014, as a result of the Enova Spin-off, a portion of the Director Deferred Shares measured at fair value represented shares of Enova common stock...

  • Page 125
    ...: Cash and cash equivalents Pawn loans Short-term loans, net Installment loans, net Pawn loan fees and service charges receivable Total Financial liabilities: Liability for estimated losses on consumer loans guaranteed by the Company Line of credit Senior unsecured notes Total December 31, 2015...

  • Page 126
    ... fees and lost ticket fees are generally a fixed amount per pawn loan. Pawn loan fees and service charges revenue and the related pawn loan fees and service charges receivable are accrued ratably over the term of the loan for the portion of those pawn loans estimated to be collectible. The Company...

  • Page 127
    ...26 0.50 0.75 29,284 2015 (a) Total revenue $ Cost of revenue Net revenue Net income attributable to Cash America International, Inc. $ Diluted net income per share Diluted weighted average common shares 2014 (a) Total revenue Cost of revenue Net revenue Net income (loss) from continuing operations...

  • Page 128
    ... and communicated to management, including the Company's Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures. There was no change in the Company's internal control over financial reporting during the quarter ended December 31, 2015 that has...

  • Page 129
    ... Company's internal control over financial reporting as of December 31, 2015 has been audited by Grant Thornton LLP, an independent registered public accounting firm, as stated in their report which appears in this Form 10-K. /s/ T. BRENT STUART T. Brent Stuart President and Chief Executive Officer...

  • Page 130
    ... Commission rules will be disclosed on the Company's website. These materials may also be requested in print and without charge by writing to the Company's Secretary at Cash America International, Inc., 1600 West 7th Street, Fort Worth, Texas 76102. ITEM 11. EXECUTIVE COMPENSATION Information...

  • Page 131
    ... of the Board of Directors and Meetings" and "Board Structure, Corporate Governance Matters and Director Compensation-Director Independence" in the Proxy Statement is incorporated into this report by reference in response to this Item 13. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES Information...

  • Page 132
    ..., 2015, 2014 and 2013 Consolidated Statements of Equity - Years Ended December 31, 2015, 2014 and 2013 Consolidated Statements of Cash Flows - Years Ended December 31, 2015, 2014 and 2013 Notes to Consolidated Financial Statements 75 78 79 80 81 82 83 Financial Statement Schedule: Refer to Schedule...

  • Page 133
    ... thereunto duly authorized. CASH AMERICA INTERNATIONAL, INC. February 25, 2016 By: /s/ T. BRENT STUART T. Brent Stuart President and Chief Executive Officer Pursuant to the requirements of the Securities and Exchange Act of 1934, the report has been signed by the following persons on behalf of the...

  • Page 134
    SCHEDULE II CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS For the Three Years Ended December 31, 2015 (dollars in thousands) Balance at Beginning of Period Balance at End of Period Description Allowance for valuation of merchandise held for disposition Year ...

  • Page 135
    ... by and among Cash America International, Inc. (the "Company") and Enova International, Inc. ("Enova") Asset Purchase Agreement dated June 20, 2013 by and among Cash America Pawn L.P. and TDP Superstores Corp. First Amendment dated July 25, 2013 to that certain Asset Purchase Agreement dated June 20...

  • Page 136
    ... Resignation, Appointment and Acceptance dated March 11, 2015 by and among the Company, Wells Fargo Bank, National Association, as resigning trustee, and Wilmington Savings Fund Society, FSB, as successor trustee for Indenture dated May 15, 2013 Credit Agreement dated as of March 30, 2011 among the...

  • Page 137
    ... (collectively with the LTIP and the LTIP First Amendment, the "2004 LTIP") * Cash America International, Inc. 2014 LongTerm Incentive Plan (the "2014 LTIP") * Form of 2015 Long-Term Incentive Plan Award Agreement for Executive Officers under the 2014 LTIP * Form of 2015 Long-Term Incentive Plan for...

  • Page 138
    .... Short-Term Incentive Plan for Executive Officers * Cash America International, Inc. Severance Pay Plan For Executives dated September 29, 2015 * Form 10-Q 10-Q 10-K 10-Q 10-Q 10-K 10-Q 10-K 10-Q 10-Q DEF 14A 10-Q Incorporated by Reference File No. Exhibit Filing Date 001-09733 10.1 4/26/2013 001...

  • Page 139
    ... 19, 2015 announcing a stock repurchase program Press Release dated October 29, 2015 announcing a stock repurchase program Press Release dated January 29, 2015 announcing a dividend increase Cash America International, Inc. consolidated balance sheets as of December 31, 2014 and 2013 Cash America...

  • Page 140
    ...(2) Exhibit Description Cash America International, Inc. consolidated statements of income for the three months ended March 31, 2014, June 30, 2014, September 30, 2014, and December 31, 2014 and for the year ended December 31, 2014 Cash America International, Inc. non-GAAP adjusted net income (loss...

  • Page 141
    ... 31, 2015 is referred to herein as the "Extended Term". 2. Limited Services. During the Extended Term only the following Services will be provided by Cash America: (a) Lawson (Infor) Software: Provide existing users with view-only access to all historical information for Enova related companies...

  • Page 142
    .... IN WITNESS WHEREOF, the parties hereto have executed this Amendment to be effective as of November 5, 2015 (the "Effective Date"). CASH AMERICA INTERNATIONAL, INC. ENOVA INTERNATIONAL, INC. By: /s/ J. Curtis Linscott Name: J. Curtis Linscott Title: Executive Vice President By: /s/ Robert Clifton...

  • Page 143
    ...12.1 CASH AMERICA INTERNATIONAL, INC. RATIO OF EARNINGS TO FIXED CHARGES (dollars in thousands) For the years ended December 31, 2014 2013 2012 $ (8,346) $ 43,985 - 136 50,288 61,876 396 396 - - 42,338 $ 106,393 81,370 295 50,634 396 - $ 132,695 $ 2011 $ 141,166 104 46,320 198 (558) $ 187,230 2015...

  • Page 144
    ... LLC Georgia Cash America, Inc. Mr. Payroll Corporation Ohio Neighborhood Finance, Inc. Ohio Neighborhood Credit Solutions, LLC Jurisdiction of Incorporation/Organization Tennessee Florida Delaware Delaware Delaware Delaware Delaware Nevada Delaware Delaware Alaska Illinois Delaware North Carolina...

  • Page 145
    ..., schedule, and internal control over financial reporting included in the Annual Report of Cash America International, Inc. on Form 10-K for the year ended December 31, 2015. We consent to the incorporation by reference of said reports in the Registration Statements of Cash America International...

  • Page 146
    ...-95827, 333-97273, 333-159953, 333-167661, and 333-196183) of Cash America International, Inc. of our report dated March 13, 2015 relating to the financial statements and financial statement schedule, which appears in this Form /s/ PricewaterhouseCoopers LLP Fort Worth, Texas February 25, 2016 142

  • Page 147
    ... and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal...

  • Page 148
    ... and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal...

  • Page 149
    ... with the Annual Report of Cash America International, Inc. (the "Company") on Form 10K for the year ended December 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, T. Brent Stuart, President and Chief Executive Officer of the Company, certify...

  • Page 150
    ... Annual Report of Cash America International, Inc. (the "Company") on Form 10-K for the year ended December 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Thomas A. Bessant, Jr., Executive Vice President and Chief Financial Officer of the Company...

  • Page 151
    ... Station, TX 77842-3170 Independent Registered Public Accountants Grant Thornton LLP Dallas, Texas Annual Shareholders' Meeting May 19, 2016 9:00 AM Cash America International Building 1600 West 7th Street Fort Worth, Texas 76102 Stock Listing Symbol: CSH Investor Relations Information requests...

  • Page 152
    1600 West 7th Street Fort Worth, Texas 76102-2599 (817) 335-1100 www.cashamerica.com www.superpawn.com www.cashlandloans.com www.mrpayroll.com Download the Cash America mobile app, without cost, from the App Store or on Google Playâ„¢ . SM