Cash America 2015 Annual Report Download - page 64

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information regarding the Company’s debt instruments.
Loss on Early Extinguishment of Debt
The Company incurred a loss on early extinguishment of debt of $22.6 million in 2014 compared to
$0.6millionin2013.In2014,thelossonearlyextinguishmentofdebtresultedfromthe2014DebtReduction.
Income Taxes
In 2014, the Company recorded income tax expense of $2.0 million on a loss from continuing operations
before income taxes of $8.3 million, resulting in a negative effectivetaxrateof24.5%.Thenegativeeffective tax
rate was primarily due to the tax impact of the write-off of non-deductible goodwill associated with the sale of the
Company’s Mexico-based pawn operations and an additional valuation allowance associated with the losses in
Mexico.
During 2013, the Company recorded an income tax benefit of $15.5 million on income from continuing
operations before income taxes of $44.0 million, resulting in a negative effectivetaxrateof35.3%.Thenegative
effective tax rate was primarily due to the recognized income tax benefit of $33.2 million associated with the
Creazione Deduction, as well as the release of reserves established for unrecognized tax benefits associated with the
Company’sMexicooperations.
Without the impact of these items, the Company’s effective tax rate would have been 11.6% and 39.6% for
2014 and 2013, respectively. The lower effective tax rate for 2014 as compared to 2013 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 operations for
2014and2013.Netincomefromdiscontinuedoperationsincreased$25.7million,or30.8%,in2014comparedto
2013. The increase was primarily due to a $27.7 million, or 6.2%, increase in net revenue, driven by higher 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, respectively, was 36.6% and 35.7%.
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