Cash America 2015 Annual Report Download - page 87

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1. Significant Accounting Policies
Nature of the Company
Cash America International, Inc. and its subsidiaries (collectively, the “Company”) provide specialty
financial services to individuals in the United States through 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 generated from the Company’s pawn
loan portfolio. In relation to its pawn lending operations, the Company also disposes of collateral from unredeemed
pawn loans and liquidates a smaller volume of merchandise purchased directly from customers or from third parties.
The Company also offered pawn loans in Mexico until the sale of its Mexico-based operations in August 2014.
Another component of the Company's business is originating, arranging, guaranteeing or purchasing
consumer loans in some of its locations. Consumer loans provide customers with cash, typically in exchange for an
obligation to repay the amount advanced plus fees and any applicable interest. Consumer loans that the Company
offers include short-term loans (commonly referred to as payday loans) and installment loans.
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”), as further described under “Consumer Loans and Allowance and Liability for
Estimated Losses on Consumer Loans—Revenue Recognition—Consumer Loans”. Installment consumer loans are
longer-term, multi-payment loans that require the pay-down of the outstanding principal balance in multiple
installments. Installment loan products that the Company offers are unsecured and can either be written by the
Company or by a third-party lender through the CSO programs. The Company previously offered installment loans
secured by a customer’s vehicle, but it ceased offering that product in the latter half of 2015.
A small component of the Company’s business includes the offering of check cashing services through
franchised check cashing centers, for which the Company receives franchise fees. In addition, in some of its
Company-operated lending locations, the Company offers check cashing services, as well as prepaid debit cards that
are issued and serviced through a third party. In July 2015, the Company ceased offering certain ancillary products
and services, including money orders, wire transfers and auto insurance, consistent with its strategy to emphasize
pawn-related services in its Company-operated locations.
Basis of Presentation
The consolidated financial statements include all of the accounts of the Company. All significant
intercompany accounts and transactions other than those related to Enova International, Inc. (“Enova”), which
previously comprised the Company’s e-commerce segment (as discussed further below), have been eliminated in
consolidation. Upon completion of the distribution of approximately 80% of the outstanding shares of Enova
common stock to the Company’s shareholders on November 13, 2014 (the “Enova Spin-off”), the Company
reclassified Enova’s financial results to discontinued operations in the Company’s consolidated financial statements
for the years ended December 31, 2014 and 2013. Intercompany accounts and transactions related to Enova are
presented separately between the Company’s continuing and discontinued operations. These accounts and
transactions were previously eliminated in the Company’s consolidated financial statements. This presentation detail
is included in the financial statements due to the significance of these accounts and transactions. The specific
elements are reflected in “Interest income,” “Interest income from note receivable,” “Proceeds from note
receivable” and “Dividends received” in the Company’s consolidated financial statements. See Note 2 for further
discussion of discontinued operations.
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
83