Cash America 2007 Annual Report Download - page 64

Download and view the complete annual report

Please find page 64 of the 2007 Cash America annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 126

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126

44
extended to customers by all independent third-party lenders. The average amount per cash advance
increased to $381 from $359 mostly due to changes in permitted loan amounts and adjustments to
underwriting criteria. The outstanding combined portfolio balance of cash advances increased $59.9
million, or 93.2%, to $124.2 million at December 31, 2006 from $64.3 million at December 31, 2005. A
portion of the increase was attributable to the addition of the online distribution channel established through
the acquisition of CashNetUSA in September of 2006 with the remainder related primarily to store maturity
and development during the year. Included in the combined portfolio balance referenced above were $99.5
million and $47.0 million for 2006 and 2005, respectively, which are included in the Company’s
consolidated balance sheets. An allowance for losses of $19.5 million and $6.3 million has been provided in
the consolidated financial statements for December 31, 2006 and 2005, respectively, which is netted against
the outstanding cash advance amounts on the Company’s consolidated balance sheets.
The following table summarizes cash advances outstanding at December 31, 2006 and 2005 and
contains certain non-Generally Accepted Accounting Principles (“non-GAAP”) measures with respect to the
cash advances owned by third-party lenders that are not included in the Company’s consolidated balance
sheets. The Company believes that presenting these non-GAAP measures is meaningful and necessary
because management evaluates and measures the cash advance portfolio performance on an aggregate basis
($ in thousands).
2006 2005
Funded by the Company (a)
Active cash advances and fees receivable............................................ $ 69,489 $ 32,207
Cash advances and fees in collection ......................................................... 24,499 7,510
Total funded by the Company (a) ....................................................... 93,988 39,717
Funded by third-party lenders (b) (c)
Active cash advances and fees receivable............................................ 24,721 19,548
Cash advances and fees in collection ......................................................... 5,466 5,010
Total funded by third-party lenders (b) (c) ......................................... 30,187 24,558
Combined gross portfolio (b) (d) ................................................................ 124,175 64,275
Less: Elimination of cash advances owned by third-party lenders ..... 24,687 16,912
Less: Discount on cash advances assigned by third-party lenders........... ʊ 350
Company-owned cash advances and fees receivable, gross...................... 99,488 47,013
Less: Allowance for losses ........................................................................ 19,513 6,309
Cash advances and fees receivable, net ....................................................... $ 79,975 $ 40,704
Allowance for loss on Company-owned cash advances................................. $ 19,513 $ 6,309
Accrued losses on third-party lender-owned cash advances .......................... 1,153 874
Combined allowance for losses and accrued third-party lender losses .. $ 20,666 $ 7,183
Combined allowance for losses and accrued third-party lender losses as
a % of combined gross portfolio (b) (d) .................................................... 16.6% 11.2%
(a) Cash advances written by the Company for its own account in its pawn locations, cash advance locations and
through the internet distribution channel.
(b) Non-GAAP presentation. For informational purposes and to provide a greater understanding of the Company’s
businesses. Management believes that information provided with this level of detail is meaningful and useful
in understanding the activities and business metrics of the Company’s operations.
(c) Cash advances written by third-party lenders that were arranged by the Company on behalf of the third-party
lenders, all at the Company’s pawn and cash advance locations and through the Company’s internet
distribution channel.
(d) Includes (i) cash advances written by the Company, and (ii) cash advances written by third-party lenders that
were arranged by the Company on behalf of the third-party lenders, all at the Company’s pawn and cash
advance locations and through the Company’s internet distribution channel.
Cash advance fees related to cash advances originated by all third-party lenders (bank and non-
bank) were $61.6 million in 2006 on $360.6 million in cash advances originated by third-party lenders,
representing 31.1% of combined cash advance revenue and 8.9% of consolidated total revenue of the