Cash America 2007 Annual Report Download - page 90

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CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
70
The following table provides information concerning the other acquisitions made by the Company’s
continuing operations during 2007, 2006 and 2005 (excluding CashNetUSA) ($ in thousands):
2007 2006 2005
Number of stores acquired:
Pawnshops............................................................... 5 19 9
Cash advance locations ........................................... ʊ ʊ 1
Purchase price allocated to:
Pawn loans .............................................................. $ 607 $ 4,365 $ 3,631
Finance and service charges receivable................... 75 467 383
Cash advances and fees receivable.......................... 38 810 34
Merchandise held for disposition, net ..................... 406 2,885 1,283
Property and equipment .......................................... 47 178 189
Goodwill.................................................................. 1,632 16,668 11,386
Intangible assets ...................................................... 217 1,475 2,170
Other (liabilities) assets, net.................................... (65) 367 (78)
Total purchase price, net of cash acquired........... 2,957 27,215 18,998
Final cash settlement for prior year acquisition .......... ʊ ʊ 850
Purchase price adjustments for prior year acquisition. 852 ʊ 159
Cash consideration payable......................................... ʊ (1,066) (70)
Total cash paid for acquisitions ........................... $ 3,809 $ 26,149 $ 19,937
4. Cash Advances, Allowance for Losses and Accruals for Losses on Third-Party Lender-Owned
Cash Advances
The Company offers cash advance products through its cash advance locations, in most of its
pawnshops and over the internet. The cash advance products are generally offered as single payment cash
advance loans. These cash advance loans typically have a term of 7 to 45 days and are generally payable on
the customer’s next payday. The Company originates cash advances in some of its locations and online. It
arranges for customers to obtain cash advances from independent third-party lenders in other locations and
online. In a cash advance transaction, a customer executes a promissory note or other repayment agreement
typically supported by that customer’s personal check or authorization to debit the customer’s checking
account via an ACH transaction. Customers may repay the amount due either with cash, by allowing their
check to be presented for collection, or by allowing their checking account to be debited via an ACH
transaction.
The Company offers services in connection with single payment cash advances originated by
independent third-party lenders, whereby the Company acts as a credit services organization on behalf of
consumers in accordance with applicable state laws (the “CSO program”). The CSO program includes
arranging loans with independent third-party lenders, assisting in the preparation of loan applications and
loan documents, and accepting loan payments. To assist the customer in obtaining a loan through the CSO
program, the Company also, as part of the credit services it provides to the customer, guarantees, on behalf
of the customer, the customer’s payment obligations to the third-party lender under the loan. A customer
who obtains a loan through the CSO program pays the Company a fee for the credit services, including the
guaranty, and enters into a contract with the Company governing the credit services arrangement. Losses on
cash advances acquired by the Company as a result of its guaranty obligations are the responsibility of the
Company. As of December 31, 2007, the CSO program was offered in Texas and Florida. The Company
discontinued the CSO program in Michigan in February 2007, and has since offered only cash advances
underwritten by the Company to customers in that state. In January of 2008, the Company began offering a
CSO program in the state of Maryland through its online platform.