Cash America 2008 Annual Report Download - page 30

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Although cash advance transactions may take the form of loans or deferred check deposit
transactions, this report refers to cash advances originated both by the Company and by third-party lenders
under the CSO program and the Processing Program as “cash advances” for convenience. Cash advance
fees earned by the Company contributed approximately 35.4% of the Company’s total revenue in 2008,
38.2% in 2007 and 28.1% in 2006.
If the Company collects a delinquent amount that exceeds the amount it has acquired as a result of
its guaranty to third-party lenders, the Company is entitled to the excess when collected. Since the
Company may not succeed in collecting all of its delinquent accounts, it records an accrual for amounts
estimated to be adequate to absorb credit losses from cash advances in the aggregate cash advance portfolio,
including those it expects to acquire as a result of its guaranty obligations. As of December 31, 2008,
$140.5 million of combined gross cash advances was outstanding, including $35.2 million owned by the
third-party lenders that is not included in the Company’s consolidated balance sheets. An allowance for
losses of $21.5 million has been provided in the consolidated financial statements. The Company also
provided accrued losses for third-party owned portfolios of $2.1 million at December 31, 2008, which is
included in “Accounts payable and accrued expenses” in the accompanying consolidated balance sheet. See
Item 8. Financial Statements and Supplementary Data, Note 4 of “Notes to Consolidated Financial
Statements.”
Presented below is information with respect to the cash advance product for the years ended
December 31, 2008, 2007 and 2006:
2008 2007 2006
Locations offering cash advances at end of year.................. 679 735 720
On behalf of the Company.............................................. 430 416 406
On behalf of the third-party lenders................................ 249 319 314
Amount of cash advances written (in thousands)................. $ 2,076,575 $ 2,024,927 $ 1,177,763
On behalf of the Company.............................................. $ 1,373,642 $ 1,370,167 $ 817,186
On behalf of the third-party lenders................................ $ 702,933 $ 654,760 $ 360,577
Amount of cash advances assigned by the third-party
lenders (in thousands) .....................................................
$ 114,877 $ 93,611
$ 33,760
Average cash advance amount written................................. $ 433 $ 413 $ 381
Number of foreign countries with online lending at end
of period............................................................................. 1 1 ʊ
Check Cashing and Other Services
The Company provides check cashing and other financial services through its Mr. Payroll and
Cashland subsidiaries and through many of its pawnshop and payday advance locations. Other financial
services include the sale of stored-value cards, money orders and money transfers, among others. As of
December 31, 2008, Mr. Payroll’s operations consisted of 128 franchised and five company-owned check
cashing centers in 16 states. Each Mr. Payroll franchisee pays royalties to Mr. Payroll based on the gross
revenues of check cashing services provided within the franchisee’s facility. Cashland provides check
cashing in all 174 of its cash advance locations. Aggregate check cashing fees, royalties and other income
were 1.5% of the Company’s total revenue in 2008, 1.8% in 2007, and 2.3% in 2006.
Financial Information on Segments and Areas
Additional financial information regarding the Company’s revenues and assets by each of its three
operating segments is provided in Note 17 of “Notes to Consolidated Financial Statements.”