Cash America 2009 Annual Report Download - page 108

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
80
1. Nature of the Company
Cash America International, Inc. (the “Company”) is a provider of specialty financial services to
individuals. The Company offers secured non-recourse loans, commonly referred to as pawn loans, short-
term unsecured cash advances, installment loans, credit services, check cashing and related financial services.
The pawn loan portfolio generates finance and service charges revenue. A related activity of the pawn
lending operations is the disposition of merchandise, primarily collateral from unredeemed pawn loans,
although the Company also liquidates a smaller volume of merchandise purchased from third-parties or
directly from customers. The Company offers unsecured cash advances in selected lending locations and over
the internet and on behalf of independent third-party lenders in other locations and over the internet. The
Company also arranges loans for customers with independent third-party lenders through a credit services
organization and operates a card services business through which the Company provides marketing and loan
processing services for a third-party bank issued line of credit on certain stored-value debit cards that the bank
issues and purchases a participation interest in certain line of credit receivables originated by the bank. In
addition, the Company provides check cashing and related financial services through many of its lending
locations and through its franchised and Company-owned check cashing centers. The Company offers short-
term cash advances exclusively over the internet under the name “CashNetUSA” in the United States, under
the name “QuickQuid” in the United Kingdom, and, beginning in 2009, under the name “DollarsDirect” in
Australia and Canada.
As of December 31, 2009, the Company had 1,048 total locations and an internet channel offering
products and services to its customers. The pawn lending operations consisted of 676 pawnshops, including
491 owned units and 9 unconsolidated franchised units in 22 states within the United States, as well as 176
locations in central and southern Mexico. The cash advance operations consisted of 246 locations in six
states, and CashNetUSA, which serves multiple markets through its internet channel and had cash advances
outstanding in 33 states in the United States, as well as the United Kingdom, Australia and Canada. The
Company’s card services business processed line of credit advances on behalf of a third-party lender and also
had a participation interest in line of credit receivables that were processed for the lender by the Company or
other third-parties that were outstanding in all 50 states and three other U.S. jurisdictions. The check cashing
operations consisted of 126 total locations, including six Company-owned and 120 franchised check cashing
centers in 16 states.
2. Summary of Significant Accounting Policies
Basis of Presentation
The consolidated financial statements include all of the accounts of the Company and its subsidiaries.
All significant intercompany accounts and transactions have been eliminated in consolidation.
Certain amounts in the consolidated financial statements for the years ended December 31, 2009,
2008 and 2007 have been reclassified to conform to the presentation format adopted in 2009. These
reclassifications have no effect on the net income attributable to the Company previously reported.
The Company has a contractual relationship with a third-party entity, Huminal, S.A. de C.V., a
Mexican sociedad anónima de capital variable ("Huminal"), to compensate and maintain the labor force of its
Mexico pawn operations, of which the Company is a majority owner due to the December 16, 2008
acquisition (the “Prenda Fácil acquisition”) by the Company of 80% of the outstanding stock of Creazione
Estilo, S.A. de C.V., SOFOM, E.N.R., a Mexican sociedad anónima de capital variable, sociedad financiera
de objeto múltiple, entidad no regulada (“Creazione”), operating under the name “Prenda Fácil” (referred to