Cash America 2009 Annual Report Download - page 149

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CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
121
assets and liabilities carried at fair value to be classified and disclosed in one of the following three
categories:
Level 1: Quoted market prices in active markets for identical assets or liabilities.
Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.
Level 3: Unobservable inputs that are not corroborated by market data.
The Company’s financial assets that are measured at fair value on a recurring basis as of December
31, 2009 and 2008 are as follows (in thousands):
December 31, Fair Value Measurements Using
2009 Level 1 Level 2 Level 3
Financial assets:
Interest rate cap $ 143 $ - $ 143 $ -
Nonqualified savings plan assets 5,159 5,159 - -
Total $ 5,302 $ 5,159 $ 143 $ -
December 31, Fair Value Measurements Using
2008 Level 1 Level 2 Level 3
Financial assets:
Interest rate cap $ 69 $ - $ 69 $ -
Nonqualified savings plan assets 6,759 6,759 - -
Total $ 6,828 $ 6,759 $ 69 $ -
The Company measures the value of its interest rate cap under Level 2 inputs as defined by ASC 820.
The Company relies on a mark to market valuation based on yield curves using observable market interest
rates for the interest rate cap. The fair value of the nonqualified savings plan assets are measured under a
Level 1 input. These assets are publicly traded equity securities for which market prices are readily
observable.
20. Gain on Sale of Foreign Notes
In August 2007, the Company received gross proceeds in the amount of $16.8 million on the sale of
notes receivable that it had received in 2004 as part of the proceeds from its sale of Svensk Pantbelåning, its
former Swedish pawn lending subsidiary. In September 2004, the Company sold Svensk Pantbelåning to
Rutland Partners LLP for cash and two subordinated notes receivable. One of the notes receivable was
convertible into approximately 27.7% of the parent company of Svensk Pantbelåning on a fully-diluted basis.
In August 2007, Rutland Partners LLP sold Svensk Pantbelåning to a third-party who also purchased the
notes receivable from the Company. The Company’s total proceeds of $16.8 million represent $12.4 million
in the repayment of the face value of the principal, including $0.3 million of accrued interest owed on notes
receivable and $4.4 million for the value of its conversion rights under the convertible note. For the year
ended December 31, 2007, the Company recognized a pre-tax gain of approximately $6.3 million from the
sale of the notes and related rights.
21. Quarterly Financial Data (Unaudited)
The Company’s operations are subject to seasonal fluctuations. Net income tends to be highest
during the first and fourth calendar quarters, when the average amount of pawn loans and cash advance