Cash America 2009 Annual Report Download - page 74

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46
OVERVIEW
Components of Consolidated Net Revenue, Reduced by Cash Advance Loss Provision. Consolidated net
revenue, reduced by cash advance loss provision, is composed of finance and service charges from pawn loans plus
the profit from the disposition of merchandise plus cash advance fees less cash advance loss provision plus other
revenue. Other revenue is composed of check cashing fees, royalties and miscellaneous other revenue items, such
as ancillary products offered in stores.
The contribution from pawn lending activities for 2009, 2008 and 2007 accounted for 61.6%, 59.7% and
58.9%, respectively, of consolidated net revenue, reduced by cash advance loss provision, and remains the
dominant component of consolidated net revenue, reduced by cash advance loss provision, for the Company.
During the year ended December 31, 2009, consolidated net revenue, reduced by cash advance loss provision,
increased 11.9% to $665.3 million from $594.7 million for the same period in 2008.
The following table shows the components of consolidated net revenue, reduced by cash advance loss
provision for the years ended December 31, 2009, 2008 and 2007:
For the years ended December 31,
% of % of % of
2009 Total 2008 Total 2007 Total
Finance and service charges $ 231,178 34.8 % $ 184,995 31.1 % $ 160,960 30.5 %
Profit from disposition of merchandise, net
of cost of revenue 178,459 26.8 170,295 28.6 150,029 28.4
Cash advance fees, net of loss provision 241,040 36.2 223,880 37.6 199,958 37.9
Check cashing fees, royalties and other 14,620 2.2 15,541 2.7 16,417 3.2
Net revenue, net of loss provision $ 665,297 100.0 % $ 594,711 100.0 % $ 527,364 100.0 %
Contribution to Increase in Net Revenue, Reduced by Cash Advance Loss Provision. The Company’s
consolidated net revenue, reduced by cash advance loss provision, increased $70.6 million, or 11.9%, and $67.3
million, or 12.8%, for the years ended December 31, 2009 and 2008, respectively, compared to the prior year
periods. The contribution from pawn lending activities increased $54.3 million from 2008 to 2009, contributing
77.0% of the increase in consolidated net revenue, net of cash advance loss provision, mainly due to greater finance
and service charges on higher average loan balances, an increase in revenue from the sale of refined gold and the
inclusion of the operating results of Prenda Fácil for the first full year following the Prenda Fácil acquisition.
During the first quarter of 2009, certain cash advance storefront locations began offering pawn lending activities,
which also contributed to the increased contribution from pawn lending activities during the entire year. Cash
advance fees, net of loss provision, increased $17.2 million from 2008 to 2009 and contributed 24.3% of the
increase, primarily due to growth in the internet channel and from a decrease in the loss provision. In 2008, the
contribution from pawn lending activities increased $44.3 million and contributed 65.8% of the increase in
consolidated net revenue, net of cash advance loss provision, mainly due to increased profit on higher disposition
volumes of merchandise. Also during 2008, higher levels of cash advance fees, reduced by cash advance loss
provision, contributed 35.5% of the increase, primarily due to significant growth in cash advance balances
outstanding and lower year over year loss rates.