Cash America 2009 Annual Report Download - page 91

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63
The following table summarizes the cash advance loss provision for the years ended December 31, 2008
and 2007, respectively (dollars in thousands):
Year Ended December 31,
2008 2007
Cash advance loss provision:
Loss provision on Company-owned cash advances $140,416 $154,565
Loss provision on third-party owned cash advances 307 673
Combined cash advance loss provision $140,723 $155,238
Charge-offs, net of recoveries $144,597 $148,402
Cash advances written:
By the Company (a) $1,373,642 $1,370,167
By third-party lenders(b)(c) 702,933 654,760
Combined cash advances written (b)(d) $2,076,575 $2,024,927
Combined cash advance loss provision as a % of combined cash advances written
(b)(d)
6.8% 7.7%
Charge-offs (net of recoveries) as a % of combined cash advances written (b)(d) 7.0% 7.3%
(a)
a
Cash advances written by the Company for its own account in pawn lending locations, cash advance storefront locations and
through the internet channel.
a
a
(b)
a
a
Non-GAAP presentation. Management evaluates and measures the cash advance portfolio performance on an aggregate basis
including its evaluation of the loss provision for the Company-owned portfolio and the third-party lender-owned portfolio that
the Company guarantees.
a
a
a
(c)
a
a
a
Cash advances written by third-party lenders that were marketed, processed or arranged by the Company on behalf of the
third-party lenders, all at the Company’s pawn and cash advance storefront locations and through the Company’s internet and
card services channels. (Note: The Company did not commence business in the card services channel until the third quarter of
2008.)
(d)
a
Includes cash advances written by the Company, as well as the cash advance products described in footnote (c) above. a
a
Administration Expenses. Consolidated administration expenses, as a percentage of total revenue, were 7.3% in
2008, compared to 5.7% in 2007. The components of administration expenses for the years ended December 31,
2008 and 2007 are as follows (dollars in thousands):
Year Ended December 31,
2008 2007
% of % of
Amount Revenue Amount Revenue
Personnel $ 51,557 5.0 % $34,111 3.7 %
Other 24,053 2.3 18,637 2.0
Total $ 75,610 7.3 % $52,748 5.7 %
The significant increase in administrative expense was due to a variety of factors, including health and
workers compensation insurance increases, higher management incentives due to performance, increased
infrastructure spending at the Company’s online lending facilities and management realignment expenses. The
Company significantly realigned its administrative activities during the fourth quarter of 2008 to create a more
efficient structure more closely aligned with the current business environment, which resulted in a one-time charge
to earnings of $3.3 million in severance and related compensation expenses in 2008.