Cash America 2009 Annual Report Download - page 94

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ensure that it is in a position to meet liquidity requirements. These alternatives may include the sale of assets,
reductions in capital spending and changes to its current assets and/or the issuance of debt or equity securities, all of
which could be expected to generate additional liquidity. The characteristics of the Company’s current assets,
specifically the ability to rapidly liquidate gold jewelry inventory and adjust outflows of cash in its lending
practices, gives the Company flexibility to quickly modify its business strategy to increase cash flow from its
business, if necessary.
Cash Flows
The Company’s cash flows and other key indicators of liquidity are summarized as follows (dollars in
thousands):
Year Ended December 31,
2009 2008 2007
Cash flows from operating activities: $267,843 $253,580 $273,073
Cash flows from investing activities
Pawn loans $545 $(9,887) $(21,761)
Cash advances (157,764) (133,025) (161,904)
Acquisitions (43,615) (182,356) (82,557)
Property and equipment additions (44,101) (57,082) (70,097)
Proceeds from sale of foreign notes - - 16,589
Proceeds from property insurance 1,031 1,214 1,416
Total cash flows from investing activities $(243,904) $(381,136) $(318,314)
Cash flows from financing activities $(12,765) $136,494 $42,218
Working capital $414,450 $313,834 $302,275
Current ratio 4.1 x 3.1 x 3.8 x
Merchandise turnover 2.9 x 2.9 x 2.7 x
Cash flows from operating activities. Net cash provided by operating activities increased $14.3 million,
or 5.6%, from $253.6 million for the year ended December 31, 2008 (the “prior year”) to $267.8 million for the
year ended December 31, 2009 (the “current year”). The increase was primarily due to an increase in net income of
22.9% from the pawn lending segment and an increase in net income of 14.9% from the cash advance segment.
The Company’s cash flows from operating activities benefited from an increase in non-cash expenses of $4.8
million from $43.1 million in 2008 to $47.9 million in 2009 related primarily to depreciation and amortization
expenses and the amortization of the debt discount on the convertible notes issued in 2009. This increase was
offset by a decrease in the cash advance loss provision, which is a non-cash expense, of $9.9 million from $140.7
million in 2008 compared to $130.8 million in 2009. Also adding to operating cash flow was a decrease in cash
used in the net change in operating assets and liabilities compared to the prior year of $1.2 million, primarily due to
a net change in current income taxes payable as a result of the timing of domestic federal income tax payments that
are based upon annualized activity through the end of the third quarter rather than an estimate of the current federal
income tax provision for the full year.
In the prior year period, net cash provided by operating activities decreased $19.5 million, or 7.1%, from
$273.1 million in 2007 to $253.6 million in 2008. The Company’s cash flows from operating activities benefited
from an increase in non-cash expenses of $5.1 million from $186.1 million in 2007 to $191.2 million in 2008
related primarily to depreciation and amortization expenses, deferred income taxes and a gain on sale of foreign
notes offset by a decrease in the cash advance loss provision. Also reducing operating cash flow was an increase in
the net change in operating assets and liabilities compared to the prior year of $26.4 million, primarily due to a
decrease in cash flows to support a net change from merchandise held for disposition of $16.9 million.