Cash America 2009 Annual Report Download - page 96

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August 15, 2011 and will be accounted for as goodwill.
The Company arranges for consumers to obtain cash advance products from multiple independent third-
party lenders through the CSO program. When a consumer executes a credit services agreement with the
Company, the Company agrees, for a fee payable to the Company by the consumer, to provide a variety of credit
services to the consumer, one of which is to guarantee the consumer’s obligation to repay the loan received by the
consumer from the third-party lender if the consumer fails to repay the loan. The outstanding amount of active cash
advances originated by third-party lenders and guaranteed by the Company was $49.9 million, $34.9 million and
$34.6 million at December 31, 2009, 2008 and 2007 respectively.
Management anticipates that expenditures for property and equipment for 2010 will be between $65.0
million and $75.0 million primarily for the remodeling of selected operating units, for the continuing development
of product delivery and information systems, including the multi-year project to upgrade the Company’s proprietary
point-of-sale system, and for the establishment of approximately 60 to 70 new pawn lending locations primarily in
the Company’s foreign operations. Included in this aggregate range of capital expenditures are minor strategic
investments and small scale acquisitions of neighborhood pawn lending locations.
Cash flows from financing activities. Net cash used for financing activities decreased $149.3 million, or
109.4%, from a source of cash of $136.5 million in 2008 to a use of cash of $12.8 million in 2009. In 2008, the
Company’s acquisitions required new debt funding. In 2009, the Company repaid debt with cash flows from
operating activities net of cash used by investing activities and with proceeds from the refinancing of debt through
issuance of the 2009 Convertible Notes.
During 2009, the Company made debt payments of $111.3 million. These payments included $92.7 million
under its bank lines of credit, the prepayment, without penalty, of its $10.0 million senior unsecured long-term
notes, due in November 2012, and the repayment of the remaining $8.6 million balance of its 7.2% senior
unsecured notes.
Additional uses of cash during the current year included $4.1 million for dividends paid and the repurchase
of 394,476 shares for $10.8 million pursuant to an authorization by the Board of Directors of the Company in
October 2007 to repurchase up to 1,500,000 shares of the Company’s common stock. The Company also received
$1.6 million for stock issued under its equity compensation plans and paid loan costs of $3.9 million.
On May 19, 2009, the Company completed the offering of its $115 million 2009 Convertible Notes. The
Company received net proceeds of approximately $111.1 million, after deducting the initial purchasers’ discount
and the offering expenses payable by the Company. The non-cash interest expense related to the amortization of
the discount on the 2009 Convertible Notes that was recognized in the Company’s consolidated statements of
income was $2.0 million for the year ended December 31, 2009. The Company used a portion of the net proceeds
of the offering to repay existing indebtedness, including outstanding balances under its revolving credit facility.
The remaining portion was used for general corporate purposes.
In the prior year, net cash provided by financing activities increased $94.3 million, or 223.3%, from $42.2
million in 2007 to $136.5 million in 2008 due to the issuance of long term debt, additional borrowings under bank
lines of credit and a reduction in treasury shares purchased.