Cash America 2010 Annual Report Download - page 108

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
79
In February 2010, FASB issued ASC Update No. 2010-9, Subsequent Events (Topic 855) (“ASU 2010-09”).
ASU 2010-09 states that an SEC filer is not required to disclose the date through which subsequent events have been
evaluated. This portion of ASU 2010-09 was effective for the Company upon issuance, and the adoption of ASU
2010-09 did not have a material effect on the Company’s financial position or results of operations.
In January 2010, FASB issued ASU 2010-06, Fair Value Measurements and Disclosures (“ASU 2010-06”),
which updates ASC 820-10-20, Fair Value Measurements and Disclosures. ASU 2010-06 requires new disclosures
for fair value measurements and provides clarification for existing disclosure requirements. More specifically, ASU
2010-06 requires (a) an entity to disclose separately the amounts of significant transfers in and out of Level 1 and 2 fair
value measurements from one measurement date to another and to describe the reasons for the transfers and
(b) information about purchases, sales, issuances and settlements to be presented separately (i.e., the activity must be
presented on a gross basis rather than net) in the reconciliation for fair value measurements using significant
unobservable inputs (Level 3 inputs). ASU 2010-06 clarifies existing disclosure requirements for the level of
disaggregation used for classes of assets and liabilities measured at fair value and requires disclosures about the
valuation techniques and inputs used to measure fair value for both recurring and nonrecurring Level 2 and Level 3 fair
value measurements. The Company adopted ASU 2010-06 as of January 1, 2010, and the adoption did not have a
material effect on the Company’s financial position or results of operations.
In December 2009, FASB issued ASU 2009-17, Improvements to Financial Reporting by Enterprises Involved
with Variable Interest Entities (“ASU 2009-17”), which updates ASC 810-10, Consolidations. ASU 2009-17 clarifies
the definition of a variable interest entity and updates the definition of the primary beneficiary of a variable interest
entity. The Company adopted ASU 2009-17 as of January 1, 2010, and the adoption did not have a material effect on
the Company’s financial position or results of operations.
3. Acquisitions
Maxit
Pursuant to its business strategy of expanding storefront operations in the United States, the Company’s
wholly-owned subsidiary, Cash America, Inc. of Nevada, completed the purchase of substantially all of the assets (the
"Maxit acquisition") of Maxit Financial, LLC ("Maxit") on October 4, 2010. Maxit owned and operated a 39-store
chain of pawn lending locations that operate in Washington and Arizona under the names “Maxit” and “Pawn X-
Change.” Per the terms of the Asset Purchase Agreement, the acquisition consideration consisted of a cash payment of
approximately $58.2 million, which was funded with borrowings under the Company’s line of credit, and 366,097
shares of the Company’s common stock, with a fair value of $10.9 million as of the closing date. In addition, the
Company incurred acquisition costs of $1.5 million related to the acquisition, which are reflected in "Operations
expenses" in the consolidated statements of income. The goodwill of $26.2 million arising from the acquisition
consists largely of the synergies and economies of scale expected from combining the operations of the Company and
Maxit. As further described in Note 18, the activities and goodwill of Maxit are included in the results of the
Company’s retail services segment.