Cash America 2010 Annual Report Download - page 112

Download and view the complete annual report

Please find page 112 of the 2010 Cash America annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 167

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
83
Other
The following table provides information concerning the acquisitions of domestic and foreign pawn lending
locations made during the years ended December 31, 2010, 2009 and 2008 (excluding locations acquired in connection
with the acquisitions described above related to Maxit and Prenda Fácil). All assets are included in the retail services
segment (dollars in thousands):
 Year Ended December 31,
2010 2009 2008
N
umber of stores acquired:
Pawn lending locations 5 3 1
Purchase price allocated to:
Pawn loans $ 803 $ 235 $ 159
Merchandise held for disposition, net 422 148 44
Pawn loan fees and service charges receivable 118 23 18
Property and equipment 40 51 10
Goodwill 1,227 372 442
Intangible assets 341 124 55
Other assets 3 - -
Other liabilities (14) (43) (3)
Customer deposits (13) - -
Total cash paid for acquisitions $ 2,927 $ 910 $ 725
4. Credit Quality Information on Pawn Loans
The Company manages the pawn loan portfolio by monitoring the type and adequacy of collateral compared to
historical gross profit margins. The Company relies on the disposition of pawned property to recover the principal
amount of an unpaid pawn loan, plus a yield on the investment, because it does not have recourse against the customer
for the loan. As a result, the customer’s creditworthiness is not a significant factor in the loan decision, and a decision
to redeem pawned property has not historically affected the customer’s personal credit status. In addition, the
customer’s creditworthiness does not affect the Company’s financial position or results of operations, as forfeited
merchandise has historically sold for an amount in excess of the cost of goods sold (lower of cash amount loaned or
market value). Goods pledged to secure pawn loans are tangible personal property items such as jewelry, tools,
televisions and other electronics, musical instruments, and other miscellaneous items. As of December 31, 2010 and
2009, the Company had performing pawn loans outstanding of $213.5 million and $184.3 million, respectively, and
nonperforming pawn loans outstanding of $4.9 million and $4.0 million, respectively.
5. Credit Quality Information and Allowances and Accruals for Losses on Consumer Loans
In order to manage the portfolios of consumer loans effectively, the Company utilizes a variety of proprietary
underwriting criteria, monitors the performance of the portfolio and maintains either an allowance or accrual for losses
on consumer loans (including fees and interest) at a level estimated to be adequate to absorb credit losses inherent in
the portfolio. The portfolio includes balances outstanding from all consumer loans, including short-term single
payment loans, participation interests in receivables acquired through the MLOC services channel, and multi-payment
installment loans. In addition, the Company maintains an accrual for losses related to loans guaranteed under CSO
programs. The allowance for losses on Company-owned consumer loans offsets the outstanding loan amounts in the
consolidated balance sheets. See Note 2 for a discussion of the Company’s consumer loan products.