Cash America 2010 Annual Report Download - page 137

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CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
108
Other Fair Value Disclosures
The carrying amounts and estimated fair values of financial instruments at December 31, 2010 and 2009 were
as follows (in thousands):
Balance at December 31,
2010 2009
Carr
y
in
g
Value
Estimated
Fair Value
Carrying
Value
Estimated
Fair Value
Financial assets:
Cash and cash equivalents $38,324 $38,324 $46,004 $46,004
Pawn loans 218,408 218,408 188,312 188,312
Consumer loans, net 139,377 139,377 108,789 108,789
Financial liabilities:
Bank lines of credit $215,025 $211,576 $189,663 $185,623
Senior unsecured notes 137,507 134,125 138,000 133,370
2009 Convertible Notes 104,172 185,725 101,520 178,825
Cash and cash equivalents bear interest at market rates and have maturities of less than 90 days. Pawn loans
have relatively short maturity periods that are generally 90 days or less. Consumer loans typically have a loan term of
seven to 45 days. Since cash and cash equivalents, pawn loans and consumer loans generally have maturities of less
than 90 days, their fair value approximates their carrying value. Pawn loan fee and service charge rates are determined
by regulations and bear no valuation relationship to the capital markets’ interest rate movements. Generally, pawn
loans may only be resold to a licensed pawnbroker.
The fair values of the Company’s long-term debt instruments are estimated based on market values for debt
issues with similar characteristics or rates currently available for debt with similar terms. The Company’s senior
unsecured notes have a lower fair market value than the carrying value due to the difference in yield when compared to
recent issuances of similar senior unsecured notes. The 2009 Convertible notes have a higher fair value than carrying
value due to the Company’s stock price as of December 31, 2010 exceeding the applicable conversion price for the
2009 Convertible Notes, thereby increasing the value of the instrument for bondholders.