Cash America 2010 Annual Report Download - page 90

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61
system, and for the establishment of approximately 40 new retail services locations.
Cash flows from financing activities. Net cash provided by financing activities increased $23.0 million, or
180.1%, from a use of $12.8 million in 2009 to a source of $10.2 million in 2010. During 2010, the Company’s
borrowings, net of repayments and debt issuance costs, were $24.8 million greater than in 2009. Net cash provided by
financing activities in 2010 included proceeds of $25.0 million for long-term debt issued by the Company in January
2010 (as more fully described below) and $25.4 million drawn under its line of credit. Scheduled debt payments of
$25.5 million were made during 2010 based on the terms of the note obligations. In addition, the Company used $3.7
million more in 2010 for the repurchase of shares of Company common stock through open market transactions,
pursuant to a 2007 authorization by the Board of Directors of the Company, and through the repurchase of shares of
common stock for tax payments related to stock based compensation.
On January 28, 2010, the Company issued and sold $25.0 million aggregate principal amount of its 2017 Notes
in a private placement pursuant to a note purchase agreement dated January 28, 2010 by and among the Company and
certain purchasers listed therein. The 2017 Notes are senior unsecured obligations of the Company. The 2017 Notes
are payable in five annual installments of $5.0 million beginning January 28, 2013. In addition, the Company may, at
its option, prepay all or a minimum portion of no less than $1.0 million of the 2017 Notes at a price equal to the
principal amount thereof plus a make-whole premium and accrued interest. The 2017 Notes are guaranteed by all of
the Company’s U.S. subsidiaries. The Company used a portion of the net proceeds of the 2017 Notes to repay existing
indebtedness, including outstanding balances under its bank line of credit. The remaining portion was used for general
corporate purposes.
During 2009, cash flows from financing activities used $149.3 million additional cash compared to 2008.
During 2009, the Company’s net borrowings, net of debt issuance costs, were $146.6 million lower than in 2008,
primarily due to the Company’s net repayments under its line of credit in 2009, compared to net borrowings under the
line of credit in 2008.
The Company had outstanding letters of credit of $16.5 million at December 31, 2010, which are considered
usage under the Company’s long-term unsecured line of credit for purposes of determining available borrowings under
that line of credit. Management believes that the borrowings available ($68.5 million at December 31, 2010) under the
credit facilities, cash generated from operations and current working capital of $491.3 million is sufficient to meet the
Company’s anticipated capital requirements for its businesses.
Contractual Obligations and Commitments
The following table summarizes the Company’s contractual obligations at December 31, 2010, and the effect
such obligations are expected to have on its liquidity and cash flow in future periods (in thousands):
2011 2012 2013 2014 2015 Thereafter Total
Bank line of credit $ - $215,025 $ - $ - $ - $ - $ 215,025
Other long-term debt (a) 24,433 39,620 14,273 14,273 14,273 134,807 241,679
Interest on other long-term debt (b) 13,170 12,262 10,646 6,763 2,749 14,173 59,763
N
on-cancelable leases 47,223 37,868 31,256 24,271 14,746 31,262 186,626
Total $ 84,826 $304,775 $ 56,175 $ 45,307 $ 31,768 $ 180,242 $ 703,093
(a) The 2009 Convertible Notes are net of a discount of $10.8 million. The 2009 Convertible Notes have a stated maturity date of
May 15, 2029; however the Company expects to repay the $115.0 million balance owed in cash during 2014. If the balance is
paid in 2014 as expected, the 2014 total contractual obligations of the Company would be $149,479, and the total contractual
obligations for “Thereafter” would be $76,070. See “Item 8. Financial Statements and Supplementary Data—Note 9.”
(b) Represents cash payments for interest and excludes interest obligations on all of the Company’s variable-rate debt. See “Item
8. Financial Statements and Supplementary Data—Note 10 and Note 11” for further discussion of the Company’s long-term
debt and operating lease obligations, respectively.