Cash America 2011 Annual Report Download - page 32

1
PART I
ITEM 1. BUSINESS
Overview
Cash America International, Inc. and its subsidiaries (collectively, the “Company”) provides specialty financial
services to individuals through retail services locations and through electronic distribution platforms known as e-
commerce activities.
The Company offers secured non-recourse loans, commonly referred to as pawn loans. Pawn loans are short-
term loans (generally 30 to 90 days) made on the pledge of tangible personal property. Pawn loan fees and service
charges revenue is generated from the Company’s pawn loan portfolio. A related activity of the pawn lending
operations is the disposition of collateral from unredeemed pawn loans and the liquidation of a smaller volume of
merchandise purchased directly from third parties or from customers.
The Company also offers unsecured consumer loans. The Company’s consumer loan portfolio includes: short-
term loans, which include single payment loans (that are commonly referred to as payday loans) and line of credit
products; longer-term multi-payment installment loans; and credit services and participation interests in receivables
acquired from a third-party lender through the micro line of credit (or "MLOC") channel. Consumer loans provide
customers with cash, typically in exchange for a promissory note or other repayment agreement supported, in most
cases, by the customer’s personal check or authorization to debit the customer’s bank account via an electronic
transaction for the aggregate amount of the payment due. Through the credit services organization programs (the "CSO
programs"), the Company provides a third-party lender's consumer loan product in some markets by acting as a credit
services organization or credit access business on behalf of consumers in accordance with applicable state laws.
Services offered under the CSO programs include credit related services such as arranging loans with independent third-
party lenders and assisting in the preparation of loan applications and loan documents. Under the CSO programs, the
Company also guarantees consumer loan payment obligations to the third-party lender in the event that the consumer
defaults on the loan. A customer who obtains a loan through the CSO programs pays the Company a fee for these credit
services (“CSO fees”). Although consumer loan transactions may take the form of loans or a line of credit, deferred
check deposit transactions, credit services transactions, or the processing of, and the participation in, MLOC receivables
originated by a third-party lender, the transactions are referred to throughout this discussion as “consumer loans.”
The Company was incorporated in Texas in 1984 and has been providing specialty financial services to its
customers for over 25 years. The Company believes it was the nation’s largest provider of pawn loans and the largest
operator of pawn shops in the world in 2011. As used in this report, the term “Company” includes Cash America
International, Inc. and its subsidiaries, unless the context otherwise requires.
The Company has two reportable segments: retail services and e-commerce. The retail services segment
includes all of the operations of the Company’s Retail Services Division, which is composed of both domestic and
foreign storefront locations that offer some or all of the following services: pawn lending, consumer loans, check
cashing and other ancillary services such as money orders, wire transfers and pre-paid debit cards. (Most of these
ancillary services are provided through third-party vendors.) The e-commerce segment includes the operations of the
Company’s E-Commerce Division, which is composed of the Company’s domestic and foreign online lending channels
and the Company’s MLOC channel.
Retail Services Segment
The following table sets forth the number of domestic and foreign Company-owned and franchised locations in
the Company’s retail services segment offering pawn lending, consumer lending, and other services as of December 31,
2011, 2010 and 2009. The Company’s domestic retail services locations operate under the names “Cash America
Pawn,” “SuperPawn,” “Cash America Payday Advance,” “Cashland,” “Pawn X-Change” and “Mr. Payroll.” The