Cash America 2011 Annual Report Download - page 93

62
YEAR ENDED 2010 COMPARED TO YEAR ENDED 2009
Pawn Lending Activities:
The following table sets forth selected data related to the Company’s pawn lending activities as of and for the
years ended December 31, 2010 and 2009 (dollars in thousands):
2010 2009
Year Ended December 31: Domestic Foreign Total Domestic Foreign Total
Pawn loan fees and service charges $ 221,335 $ 31,979 $ 253,314 $ 200,904 $ 30,274 $ 231,178
Average pawn loan balance outstanding $ 166,163 $ 22,111 $ 188,274 $ 152,800 $ 20,250 $ 173,050
Amount of pawn loans written and renewed $ 689,476 $ 89,746 $ 779,222 $ 629,196 $ 106,569 $ 735,765
Annualized yield on pawn loans 133.2% 116.4% (a) 130.8% 131.5% 145.1% (a) 133.1%
Gross profit margin on disposition of merchandise 36.7% - (a) 36.7% 35.5% - (a) 35.5%
Merchandise turnover 3.0 - (a) 3.0 2.9 - (a) 2.9
As of December 31:
Ending pawn loan balances(b) $ 197,301 $ 21,107 $ 218,408 $ 164,327 $ 23,985 $ 188,312
Ending merchandise balance, net(b) $ 124,399 $ - (a) $ 124,399 $ 113,824 $ - (a) $ 113,824
(
a
)
With respect to the Company’s foreign pawn operations, the annualized yield on pawn loans is calculated using the average pawn loan
balance outstanding in the table above, plus the average value of the collateral underlying unredeemed pawn loans, which is included in
“Other assets” in the Company’s consolidated balance sheets, of $5,355 and $625 for the years ended December 31, 2010 and 2009,
respectively. Collateral underlying unredeemed pawn loans will be sold to settle the obligations owed by the customer but is not owned by
the Company; therefore, profit on the disposition of this collateral is recorded as “Pawn loan fees and service charges” in the Company’s
consolidated statements of operations.
(b)
On October 4, 2010, the Company completed the Maxit acquisition, which included the purchase of $20.7 million in pawn loans and $6.2
million of merchandise held for dis
p
osition.
Pawn loan fees and service charges. Pawn loan balances in domestic locations and foreign locations at
December 31, 2010 were $218.4 million, which was $30.1 million, or 16.0%, higher than at December 31, 2009. The
average balance of pawn loans outstanding for 2010 increased by $15.2 million, or 8.8%, compared to the year ended
December 31, 2009 (“2009”), primarily due to growth in the number of locations offering pawn lending within the retail
services segment and, to a lesser extent, the Maxit acquisition.
Pawn loan fees and service charges increased $22.1 million, or 9.6%, to $253.3 million in 2010 from $231.2
million in 2009. The increase is mainly due to higher average pawn loan balances, which contributed $26.6 million of
the increase, offset by lower annualized yield on pawn loans, which decreased pawn loan fees and service charges by
$4.5 million.
Annualized pawn loan yield on pawn loans was 130.8% for 2010, compared to 133.1% in 2009. The
Company’s domestic annualized loan yield increased to 133.2% in 2010, compared to 131.5% in 2009, mainly due to
improved performance in the portfolio, as cash payment of fees and service charges were higher compared to the prior
year. The foreign pawn loan yield decreased to 116.4% in 2010 from 145.1% in 2009 due to a lower yield on the
liquidation of forfeited loans in 2010.