Cash America 2012 Annual Report Download - page 112

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Corporate administration expenses increased $10.1 million, or 18.3%, to $65.3 million 2011 compared to $55.2
million in 2010, primarily due to increased personnel expense.
Depreciation and Amortization Expenses
Consolidated depreciation and amortization expenses increased $10.2 million, or 23.3%, primarily due to
increased expenses in the retail services segment and in corporate operations. Depreciation and amortization expense at
the retail services segment increased $4.7 million, or 17.4%, to $32.0 million mainly due to additional depreciation
expenses associated with new and acquired locations and investments in facility upgrades, relocations and remodels.
Depreciation and amortization expenses at the e-commerce segment increased $2.7 million, or 31.6%, to $11.3 million
primarily related to systems development in support of new products, as well as normal system upgrades. Depreciation
and amortization expenses for corporate operations increased $2.8 million or 34.5%, to $10.9 million, primarily related
to additional depreciation expenses associated with the Company’s new proprietary domestic point-of-sale system,
which was placed in service in July 2011.
Interest Expense
Interest expense increased $3.2 million, or 14.2%, to $25.5 million in 2011, compared to $22.3 million in 2010,
primarily due to an increase of $47.0 million in the average amount of debt outstanding, to $466.4 million in 2011 from
$419.4 million during 2010. The increase in the average amount of debt outstanding was primarily due to additional
funding under the Company’s line of credit to support growth in the Company’s pawn loan and consumer loan balances.
In addition, an acquisition in the fourth quarter of 2010 was funded by borrowings under the Company’s line of credit of
approximately $59.6 million. The Company’s effective blended borrowing cost was 4.9% for both the years ended
December 31, 2011 and 2010. The Company incurred non-cash interest expense of $3.6 million in 2011 compared to
$3.3 million in 2010, from the 2009 Convertible Notes due 2029 (the “2009 Convertible Notes”) and debt issuance
costs. See “Item 8. Financial Statements and Supplementary Data—Note 13” for further discussion of the 2009
Convertible Notes.
Foreign Currency Transaction Gain/Loss
The Company is impacted by foreign currency transactions due to certain of its subsidiaries conducting business
in currencies other than the U.S. dollar. In 2011, the Company recorded a foreign currency transaction loss of
approximately $1.3 million related to its operations in foreign countries compared to a $0.5 million loss in 2010.
Income Taxes
The Company’s effective tax rate was 37.9% for 2011 compared to 37.5% for 2010. The increase in the
Company’s effective tax rate for 2011 was mainly attributable to an increase in state taxes.