Cash America 2012 Annual Report Download - page 137

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
112
The Company accounts for uncertainty in income taxes in accordance with ASC 740-10-25, Accounting for
Uncertainty in Income Taxes (“ASC 740-10-25”). ASC 740-10-25 requires that a more-likely-than-not threshold be
met before the benefit of a tax position may be recognized in the consolidated financial statements and prescribes how
such benefit should be measured. It also provides guidance on recognition adjustment, classification, accrual of interest
and penalties, accounting in interim periods, disclosure and transition. See Note 14.
It is the Company’s policy to classify interest and penalties on income tax liabilities as interest expense and
operations and administration expense, respectively.
Net Income Per Share
Basic net income per share is computed by dividing net income by the weighted average number of common
shares outstanding during the year. Diluted net income per share is calculated by giving effect to the potential dilution
that could occur if securities or other contracts to issue common shares were exercised and converted into common
shares during the year. Restricted stock units issued under the Company’s stock-based employee compensation plans
are included in diluted shares upon the granting of the awards even though the vesting of shares will occur over time.
Performance-based awards are included in diluted shares based on the level of performance that management estimates
is the most probable outcome at the grant date. Throughout the requisite service period, management monitors the
probability of achievement of the performance condition and, if material, adjusts the number of shares included in
diluted shares accordingly.
The following table sets forth the reconciliation of numerators and denominators of basic and diluted earnings per
share computations for the years ended December 31, 2012, 2011 and 2010 (dollars and shares in thousands, except per
share amounts):

For the year ended December 31,
2012 2011 2010
N
umerator:
Net income attributable to Cash America International, Inc. $ 107,470 $ 135,963 $ 115,538
Denominator:
Total weighted average basic shares (a) 29,514 29,602 29,640
Shares applicable to stock-based compensation(b) 174 251 548
Convertible debt(c) 1,764 2,138 1,333
Total weighted average diluted shares (d) 31,452 31,991 31,521
Net income – basic $ 3.64 $ 4.59 $ 3.90
Net income – diluted $ 3.42 $ 4.25 $ 3.67
(
a
)
c
Includes vested restricted stock units of 287, 231 and 191, as well as shares in the Company's nonqualified deferred compensation
plan of 31, 32 and 33 for the years ended December 31, 2012, 2011 and 2010, respectively.
(b)
For the years ended December 31, 2012, 2011 and 2010, includes shares related to outstanding option awards that are exercisable and
unvested or deferred restricted stock unit awards. Although there were no stock option awards outstanding as of December 31, 2012,
the dilutive effect of stock-based compensation is based on weighted amount of outstanding awards during the year; therefore, a
portion of the stock option awards outstanding during 2012 are included in this amount. For the year ended December 31, 2011, there
is an immaterial amount of unvested or deferred restricted stock units that are excluded from shares applicable to stock-based
compensation because its impact would be anti-dilutive.
(
c
)
C The shares issuable with respect to the Company's 2009 Convertible Notes due 2029 have been calculated using the treasury stock
method. The Company intends to settle the principal portion of the convertible debt in cash; therefore, only the shares related to the
conversion spread have been included in weighted average diluted shares.
(d) Except as described in footnote (b), there are no anti-dilutive shares.