Cash America 2012 Annual Report Download - page 157

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
132
15. Commitments and Contingencies
Leases
The Company leases certain of its facilities under operating leases with terms ranging from one to 23 years and
certain rights to extend for additional periods. Future minimum rentals due under non-cancelable leases are as follows for
each of the years ending December 31 (dollars in thousands):
Year Amount
2013 $ 52,531
2014 43,774
2015 33,584
2016 26,332
2017 16,913
Thereafter 34,288
Total $ 207,422
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Rent expense was $55.4 million, $52.2 million and $46.6 million for the years ended December 31, 2012,
2011 and 2010, respectively.
Guarantees
The Company guarantees consumer loan payment obligations to unrelated third-party lenders through its CSO
program and is required to purchase the loan in the event that a customer defaults on the loan. The guarantee represents
an obligation to purchase specific loans that go into default. Short-term loans that are guaranteed generally have terms
of less than 90 days. Secured auto equity loans that are guaranteed generally have terms up to 42 months. As of
December 31, 2012 and 2011, the amount of consumer loans guaranteed by the Company was $64.7 million and $59.4
million, respectively, representing amounts due under consumer loans originated by third-party lenders under the CSO
programs. The estimated fair value of the liability related to these guarantees of $3.5 million and $3.1 million as of
December 31, 2012 and 2011, respectively, is included in “Accounts payable and accrued expenses” in the
accompanying consolidated balance sheets.
Litigation
On August 6, 2004, James E. Strong filed a purported class action lawsuit in the State Court of Cobb County,
Georgia against Georgia Cash America, Inc., Cash America International, Inc. (together with Georgia Cash America,
Inc., “Cash America”), Daniel R. Feehan, and several unnamed officers, directors, owners and “stakeholders” of Cash
America. The lawsuit alleges many different causes of action, among the most significant of which is that Cash
America made illegal short-term loans in Georgia in violation of Georgia’s usury law, the Georgia Industrial Loan Act
and Georgia’s Racketeer Influenced and Corrupt Organizations Act (“RICO”). First National Bank of Brookings,
South Dakota (“FNB”) and Community State Bank of Milbank, South Dakota (“CSB”) for some time made loans to
Georgia residents through Cash America’s Georgia operating locations. The complaint in this lawsuit claims that Cash
America was the true lender with respect to the loans made to Georgia borrowers and that FNB and CSB’s
involvement in the process is “a mere subterfuge.” Based on this claim, the suit alleges that Cash America was the “de
facto” lender and was illegally operating in Georgia. The complaint seeks unspecified compensatory damages,
attorney’s fees, punitive damages and the trebling of any compensatory damages. In November 2009 the case was
certified as a class action lawsuit. In August 2011, Cash America filed a motion for summary judgment, and in October
2011, the plaintiffs filed a cross-motion for partial summary judgment. Hearings on the motions were held in October
and November 2011, and the trial court entered an order granting summary judgment in favor of Cash America on one
of the plaintiff’s claims, denying the remainder of Cash America’s motion and granting the plaintiff’s cross-motion for
partial summary judgment. Cash America filed a notice of appeal with the Georgia Court of Appeals in December