Cash America 2012 Annual Report Download - page 160

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
135
participant is 100% vested after five years of service. The Company’s consolidated contributions to the 401(k) Savings
Plan and the Nonqualified Savings Plan were $4.7 million, $3.6 million and $2.8 million for the year ended December
31, 2012 and 2011 and 2010, respectively.
In addition to the plans mentioned above, the Company established a Supplemental Executive Retirement Plan
(“SERP”) for its officers in 2003. The Company established a separate SERP for officers in the Company’s e-
commerce segment in 2012. Under each of these defined contribution plans, the Company makes an annual
supplemental cash contribution to each SERP based on the objectives of each plan as approved by the Management
Development and Compensation Committee of the Board of Directors. The Company recorded consolidated
compensation expense of $1.0 million, $0.9 million and $0.8 million for SERP contributions for the years ended
December 31, 2012, 2011 and 2010, respectively.
The Nonqualified Savings Plan and the SERP are nonqualified tax-deferred plans. Benefits under the
Nonqualified Savings Plan and SERP are unfunded. As of December 31, 2012, the Company held securities in rabbi
trusts to pay benefits under these plans. As of December 31, 2011 and 2010, the rabbi trust for the Cash America
International, Inc. 401(k) Savings Plan also held shares of the Company’s common stock. The securities other than
Company stock are classified as trading securities and the unrealized gains and losses on these securities are netted
with the costs of the plans in “Operations and administration expenses” in the consolidated statements of income. The
Company’s common stock held in the Cash America International, Inc. Nonqualified Savings Plan is included in
treasury shares.
Amounts included in the consolidated balance sheets relating to the Nonqualified Savings Plan and the SERP
were as follows (dollars in thousands):
As of December 31,
2012 2011
Prepaid expenses and other assets $11,347 $8,264
Accounts payable and accrued expenses 12,397 9,192
Other liabilities 581 616
Treasury shares 662 683
18. Derivative Instruments
The Company periodically uses derivative instruments to manage interest rate risk and foreign currency
exchange rate risk.
Prior to 2012, the Company used interest rate cap agreements for the purpose of managing interest rate
exposure on its floating rate debt. For derivatives designated as cash flow hedges, the effective portions of changes in
the estimated fair value of the derivative are reported in “Accumulated other comprehensive income (loss)” (or “OCI”)
and are subsequently reclassified into earnings when the hedged item affects earnings. The change in the estimated fair
value of the ineffective portion of the hedge, if any, was recorded as income or expense.
On March 27, 2009, the Company entered into an interest rate cap agreement with a notional amount of $15.0
million to hedge the Company’s outstanding floating rate line of credit for a term of 36 months at a fixed rate of
3.25%.This interest rate contract was determined to be a perfectly effective cash flow hedge, pursuant to ASC 815-20-
25, at its inception and on an ongoing basis until its expiration in 2012.
The Company uses forward currency exchange contracts to hedge foreign currency risk in the United
Kingdom and Australia, and, prior to 2012, in Mexico. The Company’s forward currency exchange contracts are non-
designated derivatives. Any gain or loss resulting from these contracts is recorded as income or loss and is included in
“Foreign currency transaction (loss) gain” in the Company’s consolidated statements of income.