Cash America 2012 Annual Report Download - page 90

65
histories. Despite the decrease in foreign loss provision as a percentage of consumer loan fees in 2012 compared to
2011, because the foreign e-commerce operations experienced higher loss rates than domestic operations, and due to the
greater mix of foreign consumer loans in 2012 compared to 2011, the foreign e-commerce operations contributed to the
increase in loss provision as a percentage of consumer loan fees in 2012. Future loss rates will continue to be influenced
by the mix of new customers to existing customers, the mix of short-term, line of credit and longer-term consumer loan
products in the Company’s domestic and foreign operations and the mix of foreign consumer loans as a percentage of
consolidated consumer loans.
The following table sets forth consumer loan fees by segment, adjusted for the deduction of the loan loss
provision for the years ended December 31, 2012 and 2011 (dollars in thousands):
Year Ended December 31,
2012 2011
Retail
Services E-Commerce Total
Retail
Services E-Commerce Total
Interest and fees on short-term loans $ 109,972 $ 459,793 $ 569,765 $ 110,071 $ 400,810 $ 510,881
Interest and fees on line of credit accounts - 73,572 73,572 - 30,590 30,590
Interest and fees on installment loans 11,920 126,263 138,183 9,121 48,054 57,175
Consumer loan fees $ 121,892 $ 659,628 $ 781,520 $ 119,192 $ 479,454 $ 598,646
Consumer loan loss provision 29,225 287,069 316,294 24,001 201,687 225,688
Consumer loan fees, net of loss provision $ 92,667 $ 372,559 $ 465,226 $ 95,191 $ 277,767 $ 372,958
Year-over-year change - $ $ (2,524) $ 94,792 $ 92,268 $ (1,345) $ 65,745 $ 64,400
Year-over-year change - % (2.7)% 34.1 % 24.7 % (1.4)% 31.0 % 20.9 %
Consumer loan loss provision as a % of
consumer loan fees 24.0 % 43.5 % 40.5 % 20.1 % 42.1 % 37.7 %
Combined Consumer Loans
In addition to reporting consumer loans owned by the Company and consumer loans guaranteed by the
Company, which are either GAAP items or disclosures required by GAAP, the Company has provided combined
consumer loans, which is a non-GAAP measure. In addition, the Company has reported consumer loans written and
renewed, which is statistical data that is not included in the Company’s financial statements. The Company also reports
allowances and liabilities for estimated losses on consumer loans individually and on a combined basis, which are
GAAP measures that are included in the Company’s financial statements.
Management believes these measures provide investors with important information needed to evaluate the
magnitude of potential loan losses and the opportunity for revenue performance of the consumer loan portfolio on an
aggregate basis. The comparison of the aggregate amounts from period to period is more meaningful than comparing
only the residual amount on the Company’s balance sheet since both revenue and the loss provision for loans are
impacted by the aggregate amount of loans owned by the Company and those guaranteed by the Company as reflected in
its financial statements.
Consumer Loan Balances
The outstanding combined portfolio balance of consumer loans, net of allowances and liability for estimated
losses, increased $71.6 million, or 25.6%, to $350.7 million at December 31, 2012 from $279.1 million at December 31,
2011, primarily due to increased demand for all consumer loan products from the e-commerce segment in both domestic
and foreign markets.
The combined loan balance includes $375.1 million and $285.9 million at December 31, 2012 and 2011,
respectively, of Company-owned consumer loan balances before the allowance for losses of $85.7 million and $63.1