Cash America 2013 Annual Report Download - page 121

96
$12.0 million related to the net deferred tax assets at its Mexico-based pawn operations, $0.5 million related to the net
deferred tax assets in Mexico generated by the e-commerce segment, and $9.3 million related to the deferred tax asset
associated with the Creazione stock basis difference. Without the effect of these items the Company’s effective tax rate
for 2012 would have been 38.6%. The increase of 0.7% over the 2011 rate was primarily due to increased losses from
foreign operations subject to lower foreign statutory tax rates.
Net Loss Attributable to the Noncontrolling Interest
Net loss attributable to the noncontrolling interest increased by $5.0 million from 2011 to 2012, primarily due to
increased losses in foreign retail services operations and expenses related to the Mexico Reorganization.
Prior to 2012, the Company had a contractual relationship with a third-party entity, Huminal, S.A. de C.V., a
Mexican sociedad anónima de capital variable (“Huminal”), to compensate and maintain the labor force of its Mexico
pawn operations. On January 1, 2012, the labor force of the Mexico pawn operations was transferred from Huminal to a
wholly-owned subsidiary of Creazione. However, Prenda Fácil qualifies as the primary beneficiary of Huminal in
accordance with FASB ASC 810. Therefore, the results and balances of Huminal are consolidated and allocated to net
income attributable to noncontrolling interests. Upon completing the purchase of the noncontrolling interest in
Creazione in September 2012, Huminal became the only remaining noncontrolling interest reported by the Company.
As of December 31, 2012, the Company’s Mexico-based pawn operations were owned by Creazione. Prior to
September 26, 2012, the Company owned 80% of the outstanding stock of Creazione. On September 26, 2012, the
Company acquired all outstanding shares of Creazione that were held by minority shareholders (approximately 20% of
the outstanding shares), and, as a result, Creazione became a wholly-owned subsidiary of the Company as of that date.
The Company paid approximately $5.6 million in cash and released the minority shareholders from certain contingent
obligations estimated at approximately $2.8 million. The Company accounted for this transaction as an acquisition of the
remaining interest of a majority-owned subsidiary. The purchase resulted in a reduction to additional paid in capital of
$7.7 million, representing the excess of the cash amount paid and the released contingent obligations (totaling $8.4
million) less the carrying amount of the noncontrolling interest of $0.7 million. In January 2013, the Company’s
remaining Mexico-based pawn operations were sold by Creazione to another wholly-owned subsidiary, CA Empeños
Mexico, S. de R.L. de C.V., and began operating exclusively under the name “Cash America casa de empeño.”