Cash America 2013 Annual Report Download - page 137

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
112
1. Nature of the Company
Cash America International, Inc. and its subsidiaries (collectively, the “Company”) provide specialty financial
services to individuals through retail services locations and e-commerce activities.
The Company offers secured non-recourse loans, commonly referred to as pawn loans, in many of its retail
services locations in the United States and Mexico. Pawn loans are short-term loans (generally 30 to 90 days) made on
the pledge of tangible personal property. Pawn loan fees and service charges revenue is generated from the Company’s
pawn loan portfolio. A related activity of the pawn lending operations is the disposition of collateral from forfeited
pawn loans and the liquidation of a smaller volume of merchandise purchased directly from customers or from third
parties.
The Company originates, guarantees or purchases consumer loans (collectively referred to as “consumer
loans” throughout this discussion). Consumer loans provide customers with cash, typically in exchange for an
obligation to repay the amount advanced plus fees and any applicable interest. Consumer loans include short-term
loans (commonly referred to as payday loans), line of credit accounts and installment loans.
Short-term loans include unsecured short-term loans written by the Company or by a third-party lender
through the Company's credit services organization and credit access business programs (“CSO programs” as further
described below) that the Company guarantees. Line of credit accounts include draws made through the Company’s
line of credit products. Installment loans are longer-term multi-payment loans that generally require the pay-down of
portions of the outstanding principal balance in multiple installments and include unsecured loans written by the
Company and auto equity loans, which are secured by a customer's vehicle. These secured installment loans may be
written by the Company or by a third-party lender through the Company's CSO programs that the Company
guarantees. The Company offers consumer loans in many of its retail services locations in the United States and over
the internet under the names “CashNetUSA” and “NetCredit” in the United States, under the names “QuickQuid,”
“QuickQuid FlexCredit” and “Pounds to Pocket” in the United Kingdom and under the name “DollarsDirect” in
Australia and Canada.
Through the Company’s CSO programs, the Company provides services related to a third-party lender's
consumer loan products in some markets by acting as a credit services organization or credit access business on behalf
of consumers in accordance with applicable state laws. Services offered under the CSO programs include credit-related
services such as arranging loans with independent third-party lenders and assisting in the preparation of loan
applications and loan documents (“CSO loans”). Under the CSO programs, the Company guarantees consumer loan
payment obligations to the third-party lender in the event that the customer defaults on the loan. CSO loans are not
included in the Company’s financial statements, but the Company has established a liability for the estimated losses in
support of the guarantee on these loans in its consolidated balance sheets.
In addition, the Company provides check cashing and other ancillary products and services through many of
its retail services locations and through its franchised check cashing centers. The ancillary products and services are
described in Note 20.
2. Significant Accounting Policies
Basis of Presentation
The consolidated financial statements include all of the accounts of the Company. All significant
intercompany accounts and transactions have been eliminated in consolidation.
Through April 2013, 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”). The Company qualified as the primary