Cash America 2013 Annual Report Download - page 159

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
134
Convertible Notes have an effective interest rate of 8.46% at both December 31, 2013 and 2012, respectively. As of
December 31, 2013, the if-converted value of the 2029 Convertible Notes exceeds the principal amount by
approximately $49.7 million. Upon conversion of the 2029 Convertible Notes, the Company may choose to pay or
deliver, as applicable, either shares of the Company’s common stock, or a combination of cash and shares of the
Company’s common stock, thereof. See Note 2 for further discussion of the dilutive effect of the 2029 Convertible
Notes on diluted net income per share.
In connection with the issuance of the 2029 Convertible Notes, the Company incurred approximately $3.9
million for issuance costs, which primarily consisted of underwriting fees, legal and other professional expenses. The
unamortized balance of these costs as of December 31, 2013 is included in “Other assets” in the consolidated balance
sheets. These costs are being amortized to interest expense over five years.
During 2013, the Company repurchased $12.0 million principal amount of the 2029 Convertible Notes in
privately negotiated transactions for aggregate cash consideration of $19.8 million plus accrued interest. In connection
with these purchases, the Company recorded a loss on extinguishment of debt of approximately $0.6 million, which is
included in “Loss on extinguishment of debt” in the consolidated statements of income.
As of December 31, 2013 and 2012, the carrying amount of the equity component recorded as additional paid-
in capital was $1.8 million and $9.4 million, respectively, net of deferred taxes and equity issuance costs.
Other
When the Company entered into the Credit Agreement in connection with its Domestic and Multi-currency
Line of Credit, it also entered into a Standby Letter of Credit Agreement (the “LC Agreement”) for the issuance of up
to $20.0 million in letters of credit (the “Letter of Credit Facility”) that is guaranteed by the Company’s domestic
subsidiaries. In the event that an amount is paid by the issuing bank under a stand-by letter of credit, it will be due and
payable by the Company on demand, and amounts due by the Company under the LC Agreement will bear interest
annually at a rate that is the lesser of (a) 2% above the prime rate for Wells Fargo Bank, National Association or (b)
the maximum rate of interest permissible under applicable laws. The LC Agreement also requires the Company to pay
quarterly fees equal to the applicable margin set forth in the LC Agreement on the undrawn amount of the credit
outstanding. When the Company amended its Credit Agreement on May 10, 2013, it also extended the maturity date of
its Letter of Credit Facility from March 31, 2015 to March 31, 2018. The Company had standby letters of credit of
$17.6 million issued under its Letter of Credit Facility as of December 31, 2013.
The Company’s debt agreements for its Domestic and Multi-currency Line of Credit and its senior unsecured
notes require the Company to maintain certain financial ratios. As of December 31, 2013, the Company was in
compliance with all covenants or other requirements set forth in its debt agreements.
As of December 31, 2013, required principal payments under the terms of the long-term debt, including the
Company’s line of credit, for each of the five years after December 31, 2013 are as follows (dollars in thousands):
Year Amount
2014 $ 22,606
2015 32,006
2016 32,720
2017 25,720
2018 506,104
Thereafter 120,833
$ 739,989