Cash America 2013 Annual Report Download - page 26

1
PART I
ITEM 1. BUSINESS
Overview
General
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 was incorporated in
Texas in 1984 and has been providing specialty financial services to its customers for approximately 29 years. The
Company believes it was the nation’s largest provider of pawn loans and the largest operator of pawn shops in the world
in 2013.
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 below.
The Company has two reportable operating segments: retail services and e-commerce. The retail services
segment includes all of the operations of the Company’s Retail Services Division, which is composed of both domestic
and foreign storefront locations that offer some or all of the following services: pawn loans, consumer loans, the
purchase and sale of merchandise, check cashing and other ancillary products and services such as money orders, wire
transfers, prepaid debit cards, tax filing services and auto insurance. Most of these ancillary products and services
offered in the retail services segment are provided through third-party vendors. The e-commerce segment includes the
operations of the Company’s E-Commerce Division, which is composed of the Company’s domestic and foreign online