Cash America 2013 Annual Report Download - page 59

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obtained a Private Letter Ruling from the Internal Revenue Service (the “IRS”), with respect to one of the various
factors that the Company considered in making this determination. Because there are a number of factors that must be
considered in making this determination, some of which were not specifically addressed in the Private Letter Ruling, the
IRS could challenge the availability and/or characterization of the loss. If the deduction is ultimately denied or is
determined to be a capital loss by the IRS, the Company may be required to reverse the previously recognized tax
benefit and may be required to make additional income tax payments, which could materially adversely affect the
Company’s results of operations and cash flows.
The Company is subject to the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act of 2010 and other
anticorruption laws, and the Company’s failure to comply therewith could result in penalties that could harm its
reputation and have a material adverse effect on its business, prospects, results of operations, financial condition and
cash flows.
The Company is subject to the U.S. Foreign Corrupt Practices Act (the “FCPA”), which generally prohibits
companies and their agents or intermediaries from making improper payments to foreign officials for the purpose of
obtaining or keeping business and/or other benefits. Although the Company has policies and procedures designed to
ensure that the Company, its employees, agents and intermediaries comply with the FCPA and other anticorruption laws,
there can be no assurance that such policies or procedures will work effectively all of the time or protect the Company
against liability for actions taken by its employees, agents and intermediaries with respect to its business or any
businesses that it may acquire. In the event that the Company believes, or has reason to believe, that its employees,
agents or intermediaries have or may have violated applicable anti-corruption laws, including the FCPA, the Company
may be required to investigate or have a third party investigate the relevant facts and circumstances, which can be
expensive and require significant time and attention from senior management. The Company’s continued operation and
expansion outside the United States could increase the risk of such violations in the future. If the Company is not in
compliance with the FCPA and other laws governing the conduct of business with government entities (including local
laws), the Company may be subject to criminal and civil penalties and other remedial measures, which could have an
adverse effect on the Company’s business, results of operations and financial condition. Any investigation of any
potential violations of the FCPA or other anticorruption laws by U.S. or foreign authorities could harm the Company’s
reputation and could have a material adverse effect on its business, prospects, results of operations, financial condition
and cash flows.
The Company is also subject to other anti-corruption laws, such as the U.K. Bribery Act 2010 (the “Bribery
Act”). The Bribery Act prohibits bribery of public officials, and it also makes failing to prevent bribery by relevant
commercial organizations a criminal offense. This offense applies when any person associated with the organization
offers or accepts bribes anywhere in the world intending to obtain or retain a business advantage for the organization or
in the conduct of business. The Bribery Act is applicable to businesses that operate in the United Kingdom such as the
Company. The Bribery Act is broader in scope than the FCPA in that it directly addresses commercial bribery in
addition to bribery of government officials and it does not recognize certain exceptions, notably facilitation payments
that are permitted by the FCPA. As with the FCPA, if the Company is not in compliance with the Bribery Act as well as
similar laws that are applicable to the Company’s business in the United Kingdom or in other countries where the
Company does business, or in the future may do business, it may be subject to criminal and civil penalties and other
remedial measures, which could have an adverse effect on the Company’s business, results of operations and financial
condition.
Increased competition from banks, savings and loans, other consumer lenders, and other entities offering similar
financial services, as well as retail businesses that offer products and services offered by the Company, could
adversely affect the Company’s business, prospects, results of operations, financial condition and cash flows.
The Company has many competitors. Its principal competitors are other pawnshops, consumer loan companies,
CSOs, online lenders, consumer finance companies and other financial institutions that serve the Company’s primary
customer base. Many other financial institutions or other businesses that do not now offer products or services directed
toward the Company’s traditional customer base, many of whom may be much larger than the Company, could begin
doing so. Significant increases in the number and size of competitors for the Company’s business could result in a
decrease in the number of consumer loans or pawn loans that the Company writes, resulting in lower levels of revenue
and earnings in these categories.