Cash America 2014 Annual Report Download - page 60

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45
RESULTS OF OPERATIONS
The Company completed a variety of strategic initiatives in 2014 that materially affected its reported
financial results for the period. In addition, during 2013, the Company was affected by certain income and expense
items that impacted comparisons between the two periods. Specifically, in 2014, the Company: i) completed the
Enova Spin-off, resulting in two publicly traded companies, ii) prepaid certain of its debt obligations, iii) completed
the sale of the non-strategic assets of its Mexico and Colorado pawn lending operations, iv) completed the 2014
Reorganization, which reorganized the Company’s corporate and field administrative functions and resulted in
severance expense, and v) ceased offering unsecured consumer loans in 311 of its locations. These events, including
their effect on the Company’s financial condition and results of operations for the year ended December 31, 2014,
are summarized below and explained in greater detail under “Recent Developments” and “Liquidity and Capital
Resources—Cash Flows—Cash Flows from Continuing Financing Activities.”
•As a result of the Enova Spin-off, operating results for Enova are presented as discontinued
operations for all periods presented. Unless stated otherwise, any reference to financial information
in this Management’s Discussion and Analysis of Financial Condition and Results of Operations
refers to results from continuing operations.
•On August 25, 2014, the Company completed the divestiture of its 47 pawn lending locations in
Mexico. The Company recorded a loss of $4.9 million related to this divestiture, which is included
in “Loss on divestitures” in the Company’s consolidated statement of income. During the year
ended December 31, 2014, the Company’s Mexico-based pawn operations reported revenue of
$17.5 million and an operating loss of $6.7 million.
•On August 25, 2014, the Company completed the divestiture of all five of its pawn lending
locations in Colorado, and recorded a loss of $0.3 million on the sale, which is included in “Loss on
divestitures” in the Company’s consolidated statement of income. During the year ended December
31, 2014, the Colorado operations reported total revenues of $2.8 million and an operating loss of
$0.1 million.
•During the year, the Company reduced its debt outstanding by $543.5 million and incurred $22.6
million in losses on debt extinguishment related to debt repayment activities, which are included in
“Loss on extinguishment of debt” in the consolidated statements of income.
•During the third and fourth quarters of 2014, the Company initiated a reorganization to better align
the corporate and operating cost structure with its storefront operations after the Enova Spin-off. In
connection with the 2014 Reorganization, the Company incurred $7.5 million of charges for
severance and other employee-related costs, which are included in “Operations and administration”
in the consolidated statements of income.
•In 2014, the Company continued its strategy to de-emphasize consumer lending and focus on its
core business of pawn lending. As a result, the Company discontinued unsecured consumer lending
activities in 311 of its locations. This reduction was in addition to the closure in 2013 of 36
locations in Texas that offered consumer loans as their primary source of revenue in connection
with the Texas Consumer Loan Store Closures.