Cash America 2014 Annual Report Download - page 99

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CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
84
All capitalized terms referenced throughout the notes to the consolidated financial statements have the
meanings set forth in the “Definitions and Commonly Used Terms” section of this Annual Report.
1. Nature of the Company
The Company provides specialty financial services to individuals through its storefront lending and
franchised check cashing locations. The Company’s primary line of business is pawn lending. Pawn loans are short-
term loans made on the pledge of tangible personal property. Pawn loan fees and service charges are 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.
Another component of the Company's business is originating, arranging, guaranteeing or purchasing
consumer loans in some of its locations. 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) and installment loans.
Short-term consumer loans include unsecured short-term loans written by the Company or by a third-party
lender through the Company’s CSO programs that the Company guarantees. See Note 2 for further discussion about
the Company’s CSO programs. Installment consumer loans are longer-term, multi-payment loans that generally
require the pay-down of portions of the outstanding principal balance in multiple installments. Installment loans
include unsecured loans and loans secured by a customer’s vehicle written by the Company or by a third-party
lender through the CSO programs that the Company guarantees.
Another small component of the Company's business includes the offering of check cashing and other
ancillary products and services through some of its Company-owned lending locations. The ancillary products and
services are described in Note 19. In addition, the Company’s franchised check cashing business offers check
cashing services through its franchised check cashing centers.
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 other than those related to Enova (as discussed further below) have been
eliminated in consolidation. Upon completion of the Enova Spin-off (See Note 3), the Company reclassified
Enova’s financial results to discontinued operations in the Company’s consolidated financial statements for all
periods presented. Intercompany accounts and transactions related to Enova are presented separately between the
Company’s continuing and discontinued operations. These accounts and transactions were previously eliminated in
the Company’s consolidated financial statements. This presentation detail is included in the financial statements due
to the significance of these accounts and transactions. The specific elements are reflected in “Note receivable”,
“Interest income”, “Interest income on note receivable”, “Proceeds from note receivable” and “Dividends received”
in the Company’s consolidated financial statements. These reclassifications had no impact on consolidated results
previously reported.
Additionally, amounts for “Other” income and “Operations and administration” expenses were reduced by
approximately $0.6 million to correct certain reversals of expense accrual amounts previously reported in the
Company’s financial statements for the year ended December 31, 2013. Management determined that the impact of
this change on previously-issued financial statements was immaterial, and this change had no impact on
consolidated results previously reported.