Cash America 2015 Annual Report Download - page 65

LIQUIDITY AND CAPITAL RESOURCES
The Company manages its liquidity and capital positions to satisfy three primary objectives. First, near-term
liquidity is managed to ensure that adequate resources are available to fund the Company’s seasonal working capital
growth, which is driven by demand for the Company’s loan products. Second, longer-term financing strategies are
used to manage the Company’s debt refinancing risk. Third, long-term capital strategies are used to provide the
capital necessary to fund the Company’s long-term strategic growth and capital investment objectives, including the
repurchase of its common stock under open market authorizations. Near-term liquidity is provided through
operating cash flows and the utilization of borrowings under the Company’s Line of Credit. Long-term liquidity is
provided through long-term debt financing and the issuance of debt securities. Long-term capital needs are managed
by assessing the growth capital needs of the Company over time and balancing those needs against the internal and
external capital resources available. Longer-term financing risk is managed by staggering the Company’s debt
maturities and issuing new long-term debt securities from time to time as market conditions permit.
The Company has historically generated significant cash flow through normal operating activities for
funding both short-term and long-term needs. As a result, operating cash flow, which may be supplemented with
borrowings under the Company’s Line of Credit, is expected to meet the needs of near-term operating objectives
without reliance on short-term credit instruments such as warehouse lines of credit, asset-backed securities or
commercial paper.
Management considers additional sources of long-term funding when strategic transactions, such as large
scale acquisitions, are necessary or desirable. Historically, funding for long-term strategic transactions has been
supplemented by the Company’s long-term unsecured bank line of credit or other long-term debt securities.
In the event of a significant decline in demand for the Company’s products and services or other unexpected
changes in financial condition, the Company could experience a violation of its debt agreements that could result in
an acceleration of the Company’s debt, increase the Company’s borrowing costs, and possibly adversely affect the
Company’s ability to renew its Line of Credit or obtain new credit on favorable terms in the future. The Company
does not anticipate a significant decline in demand for its services and has historically been successful in
maintaining compliance with, and renewing, its debt agreements. To the extent the Company experiences short-term
or long-term funding disruptions, the Company has the ability to address these risks through a variety of
adjustments related to the current assets of the business, which predominately have short durations. Such actions
could include the immediate liquidation of jewelry inventory, which is comprised primarily of gold items that would
be refined into pure gold and sold on the open market, and adjustments to its lending practices to consumers that
would reduce cash outflow requirements while increasing cash inflows through repayments of loans. Additional
alternatives may include the sale of assets, including the Enova shares held by the Company, reductions in capital
spending and/or the issuance of debt or equity securities, all of which could be expected to generate additional
liquidity.
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