CASH AMERICA INTERNATIONAL INC - 10-K Annual Report

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K

(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER 1-9733
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CASH AMERICA INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)

TEXAS 75-2018239
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)

1600 WEST 7TH STREET 76102-2599
FORT WORTH, TEXAS (Zip Code)
(Address of principal executive offices)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(817) 335-1100
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SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:

COMMON STOCK PURCHASE RIGHTS

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

The aggregate market value of 21,951,743 shares of the registrant's common
stock held by nonaffiliates on June 28, 2002 was approximately $201,956,036.

At March 5, 2003 there were 24,275,409 shares of the registrant's Common
Stock, $.10 par value, issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's Annual Report to Shareholders for the year
ended December 31, 2002 and definitive Proxy Statement pertaining to the 2003
Annual Meeting of Shareholders are incorporated herein by reference into Parts
II and IV, and Part III, respectively.
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CASH AMERICA INTERNATIONAL, INC.

YEAR ENDED DECEMBER 31, 2002

INDEX TO FORM 10-K

PART I ................................................................................................................1
Item 1. Business......................................................................................1
Item 2. Properties...................................................................................15
Item 3. Legal Proceedings............................................................................18
Item 4. Submission of Matters to a Vote of Security Holders..........................................18

PART II ...............................................................................................................18
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters........................18
Item 6. Selected Financial Data......................................................................18
Item 7. Management's Discussion and Analysis of Results of Operations and Financial Condition........18
Item 7A. Quantitative and Qualitative Disclosures About Market Risk...................................18
Item 8. Financial Statements and Supplementary Data..................................................19
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.........19

PART III ...............................................................................................................19
Item 10. Directors and Executive Officers of the Registrant...................................................19
Item 11. Executive Compensation...............................................................................19
Item 12. Security Ownership of Certain Beneficial Owners and Management.......................................19
Item 13. Certain Relationships and Related Transactions.......................................................19
Item 14. Controls and Procedures . . . . . . . . . . . .......................................................20

PART IV ...............................................................................................................20
Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.....................................20

SIGNATURES..............................................................................................................22

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INTRODUCTION

Cash America International, Inc. (the "Company") was incorporated in
Texas on October 4, 1984, to succeed to the business, assets and liabilities of
a predecessor corporation formed one year earlier to engage in the pawnshop
business. As of December 31, 2002, the Company owns pawnshops through wholly-
owned subsidiaries in sixteen states and the United Kingdom and Sweden. The
Company also provides check cashing services in twenty-one states through its
subsidiary Mr. Payroll Corporation. The Company's principal executive offices
are located at 1600 West Seventh Street, Fort Worth, Texas 76102, and its
telephone number is (817) 335-1100. As used herein, the "Company" includes Cash
America International, Inc. and its subsidiaries.

PART I

ITEM 1. BUSINESS

GENERAL

The Company is a specialty financial services enterprise principally
engaged in acquiring, establishing and operating pawnshops which advance money
on the security of pledged tangible personal property. Pawnshops function as
convenient sources of consumer loans and as sellers primarily of
previously-owned merchandise acquired when customers do not redeem their pawned
goods. One convenient aspect of a pawn transaction is that the customer has no
legal obligation to repay the amount advanced. Instead, the Company relies on
the value of the pawned property as security. As a result, the creditworthiness
of the customer is not a factor, and a decision not to redeem pawned property
has no effect on the customer's personal credit status. (Although pawn
transactions can take the form of an advance of funds secured by the pledge of
property or a "buy-sell agreement" involving the actual sale of the property
with an option to repurchase it, the transactions are referred to throughout
this report as "loans" for convenience.)

The Company contracts for a finance and service charge to compensate it
for the use of the funds advanced. The finance and service charge is typically
calculated as a percentage of the loan amount based on the size and duration of
the transaction, in a manner similar to which interest is charged on a loan, and
has generally ranged from 12% to 300% annually, as permitted by applicable state
pawnshop laws. The pledged property is held through the term of the transaction,
which, in the Company's domestic operations, is generally one month with an
automatic sixty-day redemption period unless otherwise earlier repaid, renewed
or extended. (For finance and service charges and transaction periods applicable
to the Company's foreign operations, see "Business--Regulation." ). A majority
of the amounts advanced by the Company are paid in full, together with accrued
finance and service charges, or are renewed or extended through payment of
accrued finance and service charges. For the years 2000, 2001, and 2002, loans
repaid or renewed as a percentage of loans made were 67.5%, 65.6% , and 66.6%
respectively. In the event that the borrower does not redeem his pawned goods,
the unredeemed collateral is forfeited and becomes merchandise available for
disposition by the Company.

The Company's growth over the years has been the result of its business
strategy of acquiring existing pawnshops and establishing new pawnshops that can
benefit from the Company's centralized management and standardized operations.
The Company intends to continue its business strategy of acquiring and
establishing pawnshops, increasing its share of consumer loan business, and
concentrating multiple pawnshops in regional and local markets in order to
expand market penetration, enhance name recognition and reinforce marketing
programs. The Company also intends to offer new products and services in its

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pawnshops in order to meet the growing financial services needs of its
customers. Studies indicate to the Company that a large portion of its customers
consists of individuals who do not regularly transact loan business with banks.
(See, for example, John P. Caskey, Fringe Banking - Check Cashing Outlets,
Pawnshops and the Poor, 1994.) These generally are persons who may not have
checking accounts and conduct as many of their transactions as possible on a
cash basis.

The Company added five lending locations in 2002 and 10 locations were
either combined or closed. As of December 31, 2002, the Company owned 396
domestic and 59 foreign operating locations. The Company plans to expand its
operating locations through new start-ups and acquisitions.

Franchising. The Company offers and sells franchises to third parties
for their independent ownership and operation of "Cash America" pawnshops in the
United States. The Company did not sell or terminate any franchises in 2002. As
of December 31, 2002, there were 13 franchised lending locations in operation.
The Company plans to expand its franchise locations through new franchise sales.

Check Cashing. While the Company's primary business involves the
acquisition, establishment and operation of pawnshops, it also provides check
cashing services through its subsidiary, Mr. Payroll Corporation ("Mr.
Payroll"). As of December 31, 2002, Mr. Payroll operated 129 franchised and 6
company- owned manned check cashing centers in 21 states.

Website Access to Reports. Through our home page at
www.cashamerica.com, we provide free access to our Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments
to those reports as soon as reasonably practicable after such reports are
electronically filed with or furnished to the SEC.

LENDING FUNCTION

The Company is engaged primarily in the business of lending money on
the security of pledged goods. The pledged goods in the Company's domestic
operations are generally tangible personal property other than securities or
printed evidences of indebtedness and generally consist of jewelry, tools,
televisions and stereos, musical instruments, firearms, and other miscellaneous
items. In the Company's foreign operations, the pledged goods predominately
consist of jewelry. Pawn loans are made without personal liability to the
borrower. Because the loan is made without the borrower's personal liability,
the Company does not investigate the creditworthiness of the borrower, but
relies on the pledged personal property, and the possibility of its forfeiture,
as a basis for its lending decision. The pledged tangible personal property is
intended to provide security to the Company for the repayment of the amount
advanced. The Company contracts for a finance and service charge as compensation
for the use of the funds advanced. Pawn lending finance and service charges
contributed approximately 59% of the Company's net revenue (total revenue less
costs of revenue) in 2000, 56% in 2001 and 52% in 2002.

At the time a pawn transaction is entered into, a pawn transaction
agreement, commonly referred to as a pawn ticket, is delivered to the borrower
(pledgor) that sets forth, among other items, the name and address of the
pawnshop and the pledgor, the pledgor's identification number from his or her
driver's license or other approved identification, the date, the identification
and description of the pledged goods, including applicable serial numbers, the
amount financed, the finance and service charge, the maturity date, the total
amount that must be paid to redeem the pledged goods on the maturity date and
the annual percentage rate.

In the United States, the amount that the Company is willing to finance
is typically based on a percentage of the pledged personal property's estimated
disposition value. The sources for the Company's determination of the estimated
disposition value are numerous and include the Company's automated product

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valuation system as well as catalogues, "blue books," newspapers and previous
disposition experience with similar items. These sources, together with the
employees' experience in disposing of similar items of merchandise in particular
pawnshops, influence the determination of the estimated disposition value of
such items. The Company does not utilize a standard or mandated percentage of
estimated disposition value in determining the amount to be financed. Instead,
employees have the authority to set the percentage for a particular item and
determine the ratio of loan amount to estimated disposition value with the
expectation that, if the item is forfeited to the pawnshop, its subsequent
disposition would yield a gross profit margin consistent with the Company's
historical experience. The pledged property is held through the term of the
transaction, which generally is one month with an automatic sixty-day redemption
period (see "Regulation" for exceptions in certain states), unless earlier
repaid, renewed or extended. A majority of the amounts advanced by the Company
are paid in full with accrued finance and service charges or are renewed or
extended through payment of accrued finance and service charges. In the event
the pledgor does not repay, renew or extend his loan, the unredeemed collateral
is forfeited to the Company and then becomes merchandise available for
disposition. The Company does not record loan losses or charge-offs inasmuch as,
if the pledged goods are not redeemed, the amount advanced becomes the carrying
cost of the forfeited collateral that is to be recovered through the merchandise
disposition function described below.

With regard to the Company's foreign operations, the amount that the
pawnshop is willing to finance in a pledge of jewelry is typically based on a
fixed amount per gram of the gold or silver content of the pledged property plus
additional amounts for diamonds and other features which, in the unit
management's assessment, enhance the market value of the pledged property.
Similar to domestic operations, fluctuations in gold and silver prices
historically have affected the amount that the pawnshop is willing to lend
against an item. A sustained increase or decrease in the market price of gold or
silver can cause a related increase or decrease in the amount of the pawnshop's
loan portfolio and related finance and service charge revenue. The pawn loans
are made for a term of six months with an approximate annual blended yield on
average foreign pawn loans outstanding in 2002 of 54.2%. The collateral is held
through the term of the loan, and, in the event that the loan is not repaid or
renewed on or before maturity, the unredeemed collateral is disposed of at
auction or through merchandise disposition activities in the pawnshops.

For domestic and foreign operations, the recovery of the amount
advanced, as well as realization of a profit on disposition of merchandise, is
dependent on the Company's initial assessment of the property's estimated
disposition value. Improper assessment of the disposition value of the
collateral in the lending function could result in the disposition of the
merchandise for an amount less than the amount advanced. However, the Company
historically has experienced profits from the disposition of such merchandise.
Declines in gold and silver prices generally will also reduce the disposition
value of jewelry items acquired in pawn transactions and could adversely affect
the Company's ability to recover the carrying cost of the acquired collateral.
For 2000, 2001 and 2002, the Company experienced gross profit margins on
dispositions of merchandise of 33%, 35%, and 35%, respectively.

At December 31, 2002, the Company had approximately 1,186,000
outstanding loans totaling $127,388,000, with an average balance of
approximately $107 per loan.

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Presented below is information with respect to pawn loans made, acquired, repaid
and forfeited for the years ended December 31, 2000, 2001, and 2002:

In addition, the Company offers a small consumer cash advance product
through many of its existing stores. The Company introduced the small consumer
cash advance product to its broad group of locations in 2000. The product was
available in 391 domestic lending units at December 31, 2002, including 309
units that offer the product on behalf of a third-party financial institution
(the "Bank") that underwrites the advance to the customer and pays the Company a
fee for its administrative services. The product offered by the Company in 82
locations provides customers with cash in exchange for a promissory note or
other repayment agreement supported by that customer's personal check for the
aggregate amount of the cash advanced plus a service fee. The Company holds the
check for the predetermined period of the cash advance, typically less than 17
days. To repay the advance, customers may redeem their checks by paying cash or
they may allow the checks to be presented for collection. (Although these cash
advance transactions may take the form of loans or deferred check deposit
transactions, the transactions are referred to throughout this report as "cash
advances" for convenience.) As of December 31, 2002, $12,139,000 of gross cash
advances were outstanding, including $8,181,000 extended to customers by the
Bank that is not included in the Company's consolidated balance sheet. An
allowance for losses of $1,748,000 has been provided in the consolidated
financial statements. Cash advance fees earned by the Company contributed
approximately 1% of the Company's net revenue (total revenue less costs of
revenue) in 2000, 3% in 2001 and 8% in 2002.

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Under the terms of the August 2001 amendment to the Company's agreement
with the Bank, the Bank assigns each cash advance that remains unpaid after its
maturity date to the Company at a discount from the amount owed by the borrower,
and the Company undertakes the collection activity on the account. One of the
reasons for this practice is to benefit from the use of the Company's
collections resources and proficiency. As a result, losses on cash advances
assigned to the Company that prove uncollectible are the sole responsibility of
the Company. Therefore, when evaluating the Company's overall allowance for
losses, management includes estimates for these cash advance losses, while
active in the Bank's portfolio, at a level projected to be adequate to absorb
credit losses inherent in the outstanding portfolio. For additional information,
see Note 5 of "Notes to Consolidated Financial Statements" in the Company's 2002
Annual Report to Stockholders, which is incorporated herein by reference.

Presented below is information with respect to the cash advance product for the
years ended December 31, 2000, 2001 and 2002:

MERCHANDISE DISPOSITION FUNCTION

The Company engages in the disposition of merchandise acquired when a
pawn loan is not repaid, when used goods are purchased from the general public
and when new merchandise is acquired from vendors. New goods consist primarily
of accessory merchandise which enhances the marketability of existing
merchandise, such as tools, consumer electronics and jewelry. For the year ended
December 31, 2002, $151,350,000 of merchandise was added to merchandise held for
disposition, of which $122,295,000 was from loans not repaid, and $29,055,000
was purchased from customers and vendors and through acquisitions of pawnshops.

The Company does not provide its customers with warranties on used
merchandise purchased from the Company. The Company permits its customers to
purchase merchandise on a layaway plan whereby the customer agrees to purchase
an item by making an initial cash deposit representing a small portion of the
disposition price and making additional, non-interest bearing payments on the
balance of the disposition price in accordance with a specified schedule. The
Company then segregates the item and holds it until the disposition price is
paid in full. Should the customer fail to make a required payment, the item is
placed with the other merchandise held for disposition. At December 31, 2002,
the Company held approximately $4,050,000 in customer layaway deposits.

The Company provides an allowance for valuation and shrinkage of its
merchandise based on management's evaluation. Management's evaluation takes into
consideration historical shrinkage, the

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quantity and age of slow-moving merchandise on hand and markdowns necessary to
liquidate slow-moving merchandise. At December 31, 2002, total lending
operations merchandise on hand was $54,444,000, after deducting an allowance for
valuation and shrinkage of merchandise of $1,445,000.

FINANCIAL INFORMATION ON SEGMENTS AND AREAS

Additional financial information regarding the Company's revenues and
assets by each of its three operational segments and by geographic area is
provided in Note 16 of "Notes to Consolidated Financial Statements" in the
Company's 2002 Annual Report to Stockholders, which is incorporated herein by
reference.

OPERATIONS

Unit Management

Each location has a unit manager who is responsible for supervising its
personnel and assuring that it is managed in accordance with Company guidelines
and established policies and procedures. Each unit manager reports to a Market
Manager who typically oversees approximately ten unit managers. As of December
31, 2002, the Company has one operating division in the United States, which is
managed by an Executive Vice President. This operating division consists of four
geographic operating regions, each of which is managed by a Region Vice
President. Each Market Manager reports to a Region Vice President. The Harvey &
Thompson and Svensk Pantbelaning chains follow a similar management
organization, with a Managing Director overseeing each of these operations.

Trade Name

The Company operates its pawnshops under the trade name "Cash America
Pawn" in the U.S., "Harvey & Thompson Pawnbrokers" in the U.K., and "Svensk
Pantbelaning" in Sweden. The Company has registered the "Cash America" mark and
descriptive logos and phrases with the United States Patent and Trademark
Office.

Personnel

At December 31, 2002, the Company employed 3,096 persons in its
operations in 16 states, the United Kingdom and Sweden. Of the total employees,
approximately 246 were in executive and administrative functions.

The Company has an established training program that provides a
combination of classroom instruction, video presentation and on-the-job loan and
merchandise disposition experience. The new employee is introduced to the
business through an orientation program and through a three-month training
program that includes classroom and on-the-job training in loans, layaways,
merchandise and general administration of unit operations.

The experienced employee receives training and an introduction to the
fundamentals of management to acquire the skills necessary to move into
management positions within the organization. Manager training involves a
twelve-month program and includes additional management principles and more
extensive training in income maximization, recruitment, merchandise control and
cost efficiency.

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FUTURE EXPANSION

The Company's objective is to continue to expand the number of
pawnshops and cash advance locations it owns and operates through acquisitions
and by establishing new units. Management believes that such anticipated
expansion will continue to provide economies of scale in supervision,
purchasing, administration and marketing by decreasing the overall average cost
of such functions per unit owned.

The primary pawnshop acquisition criteria include evaluation of the
volume of annual loan transactions, outstanding loan balances, merchandise on
hand, disposition history, and location and condition of the facility, including
lease terms or fair market value of the facility if it is to be purchased. The
primary pawnshop start-up criteria include the facility-related items noted
above and conditions in the surrounding community indicating a sufficient level
of potential customers. The Company's business strategy is to continue expanding
its pawnshop business within its existing geographic markets and into other
markets which meet the risk/reward considerations of the Company.

The Company's expansion has not only been in acquiring previously owned
pawnshops, but also in establishing new locations. After a suitable location has
been found and a lease and license are obtained, the new location can be ready
for business within four to six weeks, with completion of counters, vaults and
security system and transfer of merchandise from other locations. The
approximate start-up costs, defined as the investment in property and equipment,
for recently established pawnshops have ranged from $181,000 to $201,000, with
an average estimated cost per location of approximately $192,000 in 2002. This
amount does not include merchandise transferred from other locations, funds to
advance on pawn loans and operating expenses.

The Company's expansion program is subject to numerous factors which
cannot be predicted, such as the availability of attractive acquisition
candidates or sites on suitable terms and general economic conditions. Further,
there can be no assurance that future expansion can be continued on a profitable
basis. Among other factors, the following factors will impact the Company's
future planned expansion.

Statutory Requirements. The Company's ability to add newly-established
locations in Texas counties having a population of more than 250,000 is limited
by a law that became effective September 1, 1999, which restricts the
establishment of new pawnshops within a certain distance of existing pawnshops.
In addition, the present statutory and regulatory environment of some states
renders expansion into those states impractical. See "Business -- Regulation."

Competition. The Company faces competition in its expansion program.
Several competing pawnshop companies have implemented expansion and acquisition
programs. A number of smaller companies have also entered the market. While the
Company believes that it is the largest pawnshop operator in the United States,
there can be no assurance that the Company will be more successful than its
competitors in pursuing acquisition opportunities and leases for attractive
start-up locations. Increased competition could also increase prices for
attractive acquisition candidates.

Capital Requirements. In some states, the Company is required by law to
maintain a minimum amount of certain unencumbered net assets (currently $150,000
in Texas) for each pawnshop location. The Company's expansion plans will
therefore be limited in these states to the extent the Company is unable to
maintain these required levels of unencumbered net assets. At present, this
requirement does not limit the Company's growth in Texas.

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Availability of Qualified Unit Management Personnel. The Company's
ability to expand may also be limited by the availability of qualified unit
management personnel. While the Company seeks to train its existing personnel to
enable those capable to assume management positions and to create attractive
compensation packages to retain existing management personnel, there can be no
assurance that sufficient qualified personnel will be available to satisfy the
Company's needs with respect to its planned expansion.

COMPETITION

The Company encounters significant competition in connection with its
lending and merchandise disposition operations. Some competitors (such as
certain commercial banks and consumer finance companies) may have greater
financial resources than the Company. Several competing pawnshop companies have
implemented expansion and acquisition programs. See "Business -- Future
Expansion." These competitive conditions may adversely affect the Company's
revenues and profitability.

The Company, in connection with the lending of money, competes with
other pawnshops and other forms of financial institutions such as consumer
finance companies, which generally lend on an unsecured as well as a secured
basis. Other lenders may lend money on terms more favorable than the Company.
The pawnshop industry is characterized by a large number of independent
owner-operators, some of whom own and operate multiple pawnshops.

REGULATION

The Company's pawnshop operations are subject to extensive regulation,
supervision and licensing under various federal, state and local statutes,
ordinances and regulations in the sixteen states and two foreign countries in
which it operates. (For a geographic breakdown of operating locations, see
"Properties.") Set forth below is a summary of the state pawnshop regulations in
those states containing a preponderance of the Company's domestic operating
locations.

Texas Pawnshop Regulations. Pursuant to the terms of the Texas Pawnshop
Act, the Texas Consumer Credit Commissioner has primary responsibility for the
regulation of pawnshops and enforcement of laws relating to pawnshops in Texas.
The Company is required to furnish the Texas Consumer Credit Commissioner with
copies of information, documents and reports which are required to be filed by
it with the Securities and Exchange Commission.

The Texas Pawnshop Act prescribes the stratified loan amounts and the
maximum allowable rates of pawn service charge that pawnbrokers in Texas may
charge for the lending of money within each stratified range of loan amounts.
That is, the Texas law establishes the maximum allowable pawn service charge
rates based on the amount financed per pawn loan. The maximum allowable rates
under the Texas Pawnshop Act for the various stratified loan amounts for the
fiscal years ended June 30, 2001, 2002 and 2003 are as follows:

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These rates are reviewed and established annually by the Texas Consumer Credit
Commissioner. The maximum allowable service charge rates were established and
have not been revised since 1971, when the Texas Pawnshop Act was enacted. Since
1981, the ceiling amounts for stratification of the loan amounts to which these
rates apply have been revised each July 1 in relation to the Consumer Price
Index. In 2001, the Texas legislature amended the Texas Pawnshop Act to
establish the ceiling amounts reflected above for the year ended June 30, 2002.
The Texas Pawnshop Act also prescribes the maximum allowable pawn loan. Under
current Texas law, a pawn loan may not exceed $12,500. In addition to
establishing maximum allowable service charge rates and loan ceilings, the Texas
Pawnshop Act also provides for the licensing of pawnshops and pawnshop
employees. To be eligible for a pawnshop license in Texas, an applicant must (i)
be of good moral character, (ii) have net assets of at least $150,000 readily
available for use in conducting the business of each licensed pawnshop, (iii)
show that the pawnshop will be operated lawfully and fairly in accordance with
the Texas Pawnshop Act, (iv) show that the applicant has the financial
responsibility, experience, character, and general fitness to command the
confidence of the public in its operations, and (v) in the case of a business
entity, the good moral character requirement shall apply to each officer,
director and holder of 5% or more of the entity's outstanding shares.

As part of the license application process, any existing pawnshop
licensee who would be affected by the granting of the proposed application may
request a public hearing at which to appear and present evidence for or against
the application. For an application for a new license in a county with a
population of 250,000 or more, the proposed facility must not be located within
two miles of an existing licensed pawnshop.

The Texas Consumer Credit Commissioner may, after notice and hearing,
suspend or revoke any license for a Texas pawnshop upon finding, among other
things, that (i) any fees or charges have not been paid; (ii) the licensee
violates (whether knowingly or unknowingly without due care) any provisions of
the Texas Pawnshop Act or any regulation or order thereunder; or (iii) any fact
or condition exists which, if it had existed at the time the original
application was filed for a license, would have justified the Commissioner in
refusing such license.

Under the Texas Pawnshop Act, a pawnbroker may not accept a pledge from
a person under the age of 18 years; make any agreement requiring the personal
liability of the borrower; accept any waiver of any right or protection accorded
to a pledgor under the Texas Pawnshop Act; fail to exercise reasonable care to
protect pledged goods from loss or damage; fail to return pledged goods to a
pledgor upon payment of the

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full amount due; make any charge for insurance in connection with a pawn
transaction; enter into any pawn transaction that has a maturity date of more
than one month; display for disposition in storefront windows or sidewalk
display cases, pistols, swords, canes, blackjacks and similar weapons; operate a
pawnshop between the hours of 9:00 p.m. and 7:00 a.m.; or purchase used or
secondhand personal property or certain building construction materials unless a
record is established containing the name, address and identification of the
seller, a complete description of the property, including serial number, and a
signed statement that the seller has the right to sell the property.

Florida Pawnshop Regulations. The Florida Pawnbroking Act, adopted in
1996, provides for the licensing and bonding of pawnbrokers in Florida and for
the Department of Agriculture and Consumer Services' Division of Consumer
Services to investigate the general fitness of applicants and generally to
regulate pawnshops in the state. The statute limits the pawn service charge that
a pawnbroker may collect to a maximum of 25% of the amount advanced in the pawn
for each 30 day period of the transaction. The law also requires pawnbrokers to
maintain detailed records of all transactions and to deliver such records to the
appropriate local law enforcement officials. Among other things, the statute
prohibits pawnbrokers from falsifying or failing to make entries in pawn
transaction forms, refusing to allow appropriate law enforcement officials to
inspect their records, failing to maintain records of pawn transactions for at
least two years, making any agreement requiring the personal liability of a
pledgor, failing to return pledged goods upon payment in full of the amount due
(unless the pledged goods had been taken into custody by a court or law
enforcement officer or otherwise lost or damaged), or engaging in title loan
transactions at licensed pawnshop locations. It also prohibits pawnbrokers from
entering into pawn transactions with a person who is under the influence of
alcohol or controlled substances, a person who is under the age of eighteen, or
a person using a name other than his own name or the registered name of his
business.

Tennessee Pawnshop Regulations. Tennessee state law provides for the
licensing of pawnbrokers in that state. It also (i) requires that pawn
transactions be reported to local law enforcement agencies, (ii) requires
pawnbrokers to maintain insurance coverage on the property held on pledge for
the benefit of the pledgor, (iii) establishes certain hours during which
pawnshops may be open for business and (iv) requires that certain bookkeeping
records be maintained. Tennessee law prohibits pawnbrokers from selling,
redeeming or disposing of any goods pledged or pawned to or with them within 48
hours after making their report to local law enforcement agencies. The Tennessee
statute establishes a maximum allowable interest rate of 24% per annum; however,
the pawnshop operator may charge an additional fee of up to one-fifth of the
amount of the loan per month for investigating the title, storing and insuring
the security and various other expenses.

Georgia Pawnshop Regulations. Georgia state law requires pawnbrokers to
maintain detailed permanent records concerning pawn transactions and to keep
them available for inspection by duly authorized law enforcement authorities.
The Georgia statute prohibits pawnbrokers from failing to make entries of
material matters in their permanent records; making false entries in their
records; falsifying, obliterating, destroying, or removing permanent records
from their places of business; refusing to allow duly authorized law enforcement
officers to inspect their records; failing to maintain records of each pawn
transaction for at least four years; accepting a pledge or purchase from a
person under the age of eighteen or who the pawnbroker knows is not the true
owner of the property; making any agreement requiring the personal liability of
the pledgor or seller or waiving any of the provisions of the Georgia statute;
or failing to return or replace pledged goods upon payment of the full amount
due (unless the pledged goods have been taken into custody by a court or a law
enforcement officer). In the event pledged goods are lost or damaged while in
the possession of the pawnbroker, the pawnbroker must replace the lost or
damaged goods with like kinds of merchandise. Under Georgia law, total interest
and service charges may not, during each thirty-day period of the loan, exceed
25% of the principal amount advanced in the pawn transaction (except that after
ninety days from the original date of the loan, the maximum rate declines to
12.5% for each subsequent

10

thirty-day period). The statute provides that municipal authorities may license
pawnbrokers, define their powers and privileges by ordinance, impose taxes upon
them, revoke their licenses, and exercise such general supervision as will
ensure fair dealing between the pawnbroker and his customers.

Oklahoma Pawnshop Regulations. The Company's Oklahoma operations are
subject to the Oklahoma Pawnshop Act. Following substantially the same statutory
scheme as the Texas Pawnshop Act, the Oklahoma Pawnshop Act provides for the
licensing and bonding of pawnbrokers in Oklahoma and provides for the Oklahoma
Administrator of Consumer Credit to investigate the general fitness of the
applicant and generally regulate pawnshops in that state. The Administrator has
broad rule-making authority with respect to Oklahoma pawnshops.

In general, the Oklahoma Pawnshop Act prescribes the stratified loan
amounts and the maximum rates of service charges which pawnbrokers in Oklahoma
may charge for lending money in Oklahoma within each stratified range of loan
amounts. The regulations provide for a graduated rate structure similar to that
utilized in federal income tax computations. For example, under this method of
calculation a $500 pawn loan earns interest as follows: (a) the first $150 at
240%, annually, (b) the next $100 at 180%, annually and (c) the remaining $250
at 120%, annually. The maximum allowable pawn service charges for the various
stratified loan amounts under the Oklahoma statute are as follows:

A pawn loan in Oklahoma may not exceed $25,000.

Louisiana Pawnshop Regulations. Louisiana law provides for the
licensing and bonding of pawnbrokers in that state. In addition, the act
requires that pawn transactions be reported to local law enforcement agencies,
establishes hours during which pawnbrokers may be open for business and requires
certain bookkeeping practices. Under the Louisiana statute, no pawnbroker may
sell any jewelry pledged as collateral until the lapse of six months from the
time the loan was made or extended by payment of accrued interest. All other
unredeemed collateral from loans can be sold after the lapse of three months.
Louisiana state law establishes maximum allowable rates of interest on pawn
loans of 10% per month. In addition, Louisiana law provides that the pawnbroker
may also charge a one-time fee not to exceed 10% for all other services. Various
municipalities and parishes in the state of Louisiana have promulgated
additional ordinances and regulations pertaining to pawnshops.

Although pawnshop regulations vary from state to state to a
considerable degree, the regulations summarized above are representative of the
regulatory frameworks affecting the Company in the various states in which its
operating units are located.

United Kingdom Regulations. Pawnshops in the United Kingdom conduct
pawn operations in a manner that is similar to the Company's domestic
operations, except that pawnshops generally lend money

11

only on the security of jewelry and gold and silver items. The Consumer Credit
Act 1974 in the United Kingdom requires that the pawnbroker notify the customer
following the expiration of the six-month loan term and before the pledged items
are sold by the pawnbroker. Unredeemed items are generally sold at auction. For
loans exceeding 75 pounds sterling, any amounts received on the auction sale in
excess of the principal amount of the loan, accrued finance and service charge
and disposition expenses must be held by the pawnbroker to be reclaimed by the
customer. If the pawnbroker is the highest bidder at the auction, it reclaims
the merchandise for later disposition from its pawnshop premises and may realize
gross profit on resale. For loans of 75 pounds sterling or less, unredeemed
merchandise is automatically forfeited to the pawnbroker, and the pawnbroker may
dispose of such merchandise to the public from the pawnshop premises and retain
any excess sales proceeds.

Pawnbrokers in the United Kingdom are licensed and regulated by the
Office of Fair Trading (the "OFT") pursuant to the Consumer Credit Act 1974.
Licenses are valid for five years, subject to possible revocation, suspension,
or variance by the OFT. Unlike most state statutes in the United States
governing pawnbrokers, the Consumer Credit Act 1974 and the regulations
promulgated thereunder do not specify a maximum allowable interest rate
chargeable by pawnbrokers in the United Kingdom. Rather, the statute prohibits
pawnbrokers from entering into "extortionate credit bargains" with customers.
Currently, the Company typically charges a rate of six percent (6%) per month.

Sweden Regulations. The regulatory environment for pawnshops in Sweden
is very similar to that in the United Kingdom. Sweden's current pawnbroking act
provides that the loan term may not exceed one year, that the pawnbroker is
entitled to default interest on arrears for a maximum of four months from the
due date, and that the pawnbroker may not dispose of unredeemed merchandise less
than two months after the due date. The disposition must take place at a public
auction, and the customer is entitled to any excess disposition proceeds after
deduction for principal, interest and other fees and charges.

Swedish law provides for licensing and supervision of pawnshops by the
local County Administrative Boards. The law does not specify a maximum allowable
interest rate for pawn loans, and it does not authorize the local County
Administrative Boards to regulate the rates that pawnbrokers may charge.
Currently, the Company typically charges a rate of between 3.25% and 3.75% per
month. Also, the act grants Swedish pawnbrokers the authority to purchase
unredeemed merchandise at the public auction and then dispose of the merchandise
to the public from the pawnshop premises.

Small Consumer Cash Advances. The Company offers a small consumer cash
advance product referred to as "cash advances" through many of its existing
stores. (See "Lending Function.") Each state in which the Company offers the
product has specific laws dealing with the conduct of this business. Typically,
the applicable regulations restrict the amount of finance and service charges
that may be assessed and limit customers' ability to renew these transactions.
In many instances, the regulations also limit the aggregate amount that a
provider may advance (and, in some cases, the number of cash advances the
provider may make) to any one customer at one time. Providers typically must
obtain a separate license from the state licensing authority in order to offer
this product. The Company must also comply with the various disclosure
requirements under the federal Truth in Lending Act (and Federal Reserve
Regulation Z promulgated under that Act) in connection with these cash advance
transactions.

As noted above, these cash advances are offered by a third-party Bank
in 309 of the Company's units (at December 31, 2002). The federal banking
regulators who supervise the Bank's activities closely scrutinize all aspects of
the Bank's cash advance program. Further, certain state regulators have asserted
that the Company must have a license under state law in order to perform the
administrative services that it performs for the Bank. In addition to some of
these federal and state regulators, a number of consumer advocacy groups and
federal and state legislators have asserted that laws and regulations should be
tightened

12

so as to severely limit, if not eliminate, the availability of this cash advance
product to consumers, despite the significant demand for it. Along with the
leadership of the short-term cash advance industry, the Company opposes such
overly restrictive regulation and legislation. Nevertheless, the possibility
exists that some combination of federal and state regulation and legislation
could come to pass, which could restrict, or even eliminate, the availability of
this cash advance product at some or all of the Company's stores.

During January 2003, the Company announced its intent to change
third-party providers of these cash advances, and the Bank announced that it
would be exiting the cash advance business. The new third-party providers will
be state-chartered financial institutions supervised by the Federal Deposit
Insurance Corporation ("FDIC"). The transition will occur over the first four
months of 2003. The FDIC has recently developed draft guidelines for cash
advance programs that would apply to all financial institutions under the FDIC's
supervision that offer these programs. The guidelines describe the FDIC's
expectations for prudent risk management practices for cash advance activities,
particularly with regard to capital, allowance for loan losses, and loan
classifications. The draft also addresses guidelines for recovery practices,
income recognition, and managing risks associated with third-party
relationships, as well as compliance with consumer protection laws. The Company
anticipates that the FDIC will issue final guidelines on or about March 31, 2003
and that the guidelines should form the basis for sound and appropriate
regulation of cash advance programs conducted by FDIC-supervised financial
institutions.

Other Regulatory Matters, Etc. With respect to firearm sales, each of
the pawnshops must comply with the Brady Handgun Violence Prevention Act (the
"Brady Act"), which took effect on February 28, 1994. The Brady Act imposes a
background check requirement in connection with the disposition of firearms by
federally licensed firearms dealers. In addition, the Company must continue to
comply with the longstanding regulations promulgated by the Department of the
Treasury, Bureau of Alcohol, Tobacco and Firearms which require each pawnshop
dealing in guns to maintain a permanent written record of all receipts and
dispositions of firearms.

Under the federal Gramm-Leach-Bliley Act that took effect in 2001 and
the federal regulations adopted to implement it, the Company is required to
disclose to its customers its privacy policy and practices, including those
relating to the sharing of customers' nonpublic personal information with third
parties. The disclosure must be made to customers at the time that the customer
relationship is established and at least annually thereafter. Under these
regulations, the Company is also required to ensure that its systems are
designed to protect the confidentiality of customers' nonpublic personal
information.

Under the USA PATRIOT Act passed by Congress in 2001, the Company will
be required to maintain an anti-money laundering compliance program. The program
must include (1) the development of internal policies, procedures, and controls;
(2) the designation of a compliance officer; (3) an ongoing employee training
program; and (4) an independent audit function to test the program. The United
States Department of Treasury is expected to issue regulations specifying the
appropriate features and elements of anti-money laundering compliance programs
for the pawnbroking and short-term cash advance industries.

In addition to the federal and state statutes and regulations described
above, many of the Company's pawnshops are subject to municipal ordinances,
which may require, for example, local licenses or permits and specified
recordkeeping procedures, among other things. Each of the Company's pawnshops
voluntarily or pursuant to municipal ordinance provides to the police department
having jurisdiction copies of all daily transactions involving pawn loans and
over-the-counter purchases. These daily transaction reports are designed to
provide the local police with a detailed description of the goods involved
including serial numbers, if any, and the name and address of the owner obtained
from a valid identification card.

13

A copy of the transaction ticket is provided to local law enforcement
agencies for processing to determine conflicting claims of rightful ownership.
Goods held to secure pawn loans or goods purchased which are determined to
belong to an owner other than the borrower or seller are subject to recovery by
the rightful owner. However, the Company historically has not experienced a
material number of claims of this sort, and the claims experienced have not had
a material adverse effect on the Company's results of operations.

Casualty insurance, including burglary coverage, is maintained for each
of the Company's pawnshops, and fidelity coverage is maintained on each of the
Company's employees.

Management of the Company believes its operations are conducted in
material compliance with all federal, state and local laws and ordinances
applicable to its business.

The Company's franchising activities may be subject to various state
regulations that, among other things, mandate disclosures to prospective
franchisees and other requirements.

EXECUTIVE OFFICERS

The following sets forth, as of March 5, 2003, certain data concerning
the executive officers of the Company, all of whom are elected on an annual
basis. There is no family relationship between any of the executive officers.

Daniel R. Feehan has been Chief Executive Officer and President since
February 2000. He has served as President and Chief Operating Officer since
January 1990. He served as Chairman and Co-Chief Executive Officer of Mr.
Payroll Corporation from February 1998 to February 1999 before returning to the
position of President and Chief Operating Officer of the Company.

Thomas A. Bessant, Jr. joined the Company in May 1993 as Vice President
- - Finance and Treasurer. He was elected Senior Vice President - Chief Financial
Officer in July 1997 and has served as Executive Vice President - Chief
Financial Officer since July 1998. Prior to joining the Company, Mr. Bessant was
a Senior Manager in the Corporate Finance Consulting Services Group of Arthur
Andersen & Co., S. C. in Dallas, Texas from June 1989. Prior to that time, Mr.
Bessant was Vice President in the Corporate Banking Division of NCNB Texas,
N.A., and its predecessor banking corporations, beginning in 1981.

Robert D. Brockman joined the Company in July 1995 as Executive Vice
President-Administration. Prior to that, he served as Vice President - Human
Resources of THORN Americas, Inc., the operator of the Rent-A-Center chain of
rent-to-own stores, from December 1986 to June 1995.

14

Jerry D. Finn joined the Company in August 1994 and has served in various
operations management positions since then, including Division Vice President
from January 1995 to July 1997, Division Senior Vice President from July 1997 to
April 1998, and Executive Vice President since April 1998. Prior to joining the
Company, he served as District Supervisor for Kelly-Moore Paint Co. from March
1981 to August 1994.

Michael D. Gaston joined the Company in April 1997 as Executive Vice
President - Business Development. Prior to joining the Company, Mr. Gaston
served as President of the Gaston Corporation, a private consulting firm, from
1984 to April 1997, and Executive Vice President of Barkley & Evergreen, an
advertising and consulting agency, from 1991 to April 1997.

William R. Horne joined the Company in February 1991 as Vice President-MIS.
He was elected Senior Vice President-Information Technology in July 1997 and has
served as Executive Vice President-Information Technology since October 1999.

James H. Kauffman joined the Company in July 1996 as Executive Vice
President - Chief Financial Officer. He served as President - Cash America Pawn
from July 1997 to July 1998, and served as Chief Executive Officer of
Rent-A-Tire, Inc. from July 1998 until August 2002. He has also served as
Executive Vice President-International Operations since October 1999. Prior to
joining the Company, Mr. Kauffman served as President of Keystone Steel & Wire
Company, a wire products manufacturer, from July 1991 to June 1996.

Hugh A. Simpson joined the Company in December 1990 as Vice President and
General Counsel and was elected Vice President - General Counsel and Secretary
in April 1991. He was elected Senior Vice President - General Counsel and
Secretary in July 1997 and has served as Executive Vice President - General
Counsel and Secretary since July 1998.

ITEM 2. PROPERTIES

As of March 5, 2003, the Company owns the real estate and building for
six of its domestic pawnshop locations and four of its pawnshop locations in the
United Kingdom. Since May 1992, the Company's headquarters have been located in
a nine-story building adjacent to downtown Fort Worth, Texas. The Company
purchased the building in January 1992. On March 28, 2000, a tornado severely
damaged the building. Headquarters operations were relocated to temporary
facilities. The Company's operating locations were not affected. Restoration of
the building began in the fourth quarter of 2000 and was completed in the fourth
quarter of 2001. The Company's insurance coverage provided proceeds for repairs
to the building; replacement of furniture, improvements, and equipment; recovery
of losses resulting from business interruption; and recovery of other general
expenses. All of the Company's other locations are leased from unaffiliated
parties under non-cancelable operating leases with terms ranging from 3 to 10
years.

15

The following table sets forth, as of March 5, 2003, the geographic
markets served by the Company and the number of owned lending locations in such
markets in which it presently operates.

16

NORTH CAROLINA:
Charlotte...................................................................... 6
Greensboro/Winston Salem....................................................... 3
Other.......................................................................... 1
---
Total North Carolina....................................................... 10
---

ALABAMA:
Mobile......................................................................... 4
Birmingham..................................................................... 4
Other ......................................................................... 1
---
Total Alabama.............................................................. 9
---

KENTUCKY:
Louisville..................................................................... 9
---

ILLINOIS:
Chicago........................................................................ 9
Other.......................................................................... 1
---
Total Illinois ............................................................ 10
---

SOUTH CAROLINA:
Charleston..................................................................... 3
Greenville..................................................................... 3
---
Total South Carolina....................................................... 6
---
UTAH:
Salt Lake City................................................................. 6
---

OHIO:
Cincinnati..................................................................... 6
---

COLORADO:
Colorado Springs............................................................... 3
Denver......................................................................... 1
Other ......................................................................... 1
---
Total Colorado............................................................. 5
---
Total United States........................................................ 393
---

UNITED KINGDOM:
London......................................................................... 30
Other ......................................................................... 21
---
Total United Kingdom....................................................... 51
---

SWEDEN:
Stockholm...................................................................... 4
Other.......................................................................... 7
---
Total Sweden............................................................... 11
---

GRAND TOTAL...................................................................... 455
===

17

The Company considers its equipment, furniture and fixtures and owned
buildings to be in good condition. The Company has its own construction
supervisors who engage local contractors to selectively remodel and upgrade its
domestic pawnshop facilities throughout the year.

The Company's leases typically require the Company to pay all
maintenance costs, insurance costs and property taxes. For additional
information concerning the Company's leases see Note 19 of Notes to Consolidated
Financial Statements in the Company's 2002 Annual Report to Stockholders
("Annual Report"), which is incorporated herein by reference.

ITEM 3. LEGAL PROCEEDINGS

The Company is a defendant in certain lawsuits encountered in the
ordinary course of its business. Certain of these matters are covered to an
extent by insurance. In the opinion of management, the resolution of these
matters will not have a material adverse effect on the Company's financial
position, results of operations or liquidity.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to the Company's security holders
during the fourth quarter ended December 31, 2002.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Information contained under the caption "Common Stock Data" in the
Annual Report is incorporated herein by reference in response to this Item 5.

ITEM 6. SELECTED FINANCIAL DATA

Information contained under the caption "Five Year Summary of Selected
Financial Data" in the Annual Report is incorporated herein by reference in
response to this Item 6.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION

Information contained under the caption "Management's Discussion and
Analysis of Results of Operations and Financial Condition" in the Annual Report
is incorporated herein by reference in response to this Item 7.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Information contained under the caption "Quantitative and Qualitative
Disclosures About Market Risk" in the Annual Report is incorporated herein by
reference in response to this Item 7A.

18

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Information contained under the captions "Consolidated Financial
Statements," "Notes to Consolidated Financial Statements," and "Quarterly
Financial Data" in the Annual Report is incorporated herein by reference in
response to this Item 8.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information contained under the caption "Election of Directors" in the
Company's Notice of Annual Meeting and Proxy Statement for the Company's 2003
Annual Meeting of Shareholders (the "Proxy Statement") is incorporated herein by
reference in response to this Item 10. See Item 1, "Executive Officers" for
information concerning executive officers.

ITEM 11. EXECUTIVE COMPENSATION

Information contained under the caption "Executive Compensation" in the
Proxy Statement is incorporated herein by reference in response to this Item 11.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Information contained under the caption "Security Ownership of Certain
Beneficial Owners and Management" in the Proxy Statement is incorporated herein
by reference in response to this Item 12. Information regarding the Company's
equity compensation plans is set forth in the section entitled "Executive
Compensation-Equity Compensation Plan Information" in the Proxy Statement, which
information is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information contained under the caption "Executive Compensation" in the
Proxy Statement is incorporated herein by reference in response to this Item 13.

19

ITEM 14. CONTROLS AND PROCEDURES

(a) Under the supervision and with the participation of the
Company's Chief Executive Officer and Chief Financial Officer,
management of the Company has evaluated the effectiveness of
the design and operation of the Company's disclosure controls
and procedures (as defined in Rule 13a-14(c) under the
Securities Exchange Act of 1934) as of a date (the "Evaluation
Date") within 90 days prior to the filing date of this report.
Based upon that evaluation, the Chief Executive Officer and
Chief Financial Officer concluded that, as of the Evaluation
Date, the Company's disclosure controls and procedures are
effective in timely alerting them to the material information
relating to the Company required to be included in its
periodic filings with the Securities and Exchange Commission.

(b) There were no significant changes in the Company's internal
controls or in other factors that could significantly affect
these controls subsequent to the Evaluation Date. No
significant deficiencies or material weaknesses in the
Company's internal controls were identified. Therefore, no
corrective actions were taken.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)(1) The following financial statements of the Company and Report
of Independent Accountants are contained in the Annual Report
and are incorporated herein by reference.

CONSOLIDATED FINANCIAL STATEMENTS:

Consolidated Balance Sheets as of December 31, 2002 and 2001.

Consolidated Statements of Operations for the years ended
December 31, 2002, 2001 and 2000.

Consolidated Statements of Cash Flows for the years ended
December 31, 2002, 2001 and 2000.

Consolidated Statements of Stockholders' Equity for the years
ended December 31, 2002, 2001 and 2000.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

REPORT OF INDEPENDENT ACCOUNTANTS

(2) The following financial statement schedule of the Company is
included herein.

Schedule II -- Valuation Accounts.

Report of Independent Accountants on Financial Statement
Schedule.

20

All other schedules for which provision is made in the
applicable accounting regulation of the Securities and
Exchange Commission are not required under the related
instructions, are inapplicable, or the required information is
included elsewhere in the financial statements.

(3) The exhibits filed in response to Item 601 of Regulation S-K
are listed in the Exhibit Index on pages 28 through 31.

(b) During the fourth quarter ended December 31, 2002, the Company did not
file any reports on Form 8-K.

21

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on March 14, 2003.

CASH AMERICA INTERNATIONAL, INC.

By: /s/ DANIEL R. FEEHAN
-------------------------------------
Daniel R. Feehan
Chief Executive Officer and President

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on March 14, 2003 on behalf
of the registrant and in the capacities indicated.

22

/s/ B. D. HUNTER Director March 14, 2003
- -----------------------------------------
B. D. Hunter

/s/ TIMOTHY J. McKIBBEN Director March 14, 2003
- -----------------------------------------
Timothy J. McKibben

/s/ ALFRED M. MICALLEF Director March 14, 2003
- -----------------------------------------
Alfred M. Micallef

/s/ CLIFTON H. MORRIS, JR. Director March 14, 2003
- -----------------------------------------
Clifton H. Morris, Jr.

23

CERTIFICATION

I, Daniel R. Feehan, Chief Executive Officer and President, certify that:

1. I have reviewed this annual report on Form 10-K of Cash
America International, Inc. ("registrant");

2. Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light
of the circumstances under which such statements were made,
not misleading with respect to the period covered by this
annual report;

3. Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly
present in all material respects the financial condition,
results of operations and cash flows of the registrant as of,
and for, the periods presented in this annual report;

4. The registrant's other certifying officer and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules
13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to
ensure that material information relating to the
registrant, including its consolidated subsidiaries,
is made known to us by others within those entities,
particularly during the period in which this annual
report is being prepared;

b) evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date
within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about
the effectiveness of the disclosure controls and
procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officer and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of registrant's
board of directors (or persons performing the equivalent
function):

a) all significant deficiencies in the design or
operation of internal controls which could adversely
affect the registrant's ability to record, process,
summarize and report financial data and have
identified for the registrant's auditors any material
weaknesses in internal controls; and

b) any fraud, whether or not material, that involves
management or other employees who have a significant
role in the registrant's internal controls; and

6. The registrant's other certifying officer and I have indicated
in this annual report whether or not there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material
weaknesses.

Date: March 14, 2003

/s/ Daniel R. Feehan
- --------------------------------------
Daniel R. Feehan
Chief Executive Officer and President

24

CERTIFICATION

I, Thomas A Bessant, Jr., Executive Vice President and Chief Financial Officer,
certify that:

1. I have reviewed this annual report on Form 10-K of Cash
America International, Inc. ("registrant");

2. Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light
of the circumstances under which such statements were made,
not misleading with respect to the period covered by this
annual report;

3. Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly
present in all material respects the financial condition,
results of operations and cash flows of the registrant as of,
and for, the periods presented in this annual report;

4. The registrant's other certifying officer and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules
13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to
ensure that material information relating to the
registrant, including its consolidated subsidiaries,
is made known to us by others within those entities,
particularly during the period in which this annual
report is being prepared;

b) evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date
within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about
the effectiveness of the disclosure controls and
procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officer and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of registrant's
board of directors (or persons performing the equivalent
function):

a) all significant deficiencies in the design or
operation of internal controls which could adversely
affect the registrant's ability to record, process,
summarize and report financial data and have
identified for the registrant's auditors any material
weaknesses in internal controls; and

b) any fraud, whether or not material, that involves
management or other employees who have a significant
role in the registrant's internal controls; and

6. The registrant's other certifying officer and I have indicated
in this annual report whether or not there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material
weaknesses.

Date: March 14, 2003

/s/ Thomas A. Bessant, Jr.
- -------------------------------
Thomas A. Bessant, Jr.
Executive Vice President and
Chief Financial Officer

25

CASH AMERICA INTERNATIONAL, INC.

SCHEDULE II- VALUATION ACCOUNTS

For the Three Years Ended December 31, 2002

(Dollars in thousands)

- ----------
(a) Deducted from allowance for write-off or other disposition of merchandise.

(b) Recoveries.

26

REPORT OF INDEPENDENT ACCOUNTANTS

ON FINANCIAL STATEMENT SCHEDULE

To the Board of Directors and Stockholders

Cash America International, Inc.

Our audits of the consolidated financial statements referred to in our report
dated January 23, 2003, appearing in the 2002 Annual Report to Shareholders of
Cash America International, Inc. (which report and consolidated financial
statements are incorporated by reference in this Annual Report on Form 10-K)
also included an audit of the financial statement schedule listed in Item
15(a)(2) of this Form 10-K. In our opinion, this financial statement schedule
presents fairly, in all material respects, the information set forth therein
when read in conjunction with the related consolidated financial statements.

PRICEWATERHOUSECOOPERS LLP

Fort Worth, Texas

January 23, 2003

27

EXHIBIT INDEX

The following documents are filed as a part of this report. Those
exhibits previously filed and incorporated herein by reference are identified by
reference to the list of prior filings after the list of exhibits. Exhibits not
required for this report have been omitted.

28

10.7 --Amendment to 1994 Long-Term Incentive Plan dated April 20, 1999.
(r) (Exhibit 10.1)

10.8 --Amendment to 1994 Long-Term Incentive Plan dated May 16, 2001.

10.9 --Amended and Restated Executive Employment Agreement between the
Company and Mr. Feehan dated as of April 29, 2001. (t) (Exhibit
10.1)

10.10 --Consultation Agreements between the Company and Messrs. Dike,
Hunter, Motheral, and Rizzo, each dated April 25, 1990. (k) (Exhibit
10.49)

10.11 --Note Agreement between the Company and Teachers Insurance and
Annuity Association of America dated as of May 6, 1993. (l) (Exhibit
10.1)

10.12 --First Supplement to Note Agreement between the Company and
Teachers Insurance and Annuity Association of America dated as of
September 20, 1994. (i) (Exhibit 10.11)

10.13 --Second Supplement (May 12, 1995), Third Supplement (July 7, 1995),
and Fourth Supplement (November 10, 1995) to 1993 Note Agreement
between the Company and Teachers Insurance and Annuity Association
of America. (m) (Exhibit 10.1)

10.14 --Fifth Supplement (December 30, 1996) to 1993 Note Agreement
between the Company and Teachers Insurance and Annuity Association
of America. (h) (Exhibit 10.13)

10.15 --Sixth Supplement (December 30, 1997) to 1993 Note Agreement
between the Company and Teachers Insurance and Annuity Association
of America. (n) (Exhibit 10.16)

10.16 --Seventh Supplement (December 31, 1998) to 1993 Note Agreement
between the Company and Teachers Insurance and Annuity Association
of America. (o) (Exhibit 10.18)

10.17 --Eighth Supplement (September 29, 1999) to 1993 Note Agreement
between the Company and Teachers Insurance and Annuity Association
of America. (p) (Exhibit 10.3)

10.18 --Ninth Supplement (June 30, 2000) to 1993 Note Agreement between
the Company and Teachers Insurance and Annuity Association of
America. (s) (Exhibit 10.3)

10.19 --Tenth Supplement (September 30, 2001) to 1993 Note Agreement
between the Company and Teachers Insurance and Annuity Association
of America. (u) (Exhibit 10.18)

10.20 --Note Agreement between the Company and Teachers Insurance and
Annuity Association of America dated as of July 7, 1995. (q)
(Exhibit 10.1)

10.21 --First Supplement (November 10, 1995) to 1995 Note Agreement
between the Company and Teachers Insurance and Annuity Association
of America. (m) (Exhibit 10.2)

10.22 --Second Supplement (December 30, 1996) to 1995 Note Agreement
between the Company and Teachers Insurance and Annuity Association
of America. (h) (Exhibit 10.16)

10.23 --Third Supplement (December 30, 1997) to 1995 Note Agreement
between the Company and Teachers Insurance and Annuity Association
of America. (n) (Exhibit 10.20)

10.24 --Fourth Supplement (December 31, 1998) to 1995 Note Agreement
between the Company and Teachers Insurance and Annuity Association
of America. (o) (Exhibit 10.23)

10.25 --Fifth Supplement (September 29, 1999) to 1995 Note Agreement
between the Company and Teachers Insurance and Annuity Association
of America. (p) (Exhibit 10.2)

29

10.26 --Sixth Supplement (June 30, 2000) to 1995 Note Agreement between
the Company and Teachers Insurance and Annuity Association of
America. (s) (Exhibit 10.2)

10.27 --Seventh Supplement (September 30, 2001) to 1995 Note Agreement
between the Company and Teachers Insurance and Annuity Association
of America. (u) (Exhibit 10.26)

10.28 --Note Agreement dated as of December 1, 1997 among the Company and
the Purchasers named therein for the issuance of the Company's 7.10%
Senior Notes due January 2, 2008 in the aggregate principal amount
of $30,000,000. (n) (Exhibit 10.23)

10.29 --First Supplement (December 31, 1998) to Note Agreement dated as of
December 1, 1997 among the Company and the Purchasers named therein.
(o) (Exhibit 10.29)

10.30 --Second Supplement (September 29, 1999) to Note Agreement dated as
of December 1, 1997 among the Company and the Purchasers named
therein. (p) (Exhibit 10.1)

10.31 --Third Supplement (June 30, 2000) to Note Agreement dated as of
December 1, 1997 among the Company and the Purchasers named therein.
(s) (Exhibit 10.1)

10.32 --Fourth Supplement (September 30, 2001) to Note Agreement dated as
of December 1, 1997 among the Company and the Purchasers named
therein. (u) (Exhibit 10.38)

10.33 --Note Agreement dated as of August 12, 2002 among the Company and
the Purchasers named therein for the issuance of the Company's 7.20%
Senior Notes due August 12, 2009 in the aggregate principal amount
of $42,500,000. (v) (Exhibit 10.1)

10.34 --Credit Agreement among the Company, certain lenders named therein,
and Wells Fargo Bank Texas, National Association, as Administrative
Agent dated as of August 14, 2002. (v) (Exhibit 10.2)

13 --Portions of the 2002 Annual Report to Stockholders of the Company
specifically incorporated by reference herein.

21 --Subsidiaries of Cash America International, Inc.

23 --Consent of PricewaterhouseCoopers LLP.

99.1 --Certification of Chief Executive Officer pursuant to 18 U.S.C.
Section 1350.

99.2 --Certification of Chief Financial Officer pursuant to 18 U.S.C.
Section 1350.

- ----------
Certain Exhibits are incorporated by reference to the Exhibits shown in
parenthesis contained in the Company's following filings with the Securities and
Exchange Commission:

(a) Registration Statement Form S-1, File No. 33-10752.

(b) Amendment No. 1 to its Registration Statement on Form S-4, File No.
33-17275.

(c) Annual Report on Form 10-K for the year ended December 31, 1992.

(d) Annual Report on Form 10-K for the year ended December 31, 1993.

(e) Post-Effective Amendment No. 1 to its Registration Statement on Form S-4,
File No. 33-17275.

30

(f) Annual Report on Form 10-K for the year ended December 31, 1990.

(g) Annual Report on Form 10-K for the year ended December 31, 1989.

(h) Annual Report on Form 10-K for the year ended December 31, 1996.

(i) Annual Report on Form 10-K for the year ended December 31, 1994.

(j) Quarterly Report on Form 10-Q for the quarter ended September 30, 1997.

(k) Post-Effective Amendment No. 4 to its Registration Statement on Form S-4,
File No. 33-17275.

(l) Quarterly Report on Form 10-Q for the quarter ended March 31, 1993.

(m) Quarterly Report on Form 10-Q for the quarter ended September 30,1995.

(n) Annual Report on Form 10-K for the year ended December 31, 1997.

(o) Annual Report on Form 10-K for the year ended December 31, 1998.

(p) Quarterly Report on Form 10-Q for the quarter ended September 30, 1999.

(q) Quarterly Report on Form 10-Q for the quarter ended June 30, 1995.

(r) Quarterly Report on Form 10-Q for the quarter ended June 30, 1999.

(s) Quarterly Report on Form 10-Q for the quarter ended September 30, 2000.

(t) Quarterly Report on Form 10-Q for the quarter ended June 30, 2001.

(u) Annual Report on Form 10-K for the year ended December 31, 2001.

(v) Current Report on Form 8-K dated August 15, 2002.

31