UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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

Commission File Number 1-9733

(Exact name of registrant as specified in its charter)

Texas		75-2018239
(State or other jurisdiction of		(I.R.S. Employer
Incorporation or organization)		Identification No.)
1600 West 7th Street
Fort Worth, Texas		76102
(Address of principal executive offices)		(Zip Code)

(817) 335-1100
(Registrant’s telephone number, including area code)

NONE
(Former name, former address and former fiscal year, if changed since last report)

     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   þ       No   o

     Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes   o       No   o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer þ		Accelerated filer o		Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes   o       No   þ

APPLICABLE ONLY TO CORPORATE ISSUERS:

29,302,025 of the Registrants’ common shares, $.10 par value, were issued and outstanding as of October 16, 2009.

 

 

CASH AMERICA INTERNATIONAL, INC.

INDEX TO FORM 10-Q

		Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets — September 30, 2009 and 2008 and December 31, 2008			1
Consolidated Statements of Income — Three and Nine Months Ended September 30, 2009 and 2008			2
Consolidated Statements of Equity — September 30, 2009 and 2008			3
Consolidated Statements of Comprehensive Income — Three and Nine Months Ended September 30, 2009 and 2008			4
Consolidated Statements of Cash Flows — Nine Months Ended September 30, 2009 and 2008			5
Notes to Consolidated Financial Statements			6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			30
Item 3. Quantitative and Qualitative Disclosures About Market Risk			62
Item 4. Controls and Procedures			62
PART II. OTHER INFORMATION
Item 1. Legal Proceedings			62
Item 1A. Risk Factors			62
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			64
Item 3. Defaults upon Senior Securities			64
Item 4. Submission of Matters to a Vote of Security Holders			65
Item 5. Other Information			65
Item 6. Exhibits			66
SIGNATURE			67
EX-10.1
EX-10.2
EX-10.3
EX-10.4
EX-10.5
EX-10.6
EX-31.1
EX-31.2
EX-32.1
EX-32.2

CAUTIONARY NOTE CONCERNING FACTORS THAT MAY AFFECT FUTURE RESULTS

   This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. You should not place undue reliance on these statements. These forward-looking statements give current expectations or forecasts of future events and reflect the views and assumptions of our senior management with respect to the business, financial condition and prospects of Cash America International, Inc. (the “Company”). When used in this report, terms such as “believes,” “estimates,” “should,” “could,” “would,” “plans,” “expects,” “anticipates,” “may,” “forecast,” “project” and similar expressions or variations as they relate to the Company or its management are intended to identify forward-looking statements. Forward-looking statements address matters that involve risks and uncertainties that are beyond the ability of the Company to control and, in some cases, predict. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements. Among the key factors that could cause our actual financial results, performance or condition to differ from the expectations expressed or implied in such forward-looking statements include, but are not limited to, the following:

	•		changes in pawn, consumer credit, tax and other laws and government rules and regulations applicable to the Company’s business,
	•		changes in demand for the Company’s services,
	•		the continued acceptance of the online distribution channel by the Company’s cash advance customers,
	•		the actions of third-parties who offer products and services to or for the Company,
	•		fluctuations in the price of gold,
	•		changes in competition,
	•		the ability of the Company to open new operating units in accordance with its plans,
	•		changes in economic conditions,
	•		real estate market fluctuations,
	•		interest rate fluctuations,
	•		changes in foreign currency exchange rates,
	•		changes in the capital markets,
	•		the ability to successfully integrate newly acquired businesses into the Company’s operations,
	•		the loss of services of any of our executive officers,
	•		the effect of any current or future litigation proceedings on the Company,
	•		acts of God, war or terrorism, pandemics and other events,
	•		the effect of any of such changes on the Company’s business or the markets in which we operate, and
	•		other risks and uncertainties described in this report or from time to time in the Company’s filings with the Securities and Exchange Commission (the “SEC”).

The foregoing list of factors is not exhaustive and new factors may emerge or changes to these factors may occur that would impact the Company’s business. Additional information regarding these and other factors may be contained in our filings with the SEC, especially on Forms 10-K, 10-Q and 8-K. If one or more events related to these or other risks or uncertainties materialize, or if management’s underlying assumptions prove to be incorrect, actual results may differ materially from what the Company anticipates. The Company disclaims any intention or obligation to update or revise any forward-looking statements to reflect events or circumstances occurring after the date of this report. All forward-looking statements are expressly qualified in their entirety by the foregoing cautionary statements.

PART I. FINANCIAL INFORMATION

		September 30,								December 31,
		2009				2008				2008
		(Unaudited)
Assets
Current assets:
Cash and cash equivalents		$	28,532			$	29,754			$	30,005
Pawn loans			190,478				158,226				168,747
Cash advances, net			93,472				87,034				83,850
Merchandise held for disposition, net			116,890				111,053				109,493
Finance and service charges receivable			36,228				29,658				33,063
Income taxes receivable			—				1,306				2,606
Other receivables and prepaid expenses			21,155				13,658				15,480
Deferred tax assets			23,894				22,088				22,037
Total current assets			510,649				452,777				465,281
Property and equipment, net			188,363				181,524				185,887
Goodwill			493,384				420,840				494,192
Intangible assets, net			28,787				21,634				35,428
Other assets			7,829				3,501				5,722
Total assets		$	1,229,012			$	1,080,276			$	1,186,510
Liabilities and Equity
Current liabilities:
Accounts payable and accrued expenses		$	73,804			$	66,414			$	79,759
Accrued supplemental acquisition payment			—				69,499				47,064
Customer deposits			9,547				8,754				8,814
Income taxes currently payable			5,258				—				—
Current portion of long-term debt			17,512				8,500				15,810
Total current liabilities			106,121				153,167				151,447
Deferred tax liabilities			40,103				25,826				27,575
Noncurrent income tax payable			4,051				—				3,050
Other liabilities			3,929				2,202				2,359
Long-term debt			429,096				343,692				422,344
Total liabilities		$	583,300			$	524,887			$	606,775
Equity:
Cash America International, Inc. equity:
Common stock, $.10 par value per share, 80,000,000 shares authorized, 30,235,164 shares issued			3,024				3,024				3,024
Additional paid-in capital			166,278				163,678				160,007
Retained earnings			500,150				424,999				440,252
Accumulated other comprehensive loss			(1,607	)			(59	)			(3,964	)
Treasury shares, at cost (965,371 shares, 1,218,075 shares and 818,772 shares at September 30, 2009 and 2008, and at December 31, 2008, respectively			(27,759	)			(36,253	)			(24,278	)
Total Cash America International, Inc. stockholders’ equity			640,086				555,389				575,041
Noncontrolling interest			5,626				—				4,694
Total equity			645,712				555,389				579,735
Total liabilities and equity		$	1,229,012			$	1,080,276			$	1,186,510

See notes to consolidated financial statements.

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2009				2008				2009				2008
		(Unaudited)
Revenue
Finance and service charges		$	59,920			$	46,977			$	167,159			$	133,788
Proceeds from disposition of merchandise			114,786				105,517				354,719				330,189
Cash advance fees			98,209				96,301				263,119				274,610
Check cashing fees, royalties and other			3,209				3,355				11,599				12,476
Total Revenue			276,124				252,150				796,596				751,063
Cost of Revenue
Disposed merchandise			75,542				68,033				229,578				206,290
Net Revenue			200,582				184,117				567,018				544,773
Expenses
Operations			89,368				82,319				261,284				243,553
Cash advance loss provision			37,690				40,950				91,642				102,817
Administration			21,875				15,359				66,031				53,890
Depreciation and amortization			10,219				9,298				30,953				27,956
Total Expenses			159,152				147,926				449,910				428,216
Income from Operations			41,430				36,191				117,108				116,557
Interest expense			(5,436	)			(4,292	)			(15,591	)			(11,005	)
Interest income			7				113				26				220
Foreign currency transaction gain (loss)			(150	)			(5	)			(19	)			(77	)
Income before Income Taxes			35,851				32,007				101,524				105,695
Provision for income taxes			13,103				13,082				37,732				40,822
Net Income			22,748				18,925				63,792				64,873
Less: Net income attributable to the noncontrolling interest			(270	)			—				(797	)			—
Net Income Attributable to Cash America International, Inc.		$	22,478			$	18,925			$	62,995			$	64,873
Earnings Per Share:
Net Income attributable to Cash America International, Inc. common stockholders:
Basic		$	0.76			$	0.65			$	2.12			$	2.21
Diluted		$	0.73			$	0.63			$	2.06			$	2.16
Weighted average common shares outstanding:
Basic			29,702				29,266				29,757				29,321
Diluted			30,698				30,035				30,524				30,082
Dividends declared per common share		$	0.035			$	0.035			$	0.105			$	0.105

See notes to consolidated financial statements.

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES

		September 30,
		2009								2008
		Shares				Amounts				Shares				Amounts
		(Unaudited)
Common stock
Balance at end of period			30,235,164			$	3,024				30,235,164			$	3,024
Additional paid-in capital
Balance at beginning of year							160,007								163,581
Shares issued under stock based plans							(6,019	)							(3,496	)
Stock-based compensation expense							2,351								3,016
Income tax benefit from stock based compensation							517								577
Issuance of convertible debt							9,422								—
Balance at end of period							166,278								163,678
Retained earnings
Balance at beginning of year							440,252								363,180
Net income attributable to Cash America International, Inc.							62,995								64,873
Dividends declared							(3,097	)							(3,054	)
Balance at end of period							500,150								424,999
Accumulated other comprehensive (loss) income
Balance at beginning of year							(3,964	)							16
Unrealized derivatives gain (loss )							31								(7	)
Foreign currency translation gain (loss), net of taxes							2,326								(68	)
Balance at end of period							(1,607	)							(59	)
Treasury shares, at cost
Balance at beginning of year			(818,772	)			(24,278	)			(1,136,203	)			(33,199	)
Purchases of treasury shares			(392,852	)			(10,543	)			(219,021	)			(7,144	)
Shares issued under stock based plans			246,253				7,062				137,149				4,090
Balance at end of period			(965,371	)			(27,759	)			(1,218,075	)			(36,253	)
Total Cash America International, Inc. stockholders’ equity							640,086								555,389
Noncontrolling interests
Balance at beginning of year							4,694								—
Income attributable to noncontrolling interests							797								—
Foreign currency translation gain, net of taxes							135								—
Balance at end of period							5,626								—
Total equity						$	645,712							$	555,389

See notes to consolidated financial statements.

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2009				2008				2009				2008
		(Unaudited)								(Unaudited)
Net income		$	22,748			$	18,925			$	63,792			$	64,873
Other comprehensive gain (loss), net of tax:
Unrealized derivatives gain (loss) (1)			(30	)			(3	)			31				(7	)
Foreign currency translation gain (loss) (2)			(2,185	)			(55	)			2,326				(68	)
Total other comprehensive gain (loss), net of tax			(2,215	)			(58	)			2,357				(75	)
Comprehensive income		$	20,533			$	18,867			$	66,149			$	64,798
Less: Net income attributable to the noncontrolling interest			(270	)			—				(797	)			—
Foreign currency translation gain (loss) attributable to the noncontrolling interest			(133	)			—				135				—
Total Comprehensive income attributable to the noncontrolling interest			(403	)			—				(662	)			—
Comprehensive Income attributable to Cash America International, Inc.		$	20,130			$	18,867			$	65,487			$	64,798

See notes to consolidated financial statements.

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES

		Nine Months Ended
		September 30,
		2009				2008
		(Unaudited)
Cash Flows from Operating Activities
Net Income		$	63,792			$	64,873
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			30,953				27,956
Amortization of discount on convertible debt			1,154				—
Cash advance loss provision			91,642				102,817
Loss on disposal of property and equipment			801				—
Stock-based compensation			2,351				3,016
Foreign currency transaction (gain) loss			19				77
Deferred income taxes, net			6,146				5,399
Changes in operating assets and liabilities
Merchandise held for disposition			(12,530	)			(12,434	)
Finance and service charges receivable			(1,257	)			(3,510	)
Prepaid expenses and other assets			(7,103	)			(2,874	)
Accounts payable and accrued expenses			(4,115	)			1,355
Customer deposits, net			726				895
Current income taxes			8,381				(4,484	)
Excess income tax benefit from stock-based compensation			(517	)			(577	)
Non current income taxes payable			914				—
Net cash provided by operating activities			181,357				182,509
Cash Flows from Investing Activities
Pawn loans made			(459,391	)			(371,381	)
Pawn loans repaid			262,447				184,398
Principal recovered through dispositions of forfeited loans			180,833				165,794
Cash advances made, assigned or purchased			(882,408	)			(843,651	)
Cash advances repaid			779,972				744,204
Acquisitions, net of cash acquired			(42,481	)			(65,220	)
Purchases of property and equipment			(29,418	)			(44,461	)
Proceeds from property insurance			517				864
Net cash used in investing activities			(189,929	)			(229,453	)
Cash Flows from Financing Activities
Net repayments under bank lines of credit			(74,622	)			71,915
Issuance of long-term debt			115,000				—
Net proceeds from re-issuance of treasury shares			1,043				594
Loan costs paid			(3,943	)			(310	)
Payments on notes payable and other obligations			(18,500	)			(8,500	)
Excess income tax benefit from stock-based compensation			517				577
Treasury shares purchased			(10,543	)			(7,144	)
Dividends paid			(3,097	)			(3,054	)
Net cash provided by financing activities			5,855				54,078
Effect of exchange rates on cash			1,244				(105	)
Net (decrease) increase in cash and cash equivalents			(1,473	)			7,029
Cash and cash equivalents at beginning of year			30,005				22,725
Cash and cash equivalents at end of period		$	28,532			$	29,754
Supplemental Disclosures
Non-cash investing and financing activities
Pawn loans forfeited and transferred to merchandise held for disposition		$	175,700			$	166,235
Pawn loans renewed		$	81,510			$	71,173
Cash advances renewed		$	246,996			$	270,996

See notes to consolidated financial statements.

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES

1. Significant Accounting Policies

Basis of Presentation

     The consolidated financial statements include the accounts of Cash America International, Inc. and its majority-owned subsidiaries (the “Company”). All significant intercompany accounts and transactions have been eliminated in consolidation.

     The financial statements as of September 30, 2009 and 2008 and for the three and nine month periods then ended are unaudited but, in management’s opinion, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for such interim periods. Operating results for the three and nine month periods are not necessarily indicative of the results that may be expected for the full fiscal year.

     Certain amounts in the consolidated financial statements for the three and nine months ended September 30, 2008 have been reclassified to conform to the presentation format adopted in 2009. These reclassifications have no effect on the net income previously reported.

     The Company has a contractual relationship with a third-party entity, Huminal, S.A. de C.V., a Mexican sociedad anónima de capital variable (“Huminal”), to compensate and maintain the labor force of its Mexico pawn operations, of which the Company is a majority owner due to the December 16, 2008 acquisition (the “Prenda Fácil acquisition”) by the Company of 80% of the outstanding stock of Creazione Estilo, S.A. de C.V., SOFOM, E.N.R., a Mexican sociedad anónima de capital variable, sociedad financiera de objeto múltiple, entidad no regulada (“Creazione”), operating under the name “Prenda Fácil” (referred to as “Prenda Fácil”). The Company has no ownership interest in Huminal; however, Prenda Fácil qualifies as the primary beneficiary of Huminal in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810-10-50, Variable Interest Entities.

     These financial statements and related notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008.

Foreign Currency Translations

     The functional currencies for the Company’s subsidiaries that serve residents of the United Kingdom, Australia, and Mexico are the British pound, the Australian dollar and the Mexican peso, respectively. The assets and liabilities of these subsidiaries are translated into U.S. dollars at the exchange rates in effect at each balance sheet date, and the resulting adjustments are accumulated in other comprehensive income (loss) as a separate component of equity. Revenue and expenses are translated at the monthly average exchange rates occurring during each year.

Revenue Recognition

Pawn Lending • The Company offers pawn loans through its lending locations and through its unconsolidated franchised locations. Pawn loans are made on the pledge of tangible personal property. In the Company’s U.S. pawn business, it accrues finance and service charges revenue only on those pawn loans that it deems collectible based on historical loan redemption statistics. Pawn loans written during each calendar month are aggregated and tracked for performance. The gathering of this empirical data allows the Company

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

to analyze the characteristics of its outstanding pawn loan portfolio and estimate the probability of collection of finance and service charges. For loans not repaid, the carrying value of the forfeited collateral (“merchandise held for disposition”) is stated at the lower of cost (cash amount loaned) or market. Revenue is recognized at the time merchandise is sold. Interim customer payments for layaway sales are recorded as customer deposits and subsequently recognized as revenue during the period in which the final payment is received.

     In the Company’s foreign pawn loan business, service charges are accrued ratably over the four week term of the loan and up to an additional three week grace period for loans not redeemed prior to maturity. Following the expiration of the grace period, the collateral underlying unredeemed loans is sold with the proceeds applied against the outstanding loan balance and accrued service charges. Accrued interest on loans that have passed the maturity date and the expiration of the grace period is fully reserved to the extent that the underlying collateral has not been sold. If the proceeds from the sale are less than the outstanding loan balance, a loss is recorded for the difference at the time the collateral is sold. If the proceeds exceed the outstanding loan balance, the Company recognizes the accrued service charges and other fees. In the event there are proceeds greater than the accrued service charges and fees, the excess amount is due back to the customer if a claim is made within six months, after which any unclaimed excess amount is recognized as revenue. The collateral underlying unredeemed loans is not owned by the Company; therefore, it is held in Pawn loans on the Company’s consolidated balance sheets until sold.

Cash Advances • The Company offers cash advance products through its cash advance locations, through its internet distribution platform and many of its pawn lending locations. In addition, the Company arranges for customers to obtain cash advances from independent third-party lenders in other locations. Cash advance fees include revenue from the cash advance portfolio owned by the Company and fees paid to the Company for arranging, marketing or processing cash advance line of credit products from independent third-party lenders for customers through the CSO program (as described below) and the Company’s card services business. Cash advance fees associated with the Company’s card services business include revenue from the Company’s participation interest in the receivables generated by the third-party lender, as well as marketing, processing and other miscellaneous fee income. Although cash advance transactions may take the form of loans, deferred check deposit transactions, credit services transactions, or the marketing and processing of, and the participation in receivables generated by, a third-party lender’s line of credit product, the transactions are referred to throughout this discussion as “cash advances” for convenience.

     Cash advances provide customers with cash in exchange for a promissory note or other repayment agreement supported, in most cases, by that customer’s personal check or authorization to debit that customer’s account via an Automated Clearing House (“ACH”) transaction for the aggregate amount of the payment due. The customer may repay the cash advance either in cash, or, as applicable, by allowing the check to be presented for collection or the customer’s checking or debit account to be debited through an ACH for the aggregate amount of the payment due. The Company accrues fees and interest on cash advances on a constant yield basis ratably over the period of the cash advance, pursuant to its terms. These cash advance loans typically have terms of seven to 45 days and are generally payable on the customer’s next payday.

     The Company provides a cash advance product in some markets by acting as a credit services organization on behalf of consumers in accordance with applicable state laws (the “CSO program”). The CSO program includes arranging loans with independent third-party lenders, assisting in the preparation of loan applications and loan documents and accepting loan payments. The Company also guarantees the customer’s payment obligations in the event of default if the customer is approved for and accepts the loan. A customer who obtains a loan through the CSO program pays the Company a fee for these credit services

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(“CSO fees”). CSO fees are deferred and amortized over the term of the loan and recorded as cash advance fees in the accompanying consolidated statements of income. The contingent loss on the guaranteed loans is accrued and recorded as a liability.

     As of September 30, 2009, $161.6 million of combined gross cash advances were outstanding, including $43.4 million owned by the third-party lenders that is not included in the Company’s consolidated balance sheets. In July 2008, the Company discontinued offering the CSO program to customers in Florida and began underwriting its own loans pursuant to the Florida deferred presentment statute. In July 2009 the Company’s online distribution channel began offering a CSO program in Ohio and a similar program in Australia. As of September 30, 2009, the CSO program was offered in Texas, Maryland, Ohio and Australia.

     The Company introduced an online longer-term installment loan product, which typically has an average term of four months, during the fourth quarter of 2008 and now offers installment loans in New Mexico, Illinois and South Carolina. The Company records revenue from this product as cash advance fees.

     In connection with the Company’s card services business, the Company provides marketing and loan processing services for a third-party bank issued line of credit on certain stored-value debit cards the bank issues (“Processing Program”). The Company also acquires a participation interest in the receivables generated by the bank in connection with the Processing Program. The Company classifies revenue from its participation interest in the receivables, as well as marketing, processing and other miscellaneous fee income generated from its card services business as cash advance fees.

Check Cashing Fees, Royalties and Other • The Company offers check cashing services through its unconsolidated franchised and Company-owned check cashing locations. The Company records check cashing fees derived from both check cashing locations it owns and many of its pawn and cash advance lending locations in the period in which the check cashing service is provided. It records royalties derived from franchise locations on an accrual basis. Revenue derived from other financial services such as money order commissions, prepaid debit card fees, etc. is recognized when earned.

Allowance for Losses on Cash Advances

     See Note 3 for a discussion of the Company’s allowance for losses on cash advances.

Goodwill and Other Intangible Assets

     In accordance with FASB ASC 350-20-35, Goodwill — Subsequent Measurement the Company is required to perform an impairment review of goodwill at least annually, which it does for each reporting unit as of June 30. The Company has completed its June 2009 test and determined that there was no evidence of goodwill impairment.

     The Company amortizes intangible assets with an estimable life on the basis of their expected periods of benefit, generally three to ten years. The costs of start-up activities and organization costs are charged to expense as incurred.

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Recent Accounting Pronouncements

     The FASB issued ASC 105-10-05, Generally Accepted Accounting Principles, which establishes the Accounting Standards Codification (“Codification” or “ASC”) as the single source of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities laws are also sources of GAAP for SEC registrants. The Codification supersedes all existing non-SEC accounting and reporting standards.

     GAAP is not intended to be changed as a result of the Codification, but the ASC does change the way the guidance is organized and presented. As a result, these changes have a significant impact on how companies reference GAAP in their financial statements and in their accounting policies for financial statements issued for interim and annual periods ending after September 15, 2009. The Company has included the references to the Codification, as appropriate, in these consolidated financial statements.

     In September 2006, FASB issued ASC 820-10-20, Fair Value Measurements and Disclosures (“ASC 820-10-20”), which defines fair value to be the price that would be received when an asset is sold or paid when a liability is transferred in an orderly transaction between market participants at the measurement date and emphasizes that fair value is a market-based measurement, not an entity-specific measurement. It establishes a fair value hierarchy and expands disclosures about fair value measurements in both interim and annual periods. On January 1, 2008, the Company adopted ASC 820-10-20 for its financial assets and financial liabilities, and on January 1, 2009, the Company adopted ASC 820-10-20 for its nonfinancial assets and nonfinancial liabilities. The adoption of ASC 820-10-20 did not have a material impact on the Company’s financial position or results of operations.

     In October 2008, FASB issued ASC 820-10-65-2, Transition Related to FASB Staff Position FAS 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active (“ASC 820-10-65-2”), which clarifies the application of ASC 820-10, Fair Value Measurements and Disclosures, as it relates to the valuation of financial assets in a market that is not active for those financial assets. ASC 820-10-65-2 became effective for the Company upon issuance and did not have a material impact on the Company’s financial position or results of operations and did not materially affect how the Company determines fair value, but has resulted in certain additional disclosures. See Note 9.

     In December 2007, FASB issued ASC 810-10-65, Transition Related to FASB Statement No. 160, Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51 (“ASC 810-10-65”), which establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. ASC 810-10-65 clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as a component of equity in the consolidated financial statements. Among other requirements, ASC 810-10-65 requires consolidated net income to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest. It also requires disclosure, on the face of the consolidated income statement, of the amounts of consolidated net income attributable to the parent and to the noncontrolling interest. ASC 810-10-65 is effective for financial statements issued for fiscal years beginning on or after December 15, 2008. The Company adopted ASC 810-10-65 on January 1, 2009 for disclosures relating to its interest in Prenda Fácil, and the adoption did not have a material impact on the Company’s financial position or results of operations.

     In December 2007, FASB issued ASC 805-10-65, Transition Related to FASB Statement No. 141 (Revised 2007), Business Combinations (“ASC 805-10-65”), which establishes principles and requirements for how an acquiror in a business combination (1) recognizes and measures in its financial statements the

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; (2) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase price; and (3) determines what information to disclose to enable users of the consolidated financial statements to evaluate the nature and financial effects of the business combination. ASC 805-10-65 applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The Company adopted ASC 805-10-65 on January 1, 2009. The application of ASC 805-10-65 will cause management to evaluate future transactions under different conditions than previously completed significant acquisitions, particularly related to the near-term and long-term economic impact of expensing transaction costs.

     In March 2008, FASB issued ASC 815-10-65, Transition and Effective Date Related to FASB Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133 (“ASC 815-10-65”), which requires enhanced disclosures concerning (1) the manner in which an entity uses derivatives (and the reasons it uses them), (2) the manner in which derivatives and related hedged items are accounted for and (3) the effects that derivatives and related hedged items have on an entity’s financial position, financial performance, and cash flows. ASC 815-10-65 is effective for financial statements issued for fiscal years and interim periods beginning on or after November 15, 2008. The Company adopted ASC 815-10-65 on January 1, 2009 and the adoption did not have a material impact on the Company’s financial position or results of operations. See Note 10.

     In April 2009, FASB issued ASC 825-10-65, Transition Related to FSP FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments (“ASC 825-10-65”), which requires disclosures about fair value of financial instruments for interim reporting periods as well as in annual financial statements for interim reporting periods ending after June 15, 2009. The Company adopted ASC 825-10-65 on June 30, 2009, and the adoption did not have a material impact on the Company’s financial position or results of operations. See Note 8.

     In May 2009, FASB issued ASC 855-10-05 through ASC 855-10-55, Subsequent Events (“ASC 855-10”), which establishes principles and standards related to the accounting for and disclosure of events that occur after the balance sheet date but before the financial statements are issued. ASC 855-10-25, Recognition requires an entity to recognize, in the financial statements, subsequent events that provide additional information regarding conditions that existed at the balance sheet date. Subsequent events that provide information about conditions that did not exist at the balance sheet date shall not be recognized in the financial statements under ASC 855-10. ASC 855-10 was effective for interim and annual reporting periods on or after June 15, 2009. The Company adopted ASC 855-10 on June 30, 2009, and the adoption did not have a material impact on the Company’s financial position or results of operations.

     In August 2009, FASB issued ASC Update No. 2009-4, Accounting for Redeemable Equity Instruments (“ASU 2009-4”), which represents an update to ASC 480-10-S99, Distinguishing Liabilities from Equity. ASU 2009-4 includes disclosure requirements for redeemable securities. ASU 2009-4 became effective for the Company upon issuance and did not have a material impact on the Company’s financial position or results of operations.

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Acquisitions

Prenda Fácil

     Pursuant to its business strategy of expanding its reach into new markets with new customers and new financial services, the Company, through its wholly-owned subsidiary, Cash America of Mexico, Inc., completed the Prenda Fácil acquisition in December 2008. The Company paid an aggregate initial consideration of $90.5 million, net of cash acquired, of which $82.6 million was paid in cash, including acquisition costs of approximately $3.4 million. The remainder of the initial consideration was paid in the form of 391,236 shares of the Company’s common stock with a fair value of $7.9 million as of the closing date. The Company also agreed to pay a supplemental earn-out payment in an amount based on a five times multiple of the consolidated earnings of Creazione’s business as specifically defined in the Stock Purchase Agreement (generally Creazione’s earnings before interest, income taxes, depreciation and amortization expenses) for the twelve-month period ending June 30, 2011, reduced by amounts previously paid. If the calculation of the supplemental payment produces an amount that is zero or less, there would be no supplemental payment. This supplemental payment is expected to be paid in cash on or before August 15, 2011. This payment will be accounted for as goodwill. The activities of Creazione are included in the results of the Company’s pawn lending segment.

     The Company is in the process of finalizing its allocation of the purchase price to individual assets acquired and liabilities assumed as a result of the acquisition of Creazione. This may result in potential adjustments to the carrying value of Creazione’s recorded assets and liabilities. The preliminary allocation of the purchase price included in the current period balance sheet is based on the best estimates of management and is subject to revision based on final determination of asset fair values and useful lives.

     During the first quarter of 2009, the Company acquired one pawn lending location in Mexico for approximately $33,000.

Primary Innovations, LLC

     Pursuant to its business strategy of expanding its reach into new markets, the Company, through its wholly-owned subsidiary, Primary Cash Holdings, LLC (now known as Primary Innovations, LLC, or “PI”), on July 23, 2008, purchased substantially all the assets of Primary Business Services, Inc., Primary Finance, Inc., Primary Processing, Inc. and Primary Members Insurance Services, Inc. (collectively, “PBSI”), a group of companies in the business of, among other things, providing loan processing services for, and participating in receivables associated with, a bank issued line of credit made available by the bank on certain stored-value debit cards the bank issues. The Company paid approximately $5.6 million in cash, of which approximately $4.9 million was used to repay a loan that the Company had made to PBSI, and transaction costs of approximately $0.3 million. The Company also agreed to pay up to eight supplemental earn-out payments during the four-year period after the closing. The first supplemental payment of a minimum agreed amount of $2.7 million was made on April 1, 2009. The amount of each subsequent supplemental payment is to be based on a multiple of 3.5 times the consolidated earnings attributable to PI’s business, as defined in the Asset Purchase Agreement, for a specified period (generally 12 months) preceding each scheduled supplemental payment measurement date, reduced by amounts previously paid. The first supplemental payment was accounted for as goodwill, and the remaining supplemental payments will be accounted for as goodwill. Based on the terms of the agreement, no payment was due for the second supplemental payment calculated for the June 30, 2009 measurement date. In addition, as of September 30, 2009 no additional supplemental payment has been accrued for the December 31, 2009 measurement date based on the amounts previously paid in connection with the initial purchase price and the first supplemental payment. The remaining supplemental

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

payments will be calculated as described above based on measurement dates of each December 31 and June 30 through June 30, 2012, with each payment due, if any, within approximately 45 days after the applicable measurement date. The activities of PI are included in the results of the Company’s cash advance segment.

CashNetUSA

     Pursuant to its business strategy of expanding its reach into new markets with new customers and new financial services, on September 15, 2006, the Company, through its wholly-owned subsidiary Cash America Net Holdings, LLC, purchased substantially all of the assets of The Check Giant LLC (“TCG”). TCG offered short-term cash advances exclusively over the internet under the name “CashNetUSA.” The Company paid an initial purchase price of approximately $35.9 million in cash and transaction costs of approximately $2.9 million. The Company has continued to use the CashNetUSA trade name in connection with its online operations.

     The Company also agreed to pay up to five supplemental earn-out payments during the two-year period after the closing. The amount of each supplemental payment was based on a multiple of earnings attributable to CashNetUSA’s business as defined in the purchase agreement, for the twelve months preceding the date of determining each scheduled supplemental payment. All of these supplemental payments were accounted for as goodwill. The Company paid $214.3 million in supplemental payments and a $5.0 million final true-up payment. The true-up payment was paid on April 27, 2009. This was the final payment related to this transaction, resulting in a final purchase price of $255.2 million.

3. Cash advances, Allowance for Losses and Accruals for Losses on Third-Party Lender-Owned Cash Advances

     In order to manage the portfolio of cash advances effectively, the Company utilizes a variety of underwriting criteria, monitors the performance of the portfolio and maintains either an allowance or accrual for losses on cash advances (including fees and interest) at a level estimated to be adequate to absorb credit losses inherent in the receivables portfolio and expected losses from CSO guarantees. The allowance for losses on Company-owned cash advances offsets the outstanding cash advance amounts in the consolidated balance sheets. See Note 1 for a discussion of the Company’s cash advance products.

     With respect to CSO guarantees, if the Company collects a customer’s delinquent payment in an amount that is less than the amount the Company paid to the third-party lender pursuant to the guarantee, the Company must absorb the shortfall. If the amount collected exceeds the amount paid under the guarantee, the Company is entitled to the excess and recognizes the excess amount in income. Since the Company may not be successful in collecting delinquent amounts, the Company’s cash advance loss provision includes amounts estimated to be adequate to absorb credit losses from cash advances in the aggregate cash advance portfolio, including those expected to be acquired by the Company as a result of its guarantee obligations. The estimated amounts of losses on portfolios owned by the third-party lenders are included in “Accounts payable and accrued expenses” in the consolidated balance sheets. Active third-party lender-originated cash advances in which the Company does not have a participation interest are not included in the consolidated balance sheets.

     With respect to the Company’s card services business, losses on cash advances in which the Company has a participation interest that prove uncollectible are the responsibility of the Company. Since the Company may not be successful in the collection of these accounts, the Company’s cash advance loss provision also includes amounts estimated to be adequate to absorb credit losses from these cash advances.

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     The Company stratifies the outstanding combined cash advance portfolio by age, delinquency, and stage of collection when assessing the adequacy of the allowance for losses. It uses historical collection performance adjusted for recent portfolio performance trends to develop the expected loss rates used to establish either the allowance or accrual. Increases in either the allowance or accrual are recorded as a cash advance loss provision expense in the consolidated statements of income. The Company charges off all cash advances once they have been in default for 60 days, or sooner if deemed uncollectible. Recoveries on losses previously charged to the allowance are credited to the allowance when collected.

     The Company’s online distribution channel periodically sells selected cash advances that have been previously charged off. Proceeds from these sales are recorded as recoveries on losses previously charged to the allowance for losses. These sales generated proceeds of $0.9 million and $1.1 million for the three months ended and $2.4 million and $3.2 million for the nine months ended September 30, 2009 and 2008, respectively, which were recorded as recoveries on losses previously charged to the allowance for losses.

     The allowance deducted from the carrying value of cash advances was $24.7 million and $25.3 million at September 30, 2009 and 2008, respectively. The accrual for losses on third-party lender-owned cash advances was $2.8 million and $2.0 million at September 30, 2009 and 2008, respectively.

     Cash advances outstanding at September 30, 2009, and 2008, were as follows (in thousands):

		September 30,
		2009				2008
Funded by the Company
Active cash advances and fees receivable		$	77,216			$	73,097
Cash advances and fees in collection			19,550				25,857
Total Funded by the Company			96,766				98,954
Purchased by the Company from third-party lenders			21,394				13,381
Company-owned cash advances and fees receivable, gross			118,160				112,335
Less: Allowance for losses			24,688				25,301
Cash advances and fees receivable, net		$	93,472			$	87,034

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     Changes in the allowance for losses for the Company-owned portfolio and the accrued loss for third-party lender-owned portfolios during the three and nine months ended September 30, 2009, and 2008 were as follows (in thousands):

		Three months ended								Nine months ended
		September 30,								September 30,
		2009				2008				2009				2008
Allowance for losses for Company-owned cash advances
Balance at beginning of period		$	22,163			$	27,401			$	21,495			$	25,676
Cash advance loss provision			36,933				41,302				90,961				102,688
Charge-offs			(38,749	)			(47,762	)			(101,890	)			(123,443	)
Recoveries			4,341				4,360				14,122				20,380
Balance at end of period		$	24,688			$	25,301			$	24,688			$	25,301
Accrual for third-party lender-owned cash advances
Balance at beginning of period		$	2,059			$	2,309			$	2,135			$	1,828
Increase (decrease) in loss provision			757				(352	)			681				129
Balance at end of period		$	2,816			$	1,957			$	2,816			$	1,957

4. Earnings Per Share Computation

     The following table sets forth the reconciliation of numerators and denominators for the basic and diluted earnings per share computation for the three and nine months ended September 30, 2009 and 2008 (in thousands, except per share amounts):

		Three months ended								Nine months ended
		September 30,								September 30,
		2009				2008				2009				2008
Numerator:
Net income attributable to Cash America International, Inc.		$	22,478			$	18,925			$	62,995			$	64,873
Denominator:
Total weighted average basic shares (1)			29,702				29,266				29,757				29,321
Effect of shares applicable to stock option plans			283				346				263				343
Effect of restricted stock unit compensation plans			444				423				437				418
Effect of convertible debt(2)			269				—				67				—
Total weighted average diluted shares			30,698				30,035				30,524				30,082
Net income — basic		$	0.76			$	0.65			$	2.12			$	2.21
Net income — diluted		$	0.73			$	0.63			$	2.06			$	2.16

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5. Long-Term Debt

     The Company’s long-term debt instruments and balances outstanding at September 30, 2009 and 2008, were as follows (in thousands):

		September 30,
		2009				2008
USD line of credit up to $300,000 due 2012		$	199,325			$	234,790
GBP line of credit up to £7,500 due 2009			8,392				8,902
6.21% senior unsecured notes due 2021			25,000				25,000
6.09% senior unsecured notes due 2016			35,000				35,000
6.12% senior unsecured notes due 2012			40,000				40,000
7.20% senior unsecured notes due 2009			—				8,500
Variable rate senior unsecured note due 2012			38,000				—
5.25% convertible senior unsecured notes			100,891				—
Total debt		$	446,608			$	352,192
Less current portion			17,512				8,500
Total long-term debt		$	429,096			$	343,692

     In March 2007, the Company amended its domestic line of credit (the “USD Line of Credit”) to extend the final maturity by two years, to March 2012. The amended credit agreement also contained a provision for the ratable $50.0 million increase in the committed amounts, up to $300.0 million, upon the Company’s request and approval by the lenders. On February 29, 2008, the Company exercised this provision and increased the line of credit amount to $300.0 million through maturity. Interest on the amended line of credit is charged, at the Company’s option, at either USD LIBOR plus a margin or at the agent’s base rate. The margin on the line of credit varies from 0.875% to 1.875% (1.625% at September 30, 2009), depending on the Company’s cash flow leverage ratios as defined in the amended agreement. The Company also pays a fee on the unused portion ranging from 0.25% to 0.30% (0.30% at September 30, 2009) based on the Company’s cash flow leverage ratios. The weighted average interest rate (including margin) on the line of credit at September 30, 2009 was 1.92%.

     At September 30, 2009 and 2008, borrowings under the Company’s USD Line of Credit consisted of three pricing tranches with conclusion dates ranging from 1 to 31 days, respectively. However, pursuant to the bank line of credit agreement which expires in 2012, the Company routinely refinances these borrowings within its long-term facility. Therefore, these borrowings are reported as part of the line of credit and as long-term debt.

     In December 2008, the Company issued $38.0 million of senior unsecured long-term notes, due in November 2012 pursuant to a Credit Agreement dated November 21, 2008. Interest is charged, at the Company’s option, at either LIBOR plus a margin of 3.50% or at the agent’s base rate plus a margin of 3.50%. The notes are payable in quarterly payments of $3.0 million beginning on March 31, 2010, with any outstanding principal due at maturity in November 2012. The notes may be prepaid at the Company’s option anytime after November 20, 2009 without penalty. Net proceeds received from the issuance of the notes were used for the Prenda Fácil acquisition. The weighted average interest rate (including margin) on the $38.0 million term notes at September 30, 2009 was 3.75%.

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     In December 2008, the Company issued $10.0 million of senior unsecured long-term notes, due in November 2012 pursuant to a Credit Agreement dated December 5, 2008. Interest was charged, at the Company’s option, at either LIBOR plus a margin of 10.0% or at the agent’s base rate plus a margin of 10.0%. The notes were payable at maturity in November 2012 or could be prepaid at the Company’s option at any time without penalty. Net proceeds received from the issuance of the notes were used for the Prenda Fácil acquisition. The Company prepaid the full $10.0 million in notes on May 20, 2009 without penalty.

     In May 2008, the Company established a line of credit facility (the “GBP Line of Credit”) of up to £7.5 million with a foreign commercial bank, due in November 2009. The balance outstanding at September 30, 2009 was £5.3 million (approximately $8.4 million). Interest on the line of credit is charged, at the Company’s option, at either Pound Sterling LIBOR plus a margin or at the agent’s base rate. The margin on the line of credit varies from 1.10% to 1.575% (1.575% at September 30, 2009) based on the Company’s cash flow leverage ratios. The weighted average interest rate (including margin) on the line of credit at September 30, 2009 was 2.24%.

     On March 27, 2009, the Company entered into an interest rate cap agreement with a notional amount of $15.0 million of the Company’s outstanding floating rate line of credit for a term of 36 months at a fixed rate of 3.25%.

     On May 19, 2009, the Company completed the offering of $115.0 million aggregate principal amount of 5.25% Convertible Senior Notes due May 15, 2029 (the “2009 Convertible Notes”), which includes its offering of $100.0 million aggregate principal amount of its 2009 Convertible Notes and an additional $15.0 million aggregate principal amount of its 2009 Convertible Notes that were sold pursuant to the exercise of an over-allotment option by the initial purchasers. The 2009 Convertible Notes were sold to certain qualified institutional buyers pursuant to Rule 144A of the Securities Act of 1933, as amended. The 2009 Convertible Notes are senior unsecured obligations of the Company.

     The Company received net proceeds of approximately $111.1 million, after deducting the initial purchasers’ discount and the estimated offering expenses payable by the Company. The Company used a portion of the net proceeds of the offering to repay existing indebtedness, including outstanding balances under its revolving credit facility. The remaining portion was used for general corporate purposes.

     The 2009 Convertible Notes bear interest at a rate of 5.25% per year, payable semi-annually on May 15 and November 15 of each year, commencing November 15, 2009. The 2009 Convertible Notes will be convertible, in certain circumstances, at an initial conversion rate of 39.2157 shares per $1,000 aggregate principal amount of 2009 Convertible Notes (which is equivalent to a conversion price of approximately $25.50 per share), subject to adjustment upon the occurrence of certain events, into either, at the Company’s election: (i) shares of common stock or (ii) cash up to their principal amount and shares of its common stock in respect of the remainder, if any, of the conversion value in excess of the principal amount. This represents a conversion premium of approximately 27.5% relative to the closing price of the Company’s common stock on May 13, 2009. The Company may not redeem the 2009 Convertible Notes prior to May 14, 2014. The Company may, at its option, redeem some or all of the 2009 Convertible Notes on or after May 15, 2014 solely for cash. Holders of the 2009 Convertible Notes will have the right to require the Company to repurchase some or all of the outstanding 2009 Convertible Notes, solely for cash, on May 15, 2014, May 15, 2019 and May 15, 2024 at a price equal to 100% of the principal amount plus any accrued and unpaid interest.

     The 2009 Convertible Notes were accounted for under ASC 470-20-65, Transition Related to FASB Staff Position APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement) (“ASC 470-20-65”). ASC 470-20-65 requires the proceeds

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

from the issuance of convertible debt be allocated between a debt component and an equity component. The debt component is measured based on the fair value of similar debt without an equity conversion feature, and the equity component is determined as the residual of the fair value of the debt deducted from the original proceeds received. The resulting discount on the debt component is amortized over the period the convertible debt is expected to be outstanding, which is five years (May 15, 2009 to May 15, 2014), as additional non-cash interest expense. As of September 30, 2009, the principal amount of the notes was $115.0 million, the carrying amount was $100.9 million, and the unamortized discount was $14.1 million. As of September 30, 2009, the carrying amount of the equity component recorded as additional paid-in capital was $9.4 million, net of deferred taxes and unamortized equity issuance costs. The additional non-cash interest expense recognized in the Company’s consolidated statements of income was $0.8 million and $1.2 million for the three and nine months ended September 30, 2009. Accumulated amortization related to the convertible notes payable was $0.9 million as of September 30, 2009. As of September 30, 2009, the 2009 Convertible Notes had an effective interest rate of 8.46%.

     In connection with the issuance of the 2009 Convertible Notes, the Company incurred approximately $3.9 million in issuance costs, which primarily consisted of underwriting fees, legal and other professional expenses. These costs are being amortized to interest expense over five years. The unamortized balance of these costs at September 30, 2009 is included in the Company’s consolidated balance sheet.

     Each of the Company’s credit facility agreements and senior unsecured notes require the Company to maintain certain financial ratios. The Company is in compliance with all covenants or other requirements set forth in its debt agreements.

     In June 2008, the Company established a credit facility with a group of banks to permit the issuance of up to $12.8 million in letters of credit. Fees payable for letters of credit were tied to the LIBOR margin consistent with the Company’s line of credit agreement. The Company paid a fee on the unused portion of the facility ranging from 0.25% to 0.30%. On June 25, 2009, the Company transferred the outstanding letters of credit to the USD Line of Credit and terminated the facility. There were no letters of credit or balances outstanding under this facility on the date of its termination.

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6. Operating Segment Information

     The Company has three reportable operating segments: pawn lending, cash advance and check cashing. The cash advance and check cashing segments are managed separately due to the different operational strategies required and, therefore, are reported as separate segments. For comparison purposes, all prior periods in the tables below reflect current classification of administrative and operating expenses.

     Information concerning the operating segments is set forth below (in thousands):

		Pawn				Cash				Check
		Lending (1)				Advance (2)				Cashing				Consolidated
Three Months Ended September 30, 2009
Revenue
Finance and service charges		$	59,673			$	247			$	—			$	59,920
Proceeds from disposition of merchandise			110,302				4,484				—				114,786
Cash advance fees			8,334				89,875				—				98,209
Check cashing fees, royalties and other			1,030				1,584				595				3,209
Total revenue			179,339				96,190				595				276,124
Cost of revenue — disposed merchandise			72,704				2,838				—				75,542
Net revenue			106,635				93,352				595				200,582
Expenses
Operations			57,732				31,380				256				89,368
Cash advance loss provision			2,352				35,338				—				37,690
Administration			9,869				11,751				255				21,875
Depreciation and amortization			7,049				3,129				41				10,219
Total expenses			77,002				81,598				552				159,152
Income from operations		$	29,633			$	11,754			$	43			$	41,430
As of September 30, 2009
Total assets		$	778,621			$	443,900			$	6,491			$	1,229,012
Goodwill		$	208,819			$	279,255			$	5,310			$	493,384

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

		Pawn				Cash				Check
		Lending (1)				Advance (2)				Cashing				Consolidated
Three Months Ended September 30, 2008
Revenue
Finance and service charges		$	46,977			$	—			$	—			$	46,977
Proceeds from disposition of merchandise			105,517				—				—				105,517
Cash advance fees			8,584				87,717				—				96,301
Check cashing fees, royalties and other			967				1,610				778				3,355
Total revenue			162,045				89,327				778				252,150
Cost of revenue — disposed merchandise			68,033				—				—				68,033
Net revenue			94,012				89,327				778				184,117
Expenses
Operations			53,000				29,014				305				82,319
Cash advance loss provision			2,725				38,225				—				40,950
Administration			5,527				9,556				276				15,359
Depreciation and amortization			5,995				3,246				57				9,298
Total expenses			67,247				80,041				638				147,926
Income from operations		$	26,765			$	9,286			$	140			$	36,191
As of September 30, 2008
Total assets		$	625,192			$	448,057			$	7,027			$	1,080,276
Goodwill		$	143,998			$	271,532			$	5,310			$	420,840
		Pawn				Cash				Check
		Lending (1)				Advance (2)				Cashing				Consolidated
Nine Months Ended September 30, 2009
Revenue
Finance and service charges		$	166,755			$	404			$	—			$	167,159
Proceeds from disposition of merchandise			346,161				8,558				—				354,719
Cash advance fees			23,141				239,978				—				263,119
Check cashing fees, royalties and other			2,982				6,436				2,181				11,599
Total revenue			539,039				255,376				2,181				796,596
Cost of revenue — disposed merchandise			224,059				5,519				—				229,578
Net revenue			314,980				249,857				2,181				567,018
Expenses
Operations			173,417				86,997				870				261,284
Cash advance loss provision			5,068				86,574				—				91,642
Administration			32,582				32,705				744				66,031
Depreciation and amortization			21,255				9,511				187				30,953
Total expenses			232,322				215,787				1,801				449,910
Income from operations		$	82,658			$	34,070			$	380			$	117,108

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

		Pawn				Cash				Check
		Lending (1)				Advance (2)				Cashing				Consolidated
Nine Months Ended September 30, 2008
Revenue
Finance and service charges		$	133,788			$	—			$	—			$	133,788
Proceeds from disposition of merchandise			330,189				—				—				330,189
Cash advance fees			26,514				248,096				—				274,610
Check cashing fees, royalties and other			2,969				6,871				2,636				12,476
Total revenue			493,460				254,967				2,636				751,063
Cost of revenue — disposed merchandise			206,290				—				—				206,290
Net revenue			287,170				254,967				2,636				544,773
Expenses
Operations			159,408				83,148				997				243,553
Cash advance loss provision			7,667				95,150				—				102,817
Administration			27,081				25,985				824				53,890
Depreciation and amortization			17,525				10,249				182				27,956
Total expenses			211,681				214,532				2,003				428,216
Income from operations		$	75,489			$	40,435			$	633			$	116,557

(1)		The Pawn Lending segment is composed of the Company’s domestic pawn lending operations and Prenda Fácil. The following table summarizes the results from each channel’s contributions to the Pawn Lending segment for the three and nine months ended September 30, 2009 and 2008 (the average exchange rate of MXN (Mexican pesos) to USD was 13.330 and 14.178 for the three and nine month periods, respectively):

										Total Pawn
		Domestic				Foreign				Lending
Three Months Ended September 30, 2009
Revenue
Finance and service charges		$	52,181			$	7,492			$	59,673
Proceeds from disposition of merchandise			110,302				—				110,302
Cash advance fees			8,334				—				8,334
Check cashing fees, royalties and other			835				195				1,030
Total revenue			171,652				7,687				179,339
Cost of revenue — disposed merchandise			72,704				—				72,704
Net revenue			98,948				7,687				106,635
Expenses
Operations			54,601				3,131				57,732
Cash advance loss provision			2,352				—				2,352
Administration			7,990				1,879				9,869
Depreciation and amortization			6,083				966				7,049
Total expenses			71,026				5,976				77,002
Income from operations		$	27,922			$	1,711			$	29,633

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

										Total Pawn
		Domestic				Foreign				Lending
Three Months Ended September 30, 2008
Revenue
Finance and service charges		$	46,977			$	—			$	46,977
Proceeds from disposition of merchandise			105,517				—				105,517
Cash advance fees			8,584				—				8,584
Check cashing fees, royalties and other			967				—				967
Total revenue			162,045				—				162,045
Cost of revenue — disposed merchandise			68,033				—				68,033
Net revenue			94,012				—				94,012
Expenses
Operations			53,000				—				53,000
Cash advance loss provision			2,725				—				2,725
Administration			5,527				—				5,527
Depreciation and amortization			5,995				—				5,995
Total expenses			67,247				—				67,247
Income from operations		$	26,765			$	—			$	26,765
										Total Pawn
		Domestic				Foreign				Lending
Nine Months Ended September 30, 2009
Revenue
Finance and service charges		$	145,893			$	20,862			$	166,755
Proceeds from disposition of merchandise			346,161				—				346,161
Cash advance fees			23,141				—				23,141
Check cashing fees, royalties and other			2,653				329				2,982
Total revenue			517,848				21,191				539,039
Cost of revenue — disposed merchandise			224,059				—				224,059
Net revenue			293,789				21,191				314,980
Expenses
Operations			164,748				8,669				173,417
Cash advance loss provision			5,068				—				5,068
Administration			27,649				4,933				32,582
Depreciation and amortization			18,558				2,697				21,255
Total expenses			216,023				16,299				232,322
Income from operations		$	77,766			$	4,892			$	82,658

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

										Total Pawn
		Domestic				Foreign				Lending
Nine Months Ended September 30, 2008
Revenue
Finance and service charges		$	133,788			$	—			$	133,788
Proceeds from disposition of merchandise			330,189				—				330,189
Cash advance fees			26,514				—				26,514
Check cashing fees, royalties and other			2,969				—				2,969
Total revenue			493,460				—				493,460
Cost of revenue — disposed merchandise			206,290				—				206,290
Net revenue			287,170				—				287,170
Expenses
Operations			159,408				—				159,408
Cash advance loss provision			7,667				—				7,667
Administration			27,081				—				27,081
Depreciation and amortization			17,525				—				17,525
Total expenses			211,681				—				211,681
Income from operations		$	75,489			$	—			$	75,489

(2)		The Cash Advance segment is composed of three distribution channels — a multi-unit “storefront” platform, an online, internet based lending platform, and a card services business. The following table summarizes the results from each channel’s contributions to the Cash Advance segment for the three and nine months ended September 30, 2009 and 2008:

						Internet				Card				Total Cash
		Storefront				Lending				Services				Advance
Three Months Ended September 30, 2009
Revenue
Finance and service charges		$	247			$	—			$	—			$	247
Proceeds from disposition of merchandise			4,484				—				—				4,484
Cash advance fees			23,285				63,751				2,839				89,875
Check cashing fees, royalties and other			1,288				294				2				1,584
Total revenue			29,304				64,045				2,841				96,190
Cost of revenue — disposed merchandise			2,838				—				—				2,838
Net revenue			26,466				64,045				2,841				93,352
Expenses
Operations			13,976				16,594				810				31,380
Cash advance loss provision			4,838				29,394				1,106				35,338
Administration			2,345				9,259				147				11,751
Depreciation and amortization			1,228				1,744				157				3,129
Total expenses			22,387				56,991				2,220				81,598
Income from operations		$	4,079			$	7,054			$	621			$	11,754