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Cash America Announces Third Quarter Results and Dividend Declared

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Cash America International, Inc. (NYSE:CSH) announced today that reported net income attributable to the Company for the third quarter ended September 30, 2014, was $9,916,000 (34 cents per share). During the third quarter of 2014, management implemented plans that generated $14.1 million in after tax expenses (48 cents per share) related to the sale of non-strategic operations, the early extinguishment of long-term debt and to complete a corporate reorganization to create efficiencies in its Retail Services segment. Excluding the $14.1 million of unusual expense items incurred in the third quarter of 2014, adjusted net income, a non-GAAP measure, would have been $24.0 million (82 cents per share) for the third quarter ended September 30, 2014. Net income for the comparable third quarter of 2013 was $46,186,000 ($1.52 per share), which included an after tax net benefit of $21.9 million (72 cents per share) that was created by a tax credit that was partially offset by a significant litigation settlement during the period. The adjusted net income, a non-GAAP measure, for the third quarter of 2013, excluding the net benefit, was $24.3 million (80 cents per share).

Consolidated total revenue during the third quarter of 2014 increased by 8% to $472.2 million compared to $437.8 million during the same period in 2013. Consolidated net revenue for the three months ended September 30, 2014, increased 12% to $276.4 million from $247.0 million in the same period of 2013 as loss rates on the consumer loan portfolio were lower overall and pawn-related net revenue was up for the second consecutive quarter in 2014. The aggregate balance of consumer loans outstanding rose slightly as U.S. consumer loan growth outstripped the anticipated decline in foreign consumer loans related to changes in the regulatory environment in the United Kingdom. Total pawn loan balances in the United States were up 6.5% year-over-year and same store pawn loan balances were up 2.1% as of the end of the third quarter of 2014 compared to the same period in 2013.

During the third quarter of 2014, the Company sold non-strategic lending operations, including the disposition of 47 locations in Mexico and the disposition of 5 locations in Colorado, which generated approximately $21.5 million in net cash proceeds but contributed to an aggregate loss of $6.4 million after taxes (22 cents per share). In addition, the Company purchased $103.5 million of its outstanding long-term fixed-rate senior notes in the open market during the third quarter, which generated $6.0 million in pretax charges ($3.8 million after taxes, or 13 cents per share) related to the early extinguishment of debt. Management also completed a corporate reorganization effort in anticipation of the impending separation of its Retail Services segment and its E-Commerce segment and incurred severance and benefits costs of $6.1 million before taxes ($3.9 million after taxes, or 13 cents per share). In the third quarter of 2013, the Company recognized a tax benefit of $33.2 million ($1.09 per share) related to the reorganization of its Mexico-based pawn operations, and incurred an $18.0 million pre-tax expense ($11.3 million after taxes or 37 cents per share) associated with a negotiated settlement of a class-action lawsuit. These two items combined to create a net benefit to after tax income of $21.9 million (72 cents per share) for the period ended September 30, 2013.

Commenting on the results for the third quarter, Daniel R. Feehan, President and Chief Executive Officer, said, “We have completed a variety of strategic initiatives during the third quarter, including the refocusing of our domestic pawn operations and the positioning of our E-Commerce segment to be an independent public company. We have taken the steps we feel have the greatest potential for delivering long-term value to our shareholders for many periods in the future. Operationally, we also successfully moved through the initial transition of our U.K. e-commerce business to meet the new regulatory requirements in the United Kingdom, and we maintained our positive metrics of pawn lending that started in the second quarter.”

For the nine-month period ended September 30, 2014, the Company reported net income of $76,624,000 ($2.61 per share) compared to $115,244,000 ($3.73 per share) for the same period in 2013. Excluding the unusual items discussed above in the third quarter of 2014 totaling $14.1 million after tax (48 cents per share) plus an additional $16.5 million pre-tax ($10.4 million after tax, or 36 cents per share) attributable to the early extinguishment of debt in the first two quarters of 2014, adjusted net earnings, a non-GAAP measure, would have been $101.5 million ($3.45 per share) for the nine-month period ended September 30, 2014. This compares to adjusted net earnings, a non-GAAP measure, of $93.4 million ($3.02 per share) for the nine-month period ended September 30, 2013, when adding back the unusual items discussed above for the 2013 period, which totaled $21.9 million (71 cents per share).

Total revenue was $1.4 billion for the nine-month period ended September 30, 2014, compared to $1.3 billion for the same nine-month period in 2013.

Cash America will host a conference call to discuss the third quarter results and the previously announced spin-off of the Company’s e-commerce segment on Thursday, October 23, at 7:00 AM CDT. A live webcast of the call will be available on the Investor Relations section of the Company’s corporate website (http://www.cashamerica.com). To listen to the live call, please go to the website at least fifteen minutes early to register, download, and install any necessary audio software. A replay will be available on the Company’s website following the call.

Additionally, the Company announced that the Board of Directors, at its regularly scheduled quarterly meeting, declared a $0.035 (3.5 cents) per share cash dividend on common stock outstanding. The dividend will be paid at the close of business on November 19, 2014, to shareholders of record on November 5, 2014.

Outlook for the Fourth Quarter of 2014 and 2015 Fiscal Year

Management believes that the opportunities for growth in revenue and earnings will be largely associated with customer demand for the credit products provided by the Company, which take the form of pawn loans and consumer loans and the disposition of unredeemed collateral by way of consumer spending on retail sales and the commercial sale of refined gold and diamonds. The fourth quarter, during the seasonally important holiday selling season, represents an important period of retail sales for the Company, and results will be affected by consumer sentiments during the period. There are various other elements that could affect the growth in revenue, such as the regulation of consumer loan products and the development and growth of additional markets for the Company’s e-commerce segment for consumer lending products. As the Company enters the fourth quarter of 2014, management anticipates that demand for the Company’s consumer loan products will continue on a similar pace to the one it has experienced during the first nine months of 2014, with a continued heavier weighting to the consumer loan portfolio and longer-term installment and line of credit products. Demand for the Company’s pawn lending products during the second and third quarters of 2014 have improved, and management expects a continued growth in the Company’s pawn lending business, but at moderate levels for the balance of 2014 and the first half of 2015.

Due to the recent announcement of Board approval to spin-off the Company’s e-commerce segment, management is initiating its expectations for fiscal year 2015, breaking expectations out by each of the two segments into their relative expected range for adjusted earnings before interest, taxes, depreciation and amortization, or adjusted EBITDA, a non-GAAP measure. Based on its current views of the coming year, management establishes its initial anticipated range of adjusted EBITDA, of between $110 million to $135 million for fiscal 2015 for the retail services segment, including corporate services for that segment, and an anticipated range of adjusted EBITDA of between $180 million to $240 million for fiscal 2015 for the e-commerce segment, which is also known as Enova International, Inc.

Management is providing its expectations for the fourth quarter of 2014 as if the separation of the e-commerce segment, or Enova, does not occur before year-end 2014 in order to remain consistent with past practice related to reporting management’s expectations for future periods. Based on management’s views and on the preceding factors, management expects the fourth quarter 2014 consolidated net income per share to be between $1.00 and $1.10 per share as if the separation of the e-commerce segment does not occur before year end 2014. This range compares to $1.01 per share of consolidated net income in the fourth quarter of 2013, which included $2.8 million of after-tax expenses related to the closure of 28 locations in Texas that offered unsecured consumer loans as the primary source of revenue, a regulatory penalty incurred during the period, an adjustment to the remaining expected liability for the voluntary refund to customers in Ohio and expenses related to the early extinguishment of debt.

Based on the Company’s results through the first nine months of 2014, management expects its consolidated fiscal year 2014 earnings per share to be in a range of between $4.40 and $4.50 per share as if the separation of the e-commerce business does not occur before year end 2014, on a non-GAAP adjusted basis, adjusted for the third quarter unusual items discussed above of 48 cents per share, plus 35 cents per share related to the early extinguishment of debt in the first half of 2014, or 83 cents in total. This compares to the fiscal year 2013 consolidated net earnings per share of $4.04 per share, on a non-GAAP adjusted basis, which excludes a net benefit from unusual items during the year of $18.8 million (a benefit of 62 cents per share). During 2013, the Company recorded a tax benefit related to the disposition of assets and reorganization of its Mexico-based pawn lending business of $33.2 million ($1.09 per share), which was partially offset by unusual expense items of $14.4 million (47 cents per share) related to a litigation settlement during the third quarter of 2013, the closure of consumer lending locations, a regulatory penalty, an adjustment to the remaining expected liability for the voluntary refund to customers in Ohio and expenses for the early extinguishment of debt. Combining these amounts generates the net benefit of unusual items in 2013 of $18.8 million (62 cents per share).

Non-GAAP Measures

The “Adjusted Earnings and Adjusted Earnings Per Share” and the “Adjusted EBITDA” sections included in the attachments to this press release contains a reconciliation of non-GAAP information and a discussion of the reasons why the Company’s management believes that presentation of non-GAAP financial measures provide useful information to investors regarding the Company’s financial condition and results of operations.

About the Company

As of September 30, 2014, Cash America International, Inc. (the “Company”) operated 948 total locations offering specialty financial services to consumers, which included the following:

  • 863 lending locations in 21 states in the United States primarily under the names “Cash America Pawn,” “SuperPawn,” “Cash America Payday Advance,” and “Cashland;” and
  • 85 check cashing centers (all of which are unconsolidated franchised check cashing centers) operating in 12 states in the United States under the name “Mr. Payroll.”

Additionally, as of September 30, 2014, the Company offered consumer loans over the Internet to customers:

For additional information regarding the Company and the services it provides, visit the Company’s websites located at:

http://www.cashamerica.com

http://www.dollarsdirect.com.au

http://www.enova.com

http://www.dollarsdirect.ca

http://www.cashnetusa.com

http://www.quickquidflexcredit.co.uk

http://www.netcredit.com

http://www.onstride.co.uk

http://www.cashlandloans.com

http://www.simplic.com.br

http://www.quickquid.co.uk

http://www.mrpayroll.com

http://www.poundstopocket.co.uk

http://www.youxinyi.cn

http://www.headwaycapital.com

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This release contains forward-looking statements about the business, financial condition, operations and prospects of the Company. The actual results of the Company could differ materially from those indicated by the forward-looking statements because of various risks and uncertainties including, without limitation: the effect of, compliance with or changes in domestic and foreign pawn, consumer credit, tax and other laws and governmental rules and regulations applicable to the Company’s business or changes in the interpretation or enforcement thereof; the regulatory and examination authority of the Consumer Financial Protection Bureau in the U.S. and the Financial Conduct

Authority in the United Kingdom, including the effect of and compliance with a consent order the Company entered into with the Consumer Financial Protection Bureau in November 2013 and changes to the Company’s UK business practices as a result of adapting the Company’s business in response to the requirements of the Financial Conduct Authority; changes in the political, regulatory or economic environment in foreign countries where the Company operates or in the future may operate; risks related to the potential separation of the Company’s online lending business that comprises its e-commerce segment, Enova International, Inc.; the Company’s ability to process or collect consumer loans through the Automated Clearing House system; the actions of third parties who provide, acquire or offer products and services to, from or for the Company; public and regulatory perception of the Company’s business, including its consumer loan business and its business practices; the effect of any current or future litigation proceedings or any judicial decisions or rule-making that affect the Company, its products or its arbitration agreements; fluctuations, including a sustained decrease, in the price of gold or deterioration in economic conditions; a prolonged interruption in the Company’s operations of its facilities, systems and business functions, including its information technology and other business systems; changes in demand for the Company’s services and changes in competition; the Company’s ability to maintain an allowance or liability for estimated losses on consumer loans that are adequate to absorb credit losses; the Company’s ability to attract and retain qualified executive officers; the ability of the Company to open new locations in accordance with its plans or to successfully integrate newly acquired businesses into the Company’s operations; interest rate and foreign currency exchange rate fluctuations; changes in the capital markets, including the debt and equity markets; changes in the Company’s ability to satisfy its debt obligations or to refinance existing debt obligations or obtain new capital to finance growth; security breaches, cyber-attacks or fraudulent activity; 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 it operates; and other risks and uncertainties indicated in the Company’s filings with the Securities and Exchange Commission. These risks and uncertainties are beyond the ability of the Company to control, nor can the Company predict, in many cases, all of the risks and uncertainties that could cause its actual results to differ materially from those indicated by the forward-looking statements. When used in this release, terms such as “believes,” “estimates,” “should,” “could,” “would,” “plans,” “expects,” “anticipates,” “may,” “forecasts,” “projects” and similar expressions and variations as they relate to the Company or its management are intended to identify forward-looking statements. 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 release.

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
HIGHLIGHTS OF CONSOLIDATED RESULTS OF OPERATIONS

(dollars in thousands, except per share data)

(Unaudited)

Three Months Ended Nine Months Ended
September 30, September 30,
2014 2013 2014 2013
Consolidated Operations:
Total revenue $ 472,178 $ 437,801 $ 1,420,368 $ 1,316,309
Net revenue 276,352 247,007 847,279 763,138
Total expenses 231,351 218,488 656,670 607,785
Income from Operations $ 45,001 $ 28,519 $ 190,609 $ 155,353
Income before income taxes 21,394 18,173 127,282 128,279
Net Income $ 9,916 $ 46,186 $ 76,624 $ 115,552
Net income attributable to the noncontrolling interest $ $ $ $ (308 )
Net Income Attributable to Cash America International, Inc. $ 9,916 $ 46,186 $ 76,624 $ 115,244
Earnings per share:
Net Income attributable to Cash America International, Inc. common shareholders:
Basic $ 0.34 $ 1.62 $ 2.66 $ 4.01
Diluted $ 0.34 $ 1.52 $ 2.61 $ 3.73
Weighted average common shares outstanding:
Basic 29,186 28,426 28,808 28,747
Diluted 29,312 30,379 29,371 30,857
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share information)
(Unaudited)
September 30, December 31,
2014 2013 2013
Assets
Current assets:
Cash and cash equivalents $ 123,532 $ 80,359 $ 67,228
Restricted cash 60 8,000
Pawn loans 264,612 253,678 261,148
Consumer loans, net 348,225 328,281 358,841
Merchandise held for disposition, net 215,263 193,115 208,899
Pawn loan fees and service charges receivable 54,501 50,090 53,438
Income taxes receivable 10,931 9,535
Prepaid expenses and other assets 33,871 28,840 33,655
Deferred tax assets 36,076 46,429 38,800
Total current assets 1,076,140 991,723 1,039,544
Property and equipment, net 245,382 257,787 261,223
Goodwill 699,061 670,037 705,579
Intangible assets, net 47,490 46,860 52,256
Other assets 32,272 21,185 21,129
Total assets $ 2,100,345 $ 1,987,592 $ 2,079,731
Liabilities and Equity
Current liabilities:
Accounts payable and accrued expenses $ 141,351 $ 133,736 $ 140,068
Customer deposits 19,271 15,123 14,803
Income taxes currently payable 1,399
Current portion of long-term debt 22,606 22,606
Total current liabilities 162,021 171,465 177,477
Deferred tax liabilities 110,624 96,286 101,417
Other liabilities 1,124 1,287 1,031
Long-term debt 700,043 660,243 717,383
Total liabilities $ 973,812 $ 929,281 $ 997,308
Equity:
Cash America International, Inc. equity:
Common stock, $0.10 par value per share, 80,000,000 shares authorized, 30,235,164 shares issued and outstanding 3,024 3,024 3,024
Additional paid-in capital 87,718 152,872 150,833
Retained earnings 1,091,629 991,682 1,017,981
Accumulated other comprehensive income (loss) 2,073 2,614 4,649
Treasury shares, at cost (1,379,345 shares, 2,164,873 shares and 2,224,902 shares as of September 30, 2014 and 2013, and as of December 31, 2013, respectively) (57,911 ) (91,881 ) (94,064 )
Total equity 1,126,533 1,058,311 1,082,423
Total liabilities and equity $ 2,100,345 $ 1,987,592 $ 2,079,731
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands, except per share data)

(Unaudited)

Three Months Ended Nine Months Ended
September 30, September 30,
2014 2013 2014 2013
Revenue
Pawn loan fees and service charges $ 85,313 $ 79,298 $ 246,490 $ 227,940
Proceeds from disposition of merchandise 155,087 128,660 478,314 438,909
Consumer loan fees 229,435 227,563 688,956 640,199
Other 2,343 2,280 6,608 9,261
Total Revenue 472,178 437,801 1,420,368 1,316,309
Cost of Revenue
Disposed merchandise 114,293 91,101 343,367 301,397
Consumer loan loss provision 81,533 99,693 229,722 251,774
Total Cost of Revenue 195,826 190,794 573,089 553,171
Net Revenue 276,352 247,007 847,279 763,138
Expenses
Operations and administration 205,731 199,705 592,292 553,471
Loss on divestitures 5,176 5,176
Depreciation and amortization 20,444 18,783 59,202 54,314
Total Expenses 231,351 218,488 656,670 607,785
Income from Operations 45,001 28,519 190,609 155,353
Interest expense (17,467 ) (9,260 ) (40,363 ) (25,608 )
Interest income 10 1 28 69
Foreign currency transaction loss (159 ) (741 ) (439 ) (1,053 )
Loss on early extinguishment of debt (5,991 ) (346 ) (22,553 ) (346 )
Equity in loss of unconsolidated subsidiary (136 )
Income before Income Taxes 21,394 18,173 127,282 128,279
Provision (benefit) for income taxes 11,478 (28,013 ) 50,658 12,727
Net Income 9,916 46,186 76,624 115,552
Net income attributable to the noncontrolling interest (308 )
Net Income Attributable to Cash America International, Inc. $ 9,916 $ 46,186 $ 76,624 $ 115,244
Earnings Per Share:
Net Income attributable to Cash America International, Inc. common shareholders:
Basic $ 0.34 $ 1.62 $ 2.66 $ 4.01
Diluted $ 0.34 $ 1.52 $ 2.61 $ 3.73
Weighted average common shares outstanding:
Basic 29,186 28,426 28,808 28,747
Diluted 29,312 30,379 29,371 30,857
Dividends declared per common share $ 0.035 $ 0.035 $ 0.105 $ 0.105
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
PAWN LENDING ACTIVITIES – FINANCIAL AND OPERATING DATA

(dollars in thousands, except where otherwise noted)

The following tables outline certain data related to pawn loan activities of Cash America International, Inc. and its subsidiaries (the “Company”) as of and for the three and nine months ended September 30, 2014 and 2013 (dollars in thousands except where otherwise noted):

As of September 30,
2014 2013 Change % Change
Ending pawn loan balances
Domestic retail services $ 264,612 $ 248,427 $ 16,185 6.5 %
Foreign retail services - 5,251 (5,251 ) (100.0 )%
Consolidated pawn loan balances $ 264,612 $ 253,678 $ 10,934 4.3 %
Ending merchandise balance, net
Domestic retail services $ 215,263 $ 186,878 $ 28,385 15.2 %
Foreign retail services - 6,237 (6,237 ) (100.0 )%
Consolidated merchandise balance, net $ 215,263 $ 193,115 $ 22,148 11.5 %
Three Months Ended September 30,
2014 2013 Change % Change
Pawn loan fees and service charges
Domestic retail services $ 84,081 $ 77,532 $ 6,549 8.4 %
Foreign retail services 1,232 1,766 (534 ) (30.2 )%
Consolidated pawn loan fees and service charges $ 85,313 $ 79,298 $ 6,015 7.6 %
Average pawn loan balance outstanding
Domestic retail services $ 263,509 $ 241,785 $ 21,724 9.0 %
Foreign retail services 5,971 5,012 959 19.1 %
Consolidated average pawn loans outstanding $ 269,480 $ 246,797 $ 22,683 9.2 %
Amount of pawn loans written and renewed
Domestic retail services $ 277,651 $ 258,055 $ 19,596 7.6 %
Foreign retail services 9,942 14,043 (4,101 ) (29.2 )%
Consolidated amount of pawn loans written and renewed $ 287,593 $ 272,098 $ 15,495 5.7 %
Average amount per pawn loan (in ones)
Domestic retail services $ 125 $ 125 $ %
Foreign retail services $ 86 $ 86 $ %
Consolidated average amount per pawn loan (in ones) $ 123 $ 122 $ 1 0.8 %
Annualized yield on pawn loans
Domestic retail services 126.6 % 127.2 %
Foreign retail services 134.5 % 139.8 %
Consolidated annualized yield on pawn loans 127.0 % 127.5 %
Gross profit margin on disposition of merchandise
Domestic retail services 26.5 % 29.6 %
Foreign retail services 16.6 % 17.1 %
Gross profit margin on disposition of merchandise 26.3 % 29.2 %
Merchandise turnover
Domestic retail services 2.1 2.1
Foreign retail services 3.3 2.3
Consolidated merchandise turnover 2.2 2.1
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
PAWN LENDING ACTIVITIES – FINANCIAL AND OPERATING DATA

(dollars in thousands, except where otherwise noted)

Nine Months Ended September 30,
2014 2013 Change % Change
Pawn loan fees and service charges
Domestic retail services $ 241,459 $ 222,508 $ 18,951 8.5 %
Foreign retail services 5,031 5,432 (401 ) (7.4 )%
Consolidated pawn loan fees and service charges $ 246,490 $ 227,940 $ 18,550 8.1 %
Average pawn loan balance outstanding
Domestic retail services $ 247,002 $ 228,048 $ 18,954 8.3 %
Foreign retail services 5,347 4,910 437 8.9 %
Consolidated average pawn loans outstanding $ 252,349 $ 232,958 $ 19,391 8.3 %
Amount of pawn loans written and renewed
Domestic retail services $ 781,437 $ 707,758 $ 73,679 10.4 %
Foreign retail services 38,837 42,303 (3,466 ) (8.2 )%
Consolidated amount of pawn loans written and renewed $ 820,274 $ 750,061 $ 70,213 9.4 %
Average amount per pawn loan (in ones)
Domestic retail services $ 124 $ 127 $ (3 ) (2.4 )%
Foreign retail services $ 87 $ 87 $ %
Consolidated average amount per pawn loan (in ones) $ 122 $ 124 $ (2 ) (1.6 )%
Annualized yield on pawn loans
Domestic retail services 130.7 % 130.5 %
Foreign retail services 144.9 % 147.9 %
Consolidated annualized yield on pawn loans 131.2 % 130.8 %
Gross profit margin on disposition of merchandise
Domestic retail services 28.4 % 31.7 %
Foreign retail services 21.0 % 17.9 %
Gross profit margin on disposition of merchandise 28.2 % 31.3 %
Merchandise turnover
Domestic retail services 2.2 2.5
Foreign retail services 2.7 2.5
Consolidated merchandise turnover 2.3 2.5

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES

MERCHANDISE DISPOSITION, GROSS PROFIT AND INVENTORY OPERATING DATA

(dollars in thousands)

Profit from the disposition of merchandise represents the proceeds received from the disposition of merchandise in excess of the cost of disposed merchandise, which is generally the principal amount loaned on an item or the amount paid for purchased merchandise. The following tables summarize the proceeds from the disposition of merchandise and the related profit for the three and nine months ended September 30, 2014 and 2013 (dollars in thousands):

Three Months Ended September 30,
2014 2013
Retail Commercial Total Retail Commercial Total
Proceeds from disposition $117,721 $37,366 $155,087 $94,169 $34,491 $128,660
Gross profit on disposition $36,994 $3,800 $40,794 $33,452 $4,107 $37,559
Gross profit margin 31.4% 10.2% 26.3% 35.5% 11.9% 29.2%
Percentage of total gross profit 90.7% 9.3% 100.0% 89.1% 10.9% 100.0%
Nine Months Ended September 30,
2014 2013
Retail Commercial Total Retail Commercial Total
Proceeds from disposition $ 377,965 $ 100,349 $ 478,314 $ 296,415 $ 142,494 $ 438,909
Gross profit on disposition $ 125,027 $ 9,920 $ 134,947 $ 108,827 $ 28,685 $ 137,512
Gross profit margin 33.1 % 9.9 % 28.2 % 36.7 % 20.1 % 31.3 %
Percentage of total gross profit 92.6 % 7.4 % 100.0 % 79.1 % 20.9 % 100.0 %

The table below summarizes the age of merchandise held for disposition related to the Company’s pawn lending operations before valuation allowance of $2.4 million and $0.9 million as of September 30, 2014 and 2013, respectively (dollars in thousands):

As of September 30,
2014 2013
Amount % Amount %
Jewelry – held for one year or less $ 114,998 53.0 % $ 105,583 54.4 %
Other merchandise – held for one year or less 91,058 41.9 % 76,235 39.3 %
Total merchandise held for one year or less 206,056 94.9 % 181,818 93.7 %
Jewelry – held for more than one year 2,532 1.2 % 5,701 2.9 %
Other merchandise – held for more than one year 8,448 3.9 % 6,544 3.4 %
Total merchandise held for more than one year 10,980 5.1 % 12,245 6.3 %
Merchandise held for disposition, gross $ 217,036 100.0 % $ 194,063 100.0 %
Merchandise held for disposition, net of allowance $ 214,636 $ 193,115
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSUMER LOAN FINANCIAL AND OPERATING DATA

(dollars in thousands, except where otherwise noted)

The following tables set forth interest and fees on consumer loans by product type and segment, and the related loan loss provision for the three and nine months ended September 30, 2014 and 2013 (dollars in thousands):

Three Months Ended September 30,
2014 2013
Short-term loans Line of credit accounts Installment loans Total Short-term loans Line of credit accounts Installment loans Total
Retail services $ 21,476 $ - $ 3,355 $ 24,831 $ 26,265 $ $ 3,239 $ 29,504
E-commerce
Domestic 46,125 41,723 38,275 126,123 48,552 32,373 24,029 104,954
Foreign 15,760 39,186 23,535 78,481 43,958 18,131 31,016 93,105
Total E-commerce 61,885 80,909 61,810 204,604 92,510 50,504 55,045 198,059
Consumer loan fees $ 83,361 $ 80,909 $ 65,165 $ 229,435 $ 118,775 $ 50,504 $ 58,284 $ 227,563
Less: consumer loan loss provision 25,581 25,913 30,039 81,533 41,806 25,140 32,747 99,693
Consumer loan fees, net loss provision $ 57,780 $ 54,996 $ 35,126 $ 147,902 $ 76,969 $ 25,364 $ 25,537 $ 127,870
Year-over-year change – $ $ (19,189 ) $ 29,632 $ 9,589 $ 20,032 $ (17,424 ) $ 14,943 $ 9,556 $ 7,075
Year-over-year change – % (24.9 )% 116.8 % 37.5 % 15.7 % (18.5 )% 143.4 % 59.8 % 5.9 %
Consumer loan loss provision
as a % of consumer loan fees
30.7 % 32.0 % 46.1 % 35.5 % 35.2 % 49.8 % 56.2 % 43.8 %
Nine Months Ended September 30,
2014 2013
Short-term loans Line of credit accounts Installment loans Total Short-term loans Line of credit accounts Installment loans Total
Retail services $ 63,913 $ - $ 10,577 $ 74,490 $ 74,999 $ $ 9,474 $ 84,473
E-commerce
Domestic 131,910 112,804 99,208 343,922 138,546 82,072 62,479 283,097
Foreign 68,660 116,036 85,848 270,544 172,003 19,949 80,677 272,629
Total E-commerce 200,570 228,840 185,056 614,466 310,549 102,021 143,156 555,726
Consumer loan fees $ 264,483 $ 228,840 $ 195,633 $ 688,956 $ 385,548 $ 102,021 $ 152,630 $ 640,199
Less: consumer loan loss provision 72,963 71,074 85,685 229,722 129,903 41,612 80,259 251,774
Consumer loan fees, net loss provision $ 191,520 $ 157,766 $ 109,948 $ 459,234 $ 255,645 $ 60,409 $ 72,371 $ 388,425
Year-over-year change – $ $ (64,125 ) $ 97,357 $ 37,577 $ 70,809 $ (18,220 ) $ 32,670 $ 34,398 $ 48,848
Year-over-year change – % (25.1 )% 161.2 % 51.9 % 18.2 % (6.7 )% 117.8 % 90.6 % 14.4 %
Consumer loan loss provision as a % of consumer loan fees 27.6 % 31.1 % 43.8 % 33.3 % 33.7 % 40.8 % 52.6 % 39.3 %

In addition to reporting consumer loans owned by the Company and consumer loans guaranteed by the Company, which are either generally accepted accounting principles (“GAAP”) items or disclosures required by GAAP, the Company has provided combined consumer loans, which is a non-GAAP measure. In addition, the Company has reported consumer loans written and renewed, which is statistical data that is not included in the Company’s financial statements. The Company also reports allowances and liabilities for estimated losses on consumer loans individually and on a combined basis, which are GAAP measures that are included in the Company’s financial statements.

Management believes these measures provide investors with important information needed to evaluate the magnitude of potential loan losses and the opportunity for revenue performance of the consumer loan portfolio on an aggregate basis. The comparison of the aggregate amounts from period to period is more meaningful than comparing only the residual amount on the Company’s balance sheet since both revenue and the loss provision for loans are impacted by the aggregate amount of loans owned by the Company and those guaranteed by the Company as reflected in its financial statements.

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSUMER LOAN FINANCIAL AND OPERATING DATA

(dollars in thousands, except where otherwise noted)

The following tables summarize selected data related to the Company’s consumer loan activities as of and for the three months ended September 30, 2014 and 2013.

The following table shows short-term consumer loans and related loan loss activity, which is based on the volume of loans written and renewed, for the three months ended September 30, 2014 and 2013.

Three Months Ended
September 30,
2014 2013

Short-term consumer loans:

Consumer loan loss provision $ 25,581 $ 41,806
Charge-offs (net of recoveries) 26,323 49,271
Allowance and liability for losses 22,958 37,042
Combined consumer loans and fees receivable, gross(a) 132,917 184,836

Short-term loans:

Consumer loan loss provision as a % of combined consumer loans written and renewed(b) 5.2 % 6.5 %
Charge-offs (net of recoveries) as a % of combined consumer loans written and renewed(b) 5.3 % 7.6 %
Consumer loan loss provision as a % of consumer loan fees 30.7 % 35.2 %
Allowance and liability for losses as a % of combined consumer loan balances, gross(a) 17.3 % 20.0 %

(a) Non-GAAP measure.

(b) The disclosure regarding the amount of short-term consumer loans written and renewed is statistical data that is not included in the Company’s financial statements.

The following table shows line of credit accounts and related loan loss activity, which is based on average amount of consumer loan balance, for the three months ended September 30, 2014 and 2013.

Three Months Ended
September 30,
2014 2013

Line of credit accounts:

Consumer loan loss provision $ 25,913 $ 25,140
Charge-offs (net of recoveries) 24,818 13,855
Allowance and liability for losses 22,673 21,934
Average consumer loan balance(a) 125,342 78,839

Line of credit accounts:

Consumer loan loss provision as a % of average consumer loan balance(a) 20.7 % 31.9 %
Charge-offs (net of recoveries) as a % of average consumer loan balance(a) 19.8 % 17.6 %
Consumer loan loss provision as a % of consumer loan fees 32.0 % 49.8 %
Allowance for losses as a % of consumer loan balances, gross(b) 17.7 % 22.0 %
(a) The average consumer loan balance for line of credit accounts is the simple average of the beginning and ending consumer loan balance for the quarter for line of credit accounts.
(b) Non-GAAP measure.

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSUMER LOAN FINANCIAL AND OPERATING DATA

(dollars in thousands, except where otherwise noted)

The following table shows installment loans and related loan loss activity, which is based on average amount of combined consumer loan balance, for the three months ended September 30, 2014 and 2013.

Three Months Ended
September 30,
2014 2013

Installment loans:

Consumer loan loss provision $ 30,039 $ 32,747
Charge-offs (net of recoveries) 27,954 26,691
Allowance and liability for losses 32,170 33,810
Installment loan average loan balance:(a)
Company owned $ 193,137 $ 157,183
Guaranteed by the Company(b) 8,357 10,203
Combined average consumer loan balance(c) $ 201,494 $ 167,386

Installment loans:

Consumer loan loss provision as a % of combined average consumer loan balance(a)(c) 14.9 % 19.6 %
Charge-offs (net of recoveries) as a % of combined average consumer loan balance(a)(c) 13.9 % 15.9 %
Consumer loan loss provision as a % of consumer loan fees 46.1 % 56.2 %
Allowance and liability for losses as a % of combined consumer loan balances, gross(c) 15.4 % 18.4 %
(a) The combined average consumer loan balance for installment loans is the simple average of the beginning and ending combined consumer loan balance for the quarter for installment loans.
(b) Represents loans originated by third-party lenders through the CSO programs, which are not included in the Company’s financial statements.
(c) Non-GAAP measure.
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSUMER LOAN FINANCIAL AND OPERATING DATA

(dollars in thousands, except where otherwise noted)

The following table summarizes consumer loan balances outstanding as of September 30, 2014 and 2013 (dollars in thousands):

As of September 30,
2014 2013

Company Owned(a)

Guaranteed by the Company(a)

Combined(b)

Company Owned(a)

Guaranteed by the Company(a)

Combined(b)
Ending consumer loan balances:

Retail Services

Short-term loans $ 42,978 $ 3,728 $ 46,706 $ 47,824 $ 4,681 $ 52,505
Installment loans 6,823 8,108 14,931 9,945 10,275 20,220
Total Retail Services, gross 49,801 11,836 61,637 57,769 14,956 72,725

E-Commerce

Domestic
Short-term loans 34,113 35,389 69,502 33,926 35,107 69,033
Line of credit accounts 72,648 - 72,648 59,341 59,341
Installment loans 135,664 40 135,704 62,460 62,460
Total Domestic, gross 242,425 35,429 277,854 155,727 35,107 190,834
Foreign
Short-term loans 16,709 - 16,709 63,276 22 63,298
Line of credit accounts 55,627 - 55,627 40,265 40,265
Installment loans 58,932 - 58,932 101,200 101,200
Total Foreign, gross 131,268 - 131,268 204,741 22 204,763
Total E-Commerce, gross 373,693 35,429 409,122 360,468 35,129 395,597
Total ending loan balance, gross 423,494 47,265 470,759 418,237 50,085 468,322
Less: Allowance and liabilities for losses (75,269 ) (2,532 ) (77,801 ) (89,956 ) (2,830 ) (92,786 )
Total ending loan balance, net $ 348,225 $ 44,733 $ 392,958 $ 328,281 $ 47,255 $ 375,536
Allowance and liability for losses as a % of consumer loan balances, gross 17.8 % 5.4 % 16.5 % 21.5 % 5.7 % 19.8 %
(a) GAAP measure. The consumer loan balances guaranteed by the Company represent loans originated by third-party lenders through the Company’s credit services organization programs (the “CSO programs”), so these balances are not recorded in the Company’s financial statements. However, the Company has established a liability for estimated losses in support of its guarantee of these loans, which is reflected in the table above and included in its consolidated balance sheets.
(b) Except for allowance and liability for estimated losses, amounts represent non-GAAP measures.
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
INCOME FROM OPERATIONS BY OPERATING SEGMENT

(dollars in thousands)

The following tables contain operating segment data for the three and nine months ended September 30, 2014 and 2013 (dollars in thousands).

Retail Services E-Commerce
Domestic Foreign Total Domestic Foreign Admin Total Corporate Consolidated

Three Months Ended September 30, 2014

Revenue
Pawn loan fees and service charges $ 84,081 $ 1,232 $ 85,313 $ - $ - $ - $ - $ - $ 85,313
Proceeds from disposition of merchandise 151,399 3,688 155,087 - - - - - 155,087
Consumer loan fees 24,831 - 24,831 126,123 78,481 - 204,604 - 229,435
Other 1,564 38 1,602 7 557 - 564 177 2,343
Total revenue 261,875 4,958 266,833 126,130 79,038 - 205,168 177 472,178
Cost of revenue
Disposed merchandise 111,216 3,077 114,293 - - - - - 114,293
Consumer loan loss provision 8,614 - 8,614 55,058 17,861 - 72,919 - 81,533
Total cost of revenue 119,830 3,077 122,907 55,058 17,861 - 72,919 - 195,826
Net revenue 142,045 1,881 143,926 71,072 61,177 - 132,249 177 276,352
Expenses
Operations and administration 100,128 1,740 101,868 32,201 23,238 25,857 81,296 22,567 205,731
Loss on divestitures 273 4,903 5,176 - - - - - 5,176
Depreciation and amortization 9,931 280 10,211 2,618 601 2,119 5,338 4,895 20,444
Total expenses 110,332 6,923 117,255 34,819 23,839 27,976 86,634 27,462 231,351
Income (loss) from operations $ 31,713 $ (5,042 ) $ 26,671 $ 36,253 $ 37,338 $ (27,976 ) $ 45,615 $ (27,285 ) $ 45,001

As of September 30, 2014

Total assets $ 1,385,469 $ 714,876 $ 2,100,345
Goodwill $ 488,700 $ 210,361 $ 699,061
Retail Services E-Commerce
Domestic Foreign Total Domestic Foreign Admin Total Corporate Consolidated

Three Months Ended September 30, 2013

Revenue
Pawn loan fees and service charges $ 77,532 $ 1,766 $ 79,298 $ $ $ $ $ $ 79,298
Proceeds from disposition of merchandise 124,352 4,308 128,660 128,660
Consumer loan fees 29,504 29,504 104,954 93,105 198,059 227,563
Other 1,731 66 1,797 249 69 318 165 2,280
Total revenue 233,119 6,140 239,259 105,203 93,174 198,377 165 437,801
Cost of revenue
Disposed merchandise 87,530 3,571 91,101 91,101
Consumer loan loss provision 10,037 10,037 49,225 40,431 89,656 99,693
Total cost of revenue 97,567 3,571 101,138 49,225 40,431 89,656 190,794
Net revenue 135,552 2,569 138,121 55,978 52,743 108,721 165 247,007
Expenses
Operations and administration 111,220 2,831 114,051 30,445 25,245 15,556 71,246 14,408 199,705
Depreciation and amortization 9,878 764 10,642 1,906 706 1,346 3,958 4,183 18,783
Total expenses 121,098 3,595 124,693 32,351 25,951 16,902 75,204 18,591 218,488
Income (loss) from operations $ 14,454 $ (1,026 ) $ 13,428 $ 23,627 $ 26,792 $ (16,902 ) $ 33,517 $ (18,426 ) $ 28,519

As of September 30, 2013

Total assets $ 1,354,074 $ 633,518 $ 1,987,592
Goodwill $ 459,669 $ 210,368 $ 670,037
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
INCOME FROM OPERATIONS BY OPERATING SEGMENT

(dollars in thousands)

Retail Services E-Commerce
Domestic Foreign Total Domestic Foreign Admin Total Corporate Consolidated

Nine Months Ended September 30, 2014

Revenue
Pawn loan fees and service charges $ 241,459 $ 5,031 $ 246,490 $ - $ - $ - $ - $ - $ 246,490
Proceeds from disposition of merchandise 466,016 12,298 478,314 - - - - - 478,314
Consumer loan fees 74,490 - 74,490 343,922 270,544 - 614,466 - 688,956
Other 5,284 168 5,452 81 568 - 649 507 6,608
Total revenue 787,249 17,497 804,746 344,003 271,112 - 615,115 507 1,420,368
Cost of revenue
Disposed merchandise 333,651 9,716 343,367 - - - - - 343,367
Consumer loan loss provision 24,061 - 24,061 122,422 83,239 - 205,661 - 229,722
Total cost of revenue 357,712 9,716 367,428 122,422 83,239 - 205,661 - 573,089
Net revenue 429,537 7,781 437,318 221,581 187,873 - 409,454 507 847,279
Expenses
Operations and administration 301,470 8,375 309,845 81,425 72,419 67,883 221,727 60,720 592,292
Loss on divestitures 273 4,903 5,176 - - - - - 5,176
Depreciation and amortization 30,357 1,104 31,461 6,577 1,683 5,512 13,772 13,969 59,202
Total expenses 332,100 14,382 346,482 88,002 74,102 73,395 235,499 74,689 656,670
Income (loss) from operations $ 97,437 $ (6,601 ) $ 90,836 $ 133,579 $ 113,771 $ (73,395 ) $ 173,955 $ (74,182 ) $ 190,609
Retail Services

E-Commerce

Domestic Foreign Total

Domestic

Foreign Admin Total Corporate Consolidated

Nine Months Ended September 30, 2013

Revenue
Pawn loan fees and service charges $ 222,508 $ 5,432 $ 227,940

$

$ $ $ $ $ 227,940
Proceeds from disposition of merchandise 425,716 13,193 438,909

438,909
Consumer loan fees 84,473 84,473

283,097

272,629 555,726 640,199
Other 6,149 417 6,566

1,051

92 1,143 1,552 9,261
Total revenue 738,846 19,042 757,888

284,148

272,721 556,869 1,552 1,316,309
Cost of revenue
Disposed merchandise 290,569 10,828 301,397

301,397
Consumer loan loss provision 23,927 23,927

112,391

115,456 227,847 251,774
Total cost of revenue 314,496 10,828 325,324

112,391

115,456 227,847 553,171
Net revenue 424,350 8,214 432,564

171,757

157,265 329,022 1,552 763,138
Expenses
Operations and administration 291,409 9,432 300,841

73,688

76,176 52,071 201,935 50,695 553,471
Depreciation and amortization 27,579 1,593 29,172

6,866

2,101 4,019 12,986 12,156 54,314
Total expenses 318,988 11,025 330,013

80,554

78,277 56,090 214,921 62,851 607,785
Income (loss) from operations $ 105,362 $ (2,811 ) $ 102,551

$

91,203

$ 78,988 $ (56,090 ) $ 114,101 $ (61,299 ) $ 155,353

Corporate operations primarily include corporate expenses such as legal, occupancy, executive oversight, insurance and risk management, public and government relations, internal audit, treasury, payroll, compliance and licensing, finance, accounting, tax and information systems (except for online lending systems, which are included in the e-commerce segment). Corporate income includes miscellaneous income not directly attributable to the Company’s segments. Corporate assets primarily include corporate property and equipment, nonqualified savings plan assets, marketable securities, foreign exchange forward contracts and prepaid insurance.

During the first quarter of 2014, the Company changed the presentation of financial information within its e-commerce segment to report certain administrative and depreciation and amortization expenses within that segment separately from its domestic and foreign operating components. Administrative expenses in the e-commerce segment, which were previously allocated between the domestic and foreign components based on the amount of loans written and renewed, are included under the “Admin” heading within the e-commerce segment information in the tables above.

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES

INCOME FROM OPERATIONS BY OPERATING SEGMENT

(dollars in thousands)

Depreciation and amortization related to the e-commerce administrative function is also included in this category. For comparison purposes, amounts for prior years have been conformed to the current presentation.

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES

LOCATION INFORMATION

Retail Services Segment

The following table sets forth the number of domestic and foreign Company-owned and franchised locations in the Company’s retail services segment providing pawn lending, consumer lending, and other services as of September 30, 2014 and 2013. The Company’s domestic retail services locations operate under the names “Cash America Pawn,” “SuperPawn,” “Cash America Payday Advance,” “Cashland” and “Mr. Payroll.” In addition, some recently acquired domestic retail services locations operate under various names that are expected to be changed to “Cash America Pawn.” Prior to the Company’s sale of its Mexico-based pawn operations in August 2014, the foreign retail services locations operated under the name “Cash America casa de empe~no.”

As of September 30,
2014 2013
Domestic(a) Foreign Total Domestic(a) Foreign Total
Retail services locations offering:
Both pawn and consumer lending 420 - 420 581 581
Pawn lending only 406 - 406 211 47 258
Consumer lending only 37 - 37 68 68
Other(b) 85 - 85 88 88
Total retail services 948 - 948 948 47 995

(a) Except as described in (b) below, includes locations that operated in 21 and 22 states in the United States as of September 30, 2014 and 2013, respectively.

(b) As of September 30, 2014 and 2013, includes 85 and 88 unconsolidated franchised check cashing locations, respectively, that operated in 12 and 13 states in the United States, respectively.

E-Commerce Segment

As of September 30, 2014 and 2013, the Company’s e-commerce segment provided services in 34 and 32 states, respectively, in the United States and in five foreign countries:

In June 2014, the Company launched a pilot program in Brazil where it arranges loans that are made by a third-party lender in accordance with applicable laws and guarantees the payment of these loans by agreeing to purchase the loans from the third-party under certain circumstances. In July 2014, the Company launched a pilot program in China where it has entered into a joint venture with a third-party lender where the third-party lender makes loans in accordance with applicable laws. In addition, in July 2014, the Company launched Headway Capital, a pilot program for a new line of credit product in the United States that serves the needs of small businesses.

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES

NON-GAAP DISCLOSURE

ADJUSTED EARNINGS AND ADJUSTED EARNINGS PER SHARE

Non-GAAP Disclosure

In addition to the financial information prepared in conformity with GAAP, the Company provides historical non-GAAP financial information. Management believes that presentation of non-GAAP financial information is meaningful and useful in understanding the activities and business metrics of the Company’s operations. Management believes that these non-GAAP financial measures reflect an additional way of viewing aspects of the Company’s business that, when viewed with its GAAP results, provide a more complete understanding of factors and trends affecting its business.

Management provides non-GAAP financial information for informational purposes and to enhance understanding of the Company’s consolidated financial statements. Readers should consider the information in addition to, but not instead of or superior to, its financial statements prepared in accordance with GAAP. This non-GAAP financial information may be determined or calculated differently by other companies, limiting the usefulness of those measures for comparative purposes.

Adjusted Earnings and Adjusted Earnings Per Share

In addition to reporting financial results in accordance with GAAP, the Company has provided adjusted net income, adjusted diluted net income per share attributable to the Company, adjusted earnings and adjusted earnings per share (collectively, the “Adjusted Earnings Measures”), which are non-GAAP measures. Management believes that the presentation of these measures provides investors with greater transparency and facilitates comparison of operating results across a broad spectrum of companies with varying capital structures, compensation strategies, derivative instruments and amortization methods, which provides a more complete understanding of the Company’s financial performance, competitive position and prospects for the future. Management also believes that investors regularly rely on non-GAAP financial measures, such as the Adjusted Earnings Measures, to assess operating performance and that such measures may highlight trends in the Company’s business that may not otherwise be apparent when relying on financial measures calculated in accordance with GAAP. In addition, management believes that the adjustments included in the table below, especially those included in “Adjusted net income and adjusted diluted net income per share attributable to the Company,” are useful to investors in order to allow them to compare the Company’s financial results for the current quarter and current nine-month period with the prior year quarter and prior year nine-month period, respectively. The computation of Adjusted Earnings Measures as presented below may differ from the computation of similarly-titled measures provided by other companies.

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NON-GAAP DISCLOSURE
ADJUSTED EARNINGS AND ADJUSTED EARNINGS PER SHARE

The following table provides a reconciliation for the three and nine months ended September 30, 2014 and 2013, respectively, between net income attributable to the Company and diluted net income per share attributable to the Company calculated in accordance with GAAP to the Adjusted Earnings Measures, which are shown net of tax (dollars in thousands, except per share data):

Three Months Ended September 30, Nine Months Ended September 30,
2014 2013 2014 2013
$

Per Diluted Share(a)

$

Per Diluted Share(a)

$

Per Diluted Share(a)

$

Per Diluted Share(a)

Net income and diluted net income per share attributable to the Company $ 9,916 $ 0.34 $ 46,186 $ 1.52 $ 76,624 $ 2.61 $ 115,244 $ 3.73
Adjustments (net of tax):
Loss on divestitures (b) 6,444 0.22 6,444 0.22
Corporate Reorganization (c) 3,870 0.13 3,870 0.13
Loss on early extinguishment of debt (d) 3,774 0.13 14,208 0.48
2013 Litigation Settlement (e) - - 11,340 0.37 400 0.01 11,340 0.37
Tax benefit related to Creazione Deduction (f) - - (33,201 ) (1.09 ) - - (33,201 ) (1.08 )
Adjusted net income and adjusted diluted net income per share attributable to the Company 24,004 0.82 24,325 0.80 101,546 3.45 93,383 3.02
Other adjustments (net of tax):
Intangible asset amortization 1,043 0.04 1,014 0.03 3,134 0.11 2,675 0.09
Non-cash equity-based compensation 1,058 0.04 698 0.03 3,040 0.11 2,456 0.08
Non-cash interest and debt issuance cost amortization 869 0.02 1,014 0.03 2,423 0.08 2,939 0.10
Foreign currency transaction loss (gain) 100 - 467 0.02 277 0.01 663 0.02
Adjusted earnings and adjusted earnings per share $ 27,074 $ 0.92 $ 27,518 $ 0.91 $ 110,420 $ 3.76 $ 102,116 $ 3.31
(a) Diluted shares are calculated by giving effect to the potential dilution that could occur if securities or other contracts to issue common shares were exercised and converted into common shares during the period.
(b) For the three and nine months ended September 30, 2014, represents a loss on the sale of the Mexico-based pawn operations of $2.8 million and tax provision of $1.7 million, a $2.1 million expense, net of tax benefit of $0.3 million recognized related to an uncollectible receivable as a result of the Company’s discontinuation of its Mexico-based pawn operations, and a loss on the sale of Colorado pawn lending locations of $0.3 million, net of tax benefit of $0.1 million.
(c) For the three and nine months ended September 30, 2014, represents charges of $6.1 million, net of tax benefit of $2.3 million related to a reorganization of the Company’s corporate functions (the “Corporate Reorganization”).
(d) For the three months ended September 30, 2014, represents charges of $6.0 million, net of tax benefit of $2.2 million. For the nine months ended September 30, 2014, represents $22.6 million of charges, net of tax benefit of $8.3 million.
(e) Represents charges related to settlement of a litigation matter in 2013 (the “2013 Litigation Settlement”). For the nine months ended September 30, 2014, represents charges of $0.6 million of charges, net of tax benefit of $0.2 million. For the three and nine months ended September 30, 2013, represents $18.0 million of charges, net of a tax benefit of $6.7 million.
(f) In connection with the liquidation of Creazione, represents a recognized income tax benefit related to a tax deduction included on the Company’s 2013 federal income tax return for its tax basis in the stock of Creazione (the “Creazione Deduction”).

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES

NON-GAAP DISCLOSURE

ADJUSTED EBITDA

Adjusted EBITDA

The table below shows adjusted EBITDA, a non-GAAP measure that the Company defines as earnings excluding depreciation, amortization, interest, foreign currency transaction gains or losses, loss on early extinguishment of debt, equity in earnings or loss of unconsolidated subsidiary, taxes and including the net income or loss attributable to noncontrolling interests. Management believes adjusted EBITDA is used by investors to analyze operating performance and evaluate the Company’s ability to incur and service debt and its capacity for making capital expenditures. Adjusted EBITDA is also useful to investors to help assess the Company’s estimated enterprise value. In addition, management believes that the adjustments shown below are useful to investors in order to allow them to compare the Company’s financial results during the periods shown without the effect of each of these income and expense items. The computation of adjusted EBITDA as presented below may differ from the computation of similarly-titled measures provided by other companies. The following table provides a reconciliation between Net Income attributable to Cash America International, Inc., which is the nearest GAAP measure presented in the Company’s financial statements, to Adjusted EBITDA (dollars in thousands):

Trailing 12 Months Ended
September 30,
2014 2013
Net income attributable to Cash America International, Inc. $ 103,908 $ 139,724
Net loss attributable to the noncontrolling interest - (181 )
Provision for income taxes (a) 68,685 29,896
Equity in loss of unconsolidated subsidiary - 222
Loss on early extinguishment of debt (b) 22,814 346
Foreign currency transaction loss 591 1,294
Interest expense, net 51,041 33,540
Depreciation and amortization expenses (c) 77,980 71,377
Adjustments:
Corporate Reorganization (d) 6,143
Loss on divestitures (e) 5,176
Texas Consumer Loan Store Closures (f) 1,373
Regulatory Penalty (g) 5,000
2013 Litigation settlement (h) 635 18,000
Charges related to Mexico Reorganization (i) - 6,965
Charges related to Ohio Adjustment and Ohio Reimbursement Program (j) (5,000 ) 13,400
Adjusted EBITDA $ 338,346 $ 314,583
Adjusted EBITDA margin calculated as follows:
Total revenue $ 1,900,714 $ 1,807,913
Adjusted EBITDA $ 338,346 $ 314,583
Adjusted EBITDA as a percentage of total revenue 17.8 % 17.4 %
(a) For the trailing 12 months ended September 30, 2013, includes income benefit of $33.2 million related to the Creazione Deduction.
(b) For the trailing 12 months ended September 30, 2014, represents charges of $22.8 million, before tax benefit of $8.4 million. For the trailing 12 months ended September 30, 2013, represents charges of $0.3 million, before tax benefit of $0.1 million.
(c) For the trailing 12 months ended September 30, 2014, excludes $0.2 million of depreciation and amortization expenses, which are included in Texas Consumer Loan Store Closures related to the closure of 36 consumer lending-only retail services locations in Texas in 2013 (“Texas Consumer Loan Store Closures”). For the trailing 12 months ended September 30, 2013, excludes $1.5 million of depreciation and amortization expenses which are included in “Charges related to the Mexico Reorganization.”
(d) Represents charges of $6.1 million, before tax benefit of $2.3 million.
(e) Represents a loss on the sale of the Mexico-based pawn operations of $2.8 million and tax provision of $1.7 million, a $2.1 million expense, before tax benefit of $0.3 million recognized related to an uncollectible receivable as a result of the Company’s discontinuation of its Mexico-based pawn operations, and a loss on the sale of Colorado pawn lending locations of $0.3 million, before tax benefit of $0.1 million.
(f) Represents charges of $1.4 million, before tax benefit of $0.5 million, related to the Texas Consumer Loan Store Closures.
(g) Represents charges that are nondeductible for tax purposes related to a penalty paid to the Consumer Financial Protection Bureau “CFPB” in connection with the issuance of a consent order by the CFPB.
(h) For the trailing 12 months ended September 30, 2014, represents charges of $0.6 million, before tax benefit of $0.2 million. For the trailing 12 months ended September 30, 2013, represents charges of $18.0 million, before tax benefit of $6.7 million.
(i) Includes $1.5 million of depreciation and amortization expenses, as noted in (c) above.
(j) For the trailing 12 months ended September 30, 2014, represents the decrease in the Company’s remaining liability related to the Ohio Reimbursement Program (defined below) during 2013 after the assessment of the claims made to date and related matters (the “Ohio Adjustment”) of $5.0 million, before tax provision of $1.8 million. For the trailing 12 months ended September 30, 2013, represents charges related a voluntary program to reimburse Ohio customers in connection with legal collections proceedings initiated by the Company in Ohio (the “Ohio Reimbursement Program”), before tax benefit of $5.0 million.

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES

NON-GAAP DISCLOSURE

ADJUSTED EBITDA

In addition, management believes that the adjusted EBITDA shown by segment and for the Company’s corporate operations are useful to investors in order to allow them to compare the Company’s financial results during the periods shown without the effect of each of the applicable income and expense items discussed above. The following table provides a reconciliation between Income (loss) from operations, which is the nearest GAAP measure presented for the Company’s segments in the notes to the Company’s financial statements, to Adjusted EBITDA (dollars in thousands):

Trailing 12 Months Ended September 30,
2014 2013
Retail Services E-Commerce Corporate Consolidated Retail Services E-Commerce Corporate Consolidated
Income (loss) from operations $ 132,539 $ 210,469 $ (95,969 ) $ 247,039 $ 136,157 $ 148,051 $ (79,367 ) $ 204,841
Depreciation and amortization expenses(a) 41,750 17,929 18,301 77,980 38,334 16,977 16,066 71,377
Adjustments:
Corporate Reorganization 1,708 - 4,435 6,143
Loss on divestitures 5,176 - - 5,176
Texas Consumer Loan Store Closures(b) 1,373 - - 1,373
Regulatory Penalty 2,500 2,500 5,000
2013 Litigation Settlement 635 - - 635 18,000 18,000
Charges related to the Mexico Reorganization(c) - - - - 6,965 6,965
Charges related to Ohio Adjustment and Ohio Reimbursement(d) $ (5,000 ) $ - $ - $ (5,000 ) $ 13,400 $ $ $ 13,400
Adjusted EBITDA 180,681 230,898 (73,233 ) 338,346 212,856 165,028 (63,301 ) 314,583
(a) For the trailing 12 months ended September 30, 2014, excludes $0.2 million of depreciation and amortization expenses, which are included in Texas Consumer Loan Store Closures. For the trailing 12 months ended September 30, 2013, excludes $1.5 million of depreciation and amortization expenses which are included in “Charges related to the Mexico Reorganization.”
(b) Includes $0.2 million of depreciation and amortization expenses as noted in (a) above.
(c) Includes $1.5 million of depreciation and amortization expenses as noted in (a) above.
(d) For the trailing 12 months ended September 30, 2014, represents the Ohio Adjustment. For the trailing 12 months ended September 30, 2013, represents charges related to the Ohio Reimbursement Program.
Nine Months Ended September 30,
2014 2013
Retail Services E-Commerce Corporate Consolidated Retail Services E-Commerce Corporate Consolidated
Income (loss) from operations $ 90,836 $ 173,955 $ (74,182 ) $ 190,609 $ 102,551 $ 114,101 $ (61,299 ) $ 155,353
Depreciation and amortization expenses 31,461 13,772 13,969 59,202 29,172 12,986 12,156 54,314
Adjustments:
Corporate Reorganization 1,708 - 4,435 6,143
Loss on divestitures 5,176 - - 5,176
2013 Litigation Settlement 635 - - 635 18,000 18,000
Adjusted EBITDA $ 129,816 $ 187,727 $ (55,778 ) $ 261,765 $ 149,723 $ 127,087 $ (49,143 ) $ 227,667
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NON-GAAP DISCLOSURE
ESTIMATED ADJUSTED EBITDA FOR 2015

The following table reconciles estimated Income from operations to Adjusted EBITDA, a non-GAAP measure, for each of the Company’s retail services and e-commerce segments (dollars in thousands):

Retail services segment (including corporate services):

Estimated Results
Year ended December 31, 2015
Low High
Unaudited
Income from operations $ 50,000 $ 72,000
Depreciation and amortization 60,000 63,000
Adjusted EBITDA $ 110,000 $ 135,000

E-commerce segment:

Estimated Results
Year ended December 31, 2015
Low High
Unaudited
Income from operations $ 160,000 $ 217,000
Depreciation and amortization 20,000 23,000
Adjusted EBITDA $ 180,000 $ 240,000

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