XML 46 R30.htm IDEA: XBRL DOCUMENT
v3.6.0.2

Merger and Other Acquisitions (Tables) | 12 Months Ended
--- | ---
Dec. 31, 2016
Business Combinations [Abstract] |
Schedule of Business Acquisitions | The following table summarizes the consideration transferred in connection with the merger:
| Cash America Merger
Cash America shares outstanding at September 1, 2016 (in thousands) | 24,025 |
Exchange ratio | 0.84 |
Shares of First Cash common stock issued (in thousands) | 20,181 |
Company common stock per share price at September 1, 2016 | $ | 50.32 |
Fair value of Company common stock issued to Cash America shareholders | $ | 1,015,507 |
Cash in lieu of fractional shares paid by the Company | 10 |
Cash America outstanding stock awards settled in cash | 50,760 |
Aggregate merger consideration | $ | 1,066,277 |
Schedule of Preliminary Allocations of Purchase Price | The allocation of the aggregate merger consideration, subject to future measurement period adjustments, is as follows:
| Cash America Merger
Cash and cash equivalents | $ | 42,520 |
Pawn loans | 234,761 |
Fees and service charges receivable | 26,893 |
Consumer loans | 27,549 |
Inventories | 224,644 |
Income taxes receivable | 23,095 |
Other current assets | 28,324 |
Investment in common stock of Enova (1) | 60,785 |
Property and equipment | 118,381 |
Goodwill (2) | 522,064 |
Intangible assets (3) | 103,250 |
Other assets | 62,994 |
Current liabilities | (95,268 | )
Customer deposits | (21,536 | )
Revolving unsecured credit facility (4) | (232,000 | )
Deferred tax liabilities | (28,002 | )
Other liabilities | (32,177 | )
Aggregate merger consideration | $ | 1,066,277 |
(1) | Represents Cash America’s investment in the common stock of Enova International, Inc. (“Enova”), a publicly traded company focused on providing online consumer lending products. Prior to December 31, 2016, all of the Enova shares acquired were sold in open market transactions at an average price of $10.40 per share, which resulted in a net gain on sale of $1,299 and generated net proceeds of $62,084.
(2) | The goodwill is attributable to the excess of the aggregate merger consideration over the fair value of the net tangible and intangible assets acquired and liabilities assumed and is considered to represent the synergies and economies of scale expected from combining the operations of the Company and Cash America. This goodwill has been assigned to the U.S. operations reporting unit. Approximately $223,000 of the goodwill arising from the Merger is expected to be deductible for U.S. income tax purposes.
(3) | Intangible assets acquired and the respective useful lives assigned consist of the following:
|  | Amount |  | Useful life (in years)
Trade names |  | $ | 46,300 |  |  | Indefinite
Pawn licenses |  | 32,300 |  |  | Indefinite
Customer relationships |  | 14,700 |  |  | Five
Executive non-compete agreements |  | 8,700 |  |  | Two
Franchise agreements related to check cashing operation |  | 1,250 |  |  | Indefinite
|  | $ | 103,250 |  |  |
The customer relationships are being amortized using an accelerated amortization method that reflects the future cash flows expected from the returning pawn customers of Cash America. The non-compete agreements are being amortized over a straight-line basis over the life of the non-compete agreements. As the trade names, pawn licenses and franchise agreements have indefinite lives, they are not amortized.
(4) | Represents outstanding borrowings under Cash America’s revolving unsecured credit facility that became due upon completion of the Merger. The Cash America revolving unsecured credit facility was repaid by the Company using proceeds from the 2016 Credit Facility (as described in Note 11) and was terminated upon completion of the Merger.
Transaction costs associated with the Merger are being expensed as incurred and are presented in the consolidated statements of income as merger and other acquisition expenses. These expenses include investment banking, legal, accounting, and other related third party costs associated with the Merger, including preparation for regulatory filings and shareholder approvals. See Note 4 for further information about merger and other acquisition expenses. 2016 Other Acquisitions The Company completed other acquisitions during fiscal 2016, as described below, consistent with its strategy to continue its expansion of pawn stores in selected markets. The purchase price of each acquisition was allocated to assets and liabilities acquired based upon their estimated fair market values at the date of acquisition. The excess purchase price over the estimated fair market value of the net assets acquired has been recorded as goodwill. The goodwill arising from these acquisitions consists largely of the synergies and economies of scale expected from combining the operations of the Company and the pawn stores acquired. The Company acquired the stock of Maxi Prenda, S.A. de C.V., the operating entity owning the pawn loans, inventories, layaways and other operating assets and liabilities of 166 pawn stores located in Mexico on January 6, 2016 and the assets of 13 pawn stores located in El Salvador on February 2, 2016 in related transactions (collectively the “Latin America Acquisition”). The combined purchase price for the all-cash transaction was $30,123, net of cash acquired before certain post-closing adjustments. Subsequent to the acquisition, $229 of post closing adjustments were identified, resulting in a combined purchase price of $29,894, net of cash acquired and is subject to further post-closing adjustments. The purchase was composed of $27,357 in cash paid during fiscal 2016 and remaining payables to the sellers of approximately $2,537. In addition, the Company assumed approximately $6,630 in peso-denominated debt from these acquisitions which was repaid in full by the Company in January 2016. The assets, liabilities and results of operations of the locations are included in the Company’s consolidated results as of the acquisition dates. The goodwill resulting from the Latin America Acquisition has been assigned to the Latin America operations reporting unit. During fiscal 2016, three pawn stores located in the U.S. were acquired by the Company (“U.S. Acquisitions”) for an all-cash aggregate purchase price of $1,951, net of cash acquired and remaining payables to the sellers of approximately $17. During fiscal 2016, the Company also paid $575 of deferred purchase price amounts payable related to prior-year acquisitions. The goodwill resulting from the U.S. Acquisitions has been assigned to the U.S. operations reporting unit. The allocations of the purchase prices for the Company’s other acquisitions during 2016 (the “2016 Acquisitions”) are as follows:
| U.S. Acquisitions |  | Latin America Acquisition |  | Total
Pawn loans | $ | 385 |  |  | $ | 10,586 |  |  | $ | 10,971 |
Fees and service charges receivable | 18 |  |  | 885 |  |  | 903 |
Inventory | 359 |  |  | 3,014 |  |  | 3,373 |
Other current assets | — |  |  | 1,795 |  |  | 1,795 |
Property and equipment | 10 |  |  | 6,821 |  |  | 6,831 |
Goodwill (1) | 1,239 |  |  | 20,413 |  |  | 21,652 |
Intangible assets (2) | 36 |  |  | 405 |  |  | 441 |
Other assets | — |  |  | 512 |  |  | 512 |
Deferred tax assets | — |  |  | 2,392 |  |  | 2,392 |
Current liabilities | (96 | ) |  | (10,299 | ) |  | (10,395 | )
Notes payable | — |  |  | (6,630 | ) |  | (6,630 | )
Purchase price | $ | 1,951 |  |  | $ | 29,894 |  |  | $ | 31,845 |
(1) | Substantially all of the goodwill for the U.S. Acquisitions is expected to be deductible for U.S. income tax purposes. However, the goodwill for the Latin America Acquisition is not expected to be deductible for Mexico and El Salvador income tax purposes.
(2) | Intangible assets primarily consist of customer relationships, which are generally amortized over five years.
Intangible Assets Acquired | Intangible assets acquired and the respective useful lives assigned consist of the following:
|  | Amount |  | Useful life (in years)
Trade names |  | $ | 46,300 |  |  | Indefinite
Pawn licenses |  | 32,300 |  |  | Indefinite
Customer relationships |  | 14,700 |  |  | Five
Executive non-compete agreements |  | 8,700 |  |  | Two
Franchise agreements related to check cashing operation |  | 1,250 |  |  | Indefinite
|  | $ | 103,250 |  |  |
Pro Forma Financial Information | The following unaudited pro forma financial information reflects the consolidated results of operations of the Company as if the Merger and the 2016 Acquisitions had occurred on January 1, 2015:
|  | Year Ended |  | Year Ended
|  | December 31, 2016 |  | December 31, 2015
|  | As Reported |  | Pro Forma |  | As Reported |  | Pro Forma
Total revenue |  | $ | 1,088,377 |  |  | $ | 1,771,835 |  |  | $ | 704,602 |  |  | $ | 1,792,523 |
Net income |  | 60,127 |  |  | 118,333 |  |  | 60,710 |  |  | 61,479 |
Net income per share: |  |  |  |  |  |  |  |
Basic |  | $ | 1.72 |  |  | $ | 2.44 |  |  | $ | 2.16 |  |  | $ | 1.27 |
Diluted |  | 1.72 |  |  | 2.44 |  |  | 2.14 |  |  | 1.27 |

X
- Definition Tabular disclosure of pro forma results of operations for a material business acquisition or series of individually immaterial business acquisitions that are material in the aggregate. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (h)(2)-(3) -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1392-128463 + Details
Name: | us-gaap_BusinessAcquisitionProFormaInformationTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of finite-lived and indefinite-lived intangible assets acquired as part of a business combination. + References No definition available. + Details
Name: | us-gaap_FiniteLivedAndIndefiniteLivedIntangibleAssetsAcquiredAsPartOfBusinessCombinationTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of a material business combination completed during the period, including background, timing, and recognized assets and liabilities. This table does not include leveraged buyouts. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1486-128463 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1392-128463 + Details
Name: | us-gaap_ScheduleOfBusinessAcquisitionsByAcquisitionTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed. May include but not limited to the following: (a) acquired receivables; (b) contingencies recognized at the acquisition date; and (c) the fair value of noncontrolling interests in the acquiree. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=73530397&loc=d3e4845-128472 + Details
Name: | us-gaap_ScheduleOfRecognizedIdentifiedAssetsAcquiredAndLiabilitiesAssumedTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration