First Cash Financial Services Inc. Annual Report 2016

Plain-text annual report

FIRSTCASH, INC FORM 10-K (Annual Report) Filed 03/01/17 for the Period Ending 12/31/16 Address Telephone CIK Symbol SIC Code 1600 WEST 7TH STREET FORT WORTH, TX 76102 817-258-2650 0000840489 FCFS 5900 - Retail-Miscellaneous Retail Industry Consumer Lending Sector Fiscal Year Financials 12/31 http://www.edgar-online.com © Copyright 2017, EDGAR Online, Inc. All Rights Reserved. Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use. Table of Contents UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 10-K[ X ]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2016OR[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from __________ to ___________Commission file number 001-10960FIRSTCASH, INC.(Exact name of registrant as specified in its charter)Delaware75-2237318(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)1600 West 7th Street, Fort Worth, Texas76102(Address of principal executive offices)(Zip Code)(817) 335-1100(Registrant’s telephone number, including area code)Securities registered pursuant to Section 12(b) of the Act:Title of Each ClassName of Exchange on Which RegisteredCommon Stock, par value $.01 per shareNYSESecurities registered pursuant to Section 12(g) of the Act:NoneIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. x Yes o NoIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.o Yes x NoIndicate 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 preceding12 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. x Yes o No Table of Contents 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 andposted pursuant to Rule 405 of Regulation S-T ( § 232.405) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post suchfiles). x Yes o NoIndicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405) is not contained herein, and will not be contained, to the best ofregistrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. xIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of“large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.x Large accelerated filero Accelerated filero Non-accelerated filer (Do not check if a smaller reporting company)o Smaller reporting companyIndicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). o Yes x NoThe aggregate market value of the registrant’s common stock held by non-affiliates of the registrant, based upon the last reported sales price on the NASDAQ Global SelectMarket on June 30, 2016 , is $1,395,000,000 . As of February 20, 2017 , there were 48,289,690 shares of common stock outstanding.DOCUMENTS INCORPORATED BY REFERENCEPortions of the registrant’s definitive Proxy Statement relating to its 2017 Annual Meeting of Stockholders to be held on or about June 8, 2017 , is incorporated by reference inPart III, Items 10, 11, 12, 13 and 14 of this Annual Report on Form 10-K.Table of Contents FIRSTCASH, INC.FORM 10-KFor the Year Ended December 31, 2016TABLE OF CONTENTSPART I Item 1.Business1Item 1A.Risk Factors17Item 1B.Unresolved Staff Comments32Item 2.Properties33Item 3.Legal Proceedings33Item 4.Mine Safety Disclosures33 PART II Item 5.Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities34Item 6.Selected Financial Data35Item 7.Management's Discussion and Analysis of Financial Condition and Results of Operations38Item 7A.Quantitative and Qualitative Disclosures About Market Risk63Item 8.Financial Statements and Supplementary Data64Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure64Item 9A.Controls and Procedures64Item 9B.Other Information67 PART III Item 10.Directors, Executive Officers and Corporate Governance67Item 11.Executive Compensation67Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters67Item 13.Certain Relationships and Related Transactions, and Director Independence67Item 14.Principal Accountant Fees and Services67 PART IV Item 15.Exhibits and Financial Statement Schedules68 SIGNATURES70Table of Contents FORWARD-LOOKING INFORMATIONThis annual report contains forward-looking statements about the business, financial condition and prospects of FirstCash, Inc. and its wholly owned subsidiaries (together, the“Company”). Forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, can be identified by the use of forward-lookingterminology such as “believes,” “projects,” “expects,” “may,” “estimates,” “should,” “plans,” “targets,” “intends,” “could,” “would,” “anticipates,” “potential,” “confident,”“optimistic” or the negative thereof, or other variations thereon, or comparable terminology, or by discussions of strategy, objectives, estimates, guidance, expectations andfuture plans. Forward-looking statements can also be identified by the fact these statements do not relate strictly to historical or current matters. Rather, forward-lookingstatements relate to anticipated or expected events, activities, trends or results. Because forward-looking statements relate to matters that have not yet occurred, thesestatements are inherently subject to risks and uncertainties.These forward-looking statements are made to provide the public with management’s current assessment of the Company’s business. Although the Company believes theexpectations reflected in forward-looking statements are reasonable, there can be no assurances such expectations will prove to be accurate. Security holders are cautionedsuch forward-looking statements involve risks and uncertainties. Certain factors may cause results to differ materially from those anticipated by the forward-looking statementsmade in this annual report. Such factors may include, without limitation, the risks, uncertainties and regulatory developments discussed and described in (i) this annual report,including the risks described in Part I, Item IA, “Risk Factors” hereof, and (ii) the other reports filed with the SEC. Many of these risks and uncertainties are beyond the abilityof 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 thoseindicated by the forward-looking statements. The forward-looking statements contained in this annual report speak only as of the date of this annual report, and the Companyexpressly disclaims any obligation or undertaking to report any updates or revisions to any such statement to reflect any change in the Company’s expectations or any changein events, conditions or circumstances on which any such statement is based, except as required by law.Table of Contents PART IItem 1. BusinessGeneralThe Company is a leading operator of retail-based pawn stores in the United States and Latin America. As of December 31, 2016 , the Company had 2,085 locations,consisting of 1,130 stores across 26 U.S. states, 909 stores across 32 states in Mexico, 33 stores in Guatemala and 13 stores in El Salvador. On September 1, 2016, the Company completed its previously announced merger with Cash America International, Inc. (“Cash America”), whereby Cash America mergedwith and into a wholly owned subsidiary of the Company (the “Merger”). Following the Merger, the Company changed its name from First Cash Financial Services, Inc. toFirstCash, Inc. The accompanying audited consolidated statement of income for the year ended December 31, 2016 includes the results of operations for Cash America for theperiod September 2, 2016 to December 31, 2016. The accompanying audited consolidated balance sheet at December 31, 2016 includes the preliminary valuation of the assetsacquired and liabilities assumed. See Note 3 of Notes to Consolidated Financial Statements for additional information about the Merger.The Company’s primary business is the operation of full-service pawn stores which make small pawn loans secured by personal property such as consumer electronics,jewelry, power tools, household appliances, sporting goods and musical instruments. These pawn stores generate significant retail sales from the merchandise acquired throughcollateral forfeitures and over-the-counter purchases from customers. In addition, some of the Company’s pawn stores offer small unsecured consumer loans or credit servicesproducts. The Company’s strategy is to focus on growing its full-service pawn operations in the United States and Latin America through new store openings and strategicacquisition opportunities as they arise.In addition to its pawn stores, the Company operates a small number of stand-alone consumer finance stores in the U.S. and Mexico. These stores provide consumer financialservices products including credit services, consumer loans and check cashing. The Company also offers check cashing services through franchised check cashing centers, forwhich the Company receives franchise fees. The Company acquired this franchised, check cashing business as a result of the Merger. The Company considers the creditservices and consumer loan products to be non-core, non-growth revenue streams, representing 4% of the Company’s total revenues for the year ended December 31, 2016 .Revenue for the year ended December 31, 2016 was primarily generated from the Company’s pawn operations with 38% of total revenues derived from Latin America and62% from the United States. For additional historical information on the composition of revenues from the United States and Latin America, see “Item 7. Management’sDiscussion and Analysis of Financial Condition and Results of Operations—Results of Continuing Operations.”Prior to the fourth quarter of 2016, the Company reported its results in one reportable segment, which aggregated the Company’s U.S. and Latin America operations. Primarilyas a result of the Merger, the Company organized its operations during the fourth quarter of 2016 into two reportable segments: the U.S. operations segment and the LatinAmerica operations segment. The U.S. operations segment consists of all pawn and consumer loan operations in the United States and the Latin America operations segmentconsists of all pawn and consumer loan operations in Latin America, which currently includes operations in Mexico, Guatemala and El Salvador.The Company was formed as a Texas corporation in July 1988. In April 1991, the Company reincorporated as a Delaware corporation. On September 1, 2016, the Companychanged its name from First Cash Financial Services, Inc. to FirstCash, Inc. in connection with the completion of the Merger. The Company’s principal executive offices arelocated at 1600 West 7th Street, Fort Worth, Texas 76102, and its telephone number is (817) 335-1100.1Table of Contents Pawn IndustryPawn stores are neighborhood-based retail stores that buy and sell consumer items such as consumer electronics, jewelry, power tools, appliances, sporting goods and musicalinstruments. Pawn stores also provide a quick and convenient source of small consumer loans to unbanked, under-banked and credit-challenged customers. These consumersare typically not effectively or efficiently served by traditional lenders such as banks, credit unions, credit card providers or other small loan providers. The Company’s pawnstores directly compete in both the specialty retail and consumer finance industries.United StatesThe pawn industry in the United States is well established, with the highest concentration of pawn stores located in the Southeast, Midwest and Southwest regions of thecountry. The operation of pawn stores is governed primarily by state laws and accordingly, states that maintain regulations most conducive to profitable pawn operations havehistorically seen the greatest concentration of pawn stores. Management believes the United States pawn industry, although mature, remains highly fragmented. The two majorpublicly traded companies in the pawn industry, which includes the Company, currently operate approximately 1,600 of the estimated 10,000 to 15,000 pawn stores in theUnited States. The Company believes the majority of pawnshops in the United States are owned by individuals operating five or fewer locations.Mexico and Other Latin American MarketsMost of the Company’s pawn stores in Latin America are full-service stores, similar to the U.S. stores, which lend on a wide array of collateral and have a retail sales floor.The operation of pawn stores in Mexico is governed primarily by federal laws. The full-service pawn industry in Mexico is less developed as compared to the U.S. It isestimated that there are approximately 6,500 to 8,000 total pawn stores in Mexico. Typical stores in Mexico are much smaller than a U.S. pawn store with limited retail space,typically offering only pawn loans collateralized by gold jewelry or small consumer electronics. Competition in Mexico for the Company’s full-service pawn stores is limited,and the Company believes there are less than 2,000 of the larger full-service pawn stores. A large percentage of the population in Mexico and other countries in Latin Americaare unbanked or under-banked and have limited access to consumer credit. The Company believes that there is significant opportunity for future expansion in Mexico andother Latin American countries due to the large potential consumer base and limited competition from other large, full-service pawn store operators.Business StrategyThe Company’s business plan is to expand its operations by opening new (“de novo”) retail pawn locations, by acquiring existing pawnshops in strategic markets andattempting to increase revenue and operating profits in its existing stores. In pursuing its business strategy, the Company seeks to establish clusters of several stores in specificgeographic areas in order to achieve certain economies of scale relative to management and supervision, pricing and purchasing, information and accounting systems andmarketing.The Company has opened or acquired over 1,500 pawn stores in the last five fiscal years, including the addition of 815 stores as a result of the Merger and 211 stores as aresult of the Maxi Prenda acquisition in Latin America. Net store additions have grown at a compound annual store growth rate of 25% over this period. The Company intendsto open additional stores in locations where management believes appropriate demand and other favorable conditions exist. The following table details stores opened andacquired over the five year period ended December 31, 2016 :2Table of Contents Year Ended December 31, 2016 2015 2014 2013 2012U.S. stores: Merged Cash America locations815 — — — —New locations opened— — 8 9 6Locations acquired3 33 25 34 46Total additions818 33 33 43 52 Latin America stores: New locations opened41 38 31 60 62Locations acquired179 32 47 8 29Total additions220 70 78 68 91 Total: Merged Cash America locations815 — — — —New locations opened41 38 39 69 68Locations acquired182 65 72 42 75Total additions1,038 103 111 111 143For additional information on store count activity, see “—Locations and Operations” below.New Store OpeningsThe Company plans to continue opening new pawn stores, primarily in Latin America and to a much lesser extent in the U.S. The Company typically opens new stores inunder-developed markets, especially where customer demographics are favorable and competition is limited or restricted. After a suitable location has been identified and alease and the appropriate licenses are obtained, a new store can typically be open for business within six to twelve weeks. The investment required to open a new locationincludes store operating cash, inventory, funds for pawn and consumer loans, leasehold improvements, store fixtures, security systems, computer equipment and other start-upcosts.AcquisitionsBecause of the fragmented nature of the pawn industry, the Company believes attractive acquisition opportunities will continue to arise from time to time in both LatinAmerica and the U.S. Before making an acquisition, management assesses the demographic characteristics of the surrounding area, considers the number, proximity and sizeof competing stores, and researches state and local regulatory standards. Specific pawn store acquisition criteria include an evaluation of the volume of merchandise sales andpawn transactions, outstanding customer pawn loan balances, historical pawn yields, retail margins and redemption rates, the condition and quantity of inventory on hand, andlocation, condition and lease terms of the facility.Enhance Productivity of Existing and Newly Opened StoresThe primary factors affecting the profitability of the Company’s existing store base are the volume and gross profit of merchandise sales, the volume of and yield on customerloans and store expenses. To encourage customer traffic, which management believes is a key determinant of a store’s success, the Company has taken several steps todistinguish its stores and to make customers feel more comfortable. In addition to a clean and secure physical store facility, the stores’ exteriors typically display attractive anddistinctive signage similar to those used by contemporary specialty retailers.The Company has employee-training programs that promote customer service, productivity and professionalism. The Company utilizes a proprietary computer informationsystem that provides fully-integrated functionality to support point-of-sale retail operations, real time merchandise valuations, loan to value calculations, inventorymanagement, customer recordkeeping, loan management, compliance and control systems and employee compensation. Each store is connected on a real-time basis to a securedata center that houses the centralized databases and operating systems. The information systems provide management with the ability to continuously monitor storetransactions and operating results. The Company is in the process of converting all Cash3Table of Contents America stores to the Company’s proprietary computer information system and expects that conversion to be completed by the end of 2017.The Company maintains a well-trained internal audit staff that conducts regular store visits to test compliance of financial and operational controls. Management believes thecurrent operating and financial controls and systems are adequate for the Company’s existing store base and can accommodate reasonably foreseeable growth in the near term.Services Offered by the CompanyPawn Merchandise SalesThe Company’s pawn merchandise sales are primarily retail sales to the general public from its pawn stores. The items the Company sells generally consist of pre-ownedconsumer electronics, jewelry, power tools, household appliances, sporting goods and musical instruments. The Company also melts certain quantities of scrap jewelry andsells the gold, silver and diamonds in commodity markets. Total merchandise sales accounted for approximately 67% of the Company’s revenue during fiscal 2016 .The Company acquires pawn merchandise inventory primarily through forfeited pawn collateral and, to a lesser extent, through purchases of used goods directly from thegeneral public. Merchandise acquired by the Company through forfeited pawn collateral is carried in inventory at the amount of the related pawn loan, exclusive of anyaccrued service fees. The Company also acquires limited quantities of new or refurbished general merchandise inventories directly from wholesalers and manufacturers.The Company does not provide direct financing to customers for the purchase of its merchandise, but does permit its customers to purchase merchandise on an interest-free“layaway” plan. Should the customer fail to make a required payment pursuant to a layaway plan, the item is returned to inventory and previous payments are forfeited to theCompany. Interim payments from customers on layaway sales are recorded as deferred revenue and subsequently recorded as retail merchandise sales revenue when the finalpayment is received or when previous payments are forfeited to the Company.Retail sales are seasonally highest in the fourth quarter associated with holiday shopping and to a lesser extent in the first quarter associated with tax refunds in the U.S.Pawn Lending ActivitiesThe Company’s pawn stores make small, short term, secured loans to its customers in order to help them meet short-term cash needs. All pawn loans are collateralized bypersonal property such as consumer electronics, jewelry, power tools, household appliances, sporting goods and musical instruments. Pawn loans are non-recourse loans andthe pledged goods provide the only security to the Company for the repayment of the loan. The Company does not investigate the creditworthiness of the borrower, primarilyrelying instead on the marketability and sales value of pledged goods as a basis for its credit decision. Pawn loans are non-recourse loans and a customer does not have a legalobligation to repay a pawn loan. There is no collections process and the decision to not repay the loan will not affect the customer’s credit score.At the time a pawn loan transaction is entered into, an agreement, commonly referred to as a “pawn ticket,” is delivered to the borrower for signature that sets forth, amongother items, the name and address of the pawnshop, the borrower’s name, the borrower’s identification number from his/her driver’s license or other government issuedidentification, date, identification and description of the pledged goods, including applicable serial numbers, amount financed, pawn service fee, maturity date, total amountthat must be paid to redeem the pledged goods on the maturity date and the annual percentage rate.Pledged property is held through the term of the loan, unless the loan is paid earlier or renewed. The typical pawn loan term is generally 30 days plus an additional graceperiod of 14 to 90 days depending on geographical markets and local regulations. Pawn loans may be either paid in full with accrued pawn loan fees and service charges or,where permitted by law, may be renewed or extended by the customer’s payment of accrued pawn loan fees and service charges. If a pawn loan is not repaid prior to theexpiration of the grace period, the pawn collateral is forfeited to the Company and transferred to inventory at a value equal to the principal amount of the loan, exclusive ofaccrued service fees. The Company does not record pawn loan losses or charge-offs because the amount advanced becomes the carrying cost of the forfeited collateral that isto be recovered through the merchandise sales function described above.The pawn loan fees are typically calculated as a percentage of the pawn loan amount based on the size and duration of the transaction and generally range from 4% to 25% permonth, as permitted by applicable law. As required by applicable law, the amounts of these charges are disclosed to the customer on the pawn ticket. Pawn loan fees accountedfor approximately 29% of the Company’s revenue during fiscal 2016 .4Table of Contents The amount the Company is willing to finance for a pawn loan is primarily based on a percentage of the estimated retail value of the collateral. There are no minimum ormaximum pawn to fair market value restrictions in connection with the Company’s lending activities. In order to estimate the value of the collateral, the Company utilizes itsintegrated proprietary computer information system to recall recent selling prices of similar merchandise in its own stores. The basis for the Company’s determination of theretail value also includes such sources as precious metals spot markets, catalogs, blue books, online auction sites and retailer advertisements. These sources, together with theemployees’ experience in selling similar items of merchandise in particular stores, influence the determination of the estimated retail value of such items. The Company doesnot utilize a standard or mandated percentage of estimated retail value in determining the amount to be financed. Rather, the employee has the authority to set the percentagefor a particular item and to determine the ratio of pawn amount to estimated sale value with the expectation that, if the item is forfeited to the pawnshop, its subsequent saleshould yield a gross profit margin consistent with the Company’s historical experience. The recovery of the principal and realization of gross profit on sales of inventory isdependent on the Company’s initial assessment of the property’s estimated retail value. Improper assessment of the retail value of the collateral in the lending function canresult in reduced marketability of the property resulting in a reduced gross profit margin.The Company typically experiences seasonal growth in its pawn loan balances in the third and fourth quarters of the year following lower balances in the first two quarters ofthe year due to the heavy repayment of pawn loans associated with statutory bonuses received by customers in the fourth quarter in Mexico and with tax refund proceedstypically received by customers in the first quarter in the U.S.Credit Services and Consumer Loan ActivitiesAs of December 31, 2016 , the Company operated 45 stand-alone consumer loan locations in the U.S. and 28 stand-alone consumer loan locations in Mexico. In addition, 326pawn locations in the U.S. and 49 pawn locations in Mexico also offer consumer loan products. Total revenues from consumer loan and credit services operations accountedfor 4% of total revenues in 2016.The Company offers a fee-based credit services organization program (“CSO Program”) to assist consumers in obtaining extensions of credit. The Company’s stand-aloneconsumer loan locations and certain pawn stores in Texas and Ohio offer the CSO Program. The Company’s CSO Program complies with the respective jurisdiction’s creditservices organization act, credit access business law or a similar statute. Under the CSO Program, the Company assists customers in applying for a short-term extension ofcredit from independent, non-bank, consumer lending companies (the “Independent Lenders”) and issues the Independent Lenders a guarantee for the repayment of theextension of credit. The Company also offers an automobile title lending product under the CSO Program. Total credit services fees accounted for 2% of the Company’srevenue during fiscal 2016 .The Company also offers small, unsecured consumer loans to customers in various states within the U.S. and in Mexico. To qualify for a consumer loan, a customer generallymust have proof of steady income, residence and valid identification. At maturity, the customer typically returns to the store to pay off the loan and related fee with cash. If thecustomer fails to repay the loan, the Company initiates collection procedures. These consumer loan fees accounted for 2% of the Company’s revenue during fiscal 2016 .In connection with the Merger, the Company acquired Cash America’s stand-alone franchised based, check cashing business, operating under the “Mr. Payroll” brand. TheCompany receives franchise fees from each franchisee based on the gross revenue of check cashing services provided within the franchisee’s facility. Total revenue fromfranchise fees accounted for less than 1% of consolidated total revenue during fiscal 2016 .See additional discussion of the credit loss provision and related allowances/accruals in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results ofOperations—Critical Accounting Policies.”Financial Information about Geographic AreasFinancial information regarding the Company’s revenue and long-lived assets by geographic areas is provided in Note 17 of Notes to Consolidated Financial Statementscontained herein.5Table of Contents Locations and OperationsAs of December 31, 2016 , the Company had 2,085 store locations in 26 U.S. states, 32 states in Mexico, Guatemala and El Salvador, which represents a net store-countincrease of 94% over the number of stores at December 31, 2015 , primarily as a result of the Merger and the Maxi Prenda acquisition in Latin America.The following table details store count activity for the twelve months ended December 31, 2016 : ConsumerLoanLocations (2) PawnLocations (1) TotalLocationsU.S.: Total locations, beginning of period 296 42 338Merged Cash America locations 794 21 815Locations acquired 3 — 3Locations closed or consolidated (8) (18) (26)Total locations, end of period 1,085 45 1,130 Latin America: Total locations, beginning of period 709 28 737New locations opened 41 — 41Locations acquired 179 — 179Locations closed or consolidated (2) — (2)Total locations, end of period 927 28 955 Total: Total locations, beginning of period 1,005 70 1,075Merged Cash America locations 794 21 815New locations opened 41 — 41Locations acquired 182 — 182Locations closed or consolidated (10) (18) (28)Total locations, end of period 2,012 73 2,085(1) At December 31, 2016 , 326 of the U.S. pawn stores, which are primarily located in Texas and Ohio, also offered consumer loans or credit services products, while 49 Mexico pawnstores offer consumer loan products.(2) The Company’s U.S. free-standing consumer loan locations offer consumer loans and/or credit services products and are located in Ohio, Texas, California and limited markets inMexico. The table does not include 70 check cashing locations operated by independent franchisees under franchising agreements with the Company.The Company maintains its primary administrative offices in Fort Worth, Texas and Monterrey, Mexico.6Table of Contents As of December 31, 2016 , the Company’s stores were located in the following states: ConsumerLoanLocations (1) Total Locations PawnLocations United States: Texas393 25 418Ohio110 9 119Florida77 — 77Georgia45 — 45Tennessee44 — 44Indiana41 — 41North Carolina41 — 41Arizona35 — 35Washington33 — 33Colorado31 — 31Maryland28 — 28Nevada27 — 27South Carolina27 — 27Kentucky26 — 26Illinois25 — 25Louisiana25 — 25Missouri25 — 25Oklahoma18 — 18California— 11 11Alabama8 — 8Utah7 — 7Alaska6 — 6Virginia6 — 6District of Columbia3 — 3Wyoming3 — 3Nebraska1 — 1 1,085 45 1,130Mexico: Estado de. Mexico (State of Mexico)107 — 107Baja California71 3 74Veracruz70 — 70Nuevo Leon63 2 65Jalisco55 4 59Puebla53 4 57Tamaulipas51 3 54Coahuila41 — 41Chihuahua37 2 39Guanajuato32 6 38Estado de Ciudad de Mexico (State of Mexico City)32 — 32Guerrero26 — 26Sonora24 — 247Table of Contents ConsumerLoanLocations (1) Total Locations PawnLocations Mexico (continued): Quintana Roo21 — 21Sinaloa20 — 20Morelos17 — 17Oaxaca17 — 17Michoacan16 — 16Queretaro14 1 15Aguascalientes11 3 14Durango14 — 14San Luis Potosi13 — 13Tabasco11 — 11Baja California Sur10 — 10Chiapas10 — 10Hidalgo10 — 10Yucatan9 — 9Campeche6 — 6Zacatecas6 — 6Colima5 — 5Tlaxcala5 — 5Nayarit4 — 4 881 28 909 Guatemala33 — 33 El Salvador13 — 13 Total2,012 73 2,085(1) The table does not include 70 check cashing locations operated by independent franchisees under franchising agreements with the Company.Pawn Store OperationsThe typical Company pawn store is a freestanding building or part of a retail shopping center with adequate, well-lit parking. Management has established a standard storedesign intended to distinguish the Company’s stores from the competition. The design consists of a well-illuminated exterior with distinctive signage and a layout similar toother contemporary specialty retailers. The Company’s stores are typically open six to seven days a week from 9:00 a.m. to between 6:00 p.m. and 9:00 p.m.The Company attempts to attract customers primarily through the pawn stores’ visibility and neighborhood presence. The Company uses seasonal promotions, specialdiscounts for regular customers, prominent display of impulse purchase items such as consumer electronics, jewelry and power tools, tent and sidewalk sales, and a layawaypurchasing plan to attract retail shoppers. The Company attempts to attract and retain pawn customers by lending a competitive percentage of the estimated sale value of itemspresented for pledge and by providing quick financing, renewal and redemption services in an appealing atmosphere.Each pawnshop employs a manager, one or two assistant managers, and between one and eight sales personnel, depending upon the size, sales volume and location of thestore. The store manager is responsible for supervising personnel and assuring the store is managed in accordance with Company guidelines and established policies andprocedures. Each manager reports to an area supervisor, who typically oversees four to seven store managers. Area supervisors typically report to a Regional Market Manager,8Table of Contents who in turn, reports to a Regional Operations Director. Regional Operations Directors report to a Senior Vice President of Operations.The Company believes the profitability of its pawnshops is dependent, among other factors, upon its employees’ ability to engage in transactions that achieve optimum pawnyields and merchandise sales margins, to be effective sales people and to provide prompt and courteous service. The Company’s computer system permits a store manager orclerk to rapidly recall the cost of an item in inventory and the date it was purchased, as well as the prior transaction history of a particular customer. It also facilitates the timelyvaluation of goods by showing values assigned to similar goods. The Company has networked its stores to allow employees to more accurately determine the retail value ofmerchandise and to permit the Company’s headquarters to more efficiently monitor each store’s operations, including merchandise sales, service charge revenue, pawnswritten and redeemed and changes in inventory.The Company trains its employees through direct instruction and on-the-job pawn and sales experience. New employees are introduced to the business through an orientationand training program that includes on-the-job training in lending practices, layaways, merchandise valuation and general administration of store operations. Certainexperienced employees receive training and an introduction to the fundamentals of management to acquire the skills necessary to advance into management positions withinthe organization. Management training typically involves exposure to income maximization, recruitment, inventory control and cost efficiency. The Company maintains aperformance-based compensation plan for all store employees based on sales, gross profit and other performance criteria.Credit Services and Consumer Loan OperationsSimilar to the Company’s pawn store operations, the Company’s credit services and consumer loan locations are typically part of a retail strip shopping center with goodvisibility from a major street and easy access to parking. Management has established a standard store design intended to distinguish the Company’s stores from thecompetition, which consists of a well-illuminated exterior with distinctive signage. The interiors typically feature an ample lobby separated from employee work areas by glassteller windows. The Company’s credit services and consumer loan locations are typically open six to seven days a week from 9:00 a.m. to between 6:00 p.m. and 9:00 p.m.CompetitionThe Company encounters significant competition in connection with all aspects of its business operations. These competitive conditions may adversely affect the Company’srevenue, profitability and ability to expand. The Company believes the primary elements of competition in the businesses in which it operates are store location, the ability tolend competitive amounts on pawn and consumer loans, customer service and management of store employees. In addition, the Company competes with financial institutions,such as banks and consumer finance companies, which generally lend on an unsecured as well as a secured basis. Other lenders may and do lend money on terms morefavorable than those offered by the Company. Many of these competitors have greater financial resources than the Company.The Company’s pawn business competes primarily with other pawn store operators, other specialty consumer finance operators, rent-to-own stores and specialty consumergoods retailers. Management believes the pawn industry remains highly fragmented with an estimated 10,000 to 15,000 total pawnshops in the United States and 6,500 to8,000 pawnshops in Mexico. Including the Company, there are two publicly-held, U.S.-based pawnshop operators, both of which have pawn operations in the U.S. andMexico. Of these two, the Company had the most pawn stores and the largest market capitalization as of December 31, 2016 and believes it is the largest public or privateoperator of full-service pawn stores in the U.S. and Mexico. The pawnshop and other specialty consumer finance industries are characterized by a large number of independentowner-operators, some of whom own and operate multiple locations.In both its U.S. and Latin American retail pawn operations, the Company’s competitors include numerous retail and wholesale merchants, including jewelry stores, rent-to-own stores, discount retail stores, “second-hand” stores, consumer electronics stores, other specialty retailers, online retailers, online auction sites, online classified advertisingsites and other pawnshops. Competitive factors in the Company’s retail operations include the ability to provide the customer with a variety of merchandise items at attractiveprices. Many of the retail competitors have significantly greater size and financial resources than the Company.9Table of Contents Intellectual PropertyThe Company relies on a combination of copyright, trade secret, trademark, website domain names, and other rights, including confidentiality procedures and contractualprovisions to protect its proprietary technology, processes and other intellectual property.The Company’s competitors may develop products that are similar to its technology, such as the Company’s proprietary point of sale software. The Company enters intoagreements with its employees, consultants and partners, and through these and other written agreements, the Company attempts to control access to and distribution of itssoftware, documentation and other proprietary technology and information. Despite the Company’s efforts to protect its proprietary rights, third parties may, in an authorizedor unauthorized manner, attempt to use, copy or otherwise obtain and market or distribute its intellectual property rights or technology or otherwise develop a product with thesame functionality as its solution. Policing all unauthorized use of the Company’s intellectual property rights is nearly impossible. The Company cannot be certain that thesteps it has taken or will take in the future will prevent misappropriations of its technology or intellectual property rights.“First Cash,” “First Cash Pawn,” “Cash America” and “Cashland” are registered trademarks in the United States. Other significant trade names used by the Company in theU.S. and abroad include First Cash Empeño, First Cash Advance, Presta Max, Famous Pawn, Fast Cash Pawn & Gold Center, King Pawn, Mister Money Pawn, Money ManPawn, Valu + Pawn, Dan’s Discount Jewelry & Pawn, Quick Cash Pawn, Atomic Pawn, Loftis Jewelry & Pawnbrokers, Regent Pawn & Jewelry, Smart Pawn, Piazza Jewelry& Pawn, David’s Pawn Shop, Sharp Mart, Lakelands Pawn & Gun, Empeños Mexicanos, Realice Empeños, Maxi Prenda, Cash America Pawn, SuperPawn, Cash AmericaPayday Advance and Mr. Payroll.FranchisesEach of the Company’s unconsolidated franchised check cashing locations is subject to a franchise agreement that is negotiated individually with each franchisee. Thefranchise agreements have varying durations. As of December 31, 2016 , the Company had 70 unconsolidated franchised check cashing locations operating under its “Mr.Payroll” brand.Governmental RegulationGeneralThe Company is subject to significant regulation of its pawn, consumer loan and general business operations in all of the jurisdictions in which it operates. These regulationsare implemented through various laws, ordinances and regulatory pronouncements from federal, state and municipal governmental entities in the United States and LatinAmerica. These regulatory bodies often have broad discretionary authority in the establishment, interpretation and enforcement of such regulations. These regulations aresubject to change, sometimes significantly, as a result of political, economic or social trends, events and media perceptions.The Company is subject to specific laws, ordinances and regulations primarily concerning its pawn and consumer lending operations. Many statutes and regulations prescribe,among other things, the general terms of the Company’s pawn and consumer loan agreements, including maximum service fees and/or interest rates that may be charged andcollected and mandatory consumer disclosures. In many municipal, state and federal jurisdictions, in both the United States and countries in Latin America, the Company mustobtain and maintain regulatory operating licenses and comply with regular or frequent regulatory reporting and registration requirements, including reporting and recording ofpawn loans, pawned collateral, used merchandise purchased from the general public, retail sales activities, firearm transactions, export, import and transfer of merchandise, andcurrency transactions, among other things.In both the United States and Latin America, certain elected officials, regulators, consumer advocacy groups and the media have advocated for governmental action to furtherrestrict or even prohibit pawn transactions or small consumer loans, such as payday advances and credit services products. The elected officials, regulators, consumer groupsand media typically focus on the aggregated cost to a consumer for pawn and consumer loans, which is typically higher than the interest generally charged by banks, creditunions and credit card issuers to a more creditworthy consumer. They also focus on affordability issues such as the borrower’s ability to repay such loans, real or perceivedpatterns of sustained or cyclical usage of such lending products and consumer loan collection practices perceived to be unfair or abusive. The elected officials, regulators,consumer groups and media often characterize pawn and payday lending activities as unfair or potentially abusive to consumers. During the last few years, legislation,ordinances and edicts (on federal, state and municipal levels) have been introduced or enacted to prohibit, restrict or further regulate pawn and related transactions, includingacceptance of pawn collateral and used merchandise in general or, from certain individuals, sales of such merchandise in general or specific categories such as firearms,payday loans, consumer loans, credit services and related service fees on these products. In addition, public officials and regulatory authorities, including law enforcement invarious levels of government in the United States and countries in Latin America have and will likely continue to make edicts, proposals10Table of Contents or public statements concerning new or expanded regulations that would prohibit or further restrict pawn and consumer lending activities or other related pawn transactions.The Company is subject to numerous other types of regulations including, but not limited to, regulations related to securities and exchange activities, including financialreporting and internal controls processes, data protection and privacy, tax compliance, safety, labor and employment practices, real estate transactions, electronic banking,credit card transactions, marketing, advertising and other general business activities.There can be no assurance that the current political domestic and international climate, including additional local, state or federal statutes, regulations or edicts will not affector be enacted or that existing laws and regulations will not be amended, decreed or interpreted at some future date that could prohibit or limit the ability of the Company toprofitably operate any or all of its services. For example, such regulations could restrict the ability of the Company to offer pawn loans, consumer loans and credit services,significantly decrease the interest rates or service fees for such lending activities, prohibit or more stringently regulate the acceptance of pawn collateral or buying usedmerchandise and the sale, exportation or importation of such pawn merchandise, or processing of consumer loan transactions through the banking system, any of which couldhave a material adverse effect on the Company’s operations and financial condition. If legislative, regulatory or other arbitrary actions or interpretations are taken at a federal,state or local level in the United States or countries in Latin America which negatively affect the pawn, consumer loan or credit services industries where the Company has asignificant number of stores, those actions could have a material adverse effect on the Company’s business operations. There can be no assurance that such regulatory action atany jurisdiction level will not be enacted, or that existing laws and regulations will not be amended, decreed or interpreted in such a way which could have a material adverseeffect on the Company’s operations and financial condition.U.S. Federal RegulationsThe U.S. government and its agencies have significant regulatory authority over consumer financial services activities. In recent years, additional legislation and regulationshave been enacted or proposed which has increased or could continue to increase regulation of the consumer finance industry. These regulations and restrictions are or may bespecific to pawn, credit services and consumer loan/payday advance operations.The Consumer Financial Protection Bureau (the “CFPB”), which was created by Title X of the Dodd Frank Wall Street Reform and Consumer Protection Act of 2010 (the“Dodd-Frank Act”), has broad regulatory, supervisory and enforcement powers over most non-bank providers of consumer credit. The CFPB’s powers include explicitsupervisory authority to examine and require registration of providers of consumer financial products and services, including providers of consumer loans, such as theCompany, the authority to adopt rules describing specified acts and practices as being “unfair,” “deceptive,” “abusive” and hence “unlawful,” and the authority to imposerecordkeeping obligations and promulgate additional compliance requirements.The CFPB continues its systematic efforts of obtaining data related to all aspects of the consumer loan industry and its impact on consumers. The CFPB continues to use itsShort-Term, Small-Dollar Lending Procedures , which is the field guide CFPB examiners use when examining small-dollar lenders like the Company. The CFPB’sexamination authority permits CFPB examiners to inspect the Company’s books and records and ask questions about its business and its practices. The examination proceduresinclude, among other things, specific modules for examining marketing activities, loan application and origination activities, payment processing activities and sustained useby consumers, collections and collection practices, defaults, consumer reporting and third-party or vendor relationships.In addition to the Dodd-Frank Act’s grant of regulatory and supervisory powers to the CFPB, the Dodd-Frank Act gives the CFPB authority to pursue administrativeproceedings or litigation for actual or perceived violations of federal consumer laws (including the CFPB’s own rules). In these proceedings, the CFPB can seek consentorders, memorandums of understandings, obtain cease and desist orders (which can include orders for redisclosure, restitution or rescission of contracts, as well as affirmativeor injunctive relief) and monetary penalties ranging from $5,000 per day for certain violations of federal consumer laws to $25,000 per day for reckless violations, and$1,000,000 per day for knowing or intentional violations. Also, where a company has been found to have violated consumer laws, the Dodd-Frank Act (in additional to similarstate consumer laws) empowers state attorneys general and state regulators to bring administrative or civil actions seeking the same equitable relief available to the CFPB, inaddition to state-led enforcement actions and consent orders. If the CFPB or one or more state officials believe that the Company has violated any of the applicable laws orregulations, they could exercise their enforcement powers in ways that could have a material adverse effect on the Company or its business.11Table of Contents On June 1, 2016, the CFPB issued its notice of proposed rulemaking related to short-term consumer loans. The proposed rules are expected to become effective 15 monthsafter the rules are finalized. The proposed rules seek to establish an ability to repay assessment on all covered loans, verification by the consumer of certain debts andverification through outside sources by lenders of certain debts, mandatory cooling off periods, alternative loan offerings that would allow lenders to forego the proposedrequirement to conduct an ability to repay assessment, and restrictions on collection practices. As written, the proposed rules define the Company’s consumer loan products,both short-term loans and installment loans, as loans covered under the rules, but excludes pawn loans. The Company continues to review the proposed rules to determine thepotential impact on its consumer loan portfolio if the proposed rules become final in their current form. On a consolidated basis the Company expects consumer loan revenuefor the year ending December 31, 2017 to account for approximately 5% of the Company’s consolidated total revenue.In July 2015, the U.S. Department of Defense published a finalized set of new rules under the Military Lending Act (“MLA”). The MLA (and rules previously adoptedthereunder) have previously prevented the Company from offering its short-term unsecured credit products to members of the military or their dependents because none of theCompany’s short-term unsecured credit products carry a military annual percentage rate of 36% or less. The new rules, which went into effect October 3, 2016, expands thescope of the credit products covered by the MLA to include certain non-purchase money loans secured by personal property, such as pawn loans, or vehicles and certainunsecured installment loan products to the extent any of such products have a military annual percentage rate greater than 36%. Under the new rules, the Company is unable tooffer any of its current credit products, including pawn loans, to members of the U.S. military or their dependents. While the Company does not believe that active members ofthe U.S. military or their dependents comprise a significant percentage of the historical customer base in most locations, compliance with the MLA, and the new rules inparticular, is complex and increases compliance risks and related costs. The Company continues to assess the impact of these new rules on its business operations andcompliance requirements.In addition to the federal laws and frameworks already governing the financial industry, the United States Justice Department (“DOJ” or “Department of Justice”), inconjunction with federal banking regulators, began an initiative in 2013 (“Operation Choke Point”) which was directed at banks in the United States that do business withpayment processors, payday lenders, pawn operators and other companies believed to be at higher risk for fraud and money laundering. It is believed the intent of this initiativewas to restrict the ability of banks to provide financial services to companies in the targeted industries. In January 2015, the Federal Deposit Insurance Corporation (the“FDIC”) issued a publication encouraging banks to take a risk-based approach in assessing individual customer relationships, rather than declining to provide banking servicesto entire categories of customers without regard to the risks presented by an individual customer or the financial institution’s ability to manage the risk. While many believethis publication effectively ended Operation Choke Point, reports of the difficulty in securing new banking services and the termination of existing banking services of legalbusinesses within targeted industries continue. There can be no assurance that Operation Choke Point will not pose a future threat to the Company’s ability to access credit,maintain bank accounts, process payday lending transactions or obtain other banking services needed to operate efficiently and profitably.In connection with pawn transactions and credit services/consumer loan transactions, the Company must comply with the various disclosure requirements under the FederalTruth in Lending Act (and Federal Reserve Regulation Z promulgated thereunder). These disclosures include, among other things, the total amount of the finance charges andannualized percentage rate of the charges associated with consumer loan and credit services transactions.The credit services/consumer loan business is also subject to various laws, rules and guidelines relating to the procedures and disclosures needed for debiting a debtor’schecking account for amounts due via an automated clearing house (“ACH”) transaction. Additionally, the Company is subject to the Federal Fair Debt Collection PracticesAct (“FDCPA”) and applicable state collection laws when conducting its collection activities. Furthermore, with respect to online consumer loans, the Company is subject tovarious state and federal e-signature rules mandating that certain disclosures be made and certain steps be followed in order to obtain and authenticate e-signatures. In addition,some states restrict the advertising content of marketing materials with respect to consumer loans.Under the Bank Secrecy Act, the U.S. Department of the Treasury (the “Treasury Department”) regulates transactions involving currency in an amount greater than $10,000and the purchase of monetary instruments for cash in amounts from $3,000 to $10,000 must be recorded. In general, financial institutions, including the Company, must reporteach deposit, withdrawal, exchange of currency or other payment or transfer, whether by, through or to the financial institution, that involves currency in an amount greaterthan $10,000. In addition, multiple currency transactions must be treated as single transactions if the financial institution has knowledge that the transactions are by, or onbehalf of, any one person and result in either cash in or cash out totaling more than $10,000 during any one business day.12Table of Contents The Money Laundering Suppression Act of 1994 added a section to the Bank Secrecy Act requiring the registration of “money services businesses” that engage in checkcashing, currency exchange, money transmission, or the issuance or redemption of money orders, traveler’s checks and similar instruments. The purpose of the registration isto enable governmental authorities to better enforce laws prohibiting money laundering and other illegal activities. The regulations require money services businesses toregister with the Treasury Department by filing a form, adopted by the Financial Crimes Enforcement Network of the Treasury Department (“FinCEN”), and to re-register atleast every two years thereafter. The regulations also require that a money services business maintain a list of names and addresses of, and other information about, its agentsand that the list be made available to any requesting law enforcement agency (through FinCEN). The agent list must be updated annually. Currently, check cashing is the onlyproduct offered by the Company which is subject to such money services regulations.In March 2000, FinCEN adopted additional regulations, implementing the Bank Secrecy Act that also address money services businesses. These regulations require moneyservices businesses, such as the Company, to report suspicious transactions involving at least $2,000 to FinCEN. The regulations generally describe three classes of reportablesuspicious transactions - one or more related transactions that the money services business knows, suspects, or has reason to suspect (1) involve funds derived from illegalactivity or are intended to hide or disguise such funds; (2) are designed to evade the requirements of the Bank Secrecy Act; or (3) appear to serve no business or lawfulpurpose.Under the USA PATRIOT Act passed by Congress in 2001 and revised in 2006, the Company is required to maintain an anti-money laundering compliance program. Theprogram must include (1) the development of internal policies, procedures and controls; (2) the designation of a compliance officer; (3) an ongoing employee-trainingprogram; and (4) a review function to test the program.The Gramm-Leach-Bliley Act requires the Company to generally protect the confidentiality of its customers’ nonpublic personal information and to disclose to its customersits privacy policy and practices, including those regarding sharing the customers’ nonpublic personal information with third parties. Such disclosure must be made tocustomers at the time the customer relationship is established, at least annually thereafter, and if there is a change in the Company’s privacy policy. In addition, the Companyis subject to strict document retention and destruction policies.The federal Equal Credit Opportunity Act (“ECOA”) prohibits discrimination against any credit applicant on the basis of any protected category, such as race, color, religion,national origin, sex, marital status, or age, and requires the Company to notify credit applicants of the Company’s consumer loan products of any action taken on theindividual’s credit application. The Company must provide a loan applicant a Notice of Adverse Action (“NOAA”) when the Company denies an application for credit. TheNOAA must inform the applicant of (1) the action taken regarding the credit application; (2) a statement of the ECOA’s prohibition on discrimination; (3) the name andaddress of both the creditor and the federal agency that monitors compliance with the ECOA; and (4) the applicant’s right to learn the specific reasons for the denial of creditand the contact information for the parties the applicant can contact to obtain those reasons. The Company provides NOAA letters and maintains records of all such letters asrequired by the ECOA and its regulations.The Company’s consumer loan products are also subject to the Fair Credit Reporting Act, which requires the Company to provide certain information to customers whosecredit applications are not approved on the basis of a report obtained from a consumer reporting agency and to respond to consumers who inquire regarding any adversereporting submitted by the Company to the consumer reporting agencies.The Company’s advertising and marketing activities, in general, are subject to additional federal laws and regulations administered by the Federal Trade Commission and theCFPB which prohibit unfair or deceptive acts or practices and false or misleading advertisements.The federal Fair and Accurate Credit Transactions Act (“FACTA”) requires the Company to adopt written guidance and procedures for detecting, mitigating, preventing andresponding appropriately to identity theft and to adopt various employee policies, procedures, and provide employee training and materials that address the importance ofprotecting nonpublic personal information and aid the Company in detecting and responding to suspicious activity, including suspicious activity which may suggest a possibleidentity theft red flag, as appropriate.The Company is subject to the Foreign Corrupt Practices Act (“FCPA”) and other laws that prohibit improper payments or offers of improper payments to foreigngovernments and their officials and political parties by U.S. persons and issuers (as defined by the statute) for the purpose of obtaining or retaining business. It is theCompany’s policy to maintain safeguards to discourage these practices by its employees and follow Company standards of conduct for its business throughout the U.S. andLatin America, including the prohibition of any direct or indirect payment or transfer of Company funds or assets to suppliers, vendors, or government officials in the form ofbribes, kickbacks or other illegal payoffs.13Table of Contents Each pawn store location that handles pawned firearms or buys and sells firearms must comply with the Brady Handgun Violence Prevention Act (the “Brady Act”). TheBrady Act requires that federally licensed firearms dealers conduct a background check in connection with any disposition of handguns. In addition, the Company mustcomply with the regulations of the U.S. Department of Justice-Bureau of Alcohol, Tobacco and Firearms that require each pawn lending location dealing in guns to obtain aFederal Firearm License (“FFL”) and maintain a permanent written record of all receipts and dispositions of firearms. As of December 31, 2016 , the Company had 694locations in the U.S. with an active FFL.U.S. State and Local RegulationsThe Company operates pawn stores in 26 U.S. states, all of which have licensing and/or fee regulations on pawnshop operations. In general, state statutes and regulationsestablish licensing requirements for pawnbrokers and regulate various aspects of pawn transactions, including the purchase and sale of merchandise, service charges, interestrates, the content and form of the pawn transaction agreement and the length of time a pawnbroker must hold a purchased item or forfeited pawn before it is made available forsale. Additionally, these statutes and regulations in various jurisdictions restrict or prohibit the Company from transferring and/or relocating its pawn licenses and restrict orprohibit the issuance of new licenses. The Company’s fee structures are at or below the applicable rate ceilings adopted by each of these states. The Company offers its pawnand retail customers an interest free layaway plan which complies with applicable state laws. In addition, the Company is in compliance with the net asset requirements instates where it is required to maintain certain levels of liquid assets for each pawn store it operates in the applicable state. Failure to observe a state’s legal requirements forpawn brokering could result, among other things, in loss of pawn licenses, fines, refunds, and other civil or criminal proceedings.Many of the Company’s pawn locations are also subject to local ordinances that require, among other things, local permits, licenses, record keeping requirements andprocedures, reporting of daily transactions, and adherence to local law enforcement “do not buy lists” by checking law enforcement created databases. Specifically, under somecounty and municipal ordinances, pawn stores must provide local law enforcement agencies with reports of all daily transactions involving pawns and over-the-countermerchandise purchases. These daily transaction reports are designed to provide local law enforcement officials with a detailed description of the merchandise involved,including serial numbers, if any, or other specific identifying information, including the name and address of the customer obtained from a valid identification card andphotographs of the customers and/or merchandise in certain jurisdictions. Goods held to secure pawns or goods purchased may be subject to mandatory holding periods beforethey can be resold by the Company. If pawned or purchased merchandise is determined to belong to an owner other than the borrower or seller, it may be subject toconfiscation by police for recovery by the rightful owners. Historically, the Company has not found the volume of the confiscations or claims to have a material adverse effectupon results of operations. The Company does not maintain insurance to cover the costs of returning merchandise to its rightful owners but historically has benefited from civiland criminal restitution efforts.The Company’s consumer loan business is regulated under a variety of enabling state statutes and is also subject to various local rules, regulations and ordinances. The scopeof state regulation, including the fees and terms of the Company’s consumer loan products and services, varies from state to state. These laws generally define the services thatthe Company can provide to consumers and require the Company to provide a contract to the customer outlining the Company’s services and the cost of those services to thecustomer.The states with laws that specifically regulate the Company’s consumer loan products and services typically limit the principal amount of a consumer loan and set maximumfees or interest rates that customers may be charged. Most states also limit a customer’s ability to renew a short-term consumer loan and require various disclosures toconsumers. State statutes often specify minimum and maximum maturity dates for consumer loans and, in some cases, specify mandatory cooling-off periods betweentransactions. The Company’s collection activities regarding past due amounts are subject to consumer protection laws and state regulations relating to debt collection practices.Also, some states require the Company to report loan activity to state-wide databases and restrict the number and/or principal amount of loans a consumer may haveoutstanding at any particular time or over the course of a particular period of time, typically twelve months. In addition, these laws may require additional disclosures toconsumers and may require the Company to be registered with the jurisdiction and/or be bonded.As a credit services organization in certain jurisdictions, the Company assists customers in applying for a short-term extension of credit from the Independent Lenders andissues the Independent Lenders a guarantee for the repayment of the extension of credit. When a consumer executes a credit services agreement with the Company, thecustomer agrees to pay a fee to the Company if the Independent Lenders approve the extension of credit, and the Company agrees to guarantee the customer’s obligation torepay the extension of credit received by the customer from the Independent Lenders if the customer fails to do so. The credit services organization must give a consumer theright to cancel the credit services agreement without penalty within three days after the agreement is signed. In addition, credit services locations generally must be registeredas a credit services organization and are subject to various other jurisdictional regulations and requirements.14Table of Contents Local rules, regulations and ordinances vary widely from city to city. The most restrictive local rules and regulations relate to zoning and land use restrictions. Additionally,local jurisdictions’ efforts to regulate or restrict the terms of a consumer loan product will likely continue to increase. As a result of such efforts, the Company closed 18 stand-alone consumer loan stores during fiscal 2016 and 23 locations in fiscal 2015. The closings in 2015, coupled with overall deterioration in store-based consumer lending marketconditions, resulted in the Company recording a $7.9 million goodwill impairment charge during the third quarter of 2015 attributed to its U.S. consumer loan operations.During fiscal 2016 , the Company’s consumer loan and credit services fee revenue represented approximately 4% of the Company’s overall revenues.It is expected that additional legislation and/or regulations relating to pawn transactions, credit services, installment loans and other consumer loan products will be proposedin several state legislatures and/or city councils where the Company has pawn and credit services operations. Though the Company cannot accurately predict the scope, extentand nature of future regulations, it is likely that such legislation may address the maximum allowable interest rates on loans, significantly restrict the ability of customers toobtain such loans by limiting the maximum number of consecutive loan transactions that may be provided to a customer, and/or limiting the total loans a customer may haveoutstanding at any point in time. Any or all of these changes could make offering these products less profitable and could restrict or even eliminate the availability of consumerloan, pawn transactions and credit services products in some or all of the states or localities in which the Company offers such products.Many local government entities prohibit or restrict pawn and other consumer finance and check cashing activities through zoning ordinances, which can significantly limit theability of the Company to move, expand, remodel or relocate store locations, and in some cases cause existing stores to be closed. In some jurisdictions, check cashingcompanies or money transmission agents are required to meet minimum bonding or capital requirements and are subject to record-keeping requirements. Consequently, theCompany has de-emphasized its consumer loan business over the last few years and will likely continue to do so.The Company cannot currently assess the likelihood of any other proposed legislation, regulations or amendments, such as those described above, which could be enacted;however, if such legislation or regulations were enacted in certain jurisdictions, it could have a materially adverse impact on the revenue and profitability of the Company.Mexico Federal RegulationsFederal law in Mexico provides for administrative regulation of the pawnshop industry by the Federal Consumer Protection Bureau (“PROFECO”), Mexico’s primary federalconsumer protection agency, which requires the Company to annually register its pawn stores, approve the pawn contracts and disclose the interest rate and fees charged onpawn and consumer loan transactions. In addition, the pawnshop and consumer finance industries in Mexico are subject to various general business regulations in the areas oftax compliance, customs, consumer protections, money laundering, public safety and employment matters, among others, by various federal, state and local governmentalagencies.PROFECO regulates the form and terms of pawn contracts and defines certain operating standards and procedures for pawnshops, including retail operations, consumerdisclosures and establishes reporting requirements. In January 2013, federal legislation conveyed additional regulatory authority to PROFECO regarding the pawn industry andnational registration process. The 2013 legislation requires all pawn businesses and its owners to register annually with and be approved by PROFECO in order to legallyoperate. In addition, all operators must comply with additional customer notice and disclosure provisions, bonding requirements to insure against loss or insolvency, reportingof certain types of suspicious transactions, and reporting to state law enforcement officials of certain transactions (or series of transactions) or suspicious transactions on amonthly basis. PROFECO continues to modify, improve and implement its process and procedures regarding its annual registration requirements and the Company hascomplied and complies in all material respects with this process and registration requirements as administered by PROFECO. There are significant fines and sanctions,including operating suspensions for failure to register and/or comply with PROFECO’s rules and regulations. The Company believes it materially complies with thePROFECO rules and regulations, as currently administered. Effective in November 2013, the federal government of Mexico enacted new anti-money laundering regulations, The Federal Law for the Prevention and Identification ofTransactions with Funds From Illegal Sources (“Anti-Money Laundering Law”), which requires monthly reporting of certain transactions (or series of transactions) exceedingcertain monetary limits, imposed stricter maintenance of customer identification records and controls, and requires reporting of all foreign (non-Mexican) customertransactions. This law affects all industries in Mexico and is intended to detect commercial activities arising from illicit or ill-gotten means though bilateral cooperationbetween Mexico’s Ministry of Finance and Public Credit (“Hacienda”), and Mexico’s Attorney General’s Office (“PGR”). This law restricts the use of cash in certaintransactions associated with high-value assets, and limits, to the extent possible, money laundering activities protected by the anonymity that cash transactions provide. Thelaw empowers Hacienda to oversee and enforce these regulations and to follow up on the information received from other agencies in Mexico and abroad. Relevant aspects ofthe law specifically affecting the pawn industry include monthly reporting by the15Table of Contents Company to Hacienda and the PGR on “vulnerable activities,” which encompass the sale of jewelry, precious metals and watches exceeding $36,000 Mexican pesos,individually, and retail and pawn transactions (of cash or credit) exceeding $121,000 Mexican pesos, in aggregate. There are significant fines and sanctions for failure tocomply with the Anti-Money Laundering Law regulations.In January 2012, new terms of the Federal Personal Information Protection Act (“Privacy Law”) went into effect, which require companies to protect their customers’ personalinformation. Specifically, the Privacy Law requires that the Company inform its customers whether the Company shares the customer’s personal information with third partiesor transfers personal information to third parties. It also requires public posting (both on-line and in-store) of the Company’s privacy policy, which includes a process for thecustomer to revoke any previous consent granted to the Company for the use of the customer’s personal information, or limit the use or disclosure of such information.Mexico State and Local RegulationsCertain state and local governmental entities in Mexico also regulate pawn, other consumer finance and retail businesses through state laws and local zoning and permittingordinances. For example, in certain states where the Company has significant operations, the states have enacted legislation or implemented regulations which require itemssuch as special state operating permits for pawn stores, certification of pawn employees trained in valuation of merchandise, stricter customer identification controls, collateralownership certifications and/or detailed and specified transactional reporting of customers and operations. Certain other states have proposed similar legislation but has not yetbeen enacted. Additionally, certain municipalities in Mexico have attempted to curtail the operation of new and existing pawn stores through additional local businesslicensing, permitting and reporting requirements. State and local agencies, including local and state police officials, often have unlimited and discretionary authority to suspendstore operations pending an investigation of suspicious pawn transactions or resolution of actual or alleged regulatory, licensing and permitting issues.Other Latin American Federal and Local RegulationsSimilar to Mexico, certain federal, department and local governmental entities in Guatemala and El Salvador also regulate the pawn industry, other consumer finance(including consumer lending and disclosures) and retail and commercial businesses. Certain federal laws and local zoning and permitting ordinances require basic commercialbusiness licenses and signage permits. Operating in these countries also subjects the Company to other types of regulations including, but not limited to, regulations related tocommercialization of merchandise, financial reporting, privacy and data protection, tax compliance, labor and employment practices, real estate transactions, anti-moneylaundering, commercial and electronic banking restrictions, credit card transactions, marketing, advertising and other general business activities.As the scope of the Company’s international operations increases, the Company may face additional administrative and regulatory costs in operating and managing itsbusiness. In addition, unexpected changes, arbitrary or adverse court decisions, adverse action by the CFPB, aggressive public officials or regulators attacking the Company’sbusiness models, administrative interpretations of federal or local requirements or legislation, or public remarks by elected officials could negatively impact the Company’soperations and profitability.EmployeesThe Company had approximately 16,200 employees as of December 31, 2016 , including approximately 1,000 persons employed in executive, supervisory, administrative andaccounting functions. None of the Company’s employees are covered by collective bargaining agreements. The Company considers its employee relations to be satisfactory.InsuranceThe Company maintains property all-risk coverage and liability insurance for each of its locations in amounts management believes to be adequate. The Company maintainsworkers’ compensation insurance in states the Company operates in. The Company is a non-subscriber under the Texas Workers’ Compensation Act, and therefore maintainsemployer’s indemnification insurance in Texas.16Table of Contents FirstCash WebsiteThe Company’s primary website is at www.firstcash.com . The Company makes available, free of charge, at its corporate website, its annual report on Form 10-K, quarterlyreports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of1934, as amended (the “Exchange Act”), as soon as reasonably practicable after they are electronically filed with the Securities and Exchange Commission (“SEC”). The SECmaintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov.Item 1A. Risk FactorsImportant risk factors that could cause results or events to differ from current expectations are described below. These factors are not intended to be an all-encompassing list ofrisks and uncertainties that may affect the operations, performance, development and results of the Company’s business.Risks Related to the Company’s Business and IndustryThe Company’s financial position and results of operations may fluctuate significantly due to fluctuations in currency exchange rates in Latin American Markets.The Company derives significant revenue, earnings and cash flow from operations in Latin America, where business operations are transacted in Mexican pesos andGuatemalan quetzales. The Company’s exposure to currency exchange rate fluctuations results primarily from the translation exposure associated with the preparation of theCompany’s consolidated financial statements, as well as from transaction exposure associated with transactions and assets and liabilities denominated in currencies other thanthe respective subsidiary’s functional currency. While the Company’s consolidated financial statements are reported in U.S. dollars, the financial statements of the Company’sLatin American subsidiaries are prepared using their respective functional currency and translated into U.S. dollars by applying appropriate exchange rates. As a result,fluctuations in the exchange rate of the U.S. dollar relative to the Latin American currencies could cause significant fluctuations in the value of the Company’s assets,liabilities, stockholders’ equity and operating results. In addition, while expenses with respect to foreign operations are generally denominated in the same currency ascorresponding sales, the Company has transaction exposure to the extent expenditures are incurred in currencies other than the respective subsidiary’s functional currency. Thecosts of doing business in foreign jurisdictions also may increase as a result of adverse currency rate fluctuations. In addition, changes in currency rates could negatively affectcustomer demand, especially in Latin America and in U.S. stores located along the Mexican border. The average value of the Mexican peso to the U.S. dollar exchange rate forfiscal 2016 was 18.7 to 1, compared to 15.8 to 1 in fiscal 2015 and 13.3 to 1 in fiscal 2014 . In fiscal 2017 , through February 20, 2017 , the average exchange rate was 21.0 to1, which equates to a 12% decline as compared to the average value for fiscal 2016 of 18.7 to 1. The average value of the Guatemalan quetzal to the U.S. dollar exchange ratefor fiscal 2016 was 7.6 to 1, compared to 7.7 to 1 in fiscal 2015 . In fiscal 2017 , through February 20, 2017 , the average exchange rate was 7.5 to 1, which equates to a 1%increase as compared to the average value for fiscal 2016 of 7.6 to 1. The Company also has operations in El Salvador where the reporting and functional currency is the U.S.dollar.The Company’s products and services are subject to extensive regulation and supervision under various federal, state and local laws, ordinances and regulations in boththe United States and Latin America. If changes in regulations affecting the Company’s pawn, credit services and consumer loan businesses create increased restrictions,or have the effect of prohibiting loans in the jurisdictions where the Company offers these products, such regulations could materially impair or reduce the Company’spawn, credit services and consumer loan businesses and limit its expansion into new markets.The Company’s products and services are subject to extensive regulation and supervision under various federal, state and local laws, ordinances and regulations in both theUnited States and Latin America. The Company faces the risk that restrictions or limitations on loan products, loan amounts, loan yields, loan fees and customer acceptance ofloan products resulting from the enactment, change, or interpretation of laws and regulations in the United States or Latin America could have a negative effect on theCompany’s business activities. Both consumer loans and, to a lesser extent, pawn transactions, have come under increased scrutiny and increasingly restrictive regulation inrecent years. Other enacted or recently proposed regulatory activity may limit the number of loans that customers may receive or have outstanding and require the Company tooffer an extended payment plan to its customers, and regulations adopted by some states require that all borrowers of certain loan products be listed on a database, limit theyield on pawn or consumer loans and limit the number of such loans borrowers may have outstanding. Certain consumer advocacy groups and federal and state legislators havealso asserted that laws and regulations should be tightened so as to severely limit, if not eliminate, the availability of pawn, consumer loans and credit services products toconsumers. It is difficult to assess the likelihood of the enactment of any unfavorable federal or state legislation or local ordinances, and there can be no assurance17Table of Contents that additional legislative or regulatory initiatives will not be enacted that would severely restrict, prohibit, or eliminate the Company’s ability to offer certain products andservices.In Latin America, restrictions and regulations affecting the pawn and consumer loan industries, including licensing restrictions, customer identification requirements,suspicious activity reporting, disclosure requirements and limits on interest rates and/or loan service fees, have been and continue to be proposed from time to time. Adoptionof such federal, state or local regulation or legislation in the United States and Latin America could restrict, or even eliminate, the availability of pawn and consumer finance atsome or all of the Company’s locations, which would adversely affect the Company’s operations and financial condition.The extent of the impact of any future legislative or regulatory changes will depend on the political climate, the nature of the legislative or regulatory change, the jurisdictionsto which the new or modified laws would apply, and the amount of business the Company does in that jurisdiction. Moreover, similar actions by states or foreign countries inwhich the Company does not currently operate could limit its opportunities to pursue its growth strategies. A more detailed discussion of the regulatory environment andcurrent developments and risks to the Company is provided in “Business—Governmental Regulation.”Media reports, statements made by regulators and elected officials and public perception in general of pawnshop and consumer loan operations, including paydayadvances or pawn transactions, as being predatory or abusive could materially adversely affect the Company’s pawn, consumer loan and credit services businesses. Inrecent years, consumer advocacy groups and some media reports, in both the United States and Latin America, have advocated governmental action to prohibit or placesevere restrictions on consumer loans, including payday advances and pawn services.Reports and statements made by consumer advocacy groups, members of the media, regulators and elected officials often focus on the annual or monthly cost to a consumer ofconsumer loans and pawn transactions, which are generally higher than the interest typically charged by banks to consumers with better credit histories. These reports andstatements typically characterize pawn and/or consumer loans as predatory or abusive or focus on alleged instances of pawn operators purchasing or accepting stolen propertyas pawn collateral. If the negative characterization of these types of transactions becomes increasingly accepted by consumers, demand for pawn and/or consumer loanproducts could significantly decrease, which could materially affect the Company’s results of operations and financial condition. Additionally, if the negative characterizationof these types of transactions becomes increasingly accepted by legislators and regulators, the Company could become subject to more restrictive laws and regulations thatcould have a material adverse effect on the Company’s financial condition and results of operations.The CFPB has regulatory, supervisory and enforcement powers over providers of consumer financial products and services in the U.S., and it could exercise itsenforcement powers in ways that could have a material adverse effect on the Company’s business and financial results.The CFPB has been exercising its supervisory review over certain non-bank providers of consumer financial products and services, including providers of consumer loans suchas the Company. The CFPB’s examination authority permits CFPB examiners to inspect the books and records of providers of short-term, small dollar lenders, such as theCompany, and ask questions about their business practices. The CFPB’s examination procedures include specific modules for examining marketing activities, loan applicationand origination activities, payment processing activities and sustained use by consumers, collection practices, accounts in default and consumer reporting activities as well asthird-party relationships. As a result of these examinations of non-bank providers of consumer credit, the Company could be required to change its practices or procedures,whether as a result of another party being examined or as a result of an examination of the Company, or could be subject to monetary penalties, which could adversely affectthe Company. Under certain circumstances, the CFPB may also be able to exercise regulatory authority over providers of pawn services.In addition to having the authority to obtain monetary penalties for violations of applicable federal consumer financial laws (including the CFPB’s own rules), the CFPB canrequire remediation of practices, including through memorandums of understanding and consent orders, pursue administrative proceedings or litigation and obtain cease anddesist orders (which can include orders for restitution or rescission of contracts, as well as other kinds of affirmative relief). Also, where a company has violated Title X of theDodd-Frank Act or CFPB regulations implemented under Title X of the Dodd-Frank Act, the Dodd-Frank Act empowers state attorneys general and state regulators to bringcivil actions to remedy violations of state law. If the CFPB or one or more state attorneys general or state regulators believe that the Company has violated any of theapplicable laws or regulations or any consent orders or memorandums of understanding instituted by the CFPB or state regulators against the Company, they could exercisetheir enforcement powers in ways that could have a material adverse effect on our business and financial results.See “Business—Government Regulation” for a further discussion of the regulatory authority of the CFPB.18Table of Contents PROFECO has regulatory, supervisory and enforcement powers over pawn operators in Mexico, and it could exercise its enforcement powers in ways that could have amaterial adverse effect on the Company’s business and financial results.Federal law in Mexico provides for administrative regulation of the pawnshop industry by PROFECO, Mexico’s primary federal consumer protection agency. PROFECOrequires all pawn operators like the Company to register its pawn stores, pawn contracts and to disclose the interest rate and fees charged on pawn and consumer loantransactions. PROFECO also regulates the form and terms of pawn contracts and defines certain operating standards and procedures for pawnshops and establishes reportingrequirements.In January 2013, federal legislation conveyed additional regulatory authority to PROFECO regarding the pawn industry and national registration process. The 2013 legislationrequires all pawn businesses and their owners to annually register with and be approved by PROFECO in order to legally operate. In addition, all operators must comply withadditional customer notice and disclosure provisions, bonding requirements to insure against loss or insolvency, reporting of certain types of suspicious transactions andmonthly reporting to state law enforcement officials of certain transactions (or series of transactions) of suspicious transactions. There are significant fines and sanctions,including operating suspensions, for failure to register and/or comply with PROFECO’s rules and regulations. PROFECO continues to implement its process regarding itsregistration requirements, and the Company has complied in all material respects with this ongoing process and registration requirements as administered by PROFECO.The adoption of new laws or regulations or adverse changes in, or the interpretation or enforcement of, existing laws or regulations affecting the Company’s products andservices could adversely affect its financial condition and operating results. Governments at the national, state and local levels, may seek to impose new laws, regulatory restrictions or licensing requirements that affect the Company’s products orservices it offers, the terms on which it may offer them, and the disclosure, compliance and reporting obligations it must fulfill in connection with its business. They may alsointerpret or enforce existing requirements in new ways that could restrict the Company’s ability to continue its current methods of operation or to expand operations, imposesignificant additional compliance costs, and could have a material adverse effect on the Company’s financial condition and results of operations. In some cases these measurescould even directly prohibit some or all of the Company’s current business activities in certain jurisdictions, or render them unprofitable and/or impractical to continue.In July 2015, the U.S. Department of Defense published a finalized set of new rules under the Military Lending Act (“MLA”). The MLA (and rules previously adoptedthereunder) have previously prevented the Company from offering its short-term unsecured credit products to members of the military or their dependents because none of theCompany’s short-term unsecured credit products carry a military annual percentage rate of 36% or less. The new rules, which went into effect October 3, 2016, expand thescope of the credit products covered by the MLA to include certain non-purchase money loans secured by personal property, such as pawn loans, or vehicles and certainunsecured installment loan products to the extent any of such products have a military annual percentage rate greater than 36%. Under the new rules, the Company is unable tooffer any of its current credit products, including pawn loans, to members of the U.S. military or their dependents. While the Company does not believe that active members ofthe U.S. military or their dependents comprise a significant percentage of the historical customer base in most locations, compliance with the MLA, and the new rules inparticular, is complex and increases compliance risks and related costs. The Company continues to assess the impact of these new rules on its business operations andcompliance requirements.On June 1, 2016, the CFPB issued its notice of proposed rulemaking related to short-term consumer loans. The proposed rules are expected to become effective 15 monthsafter the rules are finalized. The proposed rules seek to establish an ability to repay assessment on all covered loans, verification by the consumer of certain debts andverification through outside sources by lenders of certain debts, mandatory cooling off periods, alternative loan offerings that would allow lenders to forego the proposedrequirement to conduct an ability to repay assessment, and restrictions on collection practices. As written, the proposed rules define the Company’s consumer loan products,both short-term loans and installment loans, as loans covered under the rules, but excludes pawn loans. The Company continues to review the proposed rules to determine thepotential impact on its consumer loan portfolio if the proposed rules become final in their current form. On a consolidated basis, the Company expects consumer loan revenuefor the year ending December 31, 2017 to account for approximately 5% of the Company’s consolidated total revenue.Declines in commodity market prices of gold and other precious metals and diamonds could negatively affect the Company’s profits.The Company’s profitability could be adversely impacted by gold market fluctuations. As of December 31, 2016 , approximately 57% of the Company’s pawn loans werecollateralized with jewelry, which is primarily gold, and 49% of its inventories consisted of jewelry, which is also primarily gold. The Company sells significant quantities ofgold, other precious metals and diamonds acquired through collateral forfeitures or direct purchases from customers. In addition to normal market risks associated withaccepting gold as loan collateral and buying and selling gold, current global economic conditions have increased the volatility of19Table of Contents commodity markets such as those for gold and other precious metals. A significant and sustained decline in gold and/or other precious metal prices could result in decreasedmerchandise sales and related margins, decreased inventory valuations and sub-standard collateralization of outstanding pawn loans. In addition, a significant decline in marketprices could result in a lower balance of pawn loans outstanding for the Company, as customers would receive lower loan amounts for individual pieces of jewelry or othergold items. For a detailed discussion of the impact of a decline in market prices on wholesale scrap jewelry sales, see “Item 7. Management’s Discussion and Analysis ofFinancial Condition and Results of Operations.”Risks and uncertainties related to the Company’s foreign operations could negatively impact the Company’s operating results.As of December 31, 2016 , the Company had 955 store locations in Latin America, including 909 in Mexico, 33 in Guatemala and 13 in El Salvador. All of these are countriesin which there are potential risks related to geo-political events, political instability, corruption, economic volatility, drug cartel and gang-related violence, social and ethnicunrest including riots and looting, enforcement of property rights, governmental regulations, tax policies, foreign investment policies, public safety and security, anti-moneylaundering regulations and import/export regulations among others. As in many developing markets, there are also uncertainties as to how both local law and U.S. federal lawis applied, including areas involving commercial transactions and foreign investment. As a result, actions or events could occur in Mexico, Guatemala or El Salvador that arebeyond the Company’s control, which could restrict or eliminate the Company’s ability to operate some or all of its locations in these countries or significantly reducecustomer traffic, product demand and the expected profitability of such operations.Changes impacting U.S. international trade and corporate tax provisions may have an adverse effect on the Company’s financial condition and results of operations.Because international operations increase the complexity of an organization, the Company may face additional administrative costs in managing its business. In addition, mostcountries typically impose additional burdens on non-domestic companies through the use of local regulations, tariffs, labor controls and other federal or state requirements orlegislation. As the Company derives significant revenue, earnings and cash flow from operations in Latin America, primarily in Mexico, there are some inherent risksregarding the overall stability of the trading relationship between Mexico and the U.S. and the burdens imposed thereon by any changes to (or the adoption of new) regulations,tariffs or other federal or state legislation. Specifically, the Company has significant exposure to fluctuations and devaluations of the Mexican peso and the health of theMexican economy, which, in each case, may be negatively impacted by changes in U.S. trade treaties (such as the North American Free Trade Agreement (“NAFTA”)) andcorporate tax policy, including the imposition of a tax on imports from countries with which the U.S. runs a trade deficit, which includes countries such as Mexico. Inparticular, the current president has indicated that NAFTA and future import taxes are under scrutiny by his administration and that NAFTA may be renegotiated and newimport taxes imposed with respect to imports from Mexico and other countries in which the U.S. runs a trade deficit. In some cases, there have been negative reactions to theproposed policies as expressed in the media and by politicians in Mexico, which could potentially impact U.S. companies operating in Mexico. While the Company engages inlimited cross-border transactions other than those involving scrap jewelry sales, any such changes in regulations, trade treaties, corporate tax policy, import taxes or adversecourt or administrative interpretations of the foregoing could adversely and significantly affect the Mexican economy and ultimately the Mexican peso, which could adverselyand significantly affect the Company’s financial position and results of the Company’s Latin America operations.In addition, foreign countries may impose additional burdens on non-domestic companies through the use of local regulations, tariffs, labor controls and other federal or staterequirements or legislation that could increase the Company’s operating costs in these foreign jurisdictions. International operations also increase the complexity of anorganization, and, as a result, the Company may face additional administrative costs in managing its business as compared to other companies in the Company’s industry withonly domestic operations.The Company’s allowance for credit losses for credit services and consumer loans may not be sufficient to cover actual credit losses, which could adversely affect itsfinancial condition and operating results.Many of the Company’s consumer loan and pawn stores offer a fee-based CSO Program through which the Company assists customers in applying for short-term extensionsof credit from Independent Lenders. When an extension of credit is granted, the Company provides a guarantee to the Independent Lenders for the repayment of the customer’sextension of credit. The Company records the estimated fair value of the guarantee liability in accrued liabilities. The Company also has customer loans arising from itsconsumer loan operations. The Company is required to recognize losses resulting from the inability of credit services and consumer loan customers and/or borrowers to repaysuch receivables or loans. The Company maintains an allowance for credit losses in an attempt to cover credit losses inherent in its consumer loan operations. Additional creditlosses will likely occur in the future and may occur at a rate greater than the Company has experienced to date. The allowance for credit losses is based primarily uponhistorical credit loss experience, with consideration given to delinquency levels, collateral values, economic conditions and underwriting and collection practices. Thisevaluation is inherently subjective, as it requires estimates of material20Table of Contents factors that may be susceptible to significant change, especially in the event of a change in the governmental regulations that affect the Company’s ability to generate newloans or collect outstanding loans. If the Company’s assumptions and judgments prove to be incorrect, its current allowance may not be sufficient and adjustments may benecessary to allow for different economic conditions or adverse developments in its loan portfolio, which could adversely affect its financial condition and operating results .The failure or inability of third-parties who provide products, services or support to the Company to maintain their products, services or support could disrupt Companyoperations or result in a loss of revenue.The Company’s credit services operations depend, in part, on the willingness and ability of the Independent Lenders to make extensions of credit to its customers. The loss ofthe relationship with these lenders, and an inability to replace them with new lenders, or the failure of the lenders to fund new extensions of credit and to maintain volumes,quality and consistency in its loan programs could cause the Company to lose customers and substantially decrease the revenue and earnings of the Company’s credit servicesbusiness. In addition, the Company’s lending, pawn retail, scrap jewelry and cash management operations are dependent upon the Company’s ability to maintain retail bankingrelationships with commercial banks. Recent actions by federal regulators in the U.S. and other Latin American countries where the Company operates have caused manycommercial banks, including certain banks used by the Company, to cease offering such services to the Company and other companies in the Company’s industry. TheCompany also relies significantly on outside vendors to provide services such as financial transaction processing (including foreign exchange), utilities, store security, armoredtransport, precious metal smelting, data and voice networks, and other information technology products and services. The failure or inability of any of these third-party lenders,financial institutions or vendors to provide such services could limit the Company’s ability to grow its business and could increase the Company’s costs of doing business,which could adversely affect the Company’s operations if the Company is unable to timely replace them with comparable service providers at a comparable cost.An inability to disburse consumer loan proceeds or collect consumer loan payments through the ACH system would materially adversely affect the Company’s consumerloan business.The Company’s consumer loan businesses, including loans made through the CSO Program, depend all or in part on the ACH system to collect amounts due to the Companyby withdrawing funds from its customers’ bank accounts when the Company has obtained written authorization to do so from its customers. The Company’s ACH transactionsare processed by banks, and if these banks cease to provide ACH processing services to the Company, the Company would have to materially alter, or possibly discontinue,some or all of its consumer loan business if alternative ACH processors are not available.It was reported that actions by the Department of Justice, the FDIC and certain state regulators appear to be discouraging banks, non-bank providers, and ACH paymentprocessors from providing access to the ACH system (e.g. debiting/crediting consumer accounts) for certain short-term consumer loan providers that they believe are operatingillegally. The heightened regulatory scrutiny by the Department of Justice, the FDIC and other state and federal regulators has the potential to cause banks and ACH paymentprocessors to cease doing business with consumer lenders who are operating legally, without regard to whether that lender is complying with applicable laws, simply to avoidthe risk of heightened scrutiny or even unwarranted litigation. In addition, the National Automated Clearing House Association (“NACHA”) adopted certain operating rulesthat govern the use of the ACH system (“Rules”). Changes to the Rules were effective in 2015 and 2016. For example, some of the Rules add more options for which NACHAmay begin an initial investigation or enforcement proceeding when an entity originates an excessive number of unauthorized entries. This could result in increasedinvestigations of originator activity, and could ultimately result in fines passed on to those originators. Other portions of the Rules establish acceptable guidelines for certainreturns of an originator. Return rates that exceed these guidelines may trigger an inquiry and review process by NACHA and the engagement of an industry review panel toevaluate the facts behind an originator's ACH activity. The evaluation could also result in a Rules violation or a Rules enforcement proceeding. Lastly, the NACHA Rules nowformally define the types of entries that may be reinitiated, and those that are prohibited from reinitiation, among other notable changes. There can be no assurance the Company’s access to the ACH system will not be impaired as a result of this heightened scrutiny or the NACHA rule amendments. If this accessis impaired, the Company’s consumer loan business could be materially adversely affected and the Company may find it difficult or impossible to continue some or all of itsconsumer loan business, which could have a material adverse effect on the Company’s business, prospects and results of operations and financial condition.21Table of Contents Increased competition from banks, credit unions, internet-based lenders, other short-term consumer lenders, and other entities offering similar financial services, as wellas retail businesses that offer products and services offered by the Company, could adversely affect the Company’s results of operations.The Company’s principal competitors are other pawnshops, consumer loan companies, internet-based lenders, consumer finance companies, rent-to-own stores, retail financeprograms, payroll lenders, banks, credit unions and other financial institutions that serve the Company’s primary cost conscious and underbanked customer base. Many otherfinancial institutions or other businesses that do not now offer products or services directed toward the Company’s traditional customer base, many of whom may be muchlarger than the Company, could begin doing so. Significant increases in the number and size of competitors for the Company’s business could result in a decrease in thenumber of consumer loans or pawn transactions that the Company writes, resulting in lower levels of revenue and earnings in these categories. Furthermore, the Company hasmany competitors to its retail operations, such as retailers of new merchandise, retailers of pre-owned merchandise, other pawnshops, thrift shops, online retailers, onlineclassified advertising sites and online auction sites. Increased competition or aggressive marketing and pricing practices by these competitors could result in decreasedrevenue, margins and turnover rates in the Company’s retail operations. In Mexico, the Company competes directly with certain pawn stores owned by government affiliatedor sponsored non-profit foundations. The government could take actions that would harm the Company’s ability to compete in the Mexico market.A sustained deterioration of economic conditions or an economic crisis could reduce demand or profitability for the Company’s products and services and increase creditlosses which would result in reduced earnings.The Company’s business and financial results may be adversely impacted by sustained unfavorable economic conditions or unfavorable economic conditions associated with aglobal or regional economic crisis which, in either case, include adverse changes in interest or tax rates, effects of government initiatives to manage economic conditions andincreased volatility of commodity markets and foreign currency exchange rates. Specifically, a sustained or rapid deterioration in the economy could cause deterioration in theperformance of the Company’s loan portfolios and in consumer or market demand for pre-owned merchandise or gold such as that sold in the Company’s pawnshops. Asustained deterioration in the economy could reduce the demand and resale value of pre-owned merchandise and reduce the amount that the Company could effectively lend onan item of collateral. Such reductions could adversely affect pawn book balances, pawn redemption rates, inventory balances, inventory mixes, sales volumes and gross profitmargins. An economic slowdown also could result in a decrease in loan demand and an increase in loan defaults on consumer loan and credit services products. During such aslowdown, the Company could be required to tighten its underwriting standards, which would reduce consumer loan balances and related revenue and credit services fees, andcould face more difficulty in collecting defaulted consumer loans, which could lead to an increase in loan losses. As consumer loans and credit services customers generallyhave to be employed to qualify for a loan or extension of credit, an increase in the unemployment rate would reduce the number of potential customers.A decrease in demand for the Company’s products and services and the failure of the Company to adapt to such decreases could adversely affect the Company’s results ofoperations.Although the Company’s products and services are a staple of its customer base, the demand for a particular product or service may decrease due to a variety of factors, suchas the availability and pricing of competing products, changes in customers’ financial conditions as a result of changes in unemployment levels, fuel prices or other events, realor perceived loss of consumer confidence or regulatory restrictions that increase or reduce customer access to particular products. Should the Company fail to adapt to asignificant change in its customers’ demand for, or regulatory access to, its products, the Company’s revenue could decrease significantly. Even if the Company does makeadaptations, customers may resist or may reject products whose adaptations make them less attractive or less available. In any event, the effect of any product change on theresults of the Company’s business may not be fully ascertainable until the change has been in effect for some time. In particular, the Company has changed, and will continueto change, some of the consumer loan products and services it offers due to regulatory developments. Demand may also fluctuate by geographic region. The current geographicconcentration of the Company’s stores creates exposure to local economies and regional downturns (see “—Item 1. Business—Locations and Operations” for storeconcentration by state). As a result, the business is currently more susceptible to regional conditions than the operations of more geographically diversified competitors, andthe Company is vulnerable to economic downturns in those regions. Any unforeseen events or circumstances that negatively affect these areas could materially adverselyaffect the Company’s revenues and profitability.22Table of Contents Changes in the capital markets or the Company’s financial condition could reduce availability of capital on favorable terms, if at all.The Company has, in the past, accessed the debt capital markets to refinance existing debt obligations and to obtain capital to finance growth. Efficient access to these marketsis critical to the Company’s ongoing financial success; however, the Company’s future access to the debt capital markets could become restricted due to a variety of factors,including a deterioration of the Company’s earnings, cash flows, balance sheet quality, regulatory restrictions or overall business or industry prospects, a significantdeterioration in the state of the capital markets or a negative bias toward the Company’s industry by market participants. Inability to access the credit markets on acceptableterms, if at all, could have a material adverse effect on the Company’s financial condition and ability to fund future growth.The Company's existing and future levels of indebtedness could adversely affect its financial health, its ability to obtain financing in the future, its ability to react tochanges in its business and its ability to fulfill its obligations under such indebtedness.As of December 31, 2016 , including the Company's 6.75% senior notes issued in March 2014 (“Notes”) and the Company’s two current credit facilities, the Company hadoutstanding principal of $460.0 million and availability of $144.0 million under its credit facilities. The Company's level of indebtedness could:•make it more difficult for it to satisfy its obligations with respect to the Notes and its other indebtedness, resulting in possible defaults on and acceleration of suchindebtedness;•require it to dedicate a substantial portion of its cash flow from operations to the payment of principal and interest on its indebtedness, thereby reducing the availabilityof such cash flows to fund working capital, acquisitions, new store openings, capital expenditures and other general corporate purposes;•limit its ability to obtain additional financing for working capital, acquisitions, new store openings, capital expenditures, debt service requirements and other generalcorporate purposes;•limit its ability to refinance indebtedness or cause the associated costs of such refinancing to increase;•restrict the ability of its subsidiaries to pay dividends or otherwise transfer assets to the Company, which could limit its ability to, among other things, make requiredpayments on its debt;•increase the Company's vulnerability to general adverse economic and industry conditions, including interest rate fluctuations (because a portion of its borrowings are atvariable rates of interest); and•place the Company at a competitive disadvantage compared to other companies with proportionately less debt or comparable debt at more favorable interest rates who,as a result, may be better positioned to withstand economic downturns.Any of the foregoing impacts of the Company's level of indebtedness could have a material adverse effect on its business, financial condition and results of operations.The Company’s business depends on the uninterrupted operation of the Company’s facilities, systems and business functions, including its information technology andother business systems.The Company’s business depends highly upon its employees’ ability to perform, in an efficient and uninterrupted fashion, necessary business functions such as operating,managing and securing its retail locations, technical support centers, call centers, security monitoring, treasury and accounting functions and other administrative supportfunctions. Additionally, the Company’s storefront operations depend on the efficiency and reliability of the Company’s point-of-sale system. A shut-down of or inability toaccess the facilities in which the Company’s online operations, storefront point-of-sale and loan management system and other technology infrastructure are based, such as dueto a power outage, a security breach, a failure of one or more of its information technology, telecommunications or other systems, or sustained or repeated disruptions of suchsystems could significantly impair its ability to perform such functions on a timely basis and could result in a deterioration of the Company’s ability to perform efficientstorefront lending and merchandise disposition activities, provide customer service, perform collection activities, or perform other necessary business functions.Security breaches, cyber attacks or fraudulent activity could result in damage to the Company’s operations or lead to reputational damage.A security breach of the Company’s computer systems could interrupt or damage its operations or harm its reputation. In addition, the Company could be subject to liability ifconfidential customer or employee personal and identifying information is misappropriated from its computer systems. Any compromise of security, including securitybreaches perpetrated on persons with whom the Company has commercial relationships, that result in the unauthorized release and use of its users’ personal information or theunauthorized access of confidential Company information, could result in a violation of applicable privacy and other laws,23Table of Contents significant legal and financial exposure, damage to the Company’s reputation, and a loss of confidence in the Company’s security measures, which could harm its business.Any compromise of security could deter people from entering into transactions that involve transmitting confidential information to the Company’s systems and could harmrelationships with the Company’s suppliers, which could have a material adverse effect on the Company’s business. Actual or anticipated cyber attacks may cause theCompany to incur increasing costs, including costs to deploy additional personnel and protection technologies, train employees and engage third-party experts and consultants.Despite the implementation of significant security measures, these systems may still be vulnerable to physical break-ins, computer viruses, programming errors, attacks bythird parties or similar disruptive problems. The Company may not have the resources or technical sophistication to anticipate or prevent rapidly evolving types of cyberattacks.Most of the Company’s customers provide personal information in three ways: (1) when conducting a pawn transaction or selling merchandise; (2) during a consumer loantransaction (when personal and bank account information is necessary for approving this transaction); and (3) when conducting a retail purchase whereby a customer’spayment method is via a credit card, debit card or check. The Company relies on encryption and authentication technology to provide security and authentication to effectivelysecure transmission of confidential information, including customer bank account and other personal information. Advances in computer capabilities, new discoveries in thefield of cryptography or other developments may result in the technology used by the Company to protect transaction data being breached or compromised.In addition, many of the third parties who provide products, services, or support to the Company could also experience any of the above cyber risks or security breaches, whichcould impact the Company’s customers and its business and could result in a loss of customers, suppliers or revenue.Judicial or administrative decisions, CFPB rule-making or amendments to the Federal Arbitration Act (the “FAA”) could render the arbitration agreements the Companyuses illegal or unenforceable.The Company includes dispute arbitration provisions in many of its customer loan agreements. These provisions are designed to allow the Company to resolve any customerdisputes through individual arbitration rather than in court. The Company’s arbitration provisions explicitly provide that all arbitrations will be conducted on an individual andnot on a class basis. Thus, the Company’s arbitration agreements, if enforced, have the effect of mitigating class and collective action liability. The Company’s arbitrationagreements do not have any impact on regulatory enforcement proceedings. The Company takes the position that the FAA requires enforcement, in accordance with the termsof its arbitration agreements, of class and collective action waivers of the type the Company uses.In the past, a number of state and federal circuit courts, including the California and Nevada Supreme Courts, and the National Labor Relations Board concluded thatarbitration agreements with class action waivers are “unconscionable” and hence unenforceable, particularly where a small dollar amount is in controversy on an individualbasis. In April 2011, however, the U.S. Supreme Court ruled in a 5-4 decision in AT&T Mobility v. Concepcion that the FAA preempts state laws that would otherwiseinvalidate consumer arbitration agreements with class action waivers. In December 2015, the Supreme Court in a 6-3 decision in DIRECTV, Inc. v. Imburgia upheldDIRECTV’s service agreement that included a binding arbitration provision with a class action waiver, and declared that the arbitration clause at issue was governed by theFAA. The Company’s arbitration agreements differ in some respects from the agreement at issue in Concepcion and DIRECTV and some courts have continued, in theaftermath of Concepcion, to find reasons to rule that arbitration agreements are unenforceable.In 2016, the CFPB proposed new federal regulations prohibiting mandatory arbitration provisions in contracts which bar class action lawsuits. The proposed rules would stillallow arbitration provisions, though they would need to specify that the consumer is not precluded from participating in a class action lawsuit. After receiving comments on theproposed rules, the CFPB is developing a final rule expected to be published sometime in 2017. Under the Dodd-Frank Act, any CFPB rule prohibiting or limiting arbitrationof disputes would apply to arbitration agreements entered into more than six months after the final rule becomes effective (and not to prior arbitration agreements). The ruleswould also require companies that choose to use arbitration clauses for individual disputes to submit to the CFPB the arbitration claims filed and awards issued so that thebureau can monitor the fairness of the process. The CFPB is also considering publishing the claims and awards on its website so that the public can monitor them.In light of conflicting court decisions and the CFPB’s pending rules, it is possible that the Company’s arbitration agreements will be rendered unenforceable. Additionally,Congress has considered legislation that would generally limit or prohibit mandatory dispute arbitration in consumer contracts, and it has adopted such prohibitions withrespect to certain mortgage loans and certain consumer loans to active-duty members of the military and their dependents.24Table of Contents Any judicial or administrative decision, federal legislation or CFPB rule that would impair the Company’s ability to enter into and enforce consumer arbitration agreementswith class action waivers could significantly increase the Company’s exposure to class action litigation as well as litigation in plaintiff friendly jurisdictions. Such litigationcould have a material adverse effect on the Company’s business, results of operations and financial condition.The Company is subject to goodwill impairment risk.At December 31, 2016 , the Company had $831.2 million of goodwill on its consolidated balance sheet, all of which represents assets capitalized in connection with theCompany’s acquisitions and business combinations. Accounting for goodwill requires significant management estimates and judgment. Management performs periodicreviews of the carrying values of goodwill to determine whether events and circumstances indicate that an impairment in value may have occurred. A variety of factors couldcause the carrying value of goodwill to become impaired. A write-down of the carrying value of goodwill could result in a non-cash charge, which could have an adverse effecton the Company’s results of operations.Due primarily to the impacts of recently enacted and additional proposed local, state and federal regulatory restrictions affecting short-term and long-term profitabilityexpectations for consumer loans, including payday and title lending products, the Company’s long-term ongoing strategy to reduce non-core consumer lending operationsalong with significant deterioration in payday lending market conditions, the Company recorded a $7.9 million goodwill impairment charge during fiscal 2015 related to theU.S. consumer loan operations reporting unit. As of December 31, 2015, the Company has no remaining goodwill or other intangible assets associated with its U.S. consumerloan operations reporting unit.The Company depends on its senior management and may not be able to retain those employees or recruit additional qualified personnel.The Company depends on its senior management. The loss of services of any of the members of the Company’s senior management could adversely affect the Company’sbusiness until a suitable replacement can be found. There may be a limited number of persons with the requisite skills to serve in these positions, and the Company cannotensure that it would be able to identify or employ such qualified personnel on acceptable terms.The inability to successfully identify attractive acquisition targets and integrate completed acquisitions could adversely affect results.The Company has historically grown, in part, through strategic acquisitions, including the addition of 815 stores as a result of the Merger and the acquisition of 182 otherstores during 2016 . The Company’s strategy is to continue to pursue attractive acquisition opportunities if and when they become available. The success of an acquisition issubject to numerous internal and external factors, such as the ability to consolidate information technology and accounting functions, the management of additional sales,administrative, operations and management personnel, overall management of a larger organization, competitive market forces, and general economic factors. It is possiblethat the integration process could result in the loss of key employees, the disruption of ongoing businesses, tax costs or inefficiencies, or inconsistencies in standards, controls,information technology systems, procedures and policies, any of which could adversely affect the Company’s ability to maintain relationships with customers, employees, orother third-parties or the Company’s ability to achieve the anticipated benefits of such acquisitions and could harm its financial performance. Failure to successfully integratean acquisition could have an adverse effect on the Company’s business, results of operations and financial condition and failure to successfully identify attractive acquisitiontargets and complete such acquisitions could have an adverse effect on the Company’s growth. Additionally, any acquisition has the risk that the Company may not realize areturn on the acquisition or the Company’s investment.Current and future litigation or regulatory proceedings, both in the U.S. and Latin America, could have a material adverse effect on the Company’s business, prospects,results of operations and financial condition.The Company or its subsidiaries has been or may be involved in future lawsuits, regulatory or administrative proceedings, examinations, investigations, consent orders,memorandums of understanding or other actions arising in the ordinary course of business, including those related to consumer protection, federal or state wage and hour laws,product liability, unclaimed property, employment, personal injury and other matters that could cause it to incur substantial expenditures and generate adverse publicity. Inparticular, the Company may be involved in lawsuits or regulatory actions related to employment, marketing, unclaimed property and other matters, including class actionlawsuits brought against it for alleged violations of the Fair Labor Standards Act, state wage and hour laws, state or federal advertising laws, consumer protection, lending,unclaimed property and other laws. The consequences of an adverse ruling in any current or future litigation, judicial or administrative proceeding, including consent orders ormemorandums of understanding, could cause the Company to have to refund fees and/or interest collected, refund the principal amount of advances, pay treble or othermultiple damages, pay monetary penalties, fines, and/or modify or terminate25Table of Contents the Company’s operations in particular states. Defense of any lawsuit or administrative proceeding, even if successful, could require substantial time and attention of theCompany’s management and could require the expenditure of significant amounts for legal fees and other related costs. Settlement of lawsuits or administrative proceedingsmay also result in significant payments and modifications to the Company’s operations. Due to the inherent uncertainties of litigation, administrative proceedings and otherclaims, the Company cannot accurately predict the ultimate outcome of any such matters.Adverse court and administrative interpretations of the various laws and regulations under which the Company operates could require the Company to alter the products that itoffers or cease doing business in the jurisdiction where the court, state or federal agency interpretation is applicable. The Company is also subject to regulatory proceedings,and the Company could suffer losses from interpretations of state or federal laws in those regulatory proceedings, even if it is not a party to those proceedings. Any of theseevents could have a material adverse effect on the Company’s business, prospects, results of operations and financial condition and could impair the Company’s ability tocontinue current operations. Besides regulation specific to consumer lending, which is discussed previously, the Company’s pawn, credit services and consumer loanbusinesses are subject to other federal, state and local regulations, tax laws and import/export laws, including but not limited to the Dodd-Frank Act, Unfair Deceptive orAbusive Acts and Practices, Federal Truth in Lending Act and Regulation Z adopted thereunder, Fair Debt Collections Practices Act, Military Lending Act, Bank Secrecy Act,Money Laundering Suppression Act of 1994, USA PATRIOT Act, Gramm-Leach-Bliley Act, Equal Credit Opportunity Act, Fair Credit Reporting Act, Electronic FundsTransfer Act, Fair and Accurate Credit Transactions Act, Foreign Corrupt Practices Act and the Brady Handgun Violence Prevention Act. In addition, the Company’smarketing efforts and the representations the Company makes about its products and services are subject to federal and state unfair and deceptive practice statutes, includingthe Federal Trade Commission Act and analogous state statutes under which the Federal Trade Commission, state attorneys general or private plaintiffs may bring legalactions. If the Company is found to have engaged in an unfair and deceptive practice, it could have a material adverse effect on its business, prospects, results of operations andfinancial condition.The Company sells products manufactured by third parties, some of which may be defective. Many such products are manufactured overseas in countries which may utilizequality control standards that vary from those legally allowed or commonly accepted in the U.S., which may increase the Company’s risk that such products may be defective.If any products that the Company sells were to cause physical injury or injury to property, the injured party or parties could bring claims against the Company as the retailer ofthe products based upon strict product liability. In addition, the Company’s products are subject to the federal Consumer Product Safety Act and the Consumer Product SafetyImprovement Act, which empower the Consumer Product Safety Commission to protect consumers from hazardous products. The Consumer Product Safety Commission hasthe authority to exclude from the market and recall certain consumer products that are found to be hazardous. Similar laws exist in some states and cities in the U.S. If theCompany fails to comply with government and industry safety standards, the Company may be subject to claims, lawsuits, product recalls, fines and negative publicity thatcould have a material adverse effect on its business, prospects, results of operations and financial condition.Some of the Company’s U.S. stores sell firearms, ammunition and certain related accessories, which may be associated with an increased risk of injury and related lawsuits.The Company may incur losses due to lawsuits relating to its performance of background checks on firearms purchases as mandated by state and federal law or the improperuse of firearms sold by the Company, including lawsuits by individuals, municipalities or other organizations attempting to recover damages or costs from firearms retailersrelating to the misuse of firearms. Commencement of such lawsuits against the Company could have a material adverse effect on its business, prospects, results of operationsand financial condition.The Company is also subject to similar applicable laws and regulations in Mexico. For example, Mexico’s Anti-Money Laundering Law (effective in November 2013), whichrequires monthly reporting of certain transactions (or series of transactions) exceeding monetary limits, and require stricter maintenance of customer identification records andcontrols, and reporting of all foreign (non-Mexican) customer transactions. The Company is also subject to the terms and enforcement of the Federal Personal InformationProtection Act (“Privacy Law”) (effective January 2012), which requires companies to protect their customers’ personal information, among other things such as mandatorydisclosures.Certain state and local governmental entities in Latin America also regulate pawn, other consumer finance and retail businesses through state laws and local zoning andpermitting ordinances. State and local agencies, including local police authorities, often have unlimited, broad and discretionary authority to suspend store operations pendinginvestigation of suspicious pawn transactions and resolution of actual or alleged regulatory, licensing and permitting issues.Compliance with applicable laws and regulations is costly, can affect operating results and may result in operational restrictions. The Company’s failure to comply withapplicable laws and regulations could subject it to regulatory enforcement actions, result in the assessment against the Company of civil, monetary, criminal or other penalties,require the Company to refund interest or fees, result in a determination that certain loans are not collectible, result in a revocation of licenses, or cause damage to its26Table of Contents reputation, brands and customer relationships, any of which could have a material adverse effect on the Company’s business, prospects, results of operations and financialcondition.The sale and ownership of firearms, ammunition and certain related accessories is subject to current and potential regulation, which could have a material adverse effecton the Company’s business, prospects, results of operations and financial condition.Because the Company sells firearms, ammunition and certain related accessories, the Company is required to comply with federal, state and local laws and regulationspertaining to the purchase, storage, transfer and sale of such products. These laws and regulations require the Company, among other things, to ensure that each pawn locationoffering firearms has its FFL, that all purchasers of firearms are subjected to a pre-sale background check, to record the details of each firearm sale on appropriate government-issued forms, to record each receipt or transfer of a firearm and to maintain these records for a specified period of time. The Company is also required to timely respond totraces of firearms by law enforcement agencies. Over the past several years, the purchase, sale and ownership of firearms, ammunition and certain related accessories has beenthe subject of increased federal, state and local regulation. These regulatory efforts are likely to continue in the Company’s current markets and other markets into which theCompany may expand. If enacted, new laws and regulations could limit the types of licenses, firearms, ammunition and certain related accessories that the Company ispermitted to purchase and sell and could impose new restrictions and requirements on the manner in which the Company offers, purchases and sells these products. If theCompany fails to comply with existing or newly enacted laws and regulations relating to the purchase and sale of firearms, ammunition and certain related accessories, itslicenses to sell or maintain inventory of firearms at its stores may be suspended or revoked, which could have a material adverse effect on the Company’s business, prospects,results of operations and financial condition. In addition, new laws and regulations impacting the ownership of firearms and ammunition could cause a decline in the demandfor and sales of the Company’s products, which could materially adversely impact its revenue and profitability. Complying with increased regulation relating to the sale offirearms, ammunition and certain related accessories could be costly.The Company is subject to the FCPA and other anti-corruption laws, and the Company’s failure to comply with these anti-corruption laws could result in penalties thatcould have a material adverse effect on its business, results of operations and financial condition.The Company is subject to the FCPA, which generally prohibits companies and their agents or intermediaries from making improper payments to foreign officials for thepurpose of obtaining or keeping business and/or other benefits. Although the Company has policies and procedures designed to ensure that it, its employees, agents, andintermediaries comply with the FCPA and other anti-corruption laws, there can be no assurance that such policies or procedures will work effectively all of the time or protectthe Company against liability for actions taken by its employees, agents, and intermediaries with respect to its business or any businesses that it may acquire. In the event theCompany believes, or has reason to believe, its employees, agents, or intermediaries have or may have violated applicable anti-corruption laws, including the FCPA, theCompany may be required to investigate or have a third party investigate the relevant facts and circumstances, which can be expensive and require significant time andattention from senior management. The Company’s continued operation and expansion outside the United States, especially in Latin America, could increase the risk,perceived or otherwise, of such violations in the future. If the Company violates the FCPA or other laws governing the conduct of business with government entities (includinglocal laws), the Company may be subject to criminal and civil penalties and other remedial measures, which could have an adverse effect on its business, results of operations,and financial condition. Investigation of any potential or perceived violations of the FCPA or other anti-corruption laws by U.S. or foreign authorities could harm theCompany’s reputation and could have a material adverse effect on its business, results of operations and financial condition.Failure to maintain certain criteria required by state and local regulatory bodies could result in fines or the loss of the Company’s licenses to conduct business.Most states and many local jurisdictions both in the United States and in Latin America in which the Company operates, as well as the federal governments in Latin America,require registration and licenses to conduct the Company’s business. These states or their respective regulatory bodies have established criteria the Company must meet inorder to obtain, maintain, and renew those licenses. For example, many of the states in which the Company operates require it to meet or exceed certain operational,advertising, disclosure, collection, and recordkeeping requirements and to maintain a minimum amount of net worth or equity. From time to time, the Company is subject toaudits in these states to ensure it is meeting the applicable requirements to maintain these licenses. Failure to meet these requirements could result in various fines and penaltiesor store closures, which could include temporary suspension of operations, the revocation of existing licenses or the denial of new and renewal licensing requests. TheCompany cannot guarantee future license applications or renewals will be granted. If the Company were to lose any of its licenses to conduct its business, it could result in thetemporary or permanent closure of stores and online activities, which could adversely affect the Company’s business, results of operations and cash flows.27Table of Contents The complexity of the political and regulatory environment in which the Company operates and the related cost of compliance are both increasing due to changing politicallandscape and additional legal and regulatory requirements, the Company’s ongoing expansion into new markets and the fact that foreign laws occasionally conflict withdomestic laws. In addition to potential damage to the Company’s reputation and brand, failure to comply with applicable federal, state and local laws and regulations such asthose outlined above may result in the Company being subject to claims, lawsuits, fines and adverse publicity that could have a material adverse effect on its business, resultsof operations and financial condition.Adverse real estate market fluctuations and/or the inability to renew and extend store operating leases could affect the Company’s profits.The Company leases most of its locations. A significant rise in real estate prices or real property taxes could result in an increase in store lease costs as the Company opensnew locations and renews leases for existing locations, thereby negatively impacting the Company’s results of operations. The Company also owns certain developed andundeveloped real estate, which could be impacted by adverse market fluctuations. In addition, the inability of the Company to renew, extend or replace expiring store leasescould have an adverse effect on the Company’s results of operations.The Company’s lending business is somewhat seasonal, which causes the Company’s revenues and operating cash flows to fluctuate and may adversely affect theCompany’s ability to service its debt obligations.The Company’s U.S. lending business typically experiences reduced demand in the first and second quarters as a result of its customers’ receipt of federal tax refund checkstypically in February of each year. Demand for the Company’s U.S. lending services is generally greatest during the third and fourth quarters. Also, retail sales are seasonallyhigher in the fourth quarter associated with holiday shopping. Typically, the Company experiences seasonal growth of service fees in the third and fourth quarter of each yeardue to loan balance growth. Service fees generally decline in the first and second quarter of each year after the heavy repayment period of pawn loans in Latin Americaassociated with statutory bonuses received by customers in the fourth quarter. This seasonality requires the Company to manage its cash flows over the course of the year. If agovernmental authority were to pursue economic stimulus actions or issue additional tax refunds, tax credits or other statutory payments at other times during the year, suchactions could have a material adverse effect on the Company’s business, prospects, results of operations and financial condition during these periods. If the Company’srevenues were to fall substantially below what it would normally expect during certain periods, the Company’s annual financial results and its ability to service its debtobligations could be adversely affected.Inclement weather or natural disasters can adversely impact the Company’s operating results.The occurrence of weather events such as rain, cold weather, snow, wind, storms, hurricanes, or other natural disasters adversely affecting consumer traffic and loanorigination or collection activities at the Company’s stores could have an adverse effect on the Company’s results of operations. In addition, the Company may incur property,casualty or other losses not covered by insurance. The Company maintains a program of insurance coverage for various types of property, casualty and other risks. The typesand amounts of insurance that the Company obtains vary from time to time, depending on availability, cost and management’s decisions with respect to risk retention. TheCompany’s insurance policies are subject to deductibles and exclusions that result in the Company’s retention of a level of risk on a self-insurance basis. Losses not covered byinsurance could be substantial and may increase the Company’s expenses, which could harm the Company’s results of operations and financial condition.The Company’s growth is subject to external factors and other circumstances over which it has limited control or that are beyond its control. These factors andcircumstances could adversely affect the Company’s ability to grow through the opening of new store locations.The success of the Company’s expansion strategy is subject to numerous external factors, such as the availability of sites with favorable customer demographics, limitedcompetition, acceptable regulatory restrictions, political or community acceptance, suitable lease terms, its ability to attract, train and retain qualified associates andmanagement personnel, the ability to obtain required government permits and licenses and the ability to identify attractive acquisition targets and complete such acquisitions.Some of these factors are beyond the Company’s control. The failure to execute the Company’s expansion strategy would adversely affect the Company’s ability to expand itsbusiness and could materially adversely affect its business, prospects, results of operations and financial condition.28Table of Contents The Company’s reported results require the judgment of management, and the Company could be subject to risks associated with these judgments or could be adverselyaffected by the implementation of new, or changes in the interpretation of existing, accounting principles or financial reporting requirements.The preparation of the Company’s financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, anddisclosure of contingent assets and liabilities, at the dates of the consolidated financial statements and the reported amounts of revenue and expenses during the reportingperiods. In addition, the Company prepares its financial statements in accordance with generally accepted accounting principles (“GAAP”), and GAAP and its interpretationsare subject to change over time. If new rules or interpretations of existing rules require the Company to change its financial reporting, the Company’s results of operations andfinancial condition could be materially adversely affected, and the Company could be required to restate historical financial reporting.Unexpected changes in both domestic and foreign tax rates could negatively impact the Company’s operating results.The Company’s financial results may be negatively impacted should tax rates or changes to tax laws in the U.S. and in Latin America be increased or otherwise affected bychanges in allowable expense deductions, or as a result of the imposition of new withholding requirements on repatriation of foreign earnings.Certain tax positions taken by the Company require the judgment of management and could be challenged by federal taxing authorities in the United States and LatinAmerica.Management’s judgment is required in determining the provision for income taxes, the deferred tax assets and liabilities and any valuation allowance recorded against deferredtax assets. Management’s judgment is also required in evaluating whether tax benefits meet the more-likely-than-not threshold for recognition under ASC 740-10-25, IncomeTaxes .The impairment of other financial institutions could adversely affect the Company.The Company has exposure to financial institutions used as depositories of its corporate cash balances and commodity transactions. If the Company’s counterparties andfinancial institutions become impaired or insolvent, this could have serious consequences to the Company’s financial condition and results of operations.The Company’s business may be impacted by the outbreak of certain public health issues, including epidemics, pandemics and other contagious diseases.In the event of an outbreak of epidemics, pandemics or other contagious diseases, regulatory and/or public health officials could restrict store operating hours, productofferings and/or the number of customers allowed in a store at one time, which could adversely affect the Company’s financial results. In addition, to the extent that theCompany’s customers become infected by such diseases, or feel uncomfortable visiting public locations due to a perceived risk of exposure to contagious diseases, theCompany could experience a reduction in customer traffic, which could have an adverse effect on the Company’s results of operations.If the Company is unable to protect its intellectual property rights, its ability to compete could be negatively impacted.The success of the Company’s business depends to a certain extent upon the value associated with its intellectual property rights. The Company uses the trademarks “FirstCash,” “First Cash Pawn” and “Cash America” along with numerous other trade names as described herein. The Company has also developed a proprietary point of salesystem for use in its stores. The Company relies on a combination of copyright, trade secret, trademark, and other rights, as well as confidentiality procedures and contractualprovisions to protect its proprietary technology, processes and other intellectual property. While the Company intends to vigorously protect its trademarks and proprietarypoint of sale systems against infringement, it may not be successful. In addition, the laws of certain foreign countries may not protect intellectual property rights to the sameextent as the laws of the U.S. The costs required to protect the Company’s intellectual property rights and trademarks could be substantial.Because the Company maintains a significant supply of cash, loan collateral and inventories in its stores, the Company may be subject to employee and third-partyrobberies, riots, looting, burglaries and thefts. The Company also may be subject to liability as a result of crimes at its stores.The Company’s business requires it to maintain a significant supply of cash, loan collateral and inventories in most of its stores. As a result, the Company is subject to the riskof riots, looting, robberies, burglaries and thefts. Although the Company has implemented various programs in an effort to reduce these risks, maintains insurance coverage forriots, looting, robberies, burglaries and thefts and utilizes various security measures at its facilities, there can be no assurance that riots, looting, robberies, burglaries29Table of Contents and thefts will not occur. The extent of the Company’s cash, loan collateral and inventory losses or shortages could increase as it expands the nature and scope of its productsand services. Riots, looting, robberies, burglaries and thefts could lead to losses and shortages and could adversely affect the Company’s business, prospects, results ofoperations and financial condition. It is also possible that violent crimes such as riots, assaults and armed robberies may be committed at the Company’s stores. The Companycould experience liability or adverse publicity arising from such crimes. For example, the Company may be liable if an employee, customer, guard or bystander suffers bodilyinjury or other harm. Any such event may have a material adverse effect on the Company’s business, prospects, results of operations and financial condition.Risks Related to the Cash America MergerThe Company may fail to realize all of the anticipated benefits of the Merger or those benefits may take longer, if at all, to realize than expected. The Company may alsoencounter significant difficulties in integrating the two businesses.The ability of the Company to realize the anticipated benefits of the Merger will depend, to a large extent, on the Company’s ability to successfully integrate the twobusinesses. The combination of two independent businesses is a complex, costly and time-consuming process. As a result, the Company will be required to devote significantmanagement attention and resources to integrating the business practices and operations of First Cash and Cash America. The integration process may disrupt the business ofthe Company and, if implemented ineffectively, would restrict the full realization of the anticipated benefits of the Merger. The failure to meet the challenges involved inintegrating the two businesses and to realize the anticipated benefits of the Merger could cause an interruption of, or a loss of momentum in, the activities of the Company andcould adversely impact the business, financial condition and results of operations of the Company. In addition, the overall integration of the businesses may result in materialunanticipated problems, expenses, liabilities, loss of customers and diversion of the attention of the Company’s management and employees. The challenges of combining theoperations of the companies include, among others:•difficulties in achieving anticipated cost savings, synergies, business opportunities and growth prospects from the Merger;•difficulties in the integration of operations and systems, including information technology systems;•difficulties in establishing effective uniform controls, standards, systems, procedures and accounting and other policies, business cultures, regulatory and complianceprograms and compensation structures between the two companies;•difficulties in the acculturation of employees;•difficulties in managing the expanded operations of a larger and more complex company with both a domestic and foreign business presence;•challenges in keeping existing customers and obtaining new customers;•challenges in retaining or attracting and retaining key personnel, including personnel that are considered key to the future success of the combined company; and•challenges in keeping key business relationships in place.Many of these factors will be outside of the control of the Company, and any one of them could result in increased costs and liabilities, decreases in the amount of expectedrevenue and earnings and diversion of management’s time and energy, which could have a material adverse effect on the business, financial condition and results of operationsof the Company. In addition, even if the operations of the businesses of First Cash and Cash America are integrated successfully, the full benefits of the Merger may not berealized, including the synergies, cost savings, growth opportunities or cash flows that are expected, and the Company will also be subject to additional risks that could impactfuture earnings. These benefits may not be achieved within the anticipated time frame, or at all. Further, additional unanticipated costs may be incurred in the integration of thebusinesses of First Cash and Cash America. All of these factors could cause dilution of the earnings per share of the Company, decrease or delay the expected accretive effectof the Merger, negatively impact the price of the Company’s stock, impair the ability of the Company to return capital to its stockholders or have a material adverse effect onthe business, financial condition and results of operations of the Company.The Merger may not be accretive and may cause dilution of the Company’s adjusted earnings per share, which may negatively affect the market price of the Company’scommon stock.The Company’s management currently anticipates that the Merger will be accretive to stockholders on an adjusted earnings per share basis in 2017. This expectation is basedon currently available net revenue and operating expense estimates, which may materially change. The Company could also encounter additional transaction and integration-related costs or other factors such as the failure to realize all of the benefits anticipated in the Merger. All of these factors could cause dilution of the Company’s adjustedearnings per share or decrease or delay the expected accretive effect of the Merger and cause a decrease in the market value of the Company’s common stock.30Table of Contents The Company’s future results will suffer if it does not effectively manage its expanded operations resulting from the Merger.As a result of the Merger, the size of the business of the Company has increased significantly. The Company’s future success depends, in part, upon its ability to manage thisexpanded business, which will pose substantial challenges for management, including challenges related to the management and monitoring of new operations and associatedincreased costs and complexity. There can be no assurances that the Merger will be successful or that the Company will realize the expected operating efficiencies, costsavings, revenue enhancements and other benefits anticipated from the Merger.The Company is expected to incur substantial future expenses related to the Merger and the integration of First Cash’s and Cash America’s businesses.The Company has incurred substantial expenses in connection with the Merger and the integration of First Cash and Cash America, and will incur additional significantexpenses in connection therewith in future periods. There are a large number of processes, policies, procedures, operations, technologies and systems that must be integrated,including store point of sale and pawn transaction management systems, accounting and finance, payroll and incentive compensation, pawn collateral valuation and pricing,legal and regulatory compliance and employee benefits. While the integration of such items have begun, a significant amount of integration work remains and is expected tocontinue through 2017 and 2018. The Company has assumed that a certain level of expenses will be incurred in connection with the integration, however, there are manyfactors beyond the Company’s control that could affect the total amount or the timing of these expenses. Moreover, many of the expenses that will be incurred are, by theirnature, difficult to estimate accurately. These expenses could, particularly in the near term, exceed the savings that the Company expects to achieve from the elimination ofduplicative expenses and the realization of economies of scale and cost savings. These integration expenses will result in the Company taking meaningful charges againstearnings in the period following the completion of the Merger, and the amount and timing of such charges are uncertain at present.If the Merger does not qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code, the former Cash America shareholders may berequired to pay substantial U.S. federal income taxes.Although the Company intends that the Merger qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code, it is possible that the InternalRevenue Service (“IRS”) may assert that the Merger fails to qualify as such. If the IRS were to be successful in any such contention or if for any other reason the Merger wereto fail to qualify as a “reorganization,” each former Cash America shareholder would recognize a gain or loss with respect to all such shareholder’s shares of Cash America’scommon stock based on the difference between (i) the former Cash America shareholders’ tax basis in such shares and (ii) the aggregate cash and the fair market value of theCompany common stock received.The CFPB issued a consent order with respect to Cash America, and any noncompliance could have a material adverse effect.On November 20, 2013, Cash America consented to the issuance of a consent order by the CFPB pursuant to which it agreed, without admitting or denying any of the facts orconclusions made by the CFPB from its 2012 review of Cash America’s consumer loan business, to pay a civil money penalty of $5 million. Cash America also agreed to setaside $8 million for a period of 180 days to fund any further payments to eligible Ohio customers in connection with Cash America’s voluntary program to reimburse Ohiocustomers that was initiated by Cash America in 2012 in connection with legal collections proceedings initiated by Cash America in Ohio from January 1, 2008 throughDecember 4, 2012 (the “Ohio Reimbursement Program”). The consent order also relates to issues self-disclosed to the CFPB during its 2012 examination of Cash America,including the making of a limited number of loans to consumers who may have been active duty members of the military at the time of the loan at rates in excess of the interestrate permitted by the MLA; for certain failures to timely provide and preserve records and information in connection with the CFPB’s examination of Cash America; forcertain conduct in the examination process; and certain conduct giving rise to the Ohio Reimbursement Program. Cash America remains subject to the obligations of theconsent order, including the CFPB’s order that Cash America ensure compliance with federal consumer financial laws and develop more robust compliance policies andprocedures; however, certain restrictions and obligations expired on November 20, 2016. The compliance plan mandated by the consent order requires Cash America toperform ongoing consumer protection compliance risk reviews before introducing or implementing new or changed products or services. This requirement could result inadditional delay or cost when introducing, integrating or implementing new or changed products or services, or a decision not to proceed with such initiatives. In addition,Cash America’s former subsidiary, Enova International, Inc. (“Enova”), also remains subject to the consent order because it was part of Cash America when the consent orderwas issued. Cash America cannot assure that Enova will continue to comply with the consent order now that it is a separate publicly traded company. If Enova does notcomply with the consent order, Cash America could be held liable for Enova’s noncompliance. Any noncompliance with the consent order, continuing obligations or similarorders or agreements from other regulators could lead to further regulatory penalties and could have a material adverse effect on the Company’s business.31Table of Contents The Company could be responsible for U.S. federal and state income tax liabilities that relate to the spin-off by Cash America of Enova, in November 2014 (the “EnovaSpin-off”).The Enova Spin-off was conditioned on the receipt of an opinion of tax counsel that the Enova Spin-off will be treated as a transaction that is tax-free for U.S. federal incometax purposes under Section 355(a) of the Internal Revenue Code. An opinion of tax counsel is not binding on the Internal Revenue Service (the “IRS”). Accordingly, theInternal Revenue Service may reach conclusions with respect to the Enova Spin-off that are different from the conclusions reached in the opinion. The opinion was based oncertain factual statements and representations made by Cash America, which, if incomplete or untrue in any material respect, could alter tax counsel’s conclusions. In addition,Cash America received a private letter ruling from the IRS to the effect that the then retention by Cash America of up to 20% of Enova’s stock will not be in pursuant to a planhaving as one of its principal purposes the avoidance of U.S. federal income tax within the meaning of Section 355(a)(1)(D)(ii) of the Internal Revenue Code. The privateletter ruling does not address any other tax issues related to the Enova Spin-off. Notwithstanding the private letter ruling, the IRS could determine on audit that the retention ofthe Enova stock was in pursuant to a plan having as one of its principal purposes the avoidance of U.S. federal income tax if it determines that any of the facts, assumptions,representations or undertakings that Cash America or Enova have made or provided to the IRS are not correct. If the retention is in pursuant to a plan having as one of itsprincipal purposes the avoidance of U.S. federal income tax, then the distribution could ultimately be determined to be taxable, and the Company would recognize a gain in anamount equal to the excess of the fair market value of shares of Enova’s common stock distributed to Cash America’s shareholders on the distribution date over CashAmerica’s tax basis in such shares of Enova’s common stock. In addition, Cash America agreed to certain actions in connection with the private letter ruling, such as disposingof the Enova common stock by September 15, 2017. All of the shares held by the Company as of the Merger date were sold in open market transactions at an average price of$10.40 per share, with the final sales completed on December 6, 2016.While the Company believes that the Merger did not and will not adversely impact the tax-free status of the Enova Spin-off, it is possible that the IRS could assert that theMerger should result in the Enova Spin-off being treated as a taxable transaction for U.S. federal income tax purposes. If the IRS were to be successful in any contention thatthe Enova Spin-off should be treated as a taxable transaction or, if for any other reason, the Company were to take actions that would cause the Enova Spin-off to be treated asa taxable transaction, the Company could be subject to significant tax liabilities. In addition, in accordance with a tax matters agreement entered into between Cash Americaand Enova in connection with the Enova Spin-off, the Company could be subject to liability for any tax liabilities incurred by Enova or Enova’s shareholders if the Mergerwere to cause the Enova Spin-off to be deemed taxable.In connection with the Enova Spin-off, Enova and Cash America agreed to indemnify each other for certain liabilities; if the Company is required to act on theseindemnities to Enova, it may need to divert cash to meet those obligations, and Enova’s indemnity could be insufficient or Enova could be unable to satisfy itsindemnification obligations.Pursuant to a separation and distribution agreement and certain other agreements that Cash America entered into with Enova at the time of the Enova Spin-off, including a taxmatters agreement, Enova agreed to indemnify Cash America for certain liabilities that could be related to tax, regulatory, litigation or other liabilities, and Cash Americaagreed to indemnify Enova for certain similar liabilities, in each case for uncapped amounts. In addition, the tax matters agreement prohibits Enova from taking any action orfailing to take any action that could reasonably be expected to cause the Enova Spin-off to be taxable or to jeopardize the conclusions of the private letter ruling obtained inconnection with the Enova Spin-off or opinions of counsel received by Cash America or Enova. Indemnities that Cash America may be required to provide Enova are notsubject to any cap, may be significant and could negatively impact the Company’s results of operations and financial condition, particularly indemnities relating to actions thatcould impact the tax-free nature of the distribution. Third parties could also seek to hold the Company responsible for any of the liabilities that Enova has agreed to assume.Further, the indemnity from Enova could be insufficient to protect the Company against the full amount of such liabilities, or Enova may be unable to fully satisfy itsindemnification obligations. Moreover, even if the Company ultimately succeeds in recovering from Enova any amounts for which it is held liable, the Company may betemporarily required to bear these losses and could suffer reputational risks if the losses are related to regulatory, litigation or other matters.A discussion of certain market risks is covered in “Item 7A. Quantitative and Qualitative Disclosures About Market Risk.”Item 1B. Unresolved Staff CommentsNone.32Table of Contents Item 2. PropertiesAs of December 31, 2016 , the Company owned the real estate and buildings for 55 of its pawn stores and owned eight other parcels of real estate, including the Company’scorporate headquarters building in Fort Worth, Texas. The Company’s strategy is generally to lease, rather than purchase, space for its pawnshop and consumer loan locations,unless the Company finds what it believes is a superior location at an attractive price. As of December 31, 2016 , the Company leased 2,049 store locations that were open orwere in the process of opening. Leased facilities are generally leased for a term of three to five years with one or more options to renew. A majority of the store leases can beterminated early upon an adverse change in law which negatively affects the store’s profitability. The Company’s leases expire on dates ranging between 2017 and 2045. Allstore leases provide for specified periodic rental payments ranging from approximately $1,000 to $25,000 per month as of December 31, 2016 . For more information aboutthe Company’s pawn store locations, see “—Item 1. Business—Locations and Operations.”The following table details material corporate locations leased by the Company (dollars in thousands):Description Location Square Footage Lease Expiration Date Monthly Rental PaymentAdministrative operations Fort Worth, Texas 34,000 December 31, 2018 $46Former corporate offices Arlington, Texas 18,000 May 31, 2020 25Administrative operations Cincinnati, Ohio 23,000 April 30, 2017 20Administrative office Monterrey, Mexico 15,000 December 31, 2019 16Administrative operations Fort Worth, Texas 24,000 July 31, 2021 10Administrative operations Euless, Texas 12,000 February 28, 2018 7Most leases require the Company to maintain the property and pay the cost of insurance and property taxes. The Company believes termination of any particular lease wouldnot have a material adverse effect on the Company’s operations. The Company believes the facilities currently owned and leased by it as pawn stores and consumer loan storesare suitable for such purposes. The Company considers its equipment, furniture and fixtures to be in good condition.Item 3. Legal ProceedingsThe description of the Senior Notes Lawsuit contained in Note 13 - Commitments and Contingencies of Notes to Consolidated Financial Statements contained in Part IV, Item15 of this report is incorporated to this Part I, Item 3 by reference.Furthermore, the Company is also a defendant in certain routine litigation matters encountered in the ordinary course of its business. Certain of these matters are covered to anextent by insurance. In the opinion of management, the resolution of these matters is not expected to have a material adverse effect on the Company’s financial position, resultsof operations or liquidity.Item 4. Mine Safety DisclosuresNot Applicable.33Table of Contents PART IIItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity SecuritiesGeneral Market InformationThe Company’s common stock is quoted on the New York Stock Exchange (“NYSE”) under the symbol “FCFS.” In connection with the closing of the Merger, shares of FirstCash ceased trading on the NASDAQ Global Select Market at the close of trading on September 1, 2016 and began trading on the NYSE under the stock symbol “FCFS” onSeptember 2, 2016.The following table sets forth the quarterly high and low sales prices per share for the common stock during fiscal 2016 and 2015 , as reported by the NYSE and NASDAQGlobal Select Market, and cash dividends declared and paid per share during fiscal 2016 (no cash dividends were declared or paid during fiscal 2015 ): First Quarter Second Quarter Third Quarter Fourth Quarter2016 High$46.72 $53.67 $53.95 $53.25Low29.64 43.11 44.94 44.60Cash dividends declared and paid0.125 0.125 0.125 0.190 2015 High$55.96 $50.90 $48.78 $44.19Low46.28 44.88 36.55 35.82On February 20, 2017 , there were approximately 293 stockholders of record of the Company’s common stock.The dividend and earnings retention policies are reviewed by the Board of Directors of the Company from time to time in light of, among other things, the Company’searnings, cash flows, financial position and debt covenant restrictions. In January 2016, the Company’s Board of Directors approved the initiation of a cash dividend paymentat an annual rate of $0.50 per share to be paid quarterly. In July 2016, the Company’s Board of Directors approved a plan, contingent on completion of the Merger, to increasethe annual dividend to $0.76 per share, or $0.19 per share quarterly, beginning in the fourth quarter of 2016. In January 2017, the Company’s Board of Directors declared a$0.19 per share first quarter cash dividend on common shares outstanding, which will be paid on February 28, 2017 to stockholders of record as of February 14, 2017. TheCompany did not declare or pay any cash dividends during fiscal 2015.Issuer Purchases of Equity SecuritiesIn January 2015, the Company’s Board of Directors authorized a common stock repurchase program for up to 2,000,000 shares of the Company’s outstanding common stock.During fiscal 2016 , the Company temporarily suspended repurchases in connection with the Merger and 1,148,000 shares remained available for repurchase under therepurchase program at December 31, 2016. The Company intends to continue repurchases under its repurchase program in 2017 through open market transactions under a 10b-5 plan subject to a variety of factors including, but not limited to, the level of cash balances, credit availability, debt covenant restrictions, general business conditions,regulatory requirements, the market price of the Company’s stock, dividend policy and the availability of alternative investment opportunities. Subsequent to December 31,2016 and through the date of this report, the Company repurchased approximately 228,000 shares of common stock at an aggregate cost of $10,005 and an average cost pershare of $43.94.34Table of Contents Performance GraphThe graph set forth below compares the cumulative total stockholder return on the common stock of the Company for the period from December 31, 2011 through December31, 2016, with the cumulative total return on the NASDAQ Composite Index and a peer group index (whose returns are weighted according to their respective marketcapitalizations) over the same period (assuming the investment of $100 in the Company’s common stock, the NASDAQ Composite Index, and the peer group on December 31,2011 and assuming the reinvestment of all dividends on the date paid). The 2016 peer group selected by the Company includes EZCORP, Inc., World Acceptance Corporation,Rent-A-Center, Inc. and Aaron Rents, Inc. The Company excluded Cash America from its 2016 peer group as they were no longer a publicly traded company as of December31, 2016 as a result of the Merger.Item 6. Selected Financial DataThe information below should be read in conjunction with “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and theCompany’s consolidated financial statements and related notes thereto in “Item 8. Financial Statements and Supplementary Data.” The income statement data for the yearended December 31, 2016 includes the results of operations for Cash America for the period September 2, 2016 to December 31, 2016 and the balance sheet data at December31, 2016 includes the preliminary valuation of the assets acquired and liabilities assumed. The information below is derived from and qualified by reference to the Company’saudited financial statements for each of the five years ended December 31, 2016 .35Table of Contents Year Ended December 31, 2016 2015 2014 2013 2012 (in thousands, except per share amounts and certain operating data)Income Statement Data (1) : Revenue: Retail merchandise sales$669,131 $449,296 $428,182 $367,187 $287,456Pawn loan fees312,757 195,448 199,357 181,555 152,237Consumer loan and credit services fees43,851 27,803 36,749 43,781 48,692Wholesale scrap jewelry sales62,638 32,055 48,589 68,325 103,706Total revenue1,088,377 704,602 712,877 660,848 592,091 Cost of revenue: Cost of retail merchandise sold418,556 278,631 261,673 221,361 167,144Consumer loan and credit services loss provision11,993 7,159 9,287 11,368 12,556Cost of wholesale scrap jewelry sold53,025 27,628 41,044 58,545 76,853Total cost of revenue483,574 313,418 312,004 291,274 256,553 Net revenue604,803 391,184 400,873 369,574 335,538 Expenses and other income: Store operating expenses328,014 207,572 198,986 181,321 148,879Administrative expenses96,537 51,883 53,588 47,180 48,902Depreciation and amortization31,865 17,939 17,476 15,361 12,939Interest expense, net19,569 15,321 12,845 3,170 1,272Merger and other acquisition expenses36,670 2,875 998 2,350 1,309Goodwill impairment - U.S. consumer loan operations— 7,913 — — —Net gain on sale of common stock of Enova(1,299) — — — —Total expenses and other income511,356 303,503 283,893 249,382 213,301 Income from continuing operations before income taxes93,447 87,681 116,980 120,192 122,237 Provision for income taxes33,320 26,971 31,542 35,713 41,375 Income from continuing operations60,127 60,710 85,438 84,479 80,862 Loss from discontinued operations, net of tax— — (272) (633) (503)Net income$60,127 $60,710 $85,166 $83,846 $80,359 Dividends declared per common share$0.565 $— $— $— $—36Table of Contents Year Ended December 31, 2016 2015 2014 2013 2012Income Statement Data (Continued) (1) : Net income per share: Basic: Income from continuing operations$1.72 $2.16 $2.98 $2.91 $2.80Net income1.72 2.16 2.97 2.89 2.78Diluted: Income from continuing operations1.72 2.14 2.94 2.86 2.72Net income1.72 2.14 2.93 2.84 2.70 Balance Sheet Data: Inventories$330,683 $93,458 $91,088 $77,793 $65,345Pawn loans350,506 117,601 118,536 115,234 103,181Net working capital748,507 279,259 258,194 236,417 209,132Total assets (2)2,145,203 752,895 711,880 660,999 506,544Long-term liabilities (2)551,589 275,338 234,880 201,889 122,978Total liabilities (2)695,217 321,513 277,439 250,650 154,128Stockholders’ equity1,449,986 431,382 434,441 410,349 352,416 Statement of Cash Flows Data: Net cash flows provided by (used in): Operating activities$96,854 $92,749 $97,679 $106,718 $88,792Investing activities(25,967) (71,676) (85,366) (140,726) (159,904)Financing activities(58,713) 9,127 (9,098) 54,644 49,525 Location Counts: Pawn stores2,012 1,005 912 821 715Credit services/consumer loan stores73 70 93 85 99 2,085 1,075 1,005 906 814(1) See “Management’s Discussion and Analysis of Financial Condition and Results of Operations —Non-GAAP Financial Information—Adjusted Net Income and Adjusted Net IncomePer Share” for additional information about certain 2016, 2015 and 2014 income and expense items that affected the Company’s consolidated income from operations, income beforeincome taxes, net income and net income per share.(2) Certain prior year amounts have been reclassified in order to conform to the 2016 presentation. See Note 2 of Notes to Consolidated Financial Statements for further information.37Table of Contents Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsGeneral On September 1, 2016, the Company completed its previously announced merger with Cash America, whereby Cash America merged with and into a wholly owned subsidiaryof the Company. Following the Merger, the Company changed its name from First Cash Financial Services, Inc. to FirstCash, Inc. The accompanying results of operations forthe year ended December 31, 2016 include the results of operations for Cash America for the period September 2, 2016 to December 31, 2016. See Note 3 of Notes toConsolidated Financial Statements for additional information about the Merger.The Company is a leading operator of retail-based pawn stores with over 2,000 store locations in the United States and Latin America. The Company’s pawn stores generatesignificant retail sales primarily from the merchandise acquired through collateral forfeitures and over-the-counter purchases from customers. The Company’s pawn stores arealso a convenient source for small consumer loans to help customers meet their short-term cash needs. Personal property such as consumer electronics, jewelry, power tools,household appliances, sporting goods and musical instruments are pledged as collateral for the loans. In addition, some of the Company’s pawn stores offer consumer loans orcredit services products. The Company’s strategy is to focus on growing its retail-based pawn operations in the United States and Latin America through new store openingsand strategic acquisition opportunities as they arise. Pawn operations accounted for approximately 96% of the Company’s consolidated revenue during fiscal 2016 and 2015 .Prior to the fourth quarter of 2016, the Company reported its results in one reportable segment, which aggregated the Company’s U.S. and Latin America operations. Primarilyas a result of the Merger, the Company organized its operations during the fourth quarter of 2016 into two reportable segments: the U.S. operations segment and the LatinAmerica operations segment. The U.S. operations segment consists of all pawn and consumer loan operations in the United States and the Latin America operations segmentconsists of all pawn and consumer loan operations in Latin America, which currently includes operations in Mexico, Guatemala and El Salvador.The Company accrues pawn loan fee revenue on a constant-yield basis over the life of the pawn loan for all pawn loans that the Company deems collection to be probablebased on historical redemption statistics. If a pawn loan is not repaid prior to the expiration of the loan term, including any automatic extension period, if applicable, theproperty is forfeited to the Company and transferred to inventory at a value equal to the principal amount of the loan, exclusive of accrued interest. The Company recordsmerchandise sales revenue at the time of the sale. The Company presents merchandise sales net of any sales or value-added taxes collected. The Company does not providedirect financing to customers for the purchase of its merchandise, but does permit its customers to purchase merchandise on an interest-free layaway plan. Should the customerfail to make a required payment pursuant to a layaway plan, the previous payments are typically forfeited to the Company. Interim payments from customers on layaway salesare recorded as deferred revenue and subsequently recorded as income during the period in which final payment is received or when previous payments are forfeited to theCompany. Some jewelry is melted at a third-party facility and the precious metal and diamond content is sold at either prevailing market commodity prices or a previouslyagreed upon price with a commodity buyer. The Company records revenue from these wholesale scrap jewelry transactions when a price has been agreed upon and theCompany ships the commodity to the buyer.The Company operates a small number of stand-alone consumer finance stores in the U.S. and Mexico. These stores provide consumer financial services products includingcredit services, consumer loans and check cashing. In addition, 375 of the Company’s pawn stores also offer credit services and/or consumer loans as an ancillary product.Consumer loan and credit services revenue accounted for approximately 4% of consolidated revenue for fiscal 2016 and 2015 .The Company recognizes service fee income on consumer loan transactions on a constant-yield basis over the life of the loan and recognizes credit services fees ratably overthe life of the extension of credit made by the Independent Lenders. Changes in the valuation reserve on consumer loans and credit services transactions are charged orcredited to the consumer loan credit loss provision. The credit loss provision associated with the Company’s CSO Program and consumer loans is based primarily uponhistorical credit loss experience, with consideration given to recent credit loss trends, delinquency rates, economic conditions and management’s expectations of future creditlosses.Stores included in the same-store calculations presented in this annual report are those stores that were opened or acquired prior to the beginning of the prior-year comparativefiscal period and remained open through the end of the measurement period. Also included are stores that were relocated during the year within a specified distance serving thesame market where there is not a significant change in store size and where there is not a significant overlap or gap in timing between the opening of the new store and theclosing of the existing store. Accordingly, same-store calculations exclude the results of the merged Cash America stores except as otherwise noted herein.38Table of Contents Operating expenses consist of all items directly related to the operation of the Company’s stores, including salaries and related payroll costs, rent, utilities, facilitiesmaintenance, advertising, property taxes, licenses, supplies and security. Administrative expenses consist of items relating to the operation of the corporate offices, includingthe compensation and benefit costs of corporate management, area supervisors and other operations management personnel, collection operations and personnel, accountingand administrative costs, information technology costs, liability and casualty insurance, outside legal and accounting fees and stockholder-related expenses. Merger and otheracquisition expenses primarily include incremental costs directly associated with the Merger and integration of Cash America, including professional fees, legal expenses,severance, retention and other employee-related costs, accelerated vesting of certain equity compensation awards, contract breakage costs and costs related to consolidation oftechnology systems and corporate facilities. Year Ended December 31, 2016 2015 2014Income statement items as a percent of total revenue: Revenue: Retail merchandise sales61.5 % 63.8% 60.0%Pawn loan fees28.7 27.7 28.0Consumer loan and credit services fees4.0 4.0 5.2Wholesale scrap jewelry sales5.8 4.5 6.8 Cost of revenue: Cost of retail merchandise sold38.4 39.6 36.7Consumer loan and credit services loss provision1.1 1.0 1.3Cost of wholesale scrap jewelry sold4.9 3.9 5.8 Net revenue55.6 55.5 56.2 Expenses and other income: Store operating expenses30.1 29.5 27.9Administrative expenses8.9 7.4 7.5Depreciation and amortization2.9 2.5 2.4Interest expense, net1.8 2.2 1.8Merger and other acquisition expenses3.4 0.4 0.2Goodwill impairment - U.S. consumer loan operations— 1.1 —Net gain on sale of common stock of Enova(0.1) — — Income from continuing operations before income taxes8.6 12.4 16.4Provision for income taxes3.1 3.8 4.4Income from continuing operations5.5 8.6 12.0 Retail merchandise sales gross profit margin37.4 % 38.0% 38.9%Pre-tax operating margin (1)23.2 23.9 26.3(1) Pre-tax operating profit is an amount equal to net revenues less store operating expenses less store depreciation expense.Discontinued OperationsDuring fiscal 2014, the Company discontinued Cash & Go, Ltd., a 50% owned joint venture which owned and operated 37 check cashing and financial services kiosks. TheCompany recorded an after-tax loss upon the liquidation of Cash & Go, Ltd. of $272, or $0.01 per share, in fiscal 2014, which was reported as a loss from discontinuedoperations. All revenue, expenses and income reported in these consolidated financial statements have been adjusted to reflect reclassification of this discontinued operation.39Table of Contents Critical Accounting PoliciesThe preparation of financial statements in conformity with GAAP requires management to make estimates, assumptions and judgments that affect the reported amounts ofassets and liabilities, related revenue and expenses, and disclosure of gain and loss contingencies at the date of the financial statements. Such estimates, assumptions andjudgments are subject to a number of risks and uncertainties, which may cause actual results to differ materially from the Company’s estimates. The significant accountingpolicies that the Company believes are the most critical to aid in fully understanding and evaluating its reported financial results include the following:Customer loans and revenue recognition - Receivables on the balance sheet consist of pawn loans and consumer loans. Pawn loans are collateralized by pledged tangiblepersonal property. The Company accrues pawn loan fee revenue on a constant-yield basis over the life of the pawn for all pawns for which the Company deems collection to beprobable based on historical pawn redemption statistics. The typical pawn loan term is generally 30 days plus an additional grace period of 14 to 90 days depending ongeographical markets and local regulations. Pawn loans may be either paid in full with accrued pawn loan fees and service charges or, where permitted by law, may berenewed or extended by the customer’s payment of accrued pawn loan fees and service charges. If the pawn is not repaid upon expiration of the grace period, the principalamount loaned becomes the carrying value of the forfeited collateral, which is typically recovered through sales of the forfeited items at prices well above the carrying value.The Company’s pawn merchandise sales are primarily retail sales to the general public in its pawn stores. The Company acquires pawn merchandise inventory throughforfeited pawns and through purchases of used goods directly from the general public. The Company also retails limited quantities of new or refurbished merchandise obtaineddirectly from wholesalers and manufacturers. The Company records sales revenue at the time of the sale. The Company presents merchandise sales net of any sales or value-added taxes collected. The Company does not provide direct financing to customers for the purchase of its merchandise, but does permit its customers to purchase merchandiseon an interest-free layaway plan. Should the customer fail to make a required payment pursuant to a layaway plan, the previous payments are forfeited to the Company. Interimpayments from customers on layaway sales are recorded as deferred revenue and subsequently recorded as retail merchandise sales revenue when the final payment is receivedor when previous payments are forfeited to the Company. Some jewelry is melted at a third-party facility and the precious metal content is sold at either prevailing marketcommodity prices or a previously agreed upon price with a commodity buyer. The Company records revenue from these wholesale scrap jewelry transactions when a price hasbeen agreed upon and the Company ships the precious metals to the buyer.The Company accrues consumer loan service fees on a constant-yield basis over the term of the consumer loan. Consumer loans have terms that range from 7 to 365 days. TheCompany recognizes credit services fees ratably over the life of the extension of credit made by the Independent Lenders. The extensions of credit made by the IndependentLenders to credit services customers have terms of 7 to 365 days.Credit loss provisions - The Company has determined no allowance related to credit losses on pawn loans is required as the fair value of the pledged collateral is significantlyin excess of the pawn loan amount. The Company maintains an allowance for credit losses on consumer loans on an aggregate basis at a level it considers sufficient to coverestimated losses in the collection of its consumer loans. The allowance for credit losses is based primarily upon historical credit loss experience, with consideration given torecent credit loss trends and changes in loan characteristics (e.g., average amount financed and term), delinquency levels, collateral values, economic conditions andunderwriting and collection practices. The allowance for credit losses is periodically reviewed by management with any changes reflected in current operations.The Company fully reserves or charges off consumer loans once the loan has been classified as delinquent for 60 days. Short-term loans are considered delinquent whenpayment of an amount due is not made as of the due date. Installment loans are considered delinquent when a customer misses two payments. If a loan is estimated to beuncollectible before it is fully reserved, it is charged off at that point. Recoveries on loans previously charged to the allowance, including the sale of delinquent loans tounaffiliated third parties, are credited to the allowance when collected or when sold to a third party. The Company generally does not accrue interest on delinquent consumerloans. In addition, delinquent consumer loans generally may not be renewed, and if, during its attempt to collect on a delinquent consumer loan, the Company allows additionaltime for payment through a payment plan or a promise to pay, it is still considered delinquent. Generally, all payments received are first applied against accrued but unpaidinterest and fees and then against the principal balance of the loan.Under the CSO Program, the Company assists customers in applying for a short-term extension of credit from Independent Lenders and issues the Independent Lenders aguarantee for the repayment of the extension of credit. The Company is required to recognize, at the inception of the guarantee, a liability for the fair value of the obligationundertaken by issuing the guarantee. According to the guarantee, if the borrower defaults on the extension of credit, the Company will pay the Independent Lenders theprincipal, accrued interest, insufficient funds and late fee, if applicable, all of which the Company records as a component of its credit loss40Table of Contents provision. The Company is entitled to seek recovery, directly from its customers, of the amounts it pays the Independent Lenders in performing under the guarantees. TheCompany records the estimated fair value of the liability in accrued liabilities. The estimated fair value of the liability is periodically reviewed by management with anychanges reflected in current operations.Inventories - Inventories represent merchandise acquired from forfeited pawns and merchandise purchased directly from the general public. The Company also retails limitedquantities of new or refurbished merchandise obtained directly from wholesalers and manufacturers. Inventories from forfeited pawns are recorded at the amount of the pawnprincipal on the unredeemed goods, exclusive of accrued interest. Inventories purchased directly from customers, wholesalers and manufacturers are recorded at cost. The costof inventories is determined on the specific identification method. Inventories are stated at the lower of cost or market value; accordingly, inventory valuation allowances areestablished, if necessary, when inventory carrying values are in excess of estimated selling prices, net of direct costs of disposal. Management has evaluated inventories anddetermined that a valuation allowance is not necessary.Goodwill and other indefinite-lived intangible assets - Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in each businesscombination. The Company performs its goodwill impairment assessment annually as of December 31, and between annual assessments if an event occurs or circumstanceschange that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company’s reporting units, which are tested for impairment,are U.S. operations and Latin America operations. The Company assesses goodwill for impairment at a reporting unit level by first assessing a range of qualitative factors,including, but not limited to, macroeconomic conditions, industry conditions, the competitive environment, changes in the market for the Company’s products and services,regulatory and political developments, entity specific factors such as strategy and changes in key personnel, and overall financial performance. If, after completing thisassessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, the Company proceeds to the two-step impairmenttesting methodology. As described in “—Results of Continuing Operations—Goodwill Impairment—U.S. Consumer Loan Operations” below, the Company recorded agoodwill impairment charge of $7.9 million during 2015.The Company’s indefinite-lived intangible assets consist of trade names, pawn licenses and franchise agreements related to a check-cashing operation. The Company performsits indefinite-lived intangible asset impairment assessment annually as of December 31, and between annual assessments if an event occurs or circumstances change that wouldmore likely than not reduce the fair value of a reporting unit below its carrying amount. The Company determined there was no impairment as of December 31, 2016 and 2015.Foreign currency transactions - The Company has significant operations in Mexico and to a lesser extent Guatemala, where the functional currency is the Mexican peso andGuatemalan quetzal, respectively. Accordingly, the assets and liabilities of these subsidiaries are translated into U.S. dollars at the exchange rate in effect at each balance sheetdate, and the resulting adjustments are accumulated in other comprehensive income (loss) as a separate component of stockholders’ equity. Revenue and expenses aretranslated at the average exchange rates occurring during the year-to-date period. Prior to translation, U.S. dollar-denominated transactions of the foreign subsidiaries areremeasured into their functional currency using current rates of exchange for monetary assets and liabilities and historical rates of exchange for non-monetary assets andliabilities. Gains and losses from remeasurement of dollar-denominated monetary assets and liabilities in Mexico and Guatemala are included in store operating expenses. TheCompany also has operations in El Salvador where the reporting and functional currency is the U.S. dollar.41Table of Contents Results of Continuing Operations (in thousands except per share data)Constant Currency ResultsThe Company’s management reviews and analyzes certain operating results in Latin America on a constant currency basis because the Company believes this better representsthe Company’s underlying business trends. Constant currency results are non-GAAP measures which exclude the effects of foreign currency translation and are calculated bytranslating current year results at prior year average exchange rates. The scrap jewelry generated in Latin America is sold and settled in U.S. dollars and is therefore noteffected by foreign currency translation. A small percentage of the operating and administrative expenses in Latin America are also billed and paid in U.S. dollars which arenot effected by foreign currency translation.The average value of the Mexican peso to the U.S. dollar decreased 18% , from 15.8 to 1 during fiscal 2015 to 18.7 to 1 during fiscal 2016 . The end-of-period value of theMexican peso to the U.S. dollar decreased 20% , from 17.2 to 1 at December 31, 2015 to 20.7 to 1 at December 31, 2016 . The average value of the Guatemalan quetzal to theU.S. dollar exchange rate for fiscal 2016 was 7.6 to 1, compared to 7.7 to 1 in fiscal 2015 .Amounts presented on a constant currency basis are denoted as such. See “—Non-GAAP Financial Information” for additional discussion of constant currency operatingresults.Operating Results for the Twelve Months Ended December 31, 2016 Compared to the Twelve Months Ended December 31, 2015U.S. Operations SegmentThe following table details earning assets, which consist of pawn loans, consumer loans, net and inventories as well as other earning asset metrics of the U.S. operationssegment as of December 31, 2016 as compared to December 31, 2015 : Balance at December 31,Increase / 2016 2015(Decrease)U.S. Operations Segment: Earning assets: Pawn loans$293,392 $68,153 330 % Consumer loans, net (1) 28,847 688 4,093 % Pawn inventories 282,860 56,040 405 % $605,099 $124,881 385 % Average outstanding pawn loan amount (in ones)$152 $169 (10)% Composition of pawn collateral: General merchandise36% 45% Jewelry64% 55% 100% 100% Composition of pawn inventory: General merchandise47% 57% Jewelry53% 43% 100% 100% Percentage of inventory aged greater than one year11% 8% (1) Does not include the off-balance sheet principal portion of active CSO extensions of credit made by independent third-party lenders. These amounts, net of the Company’s estimated fairvalue of its liability for guaranteeing the extensions of credit, totaled $12,098 and $7,005 as of December 31, 2016 and 2015, respectively.42Table of Contents The following table presents segment pre-tax operating income of the U.S. operations segment for the fiscal year ended December 31, 2016 as compared to the fiscal yearended December 31, 2015 . Store operating expenses include salary and benefit expense of store-level employees, occupancy costs, bank charges, security, insurance, utilities,supplies and other costs incurred by the stores. Year Ended December 31,Increase / 2016 2015(Decrease)U.S. Operations Segment Revenue: Retail merchandise sales $386,026 $197,011 96% Pawn loan fees 195,883 94,761 107% Consumer loan and credit services fees 41,922 25,696 63% Wholesale scrap jewelry sales 47,680 19,380 146% Total revenue 671,511 336,848 99% Cost of revenue: Cost of retail merchandise sold 241,086 117,059 106% Consumer loan and credit services loss provision 11,494 6,770 70% Cost of wholesale scrap jewelry sold 41,357 17,530 136% Total cost of revenue 293,937 141,359 108% Net revenue 377,574 195,489 93% Segment expenses: Store operating expenses 215,227 107,852 100% Depreciation and amortization 13,618 6,146 122% Total segment expenses 228,845 113,998 101% Segment pre-tax operating income $148,729 $81,491 83% Retail Merchandise Sales OperationsU.S. retail merchandise sales increased 96% to $386,026 during fiscal 2016 compared to $197,011 for fiscal 2015 . The increase was primarily due to the inclusion of CashAmerica’s results for the period September 2, 2016 to December 31, 2016 as a result of the Merger (“Cash America Results”), which accounted for 96% of the increase inretail merchandise sales. During fiscal 2016 , the gross profit margin on retail merchandise sales in the U.S. was 38% compared to a margin of 41% during fiscal 2015 ,reflecting an increased mix of general merchandise inventories compared to jewelry inventories in legacy First Cash stores and the impact of lower margins in the CashAmerica stores.U.S. inventories increased 405% from $56,040 at December 31, 2015 to $282,860 at December 31, 2016 . The increase was due to the inclusion of $232,592 of Cash Americainventories partially offset by a 10% decline in legacy First Cash store inventories. Included in the Cash America inventory balance as of December 31, 2016 was $13,507 ofscrap inventories in transit or held in processing locations. The shift in the composition of pawn inventory from general merchandise to jewelry was primarily due to the CashAmerica stores carrying greater quantities of jewelry merchandise compared to legacy First Cash stores. The increase in inventory aged greater than one year was primarilydue to the inclusion of the Cash America stores, which have historically carried higher aged balances than legacy First Cash stores, partially offset by a decrease in agedinventory at legacy First Cash stores.Pawn Lending OperationsU.S. pawn loan fees increased 107% totaling $195,883 during fiscal 2016 compared to $94,761 for fiscal 2015 . Pawn loan receivables in the U.S. as of December 31, 2016increased 330% compared to December 31, 2015 . The increase in pawn loan fees and pawn loan receivables was due to the inclusion of the Cash America Results followingthe Merger, which accounted for 101% of the pawn fee increase and 100% of the pawn receivable increase. Legacy First Cash same-store pawn receivables increased 1% as ofDecember 31, 2016 compared to December 31, 2015 . Legacy First Cash same-store pawn loan fees declined 4% in fiscal43Table of Contents 2016 compared to fiscal 2015, as a result of a 6% decline in the beginning of year same-store pawn loans. The shift in the composition of pawn receivables from generalmerchandise to jewelry was primarily due to the Cash America stores, which have historically carried a higher percentage of jewelry loans than legacy First Cash stores.Consumer Lending OperationsService fees from U.S. consumer loans and credit services transactions (collectively also known as payday loans) increased 63% to $41,922 during fiscal 2016 compared to$25,696 for fiscal 2015 . The increase in consumer loan and credit services fees was due to the inclusion of the Cash America Results following the Merger. Excluding theCash America Results, consumer loan and credit services fees decreased 29% as the Company continues to deemphasize consumer loans and focuses on its core pawn storebusiness. Consumer/payday loan-related products comprised 6% of total U.S. revenue during fiscal 2016 compared to 8% during fiscal 2015 .Wholesale Scrap Jewelry OperationsU.S. wholesale scrap jewelry revenue during fiscal 2016 consisted primarily of gold sales, which increased 146% to $47,680 during fiscal 2016 compared to $19,380 duringfiscal 2015 . The increase in wholesale scrap jewelry revenue was primarily due to the inclusion of the Cash America Results following the Merger, which accounted for 92%of the increase in wholesale scrap jewelry revenue. The scrap gross profit margin in the U.S. was 13% compared to the prior-year margin of 10% , due primarily to an 8%increase in the average spot price of gold in 2016. Scrap jewelry profits accounted for 2% of U.S. net revenue (gross profit) for fiscal 2016 compared to 1% in fiscal 2015 .Store Operating Expenses and Segment Pre-Tax Operating IncomeU.S. store operating expenses increased 100% to $215,227 during fiscal 2016 compared to $107,852 during fiscal 2015 , primarily as a result of the Merger. Same-storeoperating expenses in the First Cash legacy stores were consistent with the prior-year period.The U.S. segment pre-tax operating income for fiscal 2016 was $148,729 , which generated a pre-tax segment operating margin of 22% compared to $81,491 and 24% in theprior year, respectively.44Table of Contents Latin America Operations SegmentThe following table details earning assets, which consist of pawn loans, consumer loans, net and inventories as well as other earning asset metrics of the Latin Americaoperations segment as of December 31, 2016 as compared to December 31, 2015 : Constant Currency Basis Balance at December 31, Increase / Balance at December 31,Increase / 2016 (Decrease) 2016 2015(Decrease) (Non-GAAP) (Non-GAAP)Latin America Operations Segment: Earning assets: Pawn loans$57,114 $49,448 16 % $67,745 37 % Consumer loans, net 357 430 (17)% 429 — % Pawn inventories 47,823 37,418 28 % 56,908 52 % $105,294 $87,296 21 % $125,082 43 % Average outstanding pawn loan amount (inones)$58 $63 (8)% $69 10 % Composition of pawn collateral: General merchandise80% 87% Jewelry20% 13% 100% 100% Composition of pawn inventory: General merchandise76% 85% Jewelry24% 15% 100% 100% Percentage of inventory aged greater thanone year1% 2% 45Table of Contents The following table presents segment pre-tax operating income of the Latin America operations segment for the fiscal year ended December 31, 2016 as compared to the fiscalyear ended December 31, 2015 . Store operating expenses include salary and benefit expense of store-level employees, occupancy costs, bank charges, security, insurance,utilities, supplies and other costs incurred by the stores. Constant Currency Basis Year Ended December 31, Increase / Year Ended December 31,Increase / 2016 (Decrease) 2016 2015(Decrease) (Non-GAAP) (Non-GAAP)Latin America Operations Segment Revenue: Retail merchandise sales $283,105 $252,285 12 % $331,325 31% Pawn loan fees 116,874 100,687 16 % 136,259 35% Consumer loan and credit servicesfees 1,929 2,107 (8)% 2,271 8% Wholesale scrap jewelry sales 14,958 12,675 18 % 14,958 18% Total revenue 416,866 367,754 13 % 484,813 32% Cost of revenue: Cost of retail merchandise sold 177,470 161,572 10 % 207,615 28% Consumer loan and credit services lossprovision 499 389 28 % 587 51% Cost of wholesale scrap jewelry sold 11,668 10,098 16 % 13,505 34% Total cost of revenue 189,637 172,059 10 % 221,707 29% Net revenue 227,229 195,695 16 % 263,106 34% Segment expenses: Store operating expenses 112,787 99,720 13 % 130,029 30% Depreciation and amortization 10,429 8,803 18 % 12,064 37% Total segment expenses 123,216 108,523 14 % 142,093 31% Segment pre-tax operating income $104,013 $87,172 19 % $121,013 39% Retail Merchandise Sales OperationsLatin America retail merchandise sales increased 12% ( 31% on a constant currency basis) to $283,105 during fiscal 2016 compared to $252,285 for fiscal 2015 . The increasewas primarily due to the retail revenue contribution from the 211 Latin America stores acquired in late 2015 and early 2016 (“Maxi Prenda Acquisition”), which accounted for53% of the constant currency increase, and a 10% increase in same-store constant currency retail sales. During fiscal 2016 , the gross profit margin on retail merchandise saleswas 37% compared to a margin of 36% on retail merchandise sales during fiscal 2015 .Inventories in Latin America increased 28% ( 52% on a constant currency basis) from $37,418 at December 31, 2015 to $47,823 at December 31, 2016 . The increase wasconsistent with the growth in store counts from acquisitions and store openings in Latin America and the maturation of existing stores. The shift in the composition of pawninventory from general merchandise to jewelry was primarily due to the Maxi Prenda stores carrying lower quantities of general merchandise inventories compared to legacyFirst Cash stores.46Table of Contents Pawn Lending OperationsPawn loan fees in Latin America increased 16% ( 35% on a constant currency basis) totaling $116,874 during fiscal 2016 compared to $100,687 for fiscal 2015 . LatinAmerica pawn loan receivables as of December 31, 2016 increased 16% ( 37% on a constant currency basis) compared to December 31, 2015 . The increase in pawn loan feesand pawn receivables was primarily due to the contribution from the Maxi Prenda Acquisition, which accounted for 71% of the constant currency increase in pawn loan feesand 63% of the constant currency increase in pawn receivables. While Latin America same-store pawn receivables decreased 8% on a U.S. dollar basis compared to the prioryear period, constant currency same-store pawn receivables increased 11%, primarily accounting for the remainder of the constant currency increase in Latin America pawnloan fees and pawn receivables. The shift in the composition of pawn receivables from general merchandise to jewelry was primarily due to the Maxi Prenda stores carrying ahigher percentage of jewelry loans compared to legacy First Cash stores.Store Operating Expenses and Segment Pre-Tax Operating IncomeStore operating expenses increased 13% ( 30% on a constant currency basis) to $112,787 during fiscal 2016 compared to $99,720 during fiscal 2015 , primarily as a result ofthe Maxi Prenda Acquisition, partially offset by an 18% year-over-year decline in the average value of the Mexican peso. Same-store operating expenses decreased 9%(increased 6% on a constant currency basis) compared to the prior-year period.The segment pre-tax operating income for fiscal 2016 was $104,013 , which generated a pre-tax segment operating margin of 25% compared to $87,172 and 24% in the prioryear, respectively.Consolidated Results of OperationsThe following table reconciles pre-tax operating income of the Company’s U.S. operations segment and Latin America operations segment discussed above to consolidated netincome for the fiscal year ended December 31, 2016 as compared to the fiscal year ended December 31, 2015 : Year Ended December 31,Increase / 2016 2015(Decrease)U.S. operations segment pre-tax operating income $148,729 $81,491 83 % Latin America operations segment pre-tax operating income 104,013 87,172 19 % Consolidated segment pre-tax operating income 252,742 168,663 50 % Corporate expenses and other income: Administrative expenses 96,537 51,883 86 % Depreciation and amortization 7,818 2,990 161 % Interest expense 20,320 16,887 20 % Interest income (751) (1,566) (52)% Merger and other acquisition expenses 36,670 2,875 1,175 % Goodwill impairment - U.S. consumer loan operations — 7,913 (100)% Net gain on sale of common stock of Enova (1,299) — — % Total corporate expenses and other income 159,295 80,982 97 % Income before income taxes 93,447 87,681 7 % Provision for income taxes 33,320 26,971 24 % Net income $60,127 $60,710 (1)% Comprehensive income $18,731 $22,578 (17)% 47Table of Contents Administrative Expenses, Depreciation and Amortization, Interest, Merger and Other Acquisition Expenses, Taxes and IncomeAdministrative expenses increased to $96,537 during fiscal 2016 compared to $51,883 during fiscal 2015 primarily as a result of the Merger and a 49% increase in theweighted-average store count resulting in additional management and supervisory compensation and other support expenses required for such growth, partially offset by an18% decline in the average value of the Mexican peso, which reduced comparative administrative expenses in Mexico. As a percentage of revenue, administrative expensesincreased from 7% during fiscal 2015 to 9% during fiscal 2016 primarily due to the Merger and the Maxi Prenda Acquisition.Depreciation and amortization increased to $7,818 during fiscal 2016 compared to $2,990 during fiscal 2015 primarily due to the assumption of $118,381 in property andequipment and $23,400 in intangible assets subject to amortization as a result of the Merger.Interest expense increased to $20,320 during fiscal 2016 compared to $16,887 for fiscal 2015 primarily related to increased borrowings on the Company’s revolving unsecuredcredit facilities primarily used to pay off assumed debt in conjunction with the Merger. See “—Liquidity and Capital Resources.”Merger and other acquisition expenses increased to $36,670 during fiscal 2016 compared to $2,875 during fiscal 2015 , reflecting transaction and integration costs primarilyrelated to the Merger.In conjunction with the Merger, the Company assumed Cash America’s investment in the common stock of Enova International, Inc., a publicly traded company focused onproviding online consumer lending products. Subsequent to the Merger, all of the Enova shares were sold in open market transactions which resulted in a net gain on sale of$1,299.For fiscal 2016 and 2015 , the Company’s effective federal income tax rates were 35.7% and 30.8% , respectively. The increase in the effective tax rate was primarily due tocertain significant merger related expenses being non-deductible for income tax purposes and, to a lesser extent, the increase in taxable U.S. sourced income due to the Merger,which is subject to a higher tax rate than taxable income sourced in Latin America.Net income decreased 1% to $60,127 during fiscal 2016 compared to $60,710 during fiscal 2015 , primarily due to Merger and other acquisition expenses, partially offset bythe inclusion of the Cash America Results following the Merger and continued growth in core pawn operations. Comprehensive income decreased 17% to $18,731 duringfiscal 2016 compared to $22,578 during fiscal 2015 , due to the translation of the Company’s net assets denominated in local foreign currencies into U.S. dollars as ofDecember 31, 2016 .Net Income, Adjusted Net Income, Net Income Per Share and Adjusted Net Income Per ShareThe following table sets forth revenue, net revenue, net income, diluted net income per share, adjusted net income and adjusted diluted net income per share for the fiscal yearended December 31, 2016 as compared to the fiscal year ended December 31, 2015 : Year Ended December 31, 2016 2015 As Reported Adjusted As Reported Adjusted (GAAP) (Non-GAAP) (GAAP) (Non-GAAP)Revenue $1,088,377 $1,088,377 $704,602 $704,602Net revenue $604,803 $604,803 $391,184 $391,184Net income $60,127 $85,332 $60,710 $68,483Diluted EPS $1.72 $2.44 $2.14 $2.42Weighted avg diluted shares 35,004 35,004 28,326 28,326While as-reported GAAP net income and earnings per share for fiscal 2016 declined 1% and 20%, respectively, compared to the prior year primarily due to Merger and otheracquisition expenses, adjusted net income and earnings per share increased 25% and 1%, respectively, compared to the prior year. The smaller increase in adjusted earningsper share for fiscal 2016 compared to fiscal 2015 was a result of an increase in the weighted average diluted shares outstanding from the Merger.48Table of Contents Adjusted net income removes certain items from GAAP net income that the Company does not consider to be representative of its actual operating performance, such asMerger and other acquisition expenses, but does not adjust for the effects of foreign currency rate fluctuations. See “—Non-GAAP Financial Information—Adjusted NetIncome and Adjusted Net Income Per Share” below.Operating Results for the Twelve Months Ended December 31, 2015 Compared to the Twelve Months Ended December 31, 2014U.S. Operations SegmentThe following table details earning assets, which consist of pawn loans, consumer loans, net and inventories as well as other earning asset metrics of the U.S. operationssegment as of December 31, 2015 as compared to December 31, 2014 : Balance at December 31,Increase / 2015 2014(Decrease)U.S. Operations Segment: Earning assets: Pawn loans$68,153 $68,100 — % Consumer loans, net (1) 688 790 (13)% Pawn inventories 56,040 49,969 12 % $124,881 $118,859 5 % Average outstanding pawn loan amount (in ones)$169 $171 (1)% Composition of pawn collateral: General merchandise45% 44% Jewelry55% 56% 100% 100% Composition of pawn inventory: General merchandise57% 56% Jewelry43% 44% 100% 100% Percentage of inventory aged greater than one year8% 8% (1) Does not include the off-balance sheet principal portion of active CSO extensions of credit made by independent third-party lenders. These amounts, net of the Company’s estimated fairvalue of its liability for guaranteeing the extensions of credit, totaled $7,005 and $10,421 as of December 31, 2015 and 2014, respectively.49Table of Contents The following table presents segment pre-tax operating income of the U.S. operations segment for the fiscal year ended December 31, 2015 as compared to the fiscal yearended December 31, 2014 . Store operating expenses include salary and benefit expense of store-level employees, occupancy costs, bank charges, security, insurance, utilities,supplies and other costs incurred by the stores. Year Ended December 31,Increase / 2015 2014(Decrease)U.S. Operations Segment Revenue: Retail merchandise sales $197,011 $172,354 14 %Pawn loan fees 94,761 89,952 5 %Consumer loan and credit services fees 25,696 34,051 (25)%Wholesale scrap jewelry sales 19,380 28,243 (31)%Total revenue 336,848 324,600 4 % Cost of revenue: Cost of retail merchandise sold 117,059 98,916 18 % Consumer loan and credit services loss provision 6,770 8,723 (22)% Cost of wholesale scrap jewelry sold 17,530 24,179 (27)% Total cost of revenue 141,359 131,818 7 % Net revenue 195,489 192,782 1 % Segment expenses: Store operating expenses 107,852 97,865 10 % Depreciation and amortization 6,146 5,402 14 % Total segment expenses 113,998 103,267 10 % Segment pre-tax operating income $81,491 $89,515 (9)% Retail Merchandise Sales OperationsU.S. retail merchandise sales increased 14% to $197,011 during fiscal 2015 compared to $172,354 for fiscal 2014. The increase reflected store additions and an increase inretail inventories available for sale. During fiscal 2015, the gross profit margin on retail merchandise sales in the U.S. was 41% compared to a margin of 43% during fiscal2014.U.S. inventories increased 12% from $49,969 at December 31, 2014 to $56,040 at December 31, 2015, largely as a result of store additions and the maturation of existingstores.Pawn Lending OperationsU.S. pawn loan fees increased 5% totaling $94,761 during fiscal 2015 compared to $89,952 for fiscal 2014 due primarily to store additions and was consistent with averagepawn loan receivable balances throughout fiscal 2015. Total pawn loan receivables in the U.S. as of December 31, 2015 were consistent with balances as of December 31,2014. U.S. same-store pawn receivables decreased 6% as of December 31, 2015 compared to December 31, 2014.Consumer Lending OperationsService fees from U.S. consumer loans and credit services transactions (collectively also known as payday loans) decreased 25% to $25,696 during fiscal 2015 compared to$34,051 for fiscal 2014. The Company attributes the decrease in part to increased on-line competition, additional regulatory restrictions in many markets where the Company’spayday lending operations are focused as well as the Company’s ongoing strategic downsizing of these operations with the closure of 23 stand-alone consumer finance storesin Texas during fiscal 2015. Consumer/payday loan-related products comprised 8% of total U.S. revenue during fiscal 2015 compared to 10% during fiscal 2014.50Table of Contents Wholesale Scrap Jewelry OperationsU.S. wholesale scrap jewelry revenue during fiscal 2015 consisted primarily of gold sales, which decreased 31% to $19,380 compared to $28,243 during fiscal 2014. The scrapgross profit margin in the U.S. was 10% compared to the prior-year margin of 14%. Scrap jewelry profits accounted for 1% of U.S. net revenue (gross profit) for fiscal 2015compared to 2% in fiscal 2014.Store Operating Expenses and Segment Pre-Tax Operating IncomeU.S. store operating expenses increased by 10% to $107,852 during fiscal 2015 compared to $97,865 during fiscal 2014, primarily as a result of store additions. Same-storeoperating expenses decreased 3% compared to the prior-year period.The U.S. segment pre-tax operating income for fiscal 2015 was $81,491, which generated a pre-tax segment operating margin of 24% compared to $89,515 and 28% in theprior year, respectively. The decline in the pre-tax segment operating margin is primarily due to declines in the contribution from non-core consumer loan and scrap jewelryoperations.Latin America Operations SegmentThe following table details earning assets, which consist of pawn loans, consumer loans, net and inventories as well as other earning asset metrics of the Latin Americaoperations segment as of December 31, 2015 as compared to December 31, 2014 : Constant Currency Basis Balance at December 31, Increase / Balance at December 31,Increase / 2015 (Decrease) 2015 2014(Decrease) (Non-GAAP) (Non-GAAP)Latin America Operations Segment: Earning assets: Pawn loans$49,448 $50,436 (2)% $57,354 14% Consumer loans, net 430 451 (5)% 503 12% Pawn inventories 37,418 41,119 (9)% 43,588 6% $87,296 $92,006 (5)% $101,445 10% Average outstanding pawn loan amount (inones)$63 $67 (6)% $73 9% Composition of pawn collateral: General merchandise87% 88% Jewelry13% 12% 100% 100% Composition of pawn inventory: General merchandise85% 87% Jewelry15% 13% 100% 100% Percentage of inventory aged greater thanone year2% 2% 51Table of Contents The following table presents segment pre-tax operating income of the Latin America operations segment for the fiscal year ended December 31, 2015 as compared to the fiscalyear ended December 31, 2014 . Store operating expenses include salary and benefit expense of store-level employees, occupancy costs, bank charges, security, insurance,utilities, supplies and other costs incurred by the stores. Constant Currency Basis Year Ended December 31, Increase / Year Ended December 31,Increase / 2015 (Decrease) 2015 2014(Decrease) (Non-GAAP) (Non-GAAP)Latin America Operations Segment Revenue: Retail merchandise sales $252,285 $255,828 (1)% $300,674 18 % Pawn loan fees 100,687 109,405 (8)% 119,999 10 % Consumer loan and credit services fees 2,107 2,698 (22)% 2,511 (7)% Wholesale scrap jewelry sales 12,675 20,346 (38)% 12,675 (38)% Total revenue 367,754 388,277 (5)% 435,859 12 % Cost of revenue: Cost of retail merchandise sold 161,572 162,757 (1)% 192,562 18 % Consumer loan and credit services lossprovision 389 564 (31)% 464 (18)% Cost of wholesale scrap jewelry sold 10,098 16,865 (40)% 12,035 (29)% Total cost of revenue 172,059 180,186 (5)% 205,061 14 % Net revenue 195,695 208,091 (6)% 230,798 11 % Segment expenses: Store operating expenses 99,720 101,121 (1)% 116,743 15 % Depreciation and amortization 8,803 9,174 (4)% 10,306 12 % Total segment expenses 108,523 110,295 (2)% 127,049 15 % Segment pre-tax operating income $87,172 $97,796 (11)% $103,749 6 % Retail Merchandise Sales OperationsLatin America retail merchandise sales decreased 1% (increased 18% on a constant currency basis) to $252,285 during fiscal 2015 compared to $255,828 for fiscal 2014. Thedecrease was primarily due to a decline in foreign currency exchange rates partially offset by store additions, maturation of existing stores and an increase in retail inventoriesavailable for sale. During fiscal 2015 and 2014, the gross profit margin on retail merchandise sales was 36%.Inventories in Latin America decreased 9% (increased 6% on a constant currency basis) from $41,119 at December 31, 2014 to $37,418 at December 31, 2015. The constantcurrency increase was consistent with the growth in store counts from acquisitions and store openings in Latin America and maturation of existing stores.Pawn Lending OperationsPawn loan fees in Latin America decreased 8% (increased 10% on a constant currency basis) totaling $100,687 during fiscal 2015 compared to $109,405 for fiscal 2014. LatinAmerica pawn loan receivables as of December 31, 2015 decreased 2% (increased 14% on a constant currency basis) compared to December 31, 2014. The increase inconstant currency pawn loan fees and pawn receivables was primarily due to store additions. While Latin America same-store pawn receivables decreased 10% on a U.S.dollar basis compared to the prior year period, constant currency same-store pawn receivables increased 5%.52Table of Contents Store Operating Expenses and Segment Pre-Tax Operating IncomeStore operating expenses decreased by 1% (increased 15% on a constant currency basis) to $99,720 during fiscal 2015 compared to $101,121 during fiscal 2014. The constantcurrency increase was primarily a result of store additions. Same-store operating expenses decreased by 12% (increased 3% on a constant currency basis), compared to theprior-year period.The segment pre-tax operating income for fiscal 2015 was $87,172 , which generated a pre-tax segment operating margin of 24% compared to $97,796 and 25% in the prioryear, respectively.Consolidated Results of OperationsThe following table reconciles pre-tax operating income of the Company’s U.S. operations segment and Latin America operations segment discussed above to consolidated netincome for the fiscal year ended December 31, 2015 as compared to the fiscal year ended December 31, 2014 : Year Ended December 31,Increase / 2015 2014(Decrease) U.S. operations segment pre-tax operating income $81,491 $89,515 (9)% Latin America operations segment pre-tax operating income 87,172 97,796 (11)% Consolidated segment pre-tax operating income 168,663 187,311 (10)% Corporate expenses and other income: Administrative expenses 51,883 53,588 (3)% Depreciation and amortization 2,990 2,900 3 % Interest expense 16,887 13,527 25 % Interest income (1,566) (682) 130 % Merger and other acquisition expenses 2,875 998 188 % Goodwill impairment - U.S. consumer loan operations 7,913 — — % Total corporate expenses and other income 80,982 70,331 15 % Income from continuing operations before income taxes 87,681 116,980 (25)% Provision for income taxes 26,971 31,542 (14)% Income from continuing operations $60,710 $85,438 (29)% Loss from discontinued operations, net of tax $— $(272) (100)% Net income $60,710 $85,166 (29)% Comprehensive income $22,578 $56,649 (60)% 53Table of Contents Goodwill Impairment - U.S. Consumer Loan OperationsDuring the third quarter of 2015, the Company determined that sufficient indicators of potential impairment existed to require an interim goodwill impairment analysis for theU.S. consumer loan operations reporting unit, which is no longer a reporting unit of the Company. These indicators included, among others, the impacts of recently enactedand additional proposed local, state and federal regulatory restrictions affecting short-term and long-term profitability expectations for payday and title lending products, theCompany’s long-term ongoing strategy to reduce non-core consumer lending operations, along with continued store closures and the significant deterioration in paydaylending market conditions. As a result of the Company’s interim goodwill impairment analysis, a $7,913 goodwill impairment charge was recorded in the third quarter of 2015leaving no remaining goodwill or other intangible assets associated with its U.S. consumer loan operations reporting unit.Administrative Expenses, Interest, Merger and Other Acquisition Expenses, Taxes and IncomeAdministrative expenses decreased to $51,883 during fiscal 2015 compared to $53,588 during fiscal 2014, primarily as a result of a 19% decline in the average value of theMexican peso which reduced administrative expenses in Mexico, and reduced incentive compensation expense related to current year operating results, partially offset by a 9%increase in the weighted-average store count resulting in additional management and supervisory compensation and other support expenses required for such growth. As apercentage of revenue, administrative expenses were 7% during fiscal 2015 compared to 8% during fiscal 2014.Interest expense increased to $16,887 during fiscal 2015 compared to $13,527 for fiscal 2014, primarily due to the issuance of the Company's 6.75% senior notes in March2014 and, to a lesser extent, an increase in the amount outstanding on the Company’s revolving line of credit. See “—Liquidity and Capital Resources.”Merger and other acquisition expenses increased to $2,875 during fiscal 2015 compared to $998 during fiscal 2014 due to increased acquisition activity.For fiscal 2015 and 2014, the Company’s effective federal income tax rates were 30.8% and 27.0%, respectively. The Company recognized a non-recurring foreign income taxbenefit of $5,841 during fiscal 2014. Excluding the non-recurring net benefit, the consolidated tax rate for fiscal 2014 was 32.0%.Net income decreased 29% to $60,710 during fiscal 2015 compared to $85,166 during fiscal 2014. The decrease was primarily due to the non-cash goodwill impairment andother non-recurring charges related to the Company’s U.S. consumer loan operations, the weaker value of the Mexican peso versus the U.S. dollar, the continued declines innon-core jewelry scrapping and non-core payday lending operations and an increase in interest expense primarily due to the issuance of the Company’s 6.75% senior notes inMarch 2014. These decreases were partially offset by the continued growth in core pawn operations, a non-recurring tax benefit and a reduction in incentive compensationexpense. Comprehensive income decreased 60% to $22,578 during fiscal 2015 compared to $56,649 during fiscal 2014, as a result of the translation of the Company’s netassets denominated in local currencies into U.S. dollars as of December 31, 2015.Net Income, Adjusted Net Income, Net Income Per Share and Adjusted Net Income Per ShareThe following table sets forth revenue, net revenue, net income, diluted net income per share, adjusted net income and adjusted diluted net income per share for the fiscal yearended December 31, 2015 as compared to the fiscal year ended December 31, 2014 : Year Ended December 31, 2015 2014 As Reported Adjusted As Reported Adjusted (GAAP) (Non-GAAP) (GAAP) (Non-GAAP)Revenue $704,602 $704,602 $712,877 $712,877Net revenue $391,184 $391,184 $400,873 $400,873Net income $60,710 $68,483 $85,166 $80,004Diluted EPS $2.14 $2.42 $2.93 $2.7554Table of Contents While as-reported GAAP net income and earnings per share for fiscal 2015 declined 29% and 27%, respectively, compared to the prior year primarily due to a decline in theaverage value of the Mexican peso, the goodwill impairment recorded in fiscal 2015 and the non-recurring income tax benefit recorded in fiscal 2014, adjusted net incomedecreased 14% compared to the prior year and adjusted earnings per share decreased 12% over the prior year. The year-over-year decrease in adjusted earnings per share forfiscal 2015 was primarily due to a decline in the average value of the Mexican peso.Adjusted net income removes certain items from GAAP net income that the Company does not consider to be representative of its actual operating performance, such asmerger and other acquisition expenses, but does not adjust for the effects of foreign currency rate fluctuations. See “—Non-GAAP Financial Information—Adjusted NetIncome and Adjusted Net Income Per Share” below.Liquidity and Capital Resources (in thousands)As of December 31, 2016 , the Company’s primary sources of liquidity were $89,955 in cash and cash equivalents, $144,044 of available and unused funds under theCompany's long-term lines of credit with its commercial lenders, $420,723 in customer loans and pawn loan fees and service charges receivable and $330,683 in inventories.As of December 31, 2016 , the amount of cash associated with indefinitely reinvested foreign earnings was approximately $45,809, which is primarily held in Mexican pesos.The Company had working capital of $748,507 as of December 31, 2016 and total equity exceeded liabilities by a ratio of 2.1 to 1.On March 24, 2014, the Company issued $200,000 of 6.75% senior notes due on April 1, 2021 (the “Notes”) all of which are currently outstanding. Interest on the Notes ispayable semi-annually in arrears on April 1 and October 1. The Notes are fully and unconditionally guaranteed on a senior unsecured basis jointly and severally by all of theCompany's existing and future domestic subsidiaries that guarantee the 2016 Credit Facility (as defined below). The Notes permit the Company to make certain restrictedpayments, such as repurchasing shares of its stock and paying cash dividends, within certain parameters, the most restrictive of which generally limits such restricted paymentsto 50% of net income, adjusted for certain items as described in the indenture. As of December 31, 2016 and 2015 , deferred debt issuance costs of $3,455 and $4,126 ,respectively, are included as a direct deduction from the carrying amount of the Notes in the accompanying consolidated balance sheets.During the period from January 1, 2016 through September 1, 2016, the Company maintained a revolving line of credit agreement with a group of U.S. based commerciallenders (the “2015 Credit Facility”) in the amount of $210,000 , which was scheduled to mature in October 2020 . The 2015 Credit Facility charged interest, at the Company’soption, at either (i) the prevailing London Interbank Offered Rate (“LIBOR”) (with interest periods of 1, 2, 3 or 6 months at the Company’s option) plus a fixed spread of 2.5%or (ii) the prevailing prime or base rate plus a fixed spread of 1.5% .On September 1, 2016 and in connection with the closing of the Merger, the Company amended and extended the 2015 Credit Facility (as amended, the “2016 CreditFacility”). The total lender commitment under the 2016 Credit Facility increased from $210,000 to $400,000 and the number of participating lenders increased from five toeight. Additionally, the term of the 2016 Credit Facility was extended to September 2021 , five years from the closing date of the Merger, and is unsecured as the amendmentremoved the pledge of 65% of the voting equity interests of the Company’s first-tier foreign subsidiaries included in the 2015 Credit Facility. Also in connection with theMerger, all of Cash America’s previously outstanding 5.75% senior notes due 2018 were redeemed and Cash America’s previously outstanding credit agreement and relatedcredit facilities were repaid in full and terminated.At December 31, 2016 , the Company had $260,000 in outstanding borrowings and $5,956 in outstanding letters of credit under the 2016 Credit Facility, leaving $134,044available for future borrowings. The 2016 Credit Facility bears interest, at the Company’s option, at either (i) the prevailing London Interbank Offered Rate (“LIBOR”) (withinterest periods of 1 week or 1, 2, 3 or 6 months at the Company’s option) plus a fixed spread of 2.5% or (ii) the prevailing prime or base rate plus a fixed spread of 1.5% . Theagreement has a LIBOR floor of 0% . Additionally, the Company is required to pay an annual commitment fee of 0.50% on the average daily unused portion of the 2016Credit Facility commitment. The weighted-average interest rate on amounts outstanding under the 2016 Credit Facility at December 31, 2016 was 3.25% based on 1 weekLIBOR. Under the terms of the 2016 Credit Facility, the Company is required to maintain certain financial ratios and comply with certain financial covenants and allows theCompany to make certain restricted payments, such as repurchasing shares of its stock, within certain parameters provided the Company maintains compliance with thosefinancial ratios and covenants after giving effect to such restricted payments. The 2016 Credit Facility also contains customary restrictions on the Company’s ability to incuradditional debt, grant liens, make investments, consummate acquisitions and similar negative covenants with customary carve-outs and baskets. The Company was incompliance with the requirements and covenants of the 2016 Credit Facility as of December 31, 2016 , and believes it has the capacity to borrow a substantial portion of theamount available under the 2016 Credit Facility under the most restrictive covenant.55Table of Contents At December 31, 2016 , the Company maintained a line of credit with a bank in Mexico (the “Mexico Credit Facility”) in the amount of $10,000 . The Mexico Credit Facilitybears interest at 30-day LIBOR rate plus a fixed spread of 2.0% and matures in December 2017 . Under the terms of the Mexico Credit Facility, the Company is required tomaintain certain financial ratios and comply with certain financial covenants. The Company was in compliance with the requirements and covenants of the Mexico CreditFacility as of December 31, 2016 , and believes it has the capacity to borrow the full amount available under the Mexico Credit Facility under the most restrictive covenant.The Company is required to pay a one-time commitment fee of $25 due when the first amount is drawn/borrowed. At December 31, 2016 , the Company had no amountoutstanding under the Mexico Credit Facility and $10,000 was available for borrowings.In general, revenue growth is dependent upon the Company’s ability to fund the addition of store locations (both de novo openings and acquisitions) and growth in customerloan balances and inventories. In addition to these factors, changes in loan balances, collection of pawn fees, merchandise sales, inventory levels, operating expenses,administrative expenses, tax rates, gold prices, foreign currency exchange rates and the pace of new store expansions and acquisitions, including expenses related to theMerger and future acquisitions, affect the Company’s liquidity. Management believes cash on hand, the borrowings available under its credit facilities, anticipated cashgenerated from operations (including the normal seasonal increases in operating cash flows occurring in the first and fourth quarters) and other current working capital will besufficient to meet the Company’s anticipated capital requirements for its business for at least the next twelve months. Where appropriate or desirable, in connection with theCompany’s efficient management of its liquidity position, the Company could seek to raise additional funds from a variety of sources, including the sale of assets, reductionsin capital spending, the issuance of debt or equity securities and/or changes to its management of current assets. The characteristics of the Company’s current assets,specifically the ability to rapidly liquidate gold jewelry inventory and adjust outflows of cash in its lending practices, gives the Company flexibility to quickly modify itsbusiness strategy to increase cash flow from its business, if necessary. Regulatory developments affecting the Company’s operations may also impact profitability andliquidity. See “—Item 1—Business—Governmental Regulation.”The following tables set forth certain historical information with respect to the Company’s sources and uses of cash and other key indicators of liquidity: Year Ended December 31, 2016 2015 2014Cash flow provided by operating activities $96,854 $92,749 $97,679Cash flow used in investing activities (25,967) (71,676) (85,366)Cash flow provided by (used in) financing activities (58,713) 9,127 (9,098) Balance at December 31, 2016 2015 2014Net working capital $748,507 $279,259 $258,194Current ratio6.21:1 7.05:1 7.07:1 Liabilities to equity (1)48%75%64%(1) Certain prior year amounts impacting these indicators of liquidity have been reclassified in order to conform to the 2016 presentation. See Note 2 of Notes to Consolidated FinancialStatements for further information.Net cash provided by operating activities increased $4,105 , or 4% , from $92,749 for fiscal 2015 to $96,854 for fiscal 2016 , due to net changes in certain non-cashadjustments and operating assets and liabilities (as noted in the statements of cash flows).Net cash used in investing activities decreased $45,709 , or 64% , from $71,676 during fiscal 2015 to $25,967 during fiscal 2016 . Cash flows from investing activities areutilized primarily to fund pawn store acquisitions, growth of pawn loans and purchases of property and equipment. The Company paid $29,866 in cash related to acquisitionsduring fiscal 2016 compared to $46,887 in fiscal 2015 . In addition, the portion of the aggregate Merger consideration paid in cash upon closing of the Merger, net of cashacquired, was $8,250 . The Company funded a net increase in loans of $16,072 during fiscal 2016 compared to $3,716 during fiscal 2015 and received proceeds of $62,084from the sale of approximately six million shares of common stock of Enova International, Inc. during fiscal 2016 .Net cash used in financing activities increased $67,840 from net cash provided by financing activities of $9,127 during fiscal 2015 to net cash used in financing activities of$58,713 during fiscal 2016 . Net borrowings on the Company’s credit facilities were $202,000 during fiscal 2016 , primarily used to pay off assumed debt in conjunction withthe Merger, compared to $35,600 during56Table of Contents fiscal 2015 and the Company paid $2,373 of debt issuance costs related to the 2016 Credit Facility during fiscal 2016 . In addition, the Company repaid $6,532 in peso-denominated debt assumed from the Maxi Prenda Acquisition and $232,000 in debt assumed in conjunction with the Merger during fiscal 2016 . The Company repurchased$39,974 worth of shares of its common stock during fiscal 2015 , and realized proceeds from the exercise of stock options and the related tax benefit of $15,021 during fiscal2015 . During fiscal 2015 , the Company paid the statutory minimum withholding taxes on the net share settlement of certain stock options exercised in the amount of $1,113 .The Company paid dividends of $19,808 during fiscal 2016 , while no dividends were paid during fiscal 2015 .In addition to the 815 stores added as a result of the Merger, the Company opened 41 new pawn stores in Latin America and acquired 179 pawn stores in Latin America andthree pawn stores in the U.S. during fiscal 2016 . The combined purchase price of the 2016 acquisitions (excluding the Merger) was $31,845, net of cash acquired and certainpost-closing adjustments. The purchases were composed of $29,291 in cash paid during fiscal 2016 and approximately $2,554 of deferred purchase price payable to the sellerson or before March 2017. During fiscal 2016 , the Company also paid $575 of deferred purchase price amounts payable related to prior-year acquisitions. The Companyfunded $33,863 in capital expenditures during fiscal 2016 , $13,407 of which related to the purchase of real estate primarily at existing stores with the remainder relatedprimarily to maintenance capital expenditures and new store additions. Acquisition purchase prices, capital expenditures, working capital requirements and start-up lossesrelated to this expansion have been primarily funded through cash balances, operating cash flows and the Company’s credit facilities. The Company’s cash flow and liquidityavailable to fund expansion in 2016 included net cash flow from operating activities of $96,854 for fiscal 2016 .The Company intends to continue expansion primarily through acquisitions and new store openings. For 2017 , the Company expects to add approximately 85 stores, primarilyin Latin America, including plans for its first stores in Colombia. The Company expects that total capital expenditures for 2017, including expenditures for new and remodeledstores and other corporate assets, will total approximately $32,000 to $37,000. Management believes cash on hand, the amounts available to be drawn under the credit facilitiesand cash generated from operations will be sufficient to accommodate the Company’s current operations and store expansion plans for 2017 .The Company continually looks for, and is presented with, potential acquisition opportunities. The Company currently has no other contractual commitments for materiallysignificant future acquisitions, business combinations or capital commitments. The Company will evaluate potential acquisitions based upon growth potential, purchase price,available liquidity, debt covenant restrictions, strategic fit and quality of management personnel, among other factors. If the Company encounters an attractive opportunity toacquire new stores in the near future, the Company may seek additional financing, the terms of which will be negotiated on a case-by-case basis.In connection with the Merger, the Company has incurred, and expects to incur, additional costs, expenses and fees for severance and retention costs. The substantial majorityof these costs will be expenses relating to the Merger, including costs relating to employee severance, integration and restructuring activities. The Company plans to fund suchcosts with available cash on hand and funds from the 2016 Credit Facility and believes it has adequate capacity to borrow the necessary funds under the most restrictivecovenant.In connection with the Merger, the Company assumed forward gold sales contracts entered into by Cash America. As of December 31, 2016 , the Company has goldcommitments of 30,700 gold ounces deliverable through December 31, 2017 . The ounces required to be delivered are well within historical scrap gold delivery volumes andthe Company expects to have the required gold ounces to meet the commitments as they come due.In January 2015, the Company’s Board of Directors authorized a common stock repurchase program for up to 2,000,000 shares of the Company’s outstanding common stock.During fiscal 2016 , the Company temporarily suspended repurchases in connection with the Merger and 1,148,000 shares remained available for repurchase under therepurchase program at December 31, 2016. The Company intends to continue repurchases under its repurchase program in 2017 through open market transactions under a 10b-5 plan subject to a variety of factors, including, but not limited to, the level of cash balances, credit availability, debt covenant restrictions, general business conditions,regulatory requirements, the market price of the Company’s stock, dividend policy and the availability of alternative investment opportunities. Subsequent to December 31,2016 and through the date of this report, the Company has repurchased approximately 228,000 shares of common stock at an aggregate cost of $10,005 and an average cost pershare of $43.94.In January 2016, the Company’s Board of Directors approved the initiation of a cash dividend payment at an annual rate of $0.50 per share to be paid quarterly. In July 2016,the Company’s Board of Directors approved a plan, contingent on completion of the Merger, to increase the annual dividend to $0.76 per share, or $0.19 per share quarterly,beginning in the fourth quarter of 2016. The fourth quarter dividend of $0.19 per share was paid on November 28, 2016. Total cash dividends paid were $19,808 in 2016.57Table of Contents In January 2017, the Company’s Board of Directors declared a $0.19 per share first quarter cash dividend, or $9,216 based on current share counts, on common sharesoutstanding, which will be paid on February 28, 2017 to stockholders of record as of February 14, 2017. On an annualized basis, this represents a dividend of $0.76 per share,or $36,866 dollars based on the beginning 2017 share count of 48,507,000 shares. The declaration and payment of cash dividends in the future (quarterly or otherwise) will bemade by the Board of Directors, from time to time, subject to the Company’s financial condition, results of operations, business requirements, compliance with legalrequirements and debt covenant restrictions.Non-GAAP Financial InformationThe Company uses certain financial calculations such as adjusted net income, adjusted net income per share, adjusted EBITDA, free cash flow and constant currency results(as defined or explained below) as factors in the measurement and evaluation of the Company’s operating performance and period-over-period growth. The Company derivesthese financial calculations on the basis of methodologies other than GAAP, primarily by excluding from a comparable GAAP measure certain items that the Company doesnot consider to be representative of its actual operating performance. These financial calculations are “non-GAAP financial measures” as defined in SEC rules. The Companyuses these non-GAAP financial measures in operating its business because management believes they are less susceptible to variances in actual operating performance that canresult from the excluded items, other infrequent charges and currency fluctuations. The Company presents these financial measures to investors because management believesthey are useful to investors in evaluating the primary factors that drive the Company’s operating performance and because management believes they provide greatertransparency into the Company’s results of operations. However, items that are excluded and other adjustments and assumptions that are made in calculating adjusted netincome, adjusted net income per share, adjusted EBITDA, free cash flow and constant currency results are significant components in understanding and assessing theCompany’s financial performance. These non-GAAP financial measures should be evaluated in conjunction with, and are not a substitute for, the Company’s GAAP financialmeasures. Further, because these non-GAAP financial measures are not determined in accordance with GAAP and are thus susceptible to varying calculations, adjusted netincome, adjusted net income per share, adjusted EBITDA, free cash flow and constant currency results as presented may not be comparable to other similarly titled measuresof other companies.The Company expects to incur significant expenses over the next two years in connection with its Merger and integration with Cash America. The Company has adjusted theapplicable non-GAAP financial measures to exclude these items because it generally would not incur such costs and expenses as part of its continuing operations. The Mergerrelated expenses are predominantly incremental costs directly associated with the Merger and integration of Cash America, including professional fees, legal expenses,severance and retention payments, accelerated vesting of certain equity compensation awards, contract breakage costs and costs related to consolidation of technology systemsand corporate facilities.Adjusted Net Income and Adjusted Net Income Per ShareManagement believes the presentation of adjusted net income and adjusted net income per share (“Adjusted Income Measures”) provides investors with greater transparencyand provides a more complete understanding of the Company’s financial performance and prospects for the future. In addition, management believes the adjustments shownbelow are useful to investors in order to allow them to compare the Company’s financial results for the current periods presented with the prior periods presented.58Table of Contents The following table provides a reconciliation between the net income and diluted earnings per share calculated in accordance with GAAP to the Adjusted Income Measures,which are shown net of tax (unaudited, in thousands, except per share data): Year Ended December 31, 2016 2015 2014 In Thousands Per Share InThousands Per Share In Thousands Per ShareNet income, as reported$60,127 $1.72 $60,710 $2.14 $85,166 $2.93Adjustments, net of tax: Merger related expenses Transaction14,399 0.41 — — — —Severance and retention9,594 0.27 — — — —Other1,726 0.05 — — — —Total Merger related expenses25,719 0.73 — — — —Other acquisition expenses304 0.01 1,989 0.07 679 0.02Restructuring expenses relatedto U.S. consumer loanoperations— — 5,784 0.21 — —Foreign tax benefit— — — — (5,841) (0.20)Net gain on sale of commonstock of Enova(818) (0.02) — — — —Adjusted net income$85,332 $2.44 $68,483 $2.42 $80,004 $2.75The following tables provide a reconciliation of the gross amounts, the impact of income taxes and the net amounts for each of the adjustments included in the table above(unaudited, in thousands): Year Ended December 31, 2016 2015 2014 Pre-tax Tax After-tax Pre-tax Tax After-tax Pre-tax Tax After-taxMerger relatedexpenses (1)$36,220 $10,501 $25,719 $— $— $— $— $— $—Other acquisitionexpenses450 146 304 2,875 886 1,989 998 319 679Restructuringexpensesrelated to U.S.consumer loanoperations— — — 8,878 3,094 5,784 — — —Foreign taxbenefit— — — — — — — 5,841 (5,841)Net gain on sale ofcommon stockof Enova(1,299) (481) (818) — — — — — —Totaladjustments$35,371 $10,166 $25,205 $11,753 $3,980 $7,773 $998 $6,160 $(5,162)(1) Resulting tax benefit is less than the statutory rate as a portion of the transaction costs are not deductible for tax purposes. See Note 4 of Notes to Consolidated Financial Statements forfurther information.Adjusted Earnings Before Interest, Taxes, Depreciation and AmortizationThe Company defines adjusted EBITDA as net income before income taxes, depreciation and amortization, interest expense, interest income and certain items as listed belowthat management considers to be non-operating in nature and not representative of its actual operating performance. The Company believes adjusted EBITDA is commonlyused by investors to assess a company’s financial performance. However, adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation59Table of Contents or as a substitute for net income or other statement of income data prepared in accordance with GAAP. The following table provides a reconciliation of net income to adjustedEBITDA (unaudited, in thousands): Year Ended December 31, 2016 2015 2014Net income$60,127 $60,710 $85,166Income taxes33,320 26,971 31,542Depreciation and amortization (1)31,865 17,446 17,476Interest expense20,320 16,887 13,527Interest income(751) (1,566) (682)EBITDA144,881 120,448 147,029Adjustments: Merger related expenses36,220 — —Other acquisition expenses450 2,875 998Restructuring expenses related to U.S. consumer loan operations— 8,878 —Net gain on sale of common stock of Enova International, Inc.(1,299) — —Adjusted EBITDA$180,252 $132,201 $148,027(1) For fiscal 2015, excludes $493 of depreciation and amortization, which is included in the restructuring expenses related to U.S. consumer loan operations.Free Cash FlowFor purposes of its internal liquidity assessments, the Company considers free cash flow, which the Company defines as cash flow from operating activities reduced bypurchases of property and equipment and net cash outflow from loan receivables. Free cash flow is commonly used by investors as an additional measure of cash generated bybusiness operations that may be used to repay scheduled debt maturities and debt service or, following payment of such debt obligations and other non-discretionary items,may be available to invest in future growth through new business development activities or acquisitions, repurchase stock, pay cash dividends or repay debt obligations prior totheir maturities. These metrics can also be used to evaluate the Company’s ability to generate cash flow from business operations and the impact that this cash flow has on theCompany’s liquidity. However, free cash flow has limitations as an analytical tool and should not be considered in isolation or as a substitute for cash flow from operatingactivities, including discontinued operations, or other income statement data prepared in accordance with GAAP. The following table reconciles “net cash flow from operatingactivities” to “free cash flow” (in thousands): Year Ended December 31, 2016 2015 2014Cash flow from operating activities$96,854 $92,749 $97,679Cash flow from investing activities: Loan receivables, net of cash repayments(16,072) (3,716) (2,470)Purchases of property and equipment(33,863) (21,073) (23,954)Free cash flow$46,919 $67,960 $71,255Constant Currency ResultsThe Company’s reporting currency is the U.S. dollar. However, certain performance metrics discussed in this report are presented on a “constant currency” basis, which isconsidered a non-GAAP measurement of financial performance. The Company’s management uses constant currency results to evaluate operating results of businessoperations in Latin America, which are primarily transacted in local currencies.The Company believes that constant currency results provides investors with valuable supplemental information regarding the underlying performance of its businessoperations in Latin America, consistent with how the Company’s management evaluates such performance and operating results. Constant currency results reported herein arecalculated by translating certain balance sheet and income statement items denominated in local currencies using the exchange rate from the prior-year comparable period,60Table of Contents as opposed to the current comparable period, in order to exclude the effects of foreign currency rate fluctuations for purposes of evaluating period-over-periodcomparisons. Business operations in Mexico and Guatemala are transacted in Mexican pesos and Guatemalan quetzales, respectively. The Company also has operations in ElSalvador where the reporting and functional currency is the U.S. dollar. See the Latin America operations segment tables in “—Results of Continuing Operations” above for anadditional reconciliation of certain constant currency amounts to as reported GAAP amounts.The following tables provide exchange rates for the Mexican peso and Guatemalan quetzal for the current and prior year periods: 2016 2015 2014Mexican peso / U.S. dollar exchange rate: Rate % ChangeOver PriorYear Period Rate % ChangeOver PriorYear Period RateQuarter Ended March 31: End-of-period 17.4 (14)% 15.2 (16)% 13.1Three months ended 18.0 (21)% 14.9 (13)%13.2Quarter Ended June 30: End-of-period 18.5 (19)% 15.6 (20)% 13.0Three months ended 18.1 (18)% 15.3 (18)% 13.0Quarter Ended September 30: End-of-period 19.5 (15)% 17.0 (26)% 13.5Three months ended 18.7 (14)% 16.4 (25)% 13.1Quarter Ended December 31: End-of-period 20.7 (20)% 17.2 (17)% 14.7Three months ended 19.8 (19)% 16.7 (21)% 13.8Fiscal Year: End-of-period 20.7 (20)% 17.2 (17)% 14.7Twelve months ended 18.7 (18)% 15.8 (19)% 13.3 2016 2015 2014Guatemalan quetzal / U.S. dollar exchange rate: Rate % ChangeOver PriorYear Period Rate % ChangeOver PriorYear Period RateQuarter Ended March 31: End-of-period 7.7 (1)% 7.6 1% 7.7Three months ended 7.7 (1)% 7.6 3% 7.8Quarter Ended June 30: End-of-period 7.6 — % 7.6 3% 7.8Three months ended 7.7 — % 7.7 1% 7.8Quarter Ended September 30: End-of-period 7.5 3 % 7.7 —% 7.7Three months ended 7.6 1 % 7.7 1% 7.8Quarter Ended December 31: End-of-period 7.5 1 % 7.6 —% 7.6Three months ended 7.5 1 % 7.6 —% 7.6Fiscal Year: End-of-period 7.5 1 % 7.6 —% 7.6Twelve months ended 7.6 1 % 7.7 —% 7.761Table of Contents Contractual CommitmentsA tabular disclosure of contractual obligations at December 31, 2016 is as follows: Payments Due by Period (in thousands) Total Less Than 1 Year 1 - 3 Years 3 - 5 Years More Than 5Years Operating leases$379,401 $102,541 $154,989 $80,703 $41,168Revolving unsecured credit facilities (1)260,000 — — 260,000 —Senior unsecured notes200,000 — — 200,000 —Interest on senior unsecured notes60,750 13,500 27,000 20,250 —Employment contracts17,568 3,415 6,860 6,488 805Total$917,719 $119,456 $188,849 $567,441 $41,973(1)Excludes interest obligations under the Company's revolving unsecured credit facilities. See Note 11 of Notes to Consolidated Financial Statements.Off-Balance Sheet Arrangements (in thousands)The Company offers a fee-based credit services organization program to assist consumers in obtaining extensions of credit. The Company’s stand-alone consumer loanlocations and certain pawn stores in Texas and Ohio offer the CSO Program. The Company’s CSO Program complies with the respective jurisdiction’s credit servicesorganization act, credit access business law or a similar statute. Under the CSO Program, the Company assists customers in applying for a short-term extension of credit fromthe Independent Lenders and issues the Independent Lenders a guarantee for the repayment of the extension of credit.For extension of credit products originated by the Independent Lenders, the Independent Lenders are responsible for evaluating each of its customers’ applications,determining whether to approve an extension of credit based on an application and determining the amount of the extension of credit. The Company is not involved in theIndependent Lenders’ extension of credit approval processes or in determining the Independent Lenders’ approval procedures or criteria. At December 31, 2016 , theoutstanding amount of active extensions of credit originated and held by the Independent Lenders was $12,680 .Since the Company may not be successful in collection of delinquent accounts under the CSO Program, the Company’s consumer loan loss provision includes amountsestimated to be adequate to absorb credit losses from extensions of credit in the aggregate consumer loan portfolio, including those expected to be assigned to the Company oracquired by the Company as a result of its guaranty obligations. Estimated losses of $582 on portfolios owned by the Independent Lenders are included in accounts payableand accrued liabilities in the consolidated balance sheet as of December 31, 2016 . The Company believes this amount is adequate to absorb credit losses from extensions ofcredit expected to be assigned to the Company or acquired by the Company as a result of its guaranty obligations.InflationThe Company does not believe inflation has had a material effect on the volume of customer loans originated, merchandise sales, or results of operations.SeasonalityThe Company’s business is subject to seasonal variations. Therefore, operating results for each quarter and year-to-date periods are not necessarily indicative of the results ofoperations for the full year. Typically, the Company experiences seasonal growth of service fees in the third and fourth quarter of each year due to loan balance growth.Service fees generally decline in the first and second quarter of each year after the heavy repayment period of pawn loans associated with statutory bonuses received bycustomers in the fourth quarter in Mexico and with tax refund proceeds received by customers in the first quarter in the U.S. Retail sales are seasonally higher in the fourthquarter associated with holiday shopping, and to a lesser extent, in the first quarter associated with tax refunds.62Table of Contents Recent Accounting PronouncementsSee discussion in Note 2 of Notes to Consolidated Financial Statements.Item 7A. Quantitative and Qualitative Disclosures About Market Risk (in thousands)Market risks relating to the Company’s operations result primarily from changes in interest rates, gold prices and foreign currency exchange rates. The Company does notengage in speculative or leveraged transactions, nor does it hold or issue financial instruments for trading purposes.Gold Price RiskThe Company has significant holdings of gold in the form of jewelry inventories and pawn collateral and a significant portion of retail merchandise sales are gold jewelry asare most of the wholesale scrap jewelry sales. At December 31, 2016 , the Company held approximately $162,035 in jewelry inventories, representing 49% of total inventory.In addition, approximately $199,788, or 57% , of total pawn loans were collateralized by jewelry, which was primarily gold. Of the Company’s total retail merchandiserevenue during fiscal 2016 , approximately $187,357, or 28%, was jewelry sales. During fiscal 2016 , the average market price of gold increased by 8%, from $1,160 to $1,251per ounce. The impact of this increase on operating results for fiscal 2016 is discussed in “Item 7. Management’s Discussion and Analysis of Financial Condition and Resultsof Operations—Results of Continuing Operations.” A significant and sustained decline in the price of gold would negatively impact the value of jewelry inventories held bythe Company and the value of gold jewelry pledged as collateral by pawn customers. As a result, the Company’s profit margins from the sale of existing jewelry inventorieswould be negatively impacted, as would the potential profit margins on gold jewelry currently pledged as collateral by pawn customers in the event it was forfeited by thecustomer. In addition, a decline in gold prices could result in a lower balance of pawn loans outstanding for the Company, as customers would receive lower loan amounts forindividual pieces of pledged gold jewelry. The Company believes that many customers would be willing to add additional items of value to their pledge in order to obtain thedesired loan amount, thus mitigating a portion of this risk.Foreign Currency RiskThe financial statements of the Company’s subsidiaries in Mexico and Guatemala are translated into U.S. dollars using period-end exchange rates for assets and liabilities andaverage exchange rates for revenues and expenses. Adjustments resulting from translating net assets are reported as a separate component of accumulated other comprehensiveincome (loss) within shareholders’ equity under the caption, currency translation adjustment. Exchange rate gains or losses related to foreign currency transactions arerecognized as transaction gains or losses in the Company’s income statement as incurred. The Company also has operations in El Salvador where the reporting and functionalcurrency is the U.S. dollar.Latin America revenues and cost of revenues account for 38% and 39% , respectively, of consolidated amounts for the year ended December 31, 2016 . The majority of LatinAmerica revenues and a smaller portion of expenses are denominated in currencies other than the U.S. dollar and the Company therefore has foreign currency risk related tothese currencies, which are primarily the Mexican peso, and to a much lesser extent, the Guatemalan quetzal.Accordingly, changes in exchange rates, and in particular a weakening of foreign currencies relative to the U.S. dollar, may negatively affect the Company’s revenue andearnings of its Latin America operations as expressed in U.S. dollars. For the year ended December 31, 2016 , the Company’s Latin America revenues and pre-tax operatingincome would have been approximately $67,947 and $17,000 higher, respectively, had foreign currency exchange rates remained consistent with those for the year endedDecember 31, 2015 . See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Continuing Operations” for furtherdiscussion of Latin America constant currency results.The Company does not use foreign exchange contracts or derivatives to hedge any foreign currency exposures. The volatility of exchange rates depends on many factors that itcannot forecast with reliable accuracy. The Company’s continued Latin America expansion increases exposure to exchange rate fluctuations and, as a result, such fluctuationscould have a significant impact on future results of operations. The average value of the Mexican peso to the U.S. dollar exchange rate for fiscal 2016 was 18.7 to 1, comparedto 15.8 to 1 in fiscal 2015 and 13.3 to 1 in fiscal 2014 . In fiscal 2017 , through February 20, 2017 , the average exchange rate was 21.0 to 1, which equates to a 12% decline ascompared to the average value for fiscal 2016 of 18.7 to 1. It is anticipated that for 2017 a one point change in the average Mexican peso to the U.S. dollar exchange rate willimpact annual earnings by approximately $2,900 to $3,900.63Table of Contents The average value of the Guatemalan quetzal to the U.S. dollar exchange rate for fiscal 2016 was 7.6 to 1, compared to 7.7 to 1 in fiscal 2015 . In fiscal 2017 , throughFebruary 20, 2017 , the average exchange rate was 7.5 to 1, which equates to a 1% increase as compared to the average value for fiscal 2016 of 7.6 to 1.Interest Rate RiskThe Company is potentially exposed to market risk in the form of interest rate risk in regards to its long-term lines of credit. At December 31, 2016 , the Company had$260,000 outstanding under its revolving lines of credit. The revolving lines of credit are generally priced with a variable rate based on a 1 week or 1, 2, 3 or 6 month LIBORplus a fixed spread. Based on the average outstanding indebtedness during fiscal 2016 , a 1% (100 basis points) increase in interest rates would have increased the Company’sinterest expense by approximately $1,344 for fiscal 2016 .Interest rate fluctuations will generally not affect the Company’s future earnings or cash flows on its fixed rate debt unless such instruments mature or are otherwiseterminated. However, interest rate changes will affect the fair value of the Company’s fixed rate instruments. At December 31, 2016 , the fair value of the Company’s fixedrate debt was approximately $208,000 and the outstanding principal of the Company’s fixed rate debt was $200,000. The fair value estimate of the Company’s fixed rate debtwas estimated based on a discounted cash flow analysis using a discount rate representing the Company’s estimate of the rate that would be used by market participants.Changes in assumptions or estimation methodologies may have a material effect on this estimated fair value. As the Company expects to hold its fixed rate instruments tomaturity and the amounts due under such instruments would be limited to the outstanding principal balance and any accrued and unpaid interest, the Company does not expectthat fluctuations in interest rates, and the resulting change in fair value of its fixed rate instruments, would have a significant impact on the Company’s operations.The Company’s cash and cash equivalents are sometimes invested in money market accounts. Accordingly, the Company is subject to changes in market interest rates.However, the Company does not believe a change in these rates would have a material adverse effect on the Company’s operating results, financial condition, or cash flows.Item 8. Financial Statements and Supplementary DataThe financial statements prepared in accordance with Regulation S-X are included in a separate section of this report. See the index to Financial Statements at Item 15(a)(1)and (2) of this report.Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not applicable.Item 9A. Controls and ProceduresEvaluation of Disclosure Controls and Procedures The Company’s management, under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated theeffectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) under the Exchange Act) as of December 31, 2016 (the “Evaluation Date”).Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, the Company’s disclosure controls andprocedures were effective.Limitations on Effectiveness of Controls and ProceduresThe Company’s management, including its Chief Executive Officer and Chief Financial Officer, does not expect the Company’s disclosure controls and procedures or internalcontrols will prevent all possible error and fraud. The Company’s disclosure controls and procedures are, however, designed to provide reasonable assurance of achieving theirobjectives, and the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are effective at thatreasonable assurance level.64Table of Contents Management’s Report on Internal Control Over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting and for the assessment of the effectiveness of the Company’sinternal control over financial reporting. Internal control over financial reporting (as defined in Rules 13a-15(f) and 15d(f) under the Exchange Act) is a process designed toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance withGAAP. Internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately andfairly reflect the transactions and dispositions of assets, (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with GAAP, (3) provide reasonable assurance that receipts and expenditures are being made only in accordance with appropriate authorization ofmanagement and the board of directors, and (4) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of assetsthat could have a material effect on the financial statements.All internal control systems, no matter how well designed, have inherent limitations, therefore, even those systems determined to be effective can provide only reasonableassurance with respect to financial statement preparation and presentation.Under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, management has assessed the effectiveness of theCompany’s internal control over financial reporting as of December 31, 2016 . To make this assessment, management used the criteria for effective internal control overfinancial reporting described in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based onthis assessment, management concludes that, as of December 31, 2016 , the Company’s internal control over financial reporting is effective based on those criteria.The Company’s internal control over financial reporting as of December 31, 2016 , has been audited by RSM US LLP, the independent registered public accounting firm thataudited the Company’s financial statements included in this report, and RSM’s attestation report is included below.Changes in Internal Control Over Financial ReportingExcept for the Merger, there have been no changes in the Company’s internal control over financial reporting during the quarter ended December 31, 2016 that have materiallyaffected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. In connection with the Merger, the Company’s managementcompleted its process of documenting and testing Cash America’s internal control over financial reporting, and incorporated Cash America into its annual assessment ofinternal control over financial reporting for the Company’s year ending December 31, 2016.65Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Board of Directors and StockholdersFirstCash, Inc.We have audited FirstCash, Inc. and subsidiaries’ (collectively, the “Company”) internal control over financial reporting as of December 31, 2016 , based on criteriaestablished in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. FirstCash, Inc.’smanagement is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financialreporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the company’sinternal control over financial reporting based on our audit.We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan andperform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit includedobtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. Webelieve that our audit provides a reasonable basis for our opinion.A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparationof financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes thosepolicies and procedures that (a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of thecompany; (b) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally acceptedaccounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;and (c) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have amaterial effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness tofuture periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or proceduresmay deteriorate.In our opinion, FirstCash, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2016 , based on criteria established inInternal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of FirstCash, Inc.and subsidiaries as of December 31, 2016 , and the related consolidated statements of income, comprehensive income, changes in stockholders’ equity and cash flows for theyear ended December 31, 2016 and our report dated March 1, 2017 expressed an unqualified opinion./s/ RSM US LLPDallas, TexasMarch 1, 201766Table of Contents Item 9B. Other InformationNot applicable.PART IIIItem 10. Directors, Executive Officers and Corporate GovernanceThe information required by Item 10 to this Annual Report on Form 10-K with respect to the directors, executive officers and compliance with Section 16(a) of the ExchangeAct is incorporated herein by reference from the information provided under the headings “Election of Directors,” “Executive Officers,” “Corporate Governance and BoardMatters” and “Section 16(a) Beneficial Ownership Reporting Compliance,” contained in the Company’s Proxy Statement to be filed with the SEC in connection with thesolicitation of proxies for the Company’s 2017 Annual Meeting of Stockholders to be held on or about June 8, 2017 (the “ 2017 Proxy Statement”).The Company has adopted a Code of Ethics that applies to all of its directors, officers, and employees. This Code of Ethics is publicly available on the Company’s website atwww.firstcash.com . The Company intends to disclose future amendments to, or waivers from, certain provisions of its Code of Ethics on its website in accordance withapplicable NYSE and SEC requirements. Copies of the Company’s Code of Ethics are also available, free of charge, by submitting a written request to FirstCash, Inc., InvestorRelations, 1600 West 7th Street, Fort Worth, Texas 76102.Item 11. Executive CompensationThe information required by Item 11 to this Annual Report on Form 10-K is incorporated herein by reference from the information provided under the headings “Executiveand Director Compensation” and “Compensation Committee Interlocks and Insider Participation” of the 2017 Proxy Statement.Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersThe information required by Item 12 to this Annual Report on Form 10-K is incorporated herein by reference from the information provided under the heading “EquityCompensation Plan Information” and “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” of the 2017 Proxy Statement.Item 13. Certain Relationships and Related Transactions, and Director IndependenceThe information required by Item 13 to this Annual Report on Form 10-K is incorporated herein by reference from the information provided under the headings “CertainRelationships and Related Person Transactions” and “Corporate Governance and Board Matters” of the 2017 Proxy Statement.Item 14. Principal Accountant Fees and ServicesThe information required by Item 14 to this Annual Report on Form 10-K is incorporated herein by reference from the information provided under the heading “Ratify theSelection of RSM US LLP as the Independent Registered Public Accounting Firm of the Company for the Year Ending December 31, 2017 ” of the 2017 Proxy Statement.67Table of Contents PART IVItem 15. Exhibits and Financial Statement Schedules(a)The following documents are filed as part of this report: (1)Consolidated Financial Statements:Page Report of Independent Registered Public Accounting FirmF-1 Consolidated Balance SheetsF-3 Consolidated Statements of IncomeF-4 Consolidated Statements of Comprehensive IncomeF-5 Consolidated Statements of Changes in Stockholders’ EquityF-6 Consolidated Statements of Cash FlowsF-9 Notes to Consolidated Financial StatementsF-11 (2)All schedules are omitted because they are not applicable or the required information is shown in the financial statements or the notes thereto. (3)Exhibits: Incorporated by Reference ExhibitNo. Exhibit Description Form FileNo. Exhibit Filing Date FiledHerewith2.1 Agreement and Plan of Merger, dated as of April 28,2016, by and among First Cash Financial Services,Inc., Frontier Merger Sub, LLC and Cash AmericaInternational, Inc.* 8-K 0-19133 2.1 04/28/2016 3.1 Amended and Restated Certificate of Incorporation DEF 14A 0-19133 B 04/29/2004 3.2 Amendment to Amended and Restated Certificate ofIncorporation 8-K 001-10960 3.1 09/02/2016 3.3 Amended and Restated Bylaws 8-K 001-10960 3.2 09/02/2016 4.1 Common Stock Specimen S-1 33-48436 4.2a 06/05/1992 4.2 Indenture, dated as of March 24, 2014, by and amongFirst Cash Financial Services, Inc., the guarantorslisted therein and BOKF, NA, dba Bank of Texas(including the form of Note attached as an exhibitthereto) 8-K 0-19133 4.1 03/25/2014 10.1 First Cash Financial Services, Inc. 2004Long-Term Incentive Plan ** DEF 14A 0-19133 A 04/29/2004 10.2 First Cash Financial Services, Inc. 2011Long-Term Incentive Plan ** DEF 14A 0-19133 A 04/28/2011 10.3 Amendment to the FirstCash, Inc. 2011 Long-TermIncentive Plan ** S-8 001-10960 99.2 11/04/2016 10.4 First Cash 401(k) Profit Sharing Plan, as amendedeffective as of October 1, 2010 (executed on August5, 2010) S-8 333-106881 4(g) 05/31/2012 10.5 Amended and Restated Credit Agreement, dated July25, 2016, between First Cash Financial Services,Inc., Certain Subsidiaries of the Borrower FromTime to Time Party Thereto, the Lenders PartyThereto, and Wells Fargo Bank, NationalAssociation 8-K 0-19133 10.1 07/26/2016 10.6 Employment Agreement between Rick L. Wesseland First Cash Financial Services, Inc., dated August26, 2016 ** 8-K 0-19133 10.1 08/26/2016 68Table of Contents Incorporated by Reference ExhibitNo. Exhibit Description Form File No. Exhibit Filing Date FiledHerewith10.7 Employment Agreement between T. Brent Stuartand First Cash Financial Services, Inc., datedAugust 26, 2016 ** 8-K 0-19133 10.2 08/26/2016 10.8 Employment Agreement between R. DouglasOrr and First Cash Financial Services, Inc.,dated August 26, 2016 ** 8-K 0-19133 10.3 08/26/2016 16.1 Letter from Hein & Associates LLP to theSecurities and Exchange Commission datedAugust 29, 2016 8-K 0-19133 16.1 08/29/2016 21.1 Subsidiaries X23.1 Consent of Independent Registered PublicAccounting Firm, RSM US LLP X23.2 Consent of Independent Registered PublicAccounting Firm, Hein & Associates LLP X31.1 Certification Pursuant to Section 302 of theSarbanes-Oxley Act provided by Rick L.Wessel, Chief Executive Officer X31.2 Certification Pursuant to Section 302 of theSarbanes-Oxley Act provided by R. DouglasOrr, Chief Financial Officer X32.1 Certification Pursuant to 18 U.S.C. Section1350, as Adopted Pursuant to Section 906 of theSarbanes-Oxley Act of 2002 provided by RickL. Wessel, Chief Executive Officer X32.2 Certification Pursuant to 18 U.S.C. Section1350, as Adopted Pursuant to Section 906 of theSarbanes-Oxley Act of 2002 provided by R.Douglas Orr, Chief Financial Officer X101 (1) The following financial information from theCompany's Annual Report on Form 10-K forfiscal 2016, filed with the SEC on March 1,2017, is formatted in Extensible BusinessReporting Language (XBRL): (i) ConsolidatedBalance Sheets at December 31, 2016 andDecember 31, 2015, (ii) ConsolidatedStatements of Income for the years endedDecember 31, 2016, December 31, 2015 andDecember 31, 2014, (iii) ConsolidatedStatements of Comprehensive Income (Loss) forthe years ended December 31, 2016, December31, 2015 and December 31, 2014, (iv)Consolidated Statements of Changes inStockholders’ Equity for the years endedDecember 31, 2016, December 31, 2015 andDecember 31, 2014, (v) ConsolidatedStatements of Cash Flows for the years endedDecember 31, 2016, December 31, 2015 andDecember 31, 2014, and (vi) Notes toConsolidated Financial Statements. X*The schedules to the Agreement and Plan of Merger have been omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K. Registrant will furnish copies ofsuch schedules to the U.S. Securities and Exchange Commission upon request by the Commission.**Indicates management contract or compensatory plan, contract or arrangement. (1) The XBRL related information in Exhibit 101 to this Annual Report on Form 10-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Actof 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the SecuritiesAct of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.69Table of Contents SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by theundersigned, thereunto duly authorized. Dated: March 1, 2017FIRSTCASH, INC. (Registrant) /s/ RICK L. WESSEL Rick L. Wessel Chief Executive OfficerPursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in thecapacities and on the dates indicated.SignatureCapacityDate /s/ RICK L. WESSELRick L. WesselVice-Chairman of the Board and Chief Executive Officer(Principal Executive Officer)March 1, 2017 /s/ R. DOUGLAS ORRR. Douglas OrrExecutive Vice President and Chief Financial Officer(Principal Financial and Accounting Officer)March 1, 2017 /s/ DANIEL R. FEEHAN Daniel R. FeehanChairman of the BoardMarch 1, 2017 /s/ DANIEL E. BERCEDaniel E. BerceDirectorMarch 1, 2017 /s/ MIKEL D. FAULKNERMikel D. FaulknerDirectorMarch 1, 2017 /s/ JAMES H. GRAVESJames H. GravesDirectorMarch 1, 2017 /s/ JORGE MONTAÑOJorge MontañoDirectorMarch 1, 2017 /s/ RANDEL G. OWENRandel G. OwenDirectorMarch 1, 201770Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and StockholdersFirstCash, Inc.We have audited the accompanying consolidated balance sheet of FirstCash, Inc., and subsidiaries (collectively, the “Company”) as of December 31, 2016 , and the relatedconsolidated statements of income, comprehensive income, changes in stockholders’ equity and cash flows (collectively, the “financial statements”) for the year endedDecember 31, 2016 . These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statementsbased on our audit.We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan andperform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of FirstCash, Inc., and subsidiaries as of December 31,2016 , and the results of their operations and their cash flows for the year ended December 31, 2016 , in conformity with U.S. generally accepted accounting principles.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), FirstCash, Inc.’s, and subsidiaries’ internalcontrol over financial reporting as of December 31, 2016 , based on criteria established in Internal Control-Integrated Framework issued by the Committee of SponsoringOrganizations of the Treadway Commission in 2013, and our report dated March 1, 2017 expressed an unqualified opinion on the effectiveness of FirstCash, Inc.’s internalcontrol over financial reporting./s/ RSM US LLPDallas, TexasMarch 1, 2017F-1Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and StockholdersFirstCash, Inc.We have audited the accompanying consolidated balance sheets of First Cash Financial Services, Inc. and subsidiaries (collectively, the “Company”) as of December 31, 2015,and the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the two years in the period ended December 31,2015. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on ouraudits.We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan andperform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of First Cash Financial Services, Inc. andsubsidiaries as of December 31, 2015, and the results of their operations and their cash flows for each of the two years in the period ended December 31, 2015, in conformitywith U.S. generally accepted accounting principles./s/ Hein & Associates LLPDallas, TexasFebruary 17, 2016F-2Table of Contents FIRSTCASH, INC.CONSOLIDATED BALANCE SHEETS(in thousands, except per share amounts) December 31, 2016 2015 ASSETS Cash and cash equivalents $89,955 $86,954 Fees and service charges receivable 41,013 16,406 Pawn loans 350,506 117,601 Consumer loans, net 29,204 1,118 Inventories 330,683 93,458 Income taxes receivable 25,510 3,567 Prepaid expenses and other current assets 25,264 6,330 Total current assets 892,135 325,434 Property and equipment, net 236,057 112,447 Goodwill 831,151 295,609 Intangible assets, net 104,474 6,181 Other assets 71,679 3,903 Deferred tax assets 9,707 9,321 Total assets $2,145,203 $752,895 LIABILITIES AND STOCKHOLDERS’ EQUITY Accounts payable and accrued liabilities $109,354 $27,826 Customer deposits 33,536 14,426 Income taxes payable 738 3,923 Total current liabilities 143,628 46,175 Revolving unsecured credit facilities 260,000 58,000 Senior unsecured notes 196,545 195,874 Deferred tax liabilities 61,275 21,464 Other liabilities 33,769 — Total liabilities 695,217 321,513 Commitments and contingencies (Note 13) Stockholders’ equity: Preferred stock; $0.01 par value; 10,000 shares authorized; no shares issued or outstanding — — Common stock; $0.01 par value; 90,000 shares authorized; 49,276 and 40,288 shares issued, respectively; 48,507 and 28,236 shares outstanding, respectively 493 403 Additional paid-in capital 1,217,969 202,393 Retained earnings 387,401 643,604 Accumulated other comprehensive loss (119,806) (78,410) Common stock held in treasury, 769 and 12,052 shares at cost, respectively (36,071) (336,608) Total stockholders’ equity 1,449,986 431,382 Total liabilities and stockholders’ equity $2,145,203 $752,895 The accompanying notes are an integral partof these consolidated financial statements.F-3Table of Contents FIRSTCASH, INC.CONSOLIDATED STATEMENTS OF INCOME(in thousands, except per share amounts) Year Ended December 31, 2016 2015 2014Revenue: Retail merchandise sales $669,131 $449,296 $428,182Pawn loan fees 312,757 195,448 199,357Consumer loan and credit services fees 43,851 27,803 36,749Wholesale scrap jewelry sales 62,638 32,055 48,589Total revenue 1,088,377 704,602 712,877 Cost of revenue: Cost of retail merchandise sold 418,556 278,631 261,673Consumer loan and credit services loss provision 11,993 7,159 9,287Cost of wholesale scrap jewelry sold 53,025 27,628 41,044Total cost of revenue 483,574 313,418 312,004 Net revenue 604,803 391,184 400,873 Expenses and other income: Store operating expenses 328,014 207,572 198,986Administrative expenses 96,537 51,883 53,588Depreciation and amortization 31,865 17,939 17,476Interest expense 20,320 16,887 13,527Interest income (751) (1,566) (682)Merger and other acquisition expenses 36,670 2,875 998Goodwill impairment - U.S. consumer loan operations — 7,913 —Net gain on sale of common stock of Enova (1,299) — —Total expenses and other income 511,356 303,503 283,893 Income from continuing operations before income taxes 93,447 87,681 116,980 Provision for income taxes 33,320 26,971 31,542 Income from continuing operations 60,127 60,710 85,438 Loss from discontinued operations, net of tax — — (272)Net income $60,127 $60,710 $85,166 Basic income per share: Income from continuing operations $1.72 $2.16 $2.98Loss from discontinued operations — — (0.01)Net income per basic share $1.72 $2.16 $2.97 Diluted income per share: Income from continuing operations $1.72 $2.14 $2.94Loss from discontinued operations — — (0.01)Net income per diluted share $1.72 $2.14 $2.93 Dividends declared per common share $0.565 $— $— The accompanying notes are an integral partof these consolidated financial statements.F-4Table of Contents FIRSTCASH, INC.CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(in thousands) Year Ended December 31, 2016 2015 2014Net income $60,127 $60,710 $85,166Other comprehensive income (loss): Currency translation adjustment (41,396) (38,132) (28,517)Comprehensive income $18,731 $22,578 $56,649 The accompanying notes are an integral part of these consolidated financial statements.F-5Table of Contents FIRSTCASH, INC.CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY(in thousands) PreferredStock CommonStock AdditionalPaid-InCapital RetainedEarnings Accum-ulatedOtherCompre-hensiveLoss Common StockHeld in Treasury TotalStock-holders’Equity Shares Amount Shares Amount Shares Amount Balance at12/31/2015 — $— 40,288 $403 $202,393 $643,604 $(78,410) 12,052 $(336,608) $431,382Shares issuedunder share-based com-pensationplan — — 7 — (3,903) — — (83) 3,903 —Shares issuedupon mergerwith CashAmerica — — 20,181 202 1,015,305 — — — — 1,015,507Share-basedcompensationexpense — — — — 4,174 — — — — 4,174Net income — — — — — 60,127 — — — 60,127Dividends paid — — — — — (19,808) — — — (19,808)Currencytranslationadjustment — — — — — — (41,396) — — (41,396)Retirement oftreasury stock — — (11,200) (112) — (296,522) — (11,200) 296,634 —Balance at12/31/2016 — $— 49,276 $493 $1,217,969 $387,401 $(119,806) 769 $(36,071) $1,449,986 The accompanying notes are an integral partof these consolidated financial statements.F-6Table of Contents FIRSTCASH, INC.CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITYCONTINUED(in thousands) PreferredStock CommonStock AdditionalPaid-InCapital RetainedEarnings Accum-ulatedOtherCompre-hensiveLoss Common StockHeld in Treasury TotalStock-holders’Equity Shares Amount Shares Amount Shares Amount Balance at12/31/2014 — $— 39,708 $397 $188,062 $582,894 $(40,278) 11,200 $(296,634) $434,441Shares issuedunder share-based com-pensationplan — — 5 — — — — — — —Exercise ofstock options,net of 80shares net-settled — — 575 6 8,776 — — — — 8,782Income taxbenefit fromexercise ofstock options — — — — 5,126 — — — — 5,126Share-basedcompensationexpense — — — — 429 — — — — 429Net income — — — — — 60,710 — — — 60,710Currencytranslationadjustment — — — — — — (38,132) — — (38,132)Repurchasesof treasurystock — — — — — — — 852 (39,974) (39,974)Balance at12/31/2015 — $— 40,288 $403 $202,393 $643,604 $(78,410) 12,052 $(336,608) $431,382 The accompanying notes are an integral partof these consolidated financial statements.F-7Table of Contents FIRSTCASH, INC.CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITYCONTINUED(in thousands) PreferredStock CommonStock AdditionalPaid-InCapital RetainedEarnings Accum-ulatedOtherCompre-hensiveLoss Common StockHeld in Treasury TotalStock-holders’Equity Shares Amount Shares Amount Shares Amount Balance at12/31/2013 — $— 39,377 $394 $176,675 $497,728 $(11,761) 10,429 $(252,687) $410,349Shares issuedunder share-based com-pensationplan — — 37 — — — — — — —Exercise ofstock options — — 294 3 5,267 — — — — 5,270Income taxbenefit fromexercise ofstock options — — — — 4,141 — — — — 4,141Share-basedcompensationexpense — — — — 1,979 — — — — 1,979Net income — — — — — 85,166 — — — 85,166Currencytranslationadjustment — — — — — — (28,517) — — (28,517)Repurchasesof treasurystock — — — — — — — 771 (43,947) (43,947)Balance at12/31/2014 — $— 39,708 $397 $188,062 $582,894 $(40,278) 11,200 $(296,634) $434,441 The accompanying notes are an integral partof these consolidated financial statements.F-8Table of Contents FIRSTCASH, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands) Year Ended December 31, 2016 2015 2014Cash flow from operating activities: Net income$60,127 $60,710 $85,166Adjustments to reconcile net income to net cash flow provided byoperating activities: Non-cash portion of credit loss provision5,970 761 916Share-based compensation expense4,174 429 1,979Net gain on sale of common stock of Enova(1,299) — —Depreciation and amortization expense31,865 17,939 17,476Amortization of debt issuance costs1,427 943 902Amortization of favorable/unfavorable lease intangibles, net(232) — —Impairment of goodwill - U.S. consumer loan operations— 7,913 —Deferred income taxes11,912 (430) 1,128Changes in operating assets and liabilities, net of businesscombinations: Fees and service charges receivable1,776 (100) (116)Merchandise inventories(4,619) (1,404) (1,364)Prepaid expenses and other assets4,878 490 (1,645)Accounts payable, accrued expenses and other liabilities(16,335) 4,350 1,272Income taxes payable(2,790) 1,148 (8,035)Net cash flow provided by operating activities96,854 92,749 97,679Cash flow from investing activities: Loan receivables, net of cash repayments(16,072) (3,716) (2,470)Purchases of property and equipment(33,863) (21,073) (23,954)Portion of aggregate merger consideration paid in cash, net of cashacquired(8,250) — —Acquisitions of pawn stores, net of cash acquired(29,866) (46,887) (58,942)Proceeds from sale of common stock of Enova62,084 — —Net cash flow used in investing activities(25,967) (71,676) (85,366)Cash flow from financing activities: Borrowings from revolving credit facilities400,000 120,000 50,000Repayments of revolving credit facilities(198,000) (84,400) (209,600)Repayments of debt assumed with merger and other acquisitions(238,532) — —Repayments of notes payable— — (8,352)Issuance of senior unsecured notes— — 200,000Debt issuance costs paid(2,373) (407) (6,610)Purchases of treasury stock— (39,974) (43,947)Proceeds from exercise of share-based compensation awards— 9,895 5,270Income tax benefit from exercise of stock options— 5,126 4,141Dividends paid(19,808) — —Payment of minimum withholding taxes on net share settlement of stockoptions exercised— (1,113) —Net cash flow provided by (used in) financing activities(58,713) 9,127 (9,098)Effect of exchange rates on cash(9,173) (11,238) (5,866) F-9Table of Contents FIRSTCASH, INC.CONSOLIDATED STATEMENTS OF CASH FLOWSCONTINUED(in thousands) Year Ended December 31, 2016 2015 2014Change in cash and cash equivalents3,001 18,962 (2,651)Cash and cash equivalents at beginning of the year86,954 67,992 70,643Cash and cash equivalents at end of the year$89,955 $86,954 $67,992 Supplemental disclosure of cash flow information: Cash paid during the period for: Interest$18,663 $15,464 $10,294Income taxes21,535 21,579 32,860 Supplemental disclosure of non-cash investing and financing activity: Non-cash transactions in connection with pawn loans settled throughforfeitures of collateral transferred to inventories$265,060 $186,389 $177,519Amounts payable in connection with pawn acquisitions (see Note 3)2,554 575 1,425Issuance of common stock associated with the Merger (see Note 3)1,015,507 — —Revolving unsecured credit facilities assumed as a result of the Merger(see Note 3)(232,000) — —Notes payable assumed in other acquisitions (see Note 3)(6,630) — — The accompanying notes are an integral partof these consolidated financial statements. F-10Table of Contents FIRSTCASH, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Dollars in thousands except per share amounts, unless otherwise indicated)NOTE 1 - ORGANIZATION AND NATURE OF THE COMPANYFirstCash, Inc., (together with its wholly-owned subsidiaries, the “Company”) is incorporated in the state of Delaware. The Company is engaged primarily in the operation ofpawn stores, which lend money on the collateral of pledged personal property and retail previously owned merchandise acquired through pawn forfeitures and purchasesdirectly from the general public. The Company also retails limited quantities of new or refurbished merchandise obtained directly from wholesalers and manufacturers. Inaddition to making short-term secured pawn loans, certain of the Company’s pawn stores offer short-term consumer loans and credit services. The Company also operatesconsumer loan stores that provide consumer loans, credit services and check cashing services. As of December 31, 2016 , the Company owned and operated 2,012 pawn storesand 73 consumer loan stores in 26 U.S. states, 32 states in Mexico and the countries of Guatemala and El Salvador.On September 1, 2016, the Company completed a merger of equals with Cash America International, Inc. (“Cash America”), whereby Cash America merged with and into awholly owned subsidiary of the Company (the “Merger”). Following the Merger, the Company changed its name from First Cash Financial Services, Inc. to FirstCash, Inc.The accompanying audited consolidated statements of income for the year ended December 31, 2016 include the results of operations for Cash America for the periodSeptember 2, 2016 to December 31, 2016. The accompanying audited consolidated balance sheet at December 31, 2016 includes the preliminary valuation of the assetsacquired and liabilities assumed. See Note 3 for additional information about the Merger.NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESThe following is a summary of significant accounting policies followed in the preparation of these financial statements:Principles of consolidation - The accompanying consolidated financial statements include the accounts of FirstCash, Inc. and its wholly-owned subsidiaries. The Companyregularly makes acquisitions and the results of operations for the acquired stores have been consolidated since the acquisition dates. All significant intercompany accounts andtransactions have been eliminated. See Note 3 .Cash and cash equivalents - The Company considers any highly liquid investments with an original maturity of three months or less at the date of acquisition to be cashequivalents. As of December 31, 2016 , the amount of cash associated with indefinitely reinvested foreign earnings was approximately $45,809 , which is primarily held inMexican pesos.Customer loans and revenue recognition - Pawn loans typically have a term of 30 days and are secured by the customer’s pledge of tangible personal property. If a pawn loandefaults, the Company relies on the sale of pawned property to recover the principal amount of an unpaid pawn loan, plus a yield on the investment, because the Company’spawn loans are non-recourse against the customer. The customer’s creditworthiness does not affect the Company’s financial position or results of operations. The Companyaccrues pawn loan fee revenue on a constant-yield basis over the life of the pawn loan for all pawns for which the Company deems collection to be probable based on historicalpawn redemption statistics. If the pawn is not repaid, the principal amount loaned becomes the carrying value of the forfeited collateral, which is recovered through sales toother customers at prices above the carrying value.The Company’s pawn merchandise sales are primarily retail sales to the general public in its pawn stores. The Company acquires pawn merchandise inventory throughforfeited pawns and through purchases of used goods directly from the general public. The Company also retails limited quantities of new or refurbished merchandise obtaineddirectly from wholesalers and manufacturers. The Company records sales revenue at the time of the sale. The Company presents merchandise sales net of any sales or value-added taxes collected. The Company does not provide direct financing to customers for the purchase of its merchandise, but does permit its customers to purchase merchandiseon an interest-free layaway plan. Should the customer fail to make a required payment pursuant to a layaway plan, the previous payments are forfeited to the Company. Interimpayments from customers on layaway sales are recorded as deferred revenue and subsequently recorded as retail merchandise sales revenue when the final payment is receivedor when previous payments are forfeited to the Company. Some jewelry is melted at a third-party facility and the precious metal content is sold at either prevailing marketcommodity prices or a previously agreed upon price with a commodity buyer. The Company records revenue from these wholesale scrap jewelry transactions when a price hasbeen agreed upon and the Company ships the jewelry to the buyer.F-11Table of Contents Consumer loans are unsecured cash advances and installment loans with terms that typically range from 7 to 365 days. The Company accrues consumer loan fees on aconstant-yield basis over the term of the consumer loan. The Company offers a fee-based credit services organization program (“CSO Program”) to assist consumers inobtaining extensions of credit from independent, non-bank, consumer lending companies (the “Independent Lenders”). The Company’s stand-alone consumer loan stores andselect pawn stores in Texas and Ohio offer the CSO Program and credit services are also offered via an internet platform for Texas residents. The Company’s CSO Programcomplies with the respective jurisdiction’s credit services organization act, credit access business law or a similar statute. The Company recognizes credit services fees ratablyover the life of the extension of credit made by the Independent Lenders. The extensions of credit made by the Independent Lenders to credit services customers of theCompany have terms of 7 to 365 days. Credit loss provisions - The Company has determined no allowance related to credit losses on pawn loans is required as the fair value of the pledged collateral is significantlyin excess of the pawn loan amount. The Company maintains an allowance for credit losses on consumer loans on an aggregate basis at a level it considers sufficient to coverestimated losses in the collection of its consumer loans. The allowance for credit losses is based primarily upon historical credit loss experience, with consideration given torecent credit loss trends and changes in loan characteristics (e.g., average amount financed and term), delinquency levels, collateral values, economic conditions andunderwriting and collection practices. The allowance for credit losses is periodically reviewed by management with any changes reflected in current operations.The Company fully reserves or charges off consumer loans once the loan has been classified as delinquent for 60 days. Short-term loans are considered delinquent whenpayment of an amount due is not made as of the due date. Installment loans are considered delinquent when a customer misses two payments. If a loan is estimated to beuncollectible before it is fully reserved, it is charged off at that point. Recoveries on loans previously charged to the allowance, including the sale of delinquent loans tounaffiliated third parties, are credited to the allowance when collected or when sold to a third party. The Company generally does not accrue interest on delinquent consumerloans. In addition, delinquent consumer loans generally may not be renewed, and if, during its attempt to collect on a delinquent consumer loan, the Company allows additionaltime for payment through a payment plan or a promise to pay, it is still considered delinquent. Generally, all payments received are first applied against accrued but unpaidinterest and fees and then against the principal balance of the loan.Under the CSO Program, the Company assists customers in applying for a short-term extension of credit from Independent Lenders and issues the Independent Lenders aguarantee for the repayment of the extension of credit. The Company is required to recognize, at the inception of the guarantee, a liability for the fair value of the obligationundertaken by issuing the guarantee. According to the guarantee, if the borrower defaults on the extension of credit, the Company will pay the Independent Lenders theprincipal, accrued interest, insufficient funds and late fee, if applicable, all of which the Company records as a component of its credit loss provision. The Company is entitledto seek recovery, directly from its customers, of the amounts it pays the Independent Lenders in performing under the guarantees. The Company records the estimated fairvalue of the liability in accrued liabilities. The estimated fair value of the liability is periodically reviewed by management with any changes reflected in current operations.Although it is at least reasonably possible that events or circumstances could occur in the future that are not presently foreseen which could cause actual credit losses to bematerially different from the recorded allowance for credit losses, the Company believes it has given appropriate consideration to all relevant factors and has made reasonableassumptions in determining the allowance for credit losses.Foreign currency transactions - The Company has significant operations in Mexico, and to a lesser extent Guatemala, where the functional currency is the Mexican peso andGuatemalan quetzal, respectively. Accordingly, the assets and liabilities of these subsidiaries are translated into U.S. dollars at the exchange rate in effect at each balance sheetdate, and the resulting adjustments are accumulated in other comprehensive income (loss) as a separate component of stockholders’ equity. Revenue and expenses aretranslated at the average exchange rates occurring during the respective fiscal period. Prior to translation, U.S. dollar-denominated transactions of the foreign subsidiaries areremeasured into their functional currency using current rates of exchange for monetary assets and liabilities and historical rates of exchange for non-monetary assets andliabilities. Gains and losses from remeasurement of dollar-denominated monetary assets and liabilities in Mexico and Guatemala are included in store operating expenses.Deferred taxes are not currently provided on cumulative foreign currency translation adjustments as the Company indefinitely reinvests earnings of its foreign subsidiaries. TheCompany also has operations in El Salvador where the reporting and functional currency is the U.S. dollar.The average value of the Mexican peso to the U.S. dollar exchange rate for fiscal 2016 was 18.7 to 1 , compared to 15.8 to 1 in fiscal 2015 and 13.3 to 1 in fiscal 2014 . Theaverage value of the Guatemalan quetzal to the U.S. dollar exchange rate for fiscal 2016 was 7.6 to 1 , compared to 7.7 to 1 in fiscal 2015 .F-12Table of Contents Store operating expenses - Costs incurred in operating the pawn stores and consumer loan stores have been classified as store operating expenses. Operating expenses includesalary and benefit expense of store-level employees, occupancy costs, bank charges, security, insurance, utilities, supplies and other costs incurred by the stores.Layaway and deferred revenue - Interim payments from customers on layaway sales are credited to deferred revenue and subsequently recorded as retail merchandise salesrevenue when the final payment is received or when the previous payments are forfeited to the Company. Layaway payments from customers are included in customer depositsin the accompanying consolidated balance sheets.Inventories - Inventories represent merchandise acquired from forfeited pawns and merchandise purchased directly from the general public. The Company also retails limitedquantities of new or refurbished merchandise obtained directly from wholesalers and manufacturers. Inventories from forfeited pawns are recorded at the amount of the pawnprincipal on the unredeemed goods, exclusive of accrued interest. Inventories purchased directly from customers, wholesalers and manufacturers are recorded at cost. The costof inventories is determined on the specific identification method. Inventories are stated at the lower of cost or market value and, accordingly, inventory valuation allowancesare established when inventory carrying values are in excess of estimated selling prices, net of direct costs of disposal. Management has evaluated inventories and determinedthat a valuation allowance is not necessary.Property and equipment - Property and equipment are recorded at cost. Depreciation is recorded on the straight-line method based on estimated useful lives of 30 to 40 yearsfor buildings and three to five years for furniture, fixtures and equipment. The costs of improvements on leased stores are capitalized as leasehold improvements and areamortized on the straight-line method over the applicable lease period, or useful life, if shorter. Maintenance and repairs are charged to expense as incurred; renewals andbetterments are charged to the appropriate property and equipment accounts. Upon sale or retirement of depreciable assets, the cost and related accumulated depreciation isremoved from the accounts, and the resulting gain or loss is included in the results of operations in the period the assets are sold or retired.Goodwill and other indefinite-lived intangible assets - Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in each businesscombination. The Company performs its goodwill impairment assessment annually as of December 31, and between annual assessments if an event occurs or circumstanceschange that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company’s reporting units, which are tested for impairment,are U.S. operations and Latin America operations. The Company assesses goodwill for impairment at a reporting unit level by first assessing a range of qualitative factors,including, but not limited to, macroeconomic conditions, industry conditions, the competitive environment, changes in the market for the Company’s products and services,regulatory and political developments, entity specific factors, such as strategy and changes in key personnel, and overall financial performance. If, after completing thisassessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, the Company proceeds to the two-step impairmenttesting methodology. As described in Note 14 , the Company recorded a goodwill impairment charge related to its U.S. consumer loan operations reporting unit, which is nolonger a reporting unit for goodwill impairment testing, of $7,913 in fiscal 2015.The Company’s indefinite-lived intangible assets consist of trade names, pawn licenses and franchise agreements related to a check-cashing operation. The Company performsits indefinite-lived intangible asset impairment assessment annually as of December 31, and between annual assessments if an event occurs or circumstances change that wouldmore likely than not reduce the fair value of a reporting unit below its carrying amount. The Company determined there was no impairment as of December 31, 2016 and 2015.Long-lived assets - Property and equipment, intangible assets subject to amortization and non-current assets are reviewed for impairment whenever events or changes incircumstances indicate that the net book value of the asset may not be recoverable. An impairment loss is recognized if the sum of the expected future cash flows(undiscounted and before interest) from the use of the asset is less than the net book value of the asset. Generally, the amount of the impairment loss is measured as thedifference between the net book value of the asset and the estimated fair value of the related asset. The Company has not recorded any material impairment loss for the fiscalyears ended December 31, 2016 , 2015 and 2014 .Fair value of financial instruments - The fair value of financial instruments is determined by reference to various market data and other valuation techniques, as appropriate.Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significanceof a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fairvalue hierarchy levels. All fair value measurements related to acquisitions are level 3, non-recurring measurements, based on non-observable inputs. Unless otherwisedisclosed, the fair values of financial instruments approximate their recorded values, due primarily to their short-term nature. See Note 7 .F-13Table of Contents Income taxes - The Company uses the liability method of computing deferred income taxes on all material temporary differences. Temporary differences are the differencesbetween the reported amounts of assets and liabilities and their tax bases. See Note 12 .Advertising - The Company expenses the costs of advertising the first time the advertising takes place. Advertising expense for the fiscal years ended December 31, 2016 ,2015 and 2014 , was $1,878 , $679 , and $1,328 , respectively.Share-based compensation - All share-based payments to employees or directors are recognized in the financial statements based on the grant date or if applicable, thesubsequent modification date fair value. The Company recognizes compensation cost net of estimated forfeitures and recognizes the compensation cost for only those awardsexpected to vest on a straight-line basis over the requisite service period of the award, which is generally the vesting term. The Company records share-based compensationcost as an administrative expense. See Note 15 .Earnings per share - Basic income per share is computed by dividing income by the weighted-average number of shares outstanding during the year. Diluted income per shareis 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 sharesduring the year.The following table sets forth the computation of basic and diluted earnings per share: Year Ended December 31, 2016 2015 2014Numerator: Income from continuing operations for calculating basic and dilutedearnings per share$60,127 $60,710 $85,438Loss from discontinued operations— — (272)Net income for calculating basic and diluted earnings per share$60,127 $60,710 $85,166 Denominator (in thousands): Weighted-average common shares for calculating basic earnings pershare34,997 28,138 28,671Effect of dilutive securities: Stock options and nonvested awards7 188 399Weighted-average common shares for calculating diluted earningsper share35,004 28,326 29,070 Basic earnings per share: Income from continuing operations$1.72 $2.16 $2.98Loss from discontinued operations— — (0.01)Net income per basic share$1.72 $2.16 $2.97 Diluted earnings per share: Income from continuing operations$1.72 $2.14 $2.94Loss from discontinued operations— — (0.01)Net income per diluted share$1.72 $2.14 $2.93Pervasiveness of estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requiresmanagement to make estimates and assumptions that affect the reported amounts of assets and liabilities, and related revenue and expenses, and the disclosure of gain and losscontingencies at the date of the financial statements. Such estimates and assumptions are subject to a number of risks and uncertainties, which may cause actual results to differmaterially from the Company’s estimates. Significant estimates include allowances for doubtful accounts receivable and related credit loss provisions, impairment of goodwilland current and deferred tax assets and liabilities.F-14Table of Contents Reclassifications - Certain amounts for the years ended December 31, 2015 and 2014 have been reclassified in order to conform to the 2016 presentation. See “—Recentaccounting pronouncements” below regarding the impact of the Company’s adoption of ASU No. 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifyingthe Presentation of Debt Issuance Costs” (“ASU 2015-03”) on the classification of debt issuance costs in the Company’s consolidated balance sheets.Recent accounting pronouncements - In May 2014, the Financial Accounting Standards Board issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic606)” (“ASU 2014-09”). ASU 2014-09 is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods orservices to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. ASU 2014-09 also requires additionaldisclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes injudgments and assets recognized from costs incurred to obtain or fulfill a contract. In August 2015, the Financial Accounting Standards Board issued ASU No. 2015-14“Revenue from Contracts with Customers (Topic 606),” which delayed the effective date of ASU 2014-09 by one year. In addition, between March 2016 and December 2016,the Financial Accounting Standards Board issued ASU No. 2016-08, “Revenue from Contracts with Customers - Principal versus Agent Considerations (Reporting revenuegross versus net)” (“ASU 2016-08”), ASU No. 2016-10, “Identifying Performance Obligations and Licensing” (“ASU 2016-10”), ASU No. 2016-12, “Revenue from Contractswith Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” (“ASU 2016-12”), and ASU No. 2016-20, “Technical Corrections and Improvements toTopic 606, Revenue from Contracts with Customers” (“ASU 2016-20”). ASU 2016-08, ASU 2016-10, ASU 2016-12 and ASU 2016-20 clarify certain aspects of ASU 2014-09 and provide additional implementation guidance. ASU 2014-09, ASU 2016-08, ASU 2016-10, ASU 2016-12 and ASU 2016-20 become effective for annual reportingperiods (including interim periods within those periods) beginning after December 15, 2017 for public companies. Early adoption is permitted but not before annual reportingperiods beginning after December 15, 2016. Entities are permitted to apply ASU 2014-09, ASU 2016-08, ASU 2016-10, ASU 2016-12 and ASU 2016-20 either retrospectivelyor through an alternative transition model. The Company is currently assessing the potential impact of ASU 2014-09, ASU 2016-08, ASU 2016-10, ASU 2016-12 and ASU2016-20 on its consolidated financial statements.In April 2015, the Financial Accounting Standards Board issued ASU No. 2015-03, which requires debt issuance costs related to a recognized debt liability be presented in thebalance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. In August 2015, the Financial AccountingStandards Board issued ASU No. 2015-15, “Interest—Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associatedwith Line-of-Credit Arrangements” (“ASU2015-15”), which clarified the guidance in ASU 2015-03 regarding presentation and subsequent measurement of debt issuance costsrelated to line of credit arrangements. The SEC Staff announced they would not object to an entity deferring and presenting debt issuance costs as an asset and subsequentlyamortizing the deferred debt issuance costs ratably over the term of the line of credit arrangement, regardless of whether there are any outstanding borrowings on the line ofcredit arrangement. ASU 2015-03 requires retrospective application and represents a change in accounting principle. ASU 2015-03 is effective for fiscal years beginning afterDecember 15, 2015 and interim periods within those fiscal years. The adoption of ASU 2015-03 resulted in a $3,455 and $4,126 decrease in other assets and senior unsecurednotes in the accompanying consolidated balance sheets as of December 31, 2016 and 2015, respectively. The Company elected to present debt issuance costs related to theCompany’s revolving unsecured credit facilities as an asset as allowed in ASU 2015-15.In July 2015, the Financial Accounting Standards Board issued ASU No. 2015-11, “Simplifying the Measurement of Inventory” (“ASU 2015-11”). ASU 2015-11 requiresinventory be measured at the lower of cost or net realizable value. ASU 2015-11 defines net realizable value as the estimated selling price in the ordinary course of business,less reasonably predictable costs of completion, disposal, and transportation. Inventory measured using last-in, first-out (“LIFO”) or the retail inventory method are excludedfrom the scope of this update. ASU 2015-11 requires prospective application and is effective for fiscal years beginning after December 15, 2016 and interim periods withinthose fiscal years, with early adoption permitted. The Company does not expect ASU 2015-11 to have a material effect on the Company’s current financial position, results ofoperations or financial statement disclosures.In February 2016, the Financial Accounting Standards Board issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). ASU 2016-02 requires a lessee to recognize,in the statement of financial position, a liability to make lease payments (the lease liability) and a right-to-use asset representing its right to use the underlying asset for thelease term. Leases will be classified as either financing or operating, with classification affecting the pattern of expense recognition in the income statement. Lessor accountingremains largely unchanged. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods, withearly adoption permitted. An entity will be required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach.The Company is currently assessing the potential impact of ASU 2016-02 on its consolidated financial statements.F-15Table of Contents In March 2016, the Financial Accounting Standards Board issued ASU No. 2016-09, “Compensation-Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). Under ASU 2016-09, companies will no longer record excess tax benefits and certain tax deficiencies in additional paid-incapital (“APIC”). Instead, they will record all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement and the APIC pools will beeliminated. In addition, ASU 2016-09 eliminates the requirement that excess tax benefits be realized before companies can recognize them. ASU 2016-09 also requirescompanies to present excess tax benefits as an operating activity on the statement of cash flows rather than as a financing activity. Furthermore, ASU 2016-09 will increase theamount an employer can withhold to cover income taxes on awards and still qualify for the exception to liability classification for shares used to satisfy the employer’sstatutory income tax withholding obligation. An employer with a statutory income tax withholding obligation will now be allowed to withhold shares with a fair value up tothe amount of taxes owed using the maximum statutory tax rate in the employee’s applicable jurisdiction(s). ASU 2016-09 requires a company to classify the cash paid to a taxauthority when shares are withheld to satisfy its statutory income tax withholding obligation as a financing activity on the statement of cash flows. Under current GAAP, it wasnot specified how these cash flows should be classified. In addition, companies will now have to elect whether to account for forfeitures on share-based payments by (1)recognizing forfeitures of awards as they occur or (2) estimating the number of awards expected to be forfeited and adjusting the estimate when it is likely to change, as iscurrently required. ASU 2016-09 is effective for reporting periods beginning after December 15, 2016, with early adoption permitted and requires either prospective orretrospective application depending on the item addressed. The Company early adopted ASU 2016-09 during the third quarter of 2016, which did not have a material effect onthe Company’s current financial position, results of operations or financial statement disclosures.In June 2016, the Financial Accounting Standards Board issued ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses onFinancial Instruments” (“ASU 2016-13”). ASU 2016-13 amends the impairment model by requiring entities to use a forward-looking approach based on expected losses toestimate credit losses on certain types of financial instruments, including trade receivables. ASU 2016-13 is effective for public entities for fiscal years beginning afterDecember 15, 2019, with early adoption permitted. The Company is currently assessing the potential impact of ASU 2016-13 on its consolidated financial statements.In August 2016, the Financial Accounting Standards Board issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and CashPayments” (“ASU 2016-15”). ASU 2016-15 clarifies how companies present and classify certain cash receipts and cash payments in the statement of cash flows. ASU 2016-15addresses eight specific cash flow issues with the objective of reducing existing diversity in practice. ASU 2016-15 is effective for public entities for fiscal years beginningafter December 15, 2017, with early adoption permitted. The Company is currently assessing the potential impact of ASU 2016-15 on its consolidated financial statements.In January 2017, the Financial Accounting Standards Board issued ASU No. 2017-01, “Business Combinations (Topic 805) - Clarifying the Definition of a Business” (“ASU2017-01”). ASU 2017-01 provides amendments to clarify the definition of a business and affect all companies and other reporting organizations that must determine whetherthey have acquired or sold a business. The amendments are intended to help companies and other organizations evaluate whether transactions should be accounted for asacquisitions (or disposals) of assets or businesses. The guidance is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periodswithin those fiscal years and should be applied prospectively as of the beginning of the period of adoption. Early adoption is permitted under certain circumstances. TheCompany does not expect ASU 2017-01 to have a material effect on the Company’s current financial position, results of operations or financial statement disclosures.In January 2017, the Financial Accounting Standards Board issued ASU No. 2017-04, “Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for GoodwillImpairment” (“ASU 2017-04”). These amendments eliminate step 2 from the goodwill impairment test. The amendments also eliminate the requirements for any reporting unitwith a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform step 2 of the goodwill impairment test. An entity stillhas the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The guidance is effective for annual orany interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment testsperformed on testing dates after January 1, 2017. ASU 2017-04 should be adopted on a prospective basis. The Company does not expect ASU 2017-04 to have a materialeffect on the Company’s current financial position, results of operations or financial statement disclosures.F-16Table of Contents NOTE 3 - MERGER AND OTHER ACQUISITIONSCash America MergerOn September 1, 2016, the Company completed its previously announced merger of equals business combination with Cash America as contemplated by the Agreement andPlan of Merger, dated as of April 28, 2016 (the “Merger Agreement”), by and among the Company, Cash America and Frontier Merger Sub LLC, a wholly owned subsidiaryof the Company (“Merger Sub”). Pursuant to the Merger Agreement, Cash America merged with and into Merger Sub, with Merger Sub continuing as the surviving entity inthe Merger and a wholly owned subsidiary of the Company.In conjunction with the closing of the Merger, the Company changed its name to FirstCash, Inc. and transferred the listing of its common stock from the NASDAQ GlobalSelect Market to the New York Stock Exchange under the ticker symbol “FCFS.” The headquarters of the combined company was moved to the former Cash Americaheadquarters in Fort Worth, Texas. The Merger creates the largest combined retail pawn store operator in Latin America and the U.S., with over 2,000 locations across fourcountries. The combined company provides significant scale and a unified platform for leadership in the pawn industry while keeping the strong local presence and establishedbrands from both companies.Under the terms of the Merger Agreement, each former share of Cash America common stock issued and outstanding immediately prior to September 1, 2016 was converted to0.84 shares of the Company’s common stock with fractional shares paid in cash. As a result, the Company issued approximately 20,181,000 shares of its common stock toformer holders of Cash America common stock. Immediately following the Merger, the Company’s shareholders owned approximately 58% of the common stock of theCompany, and the former Cash America shareholders owned approximately 42% . Additionally, Cash America employee and director based restricted stock awardsoutstanding immediately prior to the Merger were fully-vested and paid out in cash in conjunction with the closing of the Merger. The Company was determined to be theaccounting acquirer in the Merger.The following table summarizes the consideration transferred in connection with the merger: Cash AmericaMergerCash America shares outstanding at September 1, 2016 (in thousands)24,025Exchange ratio0.84Shares of First Cash common stock issued (in thousands)20,181Company common stock per share price at September 1, 2016$50.32Fair value of Company common stock issued to Cash America shareholders$1,015,507Cash in lieu of fractional shares paid by the Company10Cash America outstanding stock awards settled in cash50,760Aggregate merger consideration$1,066,277The Company has performed a valuation analysis of identifiable assets acquired and liabilities assumed and allocated the aggregate merger consideration based on the fairvalues of those identifiable assets and liabilities. The purchase price allocation is subject to change as the Company finalizes the analysis of the fair value at the date of theMerger. The final determination of the fair value of assets acquired and liabilities assumed will be completed within the twelve month measurement period from the date of theMerger as required by applicable accounting guidance. Due to the significance of the Merger, the Company may use all of this measurement period to adequately analyze andassess the fair values of assets acquired and liabilities assumed.F-17Table of Contents The allocation of the aggregate merger consideration, subject to future measurement period adjustments, is as follows: Cash AmericaMergerCash and cash equivalents$42,520Pawn loans234,761Fees and service charges receivable26,893Consumer loans27,549Inventories224,644Income taxes receivable23,095Other current assets28,324Investment in common stock of Enova (1)60,785Property and equipment118,381Goodwill (2)522,064Intangible assets (3)103,250Other assets62,994Current 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 $1,299and 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 isconsidered 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 IndefinitePawn licenses 32,300 IndefiniteCustomer relationships 14,700 FiveExecutive non-compete agreements 8,700 TwoFranchise 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 CashAmerica. 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 franchiseagreements 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 unsecuredcredit 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 acquisitionexpenses. These expenses include investment banking, legal, accounting, and other related third party costs associated with the Merger, including preparation for regulatoryfilings and shareholder approvals. See Note 4 for further information about merger and other acquisition expenses.F-18Table of Contents 2016 Other AcquisitionsThe 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 excesspurchase 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 ofthe 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 of166 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. Subsequentto 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, theCompany assumed approximately $6,630 in peso-denominated debt from these acquisitions which was repaid in full by the Company in January 2016. The assets, liabilitiesand 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 AmericaAcquisition 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 cashacquired and remaining payables to the sellers of approximately $17 . During fiscal 2016, the Company also paid $575 of deferred purchase price amounts payable related toprior-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 AmericaAcquisition TotalPawn loans$385 $10,586 $10,971Fees and service charges receivable18 885 903Inventory359 3,014 3,373Other current assets— 1,795 1,795Property and equipment10 6,821 6,831Goodwill (1)1,239 20,413 21,652Intangible assets (2)36 405 441Other assets— 512 512Deferred tax assets— 2,392 2,392Current 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 notexpected 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.During fiscal 2016 , revenue from the Merger and the 2016 Acquisitions since the respective closing dates was $384,123 . During fiscal 2016 , the net earnings from theMerger and the 2016 Acquisitions since the acquisition dates (excluding acquisition and integration costs) was $21,165 . Combined transaction and integration costs related tothe Merger and the 2016 Acquisitions were $36,670 , which are further described in Note 4 .F-19Table of Contents The following unaudited pro forma financial information reflects the consolidated results of operations of the Company as if the Merger and the 2016 Acquisitions hadoccurred on January 1, 2015 : Year Ended Year Ended December 31, 2016 December 31, 2015 As Reported Pro Forma As Reported Pro FormaTotal revenue $1,088,377 $1,771,835 $704,602 $1,792,523Net income 60,127 118,333 60,710 61,479 Net income per share: Basic $1.72 $2.44 $2.16 $1.27Diluted 1.72 2.44 2.14 1.27Pro forma adjustments are included only to the extent they are directly attributable to the Merger and 2016 Acquisitions. The unaudited pro forma results have been adjustedwith respect to certain aspects of the Merger and 2016 Acquisitions primarily to reflect:•depreciation and amortization expense that would have been recognized assuming fair value adjustments to the existing tangible and intangible assets acquired andliabilities assumed;•interest expense based on a lower combined weighted-average interest rate on borrowings (see Note 11 - Long-Term Debt ) partially offset by an increase in totalindebtedness primarily incurred to finance certain cash payments and transaction costs related to the Merger;•the elimination of losses on extinguishment of debt recognized in Cash America’s historical financial statements as the related debt was terminated upon completionof the Merger; and•the inclusion in the pro forma fiscal 2015 of $68,817 in merger and other acquisition expenses incurred by both the acquirees and acquirer (excluded from the proforma fiscal 2016 amounts).The pro forma financial information has been prepared for informational purposes only and does not include any anticipated synergies or other potential benefits of the Mergeror 2016 Acquisitions. It also does not give effect to certain future charges that the Company expects to incur in connection with the Merger and 2016 Acquisitions, including,but not limited to, additional professional fees, legal expenses, severance, retention and other employee-related costs, contract breakage costs and costs related to consolidationof technology systems and corporate facilities. The pro forma information is based on the Company’s preliminary valuation analysis of identifiable assets acquired andliabilities assumed and therefore subject to change. Pro forma results do not purport to be indicative of what would have resulted had the acquisitions occurred on the dateindicated or what may result in the future.2015 AcquisitionsThe Company completed other acquisitions during fiscal 2015 as described below consistent with its strategy to continue its expansion of pawn stores in selected markets. Thepurchase price of each acquisition was allocated to assets and liabilities acquired based upon their fair market values at the date of acquisition. The excess purchase price overthe fair market value of the net assets acquired has been recorded as goodwill. The goodwill arising from these acquisitions consist largely of the synergies and economies ofscale expected from combining the operations of the Company and the pawn stores acquired.On December 31, 2015, the Company acquired the stock of Maxi Prenda Guatemala, S.A., the operating entity owning the pawn loans, inventory, layaways and otheroperating assets and liabilities of 32 full-service pawn stores located in Guatemala. The purchase price for the all-cash transaction was $10,445 , net of cash acquired andsubject to certain post-closing adjustments. This was the first step in a multi-stage acquisition which was completed in February 2016 and is further described above. Thegoodwill resulting from this acquisition has been assigned to the Latin America operations reporting unit.During fiscal 2015, 33 pawn stores located in six U.S. states were acquired by the Company in seven separate asset purchase transactions for an aggregate purchase price of$35,592 , net of cash acquired, and was composed of $35,017 in cash paid during fiscal 2015 and payables to the sellers of $575 . During fiscal 2015, the Company also paid$1,425 of purchase price amounts payable related to prior-year acquisitions. The goodwill resulting from these acquisitions has been assigned to the U.S. operations reportingunit.F-20Table of Contents NOTE 4 - MERGER AND OTHER ACQUISITION EXPENSESThe Company incurred significant expenses in 2016 in connection with the Merger and integration with Cash America. The merger related expenses are predominantlyincremental costs directly associated with the Merger and integration of Cash America, including professional fees, legal expenses, severance, retention and other employee-related costs, accelerated vesting of certain equity compensation awards, contract breakage costs and costs related to consolidation of technology systems and corporatefacilities. In addition, the Company has incurred transaction and integration costs in connection with the Company’s other acquisitions in 2016 and prior years. The Companypresents merger and other acquisition expenses separately in the consolidated statements of income to identify these activities apart from the expenses incurred to operate thebusiness. The table below summarizes the major components of merger and other acquisition expenses: Year Ended December 31, 2016 2015 2014Merger related expenses: Transaction (1) $18,252 $— $—Severance and retention (2) 15,229 — —Other (3) 2,739 — —Total merger related expenses 36,220 — — Other acquisition expenses: Transaction and integration 450 2,875 998Total other acquisition expenses 450 2,875 998Total merger and other acquisition expenses $36,670 $2,875 $998(1) For the year ended December 31, 2016 , the Company recognized an income tax benefit of $ 3,943 related to the merger transaction expenses; a significant portion of these expenseswere not deductible for income tax purposes.(2) For the year ended December 31, 2016 , the Company made severance and retention payments of $ 10,381 and as of December 31, 2016 had $ 4,848 accrued for future payments.Accrued severance and retention is included in accounts payable and accrued expenses in the accompanying consolidated balance sheets.(3) Represents accelerated share-based compensation expense related to restricted stock awards for certain First Cash employees which vested as a result of the Merger.NOTE 5 - CAPITAL STOCKOn September 1, 2016 the Company issued approximately 20,181,000 shares of its common stock to former holders of Cash America common stock as a result of the Merger.See Note 3 for additional information about the Merger.In January 2015, the Company’s Board of Directors authorized a common stock repurchase program for up to 2,000,000 shares of the Company’s outstanding common stock.During fiscal 2016 , the Company did not repurchase any of its common stock and 1,148,000 shares remain available for repurchase under the repurchase program. In April2016, the Company temporarily suspended repurchases under its repurchase program pending the completion of the Merger. Future share repurchases are subject to a varietyof factors, including, but not limited to, the level of cash balances, credit availability, debt covenant restrictions, general business conditions, regulatory requirements, themarket price of the Company’s stock, dividend policy and the availability of alternative investment opportunities. Subsequent to December 31, 2016 and through the date ofthis report, the Company has repurchased approximately 228,000 shares of common stock at an aggregate cost of $10,005 and an average cost per share of $43.94 .NOTE 6 - DISCONTINUED OPERATIONSIn 2014 the Company discontinued the operations of the Cash & Go, Ltd. joint venture, a consolidated 50% -owned subsidiary, which owned and operated 37 check cashingand financial services kiosks. The Company recorded an after-tax loss for Cash & Go, Ltd. of $272 , or $0.01 per share, in fiscal 2014, which was reported as a loss fromdiscontinued operations. All revenue, expenses and income reported in these financial statements have been adjusted to reflect the reclassification of this discontinuedoperation.F-21Table of Contents NOTE 7 - FAIR VALUE OF FINANCIAL INSTRUMENTSThe fair value of financial instruments is determined by reference to various market data and other valuation techniques, as appropriate. Financial assets and liabilities areclassified based on the lowest level of input that is significant to the fair value measurement. The Company's assessment of the significance of a particular input to the fairvalue measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. Thethree fair value levels are (from highest to lowest):Level 1: Quoted market prices in active markets for identical assets or liabilities.Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.Level 3: Unobservable inputs that are not corroborated by market data.Recurring Fair Value MeasurementsPrior to the Merger, the Company did not have any financial assets or liabilities that were measured at fair value on a recurring basis. The Company’s financial assets that aremeasured at fair value on a recurring basis as of December 31, 2016 are as follows: December 31, Fair Value Measurements UsingFinancial assets: 2016 Level 1 Level 2 Level 3Cash America nonqualified savings plan (see Note 16) $12,663 $12,663 $— $— $12,663 $12,663 $— $—Prior to the Merger, Cash America had a nonqualified savings plan that was available to certain executives whereby participants could contribute up to 100% of their annualbonus and up to 50% of their other eligible compensation to the plan. Upon completion of the Merger, the nonqualified savings plan was terminated and the Company is in theprocess of dissolving the plan and distributing the remaining assets to the participants. These assets include marketable equity securities, which are classified as Level 1 andthe fair values are based on quoted market prices. The nonqualified savings plan assets are included in prepaid expenses and other current assets in the accompanyingconsolidated balance sheets with an offsetting liability of equal amount, which is included in accounts payable and accrued expenses in the accompanying consolidated balancesheets.Fair Value Measurements on a Nonrecurring BasisThe Company measures non-financial assets and liabilities such as property and equipment and intangible assets at fair value on a nonrecurring basis or when events orcircumstances indicate that the carrying amount of the assets may be impaired.F-22Table of Contents Financial Assets and Liabilities Not Measured at Fair ValueThe Company’s financial assets and liabilities as of December 31, 2016 and 2015 that are not measured at fair value in the consolidated balance sheets are as follows: Carrying Value Estimated Fair Value December 31, December 31, Fair Value Measurements UsingFinancial assets: 2016 2016 Level 1 Level 2 Level 3Cash and cash equivalents $89,955 $89,955 $89,955 $— $—Pawn loans 350,506 350,506 — — 350,506Consumer loans, net 29,204 29,204 — — 29,204Fees and service charges receivable 41,013 41,013 — — 41,013 $510,678 $510,678 $89,955 $— $420,723 Financial liabilities: Revolving unsecured credit facilities $260,000 $260,000 $— $260,000 $—Senior unsecured notes, outstanding principal 200,000 208,000 — 208,000 — $460,000 $468,000 $— $468,000 $— Carrying Value Estimated Fair Value December 31, December 31, Fair Value Measurements UsingFinancial assets: 2015 2015 Level 1 Level 2 Level 3Cash and cash equivalents $86,954 $86,954 $86,954 $— $—Pawn loans 117,601 117,601 — — 117,601Consumer loans, net 1,118 1,118 — — 1,118Fees and service charges receivable 16,406 16,406 — — 16,406 $222,079 $222,079 $86,954 $— $135,125 Financial liabilities: Revolving unsecured credit facilities $58,000 $58,000 $— $58,000 $—Senior unsecured notes, outstanding principal 200,000 199,000 — 199,000 — $258,000 $257,000 $— $257,000 $—As cash and cash equivalents have maturities of less than three months, the carrying values of cash and cash equivalents approximate fair value. Due to their short-termmaturities, the carrying value of pawn loans and fees and service charges receivable approximate fair value. Short-term loans and installment loans, collectively, representconsumer loans, net on the accompanying consolidated balance sheets and are carried net of the allowance for estimated loan losses, which is calculated by applying historicalloss rates combined with recent default trends to the gross consumer loan balance. The unobservable inputs used to calculate the fair value of these loans include historical lossrates, recent default trends and estimated remaining loan terms; therefore, the carrying value approximated the fair value.The carrying value of the Company’s prior credit facility approximated fair value as of December 31, 2015 . The carrying value of the Company’s current credit facilities (the2016 Credit Facility and the Mexico Credit Facility) approximated fair value as of December 31, 2016 . The fair value of the senior unsecured notes have been estimated basedon a discounted cash flow analysis using a discount rate representing the Company’s estimate of the rate that would be used by market participants. Changes in assumptions orestimation methodologies may have a material effect on these estimated fair values.F-23Table of Contents NOTE 8 - CUSTOMER LOANS AND VALUATION ACCOUNTSCustomer loans, including pawn receivables and net of unearned finance fees, consist of the following: Pawn Consumer Loan TotalDecember 31, 2016 Total customer loans$350,506 $31,455 $381,961Less allowance for doubtful accounts— (2,251) (2,251) $350,506 $29,204 $379,710 December 31, 2015 Total customer loans$117,601 $1,184 $118,785Less allowance for doubtful accounts— (66) (66) $117,601 $1,118 $118,719Changes in the allowance for consumer loan credit losses are as follows: Year Ended December 31, 2016 2015 2014Balance at beginning of year$66 $81 $84Provision for credit losses6,049 808 1,207Charge-offs, net of recoveries from customers(3,864) (823) (1,210)Balance at end of year$2,251 $66 $81Under the CSO Program, the Company assists customers in applying for a short-term extension of credit from Independent Lenders and issues the Independent Lenders aguarantee for the repayment of the extension of credit. The Company is required to recognize, at the inception of the guarantee, a liability for the fair value of the obligationundertaken by issuing the guarantee. The Company records the estimated fair value of the liability in accrued liabilities. Changes in the liability for credit services losses are asfollows: Year Ended December 31, 2016 2015 2014Balance at beginning of year$498 $493 $580Provision for credit losses5,944 6,351 8,080Amounts paid to Independent Lenders under guarantees, net ofrecoveries from customers(5,860) (6,346) (8,167)Balance at end of year$582 $498 $493F-24Table of Contents NOTE 9 - PROPERTY AND EQUIPMENTProperty and equipment consists of the following: Year Ended December 31, 2016 2015Land$30,364 $14,309Buildings55,137 19,261Furniture, fixtures, equipment and leasehold improvements284,391 186,697 369,892 220,267Less: accumulated depreciation(133,835) (107,820) $236,057 $112,447Depreciation expense for the fiscal years ended December 31, 2016 , 2015 and 2014 , was $26,624 , $16,140 , and $15,947 , respectively.NOTE 10 - ACCOUNTS PAYABLE AND ACCRUED LIABILITIESAccounts payable and accrued liabilities consist of the following: Year Ended December 31, 2016 2015Accrued compensation$25,285 $7,438Sales, property, and payroll withholding taxes payable13,546 6,473Cash America nonqualified savings plan (see Note 16)12,663 —Trade accounts payable11,664 1,823Merger related severance and retention payable4,848 —Deferred CSO fees7,776 —Benefits liabilities and withholding payable4,501 1,079Accrued interest payable3,506 3,476Liability for expected losses on outstanding CSO guarantees582 498Other accrued liabilities24,983 7,039 $109,354 $27,826NOTE 11 - LONG-TERM DEBTAs of December 31, 2016 , annual maturities of the outstanding long-term debt for each of the five years after December 31, 2016 are as follows:Fiscal 2017$—2018—2019—2020—2021460,000Thereafter— $460,000F-25Table of Contents Senior Unsecured NotesOn March 24, 2014, the Company issued $200,000 of 6.75% senior notes due on April 1, 2021 (the “Notes”) all of which are currently outstanding. Interest on the Notes ispayable semi-annually in arrears on April 1 and October 1. The Notes are fully and unconditionally guaranteed on a senior unsecured basis jointly and severally by all of theCompany's existing and future domestic subsidiaries that guarantee the 2016 Credit Facility (as defined below). The Notes permit the Company to make certain restrictedpayments, such as repurchasing shares of its stock and paying cash dividends, within certain parameters, the most restrictive of which generally limits such restricted paymentsto 50% of net income, adjusted for certain items as described in the indenture. As of December 31, 2016 and December 31, 2015 , deferred debt issuance costs of $3,455 and$4,126 , respectively, are included as a direct deduction from the carrying amount of the Notes in the accompanying consolidated balance sheets.Revolving Credit FacilitiesDuring the period from January 1, 2016 through September 1, 2016, the Company maintained a revolving line of credit agreement with a group of U.S. based commerciallenders (the “2015 Credit Facility”) in the amount of $210,000 , which was scheduled to mature in October 2020 . The 2015 Credit Facility charged interest, at the Company’soption, at either (i) the prevailing London Interbank Offered Rate (“LIBOR”) (with interest periods of 1, 2, 3 or 6 months at the Company’s option) plus a fixed spread of 2.5%or (ii) the prevailing prime or base rate plus a fixed spread of 1.5% .On September 1, 2016 and in connection with the closing of the Merger, the Company amended and extended the 2015 Credit Facility (as amended, the “2016 CreditFacility”). The total lender commitment under the 2016 Credit Facility increased from $210,000 to $400,000 and the number of participating lenders increased from five toeight. Additionally, the term of the 2016 Credit Facility was extended to September 2021 , five years from the closing date of the Merger, and is unsecured as the amendmentremoved the pledge of 65% of the voting equity interests of the Company’s first-tier foreign subsidiaries included in the 2015 Credit Facility. Also in connection with theMerger, all of Cash America’s previously outstanding 5.75% senior notes due 2018 were redeemed and Cash America’s previously outstanding credit agreement and relatedcredit facilities were repaid in full and terminated.At December 31, 2016 , the Company had $260,000 in outstanding borrowings and $5,956 in outstanding letters of credit under the 2016 Credit Facility, leaving $134,044available for future borrowings. The 2016 Credit Facility bears interest, at the Company’s option, at either (i) the prevailing London Interbank Offered Rate (“LIBOR”) (withinterest periods of 1 week or 1, 2, 3 or 6 months at the Company’s option) plus a fixed spread of 2.5% or (ii) the prevailing prime or base rate plus a fixed spread of 1.5% . Theagreement has a LIBOR floor of 0% . Additionally, the Company is required to pay an annual commitment fee of 0.50% on the average daily unused portion of the 2016Credit Facility commitment. The weighted-average interest rate on amounts outstanding under the 2016 Credit Facility at December 31, 2016 was 3.25% based on 1 weekLIBOR. Under the terms of the 2016 Credit Facility, the Company is required to maintain certain financial ratios and comply with certain financial covenants and allows theCompany to make certain restricted payments, such as repurchasing shares of its stock, within certain parameters provided the Company maintains compliance with thosefinancial ratios and covenants after giving effect to such restricted payments. The 2016 Credit Facility also contains customary restrictions on the Company’s ability to incuradditional debt, grant liens, make investments, consummate acquisitions and similar negative covenants with customary carve-outs and baskets. The Company was incompliance with the requirements and covenants of the 2016 Credit Facility as of December 31, 2016 . During fiscal 2016 , the Company received net proceeds of $202,000from borrowings pursuant to the 2015 Credit Facility and 2016 Credit Facility.At December 31, 2016 , the Company maintained a line of credit with a bank in Mexico (the “Mexico Credit Facility”) in the amount of $10,000 . The Mexico Credit Facilitybears interest at 30-day LIBOR rate plus a fixed spread of 2.0% and matures in December 2017 . Under the terms of the Mexico Credit Facility, the Company is required tomaintain certain financial ratios and comply with certain financial covenants. The Company was in compliance with the requirements and covenants of the Mexico CreditFacility as of December 31, 2016 . The Company is required to pay a one-time commitment fee of $25 due when the first amount is drawn/borrowed. At December 31, 2016 ,the Company had no amount outstanding under the Mexico Credit Facility and $10,000 was available for borrowings.F-26Table of Contents NOTE 12 - INCOME TAXESComponents of the provision for income taxes and the income to which it relates for the years ended December 31, 2016 , 2015 and 2014 consist of the following: Year Ended December 31, 2016 2015 2014Income from continuing operations before income taxes (1) : Domestic$30,804 $27,599 $50,984Foreign62,643 60,082 65,996Income from continuing operations before income taxes$93,447 $87,681 $116,980 Current income taxes: Federal$1,419 $7,933 $11,494Foreign18,787 18,763 17,823State and local1,139 705 1,097Current provision for income taxes21,345 27,401 30,414 Deferred provision (benefit) for income taxes: Federal11,826 931 2,232Foreign(528) (1,414) (1,232)State and local677 53 128Total deferred provision (benefit) for income taxes11,975 (430) 1,128 Provision for income taxes$33,320 $26,971 $31,542(1) Includes the allocation of certain administrative expenses and the payment of royalties between domestic and foreign subsidiaries.The provision for income taxes related to discontinued operations for the year ended December 31, 2014 was a $147 benefit.The Company does not include foreign subsidiaries in its consolidated U.S. federal income tax return and it is the Company’s intent to indefinitely reinvest the earnings ofthese subsidiaries outside the U.S. Accordingly, under U.S. income tax law, as of December 31, 2016, the undistributed earnings of the foreign subsidiaries are not subject tocurrent U.S. federal income taxes. The cumulative amount of indefinitely reinvested earnings of foreign subsidiaries is $100,996 at December 31, 2016. These earnings wouldbe subject to additional U.S. taxes of $2,299 if the earnings were repatriated into the U.S. for 2016.F-27Table of Contents The principal deferred tax assets and liabilities consist of the following at December 31, 2016 and 2015 : December 31, 2016 2015Deferred tax assets: Property and equipment in foreign jurisdictions$5,604 $5,652Accrued fees on forfeited pawn loans8,221 3,784Deferred cost of goods sold deduction1,674 2,101Cash America nonqualified savings plan (see Note 16)4,685 —Accrued compensation and employee benefits3,626 859Accrued Merger severance and retention2,718 —Other8,024 2,382Total deferred tax assets34,552 14,778 Deferred tax liabilities: Intangible assets75,998 22,761Property and equipment in domestic jurisdictions7,716 3,093Other2,406 1,067Total deferred tax liabilities86,120 26,921 Net deferred tax liabilities$(51,568) $(12,143) Reported as: Deferred tax assets$9,707 $9,321Deferred tax liabilities(61,275) (21,464)Net deferred tax liabilities$(51,568) $(12,143)The Company has evaluated the nature and timing of its deferred tax assets and concluded that no valuation allowance is necessary.The effective rate on income from continuing operations differs from the U.S. federal statutory rate of 35% . The following is a reconciliation of such differences: Year Ended December 31, 2016 2015 2014Tax at the U.S. federal statutory rate$32,706 $30,688 $40,943State income taxes, net of federal tax benefit of $636 , $265 and $429,respectively1,181 493 796Rate benefit from foreign earnings(3,642) (3,531) (4,576)Other net non-recurring foreign benefit— — (5,841)Nondeductible transaction related costs2,659 — —Other taxes and adjustments, net416 (679) 220Provision for income taxes$33,320 $26,971 $31,542Effective tax rate35.7% 30.8% 27.0%The Company’s foreign operating subsidiaries are owned by a subsidiary located in the Netherlands. The foreign operating subsidiaries are subject to their respective foreignstatutory rates, which differ from the U.S. federal statutory rate of 35% . The statutory tax rates in Mexico, Guatemala and El Salvador are 30% , 25% and 30% , respectively.The statutory tax rate in the Netherlands is 0% on eligible dividends received from its foreign subsidiaries.F-28Table of Contents The Company reviews the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. TheCompany may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxingauthorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefitthat has a greater than fifty percent likelihood of being realized upon ultimate settlement. Interest and penalties related to income tax liabilities that could arise would beclassified as interest expense in the Company’s consolidated statements of income.As of December 31, 2016 and 2015 , the Company had no unrecognized tax benefits and, therefore, the Company did not have a liability for accrued interest and penalties andno such interest or penalties were incurred for the fiscal years ended December 31, 2016 , 2015 and 2014 . The Company does not believe its unrecognized tax benefits willsignificantly change over the next twelve months.The Company files federal income tax returns in the United States, Mexico, Guatemala, El Salvador and the Netherlands, as well as multiple state and local income tax returnsin the U.S. The Company’s U.S. federal returns are not subject to examination for tax years prior to 2013. The Company’s U.S. state income tax returns are not subject toexamination for the tax years prior to 2013 with the exception of six states, which are not subject to examination for tax years prior to 2012. With respect to federal tax returnsin Mexico, Guatemala, El Salvador and the Netherlands, the tax years prior to 2011 are closed to examination. There are no state income taxes in Mexico, Guatemala, ElSalvador or the Netherlands.NOTE 13 - COMMITMENTS AND CONTINGENCIESLeasesThe Company leases certain of its facilities and equipment under operating leases with terms generally ranging from three to five years. Most facility leases contain renewaloptions. Remaining future minimum rentals due under non-cancelable operating leases are as follows:Fiscal 2017$102,541201886,036201968,953202049,112202131,591Thereafter41,168 $379,401Rent expense from continuing operations under such leases was $74,312 , $49,959 and $46,220 for the years ended December 31, 2016 , 2015 and 2014 , respectively.As a result of the Merger, the Company recognized a favorable lease intangible asset in the amount of $64,701 and an unfavorable lease intangible liability in the amount of$38,102 related to assumed Cash America leases to the extent such leases contained favorable or unfavorable terms relative to market (see Note 3 ) (together the “LeaseIntangibles”). The current portion of favorable lease intangibles is included in prepaid expenses and other current assets and the non-current portion is included in other assetsin the accompanying consolidated balance sheets. The current portion of unfavorable lease intangibles is included in accounts payable and accrued liabilities and the non-current portion is included in other liabilities in the accompanying consolidated balance sheets. The Lease Intangibles are amortized to rent expense, which is a component ofstore operating expenses, on a straight-line basis over the lives of the respective leases.The net amortization of the Lease Intangibles reduced store operating expense by $232 for the year ended December 31, 2016 . The remaining weighted-average amortizationperiod for favorable and unfavorable lease intangibles is 5.3 and 2.6 years, respectively. Estimated future net amortization of the Lease Intangibles is as follows:F-29Table of Contents Fiscal 2017$(1,061)2018(159)201987220201,89520212,392Thereafter22,892 $26,831LitigationThe Company, in the ordinary course of business, is a defendant (actual or threatened) in certain lawsuits, arbitration claims and other general claims. In management’sopinion, any potential adverse result should not have a material adverse effect on the Company’s financial position, results of operations, or cash flows.On June 26, 2015, Wilmington Savings Fund Society, FSB, as trustee (the “Trustee”) under Cash America’s 2018 Senior Notes Indenture that governed the Cash America2018 Senior Notes (the “2018 Senior Notes Indenture”), filed a lawsuit against Cash America in the United States District Court for the Southern District of New York (the“Senior Notes Lawsuit”). The Senior Notes Lawsuit alleged that the spin-off of Enova (the “Enova Spin-off”) completed by Cash America in November 2014 was notpermitted by the 2018 Senior Notes Indenture, and the Trustee requested a remedy equal to principal and accrued and unpaid interest, plus default interest and a make-wholepremium, to be paid to the holders of the 2018 Senior Notes.In August 2016, Cash America notified the Trustee that under the optional redemption provisions of the 2018 Senior Notes Indenture, it intended to redeem all of theoutstanding 2018 Senior Notes at the end of August at the then make-whole premium called for by the 2018 Senior Notes Indenture. On September 1, 2016, the Merger wascompleted and immediately before the close of the Merger, the 2018 Senior Notes were redeemed and extinguished by Cash America.On September 19, 2016, with cross-motions for summary judgment before the court, the judge denied Cash America’s motion and granted the Trustee’s motion for summaryjudgment in all respects, granting all requested relief, including accrued and unpaid interest, default interest and a make-whole premium. The Company filed a notice of appealon October 3, 2016, but rather than pursue the appeal, in December 2016, the Trustee, related parties and the Company entered into a confidential settlement agreement andrelease disposing of all claims and issues. An assumed liability in the amount of the settlement including legal fees is included in other liabilities in the allocation of aggregateMerger consideration. See Note 3 .GuaranteesThe Company offers a fee-based CSO Program to assist consumers in obtaining extensions of credit from Independent Lenders. The Company’s CSO Program complies withthe respective jurisdiction’s credit services organization act, credit access business law or a similar statute. Under the CSO Program, the Company assists customers inapplying for a short-term extension of credit from the Independent Lenders and issues the Independent Lenders a guarantee for the repayment of the extension of credit. Theextensions of credit made by the Independent Lenders to credit services customers of the Company range in amount from $50 to $1,500 (in ones) and have terms of 7 to 365days. The Independent Lenders are considered variable interest entities of the Company. The net loans outstanding represent less than 50% of the Independent Lenders’ totalassets. In addition, the Company does not have any ownership interest in the Independent Lenders, does not exercise control over them and is not the primary beneficiary and,therefore, does not consolidate the Independent Lenders’ results with its results.The Company is required to recognize, at the inception of the guarantee, a liability for the fair value of the obligation undertaken by issuing the guarantees. According to theguarantee, if the borrower defaults on the extension of credit, the Company will pay the Independent Lenders the principal, accrued interest, insufficient funds fee and late fees,if applicable, all of which the Company records as a component of its credit loss provision. The Company is entitled to seek recovery, directly from its customers, of theamounts it pays the Independent Lenders in performing under the guarantees. The Company records the estimated fair value of the liability in accrued liabilities. The lossprovision associated with the CSO Program is based primarily upon historical loss experience, with consideration given to recent loss trends, delinquency rates, economicconditions and management’s expectations of future credit losses. The Company’s maximum loss exposure under all of the outstanding guarantees issued on behalf of itscustomers to the Independent Lenders as of December 31, 2016 was $13,172 compared to $8,192 at December 31, 2015 .F-30Table of Contents Gold Forward Sales ContractsIn connection with the Merger, the Company assumed forward gold sales contracts entered into by Cash America. As of December 31, 2016 , the Company has goldcommitments of 30,700 gold ounces deliverable through December 31, 2017 .NOTE 14 - GOODWILL AND OTHER INTANGIBLE ASSETS GoodwillThe Company performed its annual assessment of goodwill and determined there was no impairment as of December 31, 2016 . During the third quarter of 2015, the Companydetermined that sufficient indicators of potential impairment existed to require an interim goodwill impairment analysis for the U.S. consumer loan operations reporting unit,which is no longer a reporting unit for goodwill impairment testing. These indicators included, among others, the impacts of recently enacted and additional proposed local,state and federal regulatory restrictions affecting short-term and long-term profitability expectations for payday and title lending products, the Company’s long-term ongoingstrategy to reduce non-core consumer lending operations along with significant deterioration in payday lending market conditions. Due to the aforementioned indicators, theCompany concluded that it was more likely than not that the fair value of the U.S. consumer loan operations reporting unit was less than the carrying value. Therefore, a$7,913 goodwill impairment charge was recorded, which is included as goodwill impairment - U.S. consumer loan operations in the accompanying consolidated statements ofoperations.Changes in the carrying value of goodwill by segment were as follows:December 31, 2016U.S. operationssegment Latin Americaoperationssegment TotalBalance, beginning of year$222,901 $72,708 $295,609Merger and other acquisitions (see Note 3)523,303 20,413 543,716Effect of foreign currency translation— (8,276) (8,276)Other adjustments— 102 102Balance, end of year$746,204 $84,947 $831,151 December 31, 2015 Balance, beginning of year$203,160 $73,722 $276,882Merger and other acquisitions27,654 3,039 30,693Goodwill impairment - U.S. consumer loan operations(7,913) — (7,913)Effect of foreign currency translation— (4,976) (4,976)Other adjustments— 923 923Balance, end of year$222,901 $72,708 $295,609Definite-Lived Intangible AssetsThe following table summarizes the components of gross and net definite-lived intangibles assets subject to amortization as of December 31, 2016 and 2015 : As of December 31, 2016 2015 Gross CarryingAmount AccumulatedAmortization Net CarryingAmount Gross CarryingAmount AccumulatedAmortization Net CarryingAmountCustomer relationships $24,452 $(8,861) $15,591 $9,665 $(5,237) $4,428Executive non-compete agreements 8,700 (1,450) 7,250 — — — $33,152 $(10,311) $22,841 $9,665$(5,237) $4,428F-31Table of Contents The customer relationships are generally amortized using an accelerated amortization method that reflects the future cash flows expected from the returning pawn customers.The executive non-compete agreements are being amortized over a straight-line basis over the life of the executive non-compete agreements.Amortization expense for definite-lived intangible assets was $5,241 , $1,799 and $1,529 for the years ended December 31, 2016 , 2015 and 2014 , respectively. The remainingweighted-average amortization period for customer relationships, executive non-compete agreements and total definite-lived intangible assets is 1.7 , 0.9 and 1.4 years,respectively. Estimated future amortization expense is as follows:Fiscal 2017$10,68720186,52220192,58320202,04920211,000 $22,841Indefinite-Lived Intangible AssetsThe Company performed its annual assessment of indefinite-lived intangible assets and determined there was no impairment as of December 31, 2016 and 2015 . Indefinite-lived intangible assets as of December 31, 2016 and 2015 , consist of the following: As of December 31, 2016 2015Trade names $46,300 $—Pawn licenses (1) 34,083 1,753Franchise agreements related to check-cashing operation 1,250 — $81,633 $1,753(1) Costs to renew licenses with indefinite lives are expensed as incurred and recorded in store operating expenses in the consolidated statements of income.NOTE 15 - EQUITY COMPENSATION PLANS AND SHARE-BASED COMPENSATIONThe Company has previously adopted equity and share-based compensation plans to attract and retain executives, directors and key employees. Under these plans, theCompany has granted qualified and non-qualified common stock options and nonvested common stock awards to officers, directors and other key employees. At December 31,2016 , 977,000 shares were reserved for future grants to all employees and directors under the plans. Additionally, there were 2,052,000 shares reserved for future grants tocurrent employees and directors who were not employees or directors of the Company at the date of the Merger.Stock OptionsThe Company has not issued any common stock options in the last five fiscal years. Previous option awards have been granted to purchase the Company’s common stock at anexercise price equal to or greater than the fair market value at the date of grant and generally had a maximum duration of ten years. The Company typically issues shares ofcommon stock to satisfy option exercises.F-32Table of Contents Stock options outstanding as of December 31, 2016 are as follows (in thousands, except exercise price and life): Weighted-Average CurrentlyExercise Price Options Remaining Life Exercisable $24.57 13 0.3 13 $38.00 40 4.9 — $40.00 50 4.0 10 103 3.9 23 A summary of stock option activity for the years ended December 31, 2016 , 2015 and 2014 , is as follows (in thousands, except exercise price): 2016 2015 2014 Weighted- Weighted- Weighted- Average Average Average Underlying Exercise Underlying Exercise Underlying Exercise Shares Price Shares Price Shares PriceOutstanding at beginning ofyear103 $37.34 758 $20.67 1,052 $19.90Exercised— — (655) 18.06 (294) 17.93Outstanding at end of year103 $37.34 103 $37.34 758 $20.67 Exercisable at end of year23 $31.43 13 $24.57 663 $18.14At December 31, 2016 , the aggregate intrinsic value for the stock options outstanding was $990 , of which $350 was exercisable at the end of the year, with weighted-averageremaining contractual terms of 3.9 years. The aggregate intrinsic value reflects the total pre-tax intrinsic value (the difference between the Company’s closing stock price onthe last trading day of the period and the exercise price of the options, multiplied by the number of in-the-money options) that would have been received by the option holdershad all option holders exercised their options on December 31, 2016 . The total intrinsic value of options exercised for fiscal 2016 , 2015 and 2014 , was $0 , $14,609 and $11,858 , respectively. The intrinsic values are based on the closing priceof the Company’s stock on the date of exercise. The Company typically issues shares of common stock to satisfy option exercises.Nonvested Common Stock Awards (Restricted Stock)The Company has granted nonvested common stock awards (also known as “restricted stock”) under the Company’s equity and share-based incentive compensation plans. Thenonvested common stock awards are issued as common shares upon vesting. The awards granted in 2016, 2015 and 2014 each included 40,000 shares with performance-basedcriteria with four annual measurement periods beginning in the year of issuance. The vesting performance criteria for each year relate to growth in the Company’s EBITDAfrom continuing operations, adjusted for certain non-core and/or non-recurring items, compared to the base period, which is the fiscal year prior to the year of issuance. Allother awards granted in 2016, 2015 and 2014 vest ratably over time through a six year period from the date of issuance. The fair value of the nonvested awards is based on theCompany’s closing stock price on the day of the grant or subsequent award modification date, if applicable, and the fair value of performance-based awards is based on themaximum amount of the award expected to be achieved. The amount attributable to award grants is amortized to expense over the vesting periods.F-33Table of Contents The following table summarizes the nonvested common stock award activity during 2016 , 2015 and 2014 (in thousands, except fair value amounts): 2016 2015 2014 Weighted- Weighted- Weighted- Average Average Average Underlying Fair Value Underlying Fair Value Underlying Fair Value Shares of Grant Shares of Grant Shares of GrantOutstanding at beginning of year79 $48.10 87 $48.99 117 $39.91Granted51 42.60 45 47.08 47 51.08Vested(100) 45.96 (5) 43.26 (37) 46.48Canceled or forfeited— — (48) 49.26 (40) 42.14Outstanding at end of year30 45.93 79 48.10 87 48.99Nonvested common stock awards vesting in 2016 , 2015 and 2014 had an aggregate intrinsic value of $4,860 , $245 and $2,006 , respectively, based on the closing price of theCompany’s stock on the date of vesting. The outstanding award units had an aggregate intrinsic value of $1,410 at December 31, 2016 . During 2016, with the exception of40,000 performance based awards granted in 2016 to senior executives which included double-trigger change in control provisions, the change of control provisions triggeredby the Merger resulted in immediate vesting of 83,000 nonvested common stock awards outstanding as of September 1, 2016, the date of the Merger.Share-Based Compensation ExpenseThe Company’s net income includes the following compensation costs related to share-based compensation arrangements: Year Ended December 31, 2016 2015 2014Gross compensation costs: Stock options$136 $149 $153Nonvested “restricted” stock4,038 280 1,826Total gross compensation costs4,174 429 1,979 Income tax benefits: Stock options(48) (52) (54)Nonvested “restricted” stock (1)(782) (98) (639)Total income tax benefits(830) (150) (693) Net compensation expense$3,344 $279 $1,286 Tax benefit realized from stock options exercised during the year$— $5,126 $4,141(1) Income tax benefit on nonvested stock compensation expense for 2016 is less than the statutory rate as a portion of the expense is not tax deductible.As of December 31, 2016 , the total compensation cost related to nonvested stock options not yet recognized was $241 and is expected to be recognized over the weighted-average period of 1.6 years. As of December 31, 2016 , the total compensation cost related to nonvested common stock awards not yet recognized was $1,378 and is expectedto be recognized over the weighted-average period of 2.0 years.F-34Table of Contents NOTE 16 - BENEFIT PLANSThe Company’s 401(k) savings plan (the “Plan”) is available to all full-time, U.S.-based, employees who have been employed with the Company for six months or longer.Under the Plan, a participant may contribute up to 100% of earnings, with the Company matching the first 6% at a rate of 40% . The employee and Company contributions arepaid to a corporate trustee and invested in various funds. Company contributions made to participants’ accounts become fully vested upon completion of five years of service.The total Company matching contributions to the Plan were $1,960 , $800 and $784 for the years ended December 31, 2016 , 2015 and 2014 , respectively.Cash America had a 401(k) savings plan that was available to substantially all of its employees whereby participants could contribute up to 75% of their eligible earnings,subject to regulatory and other plan restrictions. Cash America made matching cash contributions of 50% of each participant’s contributions to the 401(k) plan, based onparticipant contributions of up to 5% of eligible compensation. Effective December 31, 2016, the Cash America 401(k) savings plan was merged into the Plan.Cash America had a nonqualified savings plan in place prior to the Merger that was available to certain members of its management whereby participants could contribute upto 100% of their annual bonus and up to 50% of their other eligible compensation to the plan. Upon completion of the Merger, the nonqualified savings plan was terminatedand the Company is in the process of dissolving the plan and distributing the remaining assets to the participants. The nonqualified savings plan assets are included in prepaidexpenses and other current assets in the accompanying consolidated balance sheets with an offsetting liability of equal amount, which is included in accounts payable andaccrued expenses in the accompanying consolidated balance sheets.F-35Table of Contents NOTE 17 - SEGMENT AND GEOGRAPHIC INFORMATIONSegment InformationPrimarily as a result of the Merger, changes were made to information regularly reviewed by the Company’s chief operating decision maker during the fourth quarter of 2016.As a result, the Company began organizing its operations into two reportable segments as follows:•U.S. operations - Includes all pawn and consumer loan operations in the U.S.•Latin America operations - Includes all pawn and consumer loan operations in Latin America, which currently includes operations in Mexico, Guatemala and ElSalvadorThe following tables present reportable segment information for the three years ended December 31, 2016 , 2015 and 2014 as well as separately identified segment assets: Year Ended December 31, 2016 U.S.Operations Latin AmericaOperations Corporate ConsolidatedRevenue: Retail merchandise sales $386,026 $283,105 $— $669,131Pawn loan fees 195,883 116,874 — 312,757Consumer loan and credit services fees 41,922 1,929 — 43,851Wholesale scrap jewelry sales 47,680 14,958 — 62,638Total revenue 671,511 416,866 — 1,088,377 Cost of revenue: Cost of retail merchandise sold 241,086 177,470 — 418,556Consumer loan and credit services loss provision 11,494 499 — 11,993Cost of wholesale scrap jewelry sold 41,357 11,668 — 53,025Total cost of revenue 293,937 189,637 — 483,574 Net revenue 377,574 227,229 — 604,803 Expenses and other income: Store operating expenses 215,227 112,787 — 328,014Administrative expenses — — 96,537 96,537Depreciation and amortization 13,618 10,429 7,818 31,865Interest expense — — 20,320 20,320Interest income — — (751) (751)Merger and other acquisition expenses — — 36,670 36,670Net gain on sale of common stock of Enova — — (1,299) (1,299)Total expenses and other income 228,845 123,216 159,295 511,356 Income before income taxes $148,729 $104,013 $(159,295) $93,447 December 31, 2016 U.S. Operations Latin America Operations Corporate ConsolidatedPawn loans $293,392 $57,114 $— $350,506Consumer loans, net $28,847 $357 $— $29,204Inventories $282,860 $47,823 $— $330,683Total assets $1,637,995 $247,915 $259,293 $2,145,203F-36Table of Contents Year Ended December 31, 2015 U.S.Operations Latin AmericaOperations Corporate ConsolidatedRevenue: Retail merchandise sales $197,011 $252,285 $— $449,296Pawn loan fees 94,761 100,687 — 195,448Consumer loan and credit services fees 25,696 2,107 — 27,803Wholesale scrap jewelry sales 19,380 12,675 — 32,055Total revenue 336,848 367,754 — 704,602 Cost of revenue: Cost of retail merchandise sold 117,059 161,572 — 278,631Consumer loan and credit services loss provision 6,770 389 — 7,159Cost of wholesale scrap jewelry sold 17,530 10,098 — 27,628Total cost of revenue 141,359 172,059 — 313,418 Net revenue 195,489 195,695 — 391,184 Expenses and other income: Store operating expenses 107,852 99,720 — 207,572Administrative expenses — — 51,883 51,883Depreciation and amortization 6,146 8,803 2,990 17,939Interest expense — — 16,887 16,887Interest income — — (1,566) (1,566)Merger and other acquisition expenses — — 2,875 2,875Goodwill impairment - U.S. consumer loanoperations — — 7,913 7,913Total expenses and other income 113,998 108,523 80,982 303,503 Income before income taxes $81,491 $87,172 $(80,982) $87,681 December 31, 2015 U.S. Operations Latin America Operations Corporate ConsolidatedPawn loans $68,153 $49,448 $— $117,601Consumer loans, net $688 $430 $— $1,118Inventories $56,040 $37,418 $— $93,458Total assets $423,178 $218,530 $111,187 $752,895F-37Table of Contents Year Ended December 31, 2014 U.S.Operations Latin AmericaOperations Corporate ConsolidatedRevenue: Retail merchandise sales $172,354 $255,828 $— $428,182Pawn loan fees 89,952 109,405 — 199,357Consumer loan and credit services fees 34,051 2,698 — 36,749Wholesale scrap jewelry sales 28,243 20,346 — 48,589Total revenue 324,600 388,277 — 712,877 Cost of revenue: Cost of retail merchandise sold 98,916 162,757 — 261,673Consumer loan and credit services loss provision 8,723 564 — 9,287Cost of wholesale scrap jewelry sold 24,179 16,865 — 41,044Total cost of revenue 131,818 180,186 — 312,004 Net revenue 192,782 208,091 — 400,873 Expenses and other income: Store operating expenses 97,865 101,121 — 198,986Administrative expenses — — 53,588 53,588Depreciation and amortization 5,402 9,174 2,900 17,476Interest expense — — 13,527 13,527Interest income — — (682) (682)Merger and other acquisition expenses — — 998 998Total expenses and other income 103,267 110,295 70,331 283,893 Income from continuing operations before income taxes $89,515 $97,796 $(70,331) $116,980 December 31, 2014 U.S. Operations Latin America Operations Corporate ConsolidatedPawn loans $68,100 $50,436 $— $118,536Consumer loans, net $790 $451 $— $1,241Inventories $49,969 $41,119 $— $91,088Total assets $396,642 $226,656 $88,582 $711,880F-38Table of Contents Geographic InformationThe following table shows revenue and long-lived assets (all non-current assets except goodwill, intangibles, net and deferred tax assets) by geographic area: Year Ended December 31, 2016 2015 2014Revenue: United States$671,511 $336,848 $324,600Mexico397,549 367,754 388,277Other Latin America19,317 — — $1,088,377 $704,602 $712,877 Long-lived assets: United States$257,939 $65,742 $64,713Mexico47,243 49,259 52,998Other Latin America$2,554 1,349 — $307,736 $116,350 $117,711NOTE 18 - QUARTERLY FINANCIAL DATA (UNAUDITED)Summarized quarterly financial data for the fiscal years ended December 31, 2016 and 2015 , are set forth below. The Company’s operations are subject to seasonalfluctuations. The Company issued 20,181,000 shares of common stock on September 1, 2016 as a result of the Merger, which significantly increased the diluted weightedaverage shares used in computing diluted income per share for the quarters ended September 30, 2016 and December 31, 2016. In addition, the operating results for thequarters ended September 30, 2016 and December 31, 2016 included the operating results of Cash America for one month and three months, respectively. The Companycomputed the quarterly diluted income per share amounts as if each quarter was a discrete period based on that quarter’s weighted average shares outstanding. As a result, thesum of the diluted earnings per share by quarter will not necessarily total the annual diluted earnings per share. Quarter Ended March 31 June 30 September 30 December 312016 Total revenue$183,203 $181,979 $261,153 $462,042Total cost of revenue81,340 80,518 113,789 207,927Net revenue101,863 101,461 147,364 254,115Total expenses and other income82,202 84,215 146,941 197,998Net income (loss)13,174 11,673 (1,412) 36,692Diluted net income (loss) per share0.47 0.41 (0.04) 0.76Diluted weighted average shares28,241 28,243 34,631 48,532 2015 Total revenue$176,023 $167,623 $169,532 $191,424Total cost of revenue77,252 73,577 74,090 88,499Net revenue98,771 94,046 95,442 102,925Total expenses and other income74,382 74,615 79,208 75,298Net income16,788 13,339 11,173 19,410Diluted net income per share0.59 0.47 0.40 0.69Diluted weighted average shares28,620 28,411 28,224 28,097F-39Table of Contents NOTE 19 - CONDENSED CONSOLIDATING GUARANTOR FINANCIAL STATEMENTSIn connection with the issuance of the Notes, certain of the Company’s domestic subsidiaries (collectively, “Guarantor Subsidiaries”), fully, unconditionally, jointly andseverally guaranteed the payment obligations under the Notes. Each of the Guarantor Subsidiaries is 100% owned, directly or indirectly, by the Company. In conjunction withthe Merger, Merger Sub, the surviving entity in the Merger and a wholly owned subsidiary of the Company, is included as a Guarantor Subsidiary. The following supplementalfinancial information sets forth, on a consolidating basis, the balance sheets, statements of comprehensive income (loss) and statements of cash flows of FirstCash, Inc. (the“Parent Company”), the Guarantor Subsidiaries and the Parent Company’s other subsidiaries (the “Non-Guarantor Subsidiaries”).The supplemental condensed consolidating financial information has been prepared pursuant to SEC rules and regulations for condensed financial information and does notinclude the more complete disclosures included in annual financial statements. Investments in consolidated subsidiaries have been presented under the equity method ofaccounting. The principal eliminating entries eliminate investments in subsidiaries, intercompany balances and intercompany revenues and expenses. The condensed financialinformation may not necessarily be indicative of the results of operations or financial position had the Guarantor Subsidiaries or Non-Guarantor Subsidiaries operated asindependent entities.F-40Table of Contents Condensed Consolidating Balance SheetDecember 31, 2016 ParentCompany GuarantorSubsidiaries Non-Guarantor Subsidiaries ConsolidatingEliminations ConsolidatedASSETS Cash and cash equivalents $8,663 $34,854 $46,438 $— $89,955Fees and service charges receivable — 31,378 9,635 — 41,013Pawn loans — 286,020 64,486 — 350,506Consumer loans, net — 28,797 407 — 29,204Inventories — 274,873 55,810 — 330,683Income taxes receivable 2,415 23,095 — — 25,510Prepaid expenses and other currentassets 2,750 21,177 1,337 — 25,264Intercompany receivable 1,025 — — (1,025) —Total current assets 14,853 700,194 178,113 (1,025) 892,135 Property and equipment, net 3,736 180,438 51,883 — 236,057Goodwill — 719,527 111,624 — 831,151Intangible assets, net — 103,109 1,365 — 104,474Other assets 3,254 66,261 2,164 — 71,679Deferred tax assets — — 9,707 — 9,707Investments in subsidiaries 1,906,444 — — (1,906,444) —Total assets $1,928,287 $1,769,529 $354,856 $(1,907,469) $2,145,203 LIABILITIES ANDSTOCKHOLDERS’ EQUITY Accounts payable and accruedliabilities $21,756 $72,979 $14,619 $— $109,354Customer deposits — 24,626 8,910 — 33,536Income taxes payable — — 738 — 738Intercompany payable — — 1,025 (1,025) —Total current liabilities 21,756 97,605 25,292 (1,025) 143,628 Revolving unsecured creditfacilities 260,000 — — — 260,000Senior unsecured notes 196,545 — — — 196,545Deferred tax liabilities — 58,286 2,989 — 61,275Other liabilities — 33,769 — — 33,769Total liabilities 478,301 189,660 28,281 (1,025) 695,217 Total stockholders’ equity 1,449,986 1,579,869 326,575 (1,906,444) 1,449,986Total liabilities andstockholders’ equity $1,928,287 $1,769,529 $354,856 $(1,907,469) $2,145,203F-41Table of Contents Condensed Consolidating Balance SheetDecember 31, 2015 ParentCompany GuarantorSubsidiaries Non-Guarantor Subsidiaries ConsolidatingEliminations ConsolidatedASSETS Cash and cash equivalents $5,460 $3,765 $77,729 $— $86,954Fees and service charges receivable — 7,596 8,810 — 16,406Pawn loans — 61,204 56,397 — 117,601Consumer loans, net — 624 494 — 1,118Inventories — 46,349 47,109 — 93,458Income taxes receivable 3,567 — — — 3,567Prepaid expenses and other currentassets 2,910 — 3,420 — 6,330Intercompany receivable 7,382 — — (7,382) —Total current assets 19,319 119,538 193,959 (7,382) 325,434 Property and equipment, net 3,568 55,585 53,294 — 112,447Goodwill — 196,224 99,385 — 295,609Intangible assets, net — 4,418 1,763 — 6,181Other assets 1,290 475 2,138 — 3,903Deferred tax assets — — 9,321 — 9,321Investments in subsidiaries 675,574 — — (675,574) —Total assets $699,751 $376,240 $359,860 $(682,956) $752,895 LIABILITIES ANDSTOCKHOLDERS’ EQUITY Accounts payable and accruedliabilities $14,308 $1,724 $11,794 $— $27,826Customer deposits — 6,205 8,221 — 14,426Income taxes payable — — 3,923 — 3,923Intercompany payable — — 7,382 (7,382) —Total current liabilities 14,308 7,929 31,320 (7,382) 46,175 Revolving unsecured creditfacilities 58,000 — — — 58,000Senior unsecured notes 195,874 — — — 195,874Deferred tax liabilities 187 18,880 2,397 — 21,464Total liabilities 268,369 26,809 33,717 (7,382) 321,513 Total stockholders’ equity 431,382 349,431 326,143 (675,574) 431,382Total liabilities andstockholders’ equity $699,751 $376,240 $359,860 $(682,956) $752,895F-42Table of Contents Condensed Consolidating Statement of Comprehensive Income (Loss)Year Ended December 31, 2016 ParentCompany Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Eliminations ConsolidatedRevenue: Retail merchandise sales $— $352,147 $316,984 $— $669,131Pawn loan fees — 184,907 127,850 — 312,757Consumer loan and creditservices fees — 41,591 2,260 — 43,851Wholesale scrap jewelrysales — 45,002 17,636 — 62,638Total revenue — 623,647 464,730 — 1,088,377 Cost of revenue: Cost of retail merchandise sold — 218,488 200,068 — 418,556Consumer loan and creditservices loss provision — 11,475 518 — 11,993Cost of wholesale scrap jewelrysold — 39,264 13,761 — 53,025Total cost of revenue — 269,227 214,347 — 483,574 Net revenue — 354,420 250,383 — 604,803 Expenses and other income: Store operating expenses — 200,004 128,010 — 328,014Administrative expenses (1) 26,838 28,167 41,532 — 96,537Depreciation and amortization 950 18,855 12,060 — 31,865Interest expense 20,201 49 70 — 20,320Interest income (6) (10) (735) — (751)Merger and other acquisitionexpenses 21,268 15,402 — — 36,670Net gain on sale of commonstock of Enova — (1,299) — — (1,299)Total expenses and otherincome 69,251 261,168 180,937 — 511,356 Income (loss) before income taxes (69,251) 93,252 69,446 — 93,447 Provision for income taxes (22,036) 34,503 20,853 — 33,320 Income (loss) before equity in netincome of subsidiaries (47,215) 58,749 48,593 — 60,127 Equity in net income ofsubsidiaries 107,342 — — (107,342) — Net income (loss) $60,127 $58,749 $48,593 $(107,342) $60,127Other comprehensive income (loss): Currency translation adjustment (41,396) — — — (41,396)Comprehensive income (loss) $18,731 $58,749 $48,593 $(107,342) $18,731(1) Includes the allocation of certain administrative expenses and the payment of royalties between the Parent Company and certain foreign Non-Guarantor Subsidiaries.F-43Table of Contents Condensed Consolidating Statement of Comprehensive Income (Loss)Year Ended December 31, 2015 ParentCompany Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Eliminations ConsolidatedRevenue: Retail merchandise sales $— $163,648 $285,648 $— $449,296Pawn loan fees — 84,295 111,153 — 195,448Consumer loan and creditservices fees — 25,294 2,509 — 27,803Wholesale scrap jewelrysales — 17,396 14,659 — 32,055Total revenue — 290,633 413,969 — 704,602 Cost of revenue: Cost of retail merchandisesold — 95,129 183,502 — 278,631Consumer loan and creditservices loss provision — 6,748 411 — 7,159Cost of wholesale scrapjewelry sold — 15,861 11,767 — 27,628Total cost of revenue — 117,738 195,680 — 313,418 Net revenue — 172,895 218,289 — 391,184 Expenses and other income: Store operating expenses — 92,277 115,295 — 207,572Administrative expenses (1) 23,592 — 28,291 — 51,883Depreciation and amortization 758 6,800 10,381 — 17,939Interest expense 16,887 — — — 16,887Interest income (13) — (1,553) — (1,566)Merger and other acquisitionexpenses 2,875 — — — 2,875Goodwill impairment - U.S.consumer loan operations — 7,913 — — 7,913Total expenses and otherincome 44,099 106,990 152,414 — 303,503 Income (loss) before incometaxes (44,099) 65,905 65,875 — 87,681 Provision for income taxes (16,844) 24,385 19,430 — 26,971 Income (loss) before equity in netincome of subsidiaries (27,255) 41,520 46,445 — 60,710 Equity in net income ofsubsidiaries 87,965 — — (87,965) — Net income (loss) $60,710 $41,520 $46,445 $(87,965) $60,710Other comprehensive income(loss): Currency translationadjustment (38,132) — — — (38,132)Comprehensive income (loss) $22,578 $41,520 $46,445 $(87,965) $22,578(1) Includes the allocation of certain administrative expenses and the payment of royalties between the Parent Company and certain foreign Non-Guarantor Subsidiaries.F-44Table of Contents Condensed Consolidating Statement of Comprehensive Income (Loss)Year Ended December 31, 2014 ParentCompany Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Eliminations ConsolidatedRevenue: Retail merchandise sales $— $155,619 $272,563 $— $428,182Pawn loan fees — 83,321 116,036 — 199,357Consumer loan and creditservices fees — 33,568 3,181 — 36,749Wholesale scrap jewelrysales — 26,365 22,224 — 48,589Total revenue — 298,873 414,004 — 712,877 Cost of revenue: Cost of retail merchandisesold — 88,590 173,083 — 261,673Consumer loan and creditservices loss provision — 8,678 609 — 9,287Cost of wholesale scrapjewelry sold — 22,675 18,369 — 41,044Total cost of revenue — 119,943 192,061 — 312,004 Net revenue — 178,930 221,943 — 400,873 Expenses and other income: Store operating expenses — 89,068 109,918 — 198,986Administrative expenses (1) 23,097 — 30,491 — 53,588Depreciation and amortization 997 6,104 10,375 — 17,476Interest expense 13,527 — — — 13,527Interest income (24) — (658) — (682)Merger and other acquisitionexpenses 998 — — — 998Total expenses and otherincome 38,595 95,172 150,126 — 283,893 Income (loss) from continuingoperations before incometaxes (38,595) 83,758 71,817 — 116,980 Provision for income taxes (17,651) 30,983 18,210 — 31,542 Income (loss) from continuingoperations before equity innet income of subsidiaries (20,944) 52,775 53,607 — 85,438 Loss from discontinuedoperations, net of tax — — (272) — (272)Equity in net income ofsubsidiaries 106,110 — — (106,110) — Net income (loss) $85,166 $52,775 $53,335 $(106,110) $85,166Other comprehensive income(loss): Currency translationadjustment (28,517) — — — (28,517)Comprehensive income (loss) $56,649 $52,775 $53,335 $(106,110) $56,649(1) Includes the allocation of certain administrative expenses and the payment of royalties between the Parent Company and certain foreign Non-Guarantor Subsidiaries.F-45Table of Contents Condensed Consolidating Statement of Cash FlowsYear Ended December 31, 2016 ParentCompany Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Eliminations ConsolidatedCash flow from operatingactivities: Net cash flow provided by(used in) operatingactivities $153,924 $82,030 $48,620 $(187,720) $96,854Cash flow from investingactivities: Loan receivables, net of cashrepayments — 1,909 (17,981) — (16,072)Purchases of property andequipment (1,118) (20,718) (12,027) — (33,863)Portion of aggregate mergerconsideration paid incash, net of cash acquired — (8,250) — — (8,250)Acquisitions of pawn stores,net of cash acquired — (2,433) (27,433) — (29,866)Proceeds from sale ofcommon stock of Enova — 62,084 — — 62,084Investing activity withsubsidiaries (329,422) — — 329,422 —Net cash flow provided by(used in) investingactivities (330,540) 32,592 (57,441) 329,422 (25,967)Cash flow from financingactivities: Borrowings from revolvingcredit facilities 400,000 — — — 400,000Repayments of revolvingcredit facilities (198,000) — — — (198,000)Repayments of debt assumedwith merger and otheracquisitions — (232,000) (6,532) — (238,532)Debt issuance costs paid (2,373) — — — (2,373)Common stock dividendspaid (19,808) — — — (19,808)Proceeds from intercompanyfinancing related activity — 329,138 284 (329,422) —Intercompany dividends paid — (180,671) (7,049) 187,720 —Net cash flow provided by(used in) financingactivities 179,819 (83,533) (13,297) (141,702) (58,713)Effect of exchange rates on cash — — (9,173) — (9,173)Change in cash and cashequivalents 3,203 31,089 (31,291) — 3,001Cash and cash equivalents atbeginning of the period 5,460 3,765 77,729 — 86,954Cash and cash equivalents at endof the period $8,663 $34,854 $46,438 $— $89,955F-46Table of Contents Condensed Consolidating Statement of Cash FlowsYear Ended December 31, 2015 ParentCompany Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Eliminations ConsolidatedCash flow from operatingactivities: Net cash flow provided by(used in) operatingactivities $32,753 $59,675 $66,713 $(66,392) $92,749Cash flow from investingactivities: Loan receivables, net of cashrepayments — 1,803 (5,519) — (3,716)Purchases of property andequipment (329) (6,919) (13,825) — (21,073)Acquisitions of pawn stores,net of cash acquired — (29,617) (17,270) — (46,887)Investing activity withsubsidiaries (43,890) — — 43,890 —Net cash flow provided by(used in) investingactivities (44,219) (34,733) (36,614) 43,890 (71,676)Cash flow from financingactivities: Borrowings from revolvingcredit facilities 120,000 — — — 120,000Repayments of revolvingcredit facilities (84,400) — — — (84,400)Debt issuance costs paid (407) — — — (407)Purchases of treasury stock (39,974) — — — (39,974)Proceeds from exercise ofshare-based compensationawards 9,895 — — — 9,895Income tax benefit fromexercise of stock options 5,126 — — — 5,126Payment of minimumwithholding taxes on netshare settlement of stockoptions exercised (1,113) — — — (1,113)Proceeds from intercompanyfinancing related activity — 36,536 7,354 (43,890) —Intercompany dividends paid — (60,859) (5,533) 66,392 —Net cash flow provided by(used in) financingactivities 9,127 (24,323) 1,821 22,502 9,127Effect of exchange rates on cash — — (11,238) — (11,238)Change in cash and cashequivalents (2,339) 619 20,682 — 18,962Cash and cash equivalents atbeginning of the period 7,799 3,146 57,047 — 67,992Cash and cash equivalents at endof the period $5,460 $3,765 $77,729 $— $86,954F-47Table of Contents Condensed Consolidating Statement of Cash FlowsYear Ended December 31, 2014 ParentCompany Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Eliminations ConsolidatedCash flow from operatingactivities: Net cash flow provided by(used in) operatingactivities $42,632 $62,403 $63,510 $(70,866) $97,679Cash flow from investingactivities: Loan receivables, net of cashrepayments — 2,785 (5,255) — (2,470)Purchases of property andequipment (839) (8,097) (15,018) — (23,954)Acquisitions of pawn stores,net of cash acquired — (16,417) (42,525) — (58,942)Investing activity withsubsidiaries (49,570) — — 49,570 —Net cash flow provided by(used in) investingactivities (50,409) (21,729) (62,798) 49,570 (85,366)Cash flow from financingactivities: Borrowings from revolvingcredit facilities 50,000 — — — 50,000Repayments of revolvingcredit facilities (209,600) — — — (209,600)Repayments of notes payable (8,352) — — — (8,352)Issuance of senior unsecurednotes 200,000 — — — 200,000Debt issuance costs paid (6,610) — — — (6,610)Purchases of treasury stock (43,947) — — — (43,947)Proceeds from exercise ofshare-based compensationawards 5,270 — — — 5,270Income tax benefit fromexercise of stock options 4,141 — — — 4,141Proceeds from intercompanyfinancing related activity — 24,514 25,056 (49,570) —Intercompany dividends paid — (66,623) (4,243) 70,866 —Net cash flow provided by(used in) financingactivities (9,098) (42,109) 20,813 21,296 (9,098)Effect of exchange rates on cash — — (5,866) — (5,866)Change in cash and cashequivalents (16,875) (1,435) 15,659 — (2,651)Cash and cash equivalents atbeginning of the period 24,674 4,581 41,388 — 70,643Cash and cash equivalents at endof the period $7,799 $3,146 $57,047 $— $67,992F-48EXHIBIT 21.1FIRSTCASH, INC.SUBSIDIARIESSubsidiary NameCountry/State of FormationPercentageOwnedBy RegistrantFirstCash, Inc.Delaware100%First Cash, Inc.Nevada100%Famous Pawn, Inc.Maryland100%College Park Jewelers, Inc.Maryland100%King Pawn, Inc.Maryland100%Maryland Precious Metals, Inc.Maryland100%FCFS OK, Inc.Oklahoma100%FCFS MO, Inc.Missouri100%FCFS IN, Inc.Indiana100%FCFS SC, Inc.South Carolina100%FCFS NC, Inc.North Carolina100%Frontier Merger Sub, LLCDelaware100%First Cash Corp.Delaware100%First Cash Credit Management, LLCTexas100%First Cash Credit, Ltd.Texas100%First Cash, Ltd.Texas100%First Cash Management, LLCDelaware100%LWC, LLCKentucky100%FCFS KY, Inc.Kentucky100%LTS, IncorporatedColorado100%MM-RM, Inc.Colorado100%FCFS CO, Inc.Colorado100%FC International, LLCDelaware100%FCFS Global, B.V.Netherlands100%First Cash, S.A. de C.V.Mexico100%American Loan Employee Services, S.A. de C.V.Mexico100%Maxi Prenda, S.A. de C.V.Mexico100%Empenos Mexicanos, S.A. de C.V.Mexico100%Maxi Realice Servicios Profesionales, S.A. de C.V.Mexico100%Soluciones Prima, S.A. de C.V.Mexico100%Comercializadora Maxi, Sociedad AnonimaGuatemala100%Maxi Prenda Guatemala, Sociedad AnonimaGuatemala100%Soluciones Administrativas de Guatemala, Sociedad AnonimaGuatemala100%Soluciones Prima Guatemala, Sociedad AnonimaGuatemala100%First Cash SV, Limitada de C.V.El Salvador100%First Cash Colombia, LTDAColombia100%Maxi Prenda Honduras, S.A. de C.V.Honduras100%Soluciones Prima Honduras, S.A. de C.V.Honduras100%FIRSTCASH, INC.SUBSIDIARIESCONTINUEDSubsidiary NameCountry/State of FormationPercentageOwnedBy RegistrantCash America Central, Inc.Tennessee100%Cash America East, Inc.Florida100%Cash America Financial Services, Inc.Delaware100%Cash America Holding, Inc.Delaware100%Cash America Management L.P.Delaware100%Cash America of Mexico, Inc.Delaware100%Cash America Pawn L.P.Delaware100%Cash America West, Inc.Nevada100%Cash America, Inc.Delaware100%Cash America Advance, Inc.Delaware100%Cash America, Inc. of AlaskaAlaska100%Cash America, Inc. of IllinoisIllinois100%Cash America, Inc. of LouisianaDelaware100%Cash America, Inc. of North CarolinaNorth Carolina100%Cash America, Inc. of OklahomaOklahoma100%Cash America Internet Sales, Inc.Delaware100%Cash America of Missouri, Inc.Missouri100%Cashland Financial Services, Inc.Delaware100%Creazione Estilo, S.A. de C.V., a sociedad anónima de capital variable (inliquidation) MexicoMexico100%CSH Holdings LLCDelaware100%Georgia Cash America, Inc.Georgia100%Mr. Payroll CorporationDelaware100%Ohio Neighborhood Finance, Inc.Delaware100%Ohio Neighborhood Credit Solutions, LLCDelaware100%EXHIBIT 23.1CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe consent to the incorporation by reference in Registration Statements Nos. 333-71077 and 333-106878 on Form S-3, and Nos. 333-73391, 333-106880, 333-106881, 333-132665, 333-181837 and 333-214452 on Form S-8 of our reports, dated March 1, 2017 , relating to the financial statements of FirstCash, Inc. as of December 31, 2016 and forthe year ended December 31, 2016 , and to the effectiveness of internal control over financial reporting as of December 31, 2016 , appearing in this Annual Report on Form10-K of FirstCash, Inc./s/ RSM US LLPDallas, TexasMarch 1, 2017EXHIBIT 23.2CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe consent to the incorporation by reference in Registration Statement Nos. 333-71077 and 333-106878 on Form S-3, and Nos. 333-73391, 333-106880, 333-106881, 333-132665 and 333-181837on Form S-8 of our reports, dated February 17, 2016, relating to the financial statements of First Cash Financial Services, Inc. as of December 31,2015 , and for each of the two years ended December 31, 2015, appearing in this Annual Report on Form 10-K of FirstCash, Inc./s/ Hein & Associates LLPDallas, TexasMarch 1, 2017EXHIBIT 31.1CERTIFICATION PURSUANT TOSECTION 302 OF THE SARBANES-OXLEY ACTI, Rick L. Wessel, certify that:1.I have reviewed this Annual Report on Form 10-K of FirstCash, Inc. (the “Registrant”);2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, inlight of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition,results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;4.The Registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularlyduring the period in which this report is being prepared;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles;c.Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd.Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter(the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant'sinternal control over financial reporting; and5.The Registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant'sauditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the Registrant's ability to record, process, summarize and report financial information; and b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control overfinancial reporting.Date: March 1, 2017/s/ Rick L. WesselRick L. WesselChief Executive OfficerEXHIBIT 31.2CERTIFICATION PURSUANT TOSECTION 302 OF THE SARBANES-OXLEY ACT I, R. Douglas Orr, certify that: 1.I have reviewed this Annual Report on Form 10-K of FirstCash, Inc. (the “Registrant”);2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, inlight of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition,results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;4.The Registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularlyduring the period in which this report is being prepared;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles;c.Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd.Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter(the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant'sinternal control over financial reporting; and5.The Registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant'sauditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the Registrant's ability to record, process, summarize and report financial information; and b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control overfinancial reporting.Date: March 1, 2017/s/ R. Douglas OrrR. Douglas OrrChief Financial OfficerEXHIBIT 32.1CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TO SECTION 906OF THE SARBANES-OXLEY ACT OF 2002In connection with the Annual Report of FirstCash, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2016 , as filed with the Securities and ExchangeCommission on the date hereof (the “Report”), I, Rick L. Wessel, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant toSection 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Act of 1934, as amended; and2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: March 1, 2017/s/ Rick L. WesselRick L. WesselChief Executive OfficerEXHIBIT 32.2CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TO SECTION 906OF THE SARBANES-OXLEY ACT OF 2002In connection with the Annual Report of FirstCash, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2016 , as filed with the Securities and ExchangeCommission on the date hereof (the “Report”), I, R. Douglas Orr, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant toSection 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Act of 1934, as amended; and2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: March 1, 2017/s/ R. Douglas OrrR. Douglas OrrChief Financial Officer

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