First Cash Financial Services Inc.
Annual Report 2019

Plain-text annual report

Table of Contents UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 10-KANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2019ORTRANSITION 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)Delaware 75-2237318(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 1600 West 7th StreetFort WorthTexas 76102(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 ClassTrading Symbol(s)Name of Each Exchange on Which RegisteredCommon Stock, par value $.01 per shareFCFSThe Nasdaq Stock MarketSecurities 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.☒Yes ☐ NoIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.☐Yes ☒ NoTable of Contents Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. ☒Yes ☐ No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of RegulationS-T (§232.405) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒Yes ☐ NoIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company or anemerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” inRule 12b-2 of the Exchange Act.Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting company Emerging growth companyIf an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐Yes ☒ NoAs of June 28, 2019, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately $3,102,000,000 basedon the closing price as reported on the Nasdaq Stock Market. As of January 28, 2020, there were 41,997,062 shares of common stock outstanding.DOCUMENTS INCORPORATED BY REFERENCEPortions of the registrant’s definitive Proxy Statement relating to its 2020 Annual Meeting of Stockholders to be held on or about June 4, 2020, is incorporated byreference in Part 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, 2019TABLE OF CONTENTSPART I Item 1.Business1Item 1A.Risk Factors17Item 1B.Unresolved Staff Comments29Item 2.Properties29Item 3.Legal Proceedings30Item 4.Mine Safety Disclosures30 PART II Item 5.Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities30Item 6.Selected Financial Data33Item 7.Management's Discussion and Analysis of Financial Condition and Results of Operations34Item 7A.Quantitative and Qualitative Disclosures About Market Risk56Item 8.Financial Statements and Supplementary Data57Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure57Item 9A.Controls and Procedures58Item 9B.Other Information60 PART III Item 10.Directors, Executive Officers and Corporate Governance60Item 11.Executive Compensation60Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters60Item 13.Certain Relationships and Related Transactions, and Director Independence60Item 14.Principal Accountant Fees and Services60 PART IV Item 15.Exhibits and Financial Statement Schedules61Item 16.Form 10-K Summary63 SIGNATURES64Table of Contents CAUTIONARY STATEMENT REGARDING RISKS AND UNCERTAINTIES THAT MAY AFFECT FUTURERESULTSForward-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 theuse of forward-looking terminology 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 and future plans. Forward-looking statements can also be identified by the fact these statements do not relate strictlyto historical or current matters. Rather, forward-looking statements relate to anticipated or expected events, activities, trends or results. Because forward-lookingstatements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties.While the Company believes the expectations reflected in forward-looking statements are reasonable, there can be no assurances such expectations will prove to beaccurate. Security holders are cautioned that such forward-looking statements involve risks and uncertainties. Certain factors may cause results to differ materiallyfrom those anticipated by the forward-looking statements made in this annual report. Such factors may include, without limitation, the risks, uncertainties andregulatory developments discussed and described in (1) this annual report, including the risks described in Part I, Item IA, “Risk Factors” hereof, and (2) otherreports filed with the SEC. Many of these risks and uncertainties are beyond the ability of the Company to control, nor can the Company predict, in many cases, allof the risks and uncertainties that could cause its actual results to differ materially from those indicated by the forward-looking statements. The forward-lookingstatements contained in this annual report speak only as of the date of this annual report, and the Company expressly disclaims any obligation or undertaking toreport any updates or revisions to any such statement to reflect any change in the Company’s expectations or any change in events, conditions or circumstances onwhich any such statement is based, except as required by law.Table of Contents PART IItem 1. BusinessGeneralThe Company is a leading operator of retail pawn stores in the U.S. and Latin America. As of December 31, 2019, the Company had 2,679 locations, consisting of1,056 stores in 24 U.S. states and the District of Columbia, 1,548 stores in all 32 states in Mexico, 54 stores in Guatemala, 13 stores in El Salvador and eight storesin Colombia. The Company’s primary business is the operation of full-service pawn stores, also known as “pawnshops,” which make pawn loans secured by personal propertysuch as jewelry, electronics, tools, appliances, sporting goods and musical instruments. Pawn loans can be quickly and easily accessed by customers who oftenhave limited access to traditional credit products. Pawn stores also retail value-priced consumer products acquired through collateral forfeitures on forfeited pawnloans and direct purchases of such merchandise from the general public. For the year ended December 31, 2019, 99% of the Company’s revenues were derivedfrom pawn operations.The Company organizes its operations into two reportable segments: the U.S. operations segment and the Latin America operations segment. The U.S. operationssegment consists of all pawn and consumer loan operations in the U.S. and the Latin America operations segment consists of all pawn operations in Latin America,which includes operations in Mexico, Guatemala, El Salvador and Colombia. For the year ended December 31, 2019, 64% of total revenues were derived from theU.S. and 36% were derived from Latin America. The Company’s strategy is to focus on growing its pawn operations in the U.S. and Latin America through acombination of new store openings and strategic acquisition opportunities as they arise.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, theCompany completed a merger with Cash America International, Inc. (“Cash America”), whereby Cash America merged with and into a wholly owned subsidiaryof the Company (the “Merger”).The Company’s principal executive offices are located at 1600 West 7th Street, Fort Worth, Texas 76102, and its telephone number is (817) 335-1100. TheCompany’s primary website is www.firstcash.com.Pawn IndustryPawn stores are neighborhood-based retail locations that buy and sell pre-owned consumer products such as jewelry, electronics, tools, appliances, sporting goodsand musical instruments. Pawn stores also provide a quick and convenient source of small secured consumer loans, also known as pawn loans, to unbanked, under-banked and credit-challenged customers. Pawn loans are safe and affordable non-recourse loans for which the customer has no legal obligation to repay. TheCompany does not attempt to collect on delinquent loans, does not take legal actions against its customers, does not blacklist its customers, nor does it issue anynegative external credit reporting, but rather relies only on the resale of the pawn collateral for recovery. The customers of pawnshops are typically value-conscious consumers and/or borrowers who are not effectively or efficiently served by traditional lenders such as banks, credit unions, credit card providers orother small loan providers.United StatesThe pawn industry in the U.S. 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 pawnoperations have historically seen the greatest concentration of pawn stores. Management believes the U.S. pawn industry, although mature, remains highlyfragmented. The two publicly traded companies in the pawn industry, which includes the Company, currently operate approximately 1,600 of the estimated 12,000to 14,000 pawn stores in the U.S. The Company believes the majority of pawnshops in the U.S. are owned by individuals operating five or fewer locations.Mexico and Other Latin American MarketsThe majority of pawn stores in Latin America are smaller than U.S. pawn stores, with limited retail space and pawn loans typically collateralized by gold jewelry orsmall electronics. In contrast, a majority of the Company’s pawn stores in Latin America are larger format, full-service stores, similar to the U.S. stores, whichlend on a wide array of collateral and have a larger retail sales floor. Accordingly, competition in Latin America with the Company’s larger format, full-servicepawn stores is limited. A large1Table of Contents percentage of the population in Mexico and other countries in Latin America is unbanked or under-banked and has limited access to traditional consumer credit.The Company believes there is significant opportunity for further expansion in Mexico and other Latin American countries due to the large potential consumerbase and limited competition from other large format, full-service pawn store operators.Business StrategyThe Company’s long-term business plan is to grow revenues and income by opening new (“de novo”) retail pawn locations, acquiring existing pawn stores instrategic markets and increasing revenue and operating profits in existing stores. In pursuing its business strategy, the Company seeks to establish clusters ofseveral stores in specific geographic areas with favorable regulations and customer demographics and to achieve certain economies of scale relative tomanagement and supervision, pricing and purchasing, information and accounting systems and security/loss prevention.The Company has opened or acquired 1,918 pawn stores in the last five years, including 815 pawn stores acquired in connection with the Cash America Merger,with net store additions growing at a compound annual store growth rate of 22% over this period. The Company intends to open or acquire additional stores inlocations where management believes appropriate demand and other favorable conditions exist. The following table details stores opened and acquired over thefive-year period ended December 31, 2019: Year Ended December 31, 2019 2018 2017 2016 2015U.S. operations segment: Merged Cash America locations— — — 815 —New locations opened— — 2 — —Locations acquired27 27 1 3 33Total additions27 27 3 818 33 Latin America operations segment: New locations opened89 52 45 41 38Locations acquired163 366 5 179 32Total additions252 418 50 220 70 Total: Merged Cash America locations— — — 815 —New locations opened89 52 47 41 38Locations acquired190 393 6 182 65Total additions279 445 53 1,038 103For 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. The Company typically opens new stores in under-developed markets andneighborhoods, 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 12 weeks. The investment required to open a newlocation includes store operating cash, inventory, funds for pawn loans, leasehold improvements, store fixtures, security systems, computer equipment and otherstart-up costs.2Table of Contents AcquisitionsDue to 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 size of competing stores, and researches federal, state and local regulatory standards. Specific pawn store acquisition criteria include an evaluationof the volume of merchandise sales and pawn transactions, outstanding customer pawn loan balances, historical pawn yields, merchandise sales margins, pawnloan redemption rates, the condition and quantity of inventory on hand, licensing restrictions or requirements and the location, condition and lease terms of thefacility.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 yieldon pawn loans and store operating expenses. To encourage customer traffic, which management believes is a key determinant of a store’s success, the Companyhas taken several steps to distinguish its stores and to make customers feel more comfortable and secure. In addition to a clean and secure physical store facility,the stores’ exteriors typically display attractive and distinctive signage similar to that used by contemporary specialty retailers.The Company has employee-training programs that promote customer service, productivity and professionalism. The Company utilizes a proprietary computerinformation system that provides fully-integrated functionality to support point-of-sale retail operations, real-time merchandise valuations, loan-to-valuecalculations, inventory management, customer recordkeeping, loan management, compliance and control systems and employee compensation. Each store isconnected on a real-time basis to a secure data center that houses the centralized databases and operating systems. The information system provides managementwith the ability to continuously monitor store transactions and operating results.The Company maintains a well-trained internal audit staff that conducts regular store audits to test compliance of regulatory, financial and operational controls.Management believes the current operating and financial controls and systems are adequate for the Company’s existing store base and can accommodatereasonably 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 store locations. The items sold generally consist of pre-ownedconsumer products such as jewelry, electronics, tools, appliances, sporting goods and musical instruments. The Company also melts certain quantities of non-retailable scrap jewelry and sells the gold, silver and diamonds in the commodity markets. Merchandise sales accounted for approximately 69% of the Company’srevenue during 2019.Merchandise inventory is acquired primarily through forfeited pawn loan collateral and, to a lesser extent, through purchases of used goods directly from thegeneral public. Merchandise acquired by the Company through forfeited pawn loan collateral is carried in inventory at the amount of the related pawn loan,exclusive of any accrued service fees. The Company also acquires limited quantities of new or refurbished general merchandise inventories directly fromwholesalers and manufacturers.The Company does not provide direct financing to customers for the purchase of its merchandise, but does allow 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 all or a portion ofprevious payments are typically forfeited to the Company. Interim payments from customers on layaway sales are recorded as deferred revenue and subsequentlyrecorded as retail merchandise sales revenue when the merchandise is delivered to the customer upon receipt of final payment or when previous payments areforfeited 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 theU.S.3Table of Contents Pawn Lending ActivitiesThe Company’s stores make pawn loans, which are typically small, secured loans to its customers in order to help them meet short-term cash needs. All pawnloans are collateralized by personal property such as jewelry, electronics, tools, appliances, sporting goods and musical instruments. The pledged collateralprovides the only security to the Company for the repayment of the loan. The Company does not investigate the creditworthiness of the borrower, primarily relyinginstead 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 alegal obligation 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 or contract, commonly referred to as a “pawn ticket,” is delivered to the borrower for signaturethat sets forth, among other items, the borrower’s name and identification information, a description of the pledged goods, amount financed, pawn service fee,maturity date, total amount that must be paid to redeem the pledged goods on the maturity date and the annual percentage rate.The term of a pawn loan is typically 30 days plus an additional grace period of 14 to 90 days, depending on geographic markets and local regulations. Pawn loansmay 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 ofaccrued pawn loan fees and service charges. If a pawn loan is not repaid prior to the expiration of the grace period, the pawn collateral is forfeited to the Companyand transferred to inventory at a value equal to the principal amount of the loan, exclusive of accrued service fees. Pledged property is held in a secured, non-publicwarehouse area of the pawn store for the term of the loan and the grace period, unless the loan is repaid earlier. In certain markets, the Company also providespawn loans collateralized by automobiles, which remain in the Company’s possession or in limited cases, remain in the possession of the customer. The Companydoes not record pawn loan losses or charge-offs because the amount advanced becomes the carrying cost of the forfeited collateral that is to be recovered throughthe merchandise sales function described above.The pawn loan fees are typically calculated as a percentage of the pawn loan amount based on the size, duration and type of collateral of the pawn loan andgenerally range from 4% to 25% per month, as permitted by applicable law. As required by applicable law, the amounts of these charges are disclosed to thecustomer on the pawn ticket. Pawn loan fees accounted for approximately 30% of the Company’s revenue during 2019.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 nominimum or maximum pawn loan to fair market value restrictions in connection with the Company’s lending activities. In order to estimate the value of thecollateral, the Company utilizes its proprietary point-of-sale and loan management system to recall recent selling prices of similar merchandise in its own stores.The basis for the Company’s determination of the retail value also includes such sources as precious metals spot markets, catalogs, blue books, online auction sitesand retailer advertisements. These sources, together with the employees’ experience in selling similar items of merchandise in particular stores, influence thedetermination of the estimated retail value of such items. The Company does not utilize a standard or mandated percentage of estimated retail value in determiningthe amount to be financed. Rather, the employee has the authority to set the percentage for a particular item and to determine the ratio of pawn loan amount toestimated sales value with the expectation that, if the item is forfeited to the pawnshop, its subsequent sale should yield a gross profit margin consistent with theCompany’s historical experience. The recovery of the principal and realization of gross profit on sales of inventory is dependent on the Company’s initialassessment of the property’s estimated retail value. Improper over-assessment of the retail value of the collateral in the lending function can result in reduced grossprofit margins from the sale of the merchandise.The Company typically experiences seasonal growth in its pawn loan balances in the third and fourth quarters following lower balances in the first two quartersdue to the typical 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.Consumer Loan and Credit Services ActivitiesIn a limited number of U.S. locations, the Company offers small unsecured consumer loans or a fee-based credit services organization program (“CSO Program”).The CSO Program assists consumers in obtaining extensions of credit from an independent, non-bank, consumer lending company (the “Independent Lender”).These products have been significantly deemphasized by the Company in recent years due to regulatory constraints and increased internet based competition.4Table of Contents The Company currently offers unsecured consumer loans or credit services in only 47 U.S. locations, of which 41 are full-service pawnshops offering such servicesprimarily as an ancillary product. Total revenues from unsecured consumer loan and credit services operations were $20 million and accounted for approximately1% of the Company’s revenue during 2019. For 2020, the Company expects revenue from these products to total approximately $5 million, accounting forapproximately one quarter of one percent, or 0.25%, of total revenues.Franchise OperationsAs of December 31, 2019, the Company had 46 unconsolidated franchised check cashing locations in the U.S. operating under the “Mr. Payroll” brand. Each of theCompany’s franchised check cashing locations is subject to a franchise agreement negotiated individually with each franchisee and has varying durations. TheCompany receives franchise fees from each franchisee based on the gross revenue of check cashing services provided within the franchisee’s facility.As of December 31, 2019, the Company had 43 unconsolidated franchised pawn locations in Mexico operating under the “Prendamex” brand. Each of theCompany’s franchised pawn locations is subject to a franchise agreement negotiated individually with each franchisee and has varying durations. The Companyreceives franchise fees from each franchisee based on pawn loan and inventory balances of the franchised stores.Total revenue from franchise fees accounted for less than 0.1% of the Company’s revenue during 2019.Locations and OperationsAs of December 31, 2019, the Company had 2,679 store locations composed of 1,056 stores in 24 U.S. states and the District of Columbia, 1,548 stores in 32 statesin Mexico, 54 stores in Guatemala, 13 stores in El Salvador and eight stores in Colombia.The following table details store count activity for the twelve months ended December 31, 2019: U.S. Latin America Operations Segment (1) Operations Segment (2) Total LocationsTotal locations, beginning of period 1,094 1,379 2,473New locations opened — 89 89Locations acquired 27 163 190Locations closed or consolidated (3) (65) (8) (73)Total locations, end of period 1,056 1,623 2,679(1) At December 31, 2019, includes six consumer loan locations located in Texas, which only offer credit services products. This compares to 17 consumer loan locationswhich only offered consumer loans and/or credit services as of December 31, 2018. At December 31, 2019, 41 of the pawn stores, primarily located in Texas, alsooffered consumer loans and/or credit services primarily as an ancillary product. This compares to 262 U.S. pawn locations which offered such products as ofDecember 31, 2018. The table does not include 46 check cashing locations operated by independent franchisees under franchising agreements with the Company.(2) The table does not include 43 Mexico pawn locations operated by independent franchisees under franchising agreements with the Company.(3) Includes the closing of 52 Ohio locations and two other locations in Texas primarily focused on consumer lending products.The Company maintains its primary administrative offices in Fort Worth, Texas, Monterrey, Mexico and Mexico City, Mexico.5Table of Contents As of December 31, 2019, the Company’s stores were located in the following countries and states: Number ofLocations (1)U.S.: Texas (2)418Florida77Ohio67Tennessee53Georgia46North Carolina41Washington32Indiana30Colorado29Maryland29Arizona27Illinois27Nevada27South Carolina27Kentucky26Louisiana26Missouri24Oklahoma18Alabama8Alaska6Utah6Virginia6District of Columbia3Wyoming2Nebraska1 1,056Mexico: Veracruz218Estado de. Mexico (State of Mexico)185Puebla114Tamaulipas94Baja California81Jalisco67Nuevo Leon67Estado de Ciudad de Mexico (State of Mexico City)63Chiapas60Oaxaca55Tabasco53Coahuila49Hidalgo43Chihuahua42Guanajuato406Table of Contents Number ofLocations (1)Mexico (continued): Sonora33Quintana Roo32Sinaloa28Guerrero27Morelos24Aguascalientes22Michoacan22San Luis Potosi21Campeche17Durango17Queretaro16Tlaxcala12Yucatan11Zacatecas11Baja California Sur10Nayarit9Colima5 1,548 Guatemala54 El Salvador13 Colombia8 Total2,679(1) The table does not include 43 Mexico pawn locations and 46 U.S. check cashing locations operated by independent franchisees under franchising agreements with theCompany.(2) Includes six consumer loan locations, which only offer credit services products.Pawn Store OperationsThe Company’s typical large format pawn store is a freestanding building or part of a retail shopping center with dedicated available parking. The Company alsooperates smaller stores in Mexico, mostly in dense urban markets, which may not have dedicated parking. Management has established a standard store designintended to attract customers and distinguish the Company’s stores from the competition. The design consists of a well-illuminated exterior with distinctivesignage and a layout similar to other contemporary specialty retailers. The Company’s stores are typically open six or seven days a week from 9:00 a.m. tobetween 6:00 p.m. and 9:00 p.m.The Company attempts to attract customers primarily through the pawn stores’ visibility, signage and neighborhood presence. The Company uses seasonalpromotions, special discounts for regular customers, prominent display of impulse purchase items such as jewelry, electronics, and tools, tent and sidewalk salesand a layaway purchasing plan to attract retail shoppers. The Company attempts to attract and retain pawn customers by lending a competitive loan amount as apercentage of the estimated sales value of items presented for pledge and by providing quick loan processing, funding, renewal and redemption services in anappealing, customer-friendly atmosphere.7Table of Contents Generally, each pawnshop employs a manager, one or two assistant managers, and between two and eight sales personnel, depending upon the size, sales volumeand location of the store. The store manager is responsible for customer relations, reviewing pawn transactions and related collateral, inventory management,supervising personnel and assuring the store is managed in accordance with Company guidelines and established policies and procedures which emphasizesafeguarding of pledged and Company assets, strict cost containment and financial controls. All material store expenses are paid from corporate administrativeoffices in order to enhance financial accountability. The Company believes careful monitoring of customer transaction metrics and operational expenses enables itto maintain financial stability and profitability.Each store manager reports to a district manager, who typically oversees four to seven store managers. District managers typically report to a regional managerwho, in turn, typically reports to a regional operations director. Regional operations directors report to a regional vice president of operations. There is a senior vicepresident of operations and four regional vice presidents of operations.The Company believes the profitability of its pawnshops is dependent, among other factors, upon its employees’ ability to engage with customers and provideprompt and courteous service. The Company’s proprietary computer system tracks certain key transactional performance measures including pawn loan yields andmerchandise sales margins, and permits a store manager or clerk to rapidly recall the cost of an item in inventory and the date it was purchased, as well as the priortransaction history of a particular customer. It also facilitates the timely valuation of goods by showing values assigned to similar goods. The Company hasnetworked its stores to allow employees to more accurately determine the retail value of merchandise and to permit the Company’s headquarters to moreefficiently monitor each store’s operations, including merchandise sales, service charge revenue, pawn loans written 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 anorientation and training program that includes on-the-job training in lending practices, layaways, merchandise valuation, regulatory compliance and generaladministration of store operations. Certain experienced employees receive training and an introduction to the fundamentals of management to acquire the skillsnecessary to advance into management positions within the organization. Management training typically involves exposure to revenue and margin generation,regulatory compliance, recruitment and human resources management, asset and security control and cost efficiency. The Company maintains a non-qualified,performance-based profit sharing compensation plan for all store employees based on sales, gross profit and other performance criteria.Environmental Sustainability, Social Responsibility and DiversityPawnshops are neighborhood-based stores which contribute to the modern “circular economy.” Each of the Company’s 2,673 pawn locations provides a quick andconvenient source of small, non-recourse pawn loans and a neighborhood-based market for consumers to buy and resell popular consumer products in a safeenvironment. The Company is committed to environmental sustainability, providing customers with rapid access to capital and operating its business in a mannerthat results in a positive impact on its employees, communities and the environment. Environmental SustainabilityVirtually all of the Company’s merchandise inventories are pre-owned items sourced directly from local customers in each store’s immediate geographicneighborhood. In effect, the Company operates a large consumer product recycling business wherein it acquires unwanted or unneeded jewelry, electronics, tools,appliances, sporting goods and musical instruments from individual customers and resells them to other customers desiring such products within the sameneighborhood. This process extends the life and utilization of these products and helps reduce demand for newly manufactured and distributed products. TheCompany estimates that it resold approximately 14 million used or pre-owned consumer product items in its retail stores during 2019 with a commercial value ofapproximately $1.2 billion. In addition, the Company recycles significant volumes of precious metals and diamonds whereby unwanted or broken jewelry iscollected and melted/processed by the Company and then resold as a commodity for future commercial use. During 2019, the Company estimates that it recycledover 75,000 ounces of gold and over 50,000 carats of diamonds with a combined market value of approximately $103.9 million. This process helps reduce demandfor mined precious metals and diamonds.Unlike most brick and mortar or on-line retailers, the Company does not rely on manufacturing of its inventories nor does it source any material volume ofinventories from third party manufacturers or wholesalers. Accordingly, the Company does not own, operate or contract for any manufacturing, warehousing ordistribution facilities to support its retail sales or lending operations. Almost all retail sales and pawn loans are made to customers who live or work within a tightgeographic radius of the Company’s stores, and only a very small percentage of sales require delivery service. The Company owns or operates less than 40 motor8Table of Contents vehicles and trucks to support its 2,679 locations and, other than operating small storefront locations which are typically 5,000 square feet or less, the Companyhas virtually no carbon footprint related to its retail or lending operations.Non-Recourse Microlending Products Servicing the UnderbankedIt is estimated by multiple studies and surveys that approximately 25% of U.S. households remain unbanked or underbanked. In Latin America, the number ofunbanked or underbanked consumers can be as much as 75% of the population in countries such as Mexico. As a result, the majority of the Company’s customershave limited access to traditional forms of credit or capital. The Company contributes to its communities by providing these customers with instant access tocapital through very small non-recourse pawn loans or buying merchandise from its customers. The average credit provided to a customer is $177 in the U.S. and$71 in Latin America. Traditional lenders such as banks, credit unions, credit card providers or other small loan providers do not effectively offer micro creditproducts of this size.Obtaining a pawn loan is simple, requiring only a valid government ID and an item of personal property owned by the customer. The Company does notinvestigate the creditworthiness of a pawn customer, nor does it matter if the customer has defaulted on a previous pawn loan with the Company. Unlike mostcredit products, pawn customers are not required to have a bank account, a good credit history or the ability to document their level of income. The process ofobtaining a pawn loan is extremely fast, generally taking 15 minutes or less. Loans are funded immediately giving customers immediate access to the credit.Pawn loans are highly regulated, safe and affordable non-recourse loans for which the customer has no legal obligation to repay. Pawn loans differ from mostother forms of small dollar lending, as the Company does not attempt to collect on delinquent loans, does not take legal actions against its customers, does notblacklist its customers, nor does it issue any negative external credit reporting, but rather, relies only on the resale of the pawn collateral for recovery.Focus on Social and Corporate Responsibility in MexicoThe Company has significant operations in Mexico, where the majority of its employees and customers reside and where it focuses significant time and resourceson corporate responsibility initiatives.In 2018, the Company was certified as an Empresa Socialmente Responsable (“ESR”), or a socially responsible company, in Mexico under the framework of theXII Latin American Meeting of Corporate Social Responsibility promulgations. This ESR certification is granted to companies incorporated in Mexico that meet aseries of criteria that generally cover the economic, social and environmental sustainability of its operations, which include corporate ethics, good governance, thequality of life of the Company’s employees and a proven commitment to the betterment of the community where it operates, including the care and preservation ofthe environment.The Company has also established relationships and supports multiple foundations and programs in Mexico, including an exclusive partnership with the JUCONIFoundation, which works with families and children to prevent and help heal the trauma associated with domestic violence in families or children who are living inextreme poverty or are homeless. Additionally, the Company supports or partners with several other foundations and projects, which provide educationalscholarships, intern programs, reading initiatives and recycling programs for disadvantaged citizens.Diversity and Employee EmpowermentThe Company has 21,000 employees across five countries (the U.S., Mexico, Guatemala, El Salvador and Colombia). It is committed to creating a safe, trusted anddiverse environment in which its employees can thrive. Its employees’ wages are typically above the minimum wage standards in each country in which itoperates. The Company also believes in fairly compensating its employees by providing the ability to share in the Company’s profitability. For example, themajority of the Company’s front-line, store-based employees participate in a non-qualified profit sharing program which pays up to 8% of the gross profit anemployee personally produced through assigned customer service activities.The Company also provides its employees with extensive training and advancement opportunities, demonstrated by its long track record of employee advancementand promotion from within the organization. The Company maintains robust consumer compliance, anti-money laundering and anti-bribery training programs andrequires its managers to adhere to a labor compliance program that meets or exceeds the standards established for coercion and harassment, discrimination andrestrictions to freedom of association. The Company’s locations provide a safe, comfortable and healthy work environment and maintain compliance with alloccupational safety, wage and hour laws and other workplace regulations.9Table of Contents The Company values diversity at all levels of its organization. In the U.S., approximately 70% of all employees are ethnically diverse and 52% are female.Company-wide, approximately 89% of all employees are ethnically diverse and 56% are female. The Company’s store management employee population, inparticular, exhibits a high level of female and ethnic diversity, with approximately 55% being female and approximately 91% being either female and/or ethnicallydiverse. The Company’s senior leadership team, composed of district managers and higher, corporate department leaders and other executives, is diverse as well,with approximately 32% being female and approximately 82% being female and/or ethnically diverse.CompetitionThe Company encounters significant competition in connection with all aspects of its business operations. These competitive conditions may adversely affect theCompany’s revenue, profitability and ability to expand. The Company believes the primary elements of competition in the businesses in which it operates are storelocation, customer service, the ability to lend competitive amounts on pawn loans and to sell popular retail merchandise at competitive prices. In addition, theCompany competes with other lenders and retailers to attract and retain employees with competitive compensation programs.The Company’s pawn business competes primarily with other pawn store operators, other specialty consumer finance operators, including on-line lenders, retailand virtual rent-to-own operators and consumer goods retailers, including on-line operators. Management believes the pawn industry remains highly fragmentedwith an estimated 12,000 to 14,000 total pawnshops in the U.S. and 7,000 to 8,000 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., Mexico, Guatemala and El Salvador. Of these two, the Company had the mostpawn stores and the largest market capitalization as of December 31, 2019, and believes it is the largest public or private operator of large format, full-service pawnstores in the U.S. and Mexico. The pawnshop and other specialty consumer finance industries are characterized by a large number of independent owner-operators,some of whom own and operate multiple locations. In addition, the Company competes with other non-pawn lenders, such as banks and consumer financecompanies, which generally lend on an unsecured as well as a secured basis. Other lenders may and do lend money on terms more favorable than those offered bythe Company. Many of these financial institutions have greater financial resources than the Company’s with which to compete for consumer loans.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 operators, discount retail stores, “second-hand” stores, consumer electronics stores, other specialty retailers, online retailers, online auction sites,online classified advertising sites and other pawnshops. Competitive factors in the Company’s retail operations include the ability to provide the customer with avariety of merchandise items at attractive prices. Many of the retail competitors have significantly greater size and financial resources than the Company.Intellectual PropertyThe Company relies on a combination of trademarks, trade dress, trade secrets, proprietary software, website domain names and other rights, includingconfidentiality procedures and contractual provisions, 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 and loan managementsoftware. The Company enters into agreements with its employees, consultants and partners, and through these and other confidentiality or non-competeagreements, the Company attempts to control access to and distribution of its software, documentation and other proprietary technology and information. Despitethe Company’s efforts to protect its proprietary rights, third parties may, in an authorized or unauthorized manner, attempt to use, copy or otherwise obtain andmarket or distribute its intellectual property rights or technology or otherwise develop a product with the same functionality as its solution. Policing allunauthorized use of the Company’s intellectual property rights is nearly impossible. The Company cannot be certain that the steps it has taken or will take in thefuture will prevent misappropriations of its technology or intellectual property rights.“First Cash Pawn,” “Cash America” and “Cashland” are trademarks owned by the Company registered in the U.S. “FirstCash,” “First Cash,” “First CashEmpeño y Joyeria,” “Cash Ya,” “Cash & Go,” “CA,” “Cash America,” “Presta Max,” “Realice Empeños,” “Empeños Mexicanos” and “Prendamex” aretrademarks owned by the Company registered in the respective Latin American countries. Other trade names used by the Company in the U.S. and Latin Americainclude First Cash Advance, Famous Pawn, Fast Cash Pawn & Gold Center, King Pawn, Mister Money Pawn, Money Man Pawn, Valu + Pawn, Dan’s DiscountJewelry & Pawn, Quick Cash Pawn, Atomic Pawn, Loftis Jewelry & Pawnbrokers, Regent Pawn & Jewelry, Smart Pawn, Piazza Jewelry & Pawn, David’s PawnShop, Sharp Mart, Lakelands Pawn & Gun, SuperPawn, Mr. Payroll and Cash Plus Pawn.10Table of Contents 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. Theseregulations are implemented through various laws, ordinances and regulatory pronouncements from federal, state and municipal governmental entities in the U.S.and Latin America. These regulatory bodies often have broad discretionary authority over the establishment, interpretation and enforcement of such regulations.These regulations are subject to change, sometimes significantly, as a result of political, economic or social trends, events and media perception.The Company is subject to specific laws, regulations and ordinances primarily concerning its pawn and consumer lending operations. Many statutes andregulations prescribe, among other things, the general terms of the Company’s pawn and consumer loan agreements, including maximum service fees and/orinterest rates that may be charged and collected and mandatory consumer disclosures. In many municipal, state and federal jurisdictions in both the U.S. andcountries in Latin America, the Company must obtain and maintain regulatory store operating and employee licenses and comply with regular or frequentregulatory reporting and registration requirements, including reporting and recording of pawn loans, pawned collateral, used merchandise purchased from thegeneral public, retail sales activities, firearm transactions, export, import and transfer of merchandise, and currency transactions, among other things.In both the U.S. and Latin America, certain elected officials, regulators, consumer advocacy groups and the media have advocated for governmental action tofurther restrict or even prohibit pawn transactions or small consumer loans, such as payday advances and credit services products. Such advocates oftencharacterize pawn and payday lending activities as unfair or potentially abusive to consumers and typically focus on the aggregate fees charged to a consumer forpawn and consumer loans, which are typically higher than the interest rate generally charged by banks, credit unions and credit card issuers to consumers withestablished or higher-rated credit. They also focus on affordability issues such as the borrower’s ability to repay such loans, real or perceived patterns of sustainedor cyclical usage of such lending products and consumer loan collection practices perceived to be unfair or abusive. During the last few years, legislation,ordinances and edicts at federal, state and municipal levels have been introduced or enacted to prohibit, restrict or further regulate pawn and related transactions,including acceptance of pawn collateral and used merchandise in general or from certain individuals, sales of such merchandise in general or specific categoriessuch 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 in various levels of government in the U.S. and countries in Latin America have and will likely continue to make edicts, proposals orpublic statements concerning new or expanded regulations that would prohibit or further restrict pawn and consumer lending activities or other related pawntransactions.The Company is subject to numerous other types of regulations including, but not limited to, regulations related to securities and exchange activities, includingfinancial reporting and internal controls processes, data protection and privacy, tax compliance, health and safety, labor and employment practices, import/exportactivities, 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 will not change and negatively affect the Company’s business, or thatadditional local, state or federal statutes, regulations or edicts will not be enacted or that existing laws and regulations will not be amended, decreed or interpretedat some future date that could prohibit or limit the ability of the Company to profitably operate any or all of its services. For example, such regulations couldrestrict the ability of the Company to offer pawn loans, significantly decrease the interest rates or service fees for such lending activities, prohibit or morestringently regulate the acceptance of pawn collateral or buying used merchandise and the sale, exportation or importation of such pawn merchandise, any of whichcould have a material adverse effect on the Company’s operations and financial condition. If legislative, regulatory or other arbitrary actions or interpretations aretaken at a federal, state or local level in the U.S. or countries in Latin America which negatively affect the pawn industry where the Company has a concentrated orsignificant number of stores, those actions could have a material adverse effect on the Company’s business operations. There can be no assurance that suchregulatory action at any jurisdiction level will not be enacted, or that existing laws and regulations will not be amended, decreed or interpreted in such a way whichcould have a material adverse effect 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 andregulations have been enacted or proposed which have increased or could continue to increase regulation of the consumer finance industry. These regulations andrestrictions are or may be specific to pawn, credit services and consumer loan operations.11Table of Contents The Consumer Financial Protection Bureau (the “CFPB”), 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 certain financial institutions. Specifically, it has enforcement authority overall organizations the CFPB deems may create the potential for consumer harm or risk. The CFPB’s powers include explicit supervisory authority to examine andrequire registration of providers of consumer financial products and services, including providers of secured and unsecured consumer loans, such as the Company,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.Over the years, the CFPB has systematically gathered data related to all aspects of the consumer loan industry and its impact on consumers and continues to use itsShort-Term, Small-Dollar Lending Procedures, the field guide its examiners use when examining small-dollar lenders like the Company. The CFPB’s examinationauthority permits examiners to inspect the Company’s books and records and ask questions about its business and its practices relating to unsecured, small dollarloans, like payday loans. The examination procedures include, among other things, specific modules for examining marketing activities, loan application andorigination activities, payment processing activities and sustained use by consumers, collections and collection practices, defaults, consumer reporting and third-party or vendor relationships.The CFPB also has the authority to pursue administrative proceedings or litigation for actual or perceived violations of federal consumer laws (including theCFPB’s own rules). In these proceedings, the CFPB can seek consent orders, confidential memorandums of understandings, obtain cease and desist orders (whichcan include orders for redisclosure, restitution or rescission of contracts, as well as affirmative or injunctive relief) and monetary penalties ranging from $5,000 perday 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 addition to similar state consumer laws) empowers state attorneysgeneral and state regulators to bring administrative or civil actions seeking the same equitable relief available to the CFPB, in addition to state-led enforcementactions and consent orders. If the CFPB or one or more state officials believe that the Company has violated any of the applicable laws or regulations, they couldexercise their enforcement powers in ways that could have a material adverse effect on the Company or its business.On October 5, 2017, the CFPB released its small-dollar loan rule (the “SDL Rule”), however, it has yet to take practical effect since in early December 2018 ajudge in the 5th Circuit stayed the SDL Rule in a case filed by trade groups, which effectively put the compliance date for this rule on hold until further order bythe court. Since the court ordered the stay in litigation, the CFPB has revised the SDL Rule to address the mandatory underwriting provisions, proposing to rescindthose provisions altogether, including delaying compliance until late November 2020. Until the SDL Rule is deemed final, complete and effective, the impact tothe Company is unknown. The SDL Rule defines the Company’s consumer loan products, both short-term loans, and installment loans, as loans covered under therule. However, the Company believes the SDL Rule (even in its current form) will not directly impact the vast majority of its pawn products, which compriseapproximately 99% of its total revenues. On a consolidated basis, the Company expects consumer loan revenue for the year ending December 31, 2020 to accountfor approximately one quarter of one percent, or 0.25%, of the Company’s consolidated total revenue. If the SDL Rule remains effective in its current form, thesmall dollar lending industry will experience a significant regulatory change. However, given the Company’s continued de-emphasis of consumer loans and/orcredit services in recent years, the Company does not believe the SDL Rule, as currently written, will have a material adverse effect on the Company’s operationsand financial condition.In July 2015, the U.S. Department of Defense published a finalized set of additional requirements and restrictions under the Military Lending Act (“MLA Rule”).The MLA Rule, which went into effect on October 3, 2016, amended requirements for its “safe harbor” (making covered member attestation insufficient on itsown to comply with the “safe harbor” provision of the MLA Rule) and expanded the scope of the credit products covered by the MLA to include overdraft lines ofcredit, pawn loans, or vehicle and certain unsecured installment loan products to the extent any such products have a military annual percentage rate greater than36%. While the Company does not believe that active members of the U.S. military or their dependents comprise a significant percentage of the historicalcustomer base in most locations, compliance with the MLA Rule, including its safe harbor provisions, is complex, increases compliance risks and related costs andlimits the potential customer base of the Company.In November 2019, lawmakers in both the Senate and House of Representatives introduced Senate and House versions of the Veterans and Consumers Fair CreditAct (“Credit Act”). The Credit Act, if enacted, would effectively extend the MLA’s 36% annual percentage rate cap and ban mandatory arbitration to all coveredloans, which would include all products offered by the Company, regardless of the consumers’ military status. The Company will continue monitoring the status ofthe bills but notes they currently lack critical mass of co-sponsorship in the House or the Senate.In addition to the federal laws and frameworks already governing the financial industry, the U.S. Justice Department (“DOJ” or “Department of Justice”), inconjunction with federal banking regulators, began an initiative in 2013 (“Operation Choke Point”) directed at banks in the U.S. that do business with paymentprocessors, payday lenders, pawn operators and other companies12Table of Contents believed to be at higher risk for fraud and money laundering. It is believed the intent of this initiative was to restrict the ability of banks to provide financialservices to companies in the targeted industries. In January 2015, the Federal Deposit Insurance Corporation (the “FDIC”) issued a publication encouraging banksto take a risk-based approach in assessing individual customer relationships, rather than declining to provide banking services to entire categories of customerswithout regard to the risks presented by an individual customer or the financial institution’s ability to manage the risk. In August 2017, the Department of Justiceinformed lawmakers that Operation Choke Point was no longer in effect. Further, in May 2019, the FDIC settled a 2014 lawsuit filed against it and the Office ofthe Comptroller of the Currency challenging Operation Choke Point whereby the FDIC reiterated its January 2015 publication and acknowledged “that certainemployees acted in a manner inconsistent with FDIC policies” and also stated that “regulatory threats, undue pressure, coercion, and intimidation designed torestrict access to financial services for lawful businesses have no place at the FDIC.” Nevertheless, the Company continues to experience difficulty in securing newbanking services and maintaining existing banking services in certain markets. There can be no assurance that Operation Choke Point and its subsequent effectswill not pose a further or stigmatized threat to the Company’s ability to access credit, maintain bank accounts and treasury services, process payday lendingtransactions 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 various disclosure requirements under theFederal Truth in Lending Act (and Regulation Z promulgated thereunder). These disclosures include, among other things, the total amount of the finance chargesand annualized percentage rate of the charges associated with pawn transactions, 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 adebtor’s checking account for amounts due via a pre-authorized automated clearing house (“ACH”) transaction. Additionally, the Company may be subject tocertain portions of other laws such as the Federal Fair Debt Collection Practices Act, the Fair Credit Reporting Act and applicable state collection laws whenconducting its collection activities related to its unsecured small dollar loans, depending on the product or service.The Financial Crimes Enforcement Network (“FinCEN”) exercises regulatory functions primarily under the Currency and Financial Transactions Reporting Act of1970, as amended by Title III of the USA PATRIOT Act of 2001 and other legislation, which legislative framework is commonly referred to as the “Bank SecrecyAct” (the “BSA”). The BSA is a comprehensive U.S. federal anti-money laundering (“AML”) and counter-terrorism financing statute. The BSA authorizes theSecretary of the Treasury to issue regulations requiring banks and other financial institutions to take a number of precautions against financial crimes, including theestablishment of AML programs and the filing of certain reports. The Secretary of the Treasury has delegated to the Director of FinCEN the authority toimplement, administer, and enforce compliance with the BSA and associated regulations, which among other things, regulates the reporting of transactionsinvolving currency in an amount greater than $10,000 and the purchase of monetary instruments for cash in amounts from $3,000 to $10,000. As of January 1,2018, the Company ceased offering fee-based check cashing services in its non-franchise stores and is no longer considered a money services business as definedunder federal law. Generally, however, and depending on the service or product, financial institutions, including the Company, must report certain transactionsinvolving currency in an amount greater than $10,000 during a specific period, or transactions deemed suspicious in nature.The Gramm-Leach-Bliley Act requires the Company to generally protect the confidentiality of its customers’ non-public personal information and to disclose to itscustomers its privacy policy and practices, including those regarding sharing the customers’ non-public personal information with third parties. Such disclosuremust be made to customers at the time the customer relationship is established, at least annually thereafter, and if there is a change in the Company’s privacypolicy. In addition, the Company is 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 anyaction taken on the individual’s credit application. The Company must provide a loan applicant a Notice of Adverse Action (“NOAA”) when the Company deniesan application for credit related to its unsecured consumer loan products. The NOAA must inform the applicant of (1) the action taken regarding the creditapplication, (2) a statement of the ECOA’s prohibition on discrimination, (3) the name and address of both the creditor and the federal agency that monitorscompliance with the ECOA, and (4) the applicant’s right to learn the specific reasons for the denial of credit and the contact information for the parties theapplicant can contact to obtain those reasons. The Company provides NOAA letters and maintains records of all such letters as required by the ECOA and itsregulations.The Company’s advertising and marketing activities, in general and depending on the type of product and/or service offered, are subject to additional federal lawsand regulations administered by the Federal Trade Commission and the CFPB which prohibit unfair or deceptive acts or practices and false or misleadingadvertisements.13Table of Contents The Fair and Accurate Credit Transactions Act (“FACTA”) requires the Company to adopt written guidance and procedures for detecting, mitigating, preventingand responding appropriately to identity theft and to adopt various employee policies and procedures, and provide employee training and materials that address theimportance of protecting non-public personal information, specifically, personal identifiable information, and aid the Company in detecting and responding tosuspicious activity, including suspicious activity which may suggest a possible identity theft red flag, as appropriate.The Company is subject to the Foreign Corrupt Practices Act (“FCPA”) and other similar laws in other jurisdictions that prohibit improper payments or offers ofimproper payments to foreign governments and their officials and political parties by U.S. persons and issuers (as defined by the statute) for the purpose ofobtaining or retaining business. In addition, the FCPA requires adequate accounting internal controls and record keeping. It is the Company’s policy to maintainsafeguards to discourage these practices by its employees and vendors and follow Company standards of conduct for its business throughout the U.S. and LatinAmerica, including the prohibition of any direct or indirect payment or transfer of Company funds or assets to suppliers, vendors, or government officials in theform of bribes, kickbacks or other illegal payoffs.Each pawn store location that handles pawned firearms or buys and sells firearms must comply with the Brady Handgun Violence Prevention Act (the “BradyAct”). The Brady Act requires that federally licensed firearms dealers conduct a background check in connection with releasing, selling or otherwise disposing offirearms. In addition, the Company must also comply with various state law provisions and 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 a Federal Firearm License (“FFL”) and maintain a permanent writtenrecord of all receipts and dispositions of firearms. As of December 31, 2019, the Company had 737 locations in the U.S. with an active FFL.U.S. State and Local RegulationsThe Company operates pawn stores in 24 U.S. states and the District of Columbia, all of which have licensing and/or fee regulations on pawnshop operations andemployees, and are subject to regular state level regulatory audits. In general, state statutes and regulations establish licensing requirements for pawnbrokers andmay regulate various aspects of pawn transactions, including the purchase and sale of merchandise, service charges, interest rates, the content and form of the pawntransaction agreement and the length of time a pawnbroker must hold a purchased item or forfeited pawn before it is made available for sale. Additionally, thesestatutes and regulations in various jurisdictions restrict or prohibit the Company from transferring and/or relocating its pawn licenses and restrict or prohibit theissuance 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 assetrequirements in states where it is required to maintain certain levels of liquid assets for each pawn store it operates in the applicable state. Failure to observe astate’s legal requirements for pawn 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 requirementsand procedures, reporting of daily transactions, and adherence to local law enforcement “do-not-buy-lists” by checking law enforcement created databases.Specifically, under some county and municipal ordinances, pawn stores must provide local law enforcement agencies with reports of all daily transactionsinvolving pawns and over-the-counter merchandise purchased directly from customers. These daily transaction reports are designed to provide local lawenforcement officials with a detailed description of the merchandise involved, including serial numbers, if any, or other specific identifying information, includingthe name and address of the customer obtained from a valid identification card and photographs of the customers and/or merchandise in certain jurisdictions.Goods held to secure pawns or goods directly purchased may be subject to mandatory holding periods before they can be resold by the Company. If pawned orpurchased merchandise is determined to belong to an owner other than the borrower or seller, it may be subject to confiscation by police for recovery by therightful owners. Historically, the Company has not found the volume of the confiscations or claims to have a material adverse effect upon 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 civil and criminalrestitution efforts.The Company operates its consumer loan business in three states which are regulated under a variety of enabling state statutes and subject to various local rules,regulations and ordinances. The scope of these regulations, including the fees and terms of the Company’s consumer loan products and services, varies by state,county and city. These laws generally define the services that the Company can provide to consumers and require the Company to provide a contract to thecustomer outlining the Company’s services and the cost of those services to the customer. In 2019, the Company’s consumer loan and credit services fee revenuerepresented approximately 1% of the Company’s overall revenues and the Company expects such revenue to account for approximately one quarter of one percent,or 0.25%, of the Company’s overall revenues for the year ending December 31, 2020.14Table of Contents Local rules, regulations and ordinances vary widely from county to county or city to city. While many of the local rules and regulations relate primarily to zoningand land use restrictions, certain cities have restrictive regulations specific to pawn and consumer loan products. Additionally, local jurisdictions’ efforts toregulate or restrict the terms of pawn, consumer loan and credit services products will likely continue to increase.It is expected that additional legislation and/or regulations relating to pawn transactions, credit services and consumer loan products will be proposed in severalstate legislatures and/or city councils where the Company has pawn, unsecured consumer loan products and credit services operations. Though the Companycannot accurately predict the scope, extent and nature of future regulations, it is likely that such legislation may address the maximum allowable interest rates onloans, significantly restrict the ability of customers to obtain such loans by limiting the maximum number of consecutive loan transactions that may be provided toa customer, and/or limiting the total loans a customer may have outstanding at any point in time. Any or all of these changes could make offering these productsless profitable and could restrict or even eliminate the availability of consumer loan, pawn transactions and credit services products in some or all of the states orlocalities in which the Company offers such products.The Company cannot currently assess the likelihood of any other proposed legislation, regulations or amendments, such as those described above or discussed in“Item 1A, Risk Factors,” which could be enacted. However, if such legislation or regulations were enacted in certain jurisdictions, it could have a materiallyadverse impact on the revenue and profitability of the Company.Mexico Federal RegulationsFederal law in Mexico provides for administrative regulation of the pawnshop industry by Procuraduria Federal del Consumidor (“PROFECO”), Mexico’s primaryfederal consumer protection agency, which requires the Company to annually register its pawn stores, approve pawn contracts and disclose the interest rate andfees charged on pawn transactions. In addition, the pawnshop industry in Mexico is subject to various general business regulations in the areas of tax compliance,customs, consumer protections, anti-money laundering, public safety and employment matters, among others, by various federal, state and local governmentalagencies.PROFECO regulates the form and non-financial terms of pawn contracts and defines certain operating standards and procedures for pawnshops, including retailoperations, consumer disclosures and establishes reporting requirements and requires all pawn businesses and its owners to register annually with and be approvedby PROFECO in order to legally operate. In addition, all operators must comply with additional customer notice and disclosure provisions, bonding requirementsto insure against loss or insolvency, reporting of certain types of suspicious transactions, and reporting to state law enforcement officials of certain transactions (orseries of transactions) or suspicious transactions on a monthly basis to states’ attorneys general offices. PROFECO continues to modify its process and proceduresregarding its annual registration requirements and the Company has complied and complies in all material respects with this process and registration requirementsas administered by PROFECO. There are significant fines and sanctions, including operating suspensions for failure to register and/or comply with PROFECO’srules and regulations. Mexico’s anti-money laundering regulations, The Federal Law for the Prevention and Identification of Transactions with Funds From Illegal Sources (“Anti-Money Laundering Law”), requires monthly reporting of certain transactions (or series of transactions) exceeding certain monetary limits, imposes strictmaintenance of customer identification records and controls, and requires reporting of all foreign (non-Mexican) customer transactions. This law affects allindustries in Mexico and is intended to detect commercial activities arising from illicit or ill-gotten means though bilateral cooperation between Mexico’s Ministryof Finance and Public Credit (“Hacienda”), and all of Mexico’s various states’ attorneys general offices (“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 transactionsprovide. The law empowers Hacienda to oversee and enforce these regulations and to follow up on the information received from other agencies in Mexico andabroad. Relevant aspects of the law specifically affecting the pawn industry include monthly reporting by the Company to Hacienda and the PGR on “vulnerableactivities,” which encompass the sale of jewelry, precious metals and watches exceeding certain thresholds. There are significant fines and sanctions for failure tocomply with the Anti-Money Laundering Law.Mexico’s Federal Personal Information Protection Act (“Mexico Privacy Law”) requires companies to protect their customers’ personal information, among otherthings. Specifically, the Mexico Privacy Law requires that the Company create and maintain a privacy policy and inform its customers whether the Companyshares the customer’s personal information with third parties or 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 the customer to revoke any previous consent granted to the Company for the use of thecustomer’s personal information, or limit the use or disclosure of such information.On May 1, 2019, Mexico’s Federal Official Gazette published a decree setting forth major amendments to Mexico’s Federal Labor Law (“FLL”). The labor reformin Mexico is derived from the requirements to be in compliance with Annex 23-A of the United15Table of Contents States-Mexico-Canada Agreement (“USMCA”) labor chapter. The FLL establishes new guidelines involving unions and the labor force, which includes, amongother things, a new structure to manage union life, labor agreements and labor disputes by replacing the existing federal and local conciliation and arbitrationboards and federal certification of formal unions and labor agreements.Mexico State and Local RegulationsCertain state and local governmental entities in Mexico also regulate pawn and retail businesses through state laws and local zoning and permitting ordinances. Forexample, in certain states where the Company has significant or concentrated operations, states have enacted legislation or implemented regulations which requireitems such as special state operating permits for pawn stores, certification of pawn employees trained in valuation of merchandise, strict customer identificationcontrols, collateral ownership certifications and/or detailed and specified transactional reporting of customers and operations. Certain other states have proposedsimilar legislation but have not yet enacted such legislation. Additionally, certain municipalities in Mexico have attempted to curtail the operation of new andexisting pawn stores through additional local business licensing, permitting, reporting requirements and the enactment of transaction taxes on certain pawntransactions. State and local agencies, including local and state police officials, often have unlimited and discretionary authority to suspend store operationspending 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, El Salvador and Colombia also regulate the pawn industry and retailand commercial businesses. Certain federal laws and local zoning and permitting ordinances require basic commercial business licenses and signage permits.Operating in these countries also subjects the Company to other types of regulations including, but not limited to, regulations related to commercialization ofmerchandise, financial reporting, privacy and data protection, tax compliance, customs, labor and employment practices, real estate transactions, anti-moneylaundering, commercial and electronic banking restrictions, credit card transactions, marketing, advertising and other general business activities. Like Mexico,department agencies, including local and state police officials have unlimited and discretionary authority in their application of their rules and requirements.As the scope of the Company’s international operations increases, the Company may face additional administrative and regulatory costs in operating and managingits business. In addition, unexpected changes, arbitrary or adverse court decisions, adverse action by financial regulators, aggressive public officials or regulatorsattacking the Company’s business models, administrative interpretations of federal or local requirements or legislation, or public remarks by elected officials couldnegatively impact the Company’s operations and profitability.EmployeesThe Company employs approximately 8,000 employees in the U.S. as of December 31, 2019, including approximately 500 persons employed in executive,supervisory, administrative and accounting functions. None of the Company’s U.S. employees are covered by collective bargaining agreements.The Company employs approximately 13,000 employees in Latin America as of December 31, 2019, including approximately 800 persons employed in executive,supervisory, administrative and accounting functions. The Company’s Mexico employees may become covered by labor agreements as required under the FLL.None of the Company’s other Latin American employees are covered by collective bargaining agreements.The Company considers its employee relations to be satisfactory.InsuranceThe Company maintains aggregate property all-risk coverage and liability insurance for its locations in amounts management believes to be adequate. TheCompany maintains workers’ compensation or employer’s indemnification insurance in U.S. states in which the Company operates.16Table of Contents FirstCash WebsiteThe Company’s primary website is www.firstcash.com. The Company makes available, free of charge, at its corporate website, its annual report on Form 10-K,quarterly reports 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 SecuritiesExchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after they are electronically filed with the Securities and ExchangeCommission (“SEC”). The SEC maintains an internet site that contains reports, proxy and information statements and other information regarding issuers that fileelectronically with the SEC at www.sec.gov.Item 1A. Risk FactorsImportant risk factors that could materially affect the Company’s business, financial condition or results of operations in future periods are described below. Thesefactors are not intended to be an all-encompassing list of risks and uncertainties and are not the only risks and uncertainties facing the Company. Additional risksnot currently known to the Company or that it currently deems to be immaterial also may materially adversely affect its business, financial condition or results ofoperations in future periods.Operational, Strategic and General Business RisksIncreased competition from banks, credit unions, internet-based lenders, other short-term consumer lenders, governmental entities and other organizationsoffering similar financial services and retail products 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 finance programs, payroll lenders, banks, credit unions and other financial institutions that serve the Company’s primarily cost conscious and underbankedcustomer base. Many other financial institutions, governmental entities or other businesses that do not now offer products or services directed toward theCompany’s traditional customer base, many of whom may be much larger than the Company, could begin doing so. Significant increases in the number and size ofcompetitors for the Company’s business could result in a decrease in the number of consumer loans or pawn transactions that the Company writes, resulting inlower levels of revenue and earnings in these categories. Furthermore, the Company has many competitors to its retail operations, such as retailers of newmerchandise, retailers of pre-owned merchandise, other pawnshops, thrift shops, online retailers, online classified advertising sites and online auction sites andmany consumers view these competitors as a more secure option to acquiring similar products to what the Company sells.In Mexico, the Company competes directly with government sponsored or affiliated non-profit foundations operating pawn stores. The Mexican government couldtake regulatory or administrative actions that would harm the Company’s ability to compete profitably in the Mexico market. Increased competition or aggressivemarketing and pricing practices by these competitors could result in decreased revenue, margins and inventory turnover rates in the Company’s retail operations.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 theCompany’s results of operations.Although the Company actively manages its products and service offerings to ensure that such offerings meet the needs and preferences of its customer base, thedemand for a particular product or service may decrease due to a variety of factors, including many that the Company may not be able to control, anticipate orrespond to in a timely manner, such as the availability and pricing of competing products or technology, changes in customers’ financial conditions as a result ofchanges in unemployment levels, fuel prices, interest rates, government sponsored social welfare or benefit programs, other economic conditions or other events,real or perceived loss of consumer confidence or regulatory restrictions that increase or reduce customer access to particular products. Should the Company fail toadapt to a significant change in its customers’ demand for, or regular access to, its products, the Company’s revenue could decrease significantly. Even if theCompany makes adaptations, its customers may resist or may reject products or services whose adaptations make them less attractive or less available. In anyevent, the effect of any product or service change on the results of the Company’s business may not be fully ascertainable until the change has been in effect forsome time. In particular, the Company has changed, and will continue to change, some of the consumer loan products and services it offers due to regulatorydevelopments. Demand may also fluctuate by geographic region. The current geographic concentration of the Company’s stores creates exposure to localeconomies and politics, and regional downturns (see “Item 1. Business—Locations and Operations” for store concentration by state). As a result, the Company’sbusiness is currently more susceptible to regional conditions than the operations of more geographically diversified competitors, and the Company is vulnerable toeconomic downturns or changing political landscapes in those regions. Any unforeseen events or circumstances that negatively affect these areas could materiallyadversely affect the Company’s revenues and profitability.17Table of Contents 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 to execute its business strategy and oversee its operations. A significant increase in the costs to retain anymembers of the Company’s senior management could adversely affect the Company’s business and operations. Furthermore, the loss of services of any of themembers of the Company’s senior management could adversely affect the Company’s business until a suitable replacement can be found. There may be a limitednumber of persons with the requisite skills to serve in these positions, and the Company cannot ensure that it would be able to identify or employ such qualifiedpersonnel on acceptable terms.The Company depends on hiring an adequate number of hourly employees to run its business and is subject to regulations concerning these and its otheremployees, including wage and hour regulations. The Company’s workforce is comprised primarily of employees who work on an hourly basis. To grow its operations and meet the needs and expectations of itscustomers, the Company must attract, train, and retain a large number of hourly associates, while at the same time controlling labor costs. These positions havehistorically had high turnover rates, which can lead to increased training, retention and other costs and impair the overall customer service and efficiencies at theCompany’s stores. In certain areas where the Company operates, there is significant competition for employees, including from retailers and the restaurantindustries. The lack of availability of an adequate number of hourly employees, or the Company’s inability to attract and retain them, or an increase in wages andbenefits to current employees could adversely affect its business, results of operations, cash flows and financial condition. The Company is subject to applicablerules and regulations relating to its relationship with its employees, including wage and hour regulations, health benefits, unemployment and payroll taxes,overtime and working conditions, immigration status and, in Mexico, future labor agreements and union relations under the FLL. Accordingly, federal, state orlocal legislated increases in the minimum wage, as well as increases in additional labor cost components such as employee benefit costs, workers’ compensationinsurance rates, compliance costs, fines and, in Mexico, costs associated with labor agreements and unions, would increase the Company’s labor costs, which couldhave a material adverse effect on its business, prospects, results of operations and financial condition.The Company’s organic growth is subject to external factors and other circumstances over which it has limited control or that are beyond its control. Thesefactors and circumstances could adversely affect the Company’s ability to grow through the opening of new store locations.The success of the Company’s organic expansion strategy is subject to numerous external factors, such as the availability of sites with favorable customerdemographics, limited competition, acceptable regulatory restrictions and landscape, political or community acceptance, suitable lease terms, its ability to attract,train and retain qualified associates and management personnel, the ability to obtain required government permits and licenses and the ability to identify attractiveacquisition targets and complete such acquisitions. Some of these factors are beyond the Company’s control. The failure to execute the Company’s organicexpansion strategy would adversely affect the Company’s ability to expand its business and could materially adversely affect its business, prospects, results ofoperations and financial condition.The inability to successfully identify attractive acquisition targets, realize administrative and operational synergies and integrate completed acquisitions couldadversely affect results.The Company has historically grown, in large part, through strategic acquisitions, and the Company’s strategy is to continue to pursue attractive acquisitionopportunities if and when they become available. The success of an acquisition is subject to numerous internal and external factors, such as competition rules, theability 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 and regulatory factors. It is possible that the integration processcould result in unrealized administrative and operational synergies, the loss of key employees, the disruption of ongoing businesses, tax costs or inefficiencies, orinconsistencies in standards, controls, information technology systems, procedures and policies, any of which could adversely affect the Company’s ability tomaintain relationships with customers, employees, or other third-parties or the Company’s ability to achieve the anticipated benefits of such acquisitions and couldharm its financial performance. Furthermore, future acquisitions may be in jurisdictions in which the Company does not currently operate, which could make thesuccessful consummation and integration of any such acquisitions more difficult. Attractive acquisition targets may also become increasingly scarce in futureperiods or in jurisdictions the Company would like to expand its operations in. Failure to successfully integrate an acquisition could have an adverse effect on theCompany’s business, results of operations and financial condition, and failure to successfully identify attractive acquisition targets and complete such acquisitionson favorable terms could have an adverse effect on the Company’s growth. Additionally, any acquisition has the risk that the Company may not realize a return onthe acquisition or the Company’s investment.18Table of Contents The Company’s future success is largely dependent upon the ability of its management team to successfully execute its business strategy.The Company’s future success, including its ability to achieve its growth and profitability goals, is dependent on the ability of its management team to execute onits long-term business strategy, which requires them to, among other things: (1) successfully open new pawn stores, (2) identify attractive acquisitionopportunities, close on such acquisitions on favorable terms and successfully integrate acquired businesses, (3) encourage and improve customer traffic at its pawnstores, (4) improve the customer experience at its pawn stores, (5) enhance productivity of its pawn stores, including through investments in technology, (6)control expenses in line with their current projections, (7) maintain and enhance the Company’s reputation, and (8) effectively maintain its compliance programsand respond to regulatory developments and changes that impact its business. Failure of management to execute its business strategy could negatively impact theCompany’s business, growth prospects, financial condition or results of operations. Further, if the Company’s growth is not effectively managed, the Company’sbusiness, financial condition, results of operations and future prospects could be negatively affected, and the Company may not be able to continue to implementits business strategy and successfully conduct its operations.The Company’s business depends on the uninterrupted operation of the Company’s facilities, systems and business functions, including its informationtechnology and other business systems, and reliance on other companies to provide key components of its business systems.The Company’s business depends highly upon its employees’ ability to perform, in an efficient and uninterrupted fashion, necessary business functions such asoperating, managing and securing its retail locations, technical support centers, call centers, security monitoring, treasury and accounting functions and otheradministrative support functions. Additionally, the Company’s storefront operations depend on the efficiency and reliability of the Company’s proprietary point-of-sale and loan management system. A shut-down of or inability to access the facilities in which the Company’s storefront point-of-sale and loan managementsystem and other technology infrastructure are based, such as due to a power outage, a cyber-security breach or attack, a breakdown or failure of one or more of itsinformation technology, telecommunications or other systems, or sustained or repeated disruptions of such systems could significantly impair its ability to performsuch functions on a timely basis and could result in a deterioration of the Company’s ability to perform efficient storefront lending and merchandise dispositionactivities, provide customer service, perform collection activities, or perform other necessary business functions.Furthermore, third parties provide a number of the key components necessary to the Company’s business functions and systems. While the Company has carefullyselected these third-party vendors and has ongoing programs to review these vendors and assess risk associated therewith, the Company does not control theiractions. Any problems caused by these third parties, including those resulting from disruptions in communication services provided by a vendor, failure of avendor to handle current or higher volumes, cyber-attacks and security breaches, regulatory restrictions, fines, or orders or other regulatory action causingreputational harm, failure of a vendor to provide services for any reason or poor performance of services, could adversely affect the Company’s ability to deliverproducts and services to its customers and otherwise conduct its business. Financial or operational difficulties of a third-party vendor could also hurt its operationsif those difficulties interfere with the vendor's ability to serve the Company. Furthermore, the Company’s vendors could also be sources of operational andinformation security risk to the Company, including from breakdowns or failures of their own systems or capacity constraints. Replacing these third-party vendorscould also create significant delay and expense. Accordingly, use of such third parties creates an unavoidable inherent risk to the Company’s business andoperations.Security breaches, cyber attacks or fraudulent activity could result in damage to the Company’s operations or lead to reputational damage and expose theCompany to significant liabilities.An important component of the Company’s business involves the receipt and storage of information about its customers and employees and maintaining internalbusiness data. As a large employer and operator of retail stores and provider of pawn loans and other consumer financing produces, the Company is under threat ofloss due to the velocity and sophistication of security breaches and cyber attacks. These security incidents and cyber attacks may be in the form of computerhacking, acts of vandalism or theft, malware, computer viruses or other malicious codes, phishing, employee error or malfeasance, catastrophes or unforeseenevents or other cyber-attacks. A security breach of the Company’s computer systems, or those of the Company’s third-party service providers, including as a resultof cyber attacks, could cause loss of Company assets, interrupt or damage its operations or harm its reputation. In addition, the Company could be subject toliability if confidential customer or employee information is misappropriated from its computer systems. Any compromise of security, including security breachesperpetrated on persons with whom the Company has commercial relationships, that results in the unauthorized access to or use of personal information or theunauthorized access to or use of confidential employee, customer, supplier or Company information, could result in a violation of applicable privacy and otherlaws, significant legal and financial exposure, damage to the Company’s reputation, and a loss of confidence of the Company’s customers, vendors and others,which could harm its business and operations. Any compromise of19Table of Contents 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 causethe Company to incur substantial costs, including costs to investigate, 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, computerviruses, programming errors, attacks by third parties or similar disruptive problems. The Company may not have the resources or technical sophistication toanticipate or prevent rapidly evolving types of cyber attacks.The techniques that are used to obtain unauthorized access, disable or degrade service or sabotage systems change frequently and are difficult to detect for longperiods of time. Accordingly, the Company and its third-party service providers may be unable to anticipate and prevent all data security incidents. If the Companyor its vendors experience significant data security breaches or fail to detect and appropriately respond to significant data security breaches, the Company could beexposed to litigation, fines or other costs, its operations could be disrupted, and employees and customers could lose confidence in the ability to protect theirinformation, which could cause them to stop doing business with the Company.The Company’s customers provide personal information in one of four ways: (1) when conducting a pawn transaction or selling merchandise, (2) when conductinga background check in connection with releasing or selling firearms, (3) during a consumer loan transaction (when personal and bank account information isnecessary for approving this transaction), and (4) when conducting a retail purchase whereby a customer’s payment method is via a credit card, debit card or check.While the Company has implemented systems and processes to protect against unauthorized access to or use of such personal information, there is no guaranteethat these procedures are adequate to safeguard against all security breaches or misuse of the information. Furthermore, the Company relies on encryption andauthentication technology to provide security and authentication to effectively secure transmission of confidential information, including customer bank account,credit card information and other personal information. However, there is no guarantee that these systems or processes will address all of the cyber threats thatcontinue to evolve.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 securitybreaches, which could impact the Company’s customers and its business and could result in a loss of customers, suppliers, Company assets or revenue.Lastly, the regulatory environment related to information security, data collection and use, and privacy is increasingly rigorous, with new and constantly changingrequirements applicable to the Company’s business, and compliance with those requirements could result in additional costs. These costs associated withinformation security, such as increased investment in technology or investigative expenses, the costs of compliance with privacy laws, and fines, penalties and costsincurred to prevent or remediate information security or cyber breaches, could be substantial and adversely impact the Company’s business. Even if the Companyis fully compliant with legal standards and contractual or other requirements, it still may not be able to prevent security breaches involving sensitive data. Thesophistication of efforts by hackers to gain unauthorized access to information technology systems continues to increase. Breaches, thefts, losses or fraudulent usesof customer, employee or Company business data could cause employees and customers to lose confidence in the security of its systems including the point-of-salesystem and other information technology systems and choose not to do business with the Company. Such security breaches also could expose the Company to risksof data loss, business disruption, litigation and other costs or liabilities, any of which could adversely affect the business.Because the Company maintains a significant supply of cash, loan collateral and inventories in its stores and certain processing centers, the Company may besubject to employee and third-party robberies, riots, looting, burglaries and thefts. The Company also may be subject to liability as a result of crimes at itsstores.The Company’s business requires it to maintain a significant supply of cash, loan collateral and inventories, including gold and other precious metals, in most of itsstores and certain corporate locations. As a result, the Company is subject to the risk of riots, looting, robberies, burglaries and thefts. Although the Company hasimplemented various programs in an effort to reduce these risks and utilizes various security measures at its facilities, there can be no assurance that riots, looting,robberies, burglaries and thefts will not occur. The extent of the Company’s cash, loan collateral and inventory losses or shortages could increase as it expands thenature and scope of its products and services. Riots, looting, robberies, burglaries and thefts could lead to losses and shortages and could adversely affect theCompany’s business, prospects, results of operations and financial condition. It is also possible that violent crimes such as riots, assaults and armed robberies maybe committed at the Company’s stores. The Company could experience liability or adverse publicity arising from such crimes. For example, the Company may beliable if an employee, customer, guard or bystander suffers bodily injury or other harm. Any such event may have a material adverse effect on the Company’sbusiness, prospects, results of operations and financial condition.20Table of Contents The Company maintains a program of insurance coverage for various types of property, casualty and other risks. The types and amounts of insurance that theCompany obtains vary from time to time, depending on availability, cost and management’s decisions with respect to risk retention. The Company’s insurancepolicies are subject to deductibles and exclusions that result in the Company’s retention of a level of risk on a self-insurance basis. Losses resulting from employeeand third-party robberies, riots, looting, burglaries and thefts not covered by insurance could be substantial and may increase the Company’s expenses, whichcould harm the Company’s results of operations and financial condition.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, including its proprietary,internally developed point-of-sale and loan management system that is in use in all of its stores. The Company uses the trademarks “FirstCash,” “First Cash,”“First Cash Pawn,” “Cash America,” “Cashland,” “First Cash Empeño y Joyeria,” “Cash Ya,” “Cash & Go,” “CA,” “Presta Max,” “Realice Empeños,” “EmpeñosMexicanos” and “Prendamex” along with numerous other trade names as described herein. The Company relies on a combination of trademarks, trade dress, tradesecrets, proprietary software, website domain names and other rights, including confidentiality procedures and contractual provisions to protect its proprietarytechnology, processes and other intellectual property. While the Company intends to vigorously protect its trademarks and proprietary point-of-sale and loanmanagement system against infringement, it may not be successful. In addition, the laws of certain foreign countries may not protect intellectual property rights tothe same extent as the laws of the U.S. The costs required to protect the Company’s intellectual property rights and trademarks could be substantial.The Company’s lending and retail businesses are somewhat seasonal, which causes the Company’s revenues and operating cash flows to fluctuate and mayadversely affect the Company’s ability to service its debt obligations.The Company’s U.S. pawn and consumer lending business typically experiences reduced demand in the first and second quarters as a result of its customers’receipt of federal tax refund checks typically in February of each year. Demand for the Company’s U.S. lending services is generally greatest during the third andfourth quarters. Also, retail sales are seasonally higher in the fourth quarter associated with holiday shopping and, to a lesser extent, in the first quarter associatedwith tax refunds in the U.S. Typically, the Company experiences seasonal growth of service fees in the third and fourth quarter of each year due to loan balancegrowth. Service fees generally decline in the first and second quarter of each year due to the typical repayment of pawn loans associated with statutory bonusesreceived by customers in the fourth quarter in Mexico and with tax refund proceeds typically received by customers in the first quarter in the U.S. This seasonalityrequires the Company to manage its cash flows over the course of the year. If a governmental authority were to pursue economic stimulus actions or issueadditional tax refunds, tax credits or other statutory payments at other times during the year, such actions could have a material adverse effect on the Company’sbusiness, prospects, results of operations and financial condition during these periods. If the Company’s revenues were to fall substantially below what it wouldnormally expect during certain periods, the Company’s annual financial results and its ability to service its debt obligations could be adversely affected.The failure or inability of third-parties who provide products, services or support to the Company to maintain their products, services or support could disruptCompany operations or result in a loss of revenue.The Company’s lending, pawn retail, scrap jewelry and cash management operations are dependent upon the Company’s ability to maintain retail banking andborrowing relationships with commercial banks. Actions by federal regulators in the U.S. and other Latin American countries where the Company operates havecaused many commercial banks, including certain banks used by the Company, to cease offering such services to the Company and other companies in theCompany’s industry. The Company also relies significantly on outside vendors to provide services such as financial transaction processing (including foreignexchange), utilities, store security, armored transport, precious metal smelting, data and voice networks and other information technology products and services.The failure or inability of any of these third-party financial institutions or vendors to provide such services could limit the Company’s ability to grow its businessand could increase the Company’s costs of doing business, which could adversely affect the Company’s operations if the Company is unable to timely replacethem with comparable service providers at a comparable cost.21Table of Contents Regulatory, Legislative and Legal RisksThe Company’s products and services are subject to extensive regulation and supervision under various federal, state and local laws, ordinances andregulations in both the U.S. and Latin America. If changes in regulations affecting the Company’s pawn business create increased restrictions, or have theeffect of prohibiting pawn loans in the jurisdictions where the Company currently operates, such regulations could materially impair or reduce the Company’spawn business 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 inboth the U.S. and Latin America. The Company faces the risk that restrictions or limitations on pawn loans resulting from the enactment, change, or interpretationof laws and regulations in the U.S. or Latin America could have a negative effect on the Company’s business activities. In addition, certain consumer advocacygroups, federal, state and local legislators and governmental agencies have also asserted that rules, laws and regulations should be tightened so as to severely limit,if not eliminate, the availability of pawn transactions and buy/sell agreements to consumers. It is difficult to assess the likelihood of the enactment of anyunfavorable federal or state legislation or local ordinances, and there can be no assurance that additional legislative, administrative or regulatory initiatives will notbe enacted that would severely restrict, prohibit, or eliminate the Company’s ability to offer certain products and services.In Latin America, restrictions and regulations affecting pawn transactions and buy/sell agreements, including licensing requirements for pawn stores and theiremployees, customer identification requirements, suspicious activity reporting, disclosure requirements and limits on interest rates, loan service fees, or other feeshave been and continue to be proposed from time to time. Adoption of such federal, state or local regulation or legislation in the U.S. and Latin America couldrestrict, or even eliminate, the availability of pawn transactions and buy/sell agreements at some or all of the Company’s locations, which would adversely affectthe 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, administrative orregulatory change, the jurisdictions to 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 in which the Company does not currently operate could limit its opportunities to pursue its growth strategies. A moredetailed discussion of the regulatory environment and current developments and risks to the Company is provided in “Business-Governmental Regulation.”The CFPB has regulatory, supervisory and enforcement powers over providers of consumer financial products and services in the U.S., and it could exerciseits enforcement 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 ofconsumer loans and certain title pawn loans such as the Company. The CFPB’s examination authority permits its examiners to inspect the books and records ofproviders of short-term, small dollar lenders, such as the Company, and ask questions about their business practices. As a result of these examinations of non-bankproviders of consumer credit, the Company could be required to discontinue certain services or products, or change its practices or procedures, whether as a resultof another party being examined or as a result of an examination of the Company, and could be subject to specific enforcement action, including monetarypenalties, which could adversely affect the Company. Under certain circumstances, the CFPB may also be able to exercise regulatory or enforcement authorityover providers of pawn services through its rule making authority.In addition to having the authority to assess monetary penalties for violations of applicable federal consumer financial laws (including the CFPB’s own rules), theCFPB can require remediation of practices, including through confidential memorandums of understanding and consent orders, pursue administrative proceedingsor litigation and obtain cease and desist orders (which can include orders for restitution or rescission of contracts, as well as other kinds of affirmative or equitablerelief). Also, where a company has violated Title X of the Dodd-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 bring civil actions to remedy alleged violations of state law. If the CFPB or one or more stateattorneys general or state regulators believe that the Company has violated any of the applicable laws or regulations or any consent orders or confidentialmemorandums of understanding against or with the Company, they could exercise their enforcement powers in ways that could have a material adverse effect onthe Company’s business and financial results.See “Item 1. Business—Government Regulation” for a further discussion of the regulatory authority of the CFPB.22Table of Contents Mexico’s PROFECO has regulatory, supervisory and enforcement powers over pawn operators and pawn operations, and it could exercise its enforcementpowers in ways that could have a material 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.PROFECO requires all pawn operators, like the Company, to register its pawn stores and to disclose the interest rate and fees charged on pawn transactions.PROFECO also establishes and regulates the form and non-financial terms of pawn contracts and defines certain operating standards and procedures for pawnshopsand reporting requirements for pawnshops. PROFECO requires all pawn businesses and their owners to annually register with and be approved by PROFECO inorder to legally operate. In addition, all operators must comply with additional customer notice and disclosure provisions, bonding requirements to insure againstloss or insolvency, reporting of certain types of suspicious transactions and monthly reporting to state law enforcement officials of certain transactions (or series oftransactions). There are significant fines and sanctions, including operating suspensions, for failure to register and/or comply with PROFECO’s rules andregulations. PROFECO regularly modifies its processes and procedures regarding its annual registration requirements and pawn operations and the Company hascomplied and complies in all material respects with 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’sproducts and services could adversely affect its financial condition and operating results.Governments, including agencies, at the national, state and local levels, may seek to enforce or impose new laws, regulatory restrictions, licensing requirements ortaxes that affect the Company’s products or services it offers, the terms on which it may offer them, and the disclosure, compliance and reporting obligations itmust fulfill in connection with its business. They may also interpret or enforce existing requirements in new ways that could restrict the Company’s ability tocontinue its current methods of operation or to expand operations, impose significant additional compliance costs, and could have a material adverse effect on theCompany’s financial condition and results of operations. In some cases, these measures could even directly prohibit some or all of the Company’s current businessactivities in certain jurisdictions, or render them unprofitable and/or impractical to continue.Media reports, statements made by regulators and elected officials and public perception in general of pawnshops as being predatory or abusive couldmaterially adversely affect the Company’s pawn business. In recent years, consumer advocacy groups and some media reports, in both the U.S. and LatinAmerica, have advocated governmental action to prohibit or place severe restrictions on 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 aconsumer of 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 loans as predatory or abusive or focus on alleged instances of pawn operators purchasing or accepting stolen property aspawn collateral. If the negative characterization of pawnshops becomes increasingly accepted by consumers, demand for pawn loans could significantly decrease,which could materially affect the Company’s results of operations and financial condition. Additionally, if the negative characterization of these types oftransactions becomes increasingly accepted by legislators and regulators, the Company could become subject to more restrictive laws and regulations that couldhave a material adverse effect on the Company’s financial condition and results of operations. Furthermore, any negative public perception of pawnshops generallywould likely have a material negative impact on the Company’s retail operations, including reducing the number of consumers willing to shop at the Company’sstores.Judicial or administrative decisions, CFPB rule-making, amendments to the Federal Arbitration Act (the “FAA”) or new legislation could render thearbitration agreements the Company uses illegal or unenforceable.The Company includes dispute arbitration provisions in its customer loan and pawn agreements. These provisions are designed to allow the Company to resolveany customer disputes through individual arbitration rather than in court. The Company’s arbitration provisions explicitly provide that all arbitrations will beconducted on an individual and not on a class basis. Thus, the Company’s arbitration agreements, if enforced, have the effect of mitigating class and collectiveaction liability. The Company’s arbitration agreements do not have any impact on regulatory enforcement proceedings. The Company takes the position that theFAA requires enforcement, in accordance with the terms of its arbitration agreements, of class and collective action waivers of the type the Company uses,particularly now that the CFPB’s “Arbitration Rule” prohibiting class action waivers was officially repealed in November 2017.In the past, however, a number of state and federal circuit courts, including the California and Nevada Supreme Courts, and the National Labor Relations Boardconcluded that arbitration agreements with consumer class action waivers are “unconscionable” and hence unenforceable, particularly where a small dollar amountis in controversy on an individual basis. In April 2011, however,23Table of Contents 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 otherwise invalidate consumerarbitration agreements with class action waivers. In December 2015, the Supreme Court in a 6-3 decision in DIRECTV, Inc. v. Imburgia upheld DIRECTV’sservice 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, inthe aftermath of Concepcion, to find reasons to rule that arbitration agreements are unenforceable.In light of conflicting court decisions and potential future CFPB rulemaking, including enactment of the proposed Credit Act, it is possible that the Company’sarbitration agreements will be rendered unenforceable. Additionally, Congress has considered legislation that would generally limit or prohibit mandatory disputearbitration in certain consumer contracts, and it has adopted such prohibitions with respect to certain mortgage loans and certain consumer loans to active-dutymembers of the military and their dependents.Any judicial or administrative decision, federal legislation or CFPB rule that would impair the Company’s ability to enter into and enforce consumer arbitrationagreements with class action waivers could significantly increase the Company’s exposure to class action litigation as well as litigation in plaintiff friendlyjurisdictions. Such litigation could have a material adverse effect on the Company’s business, results of operations and financial condition.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, consentorders, memorandums of understanding, audits, other actions arising in the ordinary course of business, including those related to consumer finance and protection,federal or state wage and hour laws, product liability, unclaimed property, employment, personal injury and other matters that could cause it to incur substantialexpenditures and generate adverse publicity. In particular, the Company may be involved in lawsuits or regulatory actions related to consumer finance andprotection, employment, marketing, unclaimed property, competition matters, and other matters, including class action lawsuits brought against it for allegedviolations of the Fair Labor Standards Act, state wage and hour laws, state or federal advertising laws, consumer protection, lending and other laws. Theconsequences of defending proceedings or an adverse ruling in any current or future litigation, judicial or administrative proceeding, including consent orders ormemorandums of understanding, could cause the Company to incur substantial legal fees, to have to refund fees and/or interest collected, refund the principalamount of advances, pay treble or other multiple damages, pay monetary penalties, fines, and/or modify or terminate the Company’s operations in particular statesor countries. Defense or filing of any lawsuit or administrative proceeding, even if successful, could require substantial time, resources, 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 administrativeproceedings may also result in significant payments and modifications to the Company’s operations. Due to the inherent uncertainties of litigation, administrativeproceedings and other claims, the Company cannot accurately predict the ultimate outcome of any such matters.Adverse court and administrative interpretations or enforcement of the various laws and regulations under which the Company operates could require theCompany to alter the products that it offers or cease doing business in the jurisdiction where the court, state or federal agency interpretation and enforcement isapplicable. The Company is also subject to regulatory proceedings, and the Company could suffer losses from interpretations and enforcement of state or federallaws in those regulatory proceedings, even if it is not a party to those proceedings. Any of these events could have a material adverse effect on the Company’sbusiness, prospects, results of operations and financial condition and could impair the Company’s ability to continue current operations. Besides regulation specificto consumer lending, which is discussed previously, the Company’s pawn, credit services and consumer loan businesses are subject to other federal, state and localregulations, tax laws and import/export laws, including, but not limited to, the Dodd-Frank Act, Unfair Deceptive or Abusive Acts and Practices, Federal Truth inLending Act and Regulation Z adopted thereunder, Fair Debt Collections Practices Act, Military Lending Act, Bank Secrecy Act, Money Laundering SuppressionAct of 1994, USA PATRIOT Act, Gramm-Leach-Bliley Act, Equal Credit Opportunity Act, Electronic Funds Transfer Act, Foreign Corrupt Practices Act and theBrady Handgun Violence Prevention Act. In addition, the Company’s marketing efforts and the representations the Company makes about its products andservices are subject to federal and state unfair and deceptive practice statutes, including the Federal Trade Commission Act and analogous state statutes underwhich the Federal Trade Commission, state attorneys general or private plaintiffs may bring legal actions. If the Company is found to have engaged in an unfairand deceptive practice, it could have a material adverse effect on its business, prospects, results of operations and financial condition.The Company sells products manufactured by third parties, some of which may be defective. Many such products are manufactured overseas in countries whichmay utilize quality control standards that vary from those legally allowed or commonly accepted in the U.S., which may increase the Company’s risk that suchproducts 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 bringclaims against the Company as the24Table of Contents retailer of the products based upon strict product liability. In addition, the Company’s products are subject to the federal Consumer Product Safety Act and theConsumer Product Safety Improvement Act, which empower the Consumer Product Safety Commission to protect consumers from hazardous products. TheConsumer Product Safety Commission has the authority to exclude from the market and recall certain consumer products that are found to be hazardous. Similarlaws exist in some states and cities in the U.S. If the Company fails to comply with government and industry safety standards, the Company may be subject toclaims, lawsuits, product recalls, fines and negative publicity that could have a material adverse effect on its business, prospects, results of operations and financialcondition.Many 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 relatedlawsuits. The Company may incur losses due to lawsuits relating to its performance of background checks on firearms purchases as mandated by state and federallaw, the selling of firearms or the improper use of firearms sold by the Company, including lawsuits by individuals, municipalities or other organizationsattempting to recover damages or costs from firearms retailers relating to the misuse of firearms. Commencement of such lawsuits against the Company could havea material adverse effect on its business, prospects, results of operations and financial condition.The Company is also subject to similar applicable laws and regulations in Latin America. For example, Mexico’s Anti-Money Laundering Law, which requiresmonthly reporting of certain transactions (or series of transactions) exceeding monetary limits, and require stricter maintenance of customer identification recordsand controls, and reporting of all foreign (non-Mexican) customer transactions. Guatemala, El Salvador and Colombia also have similar reporting requirements.The Company is also subject to the terms and enforcement of the Mexico Privacy Law, which requires companies to protect their customers’ personal information,among other things including mandatory disclosures.Certain state and local governmental entities in Latin America also regulate pawn, other consumer finance and retail businesses through state laws and localzoning and permitting ordinances. State and local agencies, including local police authorities, often have unlimited, broad and discretionary authority to interpretand apply laws, and suspend store operations pending investigation of suspicious pawn transactions and resolution of actual or alleged regulatory, licensing andpermitting issues, among other issues.Compliance with applicable laws and regulations is costly, can affect operating results and may result in operational restrictions. The Company’s failure to complywith applicable laws and regulations could subject it to regulatory enforcement actions, result in the assessment against the Company of civil, monetary, criminalor other penalties, require the Company to abandon operations or certain product offerings, refund interest or fees, result in a determination that certain loans arenot collectible, result in a revocation of licenses, or cause damage to its reputation, brands and customer relationships, any of which could have a material adverseeffect on the Company’s business, prospects, results of operations and financial condition.The sale and ownership of firearms, ammunition and certain related accessories is subject to current and potential regulation, which could have a materialadverse effect on the Company’s reputation, 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 andregulations pertaining to the purchase, storage, transfer and sale of such products, and the Company is subject to reputational harm if a customer purchases afirearm that is later used in a deadly shooting. These laws and regulations require the Company, among other things, to ensure that each pawn location offeringfirearms 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 appropriategovernment-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 requiredto timely respond to traces of firearms by law enforcement agencies. Over the past several years, the purchase, sale and ownership of firearms, ammunition andcertain related accessories has been the subject of increased media scrutiny and federal, state and local regulation. The media scrutiny and regulatory efforts arelikely to continue in the Company’s current markets and other markets into which the Company may expand. If enacted, new laws and regulations could limit thetypes of licenses, firearms, ammunition and certain related accessories that the Company is permitted to purchase and sell and could impose new restrictions andrequirements on the manner in which the Company offers, purchases and sells these products. If the Company fails to comply with existing or newly enacted lawsand regulations relating to the purchase and sale of firearms, ammunition and certain related accessories, its licenses to sell or maintain inventory of firearms at itsstores may be suspended or revoked, which could have a material adverse effect on the Company’s business, prospects, results of operations and financialcondition. In addition, new laws and regulations impacting the ownership of firearms and ammunition could cause a decline in the demand for and sales of theCompany’s products, which could materially adversely impact its revenue and profitability. Complying with increased regulation relating to the sale of firearms,ammunition and certain related accessories could be costly.25Table of Contents 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 inpenalties that could 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 officialsfor the purpose of obtaining or keeping business and/or other benefits. Although the Company has policies and procedures designed to ensure that it, its employees,agents, and intermediaries comply with the FCPA and other anti-corruption laws, there can be no assurance that such policies or procedures will work effectivelyall of the time or protect the Company against liability for actions taken by its employees, agents, and intermediaries with respect to its business or any businessesthat it may acquire. In the event the Company believes, or has reason to believe, its employees, agents, or intermediaries have or may have violated applicable anti-corruption laws in the jurisdiction in which it operates, including the FCPA, the Company may be required to investigate or have a third party investigate therelevant facts and circumstances, which can be expensive and require significant time and attention from senior management. The Company’s continued operationand expansion outside the U.S., especially in Latin America, could increase the risk, perceived or otherwise, of such violations in the future. If the Company isfound to have violated the FCPA or other laws governing the conduct of business with government entities (including local laws), the Company may be subject tocriminal 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 the Company’sreputation 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 conductbusiness.Most states and many local jurisdictions both in the U.S. and in Latin America in which the Company operates require registration and licenses of stores andemployees to conduct the Company’s business. These states or their respective regulatory bodies have established criteria the Company must meet in order toobtain, 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 issubject to audits in these states to ensure it is meeting the applicable requirements to maintain these licenses. Failure to meet these requirements could result insubstantial fines and penalties and/or store closures, which could include temporary suspension of operations, the revocation of existing licenses or the denial ofnew and renewal licensing requests. The Company cannot guarantee future license applications or renewals will be granted. If the Company were to lose any of itslicenses to conduct its business, it could result in the temporary or permanent closure of stores, which could adversely affect the Company’s business, results ofoperations and cash flows.The complexity of the political and regulatory environment in which the Company operates and the related cost of compliance are both increasing due to thechanging political landscape, additional legal and regulatory requirements, the Company’s ongoing expansion into new markets and the fact that foreign lawsoccasionally are vague or conflict with domestic laws. In addition to potential damage to the Company’s reputation and brand, failure to comply with applicablefederal, state and local laws and regulations such as those outlined above may result in the Company being subject to claims, lawsuits, fines and adverse publicitythat could have a material adverse effect on its business, results of operations and financial condition.Foreign Operations RisksThe Company’s financial position and results of operations may fluctuate significantly due to fluctuations in currency exchange rates in Latin Americanmarkets.The Company derives significant revenue, earnings and cash flow from operations in Latin America, where business operations are transacted in Mexican pesos,Guatemalan quetzales and Colombian pesos. The Company’s exposure to currency exchange rate fluctuations results primarily from the translation exposureassociated with the preparation of the Company’s consolidated financial statements, as well as from transaction exposure associated with transactions and assetsand liabilities denominated in currencies other than the respective subsidiaries’ functional currencies. While the Company’s consolidated financial statements arereported in U.S. dollars, the financial statements of the Company’s Latin American subsidiaries are prepared using their respective functional currency andtranslated 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 Americancurrencies could cause significant fluctuations in the value of the Company’s assets, liabilities, stockholders’ equity and operating results. In addition, whileexpenses with respect to foreign operations are generally denominated in the same currency as corresponding sales, the Company has transaction exposure to theextent expenditures are incurred in currencies other than the respective subsidiaries’ functional currencies. The costs of doing business in foreign jurisdictions alsomay increase as a result of adverse currency rate fluctuations. In addition, changes in currency26Table of Contents rates could negatively affect customer demand, especially in Latin America and in U.S. stores located along the Mexican border. For a detailed discussion of theimpact of fluctuations in currency exchange rates, see “Item 7A. Quantitative and Qualitative Disclosures About Market Risk.”Risks and uncertainties related to the Company’s foreign operations could negatively impact the Company’s operating results.As of December 31, 2019, the Company had 1,623 store locations in Latin America, including 1,548 in Mexico, 54 in Guatemala, 13 in El Salvador and eight inColombia and the Company plans to open additional stores in Latin America in the future. Doing business in each of these countries, and in Latin Americagenerally, involves increased risks related to geo-political events, political instability, corruption, economic volatility, property crime, drug cartel and gang-relatedviolence, social and ethnic unrest including riots and looting, enforcement of property rights, governmental regulations, tax policies, banking policies orrestrictions, foreign investment policies, public safety and security, anti-money laundering regulations, interest rate regulation and import/export regulationsamong others. As in many developing markets, there are also uncertainties as to how both local law and U.S. federal law is applied, including areas involvingcommercial transactions and foreign investment. As a result, actions or events could occur in Mexico, Guatemala, El Salvador or Colombia that are beyond theCompany’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 ofoperations.Because international operations increase the complexity of an organization, the Company may face additional administrative costs in managing its business. Inaddition, most countries typically impose additional burdens on non-domestic companies through the use of local regulations, tariffs, labor controls and otherfederal or state requirements or legislation. As the Company derives significant revenue, earnings and cash flow from operations in Latin America, primarily inMexico, there are some inherent risks regarding the overall stability of the trading relationship between Mexico and the U.S. and the burdens imposed thereon byany changes to (or the adoption of new) regulations, tariffs or other federal or state legislation. Specifically, the Company has significant exposure to fluctuationsand devaluations of the Mexican peso and the health of the Mexican economy, which, in each case, may be negatively impacted by changes in U.S. trade treaties,including the proposed USMCA and corporate tax policy. In some cases, there have been negative reactions to the enacted and/or proposed policies as expressed inthe media and by politicians in Mexico, which could potentially negatively impact U.S. companies operating in Mexico. In particular, there is uncertainty aroundthe new presidential administration in Mexico and how the policies of this new administration, including support of social welfare programs, may impact U.S.companies doing business in Mexico generally and pawn and consumer finance companies in particular. While the Company engages in limited cross-bordertransactions other than those involving scrap jewelry sales, any such changes in regulations, trade treaties, corporate tax policy, import taxes or adverse court oradministrative interpretations of the foregoing could adversely and significantly affect the Mexican economy and ultimately the Mexican peso, which couldadversely and significantly affect the Company’s financial position and results of the Company’s Latin America operations.General Economic and Market RisksA sustained deterioration of economic conditions or an economic crisis could reduce demand or profitability for the Company’s products and services andincrease credit losses 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 conditionsassociated with a global or regional economic crisis which, in either case, include adverse changes in interest or tax rates, effects of government initiatives tomanage economic conditions and increased volatility of commodity markets and foreign currency exchange rates. Specifically, a sustained or rapid deterioration inthe economy could cause deterioration in the performance of the Company’s loan portfolios and in consumer or market demand for pre-owned merchandise or goldsuch as that sold in the Company’s pawnshops. A sustained deterioration in the economy could reduce the demand and resale value of pre-owned merchandise andreduce the amount that the Company could effectively lend on an item of collateral. Such reductions could adversely affect pawn loan balances, pawn redemptionrates, inventory balances, inventory mixes, sales volumes and gross profit margins. Inclement weather, natural disasters or health epidemics can adversely impact the Company’s operating results.The occurrence of weather events and natural disasters such as rain, cold weather, snow, wind, storms, hurricanes, earthquakes, volcanic eruptions, or healthepidemics in the Company’s markets could adversely affect consumer traffic, retail sales and loan origination or collection activities at the Company’s stores andhave a material adverse effect on the Company’s results of operations. In addition, the Company may incur property, casualty or other losses not covered byinsurance. Losses not covered by insurance27Table of Contents could be substantial and may increase the Company’s expenses, which could harm the Company’s results of operations and financial condition.Declines in commodity market prices of gold, other precious metals and diamonds could negatively affect the Company’s profits.The Company’s profitability could be adversely impacted by commodity market fluctuations. As of December 31, 2019, approximately 57% of the Company’spawn loans were collateralized with jewelry, which is primarily gold, and 47% of its inventories consisted of jewelry, which is also primarily gold. The Companysells significant quantities of gold, other precious metals and diamonds acquired through collateral forfeitures or direct purchases from customers. A significantand sustained decline in gold and/or other precious metal and diamond prices could result in decreased merchandise sales and related margins, decreased inventoryvaluations and sub-standard collateralization of outstanding pawn loans. In addition, a significant decline in market prices could result in a lower balance of pawnloans outstanding for the Company, as customers would receive lower loan amounts for individual pieces of jewelry or other gold items. For a detailed discussionof the impact of a decline in market prices on wholesale scrap jewelry sales, see “Item 7A. Quantitative and Qualitative Disclosures About Market Risk.”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 tothese markets is critical to the Company’s ongoing financial success. However, the Company’s future access to the debt capital markets could become restricteddue to a variety of factors, including a deterioration of the Company’s earnings, cash flows, balance sheet quality, regulatory restrictions, fines, or orders or otherregulatory action causing reputational harm, or overall business or industry prospects, a significant deterioration in the state of the capital markets, includingimpacts of inflation or rising interest rates or a negative bias toward the Company’s industry by market participants. Inability to access the credit markets onacceptable terms, if at all, could have a material adverse effect on the Company’s financial condition and ability to fund future growth.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 theCompany opens new locations and renews leases for existing locations, thereby negatively impacting the Company’s results of operations. The Company alsoowns certain developed and undeveloped real estate, which could be impacted by adverse market fluctuations. In addition, the inability of the Company to renew,extend or replace expiring store leases could have an adverse effect on the Company’s results of operations.A discussion of certain other market risks is covered in “Item 7A. Quantitative and Qualitative Disclosures About Market Risk.”Accounting, Tax and Financial RisksThe Company's existing and future levels of indebtedness could adversely affect its financial health, its ability to obtain financing in the future, its ability toreact to changes in its business and its ability to fulfill its obligations under such indebtedness.As of December 31, 2019, including the Company's 5.375% senior unsecured notes issued in May 2017 (“Notes”) and the Company’s unsecured credit facility, theCompany had outstanding principal indebtedness of $635.0 million and availability of $161.7 million under its unsecured credit facility. The Company's level ofindebtedness 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 ofsuch indebtedness;•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 theavailability of 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 andother general corporate purposes;•limit its ability to refinance indebtedness or cause the associated costs of such refinancing toincrease;28Table of Contents •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, makerequired payments on its debt;•increase the Company's vulnerability to general adverse economic and industry conditions, including interest rate fluctuations (because a portion of itsborrowings are at variable 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 interestrates 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 ofoperations.The Company is subject to goodwill impairment risk.At December 31, 2019, the Company had $948.6 million of goodwill on its consolidated balance sheet, all of which represents assets capitalized in connection withthe Company’s acquisitions and business combinations. Accounting for goodwill requires significant management estimates and judgment. Management performsperiodic reviews of the carrying value of goodwill to determine whether events and circumstances indicate that an impairment in value may have occurred. Avariety of factors could cause 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 effect on the Company’s results of operations.Unexpected changes in both domestic and foreign tax policies could negatively impact the Company’s operating results.The Company’s financial results may be negatively impacted by changes in domestic or foreign tax policies, including, but not limited to, an increase in statutorytax rates, changes in allowable expense deductions, or 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 U.S. and LatinAmerica.Management’s judgment is required in determining the provision for income taxes, the deferred tax assets and liabilities and any valuation allowance recordedagainst deferred tax assets. Management’s judgment is also required in evaluating whether tax benefits meet the more-likely-than-not threshold for recognitionunder ASC 740-10-25, Income Taxes.Item 1B. Unresolved Staff CommentsNone.Item 2. PropertiesAs of December 31, 2019, the Company owned the real estate and buildings for 157 of its pawn stores and owned two other parcels of real estate, including theCompany’s corporate headquarters building in Fort Worth, Texas. While the Company generally leases its pawnshop locations, the Company also purchases realestate for its pawnshop locations as opportunities arise at attractive prices, whether through store acquisitions or through purchases from its landlords at existingstores. As of December 31, 2019, the Company leased 2,589 store locations that were open or were in the process of opening. Leased facilities are generally leasedfor a term of three to five years with one or more options to renew. A majority of the store leases can be terminated early upon an adverse change in law whichnegatively affects the store’s profitability. The Company’s leases expire on dates ranging between 2020 and 2045. All store leases provide for specified periodicrental payments ranging from approximately $1,000 to $25,000 per month as of December 31, 2019. For more information about the Company’s pawn storelocations, see “Item 1. Business—Locations and Operations.”29Table of Contents The following table details material corporate locations leased by the Company (dollars in thousands):Description Location Square Footage Lease Expiration Date Monthly Rental PaymentAdministrative offices Monterrey, Mexico 15,000 December 31, 2024 $15Administrative offices Mexico City, Mexico 8,000 March 31, 2024 15Administrative operations Cincinnati, Ohio 10,000 Month-to-month 10Administrative operations Fort Worth, Texas 24,000 July 31, 2021 10Most leases require the Company to maintain the property and pay the cost of insurance and property taxes. The Company believes termination of any particularlease would not have a material adverse effect on the Company’s operations. The Company believes the facilities currently owned and leased by it as pawn storesare suitable for such purpose. The Company considers its equipment, furniture and fixtures to be in good condition.Item 3. Legal ProceedingsThe Company is a defendant in certain routine litigation matters and regulatory actions encountered in the ordinary course of its business. Certain of these mattersare covered to an extent by insurance. In the opinion of management, the resolution of these matters is not expected to have a material adverse effect on theCompany’s financial position, results of operations or liquidity.Item 4. Mine Safety DisclosuresNot Applicable.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 Nasdaq Global Select Market (“Nasdaq”) under the symbol “FCFS.”On January 28, 2020, there were approximately 270 stockholders of record of the Company’s common stock.In October 2019, the Company’s Board of Directors approved an increase in the annual dividend of 8% from $1.00 per share to $1.08 per share, or $0.27 pershare quarterly, beginning in the fourth quarter of 2019. The declared $0.27 per share first quarter cash dividend on common shares outstanding, or an aggregate of$11.4 million based on the December 31, 2019 share count, will be paid on February 28, 2020 to stockholders of record as of February 14, 2020. While theCompany currently expects to continue the payment of quarterly cash dividends, the declaration and payment of cash dividends in the future (quarterly orotherwise) will be made by the Board of Directors, from time to time, subject to the Company’s financial condition, results of operations, business requirements,compliance with legal requirements and debt covenant restrictions.Issuer Purchases of Equity SecuritiesDuring 2019, the Company repurchased a total of 1,305,000 shares of common stock at an aggregate cost of $114.0 million and an average cost per share of$87.37, and during 2018, repurchased 3,343,000 shares of common stock at an aggregate cost of $274.5 million and an average cost per share of $82.12.30Table of Contents The following table provides the information with respect to purchases made by the Company of shares of its common stock during each month a share repurchaseprogram was in effect during the three months ended December 31, 2019 (dollars in thousands, except per share amounts): TotalNumberOf SharesPurchased AveragePricePaidPer Share Total Number OfSharesPurchasedAs Part OfPubliclyAnnouncedPlans ApproximateDollar Value OfShares That MayYet BePurchased UnderThe PlansOctober 1 through October 31, 2019 292,000 $89.29 292,000 $49,818November 1 through November 30, 2019 194,000 80.10 194,000 34,267December 1 through December 31, 2019 68,000 80.45 68,000 28,797Total 554,000 84.98 554,000 The following table provides purchases made by the Company of shares of its common stock under each share repurchase program in effect during 2019 (dollarsin thousands):Plan AuthorizationDate Plan CompletionDate Dollar AmountAuthorized Shares Purchasedin 2019 Dollar AmountPurchased in 2019 Remaining DollarAmountAuthorized ForFuture PurchasesJuly 25, 2018 April 23, 2019 $100,000 496,000 $42,760 $—October 24, 2018 Currently active 100,000 809,000 71,203 28,797Total 1,305,000 $113,963 $28,79731Table 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, 2014 throughDecember 31, 2019, with the cumulative total return on the Standard & Poor’s (“S&P”) MidCap 400 Index and the Russell 2000 Index, representing broad-basedequity market indexes, and the S&P MidCap 400 Financials Index and the S&P MidCap 400 Consumer Discretionary Index, representing industry-based indexes,over the same period (assuming the investment of $100 on December 31, 2014 and assuming the reinvestment of all dividends on the date paid). The Company haspreviously included a peer group index, however believes the comparison to the above mentioned industry-based indexes is a more applicable comparison. As aresult, the performance graph below does not include a peer group index. Note that historic performance is not necessarily indicative of future performance.32Table of Contents 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” andthe Company’s consolidated financial statements and related notes thereto in “Item 8. Financial Statements and Supplementary Data.” The information below isderived from and qualified by reference to the Company’s audited financial statements for each of the five years ended December 31, 2019. Year Ended December 31, 2019 2018 2017 2016 2015 (in thousands, except per share amounts and location counts)Income Statement Data (1): Revenue: Retail merchandise sales$1,175,561 $1,091,614 $1,051,099 $669,131 $449,296Pawn loan fees564,824 525,146 510,905 312,757 195,448Wholesale scrap jewelry sales103,876 107,821 140,842 62,638 32,055Consumer loan and credit services fees20,178 56,277 76,976 43,851 27,803Total revenue1,864,439 1,780,858 1,779,822 1,088,377 704,602 Cost of revenue: Cost of retail merchandise sold745,861 696,666 679,703 418,556 278,631Cost of wholesale scrap jewelry sold96,072 99,964 132,794 53,025 27,628Consumer loan and credit services loss provision4,159 17,461 19,819 11,993 7,159Total cost of revenue846,092 814,091 832,316 483,574 313,418 Net revenue1,018,347 966,767 947,506 604,803 391,184 Expenses and other income: Store operating expenses595,539 563,321 552,191 327,062 207,731Administrative expenses122,334 120,042 122,473 96,537 51,883Depreciation and amortization41,904 42,961 55,233 31,865 17,939Interest expense, net32,980 26,729 22,438 19,569 15,321Merger and other acquisition expenses1,766 7,643 9,062 36,670 2,875(Gain) loss on foreign exchange(787) 762 (317) 952 (159)Loss on extinguishment of debt— — 14,114 — —Net gain on sale of common stock of Enova— — — (1,299) —Goodwill impairment - U.S. consumer loanoperations— — — — 7,913Total expenses and other income793,736 761,458 775,194 511,356 303,503 Income before income taxes224,611 205,309 172,312 93,447 87,681 Provision for income taxes59,993 52,103 28,420 33,320 26,971 Net income$164,618 $153,206 $143,892 $60,127 $60,710 Dividends declared per common share$1.02 $0.91 $0.77 $0.565 $—33Table of Contents Year Ended December 31, 2019 2018 2017 2016 2015Income Statement Data (Continued) (1): Earnings per share: Basic3.83 3.42 3.01 1.72 2.16Diluted3.81 3.41 3.00 1.72 2.14 Balance Sheet Data: Inventories$265,256 $275,130 $276,771 $330,683 $93,458Pawn loans369,527 362,941 344,748 350,506 117,601Net working capital538,087 656,847 721,626 748,507 279,259Total assets 2,439,440 2,107,974 2,062,784 2,145,203 752,895Long-term liabilities886,503 656,825 466,880 551,589 275,338Total liabilities1,089,405 789,870 587,451 695,217 321,513Stockholders’ equity1,350,035 1,318,104 1,475,333 1,449,986 431,382 Statement of Cash Flows Data: Net cash flows provided by (used in): Operating activities$231,596 $243,429 $220,357 $96,854 $92,749Investing activities(137,053) (159,247) 1,397 (25,967) (71,676)Financing activities(120,806) (127,061) (197,506) (58,713) 9,127 Location Counts: Pawn stores2,673 2,456 2,039 2,012 1,005Consumer loan stores6 17 72 73 70 2,679 2,473 2,111 2,085 1,075(1) See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Information—Adjusted Net Incomeand Adjusted Diluted Earnings Per Share” for additional information about certain 2019, 2018 and 2017 income and expense items that affected the Company’sconsolidated net income and diluted earnings per share.Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsGeneral The Company is a leading operator of retail-based pawn stores with over 2,600 store locations in the U.S. and Latin America. The Company’s pawn storesgenerate retail sales primarily from the merchandise acquired through collateral forfeitures and over-the-counter purchases from customers. The stores also offerpawn loans to help customers meet small short-term cash needs. Personal property, such as jewelry, electronics, tools, appliances, sporting goods and musicalinstruments is pledged as collateral for the pawn loans and held by the Company over the term of the loan plus a stated grace period. In addition, a small number ofthe Company’s pawn stores offer credit services products or unsecured consumer loans. The Company’s strategy is to grow revenues and income by opening new(“de novo”) retail pawn locations, acquiring existing pawn stores in strategic markets and increasing revenue and operating profits in existing stores. Pawnoperations, which include retail merchandise sales, pawn loan fees and wholesale scrap jewelry sales, accounted for approximately 99% and 97% of theCompany’s consolidated revenue during 2019 and 2018, respectively.The Company organizes its operations into two reportable segments. The U.S. operations segment consists of all pawn and unsecured consumer loan operations inthe U.S. and the Latin America operations segment consists of all pawn operations in Latin America, which includes operations in Mexico, Guatemala, El Salvadorand Colombia. Financial information regarding the Company’s revenue and long-lived assets by geographic areas is provided in Note 16 of Notes to ConsolidatedFinancial Statements contained herein.34Table of Contents The Company recognizes pawn loan fee revenue on a constant-yield basis over the life of the pawn loan for all pawn loans of which the Company deems collectionto be probable based on historical redemption statistics. If a pawn loan is not repaid prior to the expiration of the loan term, including any extension or graceperiod, if applicable, the property is forfeited to the Company and transferred to inventory at a value equal to the principal amount of the loan, exclusive of accruedpawn fee revenue. The Company records merchandise sales revenue at the time of the sale and presents merchandise sales net of any sales or value-added taxescollected. 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 item is returned to inventory and all or aportion of previous payments are typically forfeited to the Company. Interim payments from customers on layaway sales are recorded as deferred revenue andsubsequently recorded as retail merchandise sales revenue when the merchandise is delivered to the customer upon receipt of final payment or when previouspayments are forfeited to the Company. Some jewelry is processed at third-party facilities and the precious metal and diamond content is sold at either prevailingmarket commodity prices or a previously agreed upon price with a commodity buyer. The Company records revenue from these wholesale scrap jewelrytransactions when a price has been agreed upon and the Company ships the commodity to the buyer.The Company operates six stand-alone consumer finance stores in the U.S., which provide credit services. In addition, 41 of the Company’s pawn stores also offercredit services or unsecured consumer loans as an ancillary product. These products have been deemphasized by the Company in recent years due to regulatoryconstraints and increased internet based competition for such products. Unsecured consumer loan and credit services revenue accounted for 1% and 3% ofconsolidated revenue for 2019 and 2018, respectively.The Company recognizes service fee income on unsecured consumer loan transactions on a constant-yield basis over the life of the loan and recognizes creditservices fees ratably over the life of the extension of credit made by the Independent Lender. Changes in the valuation reserve on unsecured consumer loans andcredit services transactions are charged or credited to the consumer loan credit loss provision.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,including the compensation and benefit costs of corporate management, district managers and other operations management personnel, collection operations andpersonnel, accounting and administrative costs, information technology costs, liability and casualty insurance, outside legal and accounting fees and stockholder-related expenses. Merger and other acquisition expenses primarily include incremental costs directly associated with merger and acquisition activities, includingprofessional fees, legal expenses, severance, retention and other employee-related costs, contract breakage costs and costs related to consolidation of technologysystems and corporate facilities.Stores included in the same-store calculations presented in this report are those stores that were opened or acquired prior to the beginning of the prior-yearcomparative period and remained open through the end of the reporting period. Also included are stores that were relocated during the applicable period within aspecified distance serving the same market where there is not a significant change in store size and where there is not a significant overlap or gap in timingbetween the opening of the new store and the closing of the existing store.The Company’s management reviews and analyzes certain operating results in Latin America on a constant currency basis because the Company believes thisbetter represents the Company’s underlying business trends. Constant currency results are non-GAAP financial measures, which exclude the effects of foreigncurrency translation and are calculated by translating current-year results at prior-year average exchange rates. The scrap jewelry generated in Latin America issold and settled in U.S. dollars, and therefore, wholesale scrap jewelry sales revenue is not affected by foreign currency translation. A small percentage of theoperating and administrative expenses in Latin America are also billed and paid in U.S. dollars, which are not affected by foreign currency translation.35Table of Contents Business operations in Mexico, Guatemala and Colombia are transacted in Mexican pesos, Guatemalan quetzales and Colombian pesos, respectively. TheCompany also has operations in El Salvador where the reporting and functional currency is the U.S. dollar. The following table provides exchange rates for theMexican peso, Guatemalan quetzal and Colombian peso for the current and prior-year periods: 2019 2018 2017 Rate % ChangeOver Prior-Year PeriodFavorable /(Unfavorable) Rate % ChangeOver Prior-Year PeriodFavorable /(Unfavorable) RateMexican peso / U.S. dollar exchange rate: End-of-period 18.8 5 % 19.7 — % 19.7Twelve months ended 19.3 (1)% 19.2 (2)% 18.9 Guatemalan quetzal / U.S. dollar exchange rate: End-of-period 7.7 — % 7.7 (5)% 7.3Twelve months ended 7.7 (3)% 7.5 (1)% 7.4 Colombian peso / U.S. dollar exchange rate: End-of-period 3,277 (1)% 3,250 (9)% 2,984Twelve months ended 3,280 (11)% 2,956 — % 2,951Amounts presented on a constant currency basis are denoted as such. See “Non-GAAP Financial Information” for additional discussion of constant currencyoperating results.36Table of Contents The following table details income statement items as a percent of total revenue and other operating metrics: Year Ended December 31, 2019 2018 2017Revenue: Retail merchandise sales63.0% 61.3% 59.1%Pawn loan fees30.3 29.5 28.7Wholesale scrap jewelry sales5.6 6.0 7.9Consumer loan and credit services fees1.1 3.2 4.3 Cost of revenue: Cost of retail merchandise sold40.0 39.1 38.2Cost of wholesale scrap jewelry sold5.2 5.6 7.5Consumer loan and credit services loss provision0.2 1.0 1.1 Net revenue54.6 54.3 53.2 Expenses and other income: Store operating expenses31.9 31.6 31.0Administrative expenses6.6 6.8 6.9Depreciation and amortization2.2 2.4 3.1Interest expense, net1.8 1.5 1.2Merger and other acquisition expenses0.1 0.4 0.5(Gain) loss on foreign exchange— 0.1 —Loss on extinguishment of debt— — 0.8 Income before income taxes12.0 11.5 9.7Provision for income taxes3.2 2.9 1.6Net income8.8 8.6 8.1Critical Accounting PoliciesThe preparation of financial statements in conformity with GAAP requires management to make estimates, assumptions and judgments that affect the reportedamounts of assets and liabilities, related revenue and expenses, and disclosure of gain and loss contingencies at the date of the financial statements. Such estimates,assumptions and judgments are subject to a number of risks and uncertainties, which may cause actual results to differ materially from the Company’s estimates.The significant accounting policies that the Company believes are the most critical to aid in fully understanding and evaluating its reported financial results includethe following:Customer loans and revenue recognition - Receivables on the balance sheet consist of pawn loans and unsecured consumer loans. Pawn loans are collateralized bypledged tangible personal property, which the Company holds during the term of the loan plus a stated grace period. In certain markets, the Company also providespawn loans collateralized by automobiles, which remain in the Company’s possession or in limited cases, remain in the possession of the customer. The Companyaccrues 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 be probable based onhistorical pawn redemption statistics. The typical pawn loan term is generally 30 days plus an additional grace period of 14 to 90 days, depending on geographicalmarkets 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 renewedor 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 inventory carrying value of the forfeited collateral, which is typically recovered through sales of the forfeited items at prices wellabove the carrying value.37Table of Contents The Company’s pawn merchandise sales are primarily retail sales to the general public in its pawn stores. The Company typically acquires pawn merchandiseinventory through forfeited pawn loans and through purchases of used goods directly from the general public. The Company records sales revenue at the time ofthe sale. The Company presents merchandise sales net of any sales or value-added taxes collected. The Company does not provide direct financing to customers forthe purchase of its merchandise, but does permit its customers to purchase merchandise on an interest-free “layaway” plan. Should the customer fail to make arequired payment pursuant to a layaway plan, the item is returned to inventory and all or a portion of previous payments are typically forfeited to the Company.Interim payments from customers on layaway sales are recorded as deferred revenue and subsequently recorded as retail merchandise sales revenue when themerchandise is delivered to the customer upon receipt of final payment or when previous payments are forfeited to the Company. Some jewelry is processed atthird-party facilities and the precious metal and diamond content is sold at either prevailing market commodity prices or a previously agreed upon price with acommodity buyer. The Company records revenue from these wholesale scrap jewelry transactions when a price has been agreed upon and the Company ships thecommodity to the buyer.The Company recognizes service fee income on unsecured consumer loan transactions on a constant-yield basis over the life of the loan. Unsecured consumerloans have terms that typically range from 7 to 45 days. The Company recognizes credit services fees ratably over the life of the extension of credit made by theIndependent Lender. The extensions of credit made by the Independent Lender to credit services customers typically have terms of 7 to 180 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 issignificantly in excess of the pawn loan amount. The Company maintains an allowance for credit losses on unsecured consumer loans on an aggregate basis at alevel it considers sufficient to cover estimated losses in the collection of its unsecured consumer loans. The allowance for credit losses is periodically reviewed bymanagement with any changes reflected in current operations.Under the CSO Program, the Company assists customers in applying for a short-term extension of credit from an Independent Lender and issues the IndependentLender a guarantee for the repayment of the extension of credit. The Company is required to recognize, at the inception of the guarantee, a liability for theestimated fair value of the obligation undertaken by issuing the guarantee, which is included in accrued liabilities. The estimated fair value of the liability isperiodically reviewed by management with any changes reflected in current operations.Inventories - Inventories represent merchandise acquired from forfeited pawns and merchandise purchased directly from the general public. The Company alsoretails limited quantities of new or refurbished merchandise obtained directly from wholesalers and manufacturers. Inventories from forfeited pawns are recordedat the amount of the pawn principal on the unredeemed goods, exclusive of accrued interest. Inventories purchased directly from customers, wholesalers andmanufacturers are recorded at cost. The cost of inventories is determined on the specific identification method. Inventories are stated at the lower of cost or netrealizable value and, accordingly, inventory valuation allowances are established if inventory carrying values are in excess of estimated selling prices, net of directcosts of disposal. Management has evaluated inventories and determined 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 eachbusiness combination. The Company performs its goodwill impairment assessment annually as of December 31, and between annual assessments if an eventoccurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company’s reportingunits, which are tested for impairment, are U.S. operations and Latin America operations. The Company assesses goodwill for impairment at a reporting unit levelby 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 keypersonnel, and overall financial performance. If, after completing this assessment, it is determined that it is more likely than not that the fair value of a reportingunit is less than its carrying value, the Company proceeds to the two-step impairment testing methodology.The Company’s material indefinite-lived intangible assets consist of trade names and pawn licenses. The Company performs its indefinite-lived intangible assetimpairment assessment annually as of December 31, and between annual assessments if an event occurs or circumstances change that would more likely than notreduce the fair value of a reporting unit below its carrying amount.38Table of Contents Foreign currency transactions - The Company has significant operations in Latin America, where in Mexico, Guatemala and Colombia the functional currency isthe Mexican peso, Guatemalan quetzal and Colombian peso, respectively. Accordingly, the assets and liabilities of these subsidiaries are translated into U.S.dollars at the exchange rate in effect at each balance sheet date, and the resulting adjustments are accumulated in other comprehensive income (loss) as a separatecomponent of stockholders’ equity. Revenues and expenses are translated at the average exchange rates occurring during the respective period. Prior to translation,U.S. dollar-denominated transactions of the foreign subsidiaries are remeasured into their functional currency using current rates of exchange for monetary assetsand liabilities and historical rates of exchange for non-monetary assets and liabilities. Gains and losses from remeasurement of dollar-denominated monetaryassets and liabilities in Mexico, Guatemala and Colombia are accumulated in (gain) loss on foreign exchange in the consolidated statements of income. Deferredtaxes are not currently recorded on cumulative foreign currency translation adjustments, as the Company indefinitely reinvests earnings of its foreign subsidiaries.The Company also has operations in El Salvador where the reporting and functional currency is the U.S. dollar.Results of Operations2019 Consolidated Operating Results HighlightsThe following table sets forth revenue, net income, diluted earnings per share, adjusted net income, adjusted diluted earnings per share, EBITDA and adjustedEBITDA for the year ended December 31, 2019 as compared to the year ended December 31, 2018 (in thousands, except per share amounts): Year Ended December 31, As Reported (GAAP) Adjusted (Non-GAAP) 2019 2018 2019 2018Revenue $1,864,439 $1,780,858 $1,864,439 $1,780,858Net income $164,618 $153,206 $167,900 $158,290Diluted earnings per share $3.81 $3.41 $3.89 $3.53EBITDA (non-GAAP measure) $299,495 $274,999 $303,782 $284,156Weighted-average diluted shares 43,208 44,884 43,208 44,884See “Non-GAAP Financial Information—Adjusted Net Income and Adjusted Diluted Earnings Per Share and —Earnings Before Interest, Taxes, Depreciation andAmortization (EBITDA) and Adjusted EBITDA” below.The following are the results from 2019 the Company believes are key indicators of its operating performance when compared to 2018. See “Non-GAAP FinancialInformation” for additional discussion of non-GAAP financial measures. •Consolidated revenue increased 5% and totaled $1.9billion.•Revenue from core pawn operations, which includes retail merchandise sales and pawn fees, increased $123.6 million, or8%.•Net revenue (gross profit) increased $51.6 million with a 30 basis point increase in the gross margin to 55% ofrevenues.•Pre-tax profit margin increased 50 basis points to 12.0% and adjusted pre-tax profit margin, which is calculated using a non-GAAP financial measure,increased 30 basis points to 12.3%.•Net income increased $11.4 million, or 7%, and adjusted net income, a non-GAAP financial measure, increased $9.6 million, or6%.•Diluted earnings per share increased 12% to $3.81 and adjusted diluted earnings per share, a non-GAAP financial measure, increased 10% to$3.89.•Adjusted EBITDA, a non-GAAP financial measure, increased 7% and totaled $303.8million.•The Company repurchased 1,305,000 shares of its outstanding common shares for $114.0million.•Cash dividends totaled $1.02 per common share, representing a 12% increase in dividends pershare.•The Company added a total of 279 locations, including 89 new locations and 190 acquired locations.•As of December 31, 2019, the Company had 2,679 store locations, which represents a store count increase of8%.39Table of Contents The following charts present net income, adjusted net income, diluted earnings per share, adjusted diluted earnings per share, EBITDA, adjusted EBITDA andstore count for the years ended December 31, 2019, 2018 and 2017 (in millions, except per share and store count amounts):* Non-GAAP financial measures. See “Non-GAAP Financial Information” for additional discussion of non-GAAP financial measures.40Table of Contents Operating Results for the Twelve Months Ended December 31, 2019 Compared to the Twelve Months Ended December 31, 2018The following tables and related discussion set forth key operating and financial data for the Company’s operations by reporting segment as of and for the yearsended December 31, 2019 and 2018. For similar operating and financial data and discussion of the Company’s 2018 results compared to its 2017 results, refer toItem 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under Part II of the Company’s annual report on Form 10-K forthe year ended December 31, 2018, which was filed with the SEC on February 5, 2019.U.S. Operations SegmentThe following table details earning assets, which consist of pawn loans, inventories and unsecured consumer loans, net, as well as other earning asset metrics of theU.S. operations segment as of December 31, 2019 as compared to December 31, 2018 (dollars in thousands, except as otherwise noted): As of December 31, Increase / 2019 2018 (Decrease)U.S. Operations Segment Earning assets: Pawn loans$268,793 $271,584 (1)% Inventories 181,320 199,978 (9)% Consumer loans, net (1) 751 15,902 (95)% $450,864 $487,464 (8)% Average outstanding pawn loan amount (in ones)$177 $172 3 % Composition of pawn collateral: General merchandise34% 34% Jewelry66% 66% 100% 100% Composition of inventories: General merchandise47% 42% Jewelry53% 58% 100% 100% Percentage of inventory aged greater than one year3% 4% (1) Does not include the off-balance sheet principal portion of active extensions of credit made by independent third-party lenders, which are guaranteed by the Companythrough its CSO Program. These amounts, net of the Company’s estimated fair value of its liability for guaranteeing the extensions of credit, totaled $1.2 million and$5.8 million as of December 31, 2019 and 2018, respectively. The Company ceased offering unsecured consumer lending and credit services products in all of itsOhio locations on April 26, 2019 and closed 52 Ohio locations during the second quarter of 2019. See “— Consumer Lending Operations” for further discussion.The following table presents segment pre-tax operating income of the U.S. operations segment for the year ended December 31, 2019 as compared to the yearended December 31, 2018 (dollars in thousands). Store operating expenses include salary and benefit expense of store-level employees, occupancy costs, bankcharges, security, insurance, utilities, supplies and other costs incurred by the stores.41Table of Contents Year Ended December 31, Increase / 2019 2018 (Decrease)U.S. Operations Segment Revenue: Retail merchandise sales $722,127 $709,594 2 % Pawn loan fees 379,395 373,406 2 % Wholesale scrap jewelry sales 71,813 85,718 (16)% Consumer loan and credit services fees (1) 20,178 55,417 (64)% Total revenue 1,193,513 1,224,135 (3)% Cost of revenue: Cost of retail merchandise sold 447,911 450,516 (1)% Cost of wholesale scrap jewelry sold 65,941 78,308 (16)% Consumer loan and credit services loss provision (1) 4,159 17,223 (76)% Total cost of revenue 518,011 546,047 (5)% Net revenue 675,502 678,088 — % Segment expenses: Store operating expenses 412,508 414,097 — % Depreciation and amortization 20,860 21,021 (1)% Total segment expenses 433,368 435,118 — % Segment pre-tax operating income $242,134 $242,970 — % (1) The Company ceased offering unsecured consumer lending and credit services products in all of its Ohio locations on April 26, 2019 and closed 52 Ohio locationsduring the second quarter of 2019. See “— Consumer Lending Operations” for further discussion.Retail OperationsU.S. retail merchandise sales increased 2% to $722.1 million during 2019 compared to $709.6 million for 2018. Same-store retail sales were flat during 2019compared to 2018. During 2019, the gross profit margin on retail merchandise sales in the U.S. was 38% compared to a margin of 37% during 2018, which resultedin a 6% increase in net revenue (gross profit) from retail sales for 2019 compared to 2018. The increase in retail sales margin was primarily driven by the continuedoptimization of inventory acquisition and pricing strategies in the Cash America locations.U.S. inventories decreased 9% from $200.0 million at December 31, 2018 to $181.3 million at December 31, 2019. The decrease was primarily a result of thestrategic reductions in inventory levels in the Cash America stores. Inventories aged greater than one year in the U.S. were 3% at December 31, 2019 compared to4% at December 31, 2018.Pawn Lending OperationsU.S. pawn loan fees increased 2% to $379.4 million during 2019 compared to $373.4 million for 2018. Same-store pawn fees increased 1% during 2019 comparedto 2018. Pawn loan receivables as of December 31, 2019 decreased 1% in total and on a same-store basis compared to December 31, 2018. The decline in same-store pawn receivables relates primarily to the ongoing adoption of FirstCash’s lending practices in the Cash America stores, including an increase in thepercentage of direct purchases of goods from customers, which the Company believes increased the yield on the pawn portfolio and increased pawn loan fees.42Table of Contents Wholesale Scrap Jewelry OperationsU.S. wholesale scrap jewelry revenue, consisting primarily of gold sales, decreased 16% to $71.8 million during 2019 compared to $85.7 million during 2018. Thedecrease was primarily due to higher than normal jewelry scrapping activity in the first half of 2018 as a result of focused liquidation of excess and agedinventories in the Cash America stores. The scrap jewelry gross profit margin in the U.S. was 8% compared to the prior-year margin of 9%. Scrap jewelry grossprofits accounted for 1% of U.S. net revenue (gross profit) for both 2019 and 2018.Consumer Lending OperationsService fees from U.S. unsecured consumer loans and credit services transactions (collectively, consumer lending operations) decreased 64% to $20.2 millionduring 2019 compared to $55.4 million for 2018. Net revenue (gross profit) from U.S. consumer lending operations decreased 58% to $16.0 million during 2019compared to $38.2 million during 2018. Revenue and gross profit from consumer lending operations accounted for 2% of both total U.S. revenue and gross profitduring 2019 compared to 5% and 6%, respectively, during 2018.The decrease in consumer lending activity during 2019 was primarily the result of regulatory changes in the state of Ohio, where most of the Company’s consumerlending stores were located. The regulatory changes significantly restricted unsecured consumer lending activities and the Company elected to stop offeringunsecured consumer lending and credit services products in all 119 Ohio locations on April 26, 2019 and closed 52 Ohio locations during the second quarter of2019. The remaining 67 locations in Ohio are expected to continue operating as full-service pawnshops. In addition to the discontinuance of consumer lendingactivities in Ohio, the Company closed two stand-alone consumer loan stores in Texas and ceased offering unsecured consumer loans and/or credit services asancillary products in 110 other pawnshops located outside of Ohio during 2019.As a result of the discontinuance of unsecured consumer lending and credit services products and store closures in Ohio and the continued contraction of U.S.locations outside of Ohio offering such products, the Company incurred non-recurring charges of approximately $2.7 million, net of tax, during 2019. Thesecharges include increased loan loss provisions, employee severance costs, lease termination costs and other exit costs.Segment Expenses and Segment Pre-Tax Operating IncomeU.S. store operating expenses decreased slightly to $412.5 million during 2019 compared to $414.1 million during 2018, primarily due to the closing of the 52 Ohiolocations during the second quarter of 2019, partially offset by a 1% increase in same-store operating expenses compared with the prior-year period.U.S. store depreciation and amortization decreased 1% to $20.9 million during 2019 compared to $21.0 million during 2018.The U.S. segment pre-tax operating income for 2019 was $242.1 million, which generated a pre-tax segment operating margin of 20% compared to $243.0 millionand 20% in the prior year, respectively. The slight decrease in the segment pre-tax operating income reflected improvements in retail sales margins and yields onpawn receivables substantially offset by declines in net revenue from consumer lending operations.43Table of Contents Latin America Operations SegmentThe Company’s management reviews and analyzes operating results in Latin America on a constant currency basis because the Company believes this betterrepresents the Company’s underlying business trends. Constant currency results are non-GAAP financial measures, which exclude the effects of foreign currencytranslation and are calculated by translating current-year results at prior-year average exchange rates. The wholesale scrap jewelry sales in Latin America are pricedand settled in U.S. dollars and are not affected by foreign currency translation as are a small percentage of the operating and administrative expenses in LatinAmerica, which are billed and paid in U.S. dollars and not affected by foreign currency translation.Latin American results of operations for 2019 compared to 2018 were impacted by a 1% unfavorable change in the average value of the Mexican peso compared tothe U.S. dollar. The translated value of Latin American earning assets as of December 31, 2019 compared to December 31, 2018 also were impacted by a 5%favorable change in the end-of-period value of the Mexican peso compared to the U.S. dollar.The following table details earning assets, which consist of pawn loans and inventories as well as other earning asset metrics of the Latin America operationssegment as of December 31, 2019 as compared to December 31, 2018 (dollars in thousands, except as otherwise noted): Constant Currency Basis As of December 31, As of December 31, 2019 Increase 2019 2018 Increase (Non-GAAP) (Non-GAAP)Latin America Operations Segment Earning assets: Pawn loans$100,734 $91,357 10% $96,640 6% Inventories 83,936 75,152 12% 80,490 7% $184,670 $166,509 11% $177,130 6% Average outstanding pawn loan amount(in ones)$71 $68 4% $68 —% Composition of pawn collateral: General merchandise67% 74% Jewelry33% 26% 100% 100% Composition of inventories: General merchandise66% 68% Jewelry34% 32% 100% 100% Percentage of inventory aged greater thanone year1% 1% 44Table of Contents The following table presents segment pre-tax operating income of the Latin America operations segment for the year ended December 31, 2019 as compared to theyear ended December 31, 2018 (dollars in thousands). Store operating expenses include salary and benefit expense of store-level employees, occupancy costs, bankcharges, security, insurance, utilities, supplies and other costs incurred by the stores. Constant Currency Basis Year Ended December 31, Increase / Year Ended December 31, Increase / 2019 (Decrease) 2019 2018 (Decrease) (Non-GAAP) (Non-GAAP)Latin America Operations Segment Revenue: Retail merchandise sales $453,434 $382,020 19 % $454,431 19 % Pawn loan fees 185,429 151,740 22 % 185,826 22 % Wholesale scrap jewelry sales 32,063 22,103 45 % 32,063 45 % Consumer loan fees (1) — 860 (100)% — (100)% Total revenue 670,926 556,723 21 % 672,320 21 % Cost of revenue: Cost of retail merchandise sold 297,950 246,150 21 % 298,621 21 % Cost of wholesale scrap jewelry sold 30,131 21,656 39 % 30,191 39 % Consumer loan loss provision (1) — 238 (100)% — (100)% Total cost of revenue 328,081 268,044 22 % 328,812 23 % Net revenue 342,845 288,679 19 % 343,508 19 % Segment expenses: Store operating expenses 183,031 149,224 23 % 183,562 23 % Depreciation and amortization 14,626 11,333 29 % 14,687 30 % Total segment expenses 197,657 160,557 23 % 198,249 23 % Segment pre-tax operating income $145,188 $128,122 13 % $145,259 13 % (1) The Company discontinued offering an unsecured consumer loan product in Latin America, effective June 30, 2018.Retail OperationsLatin America retail merchandise sales increased 19% (also 19% on a constant currency basis) to $453.4 million during 2019 compared to $382.0 million for 2018.The increase was primarily due to additional revenue contributions from the combination of recent acquisitions, new store openings and a 2% increase (also 2% ona constant currency basis) in same-store retail sales. The gross profit margin on retail merchandise sales was 34% during 2019 compared to 36% during 2018. Thedecrease in retail sales margins was primarily due to an increased level of holiday-related promotional pricing on certain highly competitive electronics categoriessuch as phones and televisions during the fourth quarter of 2019 compared to the fourth quarter of 2018.Inventories in Latin America increased 12% (7% on a constant currency basis) from $75.2 million at December 31, 2018 to $83.9 million at December 31, 2019.The increase was primarily due to the acquisition of 163 smaller format stores in Mexico during 2019, new store openings and the maturation of existing stores.Inventories aged greater than one year in Latin America were 1% at both December 31, 2019 and 2018.45Table of Contents Pawn Lending OperationsPawn loan fees in Latin America increased 22% (also 22% on a constant currency basis) totaling $185.4 million during 2019 compared to $151.7 million for 2018,primarily as a result of increased average pawn loan receivables throughout 2019 as compared to 2018 and increased pawn loan yields. The increase in pawnreceivables as of December 31, 2019 was primarily driven by recent acquisition activity and new store additions. Same-store pawn receivables increased 1% (3%decrease on a constant currency basis) as compared to the prior year. The Company believes same-store pawn loan receivables were negatively impacted in thelater half of 2019, in part, by increased governmental support for social welfare programs for lower income consumers under the new federal administration inMexico.Wholesale Scrap Jewelry OperationsLatin America wholesale scrap jewelry revenue, consisting primarily of gold sales, increased 45% (also 45% on a constant currency basis) to $32.1 million during2019 compared to $22.1 million during 2018. The increase was primarily due to increased volume contributions from recently acquired stores which carried agreater percentage of jewelry inventories. The scrap jewelry gross profit margin in Latin America was 6% (also 6% on a constant currency basis) compared to theprior-year margin of 2%. Scrap jewelry profits accounted for less than 1% of net revenue (gross profit) for both 2019 and 2018.Segment Expenses and Segment Pre-Tax Operating IncomeStore operating expenses increased 23% (also 23% on a constant currency basis) to $183.0 million during 2019 compared to $149.2 million during 2018. Totalstore operating expenses increased primarily due to the 29% increase in the Latin America weighted-average store count. Same-store operating expenses increased2% (also 2% on a constant currency basis) compared to the prior-year period.Latin America store depreciation and amortization increased 29% (30% on a constant currency basis) to $14.6 million during 2019 compared to $11.3 millionduring 2018 primarily due to the increase in the store count.The segment pre-tax operating income for 2019 was $145.2 million, which generated a pre-tax segment operating margin of 22% compared to $128.1 million and23% in the prior year, respectively. The increase in the segment pre-tax operating income was primarily due to gross profit contributions from acquired stores andincreased revenue in existing stores.46Table of Contents 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 toconsolidated net income for the year ended December 31, 2019 as compared to the year ended December 31, 2018 (dollars in thousands): Year Ended December 31, Increase / 2019 2018 (Decrease)Consolidated Results of Operations Segment pre-tax operating income: U.S. operations segment pre-tax operating income $242,134 $242,970 — % Latin America operations segment pre-tax operating income 145,188 128,122 13 % Consolidated segment pre-tax operating income 387,322 371,092 4 % Corporate expenses and other income: Administrative expenses 122,334 120,042 2 % Depreciation and amortization 6,418 10,607 (39)% Interest expense 34,035 29,173 17 % Interest income (1,055) (2,444) (57)% Merger and other acquisition expenses 1,766 7,643 (77)% (Gain) loss on foreign exchange (787) 762 203 % Total corporate expenses and other income 162,711 165,783 (2)% Income before income taxes 224,611 205,309 9 % Provision for income taxes 59,993 52,103 15 % Net income $164,618 $153,206 7 % Corporate Expenses and TaxesAdministrative expenses increased 2% to $122.3 million during 2019 compared to $120.0 million during 2018, primarily due to a 14% increase in the consolidatedweighted-average store count, resulting in additional management and supervisory compensation and other support expenses required for such growth, partiallyoffset by the realization of administrative cost synergies related to 2018 acquisitions, a 1% unfavorable change in the average value of the Mexican peso andreduced variable management incentive compensation. Administrative expenses were 7% of revenue during both 2019 and 2018.Corporate depreciation and amortization decreased to $6.4 million during 2019 compared to $10.6 million during 2018, primarily due to the realization ofdepreciation and amortization synergies from the Merger and a reduction in capital spending compared to pre-Merger levels.Interest expense increased to $34.0 million during 2019 compared to $29.2 million for 2018, primarily due to increased average balances outstanding on theCompany’s unsecured credit facility. See “Liquidity and Capital Resources.”Interest income decreased to $1.1 million during 2019 compared to $2.4 million for 2018, primarily due to decreased levels of invested cash balances in Mexicodue to acquisition activity.Merger and other acquisition expenses decreased to $1.8 million during 2019 compared to $7.6 million during 2018, reflecting a decreased level of acquisitionactivity in 2019 compared to 2018.47Table of Contents For 2019 and 2018, the Company’s consolidated effective income tax rates were 26.7% and 25.4%, respectively. The increase in the effective tax rate was due inpart to an increase in certain non-deductible expenses resulting from the Tax Cuts and Jobs Act, the increasing share of earnings from Latin America wherecorporate tax rates are higher than those in the U.S. and a reduced foreign permanent tax benefit related to a reduced inflation index adjustment allowed in Mexicofor 2019. In addition, the 2018 effective income tax rate includes a $1.5 million non-recurring income tax benefit as a result of the Company’s finalization ofcertain estimates and tax positions related to the Tax Cuts and Jobs Act. See Note 11 of Notes to Consolidated Financial Statements.Liquidity and Capital ResourcesAs of December 31, 2019, the Company’s primary sources of liquidity were $46.5 million in cash and cash equivalents, $161.7 million of available and unusedfunds under the Company's revolving unsecured credit facility, $417.0 million in customer loans and fees and service charges receivable and $265.3 million ininventories. As of December 31, 2019, the amount of cash associated with indefinitely reinvested foreign earnings was $19.6 million, which is primarily held inMexican pesos. The Company had working capital of $538.1 million as of December 31, 2019.During the period from January 1, 2019 through December 19, 2019, the Company maintained an unsecured line of credit with a group of U.S. based commerciallenders (the “Credit Facility”) in the amount of $425.0 million, which was scheduled to mature in October 2023. The Credit Facility charged interest, at theCompany’s option, at either (1) the prevailing London Interbank Offered Rate (“LIBOR”) (with interest periods of 1 week or 1, 2, 3 or 6 months at the Company’soption) plus a fixed spread of 2.5% or (2) the prevailing prime or base rate plus a fixed spread of 1.5%.On December 19, 2019, the Company amended and extended the Credit Facility. The total lender commitment under the amended facility increased from $425.0million to $500.0 million and the term was extended to December 19, 2024, which would accelerate to 90 days prior to the maturity of the Company’s seniorunsecured notes due June 1, 2024 if the Company’s senior unsecured notes have not been refinanced or otherwise extended past December 19, 2024 by such date.Certain financial covenants in the facility were amended, including a temporary increase in the permitted domestic leverage ratio from 4.0 to 4.5 times domesticEBITDA, adjusted for certain customary items as more fully set forth in the Credit Facility (“Adjusted Domestic EBITDA”), through December 31, 2020 and to4.25 times Adjusted Domestic EBITDA from January 1, 2021 through December 31, 2021 and a temporary decrease in the consolidated leverage ratio from 3.0 to2.75 times consolidated EBTIDA, adjusted for certain customary items as more fully set forth in the Credit Agreement, through December 31, 2021. Thetemporary changes to the leverage ratios will revert to the previous ratios effective January 1, 2022. In addition, the amendment allowed for a permanent exclusionof up to $50 million in parent guaranteed indebtedness of foreign subsidiaries from funded indebtedness used in the calculation of the domestic leverage ratio.At December 31, 2019, the Company had $335.0 million in outstanding borrowings and $3.3 million in outstanding letters of credit under the Credit Facility,leaving $161.7 million available for future borrowings. The Credit Facility is unsecured and bears interest, at the Company’s option, of either (1) the prevailingLIBOR (with interest periods of 1 week or 1, 2, 3 or 6 months at the Company’s option) plus a fixed spread of 2.5% or (2) the prevailing prime or base rate plus afixed spread of 1.5%. The agreement has a LIBOR floor of 0%. Additionally, the Company is required to pay an annual commitment fee of 0.50% on the averagedaily unused portion of the Credit Facility commitment. The weighted-average interest rate on amounts outstanding under the Credit Facility at December 31, 2019was 4.13% based on 1 week LIBOR. Under the terms of the Credit Facility, the Company is required to maintain certain financial ratios and comply with certainfinancial covenants. The Credit Facility also contains customary restrictions on the Company’s ability to incur additional debt, grant liens, make investments,consummate acquisitions and similar negative covenants with customary carve-outs and baskets. The Company was in compliance with the covenants of the CreditFacility as of December 31, 2019, and believes it has the capacity to borrow a substantial portion of the amount available under the Credit Facility under the mostrestrictive covenant. During 2019, the Company received net proceeds of $40.0 million from borrowings pursuant to the Credit Facility.On May 30, 2017, the Company issued $300.0 million of 5.375% senior unsecured notes due on June 1, 2024 (the “Notes”), all of which are currently outstanding.Interest on the Notes is payable semi-annually in arrears on June 1 and December 1. The Notes are fully and unconditionally guaranteed on a senior unsecuredbasis jointly and severally by all of the Company's existing and future domestic subsidiaries that guarantee its Credit Facility. The Notes will permit the Companyto make restricted payments, such as purchasing shares of its stock and paying cash dividends, in an unlimited amount if, after giving pro forma effect to theincurrence of any indebtedness to make such payment, the Company's consolidated total debt ratio (“Net Debt Ratio”) is less than 2.25 to 1. The Net Debt Ratio isdefined generally in the indenture governing the Notes as the ratio of (1) the total consolidated debt of the Company minus cash and cash equivalents of theCompany to (2) the Company’s consolidated trailing twelve months EBITDA, as adjusted to exclude certain non-recurring expenses and giving pro forma effect tooperations acquired during the measurement period. As of December 31, 2019, the Net Debt Ratio was 1.9 to 1. See “Non-GAAP Financial Information” foradditional information on the calculation of the Net Debt Ratio.48Table of Contents The Company used the proceeds from the Notes to repurchase, or otherwise redeem, its previously outstanding $200.0 million, 6.75% senior unsecured notes due2021 (the “2021 Notes”). As a result, during 2017, the Company recognized a $14.1 million loss on extinguishment of debt related to the repurchase or redemptionof the 2021 Notes.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 incustomer loan balances and inventories. In addition to these factors, changes in loan balances, collection of pawn fees, merchandise sales, inventory levels,seasonality, operating expenses, administrative expenses, expenses related to merger and acquisition activities, tax rates, gold prices, foreign currency exchangerates and the pace of new store expansions and acquisitions affect the Company’s liquidity. Management believes cash on hand, the borrowings available under itsCredit Facility, anticipated cash generated from operations (including the normal seasonal increases in operating cash flows occurring in the first and fourthquarters) and other current working capital will be sufficient to meet the Company’s anticipated capital requirements for its business for at least the next twelvemonths. Where appropriate or desirable, in connection with the Company’s efficient management of its liquidity position, the Company could seek to raiseadditional funds from a variety of sources, including the sale of assets, reductions in capital spending, the issuance of debt or equity securities and/or changes to itsmanagement of current assets. The characteristics of the Company’s current assets, specifically the ability to rapidly liquidate gold jewelry inventory and adjustoutflows of cash in its lending practices, gives the Company flexibility to quickly modify its business strategy to increase cash flow from its business, if necessary.Regulatory developments affecting the Company’s operations may also impact profitability and liquidity. See “Item 1. Business—Governmental Regulation.”The Company regularly evaluates opportunities to optimize its capital structure, including through consideration of the issuance of debt or equity, to refinanceexisting debt and to fund ongoing cash needs such as general corporate purposes, growth initiatives and its dividend and stock repurchase program.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 (dollars inthousands): Year Ended December 31, 2019 2018 2017Cash flow provided by operating activities $231,596 $243,429 $220,357Cash flow provided by (used in) investing activities (137,053) (159,247) 1,397Cash flow used in financing activities (120,806) (127,061) (197,506) As of December 31, 2019 2018 2017Net working capital (1) $538,087 $656,847 $721,626Current ratio (1)3.7:1 5.9:1 7.0:1 Liabilities to equity (2)0.8:1 0.6:1 0.4:1 Net Debt Ratio (3)1.9:1 1.8:1 1.1:1 (1)Current liabilities as of December 31, 2019 includes an $86.5 million current lease liability as a result of the adoption of Financial Accounting Standards Board’s newlease accounting standard that is not included in current liabilities as of December 31, 2018 and 2017, thereby impacting comparability of this metric.(2) Total liabilities as of December 31, 2019 includes a total of $280.0 million in lease liabilities as a result of the adoption of ASC 842 that is not included in totalliabilities as of December 31, 2018 and 2017 thereby impacting comparability of this metric.(3) Adjusted EBITDA, a component of the Net Debt Ratio, is a non-GAAP financial measure. See “Non-GAAP Financial Information” for a calculation of the Net DebtRatio.Net cash provided by operating activities decreased $11.8 million, or 5%, from $243.4 million for 2018 to $231.6 million for 2019, due to an increase in net incomeof $11.4 million offset by the receipt of a $21.4 million income tax refund during the first quarter of 2018 related to the merger with Cash America and net changesin certain non-cash adjustments to reconcile net income to operating cash flow and net changes in other operating assets and liabilities (as detailed in theconsolidated statements of cash flows).49Table of Contents Net cash used in investing activities decreased $22.2 million, or 14%, from $159.2 million during 2018 to $137.1 million during 2019. Cash flows from investingactivities are utilized primarily to fund pawn store acquisitions, purchases of furniture, fixtures, equipment and improvements, which includes capital expendituresfor improvements to existing stores and for new store openings and other corporate assets, and discretionary purchases of store real property. In addition, cashflows related to net fundings/repayments of pawn and consumer loans are included in investing activities. The Company paid $52.5 million in cash related to storeacquisitions, $44.3 million for furniture, fixtures, equipment and improvements and $74.7 million for discretionary store real property purchases during 2019compared to $113.7 million, $35.7 million and $20.0 million in 2018, respectively. The Company received funds from a net decrease in pawn and consumer loansof $34.4 million during 2019 compared to $10.1 million during 2018.Net cash used in financing activities decreased $6.3 million, or 5%, from $127.1 million during 2018 to $120.8 million during 2019. Net borrowings on the CreditFacility were $40.0 million during 2019 compared to net borrowings of $188.0 million during 2018. The Company paid $1.1 million of debt issuance costs relatedto the Credit Facility during 2019 compared to $0.9 million during 2018. The Company funded $116.1 million worth of share repurchases and paid dividends of$44.0 million during 2019, compared to funding $273.7 million worth of share repurchases and dividends paid of $40.9 million during 2018.During 2019, the Company opened 89 new pawn stores in Latin America, acquired 163 pawn stores in Latin America and acquired 27 pawn stores in the U.S. Thecumulative purchase price of these acquisitions was $46.8 million, net of cash acquired and subject to future post-closing adjustments. The aggregate purchaseprice was composed of $44.9 million in cash paid during 2019 and $1.9 million of short-term payables due to the sellers in 2020. During 2019, the Company alsopaid $7.6 million of purchase price amounts payable related to prior-year acquisitions. The Company funded $44.3 million in capital expenditures during 2019 forimprovements to existing stores, new store additions and corporate assets, and an additional $74.7 million related to the purchase of real estate at 69 storelocations, primarily from landlords at existing stores. Management considers the store real property purchases to be discretionary in nature and not required tooperate or grow its pawn operations. Acquisition purchase prices, capital expenditures, working capital requirements and start-up losses related to new storeopenings have been primarily funded through cash balances, operating cash flows and the Credit Facility.The Company intends to continue expansion primarily through acquisitions and new store openings. For 2020, the Company expects to add approximately 90 to100 de novo full-service pawn locations in Latin America, which includes Mexico, Guatemala and Colombia. Additionally, as opportunities arise at attractiveprices, the Company intends to continue purchasing the real estate from its landlords at existing stores. Excluding these discretionary store real property purchases,the Company expects total purchases of furniture, fixtures, equipment and improvements for 2020, including expenditures for new and remodeled stores and othercorporate assets, will total between $35 million and $40 million. Management believes cash on hand, the amounts available to be drawn under the Credit Facilityand cash generated from operations will be sufficient to accommodate the Company’s current operations and store expansion plans for 2020.The Company continually looks for, and is presented with, potential acquisition opportunities. The Company currently has no other contractual commitments formaterially significant future acquisitions, business combinations or capital commitments. The Company will evaluate other potential acquisitions based upongrowth potential, purchase price, available liquidity, debt covenant restrictions, strategic fit and quality of management personnel, among other factors. If theCompany encounters an attractive opportunity to acquire new stores in the near future, the Company may seek additional financing, the terms of which will benegotiated on a case-by-case basis.As of December 31, 2019, the Company had contractual commitments to deliver a total of 30,500 gold ounces between the months of January and December 2020at a weighted-average price of $1,440 per ounce. Subsequent to December 31, 2019, the Company committed to delivering an additional 14,500 gold ouncesbetween the months of April 2020 and January 2021 at a weighted-average price of $1,563 per ounce. The ounces required to be delivered over this time period arewithin historical scrap gold volumes and the Company expects to have the required gold ounces to meet the commitments as they come due.During 2019, the Company repurchased a total of 1,305,000 shares of common stock at an aggregate cost of $114.0 million and an average cost per share of$87.37, and during 2018, repurchased 3,343,000 shares of common stock at an aggregate cost of $274.5 million and an average cost per share of $82.12. TheCompany intends to continue repurchases under its active share repurchase programs through open market transactions under trading plans in accordance withRule 10b5-1 and Rule 10b-18 under the Exchange Act of 1934, as amended, 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 andthe availability of alternative investment opportunities.50Table of Contents The following table provides purchases made by the Company of shares of its common stock under each share repurchase program in effect during 2019 (dollarsin thousands):Plan AuthorizationDate Plan CompletionDate Dollar AmountAuthorized Shares Purchasedin 2019 Dollar AmountPurchased in 2019 Remaining DollarAmountAuthorized ForFuture PurchasesJuly 25, 2018 April 23, 2019 100,000 496,000 $42,760 $—October 24, 2018 Currently active 100,000 809,000 71,203 28,797Total 1,305,000 $113,963 $28,797Total cash dividends paid in 2019 and 2018 were $44.0 million and $40.9 million, respectively. In October 2019, the Company’s Board of Directors approved anincrease in the annual dividend of 8% from $1.00 per share to $1.08 per share, or $0.27 per share quarterly, beginning in the fourth quarter of 2019. The declared$0.27 per share first quarter cash dividend on common shares outstanding, or an aggregate of $11.4 million based on the December 31, 2019 share count, will bepaid on February 28, 2020 to stockholders of record as of February 14, 2020. On an annualized basis, this represents aggregate dividends of $45.7 million based onthe December 31, 2019 share count as compared to aggregate dividends paid of $44.0 million in 2019. While the Company currently expects to continue thepayment of quarterly cash dividends, the declaration and payment of cash dividends in the future (quarterly or otherwise) will be made by the Board of Directors,from time to time, subject to the Company’s financial condition, results of operations, business requirements, compliance with legal requirements and debtcovenant restrictions. Non-GAAP Financial InformationThe Company uses certain financial calculations such as adjusted net income, adjusted diluted earnings per share, EBITDA, adjusted EBITDA, free cash flow,adjusted free cash flow and constant currency results as factors in the measurement and evaluation of the Company’s operating performance and period-over-period growth. The Company derives these financial calculations on the basis of methodologies other than GAAP, primarily by excluding from a comparableGAAP measure certain items the Company does not consider to be representative of its actual operating performance. These financial calculations are “non-GAAPfinancial measures” as defined under the SEC rules. The Company uses these non-GAAP financial measures in operating its business because managementbelieves they are less susceptible to variances in actual operating performance that can result from the excluded items, other infrequent charges and currencyfluctuations. The Company presents these financial measures to investors because management believes they are useful to investors in evaluating the primaryfactors that drive the Company’s core operating performance and provide greater transparency into the Company’s results of operations. However, items that areexcluded and other adjustments and assumptions that are made in calculating these non-GAAP financial measures are significant components in understanding andassessing the Company’s financial performance. These non-GAAP financial measures should be evaluated in conjunction with, and are not a substitute for, theCompany’s GAAP financial measures. Further, because these non-GAAP financial measures are not determined in accordance with GAAP and are thussusceptible to varying calculations, the non-GAAP financial measures, as presented, may not be comparable to other similarly titled measures of other companies.While acquisitions are an important part of the Company’s overall strategy, the Company has adjusted the applicable financial calculations to exclude merger andother acquisition expenses to allow more accurate comparisons of the financial results to prior periods and because the Company does not consider these mergerand other acquisition expenses to be related to the organic operations of the acquired businesses or its continuing operations and such expenses are generally notrelevant to assessing or estimating the long-term performance of the acquired businesses. The Company believes that providing adjusted non-GAAP measures,which exclude these and other items, allows management and investors to consider the ongoing operations of the business both with, and without, such expenses.Merger and other acquisition expenses include incremental costs directly associated with merger and acquisition activities, including professional fees, legalexpenses, severance, retention and other employee-related costs, contract breakage costs and costs related to the consolidation of technology systems and corporatefacilities, among others.The Company has certain leases in Mexico which are denominated in U.S. dollars. The lease liability of these U.S. dollar denominated leases, which is considereda monetary liability, is remeasured into Mexican pesos using current period exchange rates which results in the recognition of foreign currency exchange gains orlosses. The Company has adjusted the applicable financial measures to exclude these remeasurement gains or losses because they are non-cash, non-operatingitems that could create volatility in the Company’s consolidated results of operations due to the magnitude of the end of period lease liability being remeasured andto improve comparability of current periods presented with prior periods due to the adoption of new accounting guidance on January 1, 2019.51Table of Contents Adjusted Net Income and Adjusted Diluted Earnings Per ShareManagement believes the presentation of adjusted net income and adjusted diluted earnings per share provides investors with greater transparency and provides amore complete understanding of the Company’s financial performance and prospects for the future by excluding items that management believes are non-operatingin nature and not representative of the Company’s core operating performance of its continuing operations. In addition, management believes the adjustmentsshown below are useful to investors in order to allow them to compare the Company’s financial results for the current periods presented with the prior periodspresented.The following table provides a reconciliation between net income and diluted earnings per share calculated in accordance with GAAP to adjusted net income andadjusted diluted earnings per share, which are shown net of tax (unaudited, in thousands, except per share amounts): Year Ended December 31, 2019 2018 2017 InThousands Per Share InThousands Per Share InThousands Per ShareNet income and diluted earnings pershare, as reported$164,618 $3.81 $153,206 $3.41 $143,892 $3.00Adjustments, net of tax: Merger and other acquisitionexpenses1,276 0.03 5,412 0.12 5,710 0.12Non-cash foreign currency gainrelated to lease liability(653) (0.01) — — — —Ohio consumer lending wind-down costs and assetimpairments2,659 0.06 1,166 0.03 — —Net tax benefit from Tax Act— — (1,494) (0.03) (27,269) (0.57)Loss on extinguishment of debt— — — — 8,892 0.19Adjusted net income and dilutedearnings per share$167,900 $3.89 $158,290 $3.53 $131,225 $2.7452Table of Contents The following table provides a reconciliation of the gross amounts, the impact of income taxes and the net amounts for the adjustments included in the table above(unaudited, in thousands): Year Ended December 31, 2019 2018 2017 Pre-tax Tax After-tax Pre-tax Tax After-tax Pre-tax Tax After-taxMerger and otheracquisitionexpenses$1,766 $490 $1,276 $7,643 $2,231 $5,412 $9,062 $3,352 $5,710Non-cash foreigncurrency gainrelated to leaseliability(933) (280) (653) — — — — — —Ohio consumerlending wind-down costs andassetimpairments3,454 795 2,659 1,514 348 1,166 — — —Net tax benefitfrom Tax Act— — — — 1,494 (1,494) — 27,269 (27,269)Loss onextinguishmentof debt— — — — — — 14,114 5,222 8,892Totaladjustments$4,287 $1,005 $3,282 $9,157 $4,073 $5,084 $23,176 $35,843 $(12,667)53Table of Contents Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDAThe Company defines EBITDA as net income before income taxes, depreciation and amortization, interest expense and interest income and adjusted EBITDA asEBITDA adjusted for certain items as listed below that management considers to be non-operating in nature and not representative of its actual operatingperformance. The Company believes EBITDA and adjusted EBITDA are commonly used by investors to assess a company’s financial performance, and adjustedEBITDA is used in the calculation of the Net Debt Ratio as defined in the Company’s senior unsecured notes covenants. The following table provides areconciliation of net income to EBITDA and adjusted EBITDA (unaudited, dollars in thousands): Year Ended December 31, 2019 2018 2017Net income$164,618 $153,206 $143,892Income taxes 59,993 52,103 28,420Depreciation and amortization 41,904 42,961 55,233Interest expense 34,035 29,173 24,035Interest income (1,055) (2,444) (1,597)EBITDA 299,495 274,999 249,983Adjustments: Merger and other acquisition expenses 1,766 7,643 9,062Non-cash foreign currency gain related to lease liability (933) — —Ohio consumer lending wind-down costs and asset impairments 3,454 1,514 —Loss on extinguishment of debt — — 14,114Adjusted EBITDA$303,782 $284,156 $273,159 Net Debt Ratio calculation: Total debt (outstanding principal)$635,000 $595,000 $407,000Less: cash and cash equivalents (46,527) (71,793) (114,423)Net debt$588,473 $523,207 $292,577Adjusted EBITDA$303,782 $284,156 $273,159Net Debt Ratio (Net Debt divided by Adjusted EBITDA)1.9:1 1.8:1 1.1:1Free Cash Flow and Adjusted Free Cash FlowFor purposes of its internal liquidity assessments, the Company considers free cash flow and adjusted free cash flow. The Company defines free cash flow as cashflow from operating activities less purchases of furniture, fixtures, equipment and improvements and net fundings/repayments of pawn and consumer loans, whichare considered to be operating in nature by the Company but are included in cash flow from investing activities. Adjusted free cash flow is defined as free cashflow adjusted for merger and other acquisition expenses paid that management considers to be non-operating in nature.Free cash flow and adjusted free cash flow are commonly used by investors as an additional measure of cash generated by business operations that may be used torepay scheduled debt maturities and debt service or, following payment of such debt obligations and other non-discretionary items, may be available to invest infuture growth through new business development activities or acquisitions, repurchase stock, pay cash dividends or repay debt obligations prior to their 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 and adjusted free cash flow have limitations as analytical tools and should not be considered in isolation or as asubstitute for cash flow from operating activities or other income statement data prepared in accordance with GAAP. The following table reconciles cash flowfrom operating activities to free cash flow and adjusted free cash flow (unaudited, in thousands):54Table of Contents Year Ended December 31, 2019 2018 2017Cash flow from operating activities$231,596 $243,429 $220,357Cash flow from investing activities: Loan receivables, net of cash repayments 34,406 10,125 40,735Purchases of furniture, fixtures, equipment and improvements (44,311) (35,677) (25,971)Free cash flow 221,691 217,877 235,121Merger and other acquisition expenses paid, net of tax benefit 1,276 7,072 6,659Adjusted free cash flow$222,967 $224,949 $241,780Constant 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 is considered a non-GAAP financial measure. 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 constant currency results provide 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 resultsreported herein are calculated by translating certain balance sheet and income statement items denominated in local currencies using the exchange rate from theprior-year comparable period, as opposed to the current comparable period, in order to exclude the effects of foreign currency rate fluctuations for purposes ofevaluating period-over-period comparisons. Business operations in Mexico, Guatemala and Colombia are transacted in Mexican pesos, Guatemalan quetzales andColombian pesos, respectively. The Company also has operations in El Salvador where the reporting and functional currency is the U.S. dollar. See the LatinAmerica operations segment tables in “Results of Operations” above for additional reconciliation of certain constant currency amounts to as reported GAAPamounts.Contractual CommitmentsA tabular disclosure of contractual obligations at December 31, 2019 is as follows (in thousands): Payments Due by Period Total Less Than 1Year 1 - 3 Years 3 - 5 Years More Than 5YearsOperating leases$325,100 $105,118 $145,231 $59,274 $15,477Revolving unsecured credit facility (1)335,000 — — 335,000 —Senior unsecured notes300,000 — — 300,000 —Interest on senior unsecured notes72,563 16,125 32,250 24,188 —Executive employment contracts (2)8,913 4,298 4,615 — —Total$1,041,576 $125,541 $182,096 $718,462 $15,477(1)Excludes interest obligations under the Company's revolving unsecured credit facility. See Note 10 of Notes to Consolidated Financial Statements.(2)The employment contracts provide for certain severance payments and other benefits in the event of the executive’s termination of employment or a change in controlof the Company. Further information regarding the executive employment contracts is provided under the heading “Executive Compensation - EmploymentAgreements and Change in Control Provisions” of the 2020 Proxy Statement.55Table of Contents Off-Balance Sheet ArrangementsThe Company offers a fee-based credit services organization program to assist consumers in obtaining extensions of credit. The Company’s stand-alone unsecuredconsumer loan stores and select pawn stores in the state of Texas offer the CSO Program. Under the CSO Program, the Company assists customers in applying fora short-term extension of credit from the Independent Lender and issues the Independent Lender a guarantee for the repayment of the extension of credit. AtDecember 31, 2019, the outstanding amount of active extensions of credit originated and held by the Independent Lender was $1.3 million.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, and operating results for each quarter and year-to-date periods are not necessarily indicative of the resultsof operations 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 balancegrowth. Service fees generally decline in the first and second quarter of each year after the typical repayment period of pawn and consumer loans associated withstatutory bonuses received by customers in the fourth quarter in Mexico and with tax refund proceeds received by customers in the first quarter in the U.S. Retailsales are seasonally higher 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.Recent Accounting PronouncementsSee discussion in Note 2 of Notes to Consolidated Financial Statements.Item 7A. Quantitative and Qualitative Disclosures About Market RiskMarket risks relating to the Company’s operations result primarily from changes in interest rates, gold prices and foreign currency exchange rates. The Companydoes not engage 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 goldjewelry as are most of the wholesale scrap jewelry sales. At December 31, 2019, the Company held approximately $124.7 million in jewelry inventories, whichwas primarily gold, representing 47% of total inventory. In addition, approximately $210.6 million, or 57%, of total pawn loans were collateralized by jewelry,which was also primarily gold. Of the Company’s total retail merchandise revenue during 2019, approximately $387.9 million, or 33%, was from jewelry sales.During 2019, the average market price of gold increased by 10%, from $1,268 to $1,393 per ounce. The price of gold at December 31, 2019 was $1,515 per ounce,compared to $1,279 at December 31, 2018. A significant and sustained decline in the price of gold would negatively impact the value of jewelry inventories heldby the 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 jewelryinventories could be negatively impacted, as could the potential profit margins on gold jewelry currently pledged as collateral by pawn customers in the event itwas forfeited by the customer. In addition, a decline in gold prices could result in a lower balance of pawn loans outstanding for the Company, as customersgenerally would receive lower loan amounts for individual pieces of pledged gold jewelry, although the Company believes that many customers would be willingto add additional items of value to their pledge in order to obtain the desired loan amount, thus mitigating a portion of this risk.Foreign Currency RiskThe financial statements of the Company’s subsidiaries in Mexico, Guatemala and Colombia are translated into U.S. dollars using period-end exchange rates forassets and liabilities and average exchange rates for revenues and expenses. Adjustments resulting from translating net assets are reported as a separate componentof accumulated other comprehensive income (loss) within stockholders’ equity under the caption “currency translation adjustment.” Exchange rate gains or lossesrelated to foreign currency transactions are recognized as transaction gains or losses in the Company’s income statement as incurred. The Company also hasoperations in El Salvador where the reporting and functional currency is the U.S. dollar.56Table of Contents On a dollar translated basis, Latin America revenues and cost of revenues account for 36% and 39%, respectively, of consolidated amounts for the year endedDecember 31, 2019. The majority of Latin America revenues and expenses are denominated in currencies other than the U.S. dollar and the Company, therefore,has foreign currency risk related to these currencies, which are primarily the Mexican peso, and to a much lesser extent, the Guatemalan quetzal and Colombianpeso.Accordingly, changes in exchange rates, and in particular a weakening of foreign currencies relative to the U.S. dollar, may negatively affect the Company’srevenue and earnings of its Latin America operations as expressed in U.S. dollars. For the year ended December 31, 2019, the Company’s Latin America revenuesand pre-tax operating income would have been approximately $1.4 million and $0.1 million higher, respectively, had foreign currency exchange rates remainedconsistent with those for the year ended December 31, 2018. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results ofOperations—Results of Operations” for further discussion of Latin America constant currency results.The Company does not typically use long-term foreign exchange contracts or derivatives to hedge foreign currency exposures. The volatility of exchange ratesdepends on many factors that it cannot forecast with reliable accuracy. The Company’s continued Latin America expansion increases exposure to exchange ratefluctuations and, as a result, such fluctuations could have a significant impact on future results of operations. The average value of the Mexican peso to the U.S.dollar exchange rate for 2019 was 19.3 to 1, compared to 19.2 to 1 in 2018 and 18.9 to 1 in 2017. A one point change in the average Mexican peso to the U.S. dollarexchange rate would have impacted 2019 annual earnings by approximately $4.0 million. The impact of foreign exchange rates in Guatemala and Colombia arenot material to the Company’s financial position or results of operations.Interest Rate RiskThe Company is potentially exposed to market risk in the form of interest rate risk in regards to its long-term unsecured line of credit. At December 31, 2019, theCompany had $335.0 million outstanding under its revolving line of credit. The revolving line of credit is generally priced with a variable rate based on a 1 weekor 1, 2, 3 or 6 month LIBOR plus a fixed spread. Based on the average outstanding indebtedness during 2019, a 1% (100 basis points) increase in interest rateswould have increased the Company’s interest expense by approximately $3.3 million for 2019.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 areotherwise terminated. However, interest rate changes will affect the fair value of the Company’s fixed rate instruments. At December 31, 2019, the fair value of theCompany’s fixed rate debt was approximately $310.0 million and the outstanding principal of the Company’s fixed rate debt was $300.0 million. The fair valueestimate of the Company’s fixed rate debt was estimated based on quoted prices in markets that are not active. Changes in assumptions or estimationmethodologies may have a material effect on this estimated fair value. As the Company has the ability to hold its fixed rate instruments to maturity and theamounts due under such instruments would be limited to the outstanding principal balance and any accrued and unpaid interest, the Company does not expect thatfluctuations 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 interestrates. However, the Company does not believe a change in these rates would have a material adverse effect on the Company’s operating results, financialcondition, 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 Item15(a)(1) and (2) of this report.Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not applicable.57Table of Contents 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, hasevaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) under the Exchange Act) as of December 31, 2019(the “Evaluation Date”). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, theCompany’s disclosure controls and procedures 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 andprocedures or internal controls will prevent all possible error and fraud. The Company’s disclosure controls and procedures are, however, designed to providereasonable assurance of achieving their objectives, and the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’sdisclosure controls and procedures are effective at that reasonable assurance level.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 theCompany’s internal control over financial reporting. Internal control over financial reporting (as defined in Rules 13a-15(f) and 15d(f) under the Exchange Act) isa process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reportingpurposes in accordance with GAAP. Internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of recordsthat, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets, (2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with GAAP, (3) provide reasonable assurance that receipts and expenditures are being madeonly in accordance with appropriate authorization of management and the board of directors, and (4) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition, use, or disposition of assets that 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 onlyreasonable assurance 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 theeffectiveness of the Company’s internal control over financial reporting as of December 31, 2019. To make this assessment, management used the criteria foreffective internal control over financial reporting described in Internal Control-Integrated Framework (2013) issued by the Committee of SponsoringOrganizations of the Treadway Commission. Based on this assessment, management concluded that, as of December 31, 2019, the Company’s internal controlover financial reporting is effective based on those criteria.The Company’s internal control over financial reporting as of December 31, 2019, has been audited by RSM US LLP, the independent registered publicaccounting firm that audited the Company’s financial statements included in this report, and RSM’s attestation report is included below.Changes in Internal Control Over Financial ReportingThere have been no changes in the Company’s internal control over financial reporting during the quarter ended December 31, 2019 that have materially affected,or are reasonably likely to materially affect, the Company’s internal control over financial reporting. The Company implemented internal controls to ensure itadequately evaluated the Company’s leases and properly assessed the impact of the new accounting standard related to leases on the Company’s financialstatements to facilitate its adoption on January 1, 2019. There were no significant changes to the Company’s internal control over financial reporting due to theadoption of the new standard.58Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Stockholders and the Board of Directors of FirstCash, Inc.Opinion on the Internal Control Over Financial ReportingWe have audited FirstCash, Inc. and its subsidiaries (the Company) internal control over financial reporting as of December 31, 2019, based on criteria establishedin Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. In our opinion, theCompany maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on criteria established in InternalControl - 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) (PCAOB), the consolidated balancesheets as of December 31, 2019 and 2018, the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each ofthe three years in the period ended December 31, 2019 and the related notes to the consolidated financial statements of the Company and our report datedFebruary 3, 2020 expressed an unqualified opinion.Basis for OpinionThe Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internalcontrol over financial reporting in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express anopinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and arerequired to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securitiesand Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understandingof internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believethat our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial ReportingA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financialreporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition, use, or disposition of the company’s assets that could have a material 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 ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance withthe policies or procedures may deteriorate./s/ RSM US LLPDallas, TexasFebruary 3, 202059Table of Contents Item 9B. Other InformationNone.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 theExchange Act is incorporated herein by reference from the information provided under the headings “Election of Directors,” “Executive Officers,” “CorporateGovernance, Board Matters and Director Compensation” and “Section 16(a) Beneficial Ownership Reporting Compliance,” contained in the Company’s ProxyStatement to be filed with the SEC in connection with the solicitation of proxies for the Company’s 2020 Annual Meeting of Stockholders to be held on or aboutJune 4, 2020 (the “2020 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’swebsite at www.firstcash.com. The Company intends to disclose future amendments to, or waivers from, certain provisions of its Code of Ethics on its website inaccordance with applicable Nasdaq and SEC requirements. Copies of the Company’s Code of Ethics are also available, free of charge, by submitting a writtenrequest to FirstCash, Inc., Investor Relations, 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“Executive Compensation” and “Compensation Committee Interlocks and Insider Participation” of the 2020 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“Equity Compensation Plan Information” and “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” of the 2020Proxy 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“Certain Relationships and Related Person Transactions” and “Corporate Governance, Board Matters and Director Compensation” of the 2020 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“Ratification of Independent Registered Public Accounting Firm” of the 2020 Proxy Statement.60Table 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 FiledHerewith3.1 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 3.1 04/24/2019 4.1 Common Stock Specimen S-1 33-48436 4.2a 06/05/1992 4.2 Indenture, dated as of May 30, 2017, by and amongFirstCash, Inc., the guarantors listed therein andBOKF, NA (including the form of Note attached as anexhibit thereto) 8-K 001-10960 4.1 05/31/2017 4.3 Description of Securities X10.1 First Cash Financial Services, Inc. 2004 Long-TermIncentive Plan ** DEF 14A 0-19133 C 04/29/2004 10.2 First Cash Financial Services, Inc. 2011 Long-TermIncentive Plan ** DEF 14A 0-19133 A 04/28/2011 10.3 Amendment to the FirstCash, Inc. 2011 Long-TermIncentive Plan ** S-8 333-214452 99.2 11/04/2016 10.4 First Cash 401(k) Profit Sharing Plan, as amendedeffective as of October 1, 2010 (executed on August 5,2010) 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 From Time toTime Party Thereto, the Lenders Party Thereto, andWells Fargo Bank, National Association 8-K 0-19133 10.1 07/26/2016 10.6 Employment Agreement between Rick L. Wessel andFirst Cash Financial Services, Inc., dated August 26,2016 ** 8-K 0-19133 10.1 08/26/2016 10.7 Employment Agreement between T. Brent Stuart andFirst Cash Financial Services, Inc., dated August 26,2016 ** 8-K 0-19133 10.2 08/26/2016 61Table of Contents Incorporated by Reference ExhibitNo. Exhibit Description Form File No. Exhibit Filing Date FiledHerewith10.8 Employment Agreement between R. Douglas Orrand First Cash Financial Services, Inc., datedAugust 26, 2016 ** 8-K 0-19133 10.3 08/26/2016 10.9 Performance-Based Restricted Stock Unit AwardAgreement ** 10-Q 001-10960 10.1 05/05/2017 10.10 First Amendment to Amended and Restated CreditAgreement and Waiver, dated May 30, 2017,between FirstCash, Inc., certain subsidiaries of theborrower from time to time party thereto, thelenders party thereto, and Wells Fargo Bank,National Association 8-K 001-10960 10.1 05/31/2017 10.11 Employment agreement between Raul Ramos andFirstCash, Inc., dated July 30, 2018 ** 10-Q 001-10960 10.1 08/01/2018 10.12 Employment agreement between Anna M.Alvarado and FirstCash, Inc., dated July 30, 2018** 10-Q 001-10960 10.2 08/01/2018 10.13 Second Amendment to Amended and RestatedCredit Agreement, dated October 4, 2018, betweenFirstCash, Inc., certain subsidiaries of theborrower from time to time party thereto, thelenders party thereto, and Wells Fargo Bank,National Association 8-K 001-10960 10.1 10/04/2018 10.14 FirstCash, Inc. 2019 Long-Term Incentive Plan ** DEF 14A 001-10960 B 04/26/2019 10.15 Third Amendment to Amended and RestatedCredit Agreement, dated December 19, 2019,between FirstCash, Inc., certain subsidiaries of theborrower from time to time party thereto, thelenders party thereto, and Wells Fargo Bank,National Association. 8-K 001-10960 10.1 12/19/2019 10.16 Employment agreement between Daniel R. Feehanand FirstCash, Inc., dated January 28, 2020 ** X21.1 Subsidiaries X23.1 Consent of Independent Registered PublicAccounting Firm, RSM US 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. Douglas Orr,Chief Financial Officer X32.1 Certification Pursuant to 18 U.S.C. Section 1350,as Adopted Pursuant to Section 906 of theSarbanes-Oxley Act of 2002 provided by Rick L.Wessel, Chief Executive Officer X32.2 Certification Pursuant to 18 U.S.C. Section 1350,as Adopted Pursuant to Section 906 of theSarbanes-Oxley Act of 2002 provided by R.Douglas Orr, Chief Financial Officer X 62Table of Contents Incorporated by Reference ExhibitNo. Exhibit Description Form File No. Exhibit Filing Date FiledHerewith101.INS Inline XBRL Instance Document - the instancedocument does not appear in the Interactive DataFile because its XBRL tags are embedded withinthe Inline XBRL document X101.SCH Inline XBRL Taxonomy Extension SchemaDocument X101.CAL Inline XBRL Taxonomy Extension CalculationLinkbase Document X101.DEF Inline XBRL Taxonomy Extension DefinitionLinkbase Document X101.LAB Inline XBRL Taxonomy Extension LabelLinkbase Document X101.PRE Inline XBRL Taxonomy Extension PresentationLinkbase Document X104 Cover Page Interactive Data File (embeddedwithin the Inline XBRL document contained inExhibit 101) 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 furnishcopies of such schedules to the U.S. Securities and Exchange Commission upon request by the Commission.**Indicates management contract or compensatory plan, contract orarrangement. Item 16. Form 10-K SummaryNone.63Table 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 bythe undersigned, thereunto duly authorized. Dated: February 3, 2020FIRSTCASH, INC. (Registrant) /s/ RICK L. WESSEL Rick L. Wessel Chief Executive Officer (On behalf of the Registrant)Pursuant 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 inthe capacities and on the dates indicated.SignatureCapacityDate /s/ RICK L. WESSELRick L. WesselVice-Chairman of the Board and Chief Executive Officer(Principal Executive Officer)February 3, 2020 /s/ R. DOUGLAS ORRR. Douglas OrrExecutive Vice President and Chief Financial Officer(Principal Financial and Accounting Officer)February 3, 2020 /s/ DANIEL R. FEEHANDaniel R. FeehanChairman of the BoardFebruary 3, 2020 /s/ DANIEL E. BERCEDaniel E. BerceDirectorFebruary 3, 2020 /s/ MIKEL D. FAULKNERMikel D. FaulknerDirectorFebruary 3, 2020 /s/ JAMES H. GRAVESJames H. GravesDirectorFebruary 3, 2020 /s/ RANDEL G. OWENRandel G. OwenDirectorFebruary 3, 202064Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of FirstCash, Inc.Opinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of FirstCash, Inc. and its subsidiaries (the Company) as of December 31, 2019 and 2018, therelated consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December31, 2019, and the related notes to the consolidated financial statements (collectively, the financial statements). In our opinion, the consolidated financial statementspresent fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flowsfor each of the three years in the period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internalcontrol over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework issued by the Committee ofSponsoring Organizations of the Treadway Commission in 2013, and our report dated February 3, 2020 expressed an unqualified opinion on the effectiveness ofthe Company’s internal control over financial reporting.Basis for OpinionThese financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statementsbased on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordancewith U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures toassess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Suchprocedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating theaccounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believethat our audits provide a reasonable basis for our opinion.Critical Audit MatterThe critical audit matter described below is a matter arising from the current period audit of the financial statements that was communicated or required to becommunicated to the audit committee and that: (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved ourespecially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidatedfinancial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter oron the accounts or disclosures to which it relates.Revenue Recognition - Accrual of Pawn Loan FeesAs described in Note 2 of the consolidated financial statements, the Company’s revenue recognition policy for pawn loan fees is to accrue pawn loan fee revenueon a constant-yield basis over the life of the pawn loan for all pawn loans of which the Company deems collection to be probable based on historical pawnredemption statistics. The Company's accrual for earned but uncollected pawn loan fees as of December 31, 2019 was $46,524,000, which is included in fees andservice charges receivable in the accompanying consolidated balance sheet. The determination of the accrual for pawn loan fees is subjective and requiresmanagement to make significant judgements related to the probability of collection and the expected effective yield of the pawn loan portfolio at the measurementdate. We identified the accrual for pawn loan fees as a critical audit matter as auditing the probability of collection and the expected yield of the pawn loan portfoliowas complex and required a high degree of auditor judgement and subjectivity due to the significant judgments applied by management noted above.F-1Table of Contents Our audit procedures related to the Company’s accrual of pawn loan fees included the following, among others:•We obtained an understanding of the relevant controls related to the accrual of pawn loan fees and tested such controls for design and operatingeffectiveness, including the determination of key assumptions and data inputs.•We obtained management’s calculation of the accrual for pawn loan fees and tested the calculation for completeness and accuracy of data used asinputs.•We evaluated the methodology and assumptions used by management to develop the effective pawn loan yield, including consideration of historicalpatterns and the probability of collection.•We independently recalculated certain key inputs used in management’s calculation of the accrual for pawn loanfees.•We assessed the validity of data used in the calculation of the accrual for pawn loan fees by agreeing, on a sample basis, key data inputs to sourcedocuments/s/ RSM US LLPWe have served as the Company’s auditor since 2016.Dallas, TexasFebruary 3, 2020F-2Table of Contents FIRSTCASH, INC.CONSOLIDATED BALANCE SHEETS(in thousands, except per share amounts) December 31, 2019 2018ASSETS Cash and cash equivalents $46,527 $71,793Fees and service charges receivable 46,686 45,430Pawn loans 369,527 362,941Consumer loans, net 751 15,902Inventories 265,256 275,130Income taxes receivable 875 1,379Prepaid expenses and other current assets 11,367 17,317Total current assets 740,989 789,892 Property and equipment, net 336,167 251,645Operating lease right of use asset 304,549 —Goodwill 948,643 917,419Intangible assets, net 85,875 88,140Other assets 11,506 49,238Deferred tax assets 11,711 11,640Total assets $2,439,440 $2,107,974 LIABILITIES AND STOCKHOLDERS’ EQUITY Accounts payable and accrued liabilities $72,398 $96,928Customer deposits 39,736 35,368Income taxes payable 4,302 749Lease liability, current 86,466 —Total current liabilities 202,902 133,045 Revolving unsecured credit facility 335,000 295,000Senior unsecured notes 296,568 295,887Deferred tax liabilities 61,431 54,854Lease liability, non-current 193,504 —Other liabilities — 11,084Total liabilities 1,089,405 789,870 Commitments and contingencies (Note 12) Stockholders’ equity: Common stock; $0.01 par value; 90,000 shares authorized; 49,276 and 49,276 shares issued, respectively; 42,329 and 43,603 shares outstanding, respectively 493 493Additional paid-in capital 1,231,528 1,224,608Retained earnings 727,476 606,810Accumulated other comprehensive loss (96,969) (113,117)Common stock held in treasury, 6,947 and 5,673 shares at cost, respectively (512,493) (400,690)Total stockholders’ equity 1,350,035 1,318,104Total liabilities and stockholders’ equity $2,439,440 $2,107,974 The accompanying notes are an integral part of these consolidated financial statements.F-3Table of Contents FIRSTCASH, INC.CONSOLIDATED STATEMENTS OF INCOME(in thousands, except per share amounts) Year Ended December 31, 2019 2018 2017Revenue: Retail merchandise sales $1,175,561 $1,091,614 $1,051,099Pawn loan fees 564,824 525,146 510,905Wholesale scrap jewelry sales 103,876 107,821 140,842Consumer loan and credit services fees 20,178 56,277 76,976Total revenue 1,864,439 1,780,858 1,779,822 Cost of revenue: Cost of retail merchandise sold 745,861 696,666 679,703Cost of wholesale scrap jewelry sold 96,072 99,964 132,794Consumer loan and credit services loss provision 4,159 17,461 19,819Total cost of revenue 846,092 814,091 832,316 Net revenue 1,018,347 966,767 947,506 Expenses and other income: Store operating expenses 595,539 563,321 552,191Administrative expenses 122,334 120,042 122,473Depreciation and amortization 41,904 42,961 55,233Interest expense 34,035 29,173 24,035Interest income (1,055) (2,444) (1,597)Merger and other acquisition expenses 1,766 7,643 9,062(Gain) loss on foreign exchange (787) 762 (317)Loss on extinguishment of debt — — 14,114Total expenses and other income 793,736 761,458 775,194 Income before income taxes 224,611 205,309 172,312 Provision for income taxes 59,993 52,103 28,420 Net income $164,618 $153,206 $143,892 Earnings per share: Basic $3.83 $3.42 $3.01Diluted 3.81 3.41 3.00 The accompanying notes are an integral part of these consolidated financial statements.F-4Table of Contents FIRSTCASH, INC.CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(in thousands) Year Ended December 31, 2019 2018 2017Net income $164,618 $153,206 $143,892Other comprehensive income: Currency translation adjustment 16,148 (1,240) 7,929Comprehensive income $180,766 $151,966 $151,821 The accompanying notes are an integral part of these consolidated financial statements.F-5Table of Contents FIRSTCASH, INC.CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY(in thousands) CommonStock AdditionalPaid-InCapital RetainedEarnings Accum-ulatedOtherCompre-hensiveLoss Common StockHeld in Treasury TotalStock-holders’Equity Shares Amount Shares Amount As of12/31/201849,276 $493 $1,224,608 $606,810 $(113,117) 5,673 $(400,690) $1,318,104Shares issuedunder share-basedcompensationplan— — (1,441) — — (21) 1,441 —Exercise ofstock options— — (319) — — (10) 719 400Share-basedcompensationexpense— — 8,680 — — — — 8,680Net income— — — 164,618 — — — 164,618Cash dividends($1.02 pershare)— — — (43,952) — — — (43,952)Currencytranslationadjustment— — — — 16,148 — — 16,148Purchases oftreasury stock— — — — — 1,305 (113,963) (113,963)As of12/31/201949,276 $493 $1,231,528 $727,476 $(96,969) 6,947 $(512,493) $1,350,035 The accompanying notes are an integral part of these consolidated financial statements.F-6Table of Contents FIRSTCASH, INC.CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITYCONTINUED(in thousands) CommonStock AdditionalPaid-InCapital RetainedEarnings Accum-ulatedOtherCompre-hensiveLoss Common StockHeld in Treasury TotalStock-holders’Equity Shares Amount Shares Amount As of12/31/201749,276 $493 $1,220,356 $494,457 $(111,877) 2,362 $(128,096) $1,475,333Shares issuedunder share-basedcompensationplan— — (1,240) — — (22) 1,240 —Exercise ofstock options— — (294) — — (10) 694 400Share-basedcompensationexpense— — 5,786 — — — — 5,786Net income— — — 153,206 — — — 153,206Cash dividends($0.91 pershare)— — — (40,853) — — — (40,853)Currencytranslationadjustment— — — — (1,240) — — (1,240)Purchases oftreasury stock— — — — — 3,343 (274,528) (274,528)As of12/31/201849,276 $493 $1,224,608 $606,810 $(113,117) 5,673 $(400,690) $1,318,104 The accompanying notes are an integral part of these consolidated financial statements.F-7Table of Contents FIRSTCASH, INC.CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITYCONTINUED(in thousands) CommonStock AdditionalPaid-InCapital RetainedEarnings Accum-ulatedOtherCompre-hensiveLoss Common StockHeld in Treasury TotalStock-holders’Equity Shares Amount Shares Amount As of12/31/201649,276 $493 $1,217,969 $387,401 $(119,806) 769 $(36,071) $1,449,986Shares issuedunder share-basedcompensationplan— — (440) — — (10) 440 —Exercise ofstock options— — (242) — — (13) 549 307Share-basedcompensationexpense— — 3,069 — — — — 3,069Net income— — — 143,892 — — — 143,892Cash dividends($0.77 pershare)— — — (36,836) — — — (36,836)Currencytranslationadjustment— — — — 7,929 — — 7,929Purchases oftreasury stock— — — — — 1,616 (93,014) (93,014)As of12/31/201749,276 $493 $1,220,356 $494,457 $(111,877) 2,362 $(128,096) $1,475,333 The accompanying notes are an integral part of these consolidated financial statements.F-8Table of Contents FIRSTCASH, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands) Year Ended December 31, 2019 2018 2017Cash flow from operating activities: Net income$164,618 $153,206 $143,892Adjustments to reconcile net income to net cash flow provided byoperating activities: Non-cash portion of credit loss provision2,395 9,405 12,727Share-based compensation expense8,680 5,786 3,069Depreciation and amortization expense41,904 42,961 55,233Asset impairments related to consumer loan operations— 1,514 —Amortization of debt issuance costs1,430 1,920 1,838Amortization of favorable/(unfavorable) lease intangibles, net— (259) (976)Loss on extinguishment of debt— — 14,114Deferred income taxes, net7,008 7,427 (14,497)Changes in operating assets and liabilities, net of business combinations: Fees and service charges receivable110 (432) (1,411)Inventories5,842 3,321 16,193Prepaid expenses and other assets(1,049) 681 13,702Accounts payable, accrued liabilities and other liabilities(3,383) 3,077 (35,135)Income taxes4,041 14,822 11,608Net cash flow provided by operating activities231,596 243,429 220,357Cash flow from investing activities: Loan receivables, net of cash repayments34,406 10,125 40,735Purchases of furniture, fixtures, equipment and improvements(44,311) (35,677) (25,971)Purchases of store real property(74,661) (19,996) (11,164)Acquisitions of pawn stores, net of cash acquired(52,487) (113,699) (2,203)Net cash flow provided by (used in) investing activities(137,053) (159,247) 1,397Cash flow from financing activities: Borrowings from revolving unsecured credit facility257,000 416,000 206,000Repayments of revolving unsecured credit facility(217,000) (228,000) (359,000)Issuance of senior unsecured notes— — 300,000Repurchase/redemption of senior unsecured notes— — (200,000)Repurchase/redemption premiums paid on senior unsecured notes— — (10,895)Debt issuance costs paid(1,149) (948) (5,342)Purchases of treasury stock(116,105) (273,660) (91,740)Proceeds from exercise of share-based compensation awards400 400 307Dividends paid(43,952) (40,853) (36,836)Net cash flow used in financing activities(120,806) (127,061) (197,506)Effect of exchange rates on cash997 249 220Change in cash and cash equivalents(25,266) (42,630) 24,468Cash and cash equivalents at beginning of the year71,793 114,423 89,955Cash and cash equivalents at end of the year$46,527 $71,793 $114,423 The accompanying notes are an integral part of these consolidated financial statements. F-9Table of Contents FIRSTCASH, INC.CONSOLIDATED STATEMENTS OF CASH FLOWSCONTINUED(in thousands) Year Ended December 31, 2019 2018 2017Supplemental disclosure of cash flow information: Cash paid during the period for: Interest$32,680 $27,121 $24,301Income taxes48,867 29,597 29,813 Supplemental disclosure of non-cash investing and financing activity: Non-cash transactions in connection with pawn loans settled throughforfeitures of collateral transferred to inventories$500,744 $492,743 $436,705 The accompanying notes are an integral part of these consolidated financial statements. F-10Table of Contents FIRSTCASH, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTE 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 theoperation of pawn stores, which lend money on the collateral of pledged personal property and retail previously owned merchandise acquired through pawn loanforfeitures and purchases directly from the general public. As of December 31, 2019, the Company owned and operated 2,679 stores in 24 U.S. states and theDistrict of Columbia, all 32 states in Mexico and the countries of Guatemala, El Salvador and Colombia.On September 1, 2016, the Company completed its merger with Cash America International, Inc. (“Cash America”), whereby Cash America merged with and intoa wholly owned subsidiary of the Company.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. TheCompany regularly makes acquisitions and the results of operations for the acquired stores have been consolidated since the acquisition dates. All significantintercompany accounts and transactions 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 becash equivalents. As of December 31, 2019, the amount of cash associated with indefinitely reinvested foreign earnings was $19.6 million, which is primarily heldin Mexican 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,which the Company holds during the term of the loan. In certain markets, the Company also provides pawn loans collateralized by automobiles, which remain inthe Company’s possession or in limited cases, remain in the possession of the customer. If a pawn loan defaults, the Company relies on the sale of the pawnedproperty to recover the principal amount of an unpaid pawn loan, plus a yield on the investment, because the Company’s pawn loans are non-recourse against thecustomer. The customer’s creditworthiness does not affect the Company’s financial position or results of operations. The Company accrues pawn loan fee revenueon 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 historical pawn redemptionstatistics. If the pawn loan is not repaid, the principal amount loaned becomes the inventory carrying value of the forfeited collateral, which is recovered throughsales to other 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 typically acquires pawn merchandiseinventory through forfeited pawn loans and through purchases of used goods directly from the general public. The Company also retails limited quantities of newor refurbished merchandise obtained directly from wholesalers and manufacturers. The Company records sales revenue at the time of the sale. The Companypresents merchandise sales net of any sales or value-added taxes collected. The Company does not provide direct financing to customers for the purchase of itsmerchandise, but does permit its customers to purchase merchandise on an interest-free “layaway” plan. Should the customer fail to make a required paymentpursuant to a layaway plan, the item is returned to inventory and all or a portion of previous payments are typically forfeited to the Company. Interim paymentsfrom customers on layaway sales are recorded as deferred revenue and subsequently recorded as retail merchandise sales revenue when the merchandise isdelivered to the customer upon receipt of final payment or when previous payments are forfeited to the Company. Some jewelry is processed at third-partyfacilities and the precious metal and diamond content is sold at either prevailing market commodity prices or a previously agreed upon price with a commoditybuyer. The Company records revenue from these wholesale scrap jewelry transactions when a price has been agreed upon and the Company ships the commodityto the buyer.Unsecured consumer loans are cash advances with terms that typically range from 7 to 45 days. The Company accrues unsecured 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 assistconsumers in obtaining extensions of credit from an independent, non-bank, consumer lending company (the “Independent Lender”). The Company’s stand-aloneunsecured consumer loan stores and select pawn stores in the state of Texas offer the CSO Program. The Company recognizes credit services fees ratably over thelife of theF-11Table of Contents extension of credit made by the Independent Lender. The extensions of credit made by the Independent Lender to credit services customers typically have terms of7 to 180 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 issignificantly in excess of the pawn loan amount. The Company maintains an allowance for credit losses on unsecured consumer loans on an aggregate basis at alevel it considers sufficient to cover estimated losses in the collection of its unsecured consumer loans. The allowance for credit losses is periodically reviewed bymanagement with any changes reflected in current operations.Under the CSO Program, the Company assists customers in applying for a short-term extension of credit from an Independent Lender and issues the IndependentLender a guarantee for the repayment of the extension of credit. The Company is required to recognize, at the inception of the guarantee, a liability for theestimated fair value of the obligation undertaken by issuing the guarantee, which is included in accrued liabilities. The estimated fair value of the liability isperiodically reviewed by management with any changes reflected in current operations.Foreign currency transactions - The Company has significant operations in Latin America, where in Mexico, Guatemala and Colombia the functional currency isthe Mexican peso, Guatemalan quetzal and Colombian peso, respectively. Accordingly, the assets and liabilities of these subsidiaries are translated into U.S.dollars at the exchange rate in effect at each balance sheet date, and the resulting adjustments are accumulated in other comprehensive income (loss) as a separatecomponent of stockholders’ equity. Revenues and expenses are translated at the average exchange rates occurring during the respective period. Prior to translation,U.S. dollar-denominated transactions of the foreign subsidiaries are remeasured into their functional currency using current rates of exchange for monetary assetsand liabilities and historical rates of exchange for non-monetary assets and liabilities. Gains and losses from remeasurement of dollar-denominated monetaryassets and liabilities in Mexico, Guatemala and Colombia are included in (gain) loss on foreign exchange in the consolidated statements of income. Deferred taxesare not currently recorded 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 2019 was 19.3 to 1, compared to 19.2 to 1 in 2018 and 18.9 to 1 in 2017. The averagevalue of the Guatemalan quetzal to the U.S. dollar exchange rate for 2019 was 7.7 to 1, compared to 7.5 to 1 in 2018 and 7.4 to 1 in 2017. The average value of theColombian peso to the U.S. dollar exchange rate for 2019 was 3,280 to 1, compared to 2,956 to 1 in 2018 and 2,951 to 1 in 2017.Store operating expenses - Costs incurred in operating the Company’s stores have been classified as store operating expenses. Operating expenses include salaryand 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 retailmerchandise sales revenue when the merchandise is delivered to the customer upon receipt of final payment or when the previous payments are forfeited to theCompany. Layaway payments from customers are included in customer deposits in the accompanying consolidated balance sheets.Inventories - Inventories represent merchandise acquired from forfeited pawns and merchandise purchased directly from the general public. The Company alsoretails limited quantities of new or refurbished merchandise obtained directly from wholesalers and manufacturers. Inventories from forfeited pawns are recordedat the amount of the pawn principal on the unredeemed goods, exclusive of accrued interest. Inventories purchased directly from customers, wholesalers andmanufacturers are recorded at cost. The cost of inventories is determined on the specific identification method. Inventories are stated at the lower of cost or netrealizable value and, accordingly, inventory valuation allowances are established if inventory carrying values are in excess of estimated selling prices, net of directcosts of disposal. Management has evaluated inventories and determined that a valuation allowance is not necessary.Property and equipment - Property and equipment are recorded at cost. Depreciation is recorded on the straight-line method generally based on estimated usefullives of 30 to 40 years for buildings and three to five years for furniture, fixtures and equipment. The costs of improvements on leased stores are capitalized asleasehold improvements and are depreciated using the straight-line method over the applicable lease period, or useful life, if shorter. Maintenance and repairs arecharged to expense as incurred and renewals and betterments are charged to the appropriate property and equipment accounts. Upon sale or retirement ofdepreciable assets, the cost and related accumulated depreciation is removed from the accounts, and the resulting gain or loss is included in the results ofoperations in the period the assets are sold or retired.F-12Table of Contents 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 eachbusiness combination. The Company performs its goodwill impairment assessment annually as of December 31, and between annual assessments if an eventoccurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company’s reportingunits, which are tested for impairment, are U.S. operations and Latin America operations. The Company assesses goodwill for impairment at a reporting unit levelby 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 keypersonnel, and overall financial performance. If, after completing this assessment, it is determined that it is more likely than not that the fair value of a reportingunit is less than its carrying value, the Company proceeds to the two-step impairment testing methodology. See Note 13.The Company’s material indefinite-lived intangible assets consist of trade names and pawn licenses. The Company performs its indefinite-lived intangible assetimpairment assessment annually as of December 31, and between annual assessments if an event occurs or circumstances change that would more likely than notreduce the fair value of a reporting unit below its carrying amount. See Note 13.Merger and other acquisition expenses - The Company incurs incremental costs directly associated with merger and acquisition activity, including, but not limitedto, professional fees, legal expenses, severance, retention and other employee-related costs, contract breakage costs and costs related to consolidation of technologysystems and corporate facilities. The Company presents merger and other acquisition expenses separately in the consolidated statements of income to identify theseincremental activities apart from the expenses incurred to operate the business.Long-lived assets - Property and equipment, intangible assets subject to amortization and non-current assets are reviewed for impairment whenever events orchanges in circumstances indicate that the net book value of the asset may not be recoverable. An impairment loss is recognized if the sum of the expected futurecash 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 ismeasured as the difference between the net book value of the asset and the estimated fair value of the related asset. As a result of certain regulatory impacts to theCompany’s consumer loan operations, the Company recorded a fixed asset impairment charge of approximately $1.5 million related to certain stores primarilyoffering unsecured consumer loan products during the fourth quarter of 2018. The Company did not record any impairment loss for the years ended December 31,2019 and 2017.Fair value of financial instruments - The fair value of financial instruments is determined by reference to various market data and other valuation techniques, asappropriate. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’sassessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets andliabilities and their placement within the fair value hierarchy levels. All fair value measurements related to acquisitions are level 3, non-recurring measurements,based on unobservable inputs. Unless otherwise disclosed, the fair values of financial instruments approximate their recorded values, due primarily to their short-term nature. See Note 6.Income taxes - The Company uses the asset and liability method of computing deferred income taxes on all material temporary differences. Temporary differencesare the differences between the reported amounts of assets and liabilities and their tax bases. See Note 11.Advertising - The Company expenses the costs of advertising the first time the advertising takes place. Advertising expense for the years ended December 31,2019, 2018 and 2017, was $1.2 million, $1.4 million, and $1.8 million, respectively.Share-based compensation - All share-based payments to employees and directors are recognized in the financial statements based on the grant date or ifapplicable, the subsequent modification date fair value. The Company recognizes compensation cost net of estimated forfeitures and recognizes the compensationcost for only those awards expected to vest on a straight-line basis over the requisite service period of the award, which is generally the vesting term. The Companyrecords share-based compensation cost as an administrative expense. See Note 14.Forward sales commitments - The Company periodically uses forward sale agreements with a major gold bullion bank to sell a portion of the expected amount ofscrap gold, which is typically jewelry that is broken or of low retail value, produced in the normal course of business from its liquidation of such merchandise.These commitments qualify for an exemption from derivative accounting as normal sales, based on historical terms, conditions and quantities, and are therefore notrecorded on the Company's balance sheet.F-13Table of Contents Earnings per share - Basic earnings per share is computed by dividing net income by the weighted-average number of shares outstanding during the year. Dilutedearnings per share is calculated by giving effect to the potential dilution that could occur if securities or other contracts to issue common shares were exercised andconverted into common shares during the year.The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts): Year Ended December 31, 2019 2018 2017Numerator: Net income$164,618 $153,206 $143,892 Denominator: Weighted-average common shares for calculating basic earnings pershare43,020 44,777 47,854Effect of dilutive securities: Stock options and restricted stock unit awards188 107 34Weighted-average common shares for calculating diluted earnings pershare43,208 44,884 47,888 Earnings per share: Basic$3.83 $3.42 $3.01Diluted3.81 3.41 3.00Pervasiveness of estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of Americarequires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and related revenue and expenses, and thedisclosure of gain and loss contingencies 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 differ materially from the Company’s estimates. Significant estimates include the accrual for earned but uncollected pawn loanfees, impairment of goodwill and other intangible assets and current and deferred tax assets and liabilities.Recent accounting pronouncements - On January 1, 2019, the Financial Accounting Standards Board’s lease accounting standard (“ASC 842”) became effectiverequiring lessees to recognize, in the statement of financial position, a liability for the present value of future minimum lease payments (the lease liability) and anasset representing its right to use the underlying leased property for the lease term (the right of use asset). Leases will be classified as either financing or operating,with classification affecting the pattern of expense recognition in the income statement. Lessor accounting remains largely unchanged. ASC 842 provides for amodified retrospective transition approach, which requires lessees to recognize and measure leases on the balance sheet at the beginning of the earliest periodpresented, or a cumulative effect adjustment transition approach, which requires prospective application from the adoption date. The Company adopted ASC 842prospectively as of January 1, 2019 using the cumulative effect adjustment approach. As a result of the transition method used, ASC 842 was not applied to periodsprior to adoption and the adoption of ASC 842 had no impact on the Company’s comparative prior periods presented. ASC 842 provides a number of optional practical expedients in transition. The Company elected the package of practical expedients, which permit it to not reassessunder the new standard its prior conclusions about lease identification, lease classification and initial direct costs but did not elect any other practical expedientavailable under ASC 842.The adoption of ASC 842 resulted in a material increase in the assets and liabilities reflected on the Company’s consolidated balance sheets, but did not have amaterial impact on its consolidated statements of income or consolidated statements of cash flows. See Note 4.In June 2016, the Financial Accounting Standards Board issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of CreditLosses on Financial Instruments” (“ASU 2016-13”). ASU 2016-13 amends the impairment model by requiring entities to use a forward-looking approach based onexpected losses to estimate credit losses on certain types of financial instruments, including trade receivables. In November 2018, the Financial AccountingStandards Board issued ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses” (“ASU 2018-19”), which clarifiesthat receivables arising from operating leases are accounted for using lease guidance and not as financial instruments. In April 2019,F-14Table of Contents the Financial Accounting Standards Board issued ASU No. 2019-04, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815,Derivatives and Hedging, and Topic 825, Financial Instruments” (“ASU 2019-04”), which clarifies the treatment of certain credit losses. In May 2019, theFinancial Accounting Standards Board issued ASU No. 2019-05, “Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief” (“ASU 2019-05”), which provides an option to irrevocably elect to measure certain individual financial assets at fair value instead of amortized cost. In November 2019, theFinancial Accounting Standards Board issued ASU No. 2019-11, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses” (“ASU 2019-11”), which provides guidance around how to report expected recoveries. ASU 2016-13, ASU 2018-19, ASU 2019-04, ASU 2019-05 and ASU 2019-11(collectively, “ASC 326”) are effective for public entities for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company willadopt ASC 326 on January 1, 2020 prospectively and has concluded ASC 326 will not materially impact the Company’s recognition of financial instrumentswithin the scope of the standard.In January 2017, the Financial Accounting Standards Board issued ASU No. 2017-04, “Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test forGoodwill Impairment” (“ASU 2017-04”), which eliminates step 2 from the goodwill impairment test. ASU 2017-04 also eliminates the requirements for anyreporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform step 2 of the goodwillimpairment test. An entity still has 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 or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted forinterim or annual goodwill impairment tests performed on testing dates after January 1, 2017 and should be adopted on a prospective basis. The Company does notexpect ASU 2017-04 to have a material effect on the Company’s current financial position, results of operations or financial statement disclosures.In June 2018, the Financial Accounting Standards Board issued ASU No. 2018-07, “Compensation-Stock Compensation (Topic 718) - Improvements toNonemployee Share-Based Payment Accounting” (“ASU 2018-07”). ASU 2018-07 simplifies the accounting for nonemployee share-based payment transactions.The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in agrantor’s own operations by issuing share-based payment awards. ASU 2018-07 is effective for public entities for fiscal years beginning after December 15, 2018.The adoption of ASU 2018-07 did not have a material effect on the Company’s current financial position, results of operations or financial statement disclosures.In July 2018, the Financial Accounting Standards Board issued ASU No. 2018-09, “Codification Improvements” (“ASU 2018-09”). ASU 2018-09 does notprescribe any new accounting guidance, but instead makes minor improvements and clarifications of several different Financial Accounting Standards BoardAccounting Standards Codification areas based on comments and suggestions made by various stakeholders. Certain updates are applicable immediately whileothers provide for a transition period to adopt in fiscal years beginning after December 15, 2018. The adoption of ASU 2018-09 did not have a material effect onthe Company’s current financial position, results of operations or financial statement disclosures.In August 2018, the Financial Accounting Standards Board issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework-Changes tothe Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 modifies the disclosure requirements on fair value measurements.ASU 2018-13 is effective for public entities for fiscal years beginning after December 15, 2019, with early adoption permitted for any removed or modifieddisclosures. The removed and modified disclosures will be adopted on a retrospective basis and the new disclosures will be adopted on a prospective basis. TheCompany does not expect ASU 2018-13 to have a material effect on the Company’s current financial position, results of operations or financial statementdisclosures.In July 2019, the Financial Accounting Standards Board issued ASU 2019-07, “Codification Updates to SEC Sections - Amendments to SEC Paragraphs Pursuantto SEC Final Rule Releases No. 33-10532, Disclosure Update and Simplification, and Nos. 33-10231 and 33-10442, Investment Company ReportingModernization and Miscellaneous Updates” (“ASU 2019-07”). ASU 2019-07 aligns the guidance in various SEC sections of the Codification with therequirements of certain SEC final rules. ASU 2019-07 is effective immediately and the adoption of ASU 2019-07 did not have a material effect on the Company’scurrent financial position, results of operations or financial statement disclosures.In November 2019, the Financial Accounting Standards Board issued ASU No. 2019-08, “Compensation-Stock Compensation (Topic 718) and Revenue fromContracts with Customers (Topic 606): Codification Improvements—Share-Based Consideration Payable to a Customer” (“ASU 2019-08”). ASU 2019-08expands the scope of ASC Topic 718 to provide guidance for share-based payment awards granted to a customer in conjunction with selling goods or servicesaccounted for under Topic 606. For entities that have adopted the amendments in ASU 2018-07, the amendments in ASU 2019-08 are effective in fiscal yearsbeginning after December 15, 2019, and interim periods within those fiscal years. An entity may early adopt the amendments in ASU 2019-08, but not before itadopts the amendments in ASU 2018-07. The Company adopted ASU 2019-08 effective December 31, 2019.F-15Table of Contents The adoption of ASU 2019-08 did not have a material effect on the Company’s current financial position, results of operations or financial statement disclosures.In December 2019, the Financial Accounting Standards Board issued ASU No 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for IncomeTaxes” (“ASU 2019-12”). ASU 2019-12 removes certain exceptions to the general principles in Topic 740 in Generally Accepted Accounting Principles. ASU2019-12 is effective for public entities for fiscal years beginning after December 15, 2020, with early adoption permitted. The Company does not expect ASU2019-12 to have a material effect on the Company’s current financial position, results of operations or financial statement disclosures.NOTE 3 - ACQUISITIONS2019 AcquisitionsConsistent with the Company’s strategy to continue its expansion of pawn stores in selected markets, during 2019, the Company acquired 163 pawn stores locatedin Mexico in 13 separate transactions and 27 pawn stores located in the U.S. in nine separate transactions. The aggregate purchase price for these acquisitionstotaled $46.8 million, net of cash acquired and subject to future post-closing adjustments. The aggregate purchase price was composed of $44.9 million in cashpaid during 2019 and remaining short-term amounts payable to the sellers of approximately $1.9 million. During 2019, the Company also paid $7.6 million ofpurchase price amounts payable related to prior-year acquisitions.The purchase price of each of the 2019 acquisitions was allocated to assets acquired and liabilities assumed based upon the estimated fair market values at the dateof acquisition. The excess purchase price over the estimated fair market value of the net assets acquired has been recorded as goodwill. The goodwill arising fromthese acquisitions consists largely of the synergies and economies of scale expected from combining the operations of the Company and the pawn stores acquired.The estimated fair value of the assets acquired and liabilities assumed are preliminary, as the Company is gathering information to finalize the valuation of theseassets and liabilities. The preliminary allocation of the aggregate purchase prices for these individually immaterial acquisitions during 2019 is as follows (inthousands):Pawn loans$9,991Pawn loan fees receivable815Inventories6,729Other current assets259Property and equipment1,642Goodwill (1)27,306Intangible assets (2)545Current liabilities(523)Aggregate purchase price$46,764(1) Goodwill associated with the U.S. operations segment and the Latin America operations segment was $11.8 million and $15.5 million, respectively. Substantially allof the goodwill is expected to be deductible for respective U.S. and Mexico income tax purposes.(2) Intangible assets primarily consist of customer relationships, which are generally amortized over five years.The results of operations for the acquired stores have been consolidated since the respective acquisition dates. During 2019, revenue from the acquired stores was$31.0 million and the earnings from the combined acquisitions since the acquisition dates (including $1.3 million of transaction and integration costs, net of tax)was approximately $1.2 million.Historical pre-acquisition financial statements of the 13 separate Mexico acquisitions were created in local country GAAP and the Company did not obtain pre-acquisition financial statements prepared in accordance with U.S. GAAP. As a result, and due to the insignificance of these acquisitions, it is impractical for theCompany to adequately present supplemental pro forma information.F-16Table of Contents 2018 AcquisitionsDuring 2018, the Company acquired 366 pawn stores located in Mexico in six separate transactions and 27 pawn stores located in the U.S. in nine separatetransactions. The aggregate purchase price for these acquisitions totaled $125.4 million, net of cash acquired. The aggregate purchase price was composed of$113.7 million in cash paid during 2018 and remaining short-term amounts payable to the sellers of approximately $11.7 million.In regard to the Mexico acquisitions, in February 2018, the Company acquired the operating assets of 126 pawn stores operating under the Prendamex brand. Theseller of these pawn stores also owned and operated a franchise business whereby independent franchisees entered into individual franchise agreements allowingthe franchisee, among other things, the use of the Prendamex brand. Subsequent to the February 2018 transaction, the Company entered into five additional assetacquisitions in 2018 and 13 additional asset acquisitions in 2019 of stores owned by certain of the independent Prendamex franchisees, representing aggregatepurchases of 403 locations. Each of the 18 acquisitions involved different independent ownership groups and were individually negotiated and completedseparately. Also in conjunction with the February 2018 transaction, the Company assumed certain of the franchisor rights and obligations from the originalPrendamex seller representing a total of 43 franchised store locations under which the Company continues to operate as the franchisor of these locations as ofDecember 31, 2019.NOTE 4 - OPERATING LEASESAs described in Note 2, the Company adopted ASC 842 prospectively as of January 1, 2019. The Company leases the majority of its pawnshop locations underoperating leases and determines if an arrangement is or contains a lease at inception. Many leases include both lease and non-lease components, which theCompany accounts for separately. Lease components include rent, taxes and insurance costs while non-lease components include common area or othermaintenance costs. Operating leases are included in operating lease right of use assets, lease liability, current and lease liability, non-current in the consolidatedbalance sheets. The Company does not have any finance leases.The following table details the components of the operating lease right of use asset and lease liability recognized upon adoption of ASC 842 on January 1, 2019 (inthousands):Initial measurement of operating lease right of use asset (present value of the future minimum lease payments)$295,063Accrued straight-line rent liability (1)(4,237)Amounts previously recognized in respect of business combinations: Favorable lease intangible assets (2)45,596Unfavorable lease intangible liabilities (3)(17,275)Total initial operating lease right of use asset$319,147 Lease liability, current$(87,608)Lease liability, non-current(207,455)Total initial lease liability (present value of the future minimum lease payments)$(295,063)(1) Included in accounts payable and accrued liabilities in the accompanying consolidated balance sheet as of December 31, 2018.(2) Included in prepaid expenses and other current assets and other assets in the accompanying consolidated balance sheet as of December 31, 2018.(3) Included in accounts payable and accrued liabilities and other liabilities in the accompanying consolidated balance sheet as of December 31, 2018.Leased facilities are generally leased for a term of three to five years with one or more options to renew for an additional three to five years, typically at theCompany’s sole discretion. In addition, the majority of these leases can be terminated early upon an adverse change in law which negatively affects the store’sprofitability. The Company regularly evaluates renewal and termination options to determine if the Company is reasonably certain to exercise the option, andexcludes these options from the lease term included in the recognition of the operating lease right of use asset and lease liability until such certainty exists. Theweighted-average remaining lease term for operating leases as of December 31, 2019 was 3.9 years.F-17Table of Contents The operating lease right of use asset and lease liability is recognized based on the present value of the future minimum lease payments over the lease term at thecommencement date. The Company’s leases do not provide an implicit rate and therefore, it uses its incremental borrowing rate based on the information availableat the lease commencement date in determining the present value of the lease payments. The Company utilizes a portfolio approach for determining theincremental borrowing rate to apply to groups of leases with similar characteristics. The weighted-average discount rate used to measure the lease liability as ofDecember 31, 2019 was 7.8%.The Company has certain operating leases in Mexico which are denominated in U.S. dollars. The liability related to these leases is considered a monetary liability,and requires remeasurement each reporting period into the functional currency (Mexican pesos) using reporting date exchange rates. The remeasurement results inthe recognition of foreign currency exchange gains or losses each reporting period, which can produce a certain level of earnings volatility. The Companyrecognized a foreign currency gain of $0.9 million during the year ended December 31, 2019 related to the remeasurement of these U.S. dollar denominatedoperating leases, which is included in gain on foreign exchange in the accompanying consolidated statements of income.Lease expense is recognized on a straight-line basis over the lease term, with variable lease expense recognized in the period such payments are incurred. Thefollowing table details the components of lease expense included in store operating expenses in the consolidated statements of income during the year endedDecember 31, 2019 (in thousands):Operating lease expense (1)$124,082Variable lease expense (2)7,775Total operating lease expense$131,857(1) Includes $0.8 million of net amortization related to the favorable/unfavorable lease intangible assets/liabilities that were reclassified to the operating lease right of useasset in the accompanying consolidated balance sheets upon adoption of ASC 842 on January 1, 2019.(2) Variable lease costs consist primarily of taxes, insurance and common area or other maintenance costs paid based on actual costs incurred by the lessor and cantherefore vary over the lease term.The following table details the maturity of lease liabilities for all operating leases as of December 31, 2019 (in thousands):2020$105,118202184,541202260,690202340,514202418,760Thereafter15,477Total$325,100Less amount of lease payments representing interest(45,130)Total present value of lease payments$279,970The following table details supplemental cash flow information related to operating leases for the year ended December 31, 2019 (in thousands):Cash paid for amounts included in the measurement of operating lease liabilities$116,448Leased assets obtained in exchange for new operating lease liabilities$71,117F-18Table of Contents NOTE 5 - STOCKHOLDERS' EQUITYDuring 2019, the Company repurchased a total of 1,305,000 shares of common stock at an aggregate cost of $114.0 million and an average cost per share of$87.37, and during 2018, repurchased 3,343,000 shares of common stock at an aggregate cost of $274.5 million and an average cost per share of $82.12. TheCompany intends to continue repurchases under its active share repurchase program through open market transactions under trading plans in accordance with Rule10b5-1 and Rule 10b-18 under the Exchange Act of 1934, as amended, 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 andthe availability of alternative investment opportunities.The following table provides purchases made by the Company of shares of its common stock under each share repurchase program in effect during 2019 (dollarsin thousands):Plan AuthorizationDate Plan CompletionDate Dollar AmountAuthorized Shares Purchasedin 2019 Dollar AmountPurchased in 2019 Remaining DollarAmount AuthorizedFor FuturePurchasesJuly 25, 2018 April 23, 2019 $100,000 496,000 $42,760 $—October 24, 2018 Currently active 100,000 809,000 71,203 28,797Total 1,305,000 $113,963 $28,797Total cash dividends paid in 2019 and 2018 were $44.0 million and $40.9 million, respectively. The declaration and payment of cash dividends in the future(quarterly or otherwise) will be made by the Board of Directors, from time to time, subject to the Company’s financial condition, results of operations, businessrequirements, compliance with legal requirements and debt covenant restrictions.NOTE 6 - 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 andliabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company's assessment of the significance of aparticular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement withinthe fair value hierarchy levels. The three 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 MeasurementsAs of December 31, 2019 and 2018, the Company did not have any financial assets or liabilities that are measured at fair value on a recurring basis.Fair Value Measurements on a Non-Recurring BasisThe Company measures non-financial assets and liabilities such as property and equipment and intangible assets at fair value on a non-recurring basis or whenevents or circumstances indicate that the carrying amount of the assets may be impaired.F-19Table of Contents Financial Assets and Liabilities Not Measured at Fair ValueThe Company’s financial assets and liabilities as of December 31, 2019 and 2018 that are not measured at fair value in the consolidated balance sheets are asfollows (in thousands): Carrying Value Estimated Fair Value December 31, December 31, Fair Value Measurements Using 2019 2019 Level 1 Level 2 Level 3Financial assets: Cash and cash equivalents $46,527 $46,527 $46,527 $— $—Fees and service charges receivable 46,686 46,686 — — 46,686Pawn loans 369,527 369,527 — — 369,527Consumer loans, net 751 751 — — 751 $463,491 $463,491 $46,527 $— $416,964 Financial liabilities: Revolving unsecured credit facility $335,000 $335,000 $— $335,000 $—Senior unsecured notes (outstanding principal) 300,000 310,000 — 310,000 — $635,000 $645,000 $— $645,000 $— Carrying Value Estimated Fair Value December 31, December 31, Fair Value Measurements Using 2018 2018 Level 1 Level 2 Level 3Financial assets: Cash and cash equivalents $71,793 $71,793 $71,793 $— $—Fees and service charges receivable 45,430 45,430 — — 45,430Pawn loans 362,941 362,941 — — 362,941Consumer loans, net 15,902 15,902 — — 15,902 $496,066 $496,066 $71,793 $— $424,273 Financial liabilities: Revolving unsecured credit facility $295,000 $295,000 $— $295,000 $—Senior unsecured notes (outstanding principal) 300,000 293,000 — 293,000 — $595,000 $588,000 $— $588,000 $—As cash and cash equivalents have maturities of less than three months, the carrying value of cash and cash equivalents approximates fair value. Due to their short-term maturities, the carrying value of pawn loans and fees and service charges receivable approximate fair value. Consumer loans, net are carried net of theallowance for estimated loan losses, which is calculated by applying historical loss rates combined with recent default trends to the gross consumer loan balance.Therefore, the carrying value approximates the fair value.The carrying value of the Company’s revolving unsecured credit facility approximates fair value as of December 31, 2019 and 2018. The fair value of the revolvingunsecured credit facility is estimated based on market values for debt issuances with similar characteristics or rates currently available for debt with similar terms.In addition, the revolving unsecured credit facility has a variable interest rate based on a fixed spread over LIBOR and reprices with any changes in LIBOR. Thefair value of the senior unsecured notes is estimated based on quoted prices in markets that are not active.F-20Table of Contents NOTE 7 - CONSUMER LOANS AND RELATED VALUATION ALLOWANCEConsumer loans, net are composed of the following (in thousands):December 31, 2019 Total consumer loans$785Less allowance for doubtful accounts(34)Consumer loans, net$751 December 31, 2018 Total consumer loans$16,785Less allowance for doubtful accounts(883)Consumer loans, net$15,902Changes in the allowance for consumer loan credit losses are as follows (in thousands): Year Ended December 31, 2019 2018 2017Balance at beginning of year$883 $1,815 $2,251Provision for credit losses2,395 9,405 12,762Charge-offs, net of recoveries from customers(3,244) (10,337) (13,198)Balance at end of year$34 $883 $1,815Under the CSO Program, the Company assists customers in applying for a short-term extension of credit from an Independent Lender and issues the IndependentLender a guarantee for the repayment of the extension of credit. The Company is required to recognize, at the inception of the guarantee, a liability for theestimated fair value of the obligation undertaken 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 as follows (in thousands): Year Ended December 31, 2019 2018 2017Balance at beginning of year$252 $440 $582Provision for credit losses1,764 8,056 7,057Amounts paid to Independent Lenders under guarantees, net ofrecoveries from customers(1,926) (8,244) (7,199)Balance at end of year$90 $252 $440NOTE 8 - PROPERTY AND EQUIPMENTProperty and equipment consists of the following (in thousands): As of December 31, 2019 2018Land$66,198 $37,578Buildings123,397 76,406Furniture, fixtures, equipment and improvements398,905 348,620 588,500 462,604Less: accumulated depreciation(252,333) (210,959) $336,167 $251,645F-21Table of Contents Depreciation expense for the years ended December 31, 2019, 2018 and 2017 was $39.1 million, $36.4 million and $44.5 million, respectively.NOTE 9 - ACCOUNTS PAYABLE AND ACCRUED LIABILITIESAccounts payable and accrued liabilities consist of the following (in thousands): As of December 31, 2019 2018Accrued compensation$27,738 $28,130Sales, property, and payroll withholding taxes payable15,237 12,563Acquisition purchase price amounts payable to sellers6,374 12,636Trade accounts payable5,871 6,886Benefits liabilities and withholding payable3,353 3,541Accrued interest payable1,459 1,534Liability for expected losses on outstanding guarantees from CSO Program90 252Deferred fees from CSO Program28 4,501Current unfavorable lease intangible liability (1)— 6,191Other accrued liabilities12,248 20,694 $72,398 $96,928(1) Current unfavorable lease intangible liability was reclassified to operating lease right of use asset on January 1, 2019 in conjunction with the adoption of ASC 842. SeeNote 4.NOTE 10 - LONG-TERM DEBTThe following table details the Company’s long-term debt at the respective principal amounts, net of unamortized debt issuance costs on the senior unsecurednotes (in thousands): As of December 31, 2019 2018Revolving unsecured credit facility, maturing 2024 (1)$335,000 $295,0005.375% senior unsecured notes due 2024 (2)296,568 295,887Total long-term debt$631,568 $590,887(1) Debt issuance costs related to the Company’s revolving unsecured credit facility are included in other assets in the accompanying consolidated balance sheets.(2) As of December 31, 2019 and 2018, deferred debt issuance costs of $3.4 million and $4.1 million, respectively, are included as a direct deduction from the carryingamount of the senior unsecured notes in the accompanying consolidated balance sheets.Revolving Unsecured Credit FacilityDuring the period from January 1, 2019 through December 19, 2019, the Company maintained an unsecured line of credit with a group of U.S. based commerciallenders (the “Credit Facility”) in the amount of $425.0 million, which was scheduled to mature in October 2023. The Credit Facility charged interest, at theCompany’s option, at either (1) the prevailing London Interbank Offered Rate (“LIBOR”) (with interest periods of 1 week or 1, 2, 3 or 6 months at the Company’soption) plus a fixed spread of 2.5% or (2) the prevailing prime or base rate plus a fixed spread of 1.5%.On December 19, 2019, the Company amended and extended the Credit Facility. The total lender commitment under the amended facility increased from $425.0million to $500.0 million and the term was extended to December 19, 2024, which would accelerate to 90 days prior to the maturity of the Company’s seniorunsecured notes due June 1, 2024 if the Company’s senior unsecured notes have not been refinanced or otherwise extended past December 19, 2024 by such date.Certain financial covenants in the facility were amended, including a temporary increase in the permitted domestic leverage ratio from 4.0 to 4.5 times domesticF-22Table of Contents EBITDA, adjusted for certain customary items as more fully set forth in the Credit Facility (“Adjusted Domestic EBITDA”), through December 31, 2020 and to4.25 times Adjusted Domestic EBITDA from January 1, 2021 through December 31, 2021 and a temporary decrease in the consolidated leverage ratio from 3.0 to2.75 times consolidated EBTIDA, adjusted for certain customary items as more fully set forth in the Credit Agreement, through December 31, 2021. Thetemporary changes to the leverage ratios will revert to the previous ratios effective January 1, 2022. In addition, the amendment allowed for a permanent exclusionof up to $50 million in parent guaranteed indebtedness of foreign subsidiaries from funded indebtedness used in the calculation of the domestic leverage ratio.At December 31, 2019, the Company had $335.0 million in outstanding borrowings and $3.3 million in outstanding letters of credit under the Credit Facility,leaving $161.7 million available for future borrowings. The Credit Facility is unsecured and bears interest, at the Company’s option, of either (1) the prevailingLIBOR (with interest periods of 1 week or 1, 2, 3 or 6 months at the Company’s option) plus a fixed spread of 2.5% or (2) the prevailing prime or base rate plus afixed spread of 1.5%. The agreement has a LIBOR floor of 0%. Additionally, the Company is required to pay an annual commitment fee of 0.50% on the averagedaily unused portion of the Credit Facility commitment. The weighted-average interest rate on amounts outstanding under the Credit Facility at December 31, 2019was 4.13% based on 1 week LIBOR. Under the terms of the Credit Facility, the Company is required to maintain certain financial ratios and comply with certainfinancial covenants. The Credit Facility also contains customary restrictions on the Company’s ability to incur additional debt, grant liens, make investments,consummate acquisitions and similar negative covenants with customary carve-outs and baskets. The Company was in compliance with the covenants of the CreditFacility as of December 31, 2019. During 2019, the Company received net proceeds of $40.0 million from borrowings pursuant to the Credit Facility.Senior Unsecured NotesOn May 30, 2017, the Company issued $300.0 million of 5.375% senior unsecured notes due on June 1, 2024 (the “Notes”), all of which are currently outstanding.Interest on the Notes is payable semi-annually in arrears on June 1 and December 1. The Notes are fully and unconditionally guaranteed on a senior unsecuredbasis jointly and severally by all of the Company's existing and future domestic subsidiaries that guarantee its Credit Facility. The Notes will permit the Companyto make restricted payments, such as purchasing shares of its stock and paying cash dividends, in an unlimited amount if, after giving pro forma effect to theincurrence of any indebtedness to make such payment, the Company's consolidated total debt ratio (“Net Debt Ratio”) is less than 2.25 to 1. The Net Debt Ratio isdefined generally in the indenture governing the Notes as the ratio of (1) the total consolidated debt of the Company minus cash and cash equivalents of theCompany to (2) the Company’s consolidated trailing twelve months EBITDA, as adjusted to exclude certain non-recurring expenses and giving pro forma effect tooperations acquired during the measurement period.The Company used the proceeds from the Notes to repurchase, or otherwise redeem, its previously outstanding $200.0 million, 6.75% senior unsecured notes due2021 (the “2021 Notes”). As a result, during 2017, the Company recognized a $14.1 million loss on extinguishment of debt related to the repurchase or redemptionof the 2021 Notes.As of December 31, 2019, annual maturities of the outstanding long-term debt for each of the five years after December 31, 2019 are as follows (in thousands):2020$—2021—2022—2023—2024635,000Thereafter— $635,000F-23Table of Contents NOTE 11 - INCOME TAXESComponents of the provision for income taxes and the income to which it relates for the years ended December 31, 2019, 2018 and 2017 consist of the following(in thousands): Year Ended December 31, 2019 2018 2017Income before income taxes (1): Domestic$145,570 $125,056 $93,365Foreign79,041 80,253 78,947Income before income taxes$224,611 $205,309 $172,312 Current income taxes: Federal (2)$26,624 $18,751 $15,995Foreign21,904 23,231 23,340State and local2,553 2,506 968Current provision for income taxes51,081 44,488 40,303 Deferred provision (benefit) for income taxes: Federal (3)7,498 7,621 (11,509)Foreign863 (566) (1,079)State and local551 560 705Total deferred provision (benefit) for income taxes8,912 7,615 (11,883) Provision for income taxes$59,993 $52,103 $28,420(1) Includes the allocation of certain administrative expenses and intercompany payments, such as royalties and interest, between domestic and foreign subsidiaries.(2) The year ended December 31, 2017 includes a provisional $1.9 million income tax expense relating to the one-time mandatory tax on previously deferred earnings ofthe Company’s foreign subsidiaries as a result of the Tax Cuts and Jobs Act (“Tax Act”). The year ended December 31, 2018 includes a $1.5 million income taxbenefit as a result of the Company’s finalization of certain estimates and tax positions used to record the 2017 provisional tax expense. The years ended December 31,2019 and 2018 include $1.1 million and $0.8 million of income tax expense, respectively, relating to the global intangible low-taxed income (GILTI) inclusion.(3) The year ended December 31, 2017 includes a provisional $29.2 million income tax benefit resulting from the remeasurement of the Company’s domestic net deferredtax liabilities based on the lower corporate income tax rate as a result of the Tax Act. During 2018, the Company finalized certain estimates and tax positions used inthe analysis of the 2017 provisional tax benefit resulting in no adjustments.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 theearnings of these subsidiaries outside the U.S. At December 31, 2019, the cumulative amount of indefinitely reinvested earnings of foreign subsidiaries was$256.5 million, which would not be subject to additional U.S. taxes if the earnings were repatriated into the U.S.F-24Table of Contents The principal deferred tax assets and liabilities consist of the following (in thousands): As of December 31, 2019 2018Deferred tax assets: Property and equipment$10,407 $8,073Accrued fees on forfeited pawn loans8,006 7,489Deferred cost of goods sold deduction5,721 3,494Accrued compensation and employee benefits2,163 1,912State net operating losses6,012 6,430Other4,428 6,027Total deferred tax assets36,737 33,425 Deferred tax liabilities: Intangible assets71,814 66,734Net operating lease asset5,819 —Property and equipment— 1,668Other2,812 1,807Total deferred tax liabilities80,445 70,209 Net deferred tax liabilities before valuation allowance(43,708) (36,784)Valuation allowance(6,012) (6,430)Net deferred tax liabilities$(49,720) $(43,214) Reported as: Deferred tax assets$11,711 $11,640Deferred tax liabilities(61,431) (54,854)Net deferred tax liabilities$(49,720) $(43,214)The Company has a valuation allowance of $6.0 million and $6.4 million as of December 31, 2019 and 2018, respectively, related to the deferred tax assetsassociated with its state net operating losses. The Company has evaluated the nature and timing of its other deferred tax assets and concluded that no additionalvaluation allowance is necessary.F-25Table of Contents The following is a reconciliation of income taxes calculated at the U.S. federal statutory rate to the provision for income taxes (dollars in thousands): Year Ended December 31, 2019 2018 2017U.S. federal statutory rate21% 21% 35% Tax at the U.S. federal statutory rate$47,168 $43,115 $60,309State income tax, net of federal tax benefit of $652, $644 and $586,respectively2,452 2,422 1,087Net incremental income tax expense (benefit) from foreign earnings (1)6,314 6,031 (5,442)Net tax benefit resulting from the enactment of the Tax Act— (1,494) (27,269)Non-deductible compensation expense2,074 1,827 —Other taxes and adjustments, net1,985 202 (265)Provision for income taxes$59,993 $52,103 $28,420 Effective tax rate26.7% 25.4% 16.5%(1) Includes a $2.3 million, $3.3 million and $4.0 million foreign permanent tax benefit related to an inflation index adjustment allowed under Mexico tax law for theyears ended December 31, 2019, 2018 and 2017, respectively.The Company’s foreign operating subsidiaries are owned by a wholly-owned subsidiary located in the Netherlands. The foreign operating subsidiaries are subjectto their respective foreign statutory rates, which differ from the U.S. federal statutory rate. The statutory tax rates in Mexico, Guatemala, El Salvador andColombia are generally 30%, 25%, 30% and 33%, respectively. The statutory tax rate in the Netherlands is 0% on eligible dividends received from its foreignsubsidiaries.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.The Company 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 examinationby the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measuredbased on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. Interest and penalties related to income taxliabilities that could arise would be classified as interest expense in the Company’s consolidated statements of income.As of December 31, 2019 and 2018, the Company had no unrecognized tax benefits and, therefore, the Company did not have a liability for accrued interest andpenalties and no such interest or penalties were incurred for the years ended December 31, 2019, 2018 and 2017.The Company files federal income tax returns in the U.S., Mexico, Guatemala, El Salvador, Colombia and the Netherlands, as well as multiple state and localincome tax returns in the U.S. The Company’s U.S. federal returns are not subject to examination for tax years prior to 2016. The Company’s U.S. state income taxreturns are not subject to examination for the tax years prior to 2016 with the exception of six states, which are not subject to examination for tax years prior to2015. With respect to federal tax returns in Mexico, Guatemala, El Salvador, Colombia and the Netherlands, the tax years prior to 2014 are closed to examination.There are no state income taxes in Mexico, Guatemala, El Salvador, Colombia or the Netherlands.NOTE 12 - COMMITMENTS AND CONTINGENCIESLitigationThe Company, in the ordinary course of business, is a defendant (actual or threatened) in certain lawsuits, arbitration claims and other general claims. Inmanagement’s opinion, any potential adverse result should not have a material adverse effect on the Company’s financial position, results of operations, or cashflows.F-26Table of Contents GuaranteesThe Company offers a fee-based CSO Program to assist consumers in obtaining extensions of credit from an Independent Lender. Under the CSO Program, theCompany assists customers in applying for a short-term extension of credit from an Independent Lender and issues the Independent Lender a guarantee for therepayment of the extension of credit. The Company is required to recognize, at the inception of the guarantee, a liability for the estimated fair value of theobligation undertaken by issuing the guarantees. The Company records the estimated fair value of the liability in accrued liabilities. The Company’s maximum lossexposure under all of the outstanding guarantees issued on behalf of its customers to the Independent Lender as of December 31, 2019 was $1.4 million comparedto $6.2 million at December 31, 2018.Gold Forward Sales ContractsAs of December 31, 2019, the Company had contractual commitments to deliver a total of 30,500 gold ounces between the months of January and December 2020at a weighted-average price of $1,440 per ounce. The ounces required to be delivered over this time period are within historical scrap gold volumes.NOTE 13 - GOODWILL AND OTHER INTANGIBLE ASSETS GoodwillChanges in the carrying value of goodwill by segment were as follows (in thousands):December 31, 2019U.S. operationssegment Latin Americaoperationssegment TotalBalance, beginning of year$759,538 $157,881 $917,419Acquisitions (see Note 3)11,773 15,533 27,306Effect of foreign currency translation— 5,175 5,175Other adjustments— (1,257) (1,257)Balance, end of year$771,311 $177,332 $948,643 December 31, 2018 Balance, beginning of year$743,997 $87,148 $831,145Acquisitions (see Note 3)15,541 71,427 86,968Effect of foreign currency translation— (694) (694)Balance, end of year$759,538 $157,881 $917,419The Company performed its annual assessment of goodwill and determined there was no impairment as of December 31, 2019 and 2018.Definite-Lived Intangible AssetsThe following table summarizes the components of gross and net definite-lived intangible assets subject to amortization (in thousands): As of December 31, 2019 2018 GrossCarryingAmount AccumulatedAmortization NetCarryingAmount GrossCarryingAmount AccumulatedAmortization NetCarryingAmountCustomer relationships $25,899 $(21,681) $4,218 $25,453 $(18,955) $6,498Executive non-competeagreements — — — 8,700 (8,700) — $25,899 $(21,681) $4,218 $34,153 $(27,655) $6,498F-27Table of Contents Customer relationships are generally amortized using an accelerated amortization method that reflects the future cash flows expected from the returning pawncustomers. The executive non-compete agreements expired and were fully amortized during 2018.Amortization expense for definite-lived intangible assets was $2.9 million, $6.6 million and $10.7 million for the years ended December 31, 2019, 2018 and 2017,respectively. The remaining weighted-average amortization period for customer relationships is 1.1 years. Estimated future amortization expense is as follows (inthousands):2020$2,36820211,30020222992023231202420 $4,218Indefinite-Lived Intangible AssetsIndefinite-lived intangible assets as of December 31, 2019 and 2018, consist of the following (in thousands): As of December 31, 2019 2018Trade names $46,300 $46,300Pawn licenses (1) 34,107 34,092Other indefinite-lived intangibles 1,250 1,250 $81,657 $81,642(1) Costs to renew licenses with indefinite lives are expensed as incurred and recorded in store operating expenses in the consolidated statements of income.The Company performed its annual assessment of indefinite-lived intangible assets and determined there was no impairment as of December 31, 2019 and 2018.NOTE 14 - EQUITY COMPENSATION PLANS AND SHARE-BASED COMPENSATIONThe Company has previously adopted equity and share-based compensation plans to attract and retain executive officers, directors and key employees. Under theseplans, the Company has granted qualified and non-qualified common stock options and restricted stock unit awards to executive officers, directors and other keyemployees. At December 31, 2019, 3,500,000 shares were reserved for future grants to all employees and directors under the plans.Restricted Stock Unit AwardsThe Company has granted restricted stock units under the Company’s equity and share-based incentive compensation plans. The restricted stock units are settledin shares of common stock upon vesting. The performance-based awards vest three years from the date of the grant. The performance period for each of theperformance-based grants is a three-year cumulative period beginning in January of the respective grant year. The Company’s level of achievement of theperformance goals at the end of each respective performance period will result in awards between zero and the maximum share award. The award criteria forthe 2019 performance-based grants relate to growth in the Company’s net income, adjusted for certain non-core and/or non-recurring items, growth in constantcurrency pawn revenue (retail merchandise sales, pawn loan fees and wholesale scrap jewelry sales) and new (“de novo”) store openings over the three-yearcumulative period. The award criteria for the 2018 and 2017 performance-based grants relate to growth in the Company’s net income, adjusted for certain non-coreand/or non-recurring items, and total store additions over the respective three-year cumulative period. The time-based awards granted in 2019, 2018 and 2017 vestin equal annual installments, subject to continued employment with the Company, over a five year period from the grant date. The grant date fair value of therestricted stock units is based on the Company’s closing stock price on the day of the grant or subsequent award modification date, if applicable, and the fair valueof performance-based awards is based on the maximum amount of the award expected to be achieved. The amount attributable to award grants is amortized toexpense over the vesting periods. The CompanyF-28Table of Contents typically issues treasury shares to satisfy vested restricted stock unit awards.The following table summarizes the restricted stock unit award activity for the years ended December 31, 2019, 2018 and 2017 (shares in thousands): 2019 2018 2017 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 year254 $59.53 157 $47.36 30 $45.93Performance-based grants (1)109 86.86 102 72.70 117 48.25Time-based grants19 86.86 17 72.70 20 43.55Performance-based vested(10) 45.93 (10) 45.93 (10) 45.93Time-based vested(15) 73.78 (12) 43.55 — —Outstanding at end of year357 $69.13 254 $59.53 157 $47.36(1) Represents the maximum possible award. The Company’s level of achievement of the respective performance goals will result in actual vesting of between zeroshares and the maximum share award.Restricted stock unit awards vesting in 2019, 2018 and 2017 had an aggregate intrinsic value of $2.1 million, $1.6 million and $0.7 million, respectively, based onthe closing price of the Company’s stock on the date of vesting. The outstanding award units had an aggregate intrinsic value of $28.8 million at December 31,2019.Stock OptionsThe Company has not issued common stock options in the last eight years. Previous option awards have been granted to purchase the Company’s common stock atan exercise 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 typicallyissues treasury shares to satisfy stock option exercises.Stock options outstanding as of December 31, 2019 are as follows (shares in thousands): Weighted-Average CurrentlyExercise Price Option Shares Remaining Life Exercisable Shares $38.00 40 1.9 20 40.00 30 1.0 20 70 1.5 40 The following table summarizes stock option activity for the years ended December 31, 2019, 2018 and 2017 (shares in thousands): 2019 2018 2017 Weighted- Weighted- Weighted- Average Average Average Underlying Exercise Underlying Exercise Underlying Exercise Shares Price Shares Price Shares PriceOutstanding at beginning of year80 $39.00 90 $39.11 103 $37.34Exercised(10) 40.00 (10) 40.00 (13) 24.57Outstanding at end of year70 38.86 80 39.00 90 39.11 Exercisable at end of year40 39.00 30 39.33 20 40.00F-29Table of Contents At December 31, 2019, the aggregate intrinsic value for the stock options outstanding was $2.9 million, of which $1.7 million was exercisable at the end of theyear, with weighted-average remaining contractual terms of 1.5 years. The aggregate intrinsic value reflects the total pre-tax intrinsic value (the difference betweenthe Company’s closing stock price on the 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 holders had all option holders exercised their options on December 31, 2019.The total intrinsic value of options exercised for 2019, 2018 and 2017 was $0.6 million, $0.5 million and $0.3 million, respectively. The intrinsic values are basedon the closing price of the Company’s stock on the date of exercise.Share-Based Compensation ExpenseThe Company’s net income includes the following compensation costs related to share-based compensation arrangements (in thousands): Year Ended December 31, 2019 2018 2017Gross compensation costs: Restricted stock unit awards$8,637 $5,712 $2,959Stock options43 74 110Total gross compensation costs8,680 5,786 3,069 Income tax benefits: Restricted stock unit awards(302) (1,320) (1,036)Exercise of stock options(114) (94) (39)Total income tax benefits(416) (1,414) (1,075) Net compensation expense$8,264 $4,372 $1,994As of December 31, 2019, the total compensation cost related to non-vested restricted stock unit awards not yet recognized was $9.8 million and is expected to berecognized over the weighted-average period of 1.4 years. As of December 31, 2019, the total compensation cost related to non-vested stock options not yetrecognized was $16,000 and is expected to be recognized over the weighted-average period of 0.5 years.NOTE 15 - 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 orlonger. Under the Plan, a participant may contribute up to 100% of earnings, with the Company matching the first 5% of contributions at a rate of 50%. Theemployee and Company contributions are paid to a corporate trustee and invested in various funds based on participant direction. Company contributions made toparticipants’ accounts become fully vested upon completion of five years of service. The total Company matching contributions to the Plan were $3.1 million,$3.1 million and $4.2 million for the years ended December 31, 2019, 2018 and 2017, respectively.NOTE 16 - SEGMENT AND GEOGRAPHIC INFORMATIONSegment InformationThe Company organizes its operations into two reportable segments as follows:•U.S. operations - Includes all pawn and unsecured consumer loan operations in theU.S.•Latin America operations - Includes all pawn operations in Latin America, which includes operations in Mexico, Guatemala, El Salvador andColombia.Corporate expenses, which include administrative expenses, corporate depreciation and amortization, interest expense, interest income, merger and otheracquisition expenses and loss (gain) on foreign exchange, are incurred or earned in both the U.S. and Latin America, but presented on a consolidated basis and arenot allocated between the U.S. operations segment and Latin America operations segment.F-30Table of Contents The following tables present reportable segment information for the years ended December 31, 2019, 2018 and 2017 as well as separately identified segmentassets (in thousands): Year Ended December 31, 2019 U.S.Operations Latin AmericaOperations Corporate ConsolidatedRevenue: Retail merchandise sales $722,127 $453,434 $— $1,175,561Pawn loan fees 379,395 185,429 — 564,824Wholesale scrap jewelry sales 71,813 32,063 — 103,876Consumer loan and credit services fees (1) 20,178 — — 20,178Total revenue 1,193,513 670,926 — 1,864,439 Cost of revenue: Cost of retail merchandise sold 447,911 297,950 — 745,861Cost of wholesale scrap jewelry sold 65,941 30,131 — 96,072Consumer loan and credit services loss provision (1) 4,159 — — 4,159Total cost of revenue 518,011 328,081 — 846,092 Net revenue 675,502 342,845 — 1,018,347 Expenses and other income: Store operating expenses 412,508 183,031 — 595,539Administrative expenses — — 122,334 122,334Depreciation and amortization 20,860 14,626 6,418 41,904Interest expense — — 34,035 34,035Interest income — — (1,055) (1,055)Merger and other acquisition expenses — — 1,766 1,766Loss on foreign exchange — — (787) (787)Total expenses and other income 433,368 197,657 162,711 793,736 Income (loss) before income taxes $242,134 $145,188 $(162,711) $224,611 As of December 31, 2019 U.S.Operations Latin AmericaOperations Corporate ConsolidatedPawn loans $268,793 $100,734 $— $369,527Consumer loans, net (1) 751 — — 751Inventories 181,320 83,936 — 265,256Goodwill 771,311 177,332 — 948,643Total assets 1,767,504 574,059 97,877 2,439,440(1) The Company ceased offering unsecured consumer lending and credit services products in all of its Ohio locations on April 26, 2019 and closed 52 Ohio locationsduring the second quarter of 2019.F-31Table of Contents Year Ended December 31, 2018 U.S.Operations Latin AmericaOperations Corporate ConsolidatedRevenue: Retail merchandise sales $709,594 $382,020 $— $1,091,614Pawn loan fees 373,406 151,740 — 525,146Wholesale scrap jewelry sales 85,718 22,103 — 107,821Consumer loan and credit services fees (1) 55,417 860 — 56,277Total revenue 1,224,135 556,723 — 1,780,858 Cost of revenue: Cost of retail merchandise sold 450,516 246,150 — 696,666Cost of wholesale scrap jewelry sold 78,308 21,656 — 99,964Consumer loan and credit services loss provision (1) 17,223 238 — 17,461Total cost of revenue 546,047 268,044 — 814,091 Net revenue 678,088 288,679 — 966,767 Expenses and other income: Store operating expenses 414,097 149,224 — 563,321Administrative expenses — — 120,042 120,042Depreciation and amortization 21,021 11,333 10,607 42,961Interest expense — — 29,173 29,173Interest income — — (2,444) (2,444)Merger and other acquisition expenses — — 7,643 7,643Loss on foreign exchange — — 762 762Total expenses and other income 435,118 160,557 165,783 761,458 Income (loss) before income taxes $242,970 $128,122 $(165,783) $205,309 As of December 31, 2018 U.S.Operations Latin AmericaOperations Corporate ConsolidatedPawn loans $271,584 $91,357 $— $362,941Consumer loans, net (1) 15,902 — — 15,902Inventories 199,978 75,152 — 275,130Goodwill 759,538 157,881 — 917,419Total assets 1,534,542 407,282 166,150 2,107,974(1) Effective June 30, 2018, the Company no longer offers an unsecured consumer loan product in Latin America.F-32Table of Contents Year Ended December 31, 2017 U.S.Operations Latin AmericaOperations Corporate ConsolidatedRevenue: Retail merchandise sales $717,490 $333,609 $— $1,051,099Pawn loan fees 380,596 130,309 — 510,905Wholesale scrap jewelry sales 119,197 21,645 — 140,842Consumer loan and credit services fees 75,209 1,767 — 76,976Total revenue 1,292,492 487,330 — 1,779,822 Cost of revenue: Cost of retail merchandise sold 468,527 211,176 — 679,703Cost of wholesale scrap jewelry sold 112,467 20,327 — 132,794Consumer loan and credit services loss provision 19,431 388 — 19,819Total cost of revenue 600,425 231,891 — 832,316 Net revenue 692,067 255,439 — 947,506 Expenses and other income: Store operating expenses (1) 423,214 128,977 — 552,191Administrative expenses — — 122,473 122,473Depreciation and amortization 24,073 10,311 20,849 55,233Interest expense — — 24,035 24,035Interest income — — (1,597) (1,597)Merger and other acquisition expenses — — 9,062 9,062Gain on foreign exchange (1) — — (317) (317)Loss on extinguishment of debt — — 14,114 14,114Total expenses and other income 447,287 139,288 188,619 775,194 Income (loss) before income taxes $244,780 $116,151 $(188,619) $172,312(1) The gain on foreign exchange for the Latin America operations segment of $0.3 million for 2017 was reclassified on the consolidated statements of income in order toconform with the presentation for the year ended December 31, 2019. The gain on foreign exchange was reclassified from store operating expenses and reportedseparately on the consolidated statements of income. As of December 31, 2017 U.S.Operations Latin AmericaOperations Corporate ConsolidatedPawn loans $276,570 $68,178 $— $344,748Consumer loans, net 23,179 343 — 23,522Inventories 216,739 60,032 — 276,771Goodwill 743,997 87,148 — 831,145Total assets 1,527,012 282,605 253,167 2,062,784F-33Table of Contents Geographic InformationThe following table shows revenue and long-lived assets (all non-current assets except operating lease right of use asset, goodwill, intangibles, net and deferredtax assets) by geographic area (in thousands): Year Ended December 31, 2019 2018 2017Revenue: U.S. $1,193,513 $1,224,135 $1,292,492Mexico 641,505 531,744 464,161Other Latin America 29,421 24,979 23,169 $1,864,439 $1,780,858 $1,779,822 Long-lived assets: U.S. $254,395 $226,358 $227,659Mexico 80,385 65,260 53,175Other Latin America 12,893 9,265 3,552 $347,673 $300,883 $284,386NOTE 17 - QUARTERLY FINANCIAL DATA (UNAUDITED)Summarized quarterly financial data for the years ended December 31, 2019 and 2018 are set forth in the table below (in thousands, except per share amounts).The Company’s operations are subject to seasonal fluctuations. The Company computed the quarterly diluted earnings per share amounts as if each quarter was adiscrete period based on that quarter’s weighted-average shares outstanding. As a result, the sum of the diluted earnings per share by quarter will not necessarilytotal the annual diluted earnings per share. Quarter Ended March 31 June 30 September 30 December 312019 Total revenue$467,604 $446,014 $452,459 $498,362Total cost of revenue211,805 201,709 201,480 231,098Net revenue255,799 244,305 250,979 267,264Total expenses and other income196,956 199,019 202,015 195,746Net income42,655 33,048 34,761 54,154Diluted earnings per share0.98 0.76 0.81 1.27Diluted weighted-average shares43,658 43,256 43,167 42,760 2018 Total revenue$449,800 $419,972 $429,878 $481,208Total cost of revenue210,719 191,544 192,620 219,208Net revenue239,081 228,428 237,258 262,000Total expenses and other income183,302 186,157 193,175 198,824Net income41,635 30,171 33,325 48,075Diluted earnings per share0.90 0.67 0.76 1.09Diluted weighted-average shares46,479 45,043 44,116 43,936F-34EXHIBIT 4.3DESCRIPTION OF THE REGISTRANT’S SECURITIESREGISTERED PURSUANT TO SECTION 12 OF THESECURITIES EXCHANGE ACT OF 1934As of December 31, 2019, FirstCash, Inc. (the “Company,” “us,” “we,” or “our”) had one class of securities, our common stock, par value $0.01 per share,registered under Section 12 of the Securities Exchange Act of 1934, as amended.Description of Common StockThe following description of our Common Stock is a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to ouramended and restated certificate of incorporation and our amended and restated bylaws, which are filed as exhibits to our Annual Report on Form 10-K and areincorporated by reference herein, as well as the applicable provisions of the Delaware General Corporation Law. We encourage you to carefully review ouramended and restated certificate of incorporation, our amended and restated bylaws and the applicable provisions of the Delaware General Corporation Law, foradditional information.GeneralOur authorized capital stock consists of 90,000,000 shares of common stock, par value $0.01 per share, and 10,000,000 shares of preferred stock, par value $0.01per share.Voting RightsEach share of our common stock is entitled to one vote per share of record on all matters to be voted upon by our stockholders. Generally, a matter submitted forstockholder action shall be decided by the affirmative vote of a majority of the shares present in person or represented by proxy at the meeting and entitled to votethereon. Other than in a contested election where directors are elected by a plurality vote, each nominee for director shall be elected by the vote of the majority ofthe votes cast, in person or by proxy, with respect to the director nominee at the meeting.DividendsSubject to the preferential rights of the holders of any preferred stock that may at the time be outstanding, each share of common stock will entitle the holder ofthat share to an equal and ratable right to receive dividends or other distributions if declared from time to time by our board of directors and if there are sufficientfunds to legally pay a dividend.Rights Upon LiquidationIn the event of the Company’s liquidation, dissolution or winding up, whether voluntary or involuntary, the holders of our common stock will be entitled to shareratably in all assets remaining after payments to creditors and after satisfaction of the liquidation preference, if any, of the holders of any preferred stock that mayat the time be outstanding.Other RightsHolders of our common stock have no preemptive or redemption rights and will not be subject to further calls or assessments by the Company.Preferred StockThe authorized preferred stock will be available for issuance from time to time at the discretion of our board of directors without stockholder approval. Our boardof directors has the authority to prescribe for each series of preferred stock it establishes the number of shares in that series, the number of votes, if any, to whichthe shares in that series are entitled, the consideration for the shares in that series and the powers, designations, preferences and relative, participating, optional orother special rights, and qualifications, limitations or restrictions thereof, of the shares in that series. Depending upon the rights prescribed for a series of preferredstock, the issuance of preferred stock could have an adverse effect on the voting power of the holders of our common stock and could adversely affect holders ofour common stock by delaying or preventing a change in control of the Company, making removal of the Company’s management more difficult or imposingrestrictions upon the payment of dividends and other distributions to the holders of our common stock.Certain Provisions That May Have an Anti-Takeover EffectCertain other provisions of our amended and restated certificate of incorporation and amended and restated bylaws may delay or make more difficult unsolicitedacquisitions or changes of control of the Company. These provisions could have the effect of discouraging third parties from making proposals involving anunsolicited acquisition or change in control of the Company, although these proposals, if made, might be considered desirable by a majority of the Company’sstockholders. These provisions may also have the effect of making it more difficult for third parties to cause the replacement of the current management withoutthe concurrence of our board of directors. These provisions include:•The division of our board of directors into three classes serving staggered terms of office of three years. With a classified board of directors, it wouldgenerally take a majority stockholder two annual meetings of stockholders to elect a majority of the board of directors. As a result, a classified board maydiscourage proxy contests for the election of directors or purchases of a substantial block of stock because it could operate to prevent obtaining control ofthe board in a relatively short period of time.•A prohibition of stockholder action by written consent of stockholders. Action by written consent may, in some circumstances, permit the taking ofstockholders’ action opposed by the board of directors more rapidly than would be possible if a meeting of stockholders were required. The prohibitioncontained in the amended and restated certificate of incorporation will restrict the ability of controlling stockholders to take action at any time other thanat an annual meeting and will generally force a takeover bidder to negotiate directly with the board of directors.•Permitting only the Company’s board of directors, a duly authorized committee of the board of directors, the chairman or the vice chairman of our boardof directors or the chief executive officer to call a special meeting of the Company’s stockholders. This provision could prevent a stockholder from,among other things, calling a special meeting of stockholders to consider the stockholder’s proposed slate of directors or a transaction that might result ina change of control of the corporation.•An advance notice procedure with regard to stockholder nomination of candidates for election as directors and other business to be brought before anannual meeting of our stockholders. Although our amended and restated bylaws will not give our board of directors any power to approve or disapprovestockholder nominations for the election of directors or other proposals for action, these advance notice procedures may have the effect of precluding acontest for the election of directors or the consideration of other stockholder proposals if the established procedures are not followed and of discouragingor deterring a third party from conducting a solicitation of proxies to elect its own slate of directors or to approve another proposal without regard towhether consideration of those nominees or proposals might be harmful or beneficial to the Company and our stockholders.2•Elimination, subject to certain exceptions, of the personal liability of directors of the Company for monetary damages for breaches of fiduciary duty bysuch directors. The amended and restated certificate of incorporation will not provide for the elimination of or any limitation on the personal liability of adirector for (i) any breach of the director’s duty of loyalty to the Company or its stockholders, (ii) acts or omissions not in good faith or which involveintentional misconduct or a knowing violation of law, (iii) unlawful corporate distributions, or (iv) any transaction from which such director derives animproper personal benefit. This provision of the amended and restated certificate of incorporation will limit the remedies available to a stockholder who isdissatisfied with a decision of the board of directors protected by this provision, and such stockholder’s only remedy in that circumstance may be to bringa suit to prevent the action of the board. In many situations, this remedy may not be effective, as for example when stockholders are not aware of atransaction or an event prior to board action in respect of such transaction or event. In these cases, the stockholders and the corporation could be injuredby the board’s decision and have no effective remedy.•Permitting the removal of directors only for cause by a vote of the holders of a majority of the outstanding shares of stock entitled to vote in an election ofdirectors.•Permitting the board of directors, in evaluating any takeover offer, to consider all relevant factors, including the potential economic and social impact ofthe offer on our stockholders, employees, customers, creditors, the communities in which the Company operates and any other factors the directorsconsider pertinent. Once the board, in exercising its business judgment, has determined that a proposed action is not in the best interests of the Company,it has no duty to remove any barriers to the success of the action, including a shareholder rights plan.Section 203 of the Delaware General Corporation LawThe Company is subject to Section 203 (“Section 203”) of the DGCL, which, subject to certain exceptions, prohibits a Delaware corporation from engaging in anybusiness combinations with any interested stockholder for a period of three years following the date that such stockholder became an interested stockholder, unless(i) before such date the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becomingan interested stockholder, (ii) upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholderowned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number ofshares outstanding those shares owned (x) by persons who are directors and also officers and (y) by employee stock plans in which employee participants do nothave the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer, or (iii) on or after such date thebusiness combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by theaffirmative vote of at least 66 2/3% of the outstanding voting stock which is not owned by the interested stockholder.Section 203 defines business combination to include (i) any merger or consolidation involving the corporation and the interested stockholder, (ii) any sale, lease,exchange, mortgage, transfer, pledge or other disposition involving the interested stockholder of 10% or more of assets of the corporation, (iii) subject to certainexceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder, (iv) anytransaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficiallyowned by the interested stockholder or (v) the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financialbenefits provided by or through the corporation. In general, Section 203 defines an interested stockholder as any entity or person beneficially owning 15% or moreof the outstanding voting stock of the corporation and any entity or person affiliated with or controlling or controlled by such an entity or person.Section 203 may delay, prevent or make more difficult certain unsolicited acquisitions, tender offers or changes of control of the Company and also may have theeffect of preventing changes in our management. It is possible that these provisions could make it more difficult to accomplish transactions which our stockholdersmay otherwise deem to be in their best interest.3EXHIBIT 10.16____________________________________________________________EMPLOYMENT AGREEMENTBETWEENDANIEL R. FEEHANANDFIRSTCASH, INC._________________________________________________________________EMPLOYMENT AGREEMENT1. Employment2. Term3. Extent of Service4. Compensation and Benefits(a)Base Salary(b)Savings and Retirement Plans(c)Welfare Benefit Plans(d)Vacation(e)Expenses5. Change in Control6. Termination of Employment(a)Death(b)Disability(c)Termination by the Company(d)Termination by Feehan(e)Notice of Termination(f)Date of Termination7. Obligations of the Company upon Termination(a)Termination by the Company Other Than for Cause or Disability; Termination by Feehan for Good Reason(b)Death or Disability(c)Termination by the Company for Cause; Feehan’s Resignation without Good Reason(d)Resignations8. Restrictive Covenants(a)Acknowledgments(b)Definitions(c)Restrictions on Disclosure and Use of Confidential Information(d)Non-Competition(e)Non-Solicitation of Protected Customers(f)Non-Recruitment of Employees(g)Proprietary Rights(h)Return of Materials(i)Enforcement of Restrictive Covenants(j)Disclosure of Agreement9. Agreement Not to Disparage10. Non-exclusivity of Rights11. Full Settlement; No Mitigation12. Mandatory Reduction of Payments in Certain Events13. Arbitration14. Successors15. Cooperation16. Code Section 409A17. Miscellaneous(a)Governing Law; Forum Selection; Consent to Jurisdiction(b)Captions(c)Amendments(d)Notices(e)Severability(f)Withholding(g)Waivers(h)Entire Agreement(i)Construction(j)CounterpartsEMPLOYMENT AGREEMENTTHIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into this 28th day of January 2020 by and betweenFirstCash, Inc., a Delaware corporation (the “Company”) and Daniel R. Feehan (the “Feehan”), to be effective as of January 1, 2020 (the“Effective Date”). This Agreement supersedes and replaces that certain Employment Agreement between the Company (as successor to CashAmerica International, Inc.) and Feehan dated as of April 3, 2015 (the “Original Employment Agreement”) as of the Effective Date.BACKGROUNDWHEREAS, the Company currently employs Feehan under the terms and conditions as set forth in the Original EmploymentAgreement; andWHEREAS, the Company and Feehan desire to enter into this Agreement, which shall supersede and replace the OriginalEmployment Agreement, and agree that the Original Employment Agreement shall have no further force or effect as of the Effective Date ofthis Agreement.NOW THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements set forth herein, and other goodand valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:1. Employment. Feehan is hereby employed by the Company as of the Effective Date pursuant to this Agreement. Feehan shallhave the duties, responsibilities and authority as shall be assigned by the Board of Directors of the Company (the “Board”).2. Term. Unless earlier terminated herein in accordance with Section 6 hereof, Feehan’s employment with the Company shall begoverned by the terms and conditions of this Agreement for a period beginning on the Effective Date and ending on December 31, 2023 (the“Term”).3. Extent of Service. During the Term, Feehan agrees to use his best efforts to perform faithfully and efficiently his jobresponsibilities. Nothing in this Agreement shall prohibit Feehan from (i) serving on the boards of directors of trade associations orcharitable/educational/non-profit organizations; (ii) engaging in charitable activities and community affairs; (iii) serving on the boards ofdirectors of other public and/or private companies with the prior written approval of the Board, which shall not be unreasonably withheld(provided that, for avoidance of doubt, such service does not violate any of the restrictive covenants in Section 8 of this Agreement); or (iv)managing his personal investments and affairs, provided that the activities described in the preceding clauses (i) through (iv) do notmaterially interfere with the proper performance of his duties and responsibilities hereunder.4. Compensation and Benefits.(a) Base Salary. During the Term, the Company will pay to Feehan base salary at the rate of U.S. Three Hundred ThousandDollars ($300,000) per year (“Base Salary”), less normal withholdings, payable in approximately equal bi-weekly or other installments as areor become customary under the Company’s payroll practices for its employees from time to time.(b) Savings and Retirement Plans. During the Term, Feehan shall be entitled to participate in all savings and retirementplans, practices, policies and programs generally available to the other employees of the Company.(c) Welfare Benefit Plans. Feehan and his eligible dependents shall be eligible for participation in the welfare benefit plans,practices, policies and programs provided by the Company, if any, to the extent generally available to other employees and subject toeligibility requirements and terms and conditions of each such plan; provided, however, that nothing herein shall limit the ability of theCompany to amend, modify or terminate any such benefit plans, policies or programs at any time and from time to time.(d) Vacation. Feehan shall be entitled to four (4) weeks paid vacation each year during the Term. Any vacation or personalbusiness days not used in any year shall be forfeited.(e) Expenses. During the Term, Feehan shall be entitled to receive prompt reimbursement from the Company for allreasonable and customary expenses incurred by Feehan in the course of performing his duties and responsibilities under this Agreement, inaccordance with the policies, practices and procedures of the Company with respect to travel, entertainment and other business expenses(“Business Expenses”).Notwithstanding the foregoing, (i) the reimbursements for Business Expenses provided in any one calendar year shall notaffect the amount of such reimbursements provided in any other calendar year; (ii) the reimbursement of an eligible Business Expense shallbe made within thirty (30) days following Feehan’s submission of evidence, satisfactory to the Company, of the incurrence of such BusinessExpense, but in no event later than December 31 of the year following the year in which the expense was incurred; (iii) Feehan’ s rightspursuant to this Section 4(f) shall not be subject to liquidation or exchange for another benefit; and (iv) the reimbursements for BusinessExpenses shall be provided in accordance with the policies, practices and procedures of the Company.5. Change in Control. For purposes of this Agreement, “Change in Control” shall mean the consummation of a reorganization,merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Company or a subsidiary of theCompany (a “Reorganization”), or the sale or other disposition of all or substantially all of the Company’s assets (a “Sale”) or the acquisitionof assets or stock of another corporation or other entity (an “Acquisition”), unless immediately following such Reorganization, Sale orAcquisition: (A) all or substantially all of the individuals and entities who were the beneficial owners (as defined in Rule 13d-3 of theGeneral Rules and Regulations under the Securities Exchange Act of 1934 Act, as amended (“Beneficial Owners”)), respectively, of theoutstanding Company Stock and the Company’s then outstanding securities eligible to vote for the election of directors (“Company VotingSecurities”) immediately prior to such Reorganization, Sale or Acquisition beneficially own, directly or indirectly, more than 50% of,respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitledto vote generally in the election of directors, as the case may be, of the entity resulting from or surviving such Reorganization, Sale orAcquisition (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of theCompany’s assets or stock either directly or through one or more subsidiaries, the “Surviving Entity”) in substantially the same proportionsas their ownership, immediately prior to such Reorganization, Sale or Acquisition, of the outstanding Company Stock and the outstandingCompany Voting Securities, as the case may be, and (B) no person (other than (x) the Company or any subsidiary of the Company, (y) theSurviving Entity or its ultimate parent entity, or (z) any employee benefit plan (or related trust) sponsored or maintained by any of theforegoing) is the Beneficial Owner, directly or indirectly, of250% or more of the total common stock or 50% or more of the total voting power of the outstanding voting securities eligible to electdirectors of the Surviving Entity. A Change in Control shall not include a public offering of any class or series of the Company’s equitysecurities pursuant to a registration statement filed by the Company under the Securities and Exchange Act of 1933, as amended.6. Termination of Employment.(a) Death. Feehan’s employment shall terminate automatically upon Feehan’s death during the Term.(b) Disability. If the Company determines in good faith that Feehan has become Disabled (as defined below) during theTerm, then it may give to Feehan written notice of its intention to terminate Feehan’s employment. In such event, Feehan’s employment withthe Company shall terminate effective on the thirtieth (30th) day after receipt of such written notice by Feehan (the “Disability EffectiveDate”), provided that, within the thirty (30) days after such receipt, Feehan shall not have returned to full-time performance of Feehan’sduties. For purposes of this Agreement, “Disability” shall mean the inability of Feehan, as reasonably determined by the Company, toperform the essential functions of his regular duties and responsibilities, with or without reasonable accommodation, due to a medicallydeterminable physical or mental illness which has lasted (or can reasonably be expected to last) for a period of six (6) consecutive months. Atthe request of Feehan or his personal representative, the Company’s determination that the Disability of Feehan has occurred shall becertified by a physician mutually agreed upon by Feehan, or his personal representative, and the Company.(c) Termination by the Company. The Company may terminate Feehan’s employment during the Term with or withoutCause. For purposes of this Agreement, a termination shall be considered to be for “Cause” if it occurs in conjunction with a good faithdetermination by the Board that any of the following have occurred:(i) Feehan’s material or habitual failure to meet performance standards agreed to upon by Feehan and the Board, orto follow the reasonable and lawful directions of the Board, or perform his duties with the Company (other than any such failure resultingfrom Feehan’s Disability) which failure is not cured within ten (10) days after a written demand for performance is delivered to Feehan bythe Company which specifically identifies the manner in which the Company believes that Feehan has materially or habitually failed toperform Feehan’s duties;(ii) Feehan’s engaging in any illegal conduct, gross misconduct or gross negligence in connection with theperformance of his duties hereunder, which is, or is likely to be, injurious to the Company, its financial condition, or its reputation, with theunderstanding that, without limiting the generality of the foregoing, any circumstances with respect to Feehan that, in the discretion of theBoard or the FDIC, are deemed to be violation of Section 19 of the Federal Deposit Insurance Act (12 U.S.C. § 1829(a)) shall constituteillegal conduct in connection with the performance of his duties hereunder that is injurious to the Company, its financial condition, or itsreputation;(iii) Feehan’s commission of or engagement in any act of fraud, misappropriation, dishonesty or embezzlement,whether or not such act was committed in connection with the business of the Company;(iv) Feehan’s breach of fiduciary duty, breach of any of the covenants set forth in Section 8 or 9 of this Agreement,or material breach of any other provisions of this Agreement;3(v) Feehan’s conviction of, pleading guilty to, or confession to a felony or any crime involving moral turpitude(including pleading guilty or nolo contendere to a felony or lesser charge which results from plea bargaining), whether or not such felony,crime or lesser offense is connected with the business of the Company;(vi) Feehan’s indictment or conviction of, pleading guilty to, or confession to a felony or any crime (includingpleading guilty or nolo contendere to a felony or lesser charge which results from plea bargaining), which felony, crime or lesser offense isconnected with the business of the Company; or(vii) Feehan’s violation of the Company’s policy against harassment or its equal employment opportunity policy ora material violation of any other policy or procedure of the Company (including, but not limited to, the Company’s code of businessconduct).(d) Termination by Feehan. Feehan’s employment may be terminated by Feehan for any reason or for Good Reason byproviding thirty (30) days prior written notice to the Company. For purposes of this Agreement, “Good Reason” shall mean the occurrence ofany of the following, without Feehan’s consent:(i) a material diminution in Feehan’s Base Salary;(ii) the relocation of Feehan’s principal office to a facility or location more than fifty (50) miles away fromFeehan’s principal place of work immediately prior to the relocation; provided, however, that Good Reason shall not include (A) anyrelocation of Feehan’s principal office which is proposed or initiated by Feehan; or (B) any relocation that results in Feehan’s principal placeoffice being closer to Feehan’s then-principal residence;(iii) any material breach by the Company of this Agreement;Feehan’s termination for Good Reason must occur within a period of ninety (90) days after the occurrence of an event of Good Reason. Atermination by Feehan shall not constitute termination for Good Reason unless Feehan shall first have delivered to the Company writtennotice setting forth with specificity the occurrence deemed to give rise to a right to terminate for Good Reason (which notice must be givenno later than thirty (30) days after the initial occurrence of such event), and there shall have passed a reasonable time (not less than thirty (30)days) within which the Company may take action to correct, rescind or otherwise substantially reverse the occurrence supporting terminationfor Good Reason as identified by Feehan. Good Reason shall not include Feehan’s death or Disability. The parties intend, believe and takethe position that a resignation by Feehan for Good Reason as defined above effectively constitutes an involuntary separation from servicewithin the meaning of Section 409A of the Code and Treas. Reg. Section 1.409A-1(n)(2).(e) Notice of Termination. Any termination by the Company or Feehan shall be communicated by Notice of Termination tothe other party hereto given in accordance with Section 17(d) of this Agreement. For purposes of this Agreement, a “Notice of Termination”means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, setsforth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Feehan’s employment under the provisionso indicated, and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the terminationdate. The failure by Feehan or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showingof Good Reason or Cause shall not waive any right of Feehan or the Company, respectively, hereunder or4preclude Feehan or the Company, respectively, from asserting such fact or circumstance in enforcing Feehan’s or the Company’s rightshereunder.(f) Date of Termination. “Date of Termination” means (i) if Feehan’s employment is terminated other than by reason ofdeath or Disability, the date of receipt of the Notice of Termination or, subject to any cure period, any later date specified therein within sixty(60) days after receipt of the Notice of Termination, as the case may be, or (ii) if Feehan’s employment is terminated by reason of death orDisability, the Date of Termination shall be the date of death of Feehan or the Disability Effective Date, as the case may be.7. Obligations of the Company upon Termination. (a) Termination by the Company Other Than for Cause or Disability; Termination by Feehan for Good Reason. If, duringthe Term, (A) the Company shall terminate Feehan’s employment other than for Cause or Disability, or (B) Feehan shall terminateemployment for Good Reason, then, and with respect to the payments and benefits described in clauses (ii) and (iii) below, only if withinsixty (60) days after the Date of Termination Feehan shall have executed a separation agreement containing a full general release of claimsand covenant not to sue in a form satisfactory to the Company (the “Release”) and such Release shall not have been revoked within the timeperiod specified therein:(i) the Company shall pay to Feehan his’s Base Salary through the Date of Termination to the extent not theretoforepaid (“Accrued Obligations”); and(ii) the Company shall pay to Feehan in a lump sum in cash within sixty (60) days after the Date of Termination,the exact payment date to be determined by the Company, a severance payment equal to one times (or two times, if such termination occurswithin twelve (12) months following a Change in Control) Feehan’s Base Salary in effect as of the Date of Termination; and(iii) if Feehan elects to continue participation in any group medical, dental, vision and/or prescription drug planbenefits to which Feehan and/or Feehan’s eligible dependents would be entitled under Section 4980B of the Code (COBRA), then during theperiod that Feehan is entitled to such coverage under COBRA (the “Welfare Benefits Continuation Period”), the Company shall pay theexcess of (1) the COBRA cost of such coverage over (2) the amount that Feehan would have had to pay for such coverage if Feehan hadremained employed during the Welfare Benefits Continuation Period and paid the active employee rate for such coverage (the “COBRASubsidy”); provided, however, that (A) that if Feehan becomes eligible to receive group health benefits under a program of a subsequentemployer or otherwise (including coverage available to Feehan’s spouse), the Company’s obligation to pay any portion of the cost of healthcoverage as described herein shall cease, except as otherwise provided by law; and (B) the Welfare Benefits Continuation Period shall runconcurrently with any period for which Feehan is eligible to elect health coverage under COBRA; provided, however, that if suchtermination occurs within twelve (12) months following a Change in Control, then, in lieu of the COBRA Subsidy described above, Companyshall pay to Feehan in a lump sum in cash within sixty (60) days after the Date of Termination, the exact payment date to be determined bythe Company, an amount equal to the full monthly COBRA cost of the coverage multiplied by twenty-four (24); and(iv) to the extent not theretofore paid or provided, the Company shall timely pay or provide to Feehan any otheramounts or benefits required to be paid or provided or which Feehan is eligible to receive under any plan, program, policy or practice orcontract or agreement of the Company and5its affiliated companies (such other amounts and benefits shall be hereinafter referred to as the “Other Benefits”).For the avoidance of doubt, the parties acknowledge that, in the event that Feehan terminates his employment for Good Reason as a result ofthe decrease in his Base Salary as contemplated in Section 6(d)(i) hereof, then the Base Salary used for purposes of the calculation of theAccrued Obligations and severance payment under subsection (ii) above, shall be the Base Salary in effect immediately prior to suchreduction.(b) Death or Disability. If Feehan’s employment is terminated by reason of Feehan’s death or Disability during the Term,this Agreement shall terminate without further obligations to Feehan or Feehan’s legal representatives under this Agreement, other than forpayment of Accrued Obligations and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid by the Companyto Feehan or Feehan’s estate or beneficiary, as applicable, in a lump sum in cash within thirty (30) days after the Date of Termination. Withrespect to the provision of Other Benefits, the term Other Benefits as used in this Section 7(b) shall include without limitation, and Feehan orFeehan’s estate and/or beneficiaries shall be entitled to receive, benefits under such plans, programs, practices and policies relating to deathor disability benefits, if any, as are applicable to Feehan on the Date of Termination.(c) Termination by the Company for Cause; Feehan’s Resignation without Good Reason. If, during the Term, the Companyshall terminate Feehan’s employment for Cause or Feehan shall resign for any reason other than for Good Reason, this Agreement shallterminate without further obligations to Feehan, other than for payment of Accrued Obligations and the timely payment or provision of OtherBenefits. Accrued Obligations shall be paid by the Company to Feehan in a lump sum in cash within thirty (30) days after the Date ofTermination.(d) Resignations. Termination of Feehan’s employment for any reason whatsoever shall constitute Feehan’s resignation asan officer of the Company, its subsidiaries and affiliates.8. Restrictive Covenants.(a) Acknowledgments.(i) Condition of Employment and Other Consideration. Feehan acknowledges and agrees that he has received goodand valuable consideration for entering into this Agreement and further acknowledges that the Company would not continue to employFeehan in the absence of his execution of and compliance with this Section 8.(ii) Access to Confidential Information, Relationships, and Goodwill. Feehan acknowledges and agrees that he isbeing provided and entrusted with Confidential Information (as that term is defined in Section 8(b) hereof), including highly confidentialcustomer information that is subject to extensive measures to maintain its secrecy within the Company, is not known in the trade or disclosedto the public, and would materially harm the Company’s legitimate business interests if it was disclosed or used in violation of thisAgreement. Feehan also acknowledges and agrees that he is being provided and entrusted with access to the Company’s customer andemployee relationships and goodwill. Feehan further acknowledges and agrees that the Company would not provide access to theConfidential Information, customer and employee relationships, and goodwill in the absence of Feehan’s execution of and compliance withthis Agreement. Feehan further acknowledges and agrees that the Company’s Confidential Information, customer and employeerelationships, and goodwill are valuable assets of the Company and are legitimate business interests that are properly subject to protectionthrough the covenants contained in this Agreement.6(iii) Potential Unfair Competition. Feehan acknowledges and agrees that as a result of his employment with theCompany, his knowledge of and access to Confidential Information, and his relationships with the Company’s customers and employees,Feehan would have an unfair competitive advantage if Feehan were to engage in activities in violation of this Section 8.(iv) No Undue Hardship. Feehan acknowledges and agrees that, in the event that his employment with theCompany terminates, Feehan possesses marketable skills and abilities that will enable him to find suitable employment without violating thecovenants set forth in this Section 8.(v) Voluntary Execution. Feehan acknowledges and affirms that he is executing this Agreement voluntarily, that hehas read this Agreement carefully and had a full and reasonable opportunity to consider this Agreement (including an opportunity to consultwith legal counsel), and that he has not been pressured or in any way coerced, threatened or intimidated into signing this Agreement.(vi) Geographic Scope of Service. Feehan acknowledges and agrees that, by virtue of his senior executive statuswith the Company and his substantial access to Confidential Information, customer and employee relationships, and goodwill describedabove, he will engage in business on behalf of the Company throughout the entire geographic area in which the Company conducts business,including but not limited to the Restricted Territory (as that term is defined in Section 8(b) hereof). (b) Definitions. The following capitalized terms used in this Section 8 shall have the meanings assigned to them below,which definitions shall apply to both the singular and the plural forms of such terms:(i) “Competitive Services” means owning and/or operating retail-based pawn stores or retail-based short-termconsumer loan stores, as well as the business of providing any other activities, products, or services of the type conducted, authorized,offered, or provided by the Company and comprising more than 5% of the Company’s total revenues as of Feehan’s Termination Date, orduring the two (2) years immediately prior to Feehan’s Termination Date.(ii) “Confidential Information” means any and all data and information relating to the Company, its activities,business, or clients that (A) is or has been disclosed to Feehan or of which Feehan becomes or has become aware as a consequence of hisemployment with the Company; (B) has value to the Company; and (C) is not generally known outside of the Company. “ConfidentialInformation” shall include, but is not limited to the following types of information regarding, related to, or concerning the Company: tradesecrets (as defined by O.C.G.A. § 10-1-761); financial plans and data; management planning information; business plans; operationalmethods; market studies; marketing plans or strategies; pricing information; product development techniques or plans; customer lists;customer files, data and financial information; details of customer contracts; current and anticipated customer requirements; identifying andother information pertaining to business referral sources; past, current and planned research and development; computer aided systems,software, strategies and programs; business acquisition plans; management organization and related information (including, withoutlimitation, data and other information concerning the compensation and benefits paid to officers, directors, employees and management);personnel and compensation policies; new personnel acquisition plans; and other similar information. “Confidential Information” alsoincludes combinations of information or materials which individually may be generally known outside of the Company, but for which thenature, method, or procedure for combining such information or materials is not generally known outside of the Company. In addition to dataand information relating to the Company, “Confidential Information” also includes any and all data and information relating to or concerninga third party that otherwise meets the definition set forth above, that was provided or made7available to the Company by such third party, and that the Company has a duty or obligation to keep confidential. This definition shall notlimit any definition of “confidential information” or any equivalent term under state or federal law. “Confidential Information” shall notinclude information that has become generally available to the public by the act of one who has the right to disclose such information withoutviolating any right or privilege of the Company.(iii) “Material Contact” means contact between Feehan and a customer or potential customer of the Company (A)with whom or which Feehan has or had dealings on behalf of the Company; (B) whose dealings with the Company are or were coordinated orsupervised by Feehan; (C) about whom Feehan obtains Confidential Information in the ordinary course of business as a result of hisemployment with the Company; or (D) who receives products or services of the Company, the sale or provision of which results or resulted incompensation, commissions, or earnings for Feehan within the two (2) years prior to Feehan’s Termination Date.(iv) “Person” means any individual or any corporation, partnership, joint venture, limited liability company,association or other entity or enterprise.(v) “Principal or Representative” means a principal, owner, partner, shareholder, joint venturer, investor, member,trustee, director, officer, manager, employee, agent, representative or consultant.(vi) “Protected Customer” means any Person to whom the Company has sold its products or services or activelysolicited to sell its products or services, and with whom Feehan has had Material Contact on behalf of the Company during his employmentwith the Company.(vii) “Protected Work” means any and all ideas, inventions, formulas, Confidential Information, source codes,object codes, techniques, processes, concepts, systems, programs, software, software integration techniques, hardware systems, schematics,flow charts, computer data bases, client lists, trademarks, service marks, brand names, trade names, compilations, documents, data, notes,designs, drawings, technical data and/or training materials, including improvements thereto or derivatives therefrom, whether or notpatentable, and whether or not subject to copyright or trademark or trade secret protection, conceived, developed or produced by Feehan, orby others working with Feehan or under his direction, during the period of his employment or service, or conceived, produced or used orintended for use by or on behalf of the Company or its customers.(viii) “Restricted Period” means any time during Feehan’s employment with the Company, and if Feehan’semployment is terminated for any reason during the Term, the Restricted Period shall mean during Feehan’s employment plus twenty-four(24) months following the Termination Date.(ix) “Restricted Territory” means the U.S. states and foreign countries in which the Company maintains one ormore retail pawn stores or is actively planning to open one or more stores at the time of the conduct in question (if the conduct occurs whileFeehan is still employed by the Company) or the Termination Date (if the conduct occurs after Feehan’s Termination), as applicable.(x) “Restrictive Covenants” means the restrictive covenants contained in subsections (c) through (h) of this Section8.(xi) “Termination” means the termination of Feehan’s employment with the Company, for any reason, whetherwith or without cause, upon the initiative of either party.8(xii) “Termination Date” means the date of Feehan’s Termination.(c) Restriction on Disclosure and Use of Confidential Information. Feehan agrees that he shall not, directly or indirectly,use any Confidential Information on his own behalf or on behalf of any Person other than Company, or reveal, divulge, or disclose anyConfidential Information to any Person not expressly authorized by the Company to receive such Confidential Information. This obligationshall remain in effect for as long as the information or materials in question retain their status as Confidential Information. Feehan furtheragrees that he shall fully cooperate with the Company in maintaining the Confidential Information to the extent permitted by law. The partiesacknowledge and agree that this Agreement is not intended to, and does not, alter either the Company’s rights or Feehan’s obligations underany state or federal statutory or common law regarding trade secrets and unfair trade practices. Anything herein to the contrarynotwithstanding, Feehan shall not be restricted from disclosing information that is required to be disclosed by law, court order or other validand appropriate legal process; provided, however, that in the event such disclosure is required by law, Feehan shall provide the Companywith prompt notice of such requirement so that the Company may seek an appropriate protective order prior to any such required disclosureby Feehan.(d) Non-Competition. Feehan agrees that during the Restricted Period, he will not, without prior written consent of theCompany, directly or indirectly (i) carry on or engage in Competitive Services within the Restricted Territory on his own or on behalf of anyPerson or any Principal or Representative of any Person, or (ii) own, manage, operate, join, control or participate in the ownership,management, operation or control, of any business, whether in corporate, proprietorship or partnership form or otherwise where such businessis engaged in the provision of Competitive Services within the Restricted Territory. Feehan acknowledges that the Restricted Territory isreasonable. Notwithstanding the foregoing, Feehan may maintain or undertake purely passive investments on behalf of himself, hisimmediate family or any trust on behalf of himself or his immediate family in companies engaged in a Competitive Services so long as theaggregate interest represented by such investments does not exceed 1% of any class of the outstanding publicly traded debt or equitysecurities of any company engaged in a Competitive Services.(e) Non-Solicitation of Protected Customers. Feehan agrees that during the Restricted Period, he shall not, without the priorwritten consent of the Company, directly or indirectly, on his own behalf or as a Principal or Representative of any Person, solicit, divert,take away, or attempt to solicit, divert, or take away a Protected Customer for the purpose of engaging in, providing, or selling CompetitiveServices.(f) Non-Recruitment of Employees. Feehan agrees that during the Restricted Period, he shall not, directly or indirectly,whether on his own behalf or as a Principal or Representative of any Person, solicit or induce or attempt to solicit or induce any employee ofthe Company to terminate his employment relationship with the Company or to enter into employment with Feehan or any other Person.(g) Proprietary Rights.(i) Ownership and Assignment of Protected Works. Feehan agrees that any and all Confidential Information andProtected Works are the sole property of the Company, and that no compensation in addition to Feehan’s base salary is due to Feehan fordevelopment or transfer of such Protected Works. Feehan agrees that he shall promptly disclose in writing to the Company the existence ofany Protected Works. Feehan hereby assigns all of his rights, title and interest in any and all Protected Works, including all patents or patentapplications, and all copyrights therein, to the Company. Feehan shall not be entitled to use Protected Works for his own benefit or thebenefit of anyone except the Company without written permission from the Company and then only subject to the terms of such permission.Feehan further agrees that he will communicate to the Company any facts known to him and testify in any legal proceedings,9sign all lawful papers, make all rightful oaths, execute all divisionals, continuations, continuations-in-part, foreign counterparts, or reissueapplications, all assignments, all registration applications, and all other instruments or papers to carry into full force and effect theassignment, transfer, and conveyance hereby made or to be made and generally do everything possible for title to the Protected Works and allpatents or copyrights or trademarks or service marks therein to be clearly and exclusively held by the Company. Feehan agrees that he willnot oppose or object in any way to applications for registration of Protected Works by the Company or others designated by the Company.Feehan agrees to exercise reasonable care to avoid making Protected Works available to any third party and shall be liable to the Companyfor all damages and expenses, including reasonable attorneys’ fees, if Protected Works are made available to third parties by him without theexpress written consent of the Company.Anything herein to the contrary notwithstanding, Feehan will not be obligated to assign to the Company anyProtected Work for which no equipment, supplies, facilities, or Confidential Information of the Company was used and which was developedentirely on Feehan’s own time, unless (a) the invention relates (i) directly to the business of the Company, or (ii) to the Company’s actual ordemonstrably anticipated research or development; or (b) the invention results from any work performed by Feehan for the Company. Feehanlikewise will not be obligated to assign to the Company any Protected Work that is conceived by Feehan after the he leaves the employ orservice of the Company, except that Feehan is so obligated if the same relates to or is based on Confidential Information to which Feehan hadaccess by virtue of his employment with the Company. Similarly, Feehan will not be obligated to assign any Protected Work to the Companythat was conceived and reduced to practice prior to his employment, regardless of whether such Protected Work relates to or would be usefulin the business of the Company. Feehan acknowledges and agrees that there are no Protected Works conceived and reduced to practice byhim prior to his employment with the Company.(ii) No Other Duties. Feehan acknowledges and agrees that there is no other contract or duty on his part now inexistence to assign Protected Works to anyone other than the Company.(iii) Works Made for Hire. The Company and Feehan acknowledge that in the course of his employment with theCompany, Feehan may from time to time create for the Company copyrightable works. Such works may consist of manuals, pamphlets,instructional materials, computer programs, software, software integration techniques, software codes, and data, technical data, photographs,drawings, logos, designs, artwork or other copyrightable material, or portions thereof, and may be created within or without the Company’sfacilities and before, during or after normal business hours. All such works related to or useful in the business of the Company arespecifically intended to be works made for hire by Feehan, and Feehan shall cooperate with the Company in the protection of the Company’scopyrights in such works and, to the extent deemed desirable by the Company, the registration of such copyrights.(h) Return of Materials. Feehan agrees that he will not retain or destroy (except as set forth below), and will immediatelyreturn to the Company on or prior to the Termination Date, or at any other time the Company requests such return, any and all property of theCompany that is in his possession or subject to his control, including, but not limited to, keys, credit and identification cards, personal itemsor equipment, customer files and information, papers, drawings, notes, manuals, specifications, designs, devices, code, email, documents,diskettes, CDs, tapes, keys, access cards, credit cards, identification cards, computers, mobile devices, other electronic media, all other filesand documents relating to the Company and its business (regardless of form, but specifically including all electronic files and data of theCompany), together with all Protected Works and Confidential Information belonging to the Company or that Feehan received from orthrough his employment or service with the Company. Feehan will not make, distribute, or retain copies of any such information or property.To the extent that Feehan has electronic files or10information in his possession or control that belong to the Company, contain Confidential Information, or constitute Protected Works(specifically including but not limited to electronic files or information stored on personal computers, mobile devices, electronic media, or incloud storage), on or prior to the Termination Date, or at any other time the Company requests, Feehan shall (A) provide the Company withan electronic copy of all of such files or information (in an electronic format that readily accessible by the Company); (B) after doing so,delete all such files and information, including all copies and derivatives thereof, from all non-Company-owned computers, mobile devices,electronic media, cloud storage, or other media, devices, or equipment, such that such files and information are permanently deleted andirretrievable; and (C) provide a written certification to the Company that the required deletions have been completed and specifying the filesand information deleted and the media source from which they were deleted. Feehan agrees that he will reimburse the Company for all of itscosts, including reasonable attorneys’ fees, of recovering the above materials and otherwise enforcing compliance with this provision if hedoes not return the materials to the Company or take the required steps with respect to electronic information or files on or prior to theTermination Date or at any other time the materials and/or electronic file actions are requested by the Company or if Feehan otherwise failsto comply with this provision.(i) Enforcement of Restrictive Covenants. (i) Rights and Remedies Upon Breach. The parties specifically acknowledge and agree that the remedy at law forany breach of the Restrictive Covenants will be inadequate, and that in the event Feehan breaches, or threatens to breach, any of theRestrictive Covenants, the Company shall have the right and remedy, without the necessity of proving actual damage or posting any bond, toenjoin, preliminarily and permanently, Feehan from violating or threatening to violate the Restrictive Covenants and to have the RestrictiveCovenants specifically enforced by any court of competent jurisdiction, it being agreed that any breach or threatened breach of the RestrictiveCovenants would cause irreparable injury to the Company and that money damages would not provide an adequate remedy to the Company.Feehan understands and agrees that if he violates any of the obligations set forth in the Restrictive Covenants, the period of restrictionapplicable to each obligation violated shall cease to run during the pendency of any litigation over such violation, provided that suchlitigation was initiated during the period of restriction. Such rights and remedies shall be in addition to, and not in lieu of, any other rights andremedies available to the Company at law or in equity. Feehan understands and agrees that, if the Parties become involved in legal actionregarding the enforcement of the Restrictive Covenants and if the Company prevails in such legal action, the Company will be entitled, inaddition to any other remedy, to recover from Feehan its reasonable costs and attorneys’ fees incurred in enforcing such covenants. TheCompany’s ability to enforce its rights under the Restrictive Covenants or applicable law against Feehan shall not be impaired in any way bythe existence of a claim or cause of action on the part of Feehan based on, or arising out of, this Agreement or any other event or transaction.(ii) Severability and Modification of Covenants. Feehan acknowledges and agrees that each of the RestrictiveCovenants is reasonable and valid in time and scope and in all other respects. The parties agree that it is their intention that the RestrictiveCovenants be enforced in accordance with their terms to the maximum extent permitted by law. Each of the Restrictive Covenants shall beconsidered and construed as a separate and independent covenant. Should any part or provision of any of the Restrictive Covenants be heldinvalid, void, or unenforceable, such invalidity, voidness, or unenforceability shall not render invalid, void, or unenforceable any other part orprovision of this Agreement or such Restrictive Covenant. If any of the provisions of the Restrictive Covenants should ever be held by acourt of competent jurisdiction to exceed the scope permitted by the applicable law, such provision or provisions shall be automaticallymodified to such lesser scope as such court may deem just and proper for the reasonable protection of the Company’s legitimate businessinterests and may be enforced by the Company11to that extent in the manner described above and all other provisions of this Agreement shall be valid and enforceable.(j) Disclosure of Agreement. Feehan acknowledges and agrees that, during Restricted Period, he will disclose the existenceand terms of this Agreement to any prospective employer, business partner, investor or lender prior to entering into an employment,partnership or other business relationship with such prospective employer, business partner, investor or lender. Feehan further agrees that theCompany shall have the right to make any such prospective employer, business partner, investor or lender of Feehan aware of the existenceand terms of this Agreement.9. Agreement Not to Disparage. Feehan hereby agrees that at all times after the date hereof he will not make any statement,whether verbally or in written form, or otherwise take any action that may reasonably be considered to disparage or impugn the Company orany of its subsidiaries or affiliates; the management, practices, services, or reputation of the Company or any of its subsidiaries or affiliates;or any of the Company’s or any of its subsidiaries’ or affiliates’ employees, officers, directors, agents, or affiliates. Notwithstanding theforegoing, this Section 9 shall not limit the rights of Feehan to provide truthful testimony or make truthful statements which are compelled bya court of competent jurisdiction, arbitrator, regulatory agency or other tribunal or investigative body in accordance with any applicablestatute, rule or regulation.10. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit Feehan’s continuing or future participation in anyemployee benefit plan, program, policy or practice provided by the Company or its affiliated companies and for which Feehan may qualify,except as specifically provided herein. Amounts that are vested benefits or which Feehan is otherwise entitled to receive under any plan,policy, practice or program of the Company or any of its affiliated companies at or subsequent to the Date of Termination shall be payable inaccordance with such plan, policy, practice or program except as explicitly modified by this Agreement.11. Full Settlement; No Mitigation. The Company’s obligation to make the payments provided for in this Agreement and otherwiseto perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or actionwhich the Company may have against Feehan or others. In no event shall Feehan be obligated to seek other employment or take any otheraction by way of mitigation of the amounts payable to Feehan under any of the provisions of this Agreement and such amounts shall not bereduced whether or not Feehan obtains other employment.12. Mandatory Reduction of Payments in Certain Events.(a) Notwithstanding anything in this Agreement to the contrary, in the event it shall be determined that any payment ordistribution by the Company to or for the benefit of Feehan (whether paid or payable or distributed or distributable pursuant to the terms ofthis Agreement or otherwise) (such benefits, payments or distributions are hereinafter referred to as “Payments”) would, if paid, be subject tothe excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then, prior to the making of any Payments to Feehan, a calculationshall be made comparing (i) the net after-tax benefit to Feehan of the Payments after payment by Feehan of the Excise Tax, to (ii) the netafter-tax benefit to Feehan if the Payments had been limited to the extent necessary to avoid being subject to the Excise Tax. If the amountcalculated under (i) above is less than the amount calculated under (ii) above, then the Payments shall be limited to the extent necessary toavoid being subject to the Excise Tax (the “Reduced Amount”). The reduction of the Payments due hereunder, if applicable, shall be made byfirst reducing cash Payments and then, to the extent necessary, reducing those Payments having the next highest ratio of Parachute Value toactual present value of such Payments as of the date of the Change in Control, as determined by the Determination Firm (as defined in12Section 9(b) below). For purposes of this Section 12, present value shall be determined in accordance with Section 280G(d)(4) of the Code.For purposes of this Section 12, the “Parachute Value” of a Payment means the present value as of the date of the Change in Control of theportion of such Payment that constitutes a “parachute payment” under Section 280G(b)(2) of the Code, as determined by the DeterminationFirm for purposes of determining whether and to what extent the Excise Tax will apply to such Payment.(b) All determinations required to be made under this Section 12, including whether an Excise Tax would otherwise beimposed, whether the Payments shall be reduced, the amount of the Reduced Amount, and the assumptions to be utilized in arriving at suchdeterminations, shall be made by a nationally recognized accounting firm or compensation consulting firm mutually acceptable to theCompany and Feehan (the “Determination Firm”) which shall provide detailed supporting calculations to the Company and Feehan within 15business days after the receipt of notice from Feehan that a Payment is due to be made, or such earlier time as is requested by the Company.All fees and expenses of the Determination Firm shall be borne solely by the Company. Any determination by the Determination Firm shallbe binding upon the Company and Feehan. As a result of the uncertainty in the application of Section 4999 of the Code at the time of theinitial determination by the Determination Firm hereunder, it is possible that Payments which Feehan was entitled to, but did not receivepursuant to Section 12(a), could have been made without the imposition of the Excise Tax (“Underpayment”), consistent with thecalculations required to be made hereunder. In such event, the Determination Firm shall determine the amount of the Underpayment that hasoccurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Feehan but no later than March 15 ofthe year after the year in which the Underpayment is determined to exist, which is when the legally binding right to such Underpaymentarises.(c) In the event that the provisions of Code Section 280G and 4999 or any successor provisions are repealed withoutsuccession, this Section 12 shall be of no further force or effect.13. Arbitration. Any claim or dispute arising under or relating to this Agreement or the breach, termination, or validity of any termof this Agreement shall be subject to arbitration, and prior to commencing any court action, the parties agree that they shall arbitrate allcontroversies; provided, however, that nothing in this Section 13 shall prohibit the Company from exercising its right under Section 8 topursue injunctive remedies with respect to a breach or threatened breach of the Restrictive Covenants. The arbitration shall be conducted inTarrant County, Texas, in accordance with the Employment Dispute Rules of the American Arbitration Association and the FederalArbitration Act, 9 U.S.C. §1, et. seq. The arbitrator(s) shall be authorized to award both liquidated and actual damages, in addition toinjunctive relief, but no punitive damages. The arbitrator(s) may also award attorney’s fees and costs, without regard to any restriction on theamount of such award under Texas or other applicable law. Such an award shall be binding and conclusive upon the parties hereto, subject to9 U.S.C. §10. Each party shall have the right to have the award made the judgment of a court of competent jurisdiction.14. Successors.(a) This Agreement is personal to Feehan and without the prior written consent of the Company shall not be assignable byFeehan otherwise than by will or the laws of descent and distribution. Notwithstanding the foregoing, the Company may, without Feehan’sconsent, assign, whether by assignment agreement, merger, operation of law or otherwise, this Agreement to the Company or to anysuccessor or affiliate of the Company, subject to such assignee’s express assumption of all obligations of the Company hereunder. ThisAgreement shall inure to the benefit of and be enforceable by Feehan’s legal representatives.13(b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.(c) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) toall or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the samemanner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in thisAgreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid whichassumes and agrees to perform this Agreement by operation of law, or otherwise.15. Cooperation. Feehan shall provide his reasonable cooperation in connection with any action or proceeding (or any appeal fromany action or proceeding) which relates to events occurring during Feehan’s employment hereunder. This provision shall survive anytermination of this Agreement. The Company shall reimburse Feehan for any reasonable out-of-pocket expenses incurred in connection withFeehan’s performance of obligations under this Section 15 at the request of the Company. If Feehan is entitled to be paid or reimbursed forany expenses under this Section 15, the amount reimbursable in any one calendar year shall not affect the amount reimbursable in any othercalendar year, and the reimbursement of an eligible expense must be made no later than December 31 of the year after the year in which theexpense was incurred. Feehan’s obligations under this Section 15, and Feehan’s rights to payment or reimbursement of expenses pursuant tothis Section 15, shall expire at the end of ten (10) years after the Date of Termination and such rights shall not be subject to liquidation orexchange for another benefit.16. Code Section 409A.(a) General. This Agreement shall be interpreted and administered in a manner so that any amount or benefit payablehereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements Section 409A of the Code andapplicable Internal Revenue Service guidance and Treasury Regulations issued thereunder (and any applicable transition relief under Section409A of the Code). Nevertheless, the tax treatment of the benefits provided under the Agreement is not warranted or guaranteed. Neither theCompany nor its directors, officers, employees or advisers shall be held liable for any taxes, interest, penalties or other monetary amountsowed by Feehan as a result of the application of Section 409A of the Code.(b) Definitional Restrictions. Notwithstanding anything in this Agreement to the contrary, to the extent that any amount orbenefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code (“Non-Exempt DeferredCompensation”) would otherwise be payable or distributable hereunder by reason of Feehan’s termination of employment, such Non-ExemptDeferred Compensation will not be payable or distributable to Feehan by reason of such circumstance unless the circumstances giving rise tosuch termination of employment meet any description or definition of “separation from service” in Section 409A of the Code and applicableregulations (without giving effect to any elective provisions that may be available under such definition). This provision does not prohibit thevesting of any Non-Exempt Deferred Compensation upon a termination of employment, however defined. If this provision prevents thepayment or distribution of any Non-Exempt Deferred Compensation, such payment or distribution shall be made on the date, if any, on whichan event occurs that constitutes a Section 409A-compliant “separation from service.”(c) Timing of Release of Claims. Whenever in this Agreement a payment or benefit is conditioned on Feehan’s execution ofa release of claims, such release must be executed and all revocation periods shall have expired within sixty (60) days after the Date ofTermination; failing which such payment14or benefit shall be forfeited. If such payment or benefit constitutes Non-Exempt Deferred Compensation, then such payment or benefit(including any installment payments) that would have otherwise been payable during such 60-day period shall be accumulated and paid onthe 60th day after the Date of Termination provided such release shall have been executed and such revocation periods shall have expired. Ifsuch payment or benefit is exempt from Section 409A of the Code, the Company may elect to make or commence payment at any timeduring such period.(d) Permitted Acceleration. The Company shall have the sole authority to make any accelerated distribution permissibleunder Treas. Reg. Section 1.409A-3(j)(4) to Feehan of deferred amounts, provided that such distribution meets the requirements of Treas.Reg. Section 1.409A-3(j)(4).17. Miscellaneous.(a) Governing Law; Forum Selection; Consent to Jurisdiction. The Company and Feehan agree that this Agreement shall begoverned by and construed and interpreted in accordance with the laws of the State of Texas without giving effect to its conflicts of lawprinciples. Feehan agrees that the exclusive forum for any action to enforce this Agreement, as well as any action relating to or arising out ofthis Agreement, shall be the state or federal court of the State of Texas. With respect to any such court action, Feehan hereby (a) irrevocablysubmits to the personal jurisdiction of such courts; (b) consents to service of process; (c) consents to venue; and (d) waives any otherrequirement (whether imposed by statute, rule of court, or otherwise) with respect to personal jurisdiction, service of process, or venue. Bothparties hereto further agree that such courts are convenient forums for any dispute that may arise herefrom and that neither party shall raise asa defense that such courts are not convenient forums.(b) Captions. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect.(c) Amendments. This Agreement may not be amended or modified otherwise than-by a written agreement executed by theparties hereto or their respective successors and legal representatives.(d) Notices. All notices and other communications hereunder shall be in writing and shall be given by hand delivery to theother party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:If to Feehan:Daniel R. FeehanAddress on file with the Company 15If to the Company:FirstCash, Inc.1600 West 7th StreetFort Worth, Texas 76102Attention: CEOor to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shallbe effective when actually received by the addressee.(e) Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity orenforceability of any other provision of this Agreement.(f) Withholding. The Company may withhold from any amounts payable under this Agreement such Federal, state, local orforeign taxes as shall be required to be withheld pursuant to any applicable law or regulation.(g) Waivers . Feehan’s or the Company’s failure to insist upon strict compliance with any provision of this Agreement orthe failure to assert any right Feehan or the Company may have hereunder, shall not be deemed to be a waiver of such provision or right orany other provision or right of this Agreement.(h) Entire Agreement. Except as provided herein, this Agreement contains the entire agreement between the Company andFeehan with respect to the subject matter hereof and, from and after the Effective Date, this Agreement shall supersede any other agreement(including the Original Employment Agreement) between the parties with respect to the subject matter hereof.(i) Construction. The Company and Feehan understand and agree that because they both have been given the opportunity tohave counsel review and revise this Agreement, the normal rule of construction to the effect that any ambiguities are to be resolved againstthe drafting party shall not be employed in the interpretation of this Agreement. Instead, the language of all parts of this Agreement shall beconstrued as a whole, and according to its fair meaning, and not strictly for or against either of the parties.(j) Counterparts. This Agreement may be executed in two or more counterparts, and it shall not be necessary that thesignatures of the parties hereto be contained on any one counterpart hereof. Each counterpart shall be deemed an original but all counterpartstogether shall constitute one and the same instrument. Any signature page of any such counterpart, or any electronic facsimile thereof, maybe attached or appended to any other counterpart to complete a fully executed counterpart of this Agreement, and any telecopy or otherelectronic transmission of any signature shall be deemed an original and shall bind such party.(Signatures on following page)16IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of the date first above written. __________________________________ Daniel R. Feehan FIRSTCASH, INC. By:_______________________________ Rick L. Wessel Chief Executive Officer 17EXHIBIT 21.1FIRSTCASH, INC.SUBSIDIARIESSubsidiary NameCountry/State of FormationPercentageOwnedBy RegistrantFirstCash, Inc.Delaware100%First Cash, Inc.Nevada100%Famous Pawn, 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, LLCTexas100%FCFS Corp.Delaware100%First Cash Credit Management, LLCTexas100%First Cash Credit, Ltd.Texas100%Pawn TX, Inc.Texas100%First Cash Management, LLCDelaware100%LWC, LLCKentucky100%FCFS KY, Inc.Kentucky100%LTS, IncorporatedColorado100%Mister Money 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%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%Maxi Realice Guatemala S.A. de C.V.Guatemala100%First Cash SV, Limitada de C.V.El Salvador100%First Cash Colombia, LTDAColombia100%Maxi Prenda Honduras, S.A. de C.V.Honduras100%FIRSTCASH, INC.SUBSIDIARIES(CONTINUED)Subsidiary 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)Mexico100%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, 333-214452, and 333-234350 on Form S-8 of our reports, dated February 3, 2020, relating to the consolidated financialstatements of FirstCash, Inc. as of December 31, 2019 and 2018, and for the three years ended December 31, 2019, and to the effectiveness of internal control overfinancial reporting as of December 31, 2019, appearing in this Annual Report on Form 10-K of FirstCash, Inc./s/ RSM US LLPDallas, TexasFebruary 3, 2020EXHIBIT 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 thestatements made, in light 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 thefinancial 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 inExchange Act Rules 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)) forthe Registrant and have:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during 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 oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;c.Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure 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 recentfiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the Registrant's internal 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 theRegistrant's auditors 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 reasonablylikely to adversely 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 controlover financial reporting.Date: February 3, 2020/s/ Rick L. WesselRick L. WesselChief Executive OfficerEXHIBIT 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 thestatements made, in light 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 thefinancial 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 inExchange Act Rules 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)) forthe Registrant and have:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during 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 oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;c.Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure 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 recentfiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the Registrant's internal 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 theRegistrant's auditors 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 reasonablylikely to adversely 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 controlover financial reporting.Date: February 3, 2020/s/ R. Douglas OrrR. Douglas OrrChief Financial OfficerEXHIBIT 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, 2019, as filed with the Securities andExchange Commission 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 to Section 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 theCompany.Date: February 3, 2020/s/ Rick L. WesselRick L. WesselChief Executive OfficerEXHIBIT 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, 2019, as filed with the Securities andExchange Commission 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 to Section 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 theCompany.Date: February 3, 2020/s/ R. Douglas OrrR. Douglas OrrChief Financial Officer

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