World Acceptance
Annual Report 2015

Plain-text annual report

Morningstar® Document Research℠ FORM 10-KWORLD ACCEPTANCE CORP - WRLDFiled: June 02, 2015 (period: March 31, 2015)Annual report with a comprehensive overview of the companyThe information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The userassumes all risks for any damages or losses arising from any use of this information, except to the extent such damages or losses cannot belimited or excluded by applicable law. Past financial performance is no guarantee of future results. UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549 __________________________________Form 10-K__________________________________ (Mark One)x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 31, 2015OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OFTHE SECURITIES EXCHANGE ACT OF 1934For the transition period from _______________ to _____________Commission file number 0-19599WORLD ACCEPTANCE CORPORATION(Exact name of registrant as specified in its charter) South Carolina 570425114 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 108 Frederick Street Greenville, South Carolina 29607 (Address of principal executive offices) (Zip Code) (864) 298-9800 (Registrant's telephone number, including area code) SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: Title of Each Class Name of Each Exchange on Which Registered Common Stock, no par value The NASDAQ Stock Market LLC (NASDAQ Global Select Market) SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No xIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes o No xIndicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or Section 15(d) of the Securities Exchange Act of1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filingrequirements for the past 90 days. Yes x No oIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required tobe submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required tosubmit and post such files). Yes x No oIndicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the bestof registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form10-K. oIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See theSource: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): Large Accelerated filer oAccelerated filer x Non-accelerated filer oSmaller reporting company o (Do not check if smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No xThe aggregate market value of voting stock held by non-affiliates of the registrant as of September 30, 2014, computed by reference to the closing sale priceon such date, was $444,563,910. (For purposes of calculating this amount only, all directors and executive officers are treated as affiliates. Thisdetermination of affiliate status is not necessarily a conclusive determination for other purposes.) As of May 29, 2015, 8,992,368 shares of the registrant’sCommon Stock, no par value, were outstanding.DOCUMENTS INCORPORATED BY REFERENCEPortions of the Registrant's definitive Proxy Statement pertaining to the 2015 Annual Meeting of Shareholders ("the Proxy Statement") and filed pursuant toRegulation 14A are incorporated herein by reference into Part III hereof. Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.WORLD ACCEPTANCE CORPORATIONForm 10-K ReportTable of Contents Item No.Page PART I 1.Business2 1A.Risk Factors13 1B.Unresolved Staff Comments22 2.Properties22 3.Legal Proceedings22 4.Mine Safety Disclosures23 PART II 5.Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities23 6.Selected Financial Data25 7.Management's Discussion and Analysis of Financial Condition and Results of Operations25 7A.Quantitative and Qualitative Disclosures About Market Risk36 8.Financial Statements and Supplementary Data38 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure71 9A.Controls and Procedures71 9B.Other Information72 PART III 10.Directors, Executive Officers and Corporate Governance73 11.Executive Compensation73 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters73 13.Certain Relationships and Related Transactions, and Director Independence73 14.Principal Accountant Fees and Services73 PART IV 15.Exhibits and Financial Statement Schedules74Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsIntroduction World Acceptance Corporation, a South Carolina corporation, operates a small-loan consumer finance business in fifteen states and Mexico as of March 31,2015. As used herein, the "Company,” “we,” “our,” “us,” or similar formulations include World Acceptance Corporation and each of its subsidiaries, exceptas the context otherwise requires or when used with reference to the Common Stock or other securities described herein and in describing the positions heldby management or agreements of the Company, it includes only World Acceptance Corporation. All references in this report to “fiscal 2016” are to theCompany’s fiscal year that will end on March 31, 2016; all references in this report to "fiscal 2015" are to the Company's fiscal year ended March 31, 2015;all references to “fiscal 2014” are to the Company’s fiscal year ending March 31, 2014; and all references to “fiscal 2013” are to the Company’s fiscal yearending March 31, 2013.The Company maintains an Internet website, “www.worldacceptance.com,” where interested persons will be able to access free of charge, among otherinformation, the Company’s annual reports on Form 10-K, its quarterly reports on Form 10-Q, and its current reports on Form 8-K, as well as amendments tothese filings, via a link to a third party website. These documents are available for access as soon as reasonably practicable after we electronically file thesedocuments with the Securities and Exchange Commission (“SEC”). The Company files these reports with the SEC via the SEC’s EDGAR filing system, andsuch reports also may be accessed via the SEC’s EDGAR database at www.sec.gov. The Company will also provide either electronic or paper copies free ofcharge upon written request to P.O. Box 6429, Greenville, SC 29606-6429. Information included on or linked to our website is not incorporated by referenceinto this annual report.PART I.Item 1. Description of BusinessGeneral. The Company is one of the nation's largest small-loan consumer finance companies, offering short-term small installment loans, medium-term largerinstallment loans, related credit insurance and ancillary products and services to individuals. The Company offers standardized installment loans generallybetween $300 and $4,000 through 1,320 branches in Alabama, Georgia, Idaho, Illinois, Indiana, Kentucky, Louisiana, Mississippi, Missouri, New Mexico,Oklahoma, South Carolina, Texas, Tennessee, Wisconsin and Mexico as of March 31, 2015. The Company generally serves individuals with limited accessto other sources of consumer credit, such as banks, credit unions, other consumer finance businesses and credit card lenders. In our U.S. branches, theCompany also offers income tax return preparation services to its customers and other individuals.The small-loan consumer finance industry is a highly fragmented segment of the consumer lending industry. Small-loan consumer finance companiesgenerally make loans to individuals of less than $2,000 with maturities of 18 months or less. These companies approve loans on the basis of the personalcreditworthiness of their customers and maintain close contact with borrowers to encourage the repayment or when appropriate to meet the borrower’s needs,the refinancing of loans. By contrast, commercial banks, credit unions and other consumer finance businesses typically make loans of more than $5,000 withmaturities of more than one year. Those financial institutions generally approve consumer loans on the security of qualifying personal property pledged ascollateral or impose more stringent credit requirements than those of small-loan consumer finance companies. As a result of their higher credit standards andspecific collateral requirements, commercial banks, savings and loans and other consumer finance businesses typically charge lower interest rates and feesand experience lower delinquency and charge-off rates than do small-loan consumer finance companies. Small-loan consumer finance companies generallycharge higher interest rates and fees to compensate for the greater credit risk of delinquencies and charge-offs and increased loan administration andcollection costs.The majority of the participants in the industry are independent operators with generally less than 100 branches. We believe that competition between small-loan consumer finance companies occurs primarily on the basis of the strength of customer relationships, customer service and reputation in the localcommunity, rather than pricing, as participants in this industry generally charge interest rates and fees at, or close to, the maximum permitted by applicablestate laws. We believe that our relatively large size affords us a competitive advantage over smaller companies by increasing our access to, and reducing ourcost of, capital. In addition, ParaData, our in-house integrated computer system, provides data processing at a substantially reduced cost relative to themajority of our competitors.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsSmall-loan consumer finance companies are subject to extensive regulation, supervision and licensing under various federal and state statutes, ordinancesand regulations. Consumer loan offices are licensed under state laws, which, in many states, establish maximum loan amounts and interest rates and the typesand maximum amounts of fees and other charges. In addition, state laws govern other aspects of the operation of small-loan consumer finance companies.Periodically, constituencies within states seek to enact stricter regulations that would affect our business. Furthermore, the industry is subject to numerousfederal laws and regulations that affect lending operations. These federal laws require companies to provide complete disclosure of the principal terms of eachloan to the borrower in accordance with specified standards prior to the consummation of the loan transaction. Federal laws also prohibit misleadingadvertising, protect against discriminatory lending practices and proscribe unfair, deceptive or abusive credit practices.Expansion. During fiscal 2015, the Company opened 69 new branches. Two branches were purchased and 22 branches were merged into existing branchesdue to their inability to grow to profitable levels. In fiscal 2016, the Company currently plans to open or acquire at least 30 new branches in the UnitedStates by increasing the number of branches in its existing market areas or commencing operations in new states where it believes demographic profiles andstate regulations are attractive. In addition, the Company plans to open approximately 10 new branches in Mexico in fiscal 2016. The Company's ability tocontinue existing operations and expand its operations in existing or new states is dependent upon, among other things, laws and regulations that permit theCompany to operate its business profitably and its ability to obtain necessary regulatory approvals and licenses; however, there can be no assurance that suchlaws and regulations will not change in ways that adversely affect the Company or that the Company will be able to obtain any such approvals orconsents. See Part 1, Item 1A, “Risk Factors” for a further discussion of risks to our business and plans for expansion.The Company's expansion is also dependent upon its ability to identify attractive locations for new branches and to hire suitable personnel to staff, manageand supervise new branches. In evaluating a particular community, the Company examines several factors, including the demographic profile of thecommunity, the existence of an established small-loan consumer finance market and the availability of suitable personnel to staff, manage and supervise thenew branches. The Company generally locates new branches in communities already served by at least one other small-loan consumer finance company.The following table sets forth the number of branches of the Company at the dates indicated: At March 31,State 2006200720082009201020112012201320142015South Carolina 688992939597979810199Georgia 749697100101103105108110113Texas 168183204223229247262279297300Oklahoma 58627080828282828383Louisiana 24283438384044474849Tennessee 6172809295103105105105107Illinois 37405861646875818282Missouri 38444957626672767678New Mexico 22273237394444444444Kentucky 41455258616670717679Alabama 26313542445162646868Wisconsin (1) —————514212628Indiana (2) ———————81722Mississippi (3) ————————512Idaho (4) —————————8Mexico 31535638095105119133148Total 6207328389449901,0671,1371,2031,2711,320 (1)The Company commenced operations in Wisconsin in December 2010.(2)The Company commenced operations in Indiana in September 2012.(3)The Company commenced operations in Mississippi in September 2013.(4)The Company commenced operations in Idaho in October 2014.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsLoan and Other Products. In each state in which we operate, as well as in Mexico, we primarily offer pre-computed consumer installment loans that arestandardized by amount and maturity. Our loans are payable in fully-amortizing monthly installments with terms generally from 6 to 36 months, and areprepayable at any time without penalty. In fiscal 2015, the Company's average originated gross loan size and term were approximately $1,374 and 13months, respectively. As of March 31, 2015, small loans generated in our U.S. branches averaged $912, ranged in size from $200 to $3,600 and had anaverage term of 10 months. Large loans originated in the U.S. averaged $3,275, ranged from $1,500 to $13,500 and were outstanding an average of 23months. State laws regulate various aspects of lending terms, including the maximum loan amounts, the types and maximum amounts of fees and other coststhat may be charged, and, in most cases, interest rates. In addition to installment loans, we also offer payroll deduct loans in Mexico. Payroll deduct loans areoriginated through state unions and exhibit lower loss rates than installment loans. As of March 31, 2015, payroll deduct loans originated in our Mexicobranches averaged $1,790, ranged in size from $328 to $7,878 and had an average term of 33 months. Installment loans originated in Mexico averaged $467,ranged from $263 to $1,313 and were outstanding an average of 12 months.Specific allowable interest, fees and other charges vary by state and, consistent with industry practice, we generally charge at, or close to, the maximum ratesallowable under applicable state law in those states that limit loan rates. The finance charge is a combination of origination or acquisition fees, accountmaintenance fees, monthly account handling fees, interest and other charges permitted by the relevant state laws. As of March 31, 2015, the annualpercentage rates on loans we offer in the U.S., including interest, fees and other charges as calculated in accordance with the Federal Truth in Lending Act,ranged from 25% to 199%, depending on the loan size, maturity and the state in which the loan was made.As of March 31, 2015, annual percentage rates applicable to our gross loans receivable, as defined by the Truth in Lending Act were as follows:Low High US Mexico Total Percentage of totalgross loansreceivable25% 36% $259,736,379 $— $259,736,379 23.4%37% 50% $259,847,905 $514,504 260,362,409 23.5%51% 60% $114,634,538 $6,594,880 121,229,418 10.9%61% 70% $62,219,111 $33,474,681 95,693,792 8.6%71% 80% $40,021,226 $986,190 41,007,416 3.7%81% 90% $154,568,459 $2,172,413 156,740,872 14.1%91% 100% $65,297,291 $4,059,343 69,356,634 6.2%101% 150% $51,328,671 $46,471,405 97,800,076 8.8%151% 199% 8,218,086 — 8,218,086 0.7% $1,015,871,666 $94,273,416 $1,110,145,082 100%The Company, as an agent for an unaffiliated insurance company, markets and sells credit life, credit accident and health, credit property, and unemploymentinsurance in connection with its loans in selected states where the sale of such insurance is permitted by law. Credit life insurance provides for the paymentin full of the borrower's credit obligation to the lender in the event of death. Credit accident and health insurance provides for repayment of loan installmentsto the lender that come due during the insured's period of income interruption resulting from disability from illness or injury. Credit property insuranceinsures payment of the borrower's credit obligation to the lender in the event that the personal property pledged as security by the borrower is damaged ordestroyed by a covered event. Unemployment insurance provides for repayment of loan installments to the lender that come due during the insured’s periodof involuntary unemployment. The Company offers credit insurance for all loans originated in Georgia, South Carolina, Louisiana, Indiana, Kentucky, andMississippi and on a more limited basis in Alabama, Tennessee, Oklahoma, and Texas. Customers in those states typically obtain such credit insurancethrough the Company. Charges for such credit insurance are made at filed authorized rates and are stated separately in the Company's disclosure tocustomers, as required by the Truth in Lending Act and by various applicable state laws. In the sale of insurance policies, the Company, as an agent, writespolicies only within limitations established by its agency contracts with the insurer. The Company does not sell credit insurance to non-borrowers.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsThe Company also offers automobile club memberships to its borrowers in Georgia, Tennessee, New Mexico, Louisiana, Alabama, Texas, Kentucky, Indiana,Wisconsin, and Mississippi as an agent for an unaffiliated automobile club. Club memberships entitle members to automobile breakdown, towingreimbursement and related services. The Company is paid a commission on each membership sold, but has no responsibility for administering the club,paying benefits or providing services to club members. The Company does not market automobile club memberships to non-borrowers.The table below shows the insurance types offered by the Company by state as of March 31, 2015: Credit LifeCredit Accidentand HealthCredit Property andAutoUnemploymentAutomobile ClubMembershipGeorgiaXXX XSouth CarolinaXXXX Texas (1)XXXXXOklahoma (1)XXXX LouisianaXXX XTennessee (1)XXXXXIdaho Illinois Missouri New Mexico (1)XX XKentuckyXXXXXAlabama (1)XXX XWisconsin MississippiXXX XIndianaXXXXX (1) Credit insurance is offered for certain loans.Another service offered by the Company is income tax return preparation and electronic filing. This program is provided in all but a few of the Company’sU.S branches. The Company prepared approximately 56,000, 55,000 and 53,000 returns in each of the fiscal years 2015, 2014 and 2013, respectively. Netrevenue generated by the Company from this program during fiscal 2015, 2014 and 2013 amounted to approximately $9.9 million, $9.1 million and $8.7million, respectively. The Company believes that this is a beneficial service for its existing customer base, as well as non-loan customers, and it plans tocontinue to promote this program.The Company's World Class Buying Club program offered certain electronic products and appliances to its borrowers in Texas,Georgia, Tennessee, New Mexico, and Missouri. Borrowers participating in this program could purchase a product from a limited selection of itemsmaintained in the branches or offered through a catalog available at a branch and could finance the purchase with a retail installment sales contract providedby the Company. Other than the limited product samples maintained in the branches, products sold through this program were shipped directly by thesuppliers to the Company's customers and, accordingly, the Company was not required to maintain a large inventory to support the program. The Companydecided to wind down the World Class Buying Club product during our fiscal 2015 third quarter. As of March 31, 2015, the Company is no longer financingthe purchase of products through the program. We will continue to service the outstanding retail installment sales contracts.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsLoan Receivables. The following table sets forth the composition of the Company's gross loans receivable by state at March 31 of each year from 2006through 2015: At March 31,State 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015SouthCarolina 11% 13% 12% 11% 12% 12% 11% 11% 11% 10%Georgia 13 14 15 14 14 13 13 13 12 12Texas 24 23 22 21 20 19 19 19 19 18Oklahoma 6 5 5 6 6 7 6 6 6 7Louisiana 3 3 3 3 2 2 2 2 2 2Tennessee 15 15 14 14 14 14 14 13 12 12Illinois 5 6 6 6 6 6 7 6 7 6Missouri 6 5 6 6 6 6 6 6 6 7New Mexico 3 3 3 3 3 2 2 2 2 2Kentucky 11 9 9 9 9 9 9 9 8 9Alabama 3 3 3 4 4 4 4 4 4 5Wisconsin (1) — — — — — — 1 1 1 1Indiana (2) — — — — — — — — 1 1Mississippi (3) — — — — — — — — — —Idaho (4) — — — — — — — — — —Mexico (5) — 1 2 3 4 6 6 8 9 8Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% (1)The Company commenced operations in Wisconsin in December 2010.(2)The Company commenced operations in Indiana in September 2012.(3)The Company commenced operations in Mississippi in September 2013.(4)The Company commenced operations in Idaho in October 2014.(5)The Company commenced operations in Mexico in September 2005.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsThe following table sets forth the total number of loans, the average loan balance and the gross loan balance by state at March 31, 2015: Total Numberof Loans Average GrossLoan Balance Gross LoanBalance(thousands)South Carolina77,256 $1,482 $114,520Georgia91,649 1,446 132,553Texas205,539 959 197,059Oklahoma53,045 1,375 72,928Louisiana30,444 790 24,052Tennessee95,140 1,433 136,330Illinois44,298 1,546 68,475Missouri41,314 1,718 70,971New Mexico24,303 931 22,635Kentucky61,988 1,589 98,521Alabama51,929 939 48,766Wisconsin10,564 1,345 14,204Indiana9,553 1,308 12,498Mississippi2,719 640 1,741Idaho717 863 619Mexico117,788 800 94,273Total918,246 $1,209 $1,110,145 For fiscal 2015, 2014 and 2013, 91.4%, 91.6% and 92.7%, respectively, of the Company’s revenues were attributable to U.S. customers and 8.6%, 8.4% and7.3%, respectively, were attributable to customers in Mexico. For further information regarding potential risks associated with the Company’s operations inMexico, see Part I, Item 1A, “Risk Factors–Our continued expansion into Mexico may increase the risks inherent in conducting operations internationallyand in Mexico, contribute materially to increased costs and negatively affect our business, prospects, results of operations and financial condition,” and “–Our use of derivatives exposes us to credit and market risk,” as well as Part II, Item 7A, "Quantitative and Qualitative Disclosures about Market Risk–ForeignCurrency Exchange Rate Risk.”Seasonality. The Company's highest loan demand occurs generally from October through December, its third fiscal quarter. Loan demand is generally lowestand loan repayment highest from January to March, its fourth fiscal quarter. Consequently, the Company experiences significant seasonal fluctuations in itsoperating results and cash needs. Operating results from the Company's third fiscal quarter are generally lower than in other quarters and operating results forits fourth fiscal quarter are generally higher than in other quarters.Lending and Collection Operations. The Company seeks to provide short-term consumer installment loans to the segment of the population that has limitedaccess to other sources of credit. In evaluating the creditworthiness of potential customers, the Company primarily examines the individual's discretionaryincome, length of current employment and/or sources of income, duration of residence and prior credit experience. Loans are made to individuals on thebasis of their discretionary income and other factors and are limited to amounts we believe that customers can reasonably be expected to repay from thatincome given our assessment of their stability, ability and willingness to pay. All loan applicants are required to complete standardized credit applications inperson or by telephone at local Company branches. Each of the Company's local branches are equipped to perform rapid background, employment and creditchecks and approve loan applications promptly, often while the customer waits. The Company's employees verify the applicant's sources of income andcredit histories through telephone checks with employers, other employment references and verification with various credit bureaus. Substantially all newcustomers are required to submit a listing of personal property that will serve as collateral to secure the loan, but the Company does not rely on the value ofsuch collateral in the loan approval process and generally does not perfect its security interest in that collateral. Accordingly, if the customer were to defaultin the repayment of the loan, the Company may not be able to recover the outstanding loan balance by resorting to the sale of collateral. Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsThe Company believes that development and continual reinforcement of personal relationships with customers improve the Company's ability to monitortheir creditworthiness, reduce credit risk and generate customer loyalty. It is not unusual for the Company to have made a number of loans to the samecustomer over the course of several years, many of which were refinanced with a new loan after the borrower had reduced the existing loan's outstandingbalance by making multiple payments. In determining whether to refinance existing loans, the Company typically requires loans to be current on a recencybasis, and repeat customers are generally required to complete a new credit application if they have not completed one within the prior two years.In fiscal 2015, approximately 83.1% of the Company's loans were generated through refinancings of outstanding loans and the origination of new loans toprevious customers. A refinancing represents a new loan transaction with a present customer in which a portion of the new loan proceeds is used to repay thebalance of an existing loan and the remaining portion is advanced to the customer. The Company markets the opportunity for qualifying customers torefinance existing loans prior to maturity. In many cases the existing customer’s past performance and established creditworthiness with the Companyqualifies that customer for a larger loan. This, in turn, may increase the fees and other income realized for a particular customer. For fiscal 2015, 2014 and2013, the percentages of the Company's loan originations that were refinancings of existing loans were 71.5%, 73.5% and 75.3%, respectively.The Company allows refinancing of delinquent loans on a case-by-case basis for those customers who otherwise satisfy the Company's credit standards. Eachsuch refinancing is carefully examined before approval in an effort to avoid increasing credit risk. A delinquent loan may generally be refinanced only if thecustomer has made payments which, together with any credits of insurance premiums or other charges to which the customer is entitled in connection withthe refinancing, reduce the balance due on the loan to an amount equal to or less than the original cash advance made in connection with the loan. TheCompany does not allow the amount of the new loan to exceed the original amount of the existing loan. The Company believes that refinancing delinquentloans for certain customers who have made periodic payments allows the Company to increase its average loans outstanding and its interest, fees and otherincome without experiencing a significant increase in loan losses. These refinancings also provide a resolution to temporary financial setbacks for theseborrowers and sustain their credit rating. Because they are allowed on a selective basis only, refinancings of delinquent loans represented 1.6% of theCompany’s loan volume in fiscal 2015.To reduce late payment risk, local branch staff encourage customers to inform the Company in advance of expected payment problems. Local branch staffalso promptly contact delinquent customers following any payment due date and thereafter remain in close contact with such customers through phone calls,letters or personal visits to the customer until payment is received or some other resolution is reached. When representatives of the Company make personalvisits to delinquent customers, the Company's policy is to encourage the customers to return to the Company's branch to make payment. Companyemployees are instructed not to accept payment outside of the Company's branches except in unusual circumstances. In Georgia, Oklahoma, Illinois,Missouri, Tennessee, Alabama, Louisiana, New Mexico, Wisconsin, Kentucky, Indiana and Idaho the Company is permitted under state laws to garnishcustomers' wages for repayment of loans, but the Company does not otherwise generally resort to litigation for collection purposes, and rarely attempts toforeclose on collateral.Insurance-related Operations. In certain states, the Company sells credit insurance to customers in connection with its loans as an agent for an unaffiliatedinsurance company. These insurance policies provide for the payment of the outstanding balance of the Company's loan upon the occurrence of an insuredevent. The Company earns a commission on the sale of such credit insurance, which, for most products, is directly impacted by the claims experience of theinsurance company on policies sold on its behalf by the Company. In states where commissions on certain products are capped, the commission earned is notdirectly impacted by the claims experience.The Company has a wholly-owned, captive insurance subsidiary that reinsures a portion of the credit insurance sold in connection with loans made by theCompany. Certain coverages currently sold by the Company on behalf of the unaffiliated insurance carrier are ceded by the carrier to the captive insurancesubsidiary, providing the Company with an additional source of income derived from the earned reinsurance premiums. In fiscal 2015, the captive insurancesubsidiary reinsured approximately 1.8% of the credit insurance sold by the Company and contributed approximately $1.0 million to the Company's totalrevenue.Non-Filing Insurance. The Company typically does not perfect its security interest in collateral securing its smaller loans by filing Uniform CommercialCode (“UCC”) financing statements. Statutes in Georgia, Louisiana, South Carolina, Kentucky and Alabama permit the Company to charge a non-filing ornon-recording insurance premium in connection with certain loans originated in these states. These premiums are equal in aggregate amount to the premiumspaid by the Company to purchase non-filing insurance coverage from an unaffiliated insurance company. Under its non-filing insurance coverage, theCompany is reimbursed for losses on loans resulting from its policy not to perfect its security interest in collateral securing the loans.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsInformation Technology. ParaData Financial Systems, a wholly-owned subsidiary, is a financial services software company headquartered near St. Louis,Missouri. Using the proprietary data processing software package developed by ParaData, the Company is able to fully automate all of its loan accountprocessing and collection reporting. The system provides thorough management information and control capabilities. ParaData also markets its financialservices data processing system to other financial services companies, but experiences significant fluctuations from year to year in the amount of revenuesgenerated from sales of the system to third parties. Such revenues have historically not been material to the Company.Monitoring and Supervision. The Company's loan operations are organized into Southern, Central, and Western Divisions, and Mexico. The SouthernDivision consists of South Carolina, Georgia, Louisiana, Alabama, and Mississippi; the Central Division consists of Tennessee, Illinois, Missouri, Wisconsin,Kentucky, and Indiana; and the Western Division consists of Texas, Oklahoma, Idaho and New Mexico. Several levels of management monitor and supervisethe operations of each of the Company's branches. Branch managers are directly responsible for the performance of their respective branches. Districtsupervisors are responsible for the performance of 8 to 11 branches in their districts, typically communicate with the branch managers of each of theirbranches at least weekly and visit the branches at least monthly. The Vice Presidents of Operations monitor the performance of all branches within theirstates (or partial state in the case of Texas), primarily through communication with district supervisors. These Vice Presidents of Operations typicallycommunicate with the district supervisors of each of their districts weekly and regularly visit branches.Senior management receives daily delinquency, loan volume, charge-off, and other statistical reports consolidated by state and has access to these dailyreports for each branch. At least six times per fiscal year, district supervisors examine the operations of each branch in their geographic area and submitstandardized reports detailing their findings to the Company's senior management. At least once per year, each branch undergoes an audit by the Company'sinternal auditors. These audits include an examination of cash balances and compliance with Company loan approval, review and collection procedures andcompliance with federal and state laws and regulations.Staff and Training. Local branches are generally staffed with three to four employees. The branch manager supervises operations of the branch and isresponsible for approving all new and former borrower loan applications and requests for increases in the amount of credit extended. Each branch generallyhas one or two assistant managers who contact delinquent customers, review loan applications and prepare operational reports. Each branch also generallyhas a customer service representative who takes loan applications, processes loan applications, applies payments, and assists in the preparation of operationalreports, in collection efforts, and in marketing activities. Larger branches may employ additional assistant managers and customer service representatives.New employees are required to review detailed training materials that outline the Company's operating policies and procedures. The Company tests eachemployee on the training materials during the first year of employment. In addition, each branch provides in-office training sessions once every week andperiodic training sessions outside the branch. The Company has also implemented an enhanced training tool known as World University, which providescontinuous, real-time, effective online training to all locations. This allows for more training opportunities to be available to all employees throughout thecourse of their career with the Company.Advertising. The Company actively advertises through direct mail, targeting both its present and former customers and potential customers who have usedother sources of consumer credit. The Company obtains or acquires mailing lists from third party sources. In addition to the general promotion of its loansfor vacations, back-to-school needs and other uses, the Company advertises extensively during the October through December holiday season and inconnection with new branch openings. The Company has recently begun advertising on-line, testing prospect email and marketing existing customers viaSMS/text. The Company believes its advertising contributes significantly to its ability to compete effectively with other providers of small-loan consumercredit. Advertising expenses were approximately 2.8% of total revenues in fiscal 2015, 2.7% in fiscal 2014 and 2.6% in fiscal 2013.Competition. The small-loan consumer finance industry is highly fragmented, with numerous competitors. The majority of the Company's competitors areindependent operators with generally less than 100 branches. Competition from community banks and credit unions is limited because they typically do notmake loans of less than $5,000.The Company believes that competition between small-loan consumer finance companies occurs primarily on the basis of the strength of customerrelationships, customer service and reputation in the local community, rather than pricing, as participants in this industry generally charge interest rates andfees at or close to the maximum permitted by applicable laws. The Company believes that its relatively larger size affords it a competitive advantage oversmaller companies by increasing its access to, and reducing its cost of, capital. In addition the Company’s in-house integrated computer system provides dataprocessing at a substantially reduced cost to the Company.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsSeveral of the states in which the Company currently operates limit the size of loans made by small-loan consumer finance companies and prohibit theextension of more than one loan to a customer by any one company. As a result, many customers borrow from more than one finance company, enabling theCompany, subject to the limitations of various consumer protection and privacy statutes including, but not limited to the federal Fair Credit Reporting Actand the Gramm-Leach-Bliley Act, to obtain information on the credit history of specific customers from other consumer finance companies.Employees. As of March 31, 2015, the Company had 3,586 U.S. employees, none of whom were represented by labor unions and 1,057 employees in Mexico,all of whom were represented by a Mexico-based labor union. The Company considers its relations with its personnel to be good. The Company seeks tohire people who will become long-term employees. The Company experiences a high level of turnover among its entry-level personnel, which the Companybelieves is typical of the small-loan consumer finance industry.Executive Officers of the Company. The names and ages, positions, terms of office and periods of service of each of the Company's executive officers (andother business experience for executive officers who have served as such for less than five years) are set forth below. The term of office for each executiveofficer expires upon the earlier of the appointment and qualification of a successor or such officers' death, resignation, retirement or removal.Name and AgePositionPeriod of Service as Executive Officer andPre-executive Officer Experience (if an Executive Officer for Less Than Five Years) A. Alexander McLean, III (63)Chief Executive Officer; Chairmanand DirectorChief Executive Officer since March 2006; Executive VicePresident from August 1996 until March 2006; Senior VicePresident from July 1992 until August 1996; CFO from June 1989until March 2006; Director since June 1989; and Chairman sinceAugust 2007. John L. Calmes Jr. (35)Vice President and Chief FinancialOfficerVice President and Chief Financial Officer since December 2013;Director of Finance – Corporate and Investment Banking Divisionof Bank of Tokyo-Mitsubishi UFJ in 2013; Senior Manager ofPricewaterhouseCoopers from 2011 to 2013; Manager ofPricewaterhouseCoopers from 2008 to 2011. Janet Lewis Matricciani (47)Chief Operating OfficerChief Operating Officer since January 2014; Chief Executive Officerof Antenna International (a leading creator of handheld audio,multimedia and virtual tours for museums, cultural and historic sitesand, tourist attractions) from 2010 to 2013; Senior Vice President ofCorporate Development for K12 Inc. (a technology-based educationcompany) from 2008 to 2010. Jeff L. Tinney (53)Senior Vice President, WesternDivisionSenior Vice President, Western Division, since June 2007; VicePresident, Operations – Texas and New Mexico from June 2001 toJune 2007; Vice President, Operations – Texas and Louisiana fromApril 1998 to June 2001. D. Clinton Dyer (42)Senior Vice President, CentralDivisionSenior Vice President, Central Division since June 2005; VicePresident, Operations –Tennessee and Kentucky from April 2002 toJune 2005. James D. Walters (47)Senior Vice President, SouthernDivisionSenior Vice President, Southern Division since April 2005; VicePresident, Operations – South Carolina and Alabama from August1998 to March 2005. Francisco Javier Sauza Del Pozo (60)Senior Vice President, MexicoSenior Vice President, Mexico since May 2008; Vice President ofOperations from April 2005 to May 2008.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsGovernment Regulation.U. S. Operations. Small-loan consumer finance companies are subject to extensive regulation, supervision and licensing under various federal and statestatutes, ordinances and regulations. In many cases, these statutes establish maximum loan amounts and interest rates and the types and maximum amountsof fees and other charges. In addition, state laws regulate collection procedures, the keeping of books and records and other aspects of the operation of small-loan consumer finance companies. Generally, state regulations also establish minimum capital requirements for each local branch. Accordingly, the abilityof the Company to expand by acquiring existing branches and opening new branches will depend in part on obtaining the necessary regulatory approvals.For example, Texas regulation requires the approval of the Texas Consumer Credit Commissioner for the acquisition, directly or indirectly, of more than 10%of the voting or common stock of a consumer finance company. A Louisiana statute prohibits any person from acquiring control of 50% or more of the sharesof stock of a licensed consumer lender, such as the Company, without first obtaining a license as a consumer lender. The overall effect of these laws, andsimilar laws in other states, is to make it more difficult to acquire a consumer finance company than it might be to acquire control of an unregulatedcorporation.All of the Company's branches are licensed under the laws of the state in which the branch is located. Licenses granted by the regulatory agencies in thesestates are subject to renewal every year and may be revoked for failure to comply with applicable state and federal laws and regulations. In the states in whichthe Company currently operates, licenses may be revoked only after an administrative hearing.The Company and its operations are regulated by several state agencies, including the Industrial Loan Division of the Office of the Georgia InsuranceCommissioner, the Consumer Finance Division of the South Carolina Board of Financial Institutions, the South Carolina Department of Consumer Affairs,the Texas Office of the Consumer Credit Commissioner, the Oklahoma Department of Consumer Credit, the Louisiana Office of Financial Institutions, theTennessee Department of Financial Institutions, the Missouri Division of Finance, the Consumer Credit Division of the Illinois Department of FinancialInstitutions, the Financial Institutions Division of the New Mexico Regulation and Licensing Department,the Kentucky Department of Financial Institutions, the Alabama State Banking Department, the Wisconsin Department of Financial Institutions, theIndiana Department of Financial Institutions, the Mississippi Department of Banking and Consumer Finance, and the Idaho Department of Finance. Thesestate regulatory agencies audit the Company's local branches from time to time, and each state agency performs an annual compliance audit of the Company'soperations in that state.Insurance. The Company is also subject to state regulations governing insurance agents in the states in which it sells credit insurance. State insuranceregulations require that insurance agents be licensed, govern the commissions that may be paid to agents in connection with the sale of credit insurance andlimit the premium amount charged for such insurance. The Company's captive insurance subsidiary is regulated by the insurance authorities of the Turks andCaicos Islands of the British West Indies, where the subsidiary is organized and domiciled.Consumer finance companies are affected by changes in state and federal statutes and regulations. The Company actively participates in trade associationsand in lobbying efforts in the states in which it operates and at the federal level. There have been, and the Company expects that there will continue to be,media attention, initiatives, discussions, proposals and legislation regarding the entire consumer credit industry, as well as our particular business, andpossible significant changes to the laws and regulations, or the authority exercised pursuant to those laws and regulations that govern our business. In somecases, proposed or pending legislative or regulatory changes have been introduced that would, if enacted, have a material adverse effect on, or possibly eveneliminate, our ability to continue our current business. We can give no assurance that the laws and regulations that govern our business, or the interpretationor administration of those laws and regulations, will remain unchanged or that any such future changes will not materially and adversely affect or in the worstcase, eliminate, the Company’s lending practices, operations, profitability or prospects. See "State legislation" and “Federal legislation” below and Part I,Item 1A, “Risk Factors,” for a further discussion of the potential impact of regulatory changes on our business.State legislation. The Company is subject to numerous state laws and regulations that affect our lending activities. Many of these regulations imposedetailed and complex constraints on the terms of our loans, lending forms and operations. Failure to comply with applicable laws and regulations couldsubject us to regulatory enforcement action that could result in the assessment against us of civil, monetary or other penalties.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsIn the past, several state legislative and regulatory proposals have been introduced which, had they become law, would have had a material adverse impact onour operations and ability to continue to conduct business in the relevant state. Although to date none of these state initiatives have been successful, statelegislatures continue to receive pressure to adopt similar legislation that would affect our lending operations. For example, in Missouri, following a 2013failed ballot initiative, the same proponents again commenced ballot initiatives to legislatively cap annual interest rates at 36% and to constitutionallyimpose other interest rate limitations. The proponents of the rate cap did not obtain sufficient signatures on this initiative to have it placed on the November2014 election ballot. A similar attempt to introduce rate cap legislation has been initiated in New Mexico, but was tabled in early February 2015 by alegislative subcommittee. There can be no assurance that proponents of these or similar initiatives will not pursue them and be successful the future. In addition, any adverse change in existing laws or regulations, or any adverse interpretation or litigation relating to existing laws and regulations in anystate in which we operate, could subject us to liability for prior operating activities or could lower or eliminate the profitability of our operations goingforward by, among other things, reducing the amount of interest and fees we can charge in connection with our loans. If these or other factors lead us to closeour branches in a state, then in addition to the loss of net revenues attributable to that closing, we would also incur closing costs such as lease cancellationpayments and we would have to write off assets that we could no longer use. If we were to suspend rather than permanently cease our operations in a state, wemay also have continuing costs associated with maintaining our branches and our employees in that state, with little or no revenues to offset those costs.Federal legislation. In addition to state and local laws and regulations, we are subject to numerous federal laws and regulations that affect our lendingoperations. These laws include the Truth in Lending Act, the Equal Credit Opportunity Act and the Fair Credit Reporting Act and the regulations thereunderand the Federal Trade Commission's Credit Practices Rule. These laws require the Company to provide complete disclosure of the principal terms of eachloan to the borrower, prior to the consummation of the loan transaction, prohibit misleading advertising, protect against discriminatory lending practices andproscribe unfair, deceptive or abusive credit practices. Among the principal disclosure items under the Truth in Lending Act are the terms of repayment, thefinal maturity, the total finance charge and the annual percentage rate charged on each loan. The Equal Credit Opportunity Act prohibits creditors fromdiscriminating against loan applicants on, among other things the basis of race, color, sex, age or marital status. Pursuant to Regulation B promulgated underthe Equal Credit Opportunity Act, creditors are required to make certain disclosures regarding consumer rights and advise consumers whose creditapplications are not approved of the reasons for the rejection. The Fair Credit Reporting Act also requires the Company to provide certain information toconsumers whose credit applications are not approved on the basis of a report obtained from a consumer reporting agency and to provide additionalinformation to those borrowers whose loan are approved and consummated if the credit decision was based in whole or in part on the contents of a creditreport. The Credit Practices Rule limits the types of property a creditor may accept as collateral to secure a consumer loan. Violations of the statutes andregulations described above may result in actions for damages, claims for refund of payments made, certain fines and penalties, injunctions against certainpractices and the potential forfeiture of rights to repayment of loans.Although these laws and regulations remained substantially unchanged for many years, over the last several years the laws and regulations directly affectingour lending activities have been under review and are subject to change as a result of various developments and changes in economic conditions, the make-up of the executive and legislative branches of government, and the political and media focus on issues of consumer and borrower protection. See Part I, Item1A, “Risk Factors - Media and public perception of consumer installment loans as being predatory or abusive could materially adversely affect our business,prospects, results of operations and financial condition” below. Any changes in such laws and regulations could force us to modify, suspend or cease part or,in the worst case, all of our existing operations. It is also possible that the scope of federal regulations could change or expand in such a way as to preemptwhat has traditionally been state law regulation of our business activities. The enactment of one or more of such regulatory changes could materially andadversely affect our business, results of operations and prospects.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsVarious legislative proposals addressing consumer credit transactions have been passed in recent years or are currently pending in the U.S. Congress.Congressional members continue to receive pressure from consumer activists and other industry opposition groups to adopt legislation to address variousaspects of consumer credit transactions. As part of a sweeping package of financial industry reform regulations, in July 2010 Congress passed and thePresident signed into law the “Dodd-Frank Wall Street Reform and Consumer Protection Act” (the “Dodd-Frank Act”). This created, among other things, anew federal regulatory entity, the Consumer Financial Protection Bureau (commonly referred to as the CFPB), with sweeping regulatory and enforcementover consumer financial transactions. The CFPB continues to actively engage in the announcement and implementation of various plans and initiatives inthe area of consumer financial transactions generally, including its March 26, 2015 announcement that it was considering proposing rules under its unfair,deceptive and abusive acts and practices rulemaking authority relating to payday, vehicle title, and similar loans. Some of these CFPB announced plans andinitiatives, if implemented, would directly affect certain loan products we currently offer and subject us to the CFPB’s supervisory authority. Also, aspreviously disclosed, the Company is currently under investigation by the CFPB. See Part II, Item 7, “Management’s Discussion and Analysis of FinancialCondition and Results of Operations - Regulatory Matters,” for more information regarding the CFPB investigation and its regulatory initiatives, including adiscussion of proposed rulemaking announced by the CFPB on March 26, 2015.Although the Dodd-Frank Act prohibits the CFPB from setting interest rates on consumer loans, efforts to create a federal usury cap, applicable to allconsumer credit transactions and substantially below rates at which the Company could continue to operate profitably, are still ongoing. Any federallegislative or regulatory action that severely restricts or prohibits the provision of small-loan consumer credit and similar services on terms substantiallysimilar to those we currently provide would, if enacted, have a material adverse impact on our business, prospects, results of operations and financialcondition. Any federal law that would impose a national 36% or similar annualized credit rate cap on our services would, if enacted, almost certainlyeliminate our ability to continue our current operations. See Part I, Item 1A, “Risk Factors - Federal legislative or regulatory proposals, initiatives, actions orchanges that are adverse to our operations or result in adverse regulatory proceedings, or our failure to comply with existing or future federal laws andregulations, could force us to modify, suspend or cease part or all of our nationwide operations,” for further information regarding the potential impact ofadverse legislative and regulatory changes.Mexico Operations. Effective May 1, 2008, World Acceptance Corporation de Mexico, S. de R.L. de C.V. was converted to WAC de Mexico, S.A. de C.V.,SOFOM, E.N.R. (“WAC de Mexico SOFOM”), and due to such conversion, this entity is now organized as a Sociedad Financiera de Objeto Múltiple, EntidadNo Regulada (Multiple Purpose Financial Company, Non-Regulated Entity or “SOFOM, ENR”). Mexican law provides for administrative regulation ofcompanies which are organized as SOFOM, ENRs. As such, WAC de Mexico SOFOM is mainly governed by different federal statutes, including the GeneralLaw of Auxiliary Credit Activities and Organizations, the Law for the Transparency and Order of Financial Services, the General Law of Credit Instrumentsand Operations, and the Law of Protection and Defense to the User of Financial Services. SOFOM, ENRs are also subject to regulation by and surveillance ofthe National Commission for the Protection and Defense of Users of Financial Services (“CONDUSEF”). CONDUSEF, among others, acts as mediator andarbitrator in disputes between financial lenders and customers, and resolves claims filed by loan customers. CONDUSEF also prevents unfair anddiscriminatory lending practices, and regulates, among others, the form of loan contracts, consumer disclosures, advertisement, and certain operatingprocedures of SOFOM, ENRs, with such regulations pertaining primarily to consumer protection and adequate disclosure and transparency in the terms ofborrowing. Neither CONDUSEF nor federal statutes impose interest rate caps on loans granted by SOFOM, ENRs. Due to anti-money laundering laws, we arenow being reviewed by the Comisión Nacional Bancaria y de Valores for compliance with anti-money laundering regulations. The consumer loan industry,as with most businesses in Mexico, is also subject to other various regulations in the areas of tax compliance and employment matters, among others, byvarious federal, state and local governmental agencies. Generally, federal regulations control over the state statutes with respect to the consumer loanoperations of SOFOM, ENRs.Available Information. The information regarding our website and availability of our filings with the SEC as described in the second paragraph under“Introduction” above is incorporated by reference into this Item 1 of Part I.Item 1A. Risk FactorsForward-Looking StatementsThis annual report contains various “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that are basedon management’s beliefs and assumptions, as well as information currently available to management. Statements other than those of historical fact, as well asthose identified by the use of words such as “anticipate,” “estimate,” "intend," “plan,” “expect,” “believe,” “may,” “will,” “should,” “would,” “could,”andany variations of the foregoing and similar expressions, are forward-looking statements. Although we believe that the expectations reflected in any suchforward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Any such statementsSource: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsare subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptionsprove incorrect, our actual financial results, performance or financial condition may vary materially from those anticipated, estimated, expected or implied byany forward-looking statements. Among the key factors that could cause our actual financial results, performance or condition to differ from the expectations expressed or implied in suchforward-looking statements are the following: recently enacted, proposed or future legislation and regulation and the manner in which it is implemented; thenature and scope of regulatory authority, particularly discretionary authority, that may be exercised by regulators, including, but not limited to, the CFPB,having jurisdiction over the Company’s business or consumer financial transactions generically; the unpredictable nature of regulatory proceedings andlitigation; any determinations, findings, claims or actions made or taken by the CFPB, other regulators or other third parties in connection with or resultingfrom the CID that assert or establish that the Company’s lending practices or other aspects of its business violate applicable laws or regulations; the impact ofchanges in accounting rules and regulations, or their interpretation or application, which could materially and adversely affect the Company’s reportedfinancial statements or necessitate material delays or changes in the issuance of the Company’s audited financial statements; the Company's assessment of itsinternal control over financial reporting, and the timing and effectiveness of the Company's efforts to remediate any reported material weakness in its internalcontrol over financial reporting, which could lead to the Company to report further or unremediated material weaknesses in its internal control over financialreporting: changes in interest rates; risks relating to expansion and foreign operations, including but not limited to foreign currency fluctuations; risksinherent in making loans, including repayment risks and value of collateral; the timing and amount of revenues that may be recognized by the Company;changes in current revenue and expense trends (including trends affecting delinquency and charge-offs); changes in the Company’s markets and generalchanges in the economy (particularly in the markets served by the Company). These and other risks are discussed in more detail below in this “Risk Factors”section and in the Company’s other filings made from time to time with the SEC. The Company does not undertake any obligation to update any forward-looking statements it may make.Investors should consider the following risk factors, in addition to the other information presented in this annual report and the other reports and registrationstatements the Company files with or furnishes to the SEC from time to time, in evaluating us, our business and an investment in our securities. Any of thefollowing risks, as well as other risks, uncertainties, and possibly inaccurate assumptions underlying our plans and expectations, could result in harm to ourbusiness, results of operations and financial condition and cause the value of our securities to decline, which in turn could cause investors to lose all or partof their investment in our Company. These factors, among others, could also cause actual results to differ materially from those we have experienced in thepast or those we may express or imply from time to time in any forward-looking statements we make. Investors are advised that it is impossible to identify orpredict all risks, and that risks not currently known to us or that we currently deem immaterial also could affect us in the future.Federal legislative or regulatory proposals, initiatives, actions or changes that are adverse to our operations or result in adverse regulatory proceedings,or our failure to comply with existing or future federal laws and regulations, could force us to modify, suspend or cease part or all of our nationwideoperations.We are subject to numerous federal laws and regulations that affect our lending operations. Although these laws and regulations have remained substantiallyunchanged for many years, the laws and regulations directly affecting our lending activities have been under review and subject to change in recent years as aresult of various developments and changes in economic conditions, the make-up of the executive and legislative branches of government, and the politicaland media focus on issues of consumer and borrower protection. Any changes in such laws and regulations could force us to modify, suspend or cease part, or,in the worst case, all of our existing operations. It is also possible that the scope of federal regulations could change or expand in such a way as to preemptwhat has traditionally been state law regulation of our business activities.In July 2010 the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) was enacted. The Dodd-Frank Act restructured andenhanced the regulation and supervision of the financial services industry and created the Consumer Financial Protection Bureau (the “CFPB”), an agencywith sweeping regulatory and enforcement authority over consumer financial transactions. Although the Dodd-Frank Act prohibits the CFPB from settinginterest rates on consumer loans, efforts to create a federal usury cap, applicable to all consumer credit transactions and substantially below rates at which theCompany could create to operate profitably, are still ongoing. Any federal legislative or regulatory action that severely restricts or prohibits the provision ofsmall-loan consumer credit and similar services on terms substantially similar to those we currently provide would, if enacted, have a material adverse impacton our business, prospects, results of operations and financial condition. Any federal law that would impose a 36% or similar annualized credit rate cap onour services would, if enacted, almost certainly eliminate our ability to continue our current operations.The CFPB’s rulemaking and enforcement authority extends to certain non-depository institutions, including us. The CFPB is specifically authorized, amongother things, to take actions to prevent companies providing consumer financial products or servicesSource: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsand their service providers from engaging in unfair, deceptive or abusive acts or practices in connection with consumer financial products and services, andto issue rules requiring enhanced disclosures for consumer financial products or services. The CFPB may also issue regulations regarding the use of pre-dispute arbitration clauses in consumer financial markets, but only after conducting a study of the matter as mandated by the Dodd-Frank Act. The CFPB alsohas authority to interpret, enforce, and issue regulations implementing enumerated consumer laws, including certain laws that apply to our business. Further,the CFPB has authority to designate non-depository “larger participants” in certain markets for consumer financial services and products for purposes of theCFPB’s supervisory authority under the Dodd-Frank Act. Such designated “larger participants” are subject to reporting and on-site compliance examinationsby the CFPB, which may result in increased compliance costs and potentially greater enforcement risks based on these supervisory activities. Although theCFPB has not yet developed a “larger participant” rule that directly covers the Company’s installment lending business, in March 2015 in connection withthe CFPB’s discussion of a proposed rulemaking initiative described below, the CFPB stated that it expects to conduct separate rulemaking to identify largerparticipants in the installment lending market for purposes of its supervision program. Though the timing of any such rulemaking is uncertain, the Companybelieves that the implementation of such rules would likely bring the Company’s business under the CFPB’s direct supervisory authority.On March 26, 2015, the CFPB announced that it was considering proposing rules under its unfair, deceptive and abusive acts and practices rulemakingauthority relating to payday, vehicle title, and similar loans. The proposal would cover short-term loans with a contractual term of 45 days or less, as well as“longer-term loans” with a term of longer than 45 days with an all-in annualized percentage rate of interest (“APR”) in excess of 36% in which the lender haseither a non-purchase money security interest in the consumer’s vehicle or the right to collect repayment from the consumer’s bank account or paycheck.Although the Company does not make loans with terms of 45 days or less or obtain access to a customer’s bank account or paycheck for repayment of any ofits loans, it does make some vehicle-secured loans with an APR within the scope of the proposal. The Company currently estimates that the amount of suchvehicle-secured loans in its loan portfolio as of March 31, 2015 are approximately 13% of its total number of loans and approximately 20% of its portfolio bygross loan volume. The proposals would require a lender, as a condition of making a covered longer-term loan, to first make a good-faith reasonabledetermination that the consumer has the ability to repay the covered longer-term loan without reborrowing or defaulting. The proposals would require lendersto verify income, “major financial obligations” and borrowing history. Lenders would also be required to determine that a consumer is able to make allprojected payments under the covered longer-term loan as those payments are due, while still fulfilling other major financial obligations and meeting livingexpenses. This ability to repay assessment would apply to both the initial longer-term loan and to any subsequent refinancing. In addition, the proposalswould include a rebuttable presumption that customers seeking to refinance a covered longer-term loan lack an “ability to repay” if certain conditions existat the time of the proposed refinancing. See Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations -Regulatory Matters,” for more information regarding these proposals. The proposals are subject to several procedural requirements and to possible changebefore any final rules would be issued and implemented, and we cannot predict what the ultimate rulemaking will provide. Although the Company currentlyunderwrites all its loans (including those secured by a vehicle title that would fall within the scope of these proposals) by reviewing the customer’s ability torepay based on the Company’s standards, there can be no assurance that these proposals, if and when implemented in final rulemaking, would not requirechanges to the Company’s practices and procedures regarding such loans that could materially and adversely affect the Company’s ability to make suchloans, the cost of making such loans, the Company’s ability to, or frequency with which it could, refinance any such covered loans, or the profitability ofsuch loans. Any final rulemaking also could have effects beyond those contemplated in the initial proposal that could further materially and adverselyimpact our business and operations.In addition to the specific matters described above, other aspects of our business may be the subject of future CFPB rulemaking. The enactment of one ormore of such regulatory changes, or the exercise of broad regulatory authority by regulators, including but not limited to, the CFPB, having jurisdiction overthe Company’s business or discretionary consumer financial transactions generically, could materially and adversely affect our business, results of operationsand prospects.In September 2014, the Department of Defense (the “DoD”) proposed an amendment to its existing regulation that implements the Military Lending Act (the“MLA”). Current MLA regulations prohibit creditors from making payday loans, non-purchase money motor vehicle title loans with a term of less than 181days, and refund anticipation loans to “covered borrowers” (which includes both servicemembers and their dependents) if the APR exceeds 36%. TheCompany does not make any of the loans covered under the MLA regulations. However, the proposed amendments would expand the MLA and its 36% APRcap to cover all credit offered or extended to a covered borrower primarily for personal, family, or household purposes that is either subject to a financecharge or payable by a written agreement in more than four installments. In addition, creditors must check a database maintained by the DoD before enteringinto an agreement with a covered borrower, provide both oral and written disclosures, including an all-inclusive APR referred to as the Military AnnualPercentage Rate, and must not require arbitration in agreements with covered borrowers. In April 2015, the U.S. House Armed Services Committee narrowlyvoted to remove a provision in the 2016 National Defense Authorization Act that likely would have delayed implementation of the proposed amendmentsuntil 2016. The DoD proposed regulations are subject to possible change or further delay before any final rules would be issued andSource: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsimplemented. However, the Company believes the implementation of these amendments could adversely affect its operations and cost and efficiency ofprocessing loans by requiring it to perform confirming database checks on a much greater number of loans via a database that historically has been prone totechnical glitches and outages. These or other consequences of the amendment could materially and adversely affect the Company’s business, results ofoperations and financial condition.We are currently under investigation by the CFPB, and any adverse finding, allegation, or exercise of enforcement or regulatory discretion by the CFPBcould materially and adversely affect our business, financial condition, results of operations or ability to operate our business as we currently do.As previously disclosed, on March 12, 2014, we received a Civil Investigative Demand (“CID”) from the Consumer Financial Protection Bureau (the“CFPB”). The stated purpose of the CID is to determine whether the Company has been or is “engaging in unlawful acts or practices in connection with themarketing, offering, or extension of credit in violation of Sections 1031 and 1036 of the Consumer Financial Protection Act, 12 U.S.C. §§ 5531, 5536, theTruth in Lending Act, 15 U.S.C. §§ 1601, et seq., Regulation Z, 12 C.F.R. pt. 1026, or any other Federal consumer financial law” and “also to determinewhether Bureau action to obtain legal or equitable relief would be in the public interest.” The Company responded, within the deadlines specified in the CID,to broad requests for production of documents, answers to interrogatories to and written reports related to loans made by the Company and numerous otheraspects of the Company’s business. Subsequent to the March 2014 CID, the Company has received and responded to, and is actively in the process ofresponding to, additional broad requests and demands for information from the CFPB and expects that there will continue to be additional requests ordemands for information from the CFPB and ongoing interactions between the CFPB, the Company and Company counsel as part of the investigation. Weare currently unable to predict the ultimate timing or outcome of the CFPB investigation. While the Company believes its marketing and lending practicesare lawful, there can be no assurance that the CFPB’s ongoing investigation or future exercise of its enforcement, regulatory, discretionary or other powerswill not result in findings or alleged violations of federal consumer financial protection laws that could lead to enforcement actions, proceedings or litigationand the imposition of damages, fines, penalties, restitution, other monetary liabilities, sanctions, settlements or changes to the Company’s business practicesor operations that could have a material adverse effect on the Company’s business, financial condition or results of operations or eliminate altogether theCompany’s ability to operate its business profitably or on terms substantially similar to those on which it currently operates.Litigation and regulatory actions, including challenges to the arbitration clauses in our customer agreements, could subject us to significant class actions,fines, penalties, judgments and requirements resulting in increased expenses and potential material adverse effects on our business, results of operationsand financial condition.In the normal course of business, from time to time, we have been named as a defendant in various legal actions, including arbitrations, class actions andother litigation, arising in connection with our business activities. Certain of the legal actions include claims for substantial compensatory and punitivedamages, or claims for indeterminate amounts of damages. While the arbitration provisions in our customer agreements historically have limited our exposureto consumer class action litigation, there can be no assurance that we will be successful in enforcing our arbitration clause in the future. There may also belegislative, administrative or regulatory efforts to directly or indirectly prohibit the use of pre-dispute arbitration clauses, including by the CFPB, or we maybe compelled as a result of competitive pressure or reputational concerns to voluntarily eliminate pre-dispute arbitration clauses.Unfavorable state legislative or regulatory actions or changes, adverse outcomes in litigation or regulatory proceedings or failure to comply with existinglaws and regulations could force us to cease, suspend or modify our operations in a state, potentially resulting in a material adverse effect on our business,results of operations and financial condition.In addition to federal laws and regulations, we are subject to numerous state laws and regulations that affect our lending activities. Many of these regulationsimpose detailed and complex constraints on the terms of our loans, lending forms and operations. Failure to comply with applicable laws and regulationscould subject us to regulatory enforcement action that could result in the assessment against us of civil, monetary or other penalties, including the suspensionor revocation of our licenses to lend in one or more jurisdictions.Changes in the state laws under which we currently operate or the enactment of new laws governing our operations resulting from state political activities andlegislative or regulatory initiatives could have a material adverse effect on all aspects of our business in a particular state. For example, proponents of rate caplegislation in New Mexico have recently attempted to advance bills that would place a 36% rate cap on all financial lending products. In February 2015,these measures were tabled by The New Mexico Regulatory and public affairs subcommittee.The Company, through state and federal trade associations of which it is a member, is working in opposition to this pending legislation; however, it isuncertain whether these efforts will be successful in preventing the passage of the legislation. Passage of such proposed legislation or similar initiatives inother states could have a material adverse effect on the Company’s business,Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsresults of operations, prospects or ability to continue operations in the jurisdictions affected by such changes. We can give no assurance that the laws andregulations that govern our business, or the interpretation or administration of those laws and regulations, will remain unchanged or that any such futurechanges will not materially and adversely affect or in the worst case, eliminate the Company’s lending practices, operations, profitability or prospects.In addition, any adverse change in existing laws or regulations, or any adverse interpretation or litigation relating to existing laws and regulations in anystate in which we operate, could subject us to liability for prior operating activities or could lower or eliminate the profitability of our operations goingforward by, among other things, reducing the amount of interest and fees we can charge in connection with our loans. If these or other factors lead us to closeour branches in a state, then in addition to the loss of net revenues attributable to that closing, we would also incur closing costs such as lease cancellationpayments and we would have to write off assets that we could no longer use. If we were to suspend rather than permanently cease our operations in a state, wemay also have continuing costs associated with maintaining our branches and our employees in that state, with little or no revenues to offset those costs.Media and public perception of consumer installment loans as being predatory or abusive could have a materially adverse effect on our business,prospects, results of operations and financial condition.Consumer activist groups and various other media sources continue to advocate for governmental and regulatory action to prohibit or severely restrict ourproducts and services. These critics frequently characterize our products and services as predatory or abusive toward consumers. If this negativecharacterization of the consumer installment loans we make and/or ancillary services we provide becomes widely accepted by government policy makers oris embodied in legislative, regulatory, policy or litigation developments that adversely affect our ability to continue offering our products and services or theprofitability of these products and services, our business, results of operations and financial condition would be materially and adversely affected.Employee misconduct or misconduct by third parties acting on our behalf could harm us by subjecting us to monetary loss, significant legal liability,regulatory scrutiny and reputational harm.Our reputation is critical to maintaining and developing relationships with our existing and potential customers and third parties with whom we do business.There is a risk that our employees or third party contractors could engage in misconduct that adversely affects our business. For example, if an employee or athird party contractor were to engage in, or be accused or engaging in, illegal or suspicious activities including fraud or theft, we could suffer direct lossesfrom the activity and, in addition, we could be subject to regulatory sanctions and suffer serious harm to our reputation, financial condition, customerrelationships and ability to attract future customers. Employee or third-party misconduct could prompt regulators to allege or to determine based upon suchmisconduct that we have not established adequate supervisory systems and procedures to inform employees of applicable rules or to detect violations of suchrules. Our branches have experienced employee fraud from time to time, and it is not always possible to deter employee or third-party misconduct. Theprecautions that we take to detect and prevent misconduct may not be effective in all cases. Misconduct by our employees or third party contractors, or evenunsubstantiated allegations of misconduct, could result in a material adverse effect on our reputation and our business.Our continued expansion into Mexico may increase the risks inherent in conducting operations internationally and in Mexico, contribute materially toincreased costs and negatively affect our business, prospects, results of operations and financial condition.Although our operations in Mexico accounted for only 8.6% of our revenues during fiscal 2015 and 8.5% of our gross loans receivable at March 31, 2015, weintend to continue opening branches and expanding our presence in Mexico. In addition, if and to the extent that the state and federal regulatory climate inthe U.S. changes in ways that adversely affect our ability to continue profitable operations in one or more U.S. states, we could become increasinglydependent on our operations in Mexico as our only viable expansion or growth strategy. In pursuing such an expansion or growth strategy, we may exposean increasing portion of our business to risks inherent in conducting international operations, including currency fluctuations and devaluations, unsettledpolitical and social conditions, communication and translation errors due to language barriers, compliance with differing legal and regulatory regimes anddiffering cultural attitudes toward regulation and compliance. In particular, political and social unrest in Mexico, coupled with a unionized labor structurethat effectively gives labor unions control over repayment of funds remitted from our customers who borrow under our payroll deduction loan product inMexico, create risks of non-payment or delinquent payment of these funds collected through the labor unions. We recently experienced such a situation inthe third quarter of fiscal 2015 in which a union refused to make payments of $2.6 million related to such loans. If we are unable to resolve these issues andpersuade the unions to remit these payments, our revenues, delinquencies and charge-off rates from our Mexican operations could be materially andadversely affected.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsInterest rate fluctuations may adversely affect our borrowing costs, profitability and liquidity.Our profitability may be directly affected by the level of and fluctuations in interest rates, whether caused by changes in economic conditions or other factors,that affect our borrowing costs. Interest rates are highly sensitive to many factors that are beyond our control, including general economic conditions andpolicies of various governmental and regulatory agencies and, in particular, the Federal Reserve Board. Changes in monetary policy, including changes ininterest rates, could influence the amount of interest we pay on our revolving credit facility or any other floating interest rate obligations we may incur. Ourprofitability and liquidity could be materially adversely affected during any period of higher interest rates. See Part II, Item 7A, “Quantitative and QualitativeDisclosure About Market Risk” for additional information regarding our interest rate risk.We depend to a substantial extent on borrowings under our revolving credit agreement to fund our liquidity needs.We have an existing revolving credit agreement that allows us to borrow up to $680.0 million through June 15, 2015 and up to $630.0 million through June15, 2016, assuming we are in compliance with a number of covenants and conditions, including a minimum borowing base calculation. If our existingsources of liquidity become insufficient to satisfy our financial needs or our access to these sources becomes unexpectedly restricted, we may need to try toraise additional debt or equity in the future. If such an event were to occur, we can give no assurance that such alternate sources of liquidity would beavailable to us at all or on favorable terms. Additional information regarding our liquidity risk is included in Part II, Item 7, “Management’s Discussion andAnalysis of Financial Condition and Results of Operations–Liquidity and Capital Resources.”Our substantial debt could negatively impact our business, prevent us from satisfying our debt obligations and adversely affect our financial condition.We have a substantial amount of debt. As of March 31, 2015, we had approximately $501.2 million of total debt outstanding and a total debt to shareholdersequity ratio of approximately 1.6 to 1. The substantial amount of our debt could have important consequences, including the following:our ability to obtain additional financing for working capital, debt refinancing, share repurchases or other purposes could be impaired;a substantial portion of our cash flows from operations will be dedicated to paying principal and interest on our debt, reducing funds available forother purposes;we may be vulnerable to interest rate increases, as borrowings under our revolving credit agreement bear interest at variable rates, as may any futuredebt that we incur;we could be more vulnerable to adverse developments in our industry or in general economic conditions;we may be restricted from taking advantage of business opportunities or making strategic acquisitions; andwe may be limited in our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate.We may incur substantially more debt and other liabilities. This could exacerbate further the risks associated with our current debt levels.We may be able to incur substantial additional debt in the future. Although the terms of our revolving credit agreement contain restrictions on our ability toincur additional debt, as may any future debt that we incur, these restrictions are subject, or likely to be subject, in the case of any future debt, to exceptionsthat could permit us to incur a substantial amount of additional debt. In addition, our existing and future debt agreements will not prevent us from incurringcertain liabilities that do not constitute indebtedness as defined for purposes of those debt agreements. If new debt or other liabilities are added to our currentdebt levels, the risks associated with our having substantial debt could intensify. As of March 31, 2015, we had $81.6 million available for borrowing underour revolving credit agreement, subject to borrowing base limitations and other specified terms and conditions.We may not be able to generate sufficient cash flows to service our outstanding debt and fund operations and may be forced to take other actions to satisfyour obligations under such debt.Our ability to make scheduled payments of the principal of, to pay interest on, or to refinance our indebtedness will depend in part on our cash flows fromoperations, which are subject to regulatory, economic, financial, competitive and other factors beyond our control. We cannot assure you that we willcontinue to generate a level of cash flows from operations sufficient to permit us to meet our debt service obligations. If we are unable to generate sufficientcash flows from operations to service our debt, we may be required to sell assets, refinance all or a portion of our existing debt, obtain additional financing orobtain additional equity capital on terms that may be onerous or highly dilutive. There can be no assurance that any refinancing will be possible or that anyasset sales or additional financing can be completed on acceptable terms or at all.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsThe terms of our debt limit how we conduct our business.Our revolving credit agreement contains covenants that restrict our ability to, among other things:incur and guarantee debt;pay dividends or make other distributions on or redeem or repurchase our stock;make investments or acquisitions;create liens on our assets;sell assets;merge with or into other companies;enter into transactions with shareholders and other affiliates; andmake capital expenditures.Our revolving credit agreement also imposes requirements that we maintain specified financial measures not in excess of, or not below, specified levels. Inparticular, our revolving credit agreement requires, among other things, that we maintain (i) at all times a specified minimum consolidated net worth, (ii) as ofthe end of each fiscal quarter, a minimum ratio of consolidated net income available for fixed charges for the period of four consecutive fiscal quarters mostrecently ended to consolidated fixed charges for that period of not less than a specified minimum, (iii) at all times a specified maximum ratio of total debt toconsolidated adjusted net worth and (iv) at all times a specified ratio of subordinated debt to consolidated adjusted net worth. These covenants limit themanner in which we can conduct our business and could prevent us from engaging in favorable business activities or financing future operations and capitalneeds and impair our ability to successfully execute our strategy and operate our business.A breach of any of the covenants in our revolving credit agreement would result in an event of default thereunder. Any event of default would permit thecreditors to accelerate the related debt, which could also result in the acceleration of any other or future debt containing a cross-acceleration or cross-defaultprovision. In addition, an event of default under our revolving credit agreement would permit the lenders thereunder to terminate all commitments to extendfurther credit under the revolving credit agreement. Furthermore, if we were unable to repay the amounts due and payable under the revolving creditagreement or any other secured debt we may incur, the lenders thereunder could cause the collateral agent to proceed against the collateral securing that debt.In the event our creditors accelerate the repayment of our debt, there can be no assurance that we would have sufficient assets to repay that debt, and ourfinancial condition, liquidity and results of operations would suffer. Additional information regarding our revolving credit facility is included in Part II, Item7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources.”The conditions of the U.S. and international capital markets may adversely affect lenders with which we have relationships, causing us to incur additionalcosts and reducing our sources of liquidity, which may adversely affect our financial position, liquidity and results of operations.In recent years, there has been turbulence in the global capital markets and the overall economy. Such turbulence can result in disruptions in the financialsector and affect lenders with which we have relationships, including members of the syndicate of banks that are lenders under our revolving creditagreement. Disruptions in the financial sector may increase our exposure to credit risk and adversely affect the ability of lenders to perform under the terms oftheir lending arrangements with us. Failure by our lenders to perform under the terms of our lending arrangements could cause us to incur additional coststhat may adversely affect our liquidity, financial condition and results of operations. While overall market conditions have improved, there can be noassurance that future disruptions in the financial sector will not occur that could have similar adverse effects on our business. Additional informationregarding our liquidity and related risks is included in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results ofOperations-Liquidity and Capital Resources.”We are exposed to credit risk in our lending activities.Our ability to collect on loans to individuals, our single largest asset group, depends on the ability and willingness of our borrowers to repay such loans. Anymaterial adverse change in the ability or willingness of a significant portion of our borrowers to meet their obligations to us, whether due to changes ineconomic conditions, unemployment rates, the cost of consumer goods (particularly, but not limited to, food and energy costs), disposable income, interestrates, natural disasters, acts of war or terrorism, or other causes over which we have no control, would have a material adverse impact on our earnings andfinancial condition. Although new customers are required to submit a listing of personal property that will serve as collateral to secure their loans, theCompany does not rely on the value of such collateral in the loan approval process and generally does not perfect its security interest in that collateral.Additional information regarding our credit risk is included in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results ofOperation–Credit Quality.”Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsIf our estimates of loan losses are not adequate to absorb actual losses, our provision for loan losses would increase. This would result in a decline in ourfuture revenues and earnings.We maintain an allowance for loan losses for loans we make directly to consumers. This allowance is an estimate. If our actual loan losses exceed theassumption used to establish the allowance, our provision for loan losses would increase, which would result in a decline in our future earnings. Additionalinformation regarding our allowance for loan losses is included in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Resultsof Operations–Credit Quality.”The concentration of our revenues in certain states could adversely affect us.We currently operate consumer installment loan branches in fifteen states in the United States. Any adverse legislative or regulatory change in any one of ourstates, but particularly in any of our larger states could have a material adverse effect on our business, prospects, and results of operation or financialcondition. See Part I, Item 1, "Description of Business" for information regarding the size of our business in the various states in which we operate.We have goodwill, which is subject to periodic review and testing for impairment.A portion of our total assets at March 31, 2015 is comprised of goodwill. Under generally accepted accounting principles, goodwill is subject to periodicreview and testing to determine if it is impaired. Unfavorable trends in our industry and unfavorable events or disruptions to our operations resulting fromadverse legislative or regulatory actions or from other unpredictable causes could result in significant goodwill impairment charges.Controls and procedures may fail or be circumvented.Controls and procedures are particularly important for small-loan consumer finance companies. Any system of controls, however well designed and operated,is based in part on certain assumptions and can provide only reasonable, not absolute, assurance that the objectives of the system are met. In the secondquarter of fiscal 2014, we reported a loss of $1.2 million as the result of a fraud at one of our branches where certain of our controls and procedures werecircumvented. Any failure or circumvention of our controls and procedures or failure to comply with regulations related to controls and procedures couldhave a material adverse effect on our business, results of operations and financial condition.The loss, replacement or transition of key management personnel, could cause our business to suffer. Our future success significantly depends on the continued services and performance of our key management personnel. Competition for these employees isintense. Additionally, during fiscal 2014, the Company experienced the departure and replacement of its Chief Financial Officer and Chief Operating Officer.The loss of, or inability to successfully replace and transition, the services of members of our senior management or key team members or the inability toattract additional qualified personnel as needed could materially harm our business.Regular turnover among our managers and other employees at our branches makes it more difficult for us to operate our branches and increases our costsof operations, which could have an adverse effect on our business, results of operations and financial condition.The annual turnover as of March 31, 2015 among our branch employees was approximately 34.4%. This turnover increases our cost of operations and makesit more difficult to operate our branches. If we are unable to keep our employee turnover rates consistent with historical levels or if unanticipated problemsarise from our high employee turnover, our business, results of operations and financial condition could be adversely affected.Our ability to manage our growth may deteriorate, and our ability to execute our growth strategy may be adversely affected.Our growth strategy, which is based on opening and acquiring branches in existing and new markets, is subject to significant risks, some of which are beyondour control, including:•the prevailing laws and regulatory environment of each state in which we operate or seek to operate, and, to the extent applicable, federal laws andregulations, which are subject to change at any time;•our ability to obtain and maintain any regulatory approvals, government permits or licenses that may be required;•the degree of competition in new markets and its effect on our ability to attract new customers;•our ability to obtain adequate financing for our expansion plans; and•our ability to attract, train and retain qualified personnel to staff our new operations.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsWe currently lack product and business diversification; as a result, our revenues and earnings may be disproportionately negatively impacted by externalfactors and may be more susceptible to fluctuations than more diversified companies.Our primary business activity is offering small consumer installment loans together with, in some states in which we operate, related ancillary products. Thus,any developments, whether regulatory, economic or otherwise, that would hinder, reduce the profitability of or limit our ability to operate our small consumerinstallment loan business on the terms currently conducted would have a direct and adverse impact on our business, profitability and perhaps even ourviability. Our current lack of product and business diversification could inhibit our opportunities for growth, reduce our revenues and profits and make usmore susceptible to earnings fluctuations than many other financial institutions whose operations are more diversified.Interruption of, or a breach in security relating to, our information systems could adversely affect us.We rely heavily on communications and information systems to conduct our business. Each branch is part of an information network that is designed topermit us to maintain adequate cash inventory, reconcile cash balances on a daily basis and report revenues and expenses to our headquarters. Any failure,interruption or breach in security of these systems, including any failure of our back-up systems, cyber attacks, data theft, computer viruses or similarproblems could result in failures or disruptions in our customer relationship management, general ledger, loan and other systems, loss of confidentialCompany, customer or vendor information and could result in a loss of customer confidence and business, subject us to additional regulatory scrutiny ornegative publicity, or expose us to civil litigation, financial liability, and increased costs to remediate such problems, any of which could have a materialadverse effect on our financial condition and results of operations. Our centralized headquarters functions are susceptible to disruption by catastrophic events, which could have a material adverse effect on our business,results of operations and financial condition. Our headquarters building is located in Greenville, South Carolina. Our information systems and administrative and management processes are primarilyprovided to our branches from this centralized location, and they could be disrupted if a catastrophic event, such as severe weather, natural disaster, poweroutage, act of terror or similar event, destroyed or severely damaged our headquarters. Any such catastrophic event or other unexpected disruption of ourheadquarters functions could have a material adverse effect on our business, results of operations and financial condition.Absence of dividends could reduce our attractiveness to investors.Since 1989, we have not declared or paid cash dividends on our common stock and may not pay cash dividends in the foreseeable future. As a result, ourcommon stock may be less attractive to certain investors than the stock of dividend-paying companies.Various provisions of our charter documents and applicable laws could delay or prevent a change of control that shareholders may favor.Provisions of our articles of incorporation, South Carolina law, and the laws in several of the states in which our operating subsidiaries are incorporated coulddelay or prevent a change of control that the holders of our common stock may favor or may impede the ability of our shareholders to change ourmanagement. In particular, our articles of incorporation and South Carolina law, among other things, authorize our board of directors to issue preferred stockin one or more series, without shareholder approval, and will require the affirmative vote of holders of two-thirds of our outstanding shares of voting stock, toapprove our merger or consolidation with another corporation. Additional information regarding the similar effect of laws in certain states in which weoperate is described in Part 1, Item 1, “Description of Business – Government Regulation.”Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsOverall stock market volatility may materially and adversely affect the market price of our common stock.The Company’s common stock price has been and is likely to continue to be subject to significant volatility. A variety of factors could cause the price of thecommon stock to fluctuate, perhaps substantially, including: general market fluctuations resulting from factors not directly related to the Company’soperations or the inherent value of its common stock; state or federal legislative or regulatory proposals, initiatives, actions or changes that are, or areperceived to be, adverse to our operations or the broader consumer finance industry in general; announcements of developments related to our business;fluctuations in our operating results and the provision for loan losses; low trading volume in our common stock; decreased availability of our common stockresulting from stock repurchases and concentrations of ownership by large or institutional investors; general conditions in the financial service industry, thedomestic or global economy or the domestic or global credit or capital markets; changes in financial estimates by securities analysts; our failure to meet theexpectations of securities analysts or investors; negative commentary regarding our Company and corresponding short-selling market behavior; adversedevelopments in our relationships with our customers; investigations or legal proceedings brought against the Company or its officers; or significant changesin our senior management team.Our use of derivatives exposes us to credit and market risk.From time to time we may use derivatives to manage our exposure to interest rate risk and foreign currency fluctuations. By using derivative instruments, theCompany is exposed to credit and market risk. We can provide no assurance that these strategies will mitigate the impact of increases in interest rates orforeign currency fluctuations. Additional information regarding our exposure to credit and market risk is included in Part II, Item 7A, “Quantitative andQualitative Disclosures About Market Risk.”Changes to accounting rules, regulations or interpretations could significantly affect our financial results.New accounting rules or regulations, changes to existing accounting rules or regulations and changing interpretations of existing rules and regulations haveand may continue to be issued or occur in the future. Any such changes to accounting rules, regulations or interpretations could negatively affect ourreported results of operations and could negatively affect our financial condition through increased cost of compliance.A small number of our shareholders have the ability to significantly influence matters requiring shareholder approval and such shareholders have interestswhich may conflict with the interests of our other security holders.As of March 31, 2015, based on filings made with the SEC and other information made available to us, Prescott General Partners, LLC and its affiliatesbeneficially owned approximately 27.9% of our common stock. As a result, these few shareholders are able to significantly influence matters presented toshareholders, including the election and removal of directors, the approval of significant corporate transactions, such as any reclassification, reorganization,merger, consolidation or sale of all or substantially all of our assets, and the control of our management and affairs, including executive compensationarrangements. Their interests may conflict with the interests of our other security holders.Item 1B. Unresolved Staff CommentsNone. Item 2. Properties The Company owns its headquarters facility of approximately 29,000 square feet and a printing and mailing facility of approximately 13,000 square feet inGreenville, South Carolina, and all of the furniture, fixtures and computer terminals located in each branch. As of March 31, 2015, the Company had 1,320branches, most of which are leased pursuant to short-term operating leases. During the fiscal year ended March 31, 2015, total lease expense wasapproximately $26.0 million, or an average of approximately $19,700 per branch. The Company's leases generally provide for an initial three- to five-yearterm with renewal options. The Company's branches are typically located in shopping centers, malls and the first floors of downtown buildings. Branches inthe U.S. generally have a uniform physical layout with an average size of 1,580 square feet and in Mexico with an average size of 1,740 square feet.Item 3.Legal Proceedings As previously disclosed, on March 12, 2014, the Company received a Civil Investigative Demand (“CID”) from the Consumer Financial Protection Bureau(the “CFPB”). The stated purpose of the CID is to determine whether the Company has been or is “engaging in unlawful acts or practices in connection withthe marketing, offering, or extension of credit in violation of Sections 1031 and 1036 of the Consumer Financial Protection Act, 12 U.S.C. §§ 5531, 5536, theTruth in Lending Act, 15 U.S.C. §§ 1601, et seq., Regulation Z, 12 C.F.R. pt. 1026, or any other Federal consumer financial law” and “also to determinewhether Bureau action to obtain legal or equitable relief would be in the public interest.” The Company responded, within the deadlines specified in the CID,to broad requests for production of documents, answers to interrogatories and written reports related to loans made by the Company and numerous otheraspects of the Company’s business. Subsequent to the March 2014 CID, the Company has received and responded to, and is actively in the process ofresponding to, additional broad requests and demands for information from the CFPB and expects that there will continue to be additional requests ordemands for information from the CFPB and ongoing interactions between the CFPB, the Company and Company counsel as part of the investigation. Weare currently unable to predict the ultimate timing or outcome of the CFPB investigation. While the Company believes its marketing and lending practicesare lawful, there can be no assurance that the CFPB's ongoing investigation or future exercise of its enforcement, regulatory, discretionary or other powerswill not result in findings or alleged violations of federal consumer financial protection laws that could lead to enforcement actions, proceedings or litigationand the imposition of damages, fines, penalties, restitution, other monetary liabilities, sanctions, settlements or changes to the Company’s business practicesor operations that could have a material adverse effect on the Company’s business, financial condition or results of operations or eliminate altogether theCompany's ability to operate its business profitably or on terms substantially similar to those on which it currently operates. See Part I, Item 1, “Business-Government Regulation-Federal legislation,” for a further discussion of these matters and the federal regulations to which the Company’s operations aresubject and Part I, Item 1A,“Risk Factors,” for more information regarding these regulations and related risks.As previously disclosed, on April 22, 2014, a shareholder filed a putative class action complaint, Edna Selan Epstein v. World Acceptance Corporation etal., in the United States District Court for the District of South Carolina (case number 6:14-cv-01606), against the Company and certain of its current andformer officers on behalf of all persons who purchased or otherwise acquired the Company’s common stock between April 25, 2013 and March 12, 2014. TheSource: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.complaint alleges that the Company made false and misleading statements in various SEC reports and other public statements in violation of federalsecurities laws preceding theSource: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsCompany’s disclosure in a Form 8-K filed March 13, 2014 that it had received above-referenced CID from the CFPB. The complaint seeks class certification,unspecified monetary damages, costs and attorneys’ fees. The Company believes the complaint is without merit. On June 25, 2014, the Company filed amotion to dismiss the complaint. On August 12, 2014, lead plaintiff Operating Engineers Construction Industry and Miscellaneous Pension Fund filed anamended complaint. The amended complaint contains similar allegations to the original complaint, but expands the class period and includes additionalallegations that the Company’s loan growth and volume figures were inflated because of a weakness in the Company’s internal controls relating to itsaccounting treatment of certain small-dollar loan re-financings. The Company filed a motion to dismiss the amended complaint on September 16, 2014. OnMay 18, 2015, the Court issued an order denying the Company’s motion to dismiss. On May 28, 2015, the Court granted the Company’s consent motion foran extension of time for the Company to answer the amended complaint to until July 1, 2015. On May 28, 2015, the Company filed a motion asking theCourt to certify its May 18, 2015 order for immediate appeal to the United States Court of Appeals for the Fourth Circuit, pursuant to 28 U.S.C. Section1292(b), and to stay proceedings pending the resolution of that appeal, on grounds that the Court’s decision involves a controlling question of law overwhich there is substantial ground for difference of opinion and an immediate appeal may materially advance the ultimate termination of the litigation. In theevent that this motion is disallowed, or if the Court’s decision is not reversed on appeal, then the Company intends to answer the complaint, denying allliability, and to defend the action vigorously.In addition, from time to time the Company is involved in routine litigation matters relating to claims arising out of its operations in the normal course ofbusiness, including matters in which damages in various amounts are claimed.Estimating an amount or range of possible losses resulting from litigation, government actions and other legal proceedings is inherently difficult and requiresan extensive degree of judgment, particularly where the matters involve indeterminate claims for monetary damages, may involve fines, penalties or damagesthat are discretionary in amount, involve a large number of claimants or significant discretion by regulatory authorities, represent a change in regulatorypolicy or interpretation, present novel legal theories, are in the early stages of the proceedings, are subject to appeal or could result in a change in businesspractices. In addition, because most legal proceedings are resolved over extended periods of time, potential losses are subject to change due to, among otherthings, new developments, changes in legal strategy, the outcome of intermediate procedural and substantive rulings and other parties’ settlement postureand their evaluation of the strength or weakness of their case against us. For these reasons, we are currently unable to predict the ultimate timing or outcomeof, or reasonably estimate the possible losses or a range of possible losses resulting from, the matters described above. Based on information currentlyavailable, the Company does not believe that any reasonably possible losses arising from currently pending legal matters will be material to the Company’sresults of operations or financial conditions. However, in light of the inherent uncertainties involved in such matters, an adverse outcome in one or more ofthese matters could materially and adversely affect the Company’s financial condition, results of operations or cash flows in any particular reporting period.Item 4. Mine Safety DisclosuresNone.PART II.Item 5.Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of EquitySecuritiesSince November 26, 1991, the Company's common stock has traded on NASDAQ, currently on the NASDAQ Global Select Market ("NASDAQ"), under thesymbol WRLD. As of May 29, 2015, there were 61 holders of record of common stock and a significant number of persons or entities who hold their stock innominee or “street” names through various brokerage firms. Since April 1989, the Company has not declared or paid any cash dividends on its common stock. Its policy has been to retain earnings for use in its businessand selectively use cash to repurchase its common stock on the open market. In the future, the Company's Board of Directors will determine whether to paycash dividends based on conditions then existing, including the Company's earnings, financial condition, capital requirements and other relevant factors. Inaddition, the Company's credit agreements contain certain restrictions on the payment of cash dividends on its capital stock. See “Management’s Discussionand Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources.” On March 10, 2015, the Board of Directors authorized the Company to repurchase up to $25.0 million of the Company’s common stock. This repurchaseauthorization follows, and is in addition to, similar repurchase authorizations of $25.0 million announced on February 19, 2015 and $25.0 millionannounced on July 23, 2014. After taking into account all shares repurchased through May 29, 2015, the Company has $11.5 million in aggregate remainingrepurchase capacity under all of the Company’s outstanding repurchase authorizations. The timing and actual number of shares repurchased will depend on avariety of factors, including the stock price, corporate and regulatory requirements and other market and economic conditions. Although the repurchaseauthorizations above have no stated expiration date, the Company’s stock repurchase program may be suspended or discontinued at any time. Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsThe following table provides information with respect to purchases made by the Company of shares of the Company’s common stock during the three monthperiod ended March 31, 2015: Issuer Purchases of Equity Securities Total Numberof Shares Purchased AveragePrice Paidper Share Total Dollar Valueof SharesPurchased as partof PubliclyAnnounced Plansor Programs ApproximateDollar Value ofShares That MayYet be PurchasedUnder the Plansor Programs January 1 through January 31, 2015— $— — $13,434,019 February 1 through February 28, 2015296,955 78.46 23,297,770 15,136,249*March 1 through March 31, 2015334,812 85.48 28,619,930 11,516,319* Total for the quarter631,767 $82.18 51,917,700 * On March 10, 2015, the Board of Directors authorized the Company to repurchase up to $25.0 million of the Company’s common stock. This repurchase authorization follows,and is in addition to, similar repurchase authorizations of $25.0 million announced on February 19, 2015 and $25.0 million announced on July 23, 2014.The timing and actual number of shares repurchased will depend on a variety of factors, including the stock price, corporate and regulatory requirements andother market and economic conditions. The Company’s stock repurchase program is not subject to specific targets or any expiration date, but may besuspended or discontinued at any time.The table below reflects the stock prices published by NASDAQ by quarter for the last two fiscal years. The last reported sale price on May 29, 2015 was$81.57.Market Price of Common StockFiscal 2015Quarter High LowFirst $83.22 $71.63Second 86.58 67.45Third 81.33 63.25Fourth 94.96 70.50 Market Price of Common StockFiscal 2014Quarter High LowFirst $94.99 $79.55Second 90.70 75.13Third 107.98 84.22Fourth 103.62 71.58Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsItem 6. Selected Financial DataSelected Consolidated Financial and Other Data (Amounts in Thousands, except # of Branches)Years Ended March 31, 2015 2014 2013 2012 2011Statement of Operations Data: Interest and fee income$524,277 $523,770 $485,414 $447,189 $408,254Insurance commissions and other income85,936 75,493 78,222 73,681 66,851Total revenues610,213 599,263 563,636 520,870 475,105Provision for loan losses118,830 126,575 114,323 105,706 95,908General and administrative expenses292,052 281,248 265,629 241,392 221,175Interest expense23,301 21,195 17,394 13,899 14,773Total expenses434,183 429,019 397,345 360,997 331,856Income before income taxes176,030 170,244 166,291 159,873 143,249Income taxes65,197 63,636 62,201 59,179 52,000Net income$110,833 $106,608 $104,090 $100,694 $91,249Net income per common share (diluted)$11.90 $9.60 $8.00 $6.59 $5.63Diluted weighted average shares9,317 11,106 13,003 15,289 16,210Balance Sheet Data (end of period): Loans receivable, net of unearned interest, insurance andfees$812,743 $813,920 $782,096 $715,085 $646,072Allowance for loan losses(70,438) (63,255) (59,981) (54,507) (48,355)Loans receivable, net742,305 750,665 722,115 660,578 597,717Total assets866,131 850,028 809,325 735,003 666,397Total debt501,150 505,500 400,250 279,250 187,430Shareholders' equity315,568 307,355 366,396 418,875 442,575Other Operating Data: As a percentage of average loans receivable, net: Provision for loan losses13.9% 15.1% 14.6% 14.9% 15.1%Net charge-offs12.9% 14.7% 13.9% 14.0% 14.3%Number of branches open at year-end1,320 1,271 1,203 1,137 1,067Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsGeneralThe Company's financial performance continues to be dependent in large part upon the growth in its outstanding loans receivable, the maintenance of loanquality and acceptable levels of operating expenses. Since March 31, 2010, gross loans receivable have increased at a 7.6% annual compounded rate from$770.3 million to $1.1 billion at March 31, 2015. The increase over this period reflects both the higher volume of loans generated through the Company'sexisting branches and the contribution of loans generated from new branches opened or acquired over the period. During this same five-year period, theCompany has grown from 990 branches to 1,320 branches as of March 31, 2015. During fiscal 2016, the Company currently plans to open approximately 30new branches in the United States, open 10 new branches in Mexico and also evaluate acquisitions as opportunities arise.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsThe Company's ParaData Financial Systems subsidiary provides data processing systems to 102 separate finance companies, including the Company, andcurrently supports over 1,986 individual branches in 44 states and Mexico. ParaData’s revenue is highly dependent upon its ability to attract new customers,which often requires substantial lead time, and as a result its revenue may fluctuate from year to year. Its net revenues from system sales and supportamounted to $2.1 million, $2.4 million and $2.1 million in fiscal 2015, 2014 and 2013, respectively. ParaData’s net revenue to the Company will continueto fluctuate on a year to year basis. ParaData continues to provide data processing support for the Company’s in-house integrated computer system at asubstantially reduced cost to the Company.The Company offers an income tax return preparation and electronic filing program in all but a few of its U.S. branches. The Company preparedapproximately 56,000, 55,000 and 53,000 returns in each of the fiscal years 2015, 2014 and 2013, respectively. Revenues from the Company’s taxpreparation business amounted to approximately $9.9 million, a 8.5% increase over the $9.1 million earned during fiscal 2014. The following table sets forth certain information derived from the Company's consolidated statements of operations and balance sheets, as well as operatingdata and ratios, for the periods indicated: Years Ended March 31, 2015 2014 2013 (Dollars in thousands)Average gross loans receivable (1)$1,174,391 $1,151,713 $1,072,500Average net loans receivable (2)$856,712 $836,961 $782,212Expenses as a percentage of total revenues: Provision for loan losses19.5% 21.2% 20.3%General and administrative47.9% 46.9% 47.1%Total interest expense3.8% 3.5% 3.1%Operating margin (3)32.7% 31.9% 32.6%Return on average assets12.5% 12.3% 13.0%Branches opened and acquired, net49 68 66Total branches (at period end)1,320 1,271 1,203 (1)Average gross loans receivable have been determined by averaging month-end gross loans receivable over the indicated period.(2)Average net loans receivable have been determined by averaging month-end gross loans receivable less unearned interest and deferred fees over the indicated period.(3)Operating margin is computed as total revenues less provision for loan losses and general and administrative expenses as a percentage of total revenues.Comparison of Fiscal 2015 Versus Fiscal 2014Net income was $110.8 million during fiscal 2015, a 4.0% increase over the $106.6 million million earned during fiscal 2014 . The increase in net incomewas largely due to a $10.0 million after-tax gain realized during the year from the sale of previously charged-off accounts. Operating income (revenues lessprovision for loan losses and general and administrative expenses) excluding the impact of the charge-off sale decreased $7.6 million. Net income was alsoimpacted by a $2.1 million and $1.6 million increase in interest expense and income tax expense, respectively.Total revenues increased to $610.2 million in fiscal 2015, a $10.9 million, or 1.8%, increase over the $599.3 million in fiscal 2014. Revenues from the 1,179branches open throughout both fiscal years increased by 0.8%. At March 31, 2015, the Company had 1,320 branches in operation, an increase of 49 branchesfrom March 31, 2014.Interest and fee income during fiscal 2015 increased by $0.5 million, or 0.1%, over fiscal 2014. This increase resulted from an increase of $19.8 million, or2.4%, in average net loans receivable between the two fiscal years. The revenue increase was partially offset by a reduction in loan volume in the year, whichresulted from the implementation of a system change that ensured customers were not encouraged to refinance existing loans where the proceeds from thetransaction were less than 10% of the loan being refinanced. The increase was also partially offset by a shift in the portfolio mix to larger loans and anincrease in the amount of accounts 60 days or more past due, which are no longer accruing revenue. The percentage of loans outstanding that represent largerloans has increased from 39.2% at March 31, 2014 to 40.5% at March 31, 2015.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsInsurance commissions and other income increased by $10.4 million, or 13.8%, over the two fiscal years. Insurance commissions decreased by $2.6 million,or 5.1%, when comparing the two fiscal periods due to the decrease in loan volume mentioned above. Other income increased by $13.0 million, or 51.8%,when comparing the two fiscal periods. This increase resulted primarily from the sale of approximately $16.0 million of charged off accounts, partially offsetby a decrease in the sales of World Class Buying Club ("WCBC") of $1.4 million, a decrease in the sales of motor club of $915,000, and decreased revenuefrom Paradata of $309,000. As disclosed in our second quarter, the Company has decided to wind down the WCBC product. As of March 31, 2015, theCompany is no longer financing the purchase of products through the program. The Company will continue to service all outstanding retail installment salescontracts. The WCBC product contributed $2.4 million to other income during the year and $3.9 million for the year ended March 31, 2014. The WCBCloans contributed $2.0 million to interest and fees and resulted in net charge-offs of $3.2 million for the year ended March 31, 2015 and $2.3 million and$4.1 million, respectively, for the year ended March 31, 2014.The provision for loan losses during fiscal 2015 decreased by $7.7 million, or 6.1%, from the previous year. This decrease resulted from a decrease in theamount of loans charged off and a decrease in the general reserve associated with slower growth during the current fiscal year partially offset by an increase inaccounts 90 days or more past due. Net charge-offs for fiscal 2015 amounted to $110.6 million, a 10.1% decrease over the $123.0 million charged off duringfiscal 2014. Accounts that were 60 days or more past due were 4.3% and 3.0% on a recency basis, and were 7.0% and 5.3% on a contractual basis at March 31,2015 and March 31, 2014. The increase in accounts contractually delinquent was primarily due to the change in branch level incentives discussed in thesecond quarter. When excluding the impact of payroll deduct loans in Mexico, the accounts contractually delinquent 60 days or more past due were 6.1% atMarch 31, 2015. During the current fiscal year, the Company has also had a decrease in year-over-year loan loss ratios. Net charge-offs as a percentage ofaverage net loans decreased from 14.7% during fiscal 2014 to 12.9% during fiscal 2015. The net charge-off ratio benefited from the change in branch levelincentives mentioned above. We estimate the net charge-off ratio would have been approximately 14.1% for the year excluding the impact of the change.The prior year charge-off ratio of 14.7% and the estimated current year charge-off ratio of 14.1% are in line with historical levels. From fiscal 2002 to fiscal2006, the charge-offs as a percent of average loans ranged from 14.6% to 14.8%. In fiscal 2007 the Company experienced a temporary decline to 13.3%,which was attributed to a change in the bankruptcy law but returned to 14.5% in fiscal 2008. In fiscal 2009 the ratio increased to 16.7%, the highest in theCompany’s history as a result of the difficult economic environment and higher energy costs that our customers faced. The ratio steadily declined from 15.5%in fiscal 2010 to 13.9% in fiscal 2013. General and administrative expenses during fiscal 2015 increased by $10.8 million, or 3.8%, over the previous fiscal year. Of the total increase,approximately $5.0 million related to personnel expense, the majority of which was attributable to the year-over-year increase in our branch network, normalmerit increases to employees, increased health insurance costs, and incentive costs. General and administrative expenses, when divided by average openbranches, decreased slightly when comparing the two fiscal years and, overall, general and administrative expenses as a percent of total revenues increased to47.9% in fiscal 2015 from 46.9% in fiscal 2014, respectively.Interest expense increased by $2.1 million, or 9.9%, during fiscal 2015, as compared to the previous fiscal year as a result of an increase in average debtoutstanding of 12.0%.Income tax expense increased $1.6 million, or 2.5%, primarily from an increase in pre-tax income. The effective tax rate decreased to 37.0% for fiscal 2015compared to 37.4% for fiscal 2014. The decrease was primarily due the reduction of state taxes resulting from a change in the corporate structure.Comparison of Fiscal 2014 Versus Fiscal 2013Net income was $106.6 million during fiscal 2014, a 2.4% increase over the $104.1 million earned during fiscal 2013. This increase resulted primarily froman increase in operating income (revenues less provision for loan losses and general and administrative expenses) of $7.8 million, or 4.2%, partially offset bya $3.8 million and a $1.4 million increase in interest expense and income tax expense, respectively.Total revenues increased to $599.3 million in fiscal 2014, a $35.6 million, or 6.3%, increase over the $563.6 million in fiscal 2013. Revenues from the 1,131branches open throughout both fiscal years increased by 3.7%. At March 31, 2014, the Company had 1,271 branches in operation, an increase of 68 branchesfrom March 31, 2013.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsInterest and fee income during fiscal 2014 increased by $38.4 million, or 7.9%, over fiscal 2013. This increase resulted from an increase of $54.7 million, or7.0%, in average net loans receivable between the two fiscal years. The increase in average loans receivable was attributable to the Company’s internalgrowth and an increase in the average loan balance, which increased from $1,115 to $1,163. The increase in income was less than expected given theincreased fees in Texas and Georgia due to the law changes in these two states. The revenue increase was offset by a reduction in loan volume in the yearwhich resulted from the implementation of a system change that ensured customers were not encouraged to refinance existing loans where the proceeds fromthe transaction were less than 10% of the loan being refinanced. The increase was also offset by a shift in the portfolio mix to larger loans. The percentage ofloans outstanding that represent larger loans has increased from 33.1% at March 31, 2013 to 38.0% at March 31, 2014.Insurance commissions and other income decreased by $2.7 million, or 3.5%, over the two fiscal years. Insurance commissions decreased by $1.0 million, or1.9%, when comparing the two fiscal periods. Insurance commissions in Tennessee decreased by approximately $890,000, primarily due to the state ofTennessee's change in its maximum loan size for alternative rate loans from $1,000 to $2,000. Lenders in Tennessee are not permitted to offer insuranceproducts with alternative rate loans. Other income decreased by $1.8 million, or 6.6%, when comparing the two fiscal periods. This decrease resultedprimarily from a decrease in the sales of motor club of $908,000, and a decrease in the sales of WCBC of $880,000, partially offset by increased revenue fromthe Company's tax preparation business of $422,000 and Paradata of $230,000.The provision for loan losses during fiscal 2014 increased by $12.3 million, or 10.7%, from the previous year. This increase resulted from an increase in theamount of loans charged off and an increase in the general reserve associated with the increase in the gross loans when comparing the two periods. Netcharge-offs for fiscal 2014 amounted to $123.0 million, a 12.8% increase over the $109.0 million charged off during fiscal 2013. Accounts that were 60 daysor more past due were 3.0% and 2.7% on a recency basis, and were 5.3% and 4.4% on a contractual basis at both March 31, 2014 and March 31, 2013. Whenexcluding the impact of payroll deduct loans in Mexico, the accounts contractually delinquent 60 days or more were 4.8% at March 31, 2014. During thecurrent fiscal year, the Company has also had an increase in year-over-year loan loss ratios. Annualized net charge-offs as a percentage of average net loansincreased from 13.9% during fiscal 2013 to 14.7% during fiscal 2014. The prior year charge-off ratio of 13.9% and the current year charge-off ratio of 14.7%are in line with historical levels. From fiscal 2002 to fiscal 2006, the charge-offs as a percent of average loans ranged from 14.6% to 14.8%. In fiscal 2007 theCompany experienced a temporary decline to 13.3%, which was attributed to a change in the bankruptcy law but returned to 14.5% in fiscal 2008. In fiscal2009 the ratio increased to 16.7%, the highest in the Company’s history as a result of the difficult economic environment and higher energy costs that ourcustomers faced. The ratio steadily declined from 15.5% in fiscal 2010 to 14.3% in fiscal 2012.General and administrative expenses during fiscal 2014 increased by $15.6 million, or 5.9%, over the previous fiscal year. Of the total increase,approximately $9.4 million related to personnel expense, the majority of which was attributable to the year-over-year increase in our branch network, normalmerit increases to employees, increased health insurance costs, and incentive costs, including stock compensation expense, which increased approximately$6.5 million. Increases in personnel expense were offset by the reversal of $2.9 million of compensation expense related to the resignation and retirement ofexecutive officers during the current fiscal year. General and administrative expenses, when divided by average open branches, decreased slightly whencomparing the two fiscal years and, overall, general and administrative expenses as a percent of total revenues decreased to 46.9% in fiscal 2014 from 47.1%in fiscal 2013, respectively.Interest expense increased by $3.8 million, or 21.9%, during fiscal 2014, as compared to the previous fiscal year as a result of an increase in average debtoutstanding of 26.6%.Income tax expense increased $1.4 million, or 2.3%, primarily from an increase in pre-tax income. The effective tax rate remained relatively consistent at37.4% for both fiscal 2014 and 2013.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsRegulatory MattersCFPB InvestigationAs previously disclosed, on March 12, 2014, the Company received a Civil Investigative Demand (“CID”) from the Consumer Financial Protection Bureau(the “CFPB”). The stated purpose of the CID is to determine whether the Company has been or is “engaging in unlawful acts or practices in connection withthe marketing, offering, or extension of credit in violation of Sections 1031 and 1036 of the Consumer Financial Protection Act, 12 U.S.C. §§ 5531, 5536, theTruth in Lending Act, 15 U.S.C. §§ 1601, et seq., Regulation Z, 12 C.F.R. pt. 1026, or any other Federal consumer financial law” and “also to determinewhether Bureau action to obtain legal or equitable relief would be in the public interest.” The Company responded, within the deadlines specified in the CID,to broad requests for production of documents, answers to interrogatories and written reports related to loans made by the Company and numerous otheraspects of the Company’s business. Subsequent to the March 2014 CID, the Company has received and responded to, and is actively in the process ofresponding to, additional broad requests and demands for information from the CFPB and expects that there will continue to be additional requests ordemands for information from the CFPB and ongoing interactions between the CFPB, the Company and Company counsel as part of the investigation. Weare currently unable to predict the ultimate timing or outcome of the CFPB investigation. While the Company believes its marketing and lending practicesare lawful, there can be no assurance that the CFPB's ongoing investigation or future exercise of its enforcement, regulatory, discretionary or other powerswill not result in findings or alleged violations of federal consumer financial protection laws that could lead to enforcement actions, proceedings or litigationand the imposition of damages, fines, penalties, restitution, other monetary liabilities, sanctions, settlements or changes to the Company’s business practicesor operations that could have a material adverse effect on the Company’s business, financial condition or results of operations or eliminate altogether theCompany's ability to operate its business profitably or on terms substantially similar to those on which it currently operates. See “Business - GovernmentRegulation - Federal legislation” for a further discussion of these matters and the federal regulations to which the Company’s operations are subject and“Risk Factors” for more information regarding these regulations and related risks.CFPB Proposed Rulemaking Initiative. On March 26, 2015, the CFPB announced that it was considering proposing rules under its unfair, deceptive and abusive acts and practices rulemakingauthority relating to payday, vehicle title, and similar loans. The proposal would cover short-term loans with a contractual term of 45 days or less, as well as“longer-term loans” with a term of longer than 45 days with an all-in annualized percentage rate of interest (“APR”) in excess of 36% in which the lender haseither a non-purchase money security interest in the consumer’s vehicle or the right to collect repayment from the consumer’s bank account or paycheck. Webelieve the CFPB’s “longer-term” credit proposals seek to address a concern that consumers suffer harm if lenders fail to underwrite loans but take a securityinterest in the consumer’s vehicle or access to repayment from a consumer’s account or wages. Although the Company does not make loans with terms of 45days or less or obtain access to a customer’s bank account or paycheck for repayment of any of its loans, it does make some vehicle-secured loans with anAPR within the scope of the proposal. The Company currently estimates that the amount of such vehicle-secured loans in its loan portfolio as of March 31,2015 are approximately 13% of its total number of loans and approximately 20% of its portfolio by gross loan volume. The proposals would require a lender,as a condition of making a covered longer-term loan, to first make a good-faith reasonable determination that the consumer has the ability to repay thecovered longer-term loan without reborrowing or defaulting. The proposals would require lenders to verify income, “major financial obligations” andborrowing history. Lenders would also be required determine that a consumer is able to make all projected payments under the covered longer-term loan asthose payments are due, while still fulfilling other major financial obligations and meeting living expenses. This ability to repay assessment would apply toboth the initial longer-term loan and to any subsequent refinancing. In addition, the proposals would include a rebuttable presumption that customersseeking to refinance a covered longer-term loan lack an “ability to repay” if at the time of refinancing the borrower: (i) was delinquent or had recently beendelinquent on an outstanding loan; (ii) stated or indicated an inability to make a scheduled payment or that the loan was causing financial distress; (iii) isallowed to skip a payment or pays a smaller amount than a payment that would have been due on the loan, unless the refinancing provides a substantialamount of cash to the consumer; or (iv) is in default on the outstanding loan. To overcome this presumption of inability to repay, the lender would have toverify a change in the borrower’s circumstances to indicate an ability to repay the additional extension of credit. These proposals are subject to severalprocedural requirements and to possible change before any final rules would be issued and implemented and we cannot predict what the ultimate rulemakingwill provide. The Company does not believe that these proposals as currently described by the CFPB would have a material impact on the Company’sexisting lending procedures, because the Company currently underwrites all its loans (including those secured by a vehicle title that would fall within thescope of these proposals) by reviewing the customer’s ability to repay based on the Company’s standards. However, there can be no assurance that theseproposals for longer-term loans, if and when implemented in final rulemaking, would not require changes to the Company’s practices and procedures for suchloans that could materially and adversely affect the Company’s ability to make such loans, the cost of making such loans, the Company’s ability to, orfrequency with which it could, refinance any such loans, and the profitability of such loans. Any final rulemaking also could have effects beyond thosecontemplated in the initial proposal that could further materially and adversely impact our business and operations.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsAs part of the CFPB’s outline of the proposed rulemaking initiative described above, the CFPB also stated that it expects to conduct separate rulemaking toidentify larger participants in the installment lending market for purposes of its supervision program. Though the timing of any such rulemaking is uncertain,the Company believes that the implementation of such rules would likely bring the Company’s business under the CFPB’s supervisory authority which,among other things, would subject the Company to reporting obligations to, and on-site compliance examinations by, the CFPB. See Part I, Item 1, “Business- Government Regulation - Federal legislation,” for a further discussion of these matters and the federal regulations to which the Company’s operations aresubject and Part I, Item 1A, “Risk Factors,” for more information regarding these regulatory and related risks.New Mexico Rate Cap Bills. On February 4, 2015, Members of the New Mexico House Regulatory and Public Affairs subcommittee tabled measures that would have led to theintroduction of House Bill 36 and House Bill 24, which were to propose a 36% rate cap on all financial lending products. The Company, through its state andfederal trade associations, is working in opposition to this pending legislation; however, it is uncertain whether these efforts will be successful in preventingthe passage of the legislation. As discussed elsewhere in this report, the Company’s operations are subject to extensive state and federal laws and regulations,and changes in those laws or regulations or their application could have a material adverse effect on the Company’s business, results of operations, prospectsor ability to continue operations in the jurisdictions affected by these changes. See Part I, Item 1, “Business - Government Regulation - State Legislation” and“- Federal Legislation,” and Part I, Item 1A,“Risk Factors,” for more information regarding this legislation and related risks.Critical Accounting PoliciesThe Company’s accounting and reporting policies are in accordance with U.S. generally accepted accounting principles and conform to general practiceswithin the finance company industry. The significant accounting policies used in the preparation of the Consolidated Financial Statements are discussed inNote 1 to the Consolidated Financial Statements. Certain critical accounting policies involve significant judgment by the Company’s management,including the use of estimates and assumptions which affect the reported amounts of assets, liabilities, revenues, and expenses. As a result, changes in theseestimates and assumptions could significantly affect the Company’s financial position and results of operations. The Company considers its policiesregarding the allowance for loan losses, share-based compensation, and income taxes to be its most critical accounting policies due to the significant degreeof management judgment involved.Allowance for Loan LossesThe Company has developed policies and procedures for assessing the adequacy of the allowance for loan losses that take into consideration variousassumptions and estimates with respect to the loan portfolio. The Company’s assumptions and estimates may be affected in the future by changes ineconomic conditions, among other factors. For additional discussion concerning the allowance for loan losses, see “Credit Quality” below.Share-Based CompensationThe Company measures compensation cost for share-based awards at fair value and recognizes compensation over the service period for awards expected tovest. The fair value of restricted stock is based on the number of shares granted and the quoted price of our common stock at the time of grant, and the fairvalue of stock options is determined using the Black-Scholes valuation model. The Black-Scholes model requires the input of highly subjective assumptions,including expected volatility, risk-free interest rate and expected life, changes to which can materially affect the fair value estimate. In addition, theestimation of share-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from our currentestimates, such amounts will be recorded as a cumulative adjustment in the period that the estimates are revised. The Company considers many factors whenestimating expected forfeitures, including types of awards, employee class, and historical experience. Actual results, and future changes in estimates, maydiffer substantially from our current estimates.Income Taxes Management uses certain assumptions and estimates in determining income taxes payable or refundable, deferred income tax liabilities and assets for eventsrecognized differently in its financial statements and income tax returns, and income tax expense. Determining these amounts requires analysis of certaintransactions and interpretation of tax laws and regulations. Management exercises considerable judgment in evaluating the amount and timing of recognitionof the resulting income tax liabilities and assets. These judgments and estimates are re-evaluated on a periodic basis as regulatory and business factorschange.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsNo assurance can be given that either the tax returns submitted by management or the income tax reported on the Consolidated Financial Statements will notbe adjusted by either adverse rulings by the U.S. Tax Court, changes in the tax code, or assessments made by the Internal Revenue Service state, or foreigntaxing authorities. The Company is subject to potential adverse adjustments, including but not limited to: an increase in the statutory federal or state incometax rates, the permanent non-deductibility of amounts currently considered deductible either now or in future periods, and the dependency on the generationof future taxable income in order to ultimately realize deferred income tax assets.Under FASB ASC 740, the Company includes the current and deferred tax impact of its tax positions in the financial statements when it is more likely thannot (likelihood of greater than 50%) that such positions will be sustained by taxing authorities, with full knowledge of relevant information, based on thetechnical merits of the tax position. While the Company supports its tax positions by unambiguous tax law, prior experience with the taxing authority, andanalysis that considers all relevant facts, circumstances and regulations, management must still rely on assumptions and estimates to determine the overalllikelihood of success and proper quantification of a given tax position.Credit QualityThe Company’s delinquency and net charge-off ratios reflect, among other factors, changes in the mix of loans in the portfolio, the quality of receivables, thesuccess of collection efforts, bankruptcy trends and general economic conditions.Delinquency is computed on the basis of the date of the last full contractual payment on a loan (known as the recency method) and on the basis of the amountpast due in accordance with original payment terms of a loan (known as the contractual method). Upon refinancings, the contractual delinquency of a loan ismeasured based upon the terms of the new agreement, and is not impacted by the refinanced loan's classification as a new loan or modification of the existingloan. Management closely monitors portfolio delinquency using both methods to measure the quality of the Company's loan portfolio and the probability ofcredit losses.The following table classifies the gross loans receivable of the Company that were delinquent on a contractual basis for at least 61 days at March 31, 2015,2014, and 2013: At March 31, 2015 2014 2013 (Dollars in thousands)Contractual basis: 61-90 days past due$26,028 $30,607 $22,77391 days or more past due51,133 28,663 23,941Total$77,161 $59,270 $46,714Percentage of period-end gross loans receivable7.0% 5.3% 4.4%When excluding the impact of payroll deduct loans in Mexico, the accounts contractually delinquent 60 days or more were 6.1% at March 31, 2015. Ourpayroll deduct loans in Mexico are installment loans to union members where we have an agreement with the union to deduct the loan payment from themember's payroll and remit it on the members behalf to the Company. The additional administrative process, which is unique to the payroll deduct product,often results in a higher level of contractual delinquencies. However, the historical net charge-offs to average net loans are lower than the overall Companyratio. The payroll deduct loans have increased from 37.9% of our Mexican portfolio at March 31, 2014 to 44.8% at March 31, 2015.In fiscal 2015 approximately 83.1% of the Company’s loans were generated through refinancings of outstanding loans and the origination of new loans toprevious customers. A refinancing represents a new loan transaction with a present customer in which a portion of the new loan proceeds is used to repay thebalance of an existing loan and the remaining portion is advanced to the customer. For fiscal 2015, 2014, and 2013, the percentages of the Company’s loanoriginations that were refinancings of existing loans were 71.5%, 73.5%, and 75.3%, respectively. The Company’s refinancing policies, while limited bystate regulations, in all cases consider the customer’s payment history and require that the customer has made multiple payments on the loan beingconsidered for refinancing. A refinancing is considered a current refinancing if the customer is no more than 45 days delinquent on a contractualbasis. Delinquent refinancings may be extended to customers who are more than 45 days past due on a contractual basis if the customer completes a newapplication and the manager believes that the customer’s ability and intent to repay has improved. It is the Company’s policy to not refinance delinquentloans in amounts greater than the original amounts financed. In all cases, a customer must complete a new application every two years. During fiscal 2015and 2014, delinquent refinancings represented 1.6% and 1.5%, respectively, of the Company’s total loan volume.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsCharge-offs, as a percentage of loans made by category, are greatest on loans made to new borrowers and less on loans made to former borrowers andrefinancings. As a percentage of total loans charged off, refinancings represent the greatest percentage due to the volume of loans made in this category. Thefollowing table depicts the charge-offs as a percent of loans made by category and as a percent of total charge-offs during fiscal 2015: Loan Volumeby Category Percent ofTotal Charge-offs Charge-off as a Percent of TotalLoans Made by CategoryRefinancing71.5% 69.4% 5.5%Former borrowers11.6% 7.2% 4.3%New borrowers16.9% 23.4% 13.1% 100.0% 100.0% The Company maintains an allowance for loan losses in an amount that, in management's opinion, is adequate to provide for losses inherent in the existingloan portfolio. The Company charges against current earnings, as a provision for loan losses, amounts added to the allowance to maintain it at levelsexpected to cover probable losses of principal. When establishing the allowance for loan losses, the Company takes into consideration the growth of the loanportfolio, current levels of charge-offs, current levels of delinquencies, and current economic factors.The Company uses a mathematical calculation to determine the initial allowance at the end of each reporting period. The calculation originated asmanagement's estimate of future charge-offs and is used to allocate expenses to the branch level. There are two components when calculating the allowancefor loan losses, which the Company refers to as the general reserve and the specific reserve. This calculation is a starting point and over time, and as needed,additional provisions have been added as determined by management to ensure the allowance is adequate.The general reserve is 4.25% of the gross loan portfolio. The specific reserve generally represents 100% of all loans 91 days or more past due on a recencybasis, including bankrupt accounts in that category. This methodology is based on historical data showing that the collection of loans 91 days or more pastdue and bankrupt accounts is remote.A process is then performed to determine the adequacy of the allowance for loan losses, as well as considering trends in current levels of delinquencies,charge-off levels, and economic trends (such as energy and food prices). The primary tool used is the movement model (on a contractual and recency basis)which considers the rolling twelve months of delinquency to determine expected charge-offs. The sum of expected charge-offs, determined from themovement model (on a contractual and recency basis) plus an amount related to delinquent refinancings are compared to the allowance resulting from themathematical calculation to determine if any adjustments are required to make the allowance adequate. Management would also determine if anyadjustments are needed if the consolidated annual provision for loan losses is less than total charge-offs. Management uses a precision level of 5% of theallowance for loan losses compared to the aforementioned movement model, when determining if any adjustments are needed.The Company's policy is to charge off at the earlier of when such loans are deemed to be uncollectible or when six months have elapsed since the date of thelast full contractual payment. The Company's charge-off policy has been consistently applied and no changes have been made during the periods reported.The Company's delinquencies and net charge-off ratios were significantly impacted during the year by a change to the branch level incentive plan thatbecame effective July 1, 2014. The change allows managers to continue collection efforts on accounts that are 91 days or more past due, without having theirmonthly bonus negatively impacted. As expected, this resulted in an increase in accounts 91 days or more past due and lower charge-offs during the year. TheCompany's historical annual charge-off rate for the past 10 years has ranged from 12.9% to 16.7% of net loans. Management considers the charge-off policywhen evaluating the appropriateness of the allowance for loan losses.To estimate the losses, the Company uses historical information for net charge-offs and average loan life. This method is based on the fact that manycustomers refinance their loans prior to the contractual maturity. Average contractual loan terms are approximately 13 months and the average loan life isapproximately 8 months. The Company had an allowance for loan losses that approximated 8 months of average net charge-offs at March 31, 2015.Management believes that the allowance is sufficient to cover estimated losses for its existing loans based on historical charge-offs and average loan life.A large percentage of loans that are charged off during any fiscal year are not on the Company's books at the beginning of the fiscal year. The Companybelieves that it is not appropriate to provide for losses on loans that have not been originated, that twelve months of net charge-offs are not needed in theallowance due to the average life of the loan portfolio being less than twelve months, and that the method employed is in accordance with generally acceptedaccounting principles.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsThe following is a summary of the changes in the allowance for loan losses for the years ended March 31, 2015, 2014, and 2013: 2015 2014 2013Balance at beginning of period$63,254,940 $59,980,842 54,507,299Provision for loan losses118,829,863 126,575,392 114,322,525Loan losses(126,093,332) (137,307,358) (121,514,261)Recoveries15,467,059 14,287,889 12,471,699Translation adjustment(1,020,542) (281,825) 193,580Balance at end of period$70,437,988 $63,254,940 59,980,842 Allowance as a percentage of loans receivable, net of unearned and deferred fees8.7% 7.8% 7.7%Net charge-offs as a percentage of average loans receivable (1)12.9% 14.7% 13.9%_______________________________________________________(1)Average loans receivable have been determined by averaging month-end gross loans receivable less unearned interest and deferred fees over the indicated period.Quarterly Information and SeasonalityThe Company's loan volume and corresponding loans receivable follow seasonal trends. The Company's highest loan demand typically occurs from Octoberthrough December, its third fiscal quarter. Loan demand has generally been the lowest and loan repayment highest from January to March, its fourth fiscalquarter. Loan volume and average balances typically remain relatively level during the remainder of the year. This seasonal trend affects quarterly operatingperformance through corresponding fluctuations in interest and fee income and insurance commissions earned and the provision for loan losses recorded, aswell as fluctuations in the Company's cash needs. Consequently, operating results for the Company's third fiscal quarter generally are significantly lowerthan in other quarters and operating results for its fourth fiscal quarter are significantly higher than in other quarters.The following table sets forth, on a quarterly basis, certain items included in the Company's unaudited Consolidated Financial Statements and shows thenumber of branches open during fiscal years 2015 and 2014. At or for the Three Months Ended 2015 2014 June30, September30, December31, March31, June30, September30, December31, March31, (Dollars in thousands)Total revenues$145,926 $148,185 $148,704 $167,398 $140,315 $145,046 $155,198 $158,704Provision for loanlosses$30,893 $36,161 $38,293 $13,483 $28,703 $38,188 $41,116 $18,569General andadministrativeexpenses$73,325 $71,677 $75,639 $71,410 $70,287 $67,070 $72,003 $71,887Net income$22,556 $21,274 $18,489 $48,515 $23,112 $21,565 $22,954 $38,977 Gross loansreceivable$1,164,368 $1,194,040 $1,262,618 $1,110,145 $1,125,261 $1,163,238 $1,264,058 $1,112,307Number ofbranches open1,271 1,293 1,314 1,320 1,210 1,230 1,248 1,271Recently Issued Accounting PronouncementsSee Part II, Item 8, Financial Statements and Supplementary Data. Note 1- Summary of Significant Accounting Policies the Consolidated FinancialStatements for the impact of new accounting pronouncements.Liquidity and Capital ResourcesThe Company has financed and continues to finance its operations, acquisitions, and branch expansion through a combination of cash flows from operationsand borrowings from its institutional lenders. The Company has generally applied its cash flows from operations to fund its increasing loan volume, fundacquisitions, repay long-term indebtedness, and repurchase its common stock. As the Company's gross loans receivable increased from $770.3 million atMarch 31, 2010 to $1.1 billion at March 31, 2015, net cash provided by operating activities for fiscal years 2015, 2014 and 2013 was $241.9 million, $246.0million and $232.0 million, respectively. Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsThe Company's primary ongoing cash requirements relate to the funding of new branches and acquisitions, the overall growth of loans outstanding, therepayment of long-term indebtedness and the repurchase of its common stock. As of March 31, 2015, approximately 18.1 million shares have beenrepurchased since 1996 for an aggregate purchase price of approximately $849.2 million. During fiscal 2015 the Company repurchased 1.4 million shares for$115.3 million. On March 10, 2015, the Board of Directors authorized the Company to repurchase up to $25.0 million of the Company’s common stock. Thisrepurchase authorization follows, and is in addition to, similar repurchase authorizations of $25.0 million announced on February 19, 2015 and $25.0 millionannounced on July 23, 2014. After taking into account all shares repurchased through May 29, 2015 (including pending repurchase orders subject tosettlement), the Company has $11.5 million in aggregate remaining repurchase capacity under all of the company’s outstanding repurchaseauthorizations. The Company believes stock repurchases to be a viable component of the Company’s long-term financial strategy and an excellent use ofexcess cash when the opportunity arises. In addition, the Company currently plans to open approximately 30 branches in the United States, 10 branches inMexico, and evaluate acquisition opportunities in fiscal 2016. Expenditures by the Company to open and furnish new branches generally averagedapproximately $30,000 per branch during fiscal 2015. New branches have also required from $100,000 to $400,000 to fund outstanding loans receivableoriginated during their first 12 months of operation. The Company acquired two branches and three loan portfolios from competitors in three states in five separate transactions during fiscal 2015. Gross loansreceivable purchased in these transactions were approximately $2.0 million in the aggregate at the dates of purchase. The Company believes that attractiveopportunities to acquire new branches or receivables from its competitors or to acquire branches in communities not currently served by the Company willcontinue to become available as conditions in local economies and the financial circumstances of owners change. The Company currently has a $680.0 million revolving credit facility with a syndicate of banks. The revolving credit facility provides for revolvingborrowings of up to the lesser of (1) the aggregate commitments under the facility and (2) a borrowing base, and includes a $1.5 million letter of creditsubfacility. The current aggregate commitments of $680.0 million will be reduced to $630.0 million on June 15, 2015 and the facility will mature on June 15,2016. The borrowing base limitation is equal to the product of (a) the Company’s eligible finance receivables, less unearned finance charges, insurancepremiums and insurance commissions, and (b) an advance rate percentage that ranges from 79% to 85% based on a collateral performance indicator, as morecompletely described below. On March 31, 2015, $501.2 million was outstanding under this facility, and there was $81.6 million of unused borrowingavailability under the borrowing base limitations. The Company also has $96.6 million that may become available under the revolving credit facility if itgrows the net eligible finance receivables.Borrowings under the Company’s revolving credit facility bear interest at a per annum rate equal to 4.0% or, if greater, 3.0% plus one-month LIBOR. Therevolving credit facility requires payment of a commitment fee equal to 0.40% per annum of the average daily unused portion of the aggregate commitmentsunder the facility unless the average daily unused portion equals or exceeds 55% of the aggregate commitments, in which case the commitment fee increasesto 0.50% per annum. During the twelve months ended, March 31, 2015, the effective interest rate, including the commitment fee, on borrowings under therevolving credit facility was 4.3%. Amounts applied to repay borrowings under the revolving credit facility may be reborrowed, subject to the terms of thefacility. If at any time total credit utilization under the revolving credit facility exceeds the borrowing base limitation, the Company must immediately repayoutstanding revolving loans under the facility in an amount equal to such excess.The Company’s obligations under the revolving credit facility, together with treasury management and hedging obligations owing to any lender under therevolving credit facility or any affiliate of any such lender, are required to be guaranteed by each of the Company’s wholly-owned domestic subsidiaries. Theobligations of the Company and the subsidiary guarantors under the revolving credit facility, together with such treasury management and hedgingobligations, are secured by a first-priority security interest in substantially all assets of the Company and the subsidiary guarantors (including, withoutlimitation, accounts receivable, equipment, inventory and other goods, intellectual property, contract rights and other general intangibles, cash, depositaccounts, equity interests in subsidiaries and joint ventures, investment property, documents and instruments, and proceeds of the foregoing), but excludinginterests in real property.The agreement governing the Company’s revolving credit facility contains affirmative and negative covenants, including covenants that restrict the abilityof the Company and its subsidiaries to, among other things, incur or guarantee indebtedness, incur liens, pay dividends and repurchase or redeem capitalstock, dispose of assets, engage in mergers and consolidations, make acquisitions or other investments, redeem or prepay subordinated debt, amendsubordinated debt documents, make changes in the nature of its business, and engage in transactions with affiliates. The agreement also contains financialcovenants, including a minimum consolidated net worth of $265.0 million, a minimum fixed charge coverage ratio of 2.5 to 1.0, a maximum ratio of totaldebt to consolidated adjusted net worth of 3.25 to 1.0, and a maximum ratio of subordinated debt to consolidated adjusted net worth of 1.0 to 1.0. Theagreement allows the Company to incur subordinated debt that matures after the termination date for the revolving credit facility and that contains specifiedsubordination terms, subject to limitations on amount imposed by the financial covenants under the agreement. In addition, the agreement establishes amaximum specified level for the collateral performance indicator.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsThe collateral performance indicator is equal to the sum of (1) a three-month rolling average rate of receivables at least sixty days past due and (2) an eight-month rolling average net charge-off rate. The Company was in compliance with these covenants at March 31, 2015 and does not believe that thesecovenants will materially limit its business and expansion strategy.The agreement contains events of default including, without limitation, nonpayment of principal, interest or other obligations, violation of covenants,misrepresentation, cross-default to other debt, bankruptcy and other insolvency events, judgments, certain ERISA events, actual or asserted invalidity of loandocumentation, invalidity of subordination provisions of subordinated debt, and certain changes of control of the Company.As previously disclosed, the Company entered into an additional amendment to the revolving credit facility as of May 8, 2015 that would have made certainadditional changes to the revolving credit facility conditioned upon consummation of the Company’s proposed private offering of $250 million in aggregateprincipal amount of senior notes due 2020 on or before June 1, 2015. However, based on the Company’s decision to postpone the proposed offering, thechanges to the revolving credit agreement described in this amendment never became effective.The following table summarizes the Company’s contractual cash obligations by period (in thousands): Fiscal Year Ended March 31, 2016 2017 2018 2019 2020 Thereafter TotalMaturities of notes payable$— $501,150 $— $— $— $— $501,150Interest payments20,046 4,176 — — — — 24,222Minimum lease payments23,387 15,605 7,832 2,507 1,006 119 50,456Total$43,433 $520,931 $7,832 $2,507 $1,006 $119 $575,828The Company believes that cash flow from operations and borrowings under its revolving credit facility will be adequate for the next twelve months, and forthe foreseeable future thereafter, to fund the expected cost of opening or acquiring new branches, including funding initial operating losses of new branchesand funding loans receivable originated by those branches and the Company's other branches. Except as otherwise discussed in this report, including in Part1, Item 1A, “Risk Factors,” management is not currently aware of any trends, demands, commitments, events or uncertainties that it believes will or couldresult in, or are or could be reasonably likely to result in, any material adverse effect on the Company's liquidity. From time to time, the Company has neededand obtained, and expects that it will continue to need on a recurring basis, either on an increase in the borrowing limits under its revolving credit facility oradditional sources of financing. The Company has successfully obtained such additional capacity in the past and anticipates that it will be able to do so inthe future as the need arises; however, there can be no assurance that this additional funding will be available (or available on reasonable terms) if and whenneeded. See Part I, Item 1A, “Risk Factors,” for a further discussion of risks and contingencies that could affect our business, financial condition and liquidity.Share Repurchase ProgramThe Company's historical long-term profitability has demonstrated over many years our ability to grow our loan portfolio (the Company's only earning asset)and generate excess cash flow. We have and intend to continue to use our cash flow and excess capital to repurchase shares, assuming that the repurchasedshares are accretive to earnings per share, which should provide better returns for shareholders in the future. We prefer share repurchases to dividends forseveral reasons. First, repurchasing shares should increase the value of the remaining shares. Second, repurchasing shares as opposed to dividends providesshareholders the option to defer taxes by electing to not sell any of their holdings. Finally, repurchasing shares provides shareholders with maximumflexibility to increase, maintain or decrease their ownership depending on their view of the value of the Company's shares, whereas a dividend does notprovide this flexibility. Since 1996, the Company has repurchased approximately 18.1 million shares for an aggregate purchase price of approximately $849.2 million. As ofMarch 31, 2015 our debt outstanding was $501.2 million and our shareholders' equity was $315.6 million resulting in a debt-to-equity ratio of 1.6:1.0. Ourfirst priority is to ensure we have enough capital to fund loan growth. To the extent we have excess capital and capacity under the terms of our debtagreements we intend to continue repurchasing stock, as authorized by our Board of Directors, which is consistent with our past practice. We will continue tomonitor our debt-to-equity ratio and are committed to maintaining a debt level that will allow us to continue to execute on our business objectives, while notputting undue stress on our balance sheet.Historically, management has filed a Form 8-K with the Securities and Exchange Commission to announce any new authorization the Board of Directors hasgiven regarding stock repurchases. Management plans to continue to make filings with the SecuritiesSource: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsand Exchange Commission or otherwise publicly announce future stock repurchase authorizations. When we have Board authorization to repurchase shares,we have historically repurchased shares in the open market and in accordance with applicable regulations regarding company repurchase programs and ourown self-imposed trading policies. Subject to the guidelines and conditions described above, we anticipate that we will continue to repurchase shares. InflationThe Company does not believe that inflation, within reasonably anticipated rates, will have a material adverse effect on its financial condition. Althoughinflation would increase the Company’s operating costs in absolute terms, the Company expects that the same decrease in the value of money would result inan increase in the size of loans demanded by its customer base. It is reasonable to anticipate that such a change in customer preference would result in anincrease in total loan receivables and an increase in absolute revenues to be generated from that larger amount of loans receivable. The Company believesthat this increase in absolute revenues should offset any increase in operating costs. In addition, because the Company’s loans have a relatively shortcontractual term and average life, it is unlikely that loans made at any given point in time will be repaid with significantly inflated dollars.Legal MattersFrom time to time the Company is involved in routine litigation relating to claims arising out of its operations in the normal course of business. See Part I,Item 3, “Legal Proceedings” and Note 16 to our audited Consolidated Financial Statements for further discussion of legal matters. Item 7A. Quantitative and Qualitative Disclosures About Market Risk Interest Rate RiskAs of March 31, 2015, the Company’s financial instruments consisted of the following: cash and cash equivalents, loans receivable, and senior notespayable. Fair value approximates carrying value for all of these instruments. Loans receivable are originated at prevailing market rates and have an averagelife of approximately 8 months. Given the short-term nature of these loans, they are continually repriced at current market rates. The Company’soutstanding debt under its revolving credit facility was $501.2 million at March 31, 2015. Interest on borrowings under this facility is based on the greater of4% or one month LIBOR plus 3.0%.Based on the outstanding balance at March 31, 2015, a change of 1% in the LIBOR interest rate would cause a change in interest expense of approximately$0.9 million on an annual basis.Foreign Currency Exchange Rate RiskIn September 2005 the Company began opening branches in Mexico, where its local businesses utilize the Mexican peso as their functional currency. TheConsolidated Financial Statements of the Company are denominated in U.S. dollars and are therefore subject to fluctuation as the U.S. dollar and Mexicanpeso foreign exchange rates change. Revenues from our non-U.S. operations accounted for approximately 8.6% and 8.4% of total revenues during the twelvemonth periods ended March 31, 2015 and 2014, respectively. There have been, and there may continue to be, period-to-period fluctuations in the relativeportions of our international revenues to total consolidated revenues.Our international operations are subject to risks, including but not limited to differing economic conditions, changes in political climate, differing taxstructures, other regulations and restrictions, and foreign exchange rate volatility when compared to the United States. Accordingly, our future consolidatedfinancial position as well as our consolidated results of operations results could be adversely affected by changes in these or other factors. Foreign exchangerate fluctuations may adversely impact our financial position as the assets and liabilities of our foreign operations are translated into U.S. dollars in preparingour consolidated balance sheet. Our exposure to foreign exchange rate fluctuations arises in part from balances in our intercompany accounts included on oursubsidiary balance sheets. These intercompany accounts are denominated in the functional currency of the foreign subsidiaries and are translated to U.S.dollars at each reporting period end. Additionally, foreign exchange rate fluctuations may impact our consolidated results from operations as exchange ratefluctuations will impact the amounts reported in our consolidated statement of income. The effect of foreign exchange rate fluctuations on our consolidatedfinancial position is recognized within shareholders’ equity through accumulated other comprehensive income (loss). The net translation adjustment for thetwelve months ended March 31, 2015 was a loss of approximately $10.8 million. The Company’s foreign currency exchange rate exposures may change overtime as business practices evolve and could have a material effect on the Company’s financial results. The Company will continue to monitor and assess theeffect of foreign currency fluctuations and may institute hedging strategies.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsThe Company performs a foreign exchange sensitivity analysis on a quarterly basis which assumes a hypothetical 10% increase and decrease in the value ofthe U.S. dollar relative to the Mexican peso. The foreign exchange risk sensitivity of both net loans receivable and consolidated net income is assessed usinghypothetical scenarios and assumes that earnings in Mexican pesos are recognized evenly throughout a period. The actual results may differ from the resultsnoted in the tables below particularly due to assumptions utilized or if events occur that were not included in the method used.The foreign exchange risk sensitivity of net loans denominated in Mexican pesos and translated into U.S. dollars, which were approximately $56.4 millionand $58.0 million at March 31, 2015 and 2014, respectively, on the reported net loans receivable amount is summarized in the following table:Foreign Exchange Sensitivity Analysis of Loans Receivable, Net of Unearned Amounts As of March 31, 2015Foreign exchange spot rate, US Dollars to Mexican Pesos (10)% 0% 10%Loans receivable, net of unearned $807,613,770 $812,742,678 $819,011,335% change from base amount (0.63)% — 0.77%$ change from base amount $(5,128,908) $— $6,268,657 As of March 31, 2014Foreign exchange spot rate, US Dollars to Mexican Pesos (10)% 0% 10%Loans receivable, net of unearned $808,644,606 $813,919,815 $820,367,273% change from base amount (0.65)% — 0.79%$ change from base amount $(5,275,209) $— $6,447,458 The following table summarizes the results of the foreign exchange risk sensitivity analysis on reported net income as of the dates indicated below:Foreign Exchange Sensitivity Analysis of Net Income As of March 31, 2015Foreign exchange spot rate, US Dollars to Mexican Pesos (10)% 0% 10%Net Income $110,113,519 $110,833,458 $111,713,385% change from base amount (0.65)% — 0.79%$ change from base amount $(719,939) $— $879,927 As of March 31, 2014Foreign exchange spot rate, US Dollars to Mexican Pesos (10)% 0% 10%Net Income $105,929,508 $106,607,932 $107,437,115% change from base amount (0.64)% — 0.78%$ change from base amount $(678,424) $— $829,183Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsPart IIItem 8. Financial Statements and Supplementary DataCONSOLIDATED BALANCE SHEETS March 31, 2015 2014ASSETS Cash and cash equivalents$38,338,935 19,569,683Gross loans receivable1,110,145,082 1,112,307,335Less: Unearned interest, insurance and fees(297,402,404) (298,387,520)Allowance for loan losses(70,437,988) (63,254,940)Loans receivable, net742,304,690 750,664,875Property and equipment, net25,906,507 24,826,238Deferred income taxes, net37,345,605 33,514,189Other assets, net12,749,771 11,707,639Goodwill6,121,458 5,967,127Intangible assets, net3,363,753 3,777,810Total assets$866,130,719 850,027,561 LIABILITIES & SHAREHOLDERS' EQUITY Liabilities: Senior notes payable501,150,000 505,500,000Income taxes payable18,204,186 9,521,285Accounts payable and accrued expenses31,208,814 27,650,955Total liabilities550,563,000 542,672,240 Shareholders' equity: Preferred stock, no par value Authorized 5,000,000, no shares issued or outstanding— —Common stock, no par value Authorized 95,000,000 shares; issued and outstanding 8,969,948 and 10,262,384shares at March 31, 2015 and March 31, 2014, respectively— —Additional paid-in capital141,864,764 118,365,503Retained earnings188,605,305 193,095,944Accumulated other comprehensive loss(14,902,350) (4,106,126)Total shareholders' equity315,567,719 307,355,321Commitments and contingencies Total liabilities and shareholders' equity$866,130,719 850,027,561See accompanying notes to Consolidated Financial Statements.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsCONSOLIDATED STATEMENTS OF OPERATIONS Years Ended March 31, 2015 2014 2013Revenues: Interest and fee income$524,277,341 $523,770,049 $485,413,704Insurance commissions, net and other income85,935,535 75,493,350 78,222,382Total revenues610,212,876 599,263,399 563,636,086 Expenses: Provision for loan losses118,829,863 126,575,392 114,322,525General and administrative expenses: Personnel192,419,147 187,444,744 178,009,856Occupancy and equipment41,716,893 38,879,460 36,278,134Advertising17,299,665 16,062,076 14,849,980Amortization of intangible assets723,071 1,057,620 1,365,473Other39,892,742 37,804,532 35,125,324Total general and administrative expenses292,051,518 281,248,432 265,628,767 Interest expense23,301,156 21,195,370 17,393,963Total expenses434,182,537 429,019,194 397,345,255 Income before income taxes176,030,339 170,244,205 166,290,831Income taxes65,196,881 63,636,273 62,201,083Net income$110,833,458 $106,607,932 $104,089,748 Net income per common share: Basic$12.12 $9.80 $8.18Diluted$11.90 $9.60 $8.00 Weighted average common shares outstanding: Basic9,146,003 10,876,557 12,728,360Diluted9,316,629 11,105,710 13,003,136 See accompanying notes to Consolidated Financial Statements.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Years Ended March 31, 2015 2014 2013Net income$110,833,458 106,607,932 104,089,748Foreign currency translation adjustments(10,796,224) (3,687,809) 2,318,117Comprehensive income$100,037,234 102,920,123 106,407,865See accompanying notes to Consolidated Financial Statements.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsCONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AdditionalPaid-in Capital RetainedEarnings AccumulatedOtherComprehensiveIncome (loss), net TotalShareholders'EquityBalances at March 31, 2012$65,630,753 355,980,694 (2,736,434) 418,875,013 Proceeds from exercise of stock options (332,665 shares),including tax benefits of $3,049,10812,993,709 — — 12,993,709Common stock repurchases (2,569,597 shares)— (183,045,655) — (183,045,655)Restricted common stock expense under stock option plan,net of cancellations ($976,282)3,842,674 — — 3,842,674Stock option expense7,322,653 — — 7,322,653Other comprehensive income— — 2,318,117 2,318,117Net income— 104,089,748 — 104,089,748 Balances at March 31, 2013$89,789,789 277,024,787 (418,317) 366,396,259 Proceeds from exercise of stock options (265,365 shares),including tax benefits of $2,867,62113,662,510 — — 13,662,510Common stock repurchases (2,091,699 shares)— (190,536,775) — (190,536,775)Restricted common stock expense under stock option plan,net of cancellations ($792,073)5,234,480 — — 5,234,480Stock option expense9,678,724 — — 9,678,724Other comprehensive loss— — (3,687,809) (3,687,809)Net income— 106,607,932 — 106,607,932 Balances at March 31, 2014$118,365,503 193,095,944 (4,106,126) 307,355,321 Proceeds from exercise of stock options (159,348 shares),including tax benefits of $989,7767,530,624 — — 7,530,624Common stock repurchases (1,432,058 shares)— (115,324,097) — (115,324,097)Restricted common stock expense under stock optionplan, net of cancellations ($303,818)7,834,825 — — 7,834,825Stock option expense8,133,812 — 8,133,812Other comprehensive loss— — (10,796,224) (10,796,224)Net income— 110,833,458 — 110,833,458 Balances at March 31, 2015$141,864,764 188,605,305 (14,902,350) 315,567,719See accompanying notes to Consolidated Financial Statements.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsCONSOLIDATED STATEMENTS OF CASH FLOWS Years Ended March 31, 2015 2014 2013Cash flow from operating activities: Net income$110,833,458 106,607,932 104,089,748 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of intangible assets723,071 1,057,620 1,365,473Amortization of loan costs and discounts418,847 373,441 612,021Provision for loan losses118,829,863 126,575,392 114,322,525Depreciation6,538,638 6,282,255 6,442,292Deferred income tax benefit(3,831,417) (4,098,193) (10,941,998)Compensation related to stock option and restricted stock plans15,968,637 14,913,204 11,165,327Net gain on sale of loans receivable(16,027,999) — —Change in operating assets and liabilities: Other assets, net(1,060,037) (360,471) (811,921)Income taxes payable8,494,879 (4,420,347) 2,413,396Accounts payable and accrued expenses1,041,341 (967,249) 3,387,226Net cash provided by operating activities241,929,281 245,963,584 232,044,089Cash flows from investing activities: Increase in loans receivable, net(116,921,675) (157,149,864) (171,985,755)Net assets acquired from branch acquisitions, primarily loans(1,516,149) (774,549) (1,951,646)Increase in intangible assets from acquisitions(463,345) (281,436) (716,169)Purchases of property and equipment(8,629,469) (7,432,535) (6,910,955)Proceeds from sale of property and equipment399,306 48,476 26,659Proceeds from sale of loan receivable18,880,496 — —Net cash used in investing activities(108,250,836) (165,589,908) (181,537,866)Cash flow from financing activities: Borrowings from senior notes payable310,721,600 425,640,000 443,515,466Payments on senior notes payable(315,071,600) (320,390,000) (272,515,466)Payments on junior subordinated note payable— — (50,000,000)Loan cost associated with senior notes payable(337,500) (204,000) (985,000)Proceeds from exercise of stock options6,540,847 10,794,889 9,944,601Repurchase of common stock(115,324,097) (190,536,775) (183,045,655)Excess tax benefit from exercise of stock options989,776 2,867,621 3,049,108Net cash used in financing activities(112,480,974) (71,828,265) (50,036,946)Effects of foreign currency fluctuations on cash(2,428,219) (601,093) 387,912Net change in cash and cash equivalents18,769,252 7,944,318 857,189Cash and cash equivalents at beginning of year19,569,683 11,625,365 10,768,176Cash and cash equivalents at end of year$38,338,935 19,569,683 11,625,365Supplemental Disclosures: Interest paid during the period$22,714,147 19,922,148 16,028,399Income taxes paid during the period$61,027,849 67,404,899 66,921,031 See accompanying notes to Consolidated Financial Statements.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(1)Summary of Significant Accounting PoliciesThe Company's accounting and reporting policies are in accordance with U.S. generally accepted accounting principles("GAAP") and conform togeneral practices within the finance company industry. The following is a description of the more significant of these policies used in preparing theConsolidated Financial Statements.Nature of OperationsThe Company is a small-loan consumer finance company headquartered in Greenville, South Carolina, that offers short-term small loans, medium-termlarger loans, related credit insurance products and ancillary products and services to individuals who have limited access to other sources of consumercredit. It also offers income tax return preparation services to its customer base and to others.The Company also markets computer software and related services to financial services companies through its ParaData Financial Systems (“ParaData”)subsidiary.As of March 31, 2015, the Company operated 1,172 branches in Alabama, Georgia, Idaho, Illinois, Indiana, Kentucky, Louisiana, Mississippi, Missouri,New Mexico, Oklahoma, South Carolina, Tennessee, Texas, and Wisconsin. The Company also operated 148 branches in Mexico. The Company issubject to numerous lending regulations that vary by jurisdiction.Principles of ConsolidationThe Consolidated Financial Statements include the accounts of World Acceptance Corporation and its wholly-owned subsidiaries (the“Company”). Subsidiaries consist of operating entities in various states and Mexico, ParaData (a software company acquired during fiscal 1994), WACInsurance Company, Ltd. (a captive reinsurance company established in fiscal 1994) and Servicios World Acceptance Corporation de Mexico (a servicecompany established in fiscal 2006). All significant inter-company balances and transactions have been eliminated in consolidation.The financial statements of the Company’s foreign subsidiaries in Mexico are prepared using the local currency as the functional currency. Assets andliabilities of these subsidiaries are translated into U.S. dollars at the current exchange rate while income and expense are translated at an averageexchange rate for the period. The resulting translation gains and losses are recognized as a component of equity in “Accumulated other comprehensive(loss)/income.”Use of Estimates in the Preparation of Consolidated Financial StatementsThe preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reportedamount of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenue andexpenses during the reporting period. The most significant item subject to such estimates and assumptions that could materially change in the nearterm is the allowance for loan losses. Actual results could differ from those estimates.ReclassificationCertain prior period amounts have been reclassified to conform to current presentation. Such reclassifications had no impact on previously reported netincome or shareholders' equity.Business SegmentsThe Company reports operating segments in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification("ASC") Topic 280. Operating segments are components of an enterprise about which separate financial information is available that is evaluatedregularly by the chief operating decision maker in deciding how to allocate resources and assess performance. FASB ASC Topic 280 requires that apublic enterprise report a measure of segment profit or loss, certain specific revenue and expense items, segment assets, information about the way thatthe operating segments were determined and other items.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsThe Company has one reportable segment, which is the consumer finance company. The other revenue generating activities of the Company, includingthe sale of insurance products, income tax preparation, world class buying club and the automobile club, are done in the existing branch network inconjunction with or as a complement to the lending operation. There is no discrete financial information available for these activities and they do notmeet the criteria under FASB ASC Topic 280 to be reported separately.The Company's three US divisions (Southern, Central, and Western) meet the aggregation criteria under FASB ASC Topic 280.At March 31, 2015 and 2014, the Company's Mexico operations accounted for approximately 2.6% and 2.1% of total consolidated assets. Totalrevenues for the years ended March 31, 2015, 2014 and 2013 were $52.4 million, $50.6 million, $41.1 million, which represented 8.6%, 8.4%, and7.3% of consolidated revenues. Although, the Company's Mexico operations is an operating segment under FASB ASC Topic 280, it does not meet thecriteria to require separate disclosure.ParaData provides data processing systems to 102 separate finance companies, including the Company. At March 31, 2015 and 2014, ParaData hadtotal assets of $0.2 million and $1.3 million, which represented less than 1% of total consolidated assets at each fiscal year end. Total net revenues(system sales and support) for ParaData for the years ended March 31, 2015, 2014 and 2013 were $2.1 million, $2.4 million and $2.1 million,respectively, which represented less than 1% of consolidated revenue for each year. Although ParaData is an operating segment under FASB ASCTopic 280, it does not meet the criteria to require separate disclosure.Cash and Cash EquivalentsFor purposes of the statement of cash flows, the Company considers all highly liquid investments with a maturity of three months or less from the dateof original issuance to be cash equivalents. As of March 31, 2015 and 2014 the Company had $1.1 million and $0.7 million in restricted cashassociated with captive insurance subsidiary that reinsures a portion of the credit insurance sold in connection with loans made by the Company.Loans and Interest and Fee IncomeThe Company is licensed to originate consumer loans in the states of Georgia, South Carolina, Texas, Oklahoma, Louisiana, Tennessee, Missouri,Illinois, New Mexico, Kentucky, Alabama, Wisconsin, Indiana, Idaho and Mississippi. In addition, the Company also originates consumer loans inMexico. During fiscal 2015, 2014 and 2013 the Company originated loans generally ranging up to $4,000, with terms of 42 months orless. Experience indicates that a majority of the consumer loans are refinanced, and the Company accounts for the majority of the refinancings as a newloan. Generally a customer must make multiple payments in order to qualify for refinancing. Furthermore, the Company's lending policy haspredetermined lending amounts, so that in most cases a refinancing will result in advancing additional funds. The Company believes that theadvancement of additional funds constitutes more than a minor modification to the terms of the existing loan if the present value of the cash flowsunder the terms of the new loan will be 10% or more of the present value of the remaining cash flows under the terms of the original loan.Gross loans receivable at March 31, 2015 and 2014 consisted of the following: 2015 2014Small loans661,635,284 676,760,815Large loans439,279,986 422,771,805Sales finance loans9,229,812 12,774,715Total gross loans1,110,145,082 1,112,307,335Fees received and direct costs incurred for the origination of loans are deferred and amortized to interest income over the contractual lives of the loansusing the interest method. Unamortized amounts are recognized in income at the time that loans are refinanced or paid in full except for thoserefinancings that do not constitute a more than minor modification.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsIn connection with the preparation of the consolidated financial statements for the year ended March 31, 2015, the Company has reclassified certainloan origination costs from personnel and other expenses to present them as a reduction to interest and fee income in compliance with AccountingStandards Codification 310-20, Nonrefundable Fees and Other Costs. The Company has historically deferred these costs in compliance with thestandard, but inappropriately only recorded the net difference between the deferral of costs on loans originated during a period and the amortizationof deferred costs for the same period within the statement of operations.The Company evaluated the materiality of the reclassifications in accordance with SEC Staff Accounting Bulletin No. 99, Materiality, SEC StaffAccounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements When Quantifying Misstatements in Current Year FinancialStatements, and Accounting Standards Codification 250, Accounting for Changes and Error Corrections, and concluded that the reclassifications,individually and in the aggregate, were immaterial to all prior periods impacted. While the adjustments were immaterial, the Company has elected torevise its previously reported revenue and expenses as shown in the following table: Year Ended March 31, 2014 Year Ended March 31, 2013 As Reported As Revised As Reported As RevisedInterest and fee income 542,155,900 523,770,049 505,495,331 485,413,704 Personnel expense 202,794,384 187,444,744 194,422,717 178,009,856Other expense 40,840,744 37,804,532 38,794,090 35,125,324The corrections have no impact on the Company’s consolidated balance sheets, net income, consolidated statements of comprehensive income,consolidated statements of shareholders’ equity, consolidated statements of cash flows, or earnings per share.Loans are carried at the gross amount outstanding, reduced by unearned interest and insurance income, net of deferred origination fees and direct costs,and an allowance for loan losses. The Company recognizes interest and fee income using the interest method. Charges for late payments are credited toincome when collected.The Company generally offers its loans at the prevailing statutory rates for terms not to exceed 42 months. Management believes that the carryingvalue approximates the fair value of its loan portfolio.Nonaccrual PolicyThe accrual of interest is discontinued when a loan is 60 days or more past the contractual due date. When the interest accrual is discontinued, allunpaid accrued interest is reversed against interest income. While a loan is on nonaccrual status, interest revenue is recognized only when a payment isreceived. Once a loan moves to nonaccrual status, it remains in nonaccrual status until it is paid out, charged off or refinanced.Allowance for Loan LossesThe Company maintains an allowance for loan losses in an amount that, in management's opinion, is adequate to provide for losses inherent in theexisting loan portfolio. The Company charges against current earnings, as a provision for loan losses, amounts added to the allowance to maintain it atlevels expected to cover probable losses of principal. When establishing the allowance for loan losses, the Company takes into consideration thegrowth of the loan portfolio, current levels of charge-offs, current levels of delinquencies, and current economic factors. The Company uses a mathematical calculation to determine the initial allowance at the end of each reporting period. The calculation originated asmanagement's estimate of future charge-offs and is used to allocate expenses to the branch level. There are two components when calculating theallowance for loan losses, which the Company refers to as the general reserve and the specific reserve. This calculation is a starting point and over time,and as needed, additional provisions have been added as determined by management to make the allowance adequate.The general reserve is 4.25% of the gross loan portfolio. The specific reserve represents 100% of the gross loan balance of all loans 90 or more days pastdue on a recency basis, including bankrupt accounts in that category. This methodology is based on historical data showing that the collection of loans90 days or more past due and bankrupt accounts is remote.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsA process is then performed to determine the adequacy of the allowance for loan losses, as well as considering trends in current levels of delinquencies,charge-off levels, and economic trends (such as energy and food prices). The primary tool used is the movement model (on a contractual and recencybasis) which considers the rolling twelve months of delinquency to determine expected charge-offs. The sum of expected charge-offs, determined fromthe movement model (on a contractual and recency basis) plus the amount of delinquent refinancings are compared to the allowance resulting from themathematical calculation to determine if any adjustments are needed to make the allowance adequate. Management would also determine if anyadjustments are needed if the consolidated annual provision for loan losses is less than total charge-offs. Management uses a precision level of 5% ofthe allowance for loan losses compared to the aforementioned movement model, when determining if any adjustments are needed.The Company's policy is to charge off loans at the earlier of when such loans are deemed to be uncollectible or when six months have elapsed since thedate of the last full contractual payment. The Company's charge-off policy has been consistently applied and no changes have been made during theperiods reported. The Company's historical annual charge-off rate for the past 10 years has ranged from 12.9% to 16.7% of net loans. The Company'sdelinquencies and net charge-off ratios were significantly impacted during the year by a change to the branch level incentive plan that became effectiveJuly 1, 2014. The change allows managers to continue collection efforts on accounts that are 90 days or more past due, without having their monthlybonus negatively impacted. As expected, this resulted in an increase in accounts 90 days or more past due and lower charge-offs during the year.Management considers the charge-off policy when evaluating the appropriateness of the allowance for loan losses.FASB ASC Topic 310-30 prohibits carryover or creation of valuation allowances in the initial accounting of all loans acquired in a transfer that arewithin the scope of this authoritative literature. The Company believes that loans acquired since the adoption of FASB ASC Topic 310-30 have notshown evidence of deterioration of credit quality since origination, and therefore, are not within the scope of FASB ASC Topic 310-30. Impaired LoansThe Company defines impaired loans as bankrupt accounts and accounts 90 days or more past due. In accordance with the Company’s charge-offpolicy, once a loan is deemed uncollectible, 100% of the net investment is charged off, except in the case of a borrower who has filed forbankruptcy. As of March 31, 2015, bankrupt accounts that had not been charged off were approximately $6.0 million. Bankrupt accounts 90 days ormore past due are reserved at 100% of the gross loan balance. The Company also considers accounts 90 days or more past due as impaired, and theaccounts are reserved at 100% of the gross loan balance.Delinquency is the primary credit quality indicator used to determine the credit quality of the Company's receivables (additional requirements fromASC 310-10 are disclosed in Note 2).Property and EquipmentProperty and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is recorded using the straight-line method overthe estimated useful life of the related asset as follows: building, 40 years; furniture and fixtures, 5 to 10 years; equipment, 3 to 7 years; and vehicles, 3years. Amortization of leasehold improvements is recorded using the straight-line method over the lesser of the estimated useful life of the asset or theterm of the lease. Additions to premises and equipment and major replacements or improvements are added at cost. Maintenance, repairs, and minorreplacements are charged to operating expense as incurred. When assets are retired or otherwise disposed of, the cost and accumulated depreciation areremoved from the accounts and any gain or loss is reflected in the consolidated statement of operations.Operating LeasesThe Company’s branch leases typically have a lease term of three to five years and contain lessee renewal options and cancellation clauses in the eventof regulatory changes. The Company typically renews its leases for one or more option periods. Accordingly, the Company amortizes its leaseholdimprovements over the shorter of their economic lives, which are generally five years, or the lease term that considers renewal periods that arereasonably assured.Other AssetsOther assets include cash surrender value of life insurance policies, prepaid expenses, debt issuance costs and other deposits.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsIntangible Assets and GoodwillIntangible assets include the cost of acquiring existing customers ("customer lists"), and the fair value assigned to non-compete agreements. Customerlists are amortized on a straight line or accelerated basis over their estimated period of benefit, ranging from 5 to 20 years with a weighted average ofapproximately 16 years. Non-compete agreements are amortized on a straight line basis over the term of the agreement, ranging from 2 to 7 years with aweighted average of approximately 5 years.Customer lists are allocated at a branch level and are evaluated for impairment at a branch level when a triggering event occurs, in accordance withFASB ASC Topic 360-10-5. If a triggering event occurs, the impairment loss to the customer list is generally the remaining unamortized customer listbalance. In most acquisitions, the original fair value of the customer list allocated to a branch is less than $100,000, and management believes that inthe event a triggering event were to occur, the impairment loss to an unamortized customer list would be immaterial. Non-compete agreements are valued at the stated amount paid to the other party for these agreements, which the Company believes approximates thefair value. The fair value of the customer lists is based on a valuation model that utilizes the Company’s historical data to estimate the value of anyacquired customer lists. In a business combination, the remaining excess of the purchase price over the fair value of the tangible assets, customer list,and non-compete agreements is allocated to goodwill. The branches the Company acquires are small, privately-owned branches, which do not havesufficient historical data to determine customer attrition. The Company believes that the customers acquired have the same characteristics and performsimilarly to its customers. Therefore, the Company utilized the attrition patterns of its customers when developing the attrition of acquiredcustomers. This method is re-evaluated periodically.The Company evaluates goodwill annually for impairment in the fourth quarter of the fiscal year using the market value-based approach. The Companyhas one reporting unit, the consumer finance company, and the Company has multiple components, the lowest level of which is individualbranches. The Company’s components are aggregated for impairment testing because they have similar economic characteristics. As of March 31,2015, the Company had 92 branches with recorded goodwill.Impairment of Long-Lived AssetsThe Company assesses impairment of long-lived assets, including property and equipment and intangible assets, whenever changes or events indicatethat the carrying amount may not be recoverable. The Company assesses impairment of these assets generally at the branch level based on theoperating cash flows of the branch and the Company’s plans for branch closings. The Company will write down such assets to fair value if, based on ananalysis, the sum of the expected future undiscounted cash flows is less than the carrying amount of the assets. The Company did not record anyimpairment charges for the fiscal year ended 2015, 2014, or 2013.Fair Value of Financial InstrumentsFASB ASC Topic 825 requires disclosures about the fair value of all financial instruments, whether or not recognized in the balance sheet, for which itis practicable to estimate that value. In cases where quoted market prices are not available, fair values are based on estimates using present value orother valuation techniques. The Company’s financial instruments for the periods reported consist of the following: cash and cash equivalents, loansreceivable, and senior notes payable. Fair value approximates carrying value for all of these instruments. Loans receivable are originated at prevailing market rates and have an average life of approximately 8 months. Given the short-term nature of theseloans, they are continually repriced at current market rates. The Company’s revolving credit facility has a variable rate based on a margin over LIBORand reprices with any changes in LIBOR. Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsInsurance Premiums and CommissionsInsurance premiums for credit life, accident and health, property and unemployment insurance written in connection with certain loans, net of refundsand applicable advance insurance commissions retained by the Company, are remitted monthly to an insurance company. All commissions are creditedto unearned insurance commissions and recognized as income over the life of the related insurance contracts. The Company recognizes insuranceincome using the Rule of 78s method for credit life (decreasing term), credit accident and health, unemployment insurance and the Pro Rata method forcredit life (level term) and credit property.Non-filing InsuranceNon-filing insurance premiums are charged on certain loans in lieu of recording and perfecting the Company's security interest in the assets pledged. The premiums and recoveries are remitted to a third party insurance company and are not reflected in the accompanying Consolidated FinancialStatements (See Note 8). Claims paid by the third party insurance company result in a reduction to loan losses.Certain losses related to such loans, which are not recoverable through life, accident and health, property, or unemployment insurance claims arereimbursed through non-filing insurance claims subject to policy limitations. Any remaining losses are charged to the allowance for loan losses.Income TaxesIncome taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequencesattributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases andoperating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable incomein the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change intax rates is recognized in income in the period that includes the enactment date.The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income taxpositions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected inthe period in which the change in judgment occurs.Earnings Per ShareEarnings per share (“EPS”) are computed in accordance with FASB ASC Topic 260. Basic EPS includes no dilution and is computed by dividing netincome by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution of securities thatcould share in the earnings of the Company. Potential common stock included in the diluted EPS computation consists of stock options and restrictedstock , which are computed using the treasury stock method. See Note 11 for the reconciliation of the numerators and denominators for basic anddilutive EPS calculations.Stock-Based CompensationFASB ASC Topic 718-10 requires companies to recognize in the income statement the grant-date fair value of stock options and other equity-basedcompensation issued to employees. FASB ASC Topic 718-10 does not change the accounting guidance for share-based payment transactions withparties other than employees provided in FASB ASC Topic 718-10. Under FASB ASC Topic 718-10, the way an award is classified will affect themeasurement of compensation cost. Liability-classified awards are remeasured to fair value at each balance-sheet date until the award is settled. Equity-classified awards are measured at grant-date fair value, amortized over the subsequent vesting period, and are not subsequently remeasured. The fairvalue of non-vested stock awards for the purposes of recognizing stock-based compensation expense is the market price of the stock on the grant date.The fair value of options is estimated on the grant date using the Black-Scholes option pricing model (see Note 12).At March 31, 2015, the Company had several share-based employee compensation plans, which are described more fully in Note 12. The Companyuses the modified prospective transition method in accordance with FASB ASC Topic 718. Under this method of transition, compensation costrecognized during fiscal years 2013, 2014, and 2015 was based on the grant-date fair value estimated in accordance with the provisions of FASB ASCTopic 718. Since this compensation cost is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. FASBSource: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsASC Topic 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ fromthose estimates. The Company has elected to expense grants of awards with graded vesting on a straight-line basis over the requisite service period foreach separately vesting portion of the award.Share RepurchasesThe Company's Board of Directors approved a stock repurchase program which authorizes us to repurchase common shares in the open market or inprivately negotiated transactions at price levels we deem attractive. On March 10, 2015, the Board of Directors authorized the Company to repurchaseup to $25.0 million of the Company’s common stock. This repurchase authorization follows, and is in addition to, similar repurchase authorizations of$25.0 million announced on February 19, 2015 and $25.0 million announced on July 23, 2014. After taking into account all shares repurchasedthrough May 29, 2015, the Company has $11.5 million in aggregate remaining repurchase capacity under all of the Company’s outstanding repurchaseauthorizations. The timing and actual number of shares repurchased will depend on a variety of factors, including the stock price, corporate andregulatory requirements and other market and economic conditions. Although the repurchase authorizations above have no stated expiration date, theCompany’s stock repurchase program may be suspended or discontinued at any time.Comprehensive IncomeTotal comprehensive income consists of net income and other comprehensive income (loss). The Company’s other comprehensive income (loss) andaccumulated other comprehensive income (loss) are comprised of foreign currency translation adjustments.Concentration of RiskThe Company generally serves individuals with limited access to other sources of consumer credit, such as banks, credit unions, other consumer financebusinesses and credit card lenders. During the year ended March 31, 2015, the Company operated in fifteen states in the United States as well as inMexico. For the years ended March 31, 2015, 2014 and 2013, total revenue within the Company's four largest states (Texas, Georgia, Tennessee, S.Carolina) accounted for approximately 54%, 58% and 56%, respectively, of the Company's total revenues.The Company maintains amounts in bank accounts which, at times, may exceed federally insured limits. The Company has not experienced losses insuch accounts, which are maintained with large domestic banks. Management believes the Company’s exposure to credit risk is minimal for theseaccounts.Advertising CostsAdvertising costs are expensed when incurred. Advertising costs were approximately $17.3 million, $16.1 million and $14.8 million for fiscal years2015, 2014 and 2013, respectively.Accounting Standards to be AdoptedRevenue from Contracts with CustomersIn May 2014, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2014-09, which supersedes the revenuerecognition requirements Topic 605 (Revenue Recognition), and most industry-specific guidance. ASU No. 2014-09 is based on the principle thatrevenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects tobe entitled in exchange for those goods or services. ASU No. 2014-09 also requires additional disclosure about the nature, amount, timing anduncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognizedfrom costs incurred to obtain or fulfill a contract. The guidance allows for either a "full retrospective" adoption or a "modified retrospective" adoption;however, early adoption is not permitted. We are currently evaluating the impact the adoption of this guidance will have on our consolidated financialstatements.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsDisclosure of Uncertainties about an Entity’s Ability to Continue as a Going ConcernIn August 2014, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2014-15, which requires management toevaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures incertain circumstances. ASU 2014-15 is effective for annual and interim periods beginning after December 15, 2016 with early adoption permitted. Wedo not believe the adoption of this guidance will have a material impact on our consolidated financial statements.Simplifying the Presentation of Debt Issuance CostsIn April 2015, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") 2015-03, which requires an entity to presentdebt issuance costs on the balance sheet as a direct deduction from the related debt liability as opposed to an asset. Amortization of the costs willcontinue to be reported as interest expense. ASU 2015-03 is effective for annual and interim periods beginning after December 15, 2015 with earlyadoption permitted. We do not believe the adoption of this guidance will have a material impact on our consolidated financial statements.We reviewed all other newly issued accounting pronouncements and concluded that they are either not applicable to our business or are not expected tohave a material effect on the consolidated financial statements as a result of future adoption.(2)Allowance for Loan Losses and Credit Quality IndicatorsThe following is a summary of the changes in the allowance for loan losses for the years ended March 31, 2015, 2014, and 2013: 2015 2014 2013Balance at beginning of period$63,254,940 59,980,842 54,507,299Provision for loan losses118,829,863 126,575,392 114,322,525Loan losses(126,093,332) (137,307,358) (121,514,261)Recoveries15,467,059 14,287,889 12,471,699Translation adjustment(1,020,542) (281,825) 193,580Balance at end of period$70,437,988 63,254,940 59,980,842The following is a summary of loans individually and collectively evaluated for impairment for the period indicated:March 31, 2015Loans individuallyevaluated forimpairment(impaired loans) Loans collectivelyevaluated forimpairment TotalGross loans in bankruptcy, excluding contractually delinquent$4,821,691 — 4,821,691Gross loans contractually delinquent48,262,853 — 48,262,853Loans not contractually delinquent and not in bankruptcy— 1,057,060,538 1,057,060,538Gross loan balance53,084,544 1,057,060,538 1,110,145,082Unearned interest and fees(13,115,117) (284,287,287) (297,402,404)Net loans39,969,427 772,773,251 812,742,678Allowance for loan losses(35,352,658) (35,085,330) (70,437,988)Loans, net of allowance for loan losses$4,616,769 737,687,921 742,304,690Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents March 31, 2014Loans individuallyevaluated forimpairment(impaired loans) Loans collectivelyevaluated forimpairment TotalGross loans in bankruptcy, excluding contractually delinquent$5,402,715 — 5,402,715Gross loans contractually delinquent27,556,583 — 27,556,583Loans not contractually delinquent and not in bankruptcy— 1,079,348,037 1,079,348,037Gross loan balance32,959,298 1,079,348,037 1,112,307,335Unearned interest and fees(6,721,702) (291,665,818) (298,387,520)Net loans26,237,596 787,682,219 813,919,815Allowance for loan losses(21,064,497) (42,190,443) (63,254,940)Loans, net of allowance for loan losses$5,173,099 745,491,776 750,664,875The average investment in impaired loans was $49.2 million and $32.9 million, respectively, for the periods ended March 31, 2015, and 2014. It is notpractical to compute the amount of interest earned on impaired loans.The following is an assessment of the credit quality for the period indicated: March 31, 2015 March 31, 2014Credit risk Consumer loans- non-bankrupt accounts$1,104,179,016 1,106,428,510Consumer loans- bankrupt accounts5,966,066 5,878,825Total gross loans$1,110,145,082 1,112,307,335 Consumer credit exposure Credit risk profile based on payment activity, performing$1,032,984,546 1,053,037,073Contractual non-performing, 60 days or more delinquent (1)77,160,536 59,270,262Total gross loans$1,110,145,082 1,112,307,335 Delinquent refinance$23,957,779 22,907,734 Credit risk profile based on customer type New borrower$146,376,318 151,025,603Former borrower110,149,558 102,514,264Refinance829,661,427 835,859,734Delinquent refinance23,957,779 22,907,734Total gross loans$1,110,145,082 1,112,307,335 (1) Loans in nonaccrual statusSource: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsThe following is a summary of the past due receivables as of: March 31, 2015 March 31, 2014 March 31, 2013Contractual basis: 30-60 days past due$43,663,540 37,713,414 37,674,26761-90 days past due26,027,649 30,607,515 22,773,06391 days or more past due51,132,887 28,662,747 23,941,210Total$120,824,076 96,983,676 84,388,540 Percentage of period-end gross loans receivable10.9% 8.7% 7.9%(3)Property and EquipmentProperty and equipment consist of: March 31, 2015 March 31, 2014Land$576,977 250,443Building and leasehold improvements20,361,536 19,083,381Furniture and equipment43,901,426 41,422,708 64,839,939 60,756,532Less accumulated depreciation and amortization(38,933,432) (35,930,294)Total$25,906,507 24,826,238 Depreciation expense was approximately $6.5 million, $6.3 million and $6.4 million for the years ended March 31, 2015, 2014 and 2013, respectively.(4)Intangible AssetsThe following table provides the gross carrying amount and related accumulated amortization of definite-lived intangible assets: March 31, 2015 March 31, 2014 Gross CarryingAmount AccumulatedAmortization Net IntangibleAsset Gross CarryingAmount AccumulatedAmortization Net IntangibleAssetCost of customer lists$22,539,218 (19,282,316) 3,256,902 $22,255,204 (18,630,930) 3,624,274Value assigned to non-competeagreements8,349,643 (8,242,792) 106,851 8,324,643 (8,171,107) 153,536Total$30,888,861 (27,525,108) 3,363,753 $30,579,847 (26,802,037) 3,777,810The estimated amortization expense for intangible assets for future years ended March 31 is as follows: $0.5 million for 2016; $0.4 million for 2017;$0.4 million for 2018; $0.3 million for 2019; $0.3 million for 2020; and an aggregate of $1.3 million for the years thereafter.(5)GoodwillThe following summarizes the changes in the carrying amount of goodwill for the year ended March 31, 2015 and 2014: 2015 2014Balance at beginning of year: Goodwill$5,992,520 5,921,681Accumulated goodwill impairment losses(25,393) (25,393) Goodwill acquired during the year$154,331 70,839Impairment losses— —Balance at end of year: Goodwill$6,146,851 5,992,520Accumulated goodwill impairment losses(25,393) (25,393)Total$6,121,458 5,967,127The Company performed an annual impairment test during the fourth quarter of fiscal 2015 and 2014, and determined that none of the recordedgoodwill was impaired. Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents(6)Notes PayableSenior Notes Payable $680,000,000 Revolving Credit FacilityThe Company's notes payable consist of a $680.0 million senior notes payable revolving credit facility with borrowings of $501.2 million outstandingon the borrowing facility and $750,000 standby letters of credit related to workers compensation is outstanding at March 31, 2015. To the extent thatthe letter of credit is drawn upon, the disbursement will be funded by the credit facility. There are no amounts due related to the letter of credit as ofMarch 31, 2015, and it expires on December 31, 2015. As amended the base credit facility will reduce from $680.0 million to $630 million on June 15,2015. Subject to a borrowing base formula based on eligible loans receivable, the Company may borrow at the rate of LIBOR plus 3.0% with aminimum of 4.0%. At March 31, 2015 and March 31, 2014, the Company’s effective interest rate, including the commitment fee, was 4.3% and 4.4%,respectively, and the unused amount available under the revolver at March 31, 2015 was $81.5 million. The Company also had $96.6 million that maybecome available under the revolving credit facility if it grows the net eligible finance receivables. The revolving credit facility has a commitment feeof 0.40% per annum on the unused portion of the commitment. The Company pays interest on a monthly basis. Borrowings under the revolving creditfacility mature on June 15, 2016.Junior Subordinated Note PayableOn September 17, 2010, the Company entered into a $75.0 million Junior Subordinated Note Payable with Wells Fargo Preferred Capital, Inc. (“WellsFargo”) providing for a non-revolving line of credit . Wells Fargo is also a lender under the Revolving Credit Agreement. The Company repaid thejunior subordinated note in May 2012.Substantially all of the Company’s assets, excluding Mexico, are pledged as collateral for borrowings under the revolving credit agreement.Debt CovenantsThe Company's revolving credit agreement contains a number of financial covenants, including minimum net worth and fixed charge coveragerequirements. The credit agreement also contains certain other covenants, including covenants that impose limitations on the Company with respect to(i) declaring or paying dividends or making distributions on or acquiring common or preferred stock or warrants or options; (ii) redeeming orpurchasing or prepaying principal or interest on subordinated debt; (iii) incurring additional indebtedness; and (iv) entering into a merger,consolidation or sale of substantial assets or subsidiaries. The Company was in compliance with these covenants at March 31, 2015 and does notbelieve that these covenants will materially limit its business and expansion strategy.Debt MaturitiesAs of March 31, 2015, the aggregate annual maturities of the notes payable for each of the fiscal years subsequent to March 31, 2015 were as follows:2016$—2017501,150,0002018—2019—2020—Total future debt payments$501,150,000Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents(7)Insurance Commissions and Other IncomeInsurance commissions and other income for the years ending March 31, 2015, 2014 and 2013 consist of: 2015 2014 2013Insurance commissions$47,822,485 50,379,798 51,345,424Tax return preparation revenue9,896,378 9,118,639 8,696,976Auto club membership revenue3,671,192 4,585,904 5,493,653World Class Buying Club revenue2,438,314 3,881,915 4,761,257Net gain on sale of loans receivable16,027,999 — —Other6,079,167 7,527,094 7,925,072Insurance commissions and other income$85,935,535 75,493,350 78,222,382(8)Non-filing InsuranceThe Company maintains non-filing insurance coverage with an unaffiliated insurance company. The following is a summary of the non-filinginsurance activity for the years ended March 31, 2015, 2014 and 2013: 2015 2014 2013Insurance premiums written$6,804,275 7,241,274 7,361,547 Recoveries on claims paid$1,128,347 1,086,381 1,005,757 Claims paid$7,196,437 7,501,154 7,576,902(9)LeasesThe Company conducts most of its operations from leased facilities, except for its owned corporate office building. The Company's leases typicallyhave a lease term of three to five years and contain lessee renewal options. A majority of the leases provide that the lessee pays property taxes,insurance and common area maintenance costs. It is expected that in the normal course of business, expiring leases will be renewed at the Company'soption or replaced by other leases or acquisitions of other properties. All of the Company’s leases are operating leases.The future minimum lease payments under noncancelable operating leases as of March 31, 2015, are as follows:2016$23,387,035201715,604,65620187,832,09820192,507,23320201,005,752Thereafter119,045Total future minimum lease payments$50,455,819Mexico commitments of approximately $56.7 million (MXN) were translated at the spot rate of $15.23.Rental expense for cancelable and noncancelable operating leases for the years ended March 31, 2015, 2014 and 2013, was approximately $26.0million, $23.9 million and $21.9 million, respectively.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents(10)Income TaxesIncome tax expense (benefit) consists of: Current Deferred TotalYear ended March 31, 2015 U.S. Federal$61,284,206 (3,524,067) 57,760,139State and local6,112,487 (411,543) 5,700,944Foreign1,631,605 104,193 1,735,798 $69,028,298 (3,831,417) 65,196,881 Year ended March 31, 2014 U.S. Federal$59,218,428 (3,513,833) 55,704,595State and local6,679,439 (428,210) 6,251,229Foreign1,836,599 (156,150) 1,680,449 $67,734,466 (4,098,193) 63,636,273 Year ended March 31, 2013 U.S. Federal$63,140,638 (8,792,012) 54,348,626State and local8,372,748 (857,958) 7,514,790Foreign1,629,695 (1,292,028) 337,667 $73,143,081 (10,941,998) 62,201,083 Income tax expense was $65,196,881, $63,636,273 and $62,201,083, for the years ended March 31, 2015, 2014 and 2013, respectively, and differedfrom the amounts computed by applying the U.S. federal income tax rate of 35% to pretax income from continuing operations as a result of thefollowing: 2015 2014 2013Expected income tax$61,610,619 59,585,472 58,201,791Increase (reduction) in income taxes resulting from: State tax, net of federal benefit3,705,614 4,063,299 4,884,614Insurance income exclusion(73,826) (86,189) (123,289)Uncertain tax positions1,914,990 3,001,452 283,084State tax adjustment for amended returns— (1,937,724) —Foreign income adjustments(1,453,438) (1,487,116) (961,771)Other, net(507,078) 497,079 (83,346) $65,196,881 63,636,273 62,201,083 Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsThe tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at March 31, 2015 and2014 are presented below: 2015 2014Deferred tax assets: Allowance for doubtful accounts$27,337,684 24,701,417Unearned insurance commissions12,814,428 13,042,940Accrued expenses primarily related to employee benefits15,787,850 11,176,823Reserve for uncollectible interest1,103,603 2,147,953Convertible notes75,628 226,938Other915,468 551,312 Gross deferred tax assets58,034,661 51,847,383Less valuation allowance(1,274) (1,274)Net deferred tax assets58,033,387 51,846,109 Deferred tax liabilities: Fair value adjustment for loans(12,186,719) (10,409,728)Property and equipment(4,079,130) (4,072,587)Intangible assets(1,842,004) (1,636,414)Deferred net loan origination fees(1,851,672) (1,652,645)Prepaid expenses(728,257) (560,546)Gross deferred tax liabilities(20,687,782) (18,331,920) Deferred income taxes, net$37,345,605 33,514,189The valuation allowance for deferred tax assets as of March 31, 2015 and 2014 was $1,274. The valuation allowance against the total deferred taxassets as of March 31, 2015 and 2014 relates to state net operating losses. In assessing the realizability of deferred tax assets, management considerswhether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets isdependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Managementconsiders the scheduled reversals of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Inorder to fully realize the deferred tax asset, the Company will need to generate future taxable income prior to the expiration of the deferred tax assetsgoverned by the tax code. Based upon the level of historical taxable income and projections for future taxable income over the periods in which therelated temporary differences are deductible, management believes it is more likely than not the Company will realize the benefits of these deductibledifferences, net of the existing valuation allowances at March 31, 2015. The amount of the deferred tax asset considered realizable, however, could bereduced in the near term if estimates of future taxable income during the carryforward period are reduced.The Company is required to assess whether the earnings of the Company's Mexican foreign subsidiary will be permanently reinvested in the respectiveforeign jurisdiction or if previously untaxed foreign earnings of the Company will no longer be permanently reinvested and thus become taxable in theUnited States. If these earnings were ever repatriated to the United States, the Company would be required to accrue and pay taxes on the cumulativeundistributed earnings. As of March 31, 2015, the Company has determined that approximately $23.5 million of cumulative undistributed net earnings,as well as the future net earnings, of the Mexican foreign subsidiaries will be permanently reinvested. At March 31, 2015, there was an unrecognizeddeferred tax liability in the amount of $20.6 million related to investment in the Mexican subsidiaries.As of March 31, 2015 and 2014, the Company had $8.6 million and $6.4 million of total gross unrecognized tax benefits including interest,respectively. Of these totals, approximately $6.6 million and $4.6 million, respectively, represents the amount of net unrecognized tax benefits that arepermanent in nature and, if recognized, would affect the annual effective tax rate.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsA reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:Unrecognized tax benefits balance at March 31, 2014$5,810,712Gross increases for tax positions of current year2,209,048Gross increases for tax positions of prior years—Federal and state tax settlements—Lapse of statute of limitations(398,433)Unrecognized tax benefits balance at March 31, 2015$7,621,327 At March 31, 2015, approximately $4.4 million of gross unrecognized tax benefits are expected to be resolved during the next 12 months throughsettlements with taxing authorities or the expiration of the statute of limitations. The Company’s continuing practice is to recognize interest andpenalties related to income tax matters in income tax expense. As of March 31, 2015 and 2014, the Company had $940,805 and $614,279 accrued forgross interest, respectively, of which $474,484, $379,417, and $240,609 represented the current period expense for the periods ended March 31, 2015,2014, and 2013.The Company is subject to U.S. and Mexican income taxes, as well as various other state and local jurisdictions. With few exceptions, the Company isno longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2011, although carryforwardattributes that were generated prior to 2011 may still be adjusted upon examination by the taxing authorities if they either have been or will be used ina future period.(11)Earnings Per ShareThe following is a reconciliation of the numerators and denominators of the basic and diluted EPS calculations: For the year ended March 31, 2015 Income(Numerator) Shares(Denominator) Per ShareAmountBasic EPS Income available to common shareholders$110,833,458 9,146,003 $12.12 Effect of Dilutive Securities Options and restricted stock— 170,626 Diluted EPS Income available to common shareholders plus assumed exercises of stockoptions$110,833,458 9,316,629 $11.90 For the year ended March 31, 2014 Income(Numerator) Shares(Denominator) Per Share AmountBasic EPS Income available to common shareholders$106,607,932 10,876,557 $9.80 Effect of Dilutive Securities Options and restricted stock— 229,153 Diluted EPS Income available to common shareholders plus assumed exercises of stockoptions$106,607,932 11,105,710 $9.60Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents For the year ended March 31, 2013 Income(Numerator) Shares(Denominator) Per ShareAmountBasic EPS Income available to common shareholders$104,089,748 12,728,360 $8.18 Effect of Dilutive Securities Options and restricted stock— 274,776 Diluted EPS Income available to common shareholders plus assumed exercises of stock options$104,089,748 13,003,136 $8.00Options to purchase 543,879, 404,421 and 403,123 shares of common stock at various prices were outstanding during the years ended March 31, 2015,2014 and 2013, respectively, but were not included in the computation of diluted EPS because the option exercise price was antidilutive.In connection with the preparation of the consolidated financial statements for the three and six month periods ended September 30, 2014, errors in thecomputation and disclosure of earnings per share were identified. These errors resulted from the inclusion of restricted stock as outstanding in the basicweighted average common shares outstanding, as well as the inclusion of performance based restricted stock that had not met the necessary performanceconditions as of the end of the reporting period as dilutive in the calculation of weighted average diluted shares outstanding.The Company evaluated the materiality of these errors in accordance with SEC Staff Accounting Bulletin No. 99, Materiality, SEC Staff AccountingBulletin No. 108, Considering the Effects of Prior Year Misstatements When Quantifying Misstatements in Current Year Financial Statements, andAccounting Standards Codification 250, Accounting for Changes and Error Corrections, and concluded that these errors, individually and in theaggregate, were immaterial to all prior periods impacted. While the adjustments were immaterial, the Company has elected to revise its previouslyreported basic and diluted earnings per share as shown in the following table: Year Ended March 31, 2014 Year Ended March 31, 2013 As Reported As Revised As Reported As RevisedNet income (numerator) 106,607,932 106,607,932 104,089,748 104,089,748 Basic: Weighted average common shares outstanding (denominator) 11,391,706 10,876,557 12,940,007 12,728,360 Diluted: Weighted average common shares outstanding 11,391,706 10,876,557 12,940,007 12,728,360Dilutive potential restricted stock and stock options 349,599 229,153 274,264 274,776Weighted average common shares outstanding (denominator) 11,741,305 11,105,710 13,214,271 13,003,136 Net income per common share: Basic 9.36 9.80 8.04 8.18Diluted 9.08 9.60 7.88 8.00The corrections have no impact on the Company’s consolidated balance sheets, net income, consolidated statement of comprehensive income,consolidated statements of shareholders equity, or consolidated statements of cash flows.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents(12)Benefit PlansRetirement PlanThe Company provides a defined contribution employee benefit plan (401(k) plan) covering full-time employees, whereby employees can invest up tothe maximum designated for that year. The Company makes a matching contribution equal to 50% of the employees' contributions for the first 6% ofgross pay. The Company's expense under this plan was $1,470,600, $1,483,712 and $1,432,170, for the years ended March 31, 2015, 2014 and 2013,respectively.Supplemental Executive Retirement PlanThe Company has instituted a Supplemental Executive Retirement Plan (“SERP”), which is a non-qualified executive benefit plan in which theCompany agrees to pay the executive additional benefits in the future, usually at retirement, in return for continued employment by the executive. TheSERP is an unfunded plan, and as such, there are no specific assets set aside by the Company in connection with the establishment of the plan. Theexecutive has no rights under the agreement beyond those of a general creditor of the Company. In May 2009, the Company instituted a secondSupplemental Executive Retirement Plan to provide to one executive the same type of benefits as are in the original SERP but for which he would nothave qualified due to age. This second SERP is also an unfunded plan with no specific assets set aside by the Company in connection with theplan. For the years ended March 31, 2015, 2014 and 2013, contributions of $642,710, $909,466 and $1,022,979, respectively, were charged to expenserelated to the SERP. The expense for the year ended March 31, 2014 was offset by the reversal of $904,138 of expense accrued for two executives whoresigned during the year. The unfunded liability was $7,516,249, $7,186,076 and $7,470,918, as of March 31, 2015, 2014 and 2013, respectively.For the three years presented, the unfunded liability was estimated using the following assumptions: an annual salary increase of 3.5% for all 3 years; adiscount rate of 6.0% for all 3 years; and a retirement age of 65.Executive Deferred Compensation PlanThe Company has an Executive Deferral Plan. Eligible executives and directors may elect to defer all or a portion of their incentive compensation to bepaid under the Executive Deferral Plan. As of March 31, 2015 and 2014, no executive had deferred compensation under this plan.Stock Option PlansThe Company has a 2002 Stock Option Plan, a 2005 Stock Option Plan, a 2008 Stock Option Plan, and a 2011 Stock Option Plan for the benefit ofcertain directors, officers, and key employees. Under these plans, a total of 4,100,000 shares of authorized common stock have been reserved forissuance pursuant to grants approved by the Compensation and Stock Option Committee of the Board of Directors. Stock options granted under theseplans have a maximum duration of 10 years, may be subject to certain vesting requirements, which are generally five years for officers, directors, andkey employees, and are priced at the market value of the Company's common stock on the date of grant of the option. At March 31, 2015, there were atotal of 209,178 shares available for grant under the plans. Stock-based compensation is recognized as provided under FASB ASC Topic 718-10 and FASB ASC Topic 505-50. FASB ASC Topic 718-10 requiresall share-based payments to employees, including grants of employee stock options, to be recognized as compensation expense over the requisiteservice period (generally the vesting period) in the consolidated financial statements based on their grant date fair values. The impact of forfeitures thatmay occur prior to vesting is also estimated and considered in the amount recognized. The Company has applied the Black-Scholes valuation model indetermining the grant date fair value of the stock option awards. Compensation expense is recognized only for those options expected to vest, withforfeitures estimated based on historical experience and future expectations.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsThe weighted-average fair value at the grant date for options issued during the years ended March 31, 2015, 2014 and 2013 was $34.50, $43.80 and$36.06 per share, respectively. This fair value was estimated at grant date using the weighted-average assumptions listed below. 2015 2014 2013Dividend yield0% 0% 0%Expected volatility44.62% 53.91% 56.15%Average risk-free interest rate1.77% 1.51% 0.80%Expected life6.1 years 5.4 years 5.6 years The expected stock price volatility is based on the historical volatility of the Company’s stock for a period approximating the expected life. Theexpected life represents the period of time that options are expected to be outstanding after the grant date. The risk-free rate reflects the interest rate atgrant date on zero coupon U.S. governmental bonds having a remaining life similar to the expected option term.Option activity for the year ended March 31, 2015 was as follows: Shares WeightedAverageExercisePrice WeightedAverageRemainingContractual Term AggregateIntrinsicValueOptions outstanding, beginning of year1,096,000 $63.79 Granted193,525 76.57 Exercised(159,348) 41.05 Forfeited(39,532) 69.20 Expired(6,878) 75.82 Options outstanding, end of period1,083,767 $69.15 7.43 $8,303,057Options exercisable, end of period340,883 $58.01 5.88 $5,871,954The aggregate intrinsic value reflected in the table above represents the total pre-tax intrinsic value (the difference between the closing stock price onMarch 31, 2015 and the exercise price, multiplied by the number of in-the-money options) that would have been received by option holders had alloption holders exercised their options as of March 31, 2015. This amount will change as the stock's market price changes. The total intrinsic value ofoptions exercised during the periods ended March 31, 2015, 2014 and 2013 was as follows:2015 2014 2013$6,454,022 $13,844,546 $14,049,751As of March 31, 2015, total unrecognized stock-based compensation expense related to non-vested stock options amounted to approximately $18.0million, which is expected to be recognized over a weighted-average period of approximately 3.3 years. Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsRestricted StockDuring Fiscal 2014 and 2013 the Company granted 8,590 and 70,800 Group A performance based restricted stock awards to certain officers. As of March31, 2015, 60,390 remain unforfeited. Group A awards vested on April 30, 2015 based on the Company's achievement of the following performance goalsas of March 31, 2015: EPS Target Restricted Shares Eligible for Vesting(Percentage of Award)$10.29 100%$9.76 67%$9.26 33%Below $9.26 0%During Fiscal 2014 and 2013 the Company granted 56,660 and 443,700 Group B performance based restricted stock awards to certain officers. As ofMarch 31, 2014, 373,360 remain unforfeited. Group B awards will vest as follows, if the Company achieves the following performance goals during anysuccessive trailing four quarters during the measurement period ending on March 31, 2017:Trailing 4 quarter EPS Target Restricted Shares Eligible for Vesting(Percentage of Award)$13.00 25%$14.50 25%$16.00 25%$18.00 25%On November 7, 2011, the Company granted 15,077 shares of restricted stock (which are equity classified), with a grant date fair value of $67.70 pershare, to certain executive officers. One-third of the restricted stock vested immediately, one-third vested on November 7, 2012, and 3,249 net of forfeitsvested on November 7, 2013, respectively. On that same date, the Company granted an additional 24,200 shares of restricted stock (which are equityclassified), with a grant date fair value of $67.70 per share, to certain officers. One-third of the restricted stock vested on November 7, 2012, and one-third of the restricted stock vested on November 7, 2013 and one-third of the restricted stock vested on November 7, 2014, respectively. On that samedate, the Company granted an additional 11,139 shares of restricted stock (which are equity classified), with a grant date fair value of $67.70 per share, tocertain executive officers. The remaining unforfeited 7,275 shares vested on April 30, 2014 based on the Company’s compounded annual EPS growthaccording to the following schedule:Vesting Percentage Compounded Annual EPS Growth100% 15% or higher67% 12% - 14.99%33% 10% - 11.99%0% Below 10%Compensation expense related to restricted stock is based on the number of shares expected to vest and the fair market value of the common stock on thegrant date. The Company recognized approximately $8.1 million, $6.0 million and $4.8 million of compensation expense for the years ended March 31,2015, 2014 and 2013, respectively, which is included as a component of general and administrative expenses in the Company's Consolidated Statementsof Operations. As of March 31, 2015, there was approximately $8.8 million of unrecognized compensation cost related to unvested performance-based restricted stockawards, which is expected to be recognized over the next 1.6 years based on current estimates. In addition there was approximately $6.7 million ofunrecognized compensation cost related to unvested performance-based restricted stock awards, which are not expected to vest based on currentestimates. If these estimates change the $6.7 million could be expensed, accordingly, in future periods.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsA summary of the status of the Company’s restricted stock as of March 31, 2015, and changes during the year ended March 31, 2015, are presentedbelow: Shares Weighted Average FairValue at Grant DateOutstanding at March 31, 2014461,959 $76.49Granted during the period— —Vested during the period(12,615) 67.70Forfeited during the period(15,594) 73.84Outstanding at March 31, 2015433,750 $76.84Total share-based compensation included as a component of net income during the years ended March 31, 2015, 2014 and 2013 was as follows: 2015 2014 2013Share-based compensation related to equity classified units: Share-based compensation related to stock options$8,133,812 9,678,724 7,322,653Share-based compensation related to restricted stock8,138,643 6,026,553 4,818,956Total share-based compensation related to equity classified awards$16,272,455 15,705,277 12,141,609(13)AcquisitionsThe Company evaluates each acquisition to determine if the acquired enterprise meets the definition of a business. Those acquired enterprises that meetthe definition of a business are accounted for as a business combination under FASB ASC Topic 805-10 and all other acquisitions are accounted for asasset purchases. All acquisitions have been from independent third parties.The following table sets forth the acquisition activity of the Company for the years ended March 31, 2015, 2014, and 2013 years: 2015 2014 2013Number of business combinations2 1 3Number of asset purchases3 6 9Total acquisitions5 7 12 Purchase price$1,979,494 1,055,986 2,649,000Tangible assets: Loans receivable, net1,512,149 773,049 1,925,000Property and equipment4,000 1,500 8,000 1,516,149 774,549 1,933,000 Excess of purchase prices over carrying value of net tangible assets$463,345 281,437 716,000 Customer lists$284,014 175,000 451,000Non-compete agreements25,000 35,000 60,000Goodwill154,331 70,839 205,000 Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsWhen the acquisition results in a new branch, the Company records the transaction as a business combination, since the branch acquired will continueto generate loans. The Company typically retains the existing employees and the branch location. The purchase price is allocated to the estimated fairvalue of the tangible assets acquired and to the estimated fair value of the identified intangible assets acquired (generally non-compete agreements andcustomer lists). The remainder is allocated to goodwill. During the year ended March 31, 2015, two acquisitions were recorded as businesscombinations.When the acquisition is of a portfolio of loans only, the Company records the transaction as an asset purchase. In an asset purchase, no goodwill isrecorded. The purchase price is allocated to the estimated fair value of the tangible and intangible assets acquired. During the year ended March 31,2015, there were three acquisitions recorded as asset acquisitions.The Company’s acquisitions include tangible assets (generally loans and furniture and equipment) and intangible assets (generally non-competeagreements, customer lists, and goodwill), both of which are recorded at their fair values, which are estimated pursuant to the processes described below.Acquired loans are valued at the net loan balance. Given the short-term nature of these loans, generally eight months, and that these loans are priced atcurrent rates, management believes the net loan balances approximate their fair value. Furniture and equipment are valued at the specific purchase price as agreed to by both parties at the time of acquisition, which management believesapproximates their fair values.(14) Fair ValueFair Value DisclosuresThe Company may carry certain financial instruments and derivative assets and liabilities at fair value on a recurring basis. Fair value is defined as theprice that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date.The Company determines the fair values of its financial instruments based on the fair value hierarchy, which requires an entity to maximize the use ofobservable inputs and minimize the use of unobservable inputs when measuring fair value.Financial assets and liabilities measured at fair value are grouped in three levels. The levels prioritize the inputs used to measure the fair value of theassets or liabilities. These levels are:•Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.•Level 2 – Inputs other than quoted prices that are observable for assets and liabilities, either directly or indirectly. These inputs include quotedprices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in market that are less active.•Level 3 – Unobservable inputs for assets or liabilities reflecting the reporting entity’s own assumptions.The Company’s financial instruments for the periods reported consist of the following: cash and cash equivalents, loans receivable, and senior notespayable. Fair value approximates carrying value for all of these instruments. Loans receivable are originated at prevailing market rates and have anaverage life of approximately 8 months. Given the short-term nature of these loans, they are continually repriced at current market rates. The Company’srevolving credit facility has a variable rate based on a margin over LIBOR and reprices with any changes in LIBOR. The Company also considered itscreditworthiness in its determination of fair value.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsThe carrying amount and estimated fair values of the Company’s financial instruments summarized by level are as follows: March 31, 2015 March 31, 2014 Carrying Value Estimated Fair Value Carrying Value Estimated Fair ValueASSETS Level 1 inputs Cash and cash equivalents$38,338,935 $38,338,935 $19,569,683 $19,569,683Level 3 inputs Loans receivable, net742,304,690 742,304,690 750,664,875 750,664,875LIABILITIES Level 3 inputs Senior notes payable501,150,000 501,150,000 505,500,000 505,500,000There were no significant assets or liabilities measured at fair value on a non-recurring basis as of March 31, 2015 and 2014.(15)Quarterly Information (Unaudited)The following sets forth selected quarterly operating data: 2015 2014 First Second Third Fourth First Second Third Fourth (Dollars in thousands, except for earnings per share data)Total revenues$145,926 148,185 148,704 167,398 140,315 145,046 155,198 158,704Provision for loan losses30,893 36,161 38,293 13,483 28,703 38,188 41,116 18,569General andadministrative expenses73,325 71,677 75,639 71,410 70,287 67,070 72,003 71,887Interest expense5,564 6,026 6,038 5,673 4,676 5,281 5,546 5,692Income tax expense13,588 13,047 10,245 28,317 13,537 12,942 13,579 23,579Net income$22,556 21,274 18,489 48,515 23,112 21,565 22,954 38,977 Earnings per share: Basic$2.36 2.34 2.04 5.45 2.02 1.95 2.14 3.80Diluted$2.32 2.30 2.01 5.34 1.98 1.91 2.10 3.73Total revenues and General and administrative expenses have been revised in compliance with Accounting Standards Codification310-20, Nonrefundable Fees and Other Costs as described in Note 1.The Company's highest loan demand occurs generally from October through December, its third fiscal quarter. Loan demand is generally lowest andloan repayment highest from January to March, its fourth fiscal quarter. Consequently, the Company experiences significant seasonal fluctuations in itsoperating results and cash needs. Operating results from the Company's third fiscal quarter are generally lower than in other quarters and operatingresults for its fourth fiscal quarter are generally higher than in other quarters.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents(16)LitigationAs previously disclosed, on March 12, 2014, the Company received a Civil Investigative Demand (“CID”) from the Consumer Financial ProtectionBureau (the “CFPB”). The stated purpose of the CID is to determine whether the Company has been or is “engaging in unlawful acts or practices inconnection with the marketing, offering, or extension of credit in violation of Sections 1031 and 1036 of the Consumer Financial Protection Act, 12U.S.C. §§ 5531, 5536, the Truth in Lending Act, 15 U.S.C. §§ 1601, et seq., Regulation Z, 12 C.F.R. pt. 1026, or any other Federal consumer financiallaw” and “also to determine whether Bureau action to obtain legal or equitable relief would be in the public interest.” The Company responded, withinthe deadlines specified in the CID, to broad requests for production of documents, answers to interrogatories and written reports related to loans madeby the Company and numerous other aspects of the Company’s business. Subsequent to the March 2014 CID, the Company has received and respondedto, and is actively in the process of responding to, additional broad requests and demands for information from the CFPB and expects that there willcontinue to be additional requests or demands for information from the CFPB and ongoing interactions between the CFPB, the Company and Companycounsel as part of the investigation. We are currently unable to predict the ultimate timing or outcome of the CFPB investigation. While the Companybelieves its marketing and lending practices are lawful, there can be no assurance that the CFPB's ongoing investigation or future exercise of itsenforcement, regulatory, discretionary or other powers will not result in findings or alleged violations of federal consumer financial protection laws thatcould lead to enforcement actions, proceedings or litigation and the imposition of damages, fines, penalties, restitution, other monetary liabilities,sanctions, settlements or changes to the Company’s business practices or operations that could have a material adverse effect on the Company’sbusiness, financial condition or results of operations or eliminate altogether the Company's ability to operate its business profitably or on termssubstantially similar to those on which it currently operates.As previously disclosed, on April 22, 2014, a shareholder filed a putative class action complaint, Edna Selan Epstein v. World Acceptance Corporationet al., in the United States District Court for the District of South Carolina (case number 6:14-cv-01606), against the Company and certain of its currentand former officers on behalf of all persons who purchased or otherwise acquired the Company’s common stock between April 25, 2013 and March 12,2014. The complaint alleges that the Company made false and misleading statements in various SEC reports and other public statements in violation offederal securities laws preceding the Company’s disclosure in a Form 8-K filed March 13, 2014 that it had received the above-referenced CID from theCFPB. The complaint seeks class certification, unspecified monetary damages, costs and attorneys’ fees. The Company believes the complaint iswithout merit. On June 25, 2014, the Company filed a motion to dismiss the complaint. On August 12, 2014, lead plaintiff Operating EngineersConstruction Industry and Miscellaneous Pension Fund filed an amended complaint. The amended complaint contains similar allegations to theoriginal complaint, but expands the class period and includes additional allegations that the Company’s loan growth and volume figures were inflatedbecause of a weakness in the Company’s internal controls relating to its accounting treatment of certain small-dollar loan re-financings. The Companyfiled a motion to dismiss the amended complaint on September 16, 2014. On October 21, 2014, the Plaintiff filed a response in opposition to theCompany’s motion to dismiss the amended complaint. The Company filed a reply brief in support of its motion to dismiss on November 17, 2014. OnMay 18, 2015, the Court issued an order denying the Company’s motion to dismiss. On May 28, 2015, the Court granted the Company’s consentmotion for an extension of time for the Company to answer the amended complaint to until July 1, 2015. On May 28, 2015, the Company filed a motionasking the Court to certify its May 18, 2015 order for immediate appeal to the United States Court of Appeals for the Fourth Circuit, pursuant to 28U.S.C. Section 1292(b), and to stay proceedings pending the resolution of that appeal, on grounds that the Court’s decision involves a controllingquestion of law over which there is substantial ground for difference of opinion and an immediate appeal may materially advance the ultimatetermination of the litigation. In the event that this motion is disallowed, or if the Court’s decision is not reversed on appeal, then the Company intendsto answer the complaint, denying all liability, and to defend the action vigorously. In addition, from time to time the Company is involved in routine litigation matters relating to claims arising out of its operations in the normal courseof business, including matters in which damages in various amounts are claimed.Estimating an amount or range of possible losses resulting from litigation, government actions and other legal proceedings is inherently difficult andrequires an extensive degree of judgment, particularly where the matters involve indeterminate claims for monetary damages, may involve fines,penalties or damages that are discretionary in amount, involve a large number of claimants or significant discretion by regulatory authorities, representa change in regulatory policy or interpretation, present novel legal theories, are in the early stages of the proceedings, are subject to appeal or couldresult in a change in business practices. In addition, because most legal proceedings are resolved over extended periods of time, potential losses aresubject to change due to, among other things, new developments, changes in legal strategy, the outcome of intermediate procedural and substantiverulings and other parties’ settlement posture and their evaluation of the strength or weakness of their case against us. For these reasons, we are currentlyunable to predict the ultimate timing or outcome of, or reasonably estimate the possible losses or a range of possible losses resulting from, the mattersdescribed above. BasedSource: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentson information currently available, the Company does not believe that any reasonably possible losses arising from currently pending legal matters willbe material to the Company’s results of operations or financial conditions. However, in light of the inherent uncertainties involved in such matters, anadverse outcome in one or more of these matters could materially and adversely affect the Company’s financial condition, results of operations or cashflows in any particular reporting period.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsMANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING We are responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a – 15(f) under the SecuritiesExchange Act of 1934. We have assessed the effectiveness of internal control over financial reporting as of March 31, 2015. Our assessment was based oncriteria established in the Internal Control – Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO).Our 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. Our 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 our transactions and dispositions of our assets;(2)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management andboard of directors; and(3)provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have amaterial effect on our financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, any assumptions regardinginternal control over financial reporting in future periods based on an evaluation of effectiveness in a prior period are subject to the risk that controls maybecome inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.Based on using the COSO criteria, we believe our internal control over financial reporting as of March 31, 2015 was effective.Our independent registered public accounting firm has audited the Consolidated Financial Statements included in this Annual Report and has issued anattestation report on the effectiveness of our internal control over financial reporting, as stated in their report. /s/ A. A. McLean III /s/ John L. Calmes, Jr.A. A. McLean III John L. Calmes, Jr.Chairman and Chief Executive Officer Vice President and Chief Financial OfficerSource: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMThe Board of DirectorsWorld Acceptance Corporation:We have audited the accompanying consolidated balance sheet of World Acceptance Corporation and subsidiaries (the Company) as of March 31, 2014, andthe related consolidated statements of operations, comprehensive income, shareholders’ equity, and cash flows for each of the years in the two-year periodended March 31, 2014. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express anopinion on these consolidated financial statements based on our audits.We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our auditsprovide a reasonable basis for our opinion.In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of World AcceptanceCorporation and subsidiaries as of March 31, 2014, and the results of their operations and their cash flows for each of the years in the two-year period endedMarch 31, 2014, in conformity with U.S. generally accepted accounting principles./s/ KPMGGreenville, South CarolinaJune 12, 2014Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsReport of Independent Registered Public Accounting FirmTo the Board of Directors and ShareholdersWorld Acceptance Corporation and subsidiariesWe have audited the accompanying consolidated balance sheet of World Acceptance Corporation and subsidiaries as of March 31, 2015, and the relatedconsolidated statements of operations, comprehensive income, shareholders' equity, and cash flows for the year then ended. These financial statements are theresponsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our auditprovides a reasonable basis for our opinion.In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of World AcceptanceCorporation and subsidiaries as of March 31, 2015, and the results of their operations and their cash flows for the year then ended in conformity with U.S.generally accepted accounting principles.We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), World Acceptance Corporation'sand subsidiaries' internal control over financial reporting as of March 31, 2015, based on criteria established in Internal Control -- integrated frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission in 1992, and our report dated June 1, 2015 expressed an unqualifiedopinion on the effectiveness of World Acceptance Corporation's internal control over financial reporting./s/ McGladrey LLPRaleigh, North CarolinaJune 1, 2015Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsReport of Independent Registered Public Accounting FirmTo the Board of Directors and ShareholdersWorld Acceptance Corporation and subsidiariesWe have audited World Acceptance Corporation and subsidiaries' internal control over financial reporting as of March 31, 2015, based on criteria establishedin Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 1992. World AcceptanceCorporation and subsidiaries’ management is responsible for maintaining effective internal control over financial reporting and for its assessment of theeffectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting.Our responsibility is to express an opinion on the company's internal control over financial reporting based on our audit.We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all materialrespects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, andtesting and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such otherprocedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal controlover financial reporting includes those policies and procedures that (a) pertain to the maintenance of records that, in reasonable detail, accurately and fairlyreflect the transactions and dispositions of the assets of the company; (b) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are beingmade only in accordance with authorizations of management and directors of the company; and (c) provide reasonable assurance regarding prevention ortimely detection of unauthorized 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 compliancewith the policies or procedures may deteriorate.In our opinion, World Acceptance Corporation maintained, in all material respects, effective internal control over financial reporting as of March 31, 2015,based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commissionin 1992.We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheetof World Acceptance Corporation and subsidiaries as of March 31, 2015, and the related consolidated statements of operations, comprehensive income,shareholders’ equity, and cash flows for the year then ended, and our report dated June 1, 2015 expressed an unqualified opinion./s/ McGladrey LLPRaleigh, North CarolinaJune 1, 2015Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsItem 9.Changes in and Disagreements with Accountants on Accounting and Financial DisclosureOn August 29, 2014, World Acceptance Corporation (the “Company”), was informed by KPMG LLP (“KPMG”) that KPMG would not respond to theCompany’s recent request for proposal to serve as the Company’s independent registered public accounting firm and that KPMG resigned as the Company’scurrent independent registered public accounting firm. The decision to request proposals to serve as the Company’s independent registered publicaccounting firm was approved by the Company’s Audit Committee and the Board of Directors. On September 16, 2014, the Company appointed McGladreyLLP (“McGladrey”) as the Company’s independent registered public accounting firm for the fiscal year ended March 31, 2015, based on the approval of theAudit Committee of the Company’s Board of Directors. During the years ended March 31, 2014 and 2013 and through September 16, 2014, neither theCompany nor anyone on its behalf consulted McGladrey regarding (i) the application of accounting principles to a specific completed or contemplatedtransaction, (ii) the type of audit opinion that might be rendered on the Company's financial statements, or (iii) any matter that was the subject of a“disagreement” or “reportable event” within the meaning of Item 304(a)(1) of Regulation S-K.The Company had no disagreements on accounting or financial disclosure matters with its independent registered public accountants to report under thisItem 9.Item 9A.Controls and ProceduresEvaluation of Disclosure Controls and ProceduresBased on management’s evaluation (with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as of the end of theperiod covered by this report, our CEO and CFO have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are effective to provide reasonable assurance that information required to bedisclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified inSEC rules and forms, and is accumulated and communicated to management, including our principal executive officer and principal financial officer, asappropriate, to allow timely decisions regarding required disclosure.Changes in Internal Control Over Financial ReportingThere were no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurredduring the fourth fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internalcontrol over financial reporting.Management Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statementsfor external purposes in accordance with U.S. generally accepted accounting principles.Management assessed our internal control over financial reporting as of March 31, 2015, the end of our fiscal year. Management based its assessment oncriteria established in the Internal Control—Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the TreadwayCommission. Management’s assessment included evaluation of elements such as the design and operating effectiveness of key financial reporting controls,process documentation, accounting policies, and our overall control environment.Based on our assessment, management has concluded that our internal control over financial reporting was effective as of the end of the fiscal year to providereasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordancewith U.S. generally accepted accounting principles. Management’s Report on Internal Control over Financial Reporting is included in Part II, Item 8 of thisForm 10-K. We reviewed the results of management’s assessment with the Audit Compliance Committee of our Board of Directors.Our independent registered public accounting firm, McGladrey LLP, independently assessed the effectiveness of the Company’s internal control overfinancial reporting. McGladrey LLP has issued an attestation report concurring with management’s assessment, which is included at the end of Part II, Item 8of this Form 10-K. Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsInherent Limitations on Effectiveness of ControlsOur management, including the CEO and CFO, does not expect that our disclosure controls and procedures or our internal control over financial reportingwill prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute,assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and thebenefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls canprovide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected.These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error ormistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of thecontrols. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance thatany design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of the effectiveness of controls tofuture periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliancewith policies or procedures.Item 9B.Other InformationNone.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsPART III.Item 10.Directors, Executive Officers and Corporate GovernanceInformation contained under the caption “Election of Directors–Director Qualifications and Experience,” “–Audit and Compliance Committee,” “–Audit andCompliance Committee Financial Experts,” “Section 16(a) Beneficial Ownership Reporting Compliance” and “Corporate Governance Matters–Code ofBusiness Conduct and Ethics” and “–Director Nominations” in the Proxy Statement is incorporated herein by reference in response to this Item 10. Theinformation in response to this Item 10 regarding the executive officers of the Company is contained in Item 1, Part I hereof under the caption "ExecutiveOfficers of the Company."Item 11.Executive Compensation Information contained under the caption "Executive Compensation" in the Proxy Statement, except for the information therein under the subcaption "Reportof The Compensation and Stock Option Committee," which shall be deemed furnished, but not filed herewith, is incorporated herein by reference in responseto this Item 11. Item 12. Security Ownership of Certain Beneficial Owners, Management and Related Stockholder MattersInformation contained under the captions “Executive Compensation – Equity Plan Compensation Information,” "Ownership of Shares by Certain BeneficialOwners" and "Ownership of Common Stock of Management" in the Proxy Statement is incorporated by reference herein in response to this Item 12.Item 13. Certain Relationships and Related Transactions and Director IndependenceInformation contained under the Caption "Certain Relationships and Related Transactions" in the Proxy Statement is incorporated by reference in response tothis Item 13. Information contained under the captions “Election of Directors–Director Independence,” “–Compensation and Stock Option Committee,” “–Nominating and Corporate Governance Committee” and “–Audit and Compliance Committee” in the Proxy Statement is incorporated by reference inresponse to this Item 13. Item 14. Principal Accountant Fees and ServicesInformation contained under the caption “Ratification of Appointment of Independent Registered Public Accountants,” in the Proxy Statement except for theinformation therein under the subcaption “Report of the Audit and Compliance Committee of the Board of Directors,” is incorporated by reference herein inresponse to this Item 14.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsPART IV. Item 15. Exhibits and Financial Statement Schedules (1)The following Consolidated Financial Statements of the Company and Report of Independent Registered Public Accounting Firm are filed herewith.Consolidated Financial Statements:Consolidated Balance Sheets at March 31, 2015 and 2014Consolidated Statements of Operations for the fiscal years ended March 31, 2015, 2014 and 2013Consolidated Statements of Comprehensive Income for the fiscal years ended March 31, 2015, 2014 and 2013Consolidated Statements of Shareholders' Equity for the fiscal years ended March 31, 2015, 2014 and 2013Consolidated Statements of Cash Flows for the fiscal years ended March 31, 2015, 2014 and 2013Notes to Consolidated Financial Statements Reports of Independent Registered Public Accounting Firms(2)Financial Statement SchedulesAll schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not requiredunder the related instructions, are inapplicable, or the required information is included elsewhere in the Consolidated Financial Statements.(3)ExhibitsThe following exhibits are filed as part of this report or, where so indicated, have been previously filed and are incorporated herein by reference.ExhibitNumberDescriptionFiled Herewith (*),Previously filed (+),or Incorporated by ReferencePrevious Exhibit NumberCompany RegistrationNo. or Report3.1Second Amended and Restated Articles of Incorporation of the Company, as amended3.1333-1074263.2Fourth Amended and Restated Bylaws of the Company99.18-03-07 8-K4.1Specimen Share Certificate4.133-428794.2Articles 3, 4 and 5 of the Form of Company's Second Amended and Restated Articles ofIncorporation (as amended)3.1333-1074264.3Article II, Section 9 of the Company’s Fourth Amended And Restated Bylaws99.18-03-07 8-K4.4Amended and Restated Revolving Credit Agreement, dated September 17, 201010.19-21-10 8-K4.5First Amendment to the Amended and Restated Revolving Credit Agreement datedSeptember 17, 201010.19-1-11 8-K4.6Second Amendment to the Amended and Restated Revolving Credit Agreement datedSeptember 17, 201010.15-1-12 8-K4.7Third Amendment to the Amended and Restated Revolving Credit Agreement datedSeptember 17, 201010.111-20-12 8-KSource: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents4.8Fourth Amendment to the Amended and Restated Revolving Credit Agreement datedSeptember 17, 201010.19-9-13 8-K4.9Fifth Amendment to the Amended and Restated Revolving Credit Agreement datedSeptember 17, 201010.13-19-14 8-K4.10Sixth Amendment to the Amended and Restated Revolving Credit Agreement datedSeptember 17, 201010.111-20-14 8-K4.11Seventh Amendment to the Amended and Restated Revolving Credit Agreement datedSeptember 17, 201010.14-7-15 8-K4.12Eighth Amendment to the Amended and Restated Revolving Credit Agreement datedSeptember 17, 201010.15-8-15 8-K4.13Amended and Restated Company Security Agreement, Pledge and Indenture of Trust,dated as of September 17, 201010.29-21-10 8-K4.14Amended and Restated Subsidiary Security Agreement, Pledge and Indenture of Trust,dated as of September 17, 2010 (i.e. Subsidiary Security Agreement)10.39-21-10 8-K4.15Amended and Restated Guaranty Agreement, dated as of September 17, 2010 (i.e.,Subsidiary Guaranty Agreement)10.49-21-10 8-K10.1+Employment Agreement of A. Alexander McLean, III, effective May 21, 200710.32007 10-K10.2+Employment Agreement of Javier Sauza, effective as of June 1, 200810.42009 10-K10.3+Securityholders' Agreement, dated as of September 19, 1991, between the Company andcertain of its securityholders10.533-4287910.4+Supplemental Income Plan10.72000 10-K10.5+Second Amendment to the Company’s Supplemental Income Plan10.212-31-07 10-Q10.6+Board of Directors Deferred Compensation Plan10.62000 10-K10.7Second Amendment to the Company’s Board of Directors Deferred Compensation Plan(2000)10.112-31-07 10-Q10.8+2002 Stock Option Plan of the CompanyAppendix ADefinitive Proxy Statement on Schedule 14A for the 2002 Annual Meeting10.9+First Amendment to the Company’s 2002 Stock Option Plan10.112-31-07 10-Q10.10+2005 Stock Option Plan of the CompanyAppendix BDefinitive Proxy Statement on Schedule 14A for the 2005 Annual Meeting10.11+First Amendment to the Company’s 2005 Stock Option Plan10.112-31-07 10-Q10.12+The Company’s Executive Incentive Plan10.61994 10-K10.13+The Company’s Retirement Savings Plan4.1333-1439910.14+The Company Retirement Savings Plan Fifth Amendment10.112-31-08 10-Q10.15+Executive Deferral Plan10.12001 10-K10.16+Second Amendment to the Company’s Executive Deferral Plan10.112-31-07 10-Q10.17+First Amended and Restated Board of Directors 2005 Deferred Compensation Plan10.212-31-07 10-Q10.18+First Amended and Restated 2005 Executive Deferral Plan10.212-31-07 10-Q10.19+Second Amended and Restated Company 2005 Supplemental Income Plan10.212-31-07 10-QSource: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents10.20+2008 Stock Option Plan of the CompanyAppendix ADefinitive Proxy Statement on Schedule 14A for the 2008 Annual Meeting10.21+2009 Supplemental Income Plan10.16-30-09 10-Q10.22+2011 Stock Option Plan of the CompanyAppendix ADefinitive Proxy Statement on Schedule 14A for the 2011 Annual Meeting10.23+Form of Stock Option Agreement99.112-10-12 8-K10.24+Form of Restricted Stock Award Agreement (Group A)99.212-10-12 8-K10.25+Form of Restricted Stock Award Agreement (Group B)99.312-10-12 8-K14.0Code of Ethics14.02004 10-K21.0Schedule of the Company’s Subsidiaries* 23.1Consent of KPMG LLP* 23.2Consent of McGladrey LLP* 31.1Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer* 31.2Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer* 32.1Section 1350 Certification of Chief Executive Officer* 32.2Section 1350 Certification of Chief Financial Officer* 101.1The following materials from the Company’s Annual Report on Form 10-K for the fiscalyear ended March 31, 2015, formatted in XBRL: (i) Consolidated Balance Sheets as ofMarch 31, 2015 and March 31, 2014; (ii) Consolidated Statements of Operations for thefiscal years ended March 31, 2015, March 31, 2014 and March 31, 2013; (iii)Consolidated Statements of Comprehensive Income for the fiscal years ended March 31,2015, March 31, 2014 and March 31, 2013; (iv) Consolidated Statements ofShareholders’ Equity for the fiscal years ended March 31, 2015, March 31, 2014 andMarch 31, 2013; (v) Consolidated Statements of Cash Flows for the fiscal years endedMarch 31, 2015, March 31, 2014 and March 31, 2013; and (vi) Notes to ConsolidatedFinancial Statements.* * Submitted electronically herewith.+Management Contract or other compensatory plan required to be filed under Item 15 of this report and Item 601 ofRegulation S-K of the Securities and Exchange Commission.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsSIGNATURESPursuant 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 itsbehalf by the undersigned, thereunto duly authorized. WORLD ACCEPTANCE CORPORATION By:/s/ A. Alexander McLean III A. Alexander McLean, III Chairman and Chief Executive Officer Date: June 1, 2015 By:/s/ John L. Calmes, Jr. John L. Calmes, Jr. Vice President and Chief Financial Officer Date: June 1, 2015Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and inthe capacities and on the dates indicated.Signature /s/ A. Alexander McLean III /s/ Ken R. Bramlett Jr. A. Alexander McLean, III, Chairman of the Board andChief Executive Officer (Principal Executive Officer) Ken R. Bramlett Jr., Director Date: June 1, 2015 Date: June 1, 2015 /s/ John L. Calmes, Jr. /s/ James R. Gilreath John L. Calmes, Jr., Vice President and Chief FinancialOfficer (Principal Financial and Accounting Officer) James R. Gilreath, Director Date: June 1, 2015 Date: June 1, 2015 /s/ Darrell Whitaker /s/ Charles D. Way Darrell Whitaker, Director Charles D. Way, Director Date: June 1, 2015 Date: June 1, 2015 /s/ Scott J. Vassalluzzo Scott J. Vassalluzzo, Director Date: June 1, 2015 Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Consent of Independent Registered Public Accounting FirmThe Board of DirectorsWorld Acceptance Corporation:We consent to the incorporation by reference in the registration statements on Form S-8 (No. 333-14399, 333-107426, 333-135621, 333-153212, 333-179389) of World Acceptance Corporation of our report dated June 12, 2014, with respect to the consolidated balance sheet of World AcceptanceCorporation as of March 31, 2014, and the related consolidated statements of operations, comprehensive income, shareholders' equity, and cash flows foreach of the years in the two-year period ended March 31, 2014, which report appear in the March 31, 2014 annual report on Form 10‑K of World AcceptanceCorporation./s/ KPMGGreenville, South CarolinaJune 1, 2015Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Consent of Independent Registered Public Accounting FirmWe consent to the incorporation by reference in Registration Statements (No. 333-14399, 333-107426, 333-135621, 333-153212, and 333-179389) on FormS-8 of World Acceptance Corporation of our reports dated June 1, 2015, relating to our audits of the consolidated financial statements, and internal controlover financial reporting, which appear in this Annual Report on Form 10-K of World Acceptance Corporation for the year ended March 31, 2015. /s/ McGladrey LLP Raleigh, North CarolinaJune 1, 2015Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.EXHIBIT 31.1CERTIFICATIONSI, A. A. McLean III, certify that:1.I have reviewed this Annual Report on Form 10-K of World Acceptance Corporation;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 thisreport;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 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)) for the registrant and have:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others withinthose entities, 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 mostrecent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financialreporting; and5.The registrant's other certifying officer 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 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 arereasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; andb.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internalcontrol over financial reporting.Dated:June 1, 2015/s/ A. A. McLean III A. A. McLean III Chief Executive OfficerSource: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.EXHIBIT 31.2CERTIFICATIONSI, John L. Calmes, Jr., certify that:1.I have reviewed this Annual Report on Form 10-K of World Acceptance Corporation;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 thisreport;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 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)) for the registrant and have:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others withinthose entities, 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 mostrecent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financialreporting; and5.The registrant's other certifying officer 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 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 arereasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; andb.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internalcontrol over financial reporting.Dated:June 1, 2015/s/ John L. Calmes, Jr. John L. Calmes, Jr. Vice President and Chief Financial OfficerSource: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.EXHIBIT 32.1CERTIFICATION OF PERIODIC REPORTI, A. A. McLean III, of World Acceptance Corporation (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C.Section 1350, that (to my knowledge):(1)the Annual Report on Form 10-K of the Company for the year ended March 31, 2015, (the “Report”) fully complies with the requirements of Section13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Dated:June 1, 2015/s/ A. A. McLean III A. A. McLean III Chief Executive OfficerSource: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.EXHIBIT 32.2CERTIFICATION OF PERIODIC REPORTI, John L. Calmes, Jr., of World Acceptance Corporation (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C.Section 1350, that (to my knowledge):(1)the Annual Report on Form 10-K of the Company for the year ended March 31, 2015, (the “Report”) fully complies with the requirements of Section13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Dated:June 1, 2015/s/ John L. Calmes, Jr. John L. Calmes, Jr. Vice President and Chief Financial OfficerSource: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Source: WORLD ACCEPTANCE CORP, 10-K, June 02, 2015Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.

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