UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

EZCORP, Inc.

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation)		0-19424 (Commission File Number)		74-2540145 (IRS Employer Identification No.)

1901 Capital Parkway, Austin, Texas 78746
(Address of principal executive offices) (zip code)

Registrant’s telephone number, including area code: (512) 314-3400

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Item 8.01 — Other Events

Immediately following the filing of this Report, EZCORP, Inc. (the “Company”) will file with the Securities and Exchange Commission (the “SEC”) a “shelf” registration statement on Form S-3 registering the offer and sale of an indeterminate amount of a variety of securities, including debt securities. As described in the prospectus that will be included as a part of that registration statement (the “Prospectus”) and unless otherwise indicated in any supplement to the Prospectus, each of the Company’s domestic subsidiaries as of the date of the Prospectus (the “Subsidiary Guarantors”) will fully and unconditionally guarantee on a joint and several basis the Company’s payment obligations under any series of debt securities offered by the Prospectus. As a result, the Company is filing this Report to add condensed consolidating financial information to the notes to the Company’s audited consolidated financial statements as of September 30, 2011 and 2010 and for the three years ended September 30, 2011, which are included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2011 (the “Form 10-K”). The Company’s audited consolidated financial statements, as so revised, are filed as Exhibit 99.1 to this Report and are incorporated by reference herein.

Except for the addition of the condensed consolidating financial information described above, the Company has not modified or updated the disclosures contained in the consolidated financial statements and notes thereto included in the Form 10-K. Accordingly, this Report, with the exception of the foregoing, does not reflect events occurring after the date of filing of the Form 10-K or modify or update those disclosures affected by subsequent events. Consequently, all other information not affected by the addition described above is unchanged and reflects the disclosures and other information made at the date of the filing of the Form 10-K and should be read in conjunction with our filings with the SEC subsequent to the filing of the Form 10-K, including amendments to those filings, if any.

Item 9.01— Financial Statements, Pro Forma Financial Information and Exhibits

(d)

Exhibits.

	23.1		Consent of BDO USA, LLP
	99.1		Historical audited financial statements and revised related disclosure as of September 30, 2011 and 2010 and for the three years ended September 30, 2011.
	101.INS		XBRL Instance Document
	101.SCH		XBRL Schema Document
	101.CAL		XBRL Calculation linkbase Document
	101.DEF		XBRL Definition Linkbase Document
	101.LAB		XBRL Labels Linkbase Document
	101.PRE		XBRL Presentation Linkbase Document

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		EZCORP, INC.
Date: February 3, 2012	By:	/s/ Thomas H. Welch, Jr.
		Thomas H. Welch, Jr. Senior Vice President, General Counsel and Secretary

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

EZCORP, Inc.
Austin, TX

We hereby consent to the incorporation by reference in the Registration Statement (Form S-8 No. 33-63078) pertaining to the EZCORP, Inc. 401(k) Plan, the Registration Statement (Form S-8 No. 333-108847) pertaining to the 1998 EZCORP, Inc. Stock Incentive Plan, the Registration Statement (Form S-8 No. 333-122116) pertaining to the EZCORP, Inc. 2003 Incentive Plan, the Registration Statement (Form S-8 No. 333-140492) pertaining to the EZCORP, Inc. 2006 Incentive Plan, the Registration Statement (Form S-8 No. 333-166950) pertaining to the EZCORP, Inc. 2010 Incentive Plan and the Registration Statement (Form S-3 No. 333-155394) of our reports dated November 23, 2011 except with respect to our opinion on the consolidated financial statements insofar as it related to the presentation of financial information of guarantor and non-guarantor subsidiaries discussed in Note U, as to which the date is January 10, 2012, relating to the consolidated financial statements and the effectiveness of internal control over financial reporting of EZCORP, Inc. included in this Current Report on Form 8-K.

/s/ BDO USA, LLP

Dallas, TX
February 3, 2012

Exhibit 99.1

See Item 8.01 of the accompanying Current Report on Form 8-K for an explanation regarding the following disclosure. The following information replaces the Report of Independent Registered Public Accounting Firm and the audited Consolidated Financial Statements and Notes thereto included in “Part II—Item 8 —Financial Statements and Supplementary Data” of the Company’s previously filed Annual Report on Form 10-K for the fiscal year ended September 30, 2011. Except as set forth in this Exhibit 99.1, that Annual Report on Form 10-K has not been otherwise modified or updated.

Index to Financial Statements

Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders
EZCORP, Inc.
Austin, Texas

We have audited the accompanying consolidated balance sheets of EZCORP, Inc. (the Company) as of September 30, 2011 and 2010 and the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended September 30, 2011. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these 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 that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of EZCORP, Inc. at September 30, 2011 and 2010, and the results of its operations and its cash flows for each of the three years in the period ended September 30, 2011, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of EZCORP, Inc.’s internal control over financial reporting as of September 30, 2011, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated November 23, 2011 expressed an unqualified opinion thereon.

/s/ BDO USA, LLP

Dallas, Texas
November 23, 2011, except with respect to our opinion on the consolidated financial statements insofar as it relates to the presentation of financial information of subsidiary guarantors and other subsidiaries discussed in Note U, as to which the date is February 3, 2012.

EZCORP, Inc.
Consolidated Balance Sheets

		September 30,
		2011				2010
		(In thousands)
Assets:
Current assets:
Cash and cash equivalents		$	23,969			$	25,854
Pawn loans			145,318				121,201
Signature loans, net			11,389				10,775
Auto title loans, net			3,222				3,145
Pawn service charges receivable, net			26,455				21,626
Signature loan fees receivable, net			5,348				5,818
Auto title loan fees receivable, net			1,427				1,616
Inventory, net			90,373				71,502
Deferred tax asset			18,125				23,208
Prepaid expenses and other assets			30,611				17,427
Total current assets			356,237				302,172
Investments in unconsolidated affiliates			120,319				101,386
Property and equipment, net			78,498				62,293
Deferred tax asset, non-current			—				60
Goodwill			173,206				117,305
Intangible assets, net			19,790				16,454
Other assets, net			8,400				6,742
Total assets		$	756,450			$	606,412
Liabilities and stockholders’ equity:
Current liabilities:
Current maturities of long-term debt		$	—			$	10,000
Accounts payable and other accrued expenses			57,400				49,663
Customer layaway deposits			6,176				6,109
Income taxes payable			693				3,687
Total current liabilities			64,269				69,459
Long-term debt, less current maturities			17,500				15,000
Deferred tax liability			8,331				—
Deferred gains and other long-term liabilities			2,102				2,525
Total liabilities			92,202				86,984
Commitments and contingencies
Stockholders’ equity:
Class A Non-voting Common Stock, par value $.01 per share; authorized 54 million shares; 47,228,610 issued and outstanding in 2011; 46,256,051 issued and outstanding in 2010			471				463
Class B Voting Common Stock, convertible, par value $.01 per share; 3 million shares authorized; issued and outstanding: 2,970,171			30				30
Additional paid-in capital			242,398				225,374
Retained earnings			422,095				299,936
Accumulated other comprehensive income (loss)			(746	)			(6,375	)
Total stockholders’ equity			664,248				519,428
Total liabilities and stockholders’ equity		$	756,450			$	606,412

See accompanying notes to consolidated financial statements.

EZCORP, Inc.
Consolidated Statements of Operations

		Fiscal Years Ended September 30,
		2011				2010				2009
		(In thousands, except per share amounts)
Revenues:
Sales		$	494,562.			$	411,865			$	329,923
Pawn service charges			201,135				163,695				130,169
Signature loan fees			150,250				139,315				133,344
Auto title loan fees			21,701				17,707				3,589
Other			1,669				463				431
Total revenues			869,317				733,045				597,456
Cost of goods sold			295,620				251,122				203,589
Signature loan bad debt			36,328				31,709				33,553
Auto title loan bad debt			2,431				2,735				380
Net revenues			534,938				447,479				359,934
Operating expenses:
Operations			267,052				236,664				206,237
Administrative			75,270				52,740				40,497
Depreciation and amortization			18,344				14,661				12,746
(Gain) / loss on sale or disposal of assets			309				1,528				(1,024	)
Total operating expenses			360,975				305,593				258,456
Operating income			173,963				141,886				101,478
Interest income			(37	)			(186	)			(281	)
Interest expense			1,690				1,385				1,425
Equity in net income of unconsolidated affiliates			(16,237	)			(10,750	)			(5,016	)
Other			(164	)			(93	)			38
Income before income taxes			188,711				151,530				105,312
Income tax expense			66,552				54,236				36,840
Net income		$	122,159			$	97,294			$	68,472
Net income per common share:
Basic		$	2.45			$	1.98			$	1.45
Diluted		$	2.43			$	1.96			$	1.42
Weighted average shares outstanding:
Basic			49,917				49,033				47,372
Diluted			50,369				49,576				48,076

See accompanying notes to consolidated financial statements.

EZCORP, Inc.
Consolidated Statements of Comprehensive Income

		Fiscal Years Ended September 30,
		2011				2010				2009
						(In thousands)
Net Income		$	122,159			$	97,294			$	68,472
Other comprehensive income (loss):
Foreign currency translation adjustments			10,393				(3,673	)			(8,799	)
Unrealized holding gains arising during period			930				—				—
Income tax benefit (provision)			(5,694	)			1,918				1,598
Other comprehensive income, net of tax			5,629				(1,755	)			(7,201	)
Comprehensive income		$	127,788			$	95,539			$	61,271

See accompanying notes to consolidated financial statements.

EZCORP, Inc.
Consolidated Statements of Cash Flows

		Fiscal Years Ended September 30,
		2011				2010				2009
						(In thousands)
Operating Activities:
Net income		$	122,159			$	97,294			$	68,472
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			18,344				14,661				12,746
Signature loan and auto title loan loss provisions			15,052				11,588				9,023
Deferred taxes			13,647				(1,287	)			2,493
(Gain) / loss on sale or disposal of assets			309				1,528				(1,024	)
Stock compensation			13,208				4,512				3,701
Income from investments in unconsolidated affiliates			(16,237	)			(10,750	)			(5,016	)
Changes in operating assets and liabilities, net of business acquisitions:
Service charges and fees receivable, net			(2,998	)			(4,312	)			(1,408	)
Inventory, net			(5,422	)			(2,144	)			(783	)
Prepaid expenses, other current assets, and other assets, net			(12,759	)			(6,277	)			(4,767	)
Accounts payable and accrued expenses			6,881				15,592				(3,649	)
Customer layaway deposits			(70	)			1,824				861
Deferred gains and other long-term liabilities			(345	)			(736	)			(363	)
Excess tax benefit from stock compensation			(3,230	)			(1,861	)			(1,789	)
Income taxes			(98	)			5,093				2,120
Net cash provided by operating activities			148,441				124,725				80,617
Investing Activities:
Loans made			(652,403	)			(545,579	)			(446,023	)
Loans repaid			405,594				335,832				276,255
Recovery of pawn loan principal through sale of forfeited collateral			205,662				174,224				154,235
Additions to property and equipment			(34,776	)			(25,741	)			(19,264	)
Acquisitions, net of cash acquired			(67,919	)			(21,837	)			(40,922	)
Investments in unconsolidated affiliates			—				(59,188	)			—
Dividends from unconsolidated affiliates			7,274				3,841				1,634
Proceeds on disposal of assets			—				1,347				1,062
Net cash used in investing activities			(136,568	)			(137,101	)			(73,023	)
Financing Activities:
Proceeds from exercise of stock options			397				1,602				4,943
Stock issuance costs related to acquisitions			—				—				(442	)
Excess tax benefit from stock compensation			3,230				1,861				1,789
Debt issuance costs			(2,397	)			3				(1,179	)
Taxes paid related to net share settlement of equity awards			(7,484	)			—				—
Proceeds on revolving line of credit			164,500				63,050				—
Payments on revolving line of credit			(147,000	)			(63,050	)			—
Proceeds from bank borrowings			—				—				40,000
Payments on bank borrowings			(25,004	)			(10,000	)			(35,385	)
Net cash provided by (used in) financing activities			(13,758	)			(6,534	)			9,726
Change in cash and equivalents			(1,885	)			(18,910	)			17,320
Cash and equivalents at beginning of period			25,854				44,764				27,444
Cash and equivalents at end of period		$	23,969			$	25,854			$	44,764
Cash paid during the period for:
Interest		$	1,147			$	913			$	1,181
Income taxes		$	55,124			$	50,631			$	32,231
Non-cash Investing and Financing Activities:
Pawn loans forfeited and transferred to inventory		$	215,188			$	177,821			$	155,690
Foreign currency translation adjustment		$	(5,024	)		$	1,755			$	7,201
Acquisition-related stock issuance		$	7,304			$	(31	)		$	70,753
Issuance of common stock to 401(k) plan		$	377			$	260			$	178

See accompanying notes to consolidated financial statements.

EZCORP, Inc.
Consolidated Statements of Stockholders’ Equity

		Common Stock								Additional												Accumulated
						Par				Paid In				Retained				Treasury				Other Comprehensive
		Shares				Value				Capital				Earnings				Stock				Income (Loss)				Total
		(In thousands)
Balances at September 30, 2008			41,535			$	416			$	135,895			$	134,170			$	(12	)		$	2,581			$	273,050
Issuance of Common Stock to 401(k) plan			17				—				178				—				—				—				178
Stock compensation			—				—				3,701				—				—				—				3,701
Stock options and warrants exercised			1,517				16				4,915				—				12				—				4,943
Issuance of Common Stock due to acquisitions			5,175				51				70,702				—				—				—				70,753
Release of Restricted Stock			459				4				(4	)			—				—				—				—
Excess tax benefit from stock compensation			—				—				1,789				—				—				—				1,789
Unrealized gain (loss) on available-for-sale securities			—				—				—				—				—				—				—
Foreign currency translation adjustment			—				—				—				—				—				(7,201	)			(7,201	)
Net income			—				—				—				68,472				—				—				68,472
Total comprehensive income			—				—				—				—				—				—				61,271
Balances at September 30, 2009			48,703				487				217,176				202,642				—				(4,620	)			415,685
Issuance of Common Stock to 401(k) plan			13				—				260				—				—				—				260
Stock compensation			—				—				4,512				—				—				—				4,512
Stock options exercised			494				6				1,596				—				—				—				1,602
Issuance of Common Stock due to acquisitions			—				—				(31	)			—				—				—				(31	)
Release of Restricted Stock			16				—				—				—				—				—				—
Excess tax benefit from stock compensation			—				—				1,861				—				—				—				1,861
Unrealized gain (loss) on available-for-sale securities			—				—				—				—				—				—				—
Foreign currency translation adjustment			—				—				—				—				—				(1,755	)			(1,755	)
Net income			—				—				—				97,294				—				—				97,294
Total comprehensive income			—				—				—				—				—				—				95,539
Balances at September 30, 2010			49,226				493				225,374				299,936				—				(6,375	)			519,428
Issuance of Common Stock to 401(k) plan			12				—				377				—				—				—				377
Stock compensation			—				—				13,208				—				—				—				13,208
Stock options exercised			62				1				396				—				—				—				397
Issuance of Common Stock due to acquisitions			209				2				7,302				—				—				—				7,304
Release of Restricted Stock			690				—				—				—				—				—				—
Excess tax benefit from stock compensation			—				5				3,225				—				—				—				3,230
Taxes paid related to net share settlement of equity awards			—				—				(7,484	)			—				—				—				(7,484	)
Unrealized gain (loss) on available-for-sale securities			—				—				—				—				—				605				605
Foreign currency translation adjustment			—				—				—				—				—				5,024				5,024
Net income			—				—				—				122,159				—				—				122,159
Total comprehensive income			—				—				—				—				—				—				127,788
Balances at September 30, 2011			50,199			$	501			$	242,398			$	422,095			$	—			$	(746	)		$	664,248

See accompanying notes to consolidated financial statements.

EZCORP, Inc.
Notes to Consolidated Financial Statements

Note A: Organization and Summary of Significant Accounting Policies

Organization: We are a leading provider of specialty consumer financial services. We provide collateralized, non-recourse loans, commonly known as pawn loans, and a variety of short-term consumer loans including payday loans, installment loans and auto title loans, or fee-based credit services to customers seeking loans.

At September 30, 2011, we operated a total of 1,111 locations, consisting of 433 U.S. pawn stores (operating as EZPAWN or Value Pawn), 178 pawn stores in Mexico (operating as Empeño Fácil or Empeñe Su Oro), 436 U.S. financial services stores (operating primarily as EZMONEY), 49 financial services stores in Canada (operating as CASHMAX) and 15 financial and retail services stores in Canada (operating as Cash Converters). In addition, we are the franchisor for 13 franchised stores in Canada pursuant to our acquisition of the Cash Converters master franchise in that country. We also own almost 30% of Albemarle & Bond Holdings PLC, one of the U.K.’s largest pawnbroking businesses with over 150 stores, and almost 33% of Cash Converters International Limited, which franchises and operates a worldwide network of over 600 financial services and second-hand retail stores.

Consolidation: The consolidated financial statements include the accounts of EZCORP, Inc. and its wholly owned subsidiaries. All significant inter-company accounts and transactions have been eliminated in consolidation. We account for our investments in Albemarle & Bond Holdings, PLC and Cash Converters International Limited using the equity method.

Pawn Loan and Sales Revenue Recognition: We record pawn service charges using the interest method for all pawn loans we believe to be collectible. We base our estimate of collectible loans on several factors, including recent redemption rates, historical trends in redemption rates and the amount of loans due in the following two months. Unexpected variations in any of these factors could change our estimate of collectible loans, affecting our earnings and financial condition. If a pawn loan is not repaid, we value the forfeited collateral (inventory) at the lower of cost (pawn loan principal) or market value of the property. We record sales revenue and the related cost when this inventory is sold, or when we receive the final payment on a layaway sale. Sales tax collected upon the sale of inventory is excluded from the amount recognized as sales and instead recorded as a liability in “Accounts payable and other accrued expenses” on our balance sheets until remitted to the appropriate governmental authorities.

Signature Loan Credit Service Fee Revenue Recognition: We earn credit service fees when we assist customers in obtaining signature loans from unaffiliated lenders. We initially defer recognition of the fees we expect to collect, net of direct expenses, and recognize that deferred net amount over the life of the related loans. We reserve the percentage of credit service fees we expect not to collect. Accrued fees related to defaulted loans reduce credit service fee revenue upon loan default, and increase credit service fee revenue upon collection. Signature loan credit service fee revenue is included in “Signature loan fees” on our statements of operations.

Signature Loan Credit Service Bad Debt: We issue letters of credit to enhance the creditworthiness of our customers seeking signature loans from unaffiliated lenders. The letters of credit assure the lenders that if borrowers default on the loans, we will pay the lenders, upon demand, the principal and accrued interest owed to the lenders by the borrowers plus any insufficient funds fees. Although amounts paid under letters of credit may be collected later, we charge those amounts to signature loan bad debt upon default. We record recoveries under the letters of credit as a reduction of bad debt at the time of collection. After attempting collection of bad debts internally, we occasionally sell them to an unaffiliated company as another method of recovery, and record the proceeds from such sales as a reduction of bad debt at the time of the sale.

The majority of our credit service customers obtain short-term signature loans with a single maturity date. These short-term loans, with terms averaging about 16 days, are considered defaulted if they have not been repaid or renewed by the maturity date. Other credit service customers obtain installment loans with a series of payments due over as much as a seven-month period. If one payment of an installment loan is delinquent, that one payment is considered defaulted. If more than one installment payment is delinquent at any time, the entire loan is considered defaulted.

Allowance for Losses on Signature Loan Credit Services: We provide an allowance for losses we expect to incur under letters of credit for brokered signature loans that have not yet matured. The allowance is based on recent loan default experience adjusted for seasonal variations. It includes all amounts we expect to pay to the unaffiliated lenders upon loan default, including loan principal, accrued interest, insufficient funds fees, and late fees, net of the amounts we expect to

collect from borrowers (collectively, “Expected LOC Losses”). Changes in the allowance are charged to signature loan bad debt. We include the balance of Expected LOC Losses in “Accounts payable and other accrued expenses” on our balance sheets. Based on the expected loss and collection percentages, we also provide an allowance for the signature loan credit service fees we expect not to collect, and charge changes in this allowance to signature loan fee revenue.

Signature Loan Revenue Recognition: We accrue fees in accordance with state and provincial laws on the percentage of signature loans (payday loans and installment loans) we have made that we believe to be collectible. Accrued fees related to defaulted loans reduce fee revenue upon loan default, and increase fee revenue upon collection.

Signature Loan Bad Debt: We consider a payday loan defaulted if it has not been repaid or renewed by the maturity date. If one payment of an installment loan is delinquent, that one payment is considered defaulted. If more than one installment payment is delinquent at any time, the entire installment loan is considered defaulted. Although defaulted loans may be collected later, we charge the loan principal to signature loan bad debt upon default, leaving only active loans in the reported balance. We record collections of principal as a reduction of signature loan bad debt when collected. After attempting collection of bad debts internally, we occasionally sell them to an unaffiliated company as another method of recovery and record the proceeds from such sales as a reduction of bad debt at the time of sale.

Signature Loan Allowance for Losses: We provide an allowance for losses on signature loans that have not yet matured and related fees receivable, based on recent loan default experience adjusted for seasonal variations. We charge any changes in the principal valuation allowance to signature loan bad debt. We record changes in the fee receivable valuation allowance to signature loan fee revenue.

Auto Title Loan Credit Service Fee Revenue Recognition: We earn auto title credit service fees when we assist customers in obtaining auto title loans from unaffiliated lenders. We recognize the fee revenue ratably over the life of the loan, and reserve the percentage of fees we expect not to collect. Auto title loan credit service fee revenue is included in “Auto title loan fees” on our statements of operations.

Bad Debt and Allowance for Losses on Auto Title Loan Credit Services: We issue letters of credit to enhance the creditworthiness of our customers seeking auto title loans from unaffiliated lenders. The letters of credit assure the lenders that if borrowers default on the loans, we will pay the lenders, upon demand, all amounts owed to the lenders by the borrowers plus any late fees. Through a charge to auto title loan bad debt, we provide an allowance for losses we expect to incur under letters of credit for brokered auto title loans, and record actual charge-offs against this allowance. The allowance includes all amounts we expect to pay to the unaffiliated lenders upon loan default, including principal, accrued interest and late fees, net of the amounts we expect to collect from borrowers or through the sale of repossessed vehicles. We include the allowance for expected losses in “Accounts payable and other accrued expenses” on our balance sheets.

Auto Title Loan Revenue Recognition: We accrue fees in accordance with state laws on the percentage of auto title loans we have made that we believe to be collectible. We recognize the fee revenue ratably over the life of the loan.

Auto Title Loan Bad Debt and Allowance for Losses: Based on historical collection experience, the age of past-due loans and amounts we expect to receive through the sale of repossessed vehicles, we provide an allowance for losses on auto title loans and related fees receivable. We charge any increases in the principal valuation allowance to auto title loan bad debt and charge uncollectable loans against this allowance. We record changes in the fee receivable valuation allowance to auto title loan fee revenue.

Cash and Cash Equivalents and Cash Concentrations: Cash and cash equivalents consist primarily of cash on deposit or highly liquid investments or mutual funds with original contractual maturities of three months or less. We hold cash at major financial institutions that often exceed FDIC insured limits. We manage our credit risk associated with cash and cash equivalents and cash concentrations by investing in high quality instruments or funds, concentrating our cash deposits in high quality financial institutions and by periodically evaluating the credit quality of the primary financial institutions issuing investments or holding such deposits. Historically, we have not experienced any losses due to such cash concentrations.

Inventory: If a pawn loan is not redeemed, we record the forfeited collateral at cost (the principal amount of the pawn loan). We do not record loan loss allowances or charge-offs on the principal portion of pawn loans, as they are fully collateralized. In order to state inventory at the lower of cost (specific identification) or market value, we record an allowance for excess, obsolete or slow moving inventory based on the type and age of merchandise. We record changes in the inventory valuation allowance as cost of goods sold.

Software Development Costs: We capitalize certain costs incurred in connection with developing or obtaining software for internal use, and amortize the costs by the straight-line method over the estimated useful lives of each system, typically five years.

Customer Layaway Deposits: Customer layaway deposits are recorded as deferred revenue until we collect the entire related sales price and deliver the related merchandise to the customer.

Intangible Assets: Goodwill and other intangible assets having indefinite lives are not subject to amortization. They are tested for impairment each July 1^st, or more frequently if events or changes in circumstances indicate that they might be impaired, based on cash flows and other market valuation methods. We amortize intangible assets with definite lives over their estimated useful lives using the straight-line method.

Property and Equipment: We record property and equipment at cost. We depreciate these assets on a straight-line basis using estimated useful lives of 30 years for buildings and 2 to 7 years for furniture, equipment, and software development costs. We depreciate leasehold improvements over the shorter of their estimated useful life (typically 10 years) or the reasonably assured lease term at the inception of the lease.

Valuation of Tangible Long-Lived Assets: We assess the impairment of tangible long-lived assets whenever events or changes in circumstances indicate that the net recorded amount may not be recoverable. The following factors could trigger an impairment review: significant underperformance relative to historical or projected future cash flows, significant changes in the manner of use of the assets or the strategy for the overall business, significant negative industry trends or legislative changes prohibiting us from offering our loan products. When we determine that the net recorded amount of tangible long-lived assets may not be recoverable, we measure impairment based on the excess of the assets’ net recorded amount over the estimated fair value.

Fair Value of Financial Instruments: We have elected not to measure at fair value any eligible items for which fair value measurement is optional. We determine the fair value of financial instruments by reference to various market data and other valuation techniques, as appropriate. Unless otherwise disclosed, the fair values of financial instruments approximate their recorded values, due primarily to their short-term nature. The recorded value of our outstanding debt is assumed to estimate its fair value, as it has no prepayment penalty and a floating interest rate based on market rates.

Acquisitions: We adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805-10-65 (Business Combinations — Revised) on October 1, 2009, and have applied it prospectively to all business acquisitions completed since that date. In accordance with FASB ASC 805-10-65, we allocate the total acquisition price to the fair value of assets and liabilities acquired and now immediately expense transaction costs that would have been included in the purchase price allocation under previous accounting standards.

Foreign Currency Translation: Our equity investments in Albemarle & Bond and Cash Converters International are translated from British pounds and Australian dollars, respectively, into U.S. dollars at the exchange rates as of the investees’ balance sheet date of June 30. The related interest in the investees’ net income is translated at the average exchange rates for each six-month period reported by the investees. The functional currency of our wholly-owned Empeño Fácil pawn segment is the Mexican peso and the functional currency of our wholly-owned foreign subsidiary in Canada is the Canadian dollar. Empeño Fácil’s and our Canadian subsidiary’s balance sheet accounts are translated from their respective functional currencies into U.S. dollars at the exchange rate at the end of each quarter, and their earnings are translated into U.S. dollars at the average exchange rate each quarter. We present resulting translation adjustments from Albemarle & Bond, Cash Converters International, Empeño Fácil and our Canada subsidiary as a separate component of stockholders’ equity. Foreign currency transaction gains and losses have not been significant, and are reported as “Other” expense in our statements of operations.

Cost of Goods Sold: We include in cost of goods sold the historical cost of inventory sold, inventory shrinkage and any change in the allowance for inventory shrinkage and valuation. We also include the cost of operating our central jewelry processing unit, as it relates directly to sales of precious metals to refiners.

Operations Expense: Included in operations expense are costs related to operating our stores. These costs include labor, other direct expenses such as utilities, supplies and banking fees, and indirect expenses such as store rent, building repairs and maintenance, advertising, store property taxes and insurance, regional and area management expenses and the costs of our bad debt collection center.

Administrative Expense: Included in administrative expense are costs related to our executive and administrative offices. This includes executive and administrative salaries, wages, stock and incentive compensation, professional fees, license fees and costs related to the operation of our administrative offices such as rent, property taxes, insurance, and information technology.

Advertising: We expense advertising costs as incurred.

Income Taxes: We account for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying value of assets and liabilities and their tax basis and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the related temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized when the rate change is enacted.

Stock Compensation: We account for stock compensation in accordance with the fair value recognition provisions of FASB ASC 718-10-25 (Compensation — Stock Compensation). The fair value of restricted shares is measured as the closing market price of our stock on the date of grant, which is amortized over the vesting period for each grant. When granted, our policy is to estimate the grant-date fair value of options using the Black-Scholes-Merton option-pricing model and amortize that fair value to compensation expense on a ratable basis over the options’ vesting periods.

Use of Estimates: Generally accepted accounting principles require us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ materially from those estimates.

Reclassifications: Certain prior year balances have been reclassified to conform to the current year presentation.

Recently Issued Accounting Pronouncements: In June 2009, FASB amended ASC 810-10-65 (Consolidation). Amended ASC 810-10-65 relates to the consolidation of variable interest entities. It eliminates the quantitative approach previously required for determining the primary beneficiary of a variable interest entity and requires ongoing qualitative reassessments of whether an enterprise is the primary beneficiary of a variable interest entity. This guidance also requires additional disclosures about an enterprise’s involvement in variable interest entities. We adopted this amended standard October 1, 2010, resulting in no effect on our financial position, results of operations or cash flows.

In July 2010, FASB issued Accounting Standards Update (“ASU”) 2010-20, “Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses.” This update amends FASB ASC 310 (Receivables) to improve the disclosures that an entity provides about the credit quality of its financing receivables and the related allowance for credit losses. As a result of these amendments, an entity is required to disaggregate by portfolio segment or class certain existing disclosures and provide new disclosures about its financing receivables and related allowance for credit losses. We adopted this amended standard on October 1, 2010, resulting in no effect on our financial position, results of operations or cash flows. The additional required disclosures are included in Note S.

In June 2011, FASB issued ASU 2011-05, “Presentation of Comprehensive Income.” This update amends FASB ASC 220 (Comprehensive Income) and eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity. The amendments require that all non-owner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. We early adopted this amended standard in our fiscal year beginning October 1, 2010 with no effect on our financial position, results of operations or cash flows other than the presentation of our results of operations.

Note B: Acquisitions

On December 31, 2008, we acquired through a merger all of the capital stock of Value Financial Services, Inc. (“VFS”). The following table provides information related to the acquisition:

		Fiscal Year Ended
		September 30, 2009
		(In thousands except store counts)
Pawn stores acquired			67
Consideration:
Cash		$	13,590
Equity instruments (4.1 million shares of Class A Non-voting stock at $15.92 per share)			64,609
Fair value of total consideration transferred			78,199
Capitalized acquisition costs			894
Cash acquired			(1,410	)
Total purchase price			77,683
Assumed debt			30,385
Total acquisition costs		$	108,068
Current assets:
Pawn loans		$	17,886
Pawn service charges receivable			3,491
Inventory			16,265
Deferred tax asset			4,394
Prepaid expenses and other assets			1,438
Total current assets			43,474
Property and equipment			5,584
Deferred tax asset, non-current			690
Goodwill			61,877
Other assets			5,719
Total assets		$	117,344
Current liabilities:
Current maturities of long-term debt		$	(4,000	)
Accounts payable and other accrued expenses			(8,404	)
Customer layaway deposits			(872	)
Total current liabilities			(13,276	)
Long-term debt			(26,385	)
Total liabilities			(39,661	)
Net assets acquired		$	77,683
Goodwill recorded in U.S. Pawn segment		$	61,877
Goodwill deductible for tax purposes			—
Indefinite lived intangible assets acquired:
Trademark and trade names		$	4,870
Definite lived intangible assets acquired:
Favorable lease asset		$	644

We estimated the fair value of the stock issued in the acquisition based on the average daily closing market price of our stock from two days before to two days after the announcement of the merger agreement. Since the date of acquisition, the total purchase price increased approximately $0.3 million due to additional transaction related costs identified after the point of acquisition.

As we expect to use the trademark and trade names indefinitely, they are not amortized but are tested at least annually for potential impairment. We are amortizing the favorable lease assets over the related lease terms used for straight-line rent purposes.

The factors contributing to the recognition of goodwill were based on several strategic and synergistic benefits we expect to realize from the acquisition. These benefits include a greater presence in prime pawn markets including making us the largest pawn store operator in Florida, expected administrative savings, increased scale and the ability to implement certain processes and practices at the acquired company in our existing and future operations.

The total purchase price presented above excludes contingent consideration paid under the terms of the acquisition, which depended on the price at which VFS shareholders sold their EZCORP shares. After the closing of the acquisition, we paid $10.7 million of contingent consideration to VFS shareholders related to the sale of approximately 3.9 million EZCORP shares. In accordance with accounting rules for contingent payments based on the acquirer’s stock price, all contingent consideration paid was recorded as a reduction of the additional paid-in capital recorded with the stock issuance and did not change the total recorded purchase price.

The results of the acquired stores have been consolidated with our results since their acquisition. The following table summarizes unaudited pro forma condensed combined statements of operations assuming the acquisition had occurred on the first day of fiscal 2009. Although VFS’s historical fiscal year ended on a different date than that of EZCORP, all VFS data included in the pro forma information are actual amounts for the periods indicated.

We have realized operating synergies and administrative savings. These come primarily from using the best practices from EZCORP and VFS in each business, economies of scale, reduced administrative support staff and the closure of VFS’s corporate offices. The pro forma information does not include any potential operating efficiencies or cost savings from expected synergies. The pro forma information is not necessarily an indication of the results that would have been achieved had the acquisition been completed as of the date indicated or that may be achieved in the future.

The following table presents unaudited consolidated pro forma information as if the VFS acquisition had occurred on October 1, 2009:

		Fiscal Year Ended
		September 30, 2009
		(In thousands)
Total revenues		$	634,693
Net revenues			380,020
Net income			70,358

The following table provides information related to the acquisitions of domestic and foreign pawn lending locations made during the years ended September 30, 2011, 2010 and 2009 (excluding locations acquired in connection with the acquisition described above related to Value Financial Services):

		Fiscal Years Ended September 30,
		2011				2010				2009
		(In thousands except store counts)
Number of asset purchase acquisitions			9				5				1
Number of stock purchase acquisitions			3				—				—
U.S. pawn stores acquired			34				16				11
Mexico pawn stores acquired			6				—				—
Total pawn stores acquired			40				16				11
Consideration:
Cash		$	69,977			$	22,507			$	17,124
Equity instruments			7,304				—				17,250
Fair value of total consideration transferred			77,281				22,507				34,374
Capitalized acquisition costs			—				—				178
Acquisition related costs included in administrative expenses			(920	)			(643	)			—
Cash acquired			(1,138	)			(58	)			(117	)
Total purchase price		$	75,223			$	21,806			$	34,435
Current assets:
Pawn loans		$	8,572			$	2,700			$	5,442
Signature loans			710				—				55
Auto title loans			—				—				1,105
Service charges and fees receivable			1,270				379				1,322
Inventory			4,838				1,542				2,860
Deferred tax asset			461				223				334
Prepaid expenses and other assets			728				66				79
Total current assets			16,579				4,910				11,197
Property and equipment			1,051				387				392
Goodwill			56,703				15,870				16,297
Other assets			2,558				1,057				6,711
Total assets			76,891			$	22,224			$	34,597
Current liabilities:
Accounts payable and other accrued expenses		$	(1,176	)		$	(93	)		$	(27	)
Customer layaway deposits			(182	)			(102	)			(135	)
Other current liabilities			(26	)			—				—
Total current liabilities			(1,384	)			(195	)			(162	)
Deferred tax liability			(284	)			(223	)			—
Total liabilities			(1,668	)			(418	)			(162	)
Net assets acquired		$	75,223			$	21,806			$	34,435
Goodwill deductible for tax purposes		$	34,376			$	15,870			$	16,297
Goodwill recorded in U.S. Pawn Segment			53,555				15,870				16,297
Goodwill recorded in Empeño Fácil segment			3,148				—				—
Indefinite lived intangible assets acquired:
Pawn licenses		$	—			$	607			$	6,680
Definite lived intangible assets acquired:
Favorable lease asset		$	111			$	—			$	—
Non-compete agreements			769				420				—

The fiscal year 2011 acquisitions in the table above include an acquisition of the trademark and licensing rights for Cash Converters in Canada, in which no goodwill was acquired. The factors contributing to the recognition of goodwill were based on several strategic and synergistic benefits we expect to realize from the acquisitions. These benefits include our

initial entry into Chicago, Iowa, Wisconsin, Utah, Hidalgo and Tlaxcala in addition to a greater presence in the prime pawn market of Florida and the ability to further leverage our expense structure through increased scale.

All stores were acquired as part of our continuing strategy to acquire pawn stores to enhance and diversify our earnings. Transaction related expenses were not material and were expensed as incurred. The results of all acquired stores have been consolidated with our results since their acquisition. The purchase price allocation of stores acquired in the most recent twelve months is preliminary as we continue to receive information regarding the acquired assets. Pro forma results of operations have not been presented because the acquisitions were not significant on either an individual or an aggregate basis, and it is not practicable to do so, as historical audited financial statements are not readily available.

Note C: Earnings Per Share

We compute basic earnings per share on the basis of the weighted average number of shares of common stock outstanding during the period. We compute diluted earnings per share on the basis of the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding stock options and restricted stock awards.

Potential common shares are required to be excluded from the computation of diluted earnings per share if the assumed proceeds upon exercise or vest, as defined by FASB ASC 718-10-25, are greater than the cost to re-acquire the same number of shares at the average market price, and therefore the effect would be anti-dilutive.

Components of basic and diluted earnings per share and excluded anti-dilutive potential common shares are as follows:

		Fiscal Years Ended September 30,
		2011				2010				2009
		(In thousands, except per share amounts)
Net income (A)		$	122,159			$	97,294			$	68,472
Weighted average outstanding shares of common stock (B)			49,917				49,033				47,372
Dilutive effect of stock options and restricted stock			452				543				704
Weighted average common stock and common stock equivalents (C)			50,369				49,576				48,076
Basic earnings per share (A/B)		$	2.45			$	1.98			$	1.45
Diluted earnings per share (A/C)		$	2.43			$	1.96			$	1.42
Potential common shares excluded from the calculation of diluted earnings per share			2				15				124

Note D: Strategic Investments and Fair Value of Financial Instruments

At September 30, 2011, we owned 16,644,640 ordinary shares of Albemarle & Bond Holdings, PLC, representing almost 30% of its total outstanding shares. Our total cost for those shares was approximately $27.6 million. Albemarle & Bond is primarily engaged in pawnbroking, retail jewelry sales, check cashing and lending in the United Kingdom. We account for the investment using the equity method. Since Albemarle & Bond’s fiscal year ends three months prior to ours, we report the income from this investment on a three-month lag. Albemarle & Bond files semi-annual financial reports for its fiscal periods ending December 31 and June 30. The income reported for our fiscal year ended September 30, 2011 represents our percentage interest in the results of Albemarle & Bond’s operations from July 1, 2010 to June 30, 2011. In fiscal 2011, 2010 and 2009, we received dividends from Albemarle & Bond of $3.2 million, $2.3 million and $1.6 million. Albemarle & Bond’s accumulated undistributed after-tax earnings included in our consolidated retained earnings were $23.5 million at September 30, 2011.

Conversion of Albemarle & Bond’s financial statements into US Generally Accepted Accounting Principles (“GAAP”) resulted in no material differences from those reported by Albemarle & Bond following International Financial Reporting Standards (“IFRS”).

In its functional currency of British pounds, Albemarle & Bond’s total assets increased 19% from June 30, 2010 to June 30, 2011 and its net income improved 6% for the year ended June 30, 2011. Below is summarized financial information for

Albemarle & Bond’s most recently reported results after translation to U.S. dollars (using the exchange rate as of June 30 of each year for balance sheet items and average exchange rates for the income statement items for the periods indicated):

		As of June 30,
		2011				2010
		(In thousands)
Current assets		$	125,862			$	97,476
Non-current assets			64,325				52,325
Total assets		$	190,187			$	149,801
Current liabilities		$	18,620			$	17,898
Non-current liabilities			57,016				42,078
Shareholders’ equity			114,551				89,825
Total liabilities and shareholders’ equity		$	190,187			$	149,801

		Years ended June 30,
		2011				2010				2009
		(In thousands)
Gross revenues		$	162,002			$	129,794			$	89,712
Gross profit			97,197				84,850				68,572
Profit for the year (net income)			24,324				22,792				17,239

At September 30, 2011, the recorded balance of our investment in Albemarle & Bond, accounted for on the equity method, was $48.4 million. Because Albemarle & Bond publicly reports its financial results only semi-annually as of June 30 and December 31, the latest Albemarle & Bond figures available are as of June 30, 2011, at which point our equity in net assets of Albemarle & Bond was $34.4 million. The difference between the recorded balance and our equity in Albemarle & Bond’s net assets represents the $10.0 million of unamortized goodwill, plus the cumulative difference resulting from Albemarle & Bond’s earnings, dividend payments and translation gains and losses since the dates of investment.

At September 30, 2011, we owned 124,418,000 shares, or approximately 33% of the total ordinary shares of Cash Converters International Limited, which is a publicly traded company headquartered in Perth, Australia. We acquired the shares between November 2009 and May 2010 for approximately $57.8 million. Cash Converters franchises and operates a worldwide network of approximately 600 specialty financial services and retail stores that provide pawn loans, short-term unsecured loans and other consumer finance products, and buy and sell second-hand goods. Cash Converters has significant store concentrations in Australia and the United Kingdom.

We account for our investment in Cash Converters using the equity method. Since Cash Converters’ fiscal year ends three months prior to ours, we report the income from this investment on a three-month lag. Cash Converters files semi-annual financial reports for its fiscal periods ending December 31 and June 30. Due to the three-month lag, income reported for our fiscal year ended September 30, 2011 represents our percentage interest in the results of cash Converters’ operations from July 1, 2010 to June 30, 2011. Our results for the twelve-month period ended September 30, 2010 include our percentage interest in Cash Converters’ 237 days of earnings from November 6, 2009 to June 30, 2010. This amount was estimated through daily proration of Cash Converters’ reported results for the twelve months ended June 30, 2010. In fiscal 2011 and 2010, we received dividends from Cash Converters of $4.1 and $1.5 million. Cash Converters’ accumulated undistributed after-tax earnings included in our consolidated retained earnings were $7.3 million at September 30, 2011.

Conversion of Cash Converters’ financial statements into US GAAP resulted in no material differences from those reported by Cash Converters following IFRS.

In its functional currency of Australian dollars, Cash Converters’ total assets increased 18% from June 30, 2010 to June 30, 2011 and its net income improved 27% for the year ended June 30, 2011. Below is summarized financial information for Cash Converters’ most recently reported results after translation to U.S. dollars (using the exchange rate as of June 30 of each year for balance sheet items and average exchange rates for the income statement items for the periods indicated):

		As of June 30,
		2011				2010
		(In thousands)
Current assets		$	119,633			$	96,489
Non-current assets			126,811				72,408
Total assets		$	246,444			$	168,897
Current liabilities		$	38,235			$	19,179
Non-current liabilities			22,528				10,199
Shareholders’ equity			185,681				139,519
Total liabilities and shareholders’ equity		$	246,444			$	168,897

		Years Ended June 30,
		2011				2010
		(In thousands)
Gross revenues		$	184,011			$	111,218
Gross profit			138,997				84,296
Profit for the year (net income)			27,328				19,122

At September 30, 2011, the recorded balance of our investment in Cash Converters, accounted for on the equity method, was $72.0 million. Because Cash Converters publicly reports its financial results only semi-annually as of June 30 and December 31, the latest Cash Converters figures available are as of June 30, 2011, at which point our equity in net assets of Cash Converters was $60.8 million. The difference between the recorded balance and our equity in Cash Converters’ net assets represents the $15.0 million of unamortized goodwill, plus the cumulative difference resulting from Cash Converters’ earnings, dividend payments and translation gains and losses since the dates of investment.

The table below summarizes the recorded value and fair value of each of these strategic investments at the dates indicated. These fair values are considered level one estimates within the fair value hierarchy of FASB ASC 820-10-50, and were calculated as (a) the quoted stock price on each company’s principal market multiplied by (b) the number of shares we owned multiplied by (c) the applicable foreign currency exchange rate at the dates indicated. We included no control premium for owning a large percentage of outstanding shares.

		September 30,
		2011				2010
		(In thousands of U.S. dollars)
Albemarle & Bond:
Recorded value		$	48,361			$	43,127
Fair value			91,741				75,520
Cash Converters:
Recorded value			71,958				58,259
Fair value			53,600				70,005

In August 2011, legislation was proposed in Australia that would, among other things, limit the interest charged on certain consumer loans and prohibit loan extensions and refinancings. If this legislation is enacted in its currently proposed form, Cash Converters’ consumer loan business in Australia may be adversely affected, which could have the effect of decreasing Cash Converters’ revenues and earnings. Cash Converters has announced that it is considering a wide range of steps which it can implement to reduce the potential adverse impact if the proposed legislation is enacted and that it believes it may be able to substantially reduce the adverse effects. As of September 30, 2011, the fair value of our investment in Cash Converters (based on the market price of Cash Converters stock as of that date) was below our recorded value. In light of

Cash Converters’ statements regarding its ability to mitigate the potential impact of the proposed legislation, we consider this loss in value to be temporary.

Included in “Other Assets, net” on our balance sheets are available for sale securities with a fair value of $5.4 million at September 30, 2011 and $4.9 million at September 30, 2010. This is considered to be a level one measurement of fair value as it is based on the ending market price for the securities at that date, as quoted on an active public securities exchange.

Note E: Property and Equipment

Major classifications of property and equipment were as follows:

		September 30,
		2011												2010
		(In thousands)
		Carrying				Accumulated				Net Book				Carrying				Accumulated				Net Book
		Amount				Depreciation				Value				Amount				Depreciation				Value
Land		$	4			$	—			$	4			$	—			$	—			$	—
Buildings and improvements			88,263				(53,094	)			35,169				78,997				(47,851	)			31,146
Furniture and equipment			85,654				(52,562	)			33,092				70,419				(44,209	)			26,210
Software			28,653				(23,238	)			5,415				25,128				(21,871	)			3,257
Construction in progress			4,818				—				4,818				1,680				—				1,680
Total		$	207,392			$	(128,894	)		$	78,498			$	176,224			$	(113,931	)		$	62,293

Depreciation expense for fiscal 2011, 2010 and 2009 was $17.5 million, $14.0 million and $12.3 million. Included in these amounts for fiscal 2011, 2010 and 2009 is $1.4 million, $0.9 million and $1.0 million of depreciation expense related to capitalized computer software.

Note F: Goodwill and Other Intangible Assets

The following table presents the balance of each major class of indefinite-lived intangible asset at the specified dates:

		September 30,
		2011				2010
		(In thousands)
Pawn licenses		$	8,836			$	8,836
Trade name			4,870				4,870
Goodwill			173,206				117,305
Total		$	186,912			$	131,011

The following table presents the changes in the carrying value of goodwill, by segment, for the fiscal years ended September 30, 2011 and 2010:

		U.S. Pawn				Empeño				EZMONEY
		Operations				Fácil				Operations				Consolidated
						(In thousands)
Balance at September 30, 2009		$	94,192			$	6,527			$	—			$	100,719
Acquisitions			15,871				—				—				15,871
Post-closing purchase price allocation adjustments for prior year acquisitions			192				—				—				192
Effect of foreign currency translation changes			—				523				—				523
Balance at September 30, 2010			110,255				7,050				—				117,305
Acquisitions			53,642				3,148				—				56,790
Effect of foreign currency translation changes			—				(889	)			—				(889	)
Balance at September 30, 2011		$	163,897			$	9,309			$	—			$	173,206

The following table presents the gross carrying amount and accumulated amortization for each major class of definite-lived intangible asset at the specified dates:

		September 30,
		2011												2010
		Carrying				Accumulated				Net Book				Carrying				Accumulated				Net Book
		Amount				Amortization				Value				Amount				Amortization				Value
		(In thousands)
Real estate finders’ fees		$	1,157			$	(479	)		$	678			$	948			$	(401	)		$	547
Non-compete agreements			3,722				(2,459	)			1,263				3,081				(1,834	)			1,247
Favorable lease			755				(322	)			433				644				(219	)			425
Franchise Rights			1,547				(32	)			1,515				—				—				—
Deferred financing costs			2,411				(262	)			2,149				1,469				(982	)			487
Other			58				(12	)			46				48				(6	)			42
Total		$	9,650			$	(3,566	)		$	6,084			$	6,190			$	(3,442	)		$	2,748

The amortization of most definite lived intangible assets is recorded as amortization expense. The favorable lease asset and other intangibles are amortized to operations expense (rent expense) over the related lease terms. The deferred financing costs are amortized to interest expense over the life of our credit agreement. The following table presents the amount and classification of amortization recognized as expense in each of the periods presented:

		Fiscal Years Ended September 30,
		2011				2010				2009
						(In thousands)
Amortization expense		$	855			$	631			$	485
Operations expense			111				129				95
Interest expense			615				403				296
Total expense from the amortization of definite-lived intangible assets		$	1,581			$	1,163			$	876

The following table presents our estimate of amortization expense for definite-lived intangible assets:

Fiscal Years Ended September 30,		Amortization Expense				Operations Expense				Interest Expense
						(In thousands)
2012		$	784			$	92			$	599
2013			346				76				599
2014			271				62				599
2015			234				51				352
2016			193				48				—

As acquisitions and dispositions occur in the future, amortization expense may vary from these estimates.

Note G: Accounts Payable and Other Accrued Expenses

Accounts payable and other accrued expenses consisted of the following:

		September 30,
		2011				2010
		(In thousands)
Trade accounts payable		$	9,949			$	9,135
Accrued payroll and related expenses			22,326				20,838
Accrued interest			13				94
Accrued rent and property taxes			10,728				9,121
Accrual for expected losses on credit service letters of credit			1,795				1,699
Collected funds payable to unaffiliated lenders under credit service programs			1,705				823
Other accrued expenses			10,884				7,953
		$	57,400			$	49,663