What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2024-02-05 compared with 2023-02-06 · 226 added, 326 removed, 1152 unchanged (32% of the section changed)

17 unchanged sentences

Changes in Internal Control Over Financial Reporting

Except for integrating AFF into the Company’s internal controls over financial reporting, there have been no changes in the Company’s internal control over financial reporting during the quarter ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

There have been no changes in the Company’s internal control over financial reporting during the quarter ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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We have audited FirstCash Holdings, Inc.

and its subsidiaries (the Company) internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

(the Company) internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2022 and 2021, the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2022 and the related notes to the consolidated financial statements of the Company and our report dated February 6, 2023 expressed an unqualified opinion.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2023, and the related notes to the consolidated financial statements and our report dated February 5, 2024 expressed an unqualified opinion.

Basis for Opinion

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Directors, Executive Officers and Corporate Governance

The information required by Item 10 to this Annual Report on Form 10-K with respect to the directors, executive officers and compliance with Section 16(a) of the Exchange Act is incorporated herein by reference from the information provided under the headings “Election of Directors,” “Executive Officers,” “Corporate Governance, Board Matters and Director Compensation” and “Delinquent Section 16(a) Reports,” contained in the Company’s Proxy Statement, to be filed with the SEC in connection with the solicitation of proxies for the Company’s 2023 Annual Meeting of Stockholders, to be held on or about June 8, 2023 (the “2023 Proxy Statement”).

The information required by Item 10 to this Annual Report on Form 10-K with respect to the directors, executive officers and compliance with Section 16(a) of the Exchange Act is incorporated herein by reference from the information provided under the headings “Election of Directors,” “Executive Officers,” “Corporate Governance, Board Matters and Director Compensation” and “Delinquent Section 16(a) Reports,” contained in the Company’s Proxy Statement, to be filed with the SEC in connection with the solicitation of proxies for the Company’s 2024 Annual Meeting of Stockholders (the “2024 Proxy Statement”).

The Company has adopted a Code of Ethics that applies to all of its directors, officers, and employees.

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Exhibit Filing Date Filed Herewith

2.1 Business Combination Agreement, dated as of October 27, 2021, by and among FirstCash, Inc., FirstCash Holdings, Inc., Atlantis Merger Sub, Inc., American First Finance, Inc., Doug Rippel and the other seller parties thereto.

8-K 001-10960 2.1 11/01/2021

2.2 First Amendment, dated as of December 6, 2021, to that certain Business Combination Agreement, dated as of October 27, 2021, by and among FirstCash, Inc., FirstCash Holdings, Inc., Atlantis Merger Sub, Inc., American First Finance, Inc., Doug Rippel and the other seller parties thereto.

8-K 001-10960 2.1 12/07/2021

2.3 Agreement and Plan of Merger, dated December 16, 2021, by and among FirstCash, Inc., FirstCash Holdings, Inc.

and Atlantis Merger Sub, Inc.

8-K12B 001-10960 2.1 12/16/2021

3.1 Amended and Restated Certificate of Incorporation

DEF 14A 0-19133 B 04/29/2004

3.2 Amendment to Amended and Restated Certificate of Incorporation

8-K 001-10960 3.1 09/02/2016

Amended and Restated Certificate of Incorporation of FirstCash Holdings, Inc., dated December 16, 2021

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8-K 001-10960 4.1 08/26/2020

Incorporated by Reference

Exhibit Description Form File No.

Exhibit Filing Date Filed Herewith

4.4 First Supplemental Indenture, dated November 17, 2021, by and among FirstCash, Inc., the guarantors listed therein and BOKF, N.A.

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S-8 333-106881 4(g) 05/31/2012

Incorporated by Reference

Exhibit Description Form File No.

Exhibit Filing Date Filed Herewith

10.5 Amended and Restated Credit Agreement, dated July 25, 2016, between First Cash Financial Services, Inc., certain subsidiaries of the borrower from time to time party thereto, the lenders party thereto, and Wells Fargo Bank, National Association

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8-K 001-10960 10.1 11/10/2020

Incorporated by Reference

Exhibit Description Form File No.

Exhibit Filing Date Filed Herewith

10.14 Fifth Amendment to Amended and Restated Credit Agreement, dated December 8, 2021, by and among FirstCash, Inc., the guarantors and lenders listed herein and Wells Fargo Bank, National Association

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10-K 001-10960 10.18 02/28/2022

Incorporated by Reference

Exhibit Description Form File No.

Exhibit Filing Date Filed Herewith

10.19 Employment Agreement, dated February 25, 2022, between R.

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8-K 001-10960 10.1 08/31/2022

10.22 Seventh Amendment to Amended and Restated Credit Agreement, dated October 18, 2023, between FirstCash Holdings, Inc., FirstCash, Inc., certain subsidiaries of the borrower from time to time party thereto, the lenders party thereto, and Wells Fargo Bank, National Association

10-Q 001-10960 10.1 10/30/2023

21.1 Subsidiaries

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Douglas Orr, Chief Financial Officer

97.1 F irstCash Holdings, Inc.

Compensation Recoupment Policy (effective October 2 5 , 2023) *

101.INS Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document X

101.SCH Inline XBRL Taxonomy Extension Schema Document X

Incorporated by Reference

Exhibit Description Form File No.

Exhibit Filing Date Filed Herewith

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document X

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101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document X

Incorporated by Reference

Exhibit Description Form File No.

Exhibit Filing Date Filed Herewith

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document X

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We have audited the accompanying consolidated balance sheets of FirstCash Holdings, Inc.

and its subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes to the consolidated financial statements (collectively, the “financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

and its subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes to the consolidated financial statements (collectively, the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013, and our report dated February 5, 2024, expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

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We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

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The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Allowance for loan losses—finance receivables

As described in Notes 2 and 7 to the consolidated financial statements, the Company established an allowance for credit losses on its finance receivable portfolios of $84.8 million as of December 31, 2022, which was estimated using the Company’s current expected credit loss (CECL) model.

Loan losses on finance receivables were estimated and recognized upon purchase of the receivable, based on expected loan losses for the life of the receivable.

The Company’s CECL model segmented the finance receivable population into monthly pools of receivables and estimated the allowance for loan losses by applying modeled loss rates primarily derived from internal, historical cumulative loss experience from comparable economic cycles, then adjusted by qualitative factors to address recent and forecasted business trends.

Qualitative factors to address recent and forecasted business trends included, but were not limited to, loss trends, delinquency levels, economic conditions, underwriting and collection practices.

As described in Notes 2 and 7 to the consolidated financial statements, the Company established an allowance for loan losses on its finance receivables of $96.5 million as of December 31, 2023, which was estimated using the Company’s expected lifetime loss model.

Loan losses on finance receivables were estimated and recognized upon purchase of the receivable, based on expected loan losses for the full contractual life of the receivable.

The Company’s expected lifetime loss model segmented the finance receivable population into monthly pools of receivable origination vintages by loan product and estimated the allowance for loan losses by applying modeled loss rates derived from historical cumulative loss experience.

The Company then adjusted historical cumulative loss experience for observable and forecasted economic conditions and qualitative factors to address recent and forecasted business trends including, but not limited to, loss trends, delinquency levels, economic conditions, underwriting and collection practices.

The determination of the allowance for loan losses on finance receivables was subjective and required management to make significant judgements related to the selection and application of modeled loss rates and adjustments to address recent and forecasted business trends.

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Our audit procedures related to the Company’s allowance for loan losses on finance receivables, specifically the selection and application of modeled loss rates and adjustments to address recent and forecasted business trends, included the following, among others:

• We obtained an understanding of the relevant controls related to the allowance for loan losses, including the qualitative factors and application of modeled loss rates, and tested such controls for design and operating effectiveness, including controls related to management’s review of the qualitative factors and application of modeled loss rates and approval of the allowance for loan losses calculation.

• We tested the completeness and accuracy of data inputs into the CECL model, including historical origination balances, loss rates, first payment default rates, and delinquency rates, by tracing to internal source documents.

• We evaluated key assumptions and judgements surrounding the selection of modeled loss rates and adjustments for current conditions and future expectations for reasonableness by comparing to internal and external source data.

• We obtained an understanding of the relevant controls related to the allowance for loan losses, including the application of modeled loss rates, forecasted economic conditions and qualitative factors and tested such controls for design and operating effectiveness, including controls related to management’s review of the qualitative factors and application of modeled loss rates and approval of the allowance for loan losses calculation.

• We tested the completeness and accuracy of data inputs into the expected lifetime loss model, including historical monthly origination balances and loss rates, by tracing to internal source documents.

• We evaluated key assumptions and judgements surrounding the selection of modeled loss rates and adjustments to address recent and forecasted business trends, including delinquency rates, for reasonableness by comparing to internal and external source data.

Allowance for lease losses—leased merchandise

As described in Notes 2 and 8 to the consolidated financial statements, the Company established an allowance for lease losses on its portfolio of merchandise subject to operating leases of $79.2 million as of December 31, 2022, representing estimated losses from uncollectible rental agreements.

The Company estimated this reserve based on a combination of historical losses and expected future losses that gave consideration to recent and forecasted business trends including, but not limited to, loss trends, delinquency levels, economic conditions, underwriting and collection practices.

The determination of the allowance for lease losses on merchandise subject to operating leases was subjective and required management to make significant judgements related to the selection and application of historical losses and adjustments for expected future losses.

We identified the allowance for lease losses on merchandise subject to operating leases as a critical audit matter as auditing the judgements surrounding the selection and application of historical losses and adjustments for expected future losses was complex and required a high degree of auditor judgement and subjectivity.

Our audit procedures related to the Company’s allowance for lease losses on merchandise subject to operating leases, specifically the selection and application of historical losses and adjustments for expected future losses, included the following, among others:

• We obtained an understanding of the relevant controls related to the allowance for lease losses, including the adjustments for expected future losses and application of historical losses, and tested such controls for design and operating effectiveness, including controls related to management’s review of the adjustments for expected future losses and application of historical losses and approval of the allowance for lease losses calculation.

• We tested the completeness and accuracy of data inputs into the allowance for lease losses model, including historical origination balances, loss rates, first payment default rates, and delinquency rates, by tracing to internal source documents.

• We evaluated key assumptions and judgements surrounding the selection of historical losses and adjustments for expected future losses for reasonableness by comparing to internal and external source data.

As described in Notes 2 and 8 to the consolidated financial statements, the Company established an allowance for lease losses on its portfolio of leased merchandise of $95.1 million as of December 31, 2023, representing estimated losses expected on its lease agreements.

The Company estimated this allowance based on historical losses and expected losses that gave consideration to recent and forecasted business trends including, but not limited to, loss trends, delinquency levels, economic conditions, underwriting and collection practices.

The determination of the allowance for lease losses on leased merchandise was subjective and required management to make significant judgements related to the selection and application of historical losses and adjustments for expected losses.

We identified the allowance for lease losses on leased merchandise as a critical audit matter as auditing the judgements surrounding the selection and application of historical losses and adjustments for expected losses was complex and required a high degree of auditor judgement and subjectivity.

Our audit procedures related to the Company’s allowance for lease losses on leased merchandise, specifically the selection and application of historical losses and adjustments for expected losses, included the following, among others:

• We obtained an understanding of the relevant controls related to the allowance for lease losses, including the adjustments for expected losses and application of historical losses, and tested such controls for design and operating effectiveness, including controls related to management’s review of the adjustments for expected losses and application of historical losses and approval of the allowance for lease losses calculation.

• We tested the completeness and accuracy of data inputs into the allowance for lease losses model, including historical loss rates, by tracing to internal source documents.

• We evaluated key assumptions and judgements surrounding the selection of historical losses and adjustments for expected losses for reasonableness by comparing to internal and external source data.

s/ RSM US LLP

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Lease liability, non-current 215,485 203,115

Other liabilities — 13,950

Total liabilities 2,293,497 2,025,101

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Other expenses (income), net ( 1,402 ) ( 2,731 ) 949

Loss on extinguishment of debt — — 11,737

Total expenses and other income 1,214,390 940,953 752,650

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As of 12/31/2022 57,322 $ 573 $ 1,734,528 $ 1,060,603 $ ( 106,573 ) 11,030 $ ( 809,365 ) $ 1,879,766

Shares issued under share-based compensation plan — — ( 1,281 ) — — ( 17 ) 1,281 —

Shares issued under share-based compensation plan, net of 28 shares net-settled

— — ( 7,156 ) — — ( 64 ) 4,693 ( 2,463 )

Share-based compensation expense — — 13,674 — — — — 13,674

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Currency translation adjustment — — — — 63,536 — — 63,536

Purchases of treasury stock — — — — — 2,204 ( 157,864 ) ( 157,864 )

Purchases of treasury stock, including excise tax

— — — — — 1,248 ( 115,521 ) ( 115,521 )

As of 12/31/2023 57,322 $ 573 $ 1,741,046 $ 1,218,029 $ ( 43,037 ) 12,214 $ ( 920,193 ) $ 1,996,418

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As of 12/31/2021 57,322 $ 573 $ 1,724,956 $ 866,679 $ ( 131,299 ) 8,843 $ ( 652,782 ) $ 1,808,127

Shares issued under share-based compensation plan, net of 28 shares net-settled

Shares issued under share-based compensation plan

— — ( 1,281 ) — — ( 17 ) 1,281 —

Exercise of stock options — — ( 358 ) — — ( 10 ) 738 380

Shares issued upon acquisition of American First Finance 8,046 80 505,466 — — — — 505,546

Share-based compensation expense — — 10,853 — — — — 10,853

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— — ( 7,090 ) — — ( 73 ) 5,427 ( 1,663 )

Exercise of stock options, net of 22 shares net-settled

Exercise of stock options

— — ( 358 ) — — ( 10 ) 738 380

Shares issued upon acquisition of American First Finance 8,046 80 505,466 — — — — 505,546

Share-based compensation expense — — 5,150 — — — — 5,150

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Impairments and dispositions of certain other assets 496 1,722 949

Loss on extinguishment of debt — — 11,737

Deferred income taxes, net ( 13,103 ) 42,488 10,722

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Issuance of senior unsecured notes — — 550,000

Redemption of senior unsecured notes — — ( 300,000 )

Redemption premium and other redemption costs on senior unsecured notes — — ( 8,781 )

Debt issuance costs paid ( 279 ) ( 1,838 ) ( 10,581 )

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Proceeds from exercise of stock options — — 380

Payment of withholding taxes on net share settlements of restricted stock unit awards and stock options exercised — ( 1,663 ) ( 3,668 )

Payment of withholding taxes on net share settlements of restricted stock unit awards

( 2,463 ) — ( 1,663 )

Dividends paid ( 61,875 ) ( 59,571 ) ( 47,533 )

Net cash flow provided by (used in) financing activities

51,313 ( 139,273 ) 576,993

FIRSTCASH HOLDINGS, INC.

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2023 2022 2021

Dividends paid ( 59,571 ) ( 47,533 ) ( 44,752 )

Net cash flow (used in) provided by financing activities

( 139,273 ) 576,993 ( 186,502 )

Effect of exchange rates on cash 4,565 3,695 ( 1,464 )

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On December 17, 2021, the Company completed the acquisition of AFF, which is a leading technology-driven retail POS payment solutions platform primarily focused on providing LTO products.

The accompanying audited consolidated results of operations for the year ended December 31, 2022 includes the results of operations for AFF, while the comparable prior-year period includes the results of operations for AFF for the period December 17, 2021 to December 31, 2021, affecting the comparability of 2022 and 2021 amounts.

See Note 3 for additional information about the AFF Acquisition.

The accompanying audited consolidated results of operations for the year ended December 31, 2023 and 2022 include the results of operations for AFF for the full respective period, while the comparable 2021 period includes the results of operations for AFF for the period December 17, 2021 to December 31, 2021, affecting the comparability of 2023 and 2022 amounts to 2021 amounts.

The Company operates two business lines:

pawn operations and retail POS payment solutions, which are organized into three reportable segments.

pawn segment consists of all pawn operations in 25 U.S.

states and the District of Columbia, while the Latin America pawn segment consists of all pawn operations in Mexico, Guatemala, Colombia and El Salvador.

pawn segment consists of pawn operations in 29 U.S.

states and the District of Columbia, while the Latin America pawn segment consists of pawn operations in Mexico, Guatemala, Colombia and El Salvador.

The retail POS payment solutions segment consists of the operations of AFF in all 50 states in the U.S., the District of Columbia and Puerto Rico.

The Company’s primary business line continues to be the operation of retail pawn stores, also known as “pawnshops,” which focus on serving cash and credit-constrained consumers.

The Company’s primary line of business is the operation of retail pawn stores, also known as “pawnshops,” which focus on serving cash- and credit-constrained consumers.

Pawn stores help customers meet small short-term cash needs by providing non-recourse pawn loans and buying merchandise directly from customers.

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Pawn stores also generate retail sales primarily from the merchandise acquired through collateral forfeitures and over-the-counter purchases from customers.

The Company’s retail POS payment solutions segment focuses on providing LTO and retail financing payment options across a large network of traditional and e-commerce retail merchant partners.

AFF’s retail merchant partnerships provide consumer goods and services to their shoppers and use AFF’s LTO and retail finance solutions to facilitate payments on such transactions.

The Company’s retail POS payment solutions business line consists solely of the operations of AFF, which focuses on LTO products and facilitating other retail financing payment options across a large network of traditional and e-commerce merchant partners.

AFF’s retail partners provide consumer goods and services to their customers and use AFF’s LTO and retail finance solutions to facilitate payments on such transactions.

Continuing Impact of COVID-19

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Throughout 2021 and 2022, as the contributory impacts of the pandemic normalized, pawn loan demand steadily recovered and pawn receivables, inventories and revenues are now ahead of pre-pandemic levels.

Inflationary pressures on the Company’s customer base helped drive further demand for consumer credit especially among its customer base, which contributed to the recovery in pawn loan demand.

Inflationary pressures on the Company’s customer base helped drive further demand for consumer credit, which contributed to the recovery in pawn loan demand.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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and its wholly-owned subsidiaries.

The Company regularly makes acquisitions and the results of the acquired operations have been consolidated since the acquisition dates.

The Company regularly makes acquisitions, and the results of operations for the acquisitions have been consolidated since the acquisition dates.

All significant intercompany accounts and transactions have been eliminated.

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Pawn loans and revenue recognition — Pawn loans are secured by the customer’s pledge of tangible personal property, which the Company holds during the term of the loan.

If a pawn loan defaults, the Company relies on the sale of the pawned property to recover the principal amount of an unpaid pawn loan, plus a yield on the investment, as the Company’s pawn loans are non-recourse against the customer.

The Company accrues pawn loan fee revenue on a constant-yield basis over the life of the pawn

loan for all pawns for which the Company deems collection to be probable based on historical pawn redemption statistics, which is included in accounts receivable, net in the accompanying consolidated balance sheets.

recourse against the customer.

The Company accrues pawn loan fee revenue on a constant-yield basis over the life of the pawn loan for all pawns for which the Company deems collection to be probable based on historical pawn redemption statistics, which is included in accounts receivable, net in the accompanying consolidated balance sheets.

If the pawn loan is not repaid prior to the expiration of the pawn loan term, including any extension or grace period, if applicable, the principal amount loaned becomes the inventory carrying value of the forfeited collateral, which is typically recovered through sales of the forfeited items at prices well above the carrying value.

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The Company maintains ownership of the leased merchandise until all payment obligations are satisfied under the lease agreement.

The customer has the right to cancel the lease at any time by returning the merchandise and making all scheduled payments due through the minimum lease holding period, which is typically 60 days.

Leased merchandise contracts can typically be renewed for between six and 24 months.

The customer has the right to cancel the lease at any time by returning the merchandise.

Leased merchandise contracts can typically be renewed for weekly, bi-weekly, semi-monthly, and monthly renewal periods and are generally renewed for between six and 24 months.

Leased merchandise is stated at depreciated cost.

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If an account is deemed to be uncollectible prior to this date, the Company will charge off the leased merchandise at the point in time it is deemed uncollectible.

Finance receivables and revenue recognition - The Company purchases and services retail finance receivables, the term of which typically ranges from six and 24 months, directly from its merchant partners or from its bank partner.

Finance receivables and revenue recognition — The Company purchases and services retail finance receivables, the term of which typically ranges from six to 24 months, directly from its merchant partners or from its bank partner.

The Company has a partnership with a Utah state-chartered bank that requires the Company to purchase the rights to the cash flows associated with finance receivables marketed to retail consumers on the bank’s behalf.

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The average value of the Guatemalan quetzal to the U.S.

dollar exchange rate for 2022, 2021 and 2020 was 7.7 to 1 .

dollar exchange rate for 2023 was 7.8 to 1 compared to 7.7 to 1 in 2022 and 2021.

The average value of the Colombian peso to the U.S.

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Goodwill and other indefinite-lived intangible assets — Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in each business combination.

The Company performs its goodwill impairment assessment annually and between annual assessments if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

The Company historically assessed goodwill for impairment as of December 31 each year.

In 2022, the Company changed the date of its annual goodwill impairment assessment to October 1 to allow for operational expediency.

The Company believes the change in goodwill impairment testing date does not represent a material change to its method of applying an accounting principle in light of its internal controls and requirements to assess goodwill impairment upon certain triggering events.

The Company performs its goodwill impairment assessment annually as of October 1, and between annual assessments if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

The Company’s reporting units, which are tested for impairment, are U.S.

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Earnings per share — Basic earnings per share is computed by dividing net income by the weighted-average number of shares outstanding during the year.

Diluted earnings per share is calculated by giving effect to the potential dilution that could occur if securities or other contracts to issue common shares were exercised and converted into common shares during the year.

The Company used the treasury stock method to calculate diluted earnings per share which gives effect to the potential dilution that could occur if securities or other contracts to issue common shares were exercised and converted into common shares during the year.

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts):

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Effect of dilutive securities:

Stock options and restricted stock unit awards 117 49 98

Restricted stock unit awards

Weighted-average common shares for calculating diluted earnings per share 45,693 47,330 41,024

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Significant estimates include the accrual for earned but uncollected pawn fees, allowances for lease and loan losses and related lease and loan loss provisions, valuation of acquired assets, assumed liabilities and contingent consideration of acquisitions, evaluation of goodwill and other intangible assets for impairment and current and deferred tax assets and liabilities.

Reclassification - For the purposes of comparability, certain prior year amounts in the consolidated balance sheets have been reclassified in order to conform to the current period presentation.

Recent accounting pronouncements - In March 2020, the Financial Accounting Standards Board issued ASU No 2020-04, “Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”).

ASU 2020-04 provides temporary optional expedients and exceptions to the GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank-offered rates to alternative reference rates.

ASU 2020-04 was effective beginning on March 12, 2020, and the Company could elect to apply the amendments prospectively through December 31, 2022.

In December 2022, the Financial Accounting Standards Board issued ASU No 2022-06, “Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848” (“ASU 2022-06”).

ASU 2022-06 defers the sunset date of Topic 848 from December 31, 2022 to December 31, 2024.

As the Company no longer has any LIBOR based contracts (see Note 11), ASU 2020-04 and ASU 2022-06 did not have a material effect on the Company’s current financial position, results of operations or financial statement disclosures.

In March 2022, the Financial Accounting Standards Board issued ASU No 2022-02, “Financial Instruments—Credit Losses (Topic 326):

Recent accounting pronouncements — In March 2022, the Financial Accounting Standards Board (“FASB”) issued ASU No 2022-02, “Financial Instruments—Credit Losses (Topic 326):

Troubled Debt Restructurings and Vintage Disclosures” (“ASU 2022-02”).

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In addition, the amendments require disclosure of current period gross write-offs for financing receivables and net investment in leases by year of origination in the vintage disclosures.

ASU 2022-02 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years for entities.

Early adoption is permitted if an entity has adopted the CECL accounting standard.

Except for expanded disclosures to its vintage disclosures, the Company does not expect ASU 2022-02 to have a material effect on the Company’s current financial position, results of operations or financial statements.

ASU 2022-02 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

Except for expanded disclosures to its vintage disclosures, ASU 2022-02 did not have a material effect on the Company’s current financial position, results of operations or financial statements.

In October 2023, the FASB issued ASU No 2023-06, “ Disclosure Agreements – Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative” (“ASU 2023-06”).

ASU 2023-06 will align the disclosure and presentation requirements in the FASB Accounting Standards Codification with the SEC’s regulations.

The amendments in ASU 2023-06 will be applied prospectively and are effective when the SEC removes the related requirements from Regulations S-X or S-K.

Any amendments the SEC does not remove by June 30, 2027 will not be effective.

As the Company is currently subject to these SEC requirements, ASU 2023-06 is not expected to have a material effect on the Company’s current financial position, results of operations or financial statement disclosures.

In November 2023, the FASB issued ASU No 2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures” (“ASU 2023-07”).

ASU 2023-07 expands disclosures about a public entity’s reportable segments and requires more enhanced information about a reportable segment’s expenses, interim segment profit or loss, and how a public entity’s chief operating decision maker uses reported segment profit or loss information in assessing segment performance and allocating resources.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.

Early adoption is permitted.

ASU 2023-07 should be applied retrospectively to all prior periods presented in the financial statements.

The Company does not expect ASU 2023-07 to have a material effect on the Company’s current financial position, results of operations or financial statement disclosures.

In December 2023, the FASB issued ASU No 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures” (“ASU 2023-09”).

ASU 2023-09 expands disclosures in the rate reconciliation and requires disclosure of income taxes paid by jurisdiction.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024.

Early adoption is permitted.

ASU 2023-09 should be applied prospectively;

however, retrospective application is permitted.

The Company does not expect ASU 2023-09 to have a material effect on the Company’s current financial position, results of operations or financial statement disclosures.

NOTE 3 - ACQUISITIONS

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Consistent with the Company’s strategy to continue its expansion of pawn stores in selected markets, during 2023, the Company acquired 91 pawn stores in the U.S.

in six separate transactions and one store in Guatemala in a separate transaction.

in eight separate transactions and acquired two pawn licenses that were used to open two new pawn stores in the state of Nevada.

The aggregate purchase price for these acquisitions totaled $ 178.6 million, net of cash acquired and subject to future post-closing adjustments.

The aggregate purchase price was composed of $ 69.6 million in cash paid at closing and remaining short-term amounts payable to the sellers of approximately $ 3.4 million.

The aggregate purchase price was composed of $ 178.0 million in cash paid during 2023, which included the repayment and extinguishment of $ 59.7 million of debt of the acquired businesses at closing and remaining short-term amounts payable to certain of the sellers of $ 0.6 million.

During 2023, the Company also paid $ 3.3 million of purchase price amounts payable related to prior-year pawn acquisitions.

The purchase price of each of the 2022 pawn acquisitions was allocated to assets acquired and liabilities assumed based upon the estimated fair market values at the date of acquisition.

The excess purchase price over the estimated fair market value of the net assets acquired has been recorded as goodwill.

The goodwill arising from these pawn store acquisitions consists largely of the synergies and economies of scale expected from combining the operations of the Company and the pawn stores acquired.

These pawn acquisitions were not material individually or in the aggregate to the Company’s consolidated financial statements.

The purchase price of each of the 2023 acquisitions was allocated to assets acquired and liabilities assumed based upon the estimated fair values at the date of acquisition.

The excess purchase price over the estimated fair value of the net assets acquired has been recorded as goodwill.

The goodwill arising from these acquisitions consists largely of the synergies and economies of scale expected from combining the operations of the Company and the pawn stores acquired.

These acquisitions were not material individually or in the aggregate to the Company’s consolidated financial statements.

The estimated fair value of the assets acquired and liabilities assumed are preliminary, as the Company is gathering information to finalize the valuation of these assets and liabilities.

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Pawn loans $ 27,715

Accounts receivable, net 426

Accounts receivable

Inventories 17,090

Prepaid expenses and other current assets

Property and equipment 2,986

Operating lease right of use asset

Intangible assets 4,410

Other non-current assets 280

Current liabilities ( 5,467 )

Lease liability

Aggregate purchase price $ 178,577

(1) Substantially all of the goodwill is expected to be deductible for income tax purposes.

(1) Substantially all of the goodwill is expected to be deductible for U.S.

income tax purposes.

The results of operations for the 2023 Pawn Acquisitions have been consolidated since the respective acquisition dates.

During 2022, revenue from the 2022 Pawn Acquisitions was $ 4.0 million and the net loss from the 2022 Pawn Acquisitions since the acquisition dates (including $ 1.2 million of transaction costs, net of tax) was approximately $ 0.2 million.

During 2023, revenue from the 2023 Pawn Acquisitions was $ 40.7 million and the earnings from the 2023 Pawn Acquisitions since the acquisition dates (including $ 6.1 million of transaction costs, net of tax) was approximately $ 1.1 million.

Transaction costs associated with the 2023 Pawn Acquisitions were expensed as incurred and are presented in the consolidated statements of income as merger and acquisition expenses.

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Unaudited pro forma financial information reflecting the consolidated results of operations of the Company as if the 2023 Pawn Acquisitions had occurred on January 1, 2022 has not been presented as the 2023 Pawn Acquisitions were not significant in relation to the Company’s consolidated financial position or results of operations.

2021 American First Finance Acquisition

On December 17, 2021, the Company completed the AFF Acquisition.

Under the terms and conditions set forth in the business combination agreement dated October 27, 2021, as amended, the Company acquired all of the equity interests of AFF in exchange for 8,046,252 shares of the Company’s common stock and cash consideration.

Immediately following the AFF Acquisition, the Company’s shareholders owned approximately 83 % of the common stock of the Company and the seller parties owned approximately 17 %.

In addition to the closing purchase price, the seller parties have the right to receive up to an additional $ 375.0 million of contingent consideration (the “Contingent Consideration”), which is payable in cash or Company common stock, at the Company’s discretion.

In particular, the seller parties had the right to receive up to $ 250.0 million of additional consideration if AFF achieved certain adjusted EBITDA targets for the period consisting of the fourth quarter of 2021 through the end of 2022.

AFF did not achieve the threshold adjusted EBITDA target for the period ending December 31, 2022 and, therefore, the $ 250.0 million of additional consideration was not earned by the seller parties.

The seller parties also have the right to receive up to $ 50.0 million of additional consideration if AFF achieves certain adjusted EBITDA targets for the first half of 2023.

seller parties had the right to receive up to $ 75.0 million of additional consideration in the event that the highest average stock price of the Company for any 10-day period from December 6, 2021 through February 28, 2023 is less than $ 86.25 .

As a result of an increase in the Company’s stock price during October 2022, no such contingent payment to the seller parties is required.

The following table summarizes the consideration transferred in connection with the AFF Acquisition, net of cash acquired (in thousands except share and per share amounts):

AFF Acquisition

Shares of FirstCash Holdings, Inc.

common stock issued 8,046,252

Closing common stock price per share at December 16, 2021 $ 62.83

Stock consideration $ 505,546

Cash consideration paid to AFF shareholders at closing 253,087

Cash consideration paid to extinguish AFF pre-existing debt 257,278

Present value of deferred consideration payable to AFF shareholders on December 31, 2022 23,873

Estimated fair value of Contingent Consideration (see Note 6)

Less cash acquired ( 48,263 )

Aggregate purchase consideration $ 1,118,941

During 2022, the Company made certain measurement period adjustments to the preliminary purchase price allocation, which resulted in a decrease in goodwill of $ 16.9 million.

The adjusted purchase price allocation is reflected in the accompanying consolidated balance sheet as of December 31, 2022.

The following table details the preliminary purchase price allocation as of December 31, 2021, the measurement period adjustments made during the twelve months ended December 31, 2022 and the final purchase price allocation as of December 31, 2022 (in thousands):

December 31, 2022 December 31,

2021 Adjustments 2022

Accounts receivable $ 11,660 $ — $ 11,660

Finance receivables 225,261 — 225,261

Leased merchandise 139,649 — 139,649

Prepaid expenses and other current assets 4,474 ( 188 ) 4,286

Property and equipment 11,670 ( 9 ) 11,661

Operating lease right of use asset 491 — 491

Goodwill 503,106 ( 16,901 ) 486,205

Intangible assets 305,100 — 305,100

Accounts payable and accrued liabilities ( 28,357 ) ( 1,116 ) ( 29,473 )

Customer deposits and prepayments ( 11,014 ) — ( 11,014 )

Lease liability, current ( 10 ) — ( 10 )

Deferred tax liabilities (1)

( 42,608 ) 18,214 ( 24,394 )

Lease liability, non-current ( 481 ) — ( 481 )

Purchase price $ 1,118,941 $ — $ 1,118,941

(1) Measurement period adjustment is primarily a result of the seller finalizing the ending tax basis in the assets and liabilities acquired, which carried over to the Company.

2022 Pawn Acquisitions

During 2022, the Company acquired 30 pawn stores in the U.S.

in three separate transactions and acquired a pawn license that will be used to open a new pawn store in the state of Nevada.

in six separate transactions and one store in Guatemala in a separate transaction.

The aggregate purchase price for these acquisitions totaled $ 73.0 million, net of cash acquired.

The aggregate purchase price was composed of $ 76.0 million in cash paid at closing and remaining short-term amounts payable to the sellers of approximately $ 3.5 million.

2021 Unaudited Pro Forma Financial Information

The results of operations for the AFF Acquisition and the 2021 Pawn Acquisitions have been consolidated since the respective acquisition dates.

During 2021, revenue from AFF and the 2021 Pawn Acquisitions was $ 56.0 million and the net loss from AFF and the 2021 Pawn Acquisitions since the acquisition dates (including $ 11.9 million of transaction costs, net of tax) was approximately $ 41.0 million.

Transaction costs associated with the AFF Acquisition and the 2021 Pawn Acquisitions were expensed as incurred and are presented in the consolidated statements of income as merger and acquisition expenses.

These expenses include investment banking, legal, accounting and other related third-party costs, including preparation for regulatory filings.

The following unaudited pro forma financial information reflects the consolidated results of operations of the Company as if the AFF Acquisition and the 2021 Pawn Acquisitions had occurred on January 1, 2020, after giving effect to certain adjustments (in thousands, except per share amounts):

Year Ended Year Ended

December 31, 2021 December 31, 2020

As Reported Pro Forma As Reported Pro Forma

Total revenue $ 1,698,965 $ 2,305,860 $ 1,631,284 $ 2,024,055

Net income 124,909 156,257 106,579 60,059

Net income per share:

Basic $ 3.05 $ 3.21 $ 2.57 $ 1.21

Diluted 3.04 3.20 2.56 1.21

The unaudited pro forma results have been adjusted with respect to certain aspects of the AFF Acquisition and 2021 Pawn Acquisitions primarily to reflect:

• Depreciation and amortization expense that would have been recognized assuming fair value adjustments to the tangible and intangible assets acquired and liabilities assumed;

• An increase in total indebtedness primarily incurred to finance certain cash payments and transaction costs related to the AFF Acquisition and 2021 Pawn Acquisitions, partially offset by the elimination of AFF’s pre-existing debt that was repaid at closing;

• The inclusion in the year ended December 31, 2020 of $ 15.4 million in acquisition expenses incurred by the Company (excluded from the year ended December 31, 2021);

• The exclusion of $ 44.3 million of loan loss provision expense in the year ended December 31, 2021 resulting from the establishment of the initial allowance for expected lifetime credit losses for non-PCD finance receivables acquired in the AFF Acquisition.

The pro forma financial information has been prepared for informational purposes only and does not include any anticipated synergies or other potential benefits of the AFF Acquisition and 2021 Pawn Acquisitions.

It also does not give effect to certain future charges that the Company expects to incur in connection with the AFF Acquisition and 2021 Pawn Acquisitions, including, but not limited to, additional professional fees, legal expenses, severance, retention and other employee-related costs, contract breakage costs and costs related to consolidation of technology systems.

Pro forma results do not purport to be indicative of what would have resulted had the acquisitions occurred on the date indicated or what may result in the future.

The aggregate purchase price was composed of $ 69.6 million in cash paid at closing and remaining short-term amounts payable to certain of the sellers of approximately $ 3.4 million.

NOTE 4 - OPERATING LEASES

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The remeasurement results in the recognition of foreign currency exchange gains or losses each reporting period, which can produce a certain level of earnings volatility.

The Company recognized a foreign currency gain of $ 1.3 million, loss of $ 0.6 million and loss of $ 1.2 million during the year ended December 31, 2022, 2021 and 2020, respectively, related to the remeasurement of these U.S.-dollar-denominated operating leases, which is included in (gain) loss on foreign exchange in the accompanying consolidated statements of income.

The Company recognized a foreign currency gain of $ 2.5 million, gain of $ 1.3 million and loss of $ 0.6 million during the years ended December 31, 2023, 2022 and 2021, respectively, related to the remeasurement of these U.S.-dollar-denominated operating leases, which is included in (gain) loss on foreign exchange in the accompanying consolidated statements of income.

Lease expense is recognized on a straight-line basis over the lease term, with variable lease expense recognized in the period such payments are incurred.

The following table details the components of lease expense included in operating expenses in the consolidated statements of income during the year ended December 31, 2022, 2021 and 2020 (in thousands):

The following table details the components of lease expense included in operating expenses in the consolidated statements of income during the years ended December 31, 2023, 2022 and 2021 (in thousands):

Year Ended December 31,

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Total present value of lease payments $ 317,447

The following table details supplemental cash flow information related to operating leases for the year ended December 31, 2022, 2021 and 2020 (in thousands):

The following table details supplemental cash flow information related to operating leases for the years ended December 31, 2023, 2022 and 2021 (in thousands):

Year Ended December 31,

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NOTE 5 - STOCKHOLDERS' EQUITY

During 2022, the Company repurchased a total of 2,204,000 shares of common stock at an aggregate cost of $ 157.9 million and an average cost per share of $ 71.63 , and during 2021, repurchased 688,000 shares of common stock at an aggregate cost of $ 49.6 million and an average cost per share of $ 72.10 .

During 2023, the Company repurchased a total of 1,248,000 shares of common stock at an aggregate cost of $ 114.4 million and an average cost per share of $ 91.58 .

The aggregate cost and average cost per share does not include the effect of the 1% excise tax on certain share repurchases enacted under the Inflation Reduction Act of 2022.

The Company incurred $ 1.1 million of excise taxes during 2023.

During 2022, the Company repurchased 2,204,000 shares of common stock at an aggregate cost of $ 157.9 million and an average cost per share of $ 71.63 .

All repurchases during 2023 were conducted under the Company’s $ 100.0 million share repurchase program authorized in April 2022 and the $ 100.0 million share repurchase program authorized in October 2022 and such repurchases completed the authorizations under these programs.

In July 2023, the Company’s Board of Directors authorized a new common stock repurchase program for up to $ 200.0 million of the Company’s outstanding common stock, of which the entire $ 200.0 million is currently remaining.

The Company intends to continue repurchases under its active share repurchase program, including through open market transactions under trading plans in accordance with Rule 10b5-1 and Rule 10b-18 under the Exchange Act of 1934, as amended, subject to a variety of factors, including, but not limited to, the level of cash balances, liquidity needs, credit availability, debt covenant restrictions, general business and economic conditions, regulatory requirements, the market price of the Company’s stock, the Company’s dividend policy and the availability of alternative investment opportunities.

The following table provides purchases made by the Company of shares of its common stock under each share repurchase program in effect during 2022 (dollars in thousands):

Plan Announcement Date Plan Completion Date Dollar Amount Authorized Shares Purchased in 2022 Dollar Amount Purchased in 2022 Remaining Dollar Amount Authorized For Future Purchases

January 28, 2021 March 28, 2022 $ 100,000 1,048,000 $ 72,217 $ —

April 28, 2022 Currently active 100,000 1,156,000 85,647 14,353

October 27, 2022 Currently active 100,000 — — 100,000

Total 2,204,000 $ 157,864 $ 114,353

Total cash dividends paid in 2023 and 2022 were $ 61.9 million and $ 59.6 million, respectively.

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Recurring Fair Value Measurements

The Company’s financial assets and liabilities as of December 31, 2022 and 2021 that are measured at fair value on a recurring basis are as follows (in thousands):

Estimated Fair Value

December 31, Fair Value Measurements Using

2022 Level 1 Level 2 Level 3

Financial liabilities:

Contingent Consideration $ — $ — $ — $ —

T he Company did not have any financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2023.

The Company’s financial assets and liabilities as of December 31, 2022 that are measured at fair value on a recurring basis are as follows (in thousands):

Estimated Fair Value

December 31, Fair Value Measurements Using

Fair Value Measurements Using

Level 1 Level 2 Level 3

Financial liabilities:

Contingent Consideration (1)

$ 109,549 $ — $ — $ 109,549

(1) The current portion of $ 95.6 million is included in accounts payable and accrued liabilities and the non-current portion of $ 14.0 million is included in other liabilities in the accompanying consolidated balance sheet as of December 31, 2021.

As further discussed in Note 3, the Company estimated the preliminary fair value of the Contingent Consideration to be $ 127.4 million, as of the AFF Acquisition date.

The Company revalues the Contingent Consideration to fair value at the end of each reporting period.

Contingent consideration as of December 31, 2022 (1)

(1) Under the AFF purchase agreement, the seller parties had the right to receive up to $ 50.0 million of additional consideration if AFF achieved certain adjusted EBITDA targets for the first half of 2023.

AFF did not achieve the threshold adjusted EBITDA target for the first half of 2023 and, therefore, the $ 50.0 million of additional consideration was not earned by the seller parties.

As of June 30, 2023, there was no remaining contingent consideration available to the seller parties.

The Company estimated the preliminary fair value of the AFF Acquisition contingent consideration to be $ 127.4 million, as of the AFF Acquisition date.

The Company revalued the contingent consideration to fair value at the end of each reporting period.

The estimate of the fair value of contingent consideration is determined by applying a Monte Carlo simulation, which includes inputs not observable in the market, such as the risk-free rate, risk-adjusted discount rate, the volatility of the underlying financial metrics and projected financial forecast of AFF over the earn-out period, and therefore represents a Level 3 measurement.

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Contingent consideration at beginning of period

Contingent Consideration issued December 17, 2021 (see Note 3 )

$ — $ 109,549

Change in fair value (1)

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Contingent consideration at end of period

(1) The Company recognized a gain of $ 109.5 million and $ 17.9 million during the year ended December 31, 2022 and 2021, respectively, as a result of the change in fair value of the Contingent Consideration (see Note 3), which is included in gain on revaluation of contingent acquisition consideration in the accompanying consolidated statements of income.

As further described in Note 3, $ 325.0 million of the potential $ 375.0 million in Contingent Consideration was not earned leaving the right to receive up to $ 50.0 million of additional consideration if AFF achieves certain adjusted EBITDA targets for the first half of 2023, and is the only remaining portion of Contingent Consideration as of December 31, 2022.

There were no transfers in or out of Level 1, 2 or 3 during the year ended December 31, 2022, 2021 and 2020.

(1) The Company recognized a gain of $ 109.5 million during the year ended December 31, 2022 as a result of the change in fair value of the contingent consideration, which is included in gain on revaluation of contingent acquisition consideration in the accompanying consolidated statements of income.

There were no transfers in or out of Level 1, 2 or 3 during the years ended December 31, 2023, 2022 and 2021.

Fair Value Measurements on a Non-Recurring Basis

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Financial liabilities:

Revolving unsecured credit facility $ 259,000 $ 259,000 $ — $ 259,000 $ —

Revolving unsecured credit facilities

$ 339,000 $ 339,000 $ — $ 339,000 $ —

Senior unsecured notes (outstanding principal) 1,050,000 932,000 — 932,000 —

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NOTE 7 - FINANCE RECEIVABLES, NET

Finance receivables, net, originated in the retail POS payment solutions segment, consist of the following (in thousands):

Finance receivables, net, which include retail installment sales agreements and bank-originated loans, consist of the following (in thousands):

As of December 31,

Finance receivables, gross $ 227,474 $ 195,987

Fair value premium on non-PCD finance receivables (1)

Non-credit discount on PCD finance receivables (2)

Merchant partner discounts and premiums, net ( 11,907 ) ( 3,517 )

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Finance receivables, net $ 113,901 $ 103,494

(1) Represents the difference between the initial fair value and the unpaid principal balance as of the date of the AFF Acquisition, which is recognized as interest income on an effective yield basis over the lives of the related non-PCD finance receivables.

(2) Represents the difference between the unpaid principal balance and the amortized cost basis as of the date of the AFF Acquisition, which is recognized through interest income on an effective yield basis over the lives of the related PCD finance receivables.

Changes in the allowance for loan losses are as follows (in thousands):

The following table details the c hanges in the allowance for loan losses (in thousands):

As of December 31,

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123,030 118,502

Initial allowance recognized for PCD loans (2)

Charge-offs ( 117,961 ) ( 114,535 )

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Balance at end of year $ 96,454 $ 84,833

(1) For the year ended December 31, 2021, includes $ 44.3 million as a result of the establishment of the initial allowance for expected lifetime credit losses for non-PCD finance receivables acquired in the AFF Acquisition, which is recorded as provision for loan losses in the consolidated statements of income.

(2) Represents the establishment of the initial allowance for expected lifetime credit losses for PCD finance receivables acquired in the AFF Acquisition, which is added to the acquisition date fair value to establish the initial amortized cost basis of the PCD loans.

As this initial allowance for loan losses is added to the acquisition date fair value, there is no provision for loan losses recognized in the consolidated statements of income during 2021 for PCD loans.

The following is an assessment of the credit quality indicators of the amortized cost of finance receivables as of December 31, 2023 and 2022, by origination year (in thousands):

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Finance receivables, amortized cost $ 187,277 $ 23,078 $ — $ 210,355

Origination Year

2022 2021 2020 Total

As of December 31, 2022

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6,732 1,779 — 8,511

Total past due finance receivables before fair value adjustments — 33,999 5,386 39,385

Current finance receivables before fair value adjustments — 160,998 19,482 180,480

Finance receivables before fair value adjustments $ — $ 194,997 $ 24,868 219,865

Fair value premium on non-PCD finance receivables 40,251

Non-credit discount on PCD finance receivables ( 3,521 )

Total past due finance receivables 32,018 7,182 — 39,200

Current finance receivables 129,008 20,119 — 149,127

Finance receivables, amortized cost $ 161,026 $ 27,301 $ — $ 188,327

(1) The Company charges off finance receivables when a receivable is 90 days or more contractually past due.

The following table details the gross charge-offs of finance receivables for the year ended December 31, 2023, by origination year (in thousands):

Origination Year

2023 2022 2021 Total

Finance receivables gross charge-offs:

Gross charge-offs during 2023

$ 51,597 $ 58,571 $ 7,793 $ 117,961

NOTE 8 - LEASED MERCHANDISE, NET

Leased merchandise, net, for the retail POS payment solutions segment, consists of the following (in thousands):

Leased merchandise, net, consists of the following (in thousands):

As of December 31,

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Leased merchandise, net $ 171,191 $ 153,302

(1) Acquired leased merchandise in the AFF Acquisition was recorded at fair value.

Changes in the allowance for lease losses are as follows (in thousands):

The following table details the c hanges in the allowance for lease losses (in thousands):

As of December 31,

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175,858 139,502

Charge-offs (2)

( 166,630 ) ( 70,114 )

Recoveries 6,710 4,359

Balance at end of year $ 95,127 $ 79,189

(1) During 2021, represents the provision for lease losses on leases originated from December 17, 2021 through December 31, 2021.

(2) Acquired leased merchandise in the AFF Acquisition was recorded at fair value.

As a result, leased merchandise charged-off between December 17, 2021 and December 31, 2021 was allocated no fair value.

NOTE 9 - PROPERTY AND EQUIPMENT

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Accrued compensation $ 46,257 $ 38,595

Trade accounts payable 29,243 23,077

Sales, property and payroll taxes payable

32,609 27,226

Trade accounts payable 26,502 27,417

Accrued interest payable 24,443 24,276

Legal and professional fees payable

Benefits liabilities and withholding payable 3,373 2,383

Acquisition purchase price amounts payable to sellers

1,217 123,475

Income taxes payable 635 569

1 unchanged sentence

$ 163,050 $ 139,460

(1) As of December 31, 2021, includes the present value of the deferred consideration payable to AFF shareholders on December 31, 2022 of $ 23.9 million and the short-term portion of the estimated fair value of Contingent Consideration of $ 95.6 million.

See Note 3 and Note 6.

NOTE 11 - LONG-TERM DEBT

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As of December 31,

Revolving unsecured credit facilities:

Revolving unsecured credit facility, maturing 2027 (1)

$ 568,000 $ 339,000

Revolving unsecured uncommitted credit facility, maturing 2027 (1)

Total revolving unsecured credit facilities 568,000 339,000

Senior unsecured notes:

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Revolving Unsecured Credit Facility

During the period from January 1, 2022 through August 30, 2022, the Company maintained an unsecured line of credit with a group of U.S.-based commercial lenders (the “Credit Facility”) in the amount of $ 500.0 million, which was scheduled to mature on December 19, 2024.

The Credit Facility charged interest, at the Company’s option, of either (1) the prevailing LIBOR (with interest periods of 1, 2, 3 or 6 months at the Company’s option) plus a fixed spread of 2.5 % or (2) the prevailing prime or base rate plus a fixed spread of 1.5 %.

On August 30, 2022, the Credit Facility was amended (the “2022 Amendment”) in order to increase the total lender commitment, extend the term of the Credit Facility, amend certain financial covenants and modify the benchmark interest rate to SOFR.

Under the 2022 Amendment, the total lender commitment was increased from $ 500.0 million to $ 590.0 million and the term of the Credit Facility was extended to August 30, 2027.

In addition, certain financial covenants were amended, as follows:

The financial covenant limiting the domestic leverage ratio was eliminated.

The permitted consolidated leverage ratio (defined as consolidated EBITDA, adjusted for certain customary items as more fully set forth in the Credit Facility (“Adjusted EBITDA”), divided by outstanding consolidated debt), which was previously scheduled to decrease to 3.0 times effective December 31, 2022, will remain at the current level of 3.5 times Adjusted EBITDA through December 31, 2023 when it decreases to 3.25 times Adjusted EBITDA through December 31, 2024.

The consolidated leverage ratio will revert to the previously scheduled ratio of 3.0 times Adjusted EBITDA effective January 1, 2025.

The 2022 Amendment also includes additional limits to certain restricted payments when the consolidated leverage ratio is equal to or greater than 3.0 times Adjusted EBITDA, which are more fully described in the 2022 Amendment.

The Credit Facility now bears interest at the Company’s option of either (i) the prevailing SOFR (with interest periods of 1, 3 or 6 months at the Company’s option) plus a fixed spread of 2.5 % and a fixed SOFR adjustment of 0.1 % or (ii) the prevailing prime or base rate plus a fixed spread of 1.5 %.

During the period from January 1, 2023 through October 18, 2023, the Company maintained an unsecured line of credit with a group of U.S.-based commercial lenders (the “Credit Facility”) in the amount of $ 590.0 million.

The Credit Facility matures on August 30, 2027.

On October 18, 2023, the Company amended its domestic Credit Facility.

The total lender commitment under the amended facility, which is provided by a group of twelve commercial banks, was increased by $ 50.0 million, from $ 590.0 million to $ 640.0 million.

The amended credit facility remains unsecured and all other terms remained unchanged.

As of December 31, 2023, the Company had $ 568.0 million in outstanding borrowings and $ 2.8 million in outstanding letters of credit under the Credit Facility, leaving $ 69.2 million available for future borrowings, subject to certain financial covenants.

The Credit Facility bears interest at the Company’s option of either (i) the prevailing SOFR (with interest periods of 1, 3 or 6 months at the Company’s option) plus a fixed spread of 2.5 % and a fixed SOFR adjustment of 0.1 % or (ii) the prevailing prime or base rate plus a fixed spread of 1.5 %.

The agreement has an interest rate floor of 0 %.

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Revolving Unsecured Uncommitted Credit Facility

As of December 31, 2022, the Company’s primary subsidiary in Mexico, First Cash S.A.

During the period from January 1, 2023 through March 9, 2023, the Company’s primary subsidiary in Mexico, First Cash S.A.

de C.V., maintained an unsecured and uncommitted line of credit guaranteed by FirstCash, Inc.

with a bank in Mexico (the “Mexico Credit Facility”) in the amount of $ 600.0 million Mexican pesos.

The Mexico Credit Facility bears interest at the TIIE plus a fixed spread of 2.5 % and matures on March 9, 2023.

The Mexico Credit Facility charged interest at the TIIE plus a fixed spread of 2.5 % and matured on March 9, 2023.

Under the terms of the Mexico Credit Facility, the Company is required to maintain certain financial ratios and comply with certain financial covenants.

The Company was in compliance with the covenants of the Mexico Credit Facility as

of December 31, 2022.

At December 31, 2022, the Company had no amount outstanding under the Mexico Credit Facility and $ 600.0 million Mexican pesos available for borrowings.

The Company was in compliance with the covenants of the Mexico Credit Facility through March 9, 2023.

The Mexico Credit Facility matured on March 9, 2023 and during the period from January 1, 2023 through March 9, 2023, the Company had no amount outstanding under the Mexico Credit Facility.

In August 2023, the Company’s primary subsidiary in Mexico, First Cash S.A.

de C.V., entered into an unsecured and uncommitted line of credit guaranteed by FirstCash, Inc.

with a bank in Mexico (the “2023 Mexico Credit Facility”) in the amount of $ 600.0 million Mexican pesos.

The 2023 Mexico Credit Facility bears interest at TIIE plus a fixed spread of 2.25 % and matures on August 24, 2027.

Under the terms of the 2023 Mexico Credit Facility, the Company is required to maintain certain financial ratios and comply with certain financial covenants.

The Company was in compliance with the covenants of the 2023 Mexico Credit Facility as of December 31, 2023.

As of December 31, 2023, the Company had no amount outstanding under the 2023 Mexico Credit Facility and $ 35.5 million ($ 600.0 million pesos) available for future borrowings.

Senior Unsecured Notes Due 2028

On August 26, 2020, the Company issued $ 500.0 million of 4.625 % senior unsecured notes due on September 1, 2028 (the “2028 Notes”), all of which are currently outstanding.

Interest on the 2028 Notes is payable semi-annually in arrears on March 1 and September 1, commencing on March 1, 2021.

Interest on the 2028 Notes is payable semi-annually in arrears on March 1 and September 1.

The 2028 Notes were sold in a private placement in reliance on Rule 144A and Regulation S under the Securities Act of 1933, as amended (the “Securities Act”).

6 unchanged sentences

The Company may redeem some or all of the 2028 Notes at any time on or after September 1, 2023, at the redemption prices set forth in the 2028 Notes Indenture, plus accrued and unpaid interest, if any.

In addition, prior to September 1, 2023, the Company may redeem some or all of the 2028 Notes at a price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest, if any, plus a “make-whole” premium set forth in the 2028 Notes Indenture.

The Company may redeem up to 40 % of the 2028 Notes on or prior to September 1, 2023 with the proceeds of certain equity offerings at the redemption prices set forth in the 2028 Notes Indenture.

If the Company sells certain assets or consummates certain change in control transactions, the Company will be required to make an offer to repurchase the 2028 Notes.

Redemption of 2024 Notes

During 2020, the Company redeemed all outstanding 2024 Notes.

As a result, the Company recognized a loss on extinguishment of debt of $ 11.7 million, which includes the redemption premium paid over the outstanding $ 300.0 million principal amount of the 2024 Notes and other redemption costs of $ 8.8 million and the write-off of unamortized debt issuance costs of $ 2.9 million.

Senior Unsecured Notes Due 2030

On December 13, 2021, the Company issued $ 550.0 million of 5.625 % senior unsecured notes due on January 1, 2030 (the “2030 Notes”), all of which are currently outstanding.

Interest on the 2030 Notes is payable semi-annually in arrears on January 1 and July 1, commencing on July 1, 2022.

Interest on the 2030 Notes is payable semi-annually in arrears on January 1 and July 1.

The 2030 Notes were sold in a private placement in reliance on Rule 144A and Regulation S under the Securities Act.

The Company used the net proceeds from the offering to finance the cash consideration and transaction expenses for the AFF Acquisition, including the repayment, in full, of the outstanding debt under AFF’s credit facility at the closing of the AFF Acquisition, payment of fees and expenses related to the offering and reduction of the outstanding balance on the Credit Facility.

The Company capitalized approximately $ 8.6 million in debt issuance costs, which consisted primarily of the initial purchaser’s discount and fees and legal and other professional expenses.

The debt issuance costs are being amortized over the life of the 2030 Notes as a component of interest expense and are carried as a direct deduction from the carrying amount of the 2030 Notes in the accompanying consolidated balance sheets.

The 2030 Notes are fully and unconditionally guaranteed on a senior unsecured basis jointly and severally by all of the Company's existing and future domestic subsidiaries that guarantee its Credit Facility.

The 2030 Notes will permit the Company to make restricted payments, such as purchasing shares of its stock and paying cash dividends, in an unlimited amount if, after giving pro forma effect to the incurrence of any indebtedness to make such payment, the Company's consolidated total debt ratio is less than 3.0 to 1.

The consolidated total debt ratio is defined generally in the indenture governing the 2030 Notes (the

“2030 Notes Indenture”) as the ratio of (1) the total consolidated debt of the Company minus cash and cash equivalents of the Company to (2) the Company’s consolidated trailing twelve months EBITDA, as adjusted to exclude certain non-recurring expenses and giving pro forma effect to operations acquired during the measurement period.

The consolidated total debt ratio is defined generally in the indenture governing the 2030 Notes (the “2030 Notes Indenture”) as the ratio of (1) the total consolidated debt of the Company minus cash and cash equivalents of the Company to (2) the Company’s consolidated trailing twelve months EBITDA, as adjusted to exclude certain non-recurring expenses and giving pro forma effect to operations acquired during the measurement period.

As of December 31, 2023, the Company’s consolidated total debt ratio was 2.7 to 1.

16 unchanged sentences

state and local

15,124 3,421 2,045

Current provision for income taxes 87,024 41,899 31,318

3 unchanged sentences

state and local

( 8,698 ) 1,965 809

Total deferred provision for income taxes ( 13,476 ) 28,239 10,275

46 unchanged sentences

Non-deductible compensation expense 4,358 3,297 1,943

Global intangible low-taxed income tax — — ( 1,863 )

Other taxes and adjustments, net ( 1,757 ) ( 1,069 ) 239

1 unchanged sentence

Effective tax rate 25.1 % 21.7 % 25.0 %

(1) Includes an $ 8.0 million, $ 6.3 million and $ 2.0 million foreign permanent tax benefit related to an inflation index adjustment allowed under Mexico tax law for the years ended December 31, 2022, 2021 and 2020, respectively.

(1) Includes a $ 5.7 million, $ 8.0 million and $ 6.3 million foreign permanent tax benefit related to an inflation index adjustment allowed under Mexico tax law for the years ended December 31, 2023, 2022 and 2021, respectively.

The Company’s foreign pawn operating subsidiaries are owned by a wholly-owned subsidiary located in the Netherlands.

18 unchanged sentences

Although no assurances can be given, in management’s opinion, such outstanding proceedings are not expected to have a material adverse effect on the Company’s financial position, results of operations, or cash flows.

The Company believes it has meritorious defenses to all of the claims described below, and intends to vigorously defend against such claims.

The Company believes it has meritorious defenses to all of the claims described below and intends to vigorously defend itself against such claims.

However, legal and regulatory proceedings involve an inherent level of uncertainty and no assurances can be given regarding the ultimate outcome of any such matters or whether an adverse outcome would not have a material adverse impact on the Company’s financial position, results of operations, or cash flows.

At this stage, the Company is unable to determine whether a future loss will be incurred for any of its outstanding legal and regulatory proceedings or estimate a range of loss with respect to such proceeding, if any, and accordingly, no material amounts have been accrued in the Company’s financial statements for legal and regulatory proceedings.

On January 14, 2022, plaintiff Genesee County Employees’ Retirement System filed a putative shareholder securities class action lawsuit (the “Litigation”) in the United States District Court for the Northern District of Texas against the Company and certain of its current officers styled Genesee County Employees’ Retirement System v.

FirstCash Holdings, Inc., et al.

, Civil Action No.

4:22-CV-00033-P (N.D.

The complaint alleges that the defendants made materially false and/or misleading statements that caused losses to investors, including that the Company failed to disclose in public statements that the Company engaged in widespread and systemic violations of the MLA.

The Litigation does not quantify any alleged damages, but, in addition to attorneys’ fees and costs, it seeks to recover damages on behalf of the plaintiff and other persons who purchased or otherwise acquired Company stock during the putative class period from February 1, 2018 through November 12, 2021 at allegedly inflated prices and purportedly suffered financial harm as a result.

On June 8, 2022, the Company and named defendants filed a motion to dismiss, which remains pending.

The Company was named as a nominal defendant and certain of the Company’s current and former directors and officers were named as defendants in a shareholder derivative lawsuit filed on July 19, 2022 in the United States District Court for the Northern District of Texas and styled Treppel Family Trust U/A 08/18/18 Lawrence A.

Treppel and Geri D.

Treppel for the Benefit of Geri D.

Treppel and Larry A.

Treppel, Derivatively on Behalf of FirstCash Holdings, Inc., v.

al , Case 4:22-cv-00623-P (N.D.

The complaint makes similar allegations as the Litigation and alleges a single count for breach of fiduciary duty against the named derivative defendants.

The action does not quantify any alleged damages, but, in addition to attorneys’ fees and costs and certain equitable relief, the derivative plaintiff seeks to recover damages on behalf of the Company for purported financial harm and to have the court order changes in the Company’s corporate governance.

On August 8, 2022, the Court entered an Order staying proceedings in this action pending the disposition of any motion to dismiss filed in the Litigation noted above.

At this stage, the Company is unable to determine whether a future loss will be incurred for any of its material outstanding legal and regulatory proceedings or to estimate a range of loss with respect to such proceeding, if any, and accordingly, no material amounts have been accrued in the Company’s financial statements for legal and regulatory proceedings.

On November 12, 2021, the CFPB initiated a civil action in the United States District Court for the Northern District of Texas against FirstCash, Inc.

4 unchanged sentences

The Company responded by filing a motion for partial summary judgment.

On October 24, 2022, the Company filed a motion to dismiss the lawsuit due to the funding structure of the CFPB, which the motion alleges is unconstitutional.

This motion to dismiss follows the recent decision in another case by the Fifth Circuit Court of Appeals whose decisions govern the law applied in the CFPB action against the Company.

The Fifth Circuit found that the CFPB is unconstitutionally structured.

On October 24, 2022, the Company filed a motion to dismiss the lawsuit on the basis that the funding structure of the CFPB is unconstitutional.

This motion to dismiss follows the recent decision in another case by the Fifth Circuit Court of Appeals which found that the CFPB is unconstitutionally structured.

The Fifth Circuit’s decisions govern the law applied in the jurisdiction in which the CFPB action is pending against the Company.

In light of the CFPB's stated intent to seek Supreme Court review of that decision, the parties stipulated to a stay of the action against the Company, which the Court entered on November 4, 2022.

That stay will remain in effect until the Supreme Court decides whether to review the Fifth Circuit's decision and, if it grants review, until that appeal is resolved.

The motion to dismiss remains pending.

While the Company intends to vigorously defend itself against the allegations in the case, it cannot predict or determine the timing or final outcome of this matter, or the effect that any adverse determinations from the lawsuit may have on the Company.

T he Supreme Court is currently reviewing the Fifth Circuit's decision, with oral arguments having been completed on October 3, 2023.

The stay of the CFPB’s action against the Company will remain in effect until the Supreme Court issues its decision with respect to the appeal.

If the Supreme Court decides in favor of the CFPB, the stay will be lifted and the Company and the CFPB will continue to litigate the civil action brought against the Company by the CFPB.

Gold Forward Sales Contracts

As of December 31, 2022, the Company had contractual commitments to deliver a total of 5,500 gold ounces during the months of January 2023 and February 2023 at a weighted-average price of $ 1,892 per ounce.

The ounces required to be delivered were on hand as of December 31, 2022.

As of December 31, 2023, the Company had contractual commitments to deliver a total of 72,500 gold ounces during the months of January 2024 through November 2025 at a weighted-average price of $ 2,043 per ounce.

The ounces required to be delivered over this time period are within historical scrap gold volumes, and the Company expects to have the required gold ounces to meet the commitments as they come due.

NOTE 14 - GOODWILL AND OTHER INTANGIBLE ASSETS

12 unchanged sentences

Effect of foreign currency translation — 7,849 — 7,849

Other adjustments ( 1,200 ) — ( 16,901 ) ( 18,101 )

Balance, end of year $ 916,048 $ 179,128 $ 486,205 $ 1,581,381

19 unchanged sentences

Customer relationships 2.2

Trade name 0.5

Lessee relationships 0.2

Total definite-lived intangible assets 2.1

2 unchanged sentences

2024 $ 50,146

Thereafter 22,474

Indefinite-Lived Intangible Assets

4 unchanged sentences

40,023 37,113

Other indefinite-lived intangibles — 1,250

$ 86,323 $ 83,413

(1) Costs to renew licenses with indefinite lives are expensed as incurred and recorded in operating expenses in the consolidated statements of income.

The Company performed its annual assessment of indefinite-lived intangible assets and determined there was no material impairment as of December 31, 2022 and 2021.

The Company performed its annual assessment of indefinite-lived intangible assets and determined there was no impairment as of December 31, 2023 and 2022.

NOTE 15 - EQUITY COMPENSATION PLANS AND SHARE-BASED COMPENSATION

7 unchanged sentences

The amount attributable to award grants is amortized to expense over the vesting periods.

The 2022 performance-based awards vest three years from the date of the grant.

The performance period for these awards is a three-year cumulative period beginning in January of the respective grant year.

The performance goals for the 2022 grant include net income, adjusted for certain non-core and/or non-recurring items, AFF EBITDA and the Company’s total shareholder return relative to a peer group over the three-year cumulative period.

The 2023 performance-based awards vest on December 31, 2025.

The performance period for these awards is the three-year cumulative period between January 1, 2023 and December 31, 2025.

The performance goals for the 2023 grant include net income, adjusted for certain non-core and/or non-recurring items, AFF adjusted EBITDA and the Company’s total shareholder return (“TSR”) relative to a peer group over the three-year cumulative period.

The Company’s level of achievement of the performance goals at the end of each performance period will result in awards being earned between 0 % and 150 % of the target share award.

The 2021 performance-based awards vest three years from the date of the grant.

The performance period for these awards is a three-year cumulative period beginning in January of the respective grant year.

The performance goals for the 2021 grant include net income, adjusted for certain non-core and/or non-recurring items, store additions and the Company’s total shareholder return relative to a peer group over the three-year cumulative period.

The 2022 performance-based awards vest on December 31, 2024.

The performance period for these awards is the three-year cumulative period between January 1, 2022 and December 31, 2024.

The performance goals for the 2022 grant include net income, adjusted for certain non-core and/or non-recurring items, AFF adjusted EBITDA and the Company’s TSR relative to a peer group over the three-year cumulative period.

The Company’s level of achievement of the performance goals at the end of each performance period will result in awards being earned between 0 % and 150 % of the target share award.

The 2020 performance-based awards were originally granted in January 2020, prior to the impacts of COVID-19 as described in Note 1, which caused the cumulative three-year performance targets to be deemed unattainable.

The Compensation Committee of the Board canceled the original 2020 grant and replaced it with a new grant of performance-based awards in December 2020 with a reduced target award.

Two-thirds of the replacement grant vests on December 31, 2022 based on a two-year cumulative performance period beginning on January 1, 2021 with performance measures tied to adjusted net income and store addition targets.

The remaining one-third of the replacement grant vests on December 31, 2023 based on the Company’s total shareholder return relative to a peer group over the three-year performance period from January 1, 2021 to December 31, 2023.

The Company’s achievement level of the performance goals at the end of each respective performance period will result in awards being earned between 0 % and 150 % of the target share award.

The time-based awards granted in 2022, 2021 and 2020 generally vest, subject to continued employment with the Company, over a three or five-year period from the grant date.

The 2021 performance-based awards vested on December 31, 2023.

The performance period for these awards was the three-year cumulative period between January 1, 2021 and December 31, 2023.

The performance goals for the 2021 grant included net income, adjusted for certain non-core and/or non-recurring items, store additions and the Company’s TSR relative to a peer group over the three-year cumulative period.

The Company’s level of achievement of the performance goals at the end of each performance period result in awards being earned between 0 % and 150 % of the target share award.

Based on the Company’s actual achievement of the three-year cumulative performance goals, the 2021 performance-based awards were earned at 150 % of the target share award.

The TSR component of the 2020 performance-based awards vested on December 31, 2023.

The performance period for the TSR award was the three-year cumulative period between January 1, 2021 and December 31, 2023 and measured the Company’s TSR relative to a peer group over that period.

The Company’s level of achievement of the performance goal at the end of the performance period result in an award being earned between 0 % and 150 % of the target share award.

Based on the Company’s actual achievement of the three-year cumulative performance goal, the TSR metric for the 2020 performance-based award was earned at 150 % of the target share award.

The time-based awards granted in 2023, 2022 and 2021 to employees of the Company generally vest, subject to continued employment with the Company, over a three or five-year period from the grant date.

The following table summarizes the restricted stock unit award activity for the years ended December 31, 2023, 2022 and 2021 (shares in thousands):

16 unchanged sentences

The Company’s level of achievement of the respective performance goals will result in actual vesting of between zero shares and the maximum share award.

Performance-based grants for 2020 include 114 shares which were subsequently cancelled in 2020 as described in footnote (2) below.

(2) Performance-based canceled for 2020 represents cancellation of performance-based awards granted in January of 2020 that were subsequently replaced with a new performance-based award granted in December 2020.

The grant date fair value of the December 2020 replacement performance-based awards was $ 72.37 per share.

Restricted stock unit awards vesting in 2023, 2022 and 2021 had an aggregate intrinsic value of $ 20.6 million, $ 1.5 million and $ 6.6 million, respectively, based on the closing price of the Company’s stock on the date of vesting.

3 unchanged sentences

Previous option awards have been granted to purchase the Company’s common stock at an exercise price equal to or greater than the fair market value at the date of grant and generally had a maximum duration of ten years .

The Company typically issues treasury shares to satisfy stock option exercises.

The following table summarizes stock option activity for the years ended December 31, 2022, 2021 and 2020 (shares in thousands):

2022 2021 2020

Weighted- Weighted- Weighted-

Average Average Average

Underlying Exercise Underlying Exercise Underlying Exercise

Shares Price Shares Price Shares Price

Outstanding at beginning of year — $ — 10 $ 38.00 70 $ 38.86

Exercised — — ( 10 ) 38.00 ( 60 ) 39.00

Outstanding at end of year — — — — 10 38.00

Exercisable at end of year — — — — — —

The total intrinsic value of options exercised for 2021 and 2020 was $ 0.4 million and $ 1.8 million , respectively.

The intrinsic values are based on the closing price of the Company’s stock on the date of exercise.

During the year ended December 31, 2021, the final remaining stock option award was exercised leaving no outstanding stock options as of December 31, 2021.

The option award of 10,000 shares carried an exercise price of $ 38 per share.

The total intrinsic value of the options exercised for 2021 was $ 0.4 million.

The intrinsic value is based on the closing price of the Company’s stock on the date of exercise.

Share-Based Compensation Expense

4 unchanged sentences

Restricted stock unit awards $ 13,674 $ 10,853 $ 5,150

Stock options — — 15

Total gross compensation costs 10,853 5,150 2,914

Income tax benefits:

Restricted stock unit awards ( 605 ) ( 1,428 ) ( 205 )

Exercise of stock options — — ( 94 )

Total income tax benefits ( 1,428 ) ( 205 ) ( 995 )

Net compensation expense $ 13,069 $ 9,425 $ 4,945

13 unchanged sentences

pawn segment, Latin America pawn segment or retail POS payment solutions segment.

Intersegment transactions relate to the Company offering AFF’s LTO payment solution as a payment option in its U.S.

Intersegment transactions relate to the Company offering AFF’s LTO payment solution in its U.S.

pawn stores and are eliminated to arrive at consolidated totals.

The following tables present reportable segment information for the years ended December 31, 2022, 2021 and 2020 as well as separately identified segment assets (in thousands):

The following tables present reportable segment information for the years ended December 31, 2023, 2022 and 2021 as well as segment earning assets (in thousands):

Year Ended December 31, 2023

15 unchanged sentences

Total cost of revenue 555,089 382,585 713,994 ( 7,111 ) 1,644,557

Net revenue (loss) 721,357 353,606 190,719 ( 1,096 ) (1)

813,434 420,718 272,506 581 1,507,239

Expenses and other income:

7 unchanged sentences

Merger and acquisition expenses — — — 7,922 7,922

Gain on revaluation of contingent acquisition consideration

— — — ( 109,549 ) ( 109,549 )

Other expenses (income), net — — — ( 1,402 ) ( 1,402 )

1 unchanged sentence

Income (loss) before income taxes $ 336,306 $ 156,222 $ 132,016 $ ( 331,695 ) $ 292,849

(1) Represents the elimination of intersegment transactions related to the Company offering AFF’s LTO payment solution in its U.S.

As of December 31, 2023

8 unchanged sentences

Total assets 2,423,092 693,650 1,011,541 161,632 4,289,915

(1) Represents the elimination of intersegment transactions related to the Company offering AFF’s LTO payment solution as a payment option in its U.S.

(1) Represents the elimination of intersegment transactions related to the Company offering AFF’s LTO payment solution in its U.S.

Year Ended December 31, 2022

22 unchanged sentences

Interest income — — — ( 1,313 ) ( 1,313 )

Loss on foreign exchange

Gain on foreign exchange

— — — ( 585 ) ( 585 )

5 unchanged sentences

Income (loss) before income taxes $ 291,113 $ 142,027 $ 59,191 $ ( 168,698 ) $ 323,633

(1) Represents the elimination of intersegment transactions related to the Company offering AFF’s LTO payment solution in its U.S.

As of December 31, 2022

8 unchanged sentences

Total assets 2,108,157 619,839 1,047,814 129,057 3,904,867

(1) Represents the elimination of intersegment transactions related to the Company offering AFF’s LTO payment solution in its U.S.

Year Ended December 31, 2021

Pawn Latin America

Pawn Corporate/

Pawn Retail POS

Solutions Corporate/

Eliminations Consolidated

1 unchanged sentence

Pawn loan fees 305,350 170,432 — — 475,782

Leased merchandise income — — 22,720 — 22,720

Interest and fees on finance receivables

4 unchanged sentences

Cost of retail merchandise sold 416,039 247,425 — — 663,464

Depreciation of leased merchandise — — 12,826 — 12,826

Provision for lease losses — — 5,442 — 5,442

Provision for loan losses

2 unchanged sentences

Total cost of revenue 438,925 273,668 67,220 — 779,813

Net revenue 623,105 288,034 — 911,139

Net revenue (loss)

635,962 318,666 ( 35,476 ) — 919,152

Expenses and other income:

5 unchanged sentences

Loss on foreign exchange

— — — 436 436

Merger and acquisition expenses — — — 15,449 15,449

Gain on revaluation of contingent acquisition consideration

— — — ( 17,871 ) ( 17,871 )

Other expenses (income), net — — — 949 949

Loss on extinguishment of debt — — 11,737 11,737

Total expenses and other income 403,129 196,854 5,039 147,628 752,650

2 unchanged sentences

Pawn Latin America

Pawn Corporate/

Pawn Retail POS

Solutions Corporate/

Eliminations Consolidated

Pawn loans $ 256,311 $ 91,662 $ — $ — $ 347,973

Finance receivables, net — — 181,021 — 181,021

Inventories 197,486 65,825 — — 263,311

Leased merchandise, net — — 143,944 — 143,944

Goodwill 861,793 171,279 503,106 — 1,536,178

Total assets 1,944,487 562,661 1,178,729 150,575 3,836,452

(1) Effective June 30, 2020, the Company’s U.S.

pawn segment ceased offering an unsecured consumer loan product in the U.S.

Geographic Information

12 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures