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Fair Value Measurements | 12 Months Ended
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Sep. 30, 2014
Fair Value Disclosures [Abstract] |
Fair Value Measurements | FAIR VALUE MEASUREMENTS (AS RESTATED) Recurring Fair Value Measurements In accordance with FASB ASC 820-10 Fair Value Measurements and Disclosures, our assets and liabilities which are carried at fair value are classified in one of the following three categories:
• | Level 1: Quoted market prices in active markets for identical assets or liabilities.
• | Level 2: Other observable inputs other than quoted market prices.
• | Level 3: Unobservable inputs that are not corroborated by market data.
The tables below present our financial assets (liabilities) that are measured at fair value on a recurring basis as of September 30, 2014 and 2013:
|  | September 30, 2014 |  | Fair Value Measurements Using
Financial (liabilities) assets: | Level 1 |  | Level 2 |  | Level 3
|  | As Restated (See Note 2)
|  | (in thousands)
Forward contracts |  | $ | 1,152 |  |  | $ | — |  |  | $ | 1,152 |  |  | $ | — |
Convertible notes hedges |  | 36,994 |  |  | — |  |  | 36,994 |  |  | — |
Convertible notes embedded derivative |  | (36,994 | ) |  | — |  |  | (36,994 | ) |  | — |
Contingent consideration |  | (3,758 | ) |  | — |  |  | — |  |  | (3,758 | )
Net financial (liabilities) assets |  | $ | (2,606 | ) |  | $ | — |  |  | $ | 1,152 |  |  | $ | (3,758 | )
|  | September 30, 2013 |  | Fair Value Measurements Using
Financial (liabilities) assets: | Level 1 |  | Level 2 |  | Level 3
|  | As Restated (See Note 2)
|  | (in thousands)
Marketable equity securities |  | $ | 2,339 |  |  | $ | 2,339 |  |  | $ | — |  |  | $ | — |
Forward contracts |  | 1,813 |  |  | — |  |  | 1,813 |  |  | — |
Contingent consideration |  | (21,774 | ) |  | — |  |  | — |  |  | (21,774 | )
Net financial (liabilities) assets |  | $ | (17,622 | ) |  | $ | 2,339 |  |  | $ | 1,813 |  |  | $ | (21,774 | )
We measure the value of our marketable equity securities under a Level 1 input. These assets are publicly traded equity securities for which market prices are readily available. Marketable equity securities are recorded on the consolidated balance sheets under other assets, net. In fiscal 2013 we recorded an impairment loss of $2.1 million. This amount is included in the impairment of investments line in our consolidated statement of operations. We sold all marketable equity securities during fiscal 2014. Grupo Finmart measures the value of the forward contracts under a Level 2 input. To measure the fair value of the forward contracts, Grupo Finmart used estimations of expected cash flows, appropriately risk-adjusted discount rates and available observable inputs (term of the forward, notional amount, discount rates based on local and foreign rate curves, and a credit value adjustment to consider the likelihood of nonperformance). Forward contracts are recorded on the consolidated balance sheets under other assets, net and deferred gains and other long-term liabilities. The fair value of the Convertible Notes Hedges and the Convertible Notes Embedded Derivative are determined using an option pricing model based on observable Level 1 and Level 2 inputs such as implied volatility, risk free interest rate and other factors. The Convertible Notes Hedges are recorded on the consolidated balance sheets under other assets, net. The Convertible Notes Embedded Derivative is recorded on the consolidated balance sheets under long-term debt, less current maturities. We used an income approach to measure the fair value of the contingent consideration using a probability-weighted discounted cash flow approach. The significant inputs used for the valuation are not observable in the market, and thus this fair value measurement represents a Level 3 measurement within the fair value hierarchy. Contingent consideration is recorded on the consolidated balance sheets under “Other current liabilities” and “Deferred gains and other long-term liabilities.” Significant increases or decreases in the underlying assumptions used to value the contingent consideration could significantly increase or decrease the fair value estimates recorded in the consolidated balance sheets. During fiscal 2014, we reversed a previously recorded $4.8 million liability for contingent consideration related to the purchase of Go Cash as we discontinued our online lending businesses on September 30, 2014. Refer to Note 3 for further detail on discontinued operations. We further made a $12.0 million earn out payment related to the Grupo Finmart acquisition, and recorded $0.6 million of other individually immaterial adjustments, bringing the contingent consideration liability to $3.8 million at September 30, 2014. During fiscal 2013, we paid $12.8 million in contingent consideration to Grupo Finmart’s noncontrolling owners, recorded $7.1 million of additional contingent consideration attributable to our Go Cash and Fondo ACH acquisitions and due to Grupo Finmart’s acquisition of a loan portfolio, and recorded $0.5 million of other individually immaterial adjustments, bringing the contingent consideration liability to $21.8 million at September 30, 2013. There were no transfers of assets in or out of Level 1 or Level 2 fair value measurements in the periods presented. Financial Assets, Temporary Equity and Liabilities Not Measured at Fair Value Our financial assets, temporary equity and liabilities as of September 30, 2014 and 2013 that are not measured at fair value in our consolidated balance sheets are as follows:
|  | Carrying Value |  | Estimated Fair Value
|  | September 30, 2014 |  | September 30, 2014 |  | Fair Value Measurement Using
|  | Level 1 |  | Level 2 |  | Level 3
|  | As Restated (See Note 2)
|  | (in thousands)
Financial assets: |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 55,325 |  |  | $ | 55,325 |  |  | $ | 55,325 |  |  | $ | — |  |  | $ | — |
Restricted cash |  | 63,495 |  |  | 63,495 |  |  | 63,495 |  |  | — |  |  | — |
Pawn loans |  | 162,444 |  |  | 162,444 |  |  | — |  |  | — |  |  | 162,444 |
Consumer loans, net |  | 63,995 |  |  | 64,631 |  |  | — |  |  | — |  |  | 64,631 |
Pawn service charges receivable, net |  | 31,044 |  |  | 31,044 |  |  | — |  |  | — |  |  | 31,044 |
Consumer loan fees and interest receivable, net |  | 12,647 |  |  | 12,647 |  |  | — |  |  | — |  |  | 12,647 |
Restricted cash, non-current |  | 5,070 |  |  | 5,070 |  |  | 5,070 |  |  | — |  |  | — |
Non-current consumer loans, net |  | 85,004 |  |  | 86,364 |  |  | — |  |  | — |  |  | 86,364 |
Total |  | $ | 479,024 |  |  | $ | 481,020 |  |  | $ | 123,890 |  |  | $ | — |  |  | $ | 357,130 |
Temporary equity: |  |  |  |  |  |  |  |  |  |
Redeemable noncontrolling interest |  | $ | 22,800 |  |  | $ | 49,021 |  |  | $ | — |  |  | $ | — |  |  | $ | 49,021 |
Financial liabilities: |  |  |  |  |  |  |  |  |  |
2.125% Cash convertible senior notes due 2019 |  | $ | 185,693 |  |  | $ | 185,738 |  |  | $ | — |  |  | $ | 185,738 |  |  | $ | — |
Foreign currency debt |  | 27,185 |  | * | 27,185 |  |  | — |  |  | 27,185 |  |  | — |
Consumer loans facility due 2019 |  | 54,045 |  |  | 54,178 |  |  | 54,178 |  |  | — |  |  | — |
Foreign currency unsecured notes |  | 36,991 |  | * | 36,837 |  |  | — |  |  | 36,837 |  |  | — |
Foreign currency secured notes |  | 26,195 |  | * | 26,144 |  | ** | — |  |  | 26,144 |  | ** | — |
Secured notes consolidated from VIEs |  | 61,062 |  | * | 59,906 |  |  | — |  |  | 59,906 |  |  | — |
Total |  | $ | 391,171 |  |  | $ | 389,988 |  |  | $ | 54,178 |  |  | $ | 335,810 |  |  | $ | — |
|  | Carrying Value |  | Estimated Fair Value
|  | September 30, 2013 |  | September 30, 2013 |  | Fair Value Measurement Using
|  | Level 1 |  | Level 2 |  | Level 3
|  | As Restated (See Note 2)
|  | (in thousands)
Financial assets: |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 29,100 |  |  | $ | 29,100 |  |  | $ | 29,100 |  |  | $ | — |  |  | $ | — |
Restricted cash |  | 9,176 |  |  | 9,176 |  |  | 9,176 |  |  | — |  |  | — |
Pawn loans |  | 156,637 |  |  | 156,637 |  |  | — |  |  | — |  |  | 156,637 |
Consumer loans, net |  | 56,880 |  |  | 57,065 |  |  | — |  |  | — |  |  | 57,065 |
Pawn service charges receivable, net |  | 30,362 |  |  | 30,362 |  |  | — |  |  | — |  |  | 30,362 |
Consumer loan fees and interest receivable, net |  | 19,049 |  |  | 19,049 |  |  | — |  |  | — |  |  | 19,049 |
Restricted cash, non-current |  | 3,509 |  |  | 3,509 |  |  | 3,509 |  |  | — |  |  | — |
Non-current consumer loans, net |  | 65,488 |  |  | 65,967 |  |  | — |  |  | — |  |  | 65,967 |
Total |  | $ | 370,201 |  |  | $ | 370,865 |  |  | $ | 41,785 |  |  | $ | — |  |  | $ | 329,080 |
Temporary equity: |  |  |  |  |  |  |  |  |  |
Redeemable noncontrolling interest |  | $ | 47,297 |  |  | $ | 53,068 |  |  | $ | — |  |  | $ | — |  |  | $ | 53,068 |
Financial liabilities: |  |  |  |  |  |  |  |  |  |
Domestic line of credit |  | $ | 140,900 |  |  | $ | 140,900 |  |  | $ | — |  |  | $ | 140,900 |  |  | $ | — |
Secured foreign currency debt |  | 30,310 |  | * | 31,832 |  |  | — |  |  | 31,832 |  |  | — |
Consumer loans facility due 2017 |  | 31,951 |  |  | 32,027 |  |  | 32,027 |  |  | — |  |  | — |
Unsecured notes |  | 39,029 |  | * | 38,734 |  |  | 15,686 |  |  | 23,048 |  |  | — |
Secured notes |  | 4,185 |  | * | 4,026 |  |  | — |  |  | 4,026 |  |  | — |
Total |  | $ | 246,375 |  |  | $ | 247,519 |  |  | $ | 47,713 |  |  | $ | 199,806 |  |  | $ | — |
* | Portions of these amounts are included in “Current maturities of long-term debt” and “Long-term debt, less current maturities” in our consolidated balance sheets.
** This amount has been revised from the originally filed amount to reflect the correction of an error due to a clerical matter in the formulation of this footnote. The fair value of the Foreign currency secured notes above of $26,144 had been erroneously included along with the fair value of foreign currency secured notes for a previously reported fair value of $53,487. Cash and cash equivalents and restricted cash bear interest at market rates and have maturities of less than 90 days. The maximum U.S. pawn loan term ranges between 60 and 120 days, consisting of the primary term and grace period. The maximum Mexico pawn loan term is 40 days, consisting of the primary term and grace period. We record pawn service charges using the interest method for all pawn loans we believe to be collectible. We base our estimate of collectible loans on several unobservable inputs, including recent redemption rates, historical trends in redemption rates and the amount of loans due in the following two months. Consumer loan fees and interest receivable are carried in the consolidated balance sheet net of the allowance for uncollectible consumer loan fees and interest receivable, which is based on recent loan default experience adjusted for seasonal variations and collection percentages. Based on the short-term nature of these assets we estimate that their carrying value approximates fair value. Consumer loans, including long-term unsecured consumer loans made by Grupo Finmart, are carried in the consolidated balance sheet net of the allowance for estimated loan losses, which is based on recent loan default experience adjusted for seasonal variations. Consumer loans, other than those made by Grupo Finmart, have relatively short maturity periods that are generally less than 12 months; therefore, we estimate that their carrying value approximates fair value. Consumer loans made by Grupo Finmart have an average stated term of approximately 31 months. We estimated the fair value of the Grupo Finmart consumer loans by applying an income approach (the present value of future cash flows). Key assumptions include an annualized probability of default as well as a discount rate based on the funding rate plus the portfolio liquidity risk. Significant increases or decreases in the underlying assumptions used to value the consumer loans could significantly increase or decrease the fair value estimates recorded in the consolidated balance sheets. The fair value of the redeemable noncontrolling interest was estimated by applying an income approach. This fair value measurement is based on significant inputs that are not observable in the market and thus represents a Level 3 measurement. Key assumptions include discount rates ranging from 5% to 10%, representing discounts for lack of control and lack of marketability that market participants would consider when estimating the fair value of the noncontrolling interest. Significant increases or decreases in the underlying assumptions used to value the redeemable noncontrolling interest could significantly increase or decrease the fair value estimates recorded in the consolidated balance sheets. We measure the fair value of our financial liabilities using an income approach. The carrying value of the Convertible Notes as of September 30, 2014 is accreting to the $230.0 million redemption value using a discount rate of approximately 7%, which approximated the Company’s fair value incremental borrowing rate for a similar debt instrument (without cash conversion feature) as of the date of issuance and thus represents a Level 2 measurement. Fair value measurements for our domestic line of credit were calculated using discount rates based on an estimated senior secured spread plus term matched risk free rates as of the valuation dates. We utilize credit quality-related zero rate curves for Mexican Pesos built by a price vendor authorized by the Comisión Nacional Bancaria y de Valores to determine the fair value measurements of the remaining financial liabilities that are classified as Level 2. For fair value measurements that are classified as Level 1, we utilize quoted price and yield inputs from Bloomberg and a price vendor authorized by the Comisión Nacional Bancaria y de Valores. See Note 6 for discussion of the fair value of our investment in unconsolidated affiliates.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=36462937&loc=d3e19207-110258 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 28 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13537-108611 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 16 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13504-108611 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13433-108611 + Details
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