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Fair Value Measurements | 12 Months Ended
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Sep. 30, 2015
Fair Value Disclosures [Abstract] |
Fair Value Measurements | NOTE 21: FAIR VALUE MEASUREMENTS In accordance with FASB ASC 820-10, our assets and liabilities discussed below are classified in one of the following three categories based on the inputs used to develop their fair values:
• | 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.
Recurring Fair Value Measurements The tables below present our financial assets (liabilities) that are measured at fair value on a recurring basis as of September 30, 2015 and 2014:
|  | September 30, 2015 |  | Fair Value Measurements Using
Financial assets (liabilities): | Level 1 |  | Level 2 |  | Level 3
|  | (in thousands)
Foreign currency forwards |  | $ | 10,681 |  |  | $ | — |  |  | $ | 10,681 |  |  | $ | — |
Foreign currency forwards |  | 3,488 |  |  | — |  |  | 3,488 |  |  | — |
Holding period adjustment |  | 4 |  |  | — |  |  | 4 |  |  | — |
Convertible Notes Hedges |  | 10,505 |  |  | — |  |  | 10,505 |  |  | — |
Contingent consideration |  | (2,601 | ) |  | — |  |  | — |  |  | (2,601 | )
Convertible Notes Embedded Derivative |  | (10,505 | ) |  | — |  |  | (10,505 | ) |  | — |
Net financial assets (liabilities) |  | $ | 11,572 |  |  | $ | — |  |  | $ | 14,173 |  |  | $ | (2,601 | )
|  | September 30, 2014 |  | Fair Value Measurements Using
Financial (liabilities) assets: | Level 1 |  | Level 2 |  | Level 3
|  | (in thousands)
Foreign currency forwards |  | $ | 1,152 |  |  | $ | — |  |  | $ | 1,152 |  |  | $ | — |
Foreign currency forwards |  | 2,420 |  |  | — |  |  | 2,420 |  |  | — |
Convertible Notes Hedges |  | 36,994 |  |  | — |  |  | 36,994 |  |  | — |
Contingent consideration |  | (3,758 | ) |  | — |  |  | — |  |  | (3,758 | )
Convertible Notes Embedded Derivative |  | (36,994 | ) |  | — |  |  | (36,994 | ) |  | — |
Net financial (liabilities) assets |  | $ | (186 | ) |  | $ | — |  |  | $ | 3,572 |  |  | $ | (3,758 | )
Grupo Finmart measured the value of the forward currency forwards using Level 2 inputs such as 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 in the consolidated balance sheets under “Other assets, net” and “Deferred gains and other long-term liabilities.” We measured the fair value of the Holding Period Adjustment 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 Holding Period Adjustment is recorded in the consolidated balance sheets under "Other assets, net." We measured the fair value of the Convertible Notes Hedges and the Convertible Notes Embedded Derivative 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 in the consolidated balance sheets under “Other assets, net.” The Convertible Notes Embedded Derivative is recorded in the consolidated balance sheets under “Long-term debt, less current maturities.” On April 26, 2013, Grupo Finmart, our 94%-owned subsidiary, purchased 100% of the outstanding shares of Fondo ACH, S.A. de C.V., a specialty consumer finance company. The total purchase price was performance-based and will be determined over a period of four years from the date of purchase. Total contingent consideration due on January 2, 2017 is based on interest income generated by the acquired portfolios and new loans made through Fondo ACH's contractual relationships. We used an income approach to measure the fair value of the contingent consideration using a probability-weighted discounted cash flow approach. Some of the significant inputs used for the valuation are not observable in the market and are thus Level 3 inputs. Contingent consideration is recorded in the consolidated balance sheets under "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 31, 2014. Refer to Note 2 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 2015, we recorded a $1.2 million valuation adjustment, bringing the contingent consideration liability to $2.6 million at September 30, 2015. Financial Assets, Temporary Equity and Liabilities Not Measured at Fair Value Our financial assets, temporary equity and liabilities as of September 30, 2015 and 2014 that are not measured at fair value in our consolidated balance sheets are as follows:
|  | Carrying Value |  | Estimated Fair Value
|  | September 30, 2015 |  | September 30, 2015 |  | Fair Value Measurement Using
|  | Level 1 |  | Level 2 |  | Level 3
|  | (in thousands)
Financial assets: |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 59,124 |  |  | $ | 59,124 |  |  | $ | 59,124 |  |  | $ | — |  |  | $ | — |
Restricted cash |  | 15,137 |  |  | 15,137 |  |  | 15,137 |  |  | — |  |  | — |
Pawn loans |  | 159,964 |  |  | 159,964 |  |  | — |  |  | — |  |  | 159,964 |
Consumer loans, net |  | 36,533 |  |  | 37,559 |  |  | — |  |  | — |  |  | 37,559 |
Pawn service charges receivable, net |  | 30,852 |  |  | 30,852 |  |  | — |  |  | — |  |  | 30,852 |
Consumer loan fees and interest receivable, net |  | 19,802 |  |  | 19,802 |  |  | — |  |  | — |  |  | 19,802 |
Restricted cash, non-current |  | 2,883 |  |  | 2,883 |  |  | 2,883 |  |  | — |  |  | — |
Non-current consumer loans, net |  | 75,824 |  |  | 77,644 |  |  | — |  |  | — |  |  | 77,644 |
|  | $ | 400,119 |  |  | $ | 402,965 |  |  | $ | 77,144 |  |  | $ | — |  |  | $ | 325,821 |
Temporary equity: |  |  |  |  |  |  |  |  |  |
Common stock, subject to possible redemption |  | $ | 11,696 |  |  | $ | 11,438 |  |  | $ | — |  |  | $ | — |  |  | $ | 11,438 |
Financial liabilities: |  |  |  |  |  |  |  |  |  |
Cash Convertible Notes |  | $ | 193,932 |  |  | $ | 169,050 |  |  | $ | — |  |  | $ | 169,050 |  |  | $ | — |
Foreign currency debt |  | 18,709 |  | * | 19,851 |  |  | — |  |  | 19,851 |  |  | — |
Consumer loans facility due 2019 |  | 42,689 |  |  | 40,774 |  |  | — |  |  | 40,774 |  |  | — |
Foreign currency unsecured notes |  | 21,029 |  | * | 20,477 |  |  | — |  |  | 20,477 |  |  | — |
Foreign currency secured notes |  | 20,554 |  | * | 22,476 |  |  | — |  |  | 22,476 |  |  | — |
Secured notes consolidated from VIEs |  | 73,264 |  | * | 68,685 |  |  | — |  |  | 68,685 |  |  | — |
|  | $ | 370,177 |  |  | $ | 341,313 |  |  | $ | — |  |  | $ | 341,313 |  |  | $ | — |
|  | Carrying Value |  | Estimated Fair Value
|  | September 30, 2014 |  | September 30, 2014 |  | Fair Value Measurement Using
|  | Level 1 |  | Level 2 |  | Level 3
|  | (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 |
|  | $ | 479,024 |  |  | $ | 481,020 |  |  | $ | 123,890 |  |  | $ | — |  |  | $ | 357,130 |
Temporary equity: |  |  |  |  |  |  |  |  |  |
Redeemable noncontrolling interest |  | $ | 22,800 |  |  | $ | 49,021 |  |  | $ | — |  |  | $ | — |  |  | $ | 49,021 |
Financial liabilities: |  |  |  |  |  |  |  |  |  |
Cash Convertible Notes |  | $ | 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 |  |  | — |
|  | $ | 391,171 |  |  | $ | 389,988 |  |  | $ | 54,178 |  |  | $ | 335,810 |  |  | $ | — |
* | 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.
Based on the short-term nature of cash and cash equivalents, restricted cash, pawn loans, pawn service charges receivable and consumer loan fees and interest receivable, we estimate that their carrying value approximates fair value. Significant increases or decreases in the underlying assumptions used to value the pawn loans, pawn service charges receivable and consumer loan fees and interest receivable could significantly increase or decrease the fair value estimates disclosed above. Consumer loans, other than those made by Grupo Finmart, have relatively short maturity periods that are generally 12 months; therefore, we estimate that their carrying value approximates fair value. Consumer loans made by Grupo Finmart have an average term of approximately 30 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 disclosed above. 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 disclosed above. The fair value of the Common stock, subject to possible redemption was estimated by applying an income approach. This fair value measurement is based on significant Level 3 inputs that are not observable in the market. Key assumptions include a discount rate of 7%, which approximated the Company’s incremental borrowing rate. Significant increases or decreases in the underlying assumptions used to value the Common stock, subject to possible redemption could significantly increase or decrease the fair value estimates disclosed above. We measured the fair value of our Cash Convertible Notes using quoted price inputs from Bloomberg. The Cash Convertible Notes are not actively traded and thus the price inputs represent a Level 2 measurement. There was a change in the valuation technique we used to measure our Cash Convertible Notes during the quarter ended March 31, 2015 as we believe the quoted price inputs obtained from Bloomberg more accurately represent the fair value of our Cash Convertible Notes. As the Cash Convertible Notes are not actively traded, the quoted price inputs obtained from Bloomberg are highly variable from day to day and thus the fair value estimates disclosed above could significantly increase or decrease. We measured the fair value of our Cash Convertible Notes using an income approach prior to March 31, 2015. The fair value was based on the carrying value of the Cash Convertible Notes accreting to the $230.0 million redemption value using a discount rate of 7%, which approximated the Company’s incremental borrowing rate for a similar debt instrument (without the cash conversion feature) as of the date of issuance and thus utilizes Level 2 inputs. We utilize credit quality-related zero rate curves, quoted price and yield inputs 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 measurements. For financial liability fair value measurements that are classified as Level 1 measurements, we utilized quoted price and yield inputs from Bloomberg and a price vendor authorized by the Comisión Nacional Bancaria y de Valores. We revised the price inputs and assumptions used to value our Consumer loans facility due 2019 during fiscal 2015 which caused a change in the classification of the fair value hierarchy from Level 1 to Level 2. See Note 5 for discussion of the fair value of our investment in unconsolidated affiliate. See Note 10 for discussion of the fair value of our phantom share-based awards.

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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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