XML 33 R12.htm IDEA: XBRL DOCUMENT
v3.7.0.1

Fair Value Measurements | 9 Months Ended
--- | ---
Jun. 30, 2017
Fair Value Disclosures [Abstract] |
FAIR VALUE MEASUREMENTS | NOTE 4: FAIR VALUE MEASUREMENTS In accordance with 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 market-based inputs or unobservable inputs that are corroborated by market data; and Level 3 — Unobservable inputs that are not corroborated by market data. Recurring Fair Value Measurements The tables below present our financial assets (liabilities) that were carried and measured at fair value on a recurring basis, exclusive of amounts attributable to Prestaciones Finmart, S.A.P.I. de C.V., SOFOM, E.N.R. ("Grupo Finmart"), which we divested in September 2016:
Financial Assets (Liabilities) |  | Balance Sheet Location |  | June 30, 2017 |  | June 30, 2016 |  | September 30, 2016
|  |  |  | (in thousands)
Guarantee asset — Level 3 |  | Prepaid expenses and other current assets |  | $ | 298 |  |  | $ | — |  |  | $ | 1,209 |
Guarantee liability — Level 3 |  | Accounts payable, accrued expenses and other current liabilities |  | (310 | ) |  | — |  |  | (1,258 | )
Cash Convertible Notes Hedges — Level 2 |  | Other assets, net |  | 5,900 |  |  | 16,200 |  |  | 37,692 |
Cash Convertible Notes Embedded Derivative — Level 2 |  | Long-term debt, net |  | (5,900 | ) |  | (16,200 | ) |  | (37,692 | )
Cash Convertible Notes Warrants — Level 3 |  | Accounts payable, accrued expenses and other current liabilities |  | (523 | ) |  | — |  |  | — |
We initially measured the guarantee asset and liability at fair value and are subsequently amortizing the guarantees based upon the principal payments received on the associated notes receivable, which approximates the fair value of the guarantees on a recurring basis. See discussion of settlement subsequent to June 30, 2017 in Note 10. We measured the fair value of the Cash Convertible Notes Hedges and the Cash Convertible Notes Embedded Derivative using the Black-Scholes-Merton model based on observable Level 1 and Level 2 inputs such as conversion price of underlying shares, current share price, implied volatility, risk free interest rate and other factors. As of June 30, 2017 the volatility input was revised downward to 44% based on observed market inputs. As of June 30, 2016 and September 30, 2016 these inputs included volatilities of 53% to 55%. We executed agreements dated as of June 29, 2017 to cash settle a portion of the Cash Convertible Notes Hedges and Cash Convertible Notes Warrants pertaining to the partial repayment of the Cash Convertible Notes in July 2017. Based on the negotiated cash settlement amount with our counterparties in July 2017, we realized a volatility of approximately 32% to 34%, reducing the amount received on the amounts recorded above as of June 30, 2017. As of June 30, 2017, we reclassified the portion of Cash Convertible Notes Warrants which were cash settled in July 2017 from equity to a liability at its current fair value, including inputs for current share price and trading volume. See Note 5 and Note 10 for additional discussion. There were no transfers in or out of Level 1 or Level 2 for financial assets or liabilities measured at fair value on a recurring basis during the periods presented. Financial Assets and Liabilities Not Measured at Fair Value The tables below present our financial assets and liabilities that were not measured at fair value (including those discussed below the following tables) on a recurring basis, exclusive of amounts attributable to Grupo Finmart:
|  | Carrying Value |  | Estimated Fair Value
|  | June 30, 2017 |  | June 30, 2017 |  | Fair Value Measurement Using
|  | Level 1 |  | Level 2 |  | Level 3
|  | (in thousands)
Financial assets: |  |  |  |  |  |  |  |  |  |
Notes receivable, net |  | $ | 63,277 |  |  | $ | 65,570 |  |  | $ | — |  |  | $ | — |  |  | $ | 65,570 |
Investment in unconsolidated affiliate |  | 41,725 |  |  | 37,306 |  |  | 37,306 |  |  | — |  |  | — |
Financial liabilities: |  |  |  |  |  |  |  |  |  |
Cash Convertible Notes |  | $ | 206,279 |  |  | $ | 218,500 |  |  | $ | — |  |  | $ | 218,500 |  |  | $ | — |
Term Loan Facility |  | 48,235 |  |  | 48,159 |  |  | — |  |  | — |  |  | 48,159 |
|  | Carrying Value |  | Estimated Fair Value
|  | June 30, 2016 |  | June 30, 2016 |  | Fair Value Measurement Using
|  | Level 1 |  | Level 2 |  | Level 3
|  | (in thousands)
Financial assets: |  |  |  |  |  |  |  |  |  |
Investment in unconsolidated affiliate |  | $ | 56,843 |  |  | $ | 49,149 |  |  | $ | 49,149 |  |  | $ | — |  |  | $ | — |
Financial liabilities: |  |  |  |  |  |  |  |  |  |
Cash Convertible Notes |  | $ | 195,221 |  |  | $ | 190,762 |  |  | $ | — |  |  | $ | 190,762 |  |  | $ | — |
|  | Carrying Value |  | Estimated Fair Value
|  | September 30, 2016 |  | September 30, 2016 |  | Fair Value Measurement Using
|  | Level 1 |  | Level 2 |  | Level 3
|  | (in thousands)
Financial assets: |  |  |  |  |  |  |  |  |  |
Notes receivable, net |  | $ | 83,065 |  |  | $ | 83,065 |  |  | $ | — |  |  | $ | — |  |  | $ | 83,065 |
Investment in unconsolidated affiliate |  | 37,128 |  |  | 37,128 |  |  | 37,128 |  |  | — |  |  | — |
Financial liabilities: |  |  |  |  |  |  |  |  |  |
Cash Convertible Notes |  | $ | 197,954 |  |  | $ | 227,332 |  |  | $ | — |  |  | $ | 227,332 |  |  | $ | — |
Term Loan Facility |  | 47,965 |  |  | 48,688 |  |  | — |  |  | — |  |  | 48,688 |
Based on the short-term nature of cash and cash equivalents, pawn loans, pawn service charges receivable and current consumer loans, fees and interest receivable, we estimate that their carrying value approximates fair value. We consider our cash and cash equivalents to be measured using Level 1 inputs and our pawn loans, pawn service charges receivable and current consumer loans, fees and interest receivable to be measured using Level 3 inputs. Significant increases or decreases in the underlying assumptions used to value pawn loans, pawn service charges receivable and current consumer loans, fees and interest receivable could significantly increase or decrease these fair value estimates. We measured the fair value of the notes receivable under a discounted cash flow approach considering the synthetic credit ratings for Grupo Finmart and Alpha Holding, S.A. de C.V. (“AlphaCredit”), as applicable and as determined with external consultation, with discount rates ranging primarily from 8% to 15%. Certain of the significant inputs used for the valuation were not observable in the market. Significant increases or decreases in the underlying assumptions used to value the notes receivable could significantly increase or decrease these fair value estimates. The inputs used to generate the fair value of the investment in unconsolidated affiliate Cash Converters International were considered Level 1 inputs. These inputs are comprised of (a) the quoted stock price on the Australian Stock Exchange multiplied by (b) the number of shares we owned multiplied by (c) the applicable foreign currency exchange rate as of the end of our reporting period. We included no control premium for owning a large percentage of outstanding shares. We measured the fair value of the 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. 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 the Term Loan Facility under a discounted cash flow approach considering our synthetic credit rating, including inputs that are not observable in the market, with discount rates up to approximately 9%. A 50 basis point increase or decrease in the calculated credit spread based on our underlying synthetic credit rating would increase or decrease the fair value of our Term Loan Facility by approximately $1.2 million. The fair value of the Term Loan Facility approximated its carrying value, inclusive of issuance costs and exclusive of deferred financing costs, as of September 30, 2016. See Note 5 and Note 10 for additional discussion. Notes Receivable from Grupo Finmart Divestiture Subsequent to the sale of Grupo Finmart in September 2016, we determined that we retained a variable interest in Grupo Finmart, including notes receivable and a guarantee liability of the future cash outflows of certain Grupo Finmart foreign exchange forward contracts with a backup guarantee provided by AlphaCredit for any payments we make under the guarantee. We determined that we are not the primary beneficiary of Grupo Finmart subsequent to its disposition as we lack a controlling financial interest in Grupo Finmart. As of June 30, 2017, we had a total gross outstanding balance on our notes receivable of $67.1 million. We have collected $8.2 million and $23.3 million, respectively, in principal on these notes receivable during the three and nine months ended June 30, 2017. The following table presents the carrying amount and classification of the assets and liabilities pertaining to our variable interest compared to the maximum exposure to loss for each asset and liability:
|  |  |  | June 30, 2017 |  | September 30, 2016
Instrument |  | Balance Sheet Location |  | Asset (Liability) Recorded in Consolidated Balance Sheet |  | Maximum Exposure to Loss |  | Asset (Liability) Recorded in Consolidated Balance Sheet |  | Maximum Exposure to Loss
Notes receivable |  | Notes receivable, net (including discount of $3.8 million and $6.7 million as of June 30, 2017 and September 30, 2016, respectively) |  | $ | 63,277 |  |  | $ | 63,277 |  |  | $ | 83,065 |  |  | $ | 83,065 |
Guarantee asset |  | Prepaid expenses and other current assets |  | 298 |  |  | — |  |  | 1,209 |  |  | — |
Guarantee liability* |  | Accounts payable, accrued expenses and other current liabilities |  | (310 | ) |  | — |  |  | (1,258 | ) |  | — |
* | Maximum exposure to loss under the guarantee liability was $6.2 million and $25.3 million as of June 30, 2017 and September 30, 2016, respectively. However such amount is included within the maximum exposure to loss for the notes receivable above, as the guarantee liability is a guarantee by us of Grupo Finmart’s repayment of our notes receivable owed by Grupo Finmart. See discussion of repayment subsequent to June 30, 2017 in Note 10.

X
- References No definition available. + Details
Name: | us-gaap_FairValueDisclosuresAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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 -URI http://asc.fasb.org/topic&trid=2155941 + Details
Name: | us-gaap_FairValueDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration