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Fair Value Measurements | 9 Months Ended
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Jun. 30, 2019
Fair Value Disclosures [Abstract] |
FAIR VALUE MEASUREMENTS | NOTE 5: FAIR VALUE MEASUREMENTS 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:
Financial Assets (Liabilities) |  | Balance Sheet Location |  | June 30, 2019 |  | June 30, 2018 |  | September 30, 2018
|  |  |  | (in thousands)
2019 Convertible Notes Hedges — Level 2 |  | Prepaid expenses and other current assets |  | $ | — |  |  | $ | 7,491 |  |  | $ | 2,552 |
2019 Convertible Notes Embedded Derivative — Level 2 |  | Current maturities of long-term debt, net |  | — |  |  | (7,491 | ) |  | (2,552 | )
We repaid our outstanding 2.125% Cash Convertible Senior Notes Due 2019 in June 2019 with expiration of the associated cash-settled call options (the “2019 Convertible Notes Hedges”) and the 2019 Convertible Notes derivative instrument (the “2019 Convertible Notes Embedded Derivative”). There were no transfers in or out of Level 1, Level 2 or Level 3 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 on a recurring basis:
|  | Carrying Value |  | Estimated Fair Value
|  | June 30, 2019 |  | June 30, 2019 |  | Fair Value Measurement Using
|  | Level 1 |  | Level 2 |  | Level 3
|  | (in thousands)
Financial assets: |  |  |  |  |  |  |  |  |  |
Notes receivable from Grupo Finmart, net |  | $ | 18,744 |  |  | $ | 19,517 |  |  | $ | — |  |  | $ | — |  |  | $ | 19,517 |
Zero-coupon convertible promissory note due January 2021 |  | 7,226 |  |  | 7,226 |  |  | — |  |  | — |  |  | 7,226 |
2.89% promissory note receivable due April 2024 |  | 1,108 |  |  | 1,108 |  |  | — |  |  | — |  |  | 1,108 |
Investments in unconsolidated affiliates |  | 30,922 |  |  | 27,158 |  |  | 24,464 |  |  | — |  |  | 2,694 |
Financial liabilities: |  |  |  |  |  |  |  |  |  |
2024 Convertible Notes |  | $ | 109,909 |  |  | $ | 161,719 |  |  | $ | — |  |  | $ | 161,719 |  |  | $ | — |
2025 Convertible Notes |  | 124,542 |  |  | 159,873 |  |  | — |  |  | 159,873 |  |  | — |
8.5% unsecured debt due 2024 |  | 1,148 |  |  | 1,148 |  |  | — |  |  | — |  |  | 1,148 |
CASHMAX secured borrowing facility |  | 65 |  |  | 804 |  |  | — |  |  | — |  |  | 804 |
|  | Carrying Value |  | Estimated Fair Value
|  | June 30, 2018 |  | June 30, 2018 |  | Fair Value Measurement Using
|  | Level 1 |  | Level 2 |  | Level 3
|  | (in thousands)
Financial assets: |  |  |  |  |  |  |  |  |  |
Notes receivable from Grupo Finmart, net |  | $ | 51,338 |  |  | $ | 57,116 |  |  | $ | — |  |  | $ | — |  |  | $ | 57,116 |
Investments in unconsolidated affiliates |  | 61,056 |  |  | 49,205 |  |  | 49,205 |  |  | — |  |  | — |
Financial liabilities: |  |  |  |  |  |  |  |  |  |
2019 Convertible Notes |  | $ | 184,823 |  |  | $ | 197,925 |  |  | $ | — |  |  | $ | 197,925 |  |  | $ | — |
2024 Convertible Notes |  | 104,562 |  |  | 195,974 |  |  | — |  |  | 195,974 |  |  | — |
2025 Convertible Notes |  | 118,335 |  |  | 168,464 |  |  | — |  |  | 168,464 |  |  | — |
|  | Carrying Value |  | Estimated Fair Value
|  | September 30, 2018 |  | September 30, 2018 |  | Fair Value Measurement Using
|  | Level 1 |  | Level 2 |  | Level 3
|  | (in thousands)
Financial assets: |  |  |  |  |  |  |  |  |  |
Notes receivable from Grupo Finmart, net |  | $ | 37,425 |  |  | $ | 41,153 |  |  | $ | — |  |  | $ | — |  |  | $ | 41,153 |
Investments in unconsolidated affiliates |  | 49,500 |  |  | 49,500 |  |  | 49,500 |  |  | — |  |  | — |
Financial liabilities: |  |  |  |  |  |  |  |  |  |
2019 Convertible Notes |  | $ | 187,433 |  |  | $ | 189,150 |  |  | $ | — |  |  | $ | 189,150 |  |  | $ | — |
2024 Convertible Notes |  | 105,858 |  |  | 180,399 |  |  | — |  |  | 180,399 |  |  | — |
2025 Convertible Notes |  | 119,736 |  |  | 161,253 |  |  | — |  |  | 161,253 |  |  | — |
8.5% unsecured debt due 2024 |  | 1,304 |  |  | 1,304 |  |  | — |  |  | — |  |  | 1,304 |
Based primarily on the short-term nature of cash and cash equivalents, pawn loans, pawn service charges receivable, current consumer loans, fees and interest receivable and other debt, 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, consumer loans, fees and interest receivable and other debt to be measured using Level 3 inputs. Significant increases or decreases in the underlying assumptions used to value pawn loans, pawn service charges receivable, consumer loans, fees and interest receivable and other debt could significantly increase or decrease these fair value estimates. In March 2019, we deconsolidated a previously consolidated variable interest entity ("RDC") over which we no longer have the power to direct the activities that most significantly affect its economic performance. After the deconsolidation, we continue to hold the following interests in RDC:
• | A 5% equity interest and a call option to repurchase an additional 43% equity interest for $1 in September 2019 in the event that RDC has not received a qualified third party investment. These interests were recorded at a combined fair value of $2.8 million and included in "Investment in unconsolidated affiliates" in our condensed consolidated balance sheets.
• | A $9.1 million non-interest bearing convertible promissory note due January 2021, which is automatically convertible into a 10% equity interest when RDC has received a qualified third party investment. This note was recorded at its fair value of $6.8 million in "Notes receivable, net" in our condensed consolidated balance sheets and will accrete to par value through maturity unless converted.
In conjunction with the deconsolidation and recording of the above amounts, we recognized a loss of $0.3 million, included in "Other income" in our condensed consolidated statements of operations included in our "Other International" segment and in "Other adjustments" in our condensed consolidated statements of cash flows for the current year-to-date period. The retained equity interest, call option and convertible promissory note are valued using weighted discounted cash flow and market approaches using Level 3 inputs. Significant increases or decreases in the underlying assumptions used to value these interests could significantly increase or decrease the fair value estimate. In March 2019, we received $1.1 million in previously escrowed seller funds as a result of settling certain indemnification claims with the seller of GPMX. In April 2019, we loaned the $1.1 million back to the seller of GPMX in exchange for a promissory note. The note bears interest at the rate of 2.89% per annum and is secured by certain marketable securities owned by the seller and held in a U.S. brokerage account. All principal and accrued interest is due and payable in April 2024. Subsequent to the sale of Prestaciones Finmart, S.A.P.I. de C.V., SOFOM, E.N.R. ("Grupo Finmart") to Alpha Holding, S.A. de C.V. (“AlphaCredit”) in September 2016, we determined that we retained a variable interest in Grupo Finmart including notes receivable. 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. We measured the fair value of the notes receivable as of June 30, 2019 under a discounted cash flow approach considering the estimated credit ratings for Grupo Finmart and AlphaCredit and as determined with external consultation, with discount rates of primarily 7%. Certain of the significant inputs used for the valuation were not observable in the market. Included in the fair value of the notes receivable is the estimated fair value of the deferred compensation fee negotiated in September 2017. 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 measure 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 2024 and 2025 Convertible Notes using quoted price inputs. The notes are not actively traded, and thus the price inputs represent a Level 2 measurement. As the quoted price inputs are highly variable from day to day, the fair value estimates disclosed above could significantly increase or decrease.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -URI http://asc.fasb.org/topic&trid=2155941 + Details
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