Fair Values of Assets and Liabilities

Valuations and Techniques for Assets

Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The table below summarizes (in thousands) by fair value hierarchy the June 30, 2016 and December 31, 2015 fair values and carrying amounts of (1) our assets that are required to be carried at fair value in our consolidated financial statements and (2) our assets not carried at fair value, but for which fair value disclosures are required:



Assets – As of June 30, 2016 (1)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Carrying Amount of Assets
Loans and fees receivable, net for which it is practicable to estimate fair value	$	—	$	—	$	217,680	$	198,188
Loans and fees receivable, at fair value	$	—	$	—	$	5,255	$	5,255
Loans and fees receivable pledged as collateral, at fair value	$	—	$	—	$	15,265	$	15,265



Assets – As of December 31, 2015 (1)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Carrying Amount of Assets
Loans and fees receivable, net for which it is practicable to estimate fair value	$	—	$	—	$	161,199	$	141,949
Loans and fees receivable, at fair value	$	—	$	—	$	6,353	$	6,353
Loans and fees receivable pledged as collateral, at fair value	$	—	$	—	$	20,353	$	20,353


(1)	For cash, deposits and other short-term investments (including our investments in rental merchandise), the carrying amount is a reasonable estimate of fair value.

For those asset classes above that are required to be carried at fair value in our consolidated financial statements, gains and losses associated with fair value changes are detailed on our fees and related income on earning assets table within Note 2, “Significant Accounting Policies and Consolidated Financial Statement Components.”

For Level 3 assets carried at fair value measured on a recurring basis using significant unobservable inputs, the following table presents (in thousands) a reconciliation of the beginning and ending balances for the six months ended June 30, 2016 and June 30, 2015:



	Loans and Fees Receivable, at Fair Value			Loans and Fees Receivable Pledged as Collateral under Structured Financings, at Fair Value			Total
Balance at January 1, 2016	$	6,353		$	20,353		$	26,706
Total gains—realized/unrealized:
Net revaluations of loans and fees receivable pledged as collateral under structured financings, at fair value	—			806			806
Net revaluations of loans and fees receivable, at fair value	1,619			—			1,619
Settlements, net	(2,528		)	(5,894		)	(8,422		)
Impact of foreign currency translation	(189		)	—			(189		)
Balance at June 30, 2016	$	5,255		$	15,265		$	20,520
Balance at January 1, 2015	$	18,255		$	34,905		$	53,160
Total gains—realized/unrealized:
Net revaluations of loans and fees receivable pledged as collateral under structured financings, at fair value	—			2,462			2,462
Net revaluations of loans and fees receivable, at fair value	750			—			750
Settlements, net	(7,449		)	(9,903		)	(17,352		)
Impact of foreign currency translation	(44		)	—			(44		)
Balance at June 30, 2015	$	11,512		$	27,464		$	38,976

The unrealized gains and losses for assets within the Level 3 category presented in the tables above include changes in fair value that are attributable to both observable and unobservable inputs. Impacts related to foreign currency translation are included as a component of other operating expense on the consolidated statements of operations.

Net Revaluation of Loans and Fees Receivable. We record the net revaluation of loans and fees receivable (including those pledged as collateral) in the fees and related income on earning assets category in our consolidated statements of operations, specifically as changes in fair value of loans and fees receivable recorded at fair value.

For Level 3 assets carried at fair value measured on a recurring basis using significant unobservable inputs, the following table presents (in thousands) quantitative information about the valuation techniques and the inputs used in the fair value measurement as of June 30, 2016 and December 31, 2015:



Quantitative Information about Level 3 Fair Value Measurements
Fair Value Measurements	Fair Value at June 30, 2016		Valuation Technique	Unobservable Input	Range (Weighted Average)(1)
Loans and fees receivable, at fair value	$	5,255	Discounted cash flows	Gross yield	27.9% to 33.1% (29.7%)
				Principal payment rate	1.9% to 3.5% (2.9%)
				Expected credit loss rate	11.8% to 25.5% (16.5%)
				Servicing rate	8.0% to 8.3% (8.2%)
				Discount rate	16.1% to 16.2% (16.1%)
Loans and fees receivable pledged as collateral under structured financings, at fair value	$	15,265	Discounted cash flows	Gross yield	24.0	%
				Principal payment rate	2.6	%
				Expected credit loss rate	11.1	%
				Servicing rate	8.0	%
				Discount rate	16.1	%



Quantitative Information about Level 3 Fair Value Measurements
Fair Value Measurements	Fair Value at December 31, 2015		Valuation Technique	Unobservable Input	Range (Weighted Average)(1)
Loans and fees receivable, at fair value	$	6,353	Discounted cash flows	Gross yield	15.8% to 22.7% (20.0%)
				Principal payment rate	2.1% to 3.0% (2.7%)
				Expected credit loss rate	12.9% to 22.7% (16.7%)
				Servicing rate	8.4% to 12.5% (10.9%)
				Discount rate	16.0% to 16.2% (16.1%)
Loans and fees receivable pledged as collateral under structured financings, at fair value	$	20,353	Discounted cash flows	Gross yield	28.5	%
				Principal payment rate	2.9	%
				Expected credit loss rate	12.5	%
				Servicing rate	12.9	%
				Discount rate	16.0	%

(1) Our loans and fees receivable, pledged as collateral under structured financings, at fair value consist of a single portfolio with one set of assumptions. As such, no range is given.

Valuations and Techniques for Liabilities

Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the liability. The table below summarizes (in thousands) by fair value hierarchy the June 30, 2016 and December 31, 2015 fair values and carrying amounts of (1) our liabilities that are required to be carried at fair value in our consolidated financial statements and (2) our liabilities not carried at fair value, but for which fair value disclosures are required:



Liabilities – As of June 30, 2016	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Carrying Amount of Liabilities
Liabilities not carried at fair value
Revolving credit facilities	$	—	$	—	$	64,992	$	64,992
Amortizing debt facilities	$	—	$	—	$	38,619	$	38,619
Senior secured term loan	$	—	$	—	$	20,000	$	20,000
5.875% convertible senior notes	$	—	$	36,844	$	—	$	61,903
Liabilities carried at fair value
Economic sharing arrangement liability	$	—	$	—	$	26	$	26
Notes payable associated with structured financings, at fair value	$	—	$	—	$	15,626	$	15,626



Liabilities - As of December 31, 2015	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Carrying Amount of Liabilities
Liabilities not carried at fair value
Revolving credit facilities	$	—	$	—	$	28,900	$	28,900
Amortizing debt facilities	$	—	$	—	$	61,100	$	61,100
Senior secured term loan	$	—	$	—	$	20,000	$	20,000
5.875% convertible senior notes	$	—	$	42,734	$	—	$	64,783
Liabilities carried at fair value
Economic sharing arrangement liability	$	—	$	—	$	42	$	42
Notes payable associated with structured financings, at fair value	$	—	$	—	$	20,970	$	20,970

For our material Level 3 liabilities carried at fair value measured on a recurring basis using significant unobservable inputs, the following table presents (in thousands) a reconciliation of the beginning and ending balances for the six months ended June 30, 2016 and 2015.



	Notes Payable Associated with Structured Financings, at Fair Value
	2016			2015
Beginning balance, January 1	$	20,970		$	36,511
Total (gains) losses—realized/unrealized:
Net revaluations of notes payable associated with structured financings, at fair value	(2,104		)	782
Repayments on outstanding notes payable, net	(3,240		)	(8,608		)
Ending balance, June 30	$	15,626		$	28,685

The unrealized gains and losses for liabilities within the Level 3 category presented in the tables above include changes in fair value that are attributable to both observable and unobservable inputs. We provide below a brief description of the valuation techniques used for Level 3 liabilities.

Net Revaluation of Notes Payable Associated with Structured Financings, at Fair Value. We record the net revaluations of notes payable associated with structured financings, at fair value, in the changes in fair value of notes payable associated with structured financings line item within the fees and related income on earning assets category of our consolidated statements of operations.

For material Level 3 liabilities carried at fair value measured on a recurring basis using significant unobservable inputs, the following table presents (in thousands) quantitative information about the valuation techniques and the inputs used in the fair value measurement as of June 30, 2016 and December 31, 2015:



Quantitative Information about Level 3 Fair Value Measurements
Fair Value Measurements	Fair Value at June 30, 2016 (in Thousands)		Valuation Technique	Unobservable Input	Weighted Average
Notes payable associated with structured financings, at fair value	$	15,626	Discounted cash flows	Gross yield	24.0	%
				Principal payment rate	2.6	%
				Expected credit loss rate	11.1	%
				Discount rate	16.1	%



Quantitative Information about Level 3 Fair Value Measurements
Fair Value Measurements	Fair Value at December 31, 2015 (in Thousands)		Valuation Technique	Unobservable Input	Weighted Average
Notes payable associated with structured financings, at fair value	$	20,970	Discounted cash flows	Gross yield	28.5	%
				Principal payment rate	2.9	%
				Expected credit loss rate	12.5	%
				Discount rate	16.0	%

Other Relevant Data

Other relevant data (in thousands) as of June 30, 2016 and December 31, 2015 concerning certain assets and liabilities we carry at fair value are as follows:



As of June 30, 2016	Loans and Fees Receivable at Fair Value		Loans and Fees Receivable Pledged as Collateral under Structured Financings at Fair Value
Aggregate unpaid principal balance within loans and fees receivable that are reported at fair value	$	6,011	$	20,504
Aggregate fair value of loans and fees receivable that are reported at fair value	$	5,255	$	15,265
Aggregate fair value of receivables carried at fair value that are 90 days or more past due (which also coincides with finance charge and fee non-accrual policies)	$	5	$	28
Aggregate excess of balance of unpaid principal receivables within loans and fees receivable that are reported at fair value and are 90 days or more past due (which also coincides with finance charge and fee non-accrual policies) over the fair value of such loans and fees receivable	$	270	$	559



As of December 31, 2015	Loans and Fees Receivable at Fair Value		Loans and Fees Receivable Pledged as Collateral under Structured Financings at Fair Value
Aggregate unpaid principal balance within loans and fees receivable that are reported at fair value	$	8,560	$	25,837
Aggregate fair value of loans and fees receivable that are reported at fair value	$	6,353	$	20,353
Aggregate fair value of receivables carried at fair value that are 90 days or more past due (which also coincides with finance charge and fee non-accrual policies)	$	12	$	31
Aggregate excess of balance of unpaid principal receivables within loans and fees receivable that are reported at fair value and are 90 days or more past due (which also coincides with finance charge and fee non-accrual policies) over the fair value of such loans and fees receivable	$	374	$	889



Notes Payable	Notes Payable Associated with Structured Financings, at Fair Value as of June 30, 2016		Notes Payable Associated with Structured Financings, at Fair Value as of December 31, 2015
Aggregate unpaid principal balance of notes payable	$	103,716	$	106,956
Aggregate fair value of notes payable	$	15,626	$	20,970