Fair Value Measurements

12 Months Ended

Dec. 31, 2013

Fair Value Measurements [Abstract]

Fair Value Measurements

21. Fair Value Measurements

Recurring Fair Value Measurements

In accordance with ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), certain of the Company's 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: Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

The Company's financial assets that are measured at fair value on a recurring basis as of December 31, 2013and 2012are as follows (dollars in thousands):

			December 31,		Fair Value Measurements Using
			2013		Level 1		Level 2		Level 3
	Financial assets:
	Forward currency exchange contracts	1	$	6	$	-	$	6	$	-
	Nonqualified plan-related assets (a)			14,576		14,576		-		-
	Total		$	14,582	$	14,576	$	6	$	-
			December 31,		Fair Value Measurements Using
			2012		Level 1		Level 2		Level 3
	Financial assets (liabilities):
	Forward currency exchange contracts		$	(406)	$	-	$	(406)	$	-
	Nonqualified plan-related assets (a)			11,347		11,347		-		-
	Marketable securities(b)			6,042		6,042		-		-
	Total		$	16,983	$	17,389	$	(406)	$	-
(a)a a	The nonqualified plan-related assets have an offsetting liability of equal amount, which is included in "Accounts payable and accrued expenses" in the consolidated balance sheets.
(b)a a a	Cumulative unrealized total gains, net of tax, on these equity securities of $0.3 million as of December 31, 2012 are recorded in "Accumulated other comprehensive income (loss)" in the consolidated statements of equity. These marketable securities were sold during the second quarter of 2013.

Fair Value Measurements on a Non-Recurring Basis

The Company measures non-financial assets and liabilities such as property and equipment and intangible assets at fair value on a nonrecurring basis or when events or circumstances indicate that the carrying amount of the assets may be impaired. During the third quarter of 2012, the Company announced the reorganization of the Company's Mexico-based pawn lending operations. See Note 23 for impairment charges recognized during 2012 related to this reorganization.

Financial Assets and Liabilities Not Measured at Fair Value

The Company's financial assets and liabilities as of December 31, 2013 and 2012 that are not measured at fair value in the consolidated balance sheets are as follows (dollars in thousands):

		Carrying Value		Estimated Fair Value
		December 31,		December 31,		Fair Value Measurement Using
		2013		2013		Level 1		Level 2		Level 3
	Financial assets:
	Cash and cash equivalents	$	69,238	$	69,238	$	69,238	$	-	$	-
	Pawn loans		261,148		261,148		-		-		261,148
	Short-term loans and line of credit accounts, net(a)		202,829		202,829		-		-		202,829
	Installment loans, net(a)		156,012		156,012		-		-		156,012
	Pawn loan fees and service charges receivable		53,438		53,438		-		-		53,438
	Total	$	742,665	$	742,665	$	69,238	$	-	$	673,427
	Financial liabilities:
	Liability for estimated losses on consumer loans guaranteed by the Company	$	3,080	$	3,080	$	-	$	-	$	3,080
	Domestic and Multi-currency Line of credit		193,717		207,426		-		207,426		-
	Senior unsecured notes		444,515		430,554		-		430,554		-
	2029 Convertible Notes		101,757		155,788		-		155,788		-
	Total	$	743,069	$	796,848	$	-	$	793,768	$	3,080
		Carrying Value		Estimated Fair Value
		December 31,		December 31,		Fair Value Measurement Using
		2012		2012		Level 1		Level 2		Level 3
	Financial assets:
	Cash and cash equivalents	$	63,134	$	63,134	$	63,134	$	-	$	-
	Pawn loans		244,640		244,640		-		-		244,640
	Short-term loans and line of credit accounts, net(a)		184,908		184,908		-		-		184,908
	Installment loans, net(a)		104,510		104,510		-		-		104,510
	Pawn loan fees and service charges receivable		48,991		48,991		-		-		48,991
	Total	$	646,183	$	646,183	$	63,134	$	-	$	583,049
	Financial liabilities:
	Liability for estimated losses on consumer loans guaranteed by the Company	$	3,498	$	3,498	$	-	$	-	$	3,498
	Domestic and Multi-currency Line of credit		301,011		309,969		-		309,969		-
	Senior unsecured notes		167,122		165,961		-		165,961		-
	2029 Convertible Notes		110,197		186,300		-		186,300		-
	Total	$	581,828	$	665,728	$	-	$	662,230	$	3,498
(a)a a	Short-term loans, line of credit accounts and installment loans are included in "Consumer loans, net" on the consolidated balance sheets.

Cash and cash equivalents bear interest at market rates and have maturities of less than 90 days.

Pawn loans generally have maturity periods of less than 90 days. If a pawn loan defaults, the Company disposes of the collateral. Historically, collateral has sold for an amount in excess of the principal amount of the loan.

Short-term loans, line of credit accounts and installment loans are carried in the consolidated balance sheet net of the allowance for estimated loan losses, which is calculated by applying historical loss rates combined with recent default trends to the gross consumer loan balance. The unobservable inputs used to calculate the fair value of these loans include historical loss rates, recent default trends and estimated remaining loan terms; therefore, the carrying value approximated the fair value. Short-term loans and line of credit accounts have relatively short maturity periods that are generally 12 months or less. The fair value of unsecured and secured installment loans are estimated using a discounted cash flow analysis, which considers interest rates offered for loans with similar terms to borrowers of similar credit quality. The carrying values of the Company's installment loans approximate the fair value of these loans.

Pawn loan fees and service charges receivable are accrued ratably over the term of the loan based on the portion of these pawn loans deemed collectible. The Company uses historical performance data to determine collectability of pawn loan fees and service charges receivable. Additionally, pawn loan fee and service charge rates are determined by regulations and bear no valuation relationship to the capital markets' interest rate movements.

In connection with its CSO programs, the Company guarantees consumer loan payment obligations to unrelated third-party lenders for short-term loans and secured auto-equity loans and is required to purchase any defaulted loans it has guaranteed. The estimated fair value of the liability for estimated losses on consumer loans guaranteed by the Company of $3.1 million and $3.5 million as of December 31, 2013 and 2012, respectively. The Company measures the fair value of its liability for third-party lender-owned consumer loans under Level 3 inputs. The fair value of these liabilities is calculated by applying historical loss rates combined with recent default trends to the gross consumer loan balance. The unobservable inputs used to calculate the fair value of these loans include historical loss rates, recent default trends and estimated remaining loan terms; therefore, the carrying value of these liabilities approximated the fair value.

The Company measures the fair value of long-term debt instruments using Level 2 inputs. The fair values of the Company's long-term debt instruments are estimated based on market values for debt issues with similar characteristics or rates currently available for debt with similar terms. As of December 31, 2013, the Company's Domestic and Multi-currency Line of credit had a higher fair market value than the carrying value due to the difference in yield when compared to recent issuances of similar types of credit. As of December 31, 2013, the Company's senior unsecured notes had a lower fair market value than the carrying value due to the difference in yield when compared to recent issuances of similar senior unsecured notes. As of December 31, 2013, the 2029 Convertible Notes had a higher fair value than carrying value due to the Company's stock price as of each period presented above exceeding the applicable conversion price for the 2029 Convertible Notes, thereby increasing the value of the instrument for noteholders.