DERIVATIVE INSTRUMENTS

12 Months Ended

Sep. 30, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS

DERIVATIVE INSTRUMENTS

As of September 30, 2012, the Company does not directly engage in derivative activities. As of September 30, 2012, included in Accumulated Other Comprehensive Income (Loss) were net unrealized losses of $13,000 (net of tax benefit of $9,000) related to the Company's equity interests in the hedging activity of LEAF. As of September 30, 2011, included in accumulated other comprehensive loss were unrealized net losses of $181,000 (net of tax benefit and noncontrolling interests of $223,000) related to four LEAF interest rate swap contracts.

In addition, included in accumulated other comprehensive loss as of September 30, 2012 and 2011 is a net unrealized loss of $9,000 (net of tax benefit of $6,000) and $41,000 (net of tax benefit of $28,000) for instruments held by the commercial finance investment funds in which the Company owns an equity interest. The Company recognized no gains or losses during fiscal 2011 for hedge ineffectiveness.

Prior to the deconsolidation of LEAF, the Company’s investments in commercial finance assets had been structured on a fixed-rate basis, but some of the borrowings on those assets were obtained on a floating-rate basis.  As a result, the Company was exposed to risk if interest rates rose, which in turn, would have increased the Company’s borrowing costs.  In addition, when the Company acquired commercial finance assets, it based its pricing, in part, on the spread it expected to achieve between the interest rate it charged its customers and the effective interest cost the Company paid when it funded the respective borrowings.  Increases in interest rates that increased the Company’s permanent funding costs between the time the assets were originated and the time they were funded could have narrowed, would have eliminated or even reversed this spread.  In conjunction with the securitization of its commercial finance assets in October 2011, three of the four outstanding swap contracts were terminated.

Historically, to manage its interest rate risk, LEAF employed a hedging strategy using derivative financial instruments such as interest rate swaps, which were designated as cash flow hedges.  Accordingly, changes in fair value of those derivatives were recorded in accumulated other comprehensive loss and were subsequently reclassified into earnings when the hedged forecasted interest payments were recognized in earnings.  LEAF did not use derivative financial instruments for trading or speculative purposes.  LEAF managed the credit risk of possible counterparty default in the derivative transactions by dealing exclusively with counterparties with high credit quality.  As of September 30, 2011, the fair value of derivatives in a net liability position related to these agreements was $404,000, net of accrued interest, and for which LEAF had posted $300,000 in cash collateral as security for any unfunded liability.

Derivative instruments were reported at fair value as of September 30, 2011 as follows (in thousands, except number of contracts):

	Notional Amount		Termination Date of Swap	Derivative Liability Reported in Accrued Expenses and Other Liabilities		Number of Contracts
Interest rate swaps designated as cash flow hedges	$	60,615	March 15, 2015	$	404	4