13.	Fair Value Measurements

Recurring Fair Value Measurements

In accordance with ASC 820, Fair Value Measurements and Disclosures, 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.

During the three months ended March 31, 2016 and 2015, there were no transfers of assets or liabilities in or out of Level 1, Level 2 or Level 3 fair value measurements. It is the Company’s policy to value any transfers between levels of the fair value hierarchy based on end of period fair values.

The Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2016 and 2015 and December 31, 2015 are as follows (dollars in thousands):

	March 31,			Fair Value Measurements Using
	2016			Level 1		Level 2			Level 3
Financial assets (liabilities):
Non-qualified savings plan assets⁽¹⁾		1,545			1,545		—			—
Contingent consideration		(5,658	)		—		—			(5,658	)
Total	$	(4,113	)	$	1,545	$	—		$	(5,658	)

	March 31,			Fair Value Measurements Using
	2015			Level 1		Level 2			Level 3
Financial assets (liabilities):
Forward currency exchange contracts	$	(125	)	$	—	$	(125	)	$	—
Non-qualified savings plan assets⁽¹⁾		1,158			1,158		—			—
Total	$	1,033		$	1,158	$	(125	)	$	—

	December 31,			Fair Value Measurements Using
	2015			Level 1		Level 2			Level 3
Financial assets (liabilities):
Forward currency exchange contracts	$	151		$	—	$	151		$	—
Non-qualified savings plan assets⁽¹⁾		1,075			1,075		—			—
Contingent consideration		(5,658	)		—		—			(5,658	)
Total	$	(4,432	)	$	1,075	$	151		$	(5,658	)

(1)	The non-qualified savings plan assets are included in “Other receivables and prepaid expenses” in the Company’s consolidated balance sheets and have an offsetting liability of equal amount, which is included in “Accounts payable and accrued expenses” in the Company’s consolidated balance sheets.

The Company measures the fair value of its forward currency exchange contracts under Level 2 inputs as defined by ASC 820. For these forward currency exchange contracts, current market rates are used to determine fair value. The significant inputs used in these models are derived from observable market rates. The fair value of the nonqualified savings plan assets are measured under a Level 1 input. These assets are publicly traded equity securities for which market prices are readily observable.

The Company determined the fair value of the liability for the contingent consideration based on a probability-weighted discounted cash flow analysis. This analysis reflects the contractual terms of the purchase agreement and utilizes assumptions with regard to future earnings, probabilities of achieving such future earnings, the timing of expected payments and a discount rate. Significant increases with respect to assumptions as to future earnings and probabilities of achieving such future earnings would result in a higher fair value measurement while an increase in the discount rate would result in a lower fair value measurement. The fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement as defined in the fair value hierarchy.

The changes in the fair value of the contingent consideration, which is a Level 3 liability measured at fair value on a recurring basis, are summarized in the table below for the three months ended March 31, 2016 (dollars in thousands):

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Contingent consideration		Total
Balance at December 31, 2015	$	5,658	$	5,658
Adjustments		—		—
Balance at March 31, 2016	$	5,658	$	5,658

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 non-recurring basis or when events or circumstances indicate that the carrying amount of the assets may be impaired. At March 31, 2016 and 2015 and December 31, 2015, there were no assets or liabilities recorded at fair value on a non-recurring basis.

Financial Assets and Liabilities Not Measured at Fair Value

The Company’s financial assets and liabilities as of March 31, 2016 and 2015 and December 31, 2015 that are not measured at fair value in the consolidated balance sheets are as follows (dollars in thousands):

	Balance at
	March 31,		Fair Value Measurements Using
	2016		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	112,211	$	112,211	$	—	$	—
Short-term loans and line of credit accounts, net ⁽¹⁾		123,755		—		—		123,755
Installment loans and RPAs, net ⁽¹⁾⁽⁴⁾		304,447		—		—		283,871
Restricted cash ⁽⁵⁾		20,908		20,908		—		—
Investment in unconsolidated investee⁽²⁾⁽³⁾		6,703		—		—		6,703
Total	$	568,024	$	133,119	$	—	$	414,329
Financial liabilities:
Liability for estimated losses on consumer loans guaranteed by the Company	$	1,182	$	—	$	—	$	1,182
Promissory note		3,000		—		—		3,019
Securitization Notes		113,913		—		113,913		—
Senior Notes		495,049		—		371,500		—
Total	$	613,144	$	—	$	485,413	$	4,201

	Balance at
	March 31,		Fair Value Measurements Using
	2015		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	143,444	$	143,444	$	—	$	—
Short-term loans and line of credit accounts, net ⁽¹⁾		100,124		—		—		100,124
Installment loans and RPAs, net ⁽¹⁾		178,931		—		—		178,931
Restricted cash		7,410		7,410		—		—
Investment in unconsolidated investee⁽²⁾⁽³⁾		6,703		—		—		6,703
Total	$	436,612	$	150,854	$	—	$	285,758
Financial liabilities:
Liability for estimated losses on consumer loans guaranteed by the Company	$	945	$	—	$	—	$	945
Senior Notes		494,347		—		475,000		—
Total	$	495,292	$	—	$	475,000	$	945

	Balance at
	December 31,		Fair Value Measurements Using
	2015		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	42,066	$	42,066	$	—	$	—
Short-term loans and line of credit accounts, net ⁽¹⁾		129,269		—		—		129,269
Installment loans and RPAs, net ⁽¹⁾		305,364		—		—		283,700
Restricted cash		7,379		7,379		—		—
Investment in unconsolidated investee⁽²⁾⁽³⁾		6,703		—		—		6,703
Total	$	490,781	$	49,445	$	—	$	419,672
Financial liabilities:
Liability for estimated losses on consumer loans guaranteed by the Company	$	1,756	$	—	$	—	$	1,756
Promissory note		3,000		—		—		2,984
Credit agreement borrowings		58,400		—		—		58,400
Senior Notes		494,867		—		374,500		—
Total	$	558,023	$	—	$	374,500	$	63,140

(1)	Short-term loans, line of credit accounts, installment loans and RPAs are included in “Loans and finance receivables, net” in the consolidated balance sheets.

(2)	Investment in unconsolidated investee is included in “Other assets” in the consolidated balance sheets.

(3)	See Note 4 for additional information related to the investment in unconsolidated investee.

(4)	Installment loan and RPAs, net include $138.3 million in net assets of consolidated VIEs as of March 31, 2016.

(5)	Restricted cash includes $13.7 million in assets of consolidated VIEs as of March 31, 2016.

Cash and cash equivalents and restricted cash bear interest at market rates and have original maturities of less than 90 days. The carrying amount of restricted cash and cash equivalents approximates fair value.

Short-term loans, line of credit accounts, installment loans and RPAs are carried in the consolidated balance sheet net of the allowance for estimated losses, which is calculated by applying historical loss rates combined with recent default trends to the gross receivable balance. Short-term loans and line of credit accounts have relatively short maturity periods that are generally 12 months or less. The unobservable inputs used to calculate the fair value of these receivables include historical loss rates, recent default trends and estimated remaining loan term; therefore, the carrying value approximates the fair value. The fair value of installment loans and RPAs is estimated using discounted cash flow analyses, which consider interest rates on loans and discounts offered for receivables with similar terms to customers with similar credit quality, the timing of expected payments, estimated customer default rates and/or valuations of comparable portfolios. The fair value of the Company’s installment loans and RPAs is lower than the carrying value of these loans and finance receivables. Unsecured installment loans typically have terms between two and 60 months. RPAs typically have estimated delivery terms between six and 36 months.

In connection with its CSO programs, the Company guarantees consumer loan payment obligations to unrelated third-party lenders for short-term and installment loans the Company arranges for consumers on the third-party lenders’ behalf 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 was $1.2 million, $0.9 million and $1.7 million as of March 31, 2016 and 2015 and December 31, 2015, 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 approximates the fair value.

The Company measures the fair value of the Promissory Note using Level 3 inputs. The fair value of the Promissory Note is estimated using a discounted cash flow analysis. As of March 31, 2016 and December 31, 2015, the Promissory Note had a lower fair value than the carrying value.

The Company measures the fair value of its Securitization Notes using Level 2 inputs. The fair value of the Company’s Senior Notes is estimated based on quoted prices in markets that are not active. As of March 31, 2016, the fair value of the Company’s Securitization Notes approximated the carrying value.

The Company measures the fair value of its Credit Agreement borrowings using Level 3 inputs. The Company considered the fair value of its other long-term debt and the timing of expected payment(s). As of December 31, 2015, the fair value of the Company’s Credit Agreement borrowings approximated the carrying value.

The Company measures the fair value of its Senior Notes using Level 2 inputs. The fair value of the Company’s Senior Notes is estimated based on quoted prices in markets that are not active. As of March 31, 2016 and 2015 and December 31, 2015, the Company’s Senior Notes had a lower fair market value than the carrying value based on the price of the last trade of the Senior Notes.

The Company measures the fair value of its investment in unconsolidated investee using Level 3 inputs. Because the unconsolidated investee is a private company and financial information is limited, the Company estimates the fair value based on the best available information at the measurement date. As of March 31, 2016 and 2015 and December 31, 2015 the Company estimated the fair value of its investment to be approximately equal to the book value.