Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2013

Fair Value Measurements

Schedule of fair values and carrying values of financial instruments and fair value hierarchy based on the level of inputs utilized to determine such fair value

	Fair Value Measurements Using						Total		Total
							Fair		Carrying
(dollars in thousands)	Level 1		Level 2		Level 3		Value		Value
March 31, 2013
Assets
Cash and cash equivalents	$	1,608,702	$	-	$	-	$	1,608,702	$	1,608,702
Investment securities	284		609,599		29,807		639,690		639,690
Net finance receivables, less allowance for finance receivable losses	-		-		11,331,671		11,331,671		11,217,721
Note receivable from parent	-		537,989		-		537,989		537,989
Restricted cash	178,786		-		-		178,786		178,786
Other assets:
Commercial mortgage loans	-		-		100,125		100,125		109,566
Cross currency interest rate derivatives	-		14,049		-		14,049		14,049
Escrow advance receivable	-		-		18,140		18,140		18,140
Receivable from parent and affiliates	-		16,561		-		16,561		16,561
Liabilities
Long-term debt	$	-	$	13,380,346	$	-	$	13,380,346	$	12,387,034
December 31, 2012
Assets
Cash and cash equivalents	$	1,357,212	$	-	$	-	$	1,357,212	$	1,357,212
Investment securities	255		639,148		29,767		669,170		669,170
Net finance receivables, less allowance for finance receivable losses (a)	-		-		11,608,720		11,608,720		11,516,591
Note receivable from parent	-		537,989		-		537,989		537,989
Restricted cash (b)	113,703		-		-		113,703		113,703
Other assets:
Commercial mortgage loans	-		-		99,933		99,933		110,398
Cross currency interest rate derivatives	-		26,699		-		26,699		26,699
Escrow advance receivable (b)	-		-		18,520		18,520		18,520
Receivable from parent and affiliates (b)	-		16,196		-		16,196		16,196
Liabilities
Long-term debt	$	-	$	12,912,712	$	-	$	12,912,712	$	12,454,316
Payable to affiliate	-		30,750		-		30,750		30,750

(a) At December 31, 2012, the fair value of our net finance receivables, less allowance for finance receivable losses in the table above was previously incorrectly understated by $177.0 million and has been corrected.

(b) At December 31, 2012, restricted cash, escrow advance receivable, and receivable from parent and affiliates as presented in the table above were previously incorrectly excluded and have been added to the table above.

Schedule of information about assets and liabilities measured at fair value on a recurring basis and the fair value hierarchy based on the levels of inputs utilized to determine such fair value

	Fair Value Measurements Using						Total Carried
(dollars in thousands)	Level 1		Level 2		Level 3		At Fair Value
March 31, 2013
Assets
Cash and cash equivalents in mutual funds	$	1,113,743	$	-	$	-	$	1,113,743
Investment securities:
Bonds:
U.S. government and government sponsored entities	-		38,839		-		38,839
Obligations of states, municipalities, and political subdivisions	-		129,533		-		129,533
Corporate debt	-		251,502		13,877		265,379
RMBS	-		168,490		65		168,555
CMBS	-		15,209		2		15,211
CDO/ABS	-		6,026		13,172		19,198
Total	-		609,599		27,116		636,715
Other long-term investments (a)	-		-		1,340		1,340
Common stocks (b)	284		-		-		284
Total investment securities	284		609,599		28,456		638,339
Restricted cash in mutual funds	150,448		-		-		150,448
Other assets - cross currency interest rate derivatives	-		14,049		-		14,049
Total	$	1,264,475	$	623,648	$	28,456	$	1,916,579
December 31, 2012
Assets
Cash and cash equivalents in mutual funds (c)	$	630,227	$	-	$	-	$	630,227
Investment securities:
Bonds:
U.S. government and government sponsored entities	-		36,442		-		36,442
Obligations of states, municipalities, and political subdivisions	-		140,224		-		140,224
Corporate debt	-		274,272		13,417		287,689
RMBS	-		172,135		74		172,209
CMBS	-		12,899		153		13,052
CDO/ABS	-		3,176		13,392		16,568
Total	-		639,148		27,036		666,184
Other long-term investments (a)	-		-		1,380		1,380
Common stocks (b)	255		-		-		255
Total investment securities	255		639,148		28,416		667,819
Restricted cash in mutual funds (d)	93,781		-		-		93,781
Other assets - cross currency interest rate derivatives	-		26,699		-		26,699
Total	$	724,263	$	665,847	$	28,416	$	1,418,526

(a) Other long-term investments excludes our interest in a limited partnership of $0.6 million at March 31, 2013 and December 31, 2012 that we account for using the equity method.

(b) Common stocks excludes stocks not carried at fair value of $0.7 million at March 31, 2013 and December 31, 2012.

(c) At December 31, 2012, cash and cash equivalents in mutual funds measured at fair value on a recurring basis as presented in the table above, previously incorrectly excluded mutual funds of $565.3 million that were utilized for our daily liquidity needs and for principal and interest payments on our long-term debt.  The cash and cash equivalents in mutual funds at December 31, 2012 has been added to the table above.

(d) At December 31, 2012, restricted cash in mutual funds measured at fair value on a recurring basis as presented in the table above were previously incorrectly excluded.  Restricted cash in mutual funds at December 31, 2012 have been added to the table above.

Schedule of changes in Level 3 assets and liabilities measured at fair value on a recurring basis

The following table presents changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the three months ended March 31, 2013:

			Net gains (losses) included in:
									Purchases,
									sales,
	Balance at					Other			issues,			Transfers		Transfers		Balance
	beginning		Other			comprehensive			settlements			into		out of		at end of
(dollars in thousands)	of period		revenues			income (loss)			(a)			Level 3		Level 3		period
Three Months Ended
March 31, 2013
Investment securities:
Bonds:
Corporate debt	$	13,417	$	(169	)	$	510		$	119		$	-	$	-	$	13,877
RMBS	74		(34		)	25			-			-		-		65
CMBS	153		(8		)	6			(149		)	-		-		2
CDO/ABS	13,392		111			(109		)	(222		)	-		-		13,172
Total	27,036		(100		)	432			(252		)	-		-		27,116
Other long-term investments (b)	1,380		-			(40		)	-			-		-		1,340
Total investment securities	$	28,416	$	(100	)	$	392		$	(252	)	$	-	$	-	$	28,456

(a) “Purchases, sales, issues, and settlements” column only consist of settlements. There were no purchases, sales, or issues of investment securities for the three months ended March 31, 2013.

(b) Other long-term investments excludes our interest in a limited partnership of $0.6 million at March 31, 2013 that we account for using the equity method.

The following table presents changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the three months ended March 31, 2012:

			Net gains (losses) included in:
									Purchases,
									sales,
	Balance at					Other			issues,			Transfers		Transfers		Balance
	beginning		Other			comprehensive			settlements			into		out of		at end of
(dollars in thousands)	of period		revenues			income (loss)			(a)			Level 3		Level 3		period
Three Months Ended
March 31, 2012
Investment securities:
Bonds:
Corporate debt	$	2,800	$	3		$	184		$	(2,987	)	$	-	$	-	$	-
RMBS	1,914		(4		)	(7		)	(55		)	-		-		1,848
CMBS	7,944		(4		)	601			(174		)	-		-		8,367
CDO/ABS	8,916		38			762			(104		)	-		-		9,612
Total	21,574		33			1,540			(3,320		)	-		-		19,827
Other long-term investments (b)	4,127		-			295			(936		)	-		-		3,486
Common stocks	3		(5		)	2			-			-		-		-
Total investment securities	$	25,704	$	28		$	1,837		$	(4,256	)	$	-	$	-	$	23,313

(a) “Purchases, sales, issues, and settlements” column only consist of settlements. There were no purchases, sales, or issues of investment securities for the three months ended March 31, 2012.

(b) Other long-term investments excludes our interest in a limited partnership of $1.4 million at March 31, 2012 that we account for using the equity method.

Quantitative information about Level 3 inputs for assets measured on a recurring basis

			Range (Weighted Average)
	Valuation Technique(s)	Unobservable Input	March 31, 2013	December 31, 2012
Corporate debt	Discounted cash flows	Yield	2.67% - 7.35% (4.38%)	2.74% - 7.35% (4.45%)
Other long-term investments	Discounted cash flows and indicative valuations	Historical costs Nature of investment Local market conditions Comparables Operating performance Recent financing activity	N/A*	N/A*

*    Not applicable.

Schedule of assets measured at fair value on a non-recurring basis on which impairment charges were recorded

	Fair Value Measurements Using
(dollars in thousands)	Level 1		Level 2		Level 3		Total
March 31, 2013
Assets
Real estate owned	$	-	$	-	$	82,803	$	82,803
Commercial mortgage loans	-		-		19,018		19,018
Total	$	-	$	-	$	101,821	$	101,821
December 31, 2012
Assets
Real estate owned	$	-	$	-	$	98,379	$	98,379
Commercial mortgage loans*	-		-		19,037		19,037
Total	$	-	$	-	$	117,416	$	117,416

*    At December 31, 2012, commercial mortgage loans as presented in the table above were previously incorrectly excluded and have been added to the table above.

Schedule of net impairment charges recorded on assets measured at fair value on a non-recurring basis

(dollars in thousands)
Three Months Ended March 31,	2013			2012
Assets
Real estate owned	$	7,880		$	13,324
Commercial mortgage loans*	(128		)	866
Finance receivables held for sale	-			1,371
Total	$	7,752		$	15,561

*    For the three months ended March 31, 2012, commercial mortgage loans as presented in the table above were previously incorrectly excluded and have been added to the table above.

Quantitative information about Level 3 inputs for assets measured on a nonrecurring basis

			Range (Weighted Average)
	Valuation Technique(s)	Unobservable Input	March 31, 2013	December 31, 2012
Real estate owned	Market approach	Third-party valuation	N/A*	N/A*
Commercial mortgage loans	Market approach	Local market conditions Nature of investment Comparable property sales Operating performance	N/A*	N/A*
Finance receivables held for sale	Market approach	Negotiated prices with prospective purchasers	N/A*	N/A*

*    Not applicable.