Derivative Instruments and Hedging Activities

12 Months Ended

Sep. 30, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities

NOTE 22: DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Derivative Instruments Previously Designated as Cash Flow Hedging Instruments

During the third quarter ended June 30, 2013, Grupo Finmart completed a $30.0 million cross-border debt offering for which it has to pay interest on a semiannual basis at a fixed rate. Grupo Finmart uses derivative instruments (the “foreign currency forwards”) to manage its exposure related to changes in foreign currency exchange rate on this instrument through its maturity on November 16, 2015. Grupo Finmart does not enter into derivative instruments for any purpose other than cash flow hedging.

At the beginning of the quarter ended December 31, 2014, we discontinued hedge accounting for our foreign currency forwards due to a determination that repayment of the $30.0 million cross-border debt was to occur prior to maturity. As such, not all of the forecasted interest payments were expected to occur. Grupo Finmart received proceeds of $2.3 million from settlement of the portion of the foreign currency forwards attributable to the repaid cross-border debt during the quarter ended December 31, 2014. See Note 9, 9% Unsecured Notes Due 2015, for additional discussion of the cross-border debt.

The following tables set forth certain information regarding our derivative instruments discontinued as cash flow hedging instruments:

		Fair Value of Derivative Instruments
Derivative Instrument	Balance Sheet Location	September 30, 2015		September 30, 2014
		(in thousands)
Foreign currency forwards	Prepaid expenses and other current assets	$	3,488	$	2,420

	Amount of (Loss) Gain Recognized in Other Comprehensive Income on Derivatives
	Fiscal Year Ended September 30,
Derivative Instrument	2015		2014			2013
	(in thousands)
Foreign currency forwards	$	—	$	(453	)	$	2,388

		Amount of Loss (Gain) on Derivatives Reclassified into Income from Accumulated Other Comprehensive Income
		Fiscal Year Ended September 30,
Derivative Instrument	Location of Gain	2015			2014		2013
		(in thousands)
Foreign currency forwards	Other expense	$	(457	)	$	49	$	(2,536	)

Derivative Instruments not Designated as Hedging Instruments

As described in Note 9, in June 2014 we issued and settled $200.0 million aggregate principal amount of Cash Convertible Notes. We granted the initial purchasers the option to purchase up to an additional $30.0 million aggregate principal amount of Cash Convertible Notes. On June 27, 2014, such option was exercised in full. On July 2, 2014, the purchase of the additional $30.0 million of Cash Convertible Notes was settled. The conversion feature of the Cash Convertible Notes can only be settled in cash and is required to be bifurcated from the Cash Convertible Notes and treated as a separate derivative instrument. In order to offset the cash flow risk associated with the Convertible Notes Embedded Derivative, we purchased Convertible Notes Hedges, which are accounted for as derivative instruments. The Convertible Notes Embedded Derivative and the Convertible Notes Hedges are adjusted to fair value each reporting period and unrealized gains and losses are reflected in the consolidated income statements. We expect that the realized gain or loss from the Convertible Notes Hedges will substantially offset the realized loss or gain of the Convertible Notes Embedded Derivative upon maturity of the Convertible Notes. See Note 21 for additional information regarding the fair values of the Convertible Notes Embedded Derivative and the Convertible Notes Hedges.

During the fiscal years ended September 30, 2015 and 2014, Grupo Finmart entered into a cross currency forward contract in connection with the formation of the VIEs and the related transfers of certain loans described in Note 24. The Company guarantees the future cash outflows of the forward contract, which is included in the Company’s consolidated balance sheets and adjusted to fair value each reporting period through earnings.

The following tables set forth certain information regarding our derivative instruments not designated as hedging instruments:

		Fair Value of Derivative Instruments
Derivative Instrument	Balance Sheet Location	September 30, 2015			September 30, 2014
		(in thousands)
Foreign currency forwards	Prepaid expenses and other current assets	$	10,681		$	1,152
Convertible Notes Hedges	Other assets, net	10,505			36,994
Cash Convertible Notes Embedded Derivative	Long-term debt, less current maturities	(10,505		)	(36,994		)

		Amount of Unrealized Gain on Derivatives
		Fiscal Year Ended September 30,
Derivative Instrument	Income Statement Location	2015		2014		2013
		(in thousands)
Foreign currency forwards	Other expense	$	9,529	$	1,152	$	—