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Fair Value Measurements

12 Months Ended

Mar. 31, 2020

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The inputs used to measure fair value are prioritized based on a three-level valuation hierarchy, which is comprised of observable and non-observable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's market assumptions. These three levels of inputs create the following fair value hierarchy:

•Level 1 inputs - Quoted prices in active markets for identical assets or liabilities.

•Level 2 inputs - Quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, and observable inputs (other than quoted prices) for the assets or liabilities.

•Level 3 inputs - Unobservable inputs for the assets or liabilities.

The following summarizes assets and liabilities measured at fair value on a recurring basis:


	March 31, 2020										March 31, 2019
	Level 2		Level 3		Total Assets / Liabilities, at Fair Value		Level 2		Level 3		Total Assets / Liabilities, at Fair Value
Financial assets
Derivative financial instruments	$	—	$	—	$	—	$	186	$	—	$	186
Securitized beneficial interests	—		27,021		27,021		—		40,332		40,332
Total assets	$	—	$	27,021	$	27,021	$	186	$	40,332	$	40,518
Financial liabilities
Long-term debt	$	358,782	$	848	$	359,630	$	830,082	$	703	$	830,785
Guarantees	—		2,791		2,791		—		3,714		3,714
Total liabilities	$	358,782	$	3,639	$	362,421	$	830,082	$	4,417	$	834,499

Level 2 measurements

•Debt: The fair value of debt is based on the market price for similar financial instruments or model-derived valuations with observable inputs. The primary inputs to the valuation include market expectations, the Company's credit risk, and the contractual terms of the debt instrument.

•Derivatives: The fair value of derivatives is based on the discounted cash flow analysis of the expected future cash flows. The primary inputs to the valuation include forward yield curves, implied volatilities, LIBOR rates, and credit valuation adjustments.

Level 3 measurements

•Guarantees: The fair value of guarantees is based on the discounted cash flow analysis of the expected future cash flows or historical loss rates. Should the loss rate change 10% or 20%, the fair value of the guarantee at March 31, 2020 would change by $279 and $558, respectively. The historical loss rate was weighted by the principal balance of the loans.

•Securitized beneficial interests: The fair value of securitized beneficial interests is based on the present value of future expected cash flows. Since the discount rate and the payment speed are components of the same equation, a change in either by 10% or 20% would change the value of the recorded beneficial interest at March 31, 2020 by $133 and $267, respectively. The discount rate was weighted by the outstanding interest. Payment speed was weighted by the average days outstanding.

Reconciliation of Change in Recurring Level 3 Balances

The following summarizes the changes in Level 3 instruments measured on a recurring basis.


	Securitized Beneficial Interests		Guarantees
Beginning balance March 31, 2018	$	48,715	$	5,864
Sales of receivables/issuance of guarantees	247,386		4,969
Settlements	(250,365)		(6,109)
Losses recognized in earnings	(5,404)		(1,010)
Ending balance at March 31, 2019	40,332		3,714
Sales of receivables/issuance of guarantees	229,751		2,982
Settlements	(238,437)		(3,802)
Losses recognized in earnings	(4,625)		(103)
Ending Balance at March 31, 2020	$	27,021	$	2,791

The amount of total losses included in earnings for the years ended March 31, 2020 and 2019 attributable to the change in unrealized losses relating to assets still held at the respective dates was $951 and $1,289 on securitized beneficial interests. Gains and losses included in earnings are reported in other income, net.

Information about Fair Value Measurements Using Significant Unobservable Inputs

The following summarizes significant unobservable inputs and the valuation techniques utilized:

Fair value at March 31, 2020

Valuation Technique

Unobservable Input

Range (Weighted Average)

Securitized Beneficial Interests

27,021

Discounted Cash Flow

Discount Rate

3.44% to 3.45%

Payment Speed

77 days to 100 days

Tobacco Supplier Guarantees

2,536

Historical Loss

2.20% to 10.00%

255

Discounted Cash Flow

Market Interest Rate

15.00% to 75.80%

Fair value at March 31, 2019

Valuation Technique

Unobservable Input

Range (Weighted Average)

Securitized Beneficial Interests

40,332

Discounted Cash Flow

Discount Rate

5.0% to 6.5%

Payment Speed

67 days to 80 days

Tobacco Supplier Guarantees

3,502

Historical Loss

2.4% to 10.0%

212

Discounted Cash Flow

Market Interest Rate

15.0% to 70.0%

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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