| Business and Summary of Significant Accounting Policies | BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES For a discussion of trends that we believe have affected our business during the periods covered by these financial statements, see Part I, Item 2. "Management’s Discussion and Analysis of Financial Condition and Results of Operations", including the "Highlights," "Consolidated Results of Operations" and "Liquidity and Capital Resources", below, and Part I, Item 1A "Risk Factors" of our Annual Report on Form 10-K, filed with the United States Securities and Exchange Commission on March 1, 2023 (the "2022 Annual Report"). Description of Business The Aaron's Company, Inc. (the "Company") is a leading, technology-enabled, omni-channel provider of lease-to-own ("LTO") and retail purchase solutions of furniture, electronics, appliances, and other home goods across its brands: Aaron's, BrandsMart U.S.A., BrandsMart Leasing, and Woodhaven Furniture Industries ("Woodhaven"). Unless the context otherwise requires or we specifically indicate otherwise, references to "we," "us," "our," and the "Company," refer to The Aaron's Company, Inc., which holds, directly or indirectly, the Pre-Spin Aaron’s Business (as defined in "Item 1. Business - Description of 2020 Spin-off Transaction" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.) and all other subsidiaries of the Company, which are wholly owned, as well as other lines of business described above. As of September 30, 2023, the Company's operating and reportable segments are the Aaron's Business and BrandsMart, each as described below. Effective as of April 1, 2022 and in connection with the acquisition of BrandsMart U.S.A., the Company changed its composition of reportable segments to align the reportable segments with the current organizational structure and the operating results that the chief operating decision maker regularly reviews to analyze performance and allocate resources, which includes separate segments for the Aaron's Business and BrandsMart, along with an Unallocated Corporate category for remaining unallocated costs. The Aaron's Business segment is comprised of (i) Aaron's branded Company-operated and franchise-operated stores; (ii) aarons.com e-commerce platform ("aarons.com"); (iii) Woodhaven; and (iv) BrandsMart Leasing (collectively, the "Aaron’s Business"). The operations of BrandsMart U.S.A. (excluding BrandsMart Leasing) comprise the BrandsMart segment (collectively, "BrandsMart"). BrandsMart U.S.A. Acquisition On April 1, 2022, the Company completed the previously announced transaction to acquire a 100% ownership of Interbond Corporation of America, doing business as BrandsMart U.S.A. The Company paid total consideration of approximately $230 million in cash under the terms of the agreement and additional amounts for working capital adjustments and transaction related fees. Refer to Note 2 to these condensed consolidated financial statements for additional information regarding the BrandsMart U.S.A. acquisition. Management believes that the BrandsMart U.S.A. acquisition will strengthen the Company's ability to deliver on its mission of enhancing people’s lives by providing easy access to high quality furniture, appliances, electronics, and other home goods through affordable lease-to-own and retail purchase options. Management also believes that value creation opportunities include leveraging the Company's lease-to-own expertise to provide BrandsMart U.S.A.'s customers enhanced payment options and offering a wider selection of products to millions of Aaron's customers, as well as generating procurement savings and other cost synergies. Aaron's Business Segment Since its founding in 1955, Aaron's has been committed to serving the overlooked and underserved customer with a dedication to inclusion and improving the communities in which it operates. Through a portfolio of approximately 1,250 stores and its aarons.com e-commerce platform, Aaron's, together with its franchisees, provide consumers with LTO and retail purchase solutions for the products they need and want, with a focus on providing its customers with unparalleled customer service, high approval rates, lease plan flexibility, and an attractive value proposition, including competitive monthly payments and total cost of ownership, as compared to other LTO providers. Woodhaven manufactures and supplies a significant portion of the upholstered furniture leased and sold in Company-operated and franchised Aaron's stores. Launched in 2022, BrandsMart Leasing offers LTO purchase solutions to customers of BrandsMart U.S.A. BrandsMart Segment Founded in 1977, BrandsMart U.S.A. is one of the leading appliance and consumer electronics retailers in the southeast United States and one of the largest appliance retailers in the country with 11 stores in Florida and Georgia and a growing e-commerce presence on brandsmartusa.com. The operations of BrandsMart U.S.A. (other than BrandsMart Leasing) comprise the BrandsMart segment. The following table presents store count by ownership type: Stores as of September 30 (Unaudited) 2023 2022 Company-operated Aaron's Stores 1 1,024 1,034 GenNext (included in Company-Operated) 245 195 Franchisee-operated Aaron's Stores 227 234 BrandsMart U.S.A. Stores 2 11 10 Systemwide Stores 1,262 1,278 Company-operated Aaron's Store Types as of September 30, 2023 (Unaudited) GenNext Legacy Total Store 181 621 802 Hub 56 55 111 Showroom 8 103 111 Total 245 779 1,024 1 The typical layout for a Company-operated Aaron's store is a combination of showroom, customer service and warehouse space, averaging approximately 9,500 square feet. Certain Company-operated Aaron's stores consist solely of a showroom. 2 BrandsMart U.S.A. stores average approximately 100,000 square feet and have been included in this table subsequent to the acquisition date of April 1, 2022. Basis of Presentation The financial statements as of and for the three and nine months ended September 30, 2023 and comparable prior year periods are condensed consolidated financial statements of the Company and its subsidiaries, each of which is wholly-owned, and is based on the financial position and results of operations of the Company. Intercompany balances and transactions between consolidated entities have been eliminated. These condensed consolidated financial statements reflect the historical results of operations, financial position and cash flows of the Company in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). The preparation of the Company's condensed consolidated financial statements in conformity with U.S. GAAP for interim financial information requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates. The extent to which inflationary and other economic pressures will impact the Company's business will depend on future developments. These developments are uncertain and cannot be precisely predicted at this time. In many cases, management's estimates and assumptions are dependent on estimates of such future developments and may change in the future. The accompanying unaudited condensed consolidated financial statements do not include all information required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included in the accompanying unaudited condensed consolidated financial statements. These financial statements should be read in conjunction with the financial statements and notes thereto included in the 2022 Annual Report. The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of operating results that may be achieved for any other interim period or for the full year. Accounting Policies and Estimates See Note 1 to the consolidated and combined financial statements in the 2022 Annual Report for an expanded discussion of accounting policies and estimates. (Loss) Earnings Per Share Earnings per share is computed by dividing net earnings by the weighted average number of shares of common stock outstanding during the period. The computation of earnings per share assuming dilution includes the dilutive effect of stock options, restricted stock units ("RSUs"), restricted stock awards ("RSAs"), performance share units ("PSUs") and other awards issuable under the Company's 2020 Equity and Incentive Plan or employee stock purchase plan ("ESPP"), (collectively, "share-based awards"), as determined under the treasury stock method, unless the inclusion of such awards would have been anti-dilutive. The following table shows the calculation of weighted-average shares outstanding assuming dilution: Three Months Ended Nine Months Ended (Shares In Thousands) 2023 2022 2023 2022 Weighted Average Shares Outstanding 30,880 30,875 30,889 30,921 Dilutive Effect of Share-Based Awards 1 — — 342 452 Weighted Average Shares Outstanding Assuming Dilution 30,880 30,875 31,231 31,373 1 There was no dilutive effect of share-based awards for the three months ended September 30, 2023 and September 30, 2022, due to the net loss incurred in both periods. Approximately 1.2 million weighted-average share based awards were excluded from the computation of earnings per share assuming dilution during the nine months ended September 30, 2023, and 0.8 million during the nine months ended September 30, 2022, respectively, as the awards would have been anti-dilutive for the periods presented. Revenue Recognition The Company provides lease and retail merchandise, consisting of appliances, electronics, furniture, and other home goods to its customers for lease under certain terms agreed to by the customer and through retail sales. The Company's Aaron's stores, aarons.com e-commerce platform, and BrandsMart Leasing components of the Aaron's Business segment offer leases with flexible ownership plans that can be generally renewed weekly, bi-weekly, semi-monthly, or monthly up to 12, 18 or 24 months. The Aaron's Business segment also earns revenue from the sale of merchandise to customers and Aaron's franchisees, and earns ongoing revenue from Aaron's franchisees in the form of royalties and through advertising efforts that benefit the franchisees. The Company's BrandsMart U.S.A. stores and related brandsmartusa.com e-commerce platform offer the sale of merchandise directly to its customers via retail sales. See Note 5 to these condensed consolidated financial statements for further information regarding the Company's revenue recognition policies and disclosures. Advertising The Company expenses advertising costs as incurred. Advertising production costs are initially recognized as a prepaid advertising asset and are expensed when an advertisement appears for the first time. The prepaid advertising asset was $7.3 million and $4.6 million at September 30, 2023 and December 31, 2022, respectively, and is reported within prepaid expenses and other assets on the condensed consolidated balance sheets. Total advertising costs are classified within other operating expenses, net in the condensed consolidated statements of earnings. These advertising costs are presented net of cooperative advertising considerations received from vendors, which represents reimbursement of specific, identifiable and incremental costs incurred in selling those vendors’ products, and are recorded as a reduction of advertising costs. The following table shows total advertising costs, net of cooperative advertising consideration: Three Months Ended Nine Months Ended (In Thousands) 2023 2022 2023 2022 Advertising Costs, Gross $ 15,269 $ 16,092 $ 50,951 $ 55,794 Less: Cooperative Advertising Considerations (8,074) (8,294) (24,189) (24,651) Advertising Costs, Net $ 7,195 $ 7,798 $ 26,762 $ 31,143 Accounts Receivable Accounts receivable consist of receivables due from customers on lease agreements, corporate receivables incurred during the normal course of business (primarily for vendor consideration and third-party warranty providers), and franchisee obligations. Accounts receivable, net of allowances, consist of the following: (In Thousands) September 30, 2023 December 31, 2022 Customers $ 4,110 $ 9,721 Corporate 13,252 20,597 Franchisee 6,316 7,873 $ 23,678 $ 38,191 The Company maintains an accounts receivable allowance for the Aaron's Business customer lease agreements, under which its policy is to record a provision for returns and uncollectible contractually due renewal payments based on historical payments experience, which is recognized as a reduction of lease revenues and fees within the condensed consolidated statements of earnings. Other qualitative factors are considered in estimating the allowance, such as current and forecasted business trends. The Company writes off customer lease receivables for its Aaron's Business operations that are 60 days or more past due on pre-determined dates twice monthly. The Company writes off customer lease receivables for its BrandsMart Leasing operations that are 90 days or more past due on pre-determined dates twice monthly. The Company also maintains an allowance for outstanding franchisee accounts receivable. The Company's policy is to estimate future losses related to certain franchisees that are deemed to have a higher risk of non-payment and record an allowance for these estimated losses. The estimated allowance on franchisee accounts receivable includes consideration of the financial position of each franchisee and qualitative consideration of potential losses associated with uncertainties impacting the franchisee's ability to satisfy their obligations. Uncertainties include inflationary and other economic pressures in the current macroeconomic environment. Accordingly, actual accounts receivable write-offs could differ from the allowance. The provision for uncollectible franchisee accounts receivable is recorded as bad debt expense in other operating expenses, net within the condensed consolidated statements of earnings. The allowance related to corporate receivables is not significant as of September 30, 2023 and December 31, 2022. The following table shows the components of the accounts receivable allowance: Nine Months Ended (In Thousands) 2023 2022 Beginning Balance $ 8,895 $ 7,163 Accounts Written Off, net of Recoveries (29,151) (28,020) Accounts Receivable Provision 28,278 29,331 Ending Balance $ 8,022 $ 8,474 The following table shows the components of the accounts receivable provision, which includes amounts recognized for bad debt expense and the provision for returns and uncollected payments: Nine Months Ended (In Thousands) 2023 2022 Bad Debt Expense (Reversal) $ 25 $ (263) Provision for Returns and Uncollectible Renewal Payments 28,253 29,594 Accounts Receivable Provision $ 28,278 $ 29,331 Lease Merchandise The Company’s lease merchandise is recorded at the lower of depreciated cost, including overhead costs from our distribution centers, or net realizable value. The cost of merchandise manufactured by our Woodhaven operations is recorded at cost and includes overhead from production facilities, shipping costs and warehousing costs. The Company begins depreciating furniture and appliances at the earlier of the lease date or 24 months and one day from its purchase, while all other lease merchandise begins depreciating at the earlier of when the merchandise is leased to the customer or 12 months and one day from its purchase. Lease merchandise fully depreciates over the lease agreement period when on lease, generally 12 to 24 months, and generally 36 months when not on lease. Depreciation is accelerated upon early payout. The following is a summary of lease merchandise, net of accumulated depreciation and allowances: (In Thousands) September 30, 2023 December 31, 2022 Merchandise on Lease, net of Accumulated Depreciation and Allowances $ 395,625 $ 446,923 Merchandise Not on Lease, net of Accumulated Depreciation and Allowances 1 212,702 246,872 Lease Merchandise, net of Accumulated Depreciation and Allowances $ 608,327 $ 693,795 1 Includes Woodhaven raw materials, finished goods and work-in-process inventory that has been classified within lease merchandise in the condensed consolidated balance sheets of $9.8 million and $12.9 million as of September 30, 2023 and December 31, 2022, respectively. The Aaron's store-based operations' policies require weekly merchandise counts at its store-based operations, which include write-offs for unsalable, damaged, or missing merchandise inventories. Monthly cycle counting procedures are performed at both the Aaron's distribution centers and Woodhaven manufacturing facilities. Physical inventories are also taken at the manufacturing facilities annually. The Company also monitors merchandise levels and mix by division, store, and distribution center, as well as the average age of merchandise on hand. If obsolete merchandise cannot be returned to vendors, its carrying amount is adjusted to its net realizable value or written off. Generally, all merchandise not on lease is available for lease or sale. On a monthly basis, all damaged, lost or unsalable merchandise identified is written off and is included as a component of the provision for lease merchandise write-offs in the accompanying condensed consolidated statements of earnings. The Company records a provision for write-offs using the allowance method, which is included within lease merchandise, net within the condensed consolidated balance sheets. The allowance method for lease merchandise write-offs estimates the merchandise losses incurred but not yet identified by management as of the end of the accounting period based primarily on historical write-off experience. Other qualitative factors are considered in estimating the allowance, such as seasonality and the impacts of uncertainty surrounding inflationary and other economic pressures in the current macroeconomic environment and the normalization of business trends associated with the effects of the COVID-19 pandemic on our customers. Therefore, actual lease merchandise write-offs could differ from the allowance. The provision for write-offs is included in provision for lease merchandise write-offs in the accompanying condensed consolidated statements of earnings. The Company writes off lease merchandise on lease agreements for its Aaron's Business operations that are 60 days or more past due on pre-determined dates twice monthly. The Company writes off lease merchandise on lease agreements for its BrandsMart Leasing operations that are 90 days or more past due on pre-determined dates twice monthly. The following table shows the components of the allowance for lease merchandise write-offs: Nine Months Ended (In Thousands) 2023 2022 Beginning Balance $ 13,894 $ 12,339 Merchandise Written off, net of Recoveries (61,215) (70,247) Provision for Write-offs 59,891 72,092 Ending Balance $ 12,570 $ 14,184 Merchandise Inventories The Company’s merchandise inventories are stated at the lower of weighted average cost or net realizable value and consist entirely of merchandise held for sale by the BrandsMart segment. In-bound freight-related costs from vendors, net of allowances and vendor rebates, are included as part of the net cost of merchandise inventories. Costs associated with storing and transporting merchandise inventories to our retail stores are expensed as incurred and included within retail cost of sales in the condensed consolidated statements of earnings. The Company periodically evaluates aged and distressed inventory and establishes an inventory markdown which represents the excess of the carrying value over the amount the Company expects to realize from the ultimate sale of the inventory. Markdowns establish a new cost basis for the inventory and are recorded within retail cost of sales within the condensed consolidated statement of earnings. The write-offs of merchandise inventories associated with the Company's cycle and physical inventory count processes are also included within retail cost of sales in the condensed consolidated statement of earnings. The Company records an inventory reserve for the anticipated loss associated with selling inventories below cost. This reserve is based on management’s current knowledge with respect to inventory levels, sales trends, and historical experience selling or disposing of aged or obsolete inventory. The following is a summary of merchandise inventories, net of allowances: (In Thousands) September 30, 2023 December 31, 2022 Merchandise Inventories, gross $ 100,448 $ 96,945 Reserve for Merchandise Inventories (1,041) (981) Merchandise Inventories, net $ 99,407 $ 95,964 The following table shows the components of the reserve for merchandise inventories: Nine Months Ended (In Thousands) September 30, 2023 Beginning Balance $ 981 Merchandise Written off (350) Provision for Write-offs 410 Ending Balance 1 $ 1,041 1 There were no significant markdown provisions recorded during the three and nine months ended September 30, 2022. Prepaid Expenses and Other Assets Prepaid expenses and other assets consist of the following: (In Thousands) September 30, 2023 December 31, 2022 Prepaid Expenses $ 22,798 $ 20,218 Insurance Related Assets 27,707 25,103 Company-Owned Life Insurance 14,257 13,443 Assets Held for Sale 1,113 1,857 Deferred Tax Assets 24,615 16,277 Other Assets 1 22,130 19,538 $ 112,620 $ 96,436 1 Amounts as of September 30, 2023 and December 31, 2022 included restricted cash of $1.6 million held as collateral for BrandsMart U.S.A.'s workers' compensation and general liability insurance policies. Sale-Leaseback Transactions During the nine months ended September 30, 2022, the Company entered into four sale and leaseback transactions related to seven Company-owned Aaron's store properties for a total sales price of $12.9 million, all of which was received during the nine months ended September 30, 2022. Such proceeds are presented within proceeds from dispositions of property, plant and equipment in the condensed consolidated statements of cash flows. The Company recognized gains of $2.8 million and $8.5 million associated with these transactions during the three and nine months ended September 30, 2022, respectively, which was classified within other operating expenses, net in the condensed consolidated statements of earnings. Derivative Instruments In March 2023, the Company entered into a non-speculative interest rate swap agreement for an aggregate notional amount of $100.0 million with an effective date of April 28, 2023 and a termination date of March 31, 2027. The purpose of this hedge is to limit the Company's exposure of its variable interest rate debt by effectively converting it to fixed interest rate debt. Under the terms of the agreement, the Company will receive a floating interest rate based on 1-month Chicago Mercantile Exchange ("CME") Term Secured Overnight Financing Rate ("SOFR") and pay a fixed interest rate of 3.87% on the notional amount. The Company has accounted for the interest rate swap as a cash flow hedge instrument in accordance with ASC 815, Derivatives and Hedging . Accordingly, the effective portion of the gains and losses associated with the changes in the fair value of the cash flow hedge instrument are recognized as a component of accumulated other comprehensive income in the Company's condensed consolidated balance sheets. Such amounts are reclassified into earnings in the same period during which the cash flow hedging instrument affects earnings. As of September 30, 2023, the facts and circumstances of the hedged relationship remain consistent with the initial effectiveness assessment and the hedging instrument remains an effective accounting hedge. The fair value of the hedge as of September 30, 2023 was an asset of $2.1 million, and has been recorded within prepaid expenses and other assets in the Company's condensed consolidated balance sheets. During the nine months ended September 30, 2023, the Company reclassified $0.6 million of net gains from accumulated other comprehensive income to interest expense. See Note 3 to these condensed consolidated financial statements for further information regarding the fair value determination of the Company's interest rate swap agreement. Derivative instruments in place during the prior year were not significant. Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consist of the following: (In Thousands) September 30, 2023 December 31, 2022 Accounts Payable $ 107,106 $ 106,966 Estimated Claims Liability Costs 60,895 58,549 Accrued Salaries and Benefits 28,355 33,932 Accrued Real Estate and Sales Taxes 23,331 24,030 Other Accrued Expenses and Liabilities 33,713 40,566 $ 253,400 $ 264,043 Estimated Claims Liability Costs Estimated claims liability costs are accrued primarily for workers compensation and vehicle liability, as well as general liability and group health insurance benefits provided to team members. These liabilities are recorded within estimated claims liability costs within accounts payable and accrued expenses in the condensed consolidated balance sheets. Estimates for these claims liabilities are made based on actual reported but unpaid claims and actuarial analysis of the projected claims run off for both reported and incurred but not reported claims. This analysis is based upon an assessment of the likely outcome or historical experience and considers a variety of factors, including the actuarial loss forecasts, company-specific development factors, general industry loss development factors and third-party claim administrator loss estimates of individual claims. The Company makes periodic prepayments to its insurance carriers to cover the projected claims run off for both reported and incurred but not reported claims, considering its retention or stop loss limits. In addition, we have prefunding balances on deposit and other insurance receivables with the insurance carriers which are recorded within prepaid expenses and other assets in our condensed consolidated balance sheets. Goodwill Goodwill represents the excess of the purchase price paid over the fair value of the identifiable net tangible and intangible assets acquired in connection with business acquisitions. All acquisition-related goodwill balances are allocated amongst the Company's reporting units based on the nature of the acquired operations that originally created the goodwill. During the fourth quarter of 2022, in connection with its annual impairment testing, management evaluated the various components of the operating segments further described above and in Note 8 to these condensed consolidated financial statements and identified three reporting units, Aaron's Business, BrandsMart, and BrandsMart Leasing, each as described below. The Aaron's Business reporting unit is comprised of (i) Aaron's branded Company-operated and franchise operated stores; (ii) aarons.com e-commerce platform ("aarons.com"); and (iii) Woodhaven (collectively, the "Aaron’s Business reporting unit"). The Aaron's Business reporting unit is a component of the Aaron's Business operating segment. The operations of BrandsMart Leasing comprise the BrandsMart Leasing reporting unit (collectively, the "BrandsMart Leasing reporting unit"), and is a component of the Aaron's Business operating segment. Management considered the aggregation of the BrandsMart Leasing reporting unit and Aaron's Business reporting unit as a single reporting unit and determined that these components were economically dissimilar and also reviewed separately by the segment managers of the Aaron's Business operating segment, and therefore should not be aggregated. The operations of BrandsMart, comprise the BrandsMart reporting unit (collectively, the "BrandsMart reporting unit") and is also the sole component of the BrandsMart operating segment. The acquisition of BrandsMart U.S.A. in the second quarter of 2022 resulted in the recognition of approximately $55.8 million of goodwill, inclusive of measurement period adjustments further described in Note 2 to these condensed consolidated financial statements. Of this amount, $29.2 million was assigned to the BrandsMart reporting unit and $26.5 million was assigned to the BrandsMart Leasing reporting unit. The following table provides information related to the carrying amount of goodwill by operating segment. (In Thousands) Aaron's Business BrandsMart BrandsMart Leasing Total Balance at December 31, 2022 $ — $ 28,193 $ 26,517 $ 54,710 Acquisitions — — — — Acquisition Accounting Adjustments — 1,040 — 1,040 Impairment Loss — — — — Balance at September 30, 2023 $ — $ 29,233 $ 26,517 $ 55,750 The Company’s goodwill is not amortized but is subject to an impairment test at the reporting unit level annually as of October 1 and more frequently if events or circumstances indicate that an interim impairment may have occurred. An interim goodwill impairment test is required if the Company believes it is more likely than not that the carrying amount of its reporting unit exceeds the reporting unit's fair value. The Company determined that there were no events that occurred or circumstances that changed during the nine months ended September 30, 2023 that would more likely than not reduce the fair value of its reporting units below their carrying amount. The Company may be required to recognize material impairments to the BrandsMart or BrandsMart Leasing goodwill balances in the future if: (i) the Company fails to successfully execute on one or more elements of the BrandsMart strategic plan; (ii) actual results are unfavorable to the Company's estimates and assumptions used to calculate fair value; (iii) the BrandsMart or BrandsMart Leasing carrying values increase without an associated increase in the fair value; and/or (iv) BrandsMart or BrandsMart Leasing is materially impacted by further deterioration of macroeconomic conditions, including inflation and other economic pressures, including rising interest rates. Acquisition-Related Costs Acquisition-related costs of $0.7 million and $3.1 million were incurred during the three and nine months ended September 30, 2023, and Acquisition-related costs of $1.7 million and $13.2 million were incurred during the three and nine months ended September 30, 2022. These primarily represent internal control readiness third-party consulting, banking and legal expenses and retention bonuses associated with the acquisition of BrandsMart U.S.A. completed April 1, 2022. Related Party Transactions with the Sellers of BrandsMart U.S.A. Effective as of the BrandsMart U.S.A. acquisition date, the Company entered into lease agreements for six store locations retained by the sellers of BrandsMart U.S.A., including Michael Perlman, who was employed by the Company for a short period following the acquisition. While Mr. Perlman is no longer employed by the Company as of December 31, 2022, the Company intends to continue its treatment of the lease agreements as potential related party transactions under the Company’s Related Party Transactions Policy until December 2023. The agreements include initial terms of ten years, with options to renew each location for up to 20 years thereafter. The Company recorded these leases within operating lease right-of-use assets and operating lease liabilities in the Company's condensed consolidated balance sheets. The six operating leases are considered to be above market. The value of the off-market element of the lease agreements was included as a component of the consideration transferred to the sellers of BrandsMart U.S.A. and was recognized as a reduction to the operating lease right-of-use-asset. The total amounts paid to the sellers of BrandsMart U.S.A. during the three and nine months ended September 30, 2023 related to real estate activities, including rental payments, maintenance and taxes, were approximately $3.2 million and $9.7 million, respectively. Stockholders' Equity Changes in stockholders' equity for the three and nine months ended September 30, 2023 and 2022 are as follows: Treasury Stock Common Stock Additional Retained Earnings Accumulated Other Comprehensive (Loss) Income Total Shareholders’ Equity (In Thousands, Except Per Share) Shares Amount Shares Amount Balance, December 31, 2022 (5,480) $ (138,753) 36,100 $ 18,050 $ 738,428 $ 79,073 $ (1,396) $ 695,402 Cash Dividends, $0.125 per share — — — — — (3,966) — (3,966) Stock-Based Compensation — — — — 2,874 — — 2,874 Issuance of Shares under Equity Plans (207) (2, |
