Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 26, 2016 | Jun. 30, 2015 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | AARON'S INC | ||
Trading Symbol | AAN | ||
Entity Central Index Key | 706,688 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 72,607,843 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 1,978,700,976 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
ASSETS: | ||
Cash and Cash Equivalents | $ 14,942 | $ 3,549 |
Investments | 22,226 | 21,311 |
Accounts Receivable (net of allowances of $34,861 in 2015 and $27,401 in 2014) | 113,439 | 107,383 |
Lease Merchandise (net of accumulated depreciation and allowances of $738,657 in 2015 and $710,266 in 2014) | 1,138,938 | 1,087,032 |
Loans Receivable (net of allowances of $2,971 in 2015) | 85,795 | 0 |
Property, Plant and Equipment, Net | 225,836 | 219,417 |
Goodwill | 539,475 | 530,670 |
Other Intangibles, Net | 275,912 | 297,471 |
Income Tax Receivable | 179,174 | 124,095 |
Prepaid Expenses and Other Assets | 56,162 | 59,560 |
Assets Held for Sale | 6,976 | 6,356 |
Total Assets | 2,658,875 | 2,456,844 |
LIABILITIES & SHAREHOLDERS’ EQUITY: | ||
Accounts Payable and Accrued Expenses | 300,356 | 270,421 |
Accrued Regulatory Expense | 4,737 | 27,200 |
Deferred Income Taxes Payable | 307,481 | 268,551 |
Customer Deposits and Advance Payments | 69,233 | 61,069 |
Debt | 610,450 | 606,082 |
Total Liabilities | 1,292,257 | 1,233,323 |
Shareholders’ Equity: | ||
Common Stock, Par Value $.50 Per Share: Authorized: 225,000,000 Shares at December 31, 2015 and December 31, 2014; Shares Issued: 90,752,123 at December 31, 2015 and December 31, 2014 | 45,376 | 45,376 |
Additional Paid-in Capital | 240,112 | 227,290 |
Retained Earnings | 1,403,120 | 1,274,233 |
Accumulated Other Comprehensive Loss | (517) | (90) |
Stockholders' Equity before Treasury Stock, Total | 1,688,091 | 1,546,809 |
Common Stock: 18,151,560 Shares at December 31, 2015 and 18,263,589 at December 31, 2014 | (321,473) | (323,288) |
Total Shareholders’ Equity | 1,366,618 | 1,223,521 |
Total Liabilities & Shareholders’ Equity | $ 2,658,875 | $ 2,456,844 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Accounts Receivable, allowances | $ 34,861 | $ 27,401 |
Lease Merchandise, accumulated depreciation | 738,657 | $ 710,266 |
Loans Receivable, allowances | $ 2,971 | |
Common Stock, Par Value (in dollars per share) | $ 0.50 | $ 0.50 |
Common Stock, Shares Authorized | 225,000,000 | 225,000,000 |
Common Stock, Shares Issued | 90,752,123 | 90,752,123 |
Treasury Shares | 18,151,560 | 18,263,589 |
Consolidated Statements of Earn
Consolidated Statements of Earnings - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
REVENUES: | |||
Lease Revenues and Fees | $ 2,684,184 | $ 2,221,574 | $ 1,748,699 |
Retail Sales | 32,872 | 38,360 | 40,876 |
Non-Retail Sales | 390,137 | 363,355 | 371,292 |
Franchise Royalties and Fees | 63,507 | 65,902 | 68,575 |
Interest and Fees on Loans Receivable | 2,845 | 0 | 0 |
Other | 6,211 | 5,842 | 5,189 |
Revenues | 3,179,756 | 2,695,033 | 2,234,631 |
COSTS AND EXPENSES: | |||
Depreciation of Lease Merchandise | 1,212,644 | 932,634 | 628,089 |
Retail Cost of Sales | 21,040 | 24,541 | 24,318 |
Non-Retail Cost of Sales | 351,777 | 330,057 | 337,581 |
Operating Expenses | 1,357,030 | 1,231,801 | 1,022,684 |
Financial Advisory and Legal Costs | 0 | 13,661 | 0 |
Restructuring Expenses | 0 | 9,140 | 0 |
Retirement and Vacation Charges | 0 | 9,094 | 4,917 |
Progressive-Related Transaction Costs | 0 | 6,638 | 0 |
Legal and Regulatory (Income) Expense | 0 | (1,200) | 28,400 |
Other Operating Expense (Income), Net | 1,324 | (1,176) | 1,584 |
Costs and Expenses, Total | 2,943,815 | 2,555,190 | 2,047,573 |
OPERATING PROFIT | 235,941 | 139,843 | 187,058 |
Interest Income | 2,185 | 2,921 | 2,998 |
Interest Expense | (23,339) | (19,215) | (5,613) |
Other Non-Operating (Expense) Income, Net | (1,667) | (1,845) | 517 |
EARNINGS BEFORE INCOME TAXES | 213,120 | 121,704 | 184,960 |
INCOME TAXES | 77,411 | 43,471 | 64,294 |
NET EARNINGS | $ 135,709 | $ 78,233 | $ 120,666 |
EARNINGS PER SHARE (IN DOLLARS PER SHARE) | $ 1.87 | $ 1.08 | $ 1.59 |
EARNINGS PER SHARE ASSUMING DILUTION (IN DOLLARS PER SHARE) | $ 1.86 | $ 1.08 | $ 1.58 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Comprehensive Income [Abstract] | |||
Net Earnings | $ 135,709 | $ 78,233 | $ 120,666 |
Other Comprehensive (Loss) Income: | |||
Foreign Currency Translation Adjustment | (427) | (26) | 5 |
Total Other Comprehensive (Loss) Income | (427) | (26) | 5 |
Comprehensive Income | $ 135,282 | $ 78,207 | $ 120,671 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Treasury Stock | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss |
Beginning Balance (in shares) at Dec. 31, 2012 | (15,032) | |||||
Beginning Balance at Dec. 31, 2012 | $ (216,575) | $ 45,376 | $ 220,362 | $ 1,087,032 | $ (69) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Dividends, $.094, $.086 and $.072 per share in 2015, 2014 and 2013, respectively | (5,479) | |||||
Stock-Based Compensation | 2,250 | |||||
Reissued Shares (in shares) | 739 | |||||
Reissued Shares | $ 10,825 | 570 | ||||
Repurchased Shares (in shares) | (3,502) | |||||
Repurchased Shares | $ (100,000) | (25,000) | ||||
Net Earnings | $ 120,666 | 120,666 | ||||
Foreign Currency Translation Adjustment | 5 | |||||
Ending Balance (in shares) at Dec. 31, 2013 | (17,795) | |||||
Ending Balance at Dec. 31, 2013 | $ (305,750) | 45,376 | 198,182 | 1,202,219 | (64) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Dividends, $.094, $.086 and $.072 per share in 2015, 2014 and 2013, respectively | (6,219) | |||||
Share-Based Compensation (in shares) | 17 | |||||
Stock-Based Compensation | $ 300 | 10,398 | ||||
Reissued Shares (in shares) | 515 | |||||
Reissued Shares | $ 7,162 | (6,290) | ||||
Repurchased Shares (in shares) | (1,001) | |||||
Repurchased Shares | $ (25,000) | 25,000 | ||||
Net Earnings | 78,233 | 78,233 | ||||
Foreign Currency Translation Adjustment | (26) | |||||
Ending Balance (in shares) at Dec. 31, 2014 | (18,264) | |||||
Ending Balance at Dec. 31, 2014 | 1,223,521 | $ (323,288) | 45,376 | 227,290 | 1,274,233 | (90) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Dividends, $.094, $.086 and $.072 per share in 2015, 2014 and 2013, respectively | (6,822) | |||||
Share-Based Compensation (in shares) | 5 | |||||
Stock-Based Compensation | $ 89 | 13,605 | ||||
Reissued Shares (in shares) | 107 | |||||
Reissued Shares | $ 1,726 | (783) | ||||
Net Earnings | 135,709 | 135,709 | ||||
Foreign Currency Translation Adjustment | (427) | |||||
Ending Balance (in shares) at Dec. 31, 2015 | (18,152) | |||||
Ending Balance at Dec. 31, 2015 | $ 1,366,618 | $ (321,473) | $ 45,376 | $ 240,112 | $ 1,403,120 | $ (517) |
Consolidated Statements of Sha7
Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Retained Earnings | |||
Dividends, per share (in dollars per share) | $ 0.094 | $ 0.086 | $ 0.072 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
OPERATING ACTIVITIES: | |||
Net Earnings | $ 135,709 | $ 78,233 | $ 120,666 |
Adjustments to Reconcile Net Earnings to Net Cash Provided by (Used in) Operating Activities: | |||
Depreciation of Lease Merchandise | 1,212,644 | 932,634 | 628,089 |
Other Depreciation and Amortization | 80,203 | 85,600 | 57,016 |
Accounts Receivable Provision | 163,111 | 99,283 | 35,894 |
Provision for Credit Losses on Loans Receivable | 937 | 0 | 0 |
Fee Amortization on Loans Receivable | (269) | 0 | 0 |
Stock-Based Compensation | 14,163 | 10,863 | 2,342 |
Deferred Income Taxes | 38,970 | (7,157) | (36,763) |
Other Changes, Net | (842) | 2,214 | 3,996 |
Changes in Operating Assets and Liabilities, Net of Effects of Acquisitions and Dispositions: | |||
Additions to Lease Merchandise | (1,775,479) | (1,465,501) | (964,072) |
Book Value of Lease Merchandise Sold or Disposed | 510,657 | 456,713 | 425,673 |
Accounts Receivable | (173,159) | (110,269) | (30,419) |
Prepaid Expenses and Other Assets | 3,964 | (5,332) | (1,349) |
Income Tax Receivable | (54,351) | (117,894) | 22,688 |
Accounts Payable and Accrued Expenses | 25,458 | (12,788) | 16,893 |
Accrued Litigation Expense | (22,463) | (1,200) | 28,400 |
Customer Deposits and Advance Payments | 7,508 | 5,639 | (617) |
Cash Provided by (Used in) Operating Activities | 166,761 | (48,962) | 308,437 |
INVESTING ACTIVITIES: | |||
Purchase of Investments | 0 | 0 | (74,845) |
Loans Receivable Originated | (11,700) | 0 | 0 |
Repayments of Loans Receivable | 15,211 | 0 | 0 |
Proceeds from Maturities and Calls of Investments | 0 | 89,993 | 47,930 |
Additions to Property, Plant and Equipment | (60,557) | (47,565) | (58,145) |
Acquisitions of Businesses and Contracts | (73,295) | (700,509) | (10,898) |
Proceeds from Dispositions of Businesses and Contracts | 13,976 | 16,525 | 2,163 |
Proceeds from Sale of Property, Plant, and Equipment | 7,515 | 6,032 | 6,841 |
Cash Used in Investing Activities | (108,850) | (635,524) | (86,954) |
FINANCING ACTIVITIES: | |||
Proceeds from Debt | 290,090 | 904,956 | 2,598 |
Repayments of Debt | (330,747) | (441,603) | (4,954) |
Acquisition of Treasury Stock | 0 | 0 | (125,000) |
Dividends Paid | (6,822) | (7,823) | (3,875) |
Excess Tax Benefits From Stock-Based Compensation | 348 | 1,392 | 1,381 |
Issuance of Stock Under Stock Option Plans | 1,038 | 4,388 | 9,924 |
Other | (425) | (4,366) | 0 |
Cash (Used in) Provided by Financing Activities | (46,518) | 456,944 | (119,926) |
Increase (Decrease) in Cash and Cash Equivalents | 11,393 | (227,542) | 101,557 |
Cash and Cash Equivalents at Beginning of Year | 3,549 | 231,091 | 129,534 |
Cash and Cash Equivalents at End of Year | 14,942 | 3,549 | 231,091 |
Cash Paid During the Year: | |||
Interest | 23,405 | 16,344 | 5,614 |
Income Taxes | $ 91,720 | $ 187,709 | $ 54,027 |
Business and Summary of Signifi
Business and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Business and Summary of Significant Accounting Policies | BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business Aaron’s, Inc. (the "Company" or "Aaron’s") is a leader in the sales and lease ownership and specialty retailing of furniture, consumer electronics, computers, and home appliances and accessories throughout the United States and Canada. The Company's major operating divisions are the Aaron’s Sales & Lease Ownership division (established as a monthly payment concept), Progressive, HomeSmart (established as a weekly payment concept), DAMI and Woodhaven Furniture Industries, which manufactures and supplies the majority of the upholstered furniture and bedding leased and sold in Company-operated and franchised stores. The Progressive segment, in which the Company acquired a 100% ownership interest on April 14, 2014, is a leading virtual lease-to-own company. Progressive provides lease-purchase solutions in 46 states. It does so by purchasing merchandise from third-party retailers desired by those retailers’ customers and, in turn, leasing that merchandise to the customers on a lease-to-own basis. Progressive consequently has no stores of its own, but rather offers lease-purchase solutions to the customers of traditional retailers. On October 15, 2015, the Company acquired a 100% ownership interest in Dent-A-Med, Inc., d/b/a the HELPcard®, (collectively, "DAMI") for $50.7 million , net of cash acquired. The Company also assumed $44.8 million of debt in the form of a secured revolving credit facility in connection with the acquisition. DAMI partners with merchants to provide a variety of revolving credit products originated through a federally insured bank to customers that may not qualify for traditional prime lending. These are commonly referred to as "second-look" credit products. Together with Progressive, DAMI will allow the Company to provide retail and merchant partners one source for financing and leasing transactions with below-prime customers. The following table presents store count by ownership type for the Company’s store-based operations: Stores at December 31 (Unaudited) 2015 2014 2013 Company-operated stores Sales and Lease Ownership 1,223 1,243 1,262 HomeSmart 82 83 81 RIMCO — — 27 Total Company-operated stores 1,305 1,326 1,370 Franchised stores 1 734 782 781 Systemwide stores 2,039 2,108 2,151 1 As of December 31, 2015 , 2014 and 2013 , 813 , 920 and 940 franchises had been awarded, respectively. The following table presents active doors for the Progressive segment: Active Doors at December 31 (Unaudited) 2015 2014 Progressive Active Doors 1 13,248 12,307 1 An active door is a retail store location at which at least one virtual lease-to-own transaction has been completed during the trailing three month period. Basis of Presentation The preparation of the Company’s consolidated financial statements in conformity with accounting principles generally accepted in the United States ("U.S. GAAP") requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Generally, actual experience has been consistent with management’s prior estimates and assumptions. Management does not believe these estimates or assumptions will change significantly in the future absent unsurfaced and unforeseen events. Reclassifications Certain reclassifications have been made to the prior periods to conform to the current period presentation. The Company presents sales net of related taxes for its traditional lease-to-own store-based ("core") business. Prior to 2015, Progressive presented lease revenues on a gross basis with sales taxes included. Effective January 1, 2015, Progressive conformed its presentation of sales tax to that of the core business. For the year ended December 31, 2014 , a reclassification adjustment of $30.2 million has been made to present sales net of related taxes on a consolidated basis. This adjustment reduces lease revenues and fees and operating expenses. Principles of Consolidation and Variable Interest Entities The consolidated financial statements include the accounts of Aaron’s, Inc. and its subsidiaries, each of which is wholly owned. Intercompany balances and transactions between consolidated entities have been eliminated. The Company holds notes issued by Perfect Home Holdings Limited ("Perfect Home"), a privately-held lease-to-own company that is primarily financed by share capital and subordinated debt. Perfect Home is based in the U.K. and operates 70 retail stores as of December 31, 2015 . Perfect Home is a variable interest entity ("VIE") because it does not have sufficient equity at risk. However, the Company is not the primary beneficiary and does not consolidate Perfect Home since the Company lacks the power through voting or similar rights to direct the activities that most significantly affect Perfect Home's economic performance. The Company’s maximum exposure to any potential losses associated with this VIE is equal to its total recorded investment which is $22.2 million at December 31, 2015 . Revenue Recognition Lease Revenues and Fees The Company provides merchandise, consisting of furniture, consumer electronics, computers, appliances and household accessories, to its customers for lease under certain terms agreed to by the customer. Two primary store-based lease models are offered to customers: one through the Company’s Sales & Lease Ownership division (established as a monthly model) and the other through its HomeSmart division (established as a weekly model). The typical monthly store-based lease model is 12 , 18 or 24 months , while the typical weekly store-based lease model is 65 to 104 weeks. The Company’s Progressive division offers virtual lease-purchase solutions, typically over 12 months , to the customers of traditional retailers. The Company does not require deposits upon inception of customer agreements. The customer has the right to acquire title either through a purchase option or through payment of all required lease payments. All of the Company’s customer agreements are considered operating leases. Lease revenues are recognized as revenue in the month they are due. Lease payments received prior to the month due are recorded as deferred lease revenue, and this amount is included in customer deposits and advance payments in the accompanying consolidated balance sheets. The Company maintains ownership of the lease merchandise until all payment obligations are satisfied under sales and lease ownership agreements. Initial direct costs related to the Company’s customer agreements are expensed as incurred and have been classified as operating expenses in the Company’s consolidated statements of earnings. Retail and Non-Retail Sales Revenues from the sale of merchandise to franchisees are recognized when title and risk of ownership transfer to the franchisee upon its receipt of the merchandise, which is tracked electronically by the Company’s fulfillment system. Additionally, revenues from the sale of merchandise to other customers are recognized at the time of shipment, at which time title and risk of ownership are transferred to the customer. Substantially all of the amounts reported as non-retail sales and non-retail cost of sales in the accompanying consolidated statements of earnings relate to the sale of lease merchandise to franchisees. The Company classifies the sale of merchandise to other customers as retail sales in the consolidated statements of earnings. Franchise Royalties and Fees The Company franchises its Aaron’s Sales & Lease Ownership and HomeSmart stores in markets where the Company has no immediate plans to enter. Franchisees pay an ongoing royalty of either 5% or 6% of gross revenues, which are recorded when due. In addition, franchisees typically pay a non-refundable initial franchise fee from $15,000 to $50,000 depending upon market size. Franchise fees and area development fees are generated from the sale of rights to develop, own and operate sales and lease ownership stores. These fees are recognized as income when substantially all of the Company’s obligations per location are satisfied, generally at the date of the store opening. The Company guarantees certain debt obligations of some of the franchisees and receives guarantee fees based on the outstanding debt obligations of such franchisees. The Company recognizes finance fee revenue as the guarantee obligation is satisfied. Refer to Note 9 for additional discussion of the Company’s franchise-related guarantee obligation. Franchise fee revenue was $600,000 , $1.0 million and $1.7 million ; royalty revenue was $57.7 million , $58.8 million and $59.1 million ; and finance fee revenue was $2.9 million , $3.7 million and $5.1 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. Deferred franchise and area development agreement fees, included in accounts payable and accrued expenses in the accompanying consolidated balance sheets, were $1.6 million and $2.8 million at December 31, 2015 and 2014 , respectively. Lease Merchandise The Company’s lease merchandise consists primarily of furniture, consumer electronics, computers, appliances and household accessories and is recorded at cost, which includes overhead from production facilities, shipping costs and warehousing costs. The sales and lease ownership stores depreciate merchandise to a 0% salvage value over the lease agreement period when on lease, generally 12 to 24 months (monthly agreements) or 65 to 104 weeks (weekly agreements), and generally 36 months when not on lease. The Company’s Progressive division, at which substantially all merchandise is on lease, depreciates merchandise over the lease agreement period, which is typically over 12 months . The Company’s policies require weekly lease merchandise counts at its store-based operations, which include write-offs for unsalable, damaged, or missing merchandise inventories. Full physical inventories are generally taken at the fulfillment and manufacturing facilities one to two times per year, and appropriate provisions are made for missing, damaged and unsalable merchandise. In addition, the Company monitors lease merchandise levels and mix by division, store, and fulfillment center, as well as the average age of merchandise on hand. If unsalable lease merchandise cannot be returned to vendors, it is adjusted to its net realizable value or written off. All lease merchandise is available for lease or sale. On a monthly basis, all damaged, lost or unsalable merchandise identified is written off. The Company records lease merchandise adjustments on the allowance method, which estimates the merchandise losses incurred but not yet identified by management as of the end of the accounting period based on historical write off experience. As of December 31, 2015 and 2014 , the allowance for lease merchandise write offs was $33.4 million and $27.6 million , respectively. Lease merchandise adjustments totaled $136.4 million , $99.9 million and $58.0 million during the years ended December 31, 2015 , 2014 and 2013 , respectively, and are included in operating expenses in the accompanying consolidated statements of earnings. Retail and Non-Retail Cost of Sales Included in cost of sales is the net book value of merchandise sold, primarily using specific identification. It is not practicable to allocate operating expenses between selling and lease operations. Shipping and Handling Costs The Company classifies shipping and handling costs as operating expenses in the accompanying consolidated statements of earnings, and these costs totaled $77.9 million , $81.1 million and $78.6 million in 2015 , 2014 and 2013 , respectively. 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. Total advertising costs amounted to $39.3 million , $50.5 million and $43.0 million in 2015 , 2014 and 2013 , respectively. These advertising costs are shown net of cooperative advertising considerations received from vendors, substantially all of which represent reimbursement of specific, identifiable and incremental costs incurred in selling those vendors’ products. The amount of cooperative advertising consideration netted against advertising expense was $36.3 million , $28.3 million and $25.0 million in 2015 , 2014 and 2013 , respectively. The prepaid advertising asset was $900,000 and $1.3 million at December 31, 2015 and 2014 , respectively. Stock-Based Compensation The Company has stock-based employee compensation plans, which are more fully described in Note 12. The Company estimates the fair value for the options granted on the grant date using a Black-Scholes-Merton option-pricing model. The fair value of each share of restricted stock units ("RSUs"), restricted stock awards ("RSAs") and performance share units ("PSUs") awarded is equal to the market value of a share of the Company’s common stock on the grant date. Deferred Income Taxes Deferred income taxes represent primarily temporary differences between the amounts of assets and liabilities for financial and tax reporting purposes. The Company’s largest temporary differences arise principally from the use of accelerated depreciation methods on lease merchandise for tax purposes. 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, RSUs, RSAs and PSUs as determined under the treasury stock method. The following table shows the calculation of dilutive share-based awards for the years ended December 31 (shares in thousands): (Shares In Thousands) 2015 2014 2013 Weighted average shares outstanding 72,568 72,384 75,747 Dilutive effect of share-based awards 475 339 643 Weighted average shares outstanding assuming dilution 73,043 72,723 76,390 Approximately 460,000 and 164,000 share-based awards were excluded from the computations of earnings per share assuming dilution in 2015 and 2014 , respectively, as the awards would have been anti-dilutive for the years presented. No stock options, RSUs, RSAs or PSUs were anti-dilutive during 2013 . Cash and Cash Equivalents The Company classifies highly liquid investments with maturity dates of three months or less when purchased as cash equivalents. The Company maintains its cash and cash equivalents in a limited number of banks. Bank balances typically exceed coverage provided by the Federal Deposit Insurance Corporation. However, due to the size and strength of the banks in which the balances are held, any exposure to loss is believed to be minimal. Investments At December 31, 2015 and 2014 , investments classified as held-to-maturity securities consisted of British pound-denominated notes issued by Perfect Home. The Perfect Home notes, which totaled £15.1 million ( $22.2 million ) and £13.7 million ( $21.3 million ) at December 31, 2015 and December 31, 2014 , respectively, are classified as held-to-maturity securities because the Company has the positive intent and ability to hold the investments to maturity. The Perfect Home notes are carried at amortized cost in investments in the consolidated balance sheets and mature on June 30, 2016. The increase in the carrying amount of the notes during 2015 and 2014 relates to accretion of the original discount on the notes, which had a face value of £10.0 million . Historically, the Company maintained investments in various corporate debt securities, or bonds, that were classified as held-to-maturity securities. During the year ended December 31, 2014 , the Company sold all of its investments in corporate bonds due to the Progressive acquisition. The amortized cost of the investments sold was $68.7 million , and a net realized gain of approximately $95,000 was recorded. The Company evaluates held-to-maturity securities for other-than-temporary impairment on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. The Company does not intend to sell its remaining securities and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases. The Company has estimated that the carrying amount of its Perfect Home notes approximates fair value and, therefore, no impairment is considered to have occurred as of December 31, 2015 . Accounts Receivable Accounts receivable consist primarily of receivables due from customers of Company-operated stores and Progressive, corporate receivables incurred during the normal course of business and franchisee obligations. Corporate receivables include receivables for vendor consideration, the secondary escrow described in Note 2 and in-transit credit card amounts related to customer transactions at Company-operated stores. Accounts receivable, net of allowances, consists of the following as of December 31 : (In Thousands) 2015 2014 Customers $ 35,153 $ 30,438 Corporate 26,175 32,572 Franchisee 52,111 44,373 $ 113,439 $ 107,383 The Company maintains an accounts receivable allowance, which primarily relates to its store-based operations and its Progressive division. For the Company's store-based operations, contractually required lease payments are accrued when due; however, they are not always collected and customers can terminate the lease agreements at any time. For customers that do not pay timely, the Company's store-based operations generally focus on obtaining a return of the lease merchandise. Therefore the Company’s policy for its store-based operations is to accrue a provision for returns and uncollectible contractually due renewal payments based on historical collection experience, which is recognized as a reduction of revenue. Store-based operations write off lease receivables that are 60 days or more past due on pre-determined dates occurring twice monthly. The Company’s policy for its Progressive division is to accrue for uncollected amounts due based on historical collection experience. The provision is recognized as bad debt expense classified in operating expenses. The Progressive division writes off lease receivables that are 120 days or more contractually past due. The following is a summary of the Company’s accounts receivable allowance as of December 31 : (In Thousands) 2015 2014 2013 Beginning Balance $ 27,401 $ 7,172 $ 6,001 Accounts written off (155,651 ) (79,054 ) (34,723 ) Accounts receivable provision 163,111 99,283 35,894 Ending Balance $ 34,861 $ 27,401 $ 7,172 The following table shows the amounts recognized for bad debt expense and provision for returns and non-renewals for the years ended December 31 : (In Thousands) 2015 2014 2013 Bad debt expense 122,184 60,514 — Provision for returns and uncollected renewal payments 40,927 38,769 35,894 Accounts receivable provision $ 163,111 $ 99,283 $ 35,894 Loans Receivable, Net Loans receivable, net represents the principal balances of credit card charges at DAMI's participating merchants that remain outstanding to cardholders, plus unpaid interest, capitalized origination costs and fees due from cardholders, net of an allowance for uncollectible amounts and unamortized fees (which include merchant fees, promotional fees and deferred annual card fees). DAMI extends or declines credit to an applicant through its bank partner based upon the customer's credit rating. Qualifying customers receive a credit card to finance their initial purchase and to use in subsequent purchases at the merchant or other subsequent merchants for an initial 24 month privilege period, which DAMI will renew if the cardholder remains in good standing. DAMI’s bank partner originates the loan by providing financing to the merchant at the point of sale and acquiring the receivable at a discount from the face value. The discount represents a pre-negotiated, nonrefundable fee between DAMI and the merchant that generally ranges from 3.5% to 25% (the merchant fee), depending on the product type and any promotional interest periods offered (e.g., six , 12 or 18 months of deferred or reduced interest). The fee is designed primarily to cover DAMI’s incremental direct origination costs and the risk of loss related to the portfolio of cardholder charges received from the merchant. Within a 72 hour period, DAMI acquires the receivable from the bank at the discounted amount. DAMI offsets the origination costs against the merchant fee, and the net amount is deferred. It is generally amortized into revenue over the 24 month initial privilege period. The customer is required to make periodic minimum payments that are generally 3.5% of the outstanding loan balance, which includes outstanding interest. Fixed and variable interest rates, typically 17.90% to 29.99% , compound daily. Annual fees may also be charged to the customer at the commencement of the loan and on each subsequent anniversary date. Under the provisions of the credit card agreements, the Company may assess fees for missed or late payments. Interest and fees are due in the billing period in which they are assessed. The Company acquired outstanding credit card loans in the October 15, 2015 DAMI acquisition (the "Acquired Loans"). Loans acquired in a business acquisition are recorded at their fair value at the acquisition date. The projected net cash flows from expected payments of principal, interest, fees and servicing costs and anticipated charge-offs are included in the determination of fair value; therefore, an allowance for loan losses and an amount for unamortized fees are not recognized for the Acquired Loans. The difference, or discount, between the expected cash flows to be received and the fair value of the Acquired Loans is accreted to revenue based on the effective interest method. The estimated weighted average life of the Acquired Loans was approximately one year at the acquisition date. At each period end, the Company evaluates the appropriateness of the accretable discount on the Acquired Loans based on actual and revised projected future cash receipts. Property, Plant and Equipment The Company records property, plant and equipment at cost. Depreciation and amortization are computed on a straight-line basis over the estimated useful lives of the respective assets, which range from five to 40 years for buildings and improvements and from one to 15 years for other depreciable property and equipment. Costs incurred to develop software for internal use are capitalized and amortized over the estimated useful life of the software, which ranges from five to 10 years. The Company primarily develops software for use in its store-based operations. The Company uses an agile development methodology in which feature-by-feature updates are made to its software. Costs are capitalized when management, with the relevant authority, authorizes and commits to funding a feature update and it is probable that the project will be completed and the software will be used to perform the function intended. Capitalization of costs ceases when the feature update is substantially complete and ready for its intended use. Generally, the life cycle for each feature update is one month. Gains and losses related to dispositions and retirements are recognized as incurred. Maintenance and repairs are also expensed as incurred; renewals and improvements are capitalized. Depreciation expense for property, plant and equipment is included in operating expenses in the accompanying consolidated statements of earnings and was $52.0 million , $53.7 million and $53.3 million during the years ended December 31, 2015 , 2014 and 2013 , respectively. Amortization of previously capitalized internal use software development costs, which is a component of depreciation expense for property, plant and equipment, was $7.4 million , $5.4 million and $3.3 million during the years ended December 31, 2015 , 2014 and 2013 , respectively. The Company assesses its long-lived assets other than goodwill and other indefinite-lived intangible assets for impairment whenever facts and circumstances indicate that the carrying amount may not be fully recoverable. If it is determined that the carrying amount of an asset is not recoverable, the Company compares the carrying amount of the asset to its fair value as estimated using discounted expected future cash flows, market values or replacement values for similar assets. The amount by which the carrying amount exceeds the fair value of the asset, if any, is recognized as an impairment loss. Assets Held for Sale Certain properties, consisting of parcels of land and commercial buildings, met the held for sale classification criteria as of December 31, 2015 and 2014 . After adjustment to fair value, the $7.0 million and $6.4 million carrying amount of these properties has been classified as assets held for sale in the consolidated balance sheets as of December 31, 2015 and 2014 , respectively. The Company estimated the fair values of real estate properties using the market values for similar properties. These properties are considered Level 2 assets as defined below. During the years ended 2015 , 2014 and 2013 , the Company recorded impairment charges of $459,000 , $805,000 and $3.8 million , respectively. These impairment charges related primarily to the impairment of various parcels of land and buildings included in the Sales and Lease Ownership segment that the Company decided not to utilize for future expansion, as well as the sale of the net assets of the RIMCO disposal group in January 2014, and are generally included in other operating expense (income), net within the consolidated statements of earnings. Gains and losses on the disposal of assets held for sale were not significant in 2015 or 2013 . The disposal of assets held for sale resulted in the recognition of net losses of $754,000 in 2014 . 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. Impairment occurs when the carrying amount of goodwill is not recoverable from future cash flows. 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 impairment may have occurred. Factors which could necessitate an interim impairment assessment include a sustained decline in the Company’s stock price, prolonged negative industry or economic trends and significant underperformance relative to historical or projected future operating results. The Company has deemed its operating segments to be reporting units because the operations included in each operating segment have similar economic characteristics. As of December 31, 2015 , the Company had six operating segments and reporting units: Sales and Lease Ownership, Progressive, HomeSmart, DAMI, Franchise and Manufacturing. As of December 31, 2015 , the Company’s Sales and Lease Ownership, Progressive, HomeSmart and DAMI reporting units were the only reporting units with assigned goodwill balances. The following is a summary of the Company’s goodwill by reporting unit at December 31 : (In Thousands) 2015 2014 Sales and Lease Ownership $ 233,851 $ 226,828 Progressive 290,605 289,184 HomeSmart 14,729 14,658 DAMI 290 — Total $ 539,475 $ 530,670 When evaluating goodwill for impairment, the Company may first perform a qualitative assessment to determine whether it is more likely than not that a reporting unit or intangible asset group is impaired. The decision to perform a qualitative impairment assessment for an individual reporting unit in a given year is influenced by a number of factors, including the size of the reporting unit's goodwill, the current and projected operating results, the significance of the excess of the reporting unit's estimated fair value over carrying amount at the last quantitative assessment date and the amount of time in between quantitative fair value assessments and the date of acquisition. During 2015 , as part of the annual goodwill impairment analysis, the Company performed a qualitative assessment for the Progressive reporting unit and concluded no indications of impairment existed. If the Company does not perform a qualitative assessment, or if the Company determines that it is not more likely than not that the fair value of the reporting unit or intangible asset group exceeds its carrying amount, the Company performs a goodwill impairment test that consists of a two-step process, if necessary. The first step is to calculate the estimated fair value of the reporting unit and compare its fair value to its carrying amount, including goodwill. The Company uses a combination of valuation techniques to calculate the fair value of its reporting units, including a multiple of gross projected revenues approach, a multiple of projected earnings before interest, taxes, depreciation and amortization approach and a discounted cash flow model that use assumptions consistent with those the Company believes a hypothetical marketplace participant would use. If the carrying amount of a reporting unit exceeds its fair value, a second step is performed to determine the amount of impairment loss, if any. The second step compares the implied fair value of the reporting unit’s goodwill with the carrying amount of its goodwill. If the carrying amount of the reporting unit’s goodwill exceeds its implied fair value, an impairment loss is recognized in an amount equal to that excess. During the performance of the annual assessment of goodwill for impairment in the 2015 , 2014 and 2013 fiscal years, the Company did not identify any reporting units that were not substantially in excess of their carrying values, other than the HomeSmart reporting unit in 2015 and 2014. While no impairment was noted in the impairment testing, if HomeSmart is unable to sustain its recent profitability improvements, there could be a change in the valuation of the HomeSmart reporting unit that may result in the recognition of an impairment loss in future periods. The goodwill of the DAMI reporting unit was recognized in conjunction with the October 15, 2015 DAMI acquisition. Therefore, an annual impairment test for this reporting unit was not performed in 2015 . The Company determined that there were no events that occurred or circumstances that changed in the fourth quarter of 2015 that would more likely than not reduce the fair value of a reporting unit below its carrying amount. As a result, the Company did not perform an interim impairment test for any reporting unit as of December 31, 2015 . Other Intangibles Other intangibles include customer relationships, non-compete agreements and franchise development rights acquired in connection with store-based business acquisitions. The customer relationship intangible asset is amortized on a straight-line basis over a two -year estimated useful life. The non-compete intangible asset is amortized on a straight-line basis over the life of the agreement (generally two or three years). Acquired franchise development rights are amortized on a straight-line basis over the unexpired life of the franchisee’s ten year area development agreement. Other intangibles also include the identifiable intangible assets acquired as a result of the DAMI and Progressive acquisitions, which the Company recorded at the estimated fair value as of the respective acquisition dates. As more fully described in Note 2 to these consolidated financial statements, the Company amortizes the definite-lived intangible assets acquired as a result of the DAMI acquisition on a straight-line basis over five years for the technology asset and non-compete agreements and ten years for trademarks and tradenames. The Company amortizes the definite-lived intangible assets acquired as a result of the Progressive acquisition on a straight-line basis over periods ranging from one to three years for customer lease contracts and internal use software and ten to 12 years for technology |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
Acquisitions | ACQUISITIONS During the years ended December 31, 2015 and 2014 , net cash payments related to the acquisitions of businesses, including contracts, were $73.3 million and $700.5 million , respectively. Cash payments made during the year ended December 31, 2015 principally relate to the October 15, 2015 DAMI acquisition as described below. Cash payments made during the year ended December 31, 2014 principally related to the April 2014 Progressive acquisition as described below. Acquisitions have been accounted for as business combinations, and the results of operations of the acquired businesses are included in the Company’s results of operations from their dates of acquisition. The results of DAMI and Progressive have been presented as reportable segments from their October 15, 2015 and April 14, 2014 acquisition dates, respectively. Refer to Note 13 for more information on their revenues and earnings before income taxes since their respective acquisition dates. The effect of the Company’s other acquisitions on the consolidated financial statements for the years ended December 31, 2015 and 2014 was not significant. DAMI Acquisition On October 15, 2015 , Progressive acquired a 100% ownership interest in DAMI for a total purchase price of $54.9 million , inclusive of cash acquired of $4.2 million . The DAMI subsidiary is expected to enable Progressive to drive long-term incremental revenue and earnings growth, and in turn will benefit from Progressive's proprietary technology, infrastructure, and financial capacity. It offers retail partners, along with Progressive's technology-based application and approval process, one source for financing and leasing transactions with below-prime customers. Preliminary Acquisition Accounting The following table presents the summary of the preliminary estimated fair value of the assets acquired and liabilities assumed in the DAMI acquisition as of the October 15, 2015 acquisition date: (In Thousands) Purchase Price $ 54,900 Estimated Fair Value of Identifiable Assets Acquired and Liabilities Assumed Cash and Cash Equivalents 4,185 Loans Receivable 1 89,186 Receivables 45 Property, Plant and Equipment 2,754 Other Intangibles 2 3,400 Income Tax Receivable 728 Prepaid Expenses and Other Assets 671 Deferred Income Tax Assets 375 Total Identifiable Assets Acquired 101,344 Accounts Payable and Accrued Expenses (1,709 ) Debt (45,025 ) Total Liabilities Assumed (46,734 ) Goodwill 290 Net Assets Acquired $ 54,900 1 Contractually required amounts due at the acquisition date were $94.2 million . 2 Identifiable intangible assets are further disaggregated in the table below. The preliminary acquisition accounting presented above is subject to refinement. The Company is still finalizing certain working capital adjustments with the sellers and gathering information on certain contingencies and other income tax-related matters that existed at the acquisition date. Estimates for these items have been included in the acquisition accounting and are expected to be finalized prior to the one year anniversary date of the acquisition. The estimated intangible assets attributable to the DAMI acquisition are comprised of the following: Fair Value (in thousands) Weighted Average Life (in years) Technology $ 2,550 5.0 Trade Names and Trademarks 500 10.0 Non-compete Agreements 350 5.0 Total Acquired Intangible Assets 1 $ 3,400 1 Acquired definite-lived intangible assets have a total weighted average life of 5.7 years. During the year ended December 31, 2015, the Company incurred $3.7 million of transaction costs in connection with the acquisition of DAMI. These costs were included in the line item operating expenses in the consolidated statements of earnings. In addition, the Company incurred approximately $425,000 in debt financing costs related to the assumed debt, which has been capitalized as a component of prepaid expenses and other assets in the consolidated balance sheets. Progressive Acquisition On April 14, 2014, the Company acquired a 100% ownership interest in Progressive, a leading virtual lease-to-own company, for a total purchase price of $705.8 million , inclusive of cash acquired of $5.8 million . Progressive provides lease-purchase solutions in 46 states. The Company believes the Progressive acquisition will be strategically transformational and will strengthen its business. The following table reconciles the total estimated purchase price of the Company’s acquisition of Progressive: (In Thousands) Proceeds from Private Placement Note Issuance $ 300,000 Proceeds from Term Loan 126,250 Proceeds from Revolving Credit Facility 65,000 Cash Consideration 185,454 Deferred Cash Consideration 29,106 Purchase Price $ 705,810 Refer to Note 7 for additional information regarding the debt incurred to partially finance the Progressive acquisition. The initial deferred cash consideration had amounts outstanding as of December 31, 2015 of $789,000 in withheld escrow amounts. The purchase price includes a primary escrow of $35.8 million to secure indemnification obligations of the sellers relating to the accuracy of representations, warranties and the satisfaction of covenants. As of December 31, 2015 , primary escrow funds of $8.5 million have been withheld to cover pending litigation. In addition, the purchase price includes a secondary escrow of $15.8 million to secure indemnification obligations of the sellers relating to certain acquired tax-related contingent liabilities. The Company believes that $13.4 million is fully recoverable from the secondary escrow account and included this indemnification asset as a receivable in the Company's acquisition accounting. $10.0 million had been distributed as of December 31, 2015 . Any remaining undisputed balance is payable to the sellers 36 months from the April 14, 2014 closing date. Acquisition Accounting The following table presents the summary of the preliminary estimated fair value of the assets acquired and liabilities assumed in the Progressive acquisition as of the April 14, 2014 acquisition date, as well as adjustments made during the year ended December 31, 2015 (referred to as the "measurement period adjustments"): (In Thousands) Amounts Recognized as of Acquisition Date (as adjusted) 1 Measurement Period Adjustments 2 Amounts Recognized as of Acquisition Date (as adjusted) Purchase Price $ 705,810 $ — $ 705,810 Estimated Fair Value of Identifiable Assets Acquired and Liabilities Assumed Cash and Cash Equivalents 5,810 — 5,810 Receivables 2, 3 27,581 (4,245 ) 23,336 Lease Merchandise 2 141,185 110 141,295 Property, Plant and Equipment 4,010 — 4,010 Other Intangibles 4 325,000 — 325,000 Prepaid Expenses and Other Assets 893 — 893 Total Identifiable Assets Acquired 504,479 (4,135 ) 500,344 Accounts Payable and Accrued Expenses 2 (29,104 ) 3,049 (26,055 ) Deferred Income Taxes Payable 2 (48,749 ) (335 ) (49,084 ) Customer Deposits and Advance Payments (10,000 ) — (10,000 ) Total Liabilities Assumed (87,853 ) 2,714 (85,139 ) Goodwill 5 289,184 1,421 290,605 Net Assets Acquired $ 705,810 $ — $ 705,810 1 As previously reported in the notes to consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2014, which includes the effects of certain measurement period adjustments recognized in 2014. 2 The measurement period adjustments recognized in 2015 related to the resolution of income tax uncertainties and sales tax exposures, which also impacted the fair value estimates of receivables and lease merchandise related to the secondary escrow amount, subsequent to the acquisition date. 3 Receivables include $13.4 million related to the secondary escrow amount, which the Company expects to recover prior to termination of the escrow agreement 36 months from the April 14, 2014 closing date. The gross amount due under customer-related receivables acquired was $22.7 million , of which $10.9 million was expected to be uncollectible. 4 Identifiable intangible assets are further disaggregated in the following table. 5 The total goodwill recognized in conjunction with the Progressive acquisition has been assigned to the Progressive operating segment. Of the goodwill recognized as part of this acquisition, $247.0 million is expected to be deductible for tax purposes. The primary reasons the purchase price of the acquisition exceeded the fair value of the net assets acquired, which resulted in the recognition of goodwill, is related to synergistic value created from the combination of Progressive’s virtual customer payment capabilities with the Company’s leading traditional lease-to-own model. Goodwill also includes certain other intangible assets that do not qualify for separate recognition, such as an assembled workforce. The estimated intangible assets attributable to the Progressive acquisition are comprised of the following: Fair Value (in thousands) Weighted Average Life (in years) Internal Use Software $ 14,000 3.0 Technology 66,000 10.0 Trade Names and Trademarks 53,000 Indefinite Customer Lease Contracts 11,000 1.0 Merchant Relationships 181,000 12.0 Total Acquired Intangible Assets 1 $ 325,000 1 Acquired definite-lived intangible assets have a total weighted average life of 10.6 years. During the year ended December 31, 2014, the Company incurred $6.6 million of transaction costs in connection with the acquisition of Progressive. These costs were included in the line item "Progressive-related transaction costs" in the consolidated statements of earnings. In addition, during the year ended December 31, 2014, the Company incurred approximately $2.3 million in debt financing costs related to the $491.3 million of new indebtedness incurred to partially finance the acquisition, which has been capitalized as a component of prepaid expenses and other assets in the consolidated balance sheets. Pro Forma Financial Information The following table presents unaudited consolidated pro forma information as if the acquisition of Progressive had occurred on January 1, 2013: Twelve Months Ended 2014 2013 (In Thousands) As Reported Pro Forma As Reported Pro Forma Revenues $ 2,695,033 $ 2,851,631 $ 2,234,631 $ 2,607,977 Net Earnings 78,233 86,038 120,666 105,682 The unaudited pro forma financial information presented above does not purport to represent what the actual results of the Company's operations would have been if the acquisition of Progressive had occurred on January 1, 2013, nor is it indicative of future performance. The unaudited pro forma financial information does not reflect the impact of future events that may occur after the acquisition, including, but not limited to, anticipated cost savings from operating synergies. The unaudited pro forma financial information presented in the table above has been adjusted to give effect to adjustments that are (1) directly related to the business combination; (2) factually supportable; and (3) expected to have a continuing impact. These adjustments include, but are not limited to, amortization related to fair value adjustments to intangible assets and the adjustment of interest expense to reflect the additional borrowings of the Company in conjunction with the acquisition. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | GOODWILL AND INTANGIBLE ASSETS Indefinite-Lived Intangible Assets The following table summarizes information related to indefinite-lived intangible assets at December 31 : (In Thousands) 2015 2014 Trade Names and Trademarks $ 53,000 $ 53,000 Goodwill 539,475 530,670 Indefinite-lived Intangible Assets $ 592,475 $ 583,670 The following table provides information related to the carrying amount of goodwill by operating segment: (In Thousands) Sales and Lease Progressive DAMI HomeSmart Total Balance at January 1, 2014 $ 224,523 $ — $ — $ 14,658 $ 239,181 Acquisitions 3,629 277,958 — — 281,587 Disposals (1,321 ) — — — (1,321 ) Acquisition Accounting Adjustments (3 ) 11,226 — — 11,223 Balance at December 31, 2014 226,828 289,184 — 14,658 530,670 Acquisitions 9,529 — 290 229 10,048 Disposals (2,506 ) — — (158 ) (2,664 ) Acquisition Accounting Adjustments — 1,421 — — 1,421 Balance at December 31, 2015 $ 233,851 $ 290,605 $ 290 $ 14,729 $ 539,475 Definite-Lived Intangible Assets The following table summarizes information related to definite-lived intangible assets at December 31 : 2015 2014 (In Thousands) Gross Accumulated Net Gross Accumulated Net Internal Use Software $ 14,000 $ (7,998 ) $ 6,002 $ 14,000 $ (3,331 ) $ 10,669 Technology 68,550 (11,419 ) 57,131 66,000 (4,712 ) 61,288 Customer Lease Contracts — — — 11,000 (11,000 ) — Merchant Relationships 181,000 (25,851 ) 155,149 181,000 (10,768 ) 170,232 Other Intangibles 1 7,383 (2,753 ) 4,630 5,721 (3,439 ) 2,282 Total $ 270,933 $ (48,021 ) $ 222,912 $ 277,721 $ (33,250 ) $ 244,471 1 Other intangibles primarily includes definite-lived trade names and trademarks, customer relationships, non-compete agreements, and franchise development rights from business acquisitions. Total amortization expense of definite-lived intangible assets, included in operating expenses in the accompanying consolidated statements of earnings, was $28.2 million , $31.9 million and $3.7 million during the years ended December 31, 2015 , 2014 and 2013 , respectively. As of December 31, 2015 , estimated future amortization expense for the next five years related to definite-lived intangible assets is as follows: (In Thousands) 2016 $ 28,703 2017 24,602 2018 22,622 2019 22,527 2020 22,374 |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | FAIR VALUE MEASUREMENT Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table summarizes financial liabilities measured at fair value on a recurring basis: December 31, 2015 December 31, 2014 (In Thousands) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Deferred Compensation Liability $ — $ (11,576 ) $ — $ — $ (12,677 ) $ — The Company maintains a deferred compensation plan as described in Note 16 to these consolidated financial statements. The liability representing benefits accrued for plan participants is valued at the quoted market prices of the participants’ investment elections, which consist of equity and debt "mirror" funds. As such, the Company has classified the deferred compensation liability as a Level 2 liability. Non-Financial Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis The following table summarizes non-financial assets measured at fair value on a nonrecurring basis: December 31, 2015 December 31, 2014 (In Thousands) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets Held for Sale $ — $ 6,976 $ — $ — $ 6,356 $ — The highest and best use of these assets held for sale is as real estate land parcels for development or real estate properties for use or lease; however, the Company has chosen not to develop or use these properties. Assets held for sale are written down to fair value less cost to sell, and the adjustment is recorded in other operating expense (income), net . Certain Financial Assets and Liabilities Not Measured at Fair Value The following table summarizes the fair value of assets (liabilities) that are not measured at fair value in the consolidated balance sheets, but for which the fair value is disclosed: December 31, 2015 December 31, 2014 (In Thousands) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Perfect Home Notes 1 $ — $ — $ 22,226 $ — $ — $ 21,311 Fixed-Rate Long Term Debt 2 — (395,618 ) — — (429,049 ) — 1 The Perfect Home notes were initially measured at cost. The Company periodically reviews the carrying amount utilizing company-specific transactions or changes in Perfect Home's financial performance to determine if fair value adjustments are necessary. 2 The fair value of fixed-rate long term debt is estimated using the present value of underlying cash flows discounted at a current market yield for similar instruments. The carrying amount of fixed-rate long term debt was $375.0 million and $400.0 million at December 31, 2015 and December 31, 2014 , respectively. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | PROPERTY, PLANT AND EQUIPMENT The following is a summary of the Company’s property, plant, and equipment at December 31 : (In Thousands) 2015 2014 Land $ 24,300 $ 24,861 Buildings and Improvements 76,982 83,053 Leasehold Improvements and Signs 98,435 107,380 Fixtures and Equipment 1 223,382 196,965 Assets Under Capital Leases: with Related Parties 10,573 10,573 with Unrelated Parties 11,063 10,564 Construction in Progress 3,853 2,086 448,588 435,482 Less: Accumulated Depreciation and Amortization (222,752 ) (216,065 ) $ 225,836 $ 219,417 1 Includes internal-use software development costs of $60.7 million and $50.3 million as of December 31, 2015 and 2014 , respectively. Accumulated amortization of internal-use software development costs amounted to $22.2 million and $14.8 million as of December 31, 2015 and 2014 , respectively. Amortization expense on assets recorded under capital leases is included in operating expenses and was $1.7 million , $1.7 million and $1.7 million in 2015 , 2014 and 2013 , respectively. Capital leases consist of buildings and improvements. Assets under capital leases with related parties included $8.0 million and $6.9 million in accumulated depreciation and amortization as of December 31, 2015 and 2014 , respectively. Assets under capital leases with unrelated parties included $6.3 million and $5.7 million in accumulated depreciation and amortization as of December 31, 2015 and 2014 , respectively. |
Loans Receivable
Loans Receivable | 12 Months Ended |
Dec. 31, 2015 | |
Receivables [Abstract] | |
Loans Receivables | LOANS RECEIVABLE The following is a summary of the Company’s loans receivable, net at December 31 : (In Thousands) 2015 Credit Card Loans $ 13,900 Acquired Loans 74,866 Loans Receivable, Gross 88,766 Allowance for Loan Losses (935 ) Unamortized Fees (2,036 ) Loans Receivable, Net $ 85,795 Included in the table below is an aging of the loans receivable, gross balance at December 31, 2015: Aging category Percentage 1 30-59 days past due 7.9 % 60-89 days past due 3.3 % 90 or more days past due 4.1 % Past due loans receivable 15.3 % Current loans receivable 84.7 % Balance of loans receivable 90 or more days past due and still accruing interest and fees $ — 1 This aging is based on the contractual amounts outstanding for each loan as of period end, and does not reflect the fair value adjustments for the Acquired Loans. |
Indebtedness
Indebtedness | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Indebtedness | INDEBTEDNESS Following is a summary of the Company’s debt at December 31 : (In Thousands) 2015 2014 DAMI Credit Facility $41,781 $ — Revolving Facility 75,000 69,116 Senior Unsecured Notes, 3.95%, Due in Installments through April 2018 75,000 100,000 Term Loan, Due in Installments through December 2019 109,375 121,875 Senior Unsecured Notes, 4.75%, Due in Installments through April 2021 300,000 300,000 Capital Lease Obligation: with Related Parties 4,703 6,157 with Unrelated Parties 4,591 5,684 Other Debt — 3,250 $ 610,450 $ 606,082 DAMI Credit Facility In connection with the October 15, 2015 acquisition of DAMI, the Company assumed the loan and security agreement, dated as of May 18, 2011 (as amended), which provides for a secured revolving credit facility in an amount not to exceed $85.0 million in outstanding principal balance, including a letter of credit not to exceed $2.0 million (the "DAMI credit facility"). In addition, the loan and security agreement includes an uncommitted incremental facility increase option (an "accordion facility") which, subject to certain terms and conditions, permits DAMI at any time prior to the maturity date to request an increase in extensions of credit available thereunder by an aggregate additional principal amount of up to $25.0 million . The DAMI credit facility is currently set to mature on the second anniversary of the DAMI acquisition and contains representations, warranties and covenants consistent with those of other facilities of similar size and type. Collateral under the loan and security agreement is limited to the assets and operations of DAMI. Borrowings bear interest at one-month LIBOR plus 4% . The interest rate for secured revolving credit borrowings as of December 31, 2015 was 4.24% . As of December 31, 2015 , $7.3 million was available for borrowing under the DAMI credit facility. The DAMI credit facility includes financial covenants that, among other things, require DAMI to maintain (i) an EBITDA ratio of not less than 1.7 to 1.0 and (ii) a senior debt to capital base ratio of not more than 2.0 to 1.0. We are in compliance with these covenants at December 31, 2015 . Furthermore, the DAMI credit facility restricts DAMI's ability to transfer funds by limiting intercompany dividends to an amount not to exceed the amount of capital the Company has invested in DAMI. The aggregate amount of such dividends made in a calendar year are limited to 75% of DAMI's net income for the immediately preceding calendar year. DAMI pays a non-refundable monthly unused line fee on the line of credit which ranges from .5% to .75% as determined by DAMI's average daily unused commitments. Revolving Credit Agreement and Term Loan The revolving credit and term loan agreement, which expires December 9, 2019 , permits the Company to borrow, subject to certain terms and conditions, on an unsecured basis up to $225.0 million in revolving loans. The revolving credit and term loan agreement also provides for an accordion facility that permits the Company at any time prior to the maturity date to request an increase in credit extensions thereunder (whether through additional term loans and/or revolving credit commitments or any combination thereof) by an aggregate additional principal amount of up to $200.0 million , with such additional credit extensions provided by one or more lenders thereunder at their sole discretion. The revolving credit borrowings and term loans bear interest at the lower of the lender's prime rate or one-month LIBOR plus a margin ranging from 1.75% to 2.25% as determined by the Company's ratio of total debt to EBITDA, and interest is payable quarterly. The weighted-average interest rate for revolving credit borrowings and term loans outstanding as of December 31, 2015 was approximately 2.24% . For the term loan facility, as amended, installment payments of $3.1 million commenced on December 31, 2014 and are due quarterly, with the remaining unpaid principal balance due at maturity on December 9, 2019 . The Company pays a commitment fee on unused balances, which ranges from .15% to .30% as determined by the Company's ratio of total debt to EBITDA. As of December 31, 2015 , $150.0 million was available for borrowings under the revolving credit agreement. The revolving credit and term loan agreement, senior unsecured notes discussed below and franchise loan program discussed in Note 9 contain financial covenants. These covenants include requirements that the Company maintain ratios of (i) EBITDA plus lease expense to fixed charges of no less than 1.75 to 1.00 through December 31, 2015 and 2.00 to 1.00 thereafter and (ii) total debt to EBITDA of no greater than 3.25 to 1.00 through December 31, 2015 and 3.00 to 1.00 thereafter. In each case, EBITDA refers to the Company’s consolidated net income before interest and tax expense, depreciation (other than lease merchandise depreciation), amortization expense and other non-cash charges. On September 21, 2015, the Company amended the revolving credit and term loan agreement to, among other things, exclude DAMI financial information from the calculation of financial debt covenants. If the Company fails to comply with these covenants, the Company will be in default under these agreements, and all amounts would become due immediately. Under the Company’s revolving credit and term loan agreement, senior unsecured notes and franchise loan program, the Company may pay cash dividends in any year so long as, after giving pro forma effect to the dividend payment, the Company maintains compliance with its financial covenants and no event of default has occurred or would result from the payment. At December 31, 2015 , the Company was in compliance with all covenants related to the revolving credit and term loan agreement, senior unsecured notes and franchise loan program. Senior Unsecured Notes 2011 Note Purchase Agreement Pursuant to the note purchase agreement dated as of July 5, 2011, as amended, the Company and certain of its subsidiaries as co-obligors previously issued $125.0 million in senior unsecured notes to the purchasers in a private placement. The notes bear interest at a rate of 3.95% per year and mature on April 27, 2018. Payments of interest commenced on July 27, 2011 and are due quarterly, and principal payments of $25.0 million commenced on April 27, 2014 and are due annually until maturity. On April 14, 2014, the Company entered into the third amendment which revised the 2011 note purchase agreement to, among other things, replace the interest rate of 3.75% per year with an interest rate of 3.95% commencing April 28, 2014 , conform the covenants, representations, warranties and events of default to the changes reflected in the revolving credit and term loan agreement, to contemplate the acquisition of Progressive and to authorize the new 2014 senior unsecured notes. 2014 Note Purchase Agreements On April 14, 2014, the Company entered into note purchase agreements, as amended, pursuant to which the Company and certain of its subsidiaries as co-obligors issued $300.0 million in aggregate principal amount of senior unsecured notes in a private placement. The notes bear interest at the rate of 4.75% per year and mature on April 14, 2021 . Payments of interest are due quarterly, commencing July 14, 2014 , with principal payments of $60.0 million each due annually commencing April 14, 2017 . On September 21, 2015, the Company entered into the fifth amendment to the 2011 note purchase agreement and the second amendment to the 2014 note purchase agreements to, among other things, exclude DAMI financial information from the calculation of financial debt covenants. Capital Leases with Related Parties As of December 31, 2015 , the Company had 19 remaining capital leases with a limited liability company ("LLC") controlled by a group of current and former executives. In October and November 2004, the Company sold 11 properties, including leasehold improvements, to the LLC. The LLC obtained borrowings collateralized by the land and buildings totaling $6.8 million . The Company occupies the land and buildings collateralizing the borrowings under a 15 -year term lease, with a five -year renewal at the Company’s option, at an aggregate annual rental of $788,000 . The transaction has been accounted for as a financing in the accompanying consolidated financial statements. The rate of interest implicit in the leases is approximately 9.7% . Accordingly, the land and buildings, associated depreciation expense and lease obligations are recorded in the Company’s consolidated financial statements. No gain or loss was recognized in this transaction. In December 2002, the Company sold 10 properties, including leasehold improvements, to the LLC. The LLC obtained borrowings collateralized by the land and buildings totaling $5.0 million . The Company occupies the land and buildings collateralizing the borrowings under a 15 -year term lease at an aggregate annual rental of approximately $1.2 million . The transaction has been accounted for as a financing in the accompanying consolidated financial statements. The rate of interest implicit in the leases is approximately 10.1% . Accordingly, the land and buildings, associated depreciation expense and lease obligations are recorded in the Company’s consolidated financial statements. No gain or loss was recognized in this transaction. Other Debt As of December 31, 2014, other debt included $3.3 million of industrial development corporation revenue bonds. This debt was repaid during 2015. Future maturities under the Company’s debt and capital lease obligations are as follows: (In Thousands) 2016 $ 157,178 2017 100,134 2018 98,856 2019 133,190 2020 60,755 Thereafter 60,337 $ 610,450 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Following is a summary of the Company’s income tax expense for the years ended December 31 : (In Thousands) 2015 2014 2013 Current Income Tax Expense: Federal $ 32,999 $ 41,946 $ 91,664 State 5,442 8,682 9,393 38,441 50,628 101,057 Deferred Income Tax Expense (Benefit): Federal 35,413 (3,314 ) (35,941 ) State 3,557 (3,843 ) (822 ) 38,970 (7,157 ) (36,763 ) $ 77,411 $ 43,471 $ 64,294 As a result of the extended bonus depreciation provisions in the Protecting Americans From Tax Hikes Act of 2015 not being enacted until December 2015, the Company paid more than anticipated for the 2015 federal tax liability. The Company applied for and received a refund of $120.0 million in February 2016. Significant components of the Company’s deferred income tax liabilities and assets at December 31 are as follows: (In Thousands) 2015 2014 Deferred Tax Liabilities: Lease Merchandise and Property, Plant and Equipment $ 228,174 $ 228,002 Goodwill & Other Intangibles 47,421 40,644 Investment in Partnership 88,913 61,342 Other, Net 2,062 1,866 Total Deferred Tax Liabilities 366,570 331,854 Deferred Tax Assets: Accrued Liabilities 29,192 42,024 Advance Payments 15,713 14,272 Other, Net 14,936 7,713 Total Deferred Tax Assets 59,841 64,009 Less Valuation Allowance (752 ) (706 ) Net Deferred Tax Liabilities $ 307,481 $ 268,551 The Company’s effective tax rate differs from the statutory United States Federal income tax rate for the years ended December 31 as follows: 2015 2014 2013 Statutory Rate 35.0 % 35.0 % 35.0 % Increases (Decreases) in United States Federal Taxes Resulting From: State Income Taxes, Net of Federal Income Tax Benefit 2.7 2.6 3.1 Federal Tax Credits (.5 ) (1.8 ) (1.7 ) Other, Net (.9 ) (.1 ) (1.6 ) Effective Tax Rate 36.3 % 35.7 % 34.8 % The Company files a federal consolidated income tax return in the United States and the separate legal entities file in various states and foreign jurisdictions. With few exceptions, the Company is no longer subject to federal, state and local tax examinations by tax authorities for years before 2012. The following table summarizes the activity related to the Company’s uncertain tax positions: (In Thousands) 2015 2014 2013 Balance at January 1, $ 2,644 $ 1,960 $ 1,258 Additions Based on Tax Positions Related to the Current Year 331 311 454 Additions for Tax Positions of Prior Years 1,176 928 423 Prior Year Reductions (1 ) (370 ) (5 ) Statute Expirations (589 ) (94 ) (85 ) Settlements — (91 ) (85 ) Balance at December 31, $ 3,561 $ 2,644 $ 1,960 As of December 31, 2015 and 2014 , the amount of uncertain tax benefits that, if recognized, would affect the effective tax rate is $3.1 million and $2.1 million , respectively, including interest and penalties. The Company recognized interest and penalties of $365,000 , $286,000 and $76,000 during the years ended December 31, 2015 , 2014 and 2013 respectively. The Company had $1.0 million and $499,000 of accrued interest and penalties at December 31, 2015 and 2014 , respectively. The Company recognizes potential interest and penalties related to uncertain tax benefits as a component of income tax expense. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Leases The Company leases warehouse and retail store space for most of its store-based operations, call center space, and management and information technology space for corporate functions under operating leases expiring at various times through 2033 . The Company also leases certain properties under capital or financing type leases that are more fully described in Note 7 to these consolidated financial statements. Most of the leases contain renewal options for additional periods ranging from one to 20 years. In addition, certain properties occupied under operating leases contain normal purchase options. Leasehold improvements related to these leases are generally amortized over periods that do not exceed the lesser of the lease term or 15 years. While a majority of leases do not require escalating payments, for the leases which do contain such provisions, the Company records the related expense on a straight-line basis over the lease term. The Company also leases transportation vehicles under operating leases. Management expects that most leases will be renewed or replaced by other leases in the normal course of business. Future minimum lease payments required under operating leases that have initial or remaining non-cancelable terms in excess of one year as of December 31, 2015 are as follows: (In Thousands) 2016 $ 112,134 2017 95,553 2018 79,167 2019 65,342 2020 52,636 Thereafter 135,209 $ 540,041 Rental expense was $116.5 million in 2015 , $116.4 million in 2014 and $110.0 million in 2013 . Rental expense for the year ended December 31, 2014 included $4.8 million related to the closure of 44 Company-operated stores in 2014, as discussed in Note 10 to these consolidated financial statements. These costs were included in the line item "Restructuring expenses" in the consolidated statements of earnings. All other rental expense was included as a component of operating expenses in the consolidated statements of earnings. Sublease income was $4.6 million in 2015 , $3.9 million in 2014 and $2.6 million in 2013 . The Company has anticipated future sublease rental income of $5.1 million in 2016 , $4.5 million in 2017 , $4.0 million in 2018 , $3.1 million in 2019 , $2.0 million in 2020 and $3.6 million thereafter through 2025. Sublease income is included in other revenues in the consolidated statements of earnings. Guarantees The Company has guaranteed certain debt obligations of some of the franchisees under a franchise loan program with several banks. On December 4, 2015, the Company amended the third amended and restated loan facility to, among other things, extend the maturity date to December 8, 2016. In the event these franchisees are unable to meet their debt service payments or otherwise experience an event of default, the Company would be unconditionally liable for the outstanding balance of the franchisees’ debt obligations under the franchisee loan program, which would be due in full within 90 days of the event of default. At December 31, 2015 , the maximum amount that the Company would be obligated to repay in the event franchisees defaulted was $81.0 million . The Company has recourse rights to franchisee assets securing the debt obligations, which consist primarily of lease merchandise and fixed assets. Since the inception of the franchise loan program in 1994, the Company has had no significant associated losses. The Company believes the likelihood of any significant amounts being funded in connection with these commitments to be remote. The carrying amount of the franchise-related borrowings guarantee, which is included in accounts payable and accrued expenses in the consolidated balance sheets, is approximately $863,000 as of December 31, 2015 . The maximum facility commitment amount under the franchise loan program is $175.0 million , including a Canadian subfacility commitment amount for loans to franchisees that operate stores in Canada (other than in the Province of Quebec) of Cdn $50 million . The Company remains subject to the financial covenants under the franchise loan facility. Legal Proceedings From time to time, the Company is party to various legal and regulatory proceedings arising in the ordinary course of business. Some of the proceedings to which the Company is currently a party are described below. The Company believes it has meritorious defenses to all of the claims described below, and intends to vigorously defend against the claims. However, these proceedings are still developing and due to the inherent uncertainty in litigation, regulatory and similar adversarial proceedings, there can be no guarantee that the Company will ultimately be successful in these proceedings, or in others to which it is currently a party. Substantial losses from these proceedings or the costs of defending them could have a material adverse impact upon the Company's business, financial position and results of operations. The Company establishes an accrued liability for legal and regulatory proceedings when it determines that a loss is both probable and the amount of the loss can be reasonably estimated. The Company continually monitors its litigation and regulatory exposure and reviews the adequacy of its legal and regulatory reserves on a quarterly basis in accordance with applicable accounting rules. The amount of any loss ultimately incurred in relation to matters for which an accrual has been established may be higher or lower than the amounts accrued for such matters. At December 31, 2015 , the Company had accrued $10.0 million for pending legal and regulatory matters for which it believes losses are probable, which is the Company's best estimate of its exposure to loss. The Company estimates that the aggregate range of possible loss in excess of accrued liabilities for such probable loss contingencies is between $0 and $2.9 million . At December 31, 2015 , the Company estimated that the aggregate range of loss for all material pending legal and regulatory proceedings for which a loss is reasonably possible, but less likely than probable (i.e., excluding the contingencies described in the preceding paragraph), is between $476,000 to $2.5 million . Those matters for which a reasonable estimate is not possible are not included within estimated ranges and, therefore, the estimated ranges do not represent the Company’s maximum loss exposure. The Company’s estimates as to legal and regulatory accruals, as to aggregate probable loss amounts and as to reasonably possible loss amounts, are all subject to the uncertainties and variables described above. Consumer In Margaret Korrow, et al. v. Aaron's, Inc., originally filed in the Superior Court of New Jersey, Middlesex County, Law Division on October 26, 2010, plaintiff filed suit on behalf of herself and others similarly situated alleging that the Company is liable in damages to plaintiff and each class member because the Company's lease agreements issued after March 16, 2006 purportedly violated certain New Jersey state consumer statutes. Plaintiff's complaint seeks treble damages under the New Jersey Consumer Fraud Act, and statutory penalty damages of $100 per violation of all contracts issued in New Jersey, and also claims that there are multiple violations per contract. The Company removed the lawsuit to the United States District Court for the District of New Jersey on December 6, 2010 (Civil Action No.: 10-06317(JAP)(LHG)). Plaintiff on behalf of herself and others similarly situated seeks equitable relief, statutory and treble damages, pre- and post-judgment interest and attorneys' fees. Discovery on this matter is closed. On July 31, 2013, the Court certified a class comprising all persons who entered into a rent-to-own contract with the Company in New Jersey from March 16, 2006 through March 31, 2011. In August 2013, the Court of Appeals denied the Company’s request for an interlocutory appeal of the class certification issue. The Company filed a motion to allow counterclaims against all newly certified class members who may owe legitimate fees or damages to the Company or who failed to return merchandise to the Company prior to obtaining ownership. That motion was denied by the magistrate judge and confirmed by the District Court on November 30, 2015. On August 14, 2015, the Company filed a motion for partial summary judgment seeking judicial dismissal of a portion of the claims in the case, which remains pending. On December 23, 2015, the Company filed a motion requesting permission for an interlocutory appeal of this denial to the United States Third Circuit Court of Appeals, which also remains pending. Privacy and Related Matters In Crystal and Brian Byrd v. Aaron's, Inc., Aspen Way Enterprises, Inc., John Does (1-100) Aaron's Franchisees and Designerware, LLC, filed on May 16, 2011, in the United States District Court, Western District of Pennsylvania (Case No. 1:11-CV-00101-SPB), plaintiffs alleged that the Company and its independently owned and operated franchisee Aspen Way Enterprises ("Aspen Way") knowingly violated plaintiffs' privacy in violation of the Electronic Communications Privacy Act ("ECPA") and the Computer Fraud Abuse Act and sought certification of a putative nationwide class. Plaintiffs based these claims on Aspen Way's use of a software program called "PC Rental Agent." Although the District Court dismissed the Company from the original lawsuit on March 20, 2012, after certain procedural motions, on May 23, 2013, the Court granted plaintiffs' motion for leave to file a third amended complaint, which asserted the claims under the ECPA, common law invasion of privacy, added a request for injunction, and named additional independently owned and operated Company franchisees as defendants. Plaintiffs filed the third amended complaint, and the Company moved to dismiss that complaint on substantially the same grounds as it sought to dismiss plaintiffs' prior complaints. Plaintiffs seek monetary damages as well as injunctive relief. Plaintiffs filed their motion for class certification on July 1, 2013, and the Company's response was filed in August 2013. On March 31, 2014, the United States District Judge dismissed all claims against all franchisees other than Aspen Way Enterprises, LLC. The Court also dismissed claims for invasion of privacy, aiding and abetting, and conspiracy against all defendants. In addition, the Court denied the plaintiffs’ motion to certify the class. Finally, the Judge denied the Company’s motion to dismiss the violation of ECPA claims. Plaintiffs requested and received immediate appellate review of these rulings by the United States Third Circuit Court of Appeals. On April 10, 2015, the Court of Appeals reversed the denial of class certification on the grounds stated by the District Court, and remanded the case back to the District Court for further consideration of that and the other elements necessary for class certification. The District Court has not issued a new ruling on those matters. In Michael Winslow and Fonda Winslow v. Sultan Financial Corporation, Aaron's, Inc., John Does (1-10), Aaron's Franchisees and Designerware, LLC, filed on March 5, 2013 in the Los Angeles Superior Court (Case No. BC502304), plaintiffs assert claims against the Company and its independently owned and operated franchisee, Sultan Financial Corporation (as well as certain John Doe franchisees), for unauthorized wiretapping, eavesdropping, electronic stalking, and violation of California's Comprehensive Computer Data Access and Fraud Act and its Unfair Competition Law. Each of these claims arises out of the alleged use of PC Rental Agent software. The plaintiffs are seeking injunctive relief and damages in connection with the allegations of the complaint. Plaintiffs are also seeking certification of a putative California class. Plaintiffs are represented by the same counsel as in the above-described Byrd litigation. In April 2013, the Company timely removed this matter to federal court. On May 8, 2013, the Company filed a motion to stay this litigation pending resolution of the Byrd litigation, a motion to dismiss for failure to state a claim, and a motion to strike certain allegations in the complaint. The Court subsequently stayed the case. The Company's motions to dismiss and strike certain allegations remain pending. On June 6, 2015, the plaintiffs filed a motion to lift the stay, which was denied on July 11, 2015. In Lomi Price v. Aaron's, Inc. and NW Freedom Corporation , filed on February 27, 2013, in the State Court of Fulton County, Georgia (Case No. 13-EV-016812B), an individual plaintiff asserts claims against the Company and its independently owned and operated franchisee, NW Freedom Corporation, for invasion of privacy/intrusion on seclusion, computer invasion of privacy and infliction of emotional distress. Each of these claims arises out of the alleged use of PC Rental Agent software. The plaintiff is seeking compensatory and punitive damages of not less than $250,000 . On April 3, 2013, the Company filed an answer and affirmative defenses. On that same day, the Company also filed a motion to stay the litigation pending resolution of the Byrd litigation, a motion to dismiss for failure to state a claim and a motion to strike certain allegations in the complaint. The Court stayed the proceeding pending rulings on certain motions in the Byrd case, which expired upon remand of the case back to the District Court. On April 24, 2015, the Company filed a renewed motion to stay, which was granted on June 15, 2015. In Michael Peterson v. Aaron’s, Inc. and Aspen Way Enterprises, Inc. , filed on June 19, 2014, in the United States District Court for the Northern District of Georgia (Case No. 1:14-cv-01919-TWT), several plaintiffs allege that they leased computers for use in their law practice. The plaintiffs claim that the Company and Aspen Way knowingly violated plaintiffs' privacy and the privacy of plaintiff’s legal clients in violation of the ECPA and the Computer Fraud Abuse Act. Plaintiffs seek certification of a putative nationwide class. Plaintiffs based these claims on Aspen Way's use of PC Rental Agent software. The plaintiffs claim that information and data obtained by defendants through PC Rental Agent was attorney-client privileged. The Company has filed a motion to dismiss plaintiffs' amended complaint. On June 4, 2015, the Court granted the Company’s motion to dismiss all claims except a claim for aiding and abetting invasion of privacy. Plaintiffs then filed a second amended complaint alleging only the invasion of privacy claims that survived the June 4, 2015 court order, and adding a claim for unjust enrichment. The Company filed a motion to dismiss the second amended complaint, and on September 16, 2015, the Court granted the Company’s motion to dismiss plaintiffs’ unjust enrichment claim. The only remaining claim against the Company is a claim for aiding and abetting invasion of privacy. Regulatory Investigations California Attorney General Investigation. The California Attorney General investigated the Company's retail transactional practices, including various leasing and marketing practices, information security and privacy policies and practices related to the alleged use of PC Rental Agent software by certain independently owned and operated Company franchisees. The Company reached a comprehensive resolution of this matter without litigation. The final settlement and consent order were announced on October 13, 2014. The Court filed the final judgment on February 10, 2015. The final payment as scheduled under the consent order was made on January 6, 2016. Other Matters In Foster v. Aaron’s, Inc., filed on August 21, 2015, in the United States District Court in Phoenix, Arizona (No. CV-15-1637-PHX-SRB), the plaintiff in this putative class action alleges that the Company violates the Telephone Consumer Protection Act ("TCPA") by placing automated calls to customer references, or otherwise violates the TCPA in the manner in which the Company contacts customer references. The Company's initial responsive pleading was filed on October 7, 2015. A Scheduling Order was entered on January 26, 2016. Other Commitments At December 31, 2015 , the Company had non-cancelable commitments primarily related to certain advertising and marketing programs of $22.6 million . Payments under these commitments are scheduled to be $6.7 million in 2016 , $7.2 million in 2017 , $4.2 million in 2018 and $2.3 million in 2019 , $1.6 million in 2020 , and $568,000 thereafter . The Company maintains a 401(k) savings plan for all its full-time employees who meet certain eligibility requirements. Effective January 1, 2015, the 401(k) savings plan was amended to allow employees to contribute up to 75% of their annual compensation in accordance with federal contribution limits with 100% matching by the Company on the first 3% of compensation and 50% on the next 2% of compensation for a total of 4% matching compensation. The Company’s expense related to the plan was $4.7 million in 2015 , $4.3 million in 2014 and $3.3 million in 2013 . The Company is a party to various claims and legal proceedings arising in the ordinary course of business. Management regularly assesses the Company’s insurance deductibles, monitors the Company's litigation and regulatory exposure with the Company’s attorneys and evaluates its loss experience. The Company also enters into various contracts in the normal course of business that may subject it to risk of financial loss if counterparties fail to perform their contractual obligations. Off-Balance Sheet Risk The Company, through its DAMI business, is a party to financial instruments (loans receivable) with off-balance-sheet risk in the normal course of business to meet the financing needs of its cardholders. These financial instruments primarily include commitments to extend unsecured credit. As of December 31, 2015 , there were approximately 82,000 active credit cards outstanding, of which 81,800 had remaining credit available of $378.7 million . The rates and terms of such commitments to lend are competitive with others in the market in which the Company operates. As such, the commitment amount above, if borrowed, is a reasonable estimate of fair value. While these amounts represented the total available unused credit card lines, the Company does not anticipate that all cardholders will access their entire available line at any given point in time. Commitments to extend unsecured credit are agreements to lend to a customer so long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates cardholder creditworthiness individually. |
Restructuring
Restructuring | 12 Months Ended |
Dec. 31, 2015 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | RESTRUCTURING On July 15, 2014, the Company announced that a rigorous evaluation of the Company-operated store portfolio had been performed. As a result of this evaluation and other cost-reduction initiatives, during the year ended December 31, 2014, the Company closed 44 underperforming Company-operated stores and restructured its home office and field support to more closely align with current business conditions. The restructuring was completed during the third quarter of 2014 and total restructuring charges of $9.1 million were recorded during the year ended December 31, 2014, principally comprised of $4.8 million related to contractual lease obligations, $3.3 million related to the write-off and impairment of property, plant and equipment and $620,000 related to workforce reductions. During 2014, total restructuring charges of $4.8 million have been included in the Sales and Lease Ownership segment results and total restructuring charges of $4.3 million have been included in the Other category results. These costs were included in the line item "Restructuring Expenses" in the consolidated statements of earnings. The Company does not currently anticipate any remaining costs related to this restructuring plan to be material. The following table summarizes the balances and activity related to the restructuring charges: (In Thousands) Contractual Obligations Under Canceled Leases Severance Fixed Assets Other Total Balance at January 1, 2014 $ — $ — $ — $ — $ — Restructuring Expenses 4,797 620 3,328 395 9,140 Payments (1,570 ) (620 ) — — (2,190 ) Impairment and Assets Written Off — — (3,328 ) (395 ) (3,723 ) Balance at December 31, 2014 3,227 — — — 3,227 Payments (1,559 ) — — — (1,559 ) Balance at December 31, 2015 $ 1,668 $ — $ — $ — $ 1,668 In the ordinary course of business, the Company continually reviews, and as appropriate adjusts, the amount and mix of Company-operated and franchised stores to help optimize overall performance. Costs incurred to close stores during 2015 were not significant. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Shareholders' Equity | SHAREHOLDERS’ EQUITY The Company held 18,151,560 shares in its treasury and was authorized to purchase an additional 10,496,421 shares at December 31, 2015 . The holders of common stock are entitled to receive dividends and other distributions in cash, stock or property of the Company as and when declared by its Board of Directors out of legally available funds. The Company repurchased 1,000,952 shares of its common stock in 2014 and 3,502,627 shares of its common stock in 2013 through an accelerated share repurchase program. There was no share repurchase activity during 2015. The Company has 1,000,000 shares of preferred stock authorized. The shares are issuable in series with terms for each series fixed by, and such issuance subject to approval by, the Board of Directors. As of December 31, 2015 , no preferred shares have been issued. On October 4, 2013, the Company amended its Amended and Restated Articles of Incorporation to confirm that shares of common stock the Company repurchases from time to time become treasury shares. As permitted by Georgia corporate law, the amendment was adopted by the Board of Directors of the Company without shareholder action. Accelerated Share Repurchase Program In December 2013, the Company entered into an accelerated share repurchase program with a third-party financial institution to purchase $125.0 million of the Company’s common stock, as part of its previously announced share repurchase program. The Company paid $125.0 million at the beginning of the program and received an initial delivery of 3,502,627 shares, estimated to be approximately 80% of the total number of shares to be repurchased under the agreement, which reduced the Company's shares outstanding at December 31, 2013 . The value of the initial shares received on the date of purchase was $100.0 million , reflecting a $28.55 price per share, which was recorded as treasury shares. The Company recorded the remaining $25.0 million as a forward contract indexed to its own common stock in additional paid-in capital for the year ended December 31, 2013 . In February 2014 , the accelerated share repurchase program was completed and the Company received 1,000,952 additional shares determined using a volume weighted average price of the Company's stock (inclusive of a discount) during the trading period, which resulted in an effective average price per share of $27.76 . All amounts initially classified as additional paid-in capital were reclassified to treasury shares during the first quarter of 2014 upon settlement. |
Stock Options and Restricted St
Stock Options and Restricted Stock | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Options and Restricted Stock | STOCK OPTIONS AND RESTRICTED STOCK The Company grants stock options, RSUs, RSAs and PSUs to certain employees and directors of the Company under the 2001 Stock Option and Incentive Award Plan and the 2015 Equity and Incentive Award Plan (the "2001 Plan" and "2015 Plan"). The 2001 Plan was originally approved by the Company’s shareholders in May 2001 and was amended and restated with shareholder approval in May 2009 and discontinued with the approval of the 2015 Plan on May 6, 2015. The 2015 Plan was approved by the Company's shareholders on May 6, 2015 and replaces the 2001 Plan. Differences between the 2015 Plan and the 2001 Plan, include the following: • the 2015 Plan does not include liberal share counting methodologies, such as allowing shares tendered or withheld for taxes to be added back to the shares available under the 2015 Plan; • the 2015 Plan does not permit the grant of stock options at a discounted exercise price, unless required to maintain intrinsic or economic value in certain corporate transactions (e.g., spin-offs, etc.); • the 2015 Plan prohibits the re-pricing of awards without shareholder approval; and • awards granted under the 2015 Plan will be subject to any clawback policy adopted by the Company. As of December 31, 2015 , the aggregate number of shares of common stock that may be issued or transferred under the 2015 Plan is 4,802,248 . Total stock-based compensation expense was $14.2 million , $10.9 million and $2.3 million in 2015 , 2014 and 2013 , respectively. Stock-based compensation expense for the year ended December 31, 2014 included $5.1 million related to the accelerated vesting of restricted stock and stock options upon the retirement of the Company’s Chief Executive Officer in 2014, as provided for in his employment agreement. These costs were included in the line item "Retirement and Vacation Charges" in the consolidated statements of earnings. All other stock-based compensation expense was included as a component of operating expenses in the consolidated statements of earnings. The total income tax benefit recognized in the consolidated statements of earnings for stock-based compensation arrangements was $5.4 million , $3.8 million and $889,000 in 2015 , 2014 and 2013 , respectively. Benefits of tax deductions in excess of recognized compensation cost, which are included in financing cash flows, were $348,000 , $1.4 million and $1.4 million for the years ended 2015 , 2014 and 2013 , respectively. As of December 31, 2015 , there was $23.9 million of total unrecognized compensation expense related to non-vested stock-based compensation which is expected to be recognized over a period of 1.6 years. Stock Options Under the Company's 2001 Plan, options granted to date become exercisable after a period of one to five years and unexercised options lapse 10 years after the date of grant. Under the Company’s 2015 Plan, options granted to date become exercisable after a period of one to three years and unexercised options lapse 10 years after the date of the grant. Options are subject to forfeiture upon termination of service for both plans. Shares are issued from the Company’s treasury shares upon share option exercises. The Company determines the fair value of stock options on the grant date using a Black-Scholes-Merton option pricing model that incorporates expected volatility, expected option life, risk-free interest rates and expected dividend yields. The expected volatility is based on implied volatilities from traded options on the Company’s stock and the historical volatility of the Company’s common stock over the most recent period generally commensurate with the expected estimated life of each respective grant. The expected lives of options are based on the Company's historical option exercise experience. The Company believes that the historical experience method is the best estimate of future exercise patterns. The risk-free interest rates are determined using the implied yield available for zero-coupon United States government issues with a remaining term equal to the expected life of the grant. The expected dividend yields are based on the approved annual dividend rate in effect and market price of the underlying common stock at the time of grant. No assumption for a future dividend rate increase has been included unless there is an approved plan to increase the dividend in the near term. The Company granted 338,000 and 351,000 stock options during 2015 and 2014 , respectively. No stock options were granted in 2013 . The weighted-average fair value of options granted in 2015 and 2014 and the weighted-average assumptions used in the Black-Scholes-Merton option pricing model for such grants were as follows: 2015 2014 Dividend Yield .3 % .3 % Expected Volatility 28.9 % 31.9 % Risk-free Interest Rate 1.6 % 1.9 % Expected Term (in years) 5.2 6.2 Weighted-average Fair Value of Stock Options Granted $ 8.41 $ 9.61 The following table summarizes information about stock options outstanding at December 31, 2015 : Options Outstanding Options Exercisable Range of Exercise Number Outstanding Weighted Average Remaining Contractual Life (in Years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $10.01-15.00 199,000 2.79 $ 14.11 199,000 $ 14.11 15.01-20.00 82,500 4.15 19.92 82,500 19.92 20.01-25.00 7,521 8.85 24.98 — — 25.01-30.00 380,646 8.91 28.23 53,640 27.80 30.01-32.20 202,687 8.97 31.93 — — 10.01-32.20 872,354 7.08 25.05 335,140 17.73 The table below summarizes option activity for the year ended December 31, 2015 : Options (In Thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in Years) Aggregate Intrinsic Value (in Thousands) Weighted Average Fair Value Outstanding at January 1, 2015 624 $ 21.52 Granted 338 30.17 Exercised (61 ) 16.95 Forfeited/expired (29 ) 28.92 Outstanding at December 31, 2015 872 25.05 7.08 $ — $ 8.31 Expected to Vest at December 31, 2015 485 29.56 8.93 — 8.90 Exercisable at December 31, 2015 335 17.73 4.11 1,562 7.39 The aggregate intrinsic value amounts in the table above represent the closing price of the Company’s common stock on December 31, 2015 in excess of the exercise price, multiplied by the number of in-the-money stock options as of that same date. Options outstanding that are expected to vest are net of estimated future option forfeitures. The aggregate intrinsic value of options exercised, which represents the value of the Company’s common stock at the time of exercise in excess of the exercise price, was $844,000 , $4.4 million and $11.0 million in 2015 , 2014 and 2013 , respectively. The total grant-date fair value of options vested in 2015 , 2014 and 2013 was $1.1 million , $1.3 million and $2.7 million , respectively. Restricted Stock Shares of restricted stock or restricted stock units (collectively, "restricted stock") may be granted to employees and directors under the newly authorized 2015 Plan and typically vest over approximately one to three year periods; under the 2001 Plan restricted stock typically vests over approximately one to five year periods. Restricted stock grants may be subject to one or more objective employment, performance or other forfeiture conditions as established at the time of grant. Any shares of restricted stock that are forfeited may again become available for issuance. The fair value of restricted stock is based on the fair market value of the Company’s common stock on the date of grant. In 2011, the Company established a restricted stock program as a component of the 2001 Plan, referred to as the Aaron’s Management Performance Plan ("AMP Plan"). Under the AMP Plan, which expired on December 31, 2012, restricted shares were granted quarterly to eligible participants upon achievement of certain pre-tax profit and revenue levels by the employees’ operating units or the overall Company. Restricted stock granted under the AMP Plan vests over four to five years from the date of grant. Plan participants included certain vice presidents, director level employees and other key personnel in the Company’s home office, divisional vice presidents and regional managers. These grants will begin vesting in 2016. During 2013, the Company granted performance-based restricted stock to certain executive officers. The performance-based restricted stock under this program is vested at the completion of a three -year period only upon the achievement of specific performance criteria over three annual performance periods. The compensation expense associated with these awards is amortized ratably over the vesting period based on the Company’s projected assessment of the level of performance that will be achieved and earned. The Company granted 261,000 , 548,000 and 307,000 shares of restricted stock at weighted-average fair values of $31.78 , $29.11 and $29.23 in 2015 , 2014 and 2013 , respectively. The following table summarizes information about restricted stock activity during 2015 : Restricted Stock (In Thousands) Weighted Average Fair Value Non-vested at January 1, 2015 698 $ 28.75 Granted 261 31.78 Vested (61 ) 27.07 Forfeited (77 ) 29.45 Non-vested at December 31, 2015 821 1 29.77 1 The outstanding non-vested restricted stock as of December 31, 2015 includes 37,500 shares that are subject to performance conditions. The total vest-date fair value of restricted stock described above and the performance share units described below that vested during the year was $1.8 million , $11.1 million and $184,000 in 2015 , 2014 and 2013 , respectively. Performance Share Units In 2015, as part of the Company’s long-term incentive compensation program ("LTIP Plan") and pursuant to the Company’s 2001 Plan and 2015 Plan, the Company granted a mix of stock options, time-based restricted stock and performance share units to key executives and managers. For performance share units, which are generally settled in stock, the number of shares earned is determined at the end of the one -year performance period based upon achievement of certain earnings before income taxes, depreciation and amortization (EBITDA), revenue, return on capital and invoice volume levels of the Company. If the performance criteria are met, the award is earned. One-third of the earned award vests immediately, one third is subject to a one year service period and one-third of the earned award is subject to a two year service period. The number of performance-based shares which could potentially be issued ranges from zero to 200% of the target award. The fair value of performance share units are based on the fair market value of the Company’s common stock on the date of grant. The compensation expense associated with these awards is amortized ratably over the vesting period based on the Company’s projected assessment of the level of performance that will be achieved and earned. In the event the Company determines it is no longer probable that the minimum performance criteria specified in the plan will be achieved, all previously recognized compensation expense is reversed in the period such a determination is made. The following table summarizes information about performance share unit activity based on the target share amounts during 2015 : Performance Share Units (In Thousands) Weighted Average Fair Value Non-vested at January 1, 2015 111 $ 32.01 Granted 358 32.03 Vested — — Forfeited/unearned (124 ) 29.86 Non-vested at December 31, 2015 345 32.80 |
Segments
Segments | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Segments | SEGMENTS Description of Products and Services of Reportable Segments As of December 31, 2015 , the Company had six operating and reportable segments: Sales and Lease Ownership, Progressive, HomeSmart, DAMI, Franchise and Manufacturing. The results of DAMI and Progressive have been included in the Company’s consolidated results and presented as reportable segments from their October 15, 2015 and April 14, 2014 acquisition dates, respectively. The Aaron’s Sales & Lease Ownership division offers furniture, electronics, appliances and computers to customers primarily on a monthly payment basis with no credit needed. Progressive is a leading virtual lease-to-own company that provides lease-purchase solutions on a variety of products, including furniture and bedding, consumer electronics, appliances and jewelry. The HomeSmart division offers furniture, electronics, appliances and computers to customers primarily on a weekly payment basis with no credit needed. DAMI offers a variety of second-look financing programs originated through a federally insured bank. Together with Progressive, DAMI allows the Company to provide retail partners one source for financing and leasing transactions with below-prime customers. The Company’s Franchise operation awards franchises and supports franchisees of its sales and lease ownership concept. The Manufacturing segment manufactures upholstered furniture and bedding predominantly for use by Company-operated and franchised stores. Therefore, the Manufacturing segment's revenues and earnings before income taxes are primarily the result of intercompany transactions, substantially all of which are eliminated through the elimination of intersegment revenues and intersegment profit or loss. Measurement of Segment Profit or Loss and Segment Assets The Company evaluates performance and allocates resources based on revenue growth and pre-tax profit or loss from operations. Intersegment sales are completed at internally negotiated amounts. Since the intersegment profit affects inventory valuation, depreciation and cost of goods sold are adjusted when intersegment profit is eliminated in consolidation. Factors Used by Management to Identify the Reportable Segments The Company’s reportable segments are based on the operations of the Company that the chief operating decision maker regularly reviews to analyze performance and allocate resources among business units of the Company. Information on segments and a reconciliation to earnings before income taxes are as follows for the years ended December 31: (In Thousands) 2015 2014 2013 Revenues From External Customers: Sales and Lease Ownership $ 2,001,682 $ 2,037,101 $ 2,076,269 Progressive 1,049,681 519,342 — HomeSmart 63,477 64,276 62,840 DAMI 1 2,845 — — Franchise 63,507 65,902 68,575 Manufacturing 106,020 104,058 106,523 Other 1,118 2,969 22,158 Revenues of Reportable Segments 3,288,330 2,793,648 2,336,365 Elimination of Intersegment Revenues (103,890 ) (102,296 ) (103,834 ) Cash to Accrual Adjustments (4,684 ) 3,681 2,100 Total Revenues from External Customers $ 3,179,756 $ 2,695,033 $ 2,234,631 Earnings (Loss) Before Income Taxes: Sales and Lease Ownership $ 166,838 $ 140,854 $ 183,965 Progressive 54,525 4,603 — HomeSmart 771 (2,643 ) (3,428 ) DAMI (1,964 ) — — Franchise 48,576 50,504 54,171 Manufacturing 2,520 860 107 Other (51,651 ) (75,905 ) (56,114 ) Earnings Before Income Taxes for Reportable Segments 219,615 118,273 178,701 Elimination of Intersegment Profit (2,488 ) (813 ) (94 ) Cash to Accrual and Other Adjustments (4,007 ) 4,244 6,353 Total Earnings Before Income Taxes $ 213,120 $ 121,704 $ 184,960 Assets: Sales and Lease Ownership $ 1,261,040 $ 1,246,325 $ 1,431,720 Progressive 878,457 858,159 — HomeSmart 44,429 47,585 47,970 DAMI 97,858 — — Franchise 53,693 46,755 47,788 Manufacturing 2 28,986 23,050 24,305 Other 294,412 234,970 275,393 Total Assets $ 2,658,875 $ 2,456,844 $ 1,827,176 1 Represents interest and fees on loans receivable, and excludes the effect of interest expense. 2 Includes inventory (principally raw materials and work-in-process) that has been classified within lease merchandise in the consolidated balance sheets of $19.4 million , $13.2 million and $14.0 million as of December 31, 2015 , 2014 and 2013 , respectively. (In Thousands) 2015 2014 2013 Depreciation and Amortization: Sales and Lease Ownership $ 592,450 $ 633,119 $ 639,951 Progressive 661,646 346,343 — HomeSmart 20,817 22,407 23,977 DAMI 218 — — Franchise 1,429 1,599 1,781 Manufacturing 1,482 1,649 2,081 Other 14,805 13,117 17,315 Total Depreciation and Amortization $ 1,292,847 $ 1,018,234 $ 685,105 Interest Expense: Sales and Lease Ownership $ 7,751 $ 7,834 $ 7,070 Progressive 21,959 14,992 — HomeSmart 900 922 916 DAMI 764 — — Franchise — — — Manufacturing 26 50 80 Other (8,061 ) (4,583 ) (2,453 ) Total Interest Expense $ 23,339 $ 19,215 $ 5,613 Capital Expenditures: Sales and Lease Ownership $ 23,082 $ 24,135 $ 30,831 Progressive 8,175 1,625 — HomeSmart 374 1,020 994 DAMI 40 — — Franchise — — — Manufacturing 387 1,477 1,531 Other 28,499 19,308 24,789 Total Capital Expenditures $ 60,557 $ 47,565 $ 58,145 Revenues From Canadian Operations (included in totals above): Sales and Lease Ownership $ 3,384 $ 179 $ 300 Assets From Canadian Operations (included in totals above): Sales and Lease Ownership $ 8,900 $ 776 $ 1,021 Revenues in the Other category are primarily attributable to (i) the RIMCO segment through the date of sale in January 2014, (ii) leasing space to unrelated third parties in the corporate headquarters building and (iii) several minor unrelated activities. The pre-tax losses in the Other category are the result of the activity mentioned above, net of the portion of corporate overhead not allocated to the reportable segments for management purposes. In 2015, the results of the Company's operating segments were impacted by the following items: • Sales and Lease Ownership earnings before income taxes included a $3.5 million loss related to a lease termination on a Company aircraft. • Progressive earnings before income taxes included $3.7 million of transaction costs related to the October 15, 2015 DAMI acquisition. In 2014, the results of the Company's operating segments were impacted by the following items: • Sales and Lease Ownership earnings before income taxes included $4.8 million of restructuring charges related to the Company's strategic decision to close 44 Company-operated stores. • Other category loss before income taxes included $13.7 million in financial and advisory costs related to addressing now-resolved strategic matters, including proxy contests, $4.3 million of restructuring charges in connection with the store closures noted above, $9.1 million of charges associated with the retirements of both the Company's Chief Executive Officer and Chief Operating Officer, $6.6 million in transaction costs related to the Progressive acquisition and $1.2 million of regulatory income that reduced previously recognized regulatory expense upon the resolution of the regulatory investigation by the California Attorney General. In 2013, the results of the Company's operating segments were impacted by the following items: • Other category loss before income taxes included $28.4 million related to an accrual for loss contingencies for the then-pending regulatory investigation by the California Attorney General and $4.9 million related to retirement expense and a change in vacation policies. The Company determines earnings (loss) before income taxes for all reportable segments in accordance with U.S. GAAP with the following adjustments: • Revenues in the Sales and Lease Ownership and HomeSmart segments are reported on a cash basis for management reporting purposes. • Generally a predetermined amount of each reportable segment’s revenues is charged to the reportable segment as an allocation of corporate overhead. • Accruals related to store closures are not recorded on the reportable segments’ financial statements, but are maintained and controlled by corporate headquarters. • The capitalization and amortization of manufacturing variances are recorded on the consolidated financial statements as part of Cash to Accrual and Other Adjustments and are not allocated to the segment that holds the related lease merchandise. • Advertising expense in the Sales and Lease Ownership and HomeSmart segments is estimated at the beginning of each year and then allocated to the division ratably over time for management reporting purposes. For financial reporting purposes, advertising expense is recognized when the related advertising activities occur. The difference between these two methods is reflected as part of Cash to Accrual and Other Adjustments. • Sales and lease ownership lease merchandise write-offs are recorded using the direct write-off method for management reporting purposes and using the allowance method for financial reporting purposes. The difference between these two methods is reflected as part of Cash to Accrual and Other Adjustments. • Interest is allocated to the Sales and Lease Ownership and HomeSmart segments based a percentage of their revenues. Interest is allocated to the Progressive segment based on a percentage of the outstanding balances of its intercompany borrowings and of the debt incurred when it was acquired. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS The Company leases certain properties under capital leases with certain related parties that are more fully described in Note 7 above. |
Quarterly Financial Information
Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information (Unaudited) | QUARTERLY FINANCIAL INFORMATION (UNAUDITED) Certain reclassifications have been made to prior quarters to conform to the current period presentation. (In Thousands, Except Per Share Data) First Quarter Second Quarter Third Quarter Fourth Quarter Year Ended December 31, 2015 Revenues $ 821,814 $ 769,049 $ 767,694 $ 821,199 Gross Profit * 363,478 346,110 331,628 344,144 Earnings Before Income Taxes 77,830 64,354 36,556 34,380 Net Earnings 49,243 40,546 24,194 21,726 Earnings Per Share .68 .56 .33 .30 Earnings Per Share Assuming Dilution .68 .56 .33 .30 Year Ended December 31, 2014 Revenues $ 585,423 $ 662,490 $ 698,418 $ 748,702 Gross Profit * 292,393 309,385 313,540 320,797 Earnings Before Income Taxes 60,710 13,562 13,199 34,233 Net Earnings 38,339 8,505 9,295 22,094 Earnings Per Share .53 .12 .13 .30 Earnings Per Share Assuming Dilution .53 .12 .13 .30 * Gross profit is the sum of lease revenues and fees, retail sales and non-retail sales less retail cost of sales, non-retail cost of sales, depreciation of lease merchandise and write-offs of lease merchandise. The comparability of the Company's quarterly financial results during 2015 and 2014 was impacted by certain events, as described below on a pre-tax basis: • The fourth quarter of 2015 included $2.7 million of transaction costs related to the October 15, 2015 DAMI acquisition and a $3.5 million loss related to a lease termination on a Company aircraft. • The first quarter of 2014 included an $872,000 charge for financial advisory and legal costs related to addressing now-resolved strategic matters, including an unsolicited acquisition offer, two proxy contests and certain other shareholder proposals and $803,000 in transaction costs related to the Progressive acquisition. • The second quarter of 2014 included an additional $12.4 million charge for the financial advisory and legal costs related to now-resolved strategic matters, an additional $5.5 million in transaction costs in connection with the Progressive acquisition and $2.3 million in leasehold improvement impairment charges related to the closure of 44 Company-operated stores announced July 15, 2014. • The third quarter of 2014 included an additional $385,000 charge for financial advisory and legal costs related to now-resolved strategic matters, an additional $6.9 million in restructuring charges related to the store closures noted above, $9.1 million due to the retirements of both the Company's Chief Executive Officer and Chief Operating Officer, an additional $371,000 in transaction costs related to the acquisition of Progressive and regulatory income of $1.2 million that reduced previously recognized regulatory expense upon the resolution of the regulatory investigation by the California Attorney General. |
Deferred Compensation Plan
Deferred Compensation Plan | 12 Months Ended |
Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Deferred Compensation Plan | DEFERRED COMPENSATION PLAN The Company maintains the Aaron’s, Inc. Deferred Compensation Plan, an unfunded, nonqualified deferred compensation plan for a select group of management, highly compensated employees and non-employee directors. On a pre-tax basis, eligible employees can defer receipt of up to 75% of their base compensation and up to 100% of their incentive pay compensation, and eligible non-employee directors can defer receipt of up to 100% of both their cash and stock director fees. Compensation deferred under the plan is credited to each participant’s deferral account and a deferred compensation liability is recorded in accounts payable and accrued expenses in the consolidated balance sheets. The deferred compensation plan liability was $11.6 million and $12.7 million as of December 31, 2015 and 2014 , respectively. Liabilities under the plan are recorded at amounts due to participants, based on the fair value of participants’ selected investments. The Company has established a rabbi trust to fund obligations under the plan with Company-owned life insurance. The obligations are unsecured general obligations of the Company and the participants have no right, interest or claim in the assets of the Company, except as unsecured general creditors. The cash surrender value of these policies totaled $15.4 million and $14.5 million as of December 31, 2015 and 2014 , respectively, and is included in prepaid expenses and other assets in the consolidated balance sheets. Deferred compensation expense charged to operations for the Company’s discretionary matching contributions was not significant during any of the periods presented. Benefits of $1.7 million , $1.9 million and $1.3 million were paid during the years ended December 31, 2015 , 2014 and 2013 , respectively. |
Business and Summary of Signi25
Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business Aaron’s, Inc. (the "Company" or "Aaron’s") is a leader in the sales and lease ownership and specialty retailing of furniture, consumer electronics, computers, and home appliances and accessories throughout the United States and Canada. The Company's major operating divisions are the Aaron’s Sales & Lease Ownership division (established as a monthly payment concept), Progressive, HomeSmart (established as a weekly payment concept), DAMI and Woodhaven Furniture Industries, which manufactures and supplies the majority of the upholstered furniture and bedding leased and sold in Company-operated and franchised stores. The Progressive segment, in which the Company acquired a 100% ownership interest on April 14, 2014, is a leading virtual lease-to-own company. Progressive provides lease-purchase solutions in 46 states. It does so by purchasing merchandise from third-party retailers desired by those retailers’ customers and, in turn, leasing that merchandise to the customers on a lease-to-own basis. Progressive consequently has no stores of its own, but rather offers lease-purchase solutions to the customers of traditional retailers. On October 15, 2015, the Company acquired a 100% ownership interest in Dent-A-Med, Inc., d/b/a the HELPcard®, (collectively, "DAMI") for $50.7 million , net of cash acquired. The Company also assumed $44.8 million of debt in the form of a secured revolving credit facility in connection with the acquisition. DAMI partners with merchants to provide a variety of revolving credit products originated through a federally insured bank to customers that may not qualify for traditional prime lending. These are commonly referred to as "second-look" credit products. Together with Progressive, DAMI will allow the Company to provide retail and merchant partners one source for financing and leasing transactions with below-prime customers. The following table presents store count by ownership type for the Company’s store-based operations: Stores at December 31 (Unaudited) 2015 2014 2013 Company-operated stores Sales and Lease Ownership 1,223 1,243 1,262 HomeSmart 82 83 81 RIMCO — — 27 Total Company-operated stores 1,305 1,326 1,370 Franchised stores 1 734 782 781 Systemwide stores 2,039 2,108 2,151 1 As of December 31, 2015 , 2014 and 2013 , 813 , 920 and 940 franchises had been awarded, respectively. The following table presents active doors for the Progressive segment: Active Doors at December 31 (Unaudited) 2015 2014 Progressive Active Doors 1 13,248 12,307 1 An active door is a retail store location at which at least one virtual lease-to-own transaction has been completed during the trailing three month period. |
Basis of Presentation | Basis of Presentation The preparation of the Company’s consolidated financial statements in conformity with accounting principles generally accepted in the United States ("U.S. GAAP") requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Generally, actual experience has been consistent with management’s prior estimates and assumptions. Management does not believe these estimates or assumptions will change significantly in the future absent unsurfaced and unforeseen events. |
Reclassifications | Reclassifications Certain reclassifications have been made to the prior periods to conform to the current period presentation. The Company presents sales net of related taxes for its traditional lease-to-own store-based ("core") business. Prior to 2015, Progressive presented lease revenues on a gross basis with sales taxes included. Effective January 1, 2015, Progressive conformed its presentation of sales tax to that of the core business. For the year ended December 31, 2014 , a reclassification adjustment of $30.2 million has been made to present sales net of related taxes on a consolidated basis. This adjustment reduces lease revenues and fees and operating expenses. |
Principles of Consolidation and Variable Interest Entities | Principles of Consolidation and Variable Interest Entities The consolidated financial statements include the accounts of Aaron’s, Inc. and its subsidiaries, each of which is wholly owned. Intercompany balances and transactions between consolidated entities have been eliminated. The Company holds notes issued by Perfect Home Holdings Limited ("Perfect Home"), a privately-held lease-to-own company that is primarily financed by share capital and subordinated debt. Perfect Home is based in the U.K. and operates 70 retail stores as of December 31, 2015 . Perfect Home is a variable interest entity ("VIE") because it does not have sufficient equity at risk. However, the Company is not the primary beneficiary and does not consolidate Perfect Home since the Company lacks the power through voting or similar rights to direct the activities that most significantly affect Perfect Home's economic performance. The Company’s maximum exposure to any potential losses associated with this VIE is equal to its total recorded investment which is $22.2 million at December 31, 2015 . |
Revenue Recognition | Revenue Recognition Lease Revenues and Fees The Company provides merchandise, consisting of furniture, consumer electronics, computers, appliances and household accessories, to its customers for lease under certain terms agreed to by the customer. Two primary store-based lease models are offered to customers: one through the Company’s Sales & Lease Ownership division (established as a monthly model) and the other through its HomeSmart division (established as a weekly model). The typical monthly store-based lease model is 12 , 18 or 24 months , while the typical weekly store-based lease model is 65 to 104 weeks. The Company’s Progressive division offers virtual lease-purchase solutions, typically over 12 months , to the customers of traditional retailers. The Company does not require deposits upon inception of customer agreements. The customer has the right to acquire title either through a purchase option or through payment of all required lease payments. All of the Company’s customer agreements are considered operating leases. Lease revenues are recognized as revenue in the month they are due. Lease payments received prior to the month due are recorded as deferred lease revenue, and this amount is included in customer deposits and advance payments in the accompanying consolidated balance sheets. The Company maintains ownership of the lease merchandise until all payment obligations are satisfied under sales and lease ownership agreements. Initial direct costs related to the Company’s customer agreements are expensed as incurred and have been classified as operating expenses in the Company’s consolidated statements of earnings. Retail and Non-Retail Sales Revenues from the sale of merchandise to franchisees are recognized when title and risk of ownership transfer to the franchisee upon its receipt of the merchandise, which is tracked electronically by the Company’s fulfillment system. Additionally, revenues from the sale of merchandise to other customers are recognized at the time of shipment, at which time title and risk of ownership are transferred to the customer. Substantially all of the amounts reported as non-retail sales and non-retail cost of sales in the accompanying consolidated statements of earnings relate to the sale of lease merchandise to franchisees. The Company classifies the sale of merchandise to other customers as retail sales in the consolidated statements of earnings. Franchise Royalties and Fees The Company franchises its Aaron’s Sales & Lease Ownership and HomeSmart stores in markets where the Company has no immediate plans to enter. Franchisees pay an ongoing royalty of either 5% or 6% of gross revenues, which are recorded when due. In addition, franchisees typically pay a non-refundable initial franchise fee from $15,000 to $50,000 depending upon market size. Franchise fees and area development fees are generated from the sale of rights to develop, own and operate sales and lease ownership stores. These fees are recognized as income when substantially all of the Company’s obligations per location are satisfied, generally at the date of the store opening. The Company guarantees certain debt obligations of some of the franchisees and receives guarantee fees based on the outstanding debt obligations of such franchisees. The Company recognizes finance fee revenue as the guarantee obligation is satisfied. Refer to Note 9 for additional discussion of the Company’s franchise-related guarantee obligation. Franchise fee revenue was $600,000 , $1.0 million and $1.7 million ; royalty revenue was $57.7 million , $58.8 million and $59.1 million ; and finance fee revenue was $2.9 million , $3.7 million and $5.1 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. Deferred franchise and area development agreement fees, included in accounts payable and accrued expenses in the accompanying consolidated balance sheets, were $1.6 million and $2.8 million at December 31, 2015 and 2014 , respectively. |
Lease Merchandise | Lease Merchandise The Company’s lease merchandise consists primarily of furniture, consumer electronics, computers, appliances and household accessories and is recorded at cost, which includes overhead from production facilities, shipping costs and warehousing costs. The sales and lease ownership stores depreciate merchandise to a 0% salvage value over the lease agreement period when on lease, generally 12 to 24 months (monthly agreements) or 65 to 104 weeks (weekly agreements), and generally 36 months when not on lease. The Company’s Progressive division, at which substantially all merchandise is on lease, depreciates merchandise over the lease agreement period, which is typically over 12 months . The Company’s policies require weekly lease merchandise counts at its store-based operations, which include write-offs for unsalable, damaged, or missing merchandise inventories. Full physical inventories are generally taken at the fulfillment and manufacturing facilities one to two times per year, and appropriate provisions are made for missing, damaged and unsalable merchandise. In addition, the Company monitors lease merchandise levels and mix by division, store, and fulfillment center, as well as the average age of merchandise on hand. If unsalable lease merchandise cannot be returned to vendors, it is adjusted to its net realizable value or written off. All lease merchandise is available for lease or sale. On a monthly basis, all damaged, lost or unsalable merchandise identified is written off. The Company records lease merchandise adjustments on the allowance method, which estimates the merchandise losses incurred but not yet identified by management as of the end of the accounting period based on historical write off experience. As of December 31, 2015 and 2014 , the allowance for lease merchandise write offs was $33.4 million and $27.6 million , respectively. Lease merchandise adjustments totaled $136.4 million , $99.9 million and $58.0 million during the years ended December 31, 2015 , 2014 and 2013 , respectively, and are included in operating expenses in the accompanying consolidated statements of earnings. |
Retail and Non-Retail Cost of Sales | Retail and Non-Retail Cost of Sales Included in cost of sales is the net book value of merchandise sold, primarily using specific identification. It is not practicable to allocate operating expenses between selling and lease operations. |
Shipping and Handling Costs | Shipping and Handling Costs The Company classifies shipping and handling costs as operating expenses in the accompanying consolidated statements of earnings, and these costs totaled $77.9 million , $81.1 million and $78.6 million in 2015 , 2014 and 2013 , respectively. |
Advertising | 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. Total advertising costs amounted to $39.3 million , $50.5 million and $43.0 million in 2015 , 2014 and 2013 , respectively. These advertising costs are shown net of cooperative advertising considerations received from vendors, substantially all of which represent reimbursement of specific, identifiable and incremental costs incurred in selling those vendors’ products. The amount of cooperative advertising consideration netted against advertising expense was $36.3 million , $28.3 million and $25.0 million in 2015 , 2014 and 2013 , respectively. The prepaid advertising asset was $900,000 and $1.3 million at December 31, 2015 and 2014 , respectively. |
Stock-Based Compensation | Stock-Based Compensation The Company has stock-based employee compensation plans, which are more fully described in Note 12. The Company estimates the fair value for the options granted on the grant date using a Black-Scholes-Merton option-pricing model. The fair value of each share of restricted stock units ("RSUs"), restricted stock awards ("RSAs") and performance share units ("PSUs") awarded is equal to the market value of a share of the Company’s common stock on the grant date. |
Deferred Income Taxes | Deferred Income Taxes Deferred income taxes represent primarily temporary differences between the amounts of assets and liabilities for financial and tax reporting purposes. The Company’s largest temporary differences arise principally from the use of accelerated depreciation methods on lease merchandise for tax purposes. |
Earnings Per Share | 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, RSUs, RSAs and PSUs as determined under the treasury stock method. The following table shows the calculation of dilutive share-based awards for the years ended December 31 (shares in thousands): (Shares In Thousands) 2015 2014 2013 Weighted average shares outstanding 72,568 72,384 75,747 Dilutive effect of share-based awards 475 339 643 Weighted average shares outstanding assuming dilution 73,043 72,723 76,390 Approximately 460,000 and 164,000 share-based awards were excluded from the computations of earnings per share assuming dilution in 2015 and 2014 , respectively, as the awards would have been anti-dilutive for the years presented. No stock options, RSUs, RSAs or PSUs were anti-dilutive during 2013 . |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company classifies highly liquid investments with maturity dates of three months or less when purchased as cash equivalents. The Company maintains its cash and cash equivalents in a limited number of banks. Bank balances typically exceed coverage provided by the Federal Deposit Insurance Corporation. However, due to the size and strength of the banks in which the balances are held, any exposure to loss is believed to be minimal. |
Investments | Investments At December 31, 2015 and 2014 , investments classified as held-to-maturity securities consisted of British pound-denominated notes issued by Perfect Home. The Perfect Home notes, which totaled £15.1 million ( $22.2 million ) and £13.7 million ( $21.3 million ) at December 31, 2015 and December 31, 2014 , respectively, are classified as held-to-maturity securities because the Company has the positive intent and ability to hold the investments to maturity. The Perfect Home notes are carried at amortized cost in investments in the consolidated balance sheets and mature on June 30, 2016. The increase in the carrying amount of the notes during 2015 and 2014 relates to accretion of the original discount on the notes, which had a face value of £10.0 million . Historically, the Company maintained investments in various corporate debt securities, or bonds, that were classified as held-to-maturity securities. During the year ended December 31, 2014 , the Company sold all of its investments in corporate bonds due to the Progressive acquisition. The amortized cost of the investments sold was $68.7 million , and a net realized gain of approximately $95,000 was recorded. The Company evaluates held-to-maturity securities for other-than-temporary impairment on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. The Company does not intend to sell its remaining securities and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases. |
Accounts Receivable | Accounts Receivable Accounts receivable consist primarily of receivables due from customers of Company-operated stores and Progressive, corporate receivables incurred during the normal course of business and franchisee obligations. Corporate receivables include receivables for vendor consideration, the secondary escrow described in Note 2 and in-transit credit card amounts related to customer transactions at Company-operated stores. Accounts receivable, net of allowances, consists of the following as of December 31 : (In Thousands) 2015 2014 Customers $ 35,153 $ 30,438 Corporate 26,175 32,572 Franchisee 52,111 44,373 $ 113,439 $ 107,383 The Company maintains an accounts receivable allowance, which primarily relates to its store-based operations and its Progressive division. For the Company's store-based operations, contractually required lease payments are accrued when due; however, they are not always collected and customers can terminate the lease agreements at any time. For customers that do not pay timely, the Company's store-based operations generally focus on obtaining a return of the lease merchandise. Therefore the Company’s policy for its store-based operations is to accrue a provision for returns and uncollectible contractually due renewal payments based on historical collection experience, which is recognized as a reduction of revenue. Store-based operations write off lease receivables that are 60 days or more past due on pre-determined dates occurring twice monthly. The Company’s policy for its Progressive division is to accrue for uncollected amounts due based on historical collection experience. The provision is recognized as bad debt expense classified in operating expenses. The Progressive division writes off lease receivables that are 120 days or more contractually past due. |
Loans Receivable, Net | Loans Receivable, Net Loans receivable, net represents the principal balances of credit card charges at DAMI's participating merchants that remain outstanding to cardholders, plus unpaid interest, capitalized origination costs and fees due from cardholders, net of an allowance for uncollectible amounts and unamortized fees (which include merchant fees, promotional fees and deferred annual card fees). DAMI extends or declines credit to an applicant through its bank partner based upon the customer's credit rating. Qualifying customers receive a credit card to finance their initial purchase and to use in subsequent purchases at the merchant or other subsequent merchants for an initial 24 month privilege period, which DAMI will renew if the cardholder remains in good standing. DAMI’s bank partner originates the loan by providing financing to the merchant at the point of sale and acquiring the receivable at a discount from the face value. The discount represents a pre-negotiated, nonrefundable fee between DAMI and the merchant that generally ranges from 3.5% to 25% (the merchant fee), depending on the product type and any promotional interest periods offered (e.g., six , 12 or 18 months of deferred or reduced interest). The fee is designed primarily to cover DAMI’s incremental direct origination costs and the risk of loss related to the portfolio of cardholder charges received from the merchant. Within a 72 hour period, DAMI acquires the receivable from the bank at the discounted amount. DAMI offsets the origination costs against the merchant fee, and the net amount is deferred. It is generally amortized into revenue over the 24 month initial privilege period. The customer is required to make periodic minimum payments that are generally 3.5% of the outstanding loan balance, which includes outstanding interest. Fixed and variable interest rates, typically 17.90% to 29.99% , compound daily. Annual fees may also be charged to the customer at the commencement of the loan and on each subsequent anniversary date. Under the provisions of the credit card agreements, the Company may assess fees for missed or late payments. Interest and fees are due in the billing period in which they are assessed. The Company acquired outstanding credit card loans in the October 15, 2015 DAMI acquisition (the "Acquired Loans"). Loans acquired in a business acquisition are recorded at their fair value at the acquisition date. The projected net cash flows from expected payments of principal, interest, fees and servicing costs and anticipated charge-offs are included in the determination of fair value; therefore, an allowance for loan losses and an amount for unamortized fees are not recognized for the Acquired Loans. The difference, or discount, between the expected cash flows to be received and the fair value of the Acquired Loans is accreted to revenue based on the effective interest method. The estimated weighted average life of the Acquired Loans was approximately one year at the acquisition date. At each period end, the Company evaluates the appropriateness of the accretable discount on the Acquired Loans based on actual and revised projected future cash receipts. |
Property, Plant and Equipment | Property, Plant and Equipment The Company records property, plant and equipment at cost. Depreciation and amortization are computed on a straight-line basis over the estimated useful lives of the respective assets, which range from five to 40 years for buildings and improvements and from one to 15 years for other depreciable property and equipment. Costs incurred to develop software for internal use are capitalized and amortized over the estimated useful life of the software, which ranges from five to 10 years. The Company primarily develops software for use in its store-based operations. The Company uses an agile development methodology in which feature-by-feature updates are made to its software. Costs are capitalized when management, with the relevant authority, authorizes and commits to funding a feature update and it is probable that the project will be completed and the software will be used to perform the function intended. Capitalization of costs ceases when the feature update is substantially complete and ready for its intended use. Generally, the life cycle for each feature update is one month. Gains and losses related to dispositions and retirements are recognized as incurred. Maintenance and repairs are also expensed as incurred; renewals and improvements are capitalized. Depreciation expense for property, plant and equipment is included in operating expenses in the accompanying consolidated statements of earnings and was $52.0 million , $53.7 million and $53.3 million during the years ended December 31, 2015 , 2014 and 2013 , respectively. Amortization of previously capitalized internal use software development costs, which is a component of depreciation expense for property, plant and equipment, was $7.4 million , $5.4 million and $3.3 million during the years ended December 31, 2015 , 2014 and 2013 , respectively. The Company assesses its long-lived assets other than goodwill and other indefinite-lived intangible assets for impairment whenever facts and circumstances indicate that the carrying amount may not be fully recoverable. If it is determined that the carrying amount of an asset is not recoverable, the Company compares the carrying amount of the asset to its fair value as estimated using discounted expected future cash flows, market values or replacement values for similar assets. The amount by which the carrying amount exceeds the fair value of the asset, if any, is recognized as an impairment loss. |
Assets Held for Sale | Assets Held for Sale Certain properties, consisting of parcels of land and commercial buildings, met the held for sale classification criteria as of December 31, 2015 and 2014 . After adjustment to fair value, the $7.0 million and $6.4 million carrying amount of these properties has been classified as assets held for sale in the consolidated balance sheets as of December 31, 2015 and 2014 , respectively. The Company estimated the fair values of real estate properties using the market values for similar properties. These properties are considered Level 2 assets as defined below. During the years ended 2015 , 2014 and 2013 , the Company recorded impairment charges of $459,000 , $805,000 and $3.8 million , respectively. These impairment charges related primarily to the impairment of various parcels of land and buildings included in the Sales and Lease Ownership segment that the Company decided not to utilize for future expansion, as well as the sale of the net assets of the RIMCO disposal group in January 2014, and are generally included in other operating expense (income), net within the consolidated statements of earnings. Gains and losses on the disposal of assets held for sale were not significant in 2015 or 2013 . The disposal of assets held for sale resulted in the recognition of net losses of $754,000 in 2014 |
Goodwill | 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. Impairment occurs when the carrying amount of goodwill is not recoverable from future cash flows. 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 impairment may have occurred. Factors which could necessitate an interim impairment assessment include a sustained decline in the Company’s stock price, prolonged negative industry or economic trends and significant underperformance relative to historical or projected future operating results. The Company has deemed its operating segments to be reporting units because the operations included in each operating segment have similar economic characteristics. As of December 31, 2015 , the Company had six operating segments and reporting units: Sales and Lease Ownership, Progressive, HomeSmart, DAMI, Franchise and Manufacturing. As of December 31, 2015 , the Company’s Sales and Lease Ownership, Progressive, HomeSmart and DAMI reporting units were the only reporting units with assigned goodwill balances. The following is a summary of the Company’s goodwill by reporting unit at December 31 : (In Thousands) 2015 2014 Sales and Lease Ownership $ 233,851 $ 226,828 Progressive 290,605 289,184 HomeSmart 14,729 14,658 DAMI 290 — Total $ 539,475 $ 530,670 When evaluating goodwill for impairment, the Company may first perform a qualitative assessment to determine whether it is more likely than not that a reporting unit or intangible asset group is impaired. The decision to perform a qualitative impairment assessment for an individual reporting unit in a given year is influenced by a number of factors, including the size of the reporting unit's goodwill, the current and projected operating results, the significance of the excess of the reporting unit's estimated fair value over carrying amount at the last quantitative assessment date and the amount of time in between quantitative fair value assessments and the date of acquisition. During 2015 , as part of the annual goodwill impairment analysis, the Company performed a qualitative assessment for the Progressive reporting unit and concluded no indications of impairment existed. If the Company does not perform a qualitative assessment, or if the Company determines that it is not more likely than not that the fair value of the reporting unit or intangible asset group exceeds its carrying amount, the Company performs a goodwill impairment test that consists of a two-step process, if necessary. The first step is to calculate the estimated fair value of the reporting unit and compare its fair value to its carrying amount, including goodwill. The Company uses a combination of valuation techniques to calculate the fair value of its reporting units, including a multiple of gross projected revenues approach, a multiple of projected earnings before interest, taxes, depreciation and amortization approach and a discounted cash flow model that use assumptions consistent with those the Company believes a hypothetical marketplace participant would use. If the carrying amount of a reporting unit exceeds its fair value, a second step is performed to determine the amount of impairment loss, if any. The second step compares the implied fair value of the reporting unit’s goodwill with the carrying amount of its goodwill. If the carrying amount of the reporting unit’s goodwill exceeds its implied fair value, an impairment loss is recognized in an amount equal to that excess. During the performance of the annual assessment of goodwill for impairment in the 2015 , 2014 and 2013 fiscal years, the Company did not identify any reporting units that were not substantially in excess of their carrying values, other than the HomeSmart reporting unit in 2015 and 2014. While no impairment was noted in the impairment testing, if HomeSmart is unable to sustain its recent profitability improvements, there could be a change in the valuation of the HomeSmart reporting unit that may result in the recognition of an impairment loss in future periods. The goodwill of the DAMI reporting unit was recognized in conjunction with the October 15, 2015 DAMI acquisition. Therefore, an annual impairment test for this reporting unit was not performed in 2015 . The Company determined that there were no events that occurred or circumstances that changed in the fourth quarter of 2015 that would more likely than not reduce the fair value of a reporting unit below its carrying amount. As a result, the Company did not perform an interim impairment test for any reporting unit as of December 31, 2015 . |
Other Intangibles | Other Intangibles Other intangibles include customer relationships, non-compete agreements and franchise development rights acquired in connection with store-based business acquisitions. The customer relationship intangible asset is amortized on a straight-line basis over a two -year estimated useful life. The non-compete intangible asset is amortized on a straight-line basis over the life of the agreement (generally two or three years). Acquired franchise development rights are amortized on a straight-line basis over the unexpired life of the franchisee’s ten year area development agreement. Other intangibles also include the identifiable intangible assets acquired as a result of the DAMI and Progressive acquisitions, which the Company recorded at the estimated fair value as of the respective acquisition dates. As more fully described in Note 2 to these consolidated financial statements, the Company amortizes the definite-lived intangible assets acquired as a result of the DAMI acquisition on a straight-line basis over five years for the technology asset and non-compete agreements and ten years for trademarks and tradenames. The Company amortizes the definite-lived intangible assets acquired as a result of the Progressive acquisition on a straight-line basis over periods ranging from one to three years for customer lease contracts and internal use software and ten to 12 years for technology and merchant relationships. Indefinite-lived intangible assets represent the value of trade names and trademarks acquired as part of the Progressive acquisition. At the date of acquisition, the Company determined that no legal, regulatory, contractual, competitive, economic or other factors limit the useful life of the trade name and trademark intangible asset and, therefore, the useful life is considered indefinite. The Company reassesses this conclusion quarterly and continues to believe the useful life of this asset is indefinite. Indefinite-lived intangible assets are not amortized but are subject to an impairment test annually and when events or circumstances indicate that impairment may have occurred. The Company performs the impairment test for its indefinite-lived intangible assets on October 1 by comparing the asset’s fair value to its carrying amount. The Company estimates the fair value based on projected discounted future cash flows under a relief from royalty method. An impairment charge is recognized if the asset’s estimated fair value is less than its carrying amount. The Company completed its indefinite-lived intangible asset impairment test as of October 1, 2015 and determined that no impairment had occurred. |
Insurance Reserves | Insurance Reserves Estimated insurance reserves are accrued primarily for workers compensation, vehicle liability, general liability and group health insurance benefits provided to the Company’s employees. Estimates for these insurance reserves 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. |
Asset Retirement Obligations | Asset Retirement Obligations The Company accrues for asset retirement obligations, which relate to expected costs to remove exterior signage, in the period in which the obligations are incurred. These costs are accrued at fair value. When the related liability is initially recorded, the Company capitalizes the cost by increasing the carrying amount of the related long-lived asset. Over time, the liability is accreted to its settlement value and the capitalized cost is depreciated over the useful life of the related asset. Upon settlement of the liability, the Company recognizes a gain or loss for any differences between the settlement amount and the liability recorded. Asset retirement obligations amounted to approximately $2.6 million and $2.7 million as of December 31, 2015 and 2014 , respectively. |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive loss by component for the year ended December 31, 2015 are as follows: (In Thousands) Foreign Currency Total Balance at January 1, 2015 $ (90 ) $ (90 ) Other comprehensive loss (427 ) (427 ) Balance at December 31, 2015 $ (517 ) $ (517 ) There were no reclassifications out of accumulated other comprehensive loss for the year ended December 31, 2015 . |
Fair Value Measurement | Fair Value Measurement Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value: Level 1—Valuations based on quoted prices for identical assets and liabilities in active markets. Level 2—Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3—Valuations based on unobservable inputs reflecting the Company's own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. The Company measures assets held for sale at fair value on a nonrecurring basis and records impairment charges when they are deemed to be impaired. The Company maintains certain financial assets and liabilities, including investments and fixed-rate long term debt, that are not measured at fair value but for which fair value is disclosed. The fair values of the Company’s other current financial assets and liabilities, including cash and cash equivalents, accounts receivable and accounts payable, approximate their carrying amounts due to their short-term nature. The fair value for the loans receivable and the revolving credit borrowings also approximate their carrying amounts. |
Foreign Currency | Foreign Currency The financial statements of international subsidiaries are translated to U.S. dollars using month-end rates of exchange for assets and liabilities, and average rates of exchange for revenues, costs and expenses. Translation gains and losses of international subsidiaries are recorded in accumulated other comprehensive income as a component of shareholders’ equity. Foreign currency transaction gains and losses are recorded as a component of other non-operating (expense) income, net in the consolidated statements of earnings and amounted to losses of approximately $2.5 million , $2.3 million and $1.0 million during 2015 , 2014 , and 2013 respectively. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Revenue Recognition. In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers . ASU 2014-09 replaces substantially all existing revenue recognition guidance with a single, comprehensive revenue recognition model that requires a company to recognize revenue at the amount to which it expects to be entitled in exchange for transferring goods or services to a customer. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In August 2015, the FASB issued ASU 2015-14, Deferral of the Effective Date, which deferred the effective date for ASU 2014-09 by one year to annual reporting periods, and interim periods within that period, beginning after December 15, 2017. Companies may use either a full retrospective or a modified retrospective approach to adopt ASU 2014-09. The Company has not yet determined the potential effects of adopting ASU 2014-09 on its consolidated financial statements. The Company plans to complete its initial assessment of how it will be affected by this standard in the second half of 2016. Debt Issuance Costs . In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs , which requires debt issuance costs to be presented in the balance sheet as a deduction from the corresponding debt liability rather than as a separate asset. ASU 2015-03 is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The Company does not expect the provisions of ASU 2015-03 to have a material impact on its consolidated financial statements. Cloud Computing. In April 2015, the FASB issued ASU No. 2015-05, Customer's Accounting for Fees Paid in a Cloud Computing Arrangement. Among other things, ASU 2015-05 clarifies how a customer in a cloud computing arrangement should determine whether the arrangement includes a software license, and clarifies that the acquisition of a software license must be accounted for in the same manner as other licenses of intangible assets. ASU 2015-05 is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The Company does not expect the provisions of ASU 2015-05 to have a material impact on its consolidated financial statements. Measurement-Period Adjustments . In September 2015, the FASB issued ASU No. 2015-16, Simplifying the Accounting for Measurement-Period Adjustments . ASU 2015-16 eliminates the requirement that an acquirer in a business combination account for a measurement-period adjustment retrospectively. Instead, acquirers must recognize measurement-period adjustments during the period in which they determine the adjustment amounts. The adjustment amounts must include the effect on earnings of any amounts the acquirer would have recorded in previous periods if the accounting had been completed at the acquisition date. ASU 2015-16 is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. ASU 2015-16 is applied prospectively to adjustments to provisional amounts that occur after the effective date. That is, ASU 2015-16 applies to open measurement periods, regardless of the acquisition date. The Company does not expect the provisions of ASU 2015-16 to have a material impact on its consolidated financial statements. Leases. In February 2016, the FASB issued ASU No. 2016-02, Leases , which would require lessees to recognize assets and liabilities for most leases and would change certain aspects of today’s lessor accounting, among other things. ASU 2016-02 is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. The Company has not yet determined the potential effects of adopting ASU 2016-02 on its consolidated financial statements. |
Business and Summary of Signi26
Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Schedules of Company Operated Store Activity | The following table presents store count by ownership type for the Company’s store-based operations: Stores at December 31 (Unaudited) 2015 2014 2013 Company-operated stores Sales and Lease Ownership 1,223 1,243 1,262 HomeSmart 82 83 81 RIMCO — — 27 Total Company-operated stores 1,305 1,326 1,370 Franchised stores 1 734 782 781 Systemwide stores 2,039 2,108 2,151 1 As of December 31, 2015 , 2014 and 2013 , 813 , 920 and 940 franchises had been awarded, respectively. The following table presents active doors for the Progressive segment: Active Doors at December 31 (Unaudited) 2015 2014 Progressive Active Doors 1 13,248 12,307 1 An active door is a retail store location at which at least one virtual lease-to-own transaction has been completed during the trailing three month period. |
Calculation of Dilutive Stock Awards | The following table shows the calculation of dilutive share-based awards for the years ended December 31 (shares in thousands): (Shares In Thousands) 2015 2014 2013 Weighted average shares outstanding 72,568 72,384 75,747 Dilutive effect of share-based awards 475 339 643 Weighted average shares outstanding assuming dilution 73,043 72,723 76,390 |
Accounts Receivable Net of Allowances | Accounts receivable, net of allowances, consists of the following as of December 31 : (In Thousands) 2015 2014 Customers $ 35,153 $ 30,438 Corporate 26,175 32,572 Franchisee 52,111 44,373 $ 113,439 $ 107,383 The following is a summary of the Company’s loans receivable, net at December 31 : (In Thousands) 2015 Credit Card Loans $ 13,900 Acquired Loans 74,866 Loans Receivable, Gross 88,766 Allowance for Loan Losses (935 ) Unamortized Fees (2,036 ) Loans Receivable, Net $ 85,795 |
Allowance for Doubtful Accounts | The following is a summary of the Company’s accounts receivable allowance as of December 31 : (In Thousands) 2015 2014 2013 Beginning Balance $ 27,401 $ 7,172 $ 6,001 Accounts written off (155,651 ) (79,054 ) (34,723 ) Accounts receivable provision 163,111 99,283 35,894 Ending Balance $ 34,861 $ 27,401 $ 7,172 The following table shows the amounts recognized for bad debt expense and provision for returns and non-renewals for the years ended December 31 : (In Thousands) 2015 2014 2013 Bad debt expense 122,184 60,514 — Provision for returns and uncollected renewal payments 40,927 38,769 35,894 Accounts receivable provision $ 163,111 $ 99,283 $ 35,894 |
Summary of Goodwill by Reporting Unit | The following is a summary of the Company’s goodwill by reporting unit at December 31 : (In Thousands) 2015 2014 Sales and Lease Ownership $ 233,851 $ 226,828 Progressive 290,605 289,184 HomeSmart 14,729 14,658 DAMI 290 — Total $ 539,475 $ 530,670 |
Changes in Accumulated Other Comprehensive Loss | Changes in accumulated other comprehensive loss by component for the year ended December 31, 2015 are as follows: (In Thousands) Foreign Currency Total Balance at January 1, 2015 $ (90 ) $ (90 ) Other comprehensive loss (427 ) (427 ) Balance at December 31, 2015 $ (517 ) $ (517 ) |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
DAMI | |
Business Acquisition [Line Items] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table presents the summary of the preliminary estimated fair value of the assets acquired and liabilities assumed in the DAMI acquisition as of the October 15, 2015 acquisition date: (In Thousands) Purchase Price $ 54,900 Estimated Fair Value of Identifiable Assets Acquired and Liabilities Assumed Cash and Cash Equivalents 4,185 Loans Receivable 1 89,186 Receivables 45 Property, Plant and Equipment 2,754 Other Intangibles 2 3,400 Income Tax Receivable 728 Prepaid Expenses and Other Assets 671 Deferred Income Tax Assets 375 Total Identifiable Assets Acquired 101,344 Accounts Payable and Accrued Expenses (1,709 ) Debt (45,025 ) Total Liabilities Assumed (46,734 ) Goodwill 290 Net Assets Acquired $ 54,900 1 Contractually required amounts due at the acquisition date were $94.2 million . 2 Identifiable intangible assets are further disaggregated in the table below. |
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | The estimated intangible assets attributable to the DAMI acquisition are comprised of the following: Fair Value (in thousands) Weighted Average Life (in years) Technology $ 2,550 5.0 Trade Names and Trademarks 500 10.0 Non-compete Agreements 350 5.0 Total Acquired Intangible Assets 1 $ 3,400 1 Acquired definite-lived intangible assets have a total weighted average life of 5.7 years. |
Progressive | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions, by Acquisition | The following table reconciles the total estimated purchase price of the Company’s acquisition of Progressive: (In Thousands) Proceeds from Private Placement Note Issuance $ 300,000 Proceeds from Term Loan 126,250 Proceeds from Revolving Credit Facility 65,000 Cash Consideration 185,454 Deferred Cash Consideration 29,106 Purchase Price $ 705,810 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table presents the summary of the preliminary estimated fair value of the assets acquired and liabilities assumed in the Progressive acquisition as of the April 14, 2014 acquisition date, as well as adjustments made during the year ended December 31, 2015 (referred to as the "measurement period adjustments"): (In Thousands) Amounts Recognized as of Acquisition Date (as adjusted) 1 Measurement Period Adjustments 2 Amounts Recognized as of Acquisition Date (as adjusted) Purchase Price $ 705,810 $ — $ 705,810 Estimated Fair Value of Identifiable Assets Acquired and Liabilities Assumed Cash and Cash Equivalents 5,810 — 5,810 Receivables 2, 3 27,581 (4,245 ) 23,336 Lease Merchandise 2 141,185 110 141,295 Property, Plant and Equipment 4,010 — 4,010 Other Intangibles 4 325,000 — 325,000 Prepaid Expenses and Other Assets 893 — 893 Total Identifiable Assets Acquired 504,479 (4,135 ) 500,344 Accounts Payable and Accrued Expenses 2 (29,104 ) 3,049 (26,055 ) Deferred Income Taxes Payable 2 (48,749 ) (335 ) (49,084 ) Customer Deposits and Advance Payments (10,000 ) — (10,000 ) Total Liabilities Assumed (87,853 ) 2,714 (85,139 ) Goodwill 5 289,184 1,421 290,605 Net Assets Acquired $ 705,810 $ — $ 705,810 1 As previously reported in the notes to consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2014, which includes the effects of certain measurement period adjustments recognized in 2014. 2 The measurement period adjustments recognized in 2015 related to the resolution of income tax uncertainties and sales tax exposures, which also impacted the fair value estimates of receivables and lease merchandise related to the secondary escrow amount, subsequent to the acquisition date. 3 Receivables include $13.4 million related to the secondary escrow amount, which the Company expects to recover prior to termination of the escrow agreement 36 months from the April 14, 2014 closing date. The gross amount due under customer-related receivables acquired was $22.7 million , of which $10.9 million was expected to be uncollectible. 4 Identifiable intangible assets are further disaggregated in the following table. 5 The total goodwill recognized in conjunction with the Progressive acquisition has been assigned to the Progressive operating segment. Of the goodwill recognized as part of this acquisition, $247.0 million is expected to be deductible for tax purposes. The primary reasons the purchase price of the acquisition exceeded the fair value of the net assets acquired, which resulted in the recognition of goodwill, is related to synergistic value created from the combination of Progressive’s virtual customer payment capabilities with the Company’s leading traditional lease-to-own model. Goodwill also includes certain other intangible assets that do not qualify for separate recognition, such as an assembled workforce. |
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | The estimated intangible assets attributable to the Progressive acquisition are comprised of the following: Fair Value (in thousands) Weighted Average Life (in years) Internal Use Software $ 14,000 3.0 Technology 66,000 10.0 Trade Names and Trademarks 53,000 Indefinite Customer Lease Contracts 11,000 1.0 Merchant Relationships 181,000 12.0 Total Acquired Intangible Assets 1 $ 325,000 1 Acquired definite-lived intangible assets have a total weighted average life of 10.6 years. |
Business Acquisition, Pro Forma Information | The following table presents unaudited consolidated pro forma information as if the acquisition of Progressive had occurred on January 1, 2013: Twelve Months Ended 2014 2013 (In Thousands) As Reported Pro Forma As Reported Pro Forma Revenues $ 2,695,033 $ 2,851,631 $ 2,234,631 $ 2,607,977 Net Earnings 78,233 86,038 120,666 105,682 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | The following table summarizes information related to indefinite-lived intangible assets at December 31 : (In Thousands) 2015 2014 Trade Names and Trademarks $ 53,000 $ 53,000 Goodwill 539,475 530,670 Indefinite-lived Intangible Assets $ 592,475 $ 583,670 |
Summary of Carrying Value of Goodwill by Operating Segment | The following table provides information related to the carrying amount of goodwill by operating segment: (In Thousands) Sales and Lease Progressive DAMI HomeSmart Total Balance at January 1, 2014 $ 224,523 $ — $ — $ 14,658 $ 239,181 Acquisitions 3,629 277,958 — — 281,587 Disposals (1,321 ) — — — (1,321 ) Acquisition Accounting Adjustments (3 ) 11,226 — — 11,223 Balance at December 31, 2014 226,828 289,184 — 14,658 530,670 Acquisitions 9,529 — 290 229 10,048 Disposals (2,506 ) — — (158 ) (2,664 ) Acquisition Accounting Adjustments — 1,421 — — 1,421 Balance at December 31, 2015 $ 233,851 $ 290,605 $ 290 $ 14,729 $ 539,475 |
Summary of Identifiable Intangible Assets | The following table summarizes information related to definite-lived intangible assets at December 31 : 2015 2014 (In Thousands) Gross Accumulated Net Gross Accumulated Net Internal Use Software $ 14,000 $ (7,998 ) $ 6,002 $ 14,000 $ (3,331 ) $ 10,669 Technology 68,550 (11,419 ) 57,131 66,000 (4,712 ) 61,288 Customer Lease Contracts — — — 11,000 (11,000 ) — Merchant Relationships 181,000 (25,851 ) 155,149 181,000 (10,768 ) 170,232 Other Intangibles 1 7,383 (2,753 ) 4,630 5,721 (3,439 ) 2,282 Total $ 270,933 $ (48,021 ) $ 222,912 $ 277,721 $ (33,250 ) $ 244,471 1 Other intangibles primarily includes definite-lived trade names and trademarks, customer relationships, non-compete agreements, and franchise development rights from business acquisitions. |
Estimated Future Amortization Expense | As of December 31, 2015 , estimated future amortization expense for the next five years related to definite-lived intangible assets is as follows: (In Thousands) 2016 $ 28,703 2017 24,602 2018 22,622 2019 22,527 2020 22,374 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table summarizes financial liabilities measured at fair value on a recurring basis: December 31, 2015 December 31, 2014 (In Thousands) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Deferred Compensation Liability $ — $ (11,576 ) $ — $ — $ (12,677 ) $ — |
Assets Measured at Fair Value on Nonrecurring Basis | The following table summarizes non-financial assets measured at fair value on a nonrecurring basis: December 31, 2015 December 31, 2014 (In Thousands) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets Held for Sale $ — $ 6,976 $ — $ — $ 6,356 $ — |
Fair Value of Assets (Liabilities) Not Measured at Fair Value In Consolidated Balance Sheets | The following table summarizes the fair value of assets (liabilities) that are not measured at fair value in the consolidated balance sheets, but for which the fair value is disclosed: December 31, 2015 December 31, 2014 (In Thousands) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Perfect Home Notes 1 $ — $ — $ 22,226 $ — $ — $ 21,311 Fixed-Rate Long Term Debt 2 — (395,618 ) — — (429,049 ) — 1 The Perfect Home notes were initially measured at cost. The Company periodically reviews the carrying amount utilizing company-specific transactions or changes in Perfect Home's financial performance to determine if fair value adjustments are necessary. 2 The fair value of fixed-rate long term debt is estimated using the present value of underlying cash flows discounted at a current market yield for similar instruments. The carrying amount of fixed-rate long term debt was $375.0 million and $400.0 million at December 31, 2015 and December 31, 2014 , respectively. |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property, Plant and Equipment | The following is a summary of the Company’s property, plant, and equipment at December 31 : (In Thousands) 2015 2014 Land $ 24,300 $ 24,861 Buildings and Improvements 76,982 83,053 Leasehold Improvements and Signs 98,435 107,380 Fixtures and Equipment 1 223,382 196,965 Assets Under Capital Leases: with Related Parties 10,573 10,573 with Unrelated Parties 11,063 10,564 Construction in Progress 3,853 2,086 448,588 435,482 Less: Accumulated Depreciation and Amortization (222,752 ) (216,065 ) $ 225,836 $ 219,417 1 Includes internal-use software development costs of $60.7 million and $50.3 million as of December 31, 2015 and 2014 , respectively. Accumulated amortization of internal-use software development costs amounted to $22.2 million and $14.8 million as of December 31, 2015 and 2014 , respectively. |
Loans Receivable (Tables)
Loans Receivable (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Receivables [Abstract] | |
Schedule of the Components of Loans Receivable, Net | Accounts receivable, net of allowances, consists of the following as of December 31 : (In Thousands) 2015 2014 Customers $ 35,153 $ 30,438 Corporate 26,175 32,572 Franchisee 52,111 44,373 $ 113,439 $ 107,383 The following is a summary of the Company’s loans receivable, net at December 31 : (In Thousands) 2015 Credit Card Loans $ 13,900 Acquired Loans 74,866 Loans Receivable, Gross 88,766 Allowance for Loan Losses (935 ) Unamortized Fees (2,036 ) Loans Receivable, Net $ 85,795 |
Aging of the Loans Receivable Balance | Included in the table below is an aging of the loans receivable, gross balance at December 31, 2015: Aging category Percentage 1 30-59 days past due 7.9 % 60-89 days past due 3.3 % 90 or more days past due 4.1 % Past due loans receivable 15.3 % Current loans receivable 84.7 % Balance of loans receivable 90 or more days past due and still accruing interest and fees $ — 1 This aging is based on the contractual amounts outstanding for each loan as of period end, and does not reflect the fair value adjustments for the Acquired Loans. |
Indebtedness (Tables)
Indebtedness (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Summary of Company's Credit Facilities | Following is a summary of the Company’s debt at December 31 : (In Thousands) 2015 2014 DAMI Credit Facility $41,781 $ — Revolving Facility 75,000 69,116 Senior Unsecured Notes, 3.95%, Due in Installments through April 2018 75,000 100,000 Term Loan, Due in Installments through December 2019 109,375 121,875 Senior Unsecured Notes, 4.75%, Due in Installments through April 2021 300,000 300,000 Capital Lease Obligation: with Related Parties 4,703 6,157 with Unrelated Parties 4,591 5,684 Other Debt — 3,250 $ 610,450 $ 606,082 |
Future Maturities of Long Term Debt and Capital Lease Obligations | Future maturities under the Company’s debt and capital lease obligations are as follows: (In Thousands) 2016 $ 157,178 2017 100,134 2018 98,856 2019 133,190 2020 60,755 Thereafter 60,337 $ 610,450 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Summary of Income Tax Expense | Following is a summary of the Company’s income tax expense for the years ended December 31 : (In Thousands) 2015 2014 2013 Current Income Tax Expense: Federal $ 32,999 $ 41,946 $ 91,664 State 5,442 8,682 9,393 38,441 50,628 101,057 Deferred Income Tax Expense (Benefit): Federal 35,413 (3,314 ) (35,941 ) State 3,557 (3,843 ) (822 ) 38,970 (7,157 ) (36,763 ) $ 77,411 $ 43,471 $ 64,294 |
Components of Deferred Income Tax Liabilities and Assets | Significant components of the Company’s deferred income tax liabilities and assets at December 31 are as follows: (In Thousands) 2015 2014 Deferred Tax Liabilities: Lease Merchandise and Property, Plant and Equipment $ 228,174 $ 228,002 Goodwill & Other Intangibles 47,421 40,644 Investment in Partnership 88,913 61,342 Other, Net 2,062 1,866 Total Deferred Tax Liabilities 366,570 331,854 Deferred Tax Assets: Accrued Liabilities 29,192 42,024 Advance Payments 15,713 14,272 Other, Net 14,936 7,713 Total Deferred Tax Assets 59,841 64,009 Less Valuation Allowance (752 ) (706 ) Net Deferred Tax Liabilities $ 307,481 $ 268,551 |
Effective Tax Rate Differs from Statutory United States Federal Income Tax Rate | The Company’s effective tax rate differs from the statutory United States Federal income tax rate for the years ended December 31 as follows: 2015 2014 2013 Statutory Rate 35.0 % 35.0 % 35.0 % Increases (Decreases) in United States Federal Taxes Resulting From: State Income Taxes, Net of Federal Income Tax Benefit 2.7 2.6 3.1 Federal Tax Credits (.5 ) (1.8 ) (1.7 ) Other, Net (.9 ) (.1 ) (1.6 ) Effective Tax Rate 36.3 % 35.7 % 34.8 % |
Summary of Activity Related to Uncertain Tax Positions | The following table summarizes the activity related to the Company’s uncertain tax positions: (In Thousands) 2015 2014 2013 Balance at January 1, $ 2,644 $ 1,960 $ 1,258 Additions Based on Tax Positions Related to the Current Year 331 311 454 Additions for Tax Positions of Prior Years 1,176 928 423 Prior Year Reductions (1 ) (370 ) (5 ) Statute Expirations (589 ) (94 ) (85 ) Settlements — (91 ) (85 ) Balance at December 31, $ 3,561 $ 2,644 $ 1,960 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Minimum Lease Payments Required under Operating Leases | Future minimum lease payments required under operating leases that have initial or remaining non-cancelable terms in excess of one year as of December 31, 2015 are as follows: (In Thousands) 2016 $ 112,134 2017 95,553 2018 79,167 2019 65,342 2020 52,636 Thereafter 135,209 $ 540,041 |
Restructuring (Tables)
Restructuring (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Reserve | The following table summarizes the balances and activity related to the restructuring charges: (In Thousands) Contractual Obligations Under Canceled Leases Severance Fixed Assets Other Total Balance at January 1, 2014 $ — $ — $ — $ — $ — Restructuring Expenses 4,797 620 3,328 395 9,140 Payments (1,570 ) (620 ) — — (2,190 ) Impairment and Assets Written Off — — (3,328 ) (395 ) (3,723 ) Balance at December 31, 2014 3,227 — — — 3,227 Payments (1,559 ) — — — (1,559 ) Balance at December 31, 2015 $ 1,668 $ — $ — $ — $ 1,668 |
Stock Options and Restricted 36
Stock Options and Restricted Stock (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Options, Valuation Assumptions | The weighted-average fair value of options granted in 2015 and 2014 and the weighted-average assumptions used in the Black-Scholes-Merton option pricing model for such grants were as follows: 2015 2014 Dividend Yield .3 % .3 % Expected Volatility 28.9 % 31.9 % Risk-free Interest Rate 1.6 % 1.9 % Expected Term (in years) 5.2 6.2 Weighted-average Fair Value of Stock Options Granted $ 8.41 $ 9.61 |
Summary Information about Stock Options Outstanding | The following table summarizes information about stock options outstanding at December 31, 2015 : Options Outstanding Options Exercisable Range of Exercise Number Outstanding Weighted Average Remaining Contractual Life (in Years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $10.01-15.00 199,000 2.79 $ 14.11 199,000 $ 14.11 15.01-20.00 82,500 4.15 19.92 82,500 19.92 20.01-25.00 7,521 8.85 24.98 — — 25.01-30.00 380,646 8.91 28.23 53,640 27.80 30.01-32.20 202,687 8.97 31.93 — — 10.01-32.20 872,354 7.08 25.05 335,140 17.73 |
Summary of Stock Option Activity | The table below summarizes option activity for the year ended December 31, 2015 : Options (In Thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in Years) Aggregate Intrinsic Value (in Thousands) Weighted Average Fair Value Outstanding at January 1, 2015 624 $ 21.52 Granted 338 30.17 Exercised (61 ) 16.95 Forfeited/expired (29 ) 28.92 Outstanding at December 31, 2015 872 25.05 7.08 $ — $ 8.31 Expected to Vest at December 31, 2015 485 29.56 8.93 — 8.90 Exercisable at December 31, 2015 335 17.73 4.11 1,562 7.39 |
Summary of Restricted Stock Activity | The following table summarizes information about restricted stock activity during 2015 : Restricted Stock (In Thousands) Weighted Average Fair Value Non-vested at January 1, 2015 698 $ 28.75 Granted 261 31.78 Vested (61 ) 27.07 Forfeited (77 ) 29.45 Non-vested at December 31, 2015 821 1 29.77 1 The outstanding non-vested restricted stock as of December 31, 2015 includes 37,500 shares that are subject to performance conditions. |
Summary of Performance Share Units | The following table summarizes information about performance share unit activity based on the target share amounts during 2015 : Performance Share Units (In Thousands) Weighted Average Fair Value Non-vested at January 1, 2015 111 $ 32.01 Granted 358 32.03 Vested — — Forfeited/unearned (124 ) 29.86 Non-vested at December 31, 2015 345 32.80 |
Segments (Tables)
Segments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Information on Segments and Reconciliation to Earnings Before Income Taxes from Continuing Operations | Information on segments and a reconciliation to earnings before income taxes are as follows for the years ended December 31: (In Thousands) 2015 2014 2013 Revenues From External Customers: Sales and Lease Ownership $ 2,001,682 $ 2,037,101 $ 2,076,269 Progressive 1,049,681 519,342 — HomeSmart 63,477 64,276 62,840 DAMI 1 2,845 — — Franchise 63,507 65,902 68,575 Manufacturing 106,020 104,058 106,523 Other 1,118 2,969 22,158 Revenues of Reportable Segments 3,288,330 2,793,648 2,336,365 Elimination of Intersegment Revenues (103,890 ) (102,296 ) (103,834 ) Cash to Accrual Adjustments (4,684 ) 3,681 2,100 Total Revenues from External Customers $ 3,179,756 $ 2,695,033 $ 2,234,631 Earnings (Loss) Before Income Taxes: Sales and Lease Ownership $ 166,838 $ 140,854 $ 183,965 Progressive 54,525 4,603 — HomeSmart 771 (2,643 ) (3,428 ) DAMI (1,964 ) — — Franchise 48,576 50,504 54,171 Manufacturing 2,520 860 107 Other (51,651 ) (75,905 ) (56,114 ) Earnings Before Income Taxes for Reportable Segments 219,615 118,273 178,701 Elimination of Intersegment Profit (2,488 ) (813 ) (94 ) Cash to Accrual and Other Adjustments (4,007 ) 4,244 6,353 Total Earnings Before Income Taxes $ 213,120 $ 121,704 $ 184,960 Assets: Sales and Lease Ownership $ 1,261,040 $ 1,246,325 $ 1,431,720 Progressive 878,457 858,159 — HomeSmart 44,429 47,585 47,970 DAMI 97,858 — — Franchise 53,693 46,755 47,788 Manufacturing 2 28,986 23,050 24,305 Other 294,412 234,970 275,393 Total Assets $ 2,658,875 $ 2,456,844 $ 1,827,176 1 Represents interest and fees on loans receivable, and excludes the effect of interest expense. 2 Includes inventory (principally raw materials and work-in-process) that has been classified within lease merchandise in the consolidated balance sheets of $19.4 million , $13.2 million and $14.0 million as of December 31, 2015 , 2014 and 2013 , respectively. (In Thousands) 2015 2014 2013 Depreciation and Amortization: Sales and Lease Ownership $ 592,450 $ 633,119 $ 639,951 Progressive 661,646 346,343 — HomeSmart 20,817 22,407 23,977 DAMI 218 — — Franchise 1,429 1,599 1,781 Manufacturing 1,482 1,649 2,081 Other 14,805 13,117 17,315 Total Depreciation and Amortization $ 1,292,847 $ 1,018,234 $ 685,105 Interest Expense: Sales and Lease Ownership $ 7,751 $ 7,834 $ 7,070 Progressive 21,959 14,992 — HomeSmart 900 922 916 DAMI 764 — — Franchise — — — Manufacturing 26 50 80 Other (8,061 ) (4,583 ) (2,453 ) Total Interest Expense $ 23,339 $ 19,215 $ 5,613 Capital Expenditures: Sales and Lease Ownership $ 23,082 $ 24,135 $ 30,831 Progressive 8,175 1,625 — HomeSmart 374 1,020 994 DAMI 40 — — Franchise — — — Manufacturing 387 1,477 1,531 Other 28,499 19,308 24,789 Total Capital Expenditures $ 60,557 $ 47,565 $ 58,145 Revenues From Canadian Operations (included in totals above): Sales and Lease Ownership $ 3,384 $ 179 $ 300 Assets From Canadian Operations (included in totals above): Sales and Lease Ownership $ 8,900 $ 776 $ 1,021 |
Quarterly Financial Informati38
Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information (Unaudited) | (In Thousands, Except Per Share Data) First Quarter Second Quarter Third Quarter Fourth Quarter Year Ended December 31, 2015 Revenues $ 821,814 $ 769,049 $ 767,694 $ 821,199 Gross Profit * 363,478 346,110 331,628 344,144 Earnings Before Income Taxes 77,830 64,354 36,556 34,380 Net Earnings 49,243 40,546 24,194 21,726 Earnings Per Share .68 .56 .33 .30 Earnings Per Share Assuming Dilution .68 .56 .33 .30 Year Ended December 31, 2014 Revenues $ 585,423 $ 662,490 $ 698,418 $ 748,702 Gross Profit * 292,393 309,385 313,540 320,797 Earnings Before Income Taxes 60,710 13,562 13,199 34,233 Net Earnings 38,339 8,505 9,295 22,094 Earnings Per Share .53 .12 .13 .30 Earnings Per Share Assuming Dilution .53 .12 .13 .30 * Gross profit is the sum of lease revenues and fees, retail sales and non-retail sales less retail cost of sales, non-retail cost of sales, depreciation of lease merchandise and write-offs of lease merchandise |
Business and Summary of Signi39
Business and Summary of Significant Accounting Policies - Narrative (Details) | Oct. 15, 2015USD ($)source | Dec. 31, 2015USD ($)segmentsinventory_countshares | Dec. 31, 2014USD ($)shares | Dec. 31, 2013USD ($) | Dec. 31, 2015GBP (£)store | Dec. 31, 2015USD ($)store | Dec. 31, 2014GBP (£) | Dec. 31, 2014USD ($) | Apr. 14, 2014state |
Significant Accounting Policies [Line Items] | |||||||||
Number of Store-based Lease Models | 2 | 2 | |||||||
Franchise royalties and fees | $ 63,507,000 | $ 65,902,000 | $ 68,575,000 | ||||||
Lease Revenues and Fees | 2,684,184,000 | 2,221,574,000 | 1,748,699,000 | ||||||
Shipping and handling costs | 77,900,000 | 81,100,000 | 78,600,000 | ||||||
Advertising costs | 39,300,000 | 50,500,000 | 43,000,000 | ||||||
Amount of cooperative advertising consideration netted against advertising expense | 36,300,000 | $ 28,300,000 | 25,000,000 | ||||||
Prepaid advertising asset | $ 900,000 | $ 1,300,000 | |||||||
Anti-dilutive Securities excluded from the computation of earnings per share assuming dilution | shares | 0 | ||||||||
Lease merchandise, percentage of salvage value | 0.00% | 0.00% | |||||||
Allowance for lease merchandise write-offs | $ 33,400,000 | 27,600,000 | |||||||
Lease merchandise adjustments | $ 136,400,000 | $ 99,900,000 | 58,000,000 | ||||||
Threshold period past due for write-off of lease receivable | 60 days | ||||||||
Depreciation expense for property, plant and equipment | $ 52,000,000 | 53,700,000 | 53,300,000 | ||||||
Amortization expense | 28,200,000 | 31,900,000 | 3,700,000 | ||||||
Assets Held for Sale | 6,976,000 | 6,356,000 | |||||||
Gain (loss) on disposition | $ 0 | (754,000) | 0 | ||||||
Operating segments | segments | 6 | ||||||||
Asset retirement obligations | $ 2,600,000 | 2,700,000 | |||||||
Foreign currency transaction gains and losses | $ (2,500,000) | 2,300,000 | (1,000,000) | ||||||
Acquisitions of businesses and contracts | 73,295,000 | 700,509,000 | 10,898,000 | ||||||
Held-to-maturity Securities, Sold Security, Realized Gain (Loss), Excluding Other than Temporary Impairments | 95,000 | ||||||||
Software | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Amortization expense | $ 7,400,000 | $ 5,400,000 | 3,300,000 | ||||||
Customer Relationships | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Estimated useful lives of intangibles (in years) | 2 years | ||||||||
Acquired Franchise Development Rights | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Estimated useful lives of intangibles (in years) | 10 years | ||||||||
Merchandise Not On Lease | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Lease merchandise useful life (in months) | 36 months | ||||||||
Restricted stock units | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Anti-dilutive Securities excluded from the computation of earnings per share assuming dilution | shares | 460,000 | 164,000 | |||||||
Maximum | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Number of full physical inventories taken per year | inventory_count | 2 | ||||||||
Maximum | Non-Compete Agreements | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Estimated useful lives of intangibles (in years) | 3 years | ||||||||
Maximum | Merchandise On Lease | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Lease merchandise useful life (in months) | 24 months | ||||||||
Lease merchandise useful life (in weeks) | 728 days | ||||||||
Maximum | Buildings and Improvements | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Property, plant and equipment, useful life | 40 years | ||||||||
Maximum | Other depreciable property and equipment | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Property, plant and equipment, useful life | 15 years | ||||||||
Maximum | Software | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Property, plant and equipment, useful life | 10 years | ||||||||
Maximum | Software Updates | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Property, plant and equipment, useful life | 1 month | ||||||||
Minimum | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Number of full physical inventories taken per year | inventory_count | 1 | ||||||||
Minimum | Non-Compete Agreements | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Estimated useful lives of intangibles (in years) | 2 years | ||||||||
Minimum | Merchandise On Lease | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Lease merchandise useful life (in months) | 12 months | ||||||||
Lease merchandise useful life (in weeks) | 455 days | ||||||||
Minimum | Buildings and Improvements | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Property, plant and equipment, useful life | 5 years | ||||||||
Minimum | Other depreciable property and equipment | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Property, plant and equipment, useful life | 1 year | ||||||||
Minimum | Software | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Property, plant and equipment, useful life | 5 years | ||||||||
Variable Interest Entity, Not Primary Beneficiary | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Number of retail stores | store | 70 | 70 | |||||||
Held to maturity securities | £ 15,100,000 | $ 22,200,000 | £ 13,700,000 | 21,300,000 | |||||
Amortized cost of investments | £ | £ 10,000,000 | ||||||||
Variable interest entity, reporting entity involvement, maximum loss exposure, amount | 22,200,000 | ||||||||
Sales and Lease Ownership and HomeSmart | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Franchise royalties and fees | $ 600,000 | $ 1,000,000 | 1,700,000 | ||||||
Royalty revenue | 57,700,000 | 58,800,000 | 59,100,000 | ||||||
Finance fee revenue | 2,900,000 | 3,700,000 | 5,100,000 | ||||||
Deferred franchise and area development agreement fees | $ 1,600,000 | $ 2,800,000 | |||||||
Sales and Lease Ownership and HomeSmart | Maximum | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Non-refundable initial franchise fee | $ 50,000 | ||||||||
Percentage of royalty of gross revenue | 6.00% | ||||||||
Sales and Lease Ownership and HomeSmart | Minimum | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Non-refundable initial franchise fee | $ 15,000 | ||||||||
Percentage of royalty of gross revenue | 5.00% | ||||||||
Progressive | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Threshold period past due for write-off of lease receivable | 120 days | ||||||||
Progressive | Agreement Three | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Period of lease model | 12 months | ||||||||
Sales and Lease Ownership | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Number of Store-based Lease Models | 1 | 1 | |||||||
Impairment charge | $ 459,000 | 805,000 | $ 3,800,000 | ||||||
Sales and Lease Ownership | Agreement One | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Period of lease model | 12 months | ||||||||
Sales and Lease Ownership | Agreement Two | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Period of lease model | 18 months | ||||||||
Sales and Lease Ownership | Agreement Three | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Period of lease model | 24 months | ||||||||
HomeSmart | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Number of Store-based Lease Models | 1 | 1 | |||||||
HomeSmart | Agreement One | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Period of lease model | 455 days | ||||||||
HomeSmart | Agreement Three | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Period of lease model | 728 days | ||||||||
Progressive | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Ownership percentage | 100.00% | ||||||||
Business combination, consideration | 68,700,000 | ||||||||
Number of states in which entity operates | state | 46 | ||||||||
Debt assumed | 491,300,000 | ||||||||
Progressive | Customer Lease Contracts | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Estimated useful lives of intangibles (in years) | 1 year | ||||||||
Progressive | Internal Use Software | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Estimated useful lives of intangibles (in years) | 3 years | ||||||||
Progressive | Technology | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Estimated useful lives of intangibles (in years) | 10 years | ||||||||
Progressive | Merchant Relationships | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Estimated useful lives of intangibles (in years) | 12 years | ||||||||
DAMI | Non-Compete Agreements | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Estimated useful lives of intangibles (in years) | 5 years | ||||||||
DAMI | Technology | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Estimated useful lives of intangibles (in years) | 5 years | ||||||||
DAMI | Trade Names and Trademarks | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Estimated useful lives of intangibles (in years) | 10 years | ||||||||
Restatement Adjustment | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Lease Revenues and Fees | $ (30,200,000) | ||||||||
Subsidiaries | DAMI | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Ownership percentage | 100.00% | ||||||||
Debt assumed | $ 44,800,000 | ||||||||
Number of sources of financial and leasing transactions acquired | source | 1 | ||||||||
Acquisitions of businesses and contracts | $ 50,700,000 | ||||||||
Subsidiaries | DAMI | Non-Compete Agreements | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Estimated useful lives of intangibles (in years) | 5 years | ||||||||
Subsidiaries | DAMI | Technology | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Estimated useful lives of intangibles (in years) | 5 years | ||||||||
Subsidiaries | DAMI | Trade Names and Trademarks | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Estimated useful lives of intangibles (in years) | 10 years |
Business and Summary of Signi40
Business and Summary of Significant Accounting Policies - Store Count by Ownership Type (Details) - Operating Segments - store | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Franchisor Disclosure [Line Items] | ||||
Company operated stores | 1,305 | 1,326 | 1,370 | |
Sales and Lease Ownership Excluding RIMCO | ||||
Franchisor Disclosure [Line Items] | ||||
Company operated stores | 1,223 | 1,243 | 1,262 | |
HomeSmart | ||||
Franchisor Disclosure [Line Items] | ||||
Company operated stores | 82 | 83 | 81 | |
RIMCO | ||||
Franchisor Disclosure [Line Items] | ||||
Company operated stores | 0 | 0 | 27 | |
Franchised Stores | ||||
Franchisor Disclosure [Line Items] | ||||
Company operated stores | [1] | 734 | 782 | 781 |
Systemwide Stores | ||||
Franchisor Disclosure [Line Items] | ||||
Company operated stores | 2,039 | 2,108 | 2,151 | |
Progressive | ||||
Franchisor Disclosure [Line Items] | ||||
Company operated stores | [2] | 13,248 | 12,307 | |
[1] | As of December 31, 2015, 2014 and 2013, 813, 920 and 940 franchises had been awarded, respectively. | |||
[2] | An active door is a retail store location at which at least one virtual lease-to-own transaction has been completed during the trailing three month period. |
Business and Summary of Signi41
Business and Summary of Significant Accounting Policies - Store Count by Ownership Type (Footnote) (Details) | 12 Months Ended | ||
Dec. 31, 2015storetransaction | Dec. 31, 2014store | Dec. 31, 2013store | |
Accounting Policies [Abstract] | |||
Franchises granted (in number of stores) | store | 813 | 920 | 940 |
Operating Segments | Progressive | |||
Significant Accounting Policies [Line Items] | |||
Virtual lease to own transactions completed (at least) | transaction | 1 |
Business and Summary of Signi42
Business and Summary of Significant Accounting Policies - Calculation of Dilutive Stock Awards (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accounting Policies [Abstract] | |||
Weighted average shares outstanding | 72,568 | 72,384 | 75,747 |
Dilutive effect of share-based awards | 475 | 339 | 643 |
Weighted average shares outstanding assuming dilution | 73,043 | 72,723 | 76,390 |
Business and Summary of Signi43
Business and Summary of Significant Accounting Policies - Accounts Receivable Net of Allowances (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net of allowances | $ 113,439 | $ 107,383 |
Trade Accounts Receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net of allowances | 35,153 | 30,438 |
Corporate Receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net of allowances | 26,175 | 32,572 |
Franchisee Receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net of allowances | $ 52,111 | $ 44,373 |
Business and Summary of Signi44
Business and Summary of Significant Accounting Policies - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Beginning Balance | $ 27,401 | $ 7,172 | $ 6,001 |
Accounts written off | (155,651) | (79,054) | (34,723) |
Accounts Receivable Provision | 163,111 | 99,283 | 35,894 |
Ending Balance | $ 34,861 | $ 27,401 | $ 7,172 |
Business and Summary of Signi45
Business and Summary of Significant Accounting Policies - Accounts Receivable Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accounting Policies [Abstract] | |||
Bad debt expense | $ 122,184 | $ 60,514 | $ 0 |
Provision for returns and uncollected renewal payments | 40,927 | 38,769 | 35,894 |
Provision for Doubtful Accounts | $ 163,111 | $ 99,283 | $ 35,894 |
Business and Summary of Signi46
Business and Summary of Significant Accounting Policies - Loans Receivable, Net (Details) - Credit Card Loans | Oct. 15, 2015 | Dec. 31, 2015 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Credit terms, privilege period | 24 months | |
Credit terms, merchant fee, percentage, promotional interest period one (in months) | 6 months | |
Credit terms, merchant fee, percentage, promotional interest period two (in months) | 12 months | |
Credit terms, merchant fee, percentage, promotional interest period three (in months) | 18 months | |
Credit terms, period to acquire receivable from bank (in days) | 3 days | |
Credit terms, minimum payment required, percentage of outstanding loan balance | 3.50% | |
Credit terms, interest rate, fixed and variable (percentage) | 17.90% | |
Minimum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Credit terms, merchant fee (percentage) | 3.50% | |
Maximum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Credit terms, merchant fee (percentage) | 25.00% | |
Credit terms, interest rate, fixed and variable (percentage) | 29.99% | |
DAMI | Subsidiaries | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Acquired loans, weighted average useful life (in years) | 1 year |
Business and Summary of Signi47
Business and Summary of Significant Accounting Policies - Summary of Goodwill by Reporting Unit (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Goodwill [Line Items] | |||
Goodwill | $ 539,475 | $ 530,670 | $ 239,181 |
Sales and Lease Ownership | |||
Goodwill [Line Items] | |||
Goodwill | 233,851 | 226,828 | 224,523 |
Progressive | |||
Goodwill [Line Items] | |||
Goodwill | 290,605 | 289,184 | 0 |
HomeSmart | |||
Goodwill [Line Items] | |||
Goodwill | 14,729 | 14,658 | 14,658 |
DAMI | |||
Goodwill [Line Items] | |||
Goodwill | $ 290 | $ 0 | $ 0 |
Business and Summary of Signi48
Business and Summary of Significant Accounting Policies - Accumulated Other Comprehensive Loss (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning Balance | $ 1,223,521 |
Ending Balance | 1,366,618 |
Foreign Currency | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning Balance | (90) |
Other comprehensive loss | (427) |
Ending Balance | (517) |
Accumulated Other Comprehensive Loss | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning Balance | (90) |
Other comprehensive loss | (427) |
Ending Balance | $ (517) |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) $ in Thousands | Oct. 15, 2015USD ($)source | Apr. 14, 2014USD ($)state | Dec. 31, 2015USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2015USD ($) | |||||
Business Acquisition [Line Items] | |||||||||||||||
Acquisitions of businesses and contracts | $ 73,295 | $ 700,509 | $ 10,898 | ||||||||||||
Acquisition related costs | $ 371 | $ 5,500 | $ 803 | 0 | 6,638 | $ 0 | |||||||||
Progressive | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Business acquisition, percentage of voting interests acquired | 100.00% | ||||||||||||||
Purchase Price | $ 705,810 | [1] | $ 705,810 | ||||||||||||
Cash acquired from acquisition | $ 5,800 | ||||||||||||||
Weighted average useful life (in years) | 10 years 7 months 6 days | ||||||||||||||
Acquisition related costs | 6,600 | ||||||||||||||
Debt issuance cost | 2,300 | ||||||||||||||
Number of states in which entity operates | state | 46 | ||||||||||||||
Deferred Cash Consideration | $ 29,106 | ||||||||||||||
Cash consideration | (185,454) | ||||||||||||||
Receivables | [3] | 27,581 | [1],[2] | $ 23,336 | [4] | 23,336 | [4] | 23,336 | [4] | ||||||
Customer receivables, gross | 22,700 | ||||||||||||||
Customer receivables, allowance for doubtful accounts | 10,900 | ||||||||||||||
Business acquisition, goodwill, expected tax deductible amount | 247,000 | ||||||||||||||
Proceeds from Long-term Debt | $ 491,300 | ||||||||||||||
Progressive | Escrow Deposit [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Deferred Cash Consideration | 789 | ||||||||||||||
Progressive | Primary Escrow Deposit | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Cash consideration | (35,800) | ||||||||||||||
Progressive | Secondary Escrow Deposit | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Cash consideration | $ (15,800) | ||||||||||||||
Escrow deposits withheld to cover pending litigation | 8,500 | 8,500 | 8,500 | ||||||||||||
Escrow deposit disbursements | 10,000 | ||||||||||||||
Escrow deposits, recoverable, estimate amount | 13,400 | 13,400 | $ 13,400 | ||||||||||||
Escrow deposit distribution term (in months) | 36 months | ||||||||||||||
Receivables | $ 13,400 | ||||||||||||||
Subsidiaries | DAMI | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Acquisitions of businesses and contracts | $ 50,700 | ||||||||||||||
Business acquisition, percentage of voting interests acquired | 100.00% | ||||||||||||||
Purchase Price | $ 54,900 | ||||||||||||||
Cash acquired from acquisition | $ 4,200 | ||||||||||||||
Number of sources of financial and leasing transactions acquired | source | 1 | ||||||||||||||
Loans receivable, gross | $ 94,200 | ||||||||||||||
Weighted average useful life (in years) | 5 years 8 months 12 days | ||||||||||||||
Acquisition related costs | $ 2,700 | 3,700 | |||||||||||||
Debt issuance cost | $ 425 | ||||||||||||||
Receivables | $ 45 | ||||||||||||||
Proceeds from Long-term Debt | $ 44,800 | ||||||||||||||
[1] | As previously reported in the notes to consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2014, which includes the effects of certain measurement period adjustments recognized in 2014. | ||||||||||||||
[2] | Identifiable intangible assets are further disaggregated in the table below. | ||||||||||||||
[3] | Receivables include $13.4 million related to the secondary escrow amount, which the Company expects to recover prior to termination of the escrow agreement 36 months from the April 14, 2014 closing date. The gross amount due under customer-related receivables acquired was $22.7 million, of which $10.9 million was expected to be uncollectible. | ||||||||||||||
[4] | The measurement period adjustments recognized in 2015 related to the resolution of income tax uncertainties and sales tax exposures, which also impacted the fair value estimates of receivables and lease merchandise related to the secondary escrow amount, subsequent to the acquisition date. |
Acquisitions - Fair Value of As
Acquisitions - Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Oct. 15, 2015 | Apr. 14, 2014 | [1] | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities [Abstract] | ||||||||
Goodwill | $ 539,475 | $ 530,670 | $ 239,181 | |||||
Progressive | ||||||||
Business Acquisition [Line Items] | ||||||||
Purchase Price | $ 705,810 | 705,810 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | ||||||||
Cash and Cash Equivalents | 5,810 | 5,810 | ||||||
Receivables | [3] | 27,581 | [2] | 23,336 | [4] | |||
Lease Merchandise | [4] | 141,185 | 141,295 | |||||
Property, Plant and Equipment | 4,010 | 4,010 | ||||||
Other Intangibles | [4],[5] | 325,000 | 325,000 | |||||
Prepaid Expenses and Other Assets | 893 | 893 | ||||||
Total Identifiable Assets Acquired | 504,479 | 500,344 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities [Abstract] | ||||||||
Accounts Payable and Accrued Expenses | [4] | (29,104) | (26,055) | |||||
Deferred Income Taxes Payable | [4] | (48,749) | (49,084) | |||||
Customer Deposits and Advance Payments | (10,000) | (10,000) | ||||||
Total Liabilities Assumed | (87,853) | (85,139) | ||||||
Goodwill | [6] | 289,184 | 290,605 | |||||
Net Assets Acquired | $ 705,810 | 705,810 | ||||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustments [Abstract] | ||||||||
Receivables | [3],[4] | (4,245) | ||||||
Lease Merchandise | [4] | 110 | ||||||
Total Identifiable Assets Acquired | [4] | (4,135) | ||||||
Accounts Payable And Accrued Expenses | [4] | 3,049 | ||||||
Deferred Income Tax Payable | [4] | (335) | ||||||
Total Liabilities Assumed | [4] | 2,714 | ||||||
Goodwill | [4],[6] | $ 1,421 | ||||||
Subsidiaries | DAMI | ||||||||
Business Acquisition [Line Items] | ||||||||
Purchase Price | $ 54,900 | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | ||||||||
Cash and Cash Equivalents | 4,185 | |||||||
Loans receivable | [7] | 89,186 | ||||||
Receivables | 45 | |||||||
Property, Plant and Equipment | 2,754 | |||||||
Other Intangibles | [2] | 3,400 | ||||||
Income Tax Receivable | [2] | 728 | ||||||
Prepaid Expenses and Other Assets | 671 | |||||||
Deferred Income Tax Assets | 375 | |||||||
Total Identifiable Assets Acquired | 101,344 | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities [Abstract] | ||||||||
Accounts Payable and Accrued Expenses | (1,709) | |||||||
Debt | (45,025) | |||||||
Total Liabilities Assumed | (46,734) | |||||||
Goodwill | 290 | |||||||
Net Assets Acquired | $ 54,900 | |||||||
[1] | As previously reported in the notes to consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2014, which includes the effects of certain measurement period adjustments recognized in 2014. | |||||||
[2] | Identifiable intangible assets are further disaggregated in the table below. | |||||||
[3] | Receivables include $13.4 million related to the secondary escrow amount, which the Company expects to recover prior to termination of the escrow agreement 36 months from the April 14, 2014 closing date. The gross amount due under customer-related receivables acquired was $22.7 million, of which $10.9 million was expected to be uncollectible. | |||||||
[4] | The measurement period adjustments recognized in 2015 related to the resolution of income tax uncertainties and sales tax exposures, which also impacted the fair value estimates of receivables and lease merchandise related to the secondary escrow amount, subsequent to the acquisition date. | |||||||
[5] | Identifiable intangible assets are further disaggregated in the following table. | |||||||
[6] | The total goodwill recognized in conjunction with the Progressive acquisition has been assigned to the Progressive operating segment. Of the goodwill recognized as part of this acquisition, $247.0 million is expected to be deductible for tax purposes. The primary reasons the purchase price of the acquisition exceeded the fair value of the net assets acquired, which resulted in the recognition of goodwill, is related to synergistic value created from the combination of Progressive’s virtual customer payment capabilities with the Company’s leading traditional lease-to-own model. Goodwill also includes certain other intangible assets that do not qualify for separate recognition, such as an assembled workforce. | |||||||
[7] | Contractually required amounts due at the acquisition date were $94.2 million. |
Acquisitions - Intangible Asset
Acquisitions - Intangible Assets Acquired (Details) - USD ($) $ in Thousands | Oct. 15, 2015 | Apr. 14, 2014 | Dec. 31, 2015 | |
DAMI | Technology | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated useful lives of intangibles (in years) | 5 years | |||
DAMI | Trade Names and Trademarks | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated useful lives of intangibles (in years) | 10 years | |||
DAMI | Non-Compete Agreements | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated useful lives of intangibles (in years) | 5 years | |||
DAMI | Subsidiaries | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Intangible Assets Acquired | [1] | $ 3,400 | ||
DAMI | Subsidiaries | Technology | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived Intangible Assets Acquired | 2,550 | |||
Estimated useful lives of intangibles (in years) | 5 years | |||
DAMI | Subsidiaries | Trade Names and Trademarks | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived Intangible Assets Acquired | 500 | |||
Estimated useful lives of intangibles (in years) | 10 years | |||
DAMI | Subsidiaries | Non-Compete Agreements | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived Intangible Assets Acquired | $ 350 | |||
Estimated useful lives of intangibles (in years) | 5 years | |||
Progressive | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Intangible Assets Acquired | [2] | $ 325,000 | ||
Progressive | Internal Use Software | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived Intangible Assets Acquired | 14,000 | |||
Estimated useful lives of intangibles (in years) | 3 years | |||
Progressive | Technology | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived Intangible Assets Acquired | 66,000 | |||
Estimated useful lives of intangibles (in years) | 10 years | |||
Progressive | Customer Lease Contracts | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived Intangible Assets Acquired | 11,000 | |||
Estimated useful lives of intangibles (in years) | 1 year | |||
Progressive | Merchant Relationships | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived Intangible Assets Acquired | 181,000 | |||
Estimated useful lives of intangibles (in years) | 12 years | |||
Progressive | Trade Names and Trademarks | ||||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||||
Indefinite-lived Intangible Assets Acquired | $ 53,000 | |||
[1] | Acquired definite-lived intangible assets have a total weighted average life of 5.7 years. | |||
[2] | Acquired definite-lived intangible assets have a total weighted average life of 10.6 years. |
Acquisitions - Purchase Price (
Acquisitions - Purchase Price (Details) - Progressive - USD ($) $ in Thousands | Apr. 14, 2014 | Dec. 31, 2014 | Dec. 31, 2015 | |
Business Acquisition [Line Items] | ||||
Proceeds from Long-term Debt | $ 491,300 | |||
Cash Consideration | $ 185,454 | |||
Deferred Cash Consideration | 29,106 | |||
Purchase Price | 705,810 | [1] | $ 705,810 | |
Senior Notes | Senior Unsecured Notes, 4.75% Note Due 2017 | ||||
Business Acquisition [Line Items] | ||||
Proceeds from Long-term Debt | 300,000 | |||
Senior Notes | Senior Unsecured Notes, 3.95% Due 2018 | ||||
Business Acquisition [Line Items] | ||||
Proceeds from Long-term Debt | 126,250 | |||
Line of Credit | Credit Facility, 2014 | Revolving Credit Agreement | ||||
Business Acquisition [Line Items] | ||||
Proceeds from Long-term Debt | $ 65,000 | |||
[1] | As previously reported in the notes to consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2014, which includes the effects of certain measurement period adjustments recognized in 2014. |
Acquisitions - Pro Forma Financ
Acquisitions - Pro Forma Financial Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Business Acquisition [Line Items] | |||||||||||
Revenues, as reported | $ 821,199 | $ 767,694 | $ 769,049 | $ 821,814 | $ 748,702 | $ 698,418 | $ 662,490 | $ 585,423 | $ 3,179,756 | $ 2,695,033 | $ 2,234,631 |
Net earnings, as reported | $ 21,726 | $ 24,194 | $ 40,546 | $ 49,243 | $ 22,094 | $ 9,295 | $ 8,505 | $ 38,339 | $ 135,709 | 78,233 | 120,666 |
Progressive | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Revenues, pro forma | 2,851,631 | 2,607,977 | |||||||||
Net earnings, pro forma | $ 86,038 | $ 105,682 |
Goodwill and Intangible Asset54
Goodwill and Intangible Assets - Indefinite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Indefinite-lived Intangible Assets [Line Items] | |||
Goodwill | $ 539,475 | $ 530,670 | $ 239,181 |
Indefinite-lived Intangible Assets | 592,475 | 583,670 | |
Trade Names and Trademarks | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Trade Names and Trademarks | $ 53,000 | $ 53,000 |
Goodwill and Intangible Asset55
Goodwill and Intangible Assets - Summary of Carrying Value of Goodwill by Operating Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill [Roll Forward] | ||
Beginning Balance | $ 530,670 | $ 239,181 |
Acquisitions | 10,048 | 281,587 |
Disposals | (2,664) | (1,321) |
Acquisition Accounting Adjustments | 1,421 | 11,223 |
Ending Balance | 539,475 | 530,670 |
Sales and Lease Ownership | ||
Goodwill [Roll Forward] | ||
Beginning Balance | 226,828 | 224,523 |
Acquisitions | 9,529 | 3,629 |
Disposals | (2,506) | (1,321) |
Acquisition Accounting Adjustments | 0 | (3) |
Ending Balance | 233,851 | 226,828 |
Progressive | ||
Goodwill [Roll Forward] | ||
Beginning Balance | 289,184 | 0 |
Acquisitions | 0 | 277,958 |
Disposals | 0 | 0 |
Acquisition Accounting Adjustments | 1,421 | 11,226 |
Ending Balance | 290,605 | 289,184 |
DAMI | ||
Goodwill [Roll Forward] | ||
Beginning Balance | 0 | 0 |
Acquisitions | 290 | 0 |
Disposals | 0 | 0 |
Acquisition Accounting Adjustments | 0 | 0 |
Ending Balance | 290 | 0 |
HomeSmart | ||
Goodwill [Roll Forward] | ||
Beginning Balance | 14,658 | 14,658 |
Acquisitions | 229 | 0 |
Disposals | (158) | 0 |
Acquisition Accounting Adjustments | 0 | 0 |
Ending Balance | $ 14,729 | $ 14,658 |
Goodwill and Intangible Asset56
Goodwill and Intangible Assets - Summary of Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross | $ 270,933 | $ 277,721 | |
Accumulated Amortization | (48,021) | (33,250) | |
Net | 222,912 | 244,471 | |
Internal Use Software | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross | 14,000 | 14,000 | |
Accumulated Amortization | (7,998) | (3,331) | |
Net | 6,002 | 10,669 | |
Technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross | 68,550 | 66,000 | |
Accumulated Amortization | (11,419) | (4,712) | |
Net | 57,131 | 61,288 | |
Customer Lease Contracts | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross | 0 | 11,000 | |
Accumulated Amortization | 0 | (11,000) | |
Net | 0 | 0 | |
Merchant Relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross | 181,000 | 181,000 | |
Accumulated Amortization | (25,851) | (10,768) | |
Net | 155,149 | 170,232 | |
Other Intangibles | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross | [1] | 7,383 | 5,721 |
Accumulated Amortization | [1] | (2,753) | (3,439) |
Net | [1] | $ 4,630 | $ 2,282 |
[1] | Other intangibles primarily includes definite-lived trade names and trademarks, customer relationships, non-compete agreements, and franchise development rights from business acquisitions. |
Goodwill and Intangible Asset57
Goodwill and Intangible Assets - Narrative (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 28.2 | $ 31.9 | $ 3.7 |
Goodwill and Intangible Asset58
Goodwill and Intangible Assets - Estimated Future Amortization Expense (Detail) $ in Thousands | Dec. 31, 2015USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,016 | $ 28,703 |
2,017 | 24,602 |
2,018 | 22,622 |
2,019 | 22,527 |
2,020 | $ 22,374 |
Fair Value Measurement - Summar
Fair Value Measurement - Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Level 1 | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Deferred Compensation Liability | $ 0 | $ 0 |
Level 2 | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Deferred Compensation Liability | (11,576) | (12,677) |
Level 3 | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Deferred Compensation Liability | $ 0 | $ 0 |
Fair Value Measurement - Assets
Fair Value Measurement - Assets Measured At Fair Value on Nonrecurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets Held for Sale | $ 6,976 | $ 6,356 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets Held for Sale | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets Held for Sale | 6,976 | 6,356 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets Held for Sale | $ 0 | $ 0 |
Fair Value Measurement - Narrat
Fair Value Measurement - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Long-term Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long term debt, carrying value | $ 375 | $ 400 |
Fair Value Measurement - Fair V
Fair Value Measurement - Fair Value of Assets (Liabilities) Not Measured at Fair Value In Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | |
Debt Securities | Level 1 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair Value | [1] | $ 0 | $ 0 |
Debt Securities | Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair Value | [1] | 0 | 0 |
Debt Securities | Level 3 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair Value | [1] | 22,226 | 21,311 |
Long-term Debt | Level 1 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long term debt, fair value | [2] | 0 | 0 |
Long-term Debt | Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long term debt, fair value | [2] | (395,618) | (429,049) |
Long-term Debt | Level 3 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long term debt, fair value | [2] | $ 0 | $ 0 |
[1] | The Perfect Home notes were initially measured at cost. The Company periodically reviews the carrying amount utilizing company-specific transactions or changes in Perfect Home's financial performance to determine if fair value adjustments are necessary. | ||
[2] | The fair value of fixed-rate long term debt is estimated using the present value of underlying cash flows discounted at a current market yield for similar instruments. The carrying amount of fixed-rate long term debt was $375.0 million and $400.0 million at December 31, 2015 and December 31, 2014, respectively. |
Property, Plant and Equipment -
Property, Plant and Equipment - Summary of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | |||
Land | $ 24,300 | $ 24,861 | |
Buildings and Improvements | 76,982 | 83,053 | |
Leasehold Improvements and Signs | 98,435 | 107,380 | |
Fixtures and Equipment | [1] | 223,382 | 196,965 |
Construction in Progress | 3,853 | 2,086 | |
Property, Plant and Equipment, Gross | 448,588 | 435,482 | |
Less: Accumulated Depreciation and Amortization | (222,752) | (216,065) | |
Property, Plant and Equipment, Net | 225,836 | 219,417 | |
Related Party | |||
Property, Plant and Equipment [Line Items] | |||
Assets Under Capital Leases: | 10,573 | 10,573 | |
Non-Related Party | |||
Property, Plant and Equipment [Line Items] | |||
Assets Under Capital Leases: | $ 11,063 | $ 10,564 | |
[1] | Includes internal-use software development costs of $60.7 million and $50.3 million as of December 31, 2015 and 2014, respectively. Accumulated amortization of internal-use software development costs amounted to $22.2 million and $14.8 million as of December 31, 2015 and 2014, respectively. |
Property, Plant and Equipment64
Property, Plant and Equipment - Summary of Property, Plant and Equipment (Footnote) (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Property, Plant and Equipment [Abstract] | ||
Internal-use software development cost | $ 60.7 | $ 50.3 |
Internal-use software development cost, accumulated amortization | $ 22.2 | $ 14.8 |
Property, Plant and Equipment65
Property, Plant and Equipment - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Line Items] | |||
Amortization expense on assets recorded under capital leases | $ 1,700 | $ 1,700 | $ 1,700 |
Accumulated depreciation and amortization, Capital lease assets | 222,752 | 216,065 | |
Related Party | |||
Property, Plant and Equipment [Line Items] | |||
Accumulated depreciation and amortization, Capital lease assets | 8,000 | 6,900 | |
Non-Related Party | |||
Property, Plant and Equipment [Line Items] | |||
Accumulated depreciation and amortization, Capital lease assets | $ 6,300 | $ 5,700 |
Loans Receivable - Components
Loans Receivable - Components of Loans Receivable, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Financing Receivable, Net [Abstract] | ||
Loans Receivable, Gross | $ 88,766 | |
Allowance for Loan Losses | (935) | |
Unamortized Fees | (2,036) | |
Loans Receivable, Net | 85,795 | $ 0 |
Credit Card Loans | ||
Financing Receivable, Net [Abstract] | ||
Loans Receivable, Gross | 13,900 | |
Acquired Loans | ||
Financing Receivable, Net [Abstract] | ||
Loans Receivable, Gross | $ 74,866 |
Loans Receivable - Aging of the
Loans Receivable - Aging of the Loans Receivable Balance (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015USD ($) | [1] | |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past due loans receivable (percentage) | 15.30% | |
Current loans receivable (percentage) | 84.70% | |
30-59 days past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past due loans receivable (percentage) | 7.90% | |
60-89 days past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past due loans receivable (percentage) | 3.30% | |
90 or more days past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past due loans receivable (percentage) | 4.10% | |
Balance of loans receivable 90 or more days past due and still accruing interest and fees | $ 0 | |
[1] | This aging is based on the contractual amounts outstanding for each loan as of period end, and does not reflect the fair value adjustments for the Acquired Loans. |
Indebtedness - Summary of Compa
Indebtedness - Summary of Company's Indebtedness (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
Debt | $ 610,450 | $ 606,082 |
Senior Notes | Senior Unsecured Notes, 3.75% Note Due 2018 | ||
Debt Instrument [Line Items] | ||
Debt | 75,000 | 100,000 |
Senior Notes | Senior Unsecured Notes, 4.75 Note Due 2021 | ||
Debt Instrument [Line Items] | ||
Debt | 300,000 | 300,000 |
Term Loan, Due in Installments through December 2019 | ||
Debt Instrument [Line Items] | ||
Debt | 109,375 | 121,875 |
Capital Lease Obligations, Related Party | ||
Debt Instrument [Line Items] | ||
Debt | 4,703 | 6,157 |
Capital Lease Obligations | ||
Debt Instrument [Line Items] | ||
Debt | 4,591 | 5,684 |
Other Debt | ||
Debt Instrument [Line Items] | ||
Debt | 0 | 3,250 |
Revolving Credit Agreement | Line of Credit | DAMI Secured Credit Agreement | ||
Debt Instrument [Line Items] | ||
Debt | 41,781 | 0 |
Revolving Credit Agreement | Line of Credit | Credit Facility, 2014 | ||
Debt Instrument [Line Items] | ||
Debt | $ 75,000 | $ 69,116 |
Indebtedness - Narrative (Detai
Indebtedness - Narrative (Details) | Apr. 14, 2014USD ($) | Dec. 31, 2002USD ($)Property | Nov. 30, 2004USD ($)Property | Dec. 31, 2015USD ($)leaselender | Oct. 15, 2015USD ($) | Dec. 31, 2014USD ($) | Apr. 13, 2014 | Jul. 05, 2011USD ($) |
Debt Instrument [Line Items] | ||||||||
Lease term (in years) | 15 years | |||||||
Debt | $ 610,450,000 | $ 606,082,000 | ||||||
Through December 31, 2015 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt covenant, EBITDA plus lease expense to fixed charges (no less than) | 1.75 | |||||||
Debt covenant, total debt to EBITDA (no greater than) | 3.25 | |||||||
Thereafter | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt covenant, EBITDA plus lease expense to fixed charges (no less than) | 2 | |||||||
Debt covenant, total debt to EBITDA (no greater than) | 3 | |||||||
Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Lease renewal option term (in years) | 1 year | |||||||
Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Lease renewal option term (in years) | 20 years | |||||||
DAMI Secured Credit Agreement | Revolving Credit Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Weighted-average borrowing rate (percentage) | 4.24% | |||||||
Amount available for borrowing | $ 7,300,000 | |||||||
EBIDTA ratio (not less than) | 1.7 | |||||||
Senior Debt to capital base ratio (not more than) | 2 | |||||||
Intercompany dividends maximum (as a percentage) | 75.00% | |||||||
DAMI Secured Credit Agreement | Revolving Credit Agreement | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Commitment fee for unused balance amount (percentage) | 0.50% | |||||||
DAMI Secured Credit Agreement | Revolving Credit Agreement | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Commitment fee for unused balance amount (percentage) | 0.75% | |||||||
DAMI Secured Credit Agreement | LIBOR | Revolving Credit Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate basis spread (percentage) | 4.00% | |||||||
Line of Credit | DAMI Secured Credit Agreement | Revolving Credit Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt | $ 41,781,000 | 0 | ||||||
Line of Credit | Credit Facility, 2014 | Revolving Credit Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit, current borrowing capacity (up to) | 225,000,000 | |||||||
Line of credit, additional borrowing capacity (up to) | $ 200,000,000 | |||||||
Line of credit, additional borrowing capacity, number of lenders | lender | 1 | |||||||
Installment payments required | $ 3,100,000 | |||||||
Line of credit amount outstanding | 150,000,000 | |||||||
Debt | $ 75,000,000 | 69,116,000 | ||||||
Line of Credit | Credit Facility, 2014 | Revolving Credit Agreement | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Commitment fee for unused balance amount (percentage) | 0.15% | |||||||
Line of Credit | Credit Facility, 2014 | Revolving Credit Agreement | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Commitment fee for unused balance amount (percentage) | 0.30% | |||||||
Line of Credit | Credit Facility, 2014 | LIBOR | Revolving Credit Agreement | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate basis spread (percentage) | 1.75% | |||||||
Line of Credit | Credit Facility, 2014 | LIBOR | Revolving Credit Agreement | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate basis spread (percentage) | 2.25% | |||||||
Weighted-average borrowing rate (percentage) | 2.24% | |||||||
Senior Unsecured Notes Issued July 2011 | ||||||||
Debt Instrument [Line Items] | ||||||||
Notes issued | $ 125,000,000 | |||||||
Debt interest rate (percentage) | 3.95% | 3.75% | ||||||
Annual principal repayment amount | $ 25,000,000 | |||||||
Senior Notes | Senior Unsecured Notes, 4.75 Note Due 2021 | ||||||||
Debt Instrument [Line Items] | ||||||||
Notes issued | $ 300,000,000 | |||||||
Debt interest rate (percentage) | 4.75% | |||||||
Periodic payment, principal | $ 60,000,000 | |||||||
Debt | $ 300,000,000 | 300,000,000 | ||||||
Related Party | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of capital leases | lease | 19 | |||||||
Properties sold | Property | 10 | 11 | ||||||
Borrowings collateralized by the land and buildings | $ 5,000,000 | $ 6,800,000 | ||||||
Lease term (in years) | 15 years | 15 years | ||||||
Lease renewal option term (in years) | 5 years | |||||||
Aggregate annual rental | $ 1,200,000 | $ 788,000 | ||||||
Interest implicit in the leases (percentage) | 10.10% | 9.70% | ||||||
All Other | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt | $ 0 | $ 3,250,000 | ||||||
DAMI | Subsidiaries | Letter of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 2,000,000 | |||||||
DAMI | Subsidiaries | Revolving Credit Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | 85,000,000 | |||||||
DAMI | Subsidiaries | Accordion Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 25,000,000 |
Indebtedness - Future Maturitie
Indebtedness - Future Maturities of Long Term Debt and Capital Lease Obligations (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Debt Disclosure [Abstract] | |
2,016 | $ 157,178 |
2,017 | 100,134 |
2,018 | 98,856 |
2,019 | 133,190 |
2,020 | 60,755 |
Thereafter | 60,337 |
Long-term Debt, Total | $ 610,450 |
Income Taxes - Summary of Incom
Income Taxes - Summary of Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current Income Tax Expense: | |||
Federal | $ 32,999 | $ 41,946 | $ 91,664 |
State | 5,442 | 8,682 | 9,393 |
Current Income Tax Expense (Benefit), Total | 38,441 | 50,628 | 101,057 |
Deferred Income Tax Expense (Benefit): | |||
Federal | 35,413 | (3,314) | (35,941) |
State | 3,557 | (3,843) | (822) |
Deferred Income Tax Expense (Benefit), Total | 38,970 | (7,157) | (36,763) |
INCOME TAXES | $ 77,411 | $ 43,471 | $ 64,294 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Feb. 29, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | ||||
Uncertain tax benefits that, if recognized, would affect effective tax rate | $ 3,100 | $ 2,100 | ||
Recognized interest and penalties expense (benefit) related to unrecognized tax benefits | 365 | 286 | $ 76 | |
Accrued interest and penalties | $ 1,000 | $ 499 | ||
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Proceeds from refund of overpaid federal tax | $ 120,000 |
Income Taxes - Components of De
Income Taxes - Components of Deferred Income Tax Liabilities and Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred Tax Liabilities: | ||
Lease Merchandise and Property, Plant and Equipment | $ 228,174 | $ 228,002 |
Goodwill & Other Intangibles | 47,421 | 40,644 |
Investment in Partnership | 88,913 | 61,342 |
Other, Net | 2,062 | 1,866 |
Total Deferred Tax Liabilities | 366,570 | 331,854 |
Deferred Tax Assets: | ||
Accrued Liabilities | 29,192 | 42,024 |
Advance Payments | 15,713 | 14,272 |
Other, Net | 14,936 | 7,713 |
Total Deferred Tax Assets | 59,841 | 64,009 |
Less Valuation Allowance | (752) | (706) |
Total Deferred Tax Liabilities | $ 307,481 | $ 268,551 |
Income Taxes - Effective Tax Ra
Income Taxes - Effective Tax Rate Differs from Statutory United States Federal Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
Statutory Rate | 35.00% | 35.00% | 35.00% |
Increases (Decreases) in United States Federal Taxes | |||
State Income Taxes, Net of Federal Income Tax Benefit | 2.70% | 2.60% | 3.10% |
Federal Tax Credits | (0.50%) | (1.80%) | (1.70%) |
Other, Net | (0.90%) | (0.10%) | (1.60%) |
Effective Tax Rate | 36.30% | 35.70% | 34.80% |
Income Taxes - Summary of Activ
Income Taxes - Summary of Activity Related to Uncertain Tax Positions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance at January 1, | $ 2,644 | $ 1,960 | $ 1,258 |
Additions Based on Tax Positions Related to the Current Year | 331 | 311 | 454 |
Additions for Tax Positions of Prior Years | 1,176 | 928 | 423 |
Prior Year Reductions | (1) | (370) | (5) |
Statute Expirations | (589) | (94) | (85) |
Settlements | 0 | (91) | (85) |
Balance at December 31, | $ 3,561 | $ 2,644 | $ 1,960 |
Commitments and Contingencies -
Commitments and Contingencies - Future Minimum Lease Payments Required under Operating Leases (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,016 | $ 112,134 |
2,017 | 95,553 |
2,018 | 79,167 |
2,019 | 65,342 |
2,020 | 52,636 |
Thereafter | 135,209 |
Operating leases, future minimum payments due | $ 540,041 |
Commitments and Contingencies77
Commitments and Contingencies - Narrative (Details) | Feb. 27, 2013USD ($) | Jun. 30, 2014store | Dec. 31, 2015USD ($)card | Dec. 31, 2015CADcard | Dec. 31, 2014USD ($)store | Dec. 31, 2013USD ($) | Oct. 26, 2010$ / violation |
Commitments And Contingencies Disclosure [Line Items] | |||||||
Leases of warehouse and retail store space under operating lease, expiring time | 2,033 | 2,033 | |||||
Lease term (in years) | 15 years | 15 years | |||||
Rental expense | $ 116,500,000 | $ 116,400,000 | $ 110,000,000 | ||||
Number of store closures | store | 44 | 44 | |||||
Sublease income | 4,600,000 | $ 3,900,000 | 2,600,000 | ||||
Future sublease rental income in one year | 5,100,000 | ||||||
Future sublease rental income in two years | 4,500,000 | ||||||
Future sublease rental income in three years | 4,000,000 | ||||||
Future sublease rental income in four years | 3,100,000 | ||||||
Future sublease rental income in five years | 2,000,000 | ||||||
Future sublease rental income in five years and thereafter | $ 3,600,000 | ||||||
Loan due In full, term (in days) | 90 days | 90 days | |||||
Portion that company might be obligated to repay in the event franchisees defaulted | $ 81,000,000 | ||||||
Fair value of franchise related borrowings | 863,000 | ||||||
Loan facility maximum commitment amount | 175,000,000 | ||||||
Accrued regulatory expense | 10,000,000 | ||||||
Minimum range of possible loss | 476,000 | ||||||
Maximum range of possible loss | $ 2,537,000 | ||||||
Maximum 401 (k) plan contribution rates as percentage of employees earnings | 75.00% | 75.00% | |||||
Employer 401 (k) matching contribution to employee, maximum (percentage) | 100.00% | 100.00% | |||||
Employer 401 (k) matching contribution to employee, 50% Maximum | 50.00% | 50.00% | |||||
Initial employer 401(k) matching contribution to employee (percentage) | 4.00% | ||||||
Compensation expense related to 401(k) savings plan | $ 4,700,000 | 4,300,000 | $ 3,300,000 | ||||
Number of open credit cards | card | 82,000 | 82,000 | |||||
Number of open credit cards with remaining credit available | card | 81,800 | 81,800 | |||||
Minimum | |||||||
Commitments And Contingencies Disclosure [Line Items] | |||||||
Renewal options of leases for additional periods (in years) | 1 year | 1 year | |||||
Loss contingency in excess of accrual, range of possible loss | $ 0 | ||||||
Initial employer 401(k) matching contribution to employee (percentage) | 2.00% | ||||||
Maximum | |||||||
Commitments And Contingencies Disclosure [Line Items] | |||||||
Renewal options of leases for additional periods (in years) | 20 years | 20 years | |||||
Loss contingency in excess of accrual, range of possible loss | $ 2,917,500 | ||||||
Initial employer 401(k) matching contribution to employee (percentage) | 3.00% | ||||||
Closure of Company Operated Stores | |||||||
Commitments And Contingencies Disclosure [Line Items] | |||||||
Rental expense | $ 4,800,000 | ||||||
Number of store closures | store | 44 | ||||||
Amendment | Franchise Loan Facility | |||||||
Commitments And Contingencies Disclosure [Line Items] | |||||||
Loan facility maximum Canadian sub facility commitment amount | CAD | CAD 50,000,000 | ||||||
Marketing and Advertising Expense | |||||||
Commitments And Contingencies Disclosure [Line Items] | |||||||
Non-cancelable commitments | $ 22,600,000 | ||||||
Non-cancelable commitments due in 2016 | 6,700,000 | ||||||
Non-cancelable commitments due in 2017 | 7,200,000 | ||||||
Non-cancelable commitments due in 2018 | 4,200,000 | ||||||
Non-cancelable commitments due in 2019 | 2,300,000 | ||||||
Non-cancelable commitments due in 2020 | 1,600,000 | ||||||
Non-cancelable commitments due thereafter | 568,000 | ||||||
Margaret Korrow | |||||||
Commitments And Contingencies Disclosure [Line Items] | |||||||
Statutory penalty damages, per violation (in dollars per violation) | $ / violation | 100 | ||||||
Lomi Price | Maximum | |||||||
Commitments And Contingencies Disclosure [Line Items] | |||||||
Damages sought (not less than) | $ 250,000 | ||||||
Unused Credit Card Lines | |||||||
Commitments And Contingencies Disclosure [Line Items] | |||||||
Remaining credit available | $ 378,700,000 |
Restructuring (Details)
Restructuring (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2014USD ($) | Jun. 30, 2014store | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($)store | Dec. 31, 2013USD ($) | |
Restructuring Cost and Reserve [Line Items] | |||||
Number of store closures | store | 44 | 44 | |||
Restructuring Reserve [Roll Forward] | |||||
Beginning balance | $ 3,227 | $ 0 | |||
Restructuring Expenses | $ 6,900 | 0 | 9,140 | $ 0 | |
Payments | (1,559) | (2,190) | |||
Impairment and Assets Written Off | (3,723) | ||||
Ending balance | 1,668 | 3,227 | 0 | ||
Contractual Obligations Under Canceled Leases | |||||
Restructuring Reserve [Roll Forward] | |||||
Beginning balance | 3,227 | 0 | |||
Restructuring Expenses | 4,797 | ||||
Payments | (1,559) | (1,570) | |||
Impairment and Assets Written Off | 0 | ||||
Ending balance | 1,668 | 3,227 | 0 | ||
Severance | |||||
Restructuring Reserve [Roll Forward] | |||||
Beginning balance | 0 | 0 | |||
Restructuring Expenses | 620 | ||||
Payments | 0 | (620) | |||
Impairment and Assets Written Off | 0 | ||||
Ending balance | 0 | 0 | 0 | ||
Fixed Assets | |||||
Restructuring Reserve [Roll Forward] | |||||
Beginning balance | 0 | 0 | |||
Restructuring Expenses | 3,328 | ||||
Payments | 0 | 0 | |||
Impairment and Assets Written Off | (3,328) | ||||
Ending balance | 0 | 0 | 0 | ||
Other | |||||
Restructuring Reserve [Roll Forward] | |||||
Beginning balance | 0 | 0 | |||
Restructuring Expenses | 395 | ||||
Payments | 0 | 0 | |||
Impairment and Assets Written Off | (395) | ||||
Ending balance | $ 0 | 0 | $ 0 | ||
Operating Segments | Sales and Lease Ownership | |||||
Restructuring Reserve [Roll Forward] | |||||
Restructuring Expenses | 4,800 | ||||
Operating Segments | Other | |||||
Restructuring Reserve [Roll Forward] | |||||
Restructuring Expenses | $ 4,300 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Feb. 28, 2014 | Dec. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Class of Stock [Line Items] | |||||
Treasury Shares | 18,151,560 | 18,263,589 | |||
Additional authorized shares purchased | 10,496,421 | ||||
Common stock repurchased (in shares) | 1,000,952 | 3,502,627 | |||
Preferred stock, authorized (in shares) | 1,000,000 | ||||
Preferred stock, issued (in shares) | 0 | ||||
Stock repurchased during period | $ 125,000 | ||||
Percent of shares authorized for repurchase | 80.00% | ||||
Share repurchases, effective average price per share (in dollars per share) | $ 27.76 | ||||
Treasury Stock | |||||
Class of Stock [Line Items] | |||||
Repurchased shares | $ 100,000 | $ 25,000 | $ 100,000 | ||
Share repurchases, price paid per share (in dollars per share) | $ 28.55 | ||||
Additional Paid-in Capital | |||||
Class of Stock [Line Items] | |||||
Repurchased shares | $ (25,000) | $ 25,000 | |||
Nonvoting Common Stock | |||||
Class of Stock [Line Items] | |||||
Common stock repurchased (in shares) | 0 | 1,000,952 | 3,502,627 |
Stock Options and Restricted 80
Stock Options and Restricted Stock - Narrative (Detail) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015USD ($)period$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | Dec. 31, 2013USD ($)$ / sharesshares | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Aggregate number of shares of common stock issued or transferred under the incentive stock awards plan | shares | 4,802,248 | |||
Stock based compensation expense | $ 14,200 | $ 10,900 | $ 2,300 | |
Income tax expense benefit resulting from stock options exercised | 5,400 | 3,800 | 889 | |
Excess tax benefits included in cash provided by financing activities | $ 348 | $ 1,392 | $ 1,381 | |
Stock options granted (in shares) | shares | 338,000 | 351,000 | 0 | |
Aggregate Intrinsic value of options exercised | $ 844 | $ 4,400 | $ 11,000 | |
Fair value of options vested | $ 1,100 | 1,300 | $ 2,700 | |
2001 Incentive Award Plan | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Unexercised options lapse period (in years) | 10 years | |||
2015 Incentive Award Plan | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Unexercised options lapse period (in years) | 10 years | |||
Chief Executive Officer | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock based compensation expense | $ 5,100 | |||
Stock options | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Unrecognized compensation expense related to non-vested award | $ 23,900 | |||
Unrecognized compensation expense related to non-vested award, recognition period (in years) | 1 year 7 months 6 days | |||
Stock options | Minimum | 2001 Incentive Award Plan | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Vesting period (in years) | 1 year | |||
Stock options | Minimum | 2015 Incentive Award Plan | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Vesting period (in years) | 1 year | |||
Stock options | Maximum | 2001 Incentive Award Plan | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Vesting period (in years) | 5 years | |||
Stock options | Maximum | 2015 Incentive Award Plan | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Vesting period (in years) | 3 years | |||
Restricted Stock | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock granted (in shares) | shares | 261,000 | 548,000 | 307,000 | |
Weighted average grant date fair value (in dollars per share) | $ / shares | $ 31.78 | $ 29.11 | $ 29.23 | |
Nonvested shares subject to performance condition | shares | [1] | 37,500 | ||
Total fair value of shares vesting | $ 1,800 | $ 11,100 | $ 184 | |
Restricted Stock | Executive Officer Performance Plan | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Vesting period (in years) | 3 years | |||
Number of annual performance periods | period | 3 | |||
Restricted Stock | Minimum | 2001 Incentive Award Plan | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Vesting period (in years) | 1 year | |||
Restricted Stock | Minimum | 2015 Incentive Award Plan | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Vesting period (in years) | 1 year | |||
Restricted Stock | Minimum | AMP Plan | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Vesting period (in years) | 4 years | |||
Restricted Stock | Maximum | 2001 Incentive Award Plan | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Vesting period (in years) | 5 years | |||
Restricted Stock | Maximum | 2015 Incentive Award Plan | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Vesting period (in years) | 3 years | |||
Restricted Stock | Maximum | AMP Plan | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Vesting period (in years) | 5 years | |||
Performance Share Units | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock granted (in shares) | shares | 358,000 | |||
Weighted average grant date fair value (in dollars per share) | $ / shares | $ 32.03 | |||
Performance Share Units | Minimum | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Performance percentage | 0.00% | |||
Performance Share Units | Maximum | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Performance percentage | 200.00% | |||
Immediately | Performance Share Units | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Award vesting rights (percentage) | 33.33% | |||
One-year service period | Performance Share Units | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Vesting period (in years) | 1 year | |||
Award vesting rights (percentage) | 33.33% | |||
Award requisite service period (in years) | 1 year | |||
Two-year service period | Performance Share Units | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Award vesting rights (percentage) | 33.33% | |||
Award requisite service period (in years) | 2 years | |||
[1] | The outstanding non-vested restricted stock as of December 31, 2015 includes 37,500 shares that are subject to performance conditions. |
Stock Options and Restricted 81
Stock Options and Restricted Stock - Weighted Average Valuation Assumptions (Details) - Stock options - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Dividend Yield | 0.30% | 0.30% |
Expected Volatility | 28.90% | 31.90% |
Risk-free Interest Rate | 1.60% | 1.90% |
Expected Term (in years) | 5 years 2 months 12 days | 6 years 2 months 12 days |
Weighted-average Fair Value of Stock Options Granted (in dollars per share) | $ 8.41 | $ 9.61 |
Stock Options and Restricted 82
Stock Options and Restricted Stock - Summary Information about Stock Options Outstanding (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Options outstanding, weighted average exercise price (in dollars per share) | $ 25.05 | $ 21.52 |
$10.01-15.00 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Exercise price, lower range limit (in dollars per share) | 10.01 | |
Exercise price, upper range limit (in dollars per share) | $ 15 | |
Options Outstanding | 199,000 | |
Options outstanding, weighted average remaining contractual life (in years) | 2 years 9 months 15 days | |
Options outstanding, weighted average exercise price (in dollars per share) | $ 14.11 | |
Options Exercisable | 199,000 | |
Options exercisable, weighted average exercise price (in dollars per share) | $ 14.11 | |
15.01-20.00 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Exercise price, lower range limit (in dollars per share) | 15.01 | |
Exercise price, upper range limit (in dollars per share) | $ 20 | |
Options Outstanding | 82,500 | |
Options outstanding, weighted average remaining contractual life (in years) | 4 years 1 month 24 days | |
Options outstanding, weighted average exercise price (in dollars per share) | $ 19.92 | |
Options Exercisable | 82,500 | |
Options exercisable, weighted average exercise price (in dollars per share) | $ 19.92 | |
20.01-25.00 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Exercise price, lower range limit (in dollars per share) | 20.01 | |
Exercise price, upper range limit (in dollars per share) | $ 25 | |
Options Outstanding | 7,521 | |
Options outstanding, weighted average remaining contractual life (in years) | 8 years 10 months 6 days | |
Options outstanding, weighted average exercise price (in dollars per share) | $ 24.98 | |
Options Exercisable | 0 | |
Options exercisable, weighted average exercise price (in dollars per share) | $ 0 | |
25.01-30.00 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Exercise price, lower range limit (in dollars per share) | 25.01 | |
Exercise price, upper range limit (in dollars per share) | $ 30 | |
Options Outstanding | 380,646 | |
Options outstanding, weighted average remaining contractual life (in years) | 8 years 10 months 28 days | |
Options outstanding, weighted average exercise price (in dollars per share) | $ 28.23 | |
Options Exercisable | 53,640 | |
Options exercisable, weighted average exercise price (in dollars per share) | $ 27.80 | |
30.01-32.20 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Exercise price, lower range limit (in dollars per share) | 30.01 | |
Exercise price, upper range limit (in dollars per share) | $ 32.20 | |
Options Outstanding | 202,687 | |
Options outstanding, weighted average remaining contractual life (in years) | 8 years 11 months 19 days | |
Options outstanding, weighted average exercise price (in dollars per share) | $ 31.93 | |
Options Exercisable | 0 | |
Options exercisable, weighted average exercise price (in dollars per share) | $ 0 | |
10.01-32.20 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Exercise price, lower range limit (in dollars per share) | 10.01 | |
Exercise price, upper range limit (in dollars per share) | $ 32.20 | |
Options Outstanding | 872,354 | |
Options outstanding, weighted average remaining contractual life (in years) | 7 years 29 days | |
Options outstanding, weighted average exercise price (in dollars per share) | $ 25.05 | |
Options Exercisable | 335,140 | |
Options exercisable, weighted average exercise price (in dollars per share) | $ 17.73 |
Stock Options and Restricted 83
Stock Options and Restricted Stock - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Options | |||
Beginning Balance (In Shares) | 624,000 | ||
Granted (In Shares) | 338,000 | 351,000 | 0 |
Exercised (In Shares) | (61,000) | ||
Forfeited/expired (In Shares) | (29,000) | ||
Ending Balance (In Shares) | 872,000 | 624,000 | |
Expected to Vest (In Shares) | 485,000 | ||
Exercisable (In Shares) | 335,000 | ||
Weighted Average Exercise Price | |||
Beginning Balance (in dollars per share) | $ 21.52 | ||
Granted (in dollars per share) | 30.17 | ||
Exercised (in dollars per share) | 16.95 | ||
Forfeited/expired (in dollars per share) | 28.92 | ||
Ending Balance (in dollars per share) | 25.05 | $ 21.52 | |
Expected to Vest (in dollars per share) | 29.56 | ||
Exercisable (in dollars per share) | $ 17.73 | ||
Weighted Average Remaining Contractual Term (in Years) | |||
Outstanding | 7 years 29 days | ||
Expected to Vest | 8 years 11 months 5 days | ||
Exercisable | 4 years 1 month 10 days | ||
Aggregate Intrinsic Value | |||
Outstanding | $ 0 | ||
Expected | 0 | ||
Exercisable | $ 1,562 | ||
Weighted Average Fair Value | |||
Outstanding (in dollars per share) | $ 8.31 | ||
Expected to Vest (in dollars per share) | 8.90 | ||
Exercisable (in dollars per share) | $ 7.39 |
Stock Options and Restricted 84
Stock Options and Restricted Stock - Summary of Restricted Stock and Performance Share Units Activity (Details) - $ / shares shares in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Restricted Stock | ||||
Restricted Stock | ||||
Beginning Balance (In Shares) | 698 | |||
Granted (In Shares) | 261 | 548 | 307 | |
Vested (In Shares) | (61) | |||
Forfeited (In Shares) | (77) | |||
Ending Balance (In Shares) | 821 | [1] | 698 | |
Weighted Average Fair Value | ||||
Beginning Balance (in dollars per share) | $ 28.75 | |||
Granted (in dollars per share) | 31.78 | $ 29.11 | $ 29.23 | |
Vested (in dollars per share) | 27.07 | |||
Forfeited (in dollars per share) | 29.45 | |||
Ending Balance (in dollars per share) | $ 29.77 | $ 28.75 | ||
Performance Share Units | ||||
Restricted Stock | ||||
Beginning Balance (In Shares) | 111 | |||
Granted (In Shares) | 358 | |||
Vested (In Shares) | 0 | |||
Forfeited (In Shares) | (124) | |||
Ending Balance (In Shares) | 345 | [1] | 111 | |
Weighted Average Fair Value | ||||
Beginning Balance (in dollars per share) | $ 32.01 | |||
Granted (in dollars per share) | 32.03 | |||
Vested (in dollars per share) | 0 | |||
Forfeited (in dollars per share) | 29.86 | |||
Ending Balance (in dollars per share) | $ 32.8 | [1] | $ 32.01 | |
[1] | The outstanding non-vested restricted stock as of December 31, 2015 includes 37,500 shares that are subject to performance conditions. |
Segments - Narrative (Details)
Segments - Narrative (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($)store | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($)segments | Dec. 31, 2014USD ($)store | Dec. 31, 2013USD ($) | |
Segment Reporting Information [Line Items] | ||||||
Number of operating segments | segments | 6 | |||||
Restructuring Expenses | $ 6,900 | $ 0 | $ 9,140 | $ 0 | ||
Number of store closures | store | 44 | 44 | ||||
Financial advisory and legal costs | 385 | $ 12,400 | $ 872 | 0 | $ 13,661 | 0 |
Retirement and vacation charges | 9,100 | 0 | 9,094 | 4,917 | ||
Acquisition related costs | $ 371 | $ 5,500 | $ 803 | 0 | 6,638 | 0 |
Gain (loss) related to litigation settlement | $ 0 | 1,200 | $ (28,400) | |||
Progressive | ||||||
Segment Reporting Information [Line Items] | ||||||
Acquisition related costs | 6,600 | |||||
Operating Segments | Sales and Lease Ownership | ||||||
Segment Reporting Information [Line Items] | ||||||
Restructuring Expenses | 4,800 | |||||
Operating Segments | Other | ||||||
Segment Reporting Information [Line Items] | ||||||
Restructuring Expenses | 4,300 | |||||
Financial advisory and legal costs | 13,700 | |||||
Acquisition related costs | $ 6,600 |
Segments - Information on Segme
Segments - Information on Segments and Reconciliation to Earnings Before Income Taxes from Continuing Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Segment Reporting Information [Line Items] | ||||||||||||
Revenues | $ 821,199 | $ 767,694 | $ 769,049 | $ 821,814 | $ 748,702 | $ 698,418 | $ 662,490 | $ 585,423 | $ 3,179,756 | $ 2,695,033 | $ 2,234,631 | |
Earnings (Loss) Before Income Taxes: | 34,380 | $ 36,556 | $ 64,354 | $ 77,830 | 34,233 | 13,199 | 13,562 | 60,710 | 213,120 | 121,704 | 184,960 | |
Assets: | 2,658,875 | 2,456,844 | 2,658,875 | 2,456,844 | 1,827,176 | |||||||
Depreciation and Amortization: | 1,292,847 | 1,018,234 | 685,105 | |||||||||
Interest Expense: | 23,339 | 19,215 | 5,613 | |||||||||
Capital Expenditures: | 60,557 | 47,565 | 58,145 | |||||||||
Progressive-Related Transaction Costs | $ 371 | $ 5,500 | $ 803 | 0 | 6,638 | 0 | ||||||
Cash to Accrual Adjustments | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenues | (4,684) | 3,681 | 2,100 | |||||||||
Earnings (Loss) Before Income Taxes: | (4,007) | 4,244 | 6,353 | |||||||||
Operating Segments | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenues | 3,288,330 | 2,793,648 | 2,336,365 | |||||||||
Earnings (Loss) Before Income Taxes: | 219,615 | 118,273 | 178,701 | |||||||||
Operating Segments | Sales and Lease Ownership | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenues | 2,001,682 | 2,037,101 | 2,076,269 | |||||||||
Earnings (Loss) Before Income Taxes: | 166,838 | 140,854 | 183,965 | |||||||||
Assets: | 1,261,040 | 1,246,325 | 1,261,040 | 1,246,325 | 1,431,720 | |||||||
Depreciation and Amortization: | 592,450 | 633,119 | 639,951 | |||||||||
Interest Expense: | 7,751 | 7,834 | 7,070 | |||||||||
Capital Expenditures: | 23,082 | 24,135 | 30,831 | |||||||||
Loss related to lease termination | 3,500 | |||||||||||
Operating Segments | Progressive | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenues | 1,049,681 | 519,342 | 0 | |||||||||
Earnings (Loss) Before Income Taxes: | 54,525 | 4,603 | 0 | |||||||||
Assets: | 878,457 | 858,159 | 878,457 | 858,159 | 0 | |||||||
Depreciation and Amortization: | 661,646 | 346,343 | 0 | |||||||||
Interest Expense: | 21,959 | 14,992 | 0 | |||||||||
Capital Expenditures: | 8,175 | 1,625 | 0 | |||||||||
Progressive-Related Transaction Costs | 3,700 | |||||||||||
Operating Segments | DAMI | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenues | [1] | 2,845 | 0 | 0 | ||||||||
Earnings (Loss) Before Income Taxes: | (1,964) | 0 | 0 | |||||||||
Assets: | 97,858 | 0 | 97,858 | 0 | 0 | |||||||
Depreciation and Amortization: | 218 | 0 | 0 | |||||||||
Interest Expense: | 764 | 0 | 0 | |||||||||
Capital Expenditures: | 40 | 0 | 0 | |||||||||
Operating Segments | HomeSmart | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenues | 63,477 | 64,276 | 62,840 | |||||||||
Earnings (Loss) Before Income Taxes: | 771 | (2,643) | (3,428) | |||||||||
Assets: | 44,429 | 47,585 | 44,429 | 47,585 | 47,970 | |||||||
Depreciation and Amortization: | 20,817 | 22,407 | 23,977 | |||||||||
Interest Expense: | 900 | 922 | 916 | |||||||||
Capital Expenditures: | 374 | 1,020 | 994 | |||||||||
Operating Segments | Franchise | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenues | 63,507 | 65,902 | 68,575 | |||||||||
Earnings (Loss) Before Income Taxes: | 48,576 | 50,504 | 54,171 | |||||||||
Assets: | 53,693 | 46,755 | 53,693 | 46,755 | 47,788 | |||||||
Depreciation and Amortization: | 1,429 | 1,599 | 1,781 | |||||||||
Interest Expense: | 0 | 0 | 0 | |||||||||
Capital Expenditures: | 0 | 0 | 0 | |||||||||
Operating Segments | Manufacturing | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenues | 106,020 | 104,058 | 106,523 | |||||||||
Earnings (Loss) Before Income Taxes: | 2,520 | 860 | 107 | |||||||||
Assets: | [2] | 28,986 | 23,050 | 28,986 | 23,050 | 24,305 | ||||||
Depreciation and Amortization: | 1,482 | 1,649 | 2,081 | |||||||||
Interest Expense: | 26 | 50 | 80 | |||||||||
Capital Expenditures: | 387 | 1,477 | 1,531 | |||||||||
Operating Segments | Other | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenues | 1,118 | 2,969 | 22,158 | |||||||||
Earnings (Loss) Before Income Taxes: | (51,651) | (75,905) | (56,114) | |||||||||
Assets: | 294,412 | 234,970 | 294,412 | 234,970 | 275,393 | |||||||
Depreciation and Amortization: | 14,805 | 13,117 | 17,315 | |||||||||
Interest Expense: | (8,061) | (4,583) | (2,453) | |||||||||
Capital Expenditures: | 28,499 | 19,308 | 24,789 | |||||||||
Progressive-Related Transaction Costs | 6,600 | |||||||||||
Operating Segments | Canada Operations | Sales and Lease Ownership | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenues | 3,384 | 179 | 300 | |||||||||
Assets: | 8,900 | $ 776 | 8,900 | 776 | 1,021 | |||||||
Elimination of Intersegment | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenues | (103,890) | (102,296) | (103,834) | |||||||||
Earnings (Loss) Before Income Taxes: | (2,488) | $ (813) | $ (94) | |||||||||
DAMI | Subsidiaries | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Progressive-Related Transaction Costs | $ 2,700 | $ 3,700 | ||||||||||
[1] | Represents interest and fees on loans receivable, and excludes the effect of interest expense. | |||||||||||
[2] | Includes inventory (principally raw materials and work-in-process) that has been classified within lease merchandise in the consolidated balance sheets of $19.4 million, $13.2 million and $14.0 million as of December 31, 2015, 2014 and 2013, respectively. |
Segments - Information on Seg87
Segments - Information on Segments and Reconciliation to Earnings Before Income Taxes from Continuing Operations (Footnote) (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Manufacturing | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Inventory, including raw materials and work-in-process | $ 19.4 | $ 13.2 | $ 14 |
Quarterly Financial Informati88
Quarterly Financial Information (Unaudited) - Quarterly Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||
Revenues | $ 821,199 | $ 767,694 | $ 769,049 | $ 821,814 | $ 748,702 | $ 698,418 | $ 662,490 | $ 585,423 | $ 3,179,756 | $ 2,695,033 | $ 2,234,631 | |
Gross Profit | [1] | 344,144 | 331,628 | 346,110 | 363,478 | 320,797 | 313,540 | 309,385 | 292,393 | |||
Earnings Before Income Taxes | 34,380 | 36,556 | 64,354 | 77,830 | 34,233 | 13,199 | 13,562 | 60,710 | 213,120 | 121,704 | 184,960 | |
Net Earnings | $ 21,726 | $ 24,194 | $ 40,546 | $ 49,243 | $ 22,094 | $ 9,295 | $ 8,505 | $ 38,339 | $ 135,709 | $ 78,233 | $ 120,666 | |
Earnings Per Share (in dollars per share) | $ 0.30 | $ 0.33 | $ 0.56 | $ 0.68 | $ 0.30 | $ 0.13 | $ 0.12 | $ 0.53 | $ 1.87 | $ 1.08 | $ 1.59 | |
Earnings Per Share Assuming Dilution (in dollars per share) | $ 0.30 | $ 0.33 | $ 0.56 | $ 0.68 | $ 0.30 | $ 0.13 | $ 0.12 | $ 0.53 | $ 1.86 | $ 1.08 | $ 1.58 | |
[1] | Gross profit is the sum of lease revenues and fees, retail sales and non-retail sales less retail cost of sales, non-retail cost of sales, depreciation of lease merchandise and write-offs of lease merchandise |
Quarterly Financial Informati89
Quarterly Financial Information (Unaudited) - Narrative (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2015USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($)store | Mar. 31, 2014USD ($)proxy | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($)store | Dec. 31, 2013USD ($) | |
Quarterly Financial Information Disclosure [Abstract] | |||||||
Financial advisory and legal costs | $ 385 | $ 12,400 | $ 872 | $ 0 | $ 13,661 | $ 0 | |
Number of proxy contests | proxy | 2 | ||||||
Impairment of leasehold improvement | $ 2,300 | ||||||
Number of store closures | store | 44 | 44 | |||||
Restructuring Expenses | 6,900 | 0 | $ 9,140 | 0 | |||
Retirement and vacation charges | 9,100 | 0 | 9,094 | 4,917 | |||
Regulatory expense (income) | (1,200) | ||||||
Business Acquisition [Line Items] | |||||||
Acquisition related costs | $ 371 | $ 5,500 | $ 803 | 0 | $ 6,638 | $ 0 | |
DAMI | Subsidiaries | |||||||
Business Acquisition [Line Items] | |||||||
Acquisition related costs | $ 2,700 | $ 3,700 |
Deferred Compensation Plan (Det
Deferred Compensation Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Deferred compensation plan liability | $ 11.6 | $ 12.7 | |
Cash surrender value of the policies | 15.4 | 14.5 | |
Benefits paid | $ 1.7 | $ 1.9 | $ 1.3 |
Employee | |||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Percentage of receipt of base compensation (up to) | 75.00% | ||
Percentage of receipt of incentive pay compensation (up to) | 100.00% | ||
Non Employee Director | |||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Percentage of receipt of base compensation (up to) | 100.00% |