Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2020 | Jul. 22, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 1-13941 | |
Entity Registrant Name | AARON’S, INC. | |
Entity Incorporation, State or Country Code | GA | |
Entity Tax Identification Number | 58-0687630 | |
Entity Address, Address Line One | 400 Galleria Parkway SE | |
Entity Address, Address Line Two | Suite 300 | |
Entity Address, City or Town | Atlanta | |
Entity Address, State or Province | GA | |
Entity Address, Postal Zip Code | 30339-3182 | |
City Area Code | 678 | |
Local Phone Number | 402-3000 | |
Title of 12(b) Security | Common Stock, $0.50 Par Value | |
Trading Symbol | AAN | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 67,140,559 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0000706688 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
ASSETS: | ||
Cash and Cash Equivalents | $ 313,057 | $ 57,755 |
Accounts Receivable (net of allowances of $73,294 in 2020 and $76,293 in 2019) | 79,933 | 104,159 |
Lease Merchandise (net of accumulated depreciation and allowances of $878,259 in 2020 and $896,056 in 2019) | 1,119,640 | 1,433,417 |
Loans Receivable (net of allowances and unamortized fees of $37,649 in 2020 and $21,134 in 2019) | 58,870 | 75,253 |
Property, Plant and Equipment at Cost (net of accumulated depreciation of $326,340 in 2020 and $311,252 in 2019) | 228,088 | 237,666 |
Operating Lease Right-of-Use Assets | 279,802 | 329,211 |
Goodwill | 288,801 | 736,582 |
Other Intangibles (net of accumulated amortization of $164,324 in 2020 and $151,932 in 2019) | 176,104 | 190,796 |
Income Tax Receivable | 57,487 | 18,690 |
Prepaid Expenses and Other Assets | 113,920 | 114,271 |
Total Assets | 2,715,702 | 3,297,800 |
LIABILITIES & SHAREHOLDERS’ EQUITY: | ||
Accounts Payable and Accrued Expenses | 249,182 | 272,816 |
Accrued Regulatory Expense | 0 | 175,000 |
Deferred Income Taxes Payable | 234,380 | 310,395 |
Customer Deposits and Advance Payments | 89,435 | 91,914 |
Operating Lease Liabilities | 335,705 | 369,386 |
Debt | 285,801 | 341,030 |
Total Liabilities | 1,194,503 | 1,560,541 |
Commitments and Contingencies (Note 4) | ||
SHAREHOLDERS' EQUITY: | ||
Common Stock, Par Value $0.50 Per Share: Authorized: 225,000,000 Shares at June 30, 2020 and December 31, 2019; Shares Issued: 90,752,123 at June 30, 2020 and December 31, 2019 | 45,376 | 45,376 |
Additional Paid-in Capital | 290,653 | 290,229 |
Retained Earnings | 1,805,869 | 2,029,613 |
Accumulated Other Comprehensive Loss | (1,442) | (19) |
Stockholders' Equity before Treasury Stock, Total | 2,140,456 | 2,365,199 |
Less: Treasury Shares at Cost | ||
Common Stock: 23,613,045 Shares at June 30, 2020 and 24,034,053 at December 31, 2019 | (619,257) | (627,940) |
Total Shareholders’ Equity | 1,521,199 | 1,737,259 |
Total Liabilities & Shareholders’ Equity | $ 2,715,702 | $ 3,297,800 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowances | $ 73,294 | $ 76,293 |
Lease Merchandise, accumulated depreciation and allowances | 878,259 | 896,056 |
Loans Receivable, allowances and unamortized fees | 37,649 | 21,134 |
Property, Plant and Equipment at Cost, accumulated depreciation | 326,340 | 311,252 |
Other Intangibles, accumulated amortization | $ 164,324 | $ 151,932 |
Common Stock, Par Value (in dollars per share) | $ 0.50 | $ 0.50 |
Common Stock, Shares Authorized (in shares) | 225,000,000 | 225,000,000 |
Common Stock, Shares Issued (in shares) | 90,752,123 | 90,752,123 |
Treasury Shares (in shares) | 23,613,045 | 24,034,053 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Earnings - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
REVENUES: | ||||
Revenues | $ 1,030,119 | $ 968,141 | $ 2,131,393 | $ 1,980,244 |
COSTS AND EXPENSES: | ||||
Depreciation of Lease Merchandise | 547,551 | 474,868 | 1,144,958 | 975,688 |
Operating Expenses | 343,850 | 383,576 | 756,820 | 770,792 |
Restructuring Expenses, Net | 6,991 | 18,738 | 29,277 | 32,019 |
Impairment of Goodwill | 0 | 0 | 446,893 | 0 |
Other Operating (Income) Expense, Net | (96) | (3,486) | 74 | (4,383) |
Costs and Expenses, Total | 936,677 | 908,295 | 2,446,846 | 1,846,543 |
OPERATING PROFIT (LOSS) | 93,442 | 59,846 | (315,453) | 133,701 |
Interest Income | 227 | 944 | 419 | 1,045 |
Interest Expense | (2,853) | (4,300) | (6,652) | (9,256) |
Other Non-Operating Income (Expense), Net | 1,721 | 329 | (230) | 1,637 |
EARNINGS (LOSS) BEFORE INCOME TAXES | 92,537 | 56,819 | (321,916) | 127,127 |
INCOME TAX EXPENSE (BENEFIT) | 24,160 | 14,169 | (110,288) | 28,399 |
NET EARNINGS (LOSS) | $ 68,377 | $ 42,650 | $ (211,628) | $ 98,728 |
EARNINGS (LOSS) PER SHARE | ||||
Basic (in dollars per share) | $ 1.02 | $ 0.63 | $ (3.16) | $ 1.46 |
Assuming Dilution (in dollars per share) | 1.01 | 0.62 | (3.16) | 1.44 |
CASH DIVIDENDS DECLARED PER SHARE: | ||||
Common Stock (in dollars per share) | $ 0.040 | $ 0.035 | $ 0.080 | $ 0.070 |
WEIGHTED AVERAGE SHARES OUTSTANDING: | ||||
Basic (in shares) | 67,097 | 67,687 | 66,959 | 67,492 |
Assuming Dilution (in shares) | 67,523 | 68,793 | 66,959 | 68,784 |
Lease Revenues and Fees | ||||
REVENUES: | ||||
Revenues | $ 969,987 | $ 907,565 | $ 2,017,900 | $ 1,851,722 |
Retail Sales | ||||
REVENUES: | ||||
Revenues | 14,020 | 8,898 | 23,551 | 21,707 |
COSTS AND EXPENSES: | ||||
Costs of Sales | 9,065 | 5,651 | 15,927 | 14,283 |
Non-Retail Sales | ||||
REVENUES: | ||||
Revenues | 33,044 | 34,124 | 59,890 | 71,105 |
COSTS AND EXPENSES: | ||||
Costs of Sales | 29,316 | 28,948 | 52,897 | 58,144 |
Franchise Royalties and Fees | ||||
REVENUES: | ||||
Revenues | 3,365 | 8,605 | 10,089 | 17,812 |
Interest and Fees on Loans Receivable | ||||
REVENUES: | ||||
Revenues | 9,414 | 8,610 | 19,322 | 17,256 |
Other | ||||
REVENUES: | ||||
Revenues | $ 289 | $ 339 | $ 641 | $ 642 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Earnings (Loss) | $ 68,377 | $ 42,650 | $ (211,628) | $ 98,728 |
Other Comprehensive Income (Loss): | ||||
Foreign Currency Translation Adjustment | 331 | 618 | (1,423) | 1,042 |
Total Other Comprehensive Income (Loss) | 331 | 618 | (1,423) | 1,042 |
Comprehensive Income (Loss) | $ 68,708 | $ 43,268 | $ (213,051) | $ 99,770 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
OPERATING ACTIVITIES: | ||
Net (Loss) Earnings | $ (211,628) | $ 98,728 |
Adjustments to Reconcile Net (Loss) Earnings to Cash Provided by Operating Activities: | ||
Depreciation of Lease Merchandise | 1,144,958 | 975,688 |
Other Depreciation and Amortization | 50,154 | 53,862 |
Accounts Receivable Provision | 158,587 | 137,611 |
Provision for Credit Losses on Loans Receivable | 16,150 | 9,223 |
Stock-Based Compensation | 12,487 | 14,231 |
Deferred Income Taxes | (73,656) | 19,928 |
Impairment of Goodwill and Other Assets | 468,634 | 26,267 |
Non-Cash Lease Expense | 50,638 | 58,073 |
Other Changes, Net | 5,109 | (3,390) |
Changes in Operating Assets and Liabilities, Net of Effects of Acquisitions and Dispositions: | ||
Additions to Lease Merchandise | (1,032,977) | (1,141,863) |
Book Value of Lease Merchandise Sold or Disposed | 201,058 | 196,219 |
Accounts Receivable | (134,467) | (126,112) |
Prepaid Expenses and Other Assets | (4,711) | (6,847) |
Income Tax Receivable | (38,797) | 17,227 |
Operating Lease Liabilities | (53,544) | (62,541) |
Accounts Payable and Accrued Expenses | (19,713) | (21,465) |
Accrued Regulatory Expense | (175,000) | 0 |
Customer Deposits and Advance Payments | (2,527) | (200) |
Cash Provided by Operating Activities | 360,755 | 244,639 |
INVESTING ACTIVITIES: | ||
Investments in Loans Receivable | (39,986) | (29,506) |
Proceeds from Loans Receivable | 32,248 | 27,720 |
Outflows on Purchases of Property, Plant and Equipment | (33,885) | (48,059) |
Proceeds from Property, Plant and Equipment | 2,220 | 1,425 |
Outflows on Acquisitions of Businesses and Customer Agreements, Net of Cash Acquired | (1,209) | (7,612) |
Proceeds from Dispositions of Businesses and Customer Agreements, Net of Cash Disposed | 359 | 755 |
Cash Used in Investing Activities | (40,253) | (55,277) |
FINANCING ACTIVITIES: | ||
Repayments on Revolving Facility, Net | 0 | (16,000) |
Proceeds from Debt | 5,625 | 0 |
Repayments on Debt | (60,748) | (61,465) |
Dividends Paid | (5,351) | (4,717) |
Acquisition of Treasury Stock | 0 | (14,414) |
Issuance of Stock Under Stock Option Plans | 2,250 | 5,056 |
Shares Withheld for Tax Payments | (5,877) | (12,977) |
Debt Issuance Costs | (1,020) | 0 |
Cash Used in Financing Activities | (65,121) | (104,517) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (79) | 119 |
Increase in Cash and Cash Equivalents | 255,302 | 84,964 |
Cash and Cash Equivalents at Beginning of Period | 57,755 | 15,278 |
Cash and Cash Equivalents at End of Period | $ 313,057 | $ 100,242 |
Basis and Summary of Significan
Basis and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis and Summary of Significant Accounting Policies | BASIS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES As described elsewhere in this Quarterly Report on Form 10-Q, the Coronavirus Disease ("COVID-19") pandemic has led to significant market disruption and adverse impacts on many aspects of our operations, directly and indirectly. Throughout these notes to the condensed consolidated financial statements, the impacts of the COVID-19 pandemic on the financial results for the three and six months ended June 30, 2020 have been identified under the respective sections. Additionally, there are significant uncertainties regarding the future scope and nature of these impacts, which continue to evolve each day. For a discussion of operational measures taken, as well as trends and uncertainties that have affected our business, as a result of the COVID-19 pandemic see Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, including the "Recent Developments," "Results of Operations", "Liquidity and Capital Resources", and Part II, Item 1A "Risk Factors", below. Description of Business Aaron's, Inc. (the "Company") is a leading omnichannel provider of lease-purchase solutions. As of June 30, 2020, the Company's operating and reportable segments are Progressive Leasing, Aaron's Business and Vive. We have updated all disclosures and references to Dent-A-Med, Inc. and/or DAMI in this Quarterly Report on Form 10-Q to reflect the operating segment's new name, "Vive." On July 29, 2020, the Company announced its intention to separate into two independent, publicly traded companies: (i) Progressive (comprised of Progressive Leasing and Vive) and (ii) Aaron's (comprised of the Aaron’s Business). Progressive Leasing is a virtual lease-to-own company that provides lease-purchase solutions in 46 states and the District of Columbia. It does so by purchasing merchandise from third-party retailers desired by those retailers' customers and, in turn, leasing that merchandise to the customers through a cancelable lease-to-own transaction. Progressive Leasing consequently has no stores of its own, but rather offers lease-purchase solutions to the customers of traditional and e-commerce retailers. The following table presents invoice volume for Progressive Leasing: For the Three Months Ended June 30 (Unaudited and In Thousands) 2020 2019 Progressive Leasing Invoice Volume 1 $ 394,335 $ 403,410 1 Invoice volume is defined as the retail price of lease merchandise acquired and then leased to customers during the period, net of returns. The Aaron's Business segment offers furniture, home appliances, consumer electronics and accessories to consumers through a lease-to-own agreement through the Company’s Aaron’s-branded stores in the United States, Canada and Puerto Rico, as well as through its e-commerce platform. This operating segment also supports franchisees of its Aaron’s-branded stores. In addition, the Aaron’s Business segment includes the operations of Woodhaven Furniture Industries ("Woodhaven"), which manufactures and supplies the majority of the bedding and a significant portion of the upholstered furniture leased and sold in Company-operated and franchised stores. The following table presents store count by ownership type for the Aaron's Business operations: Stores as of June 30 (Unaudited) 2020 2019 Company-operated Aaron's Branded Stores 1,098 1,171 Franchised Stores 316 357 Systemwide Stores 1,414 1,528 Vive partners with merchants to provide a variety of revolving credit products originated through third-party federally insured banks to customers that may not qualify for traditional prime lending (called "second-look" financing programs). Basis of Presentation The preparation of the Company's condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States ("U.S. GAAP") for interim financial information requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates. Generally, actual experience has been consistent with management's prior estimates and assumptions. However, as described above, the extent to which the COVID-19 pandemic and resulting measures taken by the Company will impact the Company's business will depend on future developments, which are highly uncertain and cannot be precisely predicted at this time. In many cases, management's estimates and assumptions are highly dependent on estimates of future developments and may change significantly in the future due to unforeseen direct and indirect impacts of the COVID-19 pandemic. The accompanying unaudited condensed consolidated financial statements do not include all information required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included in the accompanying unaudited condensed consolidated financial statements. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 (the "2019 Annual Report") filed with the U.S. Securities and Exchange Commission on February 20, 2020. The results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of operating results for the full year. Principles of Consolidation The condensed 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. Accounting Policies and Estimates See Note 1 to the consolidated financial statements in the 2019 Annual Report for expanded discussion of accounting policies and estimates. Discussions of accounting estimates and application of accounting policies herein have also been updated as applicable to describe the impacts of the COVID-19 pandemic described above. Earnings Per Share Earnings per share is computed by dividing net earnings by the weighted average number of shares of common stock outstanding during the period. The computation of earnings per share assuming dilution includes the dilutive effect of stock options, restricted stock units ("RSUs"), restricted stock awards ("RSAs") and performance share units ("PSUs") and awards issuable under the Company's employee stock purchase plan ("ESPP") (collectively, "share-based awards") as determined under the treasury stock method. The following table shows the calculation of dilutive share-based awards: Three Months Ended Six Months Ended (Shares In Thousands) 2020 2019 2020 2019 Weighted Average Shares Outstanding 67,097 67,687 66,959 67,492 Dilutive Effect of Share-Based Awards 1 426 1,106 — 1,292 Weighted Average Shares Outstanding Assuming Dilution 67,523 68,793 66,959 68,784 1 There was no dilutive effect to the earnings (loss) per common share for the six months ended June 30, 2020 due to the net loss incurred in the year-to-date period. Approximately 1,429,000 and 1,908,000 weighted-average share-based awards were excluded from the computation of earnings per share assuming dilution during the three and six months ended June 30, 2020, respectively, as the awards would have been anti-dilutive for the periods presented. Approximately 522,000 and 482,000 weighted-average share-based awards were excluded from the computation of earnings per share assuming dilution during the three and six months ended June 30, 2019, respectively, as the awards would have been anti-dilutive for the periods presented. Revenue Recognition Lease Revenues and Fees The Company provides merchandise, consisting primarily of furniture, appliances, electronics, jewelry and a variety of other products, to its customers for lease under certain terms agreed to by the customer. The Company's Progressive Leasing segment offers customers of traditional and e-commerce retailers a virtual lease-purchase solution through leases with payment terms that can be renewed up to 12 months. The Company's Aaron's-branded stores and its e-commerce platform offer leases with flexible terms that can be renewed up to 12, 18 or 24 months. The Company does not require deposits upon inception of customer agreements. The customer has the right to acquire ownership either through a purchase option or through payment of all required lease payments. The agreements are cancelable at any time by either party without penalty. Progressive Leasing lease revenues are earned prior to the lease payment due date and are recorded net of related sales taxes as earned. Payment terms include weekly, bi-weekly, and monthly frequencies. Revenue recorded prior to the payment due date results in unbilled receivables recognized in accounts receivable, net of allowances in the accompanying condensed consolidated balance sheets. Lease payments received prior to the month earned are recorded as deferred lease revenue, and this amount is included in customer deposits and advance payments in the accompanying condensed consolidated balance sheets. Progressive Leasing lease revenues are recorded net of a provision for returns and uncollectible renewal payments. Aaron's Business lease revenues are recognized as revenue net of related sales taxes in the month they are earned. Lease payments received prior to the month earned are recorded as deferred lease revenue, and this amount is included in customer deposits and advance payments in the accompanying condensed consolidated balance sheets. Aaron's Business lease revenues are recorded net of a provision for returns and uncollectible renewal payments. All of the Company's customer agreements are considered operating leases. 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 Progressive Leasing's lease purchase agreements are capitalized as incurred and amortized as operating expense over the estimated lease term. The capitalized costs have been classified within prepaid expenses and other assets in the accompanying condensed consolidated balance sheets. Initial direct costs related to Aaron's Business customer agreements are expensed as incurred and have been classified as operating expenses in the Company's condensed consolidated statements of earnings. The statement of earnings effects of expensing the initial direct costs of the Aaron's Business as incurred are not materially different from amortizing initial direct costs over the lease term. Retail and Non-Retail Sales Revenues from the retail sale of merchandise to customers are recognized at the point of sale. Generally, the transfer of control occurs near or at the point of sale for retail sales. Revenues for the non-retail sale of merchandise to franchisees are recognized when control transfers to the franchisee, which is upon delivery of the merchandise. Substantially all of the amounts reported as non-retail sales and non-retail cost of sales in the accompanying condensed 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 condensed consolidated statements of earnings. Franchise Royalties and Fees The Company has no current plans to franchise additional Aaron's stores. Franchisees have historically paid an ongoing royalty fee of 6% of the weekly cash revenue collections, which is recognized as the fees become due. In response to the COVID-19 pandemic, the Company temporarily suspended, as opposed to deferring, the royalty fee obligation in March 2020, effectively forgiving the franchisee royalty payments that otherwise would have been due during the suspension period. The Company reinstated the requirement that franchisees make royalty payments during the second quarter of 2020, but there can be no assurance that the Company will not implement another suspension or a deferral of franchisee royalty payments in future periods, such as, for example, in response to our franchisees experiencing financial difficulty due to a resurgence of COVID-19 cases. The Company guarantees certain debt obligations of some of the franchisees and receives guarantee fees based on the outstanding debt obligations of such franchisees. Refer to Note 4 of these condensed consolidated financial statements for additional discussion of the Company's franchise-related guarantee obligation. Interest and Fees on Loans Receivable Vive extends or declines credit to an applicant through its bank partners based upon the applicant's credit rating and other factors. Qualifying applicants receive a credit card to finance their initial purchase and to use in subsequent purchases at the merchant or other participating merchants for an initial 24-month period, which Vive may renew if the cardholder remains in good standing. Vive acquires the loan receivable from merchants through its third-party bank partners at a discount from the face value of the loan. The discount is comprised of a merchant fee discount and a promotional fee discount, if applicable. The merchant fee discount represents a pre-negotiated, nonrefundable discount that generally ranges from 3% to 25% of the loan face value. The discount is designed to cover the risk of loss related to the portfolio of cardholder charges and Vive's direct origination costs. The merchant fee discount and origination costs are presented net on the condensed consolidated balance sheets in loans receivable. Cardholders generally have an initial 24-month period that the card is active. The merchant fee discount, net of the origination costs, is amortized on a net basis and is recorded as interest and fee revenue on loans receivable in the condensed consolidated statements of earnings on a straight-line basis over the initial 24-month period. The discount from the face value of the loan on the acquisition of the loan receivable from the merchant through the third-party bank partners may also include a promotional fee discount, which generally ranges from 1% to 8%. The promotional fee discount is intended to compensate the holder of the loan receivable (i.e. Vive) for deferred or reduced interest rates that are offered to the cardholder for a specified period on the outstanding loan balance (generally for six six The customer is typically required to make monthly minimum payments of at least 3.5% of the outstanding loan balance, which includes outstanding interest. Fixed and variable interest rates, typically 27% to 35.99%, are compounded daily for cards that do not qualify for deferred or reduced interest promotional periods. Interest income, which is recognized based upon the amount of the loans outstanding, is recognized as interest and fees on loans receivable when earned if collectibility is reasonably assured. For credit cards that provide deferred interest, if the balance is not paid off during the promotional period or if the cardholder defaults, interest is billed to the customers at standard rates and the cumulative amount owed is charged to the cardholder account in the month that the promotional period expires. For credit cards that provide reduced interest, if the balance is not paid off during the promotional period, interest is billed to the cardholder at standard rates in the month that the promotional period expires or when the cardholder defaults. The Company recognizes interest revenue during the promotional period based on its historical experience related to cardholders that fail to pay off balances during the promotional period if collectibility is reasonably assured. Annual fees are charged to cardholders at the commencement of the loan and on each subsequent anniversary date. Annual fees are deferred and recognized into revenue on a straight-line basis over a one-year period. Under the provisions of the credit card agreements, the Company also may assess fees for service calls or for missed or late payments, which are recognized as revenue in the billing period in which they are assessed if collectibility is reasonably assured. Annual fees and other fees discussed are recognized as interest and fee revenue on loans receivable in the condensed consolidated statements of earnings. Accounts Receivable Accounts receivable consist primarily of receivables due from customers of Progressive Leasing and Company-operated stores, corporate receivables incurred during the normal course of business (primarily for vendor consideration and real estate leasing activities) and franchisee obligations. Accounts receivable, net of allowances, consist of the following: (In Thousands) June 30, 2020 December 31, 2019 Customers $ 57,134 $ 76,819 Corporate 12,141 14,109 Franchisee 10,658 13,231 Accounts Receivable $ 79,933 $ 104,159 The Company maintains an accounts receivable allowance, which primarily relates to its Progressive Leasing operations and, to a lesser extent, its Aaron's Business operations. The Company’s policy for both its Progressive Leasing and Aaron's Business segments is to record an allowance for returns and uncollectible renewal payments based on historical collection experience. Other qualitative factors are considered in estimating the allowance, such as current and forecasted business trends including, but not limited to, the anticipated unfavorable impacts of the COVID-19 pandemic on our businesses. The provision for returns and uncollectible renewal payments for both the Progressive Leasing and Aaron's Business segments is recognized as a reduction of lease revenues and fees within the condensed consolidated statements of earnings. The Progressive Leasing segment writes off lease receivables that are 120 days or more contractually past due. Aaron's Business writes off lease receivables that are 60 days or more past due. The Company also maintains an allowance for outstanding franchisee accounts receivable. The Company's policy is to estimate a specific allowance on accounts receivable to estimate future losses related to certain franchisees that are deemed higher risk of non-payment and a general allowance based on historical losses as well as the Company's assessment of the financial health of all other franchisees. The estimated allowance on accounts receivable in the current quarter includes consideration of broad macroeconomic trends, such as the unfavorable impacts of the COVID-19 pandemic on the franchisees' ability to satisfy their obligations. The provision for uncollectible franchisee accounts receivable is recorded as bad debt expense in operating expenses within the condensed consolidated statements of earnings. Vive's allowance for uncollectible merchant accounts receivable, which primarily relates to cardholder returns and refunds, is recorded as bad debt expense within operating expenses in the condensed consolidated statements of earnings. Given the significant uncertainty regarding the impacts of the COVID-19 pandemic on our businesses, a high level of estimation was involved in determining the allowance for accounts receivable as of June 30, 2020; therefore, actual accounts receivable write-offs could differ materially from the allowance. The following table shows the amounts recognized for bad debt expense and provision for returns and uncollected payments: Six Months Ended June 30, (In Thousands) 2020 2019 Bad Debt Expense 1 $ 1,016 $ 1,166 Provision for Returns and Uncollectible Renewal Payments 157,571 136,445 Accounts Receivable Provision $ 158,587 $ 137,611 1 Bad debt expense is recorded within operating expenses in the condensed consolidated financial statements. Lease Merchandise The Company's lease merchandise consists primarily of furniture, appliances, electronics, jewelry and a variety of other products and is recorded at the lower of cost or net realizable value. The cost of merchandise manufactured by our Woodhaven operations is recorded at cost and includes overhead from production facilities, shipping costs and warehousing costs. The Company's Progressive Leasing segment, at which substantially all merchandise is on lease, depreciates merchandise to a 0% salvage value generally over 12 months. The Company's Aaron's Business segment begins depreciating merchandise at the earlier of 12 months and one day from purchase or when the item is leased. Aaron's Business depreciates merchandise to a 0% salvage value over the lease agreement period when on lease, generally 12 to 24 months, and generally 36 months when not on lease. Depreciation is accelerated upon the early payout of a lease. The following is a summary of lease merchandise, net of accumulated depreciation and allowances: (In Thousands) June 30, 2020 December 31, 2019 Merchandise on Lease, net of Accumulated Depreciation and Allowances $ 969,364 $ 1,156,798 Merchandise Not on Lease, net of Accumulated Depreciation and Allowances 150,276 276,619 Lease Merchandise, net of Accumulated Depreciation and Allowances $ 1,119,640 $ 1,433,417 The Company's policies require weekly merchandise counts at its Aaron's Business store-based operations, which include write-offs for unsalable, damaged, or missing merchandise inventories. In addition to monthly cycle counting, full physical inventories are generally taken at the fulfillment and manufacturing facilities annually and appropriate provisions are made for missing, damaged and unsalable merchandise. In addition, the Company monitors merchandise levels and mix by division, store, and fulfillment center, as well as the average age of merchandise on hand. If obsolete merchandise cannot be returned to vendors, its carrying amount is adjusted to its net realizable value or written off. Generally, all merchandise not on lease is available for lease or sale. On a monthly basis, all damaged, lost or unsalable merchandise identified is written off. The Company records a provision for write-offs on the allowance method, which primarily relates to its Progressive Leasing operations and, to a lesser extent, its Aaron's Business operations. The allowance method for lease merchandise write-offs estimates the merchandise losses incurred but not yet identified by management as of the end of the accounting period based primarily on historical write-off experience. Other qualitative factors are considered in estimating the allowance, such as current and forecasted business trends including, but not limited to, the anticipated unfavorable impacts of the COVID-19 pandemic on our businesses. Given the significant uncertainty regarding the impacts of the COVID-19 pandemic on our businesses, a high level of estimation was involved in determining the allowance as of June 30, 2020; therefore, actual lease merchandise write-offs could differ materially from the allowance. The provision for write-offs is included in operating expenses in the accompanying condensed consolidated statements of earnings. The following table shows the components of the allowance for lease merchandise write-offs, which is included within lease merchandise, net within the condensed consolidated balance sheets: Six Months Ended June 30, (In Thousands) 2020 2019 Beginning Balance $ 61,185 $ 46,694 Merchandise Written off, net of Recoveries (119,221) (105,571) Provision for Write-offs 130,039 117,994 Ending Balance $ 72,003 $ 59,117 Loans Receivable, Net Gross loans receivable represents the principal balances of credit card charges at Vive's participating merchants that remain due from cardholders, plus unpaid interest and fees due from cardholders. The allowance and unamortized fees represent an allowance for uncollectible amounts; merchant fee discounts, net of capitalized origination costs; promotional fee discounts; and deferred annual card fees. Economic conditions and loan performance trends are closely monitored to manage and evaluate exposure to credit risk. Trends in delinquency rates are an indicator of credit risk within the loans receivable portfolio, including the migration of loans between delinquency categories over time. Charge-off rates represent another indicator of the potential for future credit losses. The risk in the loans receivable portfolio is correlated with broad economic trends, such as current and projected unemployment rates, stock market volatility, and changes in medium and long-term risk-free rates, which are considered in determining the allowance for loan losses and can have a material effect on credit performance. Effective January 1, 2020 with the adoption of ASU 2016-13, Measurement of Credit Losses on Financial Instruments ("CECL") as discussed within "Recent Accounting Pronouncements" in Note 1 to these condensed consolidated financial statements, expected lifetime losses on loans receivable are recognized upon loan origination, which requires the Company to make its best estimate of probable lifetime losses at the time of origination. Our credit card loans do not have contractually stated maturity dates, which requires the Company to estimate an average life of loan by analyzing historical payment trends to determine an expected remaining life of the loan balance. The Company segments its loans receivable portfolio into homogenous pools by FICO score and by delinquency status and evaluates loans receivable collectively for impairment when similar risk characteristics exist. The Company calculates the allowance for loan losses based on internal historical loss information and incorporates observable and forecasted macroeconomic data over a twelve-month reasonable and supportable forecast period. Incorporating macroeconomic data could have a material impact on the measurement of the allowance to the extent that forecasted data changes significantly, such as higher forecasted unemployment rates and the observed significant market volatility associated with the COVID-19 pandemic. For any periods beyond the twelve-month reasonable and supportable forecast period described above, the Company reverts to using historical loss information on a straight-line basis over a period of six months and utilizes historical loss information for the remaining life of the portfolio. The Company may also consider other qualitative factors in estimating the allowance, as necessary. For the purposes of determining the allowance as of June 30, 2020, management considered other qualitative factors such as the beneficial impact of recent government stimulus measures to our customer base that were not fully factored into the macroeconomic forecasted data. We believe those stimulus measures may have contributed to the recent favorable cardholder payment trends we are experiencing. We also considered the uncertain nature and extent of any future government stimulus programs and the potential impact, if any, these programs may have on the ability of Vive's cardholders to make payments as they come due. The allowance for loan losses is maintained at a level considered appropriate to cover expected future losses of principal, interest and fees on active loans in the loans receivable portfolio. The appropriateness of the allowance is evaluated at each period end. To the extent that actual results differ from estimates of uncollectible loans receivable, including the significant uncertainties caused by the COVID-19 pandemic, the Company's results of operations and liquidity could be materially affected. Delinquent loans receivable includes those that are 30 days or more past due based on their contractual billing dates. In response to the COVID-19 pandemic, the Company has granted affected customers payment deferrals while allowing them to maintain their delinquency status for an additional 30 days per deferral. The Company places loans receivable on nonaccrual status when they are greater than 90 days past due or upon notification of cardholder bankruptcy, death or fraud. The Company discontinues accruing interest and fees and amortizing merchant fee discounts and promotional fee discounts for loans receivable in nonaccrual status. Loans receivable are removed from nonaccrual status when cardholder payments resume, the loan becomes 90 days or less past due and collection of the remaining amounts outstanding is deemed probable. Payments received on nonaccrual loans are allocated according to the same payment hierarchy methodology applied to loans that are accruing interest. Loans receivable are charged off no later than the end of the following month after the billing cycle in which the loans receivable become 120 days past due. Vive extends or declines credit to an applicant through its bank partners based upon the applicant's credit rating and other factors. Below is a summary of the credit quality of the Company's loan portfolio as of June 30, 2020 and December 31, 2019 by Fair Isaac and Company (FICO) score as determined at the time of loan origination: FICO Score Category June 30, 2020 December 31, 2019 600 or Less 7.5 % 6.7 % Between 600 and 700 79.8 % 80.1 % 700 or Greater 12.7 % 13.2 % Prepaid Expenses and Other Assets Prepaid expenses and other assets consist of the following: (In Thousands) June 30, 2020 December 31, 2019 Prepaid Expenses $ 49,134 $ 45,034 Prepaid Insurance 29,086 26,393 Assets Held for Sale 9,193 10,131 Deferred Tax Asset 826 826 Other Assets 25,681 31,887 Prepaid Expenses and Other Assets $ 113,920 $ 114,271 Assets Held for Sale Certain properties, consisting of parcels of land and commercial buildings, met the held for sale classification criteria as of June 30, 2020 and December 31, 2019. Assets held for sale are recorded at the lower of their carrying value or fair value less estimated cost to sell and are classified within prepaid expenses and other assets in the condensed consolidated balance sheets. Depreciation is suspended on assets upon classification to held for sale. The carrying amount of the properties held for sale as of June 30, 2020 and December 31, 2019 is $9.2 million and $10.1 million, 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. Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consist of the following: (In Thousands) June 30, 2020 December 31, 2019 Accounts Payable $ 56,680 $ 89,959 Accrued Insurance Costs 54,314 44,032 Accrued Salaries and Benefits 53,636 43,972 Accrued Real Estate and Sales Taxes 34,394 32,763 Other Accrued Expenses and Liabilities 50,158 62,090 Accounts Payable and Accrued Expenses $ 249,182 $ 272,816 Debt During the first quarter of 2020, the Company temporarily borrowed $300.0 million from its revolving credit facility to preserve and protect its cash position in light of the COVID-19 pandemic. This amount was subsequently repaid on April 30, 2020. The total available credit under our revolving credit facility as of June 30, 2020 was $486.2 million . At June 30, 2020, the Company was in compliance with all covenants related to its outstanding debt. However, given the uncertainties associated with the COVID-19 pandemic's impact on our operations and financial performance in future periods, there can be no assurances that we will not be required to seek amendments or modifications to one or more of the covenants in our debt agreements and/or waivers of potential or actual defaults of those covenants. See Note 8 to the consolidated financial statements in the 2019 Annual Report for further information regarding the Company's indebtedness. Leases In response to the adverse impacts of the COVID-19 pandemic on the Aaron's Business, the Company negotiated lease concessions for approximately 175 of our Company-operated Aaron's store locations and received near-term rent abatements and deferrals of approximately $1.8 million as of June 30, 2020. On April 10, 2020, the Financial Accounting Standards Board ("FASB") issued guidance for lease concessions executed in response to the COVID-19 pandemic, which provides a practical expedient to forego an evaluation of whether a lease concession should be accounted for as a modification if the concession does not result in a substantial increase of the lessee's obligations. The Company has elected to apply this guidance to all lease concessions negotiated as a result of the COVID-19 pandemic that meet these criteria. 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. The |
Fair Value Measurement
Fair Value Measurement | 6 Months Ended |
Jun. 30, 2020 | |
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: (In Thousands) June 30, 2020 December 31, 2019 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Deferred Compensation Liability $ — $ (10,657) $ — $ — $ (11,201) $ — The Company maintains the Aaron’s, Inc. Deferred Compensation Plan, which is an unfunded, nonqualified deferred compensation plan for a select group of management, highly compensated employees and non-employee directors. The liability is recorded in accounts payable and accrued expenses in the condensed consolidated balance sheets. The liability represents benefits accrued for plan participants and 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: (In Thousands) June 30, 2020 December 31, 2019 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets Held for Sale $ — $ 9,193 $ — $ — $ 10,131 $ — Assets classified as held for sale are recorded at the lower of carrying value or fair value less estimated costs to sell, and any adjustment is recorded in other operating (income) expense, net or restructuring expenses, net (if the asset is a part of the Company's restructuring programs as described in Note 6) in the condensed consolidated statements of earnings. The highest and best use of the 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 . Certain Financial Assets and Liabilities Not Measured at Fair Value The following table summarizes the fair value of liabilities that are not measured at fair value in the condensed consolidated balance sheets, but for which the fair value is disclosed: (In Thousands) June 30, 2020 December 31, 2019 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Fixed-Rate Long Term Debt 1 $ — $ (62,431) $ — $ — $ (123,705) $ — 1 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 $60.0 million and $120.0 million at June 30, 2020 and December 31, 2019, respectively. |
Loans Receivable
Loans Receivable | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Loans Receivable | LOANS RECEIVABLE The following is a summary of the Company’s loans receivable, net: (In Thousands) June 30, 2020 December 31, 2019 Loans Receivable, Gross $ 96,519 $ 96,387 Unamortized Fees (6,956) (6,223) Loans Receivable, Amortized Cost 89,563 90,164 Allowance for Loan Losses (30,693) (14,911) Loans Receivable, Net of Allowances and Unamortized Fees $ 58,870 $ 75,253 The table below presents credit quality indicators of the amortized cost of the Company's loans receivable by origination year: (In Thousands) As of June 30, 2020 2020 2019 2018 2017 2016 Prior Total FICO Score Category: 600 or Less $ 3,237 $ 2,781 $ 840 $ 130 $ 86 $ 16 $ 7,090 Between 600 and 700 24,541 25,584 10,656 6,042 3,485 962 71,270 700 or Greater 4,248 3,078 1,604 1,123 929 221 11,203 Total Amortized Cost $ 32,026 $ 31,443 $ 13,100 $ 7,295 $ 4,500 $ 1,199 $ 89,563 Included in the table below is an aging of the loans receivable, gross balance: (Dollar Amounts in Thousands) Aging Category 1 June 30, 2020 December 31, 2019 30-59 days past due 5.1 % 6.9 % 60-89 days past due 2.5 % 3.6 % 90 or more days past due 3.6 % 5.0 % Past due loans receivable 11.2 % 15.5 % Current loans receivable 88.8 % 84.5 % Balance of Credit Card Loans on Nonaccrual Status $ 2,038 $ 2,284 Balance of Loans Receivable 90 or More Days Past Due and Still Accruing Interest and Fees $ — $ — 1 Customers that were granted a payment deferral due to factors caused by the COVID-19 pandemic maintained their delinquency status for an additional 30 days. This did not materially impact the aging disclosed above. The tables below present the components of the allowance for loan losses for the three and six months ended June 30, 2020 and 2019: Three Months Ended June 30, (In Thousands) 2020 2019 Beginning Balance $ 31,594 $ 12,363 Provision for Loan Losses 3,428 4,968 Charge-offs (5,132) (5,158) Recoveries 803 610 Ending Balance $ 30,693 $ 12,783 Six Months Ended June 30, (In Thousands) 2020 2019 Beginning Balance $ 14,911 $ 12,970 CECL Transition Adjustment 1 9,463 — Provision for Loan Losses 16,150 9,223 Charge-offs (11,333) (10,642) Recoveries 1,502 1,232 Ending Balance $ 30,693 $ 12,783 1 Upon the January 1, 2020 adoption of CECL as further described in Note 1 to these condensed consolidated financial statements, the Company increased its allowance for loan losses by $9.5 million, which was recorded as a cumulative-effect adjustment to the opening balance of the Company's 2020 retained earnings adjustment. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Guarantees The Company has guaranteed certain debt obligations of some of the Aaron's Business franchisees under a franchise loan program with one of the banks in our Credit Agreement. 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 franchise loan program, which would be due in full within 90 days of the event of default. At June 30, 2020, the maximum amount that the Company would be obligated to repay in the event franchisees defaulted was $19.5 million, and the total facility commitment was $25.0 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's losses associated with the program have been immaterial, but could be material in a future period due to the COVID-19 pandemic's impact on franchisee operations and financial performance or other adverse trends in the liquidity and/or financial performance of the Company's franchisees. The Company records a liability related to estimated future losses from repaying the franchisees' outstanding debt obligations upon any possible future events of default. This is included in accounts payable and accrued expenses in the condensed consolidated balance sheets and was $2.4 million and $0.4 million as of June 30, 2020 and December 31, 2019, respectively. The Company is subject to financial covenants under the franchise loan program that are consistent with the Revolving Credit and Term Loan Agreement, which are more fully described in Note 8 to the consolidated financial statements in the 2019 Annual Report. The Company is in compliance with all covenants at June 30, 2020 and believes it will continue to be in compliance in the future. However, given the uncertainties associated with the COVID-19 pandemic's impact on our operations and financial performance in future periods, there can be no assurances that we will not be required to seek amendments or modifications to one or more of the covenants in our debt agreements and/or waivers of potential or actual defaults of those covenants. Legal and Regulatory 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. 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. The Company accrued $3.2 million and $182.9 million as of June 30, 2020 and December 31, 2019, respectively, for pending legal and regulatory matters for which it believes losses are probable and is the Company's best estimate of its exposure to loss. The accrual at December 31, 2019 included a $175.0 million settlement with the Federal Trade Commission (the "FTC") discussed in more detail below, which was recorded as accrued regulatory expense in the consolidated balance sheet. The Company records the other legal and regulatory liabilities in accounts payable and accrued expenses in the condensed consolidated balance sheet. As of June 30, 2020, the Company has a receivable of $1.3 million for anticipated insurance proceeds on outstanding and settled legal matters which is recorded within prepaid expenses and other assets in the condensed consolidated balance sheet. The Company estimated that the aggregate range of reasonably possible loss in excess of accrued liabilities for such probable loss contingencies is between $0 and $1.0 million as of June 30, 2020. At June 30, 2020, 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 $0 and $1.0 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 for legal and regulatory accruals, aggregate probable loss amounts and reasonably possible loss amounts are all subject to the uncertainties and variables described above. Regulatory Inquiries In July 2018, the Company received civil investigative demands ("CIDs") from the FTC regarding disclosures related to lease-to-own and other financial products offered by the Company through the Aaron's Business and Progressive Leasing and whether such disclosures violate the Federal Trade Commission Act (the "FTC Act"). Although we believe such disclosures were in compliance with the FTC Act and have not admitted to any wrongdoing, in December 2019, Progressive Leasing reached an agreement in principle with the staff of the FTC with respect to a tentative settlement to resolve the FTC inquiry, pursuant to which Progressive would pay $175.0 million to the FTC. Because Progressive reached a tentative agreement with respect to the financial terms of the settlement in December 2019, the Company recognized a charge of $179.3 million during the fourth quarter of 2019, including $4.3 million of incurred legal fees. In January 2020, Progressive and the FTC staff agreed in principle on the terms of a related consent order which, among other matters, requires Progressive to undertake certain compliance-related activities, including monitoring, disclosure and reporting requirements. The proposed consent order was approved by the FTC on April 17, 2020 and approved by the United States District Court for the Northern District of Georgia on April 22, 2020. The Company paid the $175.0 million settlement amount to the FTC on April 27, 2020. In April 2019, the Aaron’s Business, along with other lease-to-own companies, received an unrelated CID from the FTC focused on certain transactions involving the contingent purchase and sale of customer lease agreements with other lease-to-own companies, and whether such transactions violated the FTC Act. Although we believe those transactions did not violate any laws and we have not admitted any wrongdoing, in August 2019, the Company reached an agreement in principle with the FTC staff to resolve the issues raised in that CID. The proposed consent agreement, which would prohibit such contingent purchases and sales of customer lease portfolios in the future but would not require any payments to the FTC, was approved by the FTC on February 21, 2020. Litigation Matters In Stein v. Aaron's, Inc., et. al., filed in the United States District Court for the Southern District of New York on February 28, 2020, the plaintiffs allege that from March 2, 2018 through February 19, 2020, Aaron's made certain misleading public statements about the Company's business, operations, and prospects. The allegations underlying the lawsuit principally relate to the Federal Trade Commission's inquiry into disclosures related to lease-to-own and other financial products offered by the Company through the Aaron's Business and Progressive Leasing segments. The Company believes the claims are without merit and intends to vigorously defend against this lawsuit. The case has been transferred to the United States District Court for the Northern District of Georgia, where the Company intends to file a motion to dismiss the case. Other Contingencies 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 Vive business, had unconditionally cancellable unfunded lending commitments totaling approximately $224.7 million and $225.0 million as of June 30, 2020 and December 31, 2019, respectively, that do not give rise to revenues and cash flows. These unfunded commitments arise in the ordinary course of business from credit card agreements with individual cardholders that give them the ability to borrow, against unused amounts, up to the maximum credit limit assigned to their account. While these unfunded amounts represent the total available unused lines of credit, the Company does not anticipate that all cardholders will utilize their entire available line at any given point in time. Commitments to extend unsecured credit are agreements to lend to a cardholder 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. Prior to the January 1, 2020 adoption of CECL as discussed further in Note 1, the Company recorded a reserve for losses on unfunded loan commitments, which was approximately $0.4 million as of December 31, 2019 and was included in accounts payable and accrued expenses in the consolidated balance sheet. Upon the adoption of CECL, the Company reversed the aforementioned reserve for losses on unfunded loan commitments and recorded a corresponding increase of $0.4 million to its January 1, 2020 retained earnings balance. |
Segments
Segments | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Segments | SEGMENTS As of June 30, 2020, the Company has three operating and reportable segments: Progressive Leasing, Aaron's Business and Vive. Progressive Leasing is a leading virtual lease-to-own company that provides lease-purchase solutions on a variety of products, including furniture and appliance, jewelry, mobile phones and accessories, mattresses, and automobile electronics and accessories. The Aaron's Business offers furniture, home appliances, consumer electronics and accessories to consumers through a lease-to-own agreement through the Company's Aaron's-branded stores in the United States and Canada and e-commerce platform. This operating segment also supports franchisees of its Aaron's stores. In addition, the Aaron's Business segment includes the operations of Woodhaven, which manufactures and supplies the majority of the bedding and a significant portion of the upholstered furniture leased and sold in Company-operated and franchised stores. Vive offers a variety of second-look financing programs originated through third-party federally insured banks to customers of participating merchants and, together with Progressive Leasing, allows the Company to provide retail partners with below-prime customers one source for financing and leasing transactions. Disaggregated Revenue The following table presents revenue by source and by segment for the three months ended June 30, 2020: Three Months Ended June 30, 2020 (In Thousands) Progressive Leasing Aaron's Business Vive Total Lease Revenues and Fees 1 $ 589,749 $ 380,238 $ — $ 969,987 Retail Sales 2 — 14,020 — 14,020 Non-Retail Sales 2 — 33,044 — 33,044 Franchise Royalties and Fees 2 — 3,365 — 3,365 Interest and Fees on Loans Receivable 3 — — 9,414 9,414 Other — 289 — 289 Total $ 589,749 $ 430,956 $ 9,414 $ 1,030,119 1 Substantially all lease revenues and fees are within the scope of ASC 842, Leases . The Company had $6.8 million of other revenue within the scope of ASC 606, Revenue from Contracts with Customers. 2 Substantially all retail sales, non-retail sales and franchise royalties and fees are within the scope of ASC 606, Revenue from Contracts with Customers . 3 All interest and fees on loans receivable are within the scope of ASC 310, Credit Card Interest & Fees . The following table presents revenue by source and by segment for the three months ended June 30, 2019: Three Months Ended June 30, 2019 (In Thousands) Progressive Leasing Aaron's Business Vive Total Lease Revenues and Fees 1 $ 516,333 $ 391,232 $ — $ 907,565 Retail Sales 2 — 8,898 — 8,898 Non-Retail Sales 2 — 34,124 — 34,124 Franchise Royalties and Fees 2 — 8,605 — 8,605 Interest and Fees on Loans Receivable 3 — — 8,610 8,610 Other — 339 — 339 Total $ 516,333 $ 443,198 $ 8,610 $ 968,141 1 Substantially all lease revenues and fees are within the scope of ASC 842, Leases . The Company had $6.9 million of other revenue within the scope of ASC 606, Revenue from Contracts with Customers. 2 Substantially all retail sales, non-retail sales and franchise royalties and fees are within the scope of ASC 606, Revenue from Contracts with Customers . 3 All interest and fees on loans receivable are within the scope of ASC 310, Credit Card Interest & Fees . The following table presents revenue by source and by segment for the six months ended June 30, 2020: Six Months Ended June 30, 2020 (In Thousands) Progressive Leasing Aaron's Business Vive Total Lease Revenues and Fees 1 $ 1,248,283 $ 769,617 $ — $ 2,017,900 Retail Sales 2 — 23,551 — 23,551 Non-Retail Sales 2 — 59,890 — 59,890 Franchise Royalties and Fees 2 — 10,089 — 10,089 Interest and Fees on Loans Receivable 3 — — 19,322 19,322 Other — 641 — 641 Total $ 1,248,283 $ 863,788 $ 19,322 $ 2,131,393 1 Substantially all lease revenues and fees are within the scope of ASC 842, Leases . The Company had $13.5 million of other revenue within the scope of ASC 606, Revenue from Contracts with Customers. 2 Substantially all retail sales, non-retail sales and franchise royalties and fees are within the scope of ASC 606, Revenue from Contracts with Customers . 3 All interest and fees on loans receivable are within the scope of ASC 310, Credit Card Interest & Fees . The following table presents revenue by source and by segment for the six months ended June 30, 2019: Six Months Ended June 30, 2019 (In Thousands) Progressive Leasing Aaron's Business Vive Total Lease Revenues and Fees 1 $ 1,039,734 $ 811,988 $ — $ 1,851,722 Retail Sales 2 — 21,707 — 21,707 Non-Retail Sales 2 — 71,105 — 71,105 Franchise Royalties and Fees 2 — 17,812 — 17,812 Interest and Fees on Loans Receivable 3 — — 17,256 17,256 Other — 642 — 642 Total $ 1,039,734 $ 923,254 $ 17,256 $ 1,980,244 1 Substantially all lease revenues and fees are within the scope of ASC 842, Leases . The Company had $13.4 million of other revenue within the scope of ASC 606, Revenue from Contracts with Customers. 2 Substantially all retail sales, non-retail sales and franchise royalties and fees are within the scope of ASC 606, Revenue from Contracts with Customers . 3 All interest and fees on loans receivable are within the scope of ASC 310, Credit Card Interest & Fees . 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. The Company determines earnings (loss) before income taxes for all reportable segments in accordance with U.S. GAAP. Interest expense is allocated to the Progressive Leasing and Vive segments based on a percentage of the outstanding balances of their intercompany borrowings and of the debt incurred when they were acquired. The following is a summary of earnings (loss) before income taxes by segment: Three Months Ended Six Months Ended (In Thousands) 2020 2019 2020 2019 Earnings (Loss) Before Income Taxes: Progressive Leasing $ 59,814 $ 58,406 $ 118,801 $ 113,794 Aaron's Business 1 32,009 138 (433,348) 17,726 Vive 714 (1,725) (7,369) (4,393) Total Earnings (Loss) Before Income Taxes $ 92,537 $ 56,819 $ (321,916) $ 127,127 1 Loss before income taxes for the Aaron's Business during the six months ended June 30, 2020 was impacted by (i) goodwill impairment charges of $446.9 million incurred during the three months ended March 31, 2020, (ii) $14.1 million related to an early termination fee for a sales and marketing agreement during the three months ended March 31, 2020, and (iii) restructuring charges of $29.3 million related to operating lease right-of-use asset impairment and operating lease charges, fixed asset impairment charges, and workforce reductions, of which $7.0 million was incurred during the three months ended June 30, 2020. Earnings before income taxes for the Aaron's Business during the six months ended June 30, 2019 includes restructuring charges of $32.0 million related to closed store right-of-use asset impairment and operating lease charges, the write-off and impairment of store property, plant and equipment and related workforce reductions, of which $18.7 million was incurred during the three months ended June 30, 2019. The following is a summary of total assets by segment and shared corporate-related assets. (In Thousands) June 30, 2020 December 31, 2019 Assets: Progressive Leasing $ 1,093,647 $ 1,261,786 Aaron's Business 1,2 1,034,194 1,740,281 Vive 71,633 85,825 Other 3 516,228 209,908 Total Assets $ 2,715,702 $ 3,297,800 1 Includes inventory (principally raw materials and work-in-process) that has been classified within lease merchandise in the condensed consolidated balance sheets of $12.8 million and $14.0 million as of June 30, 2020 and December 31, 2019, respectively. 2 During the six months ended June 30, 2020, the Aaron's Business segment assets were impacted by a goodwill impairment charge of $446.9 million to fully write-off its goodwill balance. |
Restructuring
Restructuring | 6 Months Ended |
Jun. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | RESTRUCTURING 2020 Restructuring Program During the first quarter of 2020, the Company initiated further restructuring actions related to a real estate repositioning program, which resulted in the closure and consolidation of 71 Company-operated stores during the first six months of 2020. We currently expect to close approximately 47 additional stores over the next six to nine months. Total net restructuring expenses of $6.1 million and $22.5 million were recorded for the three and six months ended June 30, 2020 under the 2020 restructuring program, all of which were incurred within the Aaron's Business segment. Restructuring expenses for the three and six months ended June 30, 2020 were comprised mainly of operating lease right-of-use asset impairment charges related to the vacancy or planned vacancy of the stores identified for closure, severance charges to rationalize our field support and store support center staff to better align the organization with current operations and business conditions, and fixed asset impairment charges. The Company continually evaluates its Company-operated Aaron's Business store portfolio to determine if it will further rationalize its store base to better align with marketplace demand. Additional restructuring charges may result from our real estate repositioning and optimization initiatives, which may include investing in our next generation store concepts to better appeal to our target customer market. 2019 Restructuring Program During the first quarter of 2019, the Company initiated a restructuring program to further optimize its Company-operated Aaron's Business store portfolio, which resulted in the closure and consolidation of 155 underperforming Company-operated stores during 2019. The Company also further rationalized its store support center and field support staff, which resulted in a reduction in associate headcount in those areas to more closely align with current business conditions. Total net restructuring expenses of $0.5 million and $5.1 million were recorded for the three and six months ended June 30, 2020 under the 2019 restructuring program, all of which were incurred within the Aaron's Business segment. Restructuring expenses for the three and six months ended June 30, 2020 were comprised principally of closed store operating lease right-of-use asset impairment charges due to changes in estimates of future sublease activity of the vacant properties. These costs were included in restructuring expenses, net in the condensed consolidated statements of earnings. We expect future restructuring expenses (reversals) due to potential future customer early buyouts of leases with landlords as well as continuing variable maintenance charges and taxes. 2017 and 2016 Restructuring Programs During the years ended December 31, 2017 and 2016, the Company initiated restructuring programs to rationalize its Company-operated Aaron's Business store portfolio to better align with marketplace demand. The programs resulted in the closure and consolidation of 139 underperforming Company-operated stores throughout 2016, 2017, and 2018. The Company also optimized its store support center and field support staff, which resulted in a reduction in associate headcount in those areas to more closely align with current business conditions. Total net restructuring expenses of $0.4 million and $1.7 million were recorded for the three and six months ended June 30, 2020 under the 2017 and 2016 restructuring programs, all of which were incurred within the Aaron's Business segment. Restructuring expenses for the three and six months ended June 30, 2020 were comprised principally of closed store operating lease right-of-use asset impairment charges due to changes in estimates of future sublease activity of the vacant properties. These costs were included in restructuring expenses, net in the condensed consolidated statements of earnings. We expect future restructuring expenses (reversals) due mainly to potential future customer early buyouts of leases with landlords as well as continuing variable maintenance charges and taxes, but do not expect these charges or reversals to be material. The following table summarizes restructuring charges for the three and six months ended June 30, 2020 and 2019, respectively, under the three programs: Three Months Ended June 30, Six Months Ended June 30, (In Thousands) 2020 2019 2020 2019 Right-of-Use Asset Impairment $ 2,456 $ 14,287 $ 18,634 $ 23,010 Operating Lease Charges 1,557 979 2,570 1,778 Severance 2,694 1,856 4,725 2,992 Fixed Asset Impairment 263 1,072 2,952 2,569 Other Expenses 21 544 396 1,670 Total Restructuring Expenses, Net $ 6,991 $ 18,738 $ 29,277 $ 32,019 To date, the Company has incurred charges of $42.5 million under the 2016 and 2017 restructuring programs, $43.5 million under the 2019 restructuring program, and $22.5 million under the 2020 restructuring program. These cumulative charges are primarily comprised of operating lease right-of-use asset and fixed impairment charges, losses recognized related to contractual lease obligations, and severance related to reductions in store support center and field support staff headcount. The following table summarizes the balances of the accruals for the restructuring programs, which are recorded in accounts payable and accrued expenses in the condensed consolidated balance sheets, and the activity for the six months ended June 30, 2020: (In Thousands) Severance Balance at January 1, 2020 $ 756 Restructuring Severance Charges 4,725 Payments (3,895) Balance at June 30, 2020 $ 1,586 |
Basis and Summary of Signific_2
Basis and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business Aaron's, Inc. (the "Company") is a leading omnichannel provider of lease-purchase solutions. As of June 30, 2020, the Company's operating and reportable segments are Progressive Leasing, Aaron's Business and Vive. We have updated all disclosures and references to Dent-A-Med, Inc. and/or DAMI in this Quarterly Report on Form 10-Q to reflect the operating segment's new name, "Vive." On July 29, 2020, the Company announced its intention to separate into two independent, publicly traded companies: (i) Progressive (comprised of Progressive Leasing and Vive) and (ii) Aaron's (comprised of the Aaron’s Business). Progressive Leasing is a virtual lease-to-own company that provides lease-purchase solutions in 46 states and the District of Columbia. It does so by purchasing merchandise from third-party retailers desired by those retailers' customers and, in turn, leasing that merchandise to the customers through a cancelable lease-to-own transaction. Progressive Leasing consequently has no stores of its own, but rather offers lease-purchase solutions to the customers of traditional and e-commerce retailers. |
Basis of Presentation | Basis of Presentation The preparation of the Company's condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States ("U.S. GAAP") for interim financial information requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates. Generally, actual experience has been consistent with management's prior estimates and assumptions. However, as described above, the extent to which the COVID-19 pandemic and resulting measures taken by the Company will impact the Company's business will depend on future developments, which are highly uncertain and cannot be precisely predicted at this time. In many cases, management's estimates and assumptions are highly dependent on estimates of future developments and may change significantly in the future due to unforeseen direct and indirect impacts of the COVID-19 pandemic. The accompanying unaudited condensed consolidated financial statements do not include all information required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included in the accompanying unaudited condensed consolidated financial statements. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 (the "2019 Annual Report") filed with the U.S. Securities and Exchange Commission on February 20, 2020. The results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of operating results for the full year. |
Principles of Consolidation | Principles of Consolidation The condensed 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. |
Accounting Policies and Estimates | Accounting Policies and Estimates See Note 1 to the consolidated financial statements in the 2019 Annual Report for expanded discussion of accounting policies and estimates. Discussions of accounting estimates and application of accounting policies herein have also been updated as applicable to describe the impacts of the COVID-19 pandemic described above. |
Earnings Per Share | Earnings Per ShareEarnings per share is computed by dividing net earnings by the weighted average number of shares of common stock outstanding during the period. The computation of earnings per share assuming dilution includes the dilutive effect of stock options, restricted stock units ("RSUs"), restricted stock awards ("RSAs") and performance share units ("PSUs") and awards issuable under the Company's employee stock purchase plan ("ESPP") (collectively, "share-based awards") as determined under the treasury stock method. |
Revenue Recognition | Revenue Recognition Lease Revenues and Fees The Company provides merchandise, consisting primarily of furniture, appliances, electronics, jewelry and a variety of other products, to its customers for lease under certain terms agreed to by the customer. The Company's Progressive Leasing segment offers customers of traditional and e-commerce retailers a virtual lease-purchase solution through leases with payment terms that can be renewed up to 12 months. The Company's Aaron's-branded stores and its e-commerce platform offer leases with flexible terms that can be renewed up to 12, 18 or 24 months. The Company does not require deposits upon inception of customer agreements. The customer has the right to acquire ownership either through a purchase option or through payment of all required lease payments. The agreements are cancelable at any time by either party without penalty. Progressive Leasing lease revenues are earned prior to the lease payment due date and are recorded net of related sales taxes as earned. Payment terms include weekly, bi-weekly, and monthly frequencies. Revenue recorded prior to the payment due date results in unbilled receivables recognized in accounts receivable, net of allowances in the accompanying condensed consolidated balance sheets. Lease payments received prior to the month earned are recorded as deferred lease revenue, and this amount is included in customer deposits and advance payments in the accompanying condensed consolidated balance sheets. Progressive Leasing lease revenues are recorded net of a provision for returns and uncollectible renewal payments. Aaron's Business lease revenues are recognized as revenue net of related sales taxes in the month they are earned. Lease payments received prior to the month earned are recorded as deferred lease revenue, and this amount is included in customer deposits and advance payments in the accompanying condensed consolidated balance sheets. Aaron's Business lease revenues are recorded net of a provision for returns and uncollectible renewal payments. All of the Company's customer agreements are considered operating leases. 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 Progressive Leasing's lease purchase agreements are capitalized as incurred and amortized as operating expense over the estimated lease term. The capitalized costs have been classified within prepaid expenses and other assets in the accompanying condensed consolidated balance sheets. Initial direct costs related to Aaron's Business customer agreements are expensed as incurred and have been classified as operating expenses in the Company's condensed consolidated statements of earnings. The statement of earnings effects of expensing the initial direct costs of the Aaron's Business as incurred are not materially different from amortizing initial direct costs over the lease term. Retail and Non-Retail Sales Revenues from the retail sale of merchandise to customers are recognized at the point of sale. Generally, the transfer of control occurs near or at the point of sale for retail sales. Revenues for the non-retail sale of merchandise to franchisees are recognized when control transfers to the franchisee, which is upon delivery of the merchandise. Substantially all of the amounts reported as non-retail sales and non-retail cost of sales in the accompanying condensed 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 condensed consolidated statements of earnings. Franchise Royalties and Fees The Company has no current plans to franchise additional Aaron's stores. Franchisees have historically paid an ongoing royalty fee of 6% of the weekly cash revenue collections, which is recognized as the fees become due. In response to the COVID-19 pandemic, the Company temporarily suspended, as opposed to deferring, the royalty fee obligation in March 2020, effectively forgiving the franchisee royalty payments that otherwise would have been due during the suspension period. The Company reinstated the requirement that franchisees make royalty payments during the second quarter of 2020, but there can be no assurance that the Company will not implement another suspension or a deferral of franchisee royalty payments in future periods, such as, for example, in response to our franchisees experiencing financial difficulty due to a resurgence of COVID-19 cases. |
Interest and Fees on Loans Receivable | Interest and Fees on Loans Receivable Vive extends or declines credit to an applicant through its bank partners based upon the applicant's credit rating and other factors. Qualifying applicants receive a credit card to finance their initial purchase and to use in subsequent purchases at the merchant or other participating merchants for an initial 24-month period, which Vive may renew if the cardholder remains in good standing. Vive acquires the loan receivable from merchants through its third-party bank partners at a discount from the face value of the loan. The discount is comprised of a merchant fee discount and a promotional fee discount, if applicable. The merchant fee discount represents a pre-negotiated, nonrefundable discount that generally ranges from 3% to 25% of the loan face value. The discount is designed to cover the risk of loss related to the portfolio of cardholder charges and Vive's direct origination costs. The merchant fee discount and origination costs are presented net on the condensed consolidated balance sheets in loans receivable. Cardholders generally have an initial 24-month period that the card is active. The merchant fee discount, net of the origination costs, is amortized on a net basis and is recorded as interest and fee revenue on loans receivable in the condensed consolidated statements of earnings on a straight-line basis over the initial 24-month period. The discount from the face value of the loan on the acquisition of the loan receivable from the merchant through the third-party bank partners may also include a promotional fee discount, which generally ranges from 1% to 8%. The promotional fee discount is intended to compensate the holder of the loan receivable (i.e. Vive) for deferred or reduced interest rates that are offered to the cardholder for a specified period on the outstanding loan balance (generally for six six The customer is typically required to make monthly minimum payments of at least 3.5% of the outstanding loan balance, which includes outstanding interest. Fixed and variable interest rates, typically 27% to 35.99%, are compounded daily for cards that do not qualify for deferred or reduced interest promotional periods. Interest income, which is recognized based upon the amount of the loans outstanding, is recognized as interest and fees on loans receivable when earned if collectibility is reasonably assured. For credit cards that provide deferred interest, if the balance is not paid off during the promotional period or if the cardholder defaults, interest is billed to the customers at standard rates and the cumulative amount owed is charged to the cardholder account in the month that the promotional period expires. For credit cards that provide reduced interest, if the balance is not paid off during the promotional period, interest is billed to the cardholder at standard rates in the month that the promotional period expires or when the cardholder defaults. The Company recognizes interest revenue during the promotional period based on its historical experience related to cardholders that fail to pay off balances during the promotional period if collectibility is reasonably assured. Annual fees are charged to cardholders at the commencement of the loan and on each subsequent anniversary date. Annual fees are deferred and recognized into revenue on a straight-line basis over a one-year period. Under the provisions of the credit card agreements, the Company also may assess fees for service calls or for missed or late payments, which are recognized as revenue in the billing period in which they are assessed if collectibility is reasonably assured. Annual fees and other fees discussed are recognized as interest and fee revenue on loans receivable in the condensed consolidated statements of earnings. |
Accounts Receivable | Accounts ReceivableAccounts receivable consist primarily of receivables due from customers of Progressive Leasing and Company-operated stores, corporate receivables incurred during the normal course of business (primarily for vendor consideration and real estate leasing activities) and franchisee obligations.The Company maintains an accounts receivable allowance, which primarily relates to its Progressive Leasing operations and, to a lesser extent, its Aaron's Business operations. The Company’s policy for both its Progressive Leasing and Aaron's Business segments is to record an allowance for returns and uncollectible renewal payments based on historical collection experience. Other qualitative factors are considered in estimating the allowance, such as current and forecasted business trends including, but not limited to, the anticipated unfavorable impacts of the COVID-19 pandemic on our businesses. The provision for returns and uncollectible renewal payments for both the Progressive Leasing and Aaron's Business segments is recognized as a reduction of lease revenues and fees within the condensed consolidated statements of earnings. The Progressive Leasing segment writes off lease receivables that are 120 days or more contractually past due. Aaron's Business writes off lease receivables that are 60 days or more past due. The Company also maintains an allowance for outstanding franchisee accounts receivable. The Company's policy is to estimate a specific allowance on accounts receivable to estimate future losses related to certain franchisees that are deemed higher risk of non-payment and a general allowance based on historical losses as well as the Company's assessment of the financial health of all other franchisees. The estimated allowance on accounts receivable in the current quarter includes consideration of broad macroeconomic trends, such as the unfavorable impacts of the COVID-19 pandemic on the franchisees' ability to satisfy their obligations. The provision for uncollectible franchisee accounts receivable is recorded as bad debt expense in operating expenses within the condensed consolidated statements of earnings. |
Lease Merchandise | Lease Merchandise The Company's lease merchandise consists primarily of furniture, appliances, electronics, jewelry and a variety of other products and is recorded at the lower of cost or net realizable value. The cost of merchandise manufactured by our Woodhaven operations is recorded at cost and includes overhead from production facilities, shipping costs and warehousing costs. The Company's Progressive Leasing segment, at which substantially all merchandise is on lease, depreciates merchandise to a 0% salvage value generally over 12 months. The Company's Aaron's Business segment begins depreciating merchandise at the earlier of 12 months and one day from purchase or when the item is leased. Aaron's Business depreciates merchandise to a 0% salvage value over the lease agreement period when on lease, generally 12 to 24 months, and generally 36 months when not on lease. Depreciation is accelerated upon the early payout of a lease. |
Loans Receivable, Net | Loans Receivable, Net Gross loans receivable represents the principal balances of credit card charges at Vive's participating merchants that remain due from cardholders, plus unpaid interest and fees due from cardholders. The allowance and unamortized fees represent an allowance for uncollectible amounts; merchant fee discounts, net of capitalized origination costs; promotional fee discounts; and deferred annual card fees. Economic conditions and loan performance trends are closely monitored to manage and evaluate exposure to credit risk. Trends in delinquency rates are an indicator of credit risk within the loans receivable portfolio, including the migration of loans between delinquency categories over time. Charge-off rates represent another indicator of the potential for future credit losses. The risk in the loans receivable portfolio is correlated with broad economic trends, such as current and projected unemployment rates, stock market volatility, and changes in medium and long-term risk-free rates, which are considered in determining the allowance for loan losses and can have a material effect on credit performance. Effective January 1, 2020 with the adoption of ASU 2016-13, Measurement of Credit Losses on Financial Instruments ("CECL") as discussed within "Recent Accounting Pronouncements" in Note 1 to these condensed consolidated financial statements, expected lifetime losses on loans receivable are recognized upon loan origination, which requires the Company to make its best estimate of probable lifetime losses at the time of origination. Our credit card loans do not have contractually stated maturity dates, which requires the Company to estimate an average life of loan by analyzing historical payment trends to determine an expected remaining life of the loan balance. The Company segments its loans receivable portfolio into homogenous pools by FICO score and by delinquency status and evaluates loans receivable collectively for impairment when similar risk characteristics exist. The Company calculates the allowance for loan losses based on internal historical loss information and incorporates observable and forecasted macroeconomic data over a twelve-month reasonable and supportable forecast period. Incorporating macroeconomic data could have a material impact on the measurement of the allowance to the extent that forecasted data changes significantly, such as higher forecasted unemployment rates and the observed significant market volatility associated with the COVID-19 pandemic. For any periods beyond the twelve-month reasonable and supportable forecast period described above, the Company reverts to using historical loss information on a straight-line basis over a period of six months and utilizes historical loss information for the remaining life of the portfolio. The Company may also consider other qualitative factors in estimating the allowance, as necessary. For the purposes of determining the allowance as of June 30, 2020, management considered other qualitative factors such as the beneficial impact of recent government stimulus measures to our customer base that were not fully factored into the macroeconomic forecasted data. We believe those stimulus measures may have contributed to the recent favorable cardholder payment trends we are experiencing. We also considered the uncertain nature and extent of any future government stimulus programs and the potential impact, if any, these programs may have on the ability of Vive's cardholders to make payments as they come due. The allowance for loan losses is maintained at a level considered appropriate to cover expected future losses of principal, interest and fees on active loans in the loans receivable portfolio. The appropriateness of the allowance is evaluated at each period end. To the extent that actual results differ from estimates of uncollectible loans receivable, including the significant uncertainties caused by the COVID-19 pandemic, the Company's results of operations and liquidity could be materially affected. Delinquent loans receivable includes those that are 30 days or more past due based on their contractual billing dates. In response to the COVID-19 pandemic, the Company has granted affected customers payment deferrals while allowing them to maintain their delinquency status for an additional 30 days per deferral. The Company places loans receivable on nonaccrual status when they are greater than 90 days past due or upon notification of cardholder bankruptcy, death or fraud. The Company discontinues accruing interest and fees and amortizing merchant fee discounts and promotional fee discounts for loans receivable in nonaccrual status. Loans receivable are removed from nonaccrual status when cardholder payments resume, the loan becomes 90 days or less past due and collection of the remaining amounts outstanding is deemed probable. Payments received on nonaccrual loans are allocated according to the same payment hierarchy methodology applied to loans that are accruing interest. Loans receivable are charged off no later than the end of the following month after the billing cycle in which the loans receivable become 120 days past due. |
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 June 30, 2020 and December 31, 2019. Assets held for sale are recorded at the lower of their carrying value or fair value less estimated cost to sell and are classified within prepaid expenses and other assets in the condensed consolidated balance sheets. Depreciation is suspended on assets upon classification to held for sale. |
Goodwill | GoodwillGoodwill 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. The Company’s goodwill is not amortized but is subject to an impairment test at the reporting unit level annually as of October 1 and more frequently if events or circumstances indicate that an impairment may have occurred. An interim goodwill impairment test is required if the Company believes it is more likely than not that the carrying amount of one or more reporting units exceeds the reporting units' fair value. The Company concluded that the need for an interim goodwill impairment test was triggered for the Aaron's Business segment as of March 31, 2020. Factors that led to this conclusion included: (i) a significant decline in the Company's stock price and market capitalization in March 2020; (ii) the temporary closure of all Company-operated store showrooms due to the COVID-19 pandemic, which adversely impacted our financial results and was expected to adversely impact future financial results; (iii) the significant uncertainty with regard to the short-term and long-term impacts that adverse macroeconomic conditions arising from the COVID-19 pandemic and related government emergency and executive orders would have on the financial health of our customers and franchisees; and (iv) consideration given to the amount by which the Aaron's Business fair value exceeded the carrying value from the October 1, 2019 annual goodwill impairment test. As of March 31, 2020, the Company determined the Aaron's Business goodwill was fully impaired and recorded a goodwill impairment loss of $446.9 million during the three months ended March 31, 2020. The Company engaged the assistance of a third-party valuation firm to perform the interim goodwill impairment test for the Aaron’s Business reporting unit. This entailed an assessment of the Aaron's Business reporting unit’s fair value relative to the carrying value that was derived using a combination of both income and market approaches and performing a market capitalization reconciliation which included an assessment of the control premium implied from the Company's estimated fair values of its reporting units. The fair value measurement involved significant unobservable inputs (Level 3 inputs, as discussed more fully below). The income approach utilized the discounted future expected cash flows, which required assumptions about short-term and long-term revenue growth or decline rates, operating margins, capital requirements, and a weighted-average cost of capital. The income approach reflects assumptions and estimates made by management regarding direct and indirect impacts of the COVID-19 pandemic on the short-term and long-term cash flows for the Aaron's Business reporting unit. Due to the significant uncertainty associated with the impacts of the COVID-19 pandemic, the assumptions and estimates used by management were highly subjective. The weighted-average cost of capital used in the income approach was adjusted to reflect the specific risks and uncertainties associated with the COVID-19 pandemic in developing the cash flow projections. Given the uncertainty discussed above, the Company performed certain sensitivity analyses including considering reasonably possible alternative assumptions for short-term and long-term growth or decline rates, operating margins, capital requirements, and weighted-average cost of capital rates. Each of the sensitivity analyses performed supported the conclusion of a full impairment of the Aaron's Business goodwill. The market approach, which includes the guideline public company method, utilized pricing multiples derived from an analysis of comparable publicly traded companies. We believe the comparable companies we evaluate as marketplace participants serve as an appropriate reference when calculating fair value because those companies have similar risks, participate in similar markets, provide similar products and services for their customers and compete with us directly. However, we considered that such publicly available information regarding the comparable companies evaluated likely does not reflect the impact of the COVID-19 pandemic in determining the multiple assumptions selected. As of October 1, 2019, the Company performed a qualitative assessment for the goodwill of the Progressive Leasing reporting unit and concluded no indications of impairment existed. As of March 31, 2020, the Company performed certain qualitative and quantitative procedures to estimate the Progressive Leasing's reporting unit fair value, primarily for purposes of reconciling the estimated fair values of the Company's reporting units to the Company's overall market capitalization, and concluded that a quantitative assessment was not necessary at that time. Subsequent to these procedures, the Company's overall market capitalization significantly increased during the second quarter of 2020 and nearly all of Progressive Leasing's merchant partners have reopened most or all of their physical store locations. As a result, the Company concluded that it is not more likely than not that the fair value of the Progressive Leasing reporting unit is below its carrying amount based on the significance of Progressive Leasing's estimated fair value in excess of carrying value. |
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 a liability related to its non-qualified deferred compensation plan, which represents benefits accrued for plan participants and is valued at the quoted market prices of the participants' investment election, at fair value on a recurring basis. 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 fixed-rate long term debt, that are not measured at fair value but for which fair value is disclosed. As discussed above, the Company performed an interim goodwill impairment analysis for the Aaron's Business which required multiple Level 3 inputs and assumptions, such as estimates about costs of capital, future projected performance and cash flows. 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 values due to their short-term nature. The fair value of loans receivable and any revolving credit borrowings also approximate their carrying amounts. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Adopted Intangibles - Goodwill and Other. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment . The update simplifies how an entity is required to measure an impairment of goodwill, if any, by eliminating the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. In accordance with the amendment, entities should perform the annual goodwill impairment test by comparing the carrying value of their reporting units to their fair value. If the carrying value of the reporting unit exceeds the fair value, an entity should record an impairment charge for the amount by which its carrying amount exceeds its reporting unit’s fair value; however, the charge recognized should not exceed the total amount of goodwill allocated to that reporting unit. The Company adopted the amendment in the first quarter of 2020 and recorded a $446.9 million impairment charge, representing a full impairment of the goodwill within the Aaron's Business reporting unit. Financial Instruments - Credit Losses . In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments . The main objective of the update is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by companies at each reporting date. For trade and other receivables, held to maturity debt securities and other instruments, companies are required to use a new forward-looking "expected losses" model that generally results in the recognition of allowances for losses earlier than under previous accounting guidance. The Company's operating lease activities within Progressive Leasing and Aaron's Business are not impacted by ASU 2016-13, as operating lease receivables are not in the scope of the CECL model. The implementation of CECL also did not have a material impact to the Company's Progressive Leasing or Aaron's Business segments. The Company is impacted by ASU 2016-13 within its Vive segment by requiring earlier recognition of estimated credit losses in the consolidated statements of earnings. Although the CECL model requires the estimated credit losses to be recognized at the time of loan origination, the related merchant fee discount continues to be amortized as interest and fee revenue on a straight-line basis over the initial 24-month period that the card is active. Therefore, on a loan-by-loan basis, the CECL model results in higher losses recognized upon loan origination for the estimated credit losses, generally followed by higher net earnings as the related merchant fee discount is amortized to interest and fee revenue, and as interest revenue is accrued and earned on the outstanding loan. Although the CECL model results in earlier recognition of credit losses in the statements of earnings, the adoption of CECL results in no changes related to the loan's cash flows or the fundamental economics of the business. |
Basis and Summary of Signific_3
Basis and Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule Of Company Operated Store Activity | The following table presents invoice volume for Progressive Leasing: For the Three Months Ended June 30 (Unaudited and In Thousands) 2020 2019 Progressive Leasing Invoice Volume 1 $ 394,335 $ 403,410 1 Invoice volume is defined as the retail price of lease merchandise acquired and then leased to customers during the period, net of returns. The following table presents store count by ownership type for the Aaron's Business operations: Stores as of June 30 (Unaudited) 2020 2019 Company-operated Aaron's Branded Stores 1,098 1,171 Franchised Stores 316 357 Systemwide Stores 1,414 1,528 |
Calculation of Dilutive Stock Awards | The following table shows the calculation of dilutive share-based awards: Three Months Ended Six Months Ended (Shares In Thousands) 2020 2019 2020 2019 Weighted Average Shares Outstanding 67,097 67,687 66,959 67,492 Dilutive Effect of Share-Based Awards 1 426 1,106 — 1,292 Weighted Average Shares Outstanding Assuming Dilution 67,523 68,793 66,959 68,784 1 There was no dilutive effect to the earnings (loss) per common share for the six months ended June 30, 2020 due to the net loss incurred in the year-to-date period. |
Accounts Receivable Net of Allowances | Accounts receivable, net of allowances, consist of the following: (In Thousands) June 30, 2020 December 31, 2019 Customers $ 57,134 $ 76,819 Corporate 12,141 14,109 Franchisee 10,658 13,231 Accounts Receivable $ 79,933 $ 104,159 The following is a summary of the Company’s loans receivable, net: (In Thousands) June 30, 2020 December 31, 2019 Loans Receivable, Gross $ 96,519 $ 96,387 Unamortized Fees (6,956) (6,223) Loans Receivable, Amortized Cost 89,563 90,164 Allowance for Loan Losses (30,693) (14,911) Loans Receivable, Net of Allowances and Unamortized Fees $ 58,870 $ 75,253 |
Components of the Accounts Receivable Provision | The following table shows the amounts recognized for bad debt expense and provision for returns and uncollected payments: Six Months Ended June 30, (In Thousands) 2020 2019 Bad Debt Expense 1 $ 1,016 $ 1,166 Provision for Returns and Uncollectible Renewal Payments 157,571 136,445 Accounts Receivable Provision $ 158,587 $ 137,611 |
Schedule of Lease Merchandise | The following is a summary of lease merchandise, net of accumulated depreciation and allowances: (In Thousands) June 30, 2020 December 31, 2019 Merchandise on Lease, net of Accumulated Depreciation and Allowances $ 969,364 $ 1,156,798 Merchandise Not on Lease, net of Accumulated Depreciation and Allowances 150,276 276,619 Lease Merchandise, net of Accumulated Depreciation and Allowances $ 1,119,640 $ 1,433,417 |
Allowance for Lease Merchandise | The following table shows the components of the allowance for lease merchandise write-offs, which is included within lease merchandise, net within the condensed consolidated balance sheets: Six Months Ended June 30, (In Thousands) 2020 2019 Beginning Balance $ 61,185 $ 46,694 Merchandise Written off, net of Recoveries (119,221) (105,571) Provision for Write-offs 130,039 117,994 Ending Balance $ 72,003 $ 59,117 |
Loan Portfolio Credit Quality Indicators | Below is a summary of the credit quality of the Company's loan portfolio as of June 30, 2020 and December 31, 2019 by Fair Isaac and Company (FICO) score as determined at the time of loan origination: FICO Score Category June 30, 2020 December 31, 2019 600 or Less 7.5 % 6.7 % Between 600 and 700 79.8 % 80.1 % 700 or Greater 12.7 % 13.2 % The table below presents credit quality indicators of the amortized cost of the Company's loans receivable by origination year: (In Thousands) As of June 30, 2020 2020 2019 2018 2017 2016 Prior Total FICO Score Category: 600 or Less $ 3,237 $ 2,781 $ 840 $ 130 $ 86 $ 16 $ 7,090 Between 600 and 700 24,541 25,584 10,656 6,042 3,485 962 71,270 700 or Greater 4,248 3,078 1,604 1,123 929 221 11,203 Total Amortized Cost $ 32,026 $ 31,443 $ 13,100 $ 7,295 $ 4,500 $ 1,199 $ 89,563 |
Schedule of Prepaid Expenses and Other Assets | Prepaid expenses and other assets consist of the following: (In Thousands) June 30, 2020 December 31, 2019 Prepaid Expenses $ 49,134 $ 45,034 Prepaid Insurance 29,086 26,393 Assets Held for Sale 9,193 10,131 Deferred Tax Asset 826 826 Other Assets 25,681 31,887 Prepaid Expenses and Other Assets $ 113,920 $ 114,271 |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consist of the following: (In Thousands) June 30, 2020 December 31, 2019 Accounts Payable $ 56,680 $ 89,959 Accrued Insurance Costs 54,314 44,032 Accrued Salaries and Benefits 53,636 43,972 Accrued Real Estate and Sales Taxes 34,394 32,763 Other Accrued Expenses and Liabilities 50,158 62,090 Accounts Payable and Accrued Expenses $ 249,182 $ 272,816 |
Schedule of Goodwill | The following table provides information related to the carrying amount of goodwill by operating segment. (In Thousands) Progressive Leasing Aaron’s Business Total Balance at December 31, 2019 $ 288,801 $ 447,781 $ 736,582 Acquisition Accounting Adjustments — 53 53 Disposals, Currency Translation and Other Adjustments — (941) (941) Impairment Loss — (446,893) (446,893) Balance at June 30, 2020 $ 288,801 $ — $ 288,801 |
Schedule of Stockholders Equity | Changes in stockholders' equity for the six months ended June 30, 2020 and 2019 are as follows: Treasury Stock Common Stock Additional Retained Earnings Accumulated Other Comprehensive Loss Total Shareholders’ Equity (In Thousands, Except Per Share) Shares Amount Balance, December 31, 2019 (24,034) $ (627,940) $ 45,376 $ 290,229 $ 2,029,613 $ (19) $ 1,737,259 Opening Balance Sheet Adjustment - ASU 2016-13 — — — — (6,715) — (6,715) Cash Dividends, $0.04 per share — — — — (2,700) — (2,700) Stock-Based Compensation — — — 5,878 — — 5,878 Reissued Shares 368 7,291 — (12,640) — — (5,349) Net Loss — — — — (280,005) — (280,005) Foreign Currency Translation Adjustment — — — — — (1,754) (1,754) Balance, March 31, 2020 (23,666) $ (620,649) $ 45,376 $ 283,467 $ 1,740,193 $ (1,773) $ 1,446,614 Cash Dividends, $0.04 per share — — — — (2,701) — (2,701) Stock-Based Compensation — — — 6,856 — — 6,856 Reissued Shares 53 1,392 — 330 — — 1,722 Repurchased Shares — — — — — — — Net Earnings — — — — 68,377 — 68,377 Foreign Currency Translation Adjustment — — — — — 331 331 Balance, June 30, 2020 (23,613) $ (619,257) $ 45,376 $ 290,653 $ 1,805,869 $ (1,442) $ 1,521,199 Treasury Stock Common Stock Additional Retained Earnings Accumulated Other Comprehensive Loss Total Shareholders’ Equity (In Thousands, Except Per Share) Shares Amount Balance, December 31, 2018 (23,568) $ (567,847) $ 45,376 $ 278,922 $ 2,005,344 $ (1,087) $ 1,760,708 Opening Balance Sheet Adjustment - ASC 842 — — — — 2,592 — 2,592 Cash Dividends, $0.035 per share — — — — (2,363) — (2,363) Stock-Based Compensation — — — 7,050 — — 7,050 Reissued Shares 493 4,264 — (15,245) — — (10,981) Net Earnings — — — — 56,078 — 56,078 Foreign Currency Translation Adjustment — — — — — 424 424 Balance, March 31, 2019 (23,075) $ (563,583) $ 45,376 $ 270,727 $ 2,061,651 $ (663) $ 1,813,508 Cash Dividends, $0.035 per share — — — — (2,386) — (2,386) Stock-Based Compensation — — — 6,522 — — 6,522 Reissued Shares 113 2,776 — 284 — — 3,060 Repurchased Shares (243) (14,414) — — — — (14,414) Net Earnings — — — — 42,650 — 42,650 Foreign Currency Translation Adjustment — — — — — 618 618 Balance, June 30, 2019 (23,205) $ (575,221) $ 45,376 $ 277,533 $ 2,101,915 $ (45) $ 1,849,558 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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: (In Thousands) June 30, 2020 December 31, 2019 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Deferred Compensation Liability $ — $ (10,657) $ — $ — $ (11,201) $ — |
Assets Measured at Fair Value on Nonrecurring Basis | The following table summarizes non-financial assets measured at fair value on a nonrecurring basis: (In Thousands) June 30, 2020 December 31, 2019 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets Held for Sale $ — $ 9,193 $ — $ — $ 10,131 $ — |
Fair Value of Assets (Liabilities) Not Measured at Fair Value In Consolidated Balance Sheets | The following table summarizes the fair value of liabilities that are not measured at fair value in the condensed consolidated balance sheets, but for which the fair value is disclosed: (In Thousands) June 30, 2020 December 31, 2019 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Fixed-Rate Long Term Debt 1 $ — $ (62,431) $ — $ — $ (123,705) $ — 1 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 $60.0 million and $120.0 million at June 30, 2020 and December 31, 2019, respectively. |
Loans Receivable (Tables)
Loans Receivable (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Schedule of the Components of Loans Receivable, Net | Accounts receivable, net of allowances, consist of the following: (In Thousands) June 30, 2020 December 31, 2019 Customers $ 57,134 $ 76,819 Corporate 12,141 14,109 Franchisee 10,658 13,231 Accounts Receivable $ 79,933 $ 104,159 The following is a summary of the Company’s loans receivable, net: (In Thousands) June 30, 2020 December 31, 2019 Loans Receivable, Gross $ 96,519 $ 96,387 Unamortized Fees (6,956) (6,223) Loans Receivable, Amortized Cost 89,563 90,164 Allowance for Loan Losses (30,693) (14,911) Loans Receivable, Net of Allowances and Unamortized Fees $ 58,870 $ 75,253 |
Loan Portfolio Credit Quality Indicators | Below is a summary of the credit quality of the Company's loan portfolio as of June 30, 2020 and December 31, 2019 by Fair Isaac and Company (FICO) score as determined at the time of loan origination: FICO Score Category June 30, 2020 December 31, 2019 600 or Less 7.5 % 6.7 % Between 600 and 700 79.8 % 80.1 % 700 or Greater 12.7 % 13.2 % The table below presents credit quality indicators of the amortized cost of the Company's loans receivable by origination year: (In Thousands) As of June 30, 2020 2020 2019 2018 2017 2016 Prior Total FICO Score Category: 600 or Less $ 3,237 $ 2,781 $ 840 $ 130 $ 86 $ 16 $ 7,090 Between 600 and 700 24,541 25,584 10,656 6,042 3,485 962 71,270 700 or Greater 4,248 3,078 1,604 1,123 929 221 11,203 Total Amortized Cost $ 32,026 $ 31,443 $ 13,100 $ 7,295 $ 4,500 $ 1,199 $ 89,563 |
Aging of the Loans Receivable Balance | Included in the table below is an aging of the loans receivable, gross balance: (Dollar Amounts in Thousands) Aging Category 1 June 30, 2020 December 31, 2019 30-59 days past due 5.1 % 6.9 % 60-89 days past due 2.5 % 3.6 % 90 or more days past due 3.6 % 5.0 % Past due loans receivable 11.2 % 15.5 % Current loans receivable 88.8 % 84.5 % Balance of Credit Card Loans on Nonaccrual Status $ 2,038 $ 2,284 Balance of Loans Receivable 90 or More Days Past Due and Still Accruing Interest and Fees $ — $ — 1 Customers that were granted a payment deferral due to factors caused by the COVID-19 pandemic maintained their delinquency status for an additional 30 days. This did not materially impact the aging disclosed above. |
Components of the Allowance for Loan Losses | The tables below present the components of the allowance for loan losses for the three and six months ended June 30, 2020 and 2019: Three Months Ended June 30, (In Thousands) 2020 2019 Beginning Balance $ 31,594 $ 12,363 Provision for Loan Losses 3,428 4,968 Charge-offs (5,132) (5,158) Recoveries 803 610 Ending Balance $ 30,693 $ 12,783 Six Months Ended June 30, (In Thousands) 2020 2019 Beginning Balance $ 14,911 $ 12,970 CECL Transition Adjustment 1 9,463 — Provision for Loan Losses 16,150 9,223 Charge-offs (11,333) (10,642) Recoveries 1,502 1,232 Ending Balance $ 30,693 $ 12,783 1 Upon the January 1, 2020 adoption of CECL as further described in Note 1 to these condensed consolidated financial statements, the Company increased its allowance for loan losses by $9.5 million, which was recorded as a cumulative-effect adjustment to the opening balance of the Company's 2020 retained earnings adjustment. |
Segments (Tables)
Segments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Information on Segments and Reconciliation to Earnings Before Income Taxes from Continuing Operations | The following table presents revenue by source and by segment for the three months ended June 30, 2020: Three Months Ended June 30, 2020 (In Thousands) Progressive Leasing Aaron's Business Vive Total Lease Revenues and Fees 1 $ 589,749 $ 380,238 $ — $ 969,987 Retail Sales 2 — 14,020 — 14,020 Non-Retail Sales 2 — 33,044 — 33,044 Franchise Royalties and Fees 2 — 3,365 — 3,365 Interest and Fees on Loans Receivable 3 — — 9,414 9,414 Other — 289 — 289 Total $ 589,749 $ 430,956 $ 9,414 $ 1,030,119 1 Substantially all lease revenues and fees are within the scope of ASC 842, Leases . The Company had $6.8 million of other revenue within the scope of ASC 606, Revenue from Contracts with Customers. 2 Substantially all retail sales, non-retail sales and franchise royalties and fees are within the scope of ASC 606, Revenue from Contracts with Customers . 3 All interest and fees on loans receivable are within the scope of ASC 310, Credit Card Interest & Fees . The following table presents revenue by source and by segment for the three months ended June 30, 2019: Three Months Ended June 30, 2019 (In Thousands) Progressive Leasing Aaron's Business Vive Total Lease Revenues and Fees 1 $ 516,333 $ 391,232 $ — $ 907,565 Retail Sales 2 — 8,898 — 8,898 Non-Retail Sales 2 — 34,124 — 34,124 Franchise Royalties and Fees 2 — 8,605 — 8,605 Interest and Fees on Loans Receivable 3 — — 8,610 8,610 Other — 339 — 339 Total $ 516,333 $ 443,198 $ 8,610 $ 968,141 1 Substantially all lease revenues and fees are within the scope of ASC 842, Leases . The Company had $6.9 million of other revenue within the scope of ASC 606, Revenue from Contracts with Customers. 2 Substantially all retail sales, non-retail sales and franchise royalties and fees are within the scope of ASC 606, Revenue from Contracts with Customers . 3 All interest and fees on loans receivable are within the scope of ASC 310, Credit Card Interest & Fees . The following table presents revenue by source and by segment for the six months ended June 30, 2020: Six Months Ended June 30, 2020 (In Thousands) Progressive Leasing Aaron's Business Vive Total Lease Revenues and Fees 1 $ 1,248,283 $ 769,617 $ — $ 2,017,900 Retail Sales 2 — 23,551 — 23,551 Non-Retail Sales 2 — 59,890 — 59,890 Franchise Royalties and Fees 2 — 10,089 — 10,089 Interest and Fees on Loans Receivable 3 — — 19,322 19,322 Other — 641 — 641 Total $ 1,248,283 $ 863,788 $ 19,322 $ 2,131,393 1 Substantially all lease revenues and fees are within the scope of ASC 842, Leases . The Company had $13.5 million of other revenue within the scope of ASC 606, Revenue from Contracts with Customers. 2 Substantially all retail sales, non-retail sales and franchise royalties and fees are within the scope of ASC 606, Revenue from Contracts with Customers . 3 All interest and fees on loans receivable are within the scope of ASC 310, Credit Card Interest & Fees . The following table presents revenue by source and by segment for the six months ended June 30, 2019: Six Months Ended June 30, 2019 (In Thousands) Progressive Leasing Aaron's Business Vive Total Lease Revenues and Fees 1 $ 1,039,734 $ 811,988 $ — $ 1,851,722 Retail Sales 2 — 21,707 — 21,707 Non-Retail Sales 2 — 71,105 — 71,105 Franchise Royalties and Fees 2 — 17,812 — 17,812 Interest and Fees on Loans Receivable 3 — — 17,256 17,256 Other — 642 — 642 Total $ 1,039,734 $ 923,254 $ 17,256 $ 1,980,244 1 Substantially all lease revenues and fees are within the scope of ASC 842, Leases . The Company had $13.4 million of other revenue within the scope of ASC 606, Revenue from Contracts with Customers. 2 Substantially all retail sales, non-retail sales and franchise royalties and fees are within the scope of ASC 606, Revenue from Contracts with Customers . 3 All interest and fees on loans receivable are within the scope of ASC 310, Credit Card Interest & Fees . Three Months Ended Six Months Ended (In Thousands) 2020 2019 2020 2019 Earnings (Loss) Before Income Taxes: Progressive Leasing $ 59,814 $ 58,406 $ 118,801 $ 113,794 Aaron's Business 1 32,009 138 (433,348) 17,726 Vive 714 (1,725) (7,369) (4,393) Total Earnings (Loss) Before Income Taxes $ 92,537 $ 56,819 $ (321,916) $ 127,127 1 Loss before income taxes for the Aaron's Business during the six months ended June 30, 2020 was impacted by (i) goodwill impairment charges of $446.9 million incurred during the three months ended March 31, 2020, (ii) $14.1 million related to an early termination fee for a sales and marketing agreement during the three months ended March 31, 2020, and (iii) restructuring charges of $29.3 million related to operating lease right-of-use asset impairment and operating lease charges, fixed asset impairment charges, and workforce reductions, of which $7.0 million was incurred during the three months ended June 30, 2020. The following is a summary of total assets by segment and shared corporate-related assets. (In Thousands) June 30, 2020 December 31, 2019 Assets: Progressive Leasing $ 1,093,647 $ 1,261,786 Aaron's Business 1,2 1,034,194 1,740,281 Vive 71,633 85,825 Other 3 516,228 209,908 Total Assets $ 2,715,702 $ 3,297,800 1 Includes inventory (principally raw materials and work-in-process) that has been classified within lease merchandise in the condensed consolidated balance sheets of $12.8 million and $14.0 million as of June 30, 2020 and December 31, 2019, respectively. 2 During the six months ended June 30, 2020, the Aaron's Business segment assets were impacted by a goodwill impairment charge of $446.9 million to fully write-off its goodwill balance. |
Restructuring (Tables)
Restructuring (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | The following table summarizes restructuring charges for the three and six months ended June 30, 2020 and 2019, respectively, under the three programs: Three Months Ended June 30, Six Months Ended June 30, (In Thousands) 2020 2019 2020 2019 Right-of-Use Asset Impairment $ 2,456 $ 14,287 $ 18,634 $ 23,010 Operating Lease Charges 1,557 979 2,570 1,778 Severance 2,694 1,856 4,725 2,992 Fixed Asset Impairment 263 1,072 2,952 2,569 Other Expenses 21 544 396 1,670 Total Restructuring Expenses, Net $ 6,991 $ 18,738 $ 29,277 $ 32,019 |
Schedule of Restructuring Reserve | The following table summarizes the balances of the accruals for the restructuring programs, which are recorded in accounts payable and accrued expenses in the condensed consolidated balance sheets, and the activity for the six months ended June 30, 2020: (In Thousands) Severance Balance at January 1, 2020 $ 756 Restructuring Severance Charges 4,725 Payments (3,895) Balance at June 30, 2020 $ 1,586 |
Basis and Summary of Signific_4
Basis and Summary of Significant Accounting Policies - Narrative (Details) | 3 Months Ended | ||
Jun. 30, 2020USD ($)statelease | Mar. 31, 2020 | Jun. 30, 2019USD ($) | |
Significant Accounting Policies [Line Items] | |||
Number of states lease-purchase solutions is provided in | state | 46 | ||
Threshold period past due for write-off of trade accounts receivable | 60 days | ||
Covid 19 | |||
Significant Accounting Policies [Line Items] | |||
Rent abatement and deferrals | $ 1,800,000 | ||
Number of lease concessions | lease | 175 | ||
Progressive Leasing | |||
Significant Accounting Policies [Line Items] | |||
Progressive leasing invoice volume | $ 394,335,000 | $ 403,410,000 | |
Progressive Finance Holdings, LLC | |||
Significant Accounting Policies [Line Items] | |||
Threshold period past due for write-off of trade accounts receivable | 120 days |
Basis and Summary of Signific_5
Basis and Summary of Significant Accounting Policies - Store Count by Ownership Type (Details) - Operating Segments - store | Jun. 30, 2020 | Jun. 30, 2019 |
Significant Accounting Policies [Line Items] | ||
Number of retail stores | 1,414 | 1,528 |
Company-operated Aaron's Branded Stores | ||
Significant Accounting Policies [Line Items] | ||
Number of retail stores | 1,098 | 1,171 |
Franchised Stores | ||
Significant Accounting Policies [Line Items] | ||
Number of retail stores | 316 | 357 |
Basis and Summary of Signific_6
Basis and Summary of Significant Accounting Policies - Calculation of Dilutive Stock Awards (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Accounting Policies [Abstract] | ||||
Weighted Average Shares Outstanding (in shares) | 67,097 | 67,687 | 66,959 | 67,492 |
Dilutive Effect of Share-Based Awards (in shares) | 426 | 1,106 | 0 | 1,292 |
Weighted Average Shares Outstanding Assuming Dilution (in shares) | 67,523 | 68,793 | 66,959 | 68,784 |
Anti-dilutive securities excluded from the computation of earnings per share assuming dilution (in shares) | 1,429 | 522 | 1,908 | 482 |
Basis and Summary of Signific_7
Basis and Summary of Significant Accounting Policies - Revenue Recognition Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | $ 1,030,119 | $ 968,141 | $ 2,131,393 | $ 1,980,244 |
Promotional fees percent promotional interest period one | 6 months | |||
Promotional fees percent promotional interest period two | 12 months | |||
Promotional fees percent promotional interest period three | 18 months | |||
Credit Card Loans | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Privilege period | 24 months | |||
Minimum payment required percentage of outstanding loan balance | 3.50% | 3.50% | ||
Minimum | Credit Card Loans | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Merchant fee percent | 3.00% | |||
Promotional fees percent | 1.00% | |||
Interest rate fixed and variable | 27.00% | 27.00% | ||
Maximum | Credit Card Loans | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Merchant fee percent | 25.00% | |||
Promotional fees percent | 8.00% | |||
Interest rate fixed and variable | 35.99% | 35.99% | ||
Progressive Finance Holdings, LLC | Agreement One | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Lease agreement period | 12 months | 12 months | ||
Sales And Lease Ownership | Agreement One | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Lease agreement period | 12 months | 12 months | ||
Sales And Lease Ownership | Agreement Two | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Lease agreement period | 18 months | 18 months | ||
Sales And Lease Ownership | Agreement Three | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Lease agreement period | 24 months | 24 months | ||
Sales and Lease Ownership and HomeSmart | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Royalty payment rate | 6.00% |
Basis and Summary of Signific_8
Basis and Summary of Significant Accounting Policies - Accounts Receivable Net of Allowances (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts Receivable | $ 79,933 | $ 104,159 |
Customers | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts Receivable | 57,134 | 76,819 |
Corporate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts Receivable | 12,141 | 14,109 |
Franchisee | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts Receivable | $ 10,658 | $ 13,231 |
Basis and Summary of Signific_9
Basis and Summary of Significant Accounting Policies - Components of the Accounts Receivable Provision (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Accounting Policies [Abstract] | ||
Bad Debt Expense | $ 1,016 | $ 1,166 |
Provision for Returns and Uncollectible Renewal Payments | 157,571 | 136,445 |
Accounts Receivable Provision | $ 158,587 | $ 137,611 |
Basis and Summary of Signifi_10
Basis and Summary of Significant Accounting Policies - Lease Merchandise (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Significant Accounting Policies [Line Items] | ||||
Lease agreement, lease period used as asset useful life | 12 months | |||
Lease merchandise salvage value percentage | 0.00% | 0.00% | ||
Lease Merchandise, net of Accumulated Depreciation and Allowances | $ 1,119,640 | $ 1,119,640 | $ 1,433,417 | |
Components of the allowance of leases merchandise write-offs: | ||||
Beginning Balance | 61,185 | $ 46,694 | ||
Merchandise Written off, net of Recoveries | (119,221) | (105,571) | ||
Provision for Write-offs | 130,039 | 117,994 | ||
Ending Balance | $ 72,003 | $ 72,003 | $ 59,117 | |
Agreement One | Sales And Lease Ownership | ||||
Significant Accounting Policies [Line Items] | ||||
Lease agreement period | 12 months | 12 months | ||
Agreement Two | Sales And Lease Ownership | ||||
Significant Accounting Policies [Line Items] | ||||
Lease agreement period | 18 months | 18 months | ||
Agreement Three | Sales And Lease Ownership | ||||
Significant Accounting Policies [Line Items] | ||||
Lease agreement period | 24 months | 24 months | ||
Merchandise on Lease, net of Accumulated Depreciation and Allowances | ||||
Significant Accounting Policies [Line Items] | ||||
Lease Merchandise, net of Accumulated Depreciation and Allowances | $ 969,364 | $ 969,364 | 1,156,798 | |
Merchandise on Lease, net of Accumulated Depreciation and Allowances | Minimum | ||||
Significant Accounting Policies [Line Items] | ||||
Lease merchandise useful life | 12 months | |||
Merchandise on Lease, net of Accumulated Depreciation and Allowances | Maximum | ||||
Significant Accounting Policies [Line Items] | ||||
Lease merchandise useful life | 24 months | |||
Merchandise Not on Lease, net of Accumulated Depreciation and Allowances | ||||
Significant Accounting Policies [Line Items] | ||||
Lease merchandise useful life | 36 months | |||
Lease Merchandise, net of Accumulated Depreciation and Allowances | $ 150,276 | $ 150,276 | $ 276,619 |
Basis and Summary of Signifi_11
Basis and Summary of Significant Accounting Policies - Credit Quality Indicators (Details) - Accounts Receivable - Credit Concentration Risk | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
600 or Less | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivable, percentage of loan portfolio per FICO Score | 7.50% | 6.70% |
Between 600 and 700 | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivable, percentage of loan portfolio per FICO Score | 79.80% | 80.10% |
700 or Greater | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivable, percentage of loan portfolio per FICO Score | 12.70% | 13.20% |
Basis and Summary of Signifi_12
Basis and Summary of Significant Accounting Policies - Components of Prepaid Expenses and Other Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||
Prepaid Expenses | $ 49,134 | $ 45,034 |
Prepaid Insurance | 29,086 | 26,393 |
Assets Held for Sale | 9,193 | 10,131 |
Deferred Tax Asset | 826 | 826 |
Other Assets | 25,681 | 31,887 |
Prepaid Expenses and Other Assets | $ 113,920 | $ 114,271 |
Basis and Summary of Signifi_13
Basis and Summary of Significant Accounting Policies - Assets Held for Sale (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||
Assets Held for Sale | $ 9,193 | $ 10,131 |
Basis and Summary of Signifi_14
Basis and Summary of Significant Accounting Policies - Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||
Accounts Payable | $ 56,680 | $ 89,959 |
Accrued Insurance Costs | 54,314 | 44,032 |
Accrued Salaries and Benefits | 53,636 | 43,972 |
Accrued Real Estate and Sales Taxes | 34,394 | 32,763 |
Other Accrued Expenses and Liabilities | 50,158 | 62,090 |
Accounts Payable and Accrued Expenses | $ 249,182 | $ 272,816 |
Basis and Summary of Signifi_15
Basis and Summary of Significant Accounting Policies - Debt (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Jun. 30, 2020 | |
Accounting Policies [Abstract] | ||
Proceeds from lines of credit | $ 300 | |
Goodwill | $ 486.2 |
Basis and Summary of Signifi_16
Basis and Summary of Significant Accounting Policies - Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Goodwill [Roll Forward] | |||||
Beginning balance | $ 736,582 | $ 736,582 | |||
Acquisition Accounting Adjustments | 53 | ||||
Disposals, Currency Translation and Other Adjustments | (941) | ||||
Impairment Loss | $ 0 | (446,900) | $ 0 | (446,893) | $ 0 |
Ending balance | 288,801 | 288,801 | |||
Progressive Leasing | |||||
Goodwill [Roll Forward] | |||||
Beginning balance | 288,801 | 288,801 | |||
Acquisition Accounting Adjustments | 0 | ||||
Disposals, Currency Translation and Other Adjustments | 0 | ||||
Impairment Loss | 0 | ||||
Ending balance | 288,801 | 288,801 | |||
Aaron's Business | |||||
Goodwill [Roll Forward] | |||||
Beginning balance | 447,781 | 447,781 | |||
Acquisition Accounting Adjustments | 53 | ||||
Disposals, Currency Translation and Other Adjustments | (941) | ||||
Impairment Loss | $ (446,900) | (446,893) | |||
Ending balance | $ 0 | $ 0 |
Basis and Summary of Signifi_17
Basis and Summary of Significant Accounting Policies - Statements of Stockholders' Equity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Beginning Balance | $ 1,446,614 | $ 1,737,259 | $ 1,813,508 | $ 1,760,708 | $ 1,737,259 | $ 1,760,708 | $ 1,760,708 |
Cash Dividends | (2,701) | (2,700) | (2,386) | (2,363) | |||
Stock-Based Compensation | 6,856 | 5,878 | 6,522 | 7,050 | |||
Reissued Shares | 1,722 | (5,349) | 3,060 | (10,981) | |||
Repurchased Shares | (14,414) | ||||||
Net (Loss) Earnings | 68,377 | (280,005) | 42,650 | 56,078 | (211,628) | 98,728 | |
Foreign Currency Translation Adjustment | 331 | (1,754) | 618 | 424 | (1,423) | 1,042 | |
Ending Balance | $ 1,521,199 | 1,446,614 | $ 1,849,558 | $ 1,813,508 | 1,521,199 | 1,849,558 | $ 1,737,259 |
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201602Member | us-gaap:AccountingStandardsUpdate201613Member | |||||
Revision of prior period, accounting standards update, adjustment | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Beginning Balance | $ (6,715) | $ 2,592 | $ (6,715) | $ 2,592 | $ 2,592 | ||
Ending Balance | $ (6,715) | ||||||
Treasury Stock | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Beginning Balance (in shares) | (23,666) | (24,034) | (23,075) | (23,568) | (24,034) | (23,568) | (23,568) |
Beginning Balance | $ (620,649) | $ (627,940) | $ (563,583) | $ (567,847) | $ (627,940) | $ (567,847) | $ (567,847) |
Reissued Shares (in shares) | 53 | 368 | 113 | 493 | |||
Reissued Shares | $ 1,392 | $ 7,291 | $ 2,776 | $ 4,264 | |||
Repurchased Shares (in shares) | (243) | ||||||
Repurchased Shares | $ (14,414) | ||||||
Ending Balance (in shares) | (23,613) | (23,666) | (23,205) | (23,075) | (23,613) | (23,205) | (24,034) |
Ending Balance | $ (619,257) | $ (620,649) | $ (575,221) | $ (563,583) | $ (619,257) | $ (575,221) | $ (627,940) |
Common Stock | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Beginning Balance | 45,376 | 45,376 | 45,376 | 45,376 | 45,376 | 45,376 | 45,376 |
Ending Balance | 45,376 | 45,376 | 45,376 | 45,376 | 45,376 | 45,376 | 45,376 |
Additional Paid-in Capital | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Beginning Balance | 283,467 | 290,229 | 270,727 | 278,922 | 290,229 | 278,922 | 278,922 |
Stock-Based Compensation | 6,856 | 5,878 | 6,522 | 7,050 | |||
Reissued Shares | 330 | (12,640) | 284 | (15,245) | |||
Ending Balance | 290,653 | 283,467 | 277,533 | 270,727 | 290,653 | 277,533 | 290,229 |
Retained Earnings | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Beginning Balance | 1,740,193 | 2,029,613 | 2,061,651 | 2,005,344 | 2,029,613 | 2,005,344 | 2,005,344 |
Cash Dividends | (2,701) | (2,700) | (2,386) | (2,363) | |||
Net (Loss) Earnings | 68,377 | (280,005) | 42,650 | 56,078 | |||
Ending Balance | $ 1,805,869 | $ 1,740,193 | $ 2,101,915 | $ 2,061,651 | 1,805,869 | 2,101,915 | 2,029,613 |
Dividends, per share (in dollars per share) | $ 0.04 | $ 0.04 | $ 0.035 | $ 0.035 | |||
Retained Earnings | Revision of prior period, accounting standards update, adjustment | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Beginning Balance | $ (6,715) | $ 2,592 | (6,715) | 2,592 | 2,592 | ||
Ending Balance | (6,715) | ||||||
Accumulated Other Comprehensive Loss | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Beginning Balance | $ (1,773) | (19) | $ (663) | (1,087) | (19) | (1,087) | (1,087) |
Foreign Currency Translation Adjustment | 331 | (1,754) | 618 | 424 | |||
Ending Balance | $ (1,442) | $ (1,773) | $ (45) | $ (663) | $ (1,442) | $ (45) | $ (19) |
Basis and Summary of Signifi_18
Basis and Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jan. 01, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Impairment of goodwill | $ 0 | $ 446,900 | $ 0 | $ 446,893 | $ 0 | ||||||
Allowance for loan losses | 30,693 | 12,783 | 30,693 | 12,783 | $ 14,911 | $ 31,594 | $ 12,970 | $ 12,363 | |||
Adjustment to stockholders' equity attributable to parent | 1,521,199 | 1,446,614 | 1,849,558 | 1,521,199 | 1,849,558 | 1,737,259 | 1,813,508 | 1,760,708 | |||
Revision of prior period, accounting standards update, adjustment | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Allowance for loan losses | $ 9,463 | $ 0 | |||||||||
Adjustment to stockholders' equity attributable to parent | (6,715) | 2,592 | |||||||||
Retained Earnings | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Adjustment to stockholders' equity attributable to parent | $ 1,805,869 | 1,740,193 | $ 2,101,915 | 1,805,869 | $ 2,101,915 | 2,029,613 | $ 2,061,651 | 2,005,344 | |||
Retained Earnings | Revision of prior period, accounting standards update, adjustment | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Adjustment to stockholders' equity attributable to parent | (6,700) | $ (6,715) | $ 2,592 | ||||||||
Accounting Standards Update 2016-13 | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Allowance for loan losses | $ 9,500 | ||||||||||
Aaron's Business | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Impairment of goodwill | $ 446,900 | $ 446,893 |
Fair Value Measurement - Summar
Fair Value Measurement - Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Fair value on a recurring basis - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred Compensation Liability | $ 0 | $ 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred Compensation Liability | (10,657) | (11,201) |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring 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 | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets Held for Sale | $ 9,193 | $ 10,131 |
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 | 9,193 | 10,131 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets Held for Sale | $ 0 | $ 0 |
Fair Value Measurement - Fair V
Fair Value Measurement - Fair Value of Assets (Liabilities) Not Measured at Fair Value In Consolidated Balance Sheets (Details) - Fixed-Rate Long-Term Debt - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long term debt, fair value | $ 0 | $ 0 |
Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long term debt, fair value | (62,431) | (123,705) |
Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long term debt, fair value | $ 0 | $ 0 |
Fair Value Measurement - Fair_2
Fair Value Measurement - Fair Value of Assets (Liabilities) Not Measured at Fair Value In Consolidated Balance Sheet - Additional Information (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Fixed-Rate Long-Term Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long term debt, carrying value | $ 60 | $ 120 |
Loans Receivable - Components o
Loans Receivable - Components of Loans Receivable, Net (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 |
Receivables [Abstract] | ||||||
Loans Receivable, Gross | $ 96,519 | $ 96,387 | ||||
Unamortized Fees | (6,956) | (6,223) | ||||
Loans Receivable, Amortized Cost | 89,563 | 90,164 | ||||
Allowance for Loan Losses | (30,693) | (14,911) | $ (12,783) | $ (31,594) | $ (12,970) | $ (12,363) |
Loans Receivable, Net of Allowances and Unamortized Fees | $ 58,870 | $ 75,253 |
Loans Receivable - Credit Quali
Loans Receivable - Credit Quality (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | $ 32,026 | |
2019 | 31,443 | |
2018 | 13,100 | |
2017 | 7,295 | |
2016 | 4,500 | |
Prior | 1,199 | |
Loans Receivable, Amortized Cost | 89,563 | $ 90,164 |
600 or Less | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 3,237 | |
2019 | 2,781 | |
2018 | 840 | |
2017 | 130 | |
2016 | 86 | |
Prior | 16 | |
Loans Receivable, Amortized Cost | 7,090 | |
Between 600 and 700 | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 24,541 | |
2019 | 25,584 | |
2018 | 10,656 | |
2017 | 6,042 | |
2016 | 3,485 | |
Prior | 962 | |
Loans Receivable, Amortized Cost | 71,270 | |
700 or Greater | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 4,248 | |
2019 | 3,078 | |
2018 | 1,604 | |
2017 | 1,123 | |
2016 | 929 | |
Prior | 221 | |
Loans Receivable, Amortized Cost | $ 11,203 |
Loans Receivable - Aging of the
Loans Receivable - Aging of the Loans Receivable Balance (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Financing Receivable, Past Due [Line Items] | ||
Past due loans receivable | 11.20% | 15.50% |
Current loans receivable | 88.80% | 84.50% |
Balance of Credit Card Loans on Nonaccrual Status | $ 2,038 | $ 2,284 |
30-59 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Past due loans receivable | 5.10% | 6.90% |
60-89 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Past due loans receivable | 2.50% | 3.60% |
90 or more days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Past due loans receivable | 3.60% | 5.00% |
Balance of Loans Receivable 90 or More Days Past Due and Still Accruing Interest and Fees | $ 0 | $ 0 |
Loans Receivable - Components_2
Loans Receivable - Components of the Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Components of the Allowance For Loan Losses: | ||||
Beginning Balance | $ 31,594 | $ 14,911 | $ 12,970 | |
Provision for Loan Losses | $ 3,428 | 4,968 | 16,150 | 9,223 |
Charge-offs | (5,132) | (5,158) | (11,333) | (10,642) |
Recoveries | 803 | 610 | 1,502 | 1,232 |
Ending Balance | $ 30,693 | $ 12,783 | $ 30,693 | $ 12,783 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Thousands | Apr. 27, 2020 | Jun. 30, 2020 | Jun. 30, 2020 | Feb. 11, 2020 | Dec. 31, 2019 |
Other Commitments [Line Items] | |||||
Event of default, loan due In full, term | 90 days | ||||
Portion that company might be obligated to repay in the event franchisees defaulted | $ 19,500 | $ 19,500 | |||
Fair value of franchisee-related borrowings | 2,400 | 2,400 | $ 400 | ||
Loan facility to franchisees, maximum commitment amount | $ 25,000 | ||||
Loss contingency accrual | 3,200 | 3,200 | 182,900 | ||
Insurance settlements receivable | 1,300 | 1,300 | |||
Reserve for unfunded loan commitments | 400 | ||||
Accounts payable and accrued expenses | 249,182 | 249,182 | 272,816 | ||
Unused credit card lines | |||||
Other Commitments [Line Items] | |||||
Remaining credit available | 224,700 | 224,700 | 225,000 | ||
Minimum | |||||
Other Commitments [Line Items] | |||||
Range of possible loss not accrued | 0 | 0 | |||
Loss contingency, estimate of possible loss | 0 | 0 | |||
Maximum | |||||
Other Commitments [Line Items] | |||||
Range of possible loss not accrued | 1,000 | 1,000 | |||
Loss contingency, estimate of possible loss | $ 1,000 | 1,000 | |||
Federal Trade Commission Inquiry | |||||
Other Commitments [Line Items] | |||||
Loss contingency accrual | 179,300 | ||||
Litigation settlement, amount awarded to other party | $ 175,000 | ||||
Accrued legal fees | $ 4,300 | ||||
Payments for loss contingency | $ 175,000 |
Segments - Narrative (Details)
Segments - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020USD ($)segment | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)sourcesegment | Jun. 30, 2019USD ($) | |
Segment Reporting [Abstract] | ||||
Number of operating segments | segment | 3 | |||
Number of reportable segments | segment | 3 | |||
Business Acquisition [Line Items] | ||||
Restructuring expenses, net | $ | $ 6,991 | $ 18,738 | $ 29,277 | $ 32,019 |
Restructuring, settlement and impairment provisions | $ | $ 18,700 | |||
Vive | Progressive Subsidiary | ||||
Business Acquisition [Line Items] | ||||
Sources of financial and leasing transactions acquired | source | 1 |
Segments Segments - Revenue by
Segments Segments - Revenue by source and segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 1,030,119 | $ 968,141 | $ 2,131,393 | $ 1,980,244 |
Progressive Leasing | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 589,749 | 516,333 | 1,248,283 | 1,039,734 |
Aaron's Business | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 430,956 | 443,198 | 863,788 | 923,254 |
Vive | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 9,414 | 8,610 | 19,322 | 17,256 |
Lease Revenues and Fees | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 969,987 | 907,565 | 2,017,900 | 1,851,722 |
Lease Revenues and Fees | Progressive Leasing | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 589,749 | 516,333 | 1,248,283 | 1,039,734 |
Lease Revenues and Fees | Aaron's Business | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 380,238 | 391,232 | 769,617 | 811,988 |
Lease Revenues and Fees | Vive | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Retail Sales | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 14,020 | 8,898 | 23,551 | 21,707 |
Retail Sales | Progressive Leasing | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Retail Sales | Aaron's Business | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 14,020 | 8,898 | 23,551 | 21,707 |
Retail Sales | Vive | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Non-Retail Sales | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 33,044 | 34,124 | 59,890 | 71,105 |
Non-Retail Sales | Progressive Leasing | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Non-Retail Sales | Aaron's Business | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 33,044 | 34,124 | 59,890 | 71,105 |
Non-Retail Sales | Vive | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Franchise Royalties and Fees | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 3,365 | 8,605 | 10,089 | 17,812 |
Franchise Royalties and Fees | Progressive Leasing | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Franchise Royalties and Fees | Aaron's Business | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 3,365 | 8,605 | 10,089 | 17,812 |
Franchise Royalties and Fees | Vive | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Interest and Fees on Loans Receivable | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 9,414 | 8,610 | 19,322 | 17,256 |
Interest and Fees on Loans Receivable | Progressive Leasing | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Interest and Fees on Loans Receivable | Aaron's Business | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Interest and Fees on Loans Receivable | Vive | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 9,414 | 8,610 | 19,322 | 17,256 |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 289 | 339 | 641 | 642 |
Other | Progressive Leasing | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Other | Aaron's Business | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 289 | 339 | 641 | 642 |
Other | Vive | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Leases | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 6,800 | $ 6,900 | $ 13,500 | $ 13,400 |
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 | 6 Months Ended | ||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | ||||||
Total Earnings (Loss) Before Income Taxes | $ 92,537 | $ 56,819 | $ (321,916) | $ 127,127 | ||
Restructuring expenses, net | 6,991 | 18,738 | 29,277 | 32,019 | ||
Early termination fee, sales and marketing agreement | $ 14,100 | |||||
Total Assets | 2,715,702 | 2,715,702 | $ 3,297,800 | |||
Impairment of goodwill | 0 | 446,900 | 0 | 446,893 | 0 | |
Progressive Leasing | ||||||
Segment Reporting Information [Line Items] | ||||||
Total Earnings (Loss) Before Income Taxes | 59,814 | 58,406 | 118,801 | 113,794 | ||
Total Assets | 1,093,647 | 1,093,647 | 1,261,786 | |||
Impairment of goodwill | 0 | |||||
Aaron's Business | ||||||
Segment Reporting Information [Line Items] | ||||||
Total Earnings (Loss) Before Income Taxes | 32,009 | 138 | (433,348) | 17,726 | ||
Total Assets | 1,034,194 | 1,034,194 | 1,740,281 | |||
Impairment of goodwill | $ 446,900 | 446,893 | ||||
Vive | ||||||
Segment Reporting Information [Line Items] | ||||||
Total Earnings (Loss) Before Income Taxes | 714 | $ (1,725) | (7,369) | $ (4,393) | ||
Total Assets | 71,633 | 71,633 | 85,825 | |||
Other | ||||||
Segment Reporting Information [Line Items] | ||||||
Total Assets | 516,228 | 516,228 | 209,908 | |||
Operating Segments | Aaron's Business | ||||||
Segment Reporting Information [Line Items] | ||||||
Inventory (principally raw materials and work-in-process) | $ 12,800 | $ 12,800 | $ 14,000 |
Restructuring - Narrative (Deta
Restructuring - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | 24 Months Ended | |||||||
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)store | Jun. 30, 2019USD ($) | Mar. 31, 2021store | Dec. 31, 2019USD ($)store | Dec. 31, 2017store | Jan. 01, 2020USD ($) | Mar. 31, 2019USD ($) | Jan. 01, 2019USD ($) | Dec. 31, 2018USD ($) | Mar. 31, 2018USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Total Restructuring Expenses | $ 6,991 | $ 18,738 | $ 29,277 | $ 32,019 | ||||||||
Allowance for loan losses | 30,693 | $ 12,783 | $ 30,693 | $ 12,783 | $ 14,911 | $ 31,594 | $ 12,970 | $ 12,363 | ||||
Revision of prior period, accounting standards update, adjustment | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Allowance for loan losses | $ 9,463 | $ 0 | ||||||||||
Restructuring Program 2020 | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring and related cost, number of store closures | store | 71 | |||||||||||
Total Restructuring Expenses | 6,100 | $ 22,500 | ||||||||||
Restructuring Program 2019 | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring and related cost, number of store closures | store | 155 | |||||||||||
Total Restructuring Expenses | 500 | 5,100 | ||||||||||
Restructuring and related cost incurred to date | 43,500 | 43,500 | ||||||||||
Restructuring Program 2016 and 2017 | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Total Restructuring Expenses | 400 | 1,700 | ||||||||||
Restructuring and related cost incurred to date | $ 42,500 | $ 42,500 | ||||||||||
Gain on Sale of Closed Store Properties | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring and related cost, number of store closures | store | 139 | |||||||||||
Forecast [Member] | Restructuring Program 2020 | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Restructuring and related cost, number of store closures | store | 47 |
Restructuring - Summary of Rest
Restructuring - Summary of Restructuring Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Restructuring Cost and Reserve [Line Items] | ||||
Total Restructuring Expenses | $ 6,991 | $ 18,738 | $ 29,277 | $ 32,019 |
Right-of-Use Asset Impairment | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total Restructuring Expenses | 2,456 | 14,287 | 18,634 | 23,010 |
Operating Lease Charges | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total Restructuring Expenses | 1,557 | 979 | 2,570 | 1,778 |
Severance | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total Restructuring Expenses | 2,694 | 1,856 | 4,725 | 2,992 |
Fixed Asset Impairment | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total Restructuring Expenses | 263 | 1,072 | 2,952 | 2,569 |
Other Expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total Restructuring Expenses | $ 21 | $ 544 | $ 396 | $ 1,670 |
Restructuring - Summary of Accr
Restructuring - Summary of Accruals of Restructuring Programs (Details) - Severance $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Restructuring Reserve [Roll Forward] | |
Balance at January 1, 2020 | $ 756 |
Restructuring Severance Charges | 4,725 |
Payments | (3,895) |
Balance at June 30, 2020 | $ 1,586 |