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Acquisitions | 12 Months Ended
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Dec. 31, 2016
Business Combinations [Abstract] |
Acquisitions | ACQUISITIONS During the years ended December 31, 2016, 2015 and 2014, cash payments, net of cash acquired, related to the acquisitions of businesses and contracts were $9.8 million, $73.3 million and $700.5 million, respectively. Cash payments made during the year ended December 31, 2015 principally relate to the DAMI acquisition as described below. Cash payments made during the year ended December 31, 2014 principally relate to the Progressive acquisition as described below. Acquisitions have been accounted for as business combinations and the results of operations of the acquired businesses are included in the Company’s results of operations from their dates of acquisition. The results of DAMI and Progressive have been presented as reportable segments from their October 15, 2015 and April 14, 2014 acquisition dates, respectively. Refer to Note 13 for more information on their revenues and earnings before income taxes since their respective acquisition dates. The effect of the Company’s other acquisitions on the consolidated financial statements for the years ended December 31, 2016, 2015 and 2014 was not significant. DAMI Acquisition On October 15, 2015, Progressive acquired a 100% ownership interest in DAMI for a total purchase price of $54.9 million, inclusive of cash acquired of $4.2 million. Together with Progressive, DAMI allows the Company to provide retail and merchant partners with one source for financing and leasing transactions with below-prime customers. The following table presents the summary of the assets acquired and liabilities assumed as of the acquisition date, as well as the acquisition accounting adjustments. The final acquisition accounting adjustments did not have a significant effect on the consolidated statements of earnings.
(In Thousands) | Amounts Recognized as of Acquisition Date 1 |  | Acquisition Accounting Adjustments 2 |  | Amounts Recognized as of Acquisition Date (as adjusted)
Purchase Price | $ | 54,900 |  |  | $ | — |  |  | $ | 54,900 |
Estimated Fair Value of Identifiable Assets Acquired and Liabilities Assumed |  |  |  |  |
Cash and Cash Equivalents | 4,185 |  |  | — |  |  | 4,185 |
Loans Receivable 3 | 89,186 |  |  | (60 | ) |  | 89,126 |
Receivables | 45 |  |  | — |  |  | 45 |
Property, Plant and Equipment | 2,754 |  |  | — |  |  | 2,754 |
Other Intangibles 4 | 3,400 |  |  | (500 | ) |  | 2,900 |
Income Tax Receivable | 728 |  |  | — |  |  | 728 |
Prepaid Expenses and Other Assets | 671 |  |  | — |  |  | 671 |
Deferred Income Tax Assets | 375 |  |  | 2,115 |  |  | 2,490 |
Total Identifiable Assets Acquired | 101,344 |  |  | 1,555 |  |  | 102,899 |
Accounts Payable and Accrued Expenses | (1,709 | ) |  | (1,265 | ) |  | (2,974 | )
Debt | (45,025 | ) |  | — |  |  | (45,025 | )
Total Liabilities Assumed | (46,734 | ) |  | (1,265 | ) |  | (47,999 | )
Goodwill | 290 |  |  | (290 | ) |  | — |
Net Assets Acquired | $ | 54,900 |  |  | $ | — |  |  | $ | 54,900 |
1 As previously reported in the notes to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015. 2 The acquisition accounting adjustments primarily relate to the resolution of certain income tax-related matters and contingencies that existed as of the acquisition date. 3 Contractually required amounts due at the acquisition date were $94.2 million. 4 Identifiable intangible assets are further disaggregated in the table below. The intangible assets attributable to the DAMI acquisition are comprised of the following:
| Fair Value (in thousands) |  | Weighted Average Life (in years)
Technology | $ | 2,550 |  |  | 5.0
Non-compete Agreements | 350 |  |  | 5.0
Total Acquired Intangible Assets | $ | 2,900 |  |  |
During the year ended December 31, 2015, the Company incurred $3.7 million of transaction costs in connection with the acquisition of DAMI. These costs were included in the line item operating expenses in the consolidated statements of earnings. In addition, the Company incurred approximately $0.4 million in debt financing costs related to the assumed debt, which was recorded as a deduction from the corresponding debt liability in the consolidated balance sheets. Progressive Acquisition On April 14, 2014, the Company acquired a 100% ownership interest in Progressive, a leading virtual lease-to-own company, for a total purchase price of $705.8 million, inclusive of cash acquired of $5.8 million. Progressive provides lease-to-own solutions in 46 states. The acquisition of Progressive provided the Company with expansion into the virtual lease-to-own marketplace through Progressive's wide network of retail partners. The following table details the sources of cash for the purchase price of the Company’s acquisition of Progressive:
(In Thousands) |
Proceeds from Private Placement Note Issuance | $ | 300,000 |
Proceeds from Term Loan | 126,250 |
Proceeds from Revolving Credit Facility | 65,000 |
Cash Consideration | 185,454 |
Deferred Cash Consideration | 29,106 |
Purchase Price | $ | 705,810 |
Refer to Note 7 for additional information regarding the debt incurred to partially finance the Progressive acquisition. The initial deferred cash consideration had amounts outstanding as of December 31, 2016 of $0.7 million in withheld escrow accounts. The purchase price includes a primary escrow of $35.8 million to secure indemnification obligations of the sellers relating to the accuracy of representations, warranties and the satisfaction of covenants. As of December 31, 2016, primary escrow funds of $8.5 million have been withheld to cover pending litigation. In addition, the purchase price includes a secondary escrow of $15.8 million to secure indemnification obligations of the sellers relating to certain acquired tax-related contingent liabilities. The Company believes that $13.4 million is fully recoverable from the secondary escrow account and included this indemnification asset as a receivable in the Company's acquisition accounting. As of December 31, 2016, $11.4 million had been distributed to the Company. Any remaining undisputed balance is payable to the sellers by April 14, 2017. The following table presents the summary of the assets acquired and liabilities assumed as of the April 14, 2014 acquisition date, as well as the acquisition adjustments.
(In Thousands) | Amounts Recognized as of Acquisition Date (as adjusted)1 |  | Acquisition Accounting Adjustments 2 |  | Amounts Recognized as of Acquisition Date (as adjusted)
Purchase Price | $ | 705,810 |  |  | $ | — |  |  | $ | 705,810 |
Estimated Fair Value of Identifiable Assets Acquired and Liabilities Assumed |  |  |  |  |
Cash and Cash Equivalents | 5,810 |  |  | — |  |  | 5,810 |
Receivables 2, 3 | 27,581 |  |  | (4,245 | ) |  | 23,336 |
Lease Merchandise 2 | 141,185 |  |  | 110 |  |  | 141,295 |
Property, Plant and Equipment | 4,010 |  |  | — |  |  | 4,010 |
Other Intangibles 4 | 325,000 |  |  | — |  |  | 325,000 |
Prepaid Expenses and Other Assets | 893 |  |  | — |  |  | 893 |
Total Identifiable Assets Acquired | 504,479 |  |  | (4,135 | ) |  | 500,344 |
Accounts Payable and Accrued Expenses 2 | (29,104 | ) |  | 3,049 |  |  | (26,055 | )
Deferred Income Taxes Payable 2 | (48,749 | ) |  | (335 | ) |  | (49,084 | )
Customer Deposits and Advance Payments | (10,000 | ) |  | — |  |  | (10,000 | )
Total Liabilities Assumed | (87,853 | ) |  | 2,714 |  |  | (85,139 | )
Goodwill 5 | 289,184 |  |  | 1,421 |  |  | 290,605 |
Net Assets Acquired | $ | 705,810 |  |  | $ | — |  |  | $ | 705,810 |
1 As previously reported in the notes to consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2014, which includes the effects of certain acquisition accounting adjustments recognized in 2014. 2 The acquisition accounting adjustments recognized in 2015 related to the resolution of income tax uncertainties and sales tax exposures, which also impacted the fair value estimates of receivables and lease merchandise related to the secondary escrow amount, subsequent to the acquisition date. 3 Receivables include $13.4 million related to the secondary escrow amount, which the Company expects to recover prior to April 14, 2017. The gross amount due under customer-related receivables acquired was $22.7 million, of which $10.9 million was expected to be uncollectible. 4 Identifiable intangible assets are further disaggregated in the following table. 5 The total goodwill recognized in conjunction with the Progressive acquisition has been assigned to the Progressive operating segment. Of the goodwill recognized as part of this acquisition, $247.0 million is expected to be deductible for tax purposes. The primary reasons the purchase price of the acquisition exceeded the fair value of the net assets acquired, which resulted in the recognition of goodwill, is related to synergistic value created from the combination of Progressive’s virtual customer payment capabilities with the Company’s leading traditional lease-to-own model. Goodwill also includes certain other intangible assets that do not qualify for separate recognition, such as an assembled workforce. The intangible assets attributable to the Progressive acquisition are comprised of the following:
|  | Fair Value (in thousands) |  | Weighted Average Life (in years)
Internal Use Software |  | $ | 14,000 |  |  | 3.0
Technology |  | 66,000 |  |  | 10.0
Trade Names and Trademarks |  | 53,000 |  |  | Indefinite
Customer Lease Contracts |  | 11,000 |  |  | 1.0
Merchant Relationships |  | 181,000 |  |  | 12.0
Total Acquired Intangible Assets 1 |  | $ | 325,000 |  |  |
1 Acquired definite-lived intangible assets have a total weighted average life of 10.6 years. During the year ended December 31, 2014, the Company incurred $6.6 million of transaction costs in connection with the acquisition of Progressive. These costs were included in the line item "Progressive-related transaction costs" in the consolidated statements of earnings. In addition, during the year ended December 31, 2014, the Company incurred $2.3 million in debt financing costs related to the $491.3 million of new indebtedness incurred to partially finance the acquisition, which has been recorded as a deduction from the corresponding debt liability in the consolidated balance sheets. Pro Forma Financial Information The following table presents unaudited consolidated pro forma information as if the acquisition of Progressive had occurred on January 1, 2013:
| Twelve Months Ended December 31, 2014
(In Thousands) | As Reported |  | Pro Forma
Revenues | $ | 2,695,033 |  |  | $ | 2,851,631 |
Net Earnings | 78,233 |  |  | 86,038 |
The unaudited pro forma financial information presented above does not purport to represent what the actual results of the Company's operations would have been if the acquisition of Progressive had occurred on January 1, 2013, nor is it indicative of future performance. The unaudited pro forma financial information does not reflect the impact of future events that may occur after the acquisition, including, but not limited to, anticipated cost savings from operating synergies. The unaudited pro forma financial information presented in the table above has been adjusted to give effect to adjustments that are (1) directly related to the business combination; (2) factually supportable; and (3) expected to have a continuing impact. These adjustments include, but are not limited to, amortization related to fair value adjustments to intangible assets and the adjustment of interest expense to reflect the additional borrowings of the Company in conjunction with the acquisition.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1497-128463 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1490-128463 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1392-128463 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e7008-128479 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1486-128463 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6927-128479 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=73530397&loc=d3e4845-128472 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1524-128463 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e7000-128479 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=73530397&loc=d3e4922-128472 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=73530397&loc=d3e4934-128472 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=73530397&loc=d3e4926-128472 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 4A -URI http://asc.fasb.org/extlink&oid=73530397&loc=SL65897772-128472 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1383-128463 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6996-128479 + Details
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