v3.19.2

Segments | 6 Months Ended
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Jun. 30, 2019
Segment Reporting [Abstract] |
Segments | SEGMENTS As of June 30, 2019, the Company has three operating and reportable segments: Progressive Leasing, Aaron's Business and DAMI. Progressive Leasing is a leading virtual lease-to-own company that provides lease-purchase solutions on a variety of products, including furniture and bedding, automobile electronics and accessories, mobile phones and accessories, jewelry, consumer electronics and appliances. The Aaron's Business offers furniture, consumer electronics, home appliances and accessories to consumers primarily with a month-to-month, lease-to-own agreement with no credit needed 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 upholstered furniture and bedding leased and sold in Company-operated and franchised stores. DAMI offers a variety of second-look financing programs originated through two 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, 2019:
| Three Months Ended June 30, 2019
(In Thousands) | Progressive Leasing | Aaron's Business | DAMI | 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 | Revenue within the scope of ASC 606, Revenue from Contracts with Customers. Of the Franchise Royalties and Fees, $6.3 million is related to franchise royalty income that is recognized as the franchisee collects cash revenue from its customers. The remaining revenue is primarily related to fees collected for pre-opening services, which are being deferred and recognized as revenue over the agreement term, and advertising fees charged to franchisees. Retail sales are recognized as revenue at the point of sale. Non-retail sales are recognized as revenue upon delivery of the merchandise.
3 Revenue 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, 2018:
| Three Months Ended June 30, 2018
(In Thousands) | Progressive Leasing | Aaron's Business | DAMI | Total
Lease Revenues and Fees 1 | $ | 483,666 |  | $ | 362,272 |  | $ | — |  | $ | 845,938 |
Retail Sales 2 | — |  | 6,592 |  | — |  | 6,592 |
Non-Retail Sales 2 | — |  | 53,661 |  | — |  | 53,661 |
Franchise Royalties and Fees 2 | — |  | 12,125 |  | — |  | 12,125 |
Interest and Fees on Loans Receivable 3 | — |  | — |  | 9,208 |  | 9,208 |
Other | — |  | 335 |  | — |  | 335 |
Total | $ | 483,666 |  | $ | 434,985 |  | $ | 9,208 |  | $ | 927,859 |
1 Substantially all lease revenues and fees are within the scope of ASC 840, Leases. The Company had $4.4 million of other revenue within the scope of ASC 606, Revenue from Contracts with Customers. 2 Revenue within the scope of ASC 606, Revenue from Contracts with Customers. Of the Franchise Royalties and Fees, $9.1 million is related to franchise royalty income that is recognized as the franchisee collects cash revenue from its customers. The remaining revenue is primarily related to fees collected for pre-opening services, which are being deferred and recognized as revenue over the agreement term, and advertising fees charged to franchisees. Retail sales are recognized as revenue at the point of sale. Non-retail sales are recognized as revenue upon delivery of the merchandise. 3 Revenue 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 | DAMI | 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 | Revenue within the scope of ASC 606, Revenue from Contracts with Customers. Of the Franchise Royalties and Fees, $13.4 million is related to franchise royalty income that is recognized as the franchisee collects cash revenue from its customers. The remaining revenue is primarily related to fees collected for pre-opening services, which are being deferred and recognized as revenue over the agreement term, and advertising fees charged to franchisees. Retail sales are recognized as revenue at the point of sale. Non-retail sales are recognized as revenue upon delivery of the merchandise.
3 Revenue 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, 2018:
| Six Months Ended June 30, 2018
(In Thousands) | Progressive Leasing | Aaron's Business | DAMI | Total
Lease Revenues and Fees 1 | $ | 970,183 |  | $ | 745,822 |  | $ | — |  | $ | 1,716,005 |
Retail Sales 2 | — |  | 15,108 |  | — |  | 15,108 |
Non-Retail Sales 2 | — |  | 106,891 |  | — |  | 106,891 |
Franchise Royalties and Fees 2 | — |  | 24,987 |  | — |  | 24,987 |
Interest and Fees on Loans Receivable 3 | — |  | — |  | 18,750 |  | 18,750 |
Other | — |  | 927 |  | — |  | 927 |
Total | $ | 970,183 |  | $ | 893,735 |  | $ | 18,750 |  | $ | 1,882,668 |
1 Substantially all lease revenues and fees are within the scope of ASC 840, Leases. The Company had $8.4 million of other revenue within the scope of ASC 606, Revenue from Contracts with Customers. 2 Revenue within the scope of ASC 606, Revenue from Contracts with Customers. Of the Franchise Royalties and Fees, $19.2 million is related to franchise royalty income that is recognized as the franchisee collects cash revenue from its customers. The remaining revenue is primarily related to fees collected for pre-opening services, which are being deferred and recognized as revenue over the agreement term, and advertising fees charged to franchisees. Retail sales are recognized as revenue at the point of sale. Non-retail sales are recognized as revenue upon delivery of the merchandise. 3 Revenue 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 DAMI 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 June 30, |  | Six Months Ended June 30,
(In Thousands) | 2019 |  | 2018 |  | 2019 |  | 2018
Earnings (Loss) Before Income Taxes: |  |  |  |  |  |  |
Progressive Leasing | $ | 58,406 |  |  | $ | 44,575 |  |  | $ | 113,794 |  |  | $ | 79,554 |
Aaron's Business 1 | 138 |  |  | 7,697 |  |  | 17,726 |  |  | 40,776 |
DAMI | (1,725 | ) |  | (2,292 | ) |  | (4,393 | ) |  | (3,598 | )
Total Earnings Before Income Taxes | $ | 56,819 |  |  | $ | 49,980 |  |  | $ | 127,127 |  |  | $ | 116,732 |
1 Earnings before income taxes for the Aaron's Business during the six months ended June 30, 2019 were impacted by (i) 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, and other impairment charges in connection with the Company's strategic decision to close Company-operated stores, of which $18.7 million was incurred during the three months ended June 30, 2019 and (ii) gains on insurance recoveries of $4.5 million related to payments received from and final settlements reached with insurance carriers for Hurricanes Harvey and Irma property and business interruption claims in excess of the related property insurance receivables, of which $3.6 million was recorded during the three months ended June 30, 2019. Earnings before income taxes for the Aaron's Business during the three and six months ended June 30, 2018 includes a full impairment of the PerfectHome investment of $20.1 million and restructuring reversals of $0.9 million. The following is a summary of total assets by segment and shared corporate-related assets.
(In Thousands) | June 30, 2019 |  | December 31, 2018
Assets: |  |  |
Progressive Leasing | $ | 1,128,719 |  |  | $ | 1,088,227 |
Aaron's Business 1 | 1,727,615 |  |  | 1,483,102 |
DAMI | 86,753 |  |  | 95,341 |
Other 2 | 237,111 |  |  | 160,022 |
Total Assets | $ | 3,180,198 |  |  | $ | 2,826,692 |
1 Includes inventory (principally raw materials and work-in-process) that has been classified within lease merchandise in the condensed consolidated balance sheets of $15.7 million and $15.2 million as of June 30, 2019 and December 31, 2018, respectively. 2 Corporate-related assets that benefit multiple segments are reported as other assets.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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