RESTRUCTURING

2016 Restructuring Program

During the year ended December 31, 2016, the Company initiated a restructuring program that included a thorough review of the Company-operated Aaron's store portfolio and the subsequent closure or planned closure of underperforming stores. As a result of this restructuring program, the Company closed 56 underperforming Company-operated stores during 2016, one store during the first quarter of 2017 and expects to close approximately 70 additional stores during the second quarter of 2017. The Company also optimized its home office and field support staff during 2016, which resulted in a reduction in employee headcount in those areas, to more closely align with current business conditions.

Total restructuring charges of $0.3 million were recorded during the three months ended March 31, 2017, comprised principally of $0.4 million related to the write-down to fair value, less estimated selling costs, of land and buildings from stores closed under the restructuring program, and $0.4 million related to workforce reductions. This was partially offset by income of $0.5 million recognized during the period due primarily to favorable early buyouts negotiated for a number of leased closed store properties during the quarter. These costs were included in the line item "Restructuring expenses" in the condensed consolidated statements of earnings. The Company estimates it will incur additional restructuring charges of $13.0 million in 2017 related to the loss on contractual lease obligations for the stores that the Company expects to close in the second quarter of 2017. To date, the Company has incurred charges of $20.5 million under the 2016 restructuring program.

The following table summarizes the balance of the accruals, which are recorded in accounts payable and accrued expenses in the condensed consolidated balance sheets, and the activity for the three months ended March 31, 2017:



(In Thousands)	Contractual Lease Obligations			Severance
Balance at January 1, 2017	$	10,583		$	2,079
Charges	59			446
Adjustments¹	(582		)	—
Restructuring Charges	(523		)	446
Payments	(2,383		)	(316		)
Balance at March 31, 2017	$	7,677		$	2,209


¹	Adjustments relate to early buyouts of leases, changes in sublease assumptions and interest accretion.

The following table summarizes restructuring charges by segment for the three months ended March 31, 2017:



(In Thousands)	Aaron's Business			DAMI¹		Total
Contractual Lease Obligations	$	(523	)	$	—	$	(523	)
Fixed Asset Impairment	404			—		404
Severance	356			90		446
Total Restructuring Expense	$	237		$	90	$	327


¹	Restructuring charges for DAMI relate primarily to the segment's relocation efforts. Future DAMI restructuring charges are expected to be immaterial.