RESTRUCTURING

2017 Restructuring Program

During the year ended December 31, 2017, the Company initiated a restructuring program that included a further review of the Company-operated Aaron's store portfolio in order to continue rationalizing its store base to better align with marketplace demand. As a result of this restructuring program, the Company closed 15 underperforming Company-operated stores during 2017. As of March 31, 2018, the Company anticipates closing an additional eight stores during the remainder of 2018 associated with this program. Total restructuring charges of $0.4 million were recorded for the three months ended March 31, 2018 under the 2017 program, all of which were incurred within the Aaron's Business segment. Restructuring charges were comprised of charges related to a realignment of the Company's home office organizational structure to more closely realign with current business conditions and Aaron's contractual lease obligations for closed stores, as well as gains recognized from the sale of the associated properties of stores closed under the restructuring program. These costs were included in restructuring expenses in the condensed consolidated statements of earnings. The Company expects to incur approximately $1.5 million of additional charges related to the 2017 restructuring program, which are expected to be incurred during the remainder of 2018. This estimate is subject to change based on future changes in assumptions for the remaining minimum lease obligation for stores closed under the restructuring program, including changes related to sublease assumptions and potential earlier buyouts of leases with landlords.

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 123 underperforming Company-operated stores throughout 2016 and 2017. The Company also optimized its home office staff during 2016 and field support during 2016 and 2017, which resulted in a reduction in employee headcount in those areas to more closely align with current business conditions.

Total restructuring charges of $0.5 million were recorded under the 2016 program during the three months ended March 31, 2018, all of which were incurred within the Aaron's Business segment. Restructuring charges were comprised of charges related to Aaron's store contractual lease obligations for closed stores and gains recognized from the sale of the associated properties of stores closed under the restructuring program. These costs were included in restructuring expenses in the condensed consolidated statements of earnings. The Company does not expect to incur any further material charges related to the 2016 restructuring program. However, this is subject to change based on future changes in assumptions for the remaining minimum lease obligation for stores closed under the restructuring program, including changes related to sublease assumptions and potential earlier buyouts of leases with landlords.

The following table summarizes restructuring charges for the three months ended March 31, 2018 and 2017, respectively, under both plans:



	Three Months Ended March 31,
(In Thousands)	2018			2017
Contractual Lease Obligations	$	719		$	(523	)
Severance	514			446
Gain on Sale of Closed Store Properties	(327		)	—
Fixed Asset Impairment	—			404
Total Restructuring Expenses	$	906		$	327

To date, the Company has incurred charges of $39.2 million under the 2016 and 2017 restructuring programs.

The following table summarizes the balances of the accruals for both programs, 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, 2018:



(In Thousands)	Contractual Lease Obligations			Severance
Balance at January 1, 2018	$	12,437		$	2,303
Charges	—			514
Adjustments¹	719			—
Restructuring Charges	719			514
Payments	(1,659		)	(835		)
Balance at March 31, 2018	$	11,497		$	1,982

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