XML 24 R13.htm IDEA: XBRL DOCUMENT v3.10.0.1
Restructuring
 6 Months Ended
Jun. 30, 2018
Restructuring and Related Activities [Abstract]  
Restructuring
RESTRUCTURING
2017 and 2016 Restructuring Programs
During the year ended December 31, 2017 and 2016, the Company initiated restructuring programs to rationalize its Company-operated Aaron's store base 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 home office staff and field support, which resulted in a reduction in employee headcount in those areas to more closely align with current business conditions. As of June 30, 2018, the Company anticipates closing an additional seven stores during the remainder of 2018 associated with these programs.
Total net restructuring reversals of $0.9 million and net charges of less than $0.1 million were recorded for the three and six months ended June 30, 2018, all of which were incurred within the Aaron's Business segment. Restructuring activity for the three months ended June 30, 2018 was comprised of reversals of previously recorded restructuring charges, partially offset by charges related to Aaron's contractual lease obligations for closed stores and severance charges related to a realignment of the Company's home office organizational structure to more closely realign with current business conditions. These costs were included in restructuring (reversals) expenses in the condensed consolidated statements of earnings. The Company expects to incur approximately $1.0 million of additional charges related to the programs, 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.
The following table summarizes restructuring charges for the three and six months ended June 30, 2018 and 2017, respectively, under both plans:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(In Thousands)
2018
 
20171
 
2018
 
20171
Contractual Lease Obligations
$
207

 
$
11,841

 
$
926

 
$
11,318

Severance
87

 
1,144

 
601

 
1,590

Other Reversals
(1,176
)
 
—

 
(1,176
)
 
—

Gain on Sale of Closed Store Properties
—

 
—

 
(327
)
 
—

Fixed Asset Impairment
—

 
460

 
—

 
864

Total Restructuring (Reversals) Expenses, Net
$
(882
)
 
$
13,445

 
$
24

 
$
13,772


1 Substantially all restructuring charges incurred during 2017 were incurred within the Aaron's Business segment. The Company also incurred restructuring charges of $0.1 million and $0.2 million during the three and six months ended June 30, 2017 within the DAMI segment related primarily to the segment's relocation efforts.
To date, the Company has incurred charges of $38.3 million under the 2016 and 2017 restructuring programs.
The following table summarizes the balances of the accruals for the 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, 2018:
(In Thousands)
Contractual Lease Obligations
 
Severance
Balance at January 1, 2018
$
12,437

 
$
2,303

Charges
—

 
601

Adjustments1
926

 
—

Restructuring Charges
926

 
601

Payments
(3,305
)
 
(1,571
)
Balance at June 30, 2018
$
10,058

 
$
1,333

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