Business and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Schedules of Company Operated Store Activity

The following table presents store count by ownership type for the Aaron’s Business operations:

Stores at December 31 (Unaudited)	2018	2017	2016
Company-operated Aaron's Branded Stores	1,312	1,175	1,165
Franchised Stores1	377	551	699
Systemwide Stores	1,689	1,726	1,864

¹As of December 31, 2018, 2017 and 2016, the Company has awarded 388, 580 and 749 franchises, respectively.

DAMI, which was acquired by Progressive Leasing on October 15, 2015, partners with merchants to provide a variety of revolving credit products originated through two third-party federally insured banks to customers that may not qualify for traditional prime lending (called "second-look" financing programs).

The following table presents invoice volume for Progressive Leasing:

For the Year Ended December 31 (Unaudited and In Thousands)	2018		2017		2016
Progressive Leasing Invoice Volume1	$	1,429,550	$	1,160,732	$	884,812

¹ Invoice volume is defined as the retail price of lease merchandise acquired and then leased to customers during the period, net of returns.

Schedule of Lease Merchandise

The following is a summary of lease merchandise, net of accumulated depreciation and allowances:

	December 31,
(In Thousands)	2018		2017
Merchandise on Lease	$	1,053,684	$	908,268
Merchandise Not on Lease	264,786		243,867
Lease Merchandise, net of Accumulated Depreciation and Allowances	$	1,318,470	$	1,152,135

Allowance for Lease Merchandise

The following table shows the components of the allowance for lease merchandise write-offs:

	Year ended December 31,
(In Thousands)	2018			2017			2016
Beginning Balance	$	35,629		$	33,399		$	33,405
Merchandise Written off, net of Recoveries	(181,252		)	(143,230		)	(134,110		)
Provision for Write-offs	192,317			145,460			134,104
Ending Balance	$	46,694		$	35,629		$	33,399

Calculation of Dilutive Stock Awards

The following table shows the calculation of dilutive share-based awards:

	Year Ended December 31,
(Shares In Thousands)	2018	2017	2016
Weighted Average Shares Outstanding	69,128	70,837	72,354
Dilutive Effect of Share-Based Awards	1,469	1,284	659
Weighted Average Shares Outstanding Assuming Dilution	70,597	72,121	73,013

Accounts Receivable Net of Allowances

Accounts receivable, net of allowances, consist of the following:

	December 31,
(In Thousands)	2018		2017
Customers	$	60,879	$	48,661
Corporate	18,171		23,431
Franchisee	19,109		27,795
	$	98,159	$	99,887

The following is a summary of the Company’s loans receivable, net:

	December 31,
(In Thousands)	2018			2017
Credit Card Loans1	$	90,406		$	89,728
Acquired Loans2	5,688			16,213
Loans Receivable, Gross	96,094			105,941
Allowance for Loan Losses	(12,970		)	(11,454		)
Unamortized Fees	(6,971		)	(8,375		)
Loans Receivable, Net of Allowances and Unamortized Fees	$	76,153		$	86,112

¹ "Credit Card Loans" are loans originated after the 2015 acquisition of DAMI.

² "Acquired Loans" are credit card loans the Company purchased in the 2015 acquisition of DAMI.

Allowance for Doubtful Accounts

The following table shows the components of the accounts receivable allowance:

	Year Ended December 31,
(In Thousands)	2018			2017			2016
Beginning Balance	$	46,946		$	35,690		$	34,861
Accounts Written Off, net of Recoveries	(252,330		)	(192,133		)	(167,094		)
Accounts Receivable Provision	268,088			203,389			167,923
Ending Balance	$	62,704		$	46,946		$	35,690

The following table shows the amounts recognized for bad debt expense and provision for returns and uncollected payments for the fiscal years presented:

	Year Ended December 31,
(In Thousands)	2018		2017		2016
Bad Debt Expense	$	227,960	$	170,574	$	128,333
Provision for Returns and Uncollected Renewal Payments	40,128		32,815		39,590
Accounts Receivable Provision	$	268,088	$	203,389	$	167,923

Loan Portfolio Credit Quality Indicators

Below is a summary of the credit quality of the Company’s loan portfolio as of December 31, 2018 and 2017 by Fair Isaac and Company (FICO) score as determined at the time of loan origination:

	December 31,
FICO Score Category	2018		2017
600 or Less	3.7	%	1.7	%
Between 600 and 700	77.9	%	76.5	%
700 or Greater	18.4	%	21.8	%

Schedule of Prepaid Expenses and Other Assets

Prepaid Expenses and Other Assets

Prepaid expenses and other assets consist of the following:

	December 31,
(In Thousands)	2018		2017
Prepaid Expenses	$	30,763	$	31,509
Prepaid Insurance	27,948		36,735
Assets Held for Sale	6,589		10,118
Deferred Tax Asset	8,761		11,589
Other Assets	24,161		26,548
	$	98,222	$	116,499

Schedule of Accounts Payable and Accrued Expenses

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consist of the following:

	December 31,
(In Thousands)	2018		2017
Accounts Payable	$	88,369	$	80,821
Accrued Insurance Costs	40,423		41,680
Accrued Salaries and Benefits	40,790		46,511
Accrued Real Estate and Sales Taxes	30,332		31,054
Deferred Rent	27,270		29,912
Other Accrued Expenses and Liabilities	65,969		74,832
	$	293,153	$	304,810

Schedule of Impact from New Revenue Adoption

The impact of adoption on the consolidated statements of earnings and balance sheets was as follows:

Consolidated Statements of Earnings

Twelve Months Ended December 31, 2018
(In Thousands)	As Reported		Balance Without ASC 606 Adoption		Effect of Change Higher/(Lower)
Franchise Royalties and Fees	$	44,815	$	36,245	$	8,570
Operating Expenses	1,618,423		1,611,210		7,213
OPERATING PROFIT	289,608		288,250		1,358
EARNINGS BEFORE INCOME TAXES	252,204		250,846		1,358
INCOME TAXES	55,994		55,661		333
NET EARNINGS	$	196,210	$	195,185	$	1,025

Consolidated Balance Sheets

Balance at December 31, 2018
(In Thousands)	As Reported		Balance Without ASC 606 Adoption		Effect of Change Higher/(Lower)
Deferred Income Taxes Payable	$	267,500	$	267,790	$	(290	)
Customer Deposits and Advance Payments	80,579		79,585		994
Total Liabilities	1,065,984		1,065,280		704
Retained Earnings	2,005,344		2,006,048		(704		)
Total Shareholders’ Equity	1,760,708		1,761,412		(704		)
Total Liabilities & Shareholders’ Equity	$	2,826,692	$	2,826,692	$	—

Comprehensive Statements of Income

Twelve Months Ended December 31, 2018
(In Thousands)	As Reported		Balance Without ASC 606 Adoption		Effect of Change Higher/(Lower)
Comprehensive Income	$	194,349	$	193,324	$	1,025