SEGMENTS

As of March 31, 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 March 31, 2019:



	Three Months Ended March 31, 2019
(In Thousands)	Progressive Leasing		Aaron's Business		DAMI		Total
Lease Revenues and Fees¹	$	523,401	$	420,756	$	—	$	944,157
Retail Sales²	—		12,809		—		12,809
Non-Retail Sales²	—		36,981		—		36,981
Franchise Royalties and Fees²	—		9,207		—		9,207
Interest and Fees on Loans Receivable³	—		—		8,646		8,646
Other	—		303		—		303
Total	$	523,401	$	480,056	$	8,646	$	1,012,103

¹Substantially all lease revenues and fees are within the scope of ASC 842, Leases. The Company had $7.9 million of other revenue within the scope of ASC 606, Revenue from Contracts with Customers.

Revenue within the scope of ASC 606, Revenue from Contracts with Customers. Of the Franchise Royalties and Fees, $7.0 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.

³Revenue 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 March 31, 2018:



	Three Months Ended March 31, 2018
(In Thousands)	Progressive Leasing		Aaron's Business		DAMI		Total
Lease Revenues and Fees¹	$	486,517	$	383,550	$	—	$	870,067
Retail Sales²	—		8,516		—		8,516
Non-Retail Sales²	—		53,230		—		53,230
Franchise Royalties and Fees²	—		12,862		—		12,862
Interest and Fees on Loans Receivable³	—		—		9,542		9,542
Other	—		592		—		592
Total	$	486,517	$	458,750	$	9,542	$	954,809

¹Substantially all lease revenues and fees are within the scope of ASC 842, Leases. The Company had $5.0 million of other revenue within the scope of ASC 606, Revenue from Contracts with Customers.

²Revenue within the scope of ASC 606, Revenue from Contracts with Customers. Of the Franchise Royalties and Fees, $10.2 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.

³Revenue 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 March 31,
(In Thousands)	2019			2018
Earnings (Loss) Before Income Taxes:
Progressive Leasing	$	55,388		$	34,979
Aaron's Business¹	17,588			33,079
DAMI	(2,668		)	(1,306		)
Total Earnings Before Income Taxes	$	70,308		$	66,752

¹Earnings before income taxes for the Aaron's Business during the three months ended March 31, 2019 includes restructuring charges of $13.3 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 84 Company-operated stores.

Earnings before income taxes for the Aaron's Business during the three months ended March 31, 2018 includes net restructuring charges of $0.9 million related to store contractual lease obligations and severance costs, partially offset by gains recognized from the sale of the associated properties of stores closed under the restructuring program.

The following is a summary of total assets by segment and shared corporate-related assets.



(In Thousands)	March 31, 2019		December 31, 2018
Assets:
Progressive Leasing	$	1,106,668	$	1,088,227
Aaron's Business¹	1,774,858		1,483,102
DAMI	89,533		95,341
Other²	266,907		160,022
Total Assets	$	3,237,966	$	2,826,692

¹Includes inventory (principally raw materials and work-in-process) that has been classified within lease merchandise in the condensed consolidated balance sheets of $14.5 million and $15.2 million as of March 31, 2019 and December 31, 2018, respectively.

²Corporate-related assets that benefit multiple segments are reported as other assets.