Basis and Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Schedule Of Company Operated Store Activity

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

Stores as of June 30 (Unaudited)	2019	2018
Company-operated Aaron's Branded Stores	1,171	1,179
Franchised Stores	357	530
Systemwide Stores	1,528	1,709

The following table presents invoice volume for Progressive Leasing:

For the Three Months Ended June 30 (Unaudited and In Thousands)	2019		2018
Progressive Leasing Invoice Volume1	$	403,410	$	335,088

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

Calculation of Dilutive Stock Awards

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

	Three Months Ended June 30,		Six Months Ended June 30,
(Shares In Thousands)	2019	2018	2019	2018
Weighted Average Shares Outstanding	67,687	69,645	67,492	69,875
Dilutive Effect of Share-Based Awards	1,106	1,192	1,292	1,553
Weighted Average Shares Outstanding Assuming Dilution	68,793	70,837	68,784	71,428

Accounts Receivable Net of Allowances

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

(In Thousands)	June 30, 2019		December 31, 2018
Customers	$	60,579	$	60,879
Corporate	12,024		18,171
Franchisee	12,654		19,109
Accounts Receivable	$	85,257	$	98,159

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

(In Thousands)	June 30, 2019			December 31, 2018
Credit Card Loans1	$	86,763		$	90,406
Acquired Loans2	2,158			5,688
Loans Receivable, Gross	88,921			96,094
Allowance for Loan Losses	(12,783		)	(12,970		)
Unamortized Fees	(6,164		)	(6,971		)
Loans Receivable, Net of Allowances and Unamortized Fees	$	69,974		$	76,153

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.

Components of the Accounts Receivable Provision

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

	Six Months Ended June 30,
(In Thousands)	2019		2018
Bad Debt Expense1	$	1,166	$	96,651
Provision for Returns and Uncollectible Renewal Payments2	136,445		16,426
Accounts Receivable Provision	$	137,611	$	113,077

¹ Bad debt expense is recorded within operating expenses in the condensed consolidated financial statements.

² In accordance with the adoption of ASC 842, Progressive Leasing provision for returns and uncollectible renewal payments are recorded as a reduction to lease revenues and fees within the condensed consolidated financial statements beginning January 1, 2019. Prior to January 1, 2019, Progressive Leasing provision for returns and uncollectible renewal payments were recorded as bad debt expense within operating expenses in the condensed consolidated financial statements.

Schedule of Lease Merchandise

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

(In Thousands)	June 30, 2019		December 31, 2018
Merchandise on Lease	$	1,036,456	$	1,053,684
Merchandise Not on Lease	256,268		264,786
Lease Merchandise, net of Accumulated Depreciation and Allowances	$	1,292,724	$	1,318,470

Allowance for Lease Merchandise

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

	Six Months Ended June 30,
(In Thousands)	2019			2018
Beginning Balance	$	46,694		$	35,629
Merchandise Written off, net of Recoveries	(105,571		)	(80,856		)
Provision for Write-offs	117,994			91,420
Ending Balance	$	59,117		$	46,193

Loan Portfolio Credit Quality Indicators

Below is a summary of the credit quality of the Company's loan portfolio as of June 30, 2019 and December 31, 2018 by Fair Isaac and Company (FICO) score as determined at the time of loan origination:

FICO Score Category	June 30, 2019		December 31, 2018
600 or Less	4.5	%	3.7	%
Between 600 and 700	79.6	%	77.9	%
700 or Greater	15.9	%	18.4	%

Schedule of Prepaid Expenses and Other Assets

Prepaid expenses and other assets consist of the following:

(In Thousands)	June 30, 2019		December 31, 2018
Prepaid Expenses	$	32,937	$	30,763
Prepaid Insurance	26,400		27,948
Assets Held for Sale	8,992		6,589
Deferred Tax Asset	8,761		8,761
Other Assets	27,844		24,161
Prepaid Expenses and Other Assets	$	104,934	$	98,222

Schedule of Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consist of the following:

(In Thousands)	June 30, 2019		December 31, 2018
Accounts Payable	$	57,414	$	88,369
Accrued Insurance Costs	40,745		40,423
Accrued Salaries and Benefits	40,125		40,790
Accrued Real Estate and Sales Taxes	27,379		30,332
Deferred Rent1	—		27,270
Other Accrued Expenses and Liabilities1	61,250		65,969
Accounts Payable and Accrued Expenses	$	226,913	$	293,153

¹

Amounts as of June 30, 2019 were impacted by the January 1, 2019 adoption of ASC 842. Upon transition to ASC 842, the remaining balances of the Company's deferred rent, lease incentives, and closed store reserve were reclassified as a reduction to the operating lease right-of-use asset in the accompanying condensed consolidated balance sheet.

Schedule of Stockholders Equity

Changes in stockholders' equity for the six months ended June 30, 2019 and 2018 are as follows:

	Treasury Stock					Common Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Shareholders’ Equity
(In Thousands, Except Per Share)	Shares		Amount
Balance, December 31, 2018	(23,568	)	$	(567,847	)	$	45,376	$	278,922		$	2,005,344		$	(1,087	)	$	1,760,708
Opening Balance Sheet Adjustment - ASC 842, net of taxes	—		—			—		—			2,592			—			2,592
Cash Dividends, $0.035 per share	—		—			—		—			(2,363		)	—			(2,363		)
Stock-Based Compensation	—		—			—		7,050			—			—			7,050
Reissued Shares	493		4,264			—		(15,245		)	—			—			(10,981		)
Net Earnings	—		—			—		—			56,078			—			56,078
Foreign Currency Translation Adjustment	—		—			—		—			—			424			424
Balance, March 31, 2019	(23,075	)	$	(563,583	)	$	45,376	$	270,727		$	2,061,651		$	(663	)	$	1,813,508
Cash Dividends, $0.035 per share	—		—			—		—			(2,386		)	—			(2,386		)
Stock-Based Compensation	—		—			—		6,522			—			—			6,522
Reissued Shares	113		2,776			—		284			—			—			3,060
Repurchased Shares	(243	)	(14,414		)	—		—			—			—			(14,414		)
Net Earnings	—		—			—		—			42,650			—			42,650
Foreign Currency Translation Adjustment	—		—			—		—			—			618			618
Balance, June 30, 2019	(23,205	)	$	(575,221	)	$	45,376	$	277,533		$	2,101,915		$	(45	)	$	1,849,558

	Treasury Stock					Common Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Shareholders’ Equity
(In Thousands, Except Per Share)	Shares		Amount
Balance, December 31, 2017	(20,733	)	$	(407,713	)	$	45,376	$	270,043		$	1,819,524		$	774		$	1,728,004
Opening Balance Sheet Adjustment - ASC 606, net of taxes	—		—			—		—			(1,729		)	—			(1,729		)
Cash Dividends, $0.03 per share	—		—			—		—			(2,146		)	—			(2,146		)
Stock-Based Compensation	—		—			—		7,862			—			—			7,862
Reissued Shares	545		3,441			—		(12,602		)	—			—			(9,161		)
Repurchased Shares	(391	)	(18,407		)	—		—			—			—			(18,407		)
Net Earnings	—		—			—		—			52,246			—			52,246
Foreign Currency Translation Adjustment	—		—			—		—			—			(477		)	(477		)
Balance, March 31, 2018	(20,579	)	$	(422,679	)	$	45,376	$	265,303		$	1,867,895		$	297		$	1,756,192
Cash Dividends, $0.03 per share	—		—			—		—			(2,087		)	—			(2,087		)
Stock-Based Compensation	—		—			—		6,380			—			—			6,380
Reissued Shares	220		1,795			—		(5,408		)	—			—			(3,613		)
Repurchased Shares	(1,234	)	(50,025		)	—		—			—			—			(50,025		)
Net Earnings	—		—			—		—			38,501			—			38,501
Foreign Currency Translation Adjustment	—		—			—		—			—			(535		)	(535		)
Balance, June 30, 2018	(21,593	)	$	(470,909	)	$	45,376	$	266,275		$	1,904,309		$	(238	)	$	1,744,813