-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MHMtHTCOmlUAbI+36Bzhh1LLqTtcuPQ02+ZzxbtGlkHAFwwDRIL2VzWJCHSEGuKt oaboqSQzNEuPwnuId14Xkg== /in/edgar/work/0000950144-00-013824/0000950144-00-013824.txt : 20001115 0000950144-00-013824.hdr.sgml : 20001115 ACCESSION NUMBER: 0000950144-00-013824 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AARON RENTS INC CENTRAL INDEX KEY: 0000706688 STANDARD INDUSTRIAL CLASSIFICATION: [7359 ] IRS NUMBER: 580687630 STATE OF INCORPORATION: GA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-13941 FILM NUMBER: 766029 BUSINESS ADDRESS: STREET 1: 3001 N FULTON DR NE STREET 2: 1100 AARON BLDG CITY: ATLANTA STATE: GA ZIP: 30363 BUSINESS PHONE: 4042310011 MAIL ADDRESS: STREET 1: 309 E. PACES FERRY ROAD., N.E. STREET 2: 3001 N FULTON DRIVE NE CITY: ATLANTA STATE: GA ZIP: 30305-2377 10-Q 1 g65468e10-q.txt AARON RENTS, INC. 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Quarterly Report under Section 13 or 15 (d) of the Securities Exchange Act of 1934 SEPTEMBER 30, 2000 0-12385 ------------------ ------- For Quarter Ended Commission File No. AARON RENTS, INC. ----------------- (Exact name of registrant as specified in its charter) GEORGIA 58-0687630 ------- ---------- (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) 309 E. PACES FERRY ROAD, N.E. ATLANTA, GEORGIA 30305-2377 ---------------- ---------- (Address of principal executive offices) (Zip Code) (404) 231-0011 -------------- (Registrant's telephone number, including area code) NOT APPLICABLE (FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST REPORT) Indicate by check mark whether registrant (l) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Shares Outstanding as of Title of Each Class November 8, 2000 ------------------- ---------------- Common Stock, $.50 Par Value 16,024,541 Class A Common Stock, $.50 Par Value 3,829,506
2 PART I - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS AARON RENTS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
(Unaudited) September 30 December 31, 2000 1999 ------------ ------------ (In thousands, except share data) ASSETS Cash $ 90 $ 99 Accounts Receivable 25,436 21,030 Rental Merchandise 358,854 316,294 Less: Accumulated Depreciation (109,708) (96,463) ------------ ------------ 249,146 219,831 Property, Plant and Equipment, Net 61,978 55,918 Prepaid Expenses and Other Assets 25,006 21,530 ------------ ------------ Total Assets $ 361,656 $ 318,408 ============ ============ LIABILITIES & SHAREHOLDERS' EQUITY Accounts Payable and Accrued Expenses $ 42,525 $ 36,941 Dividends Payable 399 Deferred and Income Taxes Payable 22,625 14,410 Customer Deposits and Advance Payments 10,686 10,180 Bank Debt 82,033 72,225 Other Debt 1,401 535 ------------ ------------ Total Liabilities 159,270 134,690 Commitments & Contingencies Shareholders' Equity Common Stock, Par Value $.50 Per Share; Authorized: 25,000,000 Shares; Shares Issued: 18,270,987 9,135 9,135 Class A Common Stock, Par Value $.50 Per Share; Authorized: 25,000,000 Shares; Shares Issued: 5,361,761 2,681 2,681 Additional Paid-in Capital 53,665 54,181 Retained Earnings 179,832 159,313 ------------ ------------ 245,313 225,310 Less: Treasury Shares at Cost, Common Stock, 2,246,446 Shares at September 30, 2000 and 2,177,956 Shares at December 31, 1999 (28,691) (27,356) Class A Common Stock, 1,532,255 Shares at September 30, 2000 and December 31, 1999 (14,236) (14,236) ------------ ------------ Total Shareholders' Equity 202,386 183,718 ------------ ------------ Total Liabilities & Shareholders' Equity $ 361,656 $ 318,408 ============ ============
See Notes to Consolidated Financial Statements 3 AARON RENTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
Three Months Ended Nine Months Ended ---------------------------- ---------------------------- September 30, September 30, ---------------------------- ---------------------------- 2000 1999 2000 1999 ---------- ---------- ---------- ---------- (in thousands, except per share amounts) REVENUES: Rentals and Fees $ 89,460 $ 79,963 $ 266,231 $ 237,204 Retail Sales 16,466 16,160 48,301 47,240 Non-Retail Sales 15,237 10,334 46,459 28,639 Other 3,687 2,922 11,141 7,963 ---------- ---------- ---------- ---------- 124,850 109,379 372,132 321,046 ---------- ---------- ---------- ---------- COSTS AND EXPENSES: Retail Cost of Sales 11,516 11,675 33,940 33,893 Non-Retail Cost of Sales 14,219 9,886 43,124 26,865 Operating Expenses 56,293 51,349 168,302 150,272 Depreciation of Rental Merchandise 30,610 25,556 89,092 76,033 Interest 1,413 1,053 3,957 2,729 ---------- ---------- ---------- ---------- 114,051 99,519 338,415 289,792 ---------- ---------- ---------- ---------- EARNINGS BEFORE TAXES 10,799 9,860 33,717 31,254 INCOME TAXES 4,093 3,752 12,804 11,892 ---------- ---------- ---------- ---------- NET EARNINGS $ 6,706 $ 6,108 $ 20,913 $ 19,362 ========== ========== ========== ========== EARNINGS PER SHARE $ .34 $ .30 $ 1.05 $ .96 ---------- ---------- ---------- ---------- EARNINGS PER SHARE ASSUMING DILUTION $ .34 $ .30 $ 1.05 $ 0.94 ---------- ---------- ---------- ---------- CASH DIVIDENDS DECLARED PER SHARE Common Stock $ -- $ -- $ .02 $ .02 ---------- ---------- ---------- ---------- Class A Common Stock $ -- $ -- $ .02 $ .02 ---------- ---------- ---------- ---------- WEIGHTED AVERAGE SHARES OUTSTANDING 19,834 20,078 19,841 20,111 ========== ========== ========== ========== WEIGHTED AVERAGE SHARES OUTSTANDING ASSUMING DILUTION 19,938 20,393 19,980 20,495 ========== ========== ========== ==========
See Notes to Consolidated Financial Statements 4 AARON RENTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended September 30, ---------------------------------- 2000 1999 ----------- ----------- (in thousands) OPERATING ACTIVITIES Net Earnings $ 20,913 $ 19,362 Depreciation and Amortization 98,060 83,783 Deferred Income Taxes 8,215 307 Change in Accounts Payable and Accrued Expenses 5,584 208 Change in Accounts Receivable (4,406) (1,886) Other Changes, Net 2,814 (2,190) ----------- ----------- Cash Provided by Operating Activities 131,180 99,584 ----------- ----------- INVESTING ACTIVITIES Additions to Property, Plant and Equipment (19,670) (17,686) Book Value of Property Retired or Sold 6,059 7,083 Additions to Rental Equipment (201,212) (158,299) Book Value of Rental Equipment Sold 85,673 73,257 Contracts and Other Assets Acquired (10,069) (10,125) ----------- ----------- Cash Used by Investing Activities (139,219) (105,770) ----------- ----------- FINANCING ACTIVITIES Proceeds from Revolving Credit Agreement 142,527 134,858 Repayments on Revolving Credit Agreement (132,719) (118,773) Increase in Other Debt 866 17 Dividends Paid (793) (816) Acquisition of Treasury Stock (4,625) (12,553) Issuance of Stock Under Stock Option Plans 2,774 3,456 ----------- ----------- Cash Provided by Financing Activities 8,030 6,189 ----------- ----------- Decrease in Cash (9) 3 Cash at Beginning of Year 99 95 ----------- ----------- Cash at End of Period $ 90 $ 98 =========== ===========
See Notes to Consolidated Financial Statements 5 AARON RENTS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE A: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of Aaron Rents, Inc. ("the Company") and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. The Consolidated Balance Sheet as of September 30, 2000, and the Consolidated Statements of Earnings and Cash Flows for the nine months ended September 30, 2000 and 1999, have been prepared without audit. In the opinion of management, all adjustments necessary to present fairly the financial position, results of operations and cash flows at September 30, 2000 and for all periods presented have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 1999. The results of operations for the period ended September 30, 2000 are not necessarily indicative of the operating results for the full year. Certain amounts in the 1999 segment information have been reclassified to conform to the 2000 presentation. NEW ACCOUNTING PRONOUNCEMENTS In June 1998, the FASB issued Statement No. 133, Accounting for Derivative Instruments and Hedging Activities. The statement requires the Company to recognize all derivatives on the balance sheet at fair value. Derivatives that are not hedges must be adjusted to fair value through income. If the derivative is a hedge, depending on the nature of the hedge, changes in the fair value of derivatives are either offset against the change in fair value of derivatives of the hedged assets, liabilities, or firm commitments through earnings or recognized in comprehensive income until the hedged item is recognized in earnings. The ineffective portion of a derivative's change in fair value will be immediately recognized in earnings. The Company is required to adopt Statement 133 in 2001, however, management does not expect its adoption to have a significant impact on the Company's financial position or results of operations. NOTE B: COMPREHENSIVE INCOME There were no differences between net income and comprehensive income for the nine months ended September 30, 2000 and 1999. 6 NOTE C: SEGMENT INFORMATION
Three Months Ended Nine Months Ended --------------------------- --------------------------- 2000 1999 2000 1999 ----------- ----------- ----------- ----------- (In thousands) REVENUES FROM EXTERNAL CUSTOMERS Rental Purchase $ 76,480 $ 62,254 $ 225,909 $ 181,682 Rent-to-Rent 44,839 43,436 134,574 130,754 Franchise 3,196 2,330 9,174 6,364 Other 1,045 154 3,651 838 Manufacturing 11,596 12,583 42,066 41,827 Elimination of intersegment revenues (11,676) (12,154) (42,211) (41,176) Cash to accrual adjustments (630) 776 (1,031) 757 ----------- ----------- ----------- ----------- Total revenues from external customers $ 124,850 $ 109,379 $ 372,132 $ 321,046 =========== =========== =========== =========== EARNINGS BEFORE INCOME TAXES: Rental Purchase $ 4,447 $ 4,446 $ 14,885 $ 15,057 Rent-to-Rent 4,040 2,751 13,041 12,139 Franchise 2,000 1,335 5,443 3,555 Other (191) (236) (733) (801) Manufacturing (65) 86 1,358 558 ----------- ----------- ----------- ----------- Earnings before income taxes for reportable segments 10,231 8,382 33,994 30,508 Elimination of intersegment profit 132 (10) (1,107) (298) Cash to accrual adjustments (604) 789 (770) 656 Other allocations and adjustments 1,040 699 1,600 388 ----------- ----------- ----------- ----------- Total earnings before income taxes $ 10,799 $ 9,860 $ 33,717 $ 31,254 =========== =========== =========== ===========
7 PART I - FINANCIAL INFORMATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Special Note Regarding Forward-Looking Information: Except for historical information contained herein, the matters set forth in this Form 10-Q are forward-looking statements. The Company notes that the forward-looking statements set forth involve a number of risks and uncertainties that could cause actual results to differ materially from any such statements, including the risks and uncertainties discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the Securities and Exchange Commission, under the caption "Certain Factors Affecting Forward Looking Statements," which discussion is incorporated herein by this reference. RESULTS OF OPERATIONS: QUARTER ENDED SEPTEMBER 30, 2000 VERSUS QUARTER ENDED SEPTEMBER 30, 1999: Total revenues for the third quarter of 2000 increased $15.5 million (14.1%) to $124.9 million compared to $109.4 million in 1999 due primarily to a $9.5 million (11.9%) increase in rentals and fees revenues, plus a $5.2 million (19.7%) increase in sales. Of this increase in rentals and fees revenues, $8.1 million was attributable to the Aaron's Rental Purchase division which added sixteen Company-operated stores in the third quarter of 2000. Rentals and fees revenues from the Company's rent-to-rent operations increased $1.4 million. Revenues from retail sales increased $306,000 (1.9%) to $16.5 million in 2000, from $16.2 million for the same period last year. This increase was primarily due to a $372,000 increase in sales of rental return merchandise in the Company's rent-to-rent operations and a $360,000 increase in rental return sales in the rental purchase division partially offset by a $447,000 decrease in new sales. Non-retail sales, which primarily represent merchandise sold to Aaron's Rental Purchase franchisees, increased $4.9 million (47.4%) to $15.2 million compared to $10.3 million for the same period last year. The increased sales are due to the growth of the franchise operations. Other revenues for the third quarter of 2000 increased $765,000 (26.2%) to $3.7 million compared to $2.9 million in 1999. This increase was attributable to fees and royalties from franchise operations increasing $877,000 (38.7%) to $3.1 million compared to $2.3 million last year, reflecting a net increase of 40 franchised stores since the end of the third quarter of 1999 and increasing operating revenues of maturing franchise stores. Cost of sales from retail sales decreased $159,000 (-1.4%) to $11.5 million compared to $11.7 million last year, and as a percentage of retail sales, decreased slightly to 69.9% from 72.2%. This decrease was primarily the result of improved margins on the sale of both residential and office rental return merchandise. Cost of sales from non-retail sales increased $4.3 million (43.8%) to $14.2 million from $9.9 million, and as a percentage of non-retail sales, decreased slightly to 93.3% from 95.7%. Operating expenses increased $4.9 million (9.6%) to $56.3 million from $51.3 million. As a percentage of total revenues, operating expenses were 45.1% in 2000 and 46.9% in 1999. Operating expenses decreased as a percentage of total revenues between quarters primarily due to increased revenues in the Aaron's Rental Purchase division. 8 Depreciation of rental merchandise increased $5.1 million (19.8%) to $30.6 million, from $25.6 million, and as a percentage of total rentals and fees, increased to 34.2% from 32.0%. The increase as a percentage of revenues is primarily due to a greater percentage of the Company's rentals and fees coming from the Aaron's Rental Purchase division, which depreciates its rental merchandise at a faster rate than the Rent-to-Rent division. Interest expense increased $360,000 (34.2%) to $1.4 million compared to $1.1 million. As a percentage of total revenues, interest expense was 1.1% in 2000 compared to 1.0% in 1999. The increase in interest expense as a percentage of total revenues was due to slightly higher interest rates and higher debt levels in the third quarter of 2000. Income tax expense increased $341,000 (9.1%) to $4.1 million for 2000 compared to $3.8 million for the same period in 1999. The Company's effective tax rate was 37.9% for the third quarter of 2000 compared to 38.1% in the third quarter of 1999. As a result, net earnings increased $598,000 (9.8 %) to $6.7 million in the third quarter of 2000 compared to $6.1 million for the same period in 1999. As a percentage of total revenues, net earnings were 5.4% in the current quarter as compared to 5.6% for the same period last year. The weighted average number of shares outstanding during the third quarter of 2000 was 19,834,000 compared to 20,078,000 (19,938,000 versus 20,393,000 assuming dilution) for the same period last year. NINE MONTHS ENDED SEPTEMBER 30, 2000 VERSUS NINE MONTHS ENDED SEPTEMBER 30, 1999: Total revenues for the first nine months of 2000 increased $51.1 million (15.9%) to $372.1 million compared to $321.0 million in 1999 due primarily to a $29.0 million (12.2%) increase in rentals and fees revenues, plus a $18.9 million (24.9%) increase in sales. Of this increase in rentals and fees revenues, $24.9 million was attributable to the Aaron's Rental Purchase division which added 35 Company-operated stores in the first nine months of 2000. Rentals and fees revenues from the Company's rent-to-rent operations increased $4.2 million. Revenues from retail sales increased $1.1 million (2.2%) to $48.3 million in 2000, from $47.2 million for the same period last year. This increase was primarily due to increased sales of new and rental return merchandise in the Company's rental purchase operations partially offset by a decrease of rental return sales in the rent-to-rent operations. Non-retail sales, which primarily represent merchandise sold to Aaron's Rental Purchase franchisees, increased $17.8 million (62.2%) to $46.5 million compared to $28.6 million for the same period last year. The increased sales are due to the growth of the franchise operations. Other revenues for the first nine months of 2000 increased $3.2 million (39.9%) to $11.1 million compared to $8.0 million in 1999. This increase was attributable to fees and royalties from franchise operations increasing $2.8 million (45.3%) to $9.0 million compared to $6.2 million last year, reflecting a net increase of 40 franchised stores since the end of the third quarter of 1999 and increasing operating revenues of maturing franchise stores. Cost of sales from retail sales remained unchanged at $33.9 million, and as a percentage of retail sales, decreased to 70.3% from 71.7%. This decrease was primarily the result of improved margins on the sale of both residential and office rental return merchandise. Cost of sales from non-retail sales increased $16.3 million (60.5%) to $43.1 million from $26.9 million, and as a percentage of sales, decreased slightly to 92.8% from 93.8%. 9 Operating expenses increased $18.0 million (12.0%) to $168.3 million from $150.3 million. As a percentage of total revenues, operating expenses were 45.2% in 2000 and 46.8% in 1999. Operating expenses decreased as a percentage of total revenues between periods primarily due to increased revenues in the Aaron's Rental Purchase division. Depreciation of rental merchandise increased $13.1 million (17.2%) to $89.1 million, from $76.0 million, and as a percentage of total rentals and fees, increased to 33.5% from 32.1%. The increase as a percentage of revenues is primarily due to a greater percentage of the Company's rentals and fees coming from the Aaron's Rental Purchase division, which depreciates its rental merchandise at a faster rate than the Rent-to-Rent division. Interest expense increased $1.2 million (45.0%) to $4.0 million compared to $2.7 million. As a percentage of total revenues, interest expense was 1.1% in 2000 compared to 1.0% in 1999. The increase in interest expense as a percentage of total revenues was due to slightly higher interest rates and higher debt levels in the first nine months of 2000. Income tax expense increased $912,000 (7.7%) to $12.8 million for 2000 compared to $11.9 million for the same period in 1999. The Company's effective tax rate was 38.0 % for the first nine months of 2000 versus 38.1%for the same period in 1999. As a result, net earnings increased $1.6 million (8.0%) to $20.9 million in the first nine months of 2000 compared to $19.4 million for the same period in 1999. As a percentage of total revenues, net earnings were 5.6% in the current period as compared to 6.0% for the same period last year. The weighted average number of shares outstanding during the first nine months of 2000 was 19,841,000 compared to 20,111,000 (19,980,000 versus 20,495,000 assuming dilution) for the same period last year. LIQUIDITY AND CAPITAL RESOURCES: During the first quarter of 2000, the Company paid a semi-annual dividend that was declared on November 3, 1999 of $.02 per share on Common Stock and Class A Common Stock. On May 2, 2000, the Company declared a semi-annual dividend which was paid on July 6, 2000 of $.02 per share on Common Stock and Class A Common Stock. Cash flow from operations for the nine months ended September 30, 2000 and 1999 was $131.2 million and $99.6 million, respectively. Such cash flows include profits on the sale of rental return merchandise. The Company's primary capital requirements consist of acquiring rental merchandise for both rent-to-rent stores and Company-operated Aaron's Rental Purchase stores. As the Company continues to grow, the need for additional rental merchandise will continue to be the Company's major capital requirement. These capital requirements historically have been financed through a revolving credit agreement, cash flow from operations, trade credit, proceeds from the sale of rental return merchandise, and stock offerings. The revolving credit agreement provides for unsecured borrowings up to $90.0 million which includes a $6.0 million credit line to fund daily working capital requirements. At September 30, 2000, an aggregate of $82.0 million was outstanding under this facility, bearing interest at an average rate of 7.12%. The Company uses interest rate swap agreements as part of its overall long-term financing program. At September 30, 2000, the Company had swap agreements with notional principal amounts of $40.0 million which effectively fixed the interest rates on an equal amount under the Company's revolving credit agreement at 6.93%. The Company believes that the expected cash flows from operations, proceeds from the sale of rental return merchandise, bank borrowings and vendor credit, will be sufficient to fund the Company's capital and liquidity needs for at least the next 24 months. 10 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. AARON RENTS, INC. (Registrant) Date - November 13, 2000 /s/ GILBERT L. DANIELSON ----------------------------------- Gilbert L. Danielson Executive Vice President Chief Financial Officer Date - November 13, 2000 /s/ ROBERT P. SINCLAIR, JR. ----------------------------------- Robert P. Sinclair, Jr. Vice President Corporate Controller 11 PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K: (a) The following exhibits are furnished herewith:
Exhibit Number Description of Exhibit ------ ---------------------- 27 Financial Data Schedule (for SEC use only)
(b) No reports on Form 8-K were filed by the Registrant during the nine months ended September 30, 2000. EX-27 2 g65468ex27.txt FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF AARON RENTS FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS DEC-31-2000 JAN-01-2000 SEP-30-2000 90 0 25,436 0 249,146 0 61,978 0 361,656 0 0 0 0 11,816 190,570 361,656 94,760 372,132 77,064 334,458 0 0 3,957 33,717 12,804 20,913 0 0 0 20,913 1.05 1.05 The allowance of doubtful accounts is netted against total accounts receivable in the Accounts Receivable balance. Rental merchandise has been classified as inventory for purposes of this schedule. Rental merchandise has been shown net of 109,708 accumulated depreciation. The financial statements are presented with an unclassified balance sheet. PP&E has been shown net of accumulated depreciation.
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