Segment Information |
Segment Information The operating segments reported below are the segments for which separate financial information is available and for which segment results are evaluated by the chief operating decision makers. Our operating segments are organized based on factors including, but not limited to, type of business transactions, geographic location and store ownership. All operating segments offer merchandise from four basic product categories: consumer electronics, appliances, computers, furniture and accessories. Our Core U.S. and Franchising segments also offer smartphones. Segment information for the three and nine months ended September 30, 2018 and 2017 is as follows: | | | | | | | | | | | | | | | | | | Three Months Ended September 30, | | Nine Months Ended September 30, | (in thousands) | 2018 | | 2017 | | 2018 | | 2017 | Revenues | | | | | | | | Core U.S. | $ | 451,320 |
| | $ | 442,763 |
| | $ | 1,389,081 |
| | $ | 1,390,687 |
| Acceptance Now | 173,438 |
| | 184,293 |
| | 549,435 |
| | 622,160 |
| Mexico | 12,784 |
| | 12,237 |
| | 37,122 |
| | 35,351 |
| Franchising | 7,400 |
| | 4,672 |
| | 23,077 |
| | 15,388 |
| Total revenues | $ | 644,942 |
| | $ | 643,965 |
| | $ | 1,998,715 |
| | $ | 2,063,586 |
|
| | | | | | | | | | | | | | | | | | Three Months Ended September 30, | | Nine Months Ended September 30, | (in thousands) | 2018 | | 2017 | | 2018 | | 2017 | Gross profit | | | | | | | | Core U.S. | $ | 313,771 |
| | $ | 309,779 |
| | $ | 975,231 |
| | $ | 965,739 |
| Acceptance Now | 81,586 |
| | 92,088 |
| | 256,441 |
| | 310,451 |
| Mexico | 8,885 |
| | 8,466 |
| | 25,756 |
| | 24,668 |
| Franchising | 3,498 |
| | 2,132 |
| | 11,176 |
| | 6,803 |
| Total gross profit | $ | 407,740 |
| | $ | 412,465 |
| | $ | 1,268,604 |
| | $ | 1,307,661 |
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Beginning in 2018, we implemented an intercompany book value adjustment charge for all rental merchandise transfers from Acceptance Now locations to Core U.S. stores. For the three and nine months ended September 30, 2018, book value adjustments on intercompany rental merchandise transfers were $2.9 million and $9.3 million, respectively, resulting in a corresponding increase in gross profit for the Core U.S. and decrease in gross profit for Acceptance Now. | | | | | | | | | | | | | | | | | | Three Months Ended September 30, | | Nine Months Ended September 30, | (in thousands) | 2018 | | 2017 | | 2018 | | 2017 | Operating profit (loss) | | | | | | | | Core U.S. | $ | 43,221 |
| | $ | 23,859 |
| | $ | 115,135 |
| | $ | 79,241 |
| Acceptance Now | 26,278 |
| | 10,379 |
| | 70,865 |
| | 49,595 |
| Mexico | 922 |
| | (242 | ) | | 2,306 |
| | (122 | ) | Franchising | 522 |
| | 1,032 |
| | 3,687 |
| | 3,565 |
| Total segments | 70,943 |
| | 35,028 |
| | 191,993 |
| | 132,279 |
| Corporate | (45,311 | ) | | (43,473 | ) | | (149,480 | ) | | (140,445 | ) | Total operating profit (loss) | $ | 25,632 |
| | $ | (8,445 | ) | | $ | 42,513 |
| | $ | (8,166 | ) |
Beginning in 2018, we implemented an intercompany book value adjustment charge for all rental merchandise transfers from Acceptance Now locations to Core U.S. stores. For the three and nine months ended September 30, 2018, book value adjustments for inventory charge-offs related to intercompany rental merchandise transfers were $0.5 million and $1.7 million, respectively, resulting in a corresponding increase in operating profit for the Core U.S. and decrease in operating profit for Acceptance Now. | | | | | | | | | | | | | | | | | | Three Months Ended September 30, | | Nine Months Ended September 30, | (in thousands) | 2018 | | 2017 | | 2018 | | 2017 | Depreciation, amortization and impairment of intangibles | | | | | | | | Core U.S. | $ | 6,216 |
| | $ | 7,725 |
| | $ | 19,482 |
| | $ | 23,715 |
| Acceptance Now | 421 |
| | 568 |
| | 1,288 |
| | 1,983 |
| Mexico | 222 |
| | 496 |
| | 839 |
| | 1,549 |
| Franchising | 45 |
| | 45 |
| | 133 |
| | 133 |
| Total segments | 6,904 |
| | 8,834 |
| | 21,742 |
| | 27,380 |
| Corporate | 10,042 |
| | 9,845 |
| | 30,532 |
| | 28,548 |
| Total depreciation, amortization and impairment of intangibles | $ | 16,946 |
| | $ | 18,679 |
| | $ | 52,274 |
| | $ | 55,928 |
|
We recorded an impairment of intangibles of $3.9 million in the Acceptance Now segment during the first quarter of 2017 that is not included in the table above. The impairment charge was recorded to Other Charges in the Condensed Consolidated Statement of Operations. | | | | | | | | | | | | | | | | | | Three Months Ended September 30, | | Nine Months Ended September 30, | (in thousands) | 2018 | | 2017 | | 2018 | | 2017 | Capital expenditures | | | | | | | | Core U.S. | $ | 3,586 |
| | $ | 6,625 |
| | $ | 12,801 |
| | $ | 21,333 |
| Acceptance Now | 76 |
| | 430 |
| | 156 |
| | 1,525 |
| Mexico | 113 |
| | 56 |
| | 151 |
| | 103 |
| Total segments | 3,775 |
| | 7,111 |
| | 13,108 |
| | 22,961 |
| Corporate | 3,021 |
| | 6,258 |
| | 9,383 |
| | 30,567 |
| Total capital expenditures | $ | 6,796 |
| | $ | 13,369 |
| | $ | 22,491 |
| | $ | 53,528 |
|
| | | | | | | | | (in thousands) | September 30, 2018 | | December 31, 2017 | On rent rental merchandise, net | | | | Core U.S. | $ | 378,221 |
| | $ | 408,993 |
| Acceptance Now | 241,044 |
| | 278,443 |
| Mexico | 15,653 |
| | 14,367 |
| Total on rent rental merchandise, net | $ | 634,918 |
| | $ | 701,803 |
|
| | | | | | | | | (in thousands) | September 30, 2018 | | December 31, 2017 | Held for rent rental merchandise, net | | | | Core U.S. | $ | 134,759 |
| | $ | 156,039 |
| Acceptance Now | 1,290 |
| | 4,940 |
| Mexico | 5,330 |
| | 6,209 |
| Total held for rent rental merchandise, net | $ | 141,379 |
| | $ | 167,188 |
|
| | | | | | | | | (in thousands) | September 30, 2018 | | December 31, 2017 | Assets by segment | | | | Core U.S. | $ | 709,074 |
| | $ | 776,296 |
| Acceptance Now | 306,553 |
| | 350,970 |
| Mexico | 30,747 |
| | 33,529 |
| Franchising | 3,899 |
| | 3,802 |
| Total segments | 1,050,273 |
| | 1,164,597 |
| Corporate | 301,820 |
| | 256,184 |
| Total assets | $ | 1,352,093 |
| | $ | 1,420,781 |
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