Cover
Cover - shares | 12 Months Ended | |
Dec. 31, 2020 | Feb. 16, 2021 | |
Cover [Abstract] | ||
Document Type | 10-K | |
Document Annual Report | true | |
Document Period End Date | Dec. 31, 2020 | |
Current Fiscal Year End Date | --12-31 | |
Document Transition Report | false | |
Entity File Number | 1-13941 | |
Entity Registrant Name | THE AARON'S COMPANY, INC. | |
Entity Central Index Key | 0001821393 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | FY | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | GA | |
Entity Tax Identification Number | 85-2483376 | |
Entity Address, Address Line One | 400 Galleria Parkway SE | |
Entity Address, Address Line Two | Suite 300 | |
Entity Address, City or Town | Atlanta | |
Entity Address, State or Province | GA | |
Entity Address, Postal Zip Code | 30339-3194 | |
City Area Code | 678 | |
Local Phone Number | 402-3000 | |
Title of 12(b) Security | Common Stock, $0.50 Par Value | |
Trading Symbol | AAN | |
Security Exchange Name | NYSE | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 34,204,911 | |
Documents Incorporated by Reference | Portions of the registrant’s definitive Proxy Statement for the 2021 annual meeting of shareholders, to be filed subsequently with the Securities and Exchange Commission, or SEC, pursuant to Regulation 14A, are incorporated by reference into Part III of this Annual Report on Form 10-K. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
ASSETS: | ||
Cash and Cash Equivalents | $ 76,123 | $ 48,773 |
Accounts Receivable (net of allowances of $7,613 in 2020 and $10,720 in 2019) | 33,990 | 37,079 |
Lease Merchandise (net of accumulated depreciation and allowances of $458,405 in 2020 and $467,769 in 2019) | 697,235 | 781,598 |
Property, Plant and Equipment, Net | 200,370 | 207,301 |
Operating Lease Right-of-Use Assets | 238,085 | 305,257 |
Goodwill | 7,569 | 447,781 |
Other Intangibles, Net | 9,097 | 14,234 |
Income Tax Receivable | 1,093 | 5,927 |
Prepaid Expenses and Other Assets | 89,895 | 92,381 |
Total Assets | 1,353,457 | 1,940,331 |
LIABILITIES & SHAREHOLDERS' EQUITY: | ||
Accounts Payable and Accrued Expenses | 230,848 | 220,596 |
Deferred Income Taxes Payable | 62,601 | 157,425 |
Customer Deposits and Advance Payments | 68,894 | 47,692 |
Operating Lease Liabilities | 278,958 | 335,807 |
Debt | 831 | 341,030 |
Total Liabilities | 642,132 | 1,102,550 |
Commitments and Contingencies (Note 10) | ||
Shareholders' Equity: | ||
Common Stock, Par Value $0.50 Per Share: Authorized: 112,500,000 Shares at December 31, 2020; Shares Issued: 35,099,571 at December 31, 2020 | 17,550 | 0 |
Additional Paid-in Capital | 708,668 | 0 |
Retained Earnings | 1,881 | 0 |
Former Parent Invested Capital | 0 | 837,800 |
Accumulated Other Comprehensive Loss | (797) | (19) |
Stockholders' Equity before Treasury Stock | 727,302 | 837,781 |
Less: Treasury Shares at Cost | ||
894,660 Shares at December 31, 2020 | (15,977) | 0 |
Total Shareholders' Equity | 711,325 | 837,781 |
Total Liabilities & Shareholders' Equity | $ 1,353,457 | $ 1,940,331 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Accounts Receivable, allowances | $ 7,613 | $ 10,720 |
Lease Merchandise, accumulated depreciation | $ 458,405 | $ 467,769 |
Common Stock, Par Value (in dollars per share) | $ 0.50 | |
Common Stock, Authorized (in shares) | 112,500,000 | |
Common Stock, Issued (in shares) | 35,099,571 | |
Treasury Shares (in shares) | 894,660 |
Consolidated and Combined State
Consolidated and Combined Statements of Earnings - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
REVENUES: | |||
Revenues | $ 1,734,919 | $ 1,784,477 | $ 1,794,716 |
COST OF REVENUES: | |||
Total Cost of Revenue | 651,377 | 672,461 | 708,154 |
GROSS PROFIT | 1,083,542 | 1,112,016 | 1,086,562 |
OPERATING EXPENSES | |||
Personnel Costs | 476,575 | 499,993 | 482,712 |
Other Operating Expenses, Net | 419,108 | 426,774 | 431,158 |
Provision for Lease Merchandise Write-Offs | 63,642 | 97,903 | 68,970 |
Restructuring Expenses, Net | 42,544 | 39,990 | 2,750 |
Impairment of Goodwill | 446,893 | 0 | 0 |
Retirement Charges | 12,634 | 0 | 0 |
Separation Costs | 8,184 | 0 | 0 |
Operating Expenses, Total | 1,469,580 | 1,064,660 | 985,590 |
OPERATING (LOSS) PROFIT | (386,038) | 47,356 | 100,972 |
Interest Expense | (10,006) | (16,967) | (16,440) |
Loss on Debt Extinguishment | (4,079) | 0 | 0 |
Impairment of Investment | 0 | 0 | (20,098) |
Other Non-Operating Income (Expense), Net | 2,309 | 3,881 | (866) |
(LOSS) EARNINGS BEFORE INCOME TAX EXPENSE (BENEFIT) | (397,814) | 34,270 | 63,568 |
INCOME TAX (BENEFIT) EXPENSE | (131,902) | 6,171 | 12,915 |
NET (LOSS) EARNINGS | $ (265,912) | $ 28,099 | $ 50,653 |
Earnings Per Share [Abstract] | |||
EARNINGS PER SHARE (IN DOLLARS PER SHARE) | $ (7.85) | $ 0.83 | $ 1.50 |
EARNINGS PER SHARE ASSUMING DILUTION (IN DOLLARS PER SHARE) | $ (7.85) | $ 0.83 | $ 1.50 |
Lease and Retail Revenues | |||
REVENUES: | |||
Revenues | $ 1,577,809 | $ 1,608,832 | $ 1,540,800 |
COST OF REVENUES: | |||
Cost of goods and services sold | 540,583 | 559,232 | 533,974 |
Non-Retail Sales | |||
REVENUES: | |||
Revenues | 127,652 | 140,950 | 207,262 |
COST OF REVENUES: | |||
Cost of goods and services sold | 110,794 | 113,229 | 174,180 |
Franchise Royalties and Other Revenues | |||
REVENUES: | |||
Revenues | 28,212 | 33,432 | 44,815 |
Franchise Royalties And Other Revenues | |||
REVENUES: | |||
Revenues | $ 29,458 | $ 34,695 | $ 46,654 |
Consolidated and Combined Sta_2
Consolidated and Combined Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | |||
Net Income (Loss) Attributable to Parent | $ (265,912) | $ 28,099 | $ 50,653 |
Other Comprehensive (Loss) Income: | |||
Foreign Currency Translation Adjustment | (778) | 1,068 | (1,861) |
Total Other Comprehensive (Loss) Income | (778) | 1,068 | (1,861) |
Comprehensive (Loss) Income | $ (266,690) | $ 29,167 | $ 48,792 |
Consolidated and Combined Sta_3
Consolidated and Combined Statements of Shareholders' Equity - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Treasury Stock | Common Stock | Invested Capital | Invested CapitalCumulative Effect, Period of Adoption, Adjustment | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
Beginning Balance at Dec. 31, 2017 | $ 737,567 | $ (1,793) | $ 736,793 | $ (1,793) | $ 774 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Stock-Based Compensation | 14,187 | 14,187 | |||||||
Net decrease in Invested Capital | (16,844) | (16,844) | |||||||
Net Earnings | 50,653 | 50,653 | |||||||
Foreign Currency Translation Adjustment | (1,861) | (1,861) | |||||||
Ending Balance at Dec. 31, 2018 | 781,909 | $ 2,535 | 782,996 | $ 2,535 | (1,087) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Stock-Based Compensation | 12,696 | 12,696 | |||||||
Net decrease in Invested Capital | 11,474 | 11,474 | |||||||
Net Earnings | 28,099 | 28,099 | |||||||
Foreign Currency Translation Adjustment | 1,068 | 1,068 | |||||||
Ending Balance at Dec. 31, 2019 | 837,781 | 837,800 | (19) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Stock-Based Compensation | 24,682 | 23,570 | $ 1,112 | ||||||
Net decrease in Invested Capital | 120,779 | 120,779 | |||||||
Net Earnings | (265,912) | (267,793) | $ 1,881 | ||||||
Transfer of Invested Capital to Additional-Paid-in-Capital | (714,356) | 714,356 | |||||||
Issuance of Common Stock | $ 16,921 | (16,921) | |||||||
Issuance of Shares under Equity Plans (in shares) | $ (895) | ||||||||
Issuance of Shares under Equity Plans | (5,227) | (15,977) | 629 | 10,121 | |||||
Foreign Currency Translation Adjustment | $ (778) | (778) | |||||||
Treasury Stock (in shares) at Dec. 31, 2020 | (894,660) | ||||||||
Ending Balance at Dec. 31, 2020 | $ 711,325 | $ (15,977) | $ 17,550 | $ 0 | $ 708,668 | $ 1,881 | $ (797) |
Consolidated and Combined Sta_4
Consolidated and Combined Statements of Shareholders' Equity (Parenthetical) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201602Member | us-gaap:AccountingStandardsUpdate201409Member |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
OPERATING ACTIVITIES: | |||
Net Income (Loss) Attributable to Parent | $ (265,912) | $ 28,099 | $ 50,653 |
Adjustments to Reconcile Net Earnings to Net Cash Provided by Operating Activities: | |||
Depreciation of Lease Merchandise | 503,593 | 528,382 | 509,351 |
Other Depreciation and Amortization | 67,667 | 73,582 | 64,618 |
Accounts Receivable Provision | 30,753 | 46,721 | 40,128 |
Stock-Based Compensation | 24,442 | 13,486 | 15,517 |
Deferred Income Taxes | (119,193) | 18,226 | 10,042 |
Impairment of Assets | 477,854 | 30,344 | 20,098 |
Non-Cash Lease Expense | 95,864 | 110,615 | 0 |
Other Changes, Net | 10,056 | (3,917) | 362 |
Changes in Operating Assets and Liabilities, Net of Effects of Acquisitions and Dispositions: | |||
Additions to Lease Merchandise | (619,397) | (734,641) | (809,672) |
Book Value of Lease Merchandise Sold or Disposed | 203,761 | 236,627 | 271,524 |
Accounts Receivable | (27,914) | (39,881) | (26,733) |
Prepaid Expenses and Other Assets | (4,303) | (18,151) | 10,122 |
Income Tax Receivable | 4,834 | 6,610 | 49,463 |
Operating Lease Right-of-Use Assets and Liabilities | (110,295) | (120,287) | 0 |
Accounts Payable and Accrued Expenses | 63,261 | 9,435 | (16,712) |
Customer Deposits and Advance Payments | 20,698 | 727 | (2,225) |
Cash Provided by Operating Activities | 355,769 | 185,977 | 186,536 |
INVESTING ACTIVITIES: | |||
Proceeds from Investments | 0 | 1,212 | 3,066 |
Purchases of Property, Plant & Equipment | (69,037) | (79,932) | (67,099) |
Proceeds from Property, Plant, and Equipment | 8,430 | 14,005 | 6,989 |
Acquisitions of Businesses and Customer Agreements, Net of Cash Acquired | (14,793) | (14,285) | (189,901) |
Proceeds from Dispositions of Businesses and Customer Agreements, Net of Cash Disposed | 359 | 2,813 | 942 |
Cash Used in Investing Activities | (75,041) | (76,187) | (246,003) |
FINANCING ACTIVITIES: | |||
(Repayments) Borrowings on Revolving Facility, Net | (16,000) | ||
(Repayments) Borrowings on Revolving Facility, Net | 0 | 16,000 | |
Proceeds from Debt | 5,625 | 0 | 137,500 |
Repayments on Debt and Related Fees | (347,960) | (68,531) | (97,583) |
Shares Withheld for Tax Payments | (5,227) | 0 | 0 |
Debt Issuance Costs | (3,193) | (40) | (535) |
Other Transfers From (To) Former Parent | 97,344 | 11,428 | (17,513) |
Cash (Used in) Provided by Financing Activities | (253,411) | (73,143) | 37,869 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 33 | 120 | (156) |
Increase (Decrease) in Cash and Cash Equivalents | 27,350 | 36,767 | (21,754) |
Cash and Cash Equivalents at Beginning of Year | 48,773 | 12,006 | 33,760 |
Cash and Cash Equivalents at End of Year | 76,123 | 48,773 | 12,006 |
Net Cash Paid (Received) During the Year: | |||
Interest | 10,418 | 16,460 | 16,243 |
Income Taxes | $ (64,013) | $ (4,554) | $ (46,272) |
Business and Summary of Signifi
Business and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Business and Summary of Significant Accounting Policies | BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Spin-off Transaction On October 16, 2020, management of Aaron’s, Inc. finalized the formation of a new holding company structure in anticipation of the separation and distribution transaction described below. Under the holding company structure, Aaron’s, Inc. became a direct, wholly owned subsidiary of a newly formed company, Aaron’s Holdings Company, Inc. Aaron's, Inc. thereafter was converted to a limited liability company ("Aaron’s, LLC"). Upon completion of the holding company formation, Aaron’s Holdings Company, Inc. became the publicly traded parent company of the Progressive Leasing, Aaron’s Business, and Vive segments. On November 30, 2020 (the "separation and distribution date"), Aaron's Holdings Company, Inc. completed the previously announced separation of the Aaron's Business segment from its Progressive Leasing and Vive segments and changed its name to PROG Holdings, Inc. (referred to herein as "PROG Holdings"). The separation of the Aaron's Business segment was effected through a distribution (the "separation", the "separation and distribution", or the "spin-off transaction") of all outstanding shares of common stock of a newly formed company called The Aaron's Company, Inc. ("Aaron's", "The Aaron's Company" or the "Company"), a Georgia corporation, to the PROG Holdings shareholders of record as of November 27, 2020. Upon the separation and distribution, Aaron's, LLC became a wholly-owned subsidiary of The Aaron's Company. Shareholders of PROG Holdings received one share of The Aaron's Company for every two shares of PROG Holdings' common stock. Upon completion of the separation and distribution transaction, The Aaron's Company, Inc. became an independent, publicly traded company under the ticker "AAN" on the New York Stock Exchange ("NYSE"). Unless the context otherwise requires or we specifically indicate otherwise, references to "we," "us," "our," "our Company," and "the Company" refer to The Aaron's Company, Inc., which holds, directly or indirectly, the assets and liabilities historically associated with the historical Aaron’s Business segment (the "Aaron’s Business") prior to the separation and distribution date. References to "the Company", "Aaron's, Inc.", or "Aaron's Holdings Company, Inc." for periods prior to the separation and distribution date refer to transactions, events, and obligations of Aaron's, Inc. which took place prior to the separation and distribution. Historical amounts herein include revenues and costs directly attributable to The Aaron's Company, Inc. and an allocation of expenses related to certain PROG Holdings' corporate functions prior to the separation and distribution date. We describe in these footnotes the business held by us after the separation as if it were a standalone business for all historical periods described. However, we were not a standalone separate entity with independently conducted operations before the separation. See Note 12 to these consolidated and combined financial statements for additional information regarding the modification of stock-based awards resulting from the separation and distribution. Business Overview Description of Business Aaron's is a leading, technology-enabled, omni-channel provider of lease-to-own ("LTO") and purchase solutions generally focused on serving the large, credit-challenged segment of the population. Through our portfolio of approximately 1,300 stores and our Aarons.com e-commerce platform, we provide consumers with LTO and purchase solutions for the products they need and want, including furniture, appliances, electronics, computers and a variety of other products and accessories. In addition, the Company includes the operations of Woodhaven Furniture Industries ("Woodhaven"), which manufactures and supplies the majority of the bedding and a significant portion of the upholstered furniture leased and sold in company-operated and franchised stores. The following table presents store count by ownership type: Stores at December 31 (Unaudited) 2020 2019 2018 Company-operated Stores 1,092 1,167 1,312 Franchised Stores 248 335 377 Systemwide Stores 1,340 1,502 1,689 Basis of Presentation The financial statements for periods prior to and through the date of the separation and distribution, November 30, 2020, were prepared on a combined standalone basis and were derived from the consolidated financial statements and accounting records of PROG Holdings. The financial statements for the period from December 1, 2020 through December 31, 2020 are consolidated financial statements of the Company and its subsidiaries, each of which is wholly-owned, and is based on the financial position and results of operations of the Company as a standalone company. Intercompany balances and transactions between consolidated entities have been eliminated. These consolidated and combined financial statements reflect the historical results of operations, financial position and cash flows of the Company in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). The historical results of operations, financial position and cash flows of the Company presented in these consolidated and combined financial statements may not be indicative of what they would have been had the Company been an independent standalone entity, nor are they necessarily indicative of the Company's future results of operations, financial position and cash flows. The combined financial statements prepared prior to and through November 30, 2020 include all revenues and costs directly attributable to the Company and an allocation of expenses related to certain corporate functions. These costs include executive management, finance, treasury, tax, audit, legal, information technology, human resources and risk management functions and the related benefit cost associated with such functions, including stock-based compensation. These expenses have been allocated to the Company based on direct usage or benefit where specifically identifiable, with the remaining expenses allocated primarily on a pro rata basis using an applicable measure of revenues, headcount or other relevant measures. The Company considers these allocations to be a reasonable reflection of the utilization of services or the benefit received. See Note 14 to these consolidated and combined financial statements for further information regarding the Company’s related party transactions between the Company and PROG Holdings impacting the consolidated and combined financial statements herein. The preparation of the Company's consolidated and combined financial statements requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates. Generally, actual experience has been consistent with management's prior estimates and assumptions. However, as described above, the extent to which the COVID-19 pandemic and resulting measures taken by the Company will impact the Company's business will depend on future developments, which are highly uncertain and cannot be precisely predicted at this time. In many cases, management's estimates and assumptions are highly dependent on estimates of future developments and may change significantly in the future due to unforeseen direct and indirect impacts of the COVID-19 pandemic. Significant Accounting Policies Revenue Recognition The Company provides lease merchandise, consisting of furniture, appliances, electronics, computers and a variety of other products and accessories to its customers for lease under certain terms agreed to by the customer. Our stores and e-commerce platform offer leases with flexible terms that can be renewed monthly up to 12, 18 or 24 months. The customer has the right to acquire ownership either through an early purchase option or through payment of all required lease payments. Our store-based operations also offer customers the option to obtain a membership in the Aaron’s Club Program (the "Club Program"). The benefits to customers of the Club Program are separated into three general categories: (a) product protection benefits; (b) health & wellness discounts; and (c) dining, shopping and consumer savings. Lease agreements and Aaron's Club Program memberships are cancelable at any time by either party without penalty, and as such, we consider these offerings to be to be month-to-month arrangements. The Company also earns revenue from the sale of merchandise to customers and its franchisees, and earns ongoing revenue from its franchisees in the form of royalties and through advertising efforts that benefit the franchisees. See Note 6 to these consolidated and combined financial statements for further information regarding the Company's revenue recognition policies and disclosures. Lease Merchandise The Company’s lease merchandise is recorded at the lower of depreciated cost or net realizable value. The cost of merchandise manufactured by our Woodhaven operations is recorded at cost and includes overhead from production facilities, shipping costs and warehousing costs. The Company begins depreciating merchandise at the earlier of 12 months and one day from its purchase of the merchandise or when the item is leased to customers. Lease merchandise depreciates to a 0% salvage value over the lease agreement period when on lease, generally 12 to 24 months, and generally 36 months when not on lease. Depreciation is accelerated upon early payout. The following is a summary of lease merchandise, net of accumulated depreciation and allowances: December 31, (In Thousands) 2020 2019 Merchandise on Lease, net of Accumulated Depreciation and Allowances $ 473,964 $ 504,979 Merchandise Not on Lease, net of Accumulated Depreciation and Allowances 1 223,271 276,619 Lease Merchandise, net of Accumulated Depreciation and Allowances 2 $ 697,235 $ 781,598 1 Includes Woodhaven raw materials and work-in-process inventory that has been classified within lease merchandise in the consolidated and combined balance sheets of $10.4 million and $14.0 million as of December 31, 2020 and 2019, respectively. 2 General and administrative overhead costs capitalized into the cost of lease merchandise were $43.5 million, $48.7 million, and $45.8 million for the years ended December 31, 2020, 2019 and 2018, respectively. Capitalized overhead costs remaining in lease merchandise were $45.2 million and $47.5 million as of December 31, 2020 and 2019, respectively. The Company’s policies require weekly merchandise counts for its store-based operations, which include write-offs for unsalable, damaged, or missing merchandise inventories. In addition to monthly cycle counting, full physical inventories are generally taken at the fulfillment and manufacturing facilities annually and appropriate provisions are made for missing, damaged and unsalable merchandise. In addition, the Company monitors merchandise levels and mix by division, store, and fulfillment center, as well as the average age of merchandise on hand. If obsolete merchandise cannot be returned to vendors, its carrying amount is adjusted to its net realizable value or written off. Generally, all merchandise not on lease is available for lease or sale. On a monthly basis, all damaged, lost or unsalable merchandise identified is written off. The Company records a provision for write-offs using the allowance method. The allowance for lease merchandise write-offs estimates the merchandise losses incurred but not yet identified by management as of the end of the accounting period based primarily on historical write-off experience. Other qualitative factors are considered in estimating the allowance, such as current and forecasted business trends including, but not limited to, the potential unfavorable impacts of the COVID-19 pandemic on our business. Given the significant uncertainty regarding the impacts of the COVID-19 pandemic on our businesses, a high level of estimation was involved in determining the allowance as of December 31, 2020; therefore, actual lease merchandise write-offs could differ materially from the allowance. The provision for write-offs is included in provision for lease merchandise write-offs in the accompanying consolidated and combined statements of earnings. The Company writes off lease merchandise on lease agreements that are 60 days or more past due on pre-determined dates twice monthly. The following table shows the components of the allowance for lease merchandise write-offs, which is included within lease merchandise, net within the consolidated and combined balance sheets: Year Ended December 31, (In Thousands) 2020 2019 2018 Beginning Balance $ 13,823 $ 10,910 $ 8,987 Merchandise Written off, net of Recoveries (65,869) (94,990) (67,047) Provision for Write-offs 63,645 97,903 68,970 Ending Balance $ 11,599 $ 13,823 $ 10,910 Retail and Non-Retail Cost of Sales Included in cost of lease and retail revenues, as well as non-retail cost of sales, is the net book value of merchandise sold via retail and non-retail sales, primarily using specific identification. Shipping and Handling Costs Shipping and handling costs of $64.2 million, $74.3 million and $75.2 million were incurred for the years ended December 31, 2020, 2019 and 2018, respectively. These costs are primarily classified within other operating expenses, net in the accompanying consolidated and combined statements of earnings, and to a lesser extent, capitalized into the cost of lease merchandise and subsequently depreciated or recognized as cost of retail sales. Advertising The Company expenses advertising costs as incurred. Advertising production costs are initially recognized as a prepaid advertising asset and are expensed when an advertisement appears for the first time. Total advertising costs were $40.2 million, $37.1 million and $33.3 million for the years ended December 31, 2020, 2019 and 2018, respectively, and are classified within other operating expenses, net in the consolidated and combined statements of earnings. These advertising costs are shown net of cooperative advertising considerations received from vendors, which represents reimbursement of specific, identifiable and incremental costs incurred in selling those vendors’ products. The amount of cooperative advertising consideration recorded as a reduction of such advertising costs was $21.8 million, $27.7 million and $28.3 million for the years ended December 31, 2020, 2019 and 2018, respectively. The prepaid advertising asset was $4.3 million and $0.3 million at December 31, 2020 and 2019, respectively, and is reported within prepaid expenses and other assets on the consolidated and combined balance sheets. Stock-Based Compensation Stock-based compensation expense in prior years and until the effective date of the separation and distribution on November 30, 2020 was allocated to The Aaron's Company based on the awards and terms previously granted to its employees under the PROG Holdings stock-based compensation plans and includes an allocation of PROG Holdings' corporate employee stock-based compensation expenses. The Aaron's Company has stock-based employee compensation plans adopted in connection with the separation and distribution in which certain Company employees are participants, which are more fully described in Note 12 to these consolidated and combined financial statements. For stock awards granted under such plans, management estimates the fair value for the options granted on the grant date using a Black-Scholes-Merton option-pricing model. The fair value of each share of restricted stock units ("RSUs"), restricted stock awards ("RSAs"), and performance share units ("PSUs") awarded is equal to the market value of a share of the Company's common stock on the grant date. Management estimates the fair value of awards issued under the Company's employee stock purchase plan ("ESPP") using a series of Black-Scholes-Merton pricing models that consider the components of the "lookback" feature of the plan, including the underlying stock, call option, and put option. The design of awards issued under the Company's ESPP is more fully described in Note 12 to these consolidated and combined financial statements. Retirement-Related Equity Modifications In connection with the completion of the separation and distribution on November 30, 2020, PROG Holdings and the Company entered into a Transition Agreement (the "Transition Agreement") with the Chief Executive Officer of Aaron's Holdings Company, Inc. (the "CEO"), pursuant to which the CEO would retire and transition to become the non-employee Chairman of the Board of Directors of the Company effective November 30, 2020. The Transition Agreement provided that all unvested stock options, restricted stock awards and performance share units granted to the CEO in prior periods become 100% vested as promptly as practicable following the completion of the separation and distribution. The Company concluded that the terms of this Transition Agreement resulted in award modifications under ASC 718, Compensation - Stock Compensation ( "ASC 718"), as both the fair value and vesting conditions of the awards were considered modified. The modifications resulted in incremental compensation expense allocated to the Company of $11.0 million, which was recognized as a component of retirement charges in the consolidated and combined statements of earnings for the year ended December 31, 2020. See Note 12 to these consolidated and combined financial statements for additional information regarding these modifications. Separation Costs Separation costs include allocated expenses prior to November 30, 2020 and actual expenses after November 30, 2020 associated with the separation and distribution, including personnel-related costs and incremental stock-based compensation expense associated with the conversion and modification of unvested and unexercised equity awards related to Company employees, as well as an allocation of similar expenses related to PROG Holdings' corporate and shared function employees. See Note 12 to these consolidated and combined financial statements for additional information regarding the modification of awards that were converted concurrent with the separation and distribution. Separation costs also include one-time expenses incurred by the Company in order to operate as an independent, standalone public entity after completion of the separation and distribution. Income Taxes The Company and its subsidiaries file U.S. federal consolidated income tax returns in the United States, and separate legal entities file in various state and foreign jurisdictions. In all periods presented, the income tax provision has been computed for the entities comprising the Company on a standalone, separate return basis as if the Company were a separate taxpayer. The provision for income taxes is determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. Income taxes as presented attribute deferred income taxes of the Company's standalone consolidated and combined financial statements in a manner that is systematic, rational and consistent with the asset and liability method. The provision for income taxes represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from differences between the financial and tax basis of the Company’s assets and liabilities and are adjusted for changes in tax rates and tax laws when such changes are enacted. The Company's largest temporary differences arise principally from the use of accelerated depreciation methods on lease merchandise for tax purposes. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. The Company recognizes uncertain tax positions in the consolidated and combined financial statements when it is more likely than not that the tax position will be sustained upon examination. Uncertain tax positions are measured based on the probabilities that the uncertain tax position will be realized upon final settlement. See further details on income taxes within Note 9 to these consolidated and combined financial statements. (Loss) Earnings Per Share (Loss) earnings per share is computed by dividing net (loss) earnings by the weighted average number of shares of common stock outstanding during the period. The computation of (loss) earnings per share assuming dilution includes the dilutive effect of stock options, RSUs, RSAs, PSUs and awards issuable under the Company's ESPP (collectively, "share-based awards") as determined under the treasury stock method, unless the inclusion of such awards would be anti-dilutive. The Company's basic earnings per share calculations for the periods prior to the separation and distribution assumes that the weighted average number of common shares outstanding was 33,841,624, which is the number of shares distributed to shareholders on the separation and distribution date, November 30, 2020. The same number of shares was used in the calculation of diluted earnings per share for the periods prior to the separation and distribution, as there were no equity awards of The Aaron's Company, Inc. outstanding prior to the distribution date. The following table shows the calculation of weighted-average shares outstanding assuming dilution: Year Ended December 31, (Shares In Thousands) 2020 2019 2018 Weighted Average Shares Outstanding 33,877 33,842 33,842 Dilutive Effect of Share-Based Awards 1 — — — Weighted Average Shares Outstanding Assuming Dilution 33,877 33,842 33,842 1 There was no dilutive effect to the (loss) earnings per common share for the year ended December 31, 2020 due to the net loss incurred in the year-to-date period. Cash and Cash Equivalents The Company classifies as cash equivalents any highly liquid investments that have maturity dates of three months or less at the time they are purchased. The Company maintains its cash and cash equivalents at various banks. Bank balances may exceed coverage provided by the Federal Deposit Insurance Corporation ("FDIC"). However, due to the size and strength of the banks in which balances that exceed the FDIC coverage are held, any exposure to loss is believed to be minimal. Cash and cash equivalents also includes amounts in transit due from financial institutions related to credit card and debit card transactions, which generally settle within three business days from the original transaction. Investments At December 31, 2017, the Company maintained an investment classified as held-to-maturity securities in PerfectHome, a rent-to-own company operating in the United Kingdom, of £15.1 million ($20.4 million). During the second quarter of 2018, PerfectHome's liquidity deteriorated significantly due to continuing operating losses and the senior lender's decision to no longer provide additional funding under a secured revolving debt agreement resulting from PerfectHome's default of certain covenants. In July 2018, PerfectHome entered into the United Kingdom’s insolvency process and was subsequently acquired by the senior lender. The Company recorded a full impairment of the PerfectHome investment of $20.1 million during the second quarter of 2018 which is classified as an impairment of investment in the consolidated and combined statements of earnings. The Company has not received any repayments since the impairment charge and does not believe it will receive any further payments on its subordinated secured notes. Accounts Receivable Accounts receivable consist primarily of receivables due from customers on lease agreements, corporate receivables incurred during the normal course of business (primarily for vendor consideration and real estate leasing activities) and franchisee obligations. Accounts receivable, net of allowances, consist of the following: December 31, (In Thousands) 2020 2019 Customers $ 8,399 $ 9,820 Corporate 12,771 14,028 Franchisee 12,820 13,231 $ 33,990 $ 37,079 The Company maintains an accounts receivable allowance, under which the Company's policy is to record a provision for returns and uncollectible contractually due renewal payments based on historical collection experience, which is recognized as a reduction of lease and retail revenues within the consolidated and combined statements of earnings. Other qualitative factors are considered in estimating the allowance, such as current and forecasted business trends including, but not limited to, the potential unfavorable impacts of the COVID-19 pandemic on our business. The Company writes off lease receivables that are 60 days or more past due on pre-determined dates twice monthly. The Company also maintains an allowance for outstanding franchisee accounts receivable. The Company's policy is to estimate a specific allowance on accounts receivable to estimate future losses related to certain franchisees that are deemed higher risk of non-payment and a general allowance based on historical losses as well as the Company's assessment of the financial health of all other franchisees. The estimated allowance on accounts receivable includes consideration of broad macroeconomic trends, such as the potential unfavorable impacts of the COVID-19 pandemic on the franchisees' ability to satisfy their obligations. The provision for uncollectible franchisee accounts receivable is recorded as bad debt expense in other operating expenses, net within the consolidated and combined statements of earnings. Given the significant uncertainty regarding the impacts of the COVID-19 pandemic on our business, actual accounts receivable write-offs could differ materially from the allowance. The following table shows the components of the accounts receivable allowance: Year Ended December 31, (In Thousands) 2020 2019 2018 Beginning Balance $ 10,720 $ 9,546 $ 6,992 Accounts Written Off, net of Recoveries (33,860) (45,547) (37,574) Accounts Receivable Provision 30,753 46,721 40,128 Ending Balance $ 7,613 $ 10,720 $ 9,546 Property, Plant and Equipment The Company records property, plant and equipment at cost. Depreciation and amortization are computed on a straight-line basis over the estimated useful lives of the respective assets, which range from five one Costs incurred to develop software for internal use are capitalized and amortized over the estimated useful life of the software, which ranges from five ten Gains and losses related to dispositions and retirements are recognized as incurred. Maintenance and repairs are also expensed as incurred, and leasehold improvements are capitalized and amortized over the lesser of the expected lease term or the asset's useful life. Depreciation expense for property, plant and equipment is classified within other operating expenses, net in the accompanying consolidated and combined statements of earnings and was $60.9 million, $60.3 million and $53.9 million during the years ended December 31, 2020, 2019 and 2018, respectively. Amortization of previously capitalized internal use software development costs, which is a component of depreciation expense for property, plant and equipment, was $17.4 million, $15.7 million and $13.5 million during the years ended December 31, 2020, 2019 and 2018, respectively. Management assesses its long-lived assets other than goodwill for impairment whenever facts and circumstances indicate that the carrying amount may not be fully recoverable. If it is determined that the carrying amount of an asset is not recoverable, management compares the carrying amount of the asset to its fair value as estimated using discounted expected future cash flows, market values or replacement values for similar assets. The amount by which the carrying amount exceeds the fair value of the asset, if any, is recognized as an impairment loss. Prepaid Expenses and Other Assets Prepaid expenses and other assets consist of the following: December 31, (In Thousands) 2020 2019 Prepaid Expenses $ 25,882 $ 28,975 Insurance Related Assets 27,960 26,393 Company-Owned Life Insurance 16,223 14,576 Assets Held for Sale 8,956 10,131 Deferred Tax Assets 7,014 3,439 Other Assets 3,860 8,867 $ 89,895 $ 92,381 Assets Held for Sale Certain properties, consisting of parcels of land and commercial buildings, met the held for sale classification criteria as of December 31, 2020 and 2019. Assets held for sale are recorded at the lower of their carrying value or fair value less estimated cost to sell and are classified within prepaid expenses and other assets in the consolidated and combined balance sheets. Depreciation is suspended on assets upon classification as held for sale. The carrying amount of the properties held for sale as of December 31, 2020 and 2019 was $9.0 million and $10.1 million, respectively. Management estimated the fair values of real estate properties using the market values for similar properties. These properties are considered Level 2 assets as defined below. Charges of $0.2 million and $1.2 million were recorded within restructuring expenses, net during the year ended December 31, 2020 and 2019, respectively, with insignificant charges recorded during 2018. These charges related to the impairment of store properties that the Company decided to close under its restructuring programs as described in Note 11. Impairment charges were also recorded on assets held for sale that were not part of a restructuring program of $0.2 million during the year ended December 31, 2018 and are included in other operating expenses, net within the consolidated and combined statements of earnings with insignificant charges recorded during 2020 and 2019. These charges related to the impairment of various parcels of land and buildings that were not part of a restructuring program and that the Company decided not to utilize for future expansion. Net gains of $1.7 million were recognized during the year ended December 31, 2019 related to the sales of four former company-operated store properties for a total selling price of $2.6 million. The sales proceeds were recorded in proceeds from sales of property, plant and equipment in the consolidated and combined statements of cash flows and the net gains were recorded as a reduction to other operating expenses, net in the consolidated and combined statements of earnings. Other than those mentioned above, gains and losses related to the disposal of assets held for sale were not significant for the years ended December 31, 2020, 2019, and 2018, respectively. Goodwill The Company’s goodwill is not amortized but is subject to an impairment test at the reporting unit level annually as of October 1 and more frequently if events or circumstances indicate that an impairment may have occurred. An interim goodwill impairment test is required if the Company believes it is more likely than not that the carrying amount of one or more reporting units exceeds the reporting units' fair value. The Company concluded that the need for an interim goodwill impairment test was triggered as of March 31, 2020. Factors that led to this conclusion included: (i) a significant decline in the Aaron's, Inc. stock price and market capitalization in March 2020; (ii) the temporary closure of all company-operated store showrooms due to the COVID-19 pandemic, which impacted our financial results and was expected to adversely impact future financial results; (iii) the significant uncertainty with regard to the short-term and long-term impacts that macroeconomic conditions arising from the COVID-19 pandemic and related government emergency and executive orders would have on the financial health of our customers and franchisees; and (iv) consideration given to the amount by which the Aaron's reporting unit's fair value exceeded the carrying value from the October 1, 2019 annual goodwill impairment test. As of March 31, 2020, management of Aaron's, Inc. determined its existing goodwill was fully impaired and recorded a goodwill impairment loss of $446.9 million during the three months ended March 31, 2020. Management engaged the assistance of a third-party valuation firm to perform the interim goodwill impairment test, which entailed an assessment of the Aaron's reporting unit’s fair value relative to the carrying value that was derived using a combination of both income and market approaches and performing a market capitali |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | ACQUISITIONS During the years ended December 31, 2020, 2019 and 2018, cash payments, net of cash acquired, related to the acquisitions of businesses and contracts were $14.8 million, $14.3 million and $189.9 million, respectively. Cash payments made during the years ended December 31, 2020 and 2019 principally relate to the acquisition of 15 and 18 franchised stores, respectively. Significant assets acquired in these acquisitions were similar in nature to the assets acquired in the 2018 franchisee acquisitions described below and included lease merchandise and property, plant and equipment of the acquired stores, as well as intangible assets and goodwill. Cash payments made during the year ended December 31, 2018 principally relate to the acquisitions of franchised stores described below. The franchisee acquisitions have been accounted for as business combinations and the results of operations of the acquired businesses are included in the Company’s results of operations from their dates of acquisition. The effect of the Company’s acquisitions of businesses and contracts to the consolidated and combined financial statements, other than the specific 2018 franchisee acquisitions described below, was not significant for the years ended December 31, 2020, 2019 and 2018. Franchisee Acquisitions - 2018 During 2018, the Company acquired 152 franchised stores operated by franchisees for an aggregate purchase price of $190.2 million, exclusive of the settlement of pre-existing receivables and post-closing working capital settlements. The acquired operations generated revenues of $176.8 million, $183.3 million and $72.0 million and earnings before income taxes of $11.8 million, $3.3 million and $0.8 million during the years ended December 31, 2020, 2019, and 2018, respectively, which are included in our consolidated and combined statements of earnings for the respective periods. The results of the acquired operations were impacted by acquisition-related transaction and transition costs, amortization expense of the various intangible assets recorded from the acquisitions, and restructuring charges incurred under restructuring programs associated with the closure of a number of the acquired stores. The revenues and earnings before income taxes of the acquired operations discussed above have not been adjusted for estimated non-retail sales, franchise royalties and fees, and related expenses that the Company could have generated as revenue and expenses to the Company from the franchisees during the years ended December 31, 2020, 2019, and 2018 had the transaction not been completed. The 2018 acquisitions are benefiting the Company's omni-channel platform through added scale, strengthening its presence in certain geographic markets, and enhancing operational control, including compliance, and enabling the Company to execute its business transformation initiatives on a broader scale. The following table presents summaries of the fair value of the assets acquired and liabilities assumed in the franchisee acquisitions as of the respective acquisition dates: (in Thousands) Final Amounts Recognized as of Acquisition Dates Purchase Price $ 190,167 Add: Settlement of Accounts Receivable from Pre-existing Relationship 5,405 Add: Working Capital Adjustments 155 Aggregate Consideration Transferred 195,727 Estimated Fair Value of Identifiable Assets Acquired and Liabilities Assumed Cash and Cash Equivalents 50 Lease Merchandise 59,616 Property, Plant and Equipment 5,568 Operating Lease Right-of-Use Assets 1 4,338 Other Intangibles 2 23,322 Prepaid Expenses and Other Assets 1,241 Total Identifiable Assets Acquired 94,135 Accounts Payable and Accrued Expenses (977) Customer Deposits and Advance Payments (5,156) Total Liabilities Assumed (6,133) Goodwill 3 107,725 Net Assets Acquired (excluding Goodwill) $ 88,002 1 As of the respective acquisition dates, the Company had not yet adopted ASC 842. As such, there were no operating lease right-of-use assets or operating lease liabilities recognized within the combined financial statements at the time of acquisition. The Company recognized operating lease right-of-use assets and operating lease liabilities for the acquired stores as part of the transition to ASC 842 on January 1, 2019. We finalized our valuation of assumed favorable and unfavorable real estate operating leases during 2019, which also impacted the valuation of the customer lease contract and customer relationship intangible assets. As a result, measurement period adjustments of $4.3 million were recorded as an increase to operating lease right-of-use assets, with a corresponding reduction of $1.2 million within other intangibles, net in the Company's consolidated and combined balance sheets. The adjustment also resulted in the recognition of immaterial adjustments to other operating expenses, net and restructuring expenses, net during 2019 to recognize expense that would have been recorded in prior periods had the favorable lease and intangible assets been recorded as of the acquisition date. 2 Identifiable intangible assets are further disaggregated in the table set forth below. 3 The total goodwill recognized in conjunction with the franchisee acquisitions is expected to be deductible for tax purposes. The purchase price exceeded the fair value of the net assets acquired, which resulted in the recognition of goodwill, primarily due to synergies created from the expected benefits to the Company’s omni-channel platform, implementation of the Company’s operational capabilities, and control of the Company’s brand name in the acquired geographic markets. Goodwill also includes certain other intangible assets that do not qualify for separate recognition, such as an assembled workforce. As discussed in further detail within Note 1, the Company determined that its then existing goodwill was fully impaired and recorded a goodwill impairment loss of $446.9 million during the three months ended March 31, 2020. The intangible assets attributable to the franchisee acquisitions are comprised of the following: Fair Value (in thousands) Weighted Average Useful Life (in years) Non-compete Agreements $ 1,872 3.0 Customer Contracts 7,457 1.0 Customer Relationships 9,330 3.0 Reacquired Franchise Rights 4,663 3.9 Total Acquired Intangible Assets 1 $ 23,322 1 Acquired definite-lived intangible assets have a total weighted average life of 2.5 years. The Company incurred $1.7 million of acquisition-related costs in connection with the franchisee acquisitions, substantially all of which were incurred during 2018. These costs were included in other operating expenses, net in the consolidated and combined statements of earnings. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | GOODWILL AND INTANGIBLE ASSETS Goodwill The following table provides information related to the carrying amount of the Company's goodwill: (In Thousands) Balance at January 1, 2019 $ 444,369 Acquisitions 6,526 Disposals, Currency Translation and Other Adjustments (362) Acquisition Accounting Adjustments (2,752) Balance at December 31, 2019 $ 447,781 Acquisitions 7,576 Disposals, Currency Translation and Other Adjustments (941) Acquisition Accounting Adjustments 46 Impairment Loss (446,893) Balance at December 31, 2020 $ 7,569 See further details regarding the full impairment of the Company's goodwill recorded during the first quarter of 2020 in Note 1. Definite-Lived Intangible Assets The following table summarizes information related to the Company's definite-lived intangible assets at December 31: 2020 2019 (In Thousands) Gross Accumulated Net Gross Accumulated Net Customer Relationships $ 10,476 $ (7,706) $ 2,770 $ 10,478 $ (4,783) $ 5,695 Reacquired Franchise Rights 7,421 (3,429) 3,992 8,428 (3,307) 5,121 Non-Compete Agreements 3,633 (2,759) 874 4,398 (2,488) 1,910 Customer Lease Contracts 690 (155) 535 804 (503) 301 Expanded Customer Base 1,807 (881) 926 1,720 (513) 1,207 Total $ 24,027 $ (14,930) $ 9,097 $ 25,828 $ (11,594) $ 14,234 Total amortization expense of the Company's definite-lived intangible assets included in other operating expenses, net in the accompanying consolidated and combined statements of earnings was $6.8 million, $13.3 million and $10.7 million during the years ended December 31, 2020, 2019 and 2018, respectively. As of December 31, 2020, estimated future amortization expense for the next five years related to the Company's definite-lived intangible assets is as follows: (In Thousands) 2021 $ 5,100 2022 1,752 2023 1,086 2024 553 2025 367 |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | FAIR VALUE MEASUREMENT Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table summarizes financial liabilities measured at fair value on a recurring basis: December 31, 2020 December 31, 2019 (In Thousands) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Deferred Compensation Liability $ — $ (10,450) $ — $ — $ (11,048) $ — The Company maintains The Aaron's Company, Inc. Deferred Compensation Plan as described in Note 13 to these consolidated and combined financial statements. The liability represents benefits accrued for plan participants and is valued at the quoted market prices of the participants’ investment elections, which consist of equity and debt "mirror" funds. As such, the Company has classified the deferred compensation liability as a Level 2 liability, which is recorded in accounts payable and accrued expenses in the consolidated and combined balance sheets. Non-Financial Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis The following table summarizes non-financial assets measured at fair value on a nonrecurring basis: December 31, 2020 December 31, 2019 (In Thousands) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets Held for Sale $ — $ 8,956 $ — $ — $ 10,131 $ — Assets classified as held for sale are recorded at the lower of carrying value or fair value less estimated costs to sell, and any adjustment is recorded in other operating expenses, net or restructuring expenses, net (if the asset is a part of restructuring programs as described in Note 11) in the consolidated and combined statements of earnings. The highest and best use of the assets held for sale is as real estate land parcels for development or real estate properties for use or lease; however, the Company has chosen not to develop or use these properties, and plans to sell the properties to third parties as quickly as practicable. In addition to the non-financial assets measured at fair value on a nonrecurring basis as described above, the Company determined it would permanently cease using an administrative building in Kennesaw, Georgia, and recorded an impairment charge of $6.0 million to reduce the carrying value of the related right-of-use asset and property, plant and equipment to an estimated fair value of $3.7 million using a discounted cash flows method. Management determined future cash flows by estimating sublease rental rates with the assistance of a third-party specialist, which incorporated management's best estimates of current and future sublease market conditions due to a lack of comparable recent market activity. The future cash flows were discounted using a rate which incorporated both the time value of money over the remaining lease term as well as a risk premium to consider potential variability in the amount and timing of future sublease income. We have classified these amounts as Level 3 assets due to the lack of recent comparable transactions in active markets. Additionally, the Company’s goodwill is subject to an impairment test at the reporting unit level annually as of October 1, and more frequently if events or circumstances indicate that an impairment may have occurred. The Company concluded that the need for an interim goodwill impairment test was triggered as of March 31, 2020, which resulted in a goodwill impairment loss of $446.9 million during the three months ended March 31, 2020. The interim impairment test entailed an assessment of the Aaron's reporting unit’s fair value, which was derived using a combination of both income and market approaches relative to the carrying value that involved significant unobservable inputs (Level 3 inputs). Refer to Note 1 to these consolidated and combined financial statements for further details regarding the determination of the fair value of the Aaron's reporting unit. Certain Financial Assets and Liabilities Not Measured at Fair Value The following table summarizes the fair value of liabilities that are not measured at fair value in the consolidated and combined balance sheets, but for which the fair value is disclosed: December 31, 2020 December 31, 2019 (In Thousands) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Fixed-Rate Long Term Debt 1 $ — $ — $ — $ — $ (123,580) $ — 1 As discussed in Note 8 to these consolidated and combined financial statements, the Company repaid the remaining $60.0 million of outstanding principal related to the fixed-rate senior unsecured notes prior to the separation and distribution transaction. The fair value of fixed-rate long term debt at December 31, 2019 was estimated using the present value of underlying cash flows discounted at a current market yield for similar instruments. The carrying amount of fixed-rate long term debt was $120.0 million at December 31, 2019. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | PROPERTY, PLANT AND EQUIPMENT The following is a summary of the Company’s property, plant, and equipment: December 31, (In Thousands) 2020 2019 Land $ 14,588 $ 16,427 Buildings and Improvements 51,841 54,923 Leasehold Improvements and Signs 77,278 75,762 Vehicles 80,847 68,328 Fixtures and Equipment 142,875 147,277 Software - Internal-Use 134,334 121,075 Assets Under Finance Leases 1,156 2,690 Construction in Progress 8,014 4,483 510,933 490,965 Less: Accumulated Depreciation and Amortization 1 (310,563) (283,664) $ 200,370 $ 207,301 1 Accumulated amortization of internal-use software development costs amounted to $87.1 million and $70.9 million as of December 31, 2020 and 2019, respectively. Depreciation expense on assets recorded under finance leases is included in other operating expenses, net and was $0.6 million, $1.5 million and $1.9 million for the years ended December 31, 2020, 2019 and 2018, respectively. Finance leases as of |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | REVENUE RECOGNITION The following table disaggregates revenue by source: Year Ended December 31, (In Thousands) 2020 2019 2018 Lease Revenues and Fees $ 1,530,464 $ 1,570,358 $ 1,509,529 Retail Sales 47,345 38,474 31,271 Non-Retail Sales 127,652 140,950 207,262 Franchise Royalties and Fees 28,212 33,432 44,815 Other 1,246 1,263 1,839 Total 1 $ 1,734,919 $ 1,784,477 $ 1,794,716 1 Includes revenues from Canadian operations of $21.7 million, $24.7 million, and $21.3 million during the years ended December 31, 2020, 2019, and 2018, which are primarily lease revenues and fees. Lease Revenues and Fees The Company provides merchandise, consisting primarily of furniture, home appliances, electronics and accessories to its customers for lease under certain terms agreed to by the customer. The Company’s stores and its e-commerce platform offer leases with flexible terms that can be renewed monthly up to 12, 18 or 24 months. The Company does not require deposits upon inception of customer agreements. The customer has the right to acquire ownership either through an early purchase option or through payment of all required lease payments. Our store-based operations also offer customers the option to obtain a membership in the Aaron’s Club Program. The benefits to customers of the Club Program are separated into three general categories: (a) product protection benefits; (b) health & wellness discounts; and (c) dining, shopping and consumer savings. Lease agreements and Aaron's Club Program memberships are cancelable at any time by either party without penalty, and as such, we consider these offerings to be to be month-to-month arrangements. Lease revenues related to the leasing of merchandise, net of related sales taxes, and Aaron's Club membership fees are recognized as revenue in the month they are earned. Payments received prior to the month earned are recorded as deferred lease revenue, and this amount is included in customer deposits and advance payments in the accompanying consolidated and combined balance sheets. Lease revenues are recorded net of a provision for returns and uncollectible renewal payments. All of the Company's customer lease agreements are considered operating leases. The Company maintains ownership of the lease merchandise until all payment obligations are satisfied under sales and lease ownership agreements. Initial direct costs related to customer agreements are expensed as incurred and have been classified as other operating expenses, net in the consolidated and combined statements of earnings. The statement of earnings effects of expensing the initial direct costs as incurred are not materially different from amortizing initial direct costs over the lease term. Substantially all lease revenues and fees were within the scope of ASC 842, Leases , during the years ended December 31, 2020 and December 31, 2019 and within the scope of ASC 840, Leases , during the year ended December 31, 2018. The Company had $25.1 million, $24.7 million and $17.7 million of other revenue during the years ended December 31, 2020, 2019, and 2018, respectively, within the scope of ASC 606, Revenue from Contracts with Customers. Lease revenues and fees are recorded within lease and retail revenues in the accompanying consolidated and combined statements of earnings. Retail and Non-Retail Sales Revenues from the retail sale of merchandise to customers are recognized at the point of sale. Generally, the transfer of control occurs near or at the point of sale for retail sales. Revenues for the non-retail sale of merchandise to franchisees are recognized when control transfers to the franchisee, which is upon delivery of the merchandise. Sales of lease merchandise to franchisees and to other customers are recorded within non-retail sales and lease and retail revenues, respectively, in the accompanying consolidated and combined statements of earnings. All retail and non-retail sales revenue is within the scope of ASC 606, Revenue from Contracts with Customers, during the years ended December 31, 2020, 2019, and 2018. Franchise Royalties and Fees Franchisees pay an ongoing royalty of 6% of the weekly cash revenue collections, which is recognized as the fees become due. In response to the COVID-19 pandemic, the Company temporarily suspended, as opposed to deferring, the royalty fee obligation in March 2020, effectively forgiving the franchisee royalty payments that otherwise would have been due during the suspension period. The Company reinstated the requirement that franchisees make royalty payments during the second quarter of 2020, but there can be no assurance that the Company will not implement another suspension or a deferral of franchisee royalty payments in future periods, such as, for example, in response to our franchisees experiencing financial difficulty due to a resurgence of COVID-19 cases. The Company guarantees certain debt obligations of some of the franchisees and receives guarantee fees based on the outstanding debt obligations of such franchisees. Refer to Note 10 of these consolidated and combined financial statements for additional discussion of the franchise-related guarantee obligation. The Company also charges fees for advertising efforts that benefit the franchisees, which are recognized at the time the advertising takes place. Substantially all franchise royalties and fees revenue is within the scope of ASC 606, Revenue from Contracts with Customers, during the years ended December 31, 2020, 2019, and 2018. Of the franchise royalties and fees, $19.5 million, $25.5 million, and $33.3 million during the years ended December 31, 2020, 2019, and 2018, respectively, is related to franchise royalty income that is recognized as the fees become due. 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. Franchise royalties and fees are recorded within franchise royalties and other revenue in the accompanying consolidated and combined statements of earnings. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Leases | LEASES Lessor Information Refer to Note 6 to these consolidated and combined financial statements for further information about the Company's revenue generating activities as a lessor. All of the Company's customer lease agreements are considered operating leases, and the Company currently does not have any sales-type or direct financing leases. Lessee Information As a lessee, the Company leases retail store and warehouse space for most of its store-based operations, as well as management and information technology space for store and e-commerce supporting functions, under operating leases expiring at various times through 2033. To the extent that a leased retail store or warehouse space ceases to be used prior to the termination of the lease, the spaces may be vacated, and to a lesser extent subleased to third parties while the Company maintains its primary obligation as the lessee in the head lease. The Company leases transportation vehicles under operating and finance leases, most of which generally expire during the next two years. The vehicle leases generally include a residual value that is guaranteed to the lessor, which ensures that the vehicles will be returned to the lessor in reasonable working condition. The Company also leases various IT equipment such as printers and computers under operating leases, most of which generally expire during the next two years. For all of its leases in which it is a lessee, the Company has elected to include both the lease and non-lease components as a single component and account for it as a lease. Finance lease costs are comprised of the amortization of right-of-use assets and the interest accretion on discounted lease liabilities, which are recorded within other operating expenses, net and interest expense, respectively, in the consolidated and combined statements of earnings. Operating lease costs are recorded on a straight-line basis and are primarily classified within other operating expenses, net in the consolidated and combined statement of earnings, and to a lesser extent capitalized into the cost of lease merchandise and subsequently depreciated. For stores that are related to restructuring programs as described in Note 11, operating lease costs recorded subsequent to any necessary operating lease right-of-use asset impairment charges and after vacancy of the store are recognized in a pattern that is generally accelerated within restructuring expenses, net in the consolidated and combined statements of earnings. The Company’s total operating and finance lease costs are comprised of the following: Year Ended December 31, (In Thousands) 2020 2019 Finance Lease cost: Amortization of Right-of-Use Assets $ 596 $ 1,542 Interest on Lease Liabilities 170 363 Total Finance Lease cost: 766 1,905 Operating Lease cost: Operating Lease cost classified within Other Operating Expenses, Net 1 94,249 107,581 Operating Lease cost classified within Restructuring Expenses, Net 1,615 3,339 Sublease Receipts 2 (2,723) (2,644) Total Operating Lease cost: 93,141 108,276 Total Lease cost $ 93,907 $ 110,181 1 Includes short-term and variable lease costs, which are not significant. Short-term lease expense is defined as leases with a lease term of greater than one month, but not greater than 12 months. The Company incurred $108.1 million of rental expense, net of sublease receipts during the year ended December 31, 2018 under ASC 840, Leases . The Company also incurred right-of-use asset impairment charges of $24.7 million and $24.4 million during the years ended December 31, 2020 and 2019, respectively, under ASC 842, Leases . During the year ended December 31, 2018, the Company incurred contractual lease obligation charges, net of estimated sublease receipts of $2.1 million related to the closure of company-operated stores under ASC 840, Leases . These charges are reported within restructuring expenses, net in the consolidated and combined statements of earnings. 2 The Company has anticipated future sublease receipts from executed sublease agreements of $2.3 million in 2021, $1.5 million in 2022, $1.0 million in 2023, $0.5 million in 2024, $0.2 million in 2025, and $0.1 million thereafter. Additional information regarding the Company’s leasing activities as a lessee is as follows: Year Ended December 31, (In Thousands) 2020 2019 Cash Paid for amounts included in measurement of Lease Liabilities: Operating Cash Flows for Finance Leases $ 170 $ 411 Operating Cash Flows for Operating Leases 111,446 121,864 Financing Cash Flows for Finance Leases 1,086 2,493 Total Cash paid for amounts included in measurement of Lease Liabilities 112,702 124,768 Right-of-Use Assets obtained in exchange for new Finance Lease Liabilities — — Right-of-Use Assets obtained in exchange for new Operating Lease Liabilities $ 45,678 $ 49,504 Supplemental balance sheet information related to leases is as follows: December 31, (In Thousands) Balance Sheet Classification 2020 2019 Assets Operating Lease Assets Operating Lease Right-of-Use Assets $ 238,085 $ 305,257 Finance Lease Assets Property, Plant and Equipment, Net 153 768 Total Lease Assets $ 238,238 $ 306,025 Liabilities Operating Lease Liabilities Operating Lease Liabilities $ 278,958 $ 335,807 Finance Lease Liabilities Debt 831 2,670 Total Lease Liabilities $ 279,789 $ 338,477 Most of the Company's real estate leases contain renewal options for additional periods ranging from one The Company uses its incremental borrowing rate as the discount rate for its leases, as the implicit rate in the lease is not readily determinable. Below is a summary of the weighted-average discount rate and weighted-average remaining lease term for finance and operating leases: December 31, 2020 2019 Weighted Average Discount Rate 1 Weighted Average Remaining Lease Term (in years) Weighted Average Discount Rate 1 Weighted Average Remaining Lease Term (in years) Finance Leases 5.7 % 1 5.7 % 2 Operating Leases 3.5 % 4 3.6 % 5 1 Upon adoption of ASC 842, discount rates for existing operating leases were established as of January 1, 2019. Under the short-term lease exception provided within ASC 842, the Company does not record a lease liability or right-of-use asset for any leases that have a lease term of 12 months or less at commencement. Below is a summary of undiscounted finance and operating lease liabilities that have initial terms in excess of one year as of December 31, 2020. The table also includes a reconciliation of the future undiscounted cash flows to the present value of the finance and operating lease liabilities included in the consolidated and combined balance sheets. (In Thousands) Operating Leases Finance Leases Total 2021 $ 94,446 $ 787 $ 95,233 2022 72,214 71 72,285 2023 51,500 — 51,500 2024 34,238 — 34,238 2025 20,442 — 20,442 Thereafter 28,980 — 28,980 Total Undiscounted Cash Flows 1 301,820 858 302,678 Less: Interest 22,862 27 22,889 Present Value of Lease Liabilities $ 278,958 $ 831 $ 279,789 1 Future undiscounted cash flows do not include approximately $3.9 million of future operating lease payments for leases that have not yet commenced. These leases will commence during 2021. COVID-19 Lease Concessions In response to the impacts of the COVID-19 pandemic, the Company negotiated lease concessions for approximately 184 of our company-operated stores and received near-term rent abatements and deferrals of approximately $1.9 million. On April 10, 2020, the Financial Accounting Standards Board ("FASB") issued guidance for lease concessions executed in response to the COVID-19 pandemic, which provides a practical expedient to forego an evaluation of whether a lease concession should be accounted for as a modification if the concession does not result in a substantial increase of the lessee's obligations. The Company has elected to apply this guidance to all lease concessions negotiated as a result of the COVID-19 pandemic that meet these criteria. Sale-Leaseback Transactions |
Leases | LEASES Lessor Information Refer to Note 6 to these consolidated and combined financial statements for further information about the Company's revenue generating activities as a lessor. All of the Company's customer lease agreements are considered operating leases, and the Company currently does not have any sales-type or direct financing leases. Lessee Information As a lessee, the Company leases retail store and warehouse space for most of its store-based operations, as well as management and information technology space for store and e-commerce supporting functions, under operating leases expiring at various times through 2033. To the extent that a leased retail store or warehouse space ceases to be used prior to the termination of the lease, the spaces may be vacated, and to a lesser extent subleased to third parties while the Company maintains its primary obligation as the lessee in the head lease. The Company leases transportation vehicles under operating and finance leases, most of which generally expire during the next two years. The vehicle leases generally include a residual value that is guaranteed to the lessor, which ensures that the vehicles will be returned to the lessor in reasonable working condition. The Company also leases various IT equipment such as printers and computers under operating leases, most of which generally expire during the next two years. For all of its leases in which it is a lessee, the Company has elected to include both the lease and non-lease components as a single component and account for it as a lease. Finance lease costs are comprised of the amortization of right-of-use assets and the interest accretion on discounted lease liabilities, which are recorded within other operating expenses, net and interest expense, respectively, in the consolidated and combined statements of earnings. Operating lease costs are recorded on a straight-line basis and are primarily classified within other operating expenses, net in the consolidated and combined statement of earnings, and to a lesser extent capitalized into the cost of lease merchandise and subsequently depreciated. For stores that are related to restructuring programs as described in Note 11, operating lease costs recorded subsequent to any necessary operating lease right-of-use asset impairment charges and after vacancy of the store are recognized in a pattern that is generally accelerated within restructuring expenses, net in the consolidated and combined statements of earnings. The Company’s total operating and finance lease costs are comprised of the following: Year Ended December 31, (In Thousands) 2020 2019 Finance Lease cost: Amortization of Right-of-Use Assets $ 596 $ 1,542 Interest on Lease Liabilities 170 363 Total Finance Lease cost: 766 1,905 Operating Lease cost: Operating Lease cost classified within Other Operating Expenses, Net 1 94,249 107,581 Operating Lease cost classified within Restructuring Expenses, Net 1,615 3,339 Sublease Receipts 2 (2,723) (2,644) Total Operating Lease cost: 93,141 108,276 Total Lease cost $ 93,907 $ 110,181 1 Includes short-term and variable lease costs, which are not significant. Short-term lease expense is defined as leases with a lease term of greater than one month, but not greater than 12 months. The Company incurred $108.1 million of rental expense, net of sublease receipts during the year ended December 31, 2018 under ASC 840, Leases . The Company also incurred right-of-use asset impairment charges of $24.7 million and $24.4 million during the years ended December 31, 2020 and 2019, respectively, under ASC 842, Leases . During the year ended December 31, 2018, the Company incurred contractual lease obligation charges, net of estimated sublease receipts of $2.1 million related to the closure of company-operated stores under ASC 840, Leases . These charges are reported within restructuring expenses, net in the consolidated and combined statements of earnings. 2 The Company has anticipated future sublease receipts from executed sublease agreements of $2.3 million in 2021, $1.5 million in 2022, $1.0 million in 2023, $0.5 million in 2024, $0.2 million in 2025, and $0.1 million thereafter. Additional information regarding the Company’s leasing activities as a lessee is as follows: Year Ended December 31, (In Thousands) 2020 2019 Cash Paid for amounts included in measurement of Lease Liabilities: Operating Cash Flows for Finance Leases $ 170 $ 411 Operating Cash Flows for Operating Leases 111,446 121,864 Financing Cash Flows for Finance Leases 1,086 2,493 Total Cash paid for amounts included in measurement of Lease Liabilities 112,702 124,768 Right-of-Use Assets obtained in exchange for new Finance Lease Liabilities — — Right-of-Use Assets obtained in exchange for new Operating Lease Liabilities $ 45,678 $ 49,504 Supplemental balance sheet information related to leases is as follows: December 31, (In Thousands) Balance Sheet Classification 2020 2019 Assets Operating Lease Assets Operating Lease Right-of-Use Assets $ 238,085 $ 305,257 Finance Lease Assets Property, Plant and Equipment, Net 153 768 Total Lease Assets $ 238,238 $ 306,025 Liabilities Operating Lease Liabilities Operating Lease Liabilities $ 278,958 $ 335,807 Finance Lease Liabilities Debt 831 2,670 Total Lease Liabilities $ 279,789 $ 338,477 Most of the Company's real estate leases contain renewal options for additional periods ranging from one The Company uses its incremental borrowing rate as the discount rate for its leases, as the implicit rate in the lease is not readily determinable. Below is a summary of the weighted-average discount rate and weighted-average remaining lease term for finance and operating leases: December 31, 2020 2019 Weighted Average Discount Rate 1 Weighted Average Remaining Lease Term (in years) Weighted Average Discount Rate 1 Weighted Average Remaining Lease Term (in years) Finance Leases 5.7 % 1 5.7 % 2 Operating Leases 3.5 % 4 3.6 % 5 1 Upon adoption of ASC 842, discount rates for existing operating leases were established as of January 1, 2019. Under the short-term lease exception provided within ASC 842, the Company does not record a lease liability or right-of-use asset for any leases that have a lease term of 12 months or less at commencement. Below is a summary of undiscounted finance and operating lease liabilities that have initial terms in excess of one year as of December 31, 2020. The table also includes a reconciliation of the future undiscounted cash flows to the present value of the finance and operating lease liabilities included in the consolidated and combined balance sheets. (In Thousands) Operating Leases Finance Leases Total 2021 $ 94,446 $ 787 $ 95,233 2022 72,214 71 72,285 2023 51,500 — 51,500 2024 34,238 — 34,238 2025 20,442 — 20,442 Thereafter 28,980 — 28,980 Total Undiscounted Cash Flows 1 301,820 858 302,678 Less: Interest 22,862 27 22,889 Present Value of Lease Liabilities $ 278,958 $ 831 $ 279,789 1 Future undiscounted cash flows do not include approximately $3.9 million of future operating lease payments for leases that have not yet commenced. These leases will commence during 2021. COVID-19 Lease Concessions In response to the impacts of the COVID-19 pandemic, the Company negotiated lease concessions for approximately 184 of our company-operated stores and received near-term rent abatements and deferrals of approximately $1.9 million. On April 10, 2020, the Financial Accounting Standards Board ("FASB") issued guidance for lease concessions executed in response to the COVID-19 pandemic, which provides a practical expedient to forego an evaluation of whether a lease concession should be accounted for as a modification if the concession does not result in a substantial increase of the lessee's obligations. The Company has elected to apply this guidance to all lease concessions negotiated as a result of the COVID-19 pandemic that meet these criteria. Sale-Leaseback Transactions |
Indebtedness
Indebtedness | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Indebtedness | INDEBTEDNESS On November 9, 2020, Aaron’s, LLC, a wholly-owned subsidiary of the Company, entered into a new credit agreement with several banks and other financial institutions providing for a $250.0 million senior unsecured revolving credit facility. Revolving borrowings became available at the completion of the separation and distribution. All borrowings and commitments under the Revolving Facility will mature or terminate on November 9, 2025. The Company expects that the Revolving Facility will be used to provide for working capital and capital expenditures, to finance future permitted acquisitions and for other general corporate purposes. The Company did not have any outstanding borrowings under the Revolving Facility as of December 31, 2020. The Company incurred approximately $2.2 million of lender and legal fees related to the Revolving Facility, which were recorded within prepaid expenses and other assets in the consolidated and combined balance sheets. In conjunction with the separation and distribution, the Company repaid in full the outstanding principal and accrued interest amounts due under the previous debt agreements of Aaron's, Inc., which consisted of (i) $225.4 million paid on November 30, 2020 to settle outstanding principal and accrued interest due under the previous Aaron's, Inc. revolving credit and term loan facility, which was scheduled to mature in January 2025; and (ii) $61.3 million paid on November 27, 2020 to settle outstanding principal, accrued interest, and an early prepayment fee related to the previous Aaron's, Inc. senior unsecured notes which were scheduled to mature in April 2021. The Company recorded a loss of $4.1 million on the extinguishment of the previous indebtedness, which was recorded within loss on debt extinguishment in the consolidated and combined statements of earnings. All debt obligations and unamortized debt issuance costs as of December 31, 2019 and the related interest expense for the years ended December 31, 2020, 2019, and 2018 have been included within the Company's consolidated and combined financial statements because Aaron's, LLC was the primary obligor for the external debt agreements and is one of the legal entities forming the basis of The Aaron's Company, Inc. Following is a summary of the Company’s debt, net of applicable unamortized debt issuance costs: December 31, (In Thousands) 2020 2019 Senior Unsecured Notes, 4.75% - Repaid in November 2020 $ — $ 119,847 Term Loan - Repaid in November 2020 — 218,513 Finance Lease Obligations 831 2,670 Total Debt 1 831 341,030 Less: Current Maturities 761 83,886 Long-Term Debt $ 70 $ 257,144 1 Total debt as of December 31, 2019 included unamortized debt issuance costs of $1.0 million. The Company also recorded $2.1 million and $1.9 million of debt issuance costs as of December 31, 2020 and 2019, respectively, related to its current and previous revolving credit facilities, which were recorded within prepaid expenses and other assets in the consolidated and combined balance sheets. Revolving Facility The Company is a guarantor of the $250.0 million Revolving Facility with Aaron’s, LLC, now a wholly-owned subsidiary of the Company. The Revolving Facility includes (i) a $35.0 million sublimit for the issuance of letters of credit on customary terms, and (ii) a $25.0 million sublimit for swing line loans on customary terms. Aaron’s, LLC will have the right from time to time to request to increase the size of the Revolving Facility or add certain incremental revolving or term loan facilities (the "Incremental Facilities") in minimum amounts to be agreed upon. The aggregate principal amount of all such Incremental Facilities may not exceed $150.0 million. Borrowings under the Revolving Facility bear interest at a rate per annum equal to, at the option of Aaron’s, LLC, (i) the LIBO rate plus a margin within the range of 1.50% to 2.50% for revolving loans, based on total leverage, or (ii) the Base Rate plus the applicable margin, which will be 1.00% lower than the applicable margin for LIBO rate loans. The Base Rate is defined as the highest of (i) the prime lending rate of the administrative agent, (ii) the federal funds rate, plus 0.50%, and (iii) the one-month LIBO rate, plus 1.00%. The Company pays a commitment fee on unused balances, which ranges from 0.20% to 0.35% as determined by the Company's ratio of total net debt to adjusted EBITDA. As of December 31, 2020, the amount available under the Revolving Facility was reduced by approximately $14.7 million for our outstanding letters of credit, resulting in total availability of $235.3 million. Financial Covenants The Revolving Facility and the Franchise Loan Facility as defined and discussed in Note 10 to these consolidated and combined financial statements contain financial covenants, which include requirements that the Company maintain ratios of (a) fixed charge coverage of no less than 1.75:1.00 and (b) total net leverage of no greater than 2.50:1.00. If the Company fails to comply with these covenants, the Company will be in default under these agreements, and all borrowings outstanding could become due immediately. Under the Revolving Facility and Franchise Loan Facility, the Company may pay cash dividends in any year so long as, after giving pro forma effect to the dividend payment, the Company maintains compliance with its financial covenants and no event of default has occurred or would result from the payment. At December 31, 2020, the Company was in compliance with all covenants related to its outstanding debt. However, given the uncertainties associated with the COVID-19 pandemic's impact on our operations and financial performance in future periods, there can be no assurances that we will not be required to seek amendments or modifications to one or more of the covenants in our debt agreements and/or waivers of potential or actual defaults of those covenants. The Company currently does not have any outstanding borrowings under the Revolving Facility. Future principal maturities under the Company's finance lease obligations as of December 31, 2020 are as follows: (In Thousands) 2021 $ 761 2022 70 Thereafter — Total $ 831 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Prior to the consummation of the separation and distribution, the Company’s operating results were included in consolidated U.S. federal and various state income tax returns, as well as non-U.S. filings, that included both Aaron’s and Progressive. For the purposes of the Company’s consolidated and combined financial statements for periods prior to the separation and distribution, income tax expense and deferred tax balances have been recorded as if the Company filed tax returns on a standalone basis separate from Progressive. The separate return method applies the accounting guidance for income taxes to the standalone financial statements as if the Company was a separate taxpayer and a standalone enterprise prior to the separation from PROG Holdings. The following is a summary of the Company’s income tax (benefit) expense: Year Ended December 31, (In Thousands) 2020 2019 2018 Current Income Tax (Benefit) Expense: Federal $ (18,661) $ (13,438) $ (140) State 4,458 916 1,757 Foreign 1,494 467 1,256 (12,709) (12,055) 2,873 Deferred Income Tax (Benefit) Expense: Federal (97,734) 19,497 9,884 State (17,883) (159) 923 Foreign (3,576) (1,112) (765) (119,193) 18,226 10,042 Income Tax (Benefit) Expense $ (131,902) $ 6,171 $ 12,915 Significant components of the Company’s deferred income tax liabilities and assets are as follows: December 31, (In Thousands) 2020 2019 Deferred Tax Liabilities: Lease Merchandise and Property, Plant and Equipment $ 184,976 $ 192,091 Goodwill and Other Intangibles — 43,713 Operating Lease Right-of-Use Assets 57,521 73,602 Other, Net 10,150 2,760 Total Deferred Tax Liabilities 252,647 312,166 Deferred Tax Assets: Goodwill and Other Intangibles 63,291 — Accrued Liabilities 19,038 14,927 Advance Payments 15,492 9,676 Operating Lease Liabilities 68,883 81,488 Net Operating Losses 21,616 41,014 Other, Net 8,740 14,734 Total Deferred Tax Assets 197,060 161,839 Less Valuation Allowance — 3,659 Net Deferred Tax Liabilities $ 55,587 $ 153,986 The Company’s effective tax rate differs from the statutory United States federal income tax rate as follows: Year Ended December 31, 2020 2019 2018 Statutory Rate 21.0 % 21.0 % 21.0 % Increases (Decreases) in United States Federal Taxes Resulting From: State Income Taxes, net of Federal Income Tax Benefit 3.7 4.8 4.4 Other Permanent Differences (0.2) (2.6) (2.5) Federal Tax Credits 0.4 (5.2) (3.6) NOL Carryback under CARES Act 8.7 — — Remeasurement of net Deferred Tax Liabilities — (0.7) 0.3 Other, net (0.4) 0.7 0.7 Effective Tax Rate 33.2 % 18.0 % 20.3 % The Company was in a net operating loss position for tax purposes in 2018 as a result of the 100% expense deduction on qualified depreciable assets as provided by the Tax Cuts and Jobs Act. The net operating loss earned during 2018 must be carried forward and would be available to offset 80% of future taxable income, based on laws in effect as of December 31, 2019. The Company also incurred a taxable loss in 2019. Aaron's, Inc. filed a consolidated federal return that included the income of Progressive Finance Holdings, LLC. The Company’s taxable loss in 2019 was offset by a portion of Progressive’s 2019 taxable income. Prior to the CARES Act enactment discussed below, a portion of the Company’s 2018 net operating loss was to be offset by Progressive’s 2019 taxable income. The current federal tax benefit of $13.4 million in 2019 was a result of the transfer of net operating losses of $11.0 million plus federal tax credits of $2.4 million to Progressive. Similarly, the Company effectively transferred state tax credits to Progressive, generating a current state tax benefit, of $0.6 million and $0.7 million in 2018 and 2019, respectively, that were absorbed by Progressive income each year reported on combined state returns. In addition, the Company acquired certain state tax attributes related to bonus depreciation tax deductions from the Progressive Leasing segment of Aaron's, Inc., which were recorded as an adjustment to invested capital with a cumulative balance of $3.8 million and $4.0 million as of December 31, 2018 and 2019, respectively. In response to the global impacts of COVID-19 on U.S. companies and citizens, the government enacted the CARES Act on March 27, 2020. The CARES Act included several tax relief options for companies, including a five-year net operating loss carryback. Aaron’s, Inc.'s 2018 consolidated return included losses of the Company and Progressive. Aaron's, Inc. elected to carryback its 2018 net operating losses of $242.2 million to offset the Company’s 2013 taxable income, thus generating a refund of $84.4 million and an income tax benefit of $34.2 million. The tax benefit is the result of the federal income tax rate differential between the current statutory rate of 21% and the 35% rate applicable to 2013. The Company incurred current federal tax expense of $14.7 million in 2020 related to the transfer of 2018 net operating losses from Progressive, previously offsetting 2019 taxable income under the TCJA, as discussed above. At December 31, 2020, the Company had approximately $98.9 million of federal tax net operating loss carryforwards, which can be carried forward indefinitely and will not expire. In addition, at December 31, 2020, the Company had $0.8 million of tax-effected state net operating loss carryforwards which will begin to expire in five years. A valuation allowance has been provided where it is more likely than not that deferred tax assets related to state tax credit carryforwards will not be realized. As of December 31, 2019, the valuation allowance totaled $3.7 million for state tax credit carryforwards. During 2020, the Company recorded tax benefit of $0.7 million for a decrease in the valuation allowance. As a result of the separation and distribution transaction, a $3.0 million decrease in valuation allowance was recorded within invested capital in the consolidated and combined financial statements, since the corresponding tax attributes reported by the Company on a carve-out basis were not transferred to the Company. The separation and distribution resulted in additional decrease to tax attributes reported by the Company on a carve-out basis that were not transferred to the Company, including foreign tax credit carryforwards of $4.2 million, tax-effected state net operating losses of $2.6 million, state tax credit carryforwards of $5.8 million, and certain state tax attributes related to bonus depreciation tax deductions of $9.1 million. The decrease in tax attributes was recorded within invested capital in the consolidated and combined financial statements. During the first quarter of 2020, the Company determined that goodwill was fully impaired and recorded a goodwill impairment loss of $446.9 million. This impairment is not currently deductible for tax creating additional taxable income and an increase to the goodwill and other intangibles deferred tax asset of $110 million. The Company will file a federal income tax return in the United States and file in various states and foreign jurisdictions. The Company has not filed its initial U.S. federal income tax return; therefore, there are no open IRS examinations. With few exceptions, the Company is no longer subject to foreign and state and local tax examinations by tax authorities for years before 2017. The following table summarizes the activity related to the Company’s uncertain tax positions: Year Ended December 31, (In Thousands) 2020 2019 2018 Balance at January 1, $ 2,350 $ 2,338 $ 2,030 Additions Based on Tax Positions Related to the Current Year 149 236 269 Additions for Tax Positions of Prior Years 250 20 615 Prior Year Reductions (108) (76) (85) Statute Expirations (304) (168) (209) Settlements (112) — (282) Amounts Transferred to Former Parent (1,542) — — Balance at December 31, $ 683 $ 2,350 $ 2,338 As of December 31, 2020 and 2019, the amount of uncertain tax benefits that, if recognized, would affect the effective tax rate is $0.7 million and $2.1 million, respectively, including interest and penalties. During the years ended December 31, 2020, 2019, and 2018 the Company recognized interest and penalties of $0.1 million, $0.1 million, and $0.1 million, respectively. The Company had $0.2 million and $0.3 million of accrued interest and penalties at December 31, 2020 and 2019, respectively. The Company recognizes potential interest and penalties related to uncertain tax benefits as a component of income tax (benefit) expense. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Guarantees The Company has guaranteed certain debt obligations of some of its franchisees under a franchise loan program as described below with several of the banks in our Revolving Facility. In the event these franchisees are unable to meet their debt service payments or otherwise experience an event of default, the Company would be unconditionally liable for the outstanding balance of the franchisees’ debt obligations under the franchisee loan program, which would be due in full within 75 days of the event of default. In connection with the separation and distribution, on November 17, 2020, the Company entered into a new franchise loan facility agreement (the "Franchise Loan Facility") in which the Company is named as the guarantor. The Franchise Loan Facility has a total commitment of $25.0 million and expires on November 16, 2021. We are able to request additional 364-day extensions of our franchise loan facility, as long as we are not in violation of any of the covenants under that facility or our Revolving Facility, and no event of default exists under those agreement, until such time as our Revolving Facility expires. We would expect to include a franchise loan facility as part of any extension or renewal of our Revolving Facility thereafter. At December 31, 2020, the maximum amount that the Company would be obligated to repay in the event franchisees defaulted was $17.5 million. The Company has recourse rights to franchisee assets securing the debt obligations, which consist primarily of lease merchandise and fixed assets. Since the inception of the franchise loan program in 1994, the Company's losses associated with the program have been immaterial, but could be material in a future period due to the COVID-19 pandemic's impact on franchisee operations and financial performance or other adverse trends in the liquidity and/or financial performance of the Company's franchisees. The Company records a liability related to estimated future losses from repaying the franchisees' outstanding debt obligations upon any possible future events of default. This is included in accounts payable and accrued expenses in the consolidated and combined balance sheets and was $2.4 million and $0.4 million at December 31, 2020 and 2019, respectively, and the balance at December 31, 2020 included incremental allowances for potential losses related to the franchise loan guarantee due to the potential adverse impacts of the COVID-19 pandemic. The Company is subject to financial covenants under the Franchise Loan Facility that are consistent with the Revolving Facility, which are more fully described in Note 8 to the consolidated and combined financial statements. Legal Proceedings From time to time, the Company is party to various legal and regulatory proceedings arising in the ordinary course of business, certain proceedings of which have been described below. The Company establishes an accrued liability for legal and regulatory proceedings when it determines that a loss is both probable and the amount of the loss can be reasonably estimated. The Company continually monitors its litigation and regulatory exposure and reviews the adequacy of its legal and regulatory reserves on a quarterly basis. The amount of any loss ultimately incurred in relation to matters for which an accrual has been established may be higher or lower than the amounts accrued for such matters due to the inherent uncertainty in litigation, regulatory and similar adversarial proceedings, and substantial losses from these proceedings or the costs of defending them could have a material adverse impact upon the Company’s business, financial position and results of operations. At December 31, 2020 and 2019, the Company had accrued $0.8 million and $7.7 million, respectively, for pending legal and regulatory matters for which it believes losses are probable and is management’s best estimate of its exposure to loss. As of December 31, 2019, the Company recorded a receivable of $5.5 million for expected insurance payments related to the pending legal and regulatory matters referenced above, and these amounts were received in full during 2020. The Company records these liabilities in accounts payable and accrued expenses in the consolidated and combined balance sheets, and the corresponding expected insurance recoveries were recorded within prepaid expenses and other assets in the consolidated and combined balance sheet. The Company estimates that the aggregate range of reasonably possible loss in excess of accrued liabilities for such probable loss contingencies is between $0 and $0.5 million. At December 31, 2020, the Company estimated that the aggregate range of loss for all material pending legal and regulatory proceedings for which a loss is reasonably possible, but less likely than probable (i.e., excluding the contingencies described in the preceding paragraph), is between $0 and $0.5 million. Those matters for which a reasonable estimate is not possible are not included within estimated ranges and, therefore, the estimated ranges do not represent the Company’s maximum loss exposure. The Company’s estimates for legal and regulatory accruals, aggregate probable loss amounts and reasonably possible loss amounts, are all subject to the uncertainties and variables described above. Regulatory Inquiries In July 2018, Aaron's, Inc. received civil investigative demands ("CIDs") from the FTC regarding disclosures related to lease-to-own and other financial products offered by the Company and whether such disclosures violate the Federal Trade Commission Act (the "FTC Act"). We believe such disclosures were in compliance with the FTC Act. We cooperated with the FTC in its inquiry regarding these disclosures, after which the FTC resolved that inquiry without taking any action against the Company. In April 2019, Aaron's, Inc., along with other lease-to-own companies, received an unrelated CID from the FTC focused on certain transactions involving the contingent purchase and sale of customer lease agreements with other lease-to-own companies, and whether such transactions violated the FTC Act. Although we believe those transactions did not violate any laws, in August 2019, Aaron's, Inc. reached an agreement in principle with the FTC staff to resolve the issues raised in that CID. The proposed consent agreement, which would prohibit such contingent purchases and sales of customer lease portfolios in the future but would not require any payments to the FTC, was approved by the FTC on February 21, 2020. In the first quarter of 2021, Aaron's, LLC, along with a number of other lease-to-own companies, received a subpoena from the California Department of Financial Protection and Innovation (the "DFPI") requesting the production of documents regarding the Company’s compliance with state consumer protection laws. The Company is cooperatively engaging with the DFPI in response to its inquiry. Although the Company believes it is in compliance with all applicable consumer protection laws and regulations in California, this inquiry ultimately could lead to an enforcement action and/or a consent order, and substantial costs, including legal fees, fines, penalties, and remediation expenses. Other Contingencies At December 31, 2020, the Company had non-cancelable commitments primarily related to certain advertising and marketing programs, software licenses, and hardware and software maintenance of $10.5 million. Payments under these commitments are scheduled to be $6.6 million in 2021 and $3.9 million in 2022. Management regularly assesses the Company’s insurance deductibles, monitors litigation and regulatory exposure with the Company’s attorneys, and evaluates its loss experience. The Company also enters into various contracts in the normal course of business that may subject it to risk of financial loss if counterparties fail to perform their contractual obligations. |
Restructuring
Restructuring | 12 Months Ended |
Dec. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | RESTRUCTURING Real Estate Repositioning and Optimization Restructuring Program During the first quarter of 2020, the Company initiated a real estate repositioning and optimization restructuring program. This program includes a strategic plan to remodel, reposition and consolidate our company-operated store footprint over the next 3 to 4 years. We believe that such strategic actions will allow the Company to continue to successfully serve our markets while continuing to utilize our growing Aarons.com shopping and servicing platform. Management expects that this strategy, along with our increased use of technology, will enable us to reduce store count while retaining a significant portion of our existing customer relationships and attracting new customers. Since initiation, the program has resulted in the closure and consolidation of 93 company-operated stores during 2020. We have identified 82 additional stores that have not yet been closed and vacated, but are expected to be by December 31, 2021. Total net restructuring expenses of $34.0 million were recorded for the year ended December 31, 2020 under the real estate repositioning and optimization restructuring program. Restructuring expenses were comprised mainly of operating lease right-of-use asset and fixed asset impairment charges related to the vacancy or planned vacancy of the stores identified for closure and the imminent disposition of fulfillment center vehicles no longer needed due to the reduction in stores, continuing variable occupancy costs incurred related to closed stores, and severance charges to rationalize our field support and store support center staff to better align the organization with current operations and business conditions. Also included in net restructuring charges for the year ended December 31, 2020 were operating lease right-of-use asset and fixed asset impairment charges of $6.0 million recorded during the fourth quarter to reflect the Company's decision to permanently cease use of an administrative building in Kennesaw, Georgia. Refer to Note 4 of these consolidated and combined financial statements for additional discussion of the methods used to calculate the fair value of the right-of-use asset and property, plant, and equipment associated with the building. The Company expects to incur restructuring charges of approximately $3.5 million under the real estate repositioning and optimization program through December 31, 2021 specifically related to the accelerated amortization of operating lease right-of-use assets and accelerated depreciation of fixed assets for stores that have been identified for closure, but have not yet closed and been vacated. Furthermore, to the extent that management executes on its long-term plan, additional restructuring charges will result from our real estate repositioning and optimization initiatives, primarily related to operating lease right-of-use asset and fixed asset impairments. However, the extent of future restructuring charges is not estimable at this time, as specific store locations to be closed and/or consolidated have not yet been identified by management. Additionally, we expect future restructuring expenses (reversals) due to potential future early buyouts of leases with landlords, as well as continuing variable occupancy costs related to closed stores. 2019 Restructuring Program During the first quarter of 2019, the Company initiated a restructuring program to further optimize its company-operated store portfolio, which resulted in the closure and consolidation of 155 company-operated stores during 2019. The Company also further rationalized its home office and field support staff, which resulted in a reduction in associate headcount in those areas to more closely align with current business conditions. Total net restructuring expenses of $6.8 million were recorded by the Company during the year ended December 31, 2020 under the 2019 restructuring program. Restructuring expenses were comprised principally of closed store operating lease right-of-use asset impairment charges due to changes in estimates of future sublease activity of the vacant properties as well as continuing variable occupancy costs related to closed stores. Restructuring expenses for the year ended December 31, 2019 also included an impairment charge related to the planned exit from one of our store support buildings and a loss on the sale of six Canadian stores to a third party. These costs were included in restructuring expenses, net in the consolidated and combined statements of earnings. We expect future restructuring expenses (reversals) due to potential future early buyouts of leases with landlords, as well as continuing variable occupancy costs related to closed stores. 2017 and 2016 Restructuring Programs During the years ended December 31, 2017 and 2016, the Company initiated restructuring programs to rationalize its company-operated store base portfolio to better align with marketplace demand. The programs resulted in the closure and consolidation of 139 company-operated stores throughout 2016, 2017, and 2018. The Company also optimized its home office staff and field support, which resulted in a reduction in associate headcount in those areas to more closely align with current business conditions. Total net restructuring expenses of $1.8 million were recorded during the year ended December 31, 2020 under the 2017 and 2016 restructuring programs. Restructuring activity for the year ended December 31, 2020 was comprised principally of closed store operating lease right-of-use asset impairment charges due to changes in estimates of future sublease activity of the vacant properties. These costs were included in restructuring expenses, net in the consolidated and combined statements of earnings. We expect future restructuring expenses (reversals) due to potential future early buyouts of leases with landlords, as well as continuing variable occupancy costs related to closed stores, but do not expect these charges or reversals to be material. The following table summarizes restructuring charges incurred under the three restructuring programs: Year Ended December 31, (In Thousands) 2020 2019 2018 Right-of-Use Asset Impairment $ 24,722 $ 24,388 $ — Operating Lease Charges 5,124 4,023 2,057 Fixed Asset Impairment 6,039 5,238 — Severance 6,153 3,403 610 Other Expenses 780 1,886 460 (Gain) Loss on Sale of Store Properties (274) 1,052 (377) Total Restructuring Expenses, Net $ 42,544 $ 39,990 $ 2,750 To date, the Company has incurred charges of $43.5 million under the 2016 and 2017 restructuring programs, $45.2 million under the 2019 restructuring program, and $34.0 million under the real estate repositioning and optimization restructuring program that was initiated in 2020. These cumulative charges are primarily comprised of operating lease right-of-use asset and fixed impairment charges, losses recognized related to contractual lease obligations, and severance related to reductions in store support center and field support staff headcount. The following table summarizes the balances of the accruals for the restructuring programs, which are recorded in accounts payable and accrued expenses in the consolidated and combined balance sheets, and the activity for the years ended December 31, 2020 and 2019: (In Thousands) Contractual Lease Obligations Severance Total Balance at January 1, 2019 $ 8,472 $ 651 $ 9,123 ASC 842 Transition Adjustment 1 (8,472) — (8,472) Adjusted Balance at January 1, 2019 — 651 651 Restructuring Severance Charges — 3,403 3,403 Payments — (3,298) (3,298) Balance at December 31, 2019 — 756 756 Restructuring Severance Charges — 6,153 6,153 Payments — (6,136) (6,136) Balance at December 31, 2020 $ — $ 773 $ 773 1 Upon the adoption of ASC 842 on January 1, 2019, the Company reclassified the remaining liability for contractual lease obligations from accounts payable and accrued expenses to a reduction to operating lease right-of-use assets within its consolidated and combined balance sheets. |
Stock-based Compensation
Stock-based Compensation | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-based Compensation | STOCK-BASED COMPENSATION Description of Plans Historically, and until the separation and distribution was completed on November 30, 2020, Aaron’s employees participated in the Aaron's, Inc.'s stock-based compensation plans, pursuant to which Aaron's Holdings Company, Inc. granted stock options, RSUs, RSAs and PSUs. In connection with the separation and distribution and effective on November 30, 2020, The Aaron's Company, Inc. established its 2020 Equity and Incentive Plan ("the 2020 Plan"), which was approved by the Company's Board of Directors on November 11, 2020. The purpose of the 2020 Plan is to promote long-term growth and profitability of the Company by providing certain employees and directors with incentives to maximize shareholder value and contribute to the success of the Company. The 2020 Plan also enables the Company to attract, retain and reward outstanding individuals to serve as directors, officers and employees. Under the 2020 Plan, awards may be made to eligible participants in the form of stock options, RSUs, RSAs and PSUs. During the year ended December 31, 2020, no new grants were made under the 2020 Plan except for the conversion of previously granted awards under PROG Holdings equity plans, as discussed below. As of December 31, 2020, the aggregate number of shares of common stock that may be issued or transferred under the 2020 Plan is 476,180. Conversion at Separation and Distribution In accordance with the terms of the Employee Matters Agreement between The Aaron's Company and PROG Holdings, all unexercised, unissued and/or unvested share-based awards previously granted to The Aaron's Company employees and directors under the Aaron's, Inc. equity plans through the separation and distribution date of November 30, 2020 were converted at the time of distribution to replacement stock options, RSUs, PSUs and RSAs. The replacement awards were converted using formulas designed to preserve the intrinsic economic value of the awards after taking into consideration the distribution. The Aaron's Company employees who held unvested RSAs and PSUs of Aaron's Holdings Company, Inc. on the record date of November 27, 2020 that were granted in 2018 or 2019 had the option to elect one of two conversion methods for determining the replacement awards: a) to receive replacement awards of both The Aaron's Company, Inc. and PROG Holdings, Inc. for the number of whole shares, rounded down to the nearest whole share, of The Aaron's Company, Inc. and PROG Holdings, Inc. common stock that they would have received as a shareholder of Aaron's Holdings Company, Inc. at the date of separation, which is one share of The Aaron's Company for every two shares of PROG Holdings (i.e., "the shareholder method") or b) to receive only The Aaron's Company replacement awards of an amount determined by a conversion ratio determined by calculating the product of the pre-distribution share price of Aaron's Holdings Company, Inc. and the pre-distribution number of awards being cancelled and replaced pursuant to this conversion, and then dividing this product by the post-distribution volume weighted adjusted three-day average share price of The Aaron's Company, Inc., rounded down to the nearest whole share (i.e., "the employee method"). In accordance with the Employee Matters Agreement, the conversion of RSAs and PSUs that were granted in 2020, as well as substantially all stock options held by the Company's employees, was required to be determined following the employee method rather than being determined by employee election. The conversion of RSUs held by the Company's board of directors was required to be determined following the shareholder method. Under both the shareholder method and the employee method, the terms and conditions of the converted awards were replicated, and, as necessary, adjusted to ensure that the vesting schedules were unchanged and the awards were converted in accordance with the Employee Matters Agreement. As a result, on the separation date, approximately 2.9 million shares of The Aaron's Company, Inc. common stock (the "converted awards") were converted and deemed issued under the 2020 Plan, as shown in the respective tables below. In connection with the conversion, certain employees and directors of The Aaron's Company have outstanding equity awards of PROG Holdings, which are not reflected in the tables below. The Company accounted for the conversion of the awards as award modifications in accordance with ASC 718. The Company performed a comparison of the fair value immediately prior to the conversion with the fair value immediately after the conversion, and determined that the conversion of equity awards held by The Aaron's Company employees resulted in incremental compensation expense of $5.5 million, which reflects the incremental fair value of the converted awards. Of this total amount, $1.1 million was related to vested but unexercised or unissued equity awards and was recognized immediately on the separation and distribution date. The remaining incremental expense is to be amortized and recognized over the remaining service periods of the respective awards, with an additional $0.8 million being recognized in December 2020. The incremental compensation expense associated with the converted award modifications was included as a component of separation costs in the consolidated and combined statements of earnings for the year ended December 31, 2020. Retirement-related Modifications In connection with the completion of the separation and distribution on November 30, 2020, PROG Holdings and the Company entered into a Transition Agreement with the former Chief Executive Officer of Aaron's Holdings Company, Inc., pursuant to which the CEO would retire and transition to become the non-employee Chairman of the Board of Directors of The Aaron's Company, Inc. effective November 30, 2020. The Transition Agreement provided that all unvested stock options, restricted stock awards and performance share units granted to the CEO in prior periods become 100% vested as promptly as practicable following the completion of the separation and distribution. These awards also followed the conversion methodology outlined in the "Conversion at Separation" section above. The Company concluded that the terms of this Transition Agreement resulted in award modifications under ASC 718 as both the fair value and vesting conditions of the awards had been changed. The modifications resulted in incremental compensation expense allocated to the Company of $11.0 million related to the conversion and subsequent accelerated vesting of approximately 143,000 restricted stock awards, 356,000 performance units and 831,000 stock options. The total incremental expense resulting from the award modifications was due to a) increases in the fair value of the awards immediately after the modification as compared to the fair value of the awards immediately prior to the modifications and b) the accelerated vesting of all awards following the completion of the separation and distribution, which resulted in the recognition of the full expense immediately on the separation and distribution date. The incremental compensation expense associated with the modification of the CEO was included as a component of retirement charges in the consolidated and combined statements of earnings for the year ended December 31, 2020. Stock-based Compensation Expense The stock-based compensation expense recorded by the Company in the periods presented prior to November 30, 2020 includes the expense directly attributable to the Company employees based on the awards and terms previously granted to our employees, as well as the expense associated with the allocation of stock-based compensation expense for PROG Holdings' corporate and shared function employees. For the periods subsequent to November 30, 2020, stock-based compensation expense includes expense related to the converted awards, including the incremental expense associated with the modifications of such awards as discussed above. Aaron’s has elected a policy to estimate forfeitures in determining the amount of stock compensation expense. Including the incremental expense associated with the modifications discussed above, total stock-based compensation expense recognized by the Company was $24.1 million, $13.2 million and $15.4 million for the years ended December 31, 2020, 2019 and 2018, respectively, which includes the allocation of stock-based compensation expense for PROG Holdings' corporate and shared function employees of $17.4 million, $7.8 million and $8.4 million, respectively. These costs were included as components of personnel costs, separation costs, and retirement charges, as applicable, in the consolidated and combined statements of earnings. The total income tax benefit recognized in the consolidated and combined statements of earnings for stock-based compensation arrangements was $6.1 million, $3.3 million and $3.8 million in the years ended December 31, 2020, 2019 and 2018, respectively. Benefits of tax deductions in excess of recognized compensation cost, which are included in operating cash flows, were $1.8 million, $2.5 million and $3.0 million for the years ended December 31, 2020, 2019 and 2018, respectively. As of December 31, 2020, there was $11.6 million of total unrecognized compensation expense related to non-vested stock-based compensation of directors and employees of The Aaron's Company. This expense, which includes the remaining incremental compensation expense associated with the modifications discussed above, is expected to be recognized by the Company over a period of 1.4 years. Stock Options The Company did not issue any stock options under the 2020 Plan during the year ended December 31, 2020 other than the options converted in connection with the separation and distribution, as discussed above. Under the 2020 Plan, options granted will become exercisable after a period of one Aaron's Holdings Company, Inc. historically determined the fair value of stock options on the grant date using a Black-Scholes-Merton option pricing model that incorporated expected volatility, expected option life, risk-free interest rates and expected dividend yields. The expected volatility was based on implied volatilities from traded options on Aaron's Holdings Company, Inc. stock and the historical volatility of common stock over the most recent period generally commensurate with the expected estimated life of each respective grant. The expected life of the options was based on historical option exercise experience, as Aaron's Holdings Company, Inc. believed that the historical experience method is the best estimate of future exercise patterns. The risk-free interest rates are determined using the implied yield available for zero-coupon United States government issues with a remaining term equal to the expected life of the grant. The expected dividend yields were based on the approved annual dividend rate in effect and market price of the underlying common stock of Aaron's Holdings Company, Inc. at the time of grant. The fair value of the converted stock options was adjusted in accordance with the Employee Matters Agreement and conversion methodology to ensure that the economic value of the awards was unchanged by the conversion. The Company also intends to determine the fair value of future stock options to be granted under the 2020 Plan using a Black-Scholes-Merton option pricing model and will reevaluate the assumptions used in the model as applicable. The table below summarizes the Company's stock option activity, including the issuance of the converted awards on the separation and distribution date of November 30, 2020, through December 31, 2020: Options Weighted Average Weighted Average Aggregate Weighted Outstanding at January 1, 2020 — $ — Converted on November 30, 2020 in connection with spin-off 1,537 12.51 Granted — — Exercised (831) 12.93 Forfeited/expired (12) 13.51 Outstanding at December 31, 2020 694 11.99 7.76 $ 4,834 $ 2.63 Expected to Vest 403 12.88 8.65 2,451 4.57 Exercisable at December 31, 2020 277 10.70 6.4 2,292 3.59 The aggregate intrinsic value amounts in the table above represent the closing price of The Aaron's Company, Inc. common stock on December 31, 2020 in excess of the exercise price, multiplied by the number of in-the-money stock options as of that same date. Options outstanding that are expected to vest are net of estimated future option forfeitures. The aggregate intrinsic value of options exercised by the Company employees between November 30, 2020 and December 31, 2020, which represents the value of The Aaron's Company, Inc. common stock at the time of exercise in excess of the exercise price, was $4.2 million. The aggregate intrinsic value of options exercised by the Company employees for periods prior to November 30, 2020, which represents the value of Aaron's Holdings Company, Inc. common stock at the time of exercise in excess of the exercise price, was $1.4 million, $1.7 million and $4.8 million during the years ended December 31, 2020, 2019 and 2018, respectively. The total grant-date fair value of options vested (which vested prior to the separation and distribution) during the years ended December 31, 2020, 2019 and 2018 was $3.8 million, $0.8 million and $0.7 million, respectively. The following table summarizes information about the Company's stock options outstanding at December 31, 2020: Options Outstanding Options Exercisable Range of Exercise Number Outstanding Weighted Average Remaining Contractual Weighted Average Number Exercisable Weighted Average $0.00-$10.00 144,586 5.53 $ 7.25 144,586 $ 7.25 $10.01-$20.00 549,349 8.34 13.24 132,791 14.45 $0.00-$20.00 693,935 7.8 11.99 277,377 10.70 Restricted Stock The Company did not issue any restricted stock awards under the 2020 Plan during the year ended December 31, 2020 other than the awards converted in connection with the spin-off, as discussed above. Restricted stock units or restricted stock awards (collectively, "restricted stock") may be granted to Aaron’s employees and directors under the 2020 Plan and typically vest over approximately one The fair value of restricted stock is generally based on the fair market value of common stock on the date of grant. The fair value of the converted awards was adjusted in accordance with the Employee Matters Agreement and conversion methodology to ensure that the economic value of the awards was unchanged by the conversion. The following table summarizes information about the Company's restricted stock activity, including the issuance of the converted awards on the separation and distribution date of November 30, 2020, through December 31, 2020: Restricted Stock Weighted Average Non-vested at January 1, 2020 — $ — Converted on November 30, 2020 in connection with spin-off 540 14.18 Granted — — Vested (118) 12.66 Forfeited/unearned (5) 12.68 Non-vested at December 31, 2020 417 14.63 The total vest-date fair value of restricted stock described above that vested between November 30, 2020 and December 31, 2020 was $2.0 million. The total vest-date fair value of Company employees' restricted stock that vested in periods prior to the separation and distribution date of November 30, 2020 was $3.0 million, $4.9 million and $6.2 million in the years ended December 31, 2020, 2019 and 2018, respectively. Performance Share Units The Company did not issue any performance share awards under the 2020 Plan during the year ended December 31, 2020 other than the awards converted in connection with the spin-off, as discussed above. For performance share units, which are generally settled in stock, the number of shares earned is determined at the end of the one-year performance period based upon achievement of various performance criteria, which have included adjusted EBITDA, revenue, adjusted pre-tax profit and return on capital metrics. When the performance criteria are met, the award is earned and one-third of the award vests. Another one-third of the earned award is subject to an additional one-year service period and the remaining one-third of the earned award is subject to an additional two-year service period. Upon vesting, shares are to be issued by the Company with common stock or from its treasury shares, based on treasury share availability. The number of performance-based shares which could potentially be issued ranges from zero to 200% of the target award. The vesting schedules and performance achievement levels of converted awards were unchanged by the conversion. The fair value of performance share units is based on the fair market value of common stock on the date of grant. The fair value of the converted awards was adjusted in accordance with the Employee Matters Agreement and conversion methodology to ensure that the economic value of the awards was unchanged by the conversion. The compensation expense associated with these awards is amortized on an accelerated basis over the vesting period based on the projected assessment of the level of performance that will be achieved and earned. In the event the Company determines it is no longer probable that the minimum performance criteria specified in the plan will be achieved, all previously recognized compensation expense is reversed in the period such a determination is made. The following table summarizes information about the Company's performance share unit activity, including the issuance of the converted awards on the separation and distribution date of November 30, 2020, through December 31, 2020: Performance Share Units Weighted Average Non-vested at January 1, 2020 — $ — Converted on November 30, 2020 in connection with spin-off 774 12.42 Granted — — Vested (309) 11.89 Forfeited/unearned (10) 13.45 Non-vested at December 31, 2020 455 12.75 The total vest-date fair value of performance share units described above that vested between November 30, 2020 and December 31, 2020 was $5.3 million. The total vest-date fair value of Company employees' performance share units that vested in periods prior to the separation and distribution date of November 30, 2020 was $5.5 million, $5.6 million and $6.0 million for the years ended December 31, 2020, 2019 and 2018, respectively. Employee Stock Purchase Plan In connection with the separation and distribution and effective on November 30, 2020, The Aaron's Company, Inc. established its Employee Stock Purchase Plan (the "2020 ESPP"), which was approved by the Company's Board of Directors on November 11, 2020. The 2020 ESPP is a tax-qualified plan under Section 423 of the Internal Revenue Code. The purpose of the 2020 ESPP is to encourage ownership of the Company's common stock by eligible employees. Under the 2020 ESPP, eligible employees are allowed to purchase common stock of the Company during six-month offering periods at the lower of: (a) 85% of the closing trading price per share of the common stock on the first trading date of an offering period in which a participant is enrolled; or (b) 85% of the closing trading price per share of the common stock on the last day of an offering period. Employees participating in the 2020 ESPP can contribute up to an amount not exceeding 10% of their base salary and wages up to an annual maximum of $25,000 in total fair market value of the common stock. The first offering period under the 2020 ESPP will begin on January 1, 2021. As of December 31, 2020, the aggregate number of shares of common stock that may be issued under the 2020 ESPP was 200,000. Historically, and until the separation and distribution was completed on November 30, 2020, the Company's employees participated in the Aaron's, Inc. Employee Stock Purchase Plan. The final offering period for the year ended December 31, 2020 was modified to accelerate the purchase date to be prior to the completion of the spin-off. The Company concluded that the acceleration of the purchase date should be considered an award modification under ASC 718 as the fair value of the award had been changed. The Company performed a comparison of fair value immediately before and after modification, noting the post-modification fair value was lower than the pre-modification fair value, resulting in no incremental compensation expense. The compensation cost related to the ESPP is measured on the grant date based on eligible employees' expected withholdings and is recognized over each six-month offering period. Total compensation cost recognized by the Company in connection with the ESPP was $0.3 million, $0.2 million and $0.1 million for years ended December 31, 2020, 2019 and 2018, respectively. These costs were included as a component of personnel costs in the consolidated and combined statements of earnings. During the year ended December 31, 2020, Aaron's Holdings Company, Inc. issued 25,291 shares to the Company employees under the ESPP at a weighted average purchase price of $38.55. During the year ended December 31, 2019, Aaron's Holdings Company, Inc. issued 24,782 shares to the Company employees at a weighted average purchase price of $42.21. During the year ended December 31, 2018, Aaron's Holdings Company, Inc. issued 13,088 shares to the Company employees at a purchase price of $35.74. |
Compensation Arrangements
Compensation Arrangements | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Compensation Arrangements | COMPENSATION ARRANGEMENTS Deferred Compensation The Company maintains The Aaron's Company, Inc. Deferred Compensation Plan, which is an unfunded, nonqualified deferred compensation plan for a select group of management, highly compensated employees and non-employee directors. Prior to the separation and distribution date, eligible Aaron's employees participated in the Aaron's, Inc. Deferred Compensation Plan. Following the separation and distribution, the rights and obligations of the plans related to Aaron's employees were transferred from PROG Holdings pursuant to the employee matters agreement. On a pre-tax basis, eligible employees can defer receipt of up to 75% of their base compensation and up to 75% of their incentive pay compensation, and eligible non-employee directors can defer receipt of up to 100% of their cash and stock director fees. Compensation deferred under the plan is recorded as a deferred compensation liability, which is recorded in accounts payable and accrued expenses in the consolidated and combined balance sheets. The deferred compensation plan liability was $10.5 million and $11.0 million as of December 31, 2020 and 2019, respectively. Liabilities under the plan are recorded at amounts due to participants, based on the fair value of participants’ selected investments, which consist of equity and debt "mirror" funds. The obligations are unsecured general obligations of the Company and the participants have no right, interest or claim in the assets of the Company, except as unsecured general creditors. The Company has established a rabbi trust to fund obligations under the plan primarily with company-owned life insurance policies. The value of the assets within the rabbi trust, which is primarily the cash surrender value of the life insurance, was $16.1 million and $14.4 million as of December 31, 2020 and 2019, respectively, and is included in prepaid expenses and other assets in the consolidated and combined balance sheets. The full value of the assets within the rabbi trust associated with the Aaron's, Inc. plan were included within the Company’s consolidated and combined balance sheets as of December 31, 2019, as the plan was maintained by one of the legal entities forming the basis of The Aaron's Company, Inc. The Company recorded gains related primarily to changes in the cash surrender value of the life insurance plans of $1.7 million and $2.1 million during the years ended December 31, 2020 and 2019, respectively, and recorded losses of $1.2 million during the year ended December 31, 2018, which were recorded within other non-operating income (expense), net in the consolidated and combined statements of earnings. Benefits of $2.3 million, $2.9 million and $2.7 million were paid to plan participants during the years ended December 31, 2020, 2019 and 2018, respectively. The terms of The Aaron's Company, Inc. deferred compensation plan include a discretionary match. The match allows eligible employees to receive 100% matching by the Company on the first 3% of contributions and 50% on the next 2% of contributions for a total of a 4% match. The annual match is not to exceed $11,000, $11,200, and $11,400 for an individual employee for 2018, 2019, and 2020, respectively, and is subject to a three-year cliff vesting schedule. Deferred compensation expense charged to operations for the matching contributions was not significant during the periods presented herein. 401(k) Defined Contribution Plan The Company maintains a 401(k) retirement savings plan for employees who meet certain eligibility requirements. Prior to the separation and distribution date, the Company's employees participated in the PROG Holdings Retirement Plan (formerly known as the Aaron's, Inc. Employees Retirement Plan). Following the separation and distribution, assets and liabilities of the PROG Holdings Retirement Plan were transferred to The Aaron's Company, Inc. 401(k) savings plan. The Aaron's Company, Inc. 401(k) savings plan allows employees to contribute up to 75% of their annual compensation in accordance with federal contribution limits with 100% matching by the Company on the first 3% of compensation and 50% on the next 2% of compensation for a total of a 4% match. The Company’s expense related to the plan was $5.3 million in 2020, $5.5 million in 2019 and $5.3 million in 2018. Employee Stock Purchase Plan |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS The Aaron's Company was a related party to PROG Holdings prior to the separation and distribution date. The significant transactions and balances with PROG Holdings prior to the separation and distribution date are further described below. All intercompany transactions between the Company and PROG Holdings prior to the separation and distribution date have been included within invested capital in the consolidated and combined balance sheets and classified as changes in invested capital on the consolidated and combined statements of equity. The total net effect of the settlement of these intercompany transactions is reflected in the consolidated and combined statements of cash flows as a financing activity. The significant components of the net increase (decrease) in invested capital, which includes the transfer of invested capital to additional paid-in-capital upon completion of the separation, for the years ended December 31, 2020, 2019, and 2018 were as follows: Year Ended December 31, (In Thousands) 2020 2019 2018 General financing activities, net $ 112,597 $ (38,052) $ (67,852) Corporate allocations 38,554 27,276 28,640 Income tax 1 (30,372) 22,250 22,368 Transfer of Invested Capital to Additional Paid-in-Capital (714,356) — — Net (decrease) increase in Invested Capital $ (593,577) $ 11,474 $ (16,844) 1 See Note 9 to these consolidated and combined financial statements for more information regarding the Company’s income taxes. Corporate Allocations The Company's previous operating model included a combination of standalone and combined business functions with PROG Holdings. The consolidated and combined financial statements in this Annual Report include corporate allocations through the separation and distribution date for expenses related to activities that were previously provided on a centralized basis within PROG Holdings, which were primarily expenses related to executive management, finance, treasury, tax, audit, legal, information technology, human resources and risk management functions and the related benefit cost associated with such functions, including stock-based compensation. See Note 12 to these consolidated and combined financial statements for more information regarding stock-based compensation. Corporate allocations during the year ended December 31, 2020 also include expenses related to the separation and distribution. These expenses have been allocated to the Company based on direct usage or benefit where specifically identifiable, with the remainder allocated primarily on a pro rata basis using an applicable measure of revenues, headcount or other relevant measures. The Company considers these allocations to be a reasonable reflection of the utilization of services or the benefit received. These allocated expenses are included within personnel costs and other operating expenses, net in the consolidated and combined statements of earnings and as an increase to invested capital in the consolidated and combined balance sheets. General corporate expenses allocated to the Company during the years ended December 31, 2020, 2019 and 2018 were $38.6 million, $27.3 million and $28.6 million, respectively. Management believes the assumptions regarding the allocation of general corporate expenses from PROG Holdings are reasonable. However, the consolidated and combined financial statements may not include all of the actual expenses that would have been incurred and may not reflect the Company's consolidated and combined results of operations, financial position and cash flows had it been a standalone company during the periods presented. Actual costs that would have been incurred if the Company had been a standalone company would depend on multiple factors, including organization structure and various other strategic decisions. Post-Separation Arrangements In connection with the separation and distribution, the Company entered into the following agreements with PROG Holdings, which (i) govern the separation and our relationship with PROG Holdings after the separation, and (ii) provide for the allocation between the two companies of PROG Holdings' assets, employees, liabilities and obligations (including its investments, property and employee benefits and tax-related assets and liabilities) attributable to periods prior to, at, and after the separation. • The separation and distribution Agreement. This agreement identifies certain transfers of assets and assumptions of liabilities in connection with the spin-off transaction and provides for when and how these transfers and assumptions will occur. The separation and distribution Agreement also provides for the settlement or extinguishment of certain liabilities and other obligations between the Company and PROG Holdings. • Transition Services Agreement. Under the terms of this agreement, both the Company and PROG Holdings will provide specified services to one another for a period of time not to exceed twelve months to help ensure an orderly transition following the separation and distribution. The services to be provided include certain information technology services, finance, tax and accounting services, fleet management support and human resource and employee benefits services. The party receiving each service is required to pay to the party providing the service a fee equal to the cost of service specified for each service, which is billed on a monthly basis. The agreed-upon charges for such services are generally intended to allow the party providing the service to recover all costs and expenses of providing such services. Amounts incurred and due to or from PROG Holdings for transition services were not significant during the year ended December 31, 2020. • Employee Matters Agreement. This agreement allocates certain assets, liabilities and responsibilities relating to employment matters, employee compensation, benefits plans and programs, and other related matters. The Employee Matters Agreement governs certain compensation and employee benefit obligations with respect to the current and former employees and non-employee directors of each company. • Tax Matters Agreement. This agreement governs the parties’ respective rights, responsibilities and obligations after the separation and distribution with respect to taxes (including taxes arising in the ordinary course of business and taxes, if any, incurred as a result of any failure of the separation and distribution and certain related transactions to qualify as tax-free for U.S. federal income tax purposes), tax attributes, the preparation and filing of tax returns, tax elections, the control of audits and other tax proceedings and assistance and cooperation in respect of tax matters. • Assignment Agreement. Pursuant to the Assignment Agreement, Progressive Leasing conveyed to Aaron’s, LLC an undivided and equal ownership interest in certain software related to Progressive Leasing’s digital decisioning platform (the "Shared Software"). Progressive Leasing also conveyed to Aaron’s, LLC all of Progressive Leasing’s interest in certain software models related to the Shared Software, and Aaron’s, LLC conveyed certain data to Progressive Leasing under the Assignment Agreement. |
Quarterly Financial Information
Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information (Unaudited) | QUARTERLY FINANCIAL INFORMATION (UNAUDITED) The following tables show selected unaudited quarterly results of operations for the years ended December 31, 2020 and 2019. The quarterly data has been prepared on the same basis as the audited annual financial statements as further described in Note 1 to these consolidated and combined financial statements. (In Thousands, Except Per Share Data) First Quarter Second Quarter Third Quarter Fourth Quarter Year Ended December 31, 2020 Revenues $ 432,831 $ 430,955 $ 440,961 $ 430,172 Gross Profit 1 267,247 263,921 279,564 272,810 (Loss) Earnings Before Income Taxes (470,261) 29,424 40,081 2,942 Net (Loss) Earnings (323,774) 22,374 32,613 2,875 (Loss) Earnings Per Share 2 (9.57) 0.66 0.96 0.08 (Loss) Earnings Per Share Assuming Dilution 2 (9.57) 0.66 0.96 0.08 Year Ended December 31, 2019 Revenues $ 480,056 $ 443,198 $ 426,271 $ 434,952 Gross Profit 1 299,076 276,565 265,187 271,188 Earnings (Loss) Before Income Taxes 13,052 (3,910) (2,255) $ 27,383 Net (Loss) Earnings (1,178) (18,080) 26,835 20,522 (Loss) Earnings Per Share 2 (0.03) (0.53) 0.79 0.61 (Loss) Earnings Per Share Assuming Dilution 2 (0.03) (0.53) 0.79 0.61 1 Gross profit is the sum of total revenues less total cost of revenues. 2 The Company's basic earnings per share calculations for the periods prior to the separation and distribution assumes that the weighted average number of common shares outstanding was 33,841,624, which is the number of shares distributed to shareholders on the separation and distribution date, November 30, 2020. The same number of shares was used in the calculation of diluted earnings per share for the periods prior to the separation and distribution, as there were no equity awards of The Aaron's Company, Inc. outstanding prior to the distribution date. The comparability of the Company’s quarterly financial results during 2020 and 2019 was impacted by certain events, as described below on a pre-tax basis: • The first quarter of 2020 included a $446.9 million loss to record the full impairment of the Company's goodwill balance as of March 31, 2020 and a $14.1 million charge related to an early termination fee for a sales and marketing agreement. • The first, second, third and fourth quarters of 2020 included net restructuring charges of $22.3 million, $7.0 million, $4.0 million, and $9.2 million, respectively. The first, second, third and fourth quarters of 2019 included net restructuring charges of $13.3 million, $18.7 million, $5.5 million and $2.5 million, respectively. The restructuring activity in both years relates primarily to impairment charges in connection with store closures, the planned exit from two of our administrative buildings, closed store contractual lease obligations and occupancy costs, and severance costs. Restructuring activity during 2019 also included impairment charges associated with the loss on the sale of six Canadian stores to a third party. Refer to Note 11 to these consolidated and combined financial statements for further details of restructuring activity. • The third and fourth quarters of 2020 included retirement charges of $0.5 million and $12.1 million, respectively. These charges are primarily associated with the retirement of the Chief Executive Officer of Aaron's Holdings Company, Inc., as well as costs associated with the announced retirement of Company executive-level employees. See Note 12 to these consolidated and combined financial statements for further details of retirement charges recognized during the fourth quarter of 2020 associated with the retirement of the Chief Executive Officer. • The third and fourth quarters of 2020 included separation costs of $1.2 million and $7.0 million, respectively. These costs represent expenses associated with the separation and distribution, including employee-related costs, incremental stock-based compensation expense associated with the conversion and modification of unvested and unexercised equity awards, and other one-time expenses incurred by the Company in order to operate as an independent, separate publicly traded entity. • The fourth quarter of 2020 included a loss on debt extinguishment of $4.1 million related to the full repayment of the outstanding borrowings of $285.0 million under the previous Aaron's, Inc. revolving credit and term loan agreement and senior unsecured notes in conjunction with the separation and distribution as further described in Note 8 to these consolidated and combined financial statements. • The third quarter of 2019 includes gains on insurance recoveries of $4.5 million related to payments received from and final settlements reached with insurance carriers for Hurricanes Harvey and Irma property and business interruption claims in excess of related property insurance receivables. Such gains were classified within other operating expenses, net in the consolidated and combined statements of earnings. • The fourth quarter of 2019 included gains of $7.4 million from the sale of various real estate properties which were classified within other operating expenses, net in the consolidated and combined statements of earnings. |
Business and Summary of Signi_2
Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Description of Business | Description of BusinessAaron's is a leading, technology-enabled, omni-channel provider of lease-to-own ("LTO") and purchase solutions generally focused on serving the large, credit-challenged segment of the population. Through our portfolio of approximately 1,300 stores and our Aarons.com e-commerce platform, we provide consumers with LTO and purchase solutions for the products they need and want, including furniture, appliances, electronics, computers and a variety of other products and accessories. In addition, the Company includes the operations of Woodhaven Furniture Industries ("Woodhaven"), which manufactures and supplies the majority of the bedding and a significant portion of the upholstered furniture leased and sold in company-operated and franchised stores. |
Basis of Presentation | Basis of Presentation The financial statements for periods prior to and through the date of the separation and distribution, November 30, 2020, were prepared on a combined standalone basis and were derived from the consolidated financial statements and accounting records of PROG Holdings. The financial statements for the period from December 1, 2020 through December 31, 2020 are consolidated financial statements of the Company and its subsidiaries, each of which is wholly-owned, and is based on the financial position and results of operations of the Company as a standalone company. Intercompany balances and transactions between consolidated entities have been eliminated. These consolidated and combined financial statements reflect the historical results of operations, financial position and cash flows of the Company in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). The historical results of operations, financial position and cash flows of the Company presented in these consolidated and combined financial statements may not be indicative of what they would have been had the Company been an independent standalone entity, nor are they necessarily indicative of the Company's future results of operations, financial position and cash flows. The combined financial statements prepared prior to and through November 30, 2020 include all revenues and costs directly attributable to the Company and an allocation of expenses related to certain corporate functions. These costs include executive management, finance, treasury, tax, audit, legal, information technology, human resources and risk management functions and the related benefit cost associated with such functions, including stock-based compensation. These expenses have been allocated to the Company based on direct usage or benefit where specifically identifiable, with the remaining expenses allocated primarily on a pro rata basis using an applicable measure of revenues, headcount or other relevant measures. The Company considers these allocations to be a reasonable reflection of the utilization of services or the benefit received. See Note 14 to these consolidated and combined financial statements for further information regarding the Company’s related party transactions between the Company and PROG Holdings impacting the consolidated and combined financial statements herein. The preparation of the Company's consolidated and combined financial statements requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates. Generally, actual experience has been consistent with management's prior estimates and assumptions. However, as described above, the extent to which the COVID-19 pandemic and resulting measures taken by the Company will impact the Company's business will depend on future developments, which are highly uncertain and cannot be precisely predicted at this time. In many cases, management's estimates and assumptions are highly dependent on estimates of future developments and may change significantly in the future due to unforeseen direct and indirect impacts of the COVID-19 pandemic. |
Revenue Recognition | Revenue Recognition The Company provides lease merchandise, consisting of furniture, appliances, electronics, computers and a variety of other products and accessories to its customers for lease under certain terms agreed to by the customer. Our stores and e-commerce platform offer leases with flexible terms that can be renewed monthly up to 12, 18 or 24 months. The customer has the right to acquire ownership either through an early purchase option or through payment of all required lease payments. Our store-based operations also offer customers the option to obtain a membership in the Aaron’s Club Program (the "Club Program"). The benefits to customers of the Club Program are separated into three general categories: (a) product protection benefits; (b) health & wellness discounts; and (c) dining, shopping and consumer savings. Lease agreements and Aaron's Club Program memberships are cancelable at any time by either party without penalty, and as such, we consider these offerings to be to be month-to-month arrangements. |
Lease Merchandise | Lease Merchandise The Company’s lease merchandise is recorded at the lower of depreciated cost or net realizable value. The cost of merchandise manufactured by our Woodhaven operations is recorded at cost and includes overhead from production facilities, shipping costs and warehousing costs. The Company begins depreciating merchandise at the earlier of 12 months and one day from its purchase of the merchandise or when the item is leased to customers. Lease merchandise depreciates to a 0% salvage value over the lease agreement period when on lease, generally 12 to 24 months, and generally 36 months when not on lease. Depreciation is accelerated upon early payout. The following is a summary of lease merchandise, net of accumulated depreciation and allowances: December 31, (In Thousands) 2020 2019 Merchandise on Lease, net of Accumulated Depreciation and Allowances $ 473,964 $ 504,979 Merchandise Not on Lease, net of Accumulated Depreciation and Allowances 1 223,271 276,619 Lease Merchandise, net of Accumulated Depreciation and Allowances 2 $ 697,235 $ 781,598 1 Includes Woodhaven raw materials and work-in-process inventory that has been classified within lease merchandise in the consolidated and combined balance sheets of $10.4 million and $14.0 million as of December 31, 2020 and 2019, respectively. 2 General and administrative overhead costs capitalized into the cost of lease merchandise were $43.5 million, $48.7 million, and $45.8 million for the years ended December 31, 2020, 2019 and 2018, respectively. Capitalized overhead costs remaining in lease merchandise were $45.2 million and $47.5 million as of December 31, 2020 and 2019, respectively. The Company’s policies require weekly merchandise counts for its store-based operations, which include write-offs for unsalable, damaged, or missing merchandise inventories. In addition to monthly cycle counting, full physical inventories are generally taken at the fulfillment and manufacturing facilities annually and appropriate provisions are made for missing, damaged and unsalable merchandise. In addition, the Company monitors merchandise levels and mix by division, store, and fulfillment center, as well as the average age of merchandise on hand. If obsolete merchandise cannot be returned to vendors, its carrying amount is adjusted to its net realizable value or written off. Generally, all merchandise not on lease is available for lease or sale. On a monthly basis, all damaged, lost or unsalable merchandise identified is written off. The Company records a provision for write-offs using the allowance method. The allowance for lease merchandise write-offs estimates the merchandise losses incurred but not yet identified by management as of the end of the accounting period based primarily on historical write-off experience. Other qualitative factors are considered in estimating the allowance, such as current and forecasted business trends including, but not limited to, the potential unfavorable impacts of the COVID-19 pandemic on our business. Given the significant uncertainty regarding the impacts of the COVID-19 pandemic on our businesses, a high level of estimation was involved in determining the allowance as of December 31, 2020; therefore, actual lease merchandise write-offs could differ materially from the allowance. The provision for write-offs is included in provision for lease merchandise write-offs in the accompanying consolidated and combined statements of earnings. The Company writes off lease merchandise on lease agreements that are 60 days or more past due on pre-determined dates twice monthly. |
Cost of Goods and Services Sold | Retail and Non-Retail Cost of Sales Included in cost of lease and retail revenues, as well as non-retail cost of sales, is the net book value of merchandise sold via retail and non-retail sales, primarily using specific identification. Shipping and Handling Costs Shipping and handling costs of $64.2 million, $74.3 million and $75.2 million were incurred for the years ended December 31, 2020, 2019 and 2018, respectively. These costs are primarily classified within other operating expenses, net in the accompanying consolidated and combined statements of earnings, and to a lesser extent, capitalized into the cost of lease merchandise and subsequently depreciated or recognized as cost of retail sales. |
Advertising | AdvertisingThe Company expenses advertising costs as incurred. Advertising production costs are initially recognized as a prepaid advertising asset and are expensed when an advertisement appears for the first time. Total advertising costs were $40.2 million, $37.1 million and $33.3 million for the years ended December 31, 2020, 2019 and 2018, respectively, and are classified within other operating expenses, net in the consolidated and combined statements of earnings. These advertising costs are shown net of cooperative advertising considerations received from vendors, which represents reimbursement of specific, identifiable and incremental costs incurred in selling those vendors’ products. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense in prior years and until the effective date of the separation and distribution on November 30, 2020 was allocated to The Aaron's Company based on the awards and terms previously granted to its employees under the PROG Holdings stock-based compensation plans and includes an allocation of PROG Holdings' corporate employee stock-based compensation expenses. The Aaron's Company has stock-based employee compensation plans adopted in connection with the separation and distribution in which certain Company employees are participants, which are more fully described in Note 12 to these consolidated and combined financial statements. |
Deferred Income Taxes | Income Taxes The Company and its subsidiaries file U.S. federal consolidated income tax returns in the United States, and separate legal entities file in various state and foreign jurisdictions. In all periods presented, the income tax provision has been computed for the entities comprising the Company on a standalone, separate return basis as if the Company were a separate taxpayer. The provision for income taxes is determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. Income taxes as presented attribute deferred income taxes of the Company's standalone consolidated and combined financial statements in a manner that is systematic, rational and consistent with the asset and liability method. The provision for income taxes represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from differences between the financial and tax basis of the Company’s assets and liabilities and are adjusted for changes in tax rates and tax laws when such changes are enacted. The Company's largest temporary differences arise principally from the use of accelerated depreciation methods on lease merchandise for tax purposes. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. The Company recognizes uncertain tax positions in the consolidated and combined financial statements when it is more likely than not that the tax position will be sustained upon examination. Uncertain tax positions are measured based on the probabilities that the uncertain tax position will be realized upon final settlement. See further details on income taxes within Note 9 to these consolidated and combined financial statements. |
Earnings Per Share | (Loss) Earnings Per Share (Loss) earnings per share is computed by dividing net (loss) earnings by the weighted average number of shares of common stock outstanding during the period. The computation of (loss) earnings per share assuming dilution includes the dilutive effect of stock options, RSUs, RSAs, PSUs and awards issuable under the Company's ESPP (collectively, "share-based awards") as determined under the treasury stock method, unless the inclusion of such awards would be anti-dilutive. The Company's basic earnings per share calculations for the periods prior to the separation and distribution assumes that the weighted average number of common shares outstanding was 33,841,624, which is the number of shares distributed to shareholders on the separation and distribution date, November 30, 2020. The same number of shares was used in the calculation of diluted earnings per share for the periods prior to the separation and distribution, as there were no equity awards of The Aaron's Company, Inc. outstanding prior to the distribution date. |
Cash and Cash Equivalents | Cash and Cash EquivalentsThe Company classifies as cash equivalents any highly liquid investments that have maturity dates of three months or less at the time they are purchased. The Company maintains its cash and cash equivalents at various banks. Bank balances may exceed coverage provided by the Federal Deposit Insurance Corporation ("FDIC"). However, due to the size and strength of the banks in which balances that exceed the FDIC coverage are held, any exposure to loss is believed to be minimal. Cash and cash equivalents also includes amounts in transit due from financial institutions related to credit card and debit card transactions, which generally settle within three business days from the original transaction. |
Investments | InvestmentsAt December 31, 2017, the Company maintained an investment classified as held-to-maturity securities in PerfectHome, a rent-to-own company operating in the United Kingdom, |
Accounts Receivable | Accounts Receivable Accounts receivable consist primarily of receivables due from customers on lease agreements, corporate receivables incurred during the normal course of business (primarily for vendor consideration and real estate leasing activities) and franchisee obligations. Accounts receivable, net of allowances, consist of the following: December 31, (In Thousands) 2020 2019 Customers $ 8,399 $ 9,820 Corporate 12,771 14,028 Franchisee 12,820 13,231 $ 33,990 $ 37,079 The Company maintains an accounts receivable allowance, under which the Company's policy is to record a provision for returns and uncollectible contractually due renewal payments based on historical collection experience, which is recognized as a reduction of lease and retail revenues within the consolidated and combined statements of earnings. Other qualitative factors are considered in estimating the allowance, such as current and forecasted business trends including, but not limited to, the potential unfavorable impacts of the COVID-19 pandemic on our business. The Company writes off lease receivables that are 60 days or more past due on pre-determined dates twice monthly. The Company also maintains an allowance for outstanding franchisee accounts receivable. The Company's policy is to estimate a specific allowance on accounts receivable to estimate future losses related to certain franchisees that are deemed higher risk of non-payment and a general allowance based on historical losses as well as the Company's assessment of the financial health of all other franchisees. The estimated allowance on accounts receivable includes consideration of broad macroeconomic trends, such as the potential unfavorable impacts of the COVID-19 pandemic on the franchisees' ability to satisfy their obligations. The provision for uncollectible franchisee accounts receivable is recorded as bad debt expense in other operating expenses, net within the consolidated and combined statements of earnings. Given the significant uncertainty regarding the impacts of the COVID-19 pandemic on our business, actual accounts receivable write-offs could differ materially from the allowance. |
Property, Plant and Equipment | Property, Plant and Equipment The Company records property, plant and equipment at cost. Depreciation and amortization are computed on a straight-line basis over the estimated useful lives of the respective assets, which range from five one Costs incurred to develop software for internal use are capitalized and amortized over the estimated useful life of the software, which ranges from five ten Gains and losses related to dispositions and retirements are recognized as incurred. Maintenance and repairs are also expensed as incurred, and leasehold improvements are capitalized and amortized over the lesser of the expected lease term or the asset's useful life. Depreciation expense for property, plant and equipment is classified within other operating expenses, net in the accompanying consolidated and combined statements of earnings and was $60.9 million, $60.3 million and $53.9 million during the years ended December 31, 2020, 2019 and 2018, respectively. Amortization of previously capitalized internal use software development costs, which is a component of depreciation expense for property, plant and equipment, was $17.4 million, $15.7 million and $13.5 million during the years ended December 31, 2020, 2019 and 2018, respectively. Management assesses its long-lived assets other than goodwill for impairment whenever facts and circumstances indicate that the carrying amount may not be fully recoverable. If it is determined that the carrying amount of an asset is not recoverable, management compares the carrying amount of the asset to its fair value as estimated using discounted expected future cash flows, market values or replacement values for similar assets. The amount by which the carrying amount exceeds the fair value of the asset, if any, is recognized as an impairment loss. |
Assets Held for Sale | Assets Held for Sale Certain properties, consisting of parcels of land and commercial buildings, met the held for sale classification criteria as of December 31, 2020 and 2019. Assets held for sale are recorded at the lower of their carrying value or fair value less estimated cost to sell and are classified within prepaid expenses and other assets in the consolidated and combined balance sheets. Depreciation is suspended on assets upon classification as held for sale. The carrying amount of the properties held for sale as of December 31, 2020 and 2019 was $9.0 million and $10.1 million, respectively. Management estimated the fair values of real estate properties using the market values for similar properties. These properties are considered Level 2 assets as defined below. Charges of $0.2 million and $1.2 million were recorded within restructuring expenses, net during the year ended December 31, 2020 and 2019, respectively, with insignificant charges recorded during 2018. These charges related to the impairment of store properties that the Company decided to close under its restructuring programs as described in Note 11. Impairment charges were also recorded on assets held for sale that were not part of a restructuring program of $0.2 million during the year ended December 31, 2018 and are included in other operating expenses, net within the consolidated and combined statements of earnings with insignificant charges recorded during 2020 and 2019. These charges related to the impairment of various parcels of land and buildings that were not part of a restructuring program and that the Company decided not to utilize for future expansion. |
Goodwill | Goodwill The Company’s goodwill is not amortized but is subject to an impairment test at the reporting unit level annually as of October 1 and more frequently if events or circumstances indicate that an impairment may have occurred. An interim goodwill impairment test is required if the Company believes it is more likely than not that the carrying amount of one or more reporting units exceeds the reporting units' fair value. The Company concluded that the need for an interim goodwill impairment test was triggered as of March 31, 2020. Factors that led to this conclusion included: (i) a significant decline in the Aaron's, Inc. stock price and market capitalization in March 2020; (ii) the temporary closure of all company-operated store showrooms due to the COVID-19 pandemic, which impacted our financial results and was expected to adversely impact future financial results; (iii) the significant uncertainty with regard to the short-term and long-term impacts that macroeconomic conditions arising from the COVID-19 pandemic and related government emergency and executive orders would have on the financial health of our customers and franchisees; and (iv) consideration given to the amount by which the Aaron's reporting unit's fair value exceeded the carrying value from the October 1, 2019 annual goodwill impairment test. As of March 31, 2020, management of Aaron's, Inc. determined its existing goodwill was fully impaired and recorded a goodwill impairment loss of $446.9 million during the three months ended March 31, 2020. Management engaged the assistance of a third-party valuation firm to perform the interim goodwill impairment test, which entailed an assessment of the Aaron's reporting unit’s fair value relative to the carrying value that was derived using a combination of both income and market approaches and performing a market capitalization reconciliation, which included an assessment of the control premium implied from the Company's estimated fair values of its reporting units. The fair value measurement involved significant unobservable inputs (Level 3 inputs, as discussed more fully below). The income approach utilized the discounted future expected cash flows, which required assumptions about short-term and long-term revenue growth or decline rates, operating margins, capital requirements, and a weighted-average cost of capital. The income approach reflected assumptions and estimates made by management regarding direct and indirect impacts of the COVID-19 pandemic on the short-term and long-term cash flows for the reporting unit. Due to the significant uncertainty associated with the impacts of the COVID-19 pandemic, the assumptions and estimates used by management were highly subjective. The weighted-average cost of capital used in the income approach was adjusted to reflect the specific risks and uncertainties associated with the COVID-19 pandemic in developing the cash flow projections. Given the uncertainty discussed above, the Company performed certain sensitivity analyses including considering reasonably possible alternative assumptions for short-term and long-term growth or decline rates, operating margins, capital requirements, and weighted-average cost of capital rates. Each of the sensitivity analyses performed supported the conclusion of a full impairment of the existing goodwill balance within the Aaron's reporting unit. The market approach, which includes the guideline public company method, utilized pricing multiples derived from an analysis of comparable publicly traded companies. We believe the comparable companies we evaluate as marketplace participants serve as an appropriate reference when calculating fair value because those companies have similar risks, participate in similar markets, provide similar products and services for their customers and compete with us directly. However, we considered that such publicly available information regarding the comparable companies evaluated likely did not reflect the impact of the COVID-19 pandemic in determining the multiple assumptions selected. |
Segment Reporting | Segment Reporting Management concluded that the Company has one operating and reportable segment based on the nature of the financial information regularly reviewed by the chief operating decision maker to assess performance and allocate resources. We have also concluded that the Company has one reporting unit due to the fact that the components included within the operating segment have similar economic characteristics, such as the nature of the products and services provided, the nature of the customers we serve, and the interrelated nature of the components that are aggregated to form the sole reporting unit. The Company evaluates performance and allocates resources as a single operating segment based on revenue growth and pre-tax profit or loss from operations. |
Other Intangibles | Other Intangibles Other intangibles include customer relationships, non-compete agreements, reacquired franchise rights, customer lease contracts and expanded customer base intangible assets acquired in connection with store-based business acquisitions, asset acquisitions of customer contracts, and franchisee acquisitions. The customer relationship intangible asset is amortized on a straight-line basis over a three-year estimated useful life. The non-compete intangible asset is amortized on a straight-line basis over the life of the agreement (generally one two |
Insurance Reserves | Estimated Claims Liabilities Estimated claims liabilities are accrued primarily for workers compensation, vehicle liability, general liability and group health insurance benefits provided to employees. These liabilities are recorded within accrued insurance costs in accounts payable and accrued expenses in the consolidated and combined balance sheets. Estimates for these claims liabilities are made based on actual reported but unpaid claims and actuarial analysis of the projected claims run off for both reported and incurred but not reported claims. This analysis is based upon an assessment of the likely outcome or historical experience. The Company makes periodic prepayments to its insurance carriers to cover the projected claims run off for both reported and incurred but not reported claims, considering its retention or stop loss limits. In addition, we have prefunding balances on deposit and other insurance receivables with the insurance carriers which are recorded within prepaid expenses and other assets in our consolidated and combined balance sheets. |
Asset Retirement Obligations | Asset Retirement Obligations The Company accrues for asset retirement obligations, which relate to expected costs to remove exterior signage, in the period in which the obligations are incurred. These costs are accrued at fair value. When the related liability is initially recorded, the Company capitalizes the cost by increasing the carrying amount of the related long-lived asset. Over time, the liability is accreted to its settlement value and updated for changes in estimates. Upon settlement of the liability, the Company recognizes a gain or loss for any differences between the settlement amount and the liability recorded. Asset retirement obligations, which are included in accounts payable and accrued expenses in the consolidated and combined balance sheets, amounted to approximately $2.5 million and $2.7 million as of December 31, 2020 and 2019, respectively. The capitalized cost is depreciated over the useful life of the related asset. |
Fair Value Measurement | Fair Value Measurement Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value: Level 1—Valuations based on quoted prices for identical assets and liabilities in active markets. Level 2—Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3—Valuations based on unobservable inputs reflecting management’s own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. The Company measures a liability related to the non-qualified deferred compensation plan, which represents benefits accrued for participants that are part of the plan and is valued at the quoted market prices of the participants’ investment elections, at fair value on a recurring basis. The Company measures assets held for sale at fair value on a nonrecurring basis and records impairment charges when they are deemed to be impaired. The fair values of the Company’s other current financial assets and liabilities, including cash and cash equivalents, accounts receivable and accounts payable, approximate their carrying values due to their short-term nature. The Company also measures certain non-financial assets at fair value on a nonrecurring basis, such as goodwill, intangible assets, operating lease right-of-use assets, and property, plant and equipment, in connection with periodic evaluations for potential impairment. During the fourth quarter of 2020, the Company elected to permanently vacate one of its leased administrative offices in Kennesaw, Georgia. As described in further detail within Note 4 to these consolidated and combined financial statements, the Company impaired a part of the carrying value of the related operating lease right-of-use asset and property, plant and equipment using certain Level 3 inputs due to a lack of recent comparable transactions in active markets. |
Foreign Currency | Foreign Currency The financial statements of the Company’s Canadian subsidiary are translated from the Canadian dollar functional currency to U.S. dollars using month-end rates of exchange for assets and liabilities, and average rates of exchange for revenues, costs and expenses. Translation gains and losses of the subsidiary are recorded in accumulated other comprehensive loss as a component of equity. The Company's assets include assets from Canadian operations of $14.5 million and $28.2 million as of December 31, 2020 and 2019, respectively. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Adopted Financial Instruments - Credit Losses . In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments ("CECL"). The main objective of the update is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by companies at each reporting date. For trade and other receivables, held to maturity debt securities and other instruments, companies will be required to use a new forward-looking "expected losses" model that generally will result in the recognition of allowances for losses earlier than under current accounting guidance. The standard was adopted on a modified retrospective basis in the first quarter of 2020. The Company's operating lease activities are not impacted by ASU 2016-13, as operating lease receivables are not in the scope of the CECL standard, and the implementation of CECL did not have a material impact to the Company's consolidated and combined financial statements. Intangibles - Goodwill and Other . In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment . The update simplifies how an entity is required to measure an impairment of goodwill, if any, by eliminating the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. In accordance with the amendment, entities should perform goodwill impairment tests by comparing the carrying value of their reporting units to their fair value. If the carrying value of the reporting unit exceeds the fair value, an entity should record an impairment charge for the amount by which its carrying amount exceeds its reporting unit’s fair value; however, the charge recognized should not exceed the total amount of goodwill allocated to that reporting unit. ASU 2017-04 was effective for the Company in the first quarter of 2020 and was adopted on a prospective basis. Management of PROG Holdings concluded that the need for an interim goodwill impairment test was triggered for the Aaron's Business reporting unit as of March 31, 2020 and applied the simplification guidance in ASU 2017-04 in the test. Management of PROG Holdings determined the existing goodwill within the Aaron's Business reporting unit was fully impaired and recorded a goodwill impairment loss of $446.9 million during the three months ended March 31, 2020. See Note 3 for further discussion. Pending Adoption In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04"). The standard provides temporary guidance to ease the potential burden in accounting for reference rate reform primarily resulting from the discontinuation of the London Interbank Overnight ("LIBO") rate, which is currently expected to occur on December 31, 2021. The Company's $250.0 million senior unsecured revolving credit facility (the "Revolving Facility") as further described in Note 8 to these consolidated and combined financial statements currently references the LIBO rate for determining interest payable on outstanding borrowings. The amendments in ASU 2020-04 are elective and apply to all entities that have contracts referencing the LIBO rate. The new guidance provides an expedient which simplifies accounting analyses under current GAAP for contract modifications if the change is directly related to a change from the LIBO rate to a new interest rate index. The Company will adopt the standard in the first quarter of 2022, and is continuing to evaluate the provisions of ASU 2020–04 and the impacts of transitioning to an alternative rate; however, we do not expect it to have a material impact to the Company's consolidated financial statements or to any key terms of our revolving facility other than the discontinuation of the LIBO rate. |
Business and Summary of Signi_3
Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedules of Company Operated Store Activity | The following table presents store count by ownership type: Stores at December 31 (Unaudited) 2020 2019 2018 Company-operated Stores 1,092 1,167 1,312 Franchised Stores 248 335 377 Systemwide Stores 1,340 1,502 1,689 |
Schedule of Lease Merchandise | The following is a summary of lease merchandise, net of accumulated depreciation and allowances: December 31, (In Thousands) 2020 2019 Merchandise on Lease, net of Accumulated Depreciation and Allowances $ 473,964 $ 504,979 Merchandise Not on Lease, net of Accumulated Depreciation and Allowances 1 223,271 276,619 Lease Merchandise, net of Accumulated Depreciation and Allowances 2 $ 697,235 $ 781,598 1 Includes Woodhaven raw materials and work-in-process inventory that has been classified within lease merchandise in the consolidated and combined balance sheets of $10.4 million and $14.0 million as of December 31, 2020 and 2019, respectively. |
Allowance for Lease Merchandise | The following table shows the components of the allowance for lease merchandise write-offs, which is included within lease merchandise, net within the consolidated and combined balance sheets: Year Ended December 31, (In Thousands) 2020 2019 2018 Beginning Balance $ 13,823 $ 10,910 $ 8,987 Merchandise Written off, net of Recoveries (65,869) (94,990) (67,047) Provision for Write-offs 63,645 97,903 68,970 Ending Balance $ 11,599 $ 13,823 $ 10,910 |
Schedule of Weighted Average Number of Shares | The following table shows the calculation of weighted-average shares outstanding assuming dilution: Year Ended December 31, (Shares In Thousands) 2020 2019 2018 Weighted Average Shares Outstanding 33,877 33,842 33,842 Dilutive Effect of Share-Based Awards 1 — — — Weighted Average Shares Outstanding Assuming Dilution 33,877 33,842 33,842 1 There was no dilutive effect to the (loss) earnings per common share for the year ended December 31, 2020 due to the net loss incurred in the year-to-date period. |
Accounts Receivable Net of Allowances | Accounts receivable, net of allowances, consist of the following: December 31, (In Thousands) 2020 2019 Customers $ 8,399 $ 9,820 Corporate 12,771 14,028 Franchisee 12,820 13,231 $ 33,990 $ 37,079 |
Allowance for Doubtful Accounts | The following table shows the components of the accounts receivable allowance: Year Ended December 31, (In Thousands) 2020 2019 2018 Beginning Balance $ 10,720 $ 9,546 $ 6,992 Accounts Written Off, net of Recoveries (33,860) (45,547) (37,574) Accounts Receivable Provision 30,753 46,721 40,128 Ending Balance $ 7,613 $ 10,720 $ 9,546 |
Schedule of Prepaid Expenses and Other Assets | Prepaid expenses and other assets consist of the following: December 31, (In Thousands) 2020 2019 Prepaid Expenses $ 25,882 $ 28,975 Insurance Related Assets 27,960 26,393 Company-Owned Life Insurance 16,223 14,576 Assets Held for Sale 8,956 10,131 Deferred Tax Assets 7,014 3,439 Other Assets 3,860 8,867 $ 89,895 $ 92,381 |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consist of the following: December 31, (In Thousands) 2020 2019 Accounts Payable $ 84,566 $ 80,173 Estimated Claims Liability 49,272 43,289 Accrued Salaries and Benefits 53,396 33,122 Accrued Real Estate and Sales Taxes 23,025 21,129 Other Accrued Expenses and Liabilities 20,589 42,883 $ 230,848 $ 220,596 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table presents summaries of the fair value of the assets acquired and liabilities assumed in the franchisee acquisitions as of the respective acquisition dates: (in Thousands) Final Amounts Recognized as of Acquisition Dates Purchase Price $ 190,167 Add: Settlement of Accounts Receivable from Pre-existing Relationship 5,405 Add: Working Capital Adjustments 155 Aggregate Consideration Transferred 195,727 Estimated Fair Value of Identifiable Assets Acquired and Liabilities Assumed Cash and Cash Equivalents 50 Lease Merchandise 59,616 Property, Plant and Equipment 5,568 Operating Lease Right-of-Use Assets 1 4,338 Other Intangibles 2 23,322 Prepaid Expenses and Other Assets 1,241 Total Identifiable Assets Acquired 94,135 Accounts Payable and Accrued Expenses (977) Customer Deposits and Advance Payments (5,156) Total Liabilities Assumed (6,133) Goodwill 3 107,725 Net Assets Acquired (excluding Goodwill) $ 88,002 1 As of the respective acquisition dates, the Company had not yet adopted ASC 842. As such, there were no operating lease right-of-use assets or operating lease liabilities recognized within the combined financial statements at the time of acquisition. The Company recognized operating lease right-of-use assets and operating lease liabilities for the acquired stores as part of the transition to ASC 842 on January 1, 2019. We finalized our valuation of assumed favorable and unfavorable real estate operating leases during 2019, which also impacted the valuation of the customer lease contract and customer relationship intangible assets. As a result, measurement period adjustments of $4.3 million were recorded as an increase to operating lease right-of-use assets, with a corresponding reduction of $1.2 million within other intangibles, net in the Company's consolidated and combined balance sheets. The adjustment also resulted in the recognition of immaterial adjustments to other operating expenses, net and restructuring expenses, net during 2019 to recognize expense that would have been recorded in prior periods had the favorable lease and intangible assets been recorded as of the acquisition date. 2 Identifiable intangible assets are further disaggregated in the table set forth below. 3 The total goodwill recognized in conjunction with the franchisee acquisitions is expected to be deductible for tax purposes. The purchase price exceeded the fair value of the net assets acquired, which resulted in the recognition of goodwill, primarily due to synergies created from the expected benefits to the Company’s omni-channel platform, implementation of the Company’s operational capabilities, and control of the Company’s brand name in the acquired geographic markets. Goodwill also includes certain other intangible assets that do not qualify for separate recognition, such as an assembled workforce. As discussed in further detail within Note 1, the Company determined that its then existing goodwill was fully impaired and recorded a goodwill impairment loss of $446.9 million during the three months ended March 31, 2020. |
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | The intangible assets attributable to the franchisee acquisitions are comprised of the following: Fair Value (in thousands) Weighted Average Useful Life (in years) Non-compete Agreements $ 1,872 3.0 Customer Contracts 7,457 1.0 Customer Relationships 9,330 3.0 Reacquired Franchise Rights 4,663 3.9 Total Acquired Intangible Assets 1 $ 23,322 1 Acquired definite-lived intangible assets have a total weighted average life of 2.5 years. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Carrying Value of Goodwill by Operating Segment | The following table provides information related to the carrying amount of the Company's goodwill: (In Thousands) Balance at January 1, 2019 $ 444,369 Acquisitions 6,526 Disposals, Currency Translation and Other Adjustments (362) Acquisition Accounting Adjustments (2,752) Balance at December 31, 2019 $ 447,781 Acquisitions 7,576 Disposals, Currency Translation and Other Adjustments (941) Acquisition Accounting Adjustments 46 Impairment Loss (446,893) Balance at December 31, 2020 $ 7,569 |
Summary of Identifiable Intangible Assets | The following table summarizes information related to the Company's definite-lived intangible assets at December 31: 2020 2019 (In Thousands) Gross Accumulated Net Gross Accumulated Net Customer Relationships $ 10,476 $ (7,706) $ 2,770 $ 10,478 $ (4,783) $ 5,695 Reacquired Franchise Rights 7,421 (3,429) 3,992 8,428 (3,307) 5,121 Non-Compete Agreements 3,633 (2,759) 874 4,398 (2,488) 1,910 Customer Lease Contracts 690 (155) 535 804 (503) 301 Expanded Customer Base 1,807 (881) 926 1,720 (513) 1,207 Total $ 24,027 $ (14,930) $ 9,097 $ 25,828 $ (11,594) $ 14,234 |
Estimated Future Amortization Expense | As of December 31, 2020, estimated future amortization expense for the next five years related to the Company's definite-lived intangible assets is as follows: (In Thousands) 2021 $ 5,100 2022 1,752 2023 1,086 2024 553 2025 367 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table summarizes financial liabilities measured at fair value on a recurring basis: December 31, 2020 December 31, 2019 (In Thousands) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Deferred Compensation Liability $ — $ (10,450) $ — $ — $ (11,048) $ — |
Assets Measured at Fair Value on Nonrecurring Basis | The following table summarizes non-financial assets measured at fair value on a nonrecurring basis: December 31, 2020 December 31, 2019 (In Thousands) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets Held for Sale $ — $ 8,956 $ — $ — $ 10,131 $ — |
Fair Value of Assets (Liabilities) Not Measured at Fair Value In Consolidated Balance Sheets | The following table summarizes the fair value of liabilities that are not measured at fair value in the consolidated and combined balance sheets, but for which the fair value is disclosed: December 31, 2020 December 31, 2019 (In Thousands) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Fixed-Rate Long Term Debt 1 $ — $ — $ — $ — $ (123,580) $ — 1 As discussed in Note 8 to these consolidated and combined financial statements, the Company repaid the remaining $60.0 million of outstanding principal related to the fixed-rate senior unsecured notes prior to the separation and distribution transaction. The fair value of fixed-rate long term debt at December 31, 2019 was estimated using the present value of underlying cash flows discounted at a current market yield for similar instruments. The carrying amount of fixed-rate long term debt was $120.0 million at December 31, 2019. |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property, Plant and Equipment | The following is a summary of the Company’s property, plant, and equipment: December 31, (In Thousands) 2020 2019 Land $ 14,588 $ 16,427 Buildings and Improvements 51,841 54,923 Leasehold Improvements and Signs 77,278 75,762 Vehicles 80,847 68,328 Fixtures and Equipment 142,875 147,277 Software - Internal-Use 134,334 121,075 Assets Under Finance Leases 1,156 2,690 Construction in Progress 8,014 4,483 510,933 490,965 Less: Accumulated Depreciation and Amortization 1 (310,563) (283,664) $ 200,370 $ 207,301 1 Accumulated amortization of internal-use software development costs amounted to $87.1 million and $70.9 million as of December 31, 2020 and 2019, respectively. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table disaggregates revenue by source: Year Ended December 31, (In Thousands) 2020 2019 2018 Lease Revenues and Fees $ 1,530,464 $ 1,570,358 $ 1,509,529 Retail Sales 47,345 38,474 31,271 Non-Retail Sales 127,652 140,950 207,262 Franchise Royalties and Fees 28,212 33,432 44,815 Other 1,246 1,263 1,839 Total 1 $ 1,734,919 $ 1,784,477 $ 1,794,716 1 Includes revenues from Canadian operations of $21.7 million, $24.7 million, and $21.3 million during the years ended December 31, 2020, 2019, and 2018, which are primarily lease revenues and fees. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Lease, Cost | The Company’s total operating and finance lease costs are comprised of the following: Year Ended December 31, (In Thousands) 2020 2019 Finance Lease cost: Amortization of Right-of-Use Assets $ 596 $ 1,542 Interest on Lease Liabilities 170 363 Total Finance Lease cost: 766 1,905 Operating Lease cost: Operating Lease cost classified within Other Operating Expenses, Net 1 94,249 107,581 Operating Lease cost classified within Restructuring Expenses, Net 1,615 3,339 Sublease Receipts 2 (2,723) (2,644) Total Operating Lease cost: 93,141 108,276 Total Lease cost $ 93,907 $ 110,181 1 Includes short-term and variable lease costs, which are not significant. Short-term lease expense is defined as leases with a lease term of greater than one month, but not greater than 12 months. The Company incurred $108.1 million of rental expense, net of sublease receipts during the year ended December 31, 2018 under ASC 840, Leases . The Company also incurred right-of-use asset impairment charges of $24.7 million and $24.4 million during the years ended December 31, 2020 and 2019, respectively, under ASC 842, Leases . During the year ended December 31, 2018, the Company incurred contractual lease obligation charges, net of estimated sublease receipts of $2.1 million related to the closure of company-operated stores under ASC 840, Leases . These charges are reported within restructuring expenses, net in the consolidated and combined statements of earnings. |
Supplemental Cash Flow Information | Additional information regarding the Company’s leasing activities as a lessee is as follows: Year Ended December 31, (In Thousands) 2020 2019 Cash Paid for amounts included in measurement of Lease Liabilities: Operating Cash Flows for Finance Leases $ 170 $ 411 Operating Cash Flows for Operating Leases 111,446 121,864 Financing Cash Flows for Finance Leases 1,086 2,493 Total Cash paid for amounts included in measurement of Lease Liabilities 112,702 124,768 Right-of-Use Assets obtained in exchange for new Finance Lease Liabilities — — Right-of-Use Assets obtained in exchange for new Operating Lease Liabilities $ 45,678 $ 49,504 |
Assets And Liabilities, Lessee | Supplemental balance sheet information related to leases is as follows: December 31, (In Thousands) Balance Sheet Classification 2020 2019 Assets Operating Lease Assets Operating Lease Right-of-Use Assets $ 238,085 $ 305,257 Finance Lease Assets Property, Plant and Equipment, Net 153 768 Total Lease Assets $ 238,238 $ 306,025 Liabilities Operating Lease Liabilities Operating Lease Liabilities $ 278,958 $ 335,807 Finance Lease Liabilities Debt 831 2,670 Total Lease Liabilities $ 279,789 $ 338,477 |
Schedule of Weighted-Average Discount Rate and Weighted-Average Remaining Lease Term | Below is a summary of the weighted-average discount rate and weighted-average remaining lease term for finance and operating leases: December 31, 2020 2019 Weighted Average Discount Rate 1 Weighted Average Remaining Lease Term (in years) Weighted Average Discount Rate 1 Weighted Average Remaining Lease Term (in years) Finance Leases 5.7 % 1 5.7 % 2 Operating Leases 3.5 % 4 3.6 % 5 1 Upon adoption of ASC 842, discount rates for existing operating leases were established as of January 1, 2019. |
Finance Lease, Liability, Maturity | The table also includes a reconciliation of the future undiscounted cash flows to the present value of the finance and operating lease liabilities included in the consolidated and combined balance sheets. (In Thousands) Operating Leases Finance Leases Total 2021 $ 94,446 $ 787 $ 95,233 2022 72,214 71 72,285 2023 51,500 — 51,500 2024 34,238 — 34,238 2025 20,442 — 20,442 Thereafter 28,980 — 28,980 Total Undiscounted Cash Flows 1 301,820 858 302,678 Less: Interest 22,862 27 22,889 Present Value of Lease Liabilities $ 278,958 $ 831 $ 279,789 1 Future undiscounted cash flows do not include approximately $3.9 million of future operating lease payments for leases that have not yet commenced. These leases will commence during 2021. |
Operating Lease, Liability, Maturity | The table also includes a reconciliation of the future undiscounted cash flows to the present value of the finance and operating lease liabilities included in the consolidated and combined balance sheets. (In Thousands) Operating Leases Finance Leases Total 2021 $ 94,446 $ 787 $ 95,233 2022 72,214 71 72,285 2023 51,500 — 51,500 2024 34,238 — 34,238 2025 20,442 — 20,442 Thereafter 28,980 — 28,980 Total Undiscounted Cash Flows 1 301,820 858 302,678 Less: Interest 22,862 27 22,889 Present Value of Lease Liabilities $ 278,958 $ 831 $ 279,789 1 Future undiscounted cash flows do not include approximately $3.9 million of future operating lease payments for leases that have not yet commenced. These leases will commence during 2021. |
Indebtedness (Tables)
Indebtedness (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Summary of Company's Credit Facilities | Following is a summary of the Company’s debt, net of applicable unamortized debt issuance costs: December 31, (In Thousands) 2020 2019 Senior Unsecured Notes, 4.75% - Repaid in November 2020 $ — $ 119,847 Term Loan - Repaid in November 2020 — 218,513 Finance Lease Obligations 831 2,670 Total Debt 1 831 341,030 Less: Current Maturities 761 83,886 Long-Term Debt $ 70 $ 257,144 1 Total debt as of December 31, 2019 included unamortized debt issuance costs of $1.0 million. The Company also recorded $2.1 million and $1.9 million of debt issuance costs as of December 31, 2020 and 2019, respectively, related to its current and previous revolving credit facilities, which were recorded within prepaid expenses and other assets in the consolidated and combined balance sheets. |
Future Maturities of Long Term Debt and Capital Lease Obligations | Future principal maturities under the Company's finance lease obligations as of December 31, 2020 are as follows: (In Thousands) 2021 $ 761 2022 70 Thereafter — Total $ 831 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Summary of Income Tax Expense | ollowing is a summary of the Company’s income tax (benefit) expense: Year Ended December 31, (In Thousands) 2020 2019 2018 Current Income Tax (Benefit) Expense: Federal $ (18,661) $ (13,438) $ (140) State 4,458 916 1,757 Foreign 1,494 467 1,256 (12,709) (12,055) 2,873 Deferred Income Tax (Benefit) Expense: Federal (97,734) 19,497 9,884 State (17,883) (159) 923 Foreign (3,576) (1,112) (765) (119,193) 18,226 10,042 Income Tax (Benefit) Expense $ (131,902) $ 6,171 $ 12,915 |
Components of Deferred Income Tax Liabilities and Assets | Significant components of the Company’s deferred income tax liabilities and assets are as follows: December 31, (In Thousands) 2020 2019 Deferred Tax Liabilities: Lease Merchandise and Property, Plant and Equipment $ 184,976 $ 192,091 Goodwill and Other Intangibles — 43,713 Operating Lease Right-of-Use Assets 57,521 73,602 Other, Net 10,150 2,760 Total Deferred Tax Liabilities 252,647 312,166 Deferred Tax Assets: Goodwill and Other Intangibles 63,291 — Accrued Liabilities 19,038 14,927 Advance Payments 15,492 9,676 Operating Lease Liabilities 68,883 81,488 Net Operating Losses 21,616 41,014 Other, Net 8,740 14,734 Total Deferred Tax Assets 197,060 161,839 Less Valuation Allowance — 3,659 Net Deferred Tax Liabilities $ 55,587 $ 153,986 |
Effective Tax Rate Differs from Statutory United States Federal Income Tax Rate | The Company’s effective tax rate differs from the statutory United States federal income tax rate as follows: Year Ended December 31, 2020 2019 2018 Statutory Rate 21.0 % 21.0 % 21.0 % Increases (Decreases) in United States Federal Taxes Resulting From: State Income Taxes, net of Federal Income Tax Benefit 3.7 4.8 4.4 Other Permanent Differences (0.2) (2.6) (2.5) Federal Tax Credits 0.4 (5.2) (3.6) NOL Carryback under CARES Act 8.7 — — Remeasurement of net Deferred Tax Liabilities — (0.7) 0.3 Other, net (0.4) 0.7 0.7 Effective Tax Rate 33.2 % 18.0 % 20.3 % |
Summary of Activity Related to Uncertain Tax Positions | The following table summarizes the activity related to the Company’s uncertain tax positions: Year Ended December 31, (In Thousands) 2020 2019 2018 Balance at January 1, $ 2,350 $ 2,338 $ 2,030 Additions Based on Tax Positions Related to the Current Year 149 236 269 Additions for Tax Positions of Prior Years 250 20 615 Prior Year Reductions (108) (76) (85) Statute Expirations (304) (168) (209) Settlements (112) — (282) Amounts Transferred to Former Parent (1,542) — — Balance at December 31, $ 683 $ 2,350 $ 2,338 |
Restructuring (Tables)
Restructuring (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charges Activity | The following table summarizes restructuring charges incurred under the three restructuring programs: Year Ended December 31, (In Thousands) 2020 2019 2018 Right-of-Use Asset Impairment $ 24,722 $ 24,388 $ — Operating Lease Charges 5,124 4,023 2,057 Fixed Asset Impairment 6,039 5,238 — Severance 6,153 3,403 610 Other Expenses 780 1,886 460 (Gain) Loss on Sale of Store Properties (274) 1,052 (377) Total Restructuring Expenses, Net $ 42,544 $ 39,990 $ 2,750 The following table summarizes the balances of the accruals for the restructuring programs, which are recorded in accounts payable and accrued expenses in the consolidated and combined balance sheets, and the activity for the years ended December 31, 2020 and 2019: (In Thousands) Contractual Lease Obligations Severance Total Balance at January 1, 2019 $ 8,472 $ 651 $ 9,123 ASC 842 Transition Adjustment 1 (8,472) — (8,472) Adjusted Balance at January 1, 2019 — 651 651 Restructuring Severance Charges — 3,403 3,403 Payments — (3,298) (3,298) Balance at December 31, 2019 — 756 756 Restructuring Severance Charges — 6,153 6,153 Payments — (6,136) (6,136) Balance at December 31, 2020 $ — $ 773 $ 773 1 Upon the adoption of ASC 842 on January 1, 2019, the Company reclassified the remaining liability for contractual lease obligations from accounts payable and accrued expenses to a reduction to operating lease right-of-use assets within its consolidated and combined balance sheets. |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Stock Option Activity | The table below summarizes the Company's stock option activity, including the issuance of the converted awards on the separation and distribution date of November 30, 2020, through December 31, 2020: Options Weighted Average Weighted Average Aggregate Weighted Outstanding at January 1, 2020 — $ — Converted on November 30, 2020 in connection with spin-off 1,537 12.51 Granted — — Exercised (831) 12.93 Forfeited/expired (12) 13.51 Outstanding at December 31, 2020 694 11.99 7.76 $ 4,834 $ 2.63 Expected to Vest 403 12.88 8.65 2,451 4.57 Exercisable at December 31, 2020 277 10.70 6.4 2,292 3.59 |
Summary Information about Stock Options Outstanding | The following table summarizes information about the Company's stock options outstanding at December 31, 2020: Options Outstanding Options Exercisable Range of Exercise Number Outstanding Weighted Average Remaining Contractual Weighted Average Number Exercisable Weighted Average $0.00-$10.00 144,586 5.53 $ 7.25 144,586 $ 7.25 $10.01-$20.00 549,349 8.34 13.24 132,791 14.45 $0.00-$20.00 693,935 7.8 11.99 277,377 10.70 |
Summary of Restricted Stock Activity | The following table summarizes information about the Company's restricted stock activity, including the issuance of the converted awards on the separation and distribution date of November 30, 2020, through December 31, 2020: Restricted Stock Weighted Average Non-vested at January 1, 2020 — $ — Converted on November 30, 2020 in connection with spin-off 540 14.18 Granted — — Vested (118) 12.66 Forfeited/unearned (5) 12.68 Non-vested at December 31, 2020 417 14.63 |
Summary of Performance Share Units | The following table summarizes information about the Company's performance share unit activity, including the issuance of the converted awards on the separation and distribution date of November 30, 2020, through December 31, 2020: Performance Share Units Weighted Average Non-vested at January 1, 2020 — $ — Converted on November 30, 2020 in connection with spin-off 774 12.42 Granted — — Vested (309) 11.89 Forfeited/unearned (10) 13.45 Non-vested at December 31, 2020 455 12.75 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The significant components of the net increase (decrease) in invested capital, which includes the transfer of invested capital to additional paid-in-capital upon completion of the separation, for the years ended December 31, 2020, 2019, and 2018 were as follows: Year Ended December 31, (In Thousands) 2020 2019 2018 General financing activities, net $ 112,597 $ (38,052) $ (67,852) Corporate allocations 38,554 27,276 28,640 Income tax 1 (30,372) 22,250 22,368 Transfer of Invested Capital to Additional Paid-in-Capital (714,356) — — Net (decrease) increase in Invested Capital $ (593,577) $ 11,474 $ (16,844) |
Quarterly Financial Informati_2
Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information (Unaudited) | (In Thousands, Except Per Share Data) First Quarter Second Quarter Third Quarter Fourth Quarter Year Ended December 31, 2020 Revenues $ 432,831 $ 430,955 $ 440,961 $ 430,172 Gross Profit 1 267,247 263,921 279,564 272,810 (Loss) Earnings Before Income Taxes (470,261) 29,424 40,081 2,942 Net (Loss) Earnings (323,774) 22,374 32,613 2,875 (Loss) Earnings Per Share 2 (9.57) 0.66 0.96 0.08 (Loss) Earnings Per Share Assuming Dilution 2 (9.57) 0.66 0.96 0.08 Year Ended December 31, 2019 Revenues $ 480,056 $ 443,198 $ 426,271 $ 434,952 Gross Profit 1 299,076 276,565 265,187 271,188 Earnings (Loss) Before Income Taxes 13,052 (3,910) (2,255) $ 27,383 Net (Loss) Earnings (1,178) (18,080) 26,835 20,522 (Loss) Earnings Per Share 2 (0.03) (0.53) 0.79 0.61 (Loss) Earnings Per Share Assuming Dilution 2 (0.03) (0.53) 0.79 0.61 1 Gross profit is the sum of total revenues less total cost of revenues. 2 The Company's basic earnings per share calculations for the periods prior to the separation and distribution assumes that the weighted average number of common shares outstanding was 33,841,624, which is the number of shares distributed to shareholders on the separation and distribution date, November 30, 2020. The same number of shares was used in the calculation of diluted earnings per share for the periods prior to the separation and distribution, as there were no equity awards of The Aaron's Company, Inc. outstanding prior to the distribution date. |
Business and Summary of Signi_4
Business and Summary of Significant Accounting Policies - Store Count by Ownership Type (Details) - store | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Franchisor Disclosure [Line Items] | |||
Number of states in which entity operates | 1,300 | ||
Operating Segments | Company-operated Stores | |||
Franchisor Disclosure [Line Items] | |||
Company operated stores | 1,092 | 1,167 | 1,312 |
Operating Segments | Franchised Stores | |||
Franchisor Disclosure [Line Items] | |||
Company operated stores | 248 | 335 | 377 |
Operating Segments | Systemwide Stores | |||
Franchisor Disclosure [Line Items] | |||
Company operated stores | 1,340 | 1,502 | 1,689 |
Business and Summary of Signi_5
Business and Summary of Significant Accounting Policies - Lease Merchandise (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Significant Accounting Policies [Line Items] | |||
Lease merchandise salvage value percentage | 0.00% | ||
Lease Merchandise, net of accumulated depreciation and allowances | $ 697,235 | $ 781,598 | |
Costs capitalized to lease merchandise | 43,500 | 48,700 | $ 45,800 |
Capitalized overhead costs included in lease merchandise | 45,200 | 47,500 | |
Allowance for Lease Merchandise Write offs: | |||
Beginning Balance | 13,823 | 10,910 | 8,987 |
Merchandise Written off, net of Recoveries | (65,869) | (94,990) | (67,047) |
Provision for Write-offs | 63,645 | 97,903 | 68,970 |
Ending Balance | 11,599 | 13,823 | $ 10,910 |
Manufacturing | Operating Segments | |||
Significant Accounting Policies [Line Items] | |||
Inventory, including raw materials and work-in-process | 10,400 | 14,000 | |
Merchandise on Lease, net of Accumulated Depreciation and Allowances | |||
Significant Accounting Policies [Line Items] | |||
Lease Merchandise, net of accumulated depreciation and allowances | $ 473,964 | 504,979 | |
Merchandise on Lease, net of Accumulated Depreciation and Allowances | Minimum | |||
Significant Accounting Policies [Line Items] | |||
Lease merchandise useful life | 12 months | ||
Merchandise on Lease, net of Accumulated Depreciation and Allowances | Maximum | |||
Significant Accounting Policies [Line Items] | |||
Lease merchandise useful life | 24 months | ||
Merchandise Not on Lease, net of Accumulated Depreciation and Allowances1 | |||
Significant Accounting Policies [Line Items] | |||
Lease merchandise useful life | 36 months | ||
Lease Merchandise, net of accumulated depreciation and allowances | $ 223,271 | $ 276,619 |
Business and Summary of Signi_6
Business and Summary of Significant Accounting Policies - Weighted Average Number of Shares (Details) - shares | Nov. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||||
Weighted Average Shares Outstanding | 33,877,000 | 33,842,000 | 33,842,000 | |
Dilutive Effect of Share-Based Awards | 0 | 0 | 0 | |
Weighted Average Shares Outstanding Assuming Dilution | 33,877,000 | 33,842,000 | 33,842,000 | |
Anti-dilutive Securities excluded from the computation of earnings per share assuming dilution | 33,841,624 |
Business and Summary of Signi_7
Business and Summary of Significant Accounting Policies - Shipping and Handling Costs and Advertising, Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Advertising costs | $ 40.2 | $ 37.1 | $ 33.3 |
Amount of cooperative advertising consideration netted against advertising expense | 21.8 | 27.7 | 28.3 |
Prepaid advertising asset | 4.3 | 0.3 | |
Shipping and Handling | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cost of goods and services sold | $ 64.2 | $ 74.3 | $ 75.2 |
Business and Summary of Signi_8
Business and Summary of Significant Accounting Policies - Investments (Details) $ in Thousands, £ in Millions | 3 Months Ended | 12 Months Ended | ||||
Jun. 30, 2019USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2017GBP (£) | |
Subsidiary or Equity Method Investee [Line Items] | ||||||
Impairment of assets | $ 477,854 | $ 30,344 | $ 20,098 | |||
Variable Interest Entity | ||||||
Subsidiary or Equity Method Investee [Line Items] | ||||||
Debt Securities, Held-to-maturity | $ 20,400 | £ 15.1 | ||||
Impairment of assets | $ 20,100 |
Business and Summary of Signi_9
Business and Summary of Significant Accounting Policies - Accounts Receivable Net of Allowances (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net of allowances | $ 33,990 | $ 37,079 |
Threshold period past due for write-off of lease receivable | 60 days | |
Customers | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net of allowances | $ 8,399 | 9,820 |
Corporate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net of allowances | 12,771 | 14,028 |
Franchisee | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net of allowances | $ 12,820 | $ 13,231 |
Business and Summary of Sign_10
Business and Summary of Significant Accounting Policies - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning Balance | $ 10,720 | $ 9,546 | $ 6,992 |
Accounts Written Off, net of Recoveries | (33,860) | (45,547) | (37,574) |
Accounts Receivable Provision | 30,753 | 46,721 | 40,128 |
Ending Balance | $ 7,613 | $ 10,720 | $ 9,546 |
Business and Summary of Sign_11
Business and Summary of Significant Accounting Policies - Property, Plant and Equipment, Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Depreciation expense for property, plant and equipment | $ 60.9 | $ 60.3 | $ 53.9 |
Amortization expense | 6.8 | 13.3 | 10.7 |
Software | |||
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Amortization expense | $ 17.4 | $ 15.7 | $ 13.5 |
Minimum | Buildings and Improvements | |||
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Property, plant and equipment, useful life | 5 years | ||
Minimum | Other depreciable property and equipment | |||
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Property, plant and equipment, useful life | 1 year | ||
Minimum | Software | |||
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Property, plant and equipment, useful life | 5 years | ||
Maximum | Buildings and Improvements | |||
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Property, plant and equipment, useful life | 20 years | ||
Maximum | Other depreciable property and equipment | |||
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Property, plant and equipment, useful life | 15 years | ||
Maximum | Software | |||
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Property, plant and equipment, useful life | 10 years | ||
Maximum | Software updates | |||
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Property, plant and equipment, useful life | 1 month |
Business and Summary of Sign_12
Business and Summary of Significant Accounting Policies - Prepaid Expenses and Other Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||
Prepaid Expenses | $ 25,882 | $ 28,975 |
Insurance Related Assets | 27,960 | 26,393 |
Company-Owned Life Insurance | 16,223 | 14,576 |
Assets Held for Sale | 8,956 | 10,131 |
Deferred Tax Assets | 7,014 | 3,439 |
Other Assets | 3,860 | 8,867 |
Prepaid Expense and Other Assets | $ 89,895 | $ 92,381 |
Business and Summary of Sign_13
Business and Summary of Significant Accounting Policies - Assets Held for Sale, Additional Information (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020USD ($)store | Dec. 31, 2019USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||
Assets Held for Sale | $ 8,956 | $ 10,131 |
Restructuring costs | 200 | $ 1,200 |
Impairment of assets held for sale | 200 | |
DAMI [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Gain on sale of corporate office building | $ 1,700 | |
Company operated stores | store | 4 | |
Proceeds from sale of buildings | $ 2,600 |
Business and Summary of Sign_14
Business and Summary of Significant Accounting Policies - Other Intangibles, Additional Information (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Customer Relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangibles (in years) | 3 years |
Non-compete Agreements | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangibles (in years) | 1 year |
Non-compete Agreements | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangibles (in years) | 5 years |
Customer-Related Intangible Assets | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangibles (in years) | 2 years |
Customer-Related Intangible Assets | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangibles (in years) | 6 years |
Reacquired Franchise Rights | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangibles (in years) | 10 years |
Business and Summary of Sign_15
Business and Summary of Significant Accounting Policies - Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||
Accounts Payable | $ 84,566 | $ 80,173 |
Estimated Claims Liability | 49,272 | 43,289 |
Accrued Salaries and Benefits | 53,396 | 33,122 |
Accrued Real Estate and Sales Taxes | 23,025 | 21,129 |
Other Accrued Expenses and Liabilities | 20,589 | 42,883 |
Accounts Payable and Accrued Liabilities | $ 230,848 | $ 220,596 |
Business and Summary of Sign_16
Business and Summary of Significant Accounting Policies - Asset Retirement Obligation, Additional Information (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Accounts Payable and Accrued Liabilities | ||
Asset retirement obligations | $ 2.5 | $ 2.7 |
Business and Summary of Sign_17
Business and Summary of Significant Accounting Policies - Foreign Currency, Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Assets | $ 1,353,457 | $ 1,940,331 |
Retirement-Related Modifications | ||
Segment Reporting Information [Line Items] | ||
Stock-based compensation expense, modifications | 11,000 | |
Operating Segments | Canada | Aaron's Business | ||
Segment Reporting Information [Line Items] | ||
Assets | $ 14,500 | $ 28,200 |
Business and Summary of Sign_18
Business and Summary of Significant Accounting Policies - Supplemental Disclosure of Non-Cash Investing Transaction, Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | |||
Add: Settlement of Accounts Receivable from Pre-existing Relationship | $ 0.4 | $ 1.7 | |
Fair value of non-cash consideration | $ 0.6 |
Business and Summary of Sign_19
Business and Summary of Significant Accounting Policies - Hurricane Impact (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | ||
Insurance proceeds received, before tax | $ (4.5) | $ (0.9) |
Business and Summary of Sign_20
Business and Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Impairment Loss | $ 446,900 | $ 446,893 | $ 0 | $ 0 | |
Goodwill acquired | $ 7,600 | $ 7,576 | $ 6,526 | ||
Aaron's Business | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Impairment Loss | $ 446,900 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) $ in Thousands | Jan. 01, 2018USD ($) | Dec. 31, 2020USD ($)store | Dec. 31, 2019USD ($)store | Dec. 31, 2018USD ($)store |
Business Acquisition [Line Items] | ||||
Payments to acquire businesses and asset acquisitions, net of cash acquired | $ (14,793) | $ (14,285) | $ (189,901) | |
Number of franchised stores acquired | store | 15 | 18 | ||
Franchisee Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Number of branded stores | store | 152 | |||
Purchase price | $ 190,167 | |||
Revenues | $ 176,800 | $ 183,300 | $ 72,000 | |
Earnings before income taxes | $ 11,800 | $ 3,300 | 800 | |
Acquisition related costs | $ 1,700 |
Acquisitions - Fair Value of As
Acquisitions - Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Jan. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2020 | Dec. 31, 2018 |
Business Acquisition [Line Items] | |||||
Add: Settlement of Accounts Receivable from Pre-existing Relationship | $ 400 | $ 1,700 | |||
Estimated Fair Value of Identifiable Assets Acquired and Liabilities Assumed | |||||
Goodwill | 7,569 | 447,781 | $ 444,369 | ||
Other Intangibles, Net | $ 9,097 | $ 14,234 | |||
Franchisee Acquisitions | |||||
Business Acquisition [Line Items] | |||||
Purchase Price | $ 190,167 | ||||
Add: Settlement of Accounts Receivable from Pre-existing Relationship | 5,405 | ||||
Add: Working Capital Adjustments | 155 | ||||
Aggregate Consideration Transferred | 195,727 | ||||
Estimated Fair Value of Identifiable Assets Acquired and Liabilities Assumed | |||||
Cash and Cash Equivalents | 50 | ||||
Lease Merchandise | 59,616 | ||||
Property, Plant and Equipment | 5,568 | ||||
Operating Lease Right-of-Use Assets | 4,338 | 4,300 | |||
Other intangibles | 23,322 | ||||
Prepaid Expenses and Other Assets | 1,241 | ||||
Total Identifiable Assets Acquired | 94,135 | ||||
Accounts Payable and Accrued Expenses | (977) | ||||
Customer Deposits and Advance Payments | (5,156) | ||||
Total Liabilities Assumed | (6,133) | ||||
Goodwill | 107,725 | $ 446,900 | |||
Net Assets Acquired (excluding Goodwill) | $ 88,002 | ||||
Other Intangibles, Net | $ (1,200) |
Acquisitions - Intangible Asset
Acquisitions - Intangible Assets Acquired (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2018 | |
Customer Relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful lives of intangibles (in years) | 3 years | |
Reacquired Franchise Rights | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful lives of intangibles (in years) | 10 years | |
Franchisee Acquisitions | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets acquired | $ 23,322 | |
Estimated useful lives of definite-lived intangibles (in years) | 2 years 6 months | |
Franchisee Acquisitions | Non-compete Agreements | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets acquired | $ 1,872 | |
Estimated useful lives of intangibles (in years) | 3 years | |
Franchisee Acquisitions | Customer Contracts | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets acquired | $ 7,457 | |
Estimated useful lives of intangibles (in years) | 1 year | |
Franchisee Acquisitions | Customer Relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets acquired | $ 9,330 | |
Estimated useful lives of intangibles (in years) | 3 years | |
Franchisee Acquisitions | Reacquired Franchise Rights | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets acquired | $ 4,663 | |
Estimated useful lives of intangibles (in years) | 3 years 10 months 24 days |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Summary of Carrying Value of Goodwill by Operating Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill [Roll Forward] | |||||
Beginning Balance | $ 447,781 | $ 447,781 | $ 444,369 | ||
Acquisitions | $ 7,600 | 7,576 | 6,526 | ||
Disposals, Currency Translation and Other Adjustments | (941) | (362) | |||
Acquisition Accounting Adjustments | 46 | (2,752) | |||
Impairment Loss | (446,900) | (446,893) | 0 | $ 0 | |
Ending Balance | $ 7,569 | $ 7,569 | $ 447,781 | $ 444,369 | |
Aaron's Business | |||||
Goodwill [Roll Forward] | |||||
Impairment Loss | $ (446,900) |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Summary of Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 24,027 | $ 25,828 |
Accumulated Amortization | (14,930) | (11,594) |
Net | 9,097 | 14,234 |
Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 10,476 | 10,478 |
Accumulated Amortization | (7,706) | (4,783) |
Net | 2,770 | 5,695 |
Reacquired Franchise Rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 7,421 | 8,428 |
Accumulated Amortization | (3,429) | (3,307) |
Net | 3,992 | 5,121 |
Non-Compete Agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 3,633 | 4,398 |
Accumulated Amortization | (2,759) | (2,488) |
Net | 874 | 1,910 |
Customer Lease Contracts | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 690 | 804 |
Accumulated Amortization | (155) | (503) |
Net | 535 | 301 |
Expanded Customer Base | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 1,807 | 1,720 |
Accumulated Amortization | (881) | (513) |
Net | $ 926 | $ 1,207 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Narrative (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 6.8 | $ 13.3 | $ 10.7 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Estimated Future Amortization Expense (Detail) $ in Thousands | Dec. 31, 2020USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2021 | $ 5,100 |
2022 | 1,752 |
2023 | 1,086 |
2024 | 553 |
2025 | $ 367 |
Fair Value Measurement - Summar
Fair Value Measurement - Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Recurring Basis - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Level 1 | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Deferred Compensation Liability | $ 0 | $ 0 |
Level 2 | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Deferred Compensation Liability | (10,450) | (11,048) |
Level 3 | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Deferred Compensation Liability | $ 0 | $ 0 |
Fair Value Measurement - Assets
Fair Value Measurement - Assets Measured At Fair Value on Nonrecurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets Held for Sale | $ 8,956 | $ 10,131 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets Held for Sale | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets Held for Sale | 8,956 | 10,131 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets Held for Sale | $ 0 | $ 0 |
Fair Value Measurement - Fair V
Fair Value Measurement - Fair Value of Assets (Liabilities) Not Measured at Fair Value In Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Repayments of Debt | $ 285,000 | ||
Fixed-Rate Long-term Debt | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Repayments of Debt | $ 60,000 | ||
Fixed-Rate Long-term Debt | Level 1 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long term debt, fair value | 0 | 0 | $ 0 |
Fixed-Rate Long-term Debt | Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long term debt, fair value | 0 | 0 | (123,580) |
Fixed-Rate Long-term Debt | Level 3 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long term debt, fair value | $ 0 | $ 0 | $ 0 |
Fair Value Measurement - Narrat
Fair Value Measurement - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Property, plant, and equipment and finance lease right-of-use asset, fair value disclosure | $ 3.7 | |
Fixed-Rate Long-term Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long term debt, carrying value | $ 120 |
Property, Plant and Equipment -
Property, Plant and Equipment - Summary of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 510,933 | $ 490,965 |
Less: Accumulated Depreciation and Amortization | (310,563) | (283,664) |
Property, plant and equipment, net | 200,370 | 207,301 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 14,588 | 16,427 |
Buildings and Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 51,841 | 54,923 |
Leasehold Improvements and Signs | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 77,278 | 75,762 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 80,847 | 68,328 |
Fixtures and Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 142,875 | 147,277 |
Software - Internal-Use | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 134,334 | 121,075 |
Assets Under Finance Leases | Non-Related Party | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,156 | 2,690 |
Construction in Progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 8,014 | $ 4,483 |
Property, Plant and Equipment_2
Property, Plant and Equipment - Summary of Property, Plant and Equipment (Footnote) (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Abstract] | ||
Internal-use software development cost, accumulated amortization | $ 87.1 | $ 70.9 |
Property, Plant and Equipment_3
Property, Plant and Equipment - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Amortization of right-of-use assets | $ 596 | $ 1,542 | |
Amortization expense on assets recorded under capital leases | $ 1,900 | ||
Non-Related Party | |||
Property, Plant and Equipment [Line Items] | |||
Finance lease, accumulated amortization | $ 1,000 | $ 1,900 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation Of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | $ 430,172 | $ 440,961 | $ 430,955 | $ 432,831 | $ 434,952 | $ 426,271 | $ 443,198 | $ 480,056 | $ 1,734,919 | $ 1,784,477 | $ 1,794,716 |
Lease and Retail Revenues | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 1,530,464 | 1,570,358 | 1,509,529 | ||||||||
Lease and Retail Revenues | Canada | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 21,700 | 24,700 | 21,300 | ||||||||
Retail Sales | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 47,345 | 38,474 | 31,271 | ||||||||
Non-Retail Sales | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 127,652 | 140,950 | 207,262 | ||||||||
Franchise Royalties and Other Revenues | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 28,212 | 33,432 | 44,815 | ||||||||
Other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | $ 1,246 | $ 1,263 | $ 1,839 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | $ 430,172 | $ 440,961 | $ 430,955 | $ 432,831 | $ 434,952 | $ 426,271 | $ 443,198 | $ 480,056 | $ 1,734,919 | $ 1,784,477 | $ 1,794,716 |
Leases | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 25,100 | 24,700 | 17,700 | ||||||||
Franchise Royalties and Other Revenues | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 28,212 | 33,432 | 44,815 | ||||||||
Franchise Royalties and Other Revenues | Transferred over Time | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | $ 19,500 | $ 25,500 | $ 33,300 | ||||||||
Sales and Lease Ownership and HomeSmart | Maximum | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Percentage of royalty of gross revenue | 6.00% | ||||||||||
Agreement One | Sales and Lease Ownership | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Lease agreement period | 12 months | ||||||||||
Agreement Two | Sales and Lease Ownership | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Lease agreement period | 18 months | ||||||||||
Agreement Three | Sales and Lease Ownership | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Lease agreement period | 24 months |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020USD ($)store | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Lessee, Lease, Description [Line Items] | |||
Rental expense | $ 108.1 | ||
Proceeds from sale and leaseback transactions | 8.1 | ||
COVID-19 Pandemic | |||
Lessee, Lease, Description [Line Items] | |||
Company operated stores | store | 184,000 | ||
Rent abatements | $ 1.9 | ||
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Renewal term | 1 year | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Renewal term | 20 years | ||
Closure of Company Operated Stores | |||
Lessee, Lease, Description [Line Items] | |||
Rental expense | $ 2.1 | ||
Operating Segments | |||
Lessee, Lease, Description [Line Items] | |||
Gain related to the sale and leaseback transaction | $ 5.6 | ||
Transportation Vehicles | |||
Lessee, Lease, Description [Line Items] | |||
Weighted average remaining lease term | 2 years | ||
Various IT Equipment | |||
Lessee, Lease, Description [Line Items] | |||
Weighted average remaining lease term | 2 years |
Leases - Total Lease Expense (D
Leases - Total Lease Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Lessee, Lease, Description [Line Items] | ||
Amortization of Right-of-Use Assets | $ 596 | $ 1,542 |
Interest on Lease Liabilities | 170 | 363 |
Total Finance Lease Cost | 766 | 1,905 |
Operating Lease Cost | 93,141 | 108,276 |
Sublease Receipts | (2,723) | (2,644) |
Total Lease Cost | 93,907 | 110,181 |
Right-of-use asset, impairment charges | 24,700 | 24,400 |
Future sublease rental income in one year | 2,300 | |
Future sublease rental income in year two | 1,500 | |
Future sublease rental income in year three | 1,000 | |
Future sublease rental income in year four | 500 | |
Future sublease rental income in year five | 200 | |
Future sublease rental income in thereafter | 100 | |
Operating Lease Cost Classified within Operating Expenses | ||
Lessee, Lease, Description [Line Items] | ||
Operating Lease Cost | 94,249 | 107,581 |
Operating Lease cost classified within Restructuring Expenses, Net | ||
Lessee, Lease, Description [Line Items] | ||
Operating Lease Cost | $ 1,615 | $ 3,339 |
Leases - Leasing Activities (De
Leases - Leasing Activities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Operating Cash Flows for Finance Leases | $ 170 | $ 411 |
Operating Cash Flows for Operating Leases | 111,446 | 121,864 |
Financing Cash Flows for Finance Leases | 1,086 | 2,493 |
Total Cash paid for amounts included in measurement of Lease Liabilities | 112,702 | 124,768 |
Right-of-Use Assets obtained in exchange for new Finance Lease Liabilities | 0 | 0 |
Right-of-Use Assets obtained in exchange for new Operating Lease Liabilities | $ 45,678 | $ 49,504 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Operating Lease Assets | $ 238,085 | $ 305,257 |
Finance Lease Assets | 153 | 768 |
Total Lease Assets | 238,238 | 306,025 |
Operating Lease Liabilities | 278,958 | 335,807 |
Finance Lease Liabilities | 831 | 2,670 |
Total Lease Liabilities | $ 279,789 | $ 338,477 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:PropertyPlantAndEquipmentNet | |
Finance Lease, Liability, Statement of Financial Position [Extensible List] | us-gaap:DebtAndCapitalLeaseObligations |
Leases - Summary of the Weighte
Leases - Summary of the Weighted-Average Discount Rate and Weighted-Average Remaining Lease Term (Details) | Dec. 31, 2020 | Dec. 31, 2019 |
Weighted Average Discount Rate | ||
Finance Leases | 5.70% | 5.70% |
Operating Leases | 3.50% | 3.60% |
Weighted Average Remaining Lease Term (in years) | ||
Finance Leases | 1 year | 2 years |
Operating Leases | 4 years | 5 years |
Leases - Operating and Finance
Leases - Operating and Finance Lease Liability (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
2020 | $ 94,446 | |
2021 | 72,214 | |
2022 | 51,500 | |
2023 | 34,238 | |
2024 | 20,442 | |
Thereafter | 28,980 | |
Total Undiscounted Cash Flows1 | 301,820 | |
Less: Interest | 22,862 | |
Present Value of Lease Liabilities | 278,958 | $ 335,807 |
Finance Lease, Liability, Payment, Due [Abstract] | ||
2020 | 787 | |
2021 | 71 | |
2022 | 0 | |
2023 | 0 | |
2024 | 0 | |
Thereafter | 0 | |
Total Undiscounted Cash Flows1 | 858 | |
Less: Interest | 27 | |
Present Value of Lease Liabilities | 831 | $ 2,670 |
Total | ||
2020 | 95,233 | |
2021 | 72,285 | |
2022 | 51,500 | |
2023 | 34,238 | |
2024 | 20,442 | |
Thereafter | 28,980 | |
Total Undiscounted Cash Flows1 | 302,678 | |
Less: Interest | 22,889 | |
Present Value of Lease Liabilities | 279,789 | |
Future operating lease payments, lease not yet commended | $ 3,900 |
Indebtedness - Narrative (Detai
Indebtedness - Narrative (Details) - USD ($) | Nov. 30, 2020 | Nov. 27, 2020 | Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Nov. 09, 2020 |
Debt Instruments [Abstract] | |||||||
Debt | $ 831,000 | $ 831,000 | $ 341,030,000 | ||||
Finance Lease Liabilities | 831,000 | 831,000 | 2,670,000 | ||||
Less: Current Maturities | 761,000 | 761,000 | 83,886,000 | ||||
Long-Term Debt | 70,000 | 70,000 | 257,144,000 | ||||
Unamortized debt issuance expense | 1,000,000 | ||||||
Repayments of lines of credit | 16,000,000 | ||||||
Loss on debt extinguishment | 4,100,000 | $ 4,079,000 | 0 | $ 0 | |||
Fixed charges coverage ratio | 1.75 | ||||||
Letter of Credit | Subsidiaries | |||||||
Debt Instruments [Abstract] | |||||||
Maximum borrowing capacity | $ 35,000,000 | $ 35,000,000 | |||||
Credit Facility, 2014 | |||||||
Debt Instruments [Abstract] | |||||||
Covenant, leverage ratio, maximum | 2.50 | 2.50 | |||||
Term Loan | Revolving Credit Agreement | |||||||
Debt Instruments [Abstract] | |||||||
Repayments of lines of credit | $ 225,400,000 | ||||||
Swingline Loans on Customary Terms | Subsidiaries | |||||||
Debt Instruments [Abstract] | |||||||
Maximum borrowing capacity | $ 25,000,000 | $ 25,000,000 | |||||
Incremental Facilities | |||||||
Debt Instruments [Abstract] | |||||||
Maximum borrowing capacity | 150,000,000 | $ 150,000,000 | |||||
Line of Credit | |||||||
Debt Instruments [Abstract] | |||||||
Base rate above (below) LIBOR | (1.00%) | ||||||
Decrease in credit amount outstanding | $ 14,700,000 | ||||||
Line of Credit | Revolving Credit Agreement | |||||||
Debt Instruments [Abstract] | |||||||
Debt issuance costs, net | 2,100,000 | 2,100,000 | 1,900,000 | ||||
Maximum borrowing capacity | $ 250,000,000 | ||||||
Debt instrument, fee amount | 2,200,000 | $ 2,200,000 | |||||
Line of Credit | LIBOR | |||||||
Debt Instruments [Abstract] | |||||||
Interest rate basis spread (percentage) | 0.50% | ||||||
Line of Credit | LIBOR | Minimum | |||||||
Debt Instruments [Abstract] | |||||||
Interest rate basis spread (percentage) | 1.50% | ||||||
Line of Credit | LIBOR | Maximum | |||||||
Debt Instruments [Abstract] | |||||||
Interest rate basis spread (percentage) | 2.50% | ||||||
Line of Credit | Base Rate | |||||||
Debt Instruments [Abstract] | |||||||
Interest rate basis spread (percentage) | 1.00% | ||||||
Line of Credit | Credit Facility, 2014 | Revolving Credit Agreement | |||||||
Debt Instruments [Abstract] | |||||||
Line of credit amount outstanding | 235,300,000 | $ 235,300,000 | |||||
Line of Credit | Credit Facility, 2014 | Revolving Credit Agreement | Minimum | |||||||
Debt Instruments [Abstract] | |||||||
Commitment fee for unused balance amount (percentage) | 0.20% | ||||||
Line of Credit | Credit Facility, 2014 | Revolving Credit Agreement | Maximum | |||||||
Debt Instruments [Abstract] | |||||||
Commitment fee for unused balance amount (percentage) | 0.35% | ||||||
Unsecured Debt | |||||||
Debt Instruments [Abstract] | |||||||
Repayments of lines of credit | $ 61,300,000 | ||||||
Senior Notes | Senior Unsecured Notes, 4.75% - Repaid in November 2020 | |||||||
Debt Instruments [Abstract] | |||||||
Debt | $ 0 | $ 0 | 119,847,000 | ||||
Debt interest rate (percentage) | 4.75% | 4.75% | |||||
Term Loan | |||||||
Debt Instruments [Abstract] | |||||||
Debt | $ 0 | $ 0 | $ 218,513,000 |
Indebtedness - Future Maturitie
Indebtedness - Future Maturities of Long Term Debt and Capital Lease Obligations (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Maturities of Long-term Debt [Abstract] | |
2020 | $ 761 |
2021 | 70 |
Thereafter | 0 |
Total | $ 831 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforwards | $ 242,200 | |||
State tax expense (benefit) | $ 4,458 | $ 916 | 1,757 | |
Income tax receivable | 1,093 | 5,927 | 84,400 | |
Accrued interest and penalties | 700 | 2,100 | ||
Federal | (18,661) | (13,438) | (140) | |
Income tax expense (benefit), CARES Act | (34,200) | |||
Valuation allowance, increase (decrease) | (700) | |||
Impairment Loss | $ 446,900 | 446,893 | 0 | 0 |
Income tax, interest and penalties | 100 | 100 | 100 | |
Income tax, accrued interest and penalties | 200 | 300 | ||
Deferred tax assets, goodwill and intangible assets | $ 110,000 | |||
Investment Tax Credit Carryforward | ||||
Operating Loss Carryforwards [Line Items] | ||||
Valuation allowance, increase (decrease) | 3,000 | |||
Progressive Finance Holdings, LLC | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforwards | 11,000 | |||
State tax expense (benefit) | 700 | 600 | ||
Federal | 14,700 | (13,400) | ||
State Tax | ||||
Operating Loss Carryforwards [Line Items] | ||||
Tax credit carryforward | 5,800 | |||
Net operating loss carryforwards | 2,600 | |||
Tax credit carryforward, valuation allowance | 3,700 | |||
Income tax deductions, bonus depreciation | 9,100 | 4,000 | $ 3,800 | |
State operating loss carryforwards, subject to expiration | 800 | |||
Federal Tax | ||||
Operating Loss Carryforwards [Line Items] | ||||
Federal operating loss carryforwards | 98,900 | |||
Federal Tax | Progressive Finance Holdings, LLC | ||||
Operating Loss Carryforwards [Line Items] | ||||
Tax credit carryforward | $ 2,400 | |||
Foreign Tax | ||||
Operating Loss Carryforwards [Line Items] | ||||
Tax credit carryforward | $ 4,200 |
Income Taxes - Summary of Incom
Income Taxes - Summary of Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Current Income Tax (Benefit) Expense: | |||
Current federal tax expense (benefit) | $ (18,661) | $ (13,438) | $ (140) |
State | 4,458 | 916 | 1,757 |
Foreign | 1,494 | 467 | 1,256 |
Current Income Tax Expense | (12,709) | (12,055) | 2,873 |
Deferred Income Tax (Benefit) Expense: | |||
Federal | (97,734) | 19,497 | 9,884 |
State | (17,883) | (159) | 923 |
Foreign | (3,576) | (1,112) | (765) |
Deferred Income Tax Expense (Benefit) | (119,193) | 18,226 | 10,042 |
Income Tax (Benefit) Expense | $ (131,902) | $ 6,171 | $ 12,915 |
Income Taxes - Components of De
Income Taxes - Components of Deferred Income Tax Liabilities and Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred Tax Liabilities: | ||
Lease Merchandise and Property, Plant and Equipment | $ 184,976 | $ 192,091 |
Goodwill and Other Intangibles | 0 | 43,713 |
Operating Lease Right-of-Use Assets | 57,521 | 73,602 |
Other, Net | 10,150 | 2,760 |
Total Deferred Tax Liabilities | 252,647 | 312,166 |
Deferred Tax Assets: | ||
Goodwill and Other Intangibles | 63,291 | 0 |
Accrued Liabilities | 19,038 | 14,927 |
Advance Payments | 15,492 | 9,676 |
Operating Lease Liabilities | 68,883 | 81,488 |
Net Operating Losses | 21,616 | 41,014 |
Other, Net | 8,740 | 14,734 |
Total Deferred Tax Assets | 197,060 | 161,839 |
Less Valuation Allowance | 0 | 3,659 |
Net Deferred Tax Liabilities | $ 55,587 | $ 153,986 |
Income Taxes - Effective Tax Ra
Income Taxes - Effective Tax Rate Differs from Statutory United States Federal Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Statutory Rate | 21.00% | 21.00% | 21.00% |
Increases (Decreases) in United States Federal Taxes | |||
State Income Taxes, net of Federal Income Tax Benefit | 3.70% | 4.80% | 4.40% |
Other Permanent Differences | (0.20%) | (2.60%) | (2.50%) |
Federal Tax Credits | 0.40% | (5.20%) | (3.60%) |
NOL Carryback under CARES Act | 0.087 | 0 | 0 |
Remeasurement of net Deferred Tax Liabilities | 0.00% | (0.70%) | 0.30% |
Other, net | (0.40%) | 0.70% | 0.70% |
Effective Tax Rate | 33.20% | 18.00% | 20.30% |
Income Taxes - Summary of Activ
Income Taxes - Summary of Activity Related to Uncertain Tax Positions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Summary of activity related to uncertain tax positions: | |||
Beginning Balance | $ 2,350 | $ 2,338 | $ 2,030 |
Additions Based on Tax Positions Related to the Current Year | 149 | 236 | 269 |
Additions for Tax Positions of Prior Years | 250 | 20 | 615 |
Prior Year Reductions | (108) | (76) | (85) |
Statute Expirations | (304) | (168) | (209) |
Settlements | (112) | 0 | (282) |
Amounts Transferred to Former Parent | (1,542) | 0 | 0 |
Ending Balance | $ 683 | $ 2,350 | $ 2,338 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Nov. 17, 2020 | Dec. 31, 2019 | |
Commitments And Contingencies Disclosure [Line Items] | |||
Loan due In full, term (in days) | 75 days | ||
Portion that company might be obligated to repay in the event franchisees defaulted | $ 17,500,000 | ||
Fair value of franchise related borrowings | 2,400,000 | $ 400,000 | |
Loan facility maximum commitment amount | $ 25,000,000 | ||
Accrued regulatory expense | 800,000 | 7,700,000 | |
Insurance receivable | $ 5,500,000 | ||
Minimum | |||
Commitments And Contingencies Disclosure [Line Items] | |||
Loss contingency in excess of accrual, range of possible loss | 0 | ||
Minimum range of possible loss | 0 | ||
Maximum | |||
Commitments And Contingencies Disclosure [Line Items] | |||
Loss contingency in excess of accrual, range of possible loss | 500,000 | ||
Minimum range of possible loss | 500,000 | ||
Marketing and Advertising Expense | |||
Commitments And Contingencies Disclosure [Line Items] | |||
Non-cancelable commitments | 10,500,000 | ||
Non-cancelable commitments due in 2020 | 6,600,000 | ||
Non-cancelable commitments due in 2021 | $ 3,900,000 |
Restructuring - Narrative (Deta
Restructuring - Narrative (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | 36 Months Ended | ||||||||||
Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2021store | Dec. 31, 2020USD ($)store | Dec. 31, 2019USD ($)store | Dec. 31, 2018USD ($) | Dec. 31, 2018store | |
Restructuring Cost and Reserve [Line Items] | |||||||||||||
Restructuring expenses net | $ 9,200 | $ 4,000 | $ 7,000 | $ 22,300 | $ 2,500 | $ 5,500 | $ 18,700 | $ 13,300 | $ 42,544 | $ 39,990 | $ 2,750 | ||
Number of stores for sale | store | 6 | ||||||||||||
Number of buildings, with a planned exit | store | 1 | ||||||||||||
Facility Closing | |||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||
Number of store closures | store | 139 | ||||||||||||
Right-of-Use Asset Impairment | |||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||
Restructuring expenses net | $ 24,722 | $ 24,388 | $ 0 | ||||||||||
Real Estate Repositioning and Optimization Restructuring Program | |||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||
Number of store closures | store | 93 | ||||||||||||
Restructuring expenses net | $ 34,000 | ||||||||||||
Restructuring and related cost, expected incurred cost | $ 3,500 | ||||||||||||
Real Estate Repositioning and Optimization Restructuring Program | Forecast | |||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||
Number of store closures | store | 82 | ||||||||||||
Real Estate Repositioning and Optimization Restructuring Program | Minimum | |||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||
Restructuring program, strategic plan term | 3 years | ||||||||||||
Real Estate Repositioning and Optimization Restructuring Program | Maximum | |||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||
Restructuring program, strategic plan term | 4 years | ||||||||||||
Real Estate Repositioning and Optimization Restructuring Program | Right-of-Use Asset Impairment | |||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||
Impairment of long-lived assets held-for-use | 6,000 | ||||||||||||
2019 Restructuring Program | |||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||
Number of store closures | store | 155 | ||||||||||||
Restructuring expenses net | $ 6,800 | ||||||||||||
Restructuring and Related Cost, Cost Incurred to Date | 45,200 | 45,200 | |||||||||||
2016 and 2017 Restructuring Program | |||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||
Restructuring expenses net | 1,800 | ||||||||||||
Restructuring and Related Cost, Cost Incurred to Date | $ 43,500 | $ 43,500 |
Restructuring - Summary of Rest
Restructuring - Summary of Restructuring Charges by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring charges | $ 9,200 | $ 4,000 | $ 7,000 | $ 22,300 | $ 2,500 | $ 5,500 | $ 18,700 | $ 13,300 | $ 42,544 | $ 39,990 | $ 2,750 |
Right-of-Use Asset Impairment | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring charges | 24,722 | 24,388 | 0 | ||||||||
Operating Lease Charges | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring charges | 5,124 | 4,023 | 2,057 | ||||||||
Fixed Asset Impairment | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring charges | 6,039 | 5,238 | 0 | ||||||||
Severance | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring charges | 6,153 | 3,403 | 610 | ||||||||
Other Expenses | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring charges | 780 | 1,886 | 460 | ||||||||
(Gain) Loss on Sale of Store Properties | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring charges | $ (274) | $ 1,052 | $ (377) |
Restructuring - Summary of Accr
Restructuring - Summary of Accruals of Restructuring Programs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Restructuring Reserve [Roll Forward] | ||
Restructuring reserve, beginning balance | $ 756 | $ 651 |
Restructuring Severance Charges | 3,403 | |
Restructuring Charges | 6,153 | |
Payments | (6,136) | (3,298) |
Restructuring reserve, ending balance | 773 | 756 |
Previously Reported | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring reserve, beginning balance | 9,123 | |
ASC 842 Transition Adjustment1 | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring reserve, beginning balance | (8,472) | |
Contractual Lease Obligations | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring reserve, beginning balance | 0 | 0 |
Restructuring Severance Charges | 0 | |
Restructuring Charges | 0 | |
Payments | 0 | 0 |
Restructuring reserve, ending balance | 0 | 0 |
Contractual Lease Obligations | Previously Reported | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring reserve, beginning balance | 8,472 | |
Contractual Lease Obligations | ASC 842 Transition Adjustment1 | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring reserve, beginning balance | (8,472) | |
Severance | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring reserve, beginning balance | 756 | 651 |
Restructuring Severance Charges | 3,403 | |
Restructuring Charges | 6,153 | |
Payments | (6,136) | (3,298) |
Restructuring reserve, ending balance | $ 773 | 756 |
Severance | Previously Reported | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring reserve, beginning balance | 651 | |
Severance | ASC 842 Transition Adjustment1 | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring reserve, beginning balance | $ 0 |
Stock-based Compensation - Narr
Stock-based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Nov. 30, 2020 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Aggregate number of shares of common stock issued or transferred under the incentive stock awards plan (in shares) | 476,180 | 476,180 | |||
Stock based compensation expense | $ 24.1 | $ 13.2 | $ 15.4 | ||
Tax benefit from exercise of stock options | 6.1 | 3.3 | 3.8 | ||
Excess tax benefit from share-based compensation, operating activities | $ 1.8 | 2.5 | 3 | ||
Stock options granted (in shares) | 0 | ||||
Aggregate Intrinsic value of options exercised | $ 4.2 | $ 1.4 | 1.7 | 4.8 | |
Fair value of options vested | 3.8 | 0.8 | 0.7 | ||
Corporate, Non-Segment | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Stock based compensation expense | $ 17.4 | $ 7.8 | $ 8.4 | ||
2015 Incentive Award Plan | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Unexercised options lapse period (in years) | 10 years | ||||
Employee Matters Agreement | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Shares converted and deemed issued (in shares) | 2,900,000 | ||||
Converted awards, incremental cost | $ 5.5 | ||||
Converted awards, incremental cost recognized | $ 1.1 | ||||
Converted awards, incremental cost, expected cost remaining to be amortized and recognized | $ 0.8 | 0.8 | |||
Retirement-Related Modifications | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Stock-based compensation expense, modifications | $ 11 | ||||
Employee Stock | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Aggregate number of shares of common stock issued or transferred under the incentive stock awards plan (in shares) | 200,000 | 200,000 | |||
Unrecognized compensation expense related to non-vested award | $ 11.6 | $ 11.6 | |||
Unrecognized compensation expense related to non-vested award, recognition period (in years) | 1 year 4 months 24 days | ||||
Weighted average grant date fair value (in dollars per share) | $ 38.55 | $ 42.21 | $ 35.74 | ||
Employee Stock | Minimum | 2015 Incentive Award Plan | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Vesting period (in years) | 1 year | ||||
Employee Stock | Maximum | 2015 Incentive Award Plan | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Vesting period (in years) | 3 years | ||||
Restricted Stock | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Vested (In Shares) | 118,000 | ||||
Aggregate Intrinsic value of options exercised | $ 2 | ||||
Stock granted (in shares) | 0 | ||||
Total fair value of shares vesting | $ 3 | $ 4.9 | $ 6.2 | ||
Weighted average grant date fair value (in dollars per share) | $ 0 | ||||
Nonvested awards that contain voting rights | 362,000,000 | ||||
Restricted Stock | Retirement-Related Modifications | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Vested (In Shares) | 143,000 | ||||
Restricted Stock | Minimum | 2015 Incentive Award Plan | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Vesting period (in years) | 1 year | ||||
Restricted Stock | Maximum | 2015 Incentive Award Plan | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Vesting period (in years) | 3 years | ||||
Performance Share Units | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Vested (In Shares) | 5,300,000 | 309,000 | |||
Stock granted (in shares) | 0 | ||||
Total fair value of shares vesting | $ 5.5 | $ 5.6 | $ 6 | ||
Weighted average grant date fair value (in dollars per share) | $ 0 | ||||
Performance Share Units | Retirement-Related Modifications | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Vested (In Shares) | 356,000 | ||||
Performance Share Units | Minimum | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Performance percentage | 0.00% | ||||
Performance Share Units | Maximum | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Performance percentage | 200.00% | ||||
Performance criteria is met | Performance Share Units | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Award vesting rights (percentage) | 33.33% | ||||
One-year service period | Performance Share Units | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Vesting period (in years) | 1 year | ||||
Award vesting rights (percentage) | 33.33% | ||||
Award requisite service period (in years) | 1 year | ||||
Two-year service period | Performance Share Units | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Award vesting rights (percentage) | 33.33% | ||||
Award requisite service period (in years) | 2 years |
Stock-based Compensation - Summ
Stock-based Compensation - Summary Information about Stock Options Outstanding (Details) - $ / shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Options outstanding, weighted average exercise price (in dollars per share) | $ 11.99 | $ 0 |
$0.00-$10.00 | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Exercise price, lower range limit (in dollars per share) | 0 | |
Exercise price, upper range limit (in dollars per share) | $ 10 | |
Options Outstanding | 144,586 | |
Options outstanding, weighted average remaining contractual life (in years) | 5 years 6 months 10 days | |
Options outstanding, weighted average exercise price (in dollars per share) | $ 7.25 | |
Options Exercisable | 144,586 | |
Options exercisable, weighted average exercise price (in dollars per share) | $ 7.25 | |
$10.01-$20.00 | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Exercise price, lower range limit (in dollars per share) | 10.01 | |
Exercise price, upper range limit (in dollars per share) | $ 20 | |
Options Outstanding | 549,349 | |
Options outstanding, weighted average remaining contractual life (in years) | 8 years 4 months 2 days | |
Options outstanding, weighted average exercise price (in dollars per share) | $ 13.24 | |
Options Exercisable | 132,791 | |
Options exercisable, weighted average exercise price (in dollars per share) | $ 14.45 | |
$0.00-$20.00 | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Exercise price, lower range limit (in dollars per share) | 0 | |
Exercise price, upper range limit (in dollars per share) | $ 20 | |
Options Outstanding | 693,935 | |
Options outstanding, weighted average remaining contractual life (in years) | 7 years 9 months 18 days | |
Options outstanding, weighted average exercise price (in dollars per share) | $ 11.99 | |
Options Exercisable | 277,377 | |
Options exercisable, weighted average exercise price (in dollars per share) | $ 10.70 |
Stock-based Compensation - Su_2
Stock-based Compensation - Summary of Stock Option Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($)$ / sharesshares | |
Options | |
Beginning Balance (In Shares) | shares | 0 |
Converted on November 30, 2020 in connection with spin-off (In Shares) | shares | 1,537 |
Granted (In Shares) | shares | 0 |
Exercised (In Shares) | shares | (831) |
Forfeited/expired (In Shares) | shares | (12) |
Ending Balance (In Shares) | shares | 694 |
Expected to Vest (In Shares) | shares | 403 |
Exercisable (In Shares) | shares | 277 |
Weighted Average Exercise Price | |
Beginning Balance (in dollars per share) | $ 0 |
Converted on November 30, 2020 in connection with spin-off (in dollars per share) | 12.51 |
Granted (in dollars per share) | 0 |
Exercised (in dollars per share) | 12.93 |
Forfeited/expired (in dollars per share) | 13.51 |
Ending Balance (in dollars per share) | 11.99 |
Expected to Vest (in dollars per share) | 12.88 |
Exercisable (in dollars per share) | $ 10.70 |
Share Based Compensation Arrangement By Share Based Payment Award Options Weighted Average Remaining Contractual Term [Abstract] | |
Outstanding | 7 years 9 months 3 days |
Expected to Vest | 8 years 7 months 24 days |
Exercisable | 6 years 4 months 24 days |
Aggregate Intrinsic Value | |
Outstanding | $ | $ 4,834 |
Expected | $ | 2,451 |
Exercisable | $ | $ 2,292 |
Weighted Average Fair Value | |
Outstanding (in dollars per share) | $ 2.63 |
Expected to Vest (in dollars per share) | 4.57 |
Exercisable (in dollars per share) | $ 3.59 |
Stock-based Compensation - Su_3
Stock-based Compensation - Summary of Restricted Stock and Performance Share Units Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total fair value of shares vesting | $ 3 | $ 4.9 | $ 6.2 | |
Restricted Stock | ||||
Beginning Balance (In Shares) | 0 | |||
Converted on November 30, 2020 in connection with spin-off (In Shares) | 540 | |||
Granted (In Shares) | 0 | |||
Vested (In Shares) | 118 | |||
Forfeited (In Shares) | (5) | |||
Ending Balance (In Shares) | 417 | 417 | 0 | |
Weighted Average Fair Value | ||||
Beginning Balance (in dollars per share) | $ 0 | |||
Converted on November 30, 2020 in connection with spin-off (in dollars per share) | 14.18 | |||
Granted (in dollars per share) | 0 | |||
Vested (in dollars per share) | 12.66 | |||
Forfeited (in dollars per share) | 12.68 | |||
Ending Balance (in dollars per share) | $ 14.63 | $ 14.63 | $ 0 | |
Restricted Stock | Retirement-Related Modifications | ||||
Restricted Stock | ||||
Vested (In Shares) | 143 | |||
Performance Share Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total fair value of shares vesting | $ 5.5 | $ 5.6 | $ 6 | |
Restricted Stock | ||||
Beginning Balance (In Shares) | 0 | |||
Converted on November 30, 2020 in connection with spin-off (In Shares) | 774 | |||
Granted (In Shares) | 0 | |||
Vested (In Shares) | 5,300 | 309 | ||
Forfeited (In Shares) | (10) | |||
Ending Balance (In Shares) | 455 | 455 | 0 | |
Weighted Average Fair Value | ||||
Beginning Balance (in dollars per share) | $ 0 | |||
Converted on November 30, 2020 in connection with spin-off (in dollars per share) | 12.42 | |||
Granted (in dollars per share) | 0 | |||
Vested (in dollars per share) | 11.89 | |||
Forfeited (in dollars per share) | 13.45 | |||
Ending Balance (in dollars per share) | $ 12.75 | $ 12.75 | $ 0 | |
Performance Share Units | Retirement-Related Modifications | ||||
Restricted Stock | ||||
Vested (In Shares) | 356 | |||
Stock Options | Retirement-Related Modifications | ||||
Restricted Stock | ||||
Vested (In Shares) | 831 |
Stock-based Compensation - Empl
Stock-based Compensation - Employee Stock Purchase Plan (Details) - Employee Stock - USD ($) $ / shares in Units, $ in Thousands | May 09, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
ESPP purchase price of common stock, percent of market price, on first and last day of trading date | 85.00% | |||
Fixed contribution rate | 10.00% | |||
Maximum contribution amount | $ 25 | |||
Compensation cost for ESPP | $ 300 | $ 200 | $ 100 | |
Number of shares issued under the ESPP | 25,291 | 24,782 | 13,088 | |
Weighted average grant date fair value (in dollars per share) | $ 38.55 | $ 42.21 | $ 35.74 |
Compensation Arrangements - Def
Compensation Arrangements - Deferred Compensation (Details) - USD ($) | Jan. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||||
Deferred compensation plan liability | $ 10,500,000 | $ 11,000,000 | ||
Cash surrender value of the policies | 16,100,000 | 14,400,000 | ||
Gain on cash surrender value | (1,700,000) | (2,100,000) | $ 1,200,000 | |
Benefits paid | $ 2,300,000 | 2,900,000 | 2,700,000 | |
Employer matching contribution, maximum (percentage) | 100.00% | |||
Compensation expense related to 401(k) savings plan | $ 5,300,000 | 5,500,000 | 5,300,000 | |
Employee | ||||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||||
Percentage of receipt of base compensation (up to) | 75.00% | |||
Employee | Nonqualified Plan | ||||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||||
Maximum contribution per employee (percentage) | 4.00% | |||
Vesting period | 3 years | 3 years | ||
Employee | Unfunded Plan | Nonqualified Plan | ||||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||||
Maximum annual contributions per employee | $ 11,000 | $ 11,200 | $ 11,400 | |
Employee | First contribution | Nonqualified Plan | ||||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||||
Employer matching contribution, maximum (percentage) | 100.00% | |||
Maximum contribution per employee (percentage) | 3.00% | |||
Employee | Second contribution | Nonqualified Plan | ||||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||||
Employer matching contribution, maximum (percentage) | 50.00% | |||
Maximum contribution per employee (percentage) | 2.00% | |||
Non Employee Director | ||||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||||
Percentage of receipt of base compensation (up to) | 100.00% |
Compensation Arrangements - 401
Compensation Arrangements - 401(k) Defined Contribution Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Maximum 401 (k) plan contribution rates as percentage of employees earnings | 75.00% | ||
Employer matching contribution, maximum (percentage) | 100.00% | ||
Employer 401 (k) matching contribution to employee, 50% Maximum | 50.00% | ||
Initial employer 401(k) matching contribution to employee (percentage) | 4.00% | ||
Compensation expense related to 401(k) savings plan | $ 5.3 | $ 5.5 | $ 5.3 |
Maximum | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Initial employer 401(k) matching contribution to employee (percentage) | 3.00% | ||
Minimum | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Initial employer 401(k) matching contribution to employee (percentage) | 2.00% |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |||
Corporate allocations | $ 38.6 | $ 27.3 | $ 28.6 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | |||
Corporate allocations | $ 38,600 | $ 27,300 | $ 28,600 |
Income Tax Expense (Benefit) | (131,902) | 6,171 | 12,915 |
PROG Holdings, Inc. | |||
Related Party Transaction [Line Items] | |||
General financing activities, net | 112,597 | (38,052) | (67,852) |
Corporate allocations | 38,554 | 27,276 | 28,640 |
Income Tax Expense (Benefit) | (30,372) | 22,250 | 22,368 |
Transfer of Invested Capital to Additional Paid-in-Capital | (714,356) | 0 | 0 |
Net Increase (Decrease) In Invested Capital | $ (593,577) | $ 11,474 | $ (16,844) |
- Quarterly Financial Informati
- Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 30, 2020 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||
Revenues | $ 430,172 | $ 440,961 | $ 430,955 | $ 432,831 | $ 434,952 | $ 426,271 | $ 443,198 | $ 480,056 | $ 1,734,919 | $ 1,784,477 | $ 1,794,716 | |
Gross Profit | 272,810 | 279,564 | 263,921 | 267,247 | 271,188 | 265,187 | 276,565 | 299,076 | 1,083,542 | 1,112,016 | 1,086,562 | |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest | 2,942 | 40,081 | 29,424 | (470,261) | 27,383 | (2,255) | (3,910) | 13,052 | (397,814) | 34,270 | 63,568 | |
Net Income (Loss) Attributable to Parent | $ 2,875 | $ 32,613 | $ 22,374 | $ (323,774) | $ 20,522 | $ 26,835 | $ (18,080) | $ (1,178) | $ (265,912) | $ 28,099 | $ 50,653 | |
Earnings Per Share (in dollars per share) | $ 0.08 | $ 0.96 | $ 0.66 | $ (9.57) | $ 0.61 | $ 0.79 | $ (0.53) | $ (0.03) | $ (7.85) | $ 0.83 | $ 1.50 | |
Earnings Per Share Assuming Dilution (in dollars per share) | $ 0.08 | $ 0.96 | $ 0.66 | $ (9.57) | $ 0.61 | $ 0.79 | $ (0.53) | $ (0.03) | $ (7.85) | $ 0.83 | $ 1.50 | |
Anti-dilutive Securities excluded from the computation of earnings per share assuming dilution | 33,841,624 |
Quarterly Financial Informati_3
Quarterly Financial Information (Unaudited) - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Business Acquisition [Line Items] | |||||||||||
Impairment Loss | $ 446,900 | $ 446,893 | $ 0 | $ 0 | |||||||
Restructuring charges | $ 9,200 | $ 4,000 | $ 7,000 | 22,300 | $ 2,500 | $ 5,500 | $ 18,700 | $ 13,300 | 42,544 | 39,990 | 2,750 |
Early Termination Fee, Sales And Marketing Agreement | 14,100 | ||||||||||
Retirement charges | 12,100 | 500 | |||||||||
Separation Costs | 7,000 | $ 1,200 | 8,184 | 0 | 0 | ||||||
Loss on Debt Extinguishment | 4,100 | $ 4,079 | $ 0 | $ 0 | |||||||
Repayments of Debt | $ 285,000 | ||||||||||
Gains (losses) on sale of real estate | $ 7,400 | ||||||||||
Aaron's Business | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Impairment Loss | $ 446,900 | ||||||||||
Gain in excess of insurance receivable | $ 4,500 |