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Basis and Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2020

Schedule Of Company Operated Store Activity

The following table presents invoice volume for Progressive Leasing:


For the Three Months Ended June 30 (Unaudited and In Thousands)	2020		2019
Progressive Leasing Invoice Volume¹	$	394,335	$	403,410

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

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


Stores as of June 30 (Unaudited)	2020	2019
Company-operated Aaron's Branded Stores	1,098	1,171
Franchised Stores	316	357
Systemwide Stores	1,414	1,528

Calculation of Dilutive Stock Awards

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


	Three Months Ended June 30,			Six Months Ended June 30,
(Shares In Thousands)	2020	2019	2020	2019
Weighted Average Shares Outstanding	67,097	67,687	66,959	67,492
Dilutive Effect of Share-Based Awards¹	426	1,106	—	1,292
Weighted Average Shares Outstanding Assuming Dilution	67,523	68,793	66,959	68,784

¹There was no dilutive effect to the earnings (loss) per common share for the six months ended June 30, 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:


(In Thousands)	June 30, 2020		December 31, 2019
Customers	$	57,134	$	76,819
Corporate	12,141		14,109
Franchisee	10,658		13,231
Accounts Receivable	$	79,933	$	104,159

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


(In Thousands)	June 30, 2020		December 31, 2019
Loans Receivable, Gross	$	96,519	$	96,387
Unamortized Fees	(6,956)		(6,223)
Loans Receivable, Amortized Cost	89,563		90,164
Allowance for Loan Losses	(30,693)		(14,911)
Loans Receivable, Net of Allowances and Unamortized Fees	$	58,870	$	75,253

Components of the Accounts Receivable Provision

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


	Six Months Ended June 30,
(In Thousands)	2020		2019
Bad Debt Expense¹	$	1,016	$	1,166
Provision for Returns and Uncollectible Renewal Payments	157,571		136,445
Accounts Receivable Provision	$	158,587	$	137,611

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

Schedule of Lease Merchandise

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


(In Thousands)	June 30, 2020		December 31, 2019
Merchandise on Lease, net of Accumulated Depreciation and Allowances	$	969,364	$	1,156,798
Merchandise Not on Lease, net of Accumulated Depreciation and Allowances	150,276		276,619
Lease Merchandise, net of Accumulated Depreciation and Allowances	$	1,119,640	$	1,433,417

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 condensed consolidated balance sheets:


	Six Months Ended June 30,
(In Thousands)	2020		2019
Beginning Balance	$	61,185	$	46,694
Merchandise Written off, net of Recoveries	(119,221)		(105,571)
Provision for Write-offs	130,039		117,994
Ending Balance	$	72,003	$	59,117

Loan Portfolio Credit Quality Indicators

Below is a summary of the credit quality of the Company's loan portfolio as of June 30, 2020 and December 31, 2019 by Fair Isaac and Company (FICO) score as determined at the time of loan origination:


FICO Score Category	June 30, 2020		December 31, 2019
600 or Less	7.5	%	6.7	%
Between 600 and 700	79.8	%	80.1	%
700 or Greater	12.7	%	13.2	%

The table below presents credit quality indicators of the amortized cost of the Company's loans receivable by origination year:


(In Thousands)
As of June 30, 2020	2020		2019		2018		2017		2016		Prior		Total
FICO Score Category:
600 or Less	$	3,237	$	2,781	$	840	$	130	$	86	$	16	$	7,090
Between 600 and 700	24,541		25,584		10,656		6,042		3,485		962		71,270
700 or Greater	4,248		3,078		1,604		1,123		929		221		11,203
Total Amortized Cost	$	32,026	$	31,443	$	13,100	$	7,295	$	4,500	$	1,199	$	89,563

Schedule of Prepaid Expenses and Other Assets

Prepaid expenses and other assets consist of the following:


(In Thousands)	June 30, 2020		December 31, 2019
Prepaid Expenses	$	49,134	$	45,034
Prepaid Insurance	29,086		26,393
Assets Held for Sale	9,193		10,131
Deferred Tax Asset	826		826
Other Assets	25,681		31,887
Prepaid Expenses and Other Assets	$	113,920	$	114,271

Schedule of Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consist of the following:


(In Thousands)	June 30, 2020		December 31, 2019
Accounts Payable	$	56,680	$	89,959
Accrued Insurance Costs	54,314		44,032
Accrued Salaries and Benefits	53,636		43,972
Accrued Real Estate and Sales Taxes	34,394		32,763
Other Accrued Expenses and Liabilities	50,158		62,090
Accounts Payable and Accrued Expenses	$	249,182	$	272,816

Schedule of Goodwill

The following table provides information related to the carrying amount of goodwill by operating segment.


(In Thousands)	Progressive Leasing		Aaron’s Business		Total
Balance at December 31, 2019	$	288,801	$	447,781	$	736,582
Acquisition Accounting Adjustments	—		53		53
Disposals, Currency Translation and Other Adjustments	—		(941)		(941)
Impairment Loss	—		(446,893)		(446,893)
Balance at June 30, 2020	$	288,801	$	—	$	288,801

Schedule of Stockholders Equity

Changes in stockholders' equity for the six months ended June 30, 2020 and 2019 are as follows:


	Treasury Stock					Common Stock		Additional Paid-in Capital		Retained Earnings				Accumulated Other Comprehensive Loss	Total Shareholders’ Equity
(In Thousands, Except Per Share)	Shares	Amount
Balance, December 31, 2019	(24,034)	$	(627,940)	$	45,376	$	290,229	$	2,029,613	$	(19)	$	1,737,259
Opening Balance Sheet Adjustment - ASU 2016-13, net of taxes	—	—		—		—		(6,715)		—		(6,715)
Cash Dividends, $0.04 per share	—	—		—		—		(2,700)		—		(2,700)
Stock-Based Compensation	—	—		—		5,878		—		—		5,878
Reissued Shares	368	7,291		—		(12,640)		—		—		(5,349)

Net Loss	—	—		—		—		(280,005)		—		(280,005)
Foreign Currency Translation Adjustment	—	—		—		—		—		(1,754)		(1,754)
Balance, March 31, 2020	(23,666)	$	(620,649)	$	45,376	$	283,467	$	1,740,193	$	(1,773)	$	1,446,614
Cash Dividends, $0.04 per share	—	—		—		—		(2,701)		—		(2,701)
Stock-Based Compensation	—	—		—		6,856		—		—		6,856
Reissued Shares	53	1,392		—		330		—		—		1,722
Repurchased Shares	—	—		—		—		—		—		—
Net Earnings	—	—		—		—		68,377		—		68,377
Foreign Currency Translation Adjustment	—	—		—		—		—		331		331
Balance, June 30, 2020	(23,613)	$	(619,257)	$	45,376	$	290,653	$	1,805,869	$	(1,442)	$	1,521,199


	Treasury Stock					Common Stock		Additional Paid-in Capital		Retained Earnings				Accumulated Other Comprehensive Loss	Total Shareholders’ Equity
(In Thousands, Except Per Share)	Shares	Amount
Balance, December 31, 2018	(23,568)	$	(567,847)	$	45,376	$	278,922	$	2,005,344	$	(1,087)	$	1,760,708
Opening Balance Sheet Adjustment - ASC 842, net of taxes	—	—		—		—		2,592		—		2,592
Cash Dividends, $0.035 per share	—	—		—		—		(2,363)		—		(2,363)
Stock-Based Compensation	—	—		—		7,050		—		—		7,050
Reissued Shares	493	4,264		—		(15,245)		—		—		(10,981)

Net Earnings	—	—		—		—		56,078		—		56,078
Foreign Currency Translation Adjustment	—	—		—		—		—		424		424
Balance, March 31, 2019	(23,075)	$	(563,583)	$	45,376	$	270,727	$	2,061,651	$	(663)	$	1,813,508
Cash Dividends, $0.035 per share	—	—		—		—		(2,386)		—		(2,386)
Stock-Based Compensation	—	—		—		6,522		—		—		6,522
Reissued Shares	113	2,776		—		284		—		—		3,060
Repurchased Shares	(243)	(14,414)		—		—		—		—		(14,414)
Net Earnings	—	—		—		—		42,650		—		42,650
Foreign Currency Translation Adjustment	—	—		—		—		—		618		618
Balance, June 30, 2019	(23,205)	$	(575,221)	$	45,376	$	277,533	$	2,101,915	$	(45)	$	1,849,558