Segment Information

12 Months Ended

Dec. 31, 2012

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

Note P — Segment Information

The operating segments reported below are the segments for which separate financial information is available and for which segment results are evaluated by the chief operating decision makers. Our operating segments are organized based on factors including, but not limited to, type of business transactions, geographic location and store ownership. All operating segments offer merchandise from four basic product categories: consumer electronics, appliances, computers, furniture and accessories. Reportable segments and their respective operations are defined as follows.

Our Core U.S. segment primarily operates rent-to-own stores in the United States and Puerto Rico whose customers enter into weekly, semi-monthly or monthly rental purchase agreements, which renew automatically upon receipt of each payment. We retain the title to the merchandise during the term of the rental purchase agreement and ownership passes to the customer if the customer has continuously renewed the rental purchase agreement through the end of the term or exercises a specified early purchase option. This segment also includes the 41 stores operating in two states that utilize a retail model which generates installment credit sales through a retail sale transaction. Segment assets include cash, receivables, rental merchandise, property assets, goodwill and other intangible assets. During 2011 in this segment, we recorded a pre-tax impairment charge of approximately $7.3 million related to the discontinuation of the financial services business, which ceased operations in December 2010, a pre-tax litigation charge of approximately $2.8 million related to the settlement of wage and hour claims in California and a pre-tax restructuring charge of approximately $7.6 million related to the closure of eight Home Choice stores in Illinois, 24 RAC Limited locations within third-party grocery stores and 26 core rent-to-own stores following the sale of all customer accounts at those locations.

Our RAC Acceptance segment operates kiosks within various traditional retailers' locations where we generally offer the rent-to-own transaction to consumers who do not qualify for financing from the traditional retailer. The transaction offered is generally similar to that of the Core U.S. segment; however, the majority of the customers in this segment enter into monthly rather than weekly agreements. Segment assets include cash, rental merchandise, property assets, goodwill and other intangible assets. A restructuring charge of $4.9 million associated with the December 2010 acquisition of The Rental Store, Inc. was recognized in this segment during 2011.

Our International segment currently consists of our company-owned rent-to-own stores in Mexico and Canada. The nature of this segment's operations and assets are the same as our Core U.S. segment. At December 31, 2012, we operated 90 stores in Mexico and 18 stores in Canada.

ColorTyme is a national franchisor of rent-to-own stores that use ColorTyme's trade names, service marks, trademarks and logos, and operate under distinctive operating procedures and standards. ColorTyme's primary source of revenue is the sale of rental merchandise to its franchisees who, in turn, offer the merchandise to the general public for rent or purchase under a rent-to-own program. As franchisor, ColorTyme receives royalties of 2.0% to 4.0% of the franchisees' monthly gross revenue and initial fees for new locations. Segment assets include cash, franchise fee receivables, property assets and intangible assets.

We incur costs at our corporate headquarters that benefit our Core U.S., RAC Acceptance and International operating segments. Accordingly, we allocate such costs among these segments based on segment revenue to determine segment operating profit.

Likewise, certain corporate assets used to support these operating segments, including the land and building in which the corporate headquarters are located and related property assets, cash and prepaid expenses are also allocated to these operating segments based on segment revenue. Because our ColorTyme segment maintains a separate, independent corporate office, no additional corporate costs or assets are allocated to that segment.

Segment information as of and for the years ended December 31, 2012, 2011 and 2010 is as follows (in thousands, except location count):

	Year Ended December 31, 2012
	Core U.S.		RAC Acceptance		International			ColorTyme		Total
Revenue	$	2,655,411	$	343,283	$	40,211		$	43,741	$	3,082,646
Gross profit	1,904,586		194,607		27,831			6,893		2,133,917
Operating profit	318,496		27,972		(30,322		)	2,326		318,472
Depreciation of property assets	63,793		3,631		5,848			89		73,361
Amortization and write-down of intangibles	2,103		2,819		967			—		5,889
Capital expenditures	84,680		5,275		12,498			—		102,453
Rental merchandise, net
On rent	597,771		209,964		14,152			—		821,887
Held for rent	189,526		2,979		6,412			—		198,917
Total assets	2,508,370		292,070		65,954			2,711		2,869,105

	Year Ended December 31, 2011
	Core U.S.		RAC Acceptance			International			ColorTyme		Total
Revenue	$	2,631,416	$	193,295		$	18,490		$	38,983	$	2,882,184
Gross profit	1,918,781		114,228			13,011			6,496		2,052,516
Operating profit	317,473		(13,985		)	(13,551		)	3,220		293,157
Depreciation of property assets	60,558		2,229			2,295			132		65,214
Amortization and write-down of intangibles	1,092		3,583			—			—		4,675
Capital expenditures	108,553		5,881			18,276			—		132,710
Rental merchandise, net
On rent	619,189		139,340			7,896			—		766,425
Held for rent	177,625		1,274			7,869			—		186,768
Total assets	2,536,115		217,157			44,535			3,571		2,801,378

	Year Ended December 31, 2010
	Core U.S.			RAC Acceptance			International			ColorTyme		Total
Revenue	$	2,667,943	(1)	$	18,203		$	10,054		$	35,432	$	2,731,632
Gross profit	1,970,280		(1)	12,074			7,128			6,190		1,995,672
Operating profit	311,501		(1)	(5,372		)	(5,226		)	2,866		303,769
Depreciation of property assets	61,879			395			989			147		63,410
Amortization and write-down of intangibles	3,254			—			—			—		3,254
Capital expenditures	90,866			1,450			691			—		93,007
Rental merchandise, net
On rent	606,121			44,293			4,834			—		655,248
Held for rent	177,621			2,809			1,176			—		181,606
Total assets	2,554,980			114,382			15,179			3,790		2,688,331

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⁽¹⁾  Includes revenue, gross profit and operating loss of $56.2 million, $56.2 million and $(12.8) million, respectively, related to our financial services business.

	Location Count at December 31,
	Core U.S.	RAC Acceptance	International	ColorTyme	Total
2012	2,990	966	108	224	4,288
2011	2,994	750	80	216	4,040
2010	2,985	384	23	209	3,601