Note S — 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.

From January 1, 2012, when we began to provide operating results by segment, through December 31, 2013, management reported four segments including Core U.S., Acceptance Now, International and Franchising. Costs incurred at our corporate headquarters that benefit our Core U.S., Acceptance Now and Mexico segments were allocated to those segments based on segment revenue to determine segment operating profit. Because our Franchising segment maintains a separate, independent corporate office, no additional corporate costs or assets were allocated to that segment.

On January 1, 2014, the Company realigned its reporting structure to include its Canadian stores in the Core U.S. segment, which were previously reported in the International segment. The accompanying prior year amounts and store counts have been revised to reflect this change, and we now refer to the segment formerly reported as "International" as "Mexico" since only that country's results are reported therein.

During the fourth quarter of 2014, management reevaluated its operating segments and segment reporting, and determined that the chief operating decision makers relied more heavily on operating profit before corporate allocations when evaluating segment performance than operating profit after corporate allocations. Therefore, we are no longer allocating corporate costs and assets to the segments. In the following tables, segment operating profit is presented before corporate allocations. Corporate costs, which are primarily costs incurred at our U.S. corporate headquarters, are reported separately to reconcile to operating profit reported in the consolidated statements of operations. The costs incurred at our Mexico field support center is reported in the Mexico segment because our Executive Vice President of Mexico Operations is responsible for Mexico's operations and its field support center. The Franchising segment's corporate costs are reported in the Franchising segment because the President of RAC Franchising International is responsible for that segment's operations and corporate functions. Certain corporate assets used to support our Core U.S., Acceptance Now and Mexico segments, including the land and building in which the corporate headquarters are located and related property assets, cash and prepaid expenses were also allocated historically to these operating segments based on segment revenue. In the following tables, corporate assets are reported separately to reconcile to the consolidated balance sheets. Management believes that these changes provide investors with a more precise view of field operations and corporate costs that accurately aligns with management's view of the business.

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, Canada 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 45 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.

Our Acceptance Now 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.

Our Mexico segment currently consists of our company-owned rent-to-own stores in Mexico. The nature of this segment's operations and assets are the same as our Core U.S. segment.

The stores in our Franchising segment use Rent-A-Center’s, ColorTyme’s or RimTyme’s trade names, service marks, trademarks and logos, and operate under distinctive operating procedures and standards. Franchising’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, Franchising receives royalties of 2.0% to 6.0% of the franchisees' monthly gross revenue and initial fees for new locations. Segment assets include cash, franchise fee receivables, property assets and intangible assets.

Segment information as of and for the years ended December 31, 2014, 2013 and 2012 is as follows (in thousands):



	Year Ended December 31,
	2014		2013		2012
Revenues
Core U.S.	$	2,414,659	$	2,527,660	$	2,681,844
Acceptance Now	644,853		489,425		333,118
Mexico	72,202		47,171		22,502
Franchising	26,082		29,762		38,207
Total revenues	$	3,157,796	$	3,094,018	$	3,075,671



	Year Ended December 31,
	2014		2013		2012
Gross profit
Core U.S.	$	1,753,269	$	1,822,243	$	1,919,230
Acceptance Now	372,012		290,647		196,050
Mexico	51,070		33,945		15,291
Franchising	8,012		6,658		6,893
Total gross profit	$	2,184,363	$	2,153,493	$	2,137,464



	Year Ended December 31,
	2014			2013			2012
Operating profit (loss)
Core U.S.	$	264,967		$	311,301		$	415,744
Acceptance Now	112,918			89,075			41,344
Mexico	(21,961		)	(22,828		)	(23,337		)
Franchising	3,295			1,853			2,326
Total segment operating profit	359,219			379,401			436,077
Corporate	(165,757		)	(132,392		)	(123,048		)
Total operating profit	$	193,462		$	247,009		$	313,029



	Year Ended December 31,
	2014		2013		2012
Depreciation, amortization and write-down of intangibles
Core U.S.	$	61,555	$	64,042	$	55,868
Acceptance Now	2,917		2,287		4,000
Mexico	6,683		5,450		4,164
Franchising	184		79		89
Total segments	71,339		71,858		64,121
Corporate	16,060		16,122		15,128
Total depreciation, amortization and write-down of intangibles	$	87,399	$	87,980	$	79,249



	Year Ended December 31,
	2014		2013		2012
Capital expenditures
Core U.S.	$	31,228	$	44,715	$	61,137
Acceptance Now	3,833		3,047		2,044
Mexico	4,164		11,537		10,670
Franchising	—		—		—
Total segments	39,225		59,299		73,851
Corporate	44,560		49,068		28,602
Total capital expenditures	$	83,785	$	108,367	$	102,453



	December 31,
	2014		2013		2012
On rent rental merchandise, net
Core U.S.	$	593,945	$	611,375	$	589,811
Acceptance Now	345,703		284,421		204,640
Mexico	20,766		17,680		10,347
Total on rent rental merchandise, net	$	960,414	$	913,476	$	804,798



	December 31,
	2014		2013		2012
Idle rental merchandise, net
Core U.S.	$	264,211	$	195,926	$	193,251
Acceptance Now	4,897		3,837		3,007
Mexico	8,334		10,959		5,363
Total idle rental merchandise, net	$	277,442	$	210,722	$	201,621



	December 31,
	2014		2013		2012
Assets by segment
Core U.S.	$	2,519,770	$	2,479,297	$	2,428,209
Acceptance Now	420,660		358,305		274,765
Mexico	59,841		69,826		46,038
Franchising	2,604		1,688		2,711
Total segments	3,002,875		2,909,116		2,751,723
Corporate	268,322		109,059		107,362
Total assets	$	3,271,197	$	3,018,175	$	2,859,085



	December 31,
	2014		2013		2012
Assets by country
United States	$	3,204,283	$	2,940,980	$	2,794,883
Mexico	59,841		69,826		46,038
Canada	7,073		7,369		18,164
Total assets	$	3,271,197	$	3,018,175	$	2,859,085

Approximately 87% of our total revenues are comprised of rental and fee revenues from the following product groups:



	Year Ended December 31,
	2014		2013		2012
	(In thousands)
Furniture and accessories	$	938,065	$	917,290	$	861,939
Consumer electronics	642,226		667,052		699,620
Appliances	422,979		432,937		423,578
Computers	375,340		347,783		358,551
Other products and services	367,218		330,833		310,237
Total rentals and fees	$	2,745,828	$	2,695,895	$	2,653,925

Our revenues originate in the following countries:



	Year Ended December 31,
	2014		2013		2012
	(In thousands)
United States	$	3,075,387	$	3,035,558	$	3,035,556
Mexico	72,202		47,171		22,502
Canada	10,207		11,289		17,613
Total revenues	$	3,157,796	$	3,094,018	$	3,075,671