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Correction of Immaterial Errors (Notes)
 3 Months Ended
Mar. 31, 2015
Correction of Immaterial Errors [Abstract]  
Correction of Immaterial Errors
Correction of Immaterial Errors
During the fourth quarter of 2014, we identified errors in accounting for revenues, cost of revenues and other store expenses resulting in an immaterial correction of errors in our previously issued consolidated financial statements. Each of these errors affected periods beginning prior to 2012 through December 31, 2014. In accordance with Staff Accounting Bulletin (SAB) No. 99, Materiality, and SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, management evaluated the materiality of the errors from qualitative and quantitative perspectives, and concluded that the errors did not, individually or in the aggregate, result in a material misstatement of our previously issued consolidated financial statements. Due to the immaterial nature of the error corrections, the comparable 2014 amounts in the accompanying financial statements have been revised herein as discussed below.
The errors discussed above, adjusted for the related income tax expense impact, resulted in an overstatement of net earnings of $1.6 million for the three-month period ended March 31, 2014 as detailed in the table below:
 
 
Three Months Ended March 31, 2014
(In thousands, except per share data)
 
Previously Reported
 
Adjustment
 
As Revised
Rentals and fees
 
$
694,168

 
$
(2,981
)
 
$
691,187

Installment sales
 
18,356

 
(296
)
 
18,060

Franchise merchandise sales
 
7,324

 
(1,996
)
 
5,328

Total revenues
 
833,746

 
(5,273
)
 
828,473

Cost of rentals and fees
 
177,870

 
(2,654
)
 
175,216

Cost of installment sales
 
6,382

 
(296
)
 
6,086

Franchise cost of merchandise sold
 
7,000

 
(1,996
)
 
5,004

Total cost of revenues
 
270,869

 
(4,946
)
 
265,923

Gross profit
 
562,877

 
(327
)
 
562,550

Store labor
 
225,678

 
260

 
225,938

Other store expenses
 
215,440

 
(282
)
 
215,158

Operating profit
 
59,763

 
(305
)
 
59,458

Finance charges from refinancing
 
1,946

 
2,267

 
4,213

Earnings before income taxes
 
46,652

 
(2,572
)
 
44,080

Income tax expense
 
17,795

 
(981
)
 
16,814

Net earnings
 
28,857

 
(1,591
)
 
27,266

Basic earnings per common share
 
$
0.55

 
$
(0.03
)
 
$
0.52

Diluted earnings per common share
 
$
0.54

 
$
(0.03
)
 
$
0.51

The errors discussed above also resulted in changes to previously reported amounts in our consolidated statements of cash flows. The previously reported changes in operating assets and liabilities in the reconciliation of net income to cash provided by operating activities have been revised as detailed in the table below. These errors had no impact on net cash provided by operating activities:
 
 
Three Months Ended March 31, 2014
(In thousands, except per share data)
 
Previously Reported
 
Adjustment
 
As Revised
Net earnings
 
$
28,857

 
$
(1,591
)
 
$
27,266

Depreciation of rental merchandise
 
169,843

 
(354
)
 
169,489

Finance charges from refinancing
 
1,946

 
(1,946
)
 
—

Deferred income taxes
 
(24,370
)
 
(980
)
 
(25,350
)
Rental merchandise
 
(135,407
)
 
(792
)
 
(136,199
)
Receivables
 
(2,849
)
 
114

 
(2,735
)
Prepaid expenses and other assets
 
(4,609
)
 
4,212

 
(397
)
Accounts payable - trade
 
2,368

 
1,009

 
3,377

Accrued liabilities
 
56,922

 
328

 
57,250

Net cash provided by operating activities
 
120,060

 
—

 
120,060