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, and our Core U.S. and franchising segments also offer smartphones. 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 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, 2017, 2016 and 2015 is as follows:



	Year Ended December 31,
(In thousands)	2017		2016		2015
Revenues
Core U.S.	$	1,835,422	$	2,069,725	$	2,371,823
Acceptance Now	797,987		817,814		818,325
Mexico	47,005		50,927		63,803
Franchising	22,126		24,786		24,469
Total revenues	$	2,702,540	$	2,963,252	$	3,278,420



	Year Ended December 31,
(In thousands)	2017		2016		2015
Gross profit
Core U.S.	$	1,276,212	$	1,467,679	$	1,644,840
Acceptance Now	400,002		422,381		420,980
Mexico	32,592		35,549		42,354
Franchising	9,736		9,440		9,935
Total gross profit	$	1,718,542	$	1,935,049	$	2,118,109



	Year Ended December 31,
(In thousands)	2017			2016			2015
Operating profit (loss)
Core U.S.	$	86,196		$	(1,020	)	$	(959,447	)
Acceptance Now	48,618			105,925			123,971
Mexico	(260		)	(2,449		)	(14,149		)
Franchising	5,081			5,650			5,793
Total segments	139,635			108,106			(843,832		)
Corporate	(202,694		)	(174,702		)	(164,056		)
Total operating loss	$	(63,059	)	$	(66,596	)	$	(1,007,888	)



	Year Ended December 31,
(In thousands)	2017		2016		2015
Depreciation, amortization and write-down of intangibles
Core U.S.⁽¹⁾	$	31,070	$	39,734	$	49,137
Acceptance Now⁽²⁾	2,498		3,309		3,334
Mexico	1,973		3,179		5,160
Franchising	177		177		185
Total segments	35,718		46,399		57,816
Corporate	38,921		34,057		22,904
Total depreciation, amortization and write-down of intangibles	$	74,639	$	80,456	$	80,720

⁽¹⁾ We recorded goodwill impairment charges of $151.3 million and $1,170 million in the Core U.S. segment during the fourth quarters of 2016 and 2015, respectively, not included in the table above.

⁽²⁾ We recorded an impairment of intangibles of $3.9 million in the Acceptance Now segment during the first quarter of 2017 that is not included in the table above. The impairment charge was recorded to Other Charges in the Consolidated Statement of Operations.



	Year Ended December 31,
(In thousands)	2017		2016		2015
Capital expenditures
Core U.S.	$	26,506	$	20,802	$	21,739
Acceptance Now	2,723		2,330		2,473
Mexico	124		283		204
Total segments	29,353		23,415		24,416
Corporate	36,107		37,728		56,454
Total capital expenditures	$	65,460	$	61,143	$	80,870



	December 31,
(In thousands)	2017		2016		2015
On rent rental merchandise, net
Core U.S.	$	408,993	$	426,845	$	540,004
Acceptance Now	278,443		354,486		350,046
Mexico	14,367		13,787		17,575
Total on rent rental merchandise, net	$	701,803	$	795,118	$	907,625



	December 31,
(In thousands)	2017		2016		2015
Held for rent rental merchandise, net
Core U.S.	$	156,039	$	192,718	$	215,327
Acceptance Now	4,940		7,489		5,000
Mexico	6,209		6,629		8,520
Total held for rent rental merchandise, net	$	167,188	$	206,836	$	228,847



	December 31,
(In thousands)	2017		2016		2015
Assets by segment					Revised
Core U.S.	$	776,296	$	860,717	$	1,240,593
Acceptance Now	350,970		432,383		426,827
Mexico	33,529		31,415		38,898
Franchising	3,802		2,197		2,723
Total segments	1,164,597		1,326,712		1,709,041
Corporate	256,184		276,029		265,427
Total assets	$	1,420,781	$	1,602,741	$	1,974,468



	December 31,
(In thousands)	2017		2016		2015
Assets by country					Revised
United States	$	1,383,004	$	1,567,933	$	1,930,676
Mexico	33,529		31,415		38,898
Canada	4,248		3,393		4,894
Total assets	$	1,420,781	$	1,602,741	$	1,974,468



	Year Ended December 31,
(In thousands)	2017		2016		2015
Rentals and fees by inventory category
Furniture and accessories	$	921,159	$	927,537	$	955,576
Consumer electronics	459,942		553,976		626,668
Appliances	351,893		391,539		415,278
Computers	124,158		148,889		207,906
Smartphones	57,927		93,449		163,667
Other products and services	352,662		384,663		412,220
Total rentals and fees	$	2,267,741	$	2,500,053	$	2,781,315



	Year Ended December 31,
(In thousands)	2017		2016		2015
Revenue by country
United States	$	2,654,819	$	2,911,613	$	3,209,736
Mexico	47,005		50,927		63,803
Canada	716		712		4,881
Total revenues	$	2,702,540	$	2,963,252	$	3,278,420