Other Charges

2018 Cost Savings Initiatives. During the first nine months of 2018, we began execution of multiple cost savings initiatives, including reductions in overhead and supply chain, resulting in pre-tax charges of $6.8 million in contract termination fees, $7.0 million in severance and other payroll-related costs, $1.9 million in legal and advisory fees, $1.1 million in other miscellaneous shutdown costs, $0.9 million in lease obligation costs, $0.4 million related to the write-down of capitalized software, and $0.1 million in disposal of fixed assets.

Store Consolidation Plan. During the first nine months of 2018, we closed 129 Core U.S. stores and 9 locations in Mexico, resulting in pre-tax charges of $10.5 million, consisting of $7.9 million in lease obligation costs, $1.5 million in disposal of fixed assets, $0.9 million in other miscellaneous shutdown costs, and $0.2 million in severance and other payroll-related cost.

Discontinuation of IT Software Projects. During the first half of 2018, we discontinued certain IT software projects and as a result incurred pre-tax charges of $1.9 million, related to the write-down of capitalized assets.

Effects of 2018 Hurricane. During the third quarter of 2018, Hurricane Florence caused damage in North Carolina and South Carolina, resulting in pre-tax expenses of approximately $0.2 million for inventory losses, store repair costs, fixed asset write-offs, and employee assistance. At this time, we are unable to estimate the full extent of losses incurred due to the damage caused by Hurricane Florence, however, we do not ultimately expect the losses to be material to our financial statements.

Acceptance Now Store Closures. During the first six months of 2017, we closed 319 Acceptance Now manned locations and 9 Acceptance Now direct locations, related to the hhgregg bankruptcy and liquidation plan and the Conn's referral contract termination. These closures resulted in pre-tax charges of $16.4 million for the nine months ended September 30, 2017, consisting primarily of rental merchandise losses, disposal of fixed assets, and other miscellaneous labor and shutdown costs. In addition, we recorded a pre-tax impairment charge of $3.9 million to our intangible assets, for our discontinued vendor relationship.

Corporate Cost Rationalization. During the first nine months of 2017, we executed a head count reduction that impacted approximately 10% of our field support center workforce. This resulted in pre-tax charges for severance and other payroll-related costs of approximately $3.4 million for the nine months ended September 30, 2017.

Effects of 2017 Hurricanes. During the third quarter of 2017, Hurricanes Harvey, Irma and Maria caused significant damage in the continental United States and surrounding areas, including Texas, Florida, and Puerto Rico, resulting in pre-tax expenses of approximately $1.9 million in the third quarter of 2017 for inventory losses, store repair costs, fixed asset write-offs, and employee assistance. Approximately $1.7 million of these pre-tax expenses related to Hurricanes Harvey and Irma, while the remaining $0.2 million related to employee assistance payments for Hurricane Maria.

Activity with respect to other charges for the nine months ended September 30, 2018 is summarized in the below table:



(in thousands)	Accrued Charges at December 31, 2017		Charges & Adjustments			Payments			Accrued Charges at September 30, 2018
Cash charges:
Labor reduction costs	$	1,674	$	7,168		$	(6,411	)	$	2,431
Lease obligation costs	2,105		9,303			(5,564		)	5,844
Contract termination costs	—		6,750			(6,750		)	—
Other miscellaneous	—		2,165			(2,165		)	—
Total cash charges	$	3,779	25,386			$	(20,890	)	$	8,275
Non-cash charges:
Rental merchandise recoveries			(484		)
Asset impairments			3,771
Other⁽¹⁾			11,992
Total other charges			$	40,665

⁽¹⁾ Other primarily includes incremental legal and advisory fees related to our strategic review process and the Vintage Merger Agreement, partially offset by insurance claims recoveries related to 2017 hurricanes.