Revenues Revenues (Notes)

6 Months Ended

Jun. 30, 2019

Revenues

The following table disaggregates our revenue for the periods ended June 30, 2019 and 2018:



	Three Months Ended June 30, 2019
	Core U.S.		Acceptance Now		Mexico		Franchising		Consolidated
(In thousands)
Store
Rentals and fees	$	399,799	$	139,104	$	12,777	$	—	$	551,680
Merchandise sales	32,935		37,140		767		—		70,842
Installment sales	17,270		—		—		—		17,270
Other	1,092		145		7		—		1,244
Total store revenues	451,096		176,389		13,551		—		641,036
Franchise
Merchandise sales	—		—		—		10,673		10,673
Royalty income and fees	—		—		—		4,216		4,216
Total revenues	$	451,096	$	176,389	$	13,551	$	14,889	$	655,925



	Six Months Ended June 30, 2019
	Core U.S.		Acceptance Now		Mexico		Franchising		Consolidated
(In thousands)
Store
Rentals and fees	$	807,379	$	282,297	$	25,358	$	—	$	1,115,034
Merchandise sales	83,493		90,296		1,523		—		175,312
Installment sales	32,706		—		—		—		32,706
Other	1,575		318		15		—		1,908
Total store revenues	925,153		372,911		26,896		—		1,324,960
Franchise
Merchandise sales	—		—		—		19,129		19,129
Royalty income and fees	—		—		—		8,530		8,530
Total revenues	$	925,153	$	372,911	$	26,896	$	27,659	$	1,352,619



	Three Months Ended June 30, 2018
	Core U.S.		Acceptance Now		Mexico		Franchising		Consolidated
(In thousands)
Store
Rentals and fees	$	410,108	$	140,799	$	11,496	$	—	$	562,403
Merchandise sales	26,109		38,077		804		—		64,990
Installment sales	17,374		—		—		—		17,374
Other	2,129		135		7		—		2,271
Total store revenues	455,720		179,011		12,307		—		647,038
Franchise
Merchandise sales	—		—		—		4,880		4,880
Royalty income and fees	—		—		—		3,812		3,812
Total revenues	$	455,720	$	179,011	$	12,307	$	8,692	$	655,730



	Six Months Ended June 30, 2018
	Core U.S.		Acceptance Now		Mexico		Franchising		Consolidated
(In thousands)
Store
Rentals and fees	$	822,750	$	281,623	$	22,744	$	—	$	1,127,117
Merchandise sales	76,693		94,083		1,570		—		172,346
Installment sales	33,778		—		—		—		33,778
Other	4,540		291		24		—		4,855
Total store revenues	937,761		375,997		24,338		—		1,338,096
Franchise
Merchandise sales	—		—		—		8,514		8,514
Royalty income and fees	—		—		—		7,163		7,163
Total revenues	$	937,761	$	375,997	$	24,338	$	15,677	$	1,353,773

Rental-Purchase Agreements

Core U.S., Acceptance Now, and Mexico

Rentals and Fees. Merchandise is leased to customers pursuant to rental purchase agreements, which provide for weekly, semi-monthly or monthly rental terms with non-refundable rental payments. At the expiration of each rental term, customers renew the rental agreement by pre-paying for the next rental term. Generally, the customer has the right to acquire title of the merchandise either through a purchase option or through payment of all required rental terms. Customers can terminate the agreement at the end of any rental term without penalty. Therefore rental transactions are accounted for as operating leases and rental revenue is recognized over the rental term. Cash received for rental payments, including processing fees, prior to the period in which it should be recognized, is deferred and recognized according to the rental term. Revenue related to various payment, reinstatement or late fees is recognized when paid by the customer at the point service is provided. Rental merchandise is depreciated using the income forecasting method and is recognized in cost of sales over the rental term. We offer additional product plans along with our rental agreements which provide customers with liability protection against significant damage or loss of a product, and club membership benefits, including various discount programs and product service and replacement benefits in the event merchandise is damaged or lost. Customers renew product plans in conjunction with their rental term renewals, and can cancel the plans at any time. Revenue for product plans is recognized over the term of the plan. Costs incurred related to product plans are primarily recognized in cost of sales. At June 30, 2019 and December 31, 2018, we had $41.6 million and $42.1 million, respectively, in deferred revenue included in accrued liabilities related to our rental purchase agreements.

Revenue from contracts with customers

Core U.S., Acceptance Now, and Mexico

Merchandise Sales. Merchandise sales include payments received for the exercise of the early purchase option offered through our rental purchase agreements or merchandise sold through point of sale transactions. Revenue for merchandise sales is recognized when payment is received and ownership of the merchandise passes to the customer. The remaining net value of merchandise sold is recorded to cost of sales at the time of the transaction.

Installment Sales. Revenue from the sale of merchandise in our retail installment stores is recognized when the installment note is signed and control of the merchandise has passed to the customer. The cost of merchandise sold through installment agreements is recognized in cost of sales at the time of the transaction. We offer extended service plans with our installment agreements which are administered by third parties and provide customers with product service maintenance beyond the term of the installment agreement. Payments received for extended service plans are deferred and recognized, net of related costs, when the installment payment plan is complete and the service plan goes into effect. Customers can cancel extended service plans at any time during the installment agreement and receive a refund for payments previously made towards the plan. At June 30, 2019 and December 31, 2018, we had $2.8 million and $3.0 million, respectively, in deferred revenue included in accrued liabilities related to extended service plans.

Other. Other revenue primarily consisted of external maintenance and repair services provided by the Company’s service department, in addition to other miscellaneous product plans offered to our rental and installment customers. We completed the shut down of our service department operations early in the first quarter of 2019. Revenue for other product plans is recognized in accordance with the terms of the applicable plan agreement.

Franchising

Merchandise Sales. Revenue from the sale of rental merchandise is recognized upon shipment of the merchandise to the franchisee.

Royalty Income and Fees. Franchise royalties, including franchisee contributions to corporate advertising funds, represent sales-based royalties calculated as a percentage of gross rental payments and sales. Royalty revenue is recognized as rental payments and sales occur. Franchise fees are initial fees charged to franchisees for new or converted franchise stores. Franchise fee revenue is recognized on a straight-line basis over the term of the franchise agreement. At June 30, 2019 and December 31, 2018, we had $4.4 million and $4.1 million, respectively, in deferred revenue included in accrued liabilities related to franchise fees.