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Other Charges (Notes)
6 Months Ended
Jun. 30, 2020
Restructuring and Related Activities [Abstract]  
Other Charges Other Charges
Store Consolidations. During the first six months of 2020, we closed 18 Rent-A-Center Business stores, resulting in pre-tax charges of $0.3 million in lease impairment charges, $0.9 million in other miscellaneous shutdown and holding costs, and $0.1 million in disposal of fixed assets. During the first six months of 2019, we closed 66 Rent-A-Center Business stores, resulting in pre-tax charges of $2.3 million in lease impairment, $0.9 million in other miscellaneous shutdown and holding costs, $0.7 million in disposal of fixed assets, and $0.3 million in severance and other payroll-related costs.
Cost Savings Initiatives. During 2018, we began the execution of multiple cost savings initiatives, including reductions in overhead and supply chain operations. In connection with these initiatives, we recorded pre-tax charges during the six months ended June 30, 2020 consisting of $1.0 million in severance and other payroll-related costs, $0.4 million in lease impairment charges, and $0.4 million in other miscellaneous shutdown and holding costs. Costs incurred during the first six months of 2019 related to these initiatives included pre-tax charges of $5.0 million in lease impairment charges, $2.8 million in severance and other payroll-related costs, $1.6 million in other miscellaneous shutdown costs, and $0.4 million in disposal of fixed assets.
COVID-19 Pandemic. In March 2020, national efforts to contain the COVID-19 virus began to be implemented. In connection with COVID-19, during the first six months of 2020, we incurred approximately $0.8 million in sanitization cleaning and personal protective equipment expenses, $0.4 million in payroll-related costs, and $0.2 million in lease expense related to closed stores and idled vehicles, partially offset by real estate lease abatement credits of $0.6 million for our Rent-A-Center Business stores.
Social Unrest. During the second quarter of 2020, we incurred expenses resulting from certain civil unrest that occurred in connection with efforts to institute law enforcement and other social and political reforms. In connection with this unrest, approximately 30 Rent-A-Center Business stores were looted and/or damaged, resulting in $0.6 million of inventory write-offs and $0.1 million in disposal of fixed assets.
Activity with respect to other charges for the six months ended June 30, 2020 is summarized in the below table:
(in thousands) Accrued Charges at December 31, 2019Charges & AdjustmentsPayments & Adjustments Accrued Charges at June 30, 2020
Cash charges:
Labor costs$738  $1,484  $(957) $1,265  
Lease obligations(1)
—  (414) 414  —  
Shutdown and holding costs—  1,307  (1,307) —  
Total cash charges$738  2,377  $(1,850) $1,265  
Non-cash charges:
Rental merchandise losses(2)
620  
Asset impairments(3)
955  
Other(4)
5,672  
Total other charges$9,624  
(1) Includes lease abatement credits related to renegotiated lease agreements in response to COVID-19
(2) Looting related to social unrest
(3) Asset impairments primarily includes impairments of operating lease right-of-use assets and other property assets related to the closure of Rent-A-Center Business stores and previously closed product service centers, damage related to social unrest, as well as a write-down of capitalized software in the first six months of 2020.
(4) Other primarily includes legal settlement reserves, state tax audit assessment reserves, expenses related to COVID-19, partially offset by the receipt of insurance proceeds related to Hurricane Maria.