Other Charges (Notes)

9 Months Ended

Sep. 30, 2020

Restructuring and Related Activities [Abstract]

Store Consolidations. During the first nine months of 2020, we closed 25 Rent-A-Center Business stores, resulting in pre-tax charges of $1.2 million in other miscellaneous shutdown and holding costs, $0.4 million in lease impairment charges, and $0.1 million in disposal of fixed assets. During the first nine months of 2019, we closed 83 Rent-A-Center Business stores, resulting in pre-tax charges of $3.1 million in lease impairment, $1.7 million in other miscellaneous shutdown and holding costs, $0.8 million in disposal of fixed assets, and $0.4 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 nine months ended September 30, 2020 consisting of $1.1 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 nine months of 2019 related to these initiatives included pre-tax charges of $4.7 million in lease impairment charges, $2.8 million in severance and other payroll-related costs, $2.2 million in other miscellaneous shutdown and holding 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 nine months of 2020, we incurred approximately $1.0 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 $0.8 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 $0.7 million of inventory write-offs and $0.1 million in disposal of fixed assets during the first nine months of 2020.

Activity with respect to other charges for the nine months ended September 30, 2020 is summarized in the below table:


(in thousands)	Accrued Charges at December 31, 2019		Charges & Adjustments		Payments & Adjustments		Accrued Charges at September 30, 2020
Cash charges:
Labor costs	$	738	$	1,610	$	(1,450)	$	898
Lease obligations(1)	—		(645)		645		—

Shutdown and holding costs	—		1,573		(1,573)		—
Total cash charges	$	738	2,538		$	(2,378)	$	898
Non-cash charges:
Rental merchandise losses(2)			721
Asset impairments(3)			1,376
Other(4)			3,133
Total other charges			$	7,768

(1) Includes lease abatement credits related to renegotiated lease agreements in response to COVID-19.

(2) Reflects losses due to looting.

(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 looting, as well as a write-down of capitalized software in the first nine months of 2020.

(4) Other primarily includes legal settlement reserves, state tax audit assessment reserves, expenses related to COVID-19, partially offset by proceeds received from the sale of a class action claim and insurance proceeds related to Hurricane Maria in 2017.