Other Charges (Notes)

9 Months Ended

Sep. 30, 2021

Restructuring and Related Activities [Abstract]

Acima Holdings Acquisition. As described in Note 2, on February 17, 2021, we completed the acquisition of Acima Holdings, a leading provider of virtual lease-to-own solutions. Included in the aggregate consideration issued to the former owners of Acima Holdings was 8,096,595 of common shares, valued at $414.1 million, subject to 36-month vesting conditions under restricted stock agreements, which will be recognized over the vesting term as stock compensation expense. During the nine months ended September 30, 2021, we recognized approximately $93.1 million in stock compensation expense related to these restricted stock agreements.

The fair value of assets acquired as part of the transaction included $520 million in intangible assets and $170 million in developed technology. During the nine months ended September 30, 2021, we recognized approximately $72.4 million in amortization expense and $9.3 million in incremental depreciation expense related to these assets.

Furthermore, during the nine months ended September 30, 2021 we recognized approximately $17.3 million in transaction costs associated with the closing of the transaction, and approximately $7.9 million in post-acquisition integration costs, including $3.5 million in employee severance, $3.3 million in inventory losses, and $1.1 million in other integration costs, including reorganization advisory fees.

Activity with respect to Other charges for the nine months ended September 30, 2021 is summarized in the below table:


(in thousands)	Accrued Charges at December 31, 2020		Charges & Adjustments		Payments & Adjustments		Accrued Charges at September 30, 2021
Cash charges:
Acima Holdings transaction costs	$	5,005	$	17,336	$	(22,341)	$	—
Acima Holdings integration costs	—		7,890		(5,749)		2,141


Other cash charges(1)	344		323		(667)		—
Total cash charges	$	5,349	25,549		$	(28,757)	$	2,141
Non-cash charges:
Depreciation and amortization of acquired assets(2)			81,725

Acima Holdings restricted stock agreements(3)			93,121

Asset impairments			789

Other(4)			10,911
Total other charges			$	212,095

(1) Represents employee severance, and shutdown and holding expenses related to store closures.

(2) Represents amortization of the total fair value of acquired intangible assets and incremental depreciation related to the fair value increase over net book value of acquired software assets in connection with the acquisition of Acima Holdings as described in Note 2.

(3) Represents stock compensation expense recognized for nine months ended September 30, 2021, related to common stock issued to Acima Holdings employees under restricted stock agreements as part of the acquisition proceeds subject to vesting restrictions, as described in Note 2 and Note 12.

(4) Includes $10.7 million in legal settlement reserves and $0.2 million in state sales tax assessment reserves. Amounts accrued for potential settlements do not represent our maximum loss exposure. The amount of any loss ultimately incurred in relation to matters for which an accrual has been established may be significantly different than the amounts accrued for such matters due to the inherent uncertainty in litigation, regulatory and similar adversarial proceedings.