Aarons 2013 Annual Report Download - page 37

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27
Results of Operations
As of December 31, 2013, the Company had five operating and reportable segments: Sales and Lease Ownership, HomeSmart,
RIMCO, Franchise and Manufacturing. In all periods presented, RIMCO has been reclassified from the Sales and Lease
Ownership segment to the RIMCO segment. In January of 2014, the Company sold the 27 Company-operated RIMCO stores
and the rights to five franchised RIMCO stores.
The Company's Sales and Lease Ownership, HomeSmart, RIMCO and Franchise segments accounted for substantially all of
the operations of the Company and, therefore, unless otherwise noted only material changes within these four segments are
discussed. The production of our Manufacturing segment, consisting of the Woodhaven Furniture Industries division, is
primarily leased or sold through the Company-operated and franchised stores, and consequently, substantially all of that
segment’s revenues and earnings before income taxes are eliminated through the elimination of intersegment revenues and
intersegment profit.
Results of Operations – Years Ended December 31, 2013, 2012 and 2011
Change
Year Ended December 31, 2013 vs. 2012 2012 vs. 2011
(In Thousands) 2013 2012 2011 $ % $ %
REVENUES:
Lease Revenues
and Fees $1,748,699 $1,676,391 $1,516,508 $ 72,308 4.3 % $ 159,883 10.5%
Retail Sales 40,876 38,455 38,557 2,421 6.3 (102) (.3)
Non-Retail Sales 371,292 425,915 388,960 (54,623) (12.8) 36,955 9.5
Franchise Royalties and
Fees 68,575 66,655 63,255 1,920 2.9 3,400 5.4
Other 5,189 5,411 5,298 (222) (4.1) 113 2.1
2,234,631 2,212,827 2,012,578 21,804 1.0 200,249 9.9
COSTS AND EXPENSES:
Retail Cost of Sales 24,318 21,608 22,619 2,710 12.5 (1,011) (4.5)
Non-Retail Cost of Sales 337,581 387,362 351,887 (49,781) (12.9) 35,475 10.1
Operating Expenses 1,022,684 952,617 866,600 70,067 7.4 86,017 9.9
Legal and Regulatory
Expense/(Income) 28,400 (35,500) 36,500 63,900 nmf (72,000) nmf
Retirement and Vacation
Charges 4,917 10,394 3,532 (5,477) (52.7) 6,862 194.3
Depreciation of Lease
Merchandise 628,089 601,552 547,839 26,537 4.4 53,713 9.8
Other Operating Expense
(Income), Net 1,584 (2,235) (3,550) 3,819 170.9 1,315 37.0
2,047,573 1,935,798 1,825,427 111,775 5.8 110,371 6.0
OPERATING PROFIT 187,058 277,029 187,151 (89,971) (32.5) 89,878 48.0
Interest Income 2,998 3,541 1,718 (543) (15.3) 1,823 106.1
Interest Expense (5,613) (6,392) (4,709) (779) (12.2) 1,683 35.7
Other Non-Operating
Income (Expense), Net 517 2,677 (783)(2,160) (80.7) 3,460 441.9
EARNINGS BEFORE
INCOME TAXES 184,960 276,855 183,377 (91,895) (33.2) 93,478 51.0
INCOME TAXES 64,294 103,812 69,610 (39,518) (38.1) 34,202 49.1
NET EARNINGS $ 120,666 $ 173,043 $ 113,767 $ (52,377) (30.3)% $ 59,276 52.1%
nmf—Calculation is not meaningful