Aarons 2013 Annual Report Download - page 64

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The amortized cost and fair value of held-to-maturity securities by contractual maturity as of December 31, 2013 are as follows:
(In Thousands) Amortized Cost Fair Value
Due in one year or less $ 55,250 $ 55,284
Due in years one through two 57,141 57,162
Total $ 112,391 $ 112,446
Information pertaining to held-to-maturity securities with gross unrealized losses is as follows.
December 31, 2013 December 31, 2012
(In Thousands) Fair Value
Gross
Unrealized
Losses Fair Value Gross Unrealized
Losses
Corporate Bonds $ 31,453 $ (43) $ 22,785 $ (41)
The unrealized losses relate principally to the increases in short-term market interest rates that occurred since the securities
were purchased. As of December 31, 2013, 18 of the 48 securities are in an unrealized loss position and at December 31, 2012,
16 of the 38 securities were in an unrealized loss position. The fair value is expected to recover as the securities approach their
maturities or if market yields for such investments decline. In analyzing an issuer’s financial condition, management considers
whether downgrades by bond rating agencies have occurred. The Company has the intent and ability to hold the investments
until their amortized cost basis is recovered on the maturity date. As a result of management’s analysis and review, no declines
are deemed to be other than temporary.
The Company has estimated that the carrying value of its Perfect Home notes approximates fair value and, therefore, no
impairment is considered to have occurred as of December 31, 2013. While no impairment was noted during 2013, if
profitability is delayed as a result of the significant start-up expenses associated with Perfect Home, there could be a change in
the valuation of the Perfect Home notes that may result in the recognition of an impairment loss in future periods.
NOTE 5: PROPERTY, PLANT AND EQUIPMENT
Following is a summary of the Company’s property, plant, and equipment at December 31:
(In Thousands) 2013 2012
Land $ 26,021 $ 25,285
Buildings and Improvements 84,520 81,773
Leasehold Improvements and Signs 120,702 120,883
Fixtures and Equipment1172,483 152,436
Assets Under Capital Leases:
with Related Parties 10,574 8,158
with Unrelated Parties 10,550 10,564
Construction in Progress 4,347 5,414
429,197 404,513
Less: Accumulated Depreciation and Amortization (197,904)(173,915)
$ 231,293 $ 230,598
1 Includes internal-use software development costs of $36.3 million and $22.6 million as of December 31, 2013 and 2012,
respectively. Accumulated amortization of internal-use software development costs amounted to $9.5 million and
$6.6 million as of December 31, 2013 and 2012, respectively.
Amortization expense on assets recorded under capital leases is included in operating expenses and was $1.7 million,
$1.2 million and $1.2 million in 2013, 2012 and 2011, respectively. Capital leases consist of buildings and improvements.
Assets under capital leases with related parties included $5.8 million and $4.8 million in accumulated depreciation and
amortization as of December 31, 2013 and 2012, respectively. Assets under capital leases with unrelated parties included
$5.1 million and $4.4 million in accumulated depreciation and amortization as of December 31, 2013 and 2012, respectively.