Aarons 2015 Annual Report Download - page 81

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The Company is a party to various claims and legal proceedings arising in the ordinary course of business. Management regularly assesses the Company’s
insurance deductibles, monitors the Company's litigation and regulatory exposure with the Company’s attorneys and evaluates its loss experience. The
Company also enters into various contracts in the normal course of business that may subject it to risk of financial loss if counterparties fail to perform their
contractual obligations.
Off-Balance Sheet Risk
The Company, through its DAMI business, is a party to financial instruments (loans receivable) with off-balance-sheet risk in the normal course of business to
meet the financing needs of its cardholders. These financial instruments primarily include commitments to extend unsecured credit. As of December 31, 2015,
there were approximately 82,000 active credit cards outstanding, of which 81,800 had remaining credit available of $378.7 million. The rates and terms of
such commitments to lend are competitive with others in the market in which the Company operates. As such, the commitment amount above, if borrowed, is
a reasonable estimate of fair value. While these amounts represented the total available unused credit card lines, the Company does not anticipate that all
cardholders will access their entire available line at any given point in time. Commitments to extend unsecured credit are agreements to lend to a customer so
long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses.
Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash
requirements. The Company evaluates cardholder creditworthiness individually.

On July 15, 2014, the Company announced that a rigorous evaluation of the Company-operated store portfolio had been performed. As a result of this
evaluation and other cost-reduction initiatives, during the year ended December 31, 2014, the Company closed 44 underperforming Company-operated
stores and restructured its home office and field support to more closely align with current business conditions. The restructuring was completed during the
third quarter of 2014 and total restructuring charges of $9.1 million were recorded during the year ended December 31, 2014, principally comprised of $4.8
million related to contractual lease obligations, $3.3 million related to the write-off and impairment of property, plant and equipment and $620,000 related to
workforce reductions.
During 2014, total restructuring charges of $4.8 million have been included in the Sales and Lease Ownership segment results and total restructuring charges
of $4.3 million have been included in the Other category results. These costs were included in the line item "Restructuring Expenses" in the consolidated
statements of earnings. The Company does not currently anticipate any remaining costs related to this restructuring plan to be material.
The following table summarizes the balances and activity related to the restructuring charges:



    
Balance at January 1, 2014 $ — $ — $ — $ — $ —
Restructuring Expenses 4,797 620 3,328 395 9,140
Payments (1,570) (620) — — (2,190)
Impairment and Assets Written Off — — (3,328) (395) (3,723)
Balance at December 31, 2014 3,227 — — — 3,227
Payments (1,559) — — — (1,559)
Balance at December 31, 2015 $ 1,668 $ — $ — $ — $ 1,668
In the ordinary course of business, the Company continually reviews, and as appropriate adjusts, the amount and mix of Company-operated and franchised
stores to help optimize overall performance. Costs incurred to close stores during 2015 were not significant.

The Company held 18,151,560 shares in its treasury and was authorized to purchase an additional 10,496,421 shares at December 31, 2015. The holders of
common stock are entitled to receive dividends and other distributions in cash, stock or property of the Company as and when declared by its Board of
Directors out of legally available funds. The Company repurchased 1,000,952 shares of its common stock in 2014 and 3,502,627 shares of its common stock
in 2013 through an accelerated share repurchase program. There was no share repurchase activity during 2015.
80