Aarons 2012 Annual Report Download - page 40

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30
Revenues
Information about our revenues by reportable segment is as follows:
Year Ended December 31,
Change
2012
2011
2010
2012 vs. 2011
2011 vs. 2010
(In Thousands)
$
%
$
%
REVENUES:
Sales and Lease
Ownership 1
$2,088,894
$1,938,614
$1,803,601
$150,280
7.8%
$135,013
7.5%
HomeSmart 1
55,226
15,624
56
39,602
253.5
15,568
nmf
Franchise 2
66,655
63,255
59,112
3,400
5.4
4,143
7.0
Manufacturing
95,693
89,430
79,113
6,263
7.0
10,317
13.0
Other
9,122
8,096
15,132
1,026
12.7
(7,036)
(46.5)
Revenues of Reportable
Segments
2,315,590
2,115,019
1,957,014
200,571
9.5
158,005
8.1
Elimination of
Intersegment Revenues
(95,150)
(89,430)
(79,113)
(5,720)
(6.4)
(10,317)
13.0
Cash to Accrual
Adjustments
2,148
(3,258)
(1,563)
5,406
165.9
(1,695)
108.4
Total Revenues from
External Customers
$2,222,588
$2,022,331
$1,876,338
$200,257
9.9%
$145,993
7.8%
nmf - Calculation is not meaningful
1 Segment revenue consists of lease revenues and fees, retail sales and non-retail sales.
2 Segment revenue consists of franchise royalties and fees.
Year Ended December 31, 2012 Versus Year Ended December 31, 2011
Sales and Lease Ownership. Sales and Lease Ownership segment revenues increased due to a 10.5% increase in lease
revenues and fees and 9.5% increase in non-retail sales. Lease revenues and fees within the Sales and Lease Ownership
segment increased due to a net addition of 100 Company-operated stores since the beginning of 2011 and a 5.1%
increase in same store revenues. Non-retail sales increased primarily due to net additions of 84 franchised stores since
the beginning of 2011.
Sales and Lease Ownership segment revenues include a $660,000 gain from the sales of three Sales and Lease
Ownership stores in 2012 and a $3.0 million gain on the sales of 25 Sales and Lease Ownership stores in 2011. The
Company has classified gains from the sales of Sales and Lease Ownership stores as ―Other‖ revenues in the
Company’s consolidated statements of earnings.
HomeSmart. HomeSmart segment revenues increased to $55.2 million due to the net addition of 75 HomeSmart stores,
since the beginning of 2011. HomeSmart segment revenues for 2012 also benefitted from the inclusion of 12 months of
revenue attributable to the 68 HomeSmart stores that were added primarily during the second half of 2011.
Franchise. Franchise segment revenues increased due to a $4.5 million, or 8.7%, increase in royalty income from
franchisees. Franchise royalty income increased due to the growth in the number of franchised stores and a 5.0%
increase in same store revenues of existing franchised stores. The total number of franchised sales and lease ownership
stores at December 31, 2012 was 749, reflecting a net addition of 85 stores since the beginning of 2011.
Other. Revenues in the ―Other‖ segment, which are primarily revenues of the Aaron’s Office Furniture division,
revenues from leasing space to unrelated third parties in the corporate headquarters building and revenues from several
minor unrelated activities, did not fluctuate significantly from 2011 to 2012.