Aarons 2013 Annual Report Download - page 38

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Revenues
Information about our revenues by reportable segment is as follows:
Change
Year Ended December 31, 2013 vs. 2012 2012 vs. 2011
(In Thousands) 2013 2012 2011 $ % $ %
REVENUES:
Sales and Lease Ownership1$2,076,269 $2,068,124 $1,920,372 $ 8,145 .4% $ 147,752 7.7%
HomeSmart162,840 55,226 15,624 7,614 13.8 39,602 253.5
RIMCO120,596 16,674 11,317 3,922 23.5 5,357 47.3
Franchise268,575 66,655 63,255 1,920 2.9 3,400 5.4
Manufacturing 106,523 95,693 89,430 10,830 11.3 6,263 7.0
Other 1,562 3,014 5,539 (1,452)(48.2)(2,525)(45.6)
Revenues of Reportable
Segments 2,336,365 2,305,386 2,105,537 30,979 1.3 199,849 9.5
Elimination of Intersegment
Revenues (103,834) (95,150) (89,430)(8,684)(9.1)(5,720)(6.4)
Cash to Accrual Adjustments 2,100 2,591 (3,529)(491)(19.0) 6,120 173.4
Total Revenues from
External Customers $2,234,631 $2,212,827 $2,012,578 $ 21,804 1.0% $ 200,249 9.9%
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, 2013 Versus Year Ended December 31, 2012
Sales and Lease Ownership. Sales and Lease Ownership segment revenues increased $8.1 million to $2.076 billion due to a
3.9% increase in lease revenues and fees, partially offset by a 13.3% decrease in non-retail sales. Lease revenues and fees
within the Sales and Lease Ownership segment increased due to a net addition of 118 Company-operated stores since the
beginning of 2012 and a .6% increase in same store revenues. Non-retail sales decreased primarily due to less demand for
product by franchisees.
HomeSmart. HomeSmart segment revenues increased $7.6 million to $62.8 million due to a 13.3% increase in lease revenues
and fees. Lease revenues and fees within the HomeSmart segment increased due to a net addition of 10 HomeSmart stores since
the beginning of 2012 and a 9.3% increase in same store revenues.
RIMCO. RIMCO segment revenues increased $3.9 million to $20.6 million primarily due to a 26.3% increase in lease revenues
and fees, primarily attributable to the addition of 11 Company-operated stores since the beginning of 2012. In January of 2014,
the Company sold the 27 Company-operated RIMCO stores and the rights to five franchised RIMCO stores.
Franchise. Franchise segment revenues increased $1.9 million to $68.6 million primarily due to an increase in royalty income
from franchisees. Franchise royalty income increased due to the net addition of 68 franchised stores since the beginning of
2012 and a 1.5% increase in same store revenues of existing franchised stores.
Other. Revenues in the “Other” segment include revenues from leasing space to unrelated third parties in the corporate
headquarters building, revenues of the Aaron's Office Furniture division through the date of sale in August 2012 and revenues
from several minor unrelated activities.
Year Ended December 31, 2012 Versus Year Ended December 31, 2011
Sales and Lease Ownership. Sales and Lease Ownership segment revenues increased $147.8 million to $2.068 billion due to a
7.5% increase in lease revenues and fees and a 9.4% increase in non-retail sales. Lease revenues and fees within the Sales and
Lease Ownership segment increased due to a net addition of 92 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.
HomeSmart. HomeSmart segment revenues increased $39.6 million 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.