Prog Holdings, Inc. · NYSE:PRG
Prog — Aaron'S — Investor Presentation (January 2019)
12 slides from Prog's investor presentation, Jan 8, 2019
Slide 1: New Lease Accounting Standard
New Lease Accounting Standard Anticipated Adoption Date: First Quarter 2019 January 8, 2019
Slide 2: Topics Covered / Forward-Looking Information
Topics Covered • Overview of the new lease accounting standard • Key impacts to Aaron’s, Inc. as a lessor • Key impacts to Aaron’s, Inc. as a lessee • Transition approach and timing • Use of Non-GAAP financial information • Progressive bad debt classification impacts Forward-Looking Information The
Slide 3: Overview of New Lease Accounting Standard
Overview of New Lease Accounting Standard In February 2016, the FASB issued ASU 2016-02, Leases (“ASC 842”), which supersedes the current lease accounting guidance (“ASC 840”) and is effective for annual and interim periods beginning after December 15, 2018. Accordingly, Aaron’s, Inc. will be impact
Slide 4: Key impacts to Aaron's, Inc. as a Lessor
Key impacts to Aaron’s, Inc. as a Lessor Progressive Leasing Bad Debt Expense – Classification change on Statement of Earnings Current Treatment Progressive bad debt expense is recorded within Operating Expenses. Future Treatment Progressive bad debt charges will be recorded as a reduction to Lease
Slide 5: Key impacts to Aaron's, Inc. as a Lessee
Key impacts to Aaron’s, Inc. as a Lessee Operating Leases from perspective of Lessee (i.e. real estate, fleet, equipment leases) Current Treatment Operating leases are “off-balance sheet” and expensed as incurred on a straight-line basis as lease expense. Losses associated with future lease obligati
Slide 6: Transition approach and timing
Transition approach and timing We will adopt the accounting standard for the three months ending March 31, 2019 using the New presentation modified retrospective approach. • We plan to adopt an optional transition method in which reporting entities are permitted to not apply ASC 842 for comparative
Slide 7: Use of Non-GAAP Financial Information
Use of Non-GAAP Financial Information For illustrative purposes only, the following slides disclose non-GAAP revenues and operating expenses for the year ended December 31, 2017 and the first three quarters of 2018, as if the lessor accounting impacts of ASC 842 was in effect inNew these presentatio
Slide 8: Progressive Bad Debt Classification Impacts: Year ended December 31, 2017
Progressive Bad Debt Classification Impacts Year ended December 31, 2017 New presentation (in thousands) Progressive Aaron's Business DAMI Consolidated As Reported: Total Revenue $ 1,566,413 $ 1,782,370 $ 34,925 $ 3,383,708 Operating Expenses 458,287 904,282 41,416 1,403,985 Bad Debt Expense 170,528
Slide 9: Progressive Bad Debt Classification Impacts: Three months ended March 31, 2018
Progressive Bad Debt Classification Impacts Three months ended March 31, 2018 New presentation (in thousands) Progressive Aaron's Business DAMI Consolidated As Reported: Total Revenue $ 486,517 $ 458,750 $ 9,542 $ 954,809 Operating Expenses 136,296 243,862 10,074 390,232 Bad Debt Expense 46,525 - 17
Slide 10: Progressive Bad Debt Classification Impacts: Three months ended June 30, 2018
Progressive Bad Debt Classification Impacts Three months ended June 30, 2018 New presentation (in thousands) Progressive Aaron's Business DAMI Consolidated As Reported: Total Revenue $ 483,666 $ 434,985 $ 9,208 $ 927,859 Operating Expenses 139,312 238,283 10,742 388,337 Bad Debt Expense 50,036 - 73
Slide 11: Progressive Bad Debt Classification Impacts: Three months ended September 30, 2018
Progressive Bad Debt Classification Impacts Three months ended September 30, 2018 New presentation (in thousands) Progressive Aaron's Business DAMI Consolidated As Reported: Total Revenue $ 504,407 $ 439,156 $ 9,508 $ 953,071 Operating Expenses 157,256 251,548 11,798 420,602 Bad Debt Expense 64,213
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