PROG Holdings Inc

Previous wording

The following discussion should be read in conjunction with the condensed consolidated financial statements as of and for the three months ended March 31, 2024 and 2023, including the notes to those statements, appearing elsewhere in this report. We also suggest that management’s discussion and analysis appearing in this report be read in conjunction with the management’s discussion and analysis and consolidated financial statements included in our 2023 Annual Report.

Current wording

The following discussion should be read in conjunction with the condensed consolidated financial statements as of June 30, 2024 and December 31, 2023, and for the three and six months ended June 30, 2024 and 2023, including the notes to those statements, appearing elsewhere in this report. We also suggest that management’s discussion and analysis appearing in this report be read in conjunction with the management’s discussion and analysis and consolidated financial statements included in our 2023 Annual Report.

Previous wording

The Company continues to operate in a challenging macroeconomic environment. We believe the higher year-over-year inflation in 2023, which remained elevated in 2024, particularly in housing, food, and gas costs, has disproportionately negatively affected the customers we serve and has resulted in an unfavorable impact on our Gross Merchandise Volume ("GMV") during 2023 and 2024. While the rate of increase in inflation has slowed, the cost of living remains significantly higher than it was prior to the COVID-19 pandemic, and we believe inflation continues to present a challenge to our customers. We believe the significant increase in inflation, elevated interest rates for extended periods, and fears of a possible recession have also unfavorably impacted consumer confidence within our customer base, resulting in a decrease in demand for the types of merchandise offered by many of our key national and regional POS partners. In light of these macroeconomic challenges and to align the cost structure of our business with our near-term revenue outlook, the Company executed a number of cost reduction initiatives during 2022, 2023 and the first quarter of 2024 to drive efficiencies and right-size variable costs, while attempting to minimize the negative impact on growth-related initiatives.

Current wording

During the first half of 2024, the Company's lease application volume increased due to the tightening of the credit supply above Progressive Leasing. This tightening contributed to a favorable impact on our Progressive Leasing Gross Merchandise Volume ("GMV") in the second quarter of 2024 when compared to the same period in 2023. Despite the increasing in demand for our lease-to-own offerings, the Company continues to operate in a challenging macroeconomic environment. We believe the higher year-over-year inflation in 2023, which remained elevated in 2024, particularly in housing, food, and gas costs, has disproportionately negatively affected the customers we serve and has resulted in an unfavorable impact on our GMV during 2023 and 2024. While the rate of increase in inflation has slowed, the cost of living remains significantly higher than it was prior to the COVID-19 pandemic, and we believe inflation continues to present a challenge to our customers. We believe the significant increase in inflation, elevated interest rates for extended periods, and fears of a possible recession have also unfavorably impacted consumer confidence within our customer base, resulting in a decrease in demand for the types of merchandise offered by many of our key national and regional POS partners. In light of these macroeconomic challenges and to align the cost structure of our business with our near-term revenue outlook, the Company executed a number of cost reduction initiatives during 2022, 2023 and the first and second quarters of 2024 to drive efficiencies and right-size variable costs, while attempting to minimize the negative impact on growth-related initiatives.

Previous wording

As a result of this cybersecurity incident, Progressive Leasing has become subject to multiple lawsuits which allege, among other things, the incurrence of various types of damages arising out of the incident. As of the date of this Form 10-Q, all of these lawsuits have been consolidated into a single action in the United States District Court for the District of Utah (the "District Court") and the plaintiffs filed a consolidated complaint on April 19, 2024.

Current wording

As a result of this cybersecurity incident, Progressive Leasing has become subject to multiple lawsuits which allege, among other things, the incurrence of various types of damages arising out of the incident. All of these lawsuits have been consolidated into a single action in the United States District Court for the District of Utah (the "District Court"). The plaintiffs filed a consolidated complaint on April 19, 2024. On June 24, 2024, Progressive Leasing filed a motion to dismiss the complaint.

Previous wording

During the three months ended March 31, 2024, the Company incurred $0.1 million for actual and anticipated costs related to the cybersecurity incident, resulting in aggregate expenses of $2.9 million since the incident occurred. These costs related primarily to third-party legal and consulting services and credit monitoring services for Progressive Leasing's customers and employees that were impacted and are included within professional services expense as a component of operating expenses in the condensed consolidated statements of earnings.

Current wording

During the three and six months ended June 30, 2024, the Company incurred $0.1 million and $0.2 million, respectively, for costs related to the cybersecurity incident, resulting in aggregate expenses of $3.1 million since the incident occurred. These costs related primarily to third-party legal and consulting services and credit monitoring services for Progressive Leasing's customers and employees that were impacted and are included within professional services expense as a component of operating expenses in the condensed consolidated statements of earnings.

Previous wording

•GMV for Progressive Leasing was relatively flat compared to the first quarter of 2023, decreasing $0.2 million. GMV decreased $4.9 million for Vive in the first quarter of 2024, compared to the same period in the prior year. The decrease for Vive was due to a decline in customer demand for products offered by certain Vive POS partners, resulting in fewer loan originations. GMV from our Other operations increased by $35.2 million, due to an increase in Four loan originations in the first quarter of 2024 compared to the first quarter of 2023.

Current wording

•GMV increased by $33.3 million for Progressive Leasing and decreased by $4.1 million for Vive in the second quarter of 2024, compared to the same period in the prior year. The increase in GMV for Progressive Leasing was due to a combination of: (i) positive customer responses to our strategic initiatives, such as e-commerce integrations with our POS partners and direct-to-consumer marketing, and (ii) increasing demand for our lease-to-own offering arising out of a tightening of the credit supply above Progressive Leasing, which resulted in an increase in lease applications when compared to the same period in the prior year. The decrease in GMV for Vive was due to a decline in customer demand for products offered by certain Vive POS partners, resulting in fewer loan originations. GMV from our Other operations increased by $41.5 million, due to an increase in Four loan originations in the second quarter of 2024 compared to the second quarter of 2023.

Previous wording

•Earnings before income taxes decreased to $31.6 million compared to $67.6 million in the same period in 2023. The decrease was primarily driven by increased restructuring costs, lower revenues, higher write-offs, and an increase in certain additional operating expenses. These decreases to earnings before income taxes were partially offset by lower personnel costs resulting from cost reduction initiatives.

Current wording

•Earnings before income taxes decreased to $48.3 million compared to $52.0 million in the same period in 2023. The decrease was primarily driven by an increase in the provision for loan losses within Other operations, higher provision for lease merchandise write-offs, and higher restructuring costs. These decreases to earnings before income taxes were partially offset by lower personnel costs resulting from our cost reduction initiatives.

Previous wording

Progressive Leasing's GMV was relatively flat compared to the first quarter of 2023. E-commerce channels generated 16.3% of Progressive Leasing's GMV in the first quarter of 2024 compared to 16.9% in the first quarter of 2023. The decrease in Vive's GMV was primarily a result of a decline in customer demand for products offered by certain Vive POS partners, resulting in fewer loan approvals. GMV from Other increased primarily due to an increase in Four loan originations.

Current wording

Progressive Leasing's GMV was higher when compared to the second quarter of 2023 due to a combination of: (i) positive customer responses to our strategic initiatives such as, e-commerce integrations with our POS partners and direct-to-consumer marketing, and (ii) increasing demand for our lease-to-own offering arising out of a tightening of the credit supply above Progressive Leasing, which resulted in an increase in lease applications when compared to the same period in the prior year. E-commerce channels generated 14.4% of Progressive Leasing's GMV in the second quarter of 2024 compared to 15.0% in the second quarter of 2023. The decrease in Vive's GMV was primarily a result of a decline in customer demand for products offered by certain Vive POS partners, resulting in fewer loan approvals. GMV from Other increased primarily due to an increase in Four loan originations.

Previous wording

Active Customer Count. Our active customer count represents the total number of customers that have an active lease agreement with Progressive Leasing, or an active loan with Vive or Other. Active customer counts include customers that may have an active lease or loan agreement with more than one segment. The following table presents our active customer count for each segment and Other:

Current wording

Active Customer Count. Our active customer count represents the total number of customers that have an active lease agreement with Progressive Leasing, or an active loan with Vive or our Other operations. Active customer counts include customers that may have an active lease or loan agreement with more than one segment. The following table presents our active customer count for each segment and Other:

Previous wording

The decrease in the number of Progressive Leasing customers was primarily due to a decrease in customer demand for the types of merchandise typically purchased through our lease-to-own solutions. The decrease in Vive customers was primarily due to a reduction in loan originations compared to the same period in the prior year, resulting from a decrease in consumer demand for products offered by certain Vive POS partners. The increase in the number of customers for Other was the result of continued growth in our other strategic businesses, primarily our Four business.

Current wording

The number of customers for Progressive Leasing was relatively flat compared to the prior year. The decrease in Vive customers was primarily due to a reduction in loan originations compared to the same period in the prior year. The increase in the number of customers for Other was the result of continued growth in our other strategic businesses.

Previous wording

In this MD&A section, we review our condensed consolidated results. For the three months ended March 31, 2024 and the comparable prior year period, some of the key revenue, cost and expense items that affected earnings before income taxes were as follows:

Current wording

In this MD&A section, we review our condensed consolidated results. For the three and six months ended June 30, 2024 and the comparable prior year periods, some of the key revenue, cost and expense items that affected earnings before income taxes were as follows:

Previous wording

The decrease in Progressive Leasing revenues was primarily the result of a smaller lease portfolio at the beginning of the quarter as compared to the first quarter of 2023 due to a decrease in customer demand for many of the products offered by our POS partners. Vive revenues declined primarily due to a smaller loan portfolio in the first quarter of 2024 as compared to the first quarter of 2023, resulting from a 19.4% decrease in GMV for the year ended 2023 compared to 2022. The increase to Other revenue was primarily driven by an increase in Four's GMV as compared to the first quarter of 2023.

Current wording

The decrease in Progressive Leasing revenues was primarily the result of a smaller lease portfolio at the beginning of the second quarter of 2024 as compared to the second quarter of 2023, due to a decrease in customer demand for many of the products offered by our POS partners, partially offset by an increase in GMV during the second quarter of 2024 along with an increase in the customers exercising early purchase options. Vive revenues declined primarily due to a smaller loan portfolio in the second quarter of 2024 as compared to the second quarter of 2023, due to a decrease in customer demand for products offered by certain Vive POS partners. The increase to Other revenue was primarily driven by an increase in Four's GMV as compared to the second quarter of 2023.

Previous wording

Information about certain significant components of operating expenses for the first quarter of 2024 as compared to the first quarter of 2023 is as follows:

Current wording

Information about certain significant components of operating expenses for the second quarter of 2024 as compared to the second quarter of 2023 is as follows:

Previous wording

4 Progressive Leasing's sales, general and administrative expense was $76.6 million and $75.9 million during the three months ended March 31, 2024 and 2023, respectively.

Current wording

4 Progressive Leasing's sales, general and administrative expense was $74.4 million and $78.3 million during the three months ended June 30, 2024 and 2023, respectively.

Previous wording

Personnel costs decreased$2.4 million compared to thesame period in 2023, primarily due to a $2.5 million decrease at Progressive Leasing attributable to its reduction in the number of employees during the first quarter of 2024 as part of its restructuring activities. The decreases were partially offset by a$0.2 million increase at Four and our other businesses due to continued growth of operations.

Current wording

Personnel costs decreased$5.1 million compared to thesame period in 2023, primarily due to a $4.9 million decrease at Progressive Leasing attributable to its reduction in the number of employees during the second half of 2023 and the first quarter of 2024 as part of its restructuring and cost cutting activities.

Previous wording

Depreciation of lease merchandise. Depreciation of lease merchandise decreased by 0.9% during the three months ended March 31, 2024 compared to the same period in 2023. The decrease was primarily due to the decline in the size of the Company's lease portfolio, resulting from decreased consumer demand for many of the leasable products offered by Progressive Leasing's retail partners. As a percentage of total lease revenues and fees, depreciation of lease merchandise increased to 69.5% from 68.3% in the prior year quarter, primarily due to a normalized level of early buyouts during the three months ended March 31, 2024 as compared to a relatively lower level of early buyouts during the same period in 2023.

Current wording

Depreciation of lease merchandise. Depreciation of lease merchandise was flat during the three months ended June 30, 2024 compared to the same period in 2023. As a percentage of lease revenues and fees, depreciation of lease merchandise increased slightly to 67.4% from 67.0% in the prior year quarter, primarily due to a normalized level of early buyouts during the three months ended June 30, 2024 as compared to a relatively lower level of early buyouts during the same period in 2023.

Previous wording

Provision for lease merchandise write-offs. The provision for lease merchandise write-offs increased $4.8 million compared to the same period in 2023. The provision for lease merchandise write-offs as a percentage of lease revenues increased to 7.0% during the first quarter of 2024 from 6.0% in the same period in 2023. The increase was due to higher write-offs compared to the lower write-offs during same period in 2023 that resulted from the Company tightening its lease decisioning in mid-2022. Given the significant economic uncertainty resulting from inflation, elevated interest rates for a prolonged period of time, the resumption of student loan repayment obligations, and the potential effects of such developments on Progressive Leasing's POS partners, customers, and business going forward, a high level of estimation was involved in determining the allowance as of March 31, 2024. Actual lease merchandise write-offs could differ materially from the allowance for those write-offs.

Current wording

Provision for lease merchandise write-offs. The provision for lease merchandise write-offs increased $2.8 million compared to the same period in 2023. The provision for lease merchandise write-offs as a percentage of lease revenues increased to 7.7% during the second quarter of 2024 from 7.1% in the same period in 2023. The increase was due to higher write-offs in the second quarter of 2024 compared to the same period in 2023, resulting from our lease portfolio performance returning to pre-pandemic trends. Given the significant economic uncertainty resulting from persistent inflationary pressures and increased interest rates for an extended period, and the potential effects of such developments on Progressive Leasing's POS partners, customers, and business going forward, a high level of estimation was involved in determining the allowance as of June 30, 2024. Actual lease merchandise write-offs could differ materially from the allowance for those write-offs.

Previous wording

The loss before income tax expense within Other primarily relates to losses from our other strategic operations and Four. Factors impacting the change in earnings before income taxes for each reporting segment are discussed above.

Current wording

The loss before income tax expense within Other primarily relates to losses from our other strategic operations. Factors impacting the change in earnings before income taxes for each reporting segment are discussed above.

Previous wording

Professional services increased $2.0 million compared to the same period in 2023, due primarily to higher technology related costs. Professional services in the prior year period was also impacted by the benefit of $0.5 million of regulatory insurance recoveries that were received during the first quarter of 2023.

Current wording

Professional services increased $3.0 million compared to the same period in 2023, primarily due to higher technology-related costs. Professional services in the prior year period were also impacted by the benefit of $0.5 million of regulatory insurance recoveries that were received during the first quarter of 2023.

Previous wording

The provision for loan losses increased $2.3 million compared to the same periodin 2023. The increase is primarily the result of a$1.9 million increase at Four due to continued growth of the business. The provision for loan losses at Vive increased$0.4 million due to higher delinquencies and write-offs compared tothe same periodin 2023.

Current wording

The provision for loan losses increased $5.6 million compared to the same period in 2023. The increase is primarily the result of a $5.1 million increase in the provision for loan losses for our Other operations, due to continued growth of our other strategic operations and Four. The provision for loan losses at Vive also increased $0.5 million due to higher delinquencies and write-offs compared to the same period in 2023.

Previous wording

Restructuring expense increased $17.3 million due to additional restructuring activities during thethree months ended March 31, 2024. For the three months ended March 31, 2024, restructuring costs included $7.8 million associated with the early termination of an independent sales agent agreement, $6.0 million of operating lease right-of-use asset and other fixed asset impairment charges related to the reduction of Progressive Leasing office space, $4.1 million of employee severance within Progressive Leasing and$0.1 million of other restructuring costs. For the same period in 2023, restructuring costs were limited to $0.8 million of employee severance within Progressive Leasing.

Current wording

Restructuring expense increased $19.2 million due to additional restructuring activities during thesix months ended June 30, 2024 compared to the same period in 2023. For the six months ended June 30, 2024, restructuring costs included$7.8 million associated with the early termination of an independent sales agent agreement for Progressive Leasing,$2.0 million associated with the early termination of a third party vendor agreement within other strategic operations,$6.0 million of operating lease right-of-use asset and other fixed asset impairment charges related to the reduction of Progressive Leasing office space, and$5.0 millionof employee severance for Progressive Leasing and Other operations. For the same period in 2023, restructuring costs primarily related to employee severance within Progressive Leasing.

Previous wording

Income tax expense decreased to $9.6 million for the three months ended March 31, 2024 compared to $19.6 million in the prior year comparable period, primarily due to lower earnings before income tax expense. The effective income tax rate for the three months ended March 31, 2024 was 30.4% compared to 28.9% for the same period in 2023. The increase in the effective tax rate was primarily driven by discrete income tax expense related to uncertain tax position liabilities on lower earnings before income tax, partially offset by a favorable change in income tax expense related to stock-based compensation.

Current wording

Income tax expense decreased to $24.2 million for the six months ended June 30, 2024 compared to $34.4 million in the prior year comparable period due to lower earnings before income tax expense compared to the same period in the prior year. The effective tax rate was 30.2% during the six months ended June 30, 2024 compared to 28.7% in the same period in 2023. The increase in the effective tax rate was primarily driven by discrete income tax expense related to uncertain tax position liabilities and permanently disallowed deductions on lower earnings before income tax.

Previous wording

•Cash and cash equivalents increased $97.4 million to $252.8 million during the three months ended March 31, 2024. For additional information, refer to the "Liquidity and Capital Resources" section below.

Current wording

•Cash and cash equivalents increased $94.7 million to $250.1 million during the six months ended June 30, 2024. For additional information, refer to the "Liquidity and Capital Resources" section below.

Previous wording

•Lease merchandise, net of accumulated depreciation and allowances, decreased $76.0 million due primarily to a 23.6% decrease in Progressive Leasing's GMV for the first quarter of 2024 as compared to the fourth quarter of 2023 as well as seasonally higher early purchase exercises during the first quarter.

Current wording

•Lease merchandise, net of accumulated depreciation and allowances, decreased $69.8 million due primarily to a 17.0% decrease in Progressive Leasing's GMV for the second quarter of 2024 as compared to the fourth quarter of 2023.

Previous wording

•Income tax receivable decreased $21.3 million primarily due to current tax expense and net tax refunds received during the three months ended March 31, 2024.

Current wording

•Income tax receivable decreased $22.6 million primarily due to current tax expense, partially offset by net tax payments made during the six months ended June 30, 2024.

Previous wording

Other capital requirements include (i) expenditures related to software development; (ii) expenditures related to our corporate operating activities; (iii) personnel expenditures; (iv) income tax payments; (v) funding of loans receivable for Vive; and (vi) servicing our outstanding debt obligations.

Current wording

Other capital requirements include (i) expenditures related to software development; (ii) expenditures related to our corporate operating activities; (iii) personnel expenditures; (iv) income tax payments; (v) funding of loans receivable for Vive and Four; and (vi) servicing our outstanding debt obligations.

Previous wording

As of March 31, 2024, the Company had $252.8 million of cash, $350.0 million of availability under the Revolving Facility, and $600.0 million of indebtedness.

Current wording

As of June 30, 2024, the Company had $250.1 million of cash, $350.0 million of availability under the Revolving Facility, and $600.0 million of indebtedness.

Previous wording

Cash provided by operating activities was $135.7 million and $157.4 million during the three months ended March 31, 2024 and 2023, respectively. The $21.7 million decrease in operating cash flows was primarily due to the $7.3 million decrease in cash received on accounts receivable and $6.9 million increase in cash paid on accounts payable compared to the same period in 2023. Operating cash flows were positively impacted by $3.8 million of tax refunds received during the three months ended March 31, 2024, compared to $2.5 million of cash paid for taxes during the same period in 2023. Other changes in cash provided by operating activities are discussed above in our discussion of results for the three months ended March 31, 2024.

Current wording

Cash provided by operating activities was $191.1 million and $205.4 million during the six months ended June 30, 2024 and 2023, respectively. The $14.3 million decrease in operating cash flows was primarily due to a $32.8 million increase in cash paid for leased merchandise and $12.9 million decrease in cash received on accounts receivable. Operating cash flows were positively impacted by a $40.9 million decrease in cash paid for taxes when compared to the same period in 2023. Other changes in cash provided by operating activities are discussed above in our discussion of results for the six months ended June 30, 2024.

Previous wording

Cash used in investing activities was $3.6 million and $0.6 million during the three months ended March 31, 2024 and 2023, respectively. The $3.0 million increase in investing cash outflows was primarily the result of a $33.9 million increase in cash investments in loans receivable and a $0.4 million increase in outflows on purchases of property and equipment. These cash outflow increases were partially offset by a $31.3 million increase in proceeds from loans receivable.

Current wording

Cash used in investing activities was $17.8 million and $10.6 million during the six months ended June 30, 2024 and 2023, respectively. The $7.2 million increase in investing cash outflows was primarily the result of an $81.8 million increase in cash investments in loans receivable due mainly to growth in Four loan originations offset by a decline in Vive originations due to a decrease in demand for products provided by Vive's POS partners. This increase in loan originations was partially offset by a $74.2 million increase in proceeds from loans receivable, due to an increase in Four loan repayments.

Previous wording

Cash used in financing activities was $34.7 million during the three months ended March 31, 2024 compared to $38.9 million during the same period in 2023. Cash used in financing activities during the three months ended March 31, 2024 was primarily for the Company's repurchase of $24.4 million of its common stock and $5.2 million paid for cash dividends, compared to $36.5 million of share repurchases and no cash paid for dividends during the same period in the prior year.

Current wording

Cash used in financing activities was $78.6 million during the six months ended June 30, 2024 compared to $73.8 million during the same period in 2023. Cash used in financing activities during the six months ended June 30, 2024 was primarily for the Company's repurchase of $61.2 million of its common stock and $10.3 million paid for cash dividends, compared to $71.8 million of share repurchases and no cash paid for dividends during the same period in the prior year.

Previous wording

We purchase our stock in the market from time to time as authorized by our Board of Directors. Effective November 3, 2021, the Company announced that its Board of Directors had authorized a new $1 billion share repurchase program that replaced the previous $300 million repurchase program. On February 21, 2024, the Company's Board of Directors reauthorized the repurchase of Company common stock at an aggregate purchase price of up to $500 million under the Company's existing share repurchase program, with such reauthorized share repurchase program to be extended for a period of three years from February 21, 2024, or until the $500 million aggregate purchase price of Company common stock purchased pursuant to the reauthorized share repurchase program has been met, whichever occurs first. The Company repurchased 780,562 shares for $24.4 million during the three months ended March 31, 2024. That amount does not include any excise tax that may be assessed on those repurchases. As of March 31, 2024, we had the authority to purchase additional shares up to our remaining authorization limit of $475.6 million.

Current wording

We purchase our stock in the market from time to time as authorized by our Board of Directors. Effective November 3, 2021, the Company announced that its Board of Directors had authorized a new $1 billion share repurchase program that replaced the previous $300 million repurchase program. On February 21, 2024, the Company's Board of Directors reauthorized the repurchase of Company common stock at an aggregate purchase price of up to $500 million under the Company's existing share repurchase program, with such reauthorized share repurchase program to be extended for a period of three years from February 21, 2024, or until the $500 million aggregate purchase price of Company common stock purchased pursuant to the reauthorized share repurchase program has been met, whichever occurs first. The Company repurchased 1,810,562 shares for $61.2 million during the six months ended June 30, 2024. That amount does not include any excise tax that may be assessed on those repurchases. As of June 30, 2024, we had the authority to purchase additional shares up to our remaining authorization limit of $438.8 million.

Previous wording

On February 21, 2024, our Board of Directors declared a quarterly cash dividend in the amount of $0.12 per share of outstanding common stock, which was paid on March 28, 2024. Aggregate dividend payments during the three months ended March 31, 2024 were $5.2 million. While we expect to continue paying quarterly cash dividends in future periods, the future payment of dividends, if permitted, will be at the sole discretion of our Board of Directors and will depend on our capital allocation strategy at that time as well as other factors, including our earnings, financial condition, and other considerations that our Board of Directors deems relevant.

Current wording

On May 15, 2024, our Board of Directors declared a quarterly cash dividend in the amount of $0.12 per share of outstanding common stock, which was paid on June 11, 2024. Aggregate dividend payments during the six months ended June 30, 2024 were $10.3 million. While we expect to continue paying quarterly cash dividends in future periods, the future payment of dividends, if permitted, will be at the sole discretion of our Board of Directors and will depend on our capital allocation strategy at that time as well as other factors, including our earnings, financial condition, and other considerations that our Board of Directors deems relevant.

Previous wording

During the three months ended March 31, 2024, we received net tax refunds of $3.8 million. Within the next nine months, we anticipate making estimated tax payments of $51.1 million for United States federal income taxes and state income taxes.

Current wording

During the six months ended June 30, 2024, we made net tax payments of $12.7 million. Within the next six months, we anticipate making estimated tax payments of $43.6 million for United States federal income taxes and state income taxes.

Previous wording

Deferred income tax liabilities as of March 31, 2024 were $95.7 million. Deferred income tax liabilities are calculated based on temporary differences between the tax basis of assets and liabilities and their respective book basis, which will result in taxable amounts in future years when the liabilities are settled at their reported financial statement amounts. The results of these calculations do not have a direct connection with the amount of cash taxes to be paid in any future periods.

Current wording

Deferred income tax liabilities as of June 30, 2024 were $87.3 million. Deferred income tax liabilities are calculated based on temporary differences between the tax basis of assets and liabilities and their respective book basis, which will result in taxable amounts in future years when the liabilities are settled at their reported financial statement amounts. The results of these calculations do not have a direct connection with the amount of cash taxes to be paid in any future periods.

Previous wording

The Company, through its Vive business, had unconditionally cancellable unfunded lending commitments totaling approximately $527.4 million and $523.9 million as of March 31, 2024 and December 31, 2023, respectively, that do not give rise to revenues and cash flows. These unfunded commitments arise in the ordinary course of business from credit card agreements with individual cardholders that give them the ability to borrow, against unused amounts, up to the maximum credit limit assigned to their account. While these unfunded amounts represented the total available unused lines of credit, the Company does not anticipate that all cardholders will utilize their entire available line at any given point in time. Commitments to extend unsecured credit are agreements to lend to a cardholder 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.

Current wording

The Company, through its Vive business, had unconditionally cancellable unfunded lending commitments totaling approximately $520.7 million and $523.9 million as of June 30, 2024 and December 31, 2023, respectively, that do not give rise to revenues and cash flows. These unfunded commitments arise in the ordinary course of business from credit card agreements with individual cardholders that give them the ability to borrow, against unused amounts, up to the maximum credit limit assigned to their account. While these unfunded amounts represented the total available unused lines of credit, the Company does not anticipate that all cardholders will utilize their entire available line at any given point in time. Commitments to extend unsecured credit are agreements to lend to a cardholder 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.

Previous wording

Refer to Note 1 to the condensed consolidated financial statements for a discussion of recently issued accounting pronouncements, including pronouncements that were adopted in the current year.

Current wording

Refer to Note 1 to the condensed consolidated financial statements for a discussion of recently issued accounting pronouncements.