RENT A CENTER INC DE - 10-Q Quarterly Report

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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

----------

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2002

Commission File Number 0-25370
RENT-A-CENTER, INC.
(Exact name of registrant as specified in its charter)

DELAWARE 48-1024367
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

5700 Tennyson Parkway, Third Floor
Plano, Texas 75024
(972) 801-1100
(Address, including zip code, and telephone
number, including area code, of registrant's
principal executive offices)

NONE
(Former name, former address and former
fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

YES X NO
--- ---

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of August 9, 2002:

TABLE OF CONTENTS

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RENT-A-CENTER, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

See accompanying notes to consolidated financial statements.

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RENT-A-CENTER, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

See accompanying notes to consolidated financial statements.

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RENT-A-CENTER, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

See accompanying notes to consolidated financial statements.

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RENT-A-CENTER, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

During the second quarter of 2002 and 2001, we paid dividends on our
Series A preferred stock of approximately $2.7 million and $2.6 million by
issuing 2,730 and 2,630 shares of Series A preferred stock, respectively.

See accompanying notes to consolidated financial statements.

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RENT-A-CENTER, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. The interim financial statements of Rent-A-Center, Inc. included herein
have been prepared by us pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United
States of America have been condensed or omitted pursuant to the
Commission's rules and regulations, although we believe that the
disclosures are adequate to make the information presented not misleading.
We suggest that these financial statements be read in conjunction with the
financial statements and notes included in our Annual Report on Form 10-K
for the year ended December 31, 2001 and our Quarterly Report on Form 10-Q
for the three months ended March 31, 2002. In our opinion, the accompanying
unaudited interim financial statements contain all adjustments, consisting
only of those of a normal recurring nature, necessary to present fairly our
results of operations and cash flows for the periods presented. The results
of operations for the periods presented are not necessarily indicative of
the results to be expected for the full year.

2. Intangibles. In June 2001, the Financial Accounting Standards Board issued
SFAS No. 141, Business Combinations and SFAS No. 142, Goodwill and
Intangible Assets. These statements established new accounting and
reporting standards for business combinations and associated goodwill and
intangible assets and require, among other things, the elimination of the
pooling of interests method of accounting, amortization of acquired
goodwill as well as periodic assessment for impairment of all goodwill and
intangible assets acquired in a business combination. SFAS No. 142 is
effective for our fiscal year beginning January 1, 2002. We conducted the
transitional test of the fair value of our goodwill outstanding as of
December 31, 2001 as required and determined there was no impairment as of
that date. Accordingly, the implementation of SFAS No. 142 had no effect on
our financial statements or operating results. Under SFAS No. 142, goodwill
is subject to an annual assessment for impairment using a prescribed
fair-value based test.

Intangibles consist of the following (in thousands):

AGGREGATE AMORTIZATION EXPENSE

Three months ended June 30, 2002............... $ 922
Three months ended June 30, 2001............... $ 7,396

Six months ended June 30, 2002................. $ 1,642
Six months ended June 30, 2001................. $14,664

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RENT-A-CENTER, INC. AND SUBSIDIARIES

SUPPLEMENTAL INFORMATION REGARDING INTANGIBLE ASSETS AND AMORTIZATION.

Estimated amortization expense for each of the years ending December 31, is
as follows:

Changes in the carrying amount of goodwill for the six months ended June
30, 2002 are as follows (in thousands):

Balance as of January 1, 2002 $ 707,362
Acquisitions through June 30, 2002 11,901
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Balance as of June 30, 2002 $ 719,263
=========

Goodwill and intangible assets recognized prior to July 1, 2001 were
amortized through December 31, 2001. At June 30, 2002, quarterly and annual
goodwill amortization of approximately $7.3 million and $29.0 million will
not be recognized in accordance with SFAS No. 142.

Below is a schedule showing the pro forma effect of SFAS No. 142 for the six
and three months ended June 30, 2002 in comparison to the six and three
months ended June 30, 2001.

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RENT-A-CENTER, INC. AND SUBSIDIARIES

3. EARNINGS PER SHARE

Basic and diluted earnings per common share is computed based on the
following information:

For the three months ended June 30, 2002 and 2001, the number of stock options
that were outstanding but not included in the computation of diluted earnings
per common share because their exercise price was greater than the average
market price of our common stock, and therefore anti-dilutive, was 5,000 and
273,000, respectively. For the six months ended June 30, 2002 and 2001, the
number of stock options that were outstanding but not included in the
computation of diluted earnings per common share because their exercise price
was greater than the average market price of our common stock, and therefore
anti-dilutive, was 276,500 and 273,000, respectively.

Dividends on our Series A preferred stock are payable quarterly at an annual
rate of 3.75%. We account for shares of preferred stock distributed as dividends
in-kind at the greater of the stated value or the value of the common stock
obtainable upon conversion on the payment date.

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RENT-A-CENTER, INC. AND SUBSIDIARIES

4. SUBSIDIARY GUARANTORS

Rent-A-Center has $275.0 million of subordinated notes outstanding,
maturing on August 15, 2008, including $100.0 million which were issued in
December 2001 at 99.5% of par. The notes require semi-annual interest-only
payments at 11%, and are guaranteed by Rent-A-Center's two principal
subsidiaries. The notes are redeemable at Rent-A-Center's option, at any
time on or after August 15, 2003, at a set redemption price that varies
depending upon the proximity of the redemption date to final maturity. Upon
a change of control, the holders of the subordinated notes have the right
to require Rent-A-Center to redeem the notes.

The notes contain restrictive covenants, as defined therein, including a
consolidated interest coverage ratio and limitations on incurring
additional indebtedness, selling assets of Rent-A-Center's subsidiaries,
granting liens to third parties, making restricted payments and engaging in
a merger or selling substantially all of Rent-A-Center's assets.

Rent-A-Center's direct and wholly-owned subsidiaries, consisting of
ColorTyme, Inc. and Advantage Companies, Inc. (collectively, the
"Guarantors"), have fully, jointly and severally, and unconditionally
guaranteed the obligations of Rent-A-Center with respect to the
subordinated notes. The only direct or indirect subsidiaries of
Rent-A-Center that are not Guarantors are inconsequential subsidiaries.
There are no restrictions on the ability of any of the Guarantors to
transfer funds to Rent-A-Center in the form of loans, advances or
dividends, except as provided by applicable law.

Set forth below is certain condensed consolidating financial information as
of June 30, 2002 and December 31, 2001, and for the six months ended June
30, 2002 and 2001. The financial information includes the Guarantors from
the dates they were acquired or formed by Rent-A-Center and is presented
using the push-down basis of accounting.

CONDENSED CONSOLIDATING BALANCE SHEETS

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RENT-A-CENTER, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

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RENT-A-CENTER, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

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RENT-A-CENTER, INC. AND SUBSIDIARIES

5. COMPREHENSIVE INCOME

Comprehensive income includes net earnings and items of other comprehensive
income or loss. The following table provides information regarding
comprehensive income, net of tax:

6. COMMON AND PREFERRED STOCK TRANSACTIONS

Purchase of Treasury Stock. In connection with the retirement of our former
Chief Executive Officer and Chairman of the Board, Mr. J. Ernest Talley, we
entered into an agreement to repurchase $25.0 million worth of shares of
our common stock held by Mr. Talley at a purchase price equal to the
average closing price of our common stock over the 10 trading days
beginning October 9, 2001, subject to a maximum of $27.00 per share and a
minimum of $20.00 per share. Under this formula, the purchase price for the
repurchase was calculated at $20.258 per share. Accordingly, on October 23,
2001 we repurchased 493,632 shares of our common stock from Mr. Talley at
$20.258 per share for a total purchase price of $10.0 million and on
November 30, 2001, repurchased an additional 740,448 shares of our common
stock from Mr. Talley at $20.258 per share, for a total purchase price of
an additional $15.0 million. On January 25, 2002, we exercised the option
to repurchase all of the remaining 1,714,086 shares of its common stock
held by Mr. Talley at $20.258 per share, for $34.7 million. We repurchased
those remaining shares on January 30, 2002.

In April 2000, we announced that our board of directors had authorized a
program to repurchase in the open market up to an aggregate of $25 million
of our common stock. During the quarter ended June 30, 2002, we did not
repurchase any of our shares pursuant to this Board authorization. Since
June 30, 2002, we have repurchased approximately 241,404 shares of our
common stock under this program for approximately $11.9 million.

Secondary Equity Offering. In connection with the issuance of our Series A
preferred stock in August 1998, we entered into a registration rights
agreement with Apollo Investment Fund IV, L.P. and Apollo Overseas Partners
IV, L.P. (Apollo) which, among other things, granted them two rights to
request that their shares be registered, and a registration rights
agreement with an affiliate of Bear, Stearns & Co., Inc. (Bear Stearns),
which granted them the right to participate in any company-initiated
registration of shares, subject to certain exceptions. In May 2002, Apollo
exercised one of their two rights to request that their shares be
registered and Bear Stearns elected to participate in such registration. In
connection therewith, Apollo and an affiliate of Bear Stearns converted
97,197 shares of our Series A preferred stock held by them into 3,500,000
shares of our common stock, which they sold in the May 2002 public
offering. We did not receive any of the proceeds from this offering.

Conversion of Series A Preferred Stock. On August 5, 2002, the first date
on which the Series A preferred stock could be optionally redeemed by us,
the holders of our Series A preferred stock converted all but two shares of
our Series A preferred stock held by them into approximately 7,281,548
shares of our common stock. As a result of the conversion, the dividend on
our Series A preferred stock has been substantially eliminated for future
periods.

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RENT-A-CENTER, INC. AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

FORWARD-LOOKING STATEMENTS

The statements, other than statements of historical facts, included in this
report are forward-looking statements. Forward-looking statements generally can
be identified by the use of forward-looking terminology such as "may," "will,"
"would," "expect," "intend," "could," "estimate," "should," "anticipate" or
"believe." We believe that the expectations reflected in such forward-looking
statements are accurate. However, we cannot assure you that these expectations
will occur. Our actual future performance could differ materially from such
statements. Factors that could cause or contribute to these differences include,
but are not limited to:

o uncertainties regarding the ability to open new stores;

o our ability to acquire additional rent-to-own stores on favorable terms;

o our ability to enhance the performance of these acquired stores;

o our ability to control store level costs and implement our margin
enhancement initiatives;

o our ability to realize benefits from our margin enhancement initiatives;

o the results of our litigation;

o the passage of legislation adversely affecting the rent-to-own industry;

o interest rates;

o our ability to collect on our rental purchase agreements;

o our ability to effectively hedge interest rates on our outstanding debt;

o changes in our effective tax rate; and

o the other risks detailed from time to time in our SEC reports.

Additional important factors that could cause our actual results to differ
materially from our expectations are discussed under Risk Factors in our Annual
Report on Form 10-K for our fiscal year ended December 31, 2001. You should not
unduly rely on these forward-looking statements, which speak only as of the date
of this report. Except as required by law, we are not obligated to publicly
release any revisions to these forward-looking statements to reflect events or
circumstances occurring after the date of this report or to reflect the
occurrence of unanticipated events.

OUR BUSINESS

We are the largest rent-to-own operator in the United States with an approximate
28% market share based on store count. At June 30, 2002, we operated 2,335
company-owned stores in 50 states, the District of Columbia and Puerto Rico. Our
subsidiary, ColorTyme, is a national franchisor of rent-to-own stores. At June
30, 2002, ColorTyme had 329 franchised stores in 41 states, 317 of which
operated under the ColorTyme name and 12 stores of which operated under the
Rent-A-Center name. Our stores offer high quality durable products such as home
electronics, appliances, computers, and furniture and accessories under flexible
rental purchase agreements that typically allow the customer to obtain ownership
of the merchandise at the conclusion of an agreed-upon rental period. These
rental purchase agreements are designed to appeal to a wide variety of customers
by allowing them to obtain merchandise that they might otherwise be unable to
obtain due to insufficient cash resources or a lack of access to credit. These
agreements also cater to customers who only have a temporary need, or who simply
desire to rent rather than purchase the merchandise.

We have pursued an aggressive growth strategy since 1989. We have sought to
acquire underperforming stores to which we could apply our operating model as
well as open new stores. As a result, the acquired stores have generally
experienced more significant revenue growth during the initial periods following
their acquisition than in subsequent periods. Because of significant growth
since our formation, particularly due to the Thorn Americas acquisition, our
historical results of operations and period-to-period comparisons of such
results and other financial data, including the rate of earnings growth, may not
be meaningful or indicative of future results.

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RENT-A-CENTER, INC. AND SUBSIDIARIES

We plan to accomplish our future growth through selective and opportunistic
acquisitions, with an emphasis on new store development. Typically, a newly
opened store is profitable on a monthly basis in the ninth to twelfth month
after its initial opening. Historically, a typical store has achieved cumulative
break-even profitability in 18 to 24 months after its initial opening. Total
financing requirements of a typical new store approximate $450,000, with roughly
70% of that amount relating to the purchase of rental merchandise inventory. A
newly opened store historically has achieved results consistent with other
stores that have been operating within the system for greater than two years by
the end of its third year of operation. As a result, our quarterly earnings are
impacted by how many new stores we opened during a particular quarter and the
quarters preceding it. There can be no assurance that we will open any new
stores in the future, or as to the number, location or profitability thereof.

In addition, to provide any additional funds necessary for the continued pursuit
of our operating and growth strategies, we may incur from time to time
additional short or long-term bank indebtedness and may issue, in public or
private transactions, equity and debt securities. The availability and
attractiveness of any outside sources of financing will depend on a number of
factors, some of which will relate to our financial condition and performance,
and some of which are beyond our control, such as prevailing interest rates and
general economic conditions. There can be no assurance additional financing will
be available, or if available, will be on terms acceptable to us.

If a change in control occurs, we may be required to offer to repurchase all of
our outstanding subordinated notes at 101% of their principal amount, plus
accrued interest to the date of repurchase. Our senior credit facility limits
our ability to repurchase our subordinated notes, including in the event of a
change in control. In addition, a change in control would result in an event of
default under our senior credit facilities, which could then be accelerated by
our lenders, and would require us to offer to redeem our Series A preferred
stock. In the event a change in control occurs, we cannot be sure that we would
have enough funds to immediately pay our accelerated senior credit facility
obligations, all of our subordinated notes and for the redemption of our Series
A preferred stock, or that we would be able to obtain financing to do so on
favorable terms, if at all.

CRITICAL ACCOUNTING POLICIES INVOLVING CRITICAL ESTIMATES, UNCERTAINTIES OR
ASSESSMENTS IN OUR FINANCIAL STATEMENTS

The preparation of our financial statements in conformity with generally
accepted accounting principles in the United States requires us to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. In applying our accounting principles, we must
often make individual estimates and assumptions regarding expected outcomes or
uncertainties. As you might expect, the actual results or outcomes are generally
different than the estimated or assumed amounts. These differences are usually
minor and are included in our consolidated financial statements as soon as they
are known. Our estimates, judgments and assumptions are continually evaluated
based on available information and experience. Because of the use of estimates
inherent in the financial reporting process, actual results could differ from
those estimates.

Actual results related to the estimates and assumptions made by us in preparing
our consolidated financial statements will emerge over periods of time, such as
estimates and assumptions underlying the determination of our self-insurance
liabilities. These estimates and assumptions are monitored by us and
periodically adjusted as circumstances warrant. For instance, our liability for
self-insurance related to our workers compensation, general liability, medical
and auto liability may be adjusted based on higher or lower actual loss
experience. Although there is greater risk with respect to the accuracy of these
estimates and assumptions because of the period over which actual results may
emerge, such risk is mitigated by our ability to make changes to these estimates
and assumptions over the same period.

In preparing our financial statements at any point in time, we are also
periodically faced with uncertainties, the outcomes of which are not within our
control and will not be known for prolonged periods of time. As discussed in the
section entitled "Legal Proceedings" and the notes to our consolidated financial
statements, we are involved in actions relating to claims that our rental
purchase agreements constitute installment sales contracts, violate state usury
laws or violate other state laws enacted to protect consumers, claims asserting
gender discrimination in our employment practices, as well as claims we violated
the federal securities laws. We, together with our counsel, make estimates, if
determinable, of our probable liabilities and record such amounts in our
consolidated financial statements. These estimates represent our best estimate,
or may be the minimum range of probable loss when no single best estimate is
determinable. Disclosure is made, when determinable, of the additional possible
amount of loss on these claims, or if such estimate cannot be made, that fact is
disclosed. We, together with our counsel, monitor developments related to these
legal matters and, when appropriate, adjustments are made to liabilities to
reflect current facts and circumstances.

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RENT-A-CENTER, INC. AND SUBSIDIARIES

Based on an assessment of our accounting policies and the underlying judgments
and uncertainties affecting the application of those policies, we believe that
our consolidated financial statements provide a meaningful and fair perspective
of our company. However, we do not suggest that other general risk factors, such
as those discussed in our Annual Report on Form 10-K as well as changes in our
growth objectives or performance of new or acquired stores, could not adversely
impact our consolidated financial position, results of operations and cash flows
in future periods.

OTHER SIGNIFICANT ACCOUNTING POLICIES

Our significant accounting policies are summarized below and in Note A to our
consolidated financial statements included in our Annual Report on Form 10-K.

Revenue. We collect non-refundable rental payments and fees in advance,
generally on a weekly or monthly basis. This revenue is recognized over the term
of the agreement. Rental purchase agreements generally include a discounted
early purchase option. Upon exercise of this option, and upon sale of used
merchandise, revenue is recognized as these payments are received.

Franchise Revenue. Revenue from the sale of rental merchandise is recognized
upon shipment of the merchandise to the franchisee. Franchise fee revenue is
recognized upon completion of substantially all services and satisfaction of all
material conditions required under the terms of the franchise agreement.

Depreciation of Rental Merchandise. We depreciate our rental merchandise using
the income forecasting method. The income forecasting method of depreciation we
use does not consider salvage value and does not allow the depreciation of
rental merchandise during periods when it is not generating rental revenue. The
objective of this method of depreciation is to provide for consistent
depreciation expense while the merchandise is on rent. On July 1, 2002, we began
accelerating the depreciation on computers that are 21 months old or older and
which have become idle using the straight-line method for a period of at least
six months. The purpose for this change is to better reflect the depreciable
life of a computer in our stores. Though this method will accelerate the
depreciation expense on the effected computers, we do not expect it to have a
material effect on our financial position, results of operations or cash flows
in future periods.

Cost of Merchandise Sold. Cost of merchandise sold represents the book value net
of accumulated depreciation of rental merchandise at time of sale.

Salaries and Other Expenses. Salaries and other expenses include all salaries
and wages paid to store level employees, together with market managers'
salaries, travel and occupancy, including any related benefits and taxes, as
well as all store level general and administrative expenses and selling,
advertising, insurance, occupancy, fixed asset depreciation and other operating
expenses.

General and Administrative Expenses. General and administrative expenses include
all corporate overhead expenses related to our headquarters such as salaries,
taxes and benefits, occupancy, administrative and other operating expenses, as
well as regional directors' salaries, travel and office expenses.

Amortization of Intangibles. Amortization of intangibles consists primarily of
the amortization of the excess of purchase price over the fair market value of
acquired assets and liabilities. Effective January 1, 2002, under SFAS 142 all
goodwill and intangible assets with indefinite lives are no longer subject to
amortization. SFAS 142 requires that an impairment test be conducted annually
and in the event of an impairment indicator.

Preferred Dividends. Dividends on Series A preferred stock are payable at an
annual rate of 3.75%. Shares of Series A preferred stock distributed as
dividends in-kind are accounted for at the greater of the stated value or the
value of the common stock obtainable upon conversion on the payment date. As
discussed below, on August 5, 2002, the holders of our Series A preferred stock
converted substantially all of the shares of Series A preferred stock held by
them. Accordingly, dividends on our Series A preferred stock have been
substantially eliminated for future periods.

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RENT-A-CENTER, INC. AND SUBSIDIARIES

RECENT DEVELOPMENTS

Store Growth. In the second half of 2000, we resumed our strategy of increasing
our store base and annual revenues and profits through opportunistic
acquisitions and new store openings. During the second quarter of 2002, we
acquired a total of 38 stores and accounts from 40 locations for approximately
$23.6 million in 16 separate transactions, opened 16 new stores, and closed
three stores. All three closed stores were merged with existing stores. For the
six months ended June 30, 2002, we acquired a total of 41 stores and accounts
from 59 locations for approximately $27.2 million in 32 separate transactions,
opened 22 new stores and closed nine stores. Of the closed stores, six were
merged with existing stores and three were sold. As of August 12, 2002 we have
acquired 22 additional stores, accounts from 21 locations, opened nine new
stores and merged two stores with existing locations during the third quarter of
2002.

Senior Credit Facilities. On May 3, 2002, we amended and restated our senior
credit facility to provide for a new Tranche D LC Facility in an aggregate
amount at closing equal to $80.0 million to support our outstanding letters of
credit. Under this new LC Facility, in the event that a letter of credit is
drawn upon, we have the right to either repay the LC lenders the amount
withdrawn or request a loan in that amount. Interest on any requested LC loan
accrues at an adjusted prime rate plus 1.75% or, at our option, at the
Eurodollar base rate plus 2.80%, with the entire amount of the LC Facility due
on December 31, 2007. As a result of this amendment, our letters of credit are
issued under the new LC Facility, which increased the amount available to us
under our revolving credit facility, thereby enabling us to achieve more
flexibility and liquidity within our capital structure.

As of August 5, 2002, our outstanding letters of credit currently amount to
$85.7 million, of which $80.0 million is supported by our Tranche D LC Facility
and the remaining $5.7 million is supported by our $120.0 million revolving
credit facility.

Secondary Equity Offering. In connection with the issuance of our Series A
preferred stock in August 1998, we entered into a registration rights agreement
with Apollo which, among other things, granted them two rights to request that
their shares be registered, and a registration rights agreement with an
affiliate of Bear Stearns, which granted them the right to participate in any
company-initiated registration of shares, subject to certain exceptions. In May
2002, Apollo exercised one of their two rights to request that their shares be
registered and Bear Stearns elected to participate in such registration. In
connection therewith, Apollo and an affiliate of Bear Stearns converted 97,197
shares of our Series A preferred stock held by them into 3,500,000 shares of our
common stock, which they sold in the May 2002 public offering that was the
subject of Apollo's request. We did not receive any of the proceeds from this
offering.

Appointment of Mary Elizabeth Burton to the Board of Directors. On May 31, 2002,
we announced that Mary Elizabeth Burton was appointed to our Board of Directors.
Ms. Burton also serves as a member of our Audit Committee.

Conversion of Series A Preferred Stock. On August 5, 2002, the first date on
which the Series A preferred stock could be optionally redeemed by us, the
holders of our Series A preferred stock converted all but two shares of our
Series A preferred stock held by them into approximately 7,281,548 shares of our
common stock. As a result of the conversion, the dividend on our Series A
preferred stock has been substantially eliminated for future periods. In
connection with Apollo's conversion of all but two of the shares of Series A
preferred stock held by them on August 5, 2002, we granted Apollo an additional
right to effect a demand registration under the existing registration rights
agreement we entered into with them in 1998.

RESULTS OF OPERATIONS

SIX MONTHS ENDED JUNE 30, 2002 COMPARED TO SIX MONTHS ENDED JUNE 30, 2001

Store Revenue. Total store revenue increased by $109.3 million, or 12.8%, to
$964.6 million for the six months ended June 30, 2002 from $855.3 million for
the six months ended June 30, 2001. The increase in total store revenue is
primarily attributable to growth in same store revenues and incremental revenues
in new and acquired stores, as well as an increase in the amount of merchandise
sales over the same period in 2001.

Same store revenues represent those revenues earned in stores that were operated
by us for each of the entire six month periods ending June 30, 2002 and 2001.
Same store revenues increased by $53.5 million, or 6.9%, to $829.4 million for
the six months ended June 30, 2002 from $775.9 million in 2001. The increase in
same store revenues was primarily attributable to an increase in the number of
customers served (approximately 397 per store for 2002 vs. approximately 391 per
store for 2001 in same stores open), the number of agreements on rent
(approximately 610 per store for 2002 vs. approximately 604 per store for 2001
in same stores open), as well as revenue earned per agreement on rent
(approximately $98 per month per agreement for 2002 vs. approximately $96 per
agreement for 2001). Merchandise sales increased $12.7 million, or 25.0%, to
$63.6 million for 2002 from $50.9 million in 2001. The increase in merchandise
sales was primarily attributable to an increase in the number of items sold in
the first six months of 2002 (approximately 463,000) from the number of items
sold

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RENT-A-CENTER, INC. AND SUBSIDIARIES

in 2001 (approximately 373,000). This increase in the number of items sold in
2002 versus the same period in 2001 was primarily the result of an increase in
the amount of customers exercising early purchase options.

Franchise Revenue. Total franchise revenue increased by $1.4 million, or 5.3%,
to $28.6 million for the six months ended June 30, 2002 from $27.2 million in
2001. This increase was primarily attributable to an increase in merchandise
sales to franchise locations, partially offset by a decrease in the number of
franchised locations in the first six months of 2002 as compared to the first
six months of 2001, which caused a slight decrease in royalty income.

Depreciation of Rental Merchandise. Depreciation of rental merchandise increased
by $21.5 million, or 13.0%, to $186.6 million for the six months ended June 30,
2002 from $165.1 million in 2001. This increase was primarily attributable to an
increase in rental and fee revenue. Depreciation of rental merchandise expressed
as a percent of store rentals and fees revenue increased to 20.7% in 2002 from
20.6% for the same period in 2001. This slight increase is primarily a result of
in-store promotions made during the third quarter of 2001, which included a
reduction in the rates and terms on certain rental agreements. These in-store
promotions caused depreciation to be a greater percentage of store rentals and
fees revenue on those promotional items rented.

Cost of Merchandise Sold. Cost of merchandise sold increased by $7.5 million, or
20.2%, to $44.5 million for the six months ended June 30, 2002 from $37.0
million in 2001. This increase was primarily a result of an increase in the
number of items sold during the first six months of 2002 as compared to the
first six months of 2001.

Salaries and Other Expenses. Salaries and other expenses expressed as a
percentage of total store revenue decreased to 54.6% for the six months ended
June 30, 2002 from 56.9% for the six months ended June 30, 2001. This decrease
was primarily attributable to an increase in store revenues in the first six
months of 2002 as compared to 2001 coupled with the realization of our margin
enhancement initiatives and reductions in store level costs.

Franchise Cost of Merchandise Sold. Franchise cost of merchandise sold increased
by $1.3 million, or 5.8%, to $24.5 million for the six months ended June 30,
2002 from $23.2 million in 2001. This increase was primarily attributable to an
increase in merchandise sales to franchise locations, partially offset by a
decrease in the number of franchised locations in the first six months of 2002
as compared to the first six months of 2001.

General and Administrative Expenses. General and administrative expenses
expressed as a percent of total revenue increased to 3.3% for the six months
ending June 30, 2002 as compared to 3.0% for the six months ending June 30,
2001. This increase is primarily attributable to additional litigation
settlement costs of $2.0 million in connection with the settlement of our class
action gender discrimination litigation incurred during the second quarter of
2002.

Amortization of Intangibles. Amortization of intangibles decreased by $13.1
million, or 88.8%, to $1.6 million for the six months ended June 30, 2002 from
$14.7 million for the six months ended June 30, 2001. This decrease was directly
attributable to the implementation of SFAS 142, which requires that goodwill no
longer be amortized.

Operating Profit. Operating profit increased by $47.4 million, or 36.7%, to
$176.5 million for the six months ended June 30, 2002 from $129.1 million in
2001. Operating profit as a percentage of total revenue increased to 17.8% for
the six months ended June 30, 2002, from 14.6% in 2001. This increase was
primarily attributable to an increase in store revenues in the first six months
of 2002 as compared to 2001 coupled with the realization of our margin
enhancement initiatives, reduction of store level costs and the reduction of
intangible amortization expense as discussed above. After adjusting reported
results for the first six months of 2001 to exclude the effects of goodwill
amortization, operating profit increased by $24.5 million, or 16.1% on a
comparable basis.

Net Earnings. Net earnings increased by $33.0 million, or 62.7%, to $85.5
million for the six months ended June 30, 2002 from $52.5 million in 2001. This
increase is primarily attributable to growth in operating profit as discussed
above. After adjusting reported results for the first six months of 2001 to
exclude the effects of goodwill amortization, net earnings increased by $20.6
million, or 31.8% on a comparable basis.

Preferred Dividends. Dividends on our Series A preferred stock are payable
quarterly at an annual rate of 3.75%. We account for shares of preferred stock
distributed as dividends in-kind at the greater of the stated value or the value
of the common stock obtainable upon conversion on the payment date. Preferred
dividends decreased by $488,000, or 5.2%, to $8.9 million for the six months
ended June 30, 2002 as compared to $9.4 million in 2001. This decrease is a
direct result of the conversion of 97,197 shares of preferred stock into
3,500,000 million common shares in May 2002, resulting in less shares
outstanding in 2002 as compared to 2001. On August 5, 2002, the holders of our
Series A preferred stock converted all but two shares of our Series A preferred
stock into approximately 7,281,548 shares of our common stock. Accordingly, the
dividend on our Series A preferred stock has been substantially eliminated for
future periods.

18

RENT-A-CENTER, INC. AND SUBSIDIARIES

THREE MONTHS ENDED JUNE 30, 2002 COMPARED TO THREE MONTHS ENDED JUNE 30, 2001

Store Revenue. Total store revenue increased by $50.7 million, or 11.8%, to
$480.7 million for the three months ended June 30, 2002 from $430.0 million for
the three months ended June 30, 2001. The increase in total store revenue is
primarily attributable to growth in same store revenues and incremental revenues
in new and acquired stores, as well as an increase in the amount of merchandise
sales over the same period in 2001.

Same store revenues represent those revenues earned in stores that were operated
by us for each of the entire three month periods ending June 30, 2002 and 2001.
Same store revenues increased by $25.9 million, or 6.6%, to $420.2 million for
the three months ended June 30, 2002 from $394.3 million in 2001. The increase
in same store revenues was primarily attributable to an increase in the number
of customers served (approximately 397 per store for 2002 vs. approximately 390
per store for 2001 in same stores open), the number of agreements on rent
(approximately 609 per store for 2002 vs. approximately 602 per store for 2001
in same stores open), as well as revenue earned per agreement on rent
(approximately $99 per month per agreement for 2002 vs. approximately $96 per
agreement for 2001). Merchandise sales increased $3.9 million, or 19.3%, to
$24.0 million for 2002 from $20.1 million in 2001. The increase in merchandise
sales was primarily attributable to an increase in the number of items sold in
the second quarter of 2002 (approximately 205,000) from the number of items sold
in 2001 (approximately 163,000). This increase in the number of items sold in
2002 versus the same period in 2001 was primarily the result of an increase in
the amount of customers exercising early purchase options.

Franchise Revenue. Total franchise revenue increased by $1.2 million, or 9.7%,
to $13.9 million for the three months ended June 30, 2002 from $12.7 million in
2001. This increase was primarily attributable to an increase in merchandise
sales to franchise locations, partially offset by a decrease in the number of
franchised locations in the second quarter of 2002 as compared to the second
quarter of 2001, which caused a slight decrease in royalty income.

Depreciation of Rental Merchandise. Depreciation of rental merchandise increased
by $10.1 million, or 12.0%, to $94.4 million for the three months ended June 30,
2002 from $84.3 million in 2001. This increase was primarily attributable to an
increase in rental and fee revenue. Depreciation of rental merchandise expressed
as a percent of store rentals and fees revenue increased to 20.7% in 2002 from
20.6% for the same period in 2001. This slight increase is primarily a result of
in-store promotions made during the third quarter of 2001, which included a
reduction in the rates and terms on certain rental agreements. These in-store
promotions caused depreciation to be a greater percentage of store rentals and
fees revenue on those promotional items rented.

Cost of Merchandise Sold. Cost of merchandise sold increased by $2.1 million, or
13.3%, to $17.5 million for the three months ended June 30, 2002 from $15.4
million in 2001. This increase was primarily a result of an increase in the
number of items sold during the second quarter of 2002 as compared to the second
quarter of 2001.

Salaries and Other Expenses. Salaries and other expenses expressed as a
percentage of total store revenue decreased to 55.0% for the three months ended
June 30, 2002 from 56.8% for the three months ended June 30, 2001. This decrease
was primarily attributable to an increase in store revenues in the second
quarter of 2002 as compared to 2001 coupled with the realization of our margin
enhancement initiatives and reductions in store level costs.

Franchise Cost of Merchandise Sold. Franchise cost of merchandise sold increased
by $1.2, or 11.0%, to $11.9 million for the three months ended June 30, 2002
from $10.7 million in 2001. This increase was primarily attributable to an
increase in merchandise sales to franchise locations, partially offset by a
decrease in the number of franchised locations in the second quarter of 2002 as
compared to the second quarter of 2001.

General and Administrative Expenses. General and administrative expenses
expressed as a percent of total revenue increased to 3.5% for the three months
ending June 30, 2002 as compared to 3.2% for the three months ending June 30,
2001. This increase is primarily attributable to additional litigation
settlement costs of $2.0 million in connection with the settlement of our class
action gender discrimination litigation.

Amortization of Intangibles. Amortization of intangibles decreased by $6.5
million, or 87.5%, to $922,000 for the three months ended June 30, 2002 from
$7.4 million for the three months ended June 30, 2001. This decrease was
directly attributable to the implementation of SFAS 142, which requires that
goodwill no longer be amortized.

Operating Profit. Operating profit increased by $21.6 million, or 32.4%, to
$88.2 million for the three months ended June 30, 2002 from $66.6 million in
2001. Operating profit as a percentage of total revenue increased to 17.8% for
the three

19

RENT-A-CENTER, INC. AND SUBSIDIARIES

months ended June 30, 2002, from 15.1% in 2001. This increase was primarily
attributable to an increase in store revenues in 2002 as compared to 2001
coupled with the realization of our margin enhancement initiatives, reduction of
store level costs and the reduction of intangible amortization expense as
discussed above. After adjusting reported results for the second quarter of 2001
to exclude the effects of goodwill amortization, operating profit increased by
$10.1 million, or 13.0% on a comparable basis.

Net Earnings. Net earnings increased by $14.4 million, or 52.3%, to $41.9
million for the three months ended June 30, 2002 from $27.5 million in 2001.
This increase is primarily attributable to growth in operating profit as
discussed above. After adjusting reported results for the first quarter of 2001
to exclude the effects of goodwill amortization, net earnings increased by $8.2
million, or 24.3% on a comparable basis.

Preferred Dividends. Dividends on our Series A preferred stock are payable
quarterly at an annual rate of 3.75%. We account for shares of preferred stock
distributed as dividends in-kind at the greater of the stated value or the value
of the common stock obtainable upon conversion on the payment date. Preferred
dividends decreased by $1.2 million or 22.9%, to $3.9 million for the three
months ended June 30, 2002 as compared to $5.1 million in 2001. This decrease is
a direct result of the conversion of 97,197 shares of preferred stock into
3,500,000 million common shares in May 2002, resulting in less shares
outstanding in 2002 as compared to 2001. On August 5, 2002, the holders of our
Series A preferred stock converted all but two shares of our Series A preferred
stock into approximately 7,281,548 shares of our common stock. Accordingly, the
dividend on our Series A preferred stock has been substantially eliminated for
future periods.

LIQUIDITY AND CAPITAL RESOURCES

Cash provided by operating activities increased by $109.3 million to $172.9
million for the six months ending June 30, 2002 from $63.6 million in 2001. This
increase resulted primarily from an increase in net earnings and depreciation of
rental merchandise, as well as a decrease in the amount of rental merchandise
purchased during the first six months of 2002 compared to 2001.

Cash used in investing activities decreased by $20.5 million to $43.4 million
during the six month period ending June 30, 2002 from $63.9 million in 2001.
This decrease is primarily attributable to the acquisition and opening of fewer
new stores during the first six months of 2002 as compared to 2001 as well as a
decrease in capital expenditures.

Cash used in financing activities increased by $134.8 million to $143.6 million
during the six month period ending June 30, 2002 from $8.8 million in 2001. This
increase is a result of our purchase of $34.7 million in treasury stock in the
first quarter of 2002 and debt repayments of $128.0 million during the first six
months of 2002, offset by no proceeds from the issuance of common stock in 2002
as compared proceeds of approximately $45.7 million in 2001.

Liquidity Requirements. Our primary liquidity requirements are for debt service,
rental merchandise purchases, capital expenditures, litigation and our store
expansion program. Our primary sources of liquidity have been cash provided by
operations, borrowings and sales of equity securities. In the future, we may
incur additional debt, or may issue debt or equity securities to finance our
operating and growth strategies. The availability and attractiveness of any
outside sources of financing will depend on a number of factors, some of which
relate to our financial condition and performance, and some of which are beyond
our control, such as prevailing interest rates and general economic conditions.
There can be no assurance that additional financing will be available, or if
available, that it will be on terms we find acceptable.

We believe that cash flow generated from operations, together with amounts
available under our senior credit facilities, will be sufficient to fund our
debt service requirements, rental merchandise purchases, capital expenditures,
litigation and our store expansion intentions during 2002. At August 9, 2002, we
had $102.4 million in cash. While our operating cash flow has been strong and
we expect this strength to continue, our liquidity could be negatively impacted
if we do not remain as profitable as we expect.

On March 9, 2002, President Bush signed into law the Job Creation and Worker
Assistance Act of 2002, which provides for accelerated tax depreciation
deductions for qualifying assets placed in service between September 11, 2001
and September 10, 2004. Under these provisions, 30 percent of the basis of
qualifying property is deductible in the year the property is placed in service,
with the remaining 70 percent of the basis depreciated under the normal tax
depreciation rules. Accordingly, our cash flow will benefit from having a lower
current cash tax obligation, which in turn will provide additional cash flows
from operations until the deferred tax liabilities begin to reverse. We estimate
that our operating cash flow will increase by approximately $60.0 million
through 2004 before the deferred tax liabilities begin to reverse over a three
year period beginning in 2005.

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RENT-A-CENTER, INC. AND SUBSIDIARIES

Rental Merchandise Purchases. We purchased $252.3 million and $270.5 million of
rental merchandise during the six month periods ending June 30, 2002 and 2001,
respectively.

Capital Expenditures. We make capital expenditures in order to maintain our
existing operations as well as for new capital assets in new and acquired
stores. We spent $16.8 million and $29.7 million on capital expenditures during
the six month periods ending June 30, 2002 and 2001, respectively, and expect to
spend approximately $20.0 million for the remainder of 2002.

Acquisitions and New Store Openings. For the first six months of 2002, we spent
approximately $27.2 million on acquiring stores and accounts. For the entire
year ending December 31, 2002, we intend to add approximately 5% to 10% to our
store base by opening between 60 and 80 new store locations as well as
continuing to pursue opportunistic acquisitions.

The profitability of our stores tends to grow at a slower rate approximately
five years from the time we open or acquire them. As a result, in order for us
to show improvements in our profitability, it is important for us to continue to
open stores in new locations or acquire underperforming stores on favorable
terms. There can be no assurance that we will be able to acquire or open new
stores at the rates we expect, or at all. We cannot assure you that the stores
we do acquire or open will be profitable at the same levels that our current
stores are, or at all.

Borrowings. The table below shows the scheduled maturity dates of our senior
debt outstanding at June 30, 2002.

For the six months ended June 30, 2002, we have prepaid $128.0 million of our
senior debt. Since June 30, 2002, we have prepaid approximately $11.0 million of
our senior debt during the third quarter of 2002.

Under our senior credit facilities, we are required to use 25% of the net
proceeds from any equity offering to repay our term loans. We intend to continue
to make prepayments of debt under our senior credit facilities, repurchase some
of our senior subordinated notes or repurchase our common stock to the extent we
have available cash that is not necessary for store openings or acquisitions.
However, we cannot assure you that we will have excess cash for these purposes.
Our senior credit facilities currently limit our ability to repurchase in excess
of $54.0 million of our senior subordinated notes. In addition, our senior
credit facilities currently limit our ability to repurchase our common stock in
excess of 25% of our consolidated net income for the period from January 1, 2002
through our latest quarterly financial reports and require us to make a matching
pre-payment on our term loans with any such repurchase.

Senior Credit Facilities. The senior credit facilities are provided by a
syndicate of banks and other financial institutions led by JP Morgan Chase Bank,
as administrative agent. On May 3, 2002, we amended and restated our senior
credit facility to provide for a new Tranche D LC Facility in an aggregate
amount at closing equal to $80.0 million to support our outstanding letters of
credit. Under this new LC Facility, in the event that a letter of credit is
drawn upon, we have the right to either repay the LC lenders the amount
withdrawn or request a loan in that amount. Interest on any requested LC loan
accrues at an adjusted prime rate plus 1.75% or, at our option, at the
Eurodollar base rate plus 2.80%, with the entire amount of the LC Facility due
on December 31, 2007. As a result of this amendment, our letters of credit are
issued under the new LC Facility, which increases the amount available to us
under our revolving credit facility, thereby enabling us to achieve more
flexibility and liquidity within our capital structure. At June 30, 2002, we had
a total of $300.0 million outstanding under our senior credit facilities, all of
which was under our term loans. At June 30, 2002, we had $120.0 million of
availability under this revolving credit facility.

As of August 5, 2002, our outstanding letters of credit currently amount to
$85.7 million, $80.0 million is supported by our Tranche D LC Facility and the
remaining $5.7 million is supported by our $120.0 million revolving credit
facility.

Borrowings under the senior credit facilities bear interest at varying rates
equal to 1.50% to 3.0% over LIBOR, which was 1.84% at June 30, 2002. We also
have a prime rate option under the facilities, but have not exercised it to
date. At June 30, 2002,

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RENT-A-CENTER, INC. AND SUBSIDIARIES

the average rate on outstanding senior debt borrowings was 9.72%. Including the
non-recurring finance fees of $2.9 million incurred in connection with our
prepayment of debt, the average rate on outstanding senior debt borrowings was
11.54%.

During 1998, we entered into interest rate protection agreements with two banks,
one of which expired in 2001. Under the terms of the current interest rate
protection agreements, the LIBOR rate used to calculate the interest rate
charged on $250.0 million of the outstanding senior term debt has been fixed at
an average rate of 5.60%. The protection on the $250.0 million expires in 2003.

The senior credit facilities are secured by a security interest in substantially
all of our tangible and intangible assets, including intellectual property and
real property. The senior credit facilities are also secured by a pledge of the
capital stock of our subsidiaries.

The senior credit facilities contain covenants that limit our ability to:

o incur additional debt (including subordinated debt) in excess of $25
million;

o repurchase our capital stock and senior subordinated notes;

o incur liens or other encumbrances;

o merge, consolidate or sell substantially all our property or business;

o sell assets, other than inventory;

o make investments or acquisitions unless we meet financial tests and other
requirements;

o make capital expenditures; or

o enter into a new line of business.

The senior credit facilities require us to comply with several financial
covenants, including a maximum leverage ratio, a minimum interest coverage ratio
and a minimum fixed charge coverage ratio. At June 30, 2002, the maximum
leverage ratio was 3.75:1, the minimum interest coverage ratio was 3.00:1, and
the minimum fixed charge coverage ratio was 1.30:1. On that date, our actual
ratios were 1.64:1, 5.62:1 and 2.34:1.

Events of default under the senior credit facilities include customary events,
such as a cross-acceleration provision in the event that we default on other
debt. In addition, an event of default under the senior credit facilities would
occur if we undergo a change of control. This is defined to include the case
where Apollo ceases to own at least 4,474,673 shares of our common stock on an
as converted basis, or a third party becomes the beneficial owner of 33.33% or
more of our voting stock at a time when certain permitted investors own less
than the third party or Apollo entities own less than 35% of the voting stock
owned by the permitted investors. We do not have the ability to prevent Apollo
from selling its stock, and therefore would be subject to an event of default if
Apollo did so and its sales were not agreed to by the lenders under the senior
credit facilities. This could result in the acceleration of the maturity of our
debt under the senior credit facilities, as well as under the subordinated notes
through their cross-acceleration provision.

Senior Subordinated Notes. In August 1998, we issued $175.0 million of senior
subordinated notes, maturing on August 15, 2008, under an indenture dated as of
August 18, 1998 among us, our subsidiary guarantors and the trustee, which is
now The Bank of New York, as successor to IBJ Schroder Bank & Trust Company. In
December 2001, we issued an additional $100.0 million of 11% senior subordinated
notes, maturing on August 15, 2008, under a separate indenture dated as of
December 19, 2001 among us, our subsidiary guarantors and The Bank of New York,
as trustee. On May 2, 2002, we closed an exchange offer for, among other things,
all of the notes issued by us under the 1998 indenture, such that all of our
senior subordinated notes are now governed by the terms of the 2001 indenture.

The 2001 indenture contains covenants that limit our ability to:

o incur additional debt;

o sell assets or our subsidiaries;

o grant liens to third parties;

o pay dividends or repurchase stock; and

o engage in a merger or sell substantially all of our assets.

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RENT-A-CENTER, INC. AND SUBSIDIARIES

Events of default under the 2001 indenture include customary events, such as a
cross-acceleration provision in the event that we default in the payment of
other debt due at maturity or upon acceleration for default in an amount
exceeding $25 million.

We may redeem the notes after August 15, 2003, at our option, in whole or in
part, at a premium declining from 105.5%. The subordinated notes also require
that upon the occurrence of a change of control (as defined in the 2001
indenture), the holders of the notes have the right to require us to repurchase
the notes at a price equal to 101% of the original aggregate principal amount,
together with accrued and unpaid interest, if any, to the date of repurchase. If
we did not comply with this repurchase obligation, this would trigger an event
of default under our senior credit facilities.

Store Leases. We lease space for all of our stores as well as our corporate and
regional offices under operating leases expiring at various times through 2010.

ColorTyme Guarantee. ColorTyme is a party to an agreement with Textron Financial
Corporation, who provides financing to qualifying franchisees of ColorTyme of up
to five times their average monthly revenues. Under this agreement, upon an
event of default by the franchisee under agreements governing this financing and
upon the occurrence of certain other events, Textron may assign the loans and
the collateral securing such loans to ColorTyme, with ColorTyme then succeeding
to the rights of Textron under the debt agreements, including the rights to
foreclose on the collateral. Approximately $10.0 million of the Textron
financing was recently refinanced by Texas Capital Bank, National Association
upon terms and conditions similar to the Textron financing. We guarantee the
obligations of ColorTyme under these agreements up to a maximum amount of $50.0
million, of which $34.3 million was outstanding as of June 30, 2002. Mark E.
Speese, our Chairman of the Board and Chief Executive Officer, is a passive
investor in Texas Capital Bank, owning less than 1% of its outstanding equity.

Litigation. In 1998, we recorded an accrual of approximately $125.0 million for
estimated probable losses on litigation assumed in connection with the Thorn
Americas acquisition. As of June 30, 2002, we have paid approximately $124.1
million of this accrual in settlement of most of these matters and legal fees.
These settlements were funded primarily from amounts available under our senior
credit facilities, including the revolving credit facility and the multidraw
facility, as well as from cash flow from operations.

In November 2001, we announced that we had reached an agreement in principle for
the settlement of the Bunch matter. Under the terms of the Bunch settlement,
while not admitting any liability, we agreed to pay an aggregate of $12.25
million to the agreed upon class, plus plaintiffs' attorneys fees as determined
by the court and costs to administer the settlement subject to an aggregate cap
of $3.15 million. Accordingly, to account for the aforementioned costs, we
recorded a non-recurring charge of $16.0 million in the third quarter of 2001.

In early March 2002, we reached an agreement in principle with the plaintiffs
attorneys in Wilfong and the EEOC to resolve the Wilfong suit and the Tennessee
EEOC action. The definitive settlement agreement documents were filed with the
Wilfong court in June 2002, and the court granted preliminary approval of the
settlement on July 19, 2002.

Under the terms of the Wilfong settlement, while not admitting any liability, we
agreed to pay an aggregate of $47.0 million to approximately 6,000 female
employees and a yet to be determined number of female applicants who were
employed by or applied for employment with us during the period commencing on
April 19, 1998 and ending on June 19, 2002, plus up to $375,000 in settlement
administrative costs. The $47.0 million payment includes the $12.25 million
payment discussed in connection with the Bunch settlement. Attorney fees for
class counsel in Wilfong will be paid out of the $47.0 million settlement fund
in an amount to be determined by the court.

The settlement agreement contemplates the settlement would be subject to a
four-year consent decree, which could be extended by the court for an additional
one year upon a showing of good cause. Also, under the settlement agreement, we
agreed to augment our human resources department and our internal employee
complaint procedures; enhance our gender anti-discrimination training for all
employees; hire a consultant mutually acceptable to the parties for two years to
advise us on employment matters; provide certain reports to the EEOC during the
period of the consent decree; seek qualified female representation on our board
of directors; publicize our desire to recruit, hire and promote qualified women;
offer to fill job vacancies within our regional markets with qualified class
members who reside in those markets and express an interest in employment by us
to the extent of 10% of our job vacancies in such markets over a fifteen month
period; and to take certain other steps to improve opportunities for women. We
initiated many of the above programs prior to entering into the settlement
agreement.

Under the settlement agreement, we have the right to terminate the settlement
under certain circumstances, including in the event that more than 60 class
members elect to opt out of the settlement.

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RENT-A-CENTER, INC. AND SUBSIDIARIES

The Wilfong settlement contemplates that the Bunch case will be dismissed with
prejudice once such settlement becomes final. At the parties' request, the court
in the Bunch case stayed the proceedings in that case, including postponing the
fairness hearing previously scheduled for March 6, 2002. Similarly, the court in
the Tennessee EEOC action has stayed the proceeding in that case and the EEOC
has agreed to having the case dismissed once the Wilfong settlement is
finalized.

In June 2002, we separately agreed to contribute an additional $2.0 million to a
dispute resolution fund in which approximately 100 class members in Bunch will
participate. This dispute resolution fund has been approved by the Bunch court
and counsel to the plaintiffs in Bunch support the dispute resolution fund and
the Wilfong settlement preliminarily approved by the Wilfong court.

To account for the aforementioned costs, as well as our own attorney's fees, we
recorded an additional non-recurring charge of $36.0 million in the fourth
quarter of 2001 in connection with the Wilfong matter and a non-recurrring
charge of $2.0 million in the second quarter of 2002 for a total non-recurring
charge of $54.0 million.

Additional settlements or judgments against us on our existing litigation could
affect our liquidity. Please refer to Note J of our consolidated financial
statements included in our Annual Report on Form 10-K.

Sales of Equity Securities. On May 31, 2001, we completed an offering of
3,680,000 shares of our common stock at an offering price of $42.50 per share.
In that offering, 1,150,000 shares were offered by us and 2,530,000 shares were
offered by some of our stockholders. Net proceeds to us were approximately $45.6
million.

During 1998, we issued 260,000 shares of our Series A preferred stock at $1,000
per share, resulting in aggregate proceeds of $260.0 million. Dividends on our
Series A preferred stock accrue on a quarterly basis at the rate of $37.50 per
annum. To date, we have these dividends in additional shares of Series A
preferred stock because of restrictive provisions in our senior credit
facilities. Beginning in August 2003, we will be required to pay the dividends
in cash and may do so under our senior credit facilities so long as we are not
in default.

On August 5, 2002, the first date in which we had the right to optionally redeem
the shares of Series A preferred stock, the holders of our Series A preferred
stock converted all but two shares of our Series A preferred stock held by them
into approximately 7,281,548 shares of our common stock. As a result, the
dividend on our Series A preferred stock has been substantially eliminated for
future periods. In connection with Apollo's conversion of all but two of the
shares of Series A preferred stock held by them on August 5, 2002, we granted
Apollo an additional right to effect a demand registration under the existing
registration rights agreement we entered into with them in 1998.

Contractual Cash Commitments. The table below summarizes debt, lease and other
minimum cash obligations outstanding as of June 30, 2002:

- ----------

(1) Excludes obligations under the ColorTyme guarantee, the change in control
and acceleration provisions under the senior credit facilities, and the
optional redemption, change in control and acceleration provisions under
the indenture governing our subordinated notes.

(2) Includes interest payments of $15.13 million on each of February 15 and
August 15 of each year.

(3) Represents cash dividends required to be paid on the Series A preferred
stock from August 5, 2003 through August 5, 2009 but excludes the
obligations related to change in control and redemption, and assumes that
the internal rate of return threshold allowing us to cease paying dividends
of the Series A preferred stock is not met. On August 5, 2002, the first
date in which we had the right to optionally redeem the shares of Series A
preferred stock, the holders of our Series A preferred stock converted all
but two of the outstanding shares of Series A preferred stock into shares
of our common stock. Accordingly, cash dividends of approximately $52.6
million that would have otherwise been paid beginning August 5, 2003
through August 5, 2009 have been substantially eliminated.

Repurchases of Outstanding Securities. In connection with the retirement of J.
Ernest Talley, our former Chairman of the Board and Chief Executive Officer, we
entered into an agreement to repurchase $25.0 million worth of shares of our
common

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RENT-A-CENTER, INC. AND SUBSIDIARIES

stock held by Mr. Talley at a purchase price equal to the average closing price
of our common stock over the 10 trading days beginning October 9, 2001, subject
to a maximum of $27.00 per share and a minimum of $20.00 per share. Under this
formula, the purchase price for the repurchase was calculated at $20.258 per
share. Accordingly, on October 23, 2001 we repurchased 493,632 shares of our
common stock from Mr. Talley at $20.258 per share for a total purchase price of
$10.0 million, and on November 30, 2001, we repurchased an additional 740,448
shares of our common stock from Mr. Talley at $20.258 per share, for a total
purchase price of an additional $15.0 million. On January 25, 2002, we exercised
the option to repurchase all of the remaining 1,714,086 shares of common stock
held by Mr. Talley at $20.258 per share. We repurchased those remaining shares
on January 30, 2002.

In April 2000, we announced that our board of directors had authorized a program
to repurchase in the open market up to an aggregate of $25 million of our common
stock. During the quarter ended June 30, 2002, we did not repurchase any of our
shares pursuant to this Board authorization. Since June 30, 2002, we have
repurchased approximately 241,404 shares of our common stock under this program
for approximately $11.9 million.

Our senior credit facilities currently limit our ability to repurchase our
common stock in excess of 25% of our consolidated net income for the period from
January 1, 2002 through our latest quarterly financial reports and require us to
make a matching pre-payment on our term loans with any such repurchase. In
addition, the indenture governing our subordinated notes contain covenants
limiting our ability to repurchase our capital stock. Accordingly, our ability
to make further repurchases of our common stock, including pursuant to our
common stock repurchase program, is limited.

Economic Conditions. Although our performance has not suffered in previous
economic downturns, we cannot assure you that demand for our products,
particularly in higher price ranges, will not significantly decrease in the
event of a prolonged recession.

Seasonality. Our revenue mix is moderately seasonal, with the first quarter of
each fiscal year generally providing higher merchandise sales than any other
quarter during a fiscal year, primarily related to federal income tax refunds.
Generally, our customers will more frequently exercise their early purchase
option on their existing rental purchase agreements or purchase pre-leased
merchandise off the showroom floor during the first quarter of each fiscal year.
We expect this trend to continue in future periods. Furthermore, we tend to
experience slower growth in the number of rental purchase agreements on rent in
the third quarter of each fiscal year when compared to other quarters throughout
the year. As a result, we would expect revenues for the third quarter of each
fiscal year to remain relatively flat with the prior quarter. We expect this
trend to continue in future periods unless we add significantly to our store
base during the third quarter of future fiscal years as a result of new store
openings or opportunistic acquisitions.

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RENT-A-CENTER, INC. AND SUBSIDIARIES

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

INTEREST RATE SENSITIVITY

As of June 30, 2002, we had $275.0 million in subordinated notes outstanding at
a fixed interest rate of 11.0% and $300.0 million in term loans outstanding at
interest rates indexed to the LIBOR rate. The subordinated notes mature on
August 15, 2008. The fair value of the subordinated notes is estimated based on
discounted cash flow analysis using interest rates currently offered for loans
with similar terms to borrowers of similar credit quality. The fair value of the
subordinated notes at June 30, 2002 was $290.1 million, which is $15.1 million
above their carrying value. Unlike the subordinated notes, the $300.0 million in
term loans have variable interest rates indexed to current LIBOR rates. Because
the variable rate structure exposes us to the risk of increased interest cost if
interest rates rise, in 1998 we entered into $500.0 million in interest rate
swap agreements that lock in a LIBOR rate of 5.59%, thus hedging this risk. Of
the $500.0 million in agreements, $250.0 million expired in September 2001 and
the remaining $250.0 million will expire in 2003. Given our current capital
structure, including our interest rate swap agreements, we have $50.0 million,
or 16.7% of our total debt, in variable rate debt. A hypothetical 1.0% change in
the LIBOR rate would affect pre-tax earnings by approximately $50,000. The swap
agreements had an aggregate negative fair value of $9.1 million and $4.7 million
at June 30, 2002 and 2001, respectively. A hypothetical 1.0% change in the LIBOR
rate would have increased the negative fair value of the swaps by approximately
$3.9 million.

MARKET RISK

Market risk is the potential change in an instrument's value caused by
fluctuations in interest rates. Our primary market risk exposure is fluctuations
in interest rates. Monitoring and managing this risk is a continual process
carried out by the Board of Directors and senior management. We manage our
market risk based on an ongoing assessment of trends in interest rates and
economic developments, giving consideration to possible effects on both total
return and reported earnings.

INTEREST RATE RISK

We hold long-term debt with variable interest rates indexed to prime or LIBOR
that exposes us to the risk of increased interest costs if interest rates rise.
To reduce the risk related to unfavorable interest rate movements, we have
entered into certain interest rate swap contracts on $250.0 million of debt to
pay a fixed rate of 5.60%.

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RENT-A-CENTER, INC. AND SUBSIDIARIES

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we, along with our subsidiaries, are party to various legal
proceedings arising in the ordinary course of business. Except as described
below, we are not currently a party to any material litigation.

Colon v. Thorn Americas, Inc. The plaintiffs filed this class action in November
1997 in New York state court. This matter was assumed by us in connection with
the Thorn Americas acquisition, and appropriate purchase accounting adjustments
were made for such contingent liabilities. The plaintiffs acknowledge that
rent-to-own transactions in New York are subject to the provisions of New York's
Rental Purchase Statute but contend the Rental Purchase Statute does not provide
Thorn Americas immunity from suit for other statutory violations. Plaintiffs
allege Thorn Americas has a duty to disclose effective interest under New York
consumer protection laws, and seek damages and injunctive relief for Thorn
Americas' failure to do so. This suit also alleges violations relating to
excessive and unconscionable pricing, late fees, harassment, undisclosed
charges, and the ease of use and accuracy of its payment records. In their
prayers for relief, the plaintiffs have requested the following:

o class certification;

o injunctive relief requiring Thorn Americas to (A) cease certain marketing
practices, (B) price their rental purchase contracts in certain ways, and
(C) disclose effective interest;

o unspecified compensatory and punitive damages;

o rescission of the class members contracts;

o an order placing in trust all moneys received by Thorn Americas in
connection with the rental of merchandise during the class period;

o treble damages, attorney's fees, filing fees and costs of suit;

o pre- and post-judgment interest; and

o any further relief granted by the court.

The plaintiffs have not alleged a specific monetary amount with respect to their
request for damages.

The proposed class originally included all New York residents who were party to
Thorn Americas' rent-to-own contracts from November 26, 1991 through November
26, 1997. In her class certification briefing, Plaintiff acknowledged her claims
under the General Business Law in New York are subject to a three year statute
of limitations, and is now requesting a class of all persons in New York who
paid for rental merchandise from us since November 26, 1994. In November 2000,
following interlocutory appeal by both parties from the denial of cross-motions
for summary judgement, we obtained a favorable ruling from the Appellate
Division of the State of New York, dismissing Plaintiff's claims based on the
alleged failure to disclose an effective interest rate. Plaintiff's other claims
were not dismissed. Plaintiff moved to certify a state-wide class in December
2000. Plaintiff's class certification motion was heard by the court on November
7, 2001, at which time the court took the motion under advisement. We are
vigorously defending this action and opposing class certification. Although
there can be no assurance that our position will prevail, or that we will be
found not to have any liability, we believe the decision by the Appellate
Division regarding interest rate disclosure to be a significant and favorable
development in this matter.

Wisconsin Attorney General Proceeding. On August 4, 1999, the Wisconsin Attorney
General filed suit against us and our subsidiary ColorTyme in the Circuit Court
of Milwaukee County, Wisconsin, alleging that our rent-to-rent transaction,
coupled with the opportunity afforded our rental customers to purchase the
rented merchandise under what we believe is a separate transaction, is a
disguised credit sale subject to the Wisconsin Consumer Act. Accordingly, the
Attorney General alleges that we have failed to disclose credit terms,
misrepresented the terms of the transaction and engaged in unconscionable
practices. We currently operate 26 stores in Wisconsin.

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RENT-A-CENTER, INC. AND SUBSIDIARIES

The Attorney General seeks injunctive relief, restoration of any losses suffered
by any Wisconsin consumer harmed and civil forfeitures and penalties in amounts
ranging from $50 to $10,000 per violation. If the Attorney General's theory on
damages prevails, the Attorney General's claim for monetary penalties would
apply to at least 18,772 transactions through March 31, 2002. On October 31,
2001, the Attorney General filed a motion for summary judgment on several counts
in the complaint, including the principal claim that our rent-to-rent
transaction is governed by the Wisconsin Consumer Act. Our response was filed on
December 17, 2001. A pre-trial conference and hearing on the motion for summary
judgment took place on January 22, 2002, at which time the court ruled in favor
of the Attorney General's motion for summary judgment on the liability issues
and set the case for trial on damages for February 2003.

Since the filing of this suit, we have attempted to negotiate a mutually
satisfactory resolution of these claims with the Wisconsin Attorney General's
office, including the consideration of possible changes in our business
practices in Wisconsin. To date, we have not been successful, but our efforts
are ongoing. If we are unable to negotiate a settlement with the Attorney
General, we intend to litigate the suit. We cannot assure you, however, that the
outcome of this matter will not have a material adverse impact on our financial
position, results of operations or cash flows.

Gender Discrimination Actions. We are subject to three class action lawsuits
claiming gender discrimination. As described below, we have settled in principle
all of the claims covered by these three actions.

In September 1999, an action was filed against us in federal court in the
Western District of Tennessee by the U.S. Equal Employment Opportunity
Commission, alleging that we engaged in gender discrimination with respect to
four named females and other unnamed female employees and applicants within our
Tennessee and Arkansas region. The allegations underlying this EEOC action
involve charges of wrongful termination and denial of promotion, disparate
impact and failure to hire. The group of individuals on whose behalf EEOC seeks
relief is approximately seventy individuals.

In August 2000, a putative nationwide class action was filed against us in
federal court in East St. Louis, Illinois by Claudine Wilfong and eighteen other
plaintiffs, alleging that we engaged in class-wide gender discrimination
following our acquisition of Thorn Americas. The allegations underlying Wilfong
involve charges of wrongful termination, constructive discharge, disparate
treatment and disparate impact. In addition, the EEOC filed a motion to
intervene on behalf of the plaintiffs, which the court granted on May 14, 2001.
On December 27, 2001, the court granted the plaintiff's motion for class
certification.

In December 2000, similar suits filed by Margaret Bunch and Tracy Levings in
federal court in the Western District of Missouri were amended to allege class
action claims similar to those in Wilfong. In November 2001, we announced that
we had reached an agreement in principle for the settlement of the Bunch matter.
Under the terms of the Bunch settlement, while not admitting any liability, we
agreed to pay an aggregate of $12.25 million to the agreed upon class, plus
plaintiffs' attorneys fees as determined by the court and costs to administer
the settlement subject to an aggregate cap of $3.15 million. On November 29,
2001, the court in Bunch granted preliminary approval of the settlement and set
a fairness hearing on such settlement for March 6, 2002.

In early March 2002, we reached an agreement in principle with the plaintiffs
attorneys in Wilfong and the EEOC to resolve the Wilfong suit and the Tennessee
EEOC action. The definitive settlement agreement documents were filed with the
Wilfong court in June 2002, and the court granted preliminary approval of the
settlement on July 19, 2002.

Under the terms of the Wilfong settlement, while not admitting any liability, we
agreed to pay an aggregate of $47.0 million to approximately 6,000 female
employees and a yet to be determined number of female applicants who were
employed by or applied for employment with us during the period commencing on
April 19, 1998 and ending on June 19, 2002, plus up to $375,000 in settlement
administrative costs. The $47.0 million payment includes the $12.25 million
payment discussed in connection with the Bunch settlement. Attorney fees for
class counsel in Wilfong will be paid out of the $47.0 million settlement fund
in an amount to be determined by the court.

The settlement agreement contemplates the settlement would be subject to a
four-year consent decree, which could be extended by the court for an additional
one year upon a showing of good cause. Also, under the settlement agreement, we
agreed to augment our human resources department and our internal employee
complaint procedures; enhance our gender anti-discrimination training for all
employees; hire a consultant mutually acceptable to the parties for two years to
advise us on employment matters; provide certain reports to the EEOC during the
period of the consent decree; seek qualified female representation on our board
of directors; publicize our desire to recruit, hire and promote qualified women;
offer to fill job vacancies within our regional markets with qualified class
members who reside in those markets and express an interest in employment by us
to the extent of 10% of our job vacancies in such markets over a fifteen month
period; and to take certain other steps to improve opportunities for women. We
initiated many of the above programs prior to entering into the settlement
agreement.

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RENT-A-CENTER, INC. AND SUBSIDIARIES

Under the settlement agreement, we have the right to terminate the settlement
under certain circumstances, including in the event that more than 60 class
members elect to opt out of the settlement.

The Wilfong settlement contemplates that the Bunch case will be dismissed with
prejudice once such settlement becomes final. At the parties' request, the court
in the Bunch case stayed the proceedings in that case, including postponing the
fairness hearing previously scheduled for March 6, 2002. Similarly, the court in
the Tennessee EEOC action has stayed the proceeding in that case and the EEOC
has agreed to having the case dismissed once the Wilfong settlement is
finalized.

In June 2002, we separately agreed to contribute an additional $2.0 million to a
dispute resolution fund in which approximately 100 class members in Bunch will
participate. This dispute resolution fund has been approved by the Bunch court
and counsel to the plaintiffs in Bunch support the dispute resolution fund and
the Wilfong settlement preliminarily approved by the Wilfong court.

Notices have been mailed to the Wilfong class members. Members of the class who
do not wish to participate in the settlement have been given the opportunity to
opt out of the settlement. A fairness hearing has been scheduled for October 4,
2002. While we believe the proposed settlement is fair, we cannot assure you
that the settlement will be approved by the court in its present form.

Terry Walker, et. al. v. Rent-A-Center, Inc., et. al. On January 4, 2002, a
putative class action was filed against us and certain of our current and former
officers and directors by Terry Walker in federal court in Texarkana, Texas. The
complaint alleges that the defendants violated Sections 10(b) and/or Section
20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder by issuing false and misleading statements and omitting material
facts regarding our financial performance and prospects for the third and fourth
quarters of 2001. The complaint purports to be brought on behalf of all
purchasers of our common stock from April 25, 2001 through October 8, 2001 and
seeks damages in unspecified amounts. We anticipate that similar complaints will
be consolidated by the court with the Walker matter. We believe that these
claims are without merit and intend to vigorously defend ourselves. However, we
cannot assure you that we will be found to have no liability in this matter.

Gregory Griffin, et. al. v. Rent-A-Center, Inc. On June 25, 2002, a suit
originally filed by Gregory Griffin in state court in Philadelphia, Pennsylvania
was amended to seek relief both individually and on behalf of a class of
customers in Pennsylvania, alleging that we violated the Pennsylvania Goods and
Services Installment Sales Act and the Pennsylvania Unfair Trade Practices and
Consumer Protection Law. The amended complaint asserts that our rental purchase
transactions are, in fact, retail installment sales transactions, and as such,
are not governed by the Pennsylvania Rental-Purchase Agreement Act, which was
enacted after the adoption of the Pennsylvania Goods and Services Installment
Sales Act and the Pennsylvania Unfair Trade Practices Act. Griffin's suit seeks
class-wide remedies, including injunctive relief, unspecified statutory, actual
and treble damages, as well as attorney's fees and costs. Discovery in the case
is in its early stages. Although we believe that these claims are without merit,
a recent trial court decision in a similar case to which we were not a party
held that rental purchase transactions in Pennsylvania are in fact retail
installment sales transactions not governed by the Pennsylvania Rental-Purchase
Agreement Act. We strongly disagree with this decision. However, we cannot
assure you that we will be found to have no liability in this matter and we
intend to vigorously defend ourselves in this case.

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RENT-A-CENTER, INC. AND SUBSIDIARIES

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

At our Annual Meeting of Stockholders held on May 21, 2002, the nominees for our
Class II directors were elected. One Class II director was elected by all of our
stockholders and one Class II director was elected by the holders of our Series
A preferred stock.

The voting was as follows for the director elected by all of our stockholders:

The voting was as follows for the director elected by the holders of our Series
A preferred stock:

In addition to the directors elected at our Annual Meeting of Stockholders, the
following directors' terms of office as a director continued after the Annual
Meeting of Stockholders:

J.V. Lentell
Andrew S. Jhawar
Mitchell E. Fadel
Peter P. Copses

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

CURRENT REPORTS ON FORM 8-K

None.

EXHIBITS

The exhibits required to be furnished pursuant to Item 6 are listed in the
Exhibit Index filed herewith, which Exhibit Index is incorporated herein by
reference.

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RENT-A-CENTER, INC. AND SUBSIDIARIES

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the registrant has duly caused this Report to be signed on its behalf by the
undersigned duly authorized officer.

RENT-A-CENTER, INC.

By: /s/ Robert D. Davis
-----------------------------------
Robert D. Davis
Senior Vice President-Finance and
Chief Financial Officer

Date: August 12, 2002

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RENT-A-CENTER, INC. AND SUBSIDIARIES

INDEX TO EXHIBITS

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RENT-A-CENTER, INC. AND SUBSIDIARIES

- ----------

* Filed herewith.
+ Management contract or company plan or arrangement

(1) Incorporated herein by reference to Exhibit 3.2 to the registrant's Annual
Report on Form 10-K for the year ended December 31, 1994

(2) Incorporated herein by reference to Exhibit 3.2 to the registrant's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1996

(3) Incorporated herein by reference to Exhibit 3.3 to the registrant's
Quarterly Report on Form 10-Q for the quarter ended June 30, 2001

(4) Incorporated herein by reference to Exhibit 3.4 to the registrant's
Quarterly Report on Form 10-Q for the quarter ended March 31, 2002

(5) Incorporated herein by reference to Exhibit 4.1 to the registrant's Form
S-4 filed on January 19, 1999.

(6) Incorporated herein by reference to Exhibit 4.2 to the registrant's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1998

(7) Incorporated herein by reference to Exhibit 4.3 to the registrant's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1998

(8) Incorporated herein by reference to Exhibit 4.4 to the registrant's
Registration Statement Form S-4 filed on January 19, 1999

(9) Incorporated herein by reference to Exhibit 4.5 to the registrant's
Registration Statement Form S-4 filed on January 19, 1999

(10) Incorporated herein by reference to Exhibit 4.6 to the registrant's
Registration Statement Form S-4 filed on January 19, 1999

(11) Incorporated herein by reference to Exhibit 4.7 to the registrant's
Registration Statement Form S-4 filed on January 19, 1999

(12) Incorporated herein by reference to Exhibit 4.6 to the registrant's
Registration Statement on Form S-4 filed on January 22, 2002

(13) Incorporated herein by reference to Exhibit 4.9 to the registrant's
Quarterly Report on Form 10-Q for the quarter ended March 31, 2002

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RENT-A-CENTER, INC. AND SUBSIDIARIES

(14) Incorporated herein by reference to Exhibit 4.7 to the registrant's
Registration Statement on Form S-4 filed on January 22, 2002

(15) Incorporated herein by reference to Exhibit 10.1 to the registrant's
Registration Statement of Form S-4 filed on January 22, 2002

(16) Incorporated herein by reference to Exhibit 10.4 to the registrant's
Quarterly Report on Form 10-Q for the quarter ended June 30, 2000

(17) Incorporated herein by reference to Exhibit 10.5 to the registrant's
Quarterly Report on Form 10-Q for the quarter ended March 31, 2001

(18) Incorporated herein by reference to Exhibit 10.4 to the registrant's
Registration Statement on Form S-4 filed on January 22, 2002

(19) Incorporated herein by reference to Exhibit 10.5 to the registrant's
Quarterly Report on Form 10-Q for the quarter ended March 31, 2002

(20) Incorporated herein by reference to Exhibit 10.19 to the registrant's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1998

(21) Incorporated herein by reference to Exhibit 10.21 to the registrant's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1998

(22) Incorporated herein by reference to Exhibit 10.22 to the registrant's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1998

(23) Incorporated herein by reference to Exhibit 10.9 to the registrant's
Quarterly Report on Form 10-Q for the quarter ended September 30, 2001

(24) Incorporated herein by reference to Exhibit 10.9 to the registrant's
Registration Statement on Form S-4 filed on January 22, 2002

(25) Incorporated herein by reference to Exhibit 21.1 to the registrant's
Registration Statement on Form S-4 filed on January 19, 1999

34