We were able to deliver on our expectations this quarter and believe we are well positioned in our core business as we approach the closing and integration of the Rent-Way acquisition.
Mark E. Speese, Chairman and CEO, Rent-A-Center

Rent-A-Center (RCII) reported total revenues for the quarter ended September 30, 2006 of $587.2 million, a $13.7 million increase (2,4%) from $573.5 million for the same period in the prior year. The revenue increase was primarily driven by a 3.6% increase in same store sales.

Rent-A-Center also announced that it has reached a prospective settlement with the California Attorney General to resolve the inquiry received in the second quarter of 2004 regarding the Company’s business practices in California with respect to its cash prices and its membership program. See details

Reported net earnings for the quarter ended September 30, 2006 were $25.2 million, or $0.36 per diluted share, versus $11.3 million for the same period in 2005.

“Our same store sales increased 3.6% for the quarter, which is primarily related to changes in our promotional activities as well as an increase in the number of units on rent,” said Mark E. Speese, Rent-A-Center’s Chairman and Chief Executive Officer. “We were able to deliver on our expectations this quarter and believe we are well positioned in our core business as we approach the closing and integration of the Rent-Way acquisition,” Speese stated.

During the third quarter of 2006, Rent-A-Center opened 9 new rent-to-own store locations, acquired 10 stores as well as accounts from 15 additional locations and consolidated 17 stores into existing locations, for a net addition of two stores and an ending balance of 2,751 stores. During the third quarter of 2006, Rent-A-Center added financial services to 25 existing rent-to-own store locations, closed one location and ended the quarter with a total of 101 stores providing these services.

Since September 30, 2006, Rent-A-Center has opened two new rent-to-own store locations. Rent-A-Center has added financial services to 22 existing rent-to-own store locations since September 30, 2006.

Burdusis/French/Corso. As previously announced on August 10, 2006, Rent-A-Center has reached a prospective settlement with the plaintiffs to resolve the Jeremy Burdusis, et al. v. Rent-A-Center, Inc., et al./Israel French, et al. v. Rent-A-Center, Inc. and Kris Corso, et al. v. Rent-A-Center, Inc. pending in state court in Los Angeles, California. These matters allege violations by the Company of certain wage and hour laws of California. Under the terms contemplated, Rent-A-Center anticipates it will pay an aggregate of $4.95 million in cash, including plaintiff’s attorneys’ fees, to be distributed to an agreed-upon class of Company employees from August 1998 through the date of preliminary court approval of the settlement.

Rent A Center is not admitting liability for its wage and hour practices in California.

A hearing on a motion for preliminary approval of the settlement is currently scheduled for November 9, 2006. Rent-A-Center recorded a pre-tax expense of $4.95 million in the third quarter of 2006 to account for the aforementioned settlement amount and attorneys’ fees.

Rent-A-Center also announced that it has reached a prospective settlement with the California Attorney General to resolve the inquiry received in the second quarter of 2004 regarding the Company’s business practices in California with respect to its cash prices and its membership program.

Under the settlement terms, Rent-A-Center expects to create a restitution fund in the amount of approximately $9.6 million in cash, to be distributed to certain groups of customers who

1. Who entered into rental purchase agreements and acquired ownership of property under those rental purchase agreements between November 1, 2004 and the date of approval of the settlement.
2. Who entered into rental purchase agreements after November 1, 2004 that are still ongoing after the date of approval of the settlement.
3. Who purchased new memberships in the Rent-A-Center Preferred Customer Club between November 1, 2004 and the date of the approval of the settlement.

Restitution checks will contain a restrictive endorsement releasing Rent-A-Center from claims that arise from or relate to the cash price set forth in the rental purchase agreement and the customer’s purchase of the Preferred Customer Club.

Rent-A-Center also expects to enter into an injunction

• (i) limiting the cash price, total of payments and purchase option price in future rental purchase agreements to the specified limits on prices set forth in the recent amendment to the Karnette Rental-Purchase Act, which amendment became effective as of September 22, 2006, and
• (ii) governing certain business practices with respect to the Company’s club program.

In addition, Rent-A-Center anticipates causing the reserve amount in the Griego settlement fund to be paid to the Attorney General. Finally, the Company expects to agree to a civil penalty in the amount of $750,000.

Under the terms of the prospective settlement, any unclaimed restitution funds at the conclusion of the restitution period will be paid to the Attorney General, and made available for a limited period of time to resolve any similar claims filed against Rent-A-Center by its customers.

In connection with the prospective settlement, the Company is not admitting liability for its past business practices in California.

While Rent-A-Center believes that "the terms of these prospective settlements are fair", there can be no assurance that the settlements, if completed, will be approved by the applicable court in their present form.

Rent-A-Center will host a conference call to discuss the third quarter results on Tuesday morning, October 31, 2006, at 10:45 a.m. EST.

Rent-A-Center, Inc. operates 2,753 company-owned stores nationwide and in Canada and Puerto Rico.

FISCAL 2007 GUIDANCE (DOES NOT INCLUDE POTENTIAL RENT-WAY, INC. ACQUISITION):

Revenues

Rent-A-Center expects total revenues to be in the range of $2.420 billion and $2.450 billion.

Store rental and fee revenues are expected to be between $2.134 billion and $2.159 billion.

Total store revenues are expected to be in the range of $2.379 billion and $2.409 billion.

Same store sales are expected to be in the 1.0% to 2.0% range.

The Company expects to open 25-35 new store locations.

Rent-A-Center expects to add financial services to 200-250 rent-to-own store locations.
Expenses

Rent-A-Center expects cost of rental and fees to be between 21.7% and 22.1% of store rental and fee revenue and cost of merchandise sold to be between 70% and 75% of store merchandise sales.