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Georgia		58-0687630
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

W. Benjamin Barkley, Esq. David M. Eaton, Esq. Kilpatrick Stockton LLP 1100 Peachtree Street, N.E., Suite 2800 Atlanta, Georgia 30309-4530 (404) 815-6500		M. Hill Jeffries, Esq. Alston & Bird LLP One Atlantic Center 1201 West Peachtree Street Atlanta, Georgia 30309-3424 (404) 881-7000

Proposed Maximum

Proposed Maximum

Amount of

Title of Each Class of

Amount

Offering

Aggregate

Registration

Securities to be Registered

to be Registered(1)

Price per Share(2)

Offering Price(2)

Fee(2)

Common Stock, par value $.50 per share

4,600,000 shares

$

$

$

(1)	Includes 600,000 shares subject to the exercise of the underwriters’ over-allotment option.
(2)	In accordance with Rules 456(b) and 457(r) of the Securities Act, the registrant is deferring payment of all of the registration fee.

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The information in this prospectus is not complete and may be changed. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

		Per Share				Total
Public offering price		$				$
Underwriting discount		$				$
Proceeds, before expenses, to Aaron Rents		$				$
Proceeds, before expenses, to the selling shareholder		$				$

SunTrust Robinson Humphrey	Morgan Keegan & Company, Inc.

	Wachovia Securities

	BB&T Capital Markets

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		Page
Prospectus Summary			1
Risk Factors			6
Forward-Looking Statements			10
Price Range of Common Stock and Dividends			11
Use of Proceeds			12
Capitalization			13
Selected Financial and Operating Data			14
Management’s Discussion and Analysis of Financial Condition and Results of Operations			16
Business			30
Management			41
Selling Shareholder			44
Description of Capital Stock			44
Underwriting			48
Legal Matters			51
Experts			51
Incorporation of Certain Documents by Reference			51
Where You Can Find More Information			52
Index to Consolidated Financial Statements			F-1
EX-4.(D) AMENDMENT NO. 2 TO THE ARTICLES OF INCORPORATION
EX-4.(E) AMENDMENT NO. 3 TO ARTICLES OF INCORPORATION
EX-5 OPINION OF KILPATRICK STOCKTON LLP
EX-15 LETTER RE: UNAUDITED INTERIM FINANCIAL INFORMATION
EX-23.(A) CONSENT OF ERNST & YOUNG LLP

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	•	the substantial outlay of financial resources required to open new stores and initially operate them, and the availability of capital sources to finance new openings and initial operation;
	•	competition in existing and new markets;
	•	consumer demand, tastes and spending patterns in new markets that differ from those in our existing markets;
	•	difficulties associated with hiring, training and retaining additional skilled personnel, including store managers;
	•	challenges in adapting our distribution and other operational and management systems to an expanded network of stores; and
	•	our ability to identify suitable new store sites and to negotiate acceptable leases for these sites.

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	•	changes in competition;
	•	general economic conditions;
	•	new product introductions;
	•	consumer trends;
	•	changes in our merchandise mix;
	•	the impact of our new stores on our existing stores, including potential decreases in existing stores’ revenues as a result of opening new stores;
	•	timing of promotional events; and
	•	our ability to execute our business strategy effectively.

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		Common Stock
										Cash
										dividends per
		High				Low				share
Fiscal year ended
December 31, 2004
First quarter		$	17.13			$	13.44			$	—
Second quarter			22.11				16.13				.013
Third quarter			22.60				18.50				.013
Fourth quarter			25.23				21.15				.013
December 31, 2005
First quarter			25.15				19.20				.013
Second quarter			25.29				17.38				.013
Third quarter			25.73				19.62				.014
Fourth quarter			23.00				18.90				.014
December 31, 2006
First quarter			28.08				20.82				.014
Second quarter (through May 5, 2006)			28.50				25.80				.014

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	•	on an actual basis; and
	•	on an “as adjusted” basis to reflect our receipt of the estimated net proceeds from the sale by us in this offering of 3,000,000 shares of our common stock, assuming an offering price of $26.82 per share (the last reported sale price of our common stock on the New York Stock Exchange on May 5, 2006), after deducting the underwriting discount and estimated offering expenses payable by us, and giving effect to our use of a portion of such proceeds for the repayment of bank debt as described in “Use of Proceeds.”

				March 31, 2006
								As adjusted for
				Actual				this offering
				(In thousands,
				except share data)
Total interest-bearing debt(1)				$	200,611			$	124,574
Shareholders’ equity:
	Common stock, par value $.50 per share — 50,000,000(2) shares authorized; 44,989,602 shares issued, 47,989,602 shares issued as adjusted			$	22,495			$	23,995
	Class A common stock, par value $.50 per share — 25,000,000 shares authorized; 12,063,856 shares issued				6,032				6,032
	Additional paid-in capital				96,990				171,527
	Retained earnings				370,235				370,235
	Accumulated other comprehensive loss				(9	)			(9	)
Less: treasury shares at cost:
	Common stock, 2,899,350 shares				(17,580	)			(17,580	)
	Class A common stock, 3,667,623 shares				(15,904	)			(15,904	)
Total shareholders’ equity					462,259				538,296
		Total capitalization		$	662,870			$	662,870

(1)	Includes approximately $81.0 million outstanding under our revolving credit agreement as of March 31, 2006. As of May 5, 2006, approximately $80.1 million was outstanding under this agreement.
(2)	As of May 2, 2006, our shareholders approved an amendment to our articles of incorporation to increase the number of authorized shares of common stock to 100,000,000 shares.

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																							Three months
			Year ended December 31,																				ended March 31,
			2001				2002				2003				2004				2005				2005				2006
			(In thousands, except per share data)
Statement of Earnings Data:
Revenues:
	Rentals and fees		$	403,385			$	459,179			$	553,773			$	694,293			$	845,162			$	209,145			$	254,246
	Retail sales			60,481				72,698				68,786				56,259				58,366				16,043				19,170
	Non-retail sales			66,212				88,969				120,355				160,774				185,622				45,571				64,027
	Franchise royalties and fees			13,620				16,595				19,328				25,093				29,474				7,191				8,223
	Other			2,983				3,247				4,555				10,061				6,881				1,398				1,621
				546,681				640,688				766,797				946,480				1,125,505				279,348				347,287
Costs and expenses:
	Retail cost of sales			43,987				53,856				50,913				39,380				39,054				10,736				12,406
	Non-retail cost of sales			61,999				82,407				111,714				149,207				172,807				42,633				59,791
	Operating expenses			276,682				293,346				344,884				414,518				507,158				119,631				143,956
	Depreciation of rental merchandise			137,900				162,660				195,661				253,456				305,630				75,130				93,281
	Interest			6,258				4,767				5,782				5,413				8,519				1,600				3,222
				526,826				597,036				708,954				861,974				1,033,168				249,730				312,656
Earnings before income taxes				19,855				43,652				57,843				84,506				92,337				29,618				34,631
Income taxes				7,519				16,212				21,417				31,890				34,344				11,196				13,070
Net earnings			$	12,336			$	27,440			$	36,426			$	52,616			$	57,993			$	18,422			$	21,561
Earnings per common share:
	Basic		$	.28			$	.58			$	.74			$	1.06			$	1.16			$	.37			$	.43
	Assuming dilution			.27				.57				.73				1.04				1.14				.36				.42
Weighted average common shares outstanding:
	Basic			44,838				47,046				48,964				49,602				49,846				49,767				50,185
	Assuming dilution			45,320				47,775				49,783				50,575				50,805				50,747				51,085
Dividends per common share			$	.018			$	.018			$	.022			$	.039			$	.054			$	.013			$	.014

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																							Three months
			Year ended December 31,																				ended March 31,
			2001				2002				2003				2004				2005				2005				2006
			(Dollars in thousands)
Revenues by Operating Unit:
Sales and lease ownership			$	380,404			$	501,390			$	634,489			$	804,723			$	975,026			$	240,618			$	307,072
Corporate furnishings				150,002				119,885				109,083				108,453				117,476				30,185				32,283
Franchise				13,913				16,663				19,347				25,253				29,781				7,270				8,328
Stores Open at End of Period:
Sales and lease ownership:
	Company-operated			364				412				500				616				748				646				764
	Franchised			209				232				287				357				392				361				400
	Systemwide			573				644				787				973				1,140				1,007				1,164
Corporate furnishings				75				70				60				58				58				58				59
	Total stores			648				714				847				1,031				1,198				1,065				1,223
Other Sales and Lease Ownership Data:
Same store revenue growth				8.1%				6.9%				12.8%				11.6%				8.3%				8.3%				10.7%
Number of customers				203,653				243,662				314,408				386,865				468,228				409,046				480,812

																						As of
		As of December 31,																				March 31,
		2001				2002				2003				2004				2005				2006
		(In thousands)
Balance Sheet Data:
Rental merchandise, net		$	258,932			$	317,287			$	343,013			$	425,567			$	550,932			$	569,140
Property, plant and equipment, net			77,282				87,094				99,584				111,118				133,759				134,367
Total assets			403,881				487,468				559,884				700,288				858,515				882,630
Interest-bearing debt			77,713				73,265				79,570				116,655				211,873				200,611
Shareholders’ equity			219,967				280,545				320,186				375,178				434,471				462,259

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			Three months ended
			March 31,								Increase in				% Increase to
											dollars to 2006				2006 from
			2006				2005				from 2005				2005
			(Dollars in thousands)
Revenues:
	Rentals and fees		$	254,246			$	209,145			$	45,101				21.6	%
	Retail sales			19,170				16,043				3,127				19.5
	Non-retail sales			64,027				45,571				18,456				40.5
	Franchise royalties and fees			8,223				7,191				1,032				14.4
	Other			1,621				1,398				223				16.0
				347,287				279,348				67,939				24.3
Costs and expenses:
	Retail cost of sales			12,406				10,736				1,670				15.6
	Non-retail cost of sales			59,791				42,633				17,158				40.2
	Operating expenses			143,956				119,631				24,325				20.3
	Depreciation of rental merchandise			93,281				75,130				18,151				24.2
	Interest			3,222				1,600				1,622				101.4
				312,656				249,730				62,926				25.2
Earnings before income taxes				34,631				29,618				5,013				16.9
Income taxes				13,070				11,196				1,874				16.7
Net earnings			$	21,561			$	18,422			$	3,139				17.0	%

	Three months ended March 31, 2006 compared with three months ended March 31, 2005

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	Year ended December 31, 2005 compared with year ended December 31, 2004

											Increase/				% Increase/
			Years ended December 31,								(decrease) in				(decrease) to
											dollars to 2005				2005 from
			2005				2004				from 2004				2004
			(Dollars in thousands)
Revenues:
	Rentals and fees		$	845,162			$	694,293			$	150,869				21.7	%
	Retail sales			58,366				56,259				2,107				3.7
	Non-retail sales			185,622				160,774				24,848				15.5
	Franchise royalties and fees			29,474				25,093				4,381				17.5
	Other			6,881				10,061				(3,180	)			(31.6	)
				1,125,505				946,480				179,025				18.9
Costs and expenses:
	Retail cost of sales			39,054				39,380				(326	)			(0.8	)
	Non-retail cost of sales			172,807				149,207				23,600				15.8
	Operating expenses			507,158				414,518				92,640				22.3
	Depreciation of rental merchandise			305,630				253,456				52,174				20.6
	Interest			8,519				5,413				3,106				57.4
				1,033,168				861,974				171,194				19.9
Earnings before income taxes				92,337				84,506				7,831				9.3
Income taxes				34,344				31,890				2,454				7.7
Net earnings			$	57,993			$	52,616			$	5,377				10.2	%

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	Year ended December 31, 2004 compared with year ended December 31, 2003

											Increase/				% Increase/
			Year ended December 31,								(decrease) in				(decrease) to
											dollars to 2004				2004 from
			2004				2003				from 2003				2003
			(Dollars in thousands)
Revenues:
	Rentals and fees		$	694,293			$	553,773			$	140,520				25.4	%
	Retail sales			56,259				68,786				(12,527	)			(18.2	)
	Non-retail sales			160,774				120,355				40,419				33.6
	Franchise royalties and fees			25,093				19,328				5,765				29.8
	Other			10,061				4,555				5,506				120.9
				946,480				766,797				179,683				23.4
Costs and expenses:
	Retail cost of sales			39,380				50,913				(11,533	)			(22.7	)
	Non-retail cost of sales			149,207				111,714				37,493				33.6
	Operating expenses			414,518				344,884				69,634				20.2
	Depreciation of rental merchandise			253,456				195,661				57,795				29.5
	Interest			5,413				5,782				(369	)			(6.4	)
				861,974				708,954				153,020				21.6
Earnings before income taxes				84,506				57,843				26,663				46.1
Income taxes				31,890				21,417				10,473				48.9
Net earnings			$	52,616			$	36,426			$	16,190				44.4	%

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	•	cash flow from operations;
	•	bank credit;
	•	trade credit with vendors;
	•	proceeds from the sale of rental return merchandise;
	•	private debt offerings; and
	•	stock offerings.

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	Commitments

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						Period less				Period 2-3				Period 4-5				Period over
		Total				than 1 year				years				years				5 years
		(In thousands)
Credit facilities, excluding capital leases		$	184,366			$	10,004			$	125,048			$	34,012			$	15,302
Capital leases			16,244				645				1,681				2,095				11,823
Operating leases			244,216				67,576				94,264				41,517				40,859
Total contractual cash obligations		$	444,826			$	78,225			$	220,993			$	77,624			$	67,984

		Total
		amounts				Period less				Period 2-3				Period 4-5				Period over
		committed				than 1 Year				years				years				5 years
		(In thousands)
Guaranteed borrowings of franchisees		$	105,577			$	105,577				$ —				$ —				$ —
Residual value guarantee under operating leases			20,858				20,858				—				—				—
Total commercial commitments		$	126,435			$	126,435				$ —				$ —				$ —

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	•	allows us to grow more quickly;
	•	enables us to achieve economies of scale in purchasing, distribution, manufacturing and advertising for our sales and lease ownership stores;
	•	increases exposure to our brand; and
	•	provides additional revenues from franchise fees and royalties.

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	The Rent-to-Own Industry

	Aaron’s Sales & Lease Ownership versus Traditional Rent-to-Own

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	•	Lower total cost — our agreement terms typically provide a lower cost of ownership to the customer.
	•	Wider merchandise selection — we generally offer a larger selection of higher-quality merchandise.
	•	Larger store layout — our stores are typically 9,000 square feet, nearly twice the size of typical rent-to-own stores.
	•	Fewer payments — our typical plan offers semi-monthly or monthly payments versus the industry standard of weekly payments. Our agreements also usually provide for a shorter term until the customer obtains ownership.
	•	Flexible payment methods — we offer our customers the opportunity to pay by cash, check, credit card or debit card, compared with the more common cash payment method at rent-to-own stores. We receive approximately 47% of our payment volume (in dollars) from customers by check, credit card or debit card.

	The Rent-to-Rent Industry

	•	individuals seeking to rent furnishings for their own homes and apartments;
	•	apartment complex managers seeking to provide furnished apartments; and
	•	third party companies that provide interim housing for their corporate clients.

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	•	Differentiate our Aaron’s Sales & Lease Ownership concept. We believe that the success of our sales and lease ownership operation is attributable to our distinctive approach to the business that sets us apart from our rent-to-own and credit retail competitors. We have pioneered innovative approaches to meeting changing customer needs that differ from our competitors’, such as offering lease ownership agreements which result in a lower “all-in” price, larger and more attractive store showrooms, a wider selection of higher-quality merchandise and up-front cash and carry purchase options on select merchandise at prices that are competitive with traditional retailers. Most sales and lease ownership customers make their payments in person, and we use these frequent visits to strengthen customer relationships and make these customers feel welcome in our stores.
	•	Offer high levels of customer service and satisfaction. We foster good relationships with our customers to attract recurring business and encourage them to rent merchandise for the full agreement term by providing high levels of service and satisfaction. We demonstrate our commitment to superior customer service by providing customers quick delivery of rented merchandise, in many cases by same or next day delivery, and repair service at no charge to the customer. We have also established an employee training program called Aaron’s University, which is a 30-course curriculum designed to enhance the customer relations skills of both company-operated and franchised store managers.
	•	Promote our vendors and the Aaron’s brand name. Our marketing programs target the prime customer base for our products, such as our brand name “Dream Products” merchandise, which we advertise through our “Drive Dreams Home” sponsorship of NASCAR championship racing. Sponsorship of other sporting events, such as arena football, NBA basketball, major league baseball and various college sports, also reaches this market. We typically distribute mass mailings of promotional material outlining specific products every two weeks, with the goal of reaching households within a specified radius of each store at least 24 times per year. We currently mail over 20 million flyers monthly to consumers in areas served by our stores. We also utilize local television and radio advertising in concentrated geographic markets and for special promotions.
	•	Manage merchandise through our manufacturing and distribution capabilities. We believe that our furniture manufacturing operations and network of 16 fulfillment centers at March 31, 2006 give us a strategic advantage over our competitors. Manufacturing enables us to control the quality, cost, delivery, styling, durability and quantity of a substantial portion of our furniture merchandise, and provides us a reliable source of furniture. Our distribution system allows us to deliver merchandise promptly to our stores in order to meet customer demand quickly and manage inventory levels more effectively. We expect to open one additional fulfillment center in 2006.
	•	Utilize proprietary management information systems. We use proprietary computerized information systems to pursue systematically collections and merchandise returns and to match inventory with demand. Each of our stores, including franchised sales and lease ownership stores, is linked by computer directly to our corporate headquarters, which enables us to monitor the performance of each store on a daily basis. Our separate systems are tailored to meet the distinct needs of our sales and lease ownership and corporate furnishings operations.

	•	Open additional company-operated sales and lease ownership stores. We plan to open sales and lease ownership stores in existing and select new geographic markets. Additional stores help us to realize economies of scale in purchasing, management, marketing and distribution. We opened 82 company-

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		operated store locations in 2005 and expect to open approximately 90 company-operated stores in 2006.
	•	Increase our sales and lease ownership franchises. We believe that our franchise program allows us to grow more quickly and increase our brand exposure in new markets. In addition, the combination of company-operated and franchised stores creates a larger store base that enhances the economies of scale in purchasing, distribution, manufacturing and advertising for our sales and lease ownership stores. Franchise fees and royalties also represent a growing source of company revenues. In 2005, we opened 71 franchised locations and had a pipeline at March 31, 2006 of 250 franchise stores scheduled to open over the next few years. We anticipate our franchisees will open approximately 65 franchised sales and lease ownership stores in 2006.
	•	Increase revenues and net earnings from existing sales and lease ownership stores. We experienced same store revenue growth for our existing company-operated sales and lease ownership stores of 12.8% in 2003, 11.6% in 2004, 8.3% in 2005 and 10.7% for the first quarter of 2006. We calculate same store revenue growth by comparing revenues from comparable periods for all stores open during the entirety of those periods, excluding stores that received rental agreements from other acquired, closed or merged stores. We expect revenues and net earnings of our sales and lease ownership division to continue to grow as the large number of stores opened in the past few years become more established.
	•	Seek selective acquisitions in both new and existing sales and lease ownership markets. We will continue to explore acquisitions of other rent-to-own operations and select company franchisees from time to time. In 2005, we acquired the rental agreements, merchandise and assets of 96 sales and lease ownership locations. Some of these locations were subsequently merged with existing locations, resulting in 56 new stores.

	Sales and Lease Ownership

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	Sales and Lease Ownership Franchise Program

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	Corporate Furnishings

	Furniture Manufacturing

	•	upholstered living-room furniture, including contemporary sofas, sofabeds, chairs and modular sofa and ottoman collections in a variety of natural and synthetic fabrics;
	•	bedding, including standard sizes of mattresses and box springs;
	•	office furniture, including desks, credenzas, conference tables, bookcases and chairs; and
	•	designer lamps, tables and accessories, which we also manufacture for select retailers.

	•	standardization of components;
	•	reduction of parts and features susceptible to wear or damage;
	•	more resilient foam;

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	•	durable, soil-resistant fabrics and sturdy frames for longer life and higher residual value; and
	•	devices that allow sofas to stand on end for easier and more efficient transport.

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	Management

	•	customer and credit relations;
	•	deliveries and pickups;
	•	warehouse and inventory management; and
	•	certain marketing efforts.

	•	purchasing;
	•	financial planning and control;
	•	franchise operations;
	•	manufacturing;
	•	employee training;
	•	new store site selection and construction for company-operated stores;
	•	long range and strategic planning;
	•	organizational issues; and
	•	acquisitions.

	Management Information Systems

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	Rental Agreement Approval, Renewal and Collection

	Customer Service

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		Percentage of
		2005
Merchandise Category		Revenues
Electronics			37	%
Computers			13	%
Furniture			33	%
Appliances			15	%
Other			2	%

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Name		Age				Position
R. Charles Loudermilk, Sr.			78			Chairman of the Board of Directors and Chief Executive Officer
Robert C. Loudermilk, Jr.			46			President, Chief Operating Officer and Director
Gilbert L. Danielson			59			Executive Vice President, Chief Financial Officer and Director
William K. Butler, Jr.			53			President of Aaron’s Sales & Lease Ownership Division and Director
James L. Cates			55			Senior Group Vice President and Secretary
Eduardo Quinones			45			President of Aaron’s Corporate Furnishings Division
Christopher M. Champion			35			Vice President, General Counsel
B. Lee Landers			47			Vice President, Chief Information Officer
Robert P. Sinclair, Jr.			44			Vice President, Corporate Controller
Mitchell S. Paull			47			Senior Vice President, Merchandising and Logistics, Aaron’s Sales & Lease Ownership Division
K. Todd Evans			42			Vice President, Franchising
Marc S. Rogovin			46			Vice President, Real Estate and Construction
Ronald W. Allen+			64			Director
Leo Benatar*•			76			Director
Earl Dolive+			88			Director
David L. Kolb+•			67			Director
Ray M. Robinson*			58			Director
John Schuerholz			65			Director

*	Member of the compensation committee

•	Member of the special committee on corporate governance

41

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42

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43

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Before the Offering

After the Offering

Class of

Shares

Percent of

Shares to

Shares

Percent of

Common

Beneficially

Class

be Sold in

Beneficially

Class

Shareholder

Stock

Owned

Outstanding

Offering

Owned

Outstanding

R. Charles Loudermilk, Sr.

Class A

5,312,441

63.27

%

—

5,312,441

63.27

%

Common

2,627,378

6.24

%

1,000,000

1,627,378

3.61

%

	•	by resolution of the board of directors if either the common stock or Class A common stock is excluded from listing on any national securities exchange on which it is then traded because of the existence of the common stock; or
	•	automatically if the number of outstanding shares of Class A common stock falls below 10% of the total number of outstanding shares of both the common stock and Class A common stock.

	Voting

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	•	adversely changing the designation, rights, preferences or limitations of the common stock;
	•	modifying, in any manner that may adversely affect the common stock, the common stock protection feature described below; and
	•	decreasing the aggregate number of authorized shares of common stock below the number of shares of common stock outstanding at that time.

	Dividends and Other Distributions

	•	payment of cash dividends to the holders of our common stock without paying any dividend on the Class A common stock; and
	•	payment of cash dividends on the common stock that are higher (but in no event lower) than any dividend paid on the Class A common stock.

	•	in shares of common stock to the holders of both Class A common stock and common stock;
	•	in shares of Class A common stock to the holders of Class A common stock, and in shares of common stock to the holders of common stock; and
	•	in any other authorized class or series of capital stock to the holders of both classes of common stock.

	Mergers, Consolidations and Share Exchanges

	The Common Stock Protection Feature

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	Convertibility

	•	by resolution of the board of directors if either the common stock or the Class A common stock is excluded from trading on any national securities exchange on which it is then traded because of the existence of the common stock; or

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	•	automatically if the number of outstanding shares of Class A common stock falls below 10% of the total number of outstanding shares of both the common stock and Class A common stock.

	Preemptive Rights

	•	any appropriation, in violation of the director’s duties, of any business opportunity of the company;
	•	acts or omissions which involve intentional misconduct or a knowing violation of law;
	•	unlawful corporate distributions; or
	•	any transaction from which the director received an improper benefit.

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			Number of
Underwriters			Shares
SunTrust Capital Markets, Inc.
Morgan Keegan & Company, Inc.
Stifel, Nicolaus & Company, Incorporated
Wachovia Capital Markets, LLC
BB&T Capital Markets,
	A Division of Scott & Stringfellow, Inc.
Total				4,000,000

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Total

Per Share

Without Option

With Option

Underwriting discount payable by us

$

$

$

Underwriting discount payable by the selling shareholder

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	•	Over-allotment involves sales by the underwriters of shares in excess of the number of shares the underwriters are obligated to purchase, which creates a syndicate short position. The short position may be either a covered short position or a naked short position. In a covered short position, the number of shares over-allotted by the underwriters is not greater than the number of shares that they may purchase in the over-allotment option. In a naked short position, the number of shares involved is greater than the number of shares in the over-allotment option. The underwriters may close out any short position by either exercising their over-allotment option, in whole or in part, or purchasing shares in the open market.
	•	Syndicate covering transactions involve purchases of the common stock in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of shares to close out the short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option. If the underwriters sell more shares than could be covered by the over-allotment option, a naked short position, the position can only be closed out by buying shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there could be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in the offering.
	•	Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specific maximum.
	•	Penalty bids permit the underwriters to reclaim a selling concession from a syndicate member when the common stock originally sold by the syndicate member is purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions.

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	•	our annual report on Form 10-K for the year ended December 31, 2005 filed with the SEC on March 15, 2006;
	•	our quarterly report on Form 10-Q for the three months ended March 31, 2006 filed with the SEC on May 9, 2006;
	•	our current reports on Form 8-K filed with the SEC on February 1, 2006 and February 27, 2006;
	•	the description of our capital stock contained in our registration statement on Form 8-A filed with the SEC on March 10, 1998 pursuant to Section 12(b) of the Securities Exchange Act of 1934, and any amendment or report subsequently filed by us for the purpose of updating the description; and

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	•	all documents we subsequently file pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the date of this prospectus and before this offering terminates.

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Unaudited Consolidated Financial Statements
Report of Independent Public Accounting Firm on the Consolidated Financial Statements			F-2
Consolidated Balance Sheets			F-3
Consolidated Statements of Earnings			F-4
Consolidated Statements of Cash Flows			F-5
Notes to Unaudited Consolidated Financial Statements			F-6
Audited Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm on the Consolidated Financial Statements			F-13
Management Report on Internal Control over Financial Reporting			F-14
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting			F-15
Consolidated Balance Sheets			F-16
Consolidated Statements of Earnings			F-17
Consolidated Statements of Shareholders’ Equity			F-18
Consolidated Statements of Cash Flows			F-19
Notes to Audited Consolidated Financial Statements			F-20

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	/s/ Ernst & Young LLP

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				March 31,
				2006				December 31,
				(Unaudited)				2005
				(In thousands, except
				share data)
ASSETS:
Cash				$	6,179			$	6,973
Accounts Receivable (net of allowances of $2,085 in 2006 and $2,742 in 2005)					43,563				42,812
Rental Merchandise					832,300				811,335
Less: Accumulated Depreciation					(263,160	)			(260,403	)
					569,140				550,932
Property, Plant and Equipment, Net					134,367				133,759
Goodwill and Other Intangibles, Net					103,027				101,085
Prepaid Expenses and Other Assets					26,354				22,954
		Total Assets		$	882,630			$	858,515
LIABILITIES & SHAREHOLDERS’ EQUITY:
Accounts Payable and Accrued Expenses				$	121,696			$	112,817
Dividends Payable					704				699
Deferred Income Taxes Payable					73,385				75,197
Customer Deposits and Advance Payments					23,975				23,458
Credit Facilities					200,611				211,873
		Total Liabilities			420,371				424,044
Commitments & Contingencies
Shareholders’ Equity
	Common Stock, Par Value $.50 Per Share; Authorized: 50,000,000 Shares; Shares Issued: 44,989,602 at March 31, 2006 and December 31, 2005				22,495				22,495
	Class A Common Stock, Par Value $.50 Per Share; Authorized: 25,000,000 Shares; Shares Issued: 12,063,856 at March 31, 2006 and December 31, 2005				6,032				6,032
	Additional Paid-in Capital				96,990				92,852
	Retained Earnings				370,235				349,377
	Accumulated Other Comprehensive Loss				(9	)			(14	)
					495,743				470,742
Less: Treasury Shares at Cost,
	Common Stock, 2,899,350 Shares at March 31, 2006 and 3,358,521 Shares at December 31, 2005				(17,580	)			(20,367	)
	Class A Common Stock, 3,667,623 Shares at March 31, 2006 and December 31, 2005				(15,904	)			(15,904	)
		Total Shareholders’ Equity			462,259				434,471
Total Liabilities & Shareholders’ Equity				$	882,630			$	858,515

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			Three Months Ended
			March 31,
			2006				2005
			(In thousands, except per
			share data)
			(Unaudited)
REVENUES:
	Rentals and Fees		$	254,246			$	209,145
	Retail Sales			19,170				16,043
	Non-Retail Sales			64,027				45,571
	Franchise Royalties and Fees			8,223				7,191
	Other			1,621				1,398
				347,287				279,348
COSTS AND EXPENSES:
	Retail Cost of Sales			12,406				10,736
	Non-Retail Cost of Sales			59,791				42,633
	Operating Expenses			143,956				119,631
	Depreciation of Rental Merchandise			93,281				75,130
	Interest			3,222				1,600
				312,656				249,730
EARNINGS BEFORE INCOME TAXES				34,631				29,618
INCOME TAXES				13,070				11,196
NET EARNINGS			$	21,561			$	18,422
COMMON STOCK AND CLASS A COMMON STOCK EARNINGS PER SHARE:
	Basic		$	.43			$	.37
	Assuming Dilution			.42				.36
CASH DIVIDENDS DECLARED PER SHARE:
	Common Stock		$	.014			$	.013
	Class A Common Stock			.014				.013
COMMON STOCK AND CLASS A COMMON STOCK WEIGHTED AVERAGE SHARES OUTSTANDING:
	Basic			50,185				49,767
	Assuming Dilution			51,085				50,747

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				Three Months Ended
				March 31,
				2006				2005
				(In thousands)
				(Unaudited)
OPERATING ACTIVITIES:
	Net Earnings			$	21,561			$	18,422
	Depreciation and Amortization				100,643				81,805
	Additions to Rental Merchandise				(187,164	)			(140,294	)
	Book Value of Rental Merchandise Sold or Disposed				76,837				56,308
	Change in Deferred Income Taxes				(1,812	)			(1,702	)
	Loss on Sale of Property, Plant, and Equipment				14				7
	Change in Income Tax Receivable, Prepaid Expenses and Other Assets				(1,042	)			15,095
	Change in Accounts Payable and Accrued Expenses				9,068				25,220
	Change in Accounts Receivable				(751	)			(4,038	)
	Other Changes, Net				(961	)			(501	)
		Cash Provided by Operating Activities			16,393				50,322
INVESTING ACTIVITIES:
	Additions to Property, Plant and Equipment				(16,261	)			(10,551	)
	Contracts and Other Assets Acquired				(3,248	)			(9,869	)
	Proceeds from Sale of Marketable Securities				—				9
	Proceeds from Sale of Property, Plant, and Equipment				8,804				1,013
		Cash Used by Investing Activities			(10,705	)			(19,398	)
FINANCING ACTIVITIES:
	Proceeds from Credit Facilities				154,241				30,534
	Repayments on Credit Facilities				(165,503	)			(62,288	)
	Dividends Paid				(698	)			(647	)
	Excess Tax Benefits From Stock Option Exercise				3,026				—
	Issuance of Stock Under Stock Option Plans				2,452				85
		Cash Used by Financing Activities			(6,482	)			(32,316	)
Decrease in Cash					(794	)			(1,392	)
	Cash at Beginning of Period				6,973				5,865
	Cash at End of Period			$	6,179			$	4,473

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	Accounting Policies and Estimates

	Rental Merchandise

	Goodwill and Other Intangibles

	Stock Compensation

F-6

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		Three Months Ended
		March 31, 2005
		(In thousands,
		except share data)
Net Earnings before effect of Key Executive grants		$	18,554
Expense effect of Key Executive grants recognized			(132	)
Net Earnings as Reported			18,422
Stock-based Employee Compensation Cost, Net of Tax — Pro Forma			(496	)
Pro Forma Net Earnings		$	17,926
Basic Earnings Per Share — As Reported		$	.37
Basic Earnings Per Share — Pro Forma		$	.36
Diluted Earnings Per Share — As Reported		$	.36
Diluted Earnings Per share — Pro Forma		$	.35

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		Options Outstanding												Options Exercisable
						Weighted Average
						Remaining
		Number Outstanding				Contractual Life				Weighted Average				Number Exercisable				Weighted Average
Range of Exercise Prices		March 31, 2006				(In Years)				Exercise Price				March 31, 2006				Exercise Price
$ 4.38 - 10.00			1,162,626				4.48			$	6.98				1,162,626			$	6.98
10.01 - 15.00			687,750				7.77				14.02				3,000				13.49
15.01 - 20.00			108,750				7.53				15.60				—				—
20.01 - 24.94			595,146				8.62				22.41				2,000				21.84
$ 4.38 - 24.94			2,554,272				6.46			$	12.84				1,167,626			$	7.02

											Weighted Average
							Weighted Average				Remaining				Aggregate Intrinsic				Weighted Average
			Options				Exercise Price				Contractual Term				Value				Fair Value
			(In thousands)												(In thousands)
Outstanding at January 1, 2006				3,026			$	11.73							$	46,726			$	4.01
	Granted			—				—								—				—
	Exercised			(459	)			5.34								(9,502	)			2.84
	Forfeited			(13	)			19.92								(95	)			5.21
Outstanding at March 31, 2006				2,554			$	12.84				6.46 years			$	36,611			$	4.72
Exercisable at March 31, 2006				1,168			$	7.02				4.47 years			$	23,529			$	2.96

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	Income Taxes

		Three Months Ended
		March 31,
		2006				2005
		(In thousands)
Net Earnings		$	21,561			$	18,422
Other Comprehensive Income:
Derivative Instruments, Net of Taxes			—				120
Unrealized (Loss) Gain on Marketable Securities, Net of Taxes			(6	)			82
Total Other Comprehensive Income			(6	)			202
Comprehensive Income		$	21,555			$	18,624

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		Three Months Ended
		March 31,
		2006				2005
		(In thousands)
Revenues From External Customers:
Sales and Lease Ownership		$	307,072			$	240,618
Corporate Furnishings			32,283				30,185
Franchise			8,328				7,270
Other			1,853				1,199
Manufacturing			21,872				25,949
Elimination of Intersegment Revenues			(21,793	)			(25,963	)
Cash to Accrual Adjustments			(2,328	)			90
Total Revenues From External Customers		$	347,287			$	279,348
Earnings Before Income Taxes:
Sales and Lease Ownership		$	28,264			$	21,213
Corporate Furnishings			3,923				3,642
Franchise			6,125				5,404
Other			(1,464	)			(623	)
Manufacturing			61				587
Earnings Before Income Taxes for Reportable Segments			36,909				30,223
Elimination of Intersegment (Profit)			(7	)			(530	)
Cash to Accrual and Other Adjustments			(2,271	)			(75	)
Total Earnings Before Income Taxes		$	34,631			$	29,618

	•	A predetermined amount of approximately 2.3% of each reportable segment’s revenues is charged to the reportable segment as an allocation of corporate overhead.
	•	Accruals related to store closures are not recorded on the reportable segment’s financial statements, but are rather maintained and controlled by corporate headquarters.
	•	The capitalization and amortization of manufacturing and distribution variances are recorded on the consolidated financial statements as part of Cash to Accrual and Other Adjustments and are not allocated to the segment that holds the related rental merchandise.
	•	Advertising expense in the sales and lease ownership division is estimated at the beginning of each year and then allocated to the division ratably over time for management reporting purposes. For financial reporting purposes, advertising expense is recognized when the related advertising activities occur. The difference between these two methods is reflected as part of Cash to Accrual and Other Adjustments.
	•	Sales and lease ownership rental merchandise write-offs are recorded using the direct write-off method for management reporting purposes. For financial reporting purposes the allowance method is used and is reflected as part of Cash to Accrual and Other Adjustments.

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	•	Interest on borrowings is estimated at the beginning of each year. Interest is then allocated to operating segments on the basis of relative total assets.
	•	Sales and lease ownership revenues are reported on a cash basis for management reporting purposes.

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	/s/ Ernst & Young LLP

F-13

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F-14

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	/s/ Ernst & Young LLP

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			December 31,				December 31,
			2005				2004
			(In thousands, except share
			data)
ASSETS:
Cash			$	6,973			$	5,865
Accounts Receivable (net of allowances of $2,742 in 2005 and $1,963 in 2004)				42,812				32,736
Rental Merchandise				811,335				639,192
Less: Accumulated Depreciation				(260,403	)			(213,625	)
				550,932				425,567
Property, Plant and Equipment, Net				133,759				111,118
Goodwill and Other Intangibles, Net				101,085				74,874
Prepaid Expenses and Other Assets				22,954				50,128
Total Assets			$	858,515			$	700,288
LIABILITIES & SHAREHOLDERS’ EQUITY:
Accounts Payable and Accrued Expenses			$	112,817			$	93,565
Dividends Payable				699				647
Deferred Income Taxes Payable				75,197				95,173
Customer Deposits and Advance Payments				23,458				19,070
Credit Facilities				211,873				116,655
Total Liabilities				424,044				325,110
Commitments & Contingencies
Shareholders’ Equity:
	Common Stock, Par Value $.50 Per Share; Authorized: 50,000,000 Shares; Shares Issued: 44,989,602 at December 31, 2005 and 2004			22,495				22,495
	Class A Common Stock, Par Value $.50 Per Share; Authorized: 25,000,000 Shares; Shares Issued: 12,063,856 at December 31, 2005 and 2004			6,032				6,032
	Additional Paid-in Capital			92,852				91,032
	Retained Earnings			349,377				294,077
	Accumulated Other Comprehensive Loss			(14	)			(539	)
				470,742				413,097
Less: Treasury Shares at Cost,
	Common Stock, 3,358,521 and 3,625,230 Shares at December 31, 2005 and 2004, respectively			(20,367	)			(22,015	)
	Class A Common Stock, 3,667,623 Shares at December 31, 2005 and 2004			(15,904	)			(15,904	)
Total Shareholders’ Equity				434,471				375,178
Total Liabilities & Shareholders’ Equity			$	858,515			$	700,288

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			Year Ended				Year Ended				Year Ended
			December 31,				December 31,				December 31,
			2005				2004				2003
			(In thousands, except per share)
REVENUES:
	Rentals and Fees		$	845,162			$	694,293			$	553,773
	Retail Sales			58,366				56,259				68,786
	Non-Retail Sales			185,622				160,774				120,355
	Franchise Royalties and Fees			29,474				25,093				19,328
	Other			6,881				10,061				4,555
				1,125,505				946,480				766,797
COSTS AND EXPENSES:
	Retail Cost of Sales			39,054				39,380				50,913
	Non-Retail Cost of Sales			172,807				149,207				111,714
	Operating Expenses			507,158				414,518				344,884
	Depreciation of Rental Merchandise			305,630				253,456				195,661
	Interest			8,519				5,413				5,782
				1,033,168				861,974				708,954
EARNINGS BEFORE INCOME TAXES				92,337				84,506				57,843
INCOME TAXES				34,344				31,890				21,417
NET EARNINGS			$	57,993			$	52,616			$	36,426
EARNINGS PER SHARE			$	1.16			$	1.06			$	0.74
EARNINGS PER SHARE ASSUMING
	DILUTION		$	1.14			$	1.04			$	0.73

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																										Accumulated Other
																										Comprehensive (Loss)
																										Income
		Treasury Stock								Common Stock								Additional								Derivatives
																		Paid-In				Retained				Designated as				Marketable
		Shares				Amount				Common				Class A				Capital				Earnings				Hedges				Securities
		(In thousands, except per share)
Balance, January 1, 2003			(8,197	)		$	(41,696	)		$	9,998			$	2,681			$	87,502			$	223,928			$	(1,972	)		$	104
Dividends, $.022 per share																							(1,090	)
Stock Dividend											4,999				1,340				(54	)			(6,340	)
Reissued Shares			306				1,635												857
Net Earnings																							36,426
Change in Fair Value of Financial Instruments, Net of Income Taxes of $1,209																											1,031				837
Balance, December 31, 2003			(7,891	)			(40,061	)			14,997				4,021				88,305				252,924				(941	)			941
Dividends, $.039 per share																							(1,954	)
Stock Dividend											7,498				2,011				(80	)			(9,509	)
Reissued Shares			598				2,142												2,807
Net Earnings																							52,616
Change in Fair Value of Financial Instruments, Net of Income Taxes of $119																											662				(1,201	)
Balance, December 31, 2004			(7,293	)			(37,919	)			22,495				6,032				91,032				294,077				(279	)			(260	)
Dividends, $.054 Per share																							(2,693	)
Reissued Shares			267				1,648												1,820
Net Earnings																							57,993
Change in Fair Value of Financial Instruments, Net of Income Taxes of $284																											279				246
Balance, December 31, 2005			(7,026	)		$	(36,271	)		$	22,495			$	6,032			$	92,852			$	349,377			$	—			$	(14	)

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				Year Ended				Year Ended				Year Ended
				December 31,				December 31,				December 31,
				2005				2004				2003
				(In thousands)
OPERATING ACTIVITIES:
	Net Earnings			$	57,993			$	52,616			$	36,426
	Depreciation and Amortization				333,131				277,187				215,397
	Additions to Rental Merchandise				(647,657	)			(528,255	)			(384,429	)
	Book Value of Rental Merchandise Sold or Disposed				233,861				206,589				178,460
	Deferred Income Taxes				(20,261	)			39,919				3,496
	Gain on Marketable Securities				(579	)			(5,481	)			—
	Loss (Gain) on Sale of Property, Plant, and Equipment				148				84				(814	)
	Change in Income Taxes Receivable, included in Prepaid Expenses and Other Assets				18,553				(20,023	)			—
	Change in Accounts Payable and Accrued Expenses				17,025				4,118				17,275
	Change in Accounts Receivable				(10,076	)			(1,858	)			(3,905	)
	Other Changes, Net				11,375				9,842				6,630
	Cash (Used by) Provided by Operating Activities				(6,487	)			34,738				68,536
INVESTING ACTIVITIES:
	Additions to Property, Plant and Equipment				(61,449	)			(37,723	)			(37,898	)
	Contracts and Other Assets Acquired				(46,725	)			(38,497	)			(44,347	)
	Proceeds from Sale of Marketable Securities				6,993				7,592				—
	Investment in Marketable Securities				—				(6,436	)			(715	)
	Proceeds from Sale of Property, Plant, and Equipment				14,000				4,760				8,025
	Cash Used by Investing Activities				(87,181	)			(70,304	)			(74,935	)
FINANCING ACTIVITIES:
	Proceeds from sale of senior notes				60,000				—				—
	Proceeds from Credit Facilities				450,854				287,307				86,424
	Repayments on Credit Facilities				(415,636	)			(250,222	)			(80,119	)
	Dividends Paid				(2,641	)			(2,042	)			(924	)
	Issuance of Stock Under Stock Option Plans				2,199				1,701				1,789
	Cash Provided by Financing Activities				94,776				36,744				7,170
	Increase in Cash				1,108				1,178				771
	Cash at Beginning of Year				5,865				4,687				3,916
	Cash at End of Year			$	6,973			$	5,865			$	4,687
	Cash Paid During the Year:
		Interest		$	8,395			$	5,361			$	6,759
		Income Taxes		$	51,228			$	16,783			$	4,987

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	As of December 31, 2005 and 2004, and for the Years Ended December 31, 2005, 2004 and 2003.

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			Year Ended				Year Ended				Year Ended
			December 31,				December 31,				December 31,
			2005				2004				2003
			(In thousands, except per share)
Net Earnings before effect of Key Executive grants			$	58,522			$	52,854			$	36,426
Expense effect of Key Executive grants recognized				(529	)			(238	)			—
Net earnings as reported				57,993				52,616				36,426
Deduct: total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects				(1,996	)			(1,687	)			(1,345	)
Pro forma net earnings			$	55,997			$	50,929			$	35,081
Earnings per share:
	Basic — as reported		$	1.16			$	1.06			$	.74
	Basic — pro forma		$	1.12			$	1.03			$	.71
	Diluted — as reported		$	1.14			$	1.04			$	.73
	Diluted — pro forma		$	1.11			$	1.01			$	.70

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			2005				2004
			(In thousands)
Land			$	15,934			$	11,687
Buildings and Improvements				46,805				39,305
Leasehold Improvements and Signs				72,842				63,291
Fixtures and Equipment				45,343				36,518
Assets Under Capital Lease:
	with Related Parties			15,734				15,734
	with Unrelated Parties			1,475				1,475
Construction in Progress				6,449				4,339
				204,582				172,349
Less: Accumulated Depreciation and Amortization				(70,823	)			(61,231	)
			$	133,759			$	111,118

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			2005				2004
			(In thousands)
Bank Debt			$	91,336			$	45,528
Senior Unsecured Notes				100,000				50,000
Capital Lease Obligation:
	with Related Parties			16,141				16,596
	with Unrelated Parties			1,066				1,197
Other Debt				3,330				3,334
			$	211,873			$	116,655

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		(In thousands)
2006		$	20,647
2007			92,094
2008			22,915
2009			23,004
2010			13,116
Thereafter			40,097

			2005				2004				2003
			(In thousands)
Current Income Tax Expense (Benefit):
	Federal		$	50,064			$	(7,720	)		$	16,506
	State			4,541				(309	)			1,415
				54,605				(8,029	)			17,921
Deferred Income Tax (Benefit) Expense:
	Federal			(17,751	)			35,967				3,220
	State			(2,510	)			3,952				276
				(20,261	)			39,919				3,496
			$	34,344			$	31,890			$	21,417

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			2005				2004
			(In thousands)
Deferred Tax Liabilities:
	Rental Merchandise and Property, Plant and Equipment		$	81,388			$	101,577
	Other, Net			6,543				4,054
Total Deferred Tax Liabilities				87,931				105,631
Deferred Tax Assets:
	Accrued Liabilities			4,915				4,948
	Advance Payments			7,556				5,510
	Other, Net			3,256				2,918
Total Deferred Tax Assets				15,727				13,376
Less Deferred Tax Valuation Allowance*				(2,993	)			(2,918	)
Net Deferred Tax Assets				12,734				10,458
Net Deferred Tax Liabilities			$	75,197			$	95,173

*	The Company has a net tax loss carryforward of $1.9 million which expires on varying dates through December 31, 2012.

			2005				2004				2003
Statutory Rate				35.0	%			35.0	%			35.0	%
Increases in U.S. Federal Taxes Resulting From:
	State Income Taxes, Net of Federal Income Tax Benefit			2.2				2.8				2.0
	Other, Net			—				(.1	)			—
Effective Tax Rate				37.2	%			37.7	%			37.0	%

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		Options Outstanding												Options Exercisable
						Weighted Average
						Remaining
		Number Outstanding				Contractual Life				Weighted Average				Number Exercisable				Weighted Average
Range of Exercise Prices		December 31, 2005				(In years)				Exercise Price				December 31, 2005				Exercise Price
$ 4.38 - 10.00			1,622,626				3.78			$	6.51				1,477,501			$	6.28
10.01 - 15.00			689,250				8.04				14.02				3,000				13.49
15.01 - 20.00			108,750				7.78				15.60				—				—
20.01 - 24.94			605,646				8.90				22.40				2,000				21.84
$ 4.38 - 24.94			3,026,272				5.92			$	11.73				1,482,501			$	6.31

							Weighted Average
			Options				Exercise Price
			(In thousands)
Outstanding at January 1, 2003				3,010			$	6.31
	Granted			738				13.29
	Exercised			(321	)			6.18
	Forfeited			(142	)			8.08
Outstanding at December 31, 2003				3,285				7.82
	Granted			865				19.79
	Exercised			(738	)			5.30
	Forfeited			(89	)			13.27
Outstanding at December 31, 2004				3,323				11.35
	Granted			102				23.17
	Exercised			(266	)			8.01
	Forfeited			(133	)			18.39
Outstanding at December 31, 2005				3,026			$	11.73
Exercisable at December 31, 2005				1,483			$	6.31

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		2005				2004				2003
Franchised stores open at January 1,			357				287				232
Opened			71				79				79
Added through acquisition			0				12				3
Purchased by the Company			(35	)			(19	)			(26	)
Closed			(1	)			(2	)			(1	)
Franchised stores open at December 31,			392				357				287

		2005				2004				2003
Company-operated stores open at January 1,			616				500				412
Opened			82				68				38
Added through acquisition			56				61				59
Closed or merged			(6	)			(13	)			(9	)
Company-operated stores open at December 31,			748				616				500

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	Description of Products and Services of Reportable Segments

	•	A predetermined amount of each reportable segment’s revenues is charged to the reportable segment as an allocation of corporate overhead. This allocation was approximately 2.3% in 2005, 2004, and 2003.
	•	Accruals related to store closures are not recorded on the reportable segments’ financial statements, but are rather maintained and controlled by corporate headquarters.

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	•	The capitalization and amortization of manufacturing variances are recorded on the consolidated financial statements as part of Cash to Accrual and Other Adjustments and are not allocated to the segment that holds the related rental merchandise.
	•	Advertising expense in the sales and lease ownership division is estimated at the beginning of each year and then allocated to the division ratably over time for management reporting purposes. For financial reporting purposes, advertising expense is recognized when the related advertising activities occur. The difference between these two methods is reflected as part of the Cash to Accrual and Other Adjustments line below.
	•	Sales and lease ownership rental merchandise write-offs are recorded using the direct write-off method for management reporting purposes and, effective in 2004, using the allowance method for financial reporting purposes. The difference between these two methods is reflected as part of the Cash to Accrual and Other Adjustments line below for 2004.
	•	Interest on borrowings is estimated at the beginning of each year. Interest is then allocated to operating segments based on relative total assets.
	•	Sales and lease ownership revenues are reported on the cash basis for management reporting purposes.

	Measurement of Segment Profit or Loss and Segment Assets

	Factors Used by Management to Identify the Reportable Segments

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				Year Ended				Year Ended				Year Ended
				December 31,				December 31,				December 31,
				2005				2004				2003
				(In thousands)
Revenues From External Customers:
	Sales and Lease Ownership			$	975,026			$	804,723			$	634,489
	Corporate Furnishings				117,476				108,453				109,083
	Franchise				29,781				25,253				19,347
	Other				5,411				10,185				4,206
Manufacturing					83,803				70,440				60,608
Elimination of Intersegment Revenues					(83,509	)			(70,884	)			(60,995	)
Cash to Accrual Adjustments					(2,483	)			(1,690	)			59
		Total Revenues from External Customers		$	1,125,505			$	946,480			$	766,797
Earnings Before Income Taxes:
	Sales and Lease Ownership			$	63,317			$	56,578			$	43,325
	Corporate Furnishings				10,802				8,842				6,341
	Franchise				22,143				18,374				13,600
	Other				(585	)			2,118				(2,356	)
	Manufacturing				1,280				(175	)			1,222
Earnings Before Income Taxes for Reportable Segments					96,957				85,737				62,132
Elimination of Intersegment (Profit) Loss					(1,103	)			178				(2,338	)
Cash to Accrual and Other Adjustments					(3,517	)			(1,409	)			(1,951	)
		Total Earnings Before Income Taxes		$	92,337			$	84,506			$	57,843
Assets:
	Sales and Lease Ownership			$	669,376			$	524,492			$	412,836
	Corporate Furnishings				91,536				83,478				79,984
	Franchise				26,902				23,495				19,493
	Other				46,355				50,452				29,244
	Manufacturing				24,346				18,371				18,327
		Total Assets		$	858,515			$	700,288			$	559,884
Depreciation and Amortization:
	Sales and Lease Ownership			$	309,022			$	255,606			$	191,777
	Corporate Furnishings				20,376				19,213				21,266
	Franchise				924				722				547
	Other				1,373				711				839
	Manufacturing				1,436				935				968
		Total Depreciation and Amortization		$	333,131			$	277,187			$	215,397
Interest Expense:
	Sales and Lease Ownership			$	7,326			$	5,197			$	5,215
	Corporate Furnishings				1,382				1,044				1,583
	Franchise				93				96				93
	Other				(282	)			(924	)			(1,109	)
		Total Interest Expense		$	8,519			$	5,413			$	5,782

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		First Quarter				Second Quarter				Third Quarter				Fourth Quarter
		(In thousands, except per share)
Year Ended December 31, 2005
Revenues		$	279,348			$	271,338			$	278,667			$	296,152
Gross Profit*			142,260				139,797				142,287				147,315
Earnings Before Taxes			29,618				25,644				13,506				23,569
Net Earnings			18,422				16,120				8,843				14,608
Earnings Per Share			.37				.32				.18				.29
Earnings Per Share Assuming Dilution			.36				.32				.17				.29
Year Ended December 31, 2004
Revenues		$	242,493			$	230,286			$	231,648			$	242,053
Gross Profit*			116,856				114,641				116,320				121,466
Earnings Before Taxes			20,706				24,928				17,551				21,321
Net Earnings			12,817				15,385				10,647				13,767
Earnings Per Share			.26				.31				.21				.28
Earnings Per Share Assuming Dilution			.26				.30				.21				.27

*	Gross profit is the sum of rentals and fees, retail sales, and non-retail sales less retail cost of sales, non-retail cost of sales, and depreciation of rental merchandise.

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SunTrust Robinson Humphrey	Morgan Keegan & Company, Inc.

	Wachovia Securities

	BB&T Capital Markets

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