We are generally pleased with the results for the fourth quarter...At the same time, the business environment remains uncertain.
Mark E. Speese. Chairman and CEO, Rent-A-Center

Rent-A-Center, Inc. (NASDAQ:RCII) reported total revenues for the quarter ended December 31, 2007 of $717.0 million, an increase of $60.9 million from the same period in 2006. This 9.3% increase in revenues was primarily driven by the Rent-Way acquisition that closed on November 15, 2006. Same store revenues for the quarter ended December 31, 2007 increased 1.0%.

Reported net loss for the quarter ended December 31, 2007 was $5.4 million. This is the second consecutive fourth quarter loss for RAC. The company reported a net loss of $2.3 million for the same period in 2006.

Rent-A-Center said it expects 2008 same store sales to be flat to +2% range. The Company expects to open approximately 40 new rent-to-own locations and add financial services to 150 - 200 locations.

"We are generally pleased with the results for the fourth quarter, where we saw positive same store sales and total revenue and adjusted diluted earnings per share that was within our guidance range. At the same time, the business environment remains uncertain," commented Mark E. Speese, the Company's Chairman and Chief Executive Officer. "In 2008, we intend to focus on the execution of our previously announced store consolidation plan, devote resources to the overall customer experience in our stores, enhance store level operations, improve operational efficiencies, and further invest in our financial services business, while continuing to generate significant cash flow from operations and maintaining a solid balance sheet," Speese stated.

Rent-A-Center, Inc. will host a conference call to discuss the fourth quarter results, guidance and other operational matters on Tuesday morning, February 5, 2008, at 10:45 a.m. EST. Audio of the call will be broadcast live. A link to the live webcast will be available from My RTO Portfolio.

Rent-A-Center Q4, and Full Year 2007 Details Follow:

Rent-A-Center also announced today that it has reached a prospective settlement with the plaintiffs to resolve the Eric Shafer et al. v. Rent-A-Center, Inc. and Victor E. Johnson et al. v. Rent-A-Center, Inc. coordinated matters 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, the Company anticipates it will pay an aggregate of $11.0 million in cash, including settlement costs and plaintiff's attorneys' fees, to be distributed to an agreed-upon class of Company employees from May 1998 through March 31, 2008. The Company would be entitled to any settlement fund monies not distributed under the terms of the prospective settlement. In connection with the prospective settlement, the Company is not admitting liability for its wage and hour practices in California. To account for the aforementioned costs, the Company recorded a pre-tax charge of $11.0 million in the fourth quarter of 2007. The terms of the prospective settlement are subject to the parties entering into a definitive settlement agreement and obtaining court approval. While the Company believes that the terms of this prospective settlement are fair, there can be no assurance that the settlement, if completed, will be approved by the court in its present form.

Year End December 31, 2007 Results

Total reported revenues for the twelve months ended December 31, 2007 were $2.906 billion, an increase of $0.472 billion from the reported total revenues of $2.434 billion for the same period in the prior year. This 19.4% increase in revenues was primarily driven by the Rent-Way acquisition that closed on November 15, 2006. Same store revenues for the twelve month period ending December 31, 2007 increased 2.1%.

Reported net earnings for the twelve months ended December 31, 2007 were $76.3 million, a decrease of $26.8 million from the reported net earnings of $103.1 million for the same period in the prior year. Reported net earnings for the twelve months ended December 31, 2006 were reduced by an aggregate of $73.3 million in pre-tax litigation expenses.

Reported diluted earnings per share for the twelve months ended December 31, 2007 were $1.10, a decrease of $0.36 from the reported diluted earnings per share of $1.46 for the same period in the prior year. Reported net earnings per diluted share for the twelve months ended December 31, 2006 were reduced by $0.65 per share as a result of litigation expenses.

Through the twelve month period ended December 31, 2007, the Company generated cash flow from operations of approximately $240.4 million, while ending the year with $97.4 million of cash on hand. During the twelve month period ended December 31, 2007, the Company repurchased 3,832,150 shares of its common stock for $83.4 million in cash under its common stock repurchase program. To date, the Company has repurchased a total of 18,460,950 shares and has utilized approximately $444.3 million of the $500.0 million authorized by its Board of Directors since the inception of the plan. In addition, during the twelve month period ended December 31, 2007, the Company reduced its outstanding indebtedness by approximately $33.9 million. Since December 31, 2007, the Company has further reduced its outstanding indebtedness by approximately $60.0 million.

During the fourth quarter of 2007, the Company opened seven new store locations, acquired accounts from four locations, and consolidated 287 stores into existing locations, for a net reduction of 280 stores and an ending balance as of December 31, 2007 of 3,081 company-owned stores. During the fourth quarter of 2007, the Company added financial services to nine existing rent-to-own store locations, acquired accounts from two locations, consolidated 14 stores with financial services into existing locations, and closed one location, ending the quarter with a total of 276 stores providing these services.

Through the twelve month period ended December 31, 2007, the Company opened 27 new store locations, acquired 14 stores as well as accounts from 34 additional locations, consolidated 363 stores into existing locations, and sold three stores, for a net reduction of 325 stores since December 31, 2006. Through the twelve month period ending December 31, 2007, the Company added financial services to 157 existing rent-to-own store locations, acquired accounts from two locations, consolidated 21 stores with financial services into existing locations, and closed 10 locations, for a net addition of 126 stores providing these services.

Since December 31, 2007, the Company has opened one new store location, acquired accounts from two locations, consolidated four stores into existing locations, and sold four stores. The Company has added financial services to four existing rent-to-own store locations and closed two locations since December 31, 2007.

2007 Significant Items

Shafer/Johnson. In the fourth quarter of 2007, the Company recorded a pre-tax expense of $11.0 million related to the prospective settlement of the Eric Shafer et al. v. Rent-A-Center, Inc. and Victor E. Johnson et al. v. Rent-A-Center, Inc. coordinated matters pending in state court in Los Angeles, California, as discussed above. This litigation expense reduced diluted earnings per share in the fourth quarter of 2007 by $0.11 and for the twelve month period ended December 31, 2007 by $0.10.

Store Consolidation Plan Expenses. During the fourth quarter of 2007, the Company recorded a pre-tax restructuring expense of approximately $38.7 million related to the store consolidation plan and other restructuring items announced on December 3, 2007. The costs with respect to these store closings relate primarily to lease terminations, fixed asset disposals and other miscellaneous items. This restructuring expense reduced diluted earnings per share in the fourth quarter of 2007 by $0.39 and for the twelve month period ended December 31, 2007 by $0.37.

Settlement with ColorTyme Franchisees. On July 31, 2007, ColorTyme entered into a settlement agreement with five affiliated ColorTyme franchisees pursuant to which the franchise agreements with respect to approximately 65 ColorTyme stores were terminated. ColorTyme received a cash payment in satisfaction of the contractually required, future royalties owed to ColorTyme pursuant to the franchise agreements. This settlement payment increased diluted earnings per share by approximately $0.04 for the twelve month period ended December 31, 2007.

Hilda Perez. On November 5, 2007, we paid an aggregate of $109.3 million, including plaintiffs' attorneys' fees and administration costs, pursuant to the court approved settlement of the Hilda Perez v. Rent-A-Center, Inc. matter pending in New Jersey. Under the terms of the settlement, the Company is entitled to 50% of any undistributed monies in the settlement. As previously reported, the Company recorded a pre-tax expense of $58.0 million in connection with the Perez matter during the fourth quarter of 2006, and an additional pre-tax charge of $51.3 million in the first quarter of 2007, to account for the aforementioned costs. The litigation expense with respect to the Perez settlement reduced diluted earnings per share by approximately $0.48 for the twelve month period ended December 31, 2007.

2006 Significant Items

2006 Litigation Expense

Hilda Perez. During the fourth quarter of 2006, the Company recorded a pre-tax expense of $58.0 million related to the Hilda Perez v. Rent-A-Center, Inc. matter. This litigation expense reduced diluted earnings per share by approximately $0.51 in the fourth quarter of 2006 and $0.52 for the twelve month period ended December 31, 2006.

Burdusis/French/Corso. In the first quarter of 2007, we paid approximately $4.95 million, including attorneys' fees, pursuant to the court approved 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. coordinated matters pending in state court in Los Angeles, California. The Company recorded a pre-tax expense of $4.95 million in the third quarter of 2006 to account for the settlement amount and attorneys' fees. This litigation expense reduced diluted earnings per share by approximately $0.04 for the twelve month period ended December 31, 2006.

California Attorney General. As announced on October 30, 2006, the Company reached a 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. As part of the settlement, the Company agreed to pay restitution to certain customers in the aggregate amount of approximately $9.6 million. The Company is in the process of finalizing the terms of the restitution program with the California Attorney General and expects to fund the restitution account as soon as reasonably practicable following the finalization of such terms. To account for the settlement costs, as well as the Company's attorneys' fees, the Company recorded a pre-tax charge of $10.35 million in the third quarter of 2006. The litigation expense with respect to the California Attorney General settlement reduced diluted earnings per share by approximately $0.09 for the twelve month period ended December 31, 2006.

2006 Refinancing Expense

2006 Senior Credit Facility Refinancing Expenses. During the third quarter of 2006, the Company recorded a pre-tax expense of approximately $2.2 million to write off the remaining unamortized balance of financing costs from our previous credit agreement closed in July 2004. This refinancing expense reduced diluted earnings per share by approximately $0.02 for the twelve month period ended December 31, 2006.

During the fourth quarter of 2006, the Company re-financed its credit agreement in connection with the Rent-Way acquisition and recorded a pre-tax expense of approximately $2.6 million to write off the remaining unamortized balance of financing costs from our previous credit agreement closed in July 2006. This refinancing expense reduced diluted earnings per share by approximately $0.02 in both the fourth quarter of 2006 and for the twelve month period ended December 31, 2006.

Rent-A-Center currently operates approximately 3,080 company-owned stores nationwide and in Canada and Puerto Rico.

FIRST QUARTER 2008 GUIDANCE:

Revenues

-- The Company expects total revenues to be in the range of $738
million to $753 million.

-- Store rental and fee revenues are expected to be between $632
million and $644 million.

-- Total store revenues are expected to be in the range of $727
million to $742 million.

-- Same store sales are expected to be in the flat to 1% range.

-- The Company expects to open approximately 5 new rent-to-own
store locations.

-- The Company expects to add financial services to approximately
10 rent-to-own store locations.

Expenses

-- The Company expects cost of rental and fees to be between
22.6% and 23.0% of store rental and fee revenue and cost of
merchandise sold to be between 68% and 72% of store
merchandise sales.

-- Store salaries and other expenses are expected to be in the
range of 56.8% to 58.3% of total store revenue.

-- General and administrative expenses are expected to be between
4.2% and 4.4% of total revenue.

-- Net interest expense is expected to be approximately $21
million, depreciation of property assets is expected to be
approximately $18 million and amortization of intangibles is
expected to be approximately $4 million.

-- The effective tax rate is expected to be approximately 37.0%
of pre-tax income.

-- Diluted earnings per share are estimated to be in the range of
$0.47 to $0.53.

-- Diluted shares outstanding are estimated to be between 66.8
million and 67.8 million.

FISCAL 2008 GUIDANCE:

Revenues

-- The Company expects total revenues to be in the range of
$2.868 billion and $2.908 billion.

-- Store rental and fee revenues are expected to be between
$2.515 billion and $2.555 billion.

-- Total store revenues are expected to be in the range of $2.830
billion and $2.870 billion.

-- Same store sales are expected to be in the flat to 2% range.

-- The Company expects to open approximately 40 new rent-to-own
store locations.

-- The Company expects to add financial services to approximately
150 - 200 rent-to-own store locations.

Expenses

-- The Company expects cost of rental and fees to be between
22.6% and 23.0% of store rental and fee revenue and cost of
merchandise sold to be between 72% and 76% of store
merchandise sales.

-- Store salaries and other expenses are expected to be in the
range of 57.0% to 58.5% of total store revenue.

-- General and administrative expenses are expected to be between
4.3% and 4.5% of total revenue.

-- Net interest expense is expected to be between $70 million and
$75 million, depreciation of property assets is expected to be
between $68 million and $73 million and amortization of
intangibles is expected to be approximately $12 million.

-- The effective tax rate is expected to be approximately 37.0%
of pre-tax income.

-- Diluted earnings per share are estimated to be in the range of
$2.17 to $2.32.

-- Diluted shares outstanding are estimated to be between 67.0
million and 68.0 million.