Aaron's Company

O p e n i n g   D o o r s   t o   U n l

i m i t e d   O p p o r t u n i t i e s .

.

.

Aaron Rents, Inc.

A n n u a l   R e p o r t

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Aaron Rents, Inc. is the leading U.S. company engaged in

the  combined  businesses  of  the  rental,  lease  ownership

and specialty retailing of residential and office furniture, 

consumer electronics, household appliances and

accessories,  with  554  stores  in  42  states  and  Puerto

Rico. The Company is positioned as “America’s

Premier  Name  in  Furniture  Rental  and  Lease

Ownership.” Its major operations are the Aaron’s Sales & Lease

Ownership  division  (formerly  Aaron’s  Rental  Purchase 

division), the Rent-to-Rent division, and MacTavish Furniture

Industries,  which  manufactures  much  of  the  furniture  rented,

leased  and  sold  in  the  Company’s

stores. Strategically, the Company is

focused on increasing the sales and

lease ownership business through the

opening  of  new  Company-operated

stores, both by internal expansion and

acquisitions, and through the growing

franchise program, while expanding

the  rent-to-rent  business  by  respond-

ing to new market opportunities.

C o n t e n t s

Financial Highlights  . . . . . . . . . . . . . . . . . . . 1

Letter to Shareholders . . . . . . . . . . . . . . . . . . 2

Selected Financial Information  . . . . . . . . . . . 13

Management’s Discussion and 
Analysis of Financial Condition 
and Results of Operations  . . . . . . . . . . . . . . 14

Consolidated Balance Sheets  . . . . . . . . . . . . 16

Consolidated Statements 
of Earnings  . . . . . . . . . . . . . . . . . . . . . . . 17

Consolidated Statements of 
Shareholders’ Equity  . . . . . . . . . . . . . . . . . 17

Consolidated Statements of 
Cash Flows  . . . . . . . . . . . . . . . . . . . . . . . 18

Notes to Consolidated 
Financial Statements  . . . . . . . . . . . . . . . . . 19

Report of Independent Auditors . . . . . . . . . . . 26

Store Locations . . . . . . . . . . . . . . . . . . . . . 27

Board of Directors and Officers . . . . . . . . . . . 28

Corporate and 
Shareholder Information  . . . . . . . . . . . . . . . 28

F i n a n c i a l   H i g h l i g h t s

1

(Dollar Amounts in Thousands, 
Except Per Share)

Year Ended
December 31,
2000

Year Ended
December 31,
1999

Percentage
Change

O p e r a t i n g   R e s u l t s
Revenues
Earnings Before Taxes
Net Earnings
Earnings Per Share
Earnings Per Share

Assuming Dilution

F i n a n c i a l   P o s i t i o n
Total Assets
Rental Merchandise, Net
Interest-Bearing Debt
Shareholders’ Equity
Book Value Per Share
Debt to Capitalization
Pre-Tax Profit Margin
Net Profit Margin
Return on Average Equity

S t o r e s   O p e n
Sales & Lease Ownership
Sales & Lease Ownership Franchised
Rent-to-Rent

Total Stores

$502,920
43,906
27,261
1.38

$437,359
41,302
25,602
1.28

15.0%
6.3
6.5
7.8

1.37

1.26

8.7

$380,379
267,713
104,769
208,538
10.50
33.4%
8.7
5.4
13.9

263
193
98

554

$318,408
219,831
72,760
183,718
9.22
28.4%
9.4
5.9
14.5

213
155
107

475

19.5%
21.8
44.0
13.5
13.8

23.5%
24.5
(8.4)

16.6%

Revenues By Calendar Year

Net Earnings By Calendar Year

)
s
0
0
0
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$
(

$30,000

25,000

20,000

15,000

10,000

5,000

0

’96   ’97   ’98    ’99    ’00

)
s
0
0
0
n

i

$
(

$600,000

500,000

400,000

300,000

200,000

100,000

0

’96   ’97   ’98    ’99    ’00

Rent-to-Rent Division

Sales & Lease 
Ownership Division

 
 
 
 
2

To   O u r   S h a r e h o l d e r s :

The  3,900-plus  Aaron  Associates  are  proud  to  tell  you  that:  ❚ We  began  the  Millennium  with 
another record-breaking year! ❚ We achieved record revenues and earnings for the ninth year in a
row.  ❚ We  crossed  the  $500  million  threshold  in  revenues,  with  systemwide  revenues,  including 
franchise revenues, increasing to $656 million. ❚ We reached the 500-store milestone, and by year-
end we had a total of 554 stores open across the country and Puerto Rico. ❚ We increased our store
count in Aaron’s Sales & Lease Ownership, our rental purchase division, by 24%, a record number
of  store  openings.  ❚ We  made  our  initial  expansion  outside  the  United  States  with  the 
acquisition  of  10  stores  in  the  Commonwealth  of  Puerto  Rico.  ❚ We  acquired  a  total  of  26  store 
locations formerly operated by one of the nation’s largest furniture retailers, providing the opportunity
to accelerate our store-opening plans in the first two quarters of 2001 by serving a customer base 
already familiar with those locations.

All this and more served as a prelude to the

future as we expanded our infrastructure of
manufacturing and distribution capabili-
ties to gain a larger share of the growing markets
for our products and services. And the outlook is
very good as indicated in our annual report theme,
“Opening Doors to Unlimited Opportunities.” For
even though 2000 was our best year ever, we see
many more opportunities for growth, and we are
positioned to open the doors to the future.

Revenues for the year increased 15% to a
record $502.9 million compared to $437.4 million
for 1999. Systemwide revenues, which include 
revenues of our franchised stores, increased 20% 
to $656.1 million. Earnings advanced to a record
$27.3 million versus $25.6 million for the previous
year. Earnings per share reached $1.38 ($1.37
assuming dilution) compared to $1.28 ($1.26
assuming dilution) for 1999. If new stores opened
in the last two years are excluded, revenues and
net earnings would have increased in 2000 over
1999 by approximately 11% and 14%, respectively.
Our Aaron’s Sales & Lease Ownership division 
continued its rapid growth, opening 32 Company-
operated and 47 franchised stores during the year.
In addition, 10 stores were acquired in Puerto
Rico, bringing the net new store count to 88 —
exceeding the number for the previous two years
combined. At the end of 2000, we had a total of
456 Aaron’s Sales & Lease Ownership stores open.
Seizing a new growth opportunity, our sales and

leasing division entered into a strategic alliance
with CompUSA to market personal computers at
our stores during the year.

Franchised stores open increased 25% to a 
total of 193 stores, reflecting the success of this
program, which enables us to grow at a faster 
rate than is feasible through internal growth alone.
In the past year, we began to see a rising level of
profitability from our franchised operations. The
outlook is also very favorable with a backlog of
146 franchised stores to be opened in the future.
Our nationally recognized franchise program was
first in its category in Entrepreneur magazine’s
annual ranking and placed in the top 100 fran-
chise chains by worldwide sales in Franchise 
Times’ survey.

The rent-to-rent division improved its per-
formance, especially in office furniture rentals, 
and began laying the groundwork for collaborative
relationships with manufacturers and competitors
to market and distribute office products. This 
division, our original business, continues to 
generate cash to help finance new store growth.
Our manufacturing division, MacTavish
Furniture Industries, produced more than $50 
million of furniture and accessories at cost to 
supply our rapidly expanding number of stores.
MacTavish opened a new Texas plant during 
the year to manufacture office and residential 
furniture, its 11th facility. We also opened a new
distribution center in Baltimore, for a total of six

3

with two others planned for 2001. These are a
vital part of the vertical integration that gives 
the Company competitive advantages.

Our Company maintains a strong balance 
sheet consistent with our longstanding business
philosophy, which favors a sustainable rate 
of growth while avoiding the pitfalls of over-
expansion. Our debt to capitalization ratio at year-
end was 33%, supporting the costs of our internal
growth program, the purchase of the Texas plant
and the store and lease acquisitions.

To meet the demands created by our record
growth, we continued to strengthen our excellent
management team. W. Kenneth Butler, President
of the Aaron’s Sales & Lease Ownership division,
was elected to the Board of Directors; Eduardo
Quiñones was promoted to President of the 
Rent-to-Rent division after serving in regional
management for over a decade; William R.
Mitchell joined the Company as Vice President,
Franchising for Aaron’s Sales & Lease Ownership;
and Todd Evans, formerly Vice President, 
Franchise Development of the Aaron’s Sales 
& Lease Ownership division, was named Vice
President, Business Development. Subsequent 
to year-end, Mitchell S. Paull was named Senior
Vice President.

We believe the solid, sustained growth of
Aaron Rents will increase investor awareness 
and build value for shareholders. During the past
year we continued our stock repurchase program,

buying 327,500 shares of the Company’s stock.
This brought to almost two million the number 
of shares purchased since September 1998 as part
of our efforts to increase share value. 

Events in the broader retailing industry are
opening the way for Aaron Rents to improve 
its position, expand its store base and gain 
new customers.

The opportunities ahead of us are unlimited.

We are prepared to seize one opportunity after
another to create an even stronger company, 
dedicated to serving our extremely large market
with quality products and services. 

We are especially proud of our people, the
3,900 associates across the country and in Puerto
Rico, who possess the talents, the skills and the
commitment to be the best. 

We look to the future with the anticipation 

of unlimited opportunities.

R. Charles Loudermilk, Sr.
Chairman and Chief Executive Officer

Robert C. Loudermilk, Jr.
President and Chief Operating Officer

Aaron’s new lines of personal 
computers have met strong
response from customers. Targeting
a larger share of the growing PC
market, Aaron’s entered into a
strategic alliance with CompUSA, a

leading computer manufacturer, to

offer two of its most popular models.

5

A a r o n ’s   S a l e s   &   L e a s e   O w n e r s h i p

A c c e l e r a t i n g   G r o w t h

Aaron’s Sales & Lease Ownership division is accelerating its expansion across the nation, opening

stores at the rate of about one every four days in 2000 — propelled by the highly successful “Dream
Products” marketing and sponsorship of nascar championship racing. A major development late
in the year opened the door to faster than expected store openings in 2001 when the Company acquired
nearly 30 store locations formerly operated by one of the nation’s major furniture retailers.

The number of Aaron’s Sales & Lease Ownership stores increased during the year from 368 to 456, a
net gain of 88 stores and a 24% increase, including both Company-operated and franchised stores and 10
stores acquired in Puerto Rico.

The record increase in store count confirms the appeal of the Aaron’s concept for providing quality
merchandise at competitive prices to a large market of consumers which neither conventional retailers
nor rent-to-own stores serve adequately. Aaron’s niche is the higher end of the market comprising an 
estimated 30% of the households in the United States. The market reached by Aaron’s is a combination
of rental, lease ownership and retail credit customers.

Driving Aaron’s rapid expansion is its “Dream Products” program. This targets the high end of the

market with “dream” products such as large-screen televisions,
home theater systems, leather upholstery, stainless steel 
refrigerators and top name brand washers and dryers. 

Aaron’s Sales & Lease Ownership expanded its relationship

with nascar, which reaches the prime audience for Aaron’s 
products. The initial step was the title sponsorship of the nascar
Busch Grand National Car Race at the Atlanta Motor Speedway
— the nationally televised “Aaron’s 312,” named for Aaron’s three
ways to obtain merchandise and its unique 12-month plan. The 
next step was a limited sponsorship for driver Michael Waltrip’s
#99 Aaron’s Dream Machine in the Busch Grand National Series.
The final step was a sponsorship for driver Johnny Benson’s #10
Aaron’s Dream Machine for the last half of the 2000 nascar
Winston Cup Series. The market response to the nascar
promotions has been tremendous. Sponsorship of Atlanta 
Braves games and other sports events also reach this market.
Aaron’s moved up its timetable for store openings with 
the acquisition of 26 store locations in an auction of facilities 
formerly operated by a large national furniture retailer. The most
strategically advantageous locations were selected in markets
where the Company already had a strong presence, which is
expected to result in an extremely high level of synergy between
existing stores and acquired stores. The customer base of the
acquired stores closely fits the Aaron’s customer profile. 

In the first move outside the U.S. mainland, Aaron’s acquired 

a privately owned chain of 10 rental purchase stores in Puerto
Rico. The island commonwealth offers the opportunity for 
immediate expansion, and the Company plans to open at least 
five more stores beginning this year. 

Aaron’s has targeted a larger share of the growing market 
for personal computers, entering into a strategic alliance with
CompUSA, a leading computer manufacturer. Aaron’s stores 
last year began selling two of the most popular PCs made by
CompUSA and a more powerful Hewlett Packard model. The 
new lines met strong response from consumers in the rental 
purchase market, confirming the demand for personal computers
in this sector. 

The strategic alliance brings two important competitive 
advantages. First, Aaron’s Sales & Lease Ownership buys directly
from the manufacturer, reducing costs; and second, the Company 
utilizes the volume purchasing power of its strategic partner to
lower costs on the Hewlett Packard personal computer. The 
result is lower pricing for Aaron’s customers. A two-year, 
in-home warranty is provided by Aaron’s, while CompUSA 
offers technical support and customer service. 

The move into the personal computer market required 
Aaron’s to redesign the interiors of its stores to expand the 

Aaron’s Sales & Lease
Ownership Systemwide
Revenue Growth And
Store Count

456*

368*

318*

$500,000

400,000

300,000

200,000

282*

198*

100,000

0

)
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0
0
0
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$
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’96   ’97   ’98   ’99    ’00

Franchise Revenues

Company-Operated 
Revenues

*Number of Stores

Sales & Lease Ownership 
Rental Revenues

Furniture 35%

Computers 6%

Other 2%

Appliances
& Electronics 57%

 
 
6

space for displaying personal computers. This has heightened customer appeal in the already attractive
Aaron’s stores, which are large and inviting, generally in suburban areas with more upscale customers
than are typical of competing rental purchase stores. With an average 9,000 square feet, an Aaron’s store
is more than three times the size of conventional competitors. Consequently, Aaron’s customers enjoy 
a much greater selection of leading brand name merchandise plus the Company’s own lines of furniture
and accessories.

All of these advantages are combined with the Aaron’s 12-month ownership plan to create a powerful,

winning formula unmatched in the marketplace. Customers can acquire merchandise from Aaron’s with
12 monthly payments versus the typical 18 to 36 months of weekly payments at most competing stores.
Aaron’s also provides automatic pre-approval and the guaranteed lowest price. Customers have the right
to return merchandise at any time. Flexible payment options include cash, check or credit card. 

Vertical integration of Aaron’s operations together with volume purchasing are key factors in timely
delivery of high quality merchandise to the market. First, the Company’s furniture manufacturing division,
MacTavish Furniture Industries, supplies much of the furniture to the stores at a cost advantage, allowing
very competitive pricing to the customers. Second, the expanding distribution system of Aaron Rents,
with six large centers located across the country, ensures the same-day or next-day delivery of merchan-
dise to the customers, a critical success factor in our market.

Aaron’s Sales & Lease Ownership features its Dream Products and pricing on the Internet at

www.shopaarons.com.

F r a n c h i s i n g

N a t i o n w i d e   E x p a n s i o n

Aaron’s Sales & Lease Ownership franchise owners are opening new stores and new territories at 

a record pace, reflecting the strong demand for the Aaron’s concept throughout the country. In
2000 franchise owners acquired franchises for 78 new stores, and at year-end an additional 146

stores were in the pipeline for future opening.

During the year 47 new franchised stores were opened; nine were acquired by the Company bringing
the year-end total to 193 franchised stores, a store increase of 25% over 1999. Aaron’s opened franchised
stores in three new states, Maine, North Dakota and Nebraska. Including the franchised stores, the
Company had a total of 456 sales and lease ownership stores in 42 states and Puerto Rico.

The record-setting growth is driven by multi-store franchise owners. Eighteen franchise owners

acquired the 78 franchises awarded last year, including one who signed up for 19 new stores. 

$50,000

Quarterly Revenues Of Franchised Stores

40,000

)
s
0
0
0
n

i

$
(

30,000

20,000

10,000

193*

186*

166*179*

155*

142*

138*136*

136*

121*

116*

106*

101*

86*

76*

71*

61*

54*

38*

45*

28*

31*

36*

24*

26*

18* 21*

15*

6*

6*

13*

8*

0

Q1 Q2  Q3 Q4      Q1 Q2 Q3 Q4    Q1 Q2 Q3 Q4    Q1 Q2 Q3 Q4    Q1 Q2 Q3 Q4    Q1 Q2 Q3 Q4    Q1 Q2 Q3 Q4     Q1 Q2 Q3 Q4  

1993              1994              1995               1996              1997               1998              1999             2000

*Number of Franchise Stores

 
 
Aaron’s stores, much larger than 

a conventional competitor’s, give

customers a far greater selection of

leading brand name merchandise
plus the Company’s own lines of 

furniture and accessories.

Aaron’s offers a wide range of 
designer-inspired furniture for residen-
tial rental customers. The Company
continues as the leader in La-Z-Boy

furniture rentals and also carries many

other major brands of merchandise.

9

The nationally ranked franchise program attracts experienced businesspeople and entrepreneurs who
acquire multi-store franchise territories. A growing number of Aaron’s franchise partners now own or have
acquired rights to open from 10 to 20 or more stores in cities from coast to coast. Expansion of franchised
stores into the Midwest came in the past year with a major franchisee committing to a total of 29 stores 
in the Chicago area, while another owner plans a total of 18 stores in California. Also in Los Angeles a
third franchise owner plans to open nine stores within the next three years.

Typical of the stature of Aaron’s franchise owners are those who signed on during 2000. They include
the vice president of a major bank and former auto service franchise owner, a former auto dealer, a director
of franchise development for a chain of restaurants, and a former owner of several franchised restaurants.
It is the current owners of Aaron’s franchises who are driving the rapid expansion of the franchise 
program. These owners are able to achieve greater efficiency through economies of scale and thereby
increase their long-term profitability. They also have the benefits of the Aaron’s franchise financing 
program which provides support for the faster rate of store openings by franchise owners. 

Vital support for franchise owners is provided by the Company. The broad range of franchise services
starts with assistance in the development of a successful business plan, based on years of experience and
know-how. Guidance is given in such critical steps as the selection of store locations and analysis of the
market competition that the franchise owner will face. Training in the management and operation of
Aaron’s stores is provided by the franchise support center. Assistance with advertising and publicity are
also part of the support program.

Proof of the strength and standing of the Aaron’s franchising program is its consistent high ranking 

in national surveys of franchisors. Aaron’s ranked 81st in Franchise Times Top 200 franchise chains by
worldwide sales last year, also placed in the Top 200 of Success magazine, and currently ranks number 
one in the appliance and furniture rentals category of Entrepreneur magazine. To gain these rankings, a
company must pass an extensive evaluation of financial performance including revenues, franchise fees
and proprietary goods and services; the management of the company, its rate of growth and stability; 
the relationship between franchisor and franchisee; and the opportunities for growth available to the 
franchise owner.

Aaron’s franchise owners also have input into the policies covering their operations through the
Aaron’s Franchise Association. Franchise owners join with Company representatives as members of the
Aaron’s Management Team to provide leadership for the franchise program, to discuss the direction of the
division and to bring about improvements for the benefit of both the franchise owners and the Company.
Franchise owner Jimmy Day of DPR Investments, LLC, who added three more stores last year for a
total of 15 in the Southwest, serves as President of Aaron’s Franchise Association. In the words of this 
successful business owner: “The Aaron concept provides a valuable service to customers, and it offers 
an outstanding business opportunity in franchising.”

R e n t - To - R e n t

T a r g e t i n g   P r o f i t a b l e   M a r k e t s

Atradition of excellence stands behind the nearly half-century of success achieved by the rent-

to-rent division of Aaron Rents, which provides a foundation for the Company’s growth. The
rent-to-rent division constitutes the second largest business in the furniture rental industry with

approximately 30% of the estimated $600 million domestic market. Just under 100 rent-to-rent stores
throughout the country provide residential and office furniture for the temporary needs of individuals 
and corporations. 

Building on its strong reputation, the residential division’s growth strategy is to place a renewed 
focus on the more profitable individual rental customer, while continuing to maintain and develop 
new corporate business.

The office division’s growth strategy is to become a major national force in the much larger office 

furniture market, comprised of two major segments — corporate offices with projected sales of $11.5 
billion next year and the small office/home office (soho) sector with $10 billion projected sales. It is
small to medium-size businesses that are driving the growth of the U.S. economy as many Fortune 500
companies are downsizing. The home office/telecommuting market is growing rapidly with an estimated
41 million Americans now working at home. 

To gain share of the office furniture market, Aaron’s began laying the groundwork for collaborative
relationships with manufacturers to market and distribute office products nationally. The concept is to
utilize existing Aaron Rents stores while developing quick ship programs with the nation’s largest and 

10

best name brand office furniture manufacturers, and to source the best third-party delivery firms. Aaron’s
is focusing on providing exemplary customer service and the fastest delivery time of name brand quality,
fully assembled furniture in America with this pledge: “The furniture you want when you want it.” 

The rent-to-rent division’s strategy also plays off its reputation and strength as a market pioneer and
leader in the furniture rental business for 46 years. From stylish, name-brand furnishings to the proprietary
designs of Aaron’s own manufacturing division, MacTavish Furniture Industries, a wide range of designer-
inspired furniture is offered to both residential and business customers. 

Aaron also provides special events furniture, office panel work stations, housewares, appliances and
electronics. Free in-office consultation and assistance with space planning are also part of the services

Rent-to-Rent 
Rental Revenues

Residential
Furniture–59%

Office
Furniture–34%

Electronics
& Appliances –7%

available to business clientele, who have a choice of rental, purchase 
or lease purchase. 

For individual customers, electronics such as large-screen televisions

and the new line of computers are gaining in popularity, while Aaron 
continues as the leader in La-Z-Boy furniture rentals and provides a
large selection of other major brands of merchandise.

Repeat business is a key to the rent-to-rent business, indicating 
the importance of high quality service as well as merchandise. From 
its inception, Aaron Rents has been known for fast and efficient 
customer service. This begins with guaranteed next-day furniture 
delivery on merchandise in stock on orders placed before 3 p.m. Aaron
also guarantees replacement at no cost of any item of furniture not 
considered satisfactory for any reason. Customers have a further guaran-
tee that furniture may be returned within the first week for any reason
with full refund.

As the Company’s original business enters its 46th year, Aaron 
Rents continues to build its reputation for quality, style and selection,
for commitment to and respect for all customers — the doors to new
opportunities for growth.

M a c Ta v i s h   F u r n i t u r e   I n d u s t r i e s  
a n d   D i s t r i b u t i o n   C e n t e r s

G r o w i n g   S t r a t e g i c a l l y   N a t i o n w i d e

MacTavish Furniture Industries, the manufacturing division of Aaron Rents, had another banner

year in 2000, producing most of the furniture for the Company’s rapidly increasing number 
of stores. This division, combined with the growing nationwide network of Aaron Rents 

distribution centers and fleet of delivery trucks, provides a vertical integration unique in the industry 
and affords major competitive advantages. 

The capabilities of manufacturing and distribution set Aaron Rents apart, insuring the supply of furni-
ture needed to meet the demands of stores and the same-day or next-day delivery of merchandise required
by rental customers. No competitor can match this synergistic model that assures the Company of quality
control, cost savings and inventory control.

MacTavish’s production last year exceeded $50 million of furniture, accessories and bedding at cost,
maintaining its standing as one of the major furniture manufacturers in the United States. During the
year, the division opened its 11th production facility, located near Houston, providing fast delivery of 
furniture to the expanding number of stores in the Western region of the country. MacTavish also imple-
mented a barcode inventory management system for raw materials and finished goods, resulting in greater
accuracy, improved forecasting and just-in-time inventory management for raw materials.

Computer-aided design and computer-controlled cutting techniques are utilized in the MacTavish

plants in creating furniture styles in demand by consumers. MacTavish is known for the quality and
appeal of its designer-inspired products, which are always both fashionable and functional, adhering to 
the strict standards of furniture built to be rented multiple times. 

To meet the demand for coordinated rooms, exclusive lines of accessories designed by the well-known

designer Avi Yofan are produced by MacTavish. These accessories, including lamps and tables, magnify
the customer appeal of furniture groupings in our stores. 

Aaron’s provides free in-office 
consultation and assistance with
space planning as part of the 
services available to business 
clientele, who have a choice of 

rental, purchase or lease purchase.

Small office/home office customers

comprise a growing target market.

12

Keeping pace with the fast-track store expansion, Aaron Rents opened its sixth distribution center 
last year in Baltimore with the seventh center scheduled for opening in the first quarter of 2001 in North
Carolina. These centers in key locations across the country are part of the Company’s long-term strategy
to maintain its competitive advantage in its markets through the efficiencies and cost benefits, control 
of design, quality and inventory — all of which translates into lower prices and prompt delivery of mer-
chandise to customers.

Aaron’s distribution centers enable the Company to purchase products in large quantities, resulting 
in major competitive advantages. Vendors give priority to Aaron’s in filling and shipping orders. Volume
buying also commands substantial cost savings, and the benefit is passed on to the stores, both Company-
operated and franchised. The stores, in turn, provide pricing incentives to customers. In addition, the
capacity of the distribution system enables Aaron’s to take advantage of special offers by vendors at
extremely favorable prices.

Aaron’s stores rely on the distribution centers for quick replenishment of inventory, avoiding the 
problem of overstocking and better managing inventory flow. The distribution centers typically deliver
twice a week to stores within a 150-mile radius and once a week to stores beyond that distance. Even on
out-of-stock items, a store can process the customer’s order and provide the merchandise, rather than lose
the order, by virtue of the quick delivery from a distribution center — a strategic capability unmatched by
any competitor. Another major advantage for the stores is less warehouse space being needed at store
facilities, permitting larger showrooms, displaying more merchandise and increasing rentals and sales. 
The distribution centers provide the base for the Company’s highly effective strategic partnerships
with vendors. The Partners in Profit program provides millions of dollars from name brand vendors for 
cooperative advertising. When the advertising brings customers into the stores, the advertised products
from major manufacturers and vendors are in the showrooms and warehouses, backed by the unique
advantage of quickly available stock in the distribution centers. The Partners in Profit program creates
good relationships with the suppliers who realize substantial sales of their products.

The Company ranks as one of the leading wholesale buyers of large-screen televisions, and its total

purchases from key vendors and major manufacturers in the Partners in Profit program increased by 
42% from 1999 to 2000, reflecting the growing importance of Aaron Rents in its markets — opening 
new doors of opportunity.

A a r o n ’s   C o m m u n i t y   O u t r e a c h   P r o g r a m
G i v i n g   B a c k   T o   O u r   C o m m u n i t i e s

Giving back to the community is a priority of the people of Aaron Rents. They give of their time

and talents in volunteer efforts, supporting the financial donations made through Aaron’s
Community Outreach Program (acorp). In only two years, acorp has returned more than
$700,000 to communities served by the Company’s stores meeting performance goals and qualifying 
for $500 each month to be donated by store associates to local charities.

Acorp supports organizations such as the Make A Wish Foundation and Habitat for Humanity, which

receive donations from Aaron Rents, while the stores give to local chapters and affiliates. Associates at
many stores work together to support educational and after-school programs in their communities. 

Acorp provides assistance to Samaritan House/CAFÉ 458, an Atlanta shelter for the homeless and
those needing a fresh start, with a wide range of free services from alcohol and substance abuse support
groups to a free clothing closet and a full-service restaurant where meals are served by volunteers. 
Also receiving help is the Toys for Tots program to which acorp gave approximately $20,000 in toy
donations in 2000.

The third Habitat for Humanity house sponsored by acorp was part of the Jimmy Carter Work
Project 2000 “Blitz Build,” which ended substandard housing in Sumter County, Georgia — said to be
the first county in the world to end poverty-level housing. acorp Volunteers helped build the house, 
an experience that left the Aaron’s associates feeling they were beneficiaries too. 

The spirit of acorp was expressed by Bill Tuccio of Aaron’s Sales & Lease Ownership Florida Region:

“How many people have fun and help someone at the same time? That’s what it’s all about, and that’s
what makes us feel good.”

13

S e l e c t e d   F i n a n c i a l  
I n f o r m a t i o n

(Dollar Amounts 
in Thousands
Except Per Share)

O p e r a t i n g   R e s u l t s
Systemwide Revenues1
Revenues:

Rentals & Fees
Sales
Other

Costs & Expenses:
Cost of Sales
Operating Expenses
Depreciation of

Rental Merchandise

Interest

Earnings Before
Income Taxes

Income Taxes
Net Earnings
Earnings Per Share
Earnings Per Share

Assuming Dilution
Dividends Per Share:

Common
Class A

F i n a n c i a l   P o s i t i o n
Rental Merchandise, Net
Property, Plant &
Equipment, Net

Total Assets
Interest-Bearing Debt
Shareholders’ Equity

A t   Y e a r   E n d
Stores Open:

Company-Operated
Franchised

Rental Agreements in Effect
Number of Employees

Year Ended
Year Ended
Year Ended
December 31, December 31, December 31,
1999

1998

2000

Year Ended
December 31,
1997

Year Ended
December 31,
1996

$656,096

$547,255

$464,175

$364,306

$306,200

$359,880
127,915
15,125
502,920

105,152
227,587

120,650
5,625
459,014

43,906
16,645
$ 27,261
1.38
$

1.37

.04
.04

$

$318,154
107,690
11,515
437,359

87,705
201,923

102,324
4,105
396,057

41,302
15,700
$ 25,602
1.28
$

1.26

.04
.04

$

$289,272
81,561
8,826
379,659

62,017
189,719

89,171
3,561
344,468

35,191
13,707
$ 21,484
1.06
$

1.04

.04
.04

$

$231,207
73,223
6,321
310,751

55,914
149,728

71,151
3,721
280,514

30,237
11,841
$ 18,396
.96
$

.94

.04
.04

$

$208,463
61,527
4,255
274,245

46,168
135,012

64,437
3,449
249,066

25,179
9,786
$ 15,393
.81
$

.77

.04
.04

$

$267,713

$219,831

$194,163

$176,968

$149,984

63,174
380,379
104,769
208,538

361
193
281,000
3,900

55,918
318,408
72,760
183,718

320
155
254,000
3,600

50,113
272,174
51,727
168,871

291
136
227,400
3,400

39,757
239,382
76,486
116,455

292
101
219,800
3,100

33,267
198,103
55,365
107,335

240
61
179,600
2,550

1Systemwide revenues include rental revenues of franchised Aaron’s Sales & Lease Ownership stores.

14

M a n a g e m e n t ’s   D i s c u s s i o n   a n d   A n a l y s i s   o f
F i n a n c i a l   C o n d i t i o n   a n d   R e s u l t s   o f   O p e r a t i o n s

Results  of  Operations

Year Ended December 31, 2000 versus Year Ended 
December 31, 1999

Total revenues for 2000 increased $65.6 million
(15.0%) to $502.9 million compared to $437.4 million 
in 1999 due primarily to a $41.7 million (13.1%) increase
in rentals and fees revenues, plus a $20.1 million (44.3%)
increase in non-retail sales. Of this increase in rentals and
fees revenues, $37.7 million was attributable to Aaron’s
Sales & Lease Ownership, the Company’s rental purchase
division. Rentals and fees revenues from the Company’s
rent-to-rent operations increased $4.0 million during the
same period.

Revenues from retail sales increased $121,000 (.2%) 

to $62.4 million in 2000, from $62.3 million for the 
same period last year. Non-retail sales, which primarily 
represent merchandise sold to Aaron’s Sales & Lease
Ownership franchisees, increased $20.1 million (44.3%) 
to $65.5 million compared to $45.4 million for the same
period last year. The increased sales are due to the growth
of the franchise operations.

Other revenues for 2000 increased $3.6 million
(31.4%) to $15.1 million compared to $11.5 million in
1999. This increase was attributable to franchise fee and
royalty income increasing $3.3 million (36.3%) to $12.4
million compared to $9.1 million last year, reflecting the
net addition of 38 new franchised stores in 2000 and
improved operating revenues at mature franchised stores.
Cost of sales from retail sales decreased $1.1 million
(2.4%) to $44.2 million compared to $45.3 million, and 
as a percentage of sales, decreased to 70.7% from 72.6%
primarily due to product mix. Cost of sales from non-retail
sales increased $18.5 million (43.7%) to $61.0 million
from $42.5 million, and as a percentage of sales, decreased
to 93.1% from 93.5%. The increased margins on non-retail
sales was primarily the result of slightly higher margins on
certain products sold to franchisees.

Operating expenses increased $25.7 million (12.7%) 
to $227.6 million from $201.9 million. As a percentage of
total revenues, operating expenses were 45.3% in 2000 
and 46.2% in 1999. Operating expenses decreased as 
a percentage of total revenues between years primarily 
due to increased revenues in the Aaron’s Sales & Lease
Ownership division.

Depreciation of rental merchandise increased $18.3
million (17.9%) to $120.7 million, from $102.3 million,
and as a percentage of total rentals and fees increased to
33.5% from 32.2% in 1999. The increase as a percentage
of rentals and fees is primarily due to a greater percentage
of the Company’s rentals and fees coming from the 
Aaron’s Sales & Lease Ownership division which depre-
ciates its rental merchandise at a faster rate than the 
rent-to-rent division.

Interest expense increased $1.5 million (37.0%) to 
$5.6 million compared to $4.1 million. As a percentage 
of total revenues, interest expense was 1.1% in 2000 
compared to .9% in 1999. The increase in interest expense
as a percentage of revenues was due to increased interest
rates along with higher daily average debt levels.

The Company manages its exposure to changes in
short-term interest rates, particularly to reduce the impact
on its floating-rate revolving credit facility, by entering
into interest rate swap agreements. The counterparties to
these contracts are high credit quality commercial banks.
Consequently, credit risk, which is inherent in all swaps,
has been minimized to a large extent. Interest expense 
is adjusted for the differential to be paid or received as
interest rates change. The effect of such adjustments on
interest expense has not been significant. The level of
floating-rate debt fixed by swap agreements was $40.0 
million during the year and the Company does not expect
a significant change in this amount in 2001. Accordingly, 
the Company does not believe it has material exposure 
of potential near-term losses in future earnings, and/or 
cash flows from reasonably possible near-term changes 
in market rates.

Income tax expense increased $945,000 (6.0%) to
$16.6 million compared to $15.7 million. The Company’s
effective tax rate was 37.9% in 2000 compared to 38.0% 
in 1999. 

As a result, net earnings increased $1.7 million (6.5%)

to $27.3 million for 2000 compared to $25.6 million for
the same period in 1999. As a percentage of total revenues,
net earnings were 5.4% in 2000 and 5.9% in 1999.

The decrease in net earnings as a percentage of total
revenues is the result of startup losses associated with the
increased rate at which the Company opened new Aaron’s
Sales & Lease Ownership stores with 32 stores opened in
2000 compared to 17 in 1999.

Year Ended December 31, 1999 versus Year Ended 
December 31, 1998

Total revenues for 1999 increased $57.7 million (15.2%)
to $437.4 million compared to $379.7 million in 1998 due
primarily to a $28.9 million (10.0%) increase in rentals
and fees revenues, plus a $26.4 million (139.1%) increase
in non-retail sales. Of this increase in rentals and fees 
revenues, $32.7 million was attributable to the Aaron’s
Sales & Lease Ownership division. Rentals and fees from
the Company’s rent-to-rent operations increased $2.0 
million excluding $5.8 million of rentals and fees from 
the Company’s convention furnishings division, which 
was sold in the fourth quarter of 1998.

Revenues from retail sales decreased $280,000 (.4%) 
to $62.3 million in 1999 from $62.6 million for the same
period in 1998. The decrease was the result of new sales 
in the rent-to-rent division decreasing and the discon-
tinued sale of prepaid cellular air time in the rental 
purchase division. Non-retail sales, which primarily 
represent merchandise sold to Aaron’s Sales & Lease
Ownership franchisees, increased $26.4 million (139.1%)
to $45.4 million compared to $19.0 million for the same
period in 1998. The increased sales are due to the growth
of the franchise operations coupled with the addition of a
new distribution center.

15

Other revenues for 1999 increased $2.7 million (30.5%)

Liquidity  and  Capital  Resources

to $11.5 million compared to $8.8 million in 1998. This
increase was attributable to franchise fee and royalty
income increasing $1.8 million (25.3%) to $9.1 million
compared to $7.3 million in 1998, reflecting the net 
addition of 19 new franchised stores in 1999 and 
increasing operating revenues at mature franchised stores.
Cost of sales from retail sales increased $868,000
(2.0%) to $45.3 million compared to $44.4 million, and 
as a percentage of sales, increased slightly to 72.6% from
70.9% primarily due to product mix. Cost of sales from
non-retail sales increased $24.8 million (140.8%) to $42.5
million from $17.6 million, and as a percentage of sales,
increased to 93.5% from 92.9%. The reduced margins on
non-retail sales was primarily the result of lower margins
on certain products sold to franchisees.

Operating expenses increased $12.2 million (6.4%) to

$201.9 million from $189.7 million. As a percentage of
total revenues, operating expenses were 46.2% in 1999 
and 50.0% in 1998. Operating expenses decreased as a 
percentage of total revenues between years primarily due to
increased revenues in the Aaron’s Sales & Lease Ownership
division and the sale of the Company’s convention furnish-
ings division which had higher operating expenses than 
traditional rent-to-rent and rental purchase operations.
Depreciation of rental merchandise increased $13.2
million (14.8%) to $102.3 million, from $89.2 million, 
and as a percentage of total rentals and fees, was 32.2%
compared to 30.8% in 1998. The increase as a percentage
of rentals and fees is primarily due to a greater percentage
of the Company’s rentals and fees coming from the 
Aaron’s Sales & Lease Ownership division which depre-
ciates its rental merchandise at a faster rate than the 
rent-to-rent division.

Interest expense increased $544,000 (15.3%) to $4.1
million compared to $3.6 million. As a percentage of total
revenues, interest expense remained unchanged at 0.9%. 
Income tax expense increased $2.0 million (14.5%) to
$15.7 million compared to $13.7 million. The Company’s
effective tax rate was 38.0% in 1999 compared to 39.0% 
in 1998.

As a result, net earnings increased $4.1 million (19.2%)

to $25.6 million for 1999 compared to $21.5 million for
the same period in 1998. As a percentage of total revenues,
net earnings were 5.9% in 1999 and 5.7% in 1998.

Cash flows from operations for the years ended
December 31, 2000 and 1999 were $166.2 million and
$140.3 million, respectively. Such cash flows include 
profits on the sale of rental return merchandise. The
Company’s primary capital requirements consist of 
acquiring rental merchandise for both rent-to-rent and
Company-operated Aaron’s Sales & Lease Ownership
stores. As the Company continues to grow, the need for
additional rental merchandise will continue to be the
Company’s major capital requirement. These capital
requirements historically have been financed through 
bank credit, cash flow from operations, trade credit, 
proceeds from the sale of rental return merchandise 
and stock offerings.

The Company has financed its growth through a
revolving credit agreement with several banks, trade 
credit and internally generated funds. The revolving credit
agreement provides for unsecured borrowings up to $90.0
million which includes a $6.0 million credit line to fund
daily working capital requirements. At December 31, 2000,
an aggregate of $90.0 million was outstanding under this
facility, bearing interest at a weighted average variable rate
of 7.04%. The Company uses interest rate swap agreements
as part of its overall long-term financing program. At
December 31, 2000, the Company had swap agreements
with notional principal amounts of $40.0 million which
effectively fixed the interest rates on an equal amount of
the Company’s revolving credit agreement at 6.93%.

In 2000, the Company entered into a credit agreement

with two banks providing for unsecured borrowings up 
to $10,000,000. At December 31, 2000 and aggregate of
$10,000,000 bearing interest at libor plus 1.00% was out-
standing under the agreement. The debt matures in 2001.
In addition, the Company issued $4,200,000 of industrial
development corporation revenue bonds. The average
weighted borrowing rate on these bonds in 2000 was 4.55%.
No principal payments are due on the bonds until maturity
in 2015.

On April 28, 1998, the Company issued through a 
public offering 2.1 million shares of Common Stock. The
net proceeds to the Company after deducting underwriting
discounts and offering expenses were $40.0 million. The
proceeds were used to reduce bank debt.

The Company believes that the expected cash flows
from operations, proceeds from the sale of rental return
merchandise, bank borrowings and vendor credit will be
sufficient to fund the Company’s capital and liquidity
needs for at least the next 24 months.

During 2000, 327,500 shares of the Company’s stock
were purchased at an aggregate cost of $4.6 million and
the Company was authorized to purchase an additional
1,284,690 shares at December 31, 2000.

The Company has paid dividends for fourteen con-
secutive years. A $.02 per share dividend on Common
Stock and on Class A Common Stock was paid in January
2000 and July 2000, for a total fiscal year cash outlay of
$792,000. The Company currently expects to continue 
its policy of paying dividends.

16

C o n s o l i d a t e d  
B a l a n c e   S h e e t s

(In Thousands, Except Share Data)

A s s e t s
Cash
Accounts Receivable
Rental Merchandise
Less: Accumulated Depreciation

Property, Plant & Equipment, Net
Prepaid Expenses & Other Assets
Total Assets

L i a b i l i t i e s   &   S h a r e h o l d e r s ’   E q u i t y
Accounts Payable & Accrued Expenses
Dividends Payable
Deferred Income Taxes Payable
Customer Deposits & Advance Payments
Bank Debt
Other Debt

Total Liabilities

Commitments & Contingencies
Shareholders’ Equity

Common Stock, Par Value $.50 Per Share;

Authorized: 25,000,000 Shares; 
Shares Issued: 18,270,987

Class A Common Stock, Par Value $.50 Per Share; 

Authorized: 25,000,000 Shares; 
Shares Issued: 5,361,761 

Additional Paid-In Capital
Retained Earnings

Less: Treasury Shares at Cost,

Common Stock, 2,230,446 Shares at December 31, 2000 

& 2,177,956 Shares at December 31, 1999

Class A Common Stock, 1,532,255 Shares 

Total Shareholders’ Equity
Total Liabilities & Shareholders’ Equity

December 31,
2000

December 31,
1999

$

95
23,637
381,930
(114,217)
267,713
63,174
25,760
$380,379

$ 34,693
399
20,986
10,994
100,000
4,769
171,841

$

99
21,030
316,294
(96,463)
219,831
55,918
21,530
$318,408

$ 36,941
399
14,410
10,180
72,225
535
134,690

9,135

9,135

2,681
53,662
185,782
251,260

2,681
54,181
159,313
225,310

(28,486)
(14,236)
208,538
$380,379

(27,356)
(14,236)
183,718
$318,408

The accompanying notes are an integral part of the Consolidated Financial Statements.

C o n s o l i d a t e d   S t a t e m e n t s  
o f   E a r n i n g s

17

(In Thousands,
Except Per Share)

R e v e n u e s
Rentals & Fees
Retail Sales
Non-Retail Sales
Other

C o s t s   &   E x p e n s e s
Retail Cost of Sales
Non-Retail Cost of Sales
Operating Expenses
Depreciation of Rental Merchandise
Interest

Earnings Before Income Taxes
Income Taxes
Net Earnings
Earnings Per Share 
Earnings Per Share Assuming Dilution

Year Ended
December 31,
2000

Year Ended
Year Ended
December 31, December 31,

1999

1998

$359,880
62,417
65,498
15,125
502,920

44,156
60,996
227,587
120,650
5,625
459,014

43,906
16,645
$ 27,261
1.38
$
1.37

$318,154
62,296
45,394
11,515
437,359

45,254
42,451
201,923
102,324
4,105
396,057

41,302
15,700
$ 25,602
1.28
$
1.26

$289,272
62,576
18,985
8,826
379,659

44,386
17,631
189,719
89,171
3,561
344,468

35,191
13,707
$ 21,484
1.06
$
1.04

The accompanying notes are an integral part of the Consolidated Financial Statements.

C o n s o l i d a t e d   S t a t e m e n t s  
o f   S h a r e h o l d e r s ’   E q u i t y

(In Thousands)

Treasury Stock

Common Stock

Shares

Amount

Common

Class A

$8,085
1,050

$2,681

Additional
Paid-In
Capital

$15,484
38,908

(108)

(2,583)

($23,659)

(736)

(10,560)

235

2,479

(3,084)
(860)

(31,740)
(12,673)

Balance, December 31, 1997
Stock Offering
Reacquired Shares
Dividends
Reissued Shares
Net Earnings

Balance, December 31, 1998
Reacquired Shares
Dividends
Reissued Shares
Net Earnings

Balance, December 31, 1999
Reacquired Shares
Dividends
Reissued Shares
Net Earnings

9,135

2,681

54,284

234

2,821

(103)

(3,710)
(328)

(41,592)
(4,625)

9,135

2,681

54,181

275

3,495

(519)

Retained
Earnings

$113,864

(837)

21,484

134,511

(800)

25,602

159,313

(792)

27,261

Balance, December 31, 2000

(3,763)

($42,722)

$9,135

$2,681

$53,662

$185,782

The accompanying notes are an integral part of the Consolidated Financial Statements.

18

(In Thousands)

O p e r a t i n g   A c t i v i t i e s
Net Earnings
Depreciation & Amortization
Deferred Income Taxes
Change in Accounts Payable & 

Accrued Expenses

Change in Accounts Receivable
Other Changes, Net
Cash Provided by Operating Activities

I n v e s t i n g   A c t i v i t i e s
Additions to Property, Plant & Equipment
Book Value of Property Retired or Sold
Additions to Rental Merchandise
Book Value of Rental Merchandise Sold
Contracts & Other Assets Acquired
Cash Used by Investing Activities

F i n a n c i n g   A c t i v i t i e s
Proceeds from Revolving Credit Agreement
Repayments on Revolving Credit Agreement
Proceeds from Common Stock Offering
Increase (Decrease) in Other Debt
Dividends Paid
Acquisition of Treasury Stock
Issuance of Stock under Stock Option Plans
Cash Provided by Financing Activities
(Decrease) Increase in Cash
Cash at Beginning of Year
Cash at End of Year

Cash Paid During the Year:

Interest
Income Taxes

C o n s o l i d a t e d   S t a t e m e n t s
o f   C a s h   F l o w s

Year Ended
December 31,
2000

Year Ended
December 31,
1999

Year Ended
December 31,
1998

$ 27,261
133,109
6,576

$ 25,602
112,746
6,599

$ 21,484
98,090
1,124

3,109
(4,432)
1,253
120,628

(22,209)
3,521
(174,496)
69,018
(1,841)
(126,007)

157,622
(183,115)
39,958
734
(801)
(10,560)
1,540
5,378
(1)
96
95

$

(2,248)
(2,607)
4,074
166,165

(23,761)
7,326
(279,580)
115,601
(14,273)
(194,687)

3,480
(4,804)
(3,330)
140,293

(21,030)
5,833
(218,933)
95,840
(11,393)
(149,683)

198,403
(170,628)

180,213
(158,399)

(781)
(816)
(12,673)
1,850
9,394
4
95
99

4,234
(792)
(4,625)
1,926
28,518
(4)
99
95

5,674
5,762

$

$

$

$

4,025
15,289

$

4,082
10,004

The accompanying notes are an integral part of the Consolidated Financial Statements.

19

N o t e s   t o   C o n s o l i d a t e d
F i n a n c i a l   S t a t e m e n t s

As of December 31, 2000 and 1999, and for the Years Ended December 31, 2000, 1999 and 1998.

Note  A:  Summary  of  Significant 
Accounting  Policies

Basis of Presentation — The consolidated financial statements include the accounts of Aaron Rents, Inc.
and its wholly-owned subsidiaries (the Company). All significant intercompany accounts and transactions
have been eliminated. The preparation of the Company’s consolidated financial statements in conformity
with generally accepted accounting principles requires management to make estimates and assumptions
that affect the amounts reported in these financial statements and accompanying notes. Actual results
could differ from those estimates.

Line of Business — The Company is engaged in the business of renting and selling residential and
office furniture, consumer electronics, appliances and other merchandise throughout the U.S. and Puerto
Rico. The Company manufactures furniture principally for its rental and sales operations. 

Rental Merchandise consists primarily of residential and office furniture, consumer electronics, appliances
and other merchandise and is recorded at cost. The sales & lease ownership division depreciates merchan-
dise over the agreement period, generally 12 months, when on rent, and 36 months, when not on rent, to
a 0% salvage value. This method is similar to a method referred to as the income forecasting method in
the rental purchase industry. The rent-to-rent division depreciates merchandise over its estimated useful
life which ranges from 6 months to 60 months, net of its salvage value which ranges from 0% to 60%. 
All rental merchandise is available for rental and sale.

Property, Plant and Equipment are recorded at cost. Depreciation and amortization are computed on a
straight-line basis over the estimated useful lives of the respective assets, which are from 8 to 27 years for
buildings and improvements and from 1 to 5 years for other depreciable property and equipment. Gains
and losses related to dispositions and retirements are expensed as incurred. Maintenance and repairs are
also expensed as incurred; renewals and betterments are capitalized. 

Deferred Income Taxes are provided for temporary differences between the amounts of assets and 
liabilities for financial and tax reporting purposes. Such temporary differences arise principally from the
use of accelerated depreciation methods on rental merchandise for tax purposes.

Cost of Sales includes the net book value of merchandise sold, primarily using specific identification 

in the sales & lease ownership division and first-in, first-out in the rent-to-rent division. It is not prac-
ticable to allocate operating expenses between selling and rental operations.

Shipping and Handling Costs — Shipping and handling costs are classified as operating expenses in 
the accompanying consolidated statements of operations and totaled approximately $17,397,000 in 2000,
$15,129,000 in 1999 and $13,458,000 in 1998. 

Advertising — The Company expenses advertising costs as incurred. Such costs aggregated $11,937,000

in 2000, $12,496,000 in 1999, and $11,523,000 in 1998. 

Stock Based Compensation — The Company has elected to follow Accounting Principles Board

Opinion No. 25, Accounting for Stock Issued to Employees and related Interpretations in accounting for its
employee stock options and adopted the disclosure-only provisions of Statement of Financial Accounting
Standards No. 123, Accounting for Stock Based Compensation (FAS 123). The Company grants stock
options for a fixed number of shares to employees with an exercise price equal to the fair value of the
shares at the date of grant and, accordingly, recognizes no compensation expense for the stock option
grants. Income tax benefits resulting from stock option exercises credited to additional paid-in capital
totaled approximately $540,000, $867,000 and $830,000, in 2000, 1999 and 1998, respectively.

Excess Costs over Net Assets Acquired — Goodwill is amortized on a straight-line basis over a period 
of twenty years. Long-lived assets, including goodwill, are periodically reviewed for impairment based on
an assessment of future operations. The Company records impairment losses on long-lived assets used in
operations when indicators of impairment are present and the undiscounted cash flows estimated to be
generated by those assets are less than the assets’ carrying amount. Measurement of an impairment loss 
is based on the estimated fair value of the asset.

Fair Value of Financial Instruments — The carrying amounts reflected in the consolidated balance

sheets for cash, accounts receivable, bank and other debt approximate their respective fair values.

Revenue Recognition — Rental revenues are recognized as revenue in the month they are due. Rental
payments received prior to the month due are recorded as deferred rental revenue. Revenues from the sale
of residential and office furniture and other merchandise are recognized at the time of shipment.

20

New Accounting Pronouncements — In June 1998, the FASB issued Statement No.133, Accounting for
Derivative Instruments and Hedging Activities (Statement 133). The statement requires the Company to 
recognize all derivatives on the balance sheet at fair value. Derivatives that are not hedges must be 
adjusted to fair value through income. If the derivative is a hedge, depending on the nature of the hedge,
changes in the fair value of derivatives are either offset against the change in fair value of the hedged
assets, liabilities, or firm commitments through earnings or recognized in comprehensive income until 
the hedged item is recognized in earnings. The ineffective portion of a derivative’s change in fair value
will be immediately recognized in earnings.

The Company adopted Statement 133 on January 1, 2001. The cumulative effect of this adoption had

no significant effect on the Company’s financial position or results of operations.

Note  B:  Earnings  Per  Share

Earnings per share is computed by dividing net income by the weighted average number of common
shares outstanding during the year which were 19,825,000 shares in 2000, 20,062,000 shares in 1999, 
and 20,312,000 in 1998. The computation of earnings per share assuming dilution includes the dilutive
effect of stock options and awards. Such stock options and awards had the effect of increasing the 
weighted average shares outstanding assuming dilution by 142,000 in 2000, 273,000 in 1999 and 
421,000 in 1998, respectively.

Note  C:  Property,  Plant  &  Equipment 

(In Thousands)

Land
Buildings & Improvements
Leasehold Improvements & Signs
Fixtures & Equipment
Construction in Progress

Less: Accumulated Depreciation & Amortization

December 31,  December 31,

2000

1999

$

8,977
28,681
34,128
25,786
2,051
99,623
(36,449)
$ 63,174

$

8,837
25,612
31,294
24,622
1,043
91,408
(35,490)
$ 55,918

Note  D:  Debt

Bank Debt — The Company has a revolving credit agreement with four banks providing for unsecured
borrowings up to $90,000,000, which includes a $6,000,000 credit line to fund daily working capital
requirements. Amounts borrowed bear interest at the lower of the lender’s prime rate, libor plus .50%, or
the rate at which certificates of deposit are offered in the secondary market plus .625%. The pricing under
the working capital line is based upon overnight bank borrowing rates. At December 31, 2000 and 1999,
an aggregate of $90,000,000 (bearing interest at 7.04%) and $72,225,000 (bearing interest at 6.88%),
respectively, was outstanding under this agreement. The Company pays a .22% commitment fee on
unused balances. The weighted average interest rate on borrowings under the revolving credit agreement
(before giving effect to interest rate swaps) was 7.07% in 2000, 5.94% in 1999 and 6.41% in 1998. The
effects of interest rate swaps on the weighted average interest rate were not material.

The Company has entered into interest rate swap agreements that effectively fix the interest rate 
on $20,000,000 of borrowings under the revolving credit agreement at an average rate of 7.0% until
November 2003 and an additional $20,000,000 at an average rate of 6.85% until June 2005. These swap
agreements involve the receipt of amounts when the floating rates exceed the fixed rates and the payment
of amounts when the fixed rates exceed the floating rates in such agreements over the life of the agree-
ments. The differential to be paid or received is accrued as interest rates change and is recognized as an
adjustment to the floating rate interest expense related to the debt. The related amount payable to or
receivable from counterparties is included in accrued liabilities or other assets. Unrealized losses under 
the swap agreements aggregated $804,000 at December 31, 2000.

The revolving credit agreement may be terminated on ninety days’ notice by the Company or six
months’ notice by the lenders. The debt is payable in 60 monthly installments following the termination
date if terminated by the lenders.

The agreement requires that the Company not permit its consolidated net worth as of the last day of
any fiscal quarter to be less than the sum of (a) $105,000,000 plus (b) 50% of the Company’s consolidated

21

N o t e s   t o   C o n s o l i d a t e d
F i n a n c i a l   S t a t e m e n t s

net income (but not loss) for the period beginning July 1, 1997 and ending on the last day of such fiscal
quarter. It also places other restrictions on additional borrowings and requires the maintenance of certain
financial ratios. At December 31, 2000, $61,640,000 of retained earnings were available for dividend 
payments and stock repurchases under the debt restrictions.

In September 2000, the Company entered into a credit agreement with two banks providing for 
unsecured borrowings up to $10,000,000. At December 31, 2000 an aggregate of $10,000,000 bearing
interest at libor plus 1.00% was outstanding under the agreement. The debt matures in 2001.

Other Debt — Other debt at December 31, 2000 of $4,769,000 is primarily comprised of $4,200,000 of
industrial development corporation revenue bonds. The average weighted borrowing rate on these bonds
in 2000 was 4.55%. No principal payments are due on the bonds until maturity in 2015.

(In Thousands)

Current Income Tax Expense:
Federal
State

Deferred Income Tax Expense:
Federal
State

Note  E:  Income  Taxes

Year Ended
December 31,
2000

Year Ended
Year Ended
December 31,  December 31,

1999

1998

$9,461
608
10,069

5,520
1,056
6,576
$16,645

$8,020
1,081
9,101

5,989
610
6,599
$15,700

$11,422
1,161
12,583

949
175
1,124
$13,707

Significant components of the Company’s deferred income tax liabilities and assets are as follows:

(In Thousands)

Deferred Tax Liabilities:

Rental Merchandise and 

Property, Plant & Equipment

Other, Net

Total Deferred Tax Liabilities
Deferred Tax Assets:

Accrued Liabilities
Advance Payments
Other, Net

Total Deferred Tax Assets
Net Deferred Tax Liabilities

December 31,
2000

December 31, 
1999

$25,770
1,531
27,301

1,324
3,179
1,812
6,315
$20,986

$19,345
577
19,922

961
2,858
1,693
5,512
$14,410

The Company’s effective tax rate differs from the federal income tax statutory rate as follows:

Statutory Rate
Increases in Taxes 

Resulting From:

State Income Taxes, 

Net of Federal Income 
Tax Benefit

Other, Net
Effective Tax Rate

Year Ended
December 31,
2000

35.0%

Year Ended
Year Ended
December 31,  December 31,

1999

35.0%

1998

35.0%

2.5
0.4
37.9%

2.7
0.3
38.0%

2.4
1.6
39.0%

22

Note  F:  Commitments

The Company leases warehouse and retail store space for substantially all of its operations under operating
leases expiring at various times through 2013. Most of the leases contain renewal options for additional
periods ranging from 1 to 15 years or provide for options to purchase the related property at predeter-
mined purchase prices which do not represent bargain purchase options. The Company also leases trans-
portation equipment under operating leases expiring during the next 3 years. Management expects that
most leases will be renewed or replaced by other leases in the normal course of business.

Future minimum rental payments, including guaranteed residual values, required under operating 
leases that have initial or remaining non-cancelable terms in excess of one year as of December 31, 2000,
are as follows: $28,238,000 in 2001; $19,892,000 in 2002; $14,388,000 in 2003; $10,558,000 in 2004;
$9,252,000 in 2005; and $6,404,000 thereafter.

Rental expense was $30,659,000 in 2000; $28,851,000 in 1999; and $25,563,000 in 1998.
The Company leases one building from an officer of the Company under a lease expiring in 2008 for

annual rentals aggregating $212,700.

The Company maintains a 401(k) savings plan for all full-time employees with at least one year of
service with the Company and who meet certain eligibility requirements. The plan allows employees to
contribute up to 10% of their annual compensation with 50% matching by the Company on the first 4%
of compensation. The Company’s expense related to the plan was $427,000 in 2000; $447,000 in 1999; 
and $415,000 in 1998.

Note  G:  Shareholders’  Equity

In February 1999, the Company’s Board of Directors authorized the repurchase of up to 2,000,000 shares
of the Company’s Common Stock and/or Class A Common Stock. During 2000, 327,500 shares of the
Company’s common shares were purchased at an aggregate cost of $4,625,000 and the Company was
authorized to purchase an additional 1,284,690 at December 31, 2000. At December 31, 2000, the
Company held a total of 3,762,701 common shares in its treasury.

On April 28, 1998, the Company issued, through a public offering, 2,100,000 shares of Common
Stock. The net proceeds to the Company after deducting underwriting discounts and offering expenses
were $39,958,000. The net proceeds were used to reduce indebtedness and for general business purposes.

The Company has 1,000,000 shares of preferred stock authorized. The shares are issuable in series with
terms for each series fixed by the Board and such issuance is subject to approval by the Board of Directors.
No preferred shares have been issued.

Note  H:  Stock  Options

The Company has stock option plans under which options to purchase shares of the Company’s Common
Stock are granted to certain key employees. Under the plans, options granted become exercisable after 
a period of two or three years and unexercised options lapse five or ten years after the date of the grant.
Options are subject to forfeiture upon termination of service. Under the plans, 1,425,000 of the Company
shares are reserved for issuance at December 31, 2000. The weighted average fair value of options granted
was $8.11 in 2000, $9.55 in 1999 and $9.26 in 1998.

Pro forma information regarding net earnings and earnings per share is required by FAS 123, and has
been determined as if the Company had accounted for its employee stock options granted in 2000, 1999
and 1998 under the fair value method. The fair value for these options was estimated at the date of grant
using a Black-Scholes option pricing model with the following weighted average assumptions for 2000,
1999 and 1998, respectively: risk-free interest rates of 6.47%, 6.36% and 5.36%, a dividend yield of .28%,
.23% and .26%; a volatility factor of the expected market price of the Company’s Common Stock of .45,
.42 and .43; and a weighted average expected life of the option of 8 years.

The Black-Scholes option valuation model was developed for use in estimating the fair value of traded
options which have no vesting restrictions and are fully transferable. In addition, option valuation models
require the input of highly subjective assumptions including the expected stock price volatility. Because the
Company’s employee stock options have characteristics significantly different from those of traded options,
and because changes in the subjective input assumptions can materially affect the fair value estimate, in
management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair
value of its employee stock options.

23

N o t e s   t o   C o n s o l i d a t e d
F i n a n c i a l   S t a t e m e n t s

For purposes of pro forma disclosures, the estimated fair value of the options is amortized to expense

over the options’ vesting period. The Company’s pro forma information follows:

(In Thousands Except Per Share)

Pro Forma Net Earnings
Pro Forma Earnings Per Share
Pro Forma Earnings Per Share

Assuming Dilution

Years Ended December 31,
1999

1998

2000

$25,910
1.31

$24,424
1.22

$20,076
.99

1.30

1.20

.97

The table below summarizes option activity for the periods indicated in the Company’s stock 

option plans.

(In Thousands Except Per Share)

Outstanding at December 31, 1997

Granted
Exercised
Forfeited

Outstanding at December 31, 1998

Granted
Exercised
Forfeited

Outstanding at December 31, 1999

Granted
Exercised
Forfeited

Outstanding at December 31, 2000
Exercisable at December 31, 2000

Weighted 
Average
Exercise 
Price

$10.07
16.73
6.53
15.47
10.92
16.74
7.91
16.33
12.17
13.73
8.22
16.18
13.02
$11.38

Options

1,585
133
(235)
(101)
1,382
230
(233)
(77)
1,302
405
(235)
(95)
1,377
726

The following table summarizes information about stock options outstanding at December 31, 2000.

Options Outstanding

Options Exercisable

Range of Exercise Prices December 31, 2000

Number
Outstanding

Weighted Average Weighted
Average 
Exercise
Price

Remaining
Contractual
Life

Number
Exercisable
December 31, 2000

Weighted
Average
Exercise
Price

$ 9.87 – $10.00
10.01 – 15.00
15.01 – 20.25
$ 9.87 – $20.25

544,500
449,500
383,250
1,377,250

5.27 years
9.18 years
8.16 years
7.19 years

$ 9.88
13.49
16.94
$13.02

544,500

$ 9.88

182,000
726,500

15.94
$11.38

24

Note  I:  Franchising  of  Aaron’s  Sales 
&  Lease  Ownership  Stores

The Company franchises Aaron’s Sales & Lease Ownership stores. As of December 31, 2000 and
December 31, 1999, 339 and 277 franchises had been awarded, respectively. Franchisees pay a non-
refundable initial franchise fee of $35,000 and an ongoing royalty of 5% of cash receipts. Franchise 
fees and area development franchise fees are generated from the sale of rights to develop, own and 
operate Aaron’s Sales & Lease Ownership stores. These fees are recognized when substantially all of the
Company’s obligations per location are satisfied (generally at the date of the store opening). Franchise
fees and area development fees received prior to the substantial completion of the Company’s obligations
are deferred. The Company includes this income in Other Revenues in the Consolidated Statement 
of Earnings. 

The Company has guaranteed certain debt obligations of some of the franchisees amounting to
$39,127,000 at December 31, 2000. The Company receives a guarantee and servicing fee based on 
such franchisees’ outstanding debt obligations which it recognizes as income as earned. The Company 
has recourse rights to the assets securing the debt obligations. As a result, the Company does not 
expect to incur any significant losses under these guarantees.

Note  J:  Acquisitions  and  Dispositions

During 1998, the Company acquired five rental purchase stores from a franchisee and acquired a lamp
designer and manufacturer, Lamps Forever, Inc. The aggregate purchase price of these 1998 acquisitions
was not significant. In 1999, the Company acquired 18 rental purchase stores with an aggregate purchase
price of $10,252,000. The excess cost over the fair market value of tangible assets acquired was approxi-
mately $5,985,000. Also in 1999, the Company acquired two rent-to-rent stores. The aggregate purchase
price of these 1999 acquisitions was not significant. During 2000, the Company acquired 20 rental 
purchase stores including nine stores purchased from franchisees and 10 stores located in Puerto Rico.
The aggregate purchase price of these 2000 acquisitions was $14,273,000 and the excess cost over the 
fair market value of tangible assets acquired was approximately $7,150,000.

These acquisitions were accounted for under the purchase method and, accordingly, the results of
operations of the acquired businesses are included in the Company’s results of operations from their 
dates of acquisition. The effect of these acquisitions on the 2000, 1999 and 1998 consolidated financial
statements was not significant.

In October 1998, the Company sold substantially all of the assets of its convention furnishings division.

In 2000, the Company sold four of its rent-to-rent stores and an additional four in 1999. The effect of
these sales on the consolidated financial statements was not significant.

Note  K:  Segments 

Description of Products and Services of Reportable Segments

Aaron Rents, Inc. has four reportable segments: sales & lease ownership, rent-to-rent, franchise 
and manufacturing. The sales & lease ownership division offers electronics, residential furniture and
appliances to consumers primarily on a monthly payment basis with no credit requirements. The rent-
to-rent division rents and sells residential and office furniture to businesses and consumers who meet 
certain minimum credit requirements. The Company’s franchise operation sells and supports franchises of
its sales & lease ownership concept. The manufacturing division manufactures upholstery, office furniture,
lamps and accessories, and bedding predominantly for use by the other divisions.

The principal source of revenue in the “Other” category was the Company’s convention furnishings

division which was sold during 1998.

Measurement of Segment Profit or Loss and Segment Assets

The Company evaluates performance and allocates resources based on revenue growth and pre-tax
profit or loss from operations. The accounting policies of the reportable segments are the same as those
described in the summary of significant accounting policies except that the sales & lease ownership 
division revenues and certain other items are presented on a cash basis. Intersegment sales are completed
at internally negotiated amounts ensuring competitiveness with outside vendors. Since the intersegment
profit and loss affect inventory valuation, depreciation and cost of goods sold are adjusted when interseg-
ment profit is eliminated in consolidation.

Factors Used by Management to Identify the Reportable Segments

Aaron Rents, Inc.’s reportable segments are business units that service different customer profiles using

distinct payment arrangements. The reportable segments are each managed separately because of differ-
ences in both customer base and infrastructure.

N o t e s   t o   C o n s o l i d a t e d
F i n a n c i a l   S t a t e m e n t s

Information on segments and a reconciliation to earnings before income taxes are as follows:

25

Years Ended December 31,
1999

1998

2000

(In Thousands)

Revenues From External Customers:
Sales & Lease Ownership
Rent-to-Rent
Franchise
Other
Manufacturing
Elimination of Intersegment Revenues
Cash to Accrual Adjustments

Total Revenues From External Customers

Earnings Before Income Taxes:
Sales & Lease Ownership
Rent-to-Rent
Franchise
Other
Manufacturing

Earnings Before Income Taxes For Reportable Segments
Elimination of Intersegment Profit
Cash to Accrual Adjustments
Other Allocations & Adjustments

Total Earnings Before Income Taxes

Assets:

Sales & Lease Ownership
Rent-to-Rent
Franchise
Other
Manufacturing
Total Assets

Depreciation & Amortization:
Sales & Lease Ownership
Rent-to-Rent
Franchise
Other
Manufacturing

Total Depreciation & Amortization

Interest Expense:

Sales & Lease Ownership
Rent-to-Rent
Franchise
Other
Manufacturing
Elimination of Intersegment Allocations

Total Interest Expense

$312,921
174,918
12,621
4,057
54,340
(54,807)
(1,130)
$502,920

$ 19,527
16,346
7,484
(943)
728
43,142
(441)
(804)
2,009
$ 43,906

$205,043
128,163
12,961
17,485
16,727
$380,379

$ 97,139
34,557
412
354
647
$133,109

$

2,750
2,496
144
235

$252,284
173,579
9,079
1,551
54,550
(53,941)
257
$437,359

$ 20,630
14,369
5,042
(1,072)
717
39,686
(357)
855
1,118
$ 41,302

$139,177
138,349
10,755
16,097
14,030
$318,408

$ 78,385
32,946
347
492
576
$112,746

$

1,702
2,317
117
(31)

$193,283
173,657
7,209
5,470
52,628
(52,067)
(521)
$379,659

$ 11,668
19,565
3,607
(744)
1,068
35,164
(901)
(344)
1,272
$ 35,191

$103,930
138,734
5,415
9,286
14,809
$272,174

$ 67,401
29,327
276
562
524
$ 98,090

$

2,826
1,698
48
(1,011)
406
(406)
3,561

$

5,625

$

4,105

$

26

Note  L:  Quarterly  Financial  Information
(Unaudited)

(In Thousands Except Per Share)

First
Quarter

Second
Quarter

Third
Quarter

Fourth 
Quarter

Y e a r   E n d e d   D e c e m b e r   3 1 ,   2 0 0 0
Revenues
Gross Profit
Earnings Before Taxes
Net Earnings
Earnings Per Share
Earnings Per Share Assuming Dilution

Y e a r   E n d e d   D e c e m b e r   3 1 ,   1 9 9 9
Revenues
Gross Profit
Earnings Before Taxes
Net Earnings
Earnings Per Share
Earnings Per Share Assuming Dilution 

$125,372
65,660
11,741
7,278
.37
.36

$

$104,303
57,706
10,779
6,679
.33
.33

$

$121,910
64,357
11,177
6,929
.35
.35

$

$107,364
59,246
10,615
6,575
.33
.32

$

$124,850
64,818
10,799
6,706
.34
.34

$

$109,379
59,340
9,860
6,108
.30
.30

$

$130,788
67,158
10,189
6,348
.32
.32

$

$116,313
59,523
10,048
6,240
.32
.31

$

Report  of  Independent  Auditors

To  the  Board  of  Directors  and 
Shareholders  of  Aaron  Rents,  Inc.:

We have audited the accompanying consolidated balance sheets of Aaron Rents, Inc. and Subsidiaries 
as of December 31, 2000 and 1999, and the related consolidated statements of earnings, shareholders’
equity and cash flows for the years ended December 31, 2000, 1999 and 1998. These financial statements
are the responsibility of the Company’s management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United
States. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable
basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the
consolidated financial position of Aaron Rents, Inc. and Subsidiaries as of December 31, 2000 and 1999,
and the consolidated results of their operations and their cash flows for the years ended December 31,
2000, 1999 and 1998, in conformity with accounting principles generally accepted in the United States.

Atlanta, Georgia
February 19, 2001

C o m m o n   S t o c k   M a r k e t  
P r i c e s   &   D i v i d e n d s

27

Common Stock

High

Low

D e c e m b e r   3 1 ,   2 0 0 0
First Quarter
Second Quarter
Third Quarter
Fourth Quarter

D e c e m b e r   3 1 ,   1 9 9 9
First Quarter
Second Quarter
Third Quarter
Fourth Quarter

$17.89
14.96
15.48
18.00

$17.00
22.25
22.00
20.00

$13.46
11.45
12.61
11.74

$12.88
15.06
16.50
15.25

Class A Common Stock

High

Low

D e c e m b e r   3 1 ,   2 0 0 0
First Quarter
Second Quarter
Third Quarter
Fourth Quarter

D e c e m b e r   3 1 ,   1 9 9 9
First Quarter
Second Quarter
Third Quarter
Fourth Quarter

$18.58
17.08
16.10
15.92

$15.50
18.00
18.56
20.00

$16.46
14.59
15.35
13.44

$11.63
11.88
14.75
14.75

Cash
Dividends
Per Share

.02

.02

.02

.02

Cash
Dividends
Per Share

.02

.02

.02

.02

The following table shows, for the periods indicated, the
range of high and low prices per share for the Common
Stock and Class A Common Stock and the cash dividends
declared per share.

The Company’s Common Stock and Class A Common

Stock are listed on the New York Stock Exchange under
the symbols “rnt” and “rnt.a,” respectively. 

The approximate number of shareholders of the

Company’s Common Stock and Class A Common Stock 
at March 15, 2001, was 4,000. The closing price for the
Common Stock and Class A Common Stock on March
15, 2001, was $15.65 and $15.35, respectively.

S t o r e   L o c a t i o n   M a p

A t   D e c e m b e r   3 1 ,   2 0 0 0
Company-Operated Sales & Lease Ownership
Franchised Sales & Lease Ownership
Rent-to-Rent
Total Stores
Manufacturing & Distribution Centers

263
193
__98
554
17

28

Board  of  Directors

R. Charles Loudermilk, Sr.
Chairman of the Board, 
Chief Executive Officer, 
Aaron Rents, Inc.
Ronald W. Allen
Retired Chairman, President
and Chief Executive Officer 
of Delta Air Lines

Officers

R. Charles Loudermilk, Sr.
Chairman of the Board, 
Chief Executive Officer, 
Aaron Rents, Inc.
Robert C. Loudermilk, Jr.
President, Chief Operating
Officer, Aaron Rents, Inc.
Gilbert L. Danielson
Executive Vice President,
Chief Financial Officer, Aaron
Rents, Inc.
William K. Butler, Jr.
President, Aaron’s Sales &
Lease Ownership Division
Eduardo Quiñones
President, Aaron Rents’ 
Rent-to-Rent Division
James L. Cates
Vice President, Risk
Management and Secretary,
Aaron Rents, Inc.
B. Lee Landers, Jr.
Vice President, Chief
Information Officer, Aaron
Rents, Inc.

Leo Benatar (1), (2)
Sr. Partner and Associate
Consultant, A.T. Kearney
William K. Butler, Jr.
President, Aaron’s Sales &
Lease Ownership Division
Gilbert L. Danielson
Executive Vice President,
Chief Financial Officer, 
Aaron Rents, Inc.

Earl Dolive (1)
Vice Chairman of the Board,
Emeritus, Genuine Parts
Company
J. Rex Fuqua
Vice Chairman, Fuqua
Enterprises, Inc.
Ingrid Saunders Jones (2)
Vice President, Corporate
External Affairs,
The Coca-Cola Company

Robert C. Loudermilk, Jr.
President, Chief Operating
Officer, Aaron Rents, Inc.
Lt. Gen. M. Collier Ross (1)
U.S. Army (retired)

Mitchell S. Paull
Senior Vice President, 
Aaron Rents, Inc.
David M. Rhodus
Vice President, General
Counsel, Aaron Rents, Inc.
Robert P. Sinclair, Jr.
Vice President, Corporate
Controller, Aaron Rents, Inc.
James D. Almond
Vice President, Franchise
Operations, Aaron’s Sales &
Lease Ownership Division
Ronald Benedit
Vice President, Florida 
Office Region
David L. Buck
Vice President, Western
Operations, Aaron’s Sales &
Lease Ownership Division
D. Bruce Cox
Vice President, Northeast
Residential Region

Bennett E. Creasman
Senior Vice President, Mid-
Atlantic Office Region 
David M. Deignan
Vice President, Marketing and
Merchandising, Aaron’s Sales
& Lease Ownership Division
K. Todd Evans
Vice President, Business
Development, Aaron 
Rents, Inc.
Joseph N. Fedorchak
Vice President, Eastern
Operations, Aaron’s Sales &
Lease Ownership Division
Phil J. Karl
Vice President, Southeast
Residential Region
Michael B. Hickey
Vice President, Management
Development, Aaron’s Sales 
& Lease Ownership Division

James C. Johnson
Vice President, Internal 
Audit, Aaron Rents, Inc.
Richard L. Levine
Vice President, Purchasing,
Aaron Rents, Inc.
William R. Mitchell
Vice President, Franchising,
Aaron’s Sales & Lease
Ownership Division
Sandra W. Richards
Vice President, West
Residential Region
Marc S. Rogovin
Vice President, Real Estate 
and Construction, Aaron
Rents, Inc.
Wayne Walter
Vice President, Western 
Office Region

Corporate  and  Shareholder  Information

Annual Shareholders Meeting
The annual meeting of the
shareholders of Aaron Rents,
Inc. will be held on Tuesday,
May 1, 2001, at 10:00 a.m.
E.D.T. on the 4th Floor,
SunTrust Plaza, 303 Peachtree
Street, Atlanta, Georgia
30303.

Form 10-K
Shareholders may obtain a
copy of the Company’s annual
report on Form 10-K filed with
the Securities and Exchange
Commission upon written
request, without charge. Such
requests should be sent to 
the attention of Gilbert L.
Danielson, Executive Vice
President, Chief Financial
Officer, Aaron Rents, Inc., 
309 E. Paces Ferry Rd., N.E.,
Atlanta, Georgia 30305-2377.

Stock Listing

RNT

Aaron Rents, Inc.’s
Common Stock and
Class A Common
Stock are traded 
on the New York
Stock Exchange 

under the symbols “rnt” and
“rnt.a,” respectively.
Transfer Agent and Registrar
SunTrust Bank, Atlanta
Atlanta, Georgia
General Counsel
Kilpatrick Stockton LLP
Atlanta, Georgia

Corporate Headquarters
309 E. Paces Ferry Rd., N.E.
Atlanta, Georgia 30305-2377
(404) 231-0011
http://www.aaronrents.com
Subsidiaries
Aaron Investment Company
10th & Market Streets
Mellon Bank Building
2nd Floor
Wilmington, Delaware 19801
(302) 888-2351
Aaron Rents, Inc. Puerto Rico
Calle Barbosa #376, 2nd Floor
Hato Rey, Puerto Rico 00926
(787) 294-0905

(1) Member of Audit Committee
(2) Member of Stock Option Committee

Aaron Rents, Inc.

309  E.  Paces  Ferry  Rd.,  N.E.
Atlanta,  Georgia  30305-2377
(404)  231-0011
www.aaronrents.com