Rent A Center : RCII Third Quarter 2020 Earnings Review

Rent-A-Center:

Third Quarter 2020 Earnings Review

IMPORTANT NOTICES

Forward-Looking Statements

This communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others, statements regarding our goals, plans and projections with respect to our operations, financial position and business strategy. Such forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "will," "expect," "intend," "could," "estimate," "predict,"

"continue," "should," "anticipate," "believe," or "confident," or the negative thereof or variations thereon or similar terminology. Such forward-looking statements are based on particular assumptions that our management has made

in light of its experience and its perception of expected future developments and other factors that it believes are appropriate under the circumstances, and are subject to various risks and uncertainties. Factors that could cause or contribute to material and adverse differences between actual and anticipated results include, but are not limited to, the impact on our business of the COVID-19 pandemic and related federal, state, and local government restrictions, including adverse changes in such restrictions or the potential re-imposition of such restrictions limiting our ability to operate or that of our retail partners or franchisees, and the continuing economic uncertainty and volatility that has resulted from such matters and the other risks detailed from time to time in the reports filed by us with the SEC, including our most recently filed Annual Report on Form 10-K, as may be updated by reports on Form 10-Q or Form 8-K filed thereafter. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this communication. Except as required by law, we are not obligated to, and do not undertake to, publicly release any revisions to these forward-looking statements to reflect any events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Use of Non-GAAP Financial Measures

This communication contains certain financial information determined by methods other than in accordance with U.S. Generally Accepted Accounting Principles (GAAP), including (1) Non-GAAP diluted earnings per share (net earnings, as adjusted for special items (as defined below), net of taxes, divided by the number of shares of our common stock on a fully diluted basis), (2) Adjusted EBITDA (net earnings before interest, taxes, depreciation and amortization, as adjusted for special items) on a consolidated and segment basis and (3) Free Cash Flow (net cash provided by operating activities less capital expenditures). "Special items" refers to certain gains and charges we view as extraordinary, unusual or non-recurring in nature and which we believe do not reflect our core business activities. For the periods presented herein, these special items are described in the quantitative reconciliation tables included below in this communication. Because of the inherent uncertainty related to the special items, management does not believe it is able to provide a meaningful forecast of the comparable GAAP measures or reconciliation to any forecasted GAAP measure without unreasonable effort.

These non-GAAP measures are additional tools intended to assist our management in comparing our performance on a more consistent basis for purposes of business decision-making by removing the impact of certain items management believes do not directly reflect our core operations. These measures are intended to assist management in evaluating operating performance and liquidity, comparing performance and liquidity across periods, planning and forecasting future business operations, helping determine levels of operating and capital investments and identifying and assessing additional trends potentially impacting our company that may not be shown solely by comparisons of GAAP measures. Consolidated Adjusted EBITDA and Free Cash Flow are also used as part our incentive compensation program for our executive officers and others.

We believe these non-GAAP financial measures also provide supplemental information that is useful to investors, analysts and other external users of our consolidated financial statements in understanding our financial results and evaluating our performance and liquidity from period to period. However, non-GAAP financial measures have inherent limitations and are not substitutes for or superior to, and they should be read together with, our consolidated financial statements prepared in accordance with GAAP. Further, because non-GAAP financial measures are not standardized, it may not be possible to compare such measures to the non-GAAP financial measures presented by other companies, even if they have the same or similar names.

Note that all sources in this presentation are from Company reports and Company estimates unless otherwise noted.

2

	Preferred Lease Invoice Volume
40%	Year-over-Year Growth
34.4%
30%
20%
10%

0%

Q1 '20

Q2 '20

Q3 '20

	Rent-A-Center Business
20%	2-Year Same Store Sales

16.6% 15%

10%

5%

0%

Q1 '20

Q2 '20

Q3 '20

1 Non-GAAP financial measure. Refer to explanations and reconciliations elsewhere in this presentation.

THIRD QUARTER 2020 REVIEW

• Consolidated revenues of $712 million, up 9.6% versus the third quarter of 2019
• Third quarter Adjusted EBITDA1 of $92.1 million increased 63% over the third quarter 2019 and Non-GAAP Diluted EPS1 of $1.04 increased 121% over third quarter 2019
• Preferred Lease invoice volume +34.4%, which drove 9.3% revenue growth in the third quarter and should benefit further revenue growth as the team executes on growing pipeline
• Eleventh consecutive quarter of positive same store sales in the Rent-A-Center Business (+16.6% on a 2-year basis), with a significant increase in profitability
• E-commerce+71% in third quarter to 21% of Rent-A-Center Business sales; on track to reach 25% of sales in 2020

Note: Same store sale methodology - Same store sales generally represents revenue earned in stores that were operated by us for 13 months or more and are reported on a constant currency basis as a percentage of total revenue earned in stores of the segment during the indicated period. The Company excludes from the same store sales base any store that receives a certain level of customer accounts from closed stores or acquisitions. The receiving store will be eligible for inclusion in the same store 3 sales base in the 24th full month following account transfer. Due to the COVID-19 pandemic and related temporary store closures, all 32 stores in Puerto Rico were excluded starting in March 2020 and will remain excluded for 18 months.

ECONOMIC TRENDS: FAVORABLE FOR LTO

• Our model has proved resilient across economic cycles with current trends supportive for LTO growth
• 70% of banks tightened lending standards in Q3, according to the Federal Reserve Bank
• Subprime borrowers saw their limits cut 19.2% as banks reduced exposure during the coronavirus pandemic

Percent of Banks Tightening	Reduction in Borrowing Limits by
Lending Standards	Banks

Source: Federal Reserve Bank

Source: Bloomberg/Transunion

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