Exhibit 99.3
Delivering Shareholder Value
April 15, 2014
Disclaimers
Safe Harbor Statement
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: Statements in this presentation regarding Aaron’s, Inc.’s business that are not historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by the use of words such as “expect,” “anticipate,” “believe,” “estimate,” “potential,” “should” or similar words. Examples of such statements include Aaron’s plans for value creation and delivery of long-term shareholder value; long-term financial targets; potential share repurchases; industry outlook; and expectations regarding accretion to earnings, increased revenues, returns to shareholders, expansion of customer base and the other expected strategic and financial benefits of the acquisition. These statements are based on current expectations, forecasts and assumptions of Aaron’s that involve risks and uncertainties which could cause actual results to differ materially from those contained in the forward-looking statements. These risks and uncertainties include: changes in general economic conditions; the impact of competition; the impact of litigation; changes to customer demand; Aaron’s ability to maintain customer privacy and information security; the cost and time required of Aaron’s management and employees and general disruption to Aaron’s operations associated with responding to any potential proxy contest; the ability to achieve expected synergies and operating efficiencies from the acquisition; the ability to successfully integrate Progressive’s operations; such integration may be more difficult, time-consuming or costly than expected; revenues following the acquisition may be lower than expected; operating costs, customer loss and business disruption may be greater than expected following the acquisition; the retention of certain key employees at Progressive; the amount of the costs, fees, expenses and charges related to the acquisition; and the risks and uncertainties discussed under “Risk Factors” in Aaron’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013. Aaron’s assumes no obligation to update the information included in this press release, whether as a result of new information, future events or otherwise.
Additional Information and Where To Find It
This communication may be deemed to be solicitation material in connection with the Aaron’s 2014 Annual Meeting of Shareholders. Aaron’s will be filing documents with the U.S. Securities and Exchange Commission (the “SEC”) in connection with the 2014 Annual Meeting of Shareholders, including the filing by Aaron’s of a proxy statement. SHAREHOLDERS ARE URGED TO READ THE AARON’S PROXY STATEMENT AND ACCOMPANYING PROXY CARD FOR THE 2014 ANNUAL MEETING OF SHAREHOLDERS WHEN IT BECOMES AVAILABLE, AS WELL AS OTHER DOCUMENTS FILED WITH THE SEC, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Shareholders may obtain these documents (when they are available) free of charge at the SEC’s website, http://www.sec.gov, and at the Investor Relations section of the Aaron’s website, http://www.aarons.com. The final Proxy Statement for the 2014 Annual Meeting of Shareholders will be mailed to shareholders of Aaron’s.
Participants in Solicitation
Aaron’s and its directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from shareholders in connection with the Aaron’s 2014 Annual Meeting of Shareholders. Information concerning such participants and their direct or indirect interests, including their beneficial ownership in Aaron’s, is available in the Aaron’s Proxy Statement for the 2013 Annual Meeting of Shareholders filed with the SEC on April 8, 2013, and will be set forth in the Proxy Statement and other materials to be filed with the SEC in connection with the 2014 Annual Meeting of Shareholders when it becomes available. Information regarding the direct and indirect beneficial ownership of the Aaron’s directors and executive officers in Aaron’s securities is also included in their respective SEC filings on Forms 3, 4 and 5. Shareholders are advised to read Aaron’s Proxy Statement for the 2014 Annual Meeting of Shareholders and other relevant documents when they become available, because they will contain important information. You can obtain free copies of these documents from Aaron’s as described above.
1
Aaron’s Up to Today
Aaron’s has enjoyed a long and successfuluccessful historyistory in lease-to-own and wee remainemain the market leadereader
However, the competitiveompetitive dynamics of the industryndustry are evolving, as is our addressable customer base
Today we are pleased to outline the next steps in that process as we shape Aaron’s to deliver shareholder value
2
Reshaping Aaron’s to Deliver Shareholder Value
The Board and management are confident in a new path for Aaron’s that addresses
the evolving customer base and competitive dynamics in the rent-to-own (“RTO”) industry
External forces are re-shaping the industry …
Virtual RTO players have broadened the scope of the industry into traditional retail channels
Credit-challenged customers are increasingly comfortable shopping online
Aaron’s traditional customer base continues to face economic challenges
…leading Aaron’s to develop a new three-pronged strategy
Acquire Progressive to establish Aaron’s as the leader in virtual RTO sector
Refocus the core business to drive higher returns from our store footprint by upgrading store base and implementing cost / efficiency initiatives
Drive incremental revenue growth through online initiatives (Aarons.com)
3
Agenda and Speakers
Overview of Our Plan for
Value Creation
RON ALLEN IL DANIELSON
CEO EVP and CFO
The Progressive Acquisition
RAY ROBINSON
Chairman
Update on Transaction Committee STEVE MICHAELS JOHN ROBINSON Review and Vintage Proposal President
EVP and Progressive CEO
Summary / Q&A
4
I. Overview of Our Plan for Value Creation
Three Primary Components of Our Plan for Value Creation
Progressive Acquisition Aaron’s Core Business
in the high-growth virtual revenue growth RTO market
Refine and grow the online platform Transforms Aaron’s Strategic and
financial profile margin
Moderate growth in Company -operated stores Continue to strengthen and grow the franchisee network Highly experienced Progressive management team Drive cash flow generation and returns
Acquisition of the market leader in the high-growth virtual RTO market
Transforms Aaron’s strategic and financial profile
Significant leveraging of capabilities among the two companies
Leadership & Goverance
Bulid and develop the next generation of Aaron’s leadership
Named 3 new independent Directors in the past 3 years
Spencer Stuart is engaged as we continue to enhance Board
Separated Chairamna/CEO role and adopted majority voting
Additional changes to executive compensation based on performance objectives
Overview of Our Plan for Value Creation
6
Aaron’s Acquisition of Progressive
Transaction » Met with Progressive in May 2013 and began active dialogue shortly thereafter
Background » Today’s announcement is the result of approximately one year of discussions
» Cash purchase price of $700 million
Purchase Price » Associated tax step-up provides estimated NPV of ~$90 million
— Implies 10.6x 2014E EV/EBITDA, 6.4x 2015E EV/EBITDA
» Immediately accretive to cash earnings per share1
Pro Forma
Financial Impact — Double digit accretive in FY2014
— Significantly more accretive in FY2015
» Financed through $200mm cash-on-hand, $126mm senior debt facility, $300mm private
Transaction placement notes, and the remainder through revolving credit facility draw
Financing — 4.1% weighted cost of new financing
— 2.1x Debt / EBITDA
» Progressive management team is fully committed to the combined business
Experienced
Management Team — Progressive to operate as a distinct business unit of Aaron’s
— Progressive will continue to be led by current CEO John Robinson and his team
1 Cash EPS accretion vs. IBES consensus estimates as of April 11, 2014. Cash EPS adjusted for post-tax transaction amortization
Overview of Our Plan for Value Creation 7
Progressive Will Enhance Aaron’s Scale, Growth Rate, and Returns
The leading player in the virtual RTO channel
Natural extension of Aaron’s business
Industry Leader in Large and Growing Market
Top-tier merchant partners and management team
Omnichannel Retailingetailing Platform
» Ability to serve customers at the point-of-sale across oss
a wide array of retail channels
Future Combination Opportunities
Integrate Progressive’s decision engine into Aaron’s
Leverage Aaron’s store footprint
Note: ’13A-’15E compound annual growth rates represent midpoint of range
Overview of Our Plan for Value Creation
Accelerated Revenue Growth
Strong and proven track record of growth
Growing merchant relationship/ strong pipeline
Attractive returns on capital
Highly Scalable Business Model
High degree of technology and automation
Centralized call center
($in millions)
($in millions)
$228
$403
$630-$650
$910-$940
2012A 2013A 2014E 2015E
$20
$39
‘12A-’13A CAGR: 77% ‘13A-’15E CAGR: 525
‘12A-’13A CAGR: 97% ‘13A-’15E CAGR: 55%
$55-$60
$90-$100
Progressive Standalone EBITDA
Progressive Standalone Revenue
8
Acquisition of Progressive Reshapes the RTO Industry
17,123
15,000
4,665
Doors of 1,325 Number 179
2,132 787 787 3,161
1,345 1,345 239
168 78 64 59
112
PF Aaron’s Rent-A-Center Aarons Easyhome³ Buddy’s Bestway³ Rent One³ Premier³ Home Rentals Furnishings³
Company -operated / Core Franchise Stores Progressive Acceptance NOW Kiosks
Aaron’s is Now the Clear Market Leader with the Scale and Presence to Reach Our ~60mm Target U.S. Households 4
1 Company data as of March 31, 2014
2 Company data as of December 31, 2013
3 AGG data as of December 31, 2013
4 Defined as households with total household income of less than $50,000
Overview of Our Plan for Value Creation
9
Combination Opportunities for Aaron’s and Progressive
Creating a Powerful Omnichannel Platform for Future Growth
Benefits to Aaron’s Benefits to Progressive
» Allows Aaron’s to evolve with new customer, » Aaron’s focused on “feeding” Progressive’s potential including attracting a younger customer demographic
Operational Improvements
» Employ Progressives decision engine and payment capabilities to improve charge-offs and profitability
» Utilize Progressives call center
Incremental Growth Channels
» Grow Aarons.com with Progressives technology
Successful Management Team to Join Aaron’s
» Progressive will be managed and operated as a distinct business unit, led by John Robinson
» Aarons focused on “feeding” Progressives potential
Financial Scale and Transparency
» Gives retail partners confidence of Progressives strong backing from Aarons, an industry leader
Tapping the Unbanked Market
» Expand Progressives customer base to unbanked customers (8-10% of US households1) by leveraging
Aarons store base
Charge-Off Pick-Up Opportunity
» Enhance Progressives profitability by utilizing Aarons store network to manage merchandise
1 2011 FDIC study
Two Powerful Platforms Combine to Create the Leading Omnichannel Provider in the RTO Market with Enhanced Strategic Capabilities
Overview of Our Plan for Value Creation 10
Sharpening the Focus on Aaron’s Core Business
Multiple Levers to Restore Stability and Profitability to Core Store Operations
1
Renewed focus on same store revenue growth
5 2 Strengthen Refine and and grow the grow our franchisee online network platform
The Industry Leader in Lease-to-Own
4 3 Drive cost Moderate efficiency to new store recapture growth margin
Improve execution
Optimize merchandising and pricing
Enhanced go-to market strategy
One-of-a-kind offering in the RTO space
Seamless, direct-to-door platform
~18mm unique visits in the last 12 months
Extensive review of operating expenses
Significant SG&A cost savings
Rigorous evaluation of Company-operated stores
Overview of Our Plan for Value Creation 11
Acquisition of Progressive and Refocus on Core Business Will Transform Aaron’s Growth Profile
Revenue Cash EPS
($ in millions) ($ in millions) $3,250–$3,350 $2.55–$2.80
$2,850–$2,950 $2.05–$2.20
$1.86
$2,235
$2,650-$1.95-$2,750 $2.10
2013A 2014E 2015E 2013A 2014E 2015E
Aaron’s Aaron’s + Progressive Aaron’s + Progressive Full Year Pro Forma
Note: Pro forma numbers exclude impact of potential synergies.
Overview of Our Plan for Value Creation
12
II.The Progressive Acquisition
Progressive’s Strengths and Future Opportunities
Massively Untapped Market Opportunity
Industry Leading Scale/Leader in Virtual RTO
Strong Value Proposition to Merchants and Consumers Proprietary Technology and Automated Decision Engine Highly Experienced Management Team
The Progressive Acquisition 14
The Progressive Management Team is Highly Experienced and Committed to Aaron’s Going Forward
John Robinson (CEO)
Former President and COO of TMX Finance (dbaTitleMax) from 2004-2011
– Under John’s Leadership, TMX Finance grew to over 750 stores and $125mm of EBITDA
Previously worked at Morgan Stanley and Lehman Brothers
BA from Washington & Lee University; MBA from Dartmouth College
Ryan Woodley (COO, CFO)
Previously COO/CFO at DigiCert
Former Principal at Polaris Partners and Monitor Group
BS from Brigham Young University; MBA from Harvard Business School
Curt Doman (Founder, CTO)
Co-founder of Progressive and chief architect behind proprietary decision engine
Co-founder of International Document Services, Inc.
BS from University of Utah
Blake Wakefield (SVP, Sales and Marketing)
Former Head of Retail Sales, Marketing & Operations for the EMEA region of Seagate Technologies
Previously worked at New Age Electronics and Hewlett-Packard
BS from Brigham Young University; MBA from Portland State University
Frank Laura (CIO)
Served as Chief Information Officer and Director of Software engineering for Quicken Loans
Former Chief Information Officer for Entertainment Publications
BS and AS from Lawrence Technological University
Marvin Fentress (General Counsel)
Former private practice attorney -- focused on consumer finance for the last 15 years
BS from University of Virginia; JD from University of Georgia School of Law
Todd Jeffcoat (VP of Finance)
Former Chief Accounting Officer and Controller for TMX Finance
Prior to TMX Finance, served as staff accountant and Corporate Accounting Supervisor for Advance America
BS from University of South Carolina; Licensed CPA
Ryan Ray (VP of Operations)
15 years with Discover Financial Services
Former Head of Operations for Discover Student Loans
BA from University of Utah; MBA from Kellogg School of Management at Northwestern University
The Progressive Acquisition
15
Virtual Rent-to-Own Has Tremendous Growth Opportunity
Sizing the Addressable Market for Progressive
Virtual Rent-to-Own Annual Addressable Market Size in
Key Verticals
($ in billions) Appliances
$1b
6%
Other $3b 14%
Consumer Electronics $10b 42% Furniture & Bedding $4b 16%
Mobile $5b 21%
FRecent economic downturn motivated retailers to explore secondary / tertiary financing solutions
As competition increase, retailers are focused on ways to increase traffic conversion
Progressive management estimateds a sertain percentage of retialers and a certain subset of products within a industry are not likely to be a fit with progressive
Progressive management estimates that they can achieve a certain percentage of total industry revenue
Based on estimastes of retailers and products that fit with progressive’s strategy and achieving a certain percentage of industry revenue, we believe the addressable market size is ~$24 billion
Source: Bureau of Economic Analysis, Euler Hermes, IBISWorld and public filings
The Progressive Acquisition 16
Progressive is the Industry Leader in Virtual Lease-to-Own
Progressive Overview
Nation’s largest provider of virtual lease-to-own
5,500 merchant partners who operate ~15,000 retail locations
Founded in 1999 and headquartered in suburban Salt Lake City, UT; ~500 employees
“Saves the sale” for retailers when customers are turned down by traditional FICO-based lending sources
Prime and secondary lenders typically turn down ~40% of applicants
Progressive approves ~60% of those rejected applicants
Progressive drives 6-10% of incremental same store revenue for its retail partners
Technology-driven proprietary approval system
96% of sales decisions made instantly
> 500 unique attributes incorporated in credit decision; FICO scores not used or pulled at any time
Simple lease process executed by retailer at the POS
Completely paperless, efficient processing
Integrated into POS or through web portal
No need for physical kiosks or employees in stores
Trainers/Merchant Support reps onboard and provide ongoing merchant support
The Progressive Revenue Opportunity
Progressive $650mm FY14¹
Substantial Pipeline
Online Opportunity
Unbanked Market
Source: Bureau of Economic Analysis, Public Filings and Ovum
¹ High-end of estimate range
The Progressive Acquisition
17
Progressive is by Far the Largest Player in the Virtual Rent-to-Own Landscape
The Virtual RTO Competitive Landscape has Grown Significantly in Recent Years by Offering Purchasing Solutions at the Point-of-Sale for a Wide Variety of Industries
Company
Key Retail Relationships
Unmanned
Estimated # of Locations
1,325 ~5,700 2,500 Less than 1,000 on average
Primarily single store and small chain furniture locations
The Progressive Acquisition 18
Progressive is a High Growth, Best-in-Class Industry Leader
Delivered Invoice Volume Provides Revenue Visibility Invoice Volume
Q1 invoice volume and count beatbudget by 15% and 22%, respectively
($ in millions) $123 $114 $75 $81 $89 $64 $45 $45 $48
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2012A 2013A 2014A
Revenue
($ in millions) $910-$940 $630-$650 $403 $228
2012A 2013A 2014E 2015E
EBITDA
($ in millions) $90-$100
$55-$60 $39 $20
2012A 2013A 2014E 2015E
Invoice volume is a key leading indicator of future revenue and earnings
Represents retail value of newly leased products
Cumulative payments per invoice contract are highly predictable
Progressive has profitably grown invoice volume rapidly since inception
Q1 2014 invoice volume was ~15% ahead of budget
Progressive’s exposure to large and ultra-large merchants helps to drive outperformance
Given our typical collection profile, Q1 outperformance will be reflected in FY2014E revenue growth
Note: ’12A-’15E compound annual growth rates shown to midpoint of range
The Progressive Acquisition 19
Operates in states with enabling rent-to-own legislation
Typical offering is 12-month contract term, with monthly payments of 15% of invoice amount
Payments tied to pay periods, typically via ACH every two weeks
Option to purchase “same as cash, plus initial payment” price within 90 days
After 90 days, option to buy out lease contract for 65% (depending on regulation) of remaining scheduled payments
No penalty for early buyout of the lease contract
Contract amounts range from $300 to $3,000
Average contract ~$1,000
Future potential changes to contract structure due to product enhancements
Progressive Enjoys Deep Relationships with Leading Retailers Across Key Verticals
Progressive Retail Partners
Serves 5,500 retail partners with approximately 15,000 locations
40 of the top 100 and eight of the top 20 U.S. Furniture and Bedding retailers are partners
Select lect merchants rchants include Mattress ttress Firm, Big Lots, Art Vanrm, Furniture and Sleepy’s
Invoice Volume by Merchant Size Invoice Volume by Vertical
3% 2% 2%
Furniture 1-20 Doors 13% 36% Mattress
36%
21-50 Doors Mobile 50% 51-100 Doors 17% Auto >100 Doors Jewelry Electronics
9% 26% Other 5%
Note: Data as of FY2013
The Progressive Acquisition 21
Reshaping Our Core Business
Aaron’s is the Leading Lease-to-Own Specialty Retailer
Historical Revenue Historical EBITDA and Competitive Strengths 1 ($mm) Margin ($mm) A Winning Concept and Focus On Monthly $1,877 $2,013 $2,213 $2,235 13.9% 14.0%
13.2% $1,753 12.8% 12.4%
Contracts
$310 $280 $277 $248 $225
Fast Ownership With No Long Term Obligation
2009 2010 2011 2012 2013 2009 2010 2011 2012 2013
StoreBase 2 Product Mix3
Company-operated Other Furniture 63% Computers
Attractive Store Layouts Franchised 3% 35%
1,345 Stores 10% 37% 787 Stores
Wide Merchandise Selection
Appliances Consumer
20% Electronics
32%
Leading Brands Competitive Pricing
1 EBITDA adjusted to exclude one-time items relating to litigation, severance, and disposal activities
2 As of March 2014
3 As of February 28, 2014; Excludes RIMCO assets sold in January 2014
Reshaping Our Core Business
23
Aaron’s is Best Positioned to Capitalize on Substantial Opportunities in the Rent-to-Own Industry
Attractive Market Growth
Large Addressable Market
$ 8.5
+ 4.2 % CAGR
$ 5.0
Operational Improvements to Stabilize the Core Business and Improve Margin Profile
1999 2012
Rent-to-Own Industry Revenue (in billions)
Significant Opportunity for Further Customer Penetration
US HHs Under $50k Income: New Acquisition isaGame Changer ~60mm and Transforms Growth Profile
Aaron’s 1.7mm Customers
Results in Increasing Profitability and Shareholder Return
Source: APRO (Association of Progressive Rental Organizations)
Reshaping Our Core Business 24
Positioning Aaron’s for Future Success
1
Renewed focus on same store revenue growth
5 2
Strengthen Refine and
and grow the grow our
franchisee online
network platform
3 4
Drive cost Moderate efficiency to new store recapture growth margin
Reshaping Our Core Business 25
1 Renewed Focus on Same Store Revenue Growth Across the Core Business
» Enhance customer experience
— Employee training and development, including customer service
— New store design
» Reinforce leadership team to implement best practices
» Implement sophisticated POS system to support use of data analytics
— Leading to a more efficient sale process and also enables use of ‘big data’ to gain
customer insights
» Execute strategic pricing review to ensure competitiveness while continuing to be the
Optimize low cost leader
Improve Execution
Optimize Merchandising and Pricing
Enhance Go-To Market Strategy
Merchandising — Aaron’s is ~25+% lower in cost of ownership than key peers
and Pricing » Maintain targeted price points
» Offer innovative bundling options to customers
» Recently completed rollout of exciting brand and marketing campaign
» New brand campaign focuses on engaging with customers at every touch point (web,
mobile, in-store)
» Develop and deploy omnichannel to increase purchases and store traffic
» Actively engaging growing Hispanic demographic
» Leverage data analytics to drive targeting and promotional strategies
» Drive increasing traffic through Aarons.com (+18% unique visits YTD¹)
1 Through March 31, 2014
Reshaping Our Core Business 26
1 “Own the Life You Want” Branding and Marketing Campaign Supported by Enhanced Digital Offerings
Aaron’s to engage with customers at every touch point
owning easy through lease ownership, so you can own the life you want”
for success
Will be supported by enhanced digital offerings to allow more connectivity with customers at every touch point (e.g., web, mobile or in-store)
Aaron’s to engage with customers at every touch point
Emphasizes Aaron’s brand promise – “makes owning easy through lease ownership, so you can own the life you want”
Captures the spirit of the American Dream for success
Builds upon unique point of difference – Aaron’s has a proven track record of helping customers attain ownership
Commercials to be in English and Spanish as new marketing strategies will engage the growing Hispanic demographic
Will be supported by enhanced digital offerings to allow more connectivity with customers at every touch point (e.g., web, mobile or in-store)
Reshaping Our Core Business 27
2 The New Aarons. com
Re-launch of Aarons. com Presents a Tremendous Opportunity
Aarons. com Unique Visits
Large, incremental opportunity for Aaron’s to have
(millions of visits) a one of a kind offering in the lease-to-own space
17.8
platform 15.1
LTM Feb ‘13 LTM Feb ‘14
At checkout, users will be approved real-time using both Aaron’s and Progressive’s technology
Delivery logistics leverage existing infrastructure New online efforts expected to considerably and store footprint increase online traffic and conversion rates
~18 million unique visits to Aarons.com in the last twelve months
New online efforts expected to considerably increase online traffic and conversion rates
Reshaping Our Core Business 28
3 Executing on Our Cost Cutting Initiatives Will Allow Us to Recapture Margin Following Recent Challenges
Reducing Operating Expenses Key Initiatives
Operating Expenses as a % of Revenue
45.8 %
43%—45% 43.4 %
240 bps
(200) + bps
Key Initiatives
Focused effort to review operating expenses given fundamental change in future store growth expectations Extensive SG&A cost savings identified including
Centralized procurement function
Fleet rationalization
Rigorous evaluation of Company-operated store portfolio
Initial closure target of 50+ underperforming stores over next 18 months
Closure of underperforming stores to result in annual savings of $25+mm by 2017 Improved analytics to reduce write-offs
4 Year Avg¹ 2013 Long-Term Target
Note: Long term target for Aaron’s core business. 1 4 year average represents fiscal years 2009–2012
Reshaping Our Core Business 29
4 Moderation of Store Growth Following Rigorous Evaluation of Our Company-operated Portfolio
Be Strategic and Disciplined in Opening New Company-operated Stores
2%-3% new Company-operated store openings per year
Target attractive key markets such as California and New York
Company-operated store growth offset by store closures of underperforming locations
Support Our Franchisee Operators as They Continue to Grow and Build the Brand
Anticipate 3% -4% growth per year in our franchised store base
Potential to Re-Franchise Select Company-operated Stores
Continue to Refine HomeSmart Model Before Considering Further Rollout
Focus on Smart and Profitable Growth in Select Markets
Reshaping Our Core Business 30
4 Strengthen and Grow The Franchisee Network
Franchisee Health is Critical to Aaron’s
Enhanced Support Function
Advisory board, field consulting, improved communication, and new leadership
Exit Opportunities Implement Price
(Aaron’s acquisitions) Optimization
Highly successful program now in 22nd year
787 franchised stores open as of March 2014
Accelerates unit store growth
Increases borad exposure
Generates economies of scale
Progressive
Reserve logistics synergies to provide additional customer traffic
Increase Connectivity Between Online and Stores to Drive Traffic
synergies to provide Between Online and
additional Stores to Drive Traffic
customer traffic
Reshaping Our Core Business 31
IV. Enhancing Leadership and Corporate Governance
Building the New Generation of Aaron’s Leadership
STEVE MICHAELS
President, Aaron’s, Inc.
» Promoted in April 2014
» Previously served as Vice President of Strategic Planning and Business Development
DAVE BUCK
Chief Operating Officer
» Promoted in April 2013
» Divisional Vice President of the Year in 2011 and 2012
» Top 3 ranked Divisional Vice President for each of the past 10 years
ROBBIE KAMERSCHEN
Executive Vice President, General Counsel, Corporate Secretary
» Joined Aaron’s in 2013
» Former U.S. General Counsel, Senior Vice President of Government Relations & Chief Compliance Officer at Equifax
» Extensive experience in corporate governance
TRISTAN MONTANERO
Senior Vice President, Operations
» Promoted in December 2012
» Named Store, District, and Regional Manager of the Year
» Elected as 3rd Divisional Vice President on creation of central operations
» Played instrumental role in store rollout program
MICHAEL P. RYAN
Vice President of Franchising
» Promoted in February 2014
» Consistent top regional performer
» Spearheaded company growth
» Grew managed Division from 57 stores to four Divisions with more than 400 stores
ANDREA FREEMAN
Vice President of Marketing
» Joined Aaron’s in 2013
» 17 years of broad-based marketing experience
» Previously served as Newell Rubbermaid’s Global VP of Marketing in the Baby & Parenting Essentials
KIM RIVERA
Vice President of Learning and Development
» Joined Aaron’s in 2013
» 17 years of experience in the corporate coaching, human resources, training and development arenas
» Owned a corporate training and development company and worked with Aaron’s as a consultant
Progressive
JOHN ROBINSON, CEO
» Former President and COO of TitleMax
» Previously worked at Morgan Stanley and Lehman Brothers
» Significant corporate finance experience
RYAN WOODLEY, COO / CFO
» Former COO/CFO at DigiCert
» Previously worked at Polaris Partners and Monitor Group
» Experience in investing, strategy, and operations
Enhancing Leadership and Corporate Governance
33
Corporate Governance Initiatives
Board of Directors & Governance
» Strong, diverse and independent Board focused on creating shareholder value
» 3 new independent Directors added in the past 3 years
» 7 of 8 Directors now independent
» Spencer Stuart continues to work with the Board on further enhancements
» Separated roles of Chairman and CEO
» Adopted majority voting
» Strengthened management depth
» Executing on CEO succession planning
Compensation Structure
» Compensation Committee undertook a detailed review of plans for senior management:
— Engaged an external consultant to assist with the review
— Revised legacy annual and long-term incentive programs for senior executives to align with Company performance and market practices for 2014
— Approximately 50% of long-term compensation and 100% of short-term incentive compensation at risk based on performance
Enhancing Leadership and Corporate Governance
34
An Engaged and Experienced Board Focused on Performance
Independent
» Ray Robinson (Chairman)
— Former Southern Region President, AT&T
— Current Director for Avnet, Acuity and American Airlines Group
» Ronald W. Allen
CEO, Aaron’s
Former Chairman and CEO, Delta Air Lines
» Leo Benatar
— Former CEO, Engraph
— Former Chairman, Federal Reserve Bank of Atlanta
» Kathy Betty
— Founder, Tradewind Group
— Former Executive Vice President and Partner, Scott Madden
— One of the first female partners at Ernst & Young
» Cynthia Day
— President and CEO, Citizens Bancshares Corporation and Citizens Trust Bank
— Current Director, Citizens Trust Bank, Primerica
» Hubert Harris, Jr.
— Former CEO and Chairman, Invesco North America, Invesco Retirement Services
— Trustee of SEI family of mutual funds
» David Kolb
— Former Chairman and CEO, Mohawk Industries
» John Schuerholz
— President, Atlanta Braves professional baseball organization
Enhancing Leadership and Corporate Governance
35
V. Update On Transaction Committee Review and
Vintage Proposal
Aaron’s Board Undertook a Comprehensive and Detailed Review of Opportunities for Shareholder Value Creation
Review Process
Aaron’s Board and Management have participated in a comprehensive year-long strategic review given the changing competitive landscape
The review encompassed all aspects of Aaron’s business, including both operations and governance
the Board also formed a transaction Committee to consider the unsolicited proposal put forward by Vintage
The review undertaken included consideration of alternative strategic and financial options, alongside the broader operational review that was already underway
As part of this process, we consulted with our shareholders to hear their views, along with our franchisees
We’re confident that as a result of this thorough review, Aaron’s is on the right path forward
Update On Transaction Committee Review of Alternatives and Vintage Proposal 37
Vintage Capital Proposal is Inadequate and Illusory
Meaningfully undervalues Aaron’s
12.8% premium to undisturbed price of $27.051
Less than 12.0% premium to 6 month, 1 year and 3 year volume weighted average price
Vintage acknowledged that the Board would deem its offer inadequate but was not willing to be specific on a higher price
Our financial advisors held meetings/discussions with Vintage
Vintage was not willing to provide any information on the substantial sources of equity required to complete the transaction
Vintage was also unwilling to provide customary specificity on sources of substantial debt financing required to complete the transaction
¹As of February 6, 2014
Update On Transaction Committee Review of Alternatives and Vintage Proposal 38
Our Board Undertook a Comprehensive and Detailed Review of Opportunities for Shareholder Value Creation
Core Store Performance Core Business Cost Management
Progressive
GrowthInitiatives
New Stores
Online
Balance
Return of Capital
Acquisition Potential Transactions
Divestiture / Sale
Renewed focus on same storeor revenue growth in the core business
Focus on cost management to recapture margin
Close underperforming stores
Transformational opportunity with Progressive
Moderate Company-operated storee growth
Continue to develop and grow online presence
Target debt / capitalization ratio of ~20%
Excess cash to be returned to shareholders
Divestiture of RIMCO
Acquisition of Progressive
Evaluation of other alternatives
Update On Transaction Committee Review of Alternatives and Vintage Proposal
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VI. Summary / Q&A
Our Plan to Deliver Shareholder Value
Acquisition of Progressive
The leading Virtual RTO business $700mm cash purchase price
— Associated tax step-up provides NPV of ~$90mm
— Implies 10.6x 2014E EV/EBITDA, 6.4x 2015E EV/EBITDA
2014E revenues of $630 –$650mm, 2015E revenues of $910 – $940mm
— Expected 59% CAGR from 2012 -20151 2014E EBITDA of $55 – $60mm, 2015E EBITDA of $90 – $100mm
— Expected 68% CAGR from 2012 -20151 Double digit accretive in FY20142; Significantly more accretive in
20152
Refocusing the Core Business
Renewed focus on same store revenue growth
Refine and grow online platform
Recapture margin through focus on cost management Rationalize underperforming stores, resulting in annual savings of
+$25mm by 2017
Moderate growth in new Company-operated stores Target debt/capitalization of ~20% Excess cash to be returned to shareholders
Enhancing Leadership, the Board and Governance
Identify the next generation of leaders for Aarons
3 new independent Directors appointed in past 3 years Separated roles of Chairman and CEO
Continue to work with Spencer Stuart to enhance board Adopted majority voting Reviewed and changed compensation structure Executing on CEO succession planning, and strengthened management bench
Summary / Q&A
1 Based on mid-point of range. CAGR calculated from 2012 –2015E
2 All accretion estimates are based on cash EPS versus IBES consensus estimates as of April 11, 2014
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