Presentation To

September 6, 2005
1

Presentation To

September 7, 2005
2

Introductions
Joe Malugen Chairman of the Board - Chief Executive Officer

Tim Price Executive Vice President - Chief Financial Officer

Thomas Johnson Senior Vice President - Corporate Finance & Business Development

Mark Moreland Vice President and Treasurer

3

Agenda

Thomas Johnson Senior Vice President - Corporate Finance & Business Development

Agenda

1 2

Transaction Update Update on the video rental industry Company overview and integration update Financial review and update on projections

3 4

Appendices
A

Additional Industry Overview Support

Transaction Update
Strategic Rationale For Transaction
Strength of Combined Company
Critical mass of approximately 4,700 stores creates very strong #2 competitor in industry versus Blockbusters approximately 4,700 company-operated stores and 1,100 franchised stores in the US Greater financial strength, cash flow, and store growth potential than either company would have on a stand-alone basis Significantly better competitive position, ability to capitalize on an evolving industry Greater purchasing leverage as a combined company

Geographic Footprint of Combined Company

Acquisition combines Hollywoods western US-focused prime urban and suburban superstore locations with Movie Gallerys eastern US-focused rural and secondary market dominance

Cash Savings
Management conservatively estimates annual cash savings of $50 million to be realized gradually: $20 million in 2005, $40 million in 2006, and $50 million in 2007 and beyond

Operating Efficiencies
Management expects to improve operational performance due to greater distribution density and the adoption of best practices of both companies

Transaction Update Pro Forma Movie Gallery Store Footprint

Transaction Update

What We Have Learned About the Hollywood Business

Acquisition has exceeded expectations and Video business is very similar to Movie Gallerys Exceptional talent pool, particularly in financial and logistics personnel Well-maintained corporate infrastructure Significant prior investments have already been made in Hollywood stores and distribution facilities Real estate may offer additional value creation opportunities Hollywood possessed better purchasing practices in terms of quantity and title mix. Continued implementation of best practices may offer further long-term margin enhancement Game business has different cash flow and working capital needs than video.
8

Transaction Update Integration Update

Realized savings to date ahead of original plan Projected 2005 savings expected to exceed original plan by over $10 million ($10MM vs $23.1MM) Consolidated executive management (Finance, HR, Real Estate, Legal, Lease Administration, IT, and Distribution departments) and eliminated 60 positions Closed VHQ acquisition in June Closed 51 Game Crazy stores Began fulfilling Movie Gallery distribution needs via Hollywoods established DCs expected to result in approximately $12 million annual savings (previously outsourced by Movie Gallery)

Industry Overview

Joe Malugen Chairman of the Board - Chief Executive Officer

10

Industry Overview Weak Box Office Sales

Historically, success at the box office has translated into significant demand for the DVD titles when they are released four to six months later on home video. Home Video Release Quarterly Comparison
Title Slate Titles > $100M
TTL Titles TTL Box Titles $25M-$99.9M TTL Titles TTL Box Titles $10M-$99.9M TTL Titles TTL Box 3 336 5 774 67% 130% 6 989 7 1080 17% 9% 1 370 3 386 200% 4% 10 2065 8 1686 -20% -18%

First Quarter
Q1 04 Q105 05 Comp

Second Quarter
Q2 04 Q2 05 05 Comp

Third Quarter*
Q3 04 Q3 05 05 Comp

Fourth Quarter*
Q4 04 Q4 05 05 Comp

24 1184

20 1067

-17% -10%

18 1113

16 813

-11% -27%

20 1007

17 889

-15% -12%

18 1086

25 1230

39% 13%

34 1350

31 1257

-9% -7%

30 1310

27 1015

-10% -23%

32 1202

23 1002

-28% -17%

29 1261

38 1457

31% 16%

11

Industry Overview Weak Box Office Sales (continued)

The current slump at the box office is impacting the home video industry Movie theater revenue YTD in 2005 has declined 8%
The movie theater industry experienced 19 consecutive weekends of declining box office revenues this spring and has been off on a comp basis on 3 of the 5 subsequent weekends

Box office revenues have been down vs. 2004 in 25 of 32 weeks this year
12

Industry Overview 3Q05 Title Slate

Title Hide and Seek Bride and Prejudice Dear Frankie In My Country Very Long Engagement, A Million Dollar Baby State Property 2 Space Station (IMAX) Constantine Man of the House Up and Down Ice Princess Upside of Anger, The Steamboy King's Ransom XXX: State Of The Union Alexander Guess Who Because of Winn-Dixie Look at Me Kung Fu Hustle Wedding Date, The Ballad Of Jack And Rose, The Sin City Ring 2, The Release Date 07/05/05 07/05/05 07/05/05 07/05/05 07/12/05 07/12/05 07/12/05 07/19/05 07/19/05 07/19/05 07/19/05 07/19/05 07/26/05 07/26/05 07/26/05 07/26/05 08/02/05 08/02/05 08/09/05 08/09/05 08/09/05 08/16/05 08/16/05 08/16/05 08/23/05 Box Office 51 7 1 1 6 100 2 58 75 19 1 24 19 1 4 27 34 68 33 1 17 32 1 74 76 Title Beauty Shop Dust to Glory A Lot Like Love Layer Cake Schultze Gets the Blues Sahara Monster-In-Law Ong Bak: The Thai Warrior (Sub) 3-Iron Holy Girl Crash Nobody Knows Fever Pitch Winter Solstice Madison Hitchhiker's Guide to the Galaxy, The Twin Sisters Inside Deep Throat Turtles Can Fly Brothers (Brodre) Mindhunters Longest Yard, The Adventures of Shark Boy and Lava Girl, The Robots Lords of Dogtown Release Date 08/23/05 08/23/05 08/23/05 08/23/05 08/30/05 08/30/05 08/30/05 08/30/05 09/06/05 09/06/05 09/06/05 09/13/05 09/13/05 09/13/05 09/13/05 09/13/05 09/13/05 09/20/05 09/20/05 09/20/05 09/20/05 09/20/05 09/20/05 09/27/05 09/27/05 Box Office 37 1 22 1 1 68 78 5 1 1 50 1 42 1 1 50 1 2 1 2 4 158 36 128 12

13

Industry Overview Attractive 4Q05 Title Releases

4Q05 will see an improvement in number of video releases including some of the years biggest titles and likely best rentals
Title Interpreter, The Amityville Horror Kicking And Screaming Kingdom of Heaven Sisterhood of the Traveling Pants Unleashed Batman Begins Herbie: Fully Loaded Bewitched House of Wax George A. Romero's Land of the Dead Star Wars Episode 3 Perfect Man, The Charlie and the Chocolate Factory Stealth Devil's Rejects Madagascar Skeleton Key, The War of the Worlds Polar Express Honeymooners, The Mr. And Mrs. Smith Christmas With the Kranks Release Date 10/04/05 10/04/05 10/11/05 10/11/05 10/11/05 10/11/05 10/18/05 10/25/05 10/25/05 10/25/05 10/25/05 11/01/05 11/01/05 11/08/05 11/08/05 11/08/05 11/15/05 11/15/05 11/22/05 11/22/05 11/22/05 11/29/05 11/29/05 Box Office 73 65 53 47 38 25 204 64 63 32 21 382 16 200 30 20 187 51 226 163 13 180 74 Title March Of The Penguins Deuce Bigalow: European Gigolo Broken Flowers Cave, The Fantastic Four Cinderella Man Sky High Must Love Dogs Island, The Hustle & Flow Underclassman Everything is Illuminated Dukes of Hazard, The 40 Year-old Virgin, The Bad News Bears Valiant Four Brothers Serenity Brothers Grimm, The Rebound (aka Rage Control) Into the Blue Dark Water Cry Wolf Release Date 11/29/05 11/29/05 11/29/05 11/29/05 12/06/05 12/06/05 12/06/05 12/06/05 12/06/05 12/06/05 12/06/05 12/06/05 12/13/05 12/13/05 12/13/05 12/13/05 12/20/05 12/20/05 12/20/05 12/20/05 12/27/05 12/27/05 12/27/05 Box Office 45 28 21 14 144 63 58 43 31 19 16 12 75 72 35 22 65 38 21 17 36 26 15

14

Industry Overview Significant DVD Catalog Release

No. of Titles Released on DVD, 1998 - 2004

12,000

11,313

10,000

CAGR 55%
7,351 5,629 3,958

10,089

8,000

6,000

4,000 1,522

2,742

2,000

1998 1999 2000 2001 2002 2003 2004

Source: DVD Release report

Year to date in 2005, the number of DVD titles continues to increase driven in part by the TV series on DVD category.
15

Industry Overview One Quarter of Library Unwatched

Open/Don't Watch 12% Watch Some 6% Never Open or Watch 7%

Watch All 1x 24%

Watch All 2x+ 51%

Source: Fox Research

16

Industry Overview High Definition Is Expected To Drive Significant Growth

New technology offers 4x and 3x picture and sound quality of DVD, respectively Expected $30 - $35 price point will make rental a more compelling alternative Interactive technology Makes use of growing HDTV in American households Hi-Def DVD delayed because of the ongoing battle over Blu-Ray and HD DVD technology Until one format dominates, expectation is that consumers will delay purchases of the new high definition players, resulting in less copy depth coming out of the movie studios and therefore slower consumer penetration / acceptance Further delays will continue to impact consumer behavior
17

Industry Overview

Format Battle - Blu-Ray vs. HD DVD

One solution for the DVD market maturation is the successful introduction of a second generation format that offers an array of different features Currently, there are two competing formats: Blu-Ray Supporters: Sony, Apple, Panasonic, Matsushita, Fox, Disney, Lions Gate
Pros: Most storage- allows for more interactive content Higher picture and sound quality than HDDVD Wholly new technology, could grow in capacity like DVD Cons: Expensive to duplicate
18

HD DVD Supporters: Toshiba, Microsoft Warner, Universal, Paramount

Pros: Can be manufactured with minimal modifications to existing duplication equipment

Cons: Likely limit of DVD format- little potential for capacity increases

Industry Overview

Rapid Acceptance of HDTV

HDTV has grown as fast, or faster, than previous technologies like color TV, satellite TV and the DVD.
HDTV Installed Base (millions of units)
55
86

33

18

2003

'04

'05E

'06E

'07E

Source: Consumer Electronics Association

The ultimate success of the next generation DVD depends upon the industry uniting behind one new standard.
19

Industry Overview Packaged Media Will Dominate

$35
Total Home Entertainment Consumer Spending: U.S.

$30 $25 $B $20 $15 $10 $5 $0

2000 VHS Sell-through 2001 2002 2003 2004 2005P 2006P 2007P HD S/T 2008P 2009P 2010P VHS Rental DVD Sell-through DVD Rental HD Rental

Source: Videoscan, Rentrak, Centris, Alexander & Assoc., Adams Research, Video Business, Video Store, Fox Research, & Company estimates

20

Industry Overview Next Generation Game Platforms Expected to Drive Growth in the Gaming Segment
Microsofts Xbox 360 to launch in November 2005 Interactive technology TV quality graphics Sony and Nintendo expected to launch during 2006 History shows that new game platforms drive significant growth during the first 24 months

Microsoft Xbox 360

21

Industry Overview Previously Viewed Movies

Sales of previously viewed titles have increased substantially as consumers weigh the relative economics of renting versus purchasing a pre-owned movie or game Relative cost to consumer 4 weeks after street date: $19.99 new; $9.99 used Volume of previously viewed movies available for sale should increase significantly as new adapters of HD DVD upgrade their libraries Effective way to manage company inventories as titles mature Competitive advantage over pure retail business who dont sell used product, e.g. Wal-Mart, Circuit City, Best Buy
22

Industry Overview Nearly Everyone Owns a Previously Viewed Movie Avid Non-Avid SuperAvid Non-Avid
Early Early Adopters Adopters Later Later Techno Techno Mainstream Mainstream Final Wave Final Wave

98% 96% 92% 90%

Source: Fox Research

23

Industry Overview Trading / Re-Selling

Trading of movies will likely become more important as consumers look to upgrade traditional DVD libraries with the new HD DVD format Likewise, game trading should see notable increases with the upcoming launch of new Microsoft (Q4 2005), Sony (2006) and Nintendo (2006) game platforms All Hollywood stores trade DVDs today and all Game Crazy stores trade games

24

Industry Overview Trading Emerging SuperAvid

Early Early Adopters Adopters Later Later Techno Techno

Avid

Non-Avid Non-Avid
Mainstream Mainstream Final Wave Final Wave

24%

15% 12% 9%

Among those with PVM

Source: Fox Research

25

Industry Overview We Believe Home Video Will Remain A Stable, Growing Business
Still a growth business - AMR data shows growing industry for at least next 5 years Largest share of studio revenues Value proposition movie rentals remain one of the least expensive forms of entertainment Consolidation of smaller players will drive growing market share for industry leaders Rental is an impulse action niche retail shopping experience Possibility of a shrinking theatrical release window should benefit the rental business closer to studio marketing spend
26

Financial Overview

Tim Price
Executive Vice President - Chief Financial Officer

27

Financial Overview

Components of 3Q05 EBITDA Change from March Plan to Current Estimate

($ in millions) $81.2 $0.3
Reflects closure of 51 underperforming Game Crazy stores during Q2

($34.0)

($6.1) (2.1)
Driven by estimated comp store declines of 9% for Hollywood Video and 8% for Movie Gallery for Q3

($1.4)
Higher COGS rates driven by lower than anticipated revenues Reduced nonrent expense leverage Reduced depreciation expense due to reduced store openings

$0.9

Actual synergies above the $2.5MM forecasted in the March Plan

$38.7

March Plan Q3 2005 EBITDA

Change in Store Count

Comp Store Sales

Gross Margin Impact

Change in Operating Expenses

Depreciation

Synergies

September Plan Q3 2005 EBITDA

28

Financial Overview

FY 2005 EBITDA Change from March Plan to the Revised Forecast

($ in millions)

$382.0

($0.4)
Reflects closure of 51 underperforming Game Crazy stores during Q2

($55.7)

($17.7) ($10.0 )
Driven by estimated comp store declines of 5% for Hollywood Video and Movie Gallery for FY 05 Higher COGS rates driven by lower than anticipated revenues

($8.9 )
Reduced depreciation expense due to reduced store openings

($2.3)
Synergies in the March Plan were Pro Forma and included a Q1 impact

Reduced nonrent expense leverage

$292.3

March Plan 2005 FYE EBITDA

Change in Store Count

Comp Store Sales

Gross Margin Impact

Change in Operating Expenses

Depreciation

Synergies

September Plan 2005 FYE EBITDA

29

Financial Overview

Cash Flow Summary

Q21 Cash at beginning of period Operating cash flow (excluding rental purchases / depreciation) Rental purchases Rental depreciation2 Capital expenditures Debt borrowing / (repayment) Business Acquisitions Long-term debt financing fees Other Cash at end of period $22.6 13.1 (71.7) 87.9 (21.8) 1,141.2 (1,089.4) (29.1) (1.6) $51.1 Q3 $51.1 18.2 (82.9) 80.7 (21.0) (3.5) 0.0 0.0 (1.2) $41.3 Q4 $41.3 88.0 (98.1) 82.1 (13.5) (36.1) 0.0 0.0 (1.2) $62.4

Q2 based on externally reported cash flow, and includes 13 weeks of Movie Gallery and 10 weeks of Hollywood Entertainment results. 2 Q2 rental depreciation inlcudes a one-time VHS inventory valuation of $10.1 mil.

30

Financial Overview

Fiscal 2005 Revenue Assumptions

Q2 Sales MOVI Comp % Hollywood Video Comp % Game Crazy Comp % HLYW Consolidated Comp % Total Company Acquisition Model Q3 Q4 FY'05 Total Q2 Forecast Q3 Q4 FY'05 Total Q2 Variance B/(W) Model Q3 Q4 FY'05 Total

$211.6

$215.4

$241.4

$898.4 1.4% 1,525.3 (1.7%) 352.6 $1,877.9 $2,776.3

$199.1 $202.3 $228.8 (8.0%) (7.9%) (3.5%) 355.2 (7.9%) 69.6 10.4% 320.9 (8.6%) 64.6 2.2% 381.7 (3.8%) 128.9 14.7%

$864.0 (4.5%) 1,459.5 (4.8%) 337.4 10.5% $1,796.9 (1.4%) $2,660.9

($12.6)

($13.1)

($12.6)

($34.4) (5.9%) (65.8) (3.1%) (15.2) ($81.0) ($115.4)

357.2 69.8 $427.1 $638.7

361.2 76.6 $437.8 $653.2

406.7 134.2 $541.0 $782.4

(2.0) (0.3) ($2.3) ($14.8)

(40.3) (12.0) ($52.4) ($65.5)

(25.0) (5.3) ($30.4) ($42.9)

$424.8 $385.4 $510.6 (4.4%) (6.4%) 0.7% $623.9 $587.7 $739.5

Number of New Stores - Increase / (Decrease) MOVI - Build 90 119 VHQ Acquisition 61 0 Other Acquired 12 12 Hollywood Video - Build 18 16 Game Crazy - Build 0 0 Subtotal New and Acquired 181 147 Closures (22) (21) Net 159 126 Capital Expenditures (1) ($30.4) ($33.9)

118 0 13 23 0 154 (16) 138 ($34.8)

400 61 44 80 5 590 (81) 509 ` ($127.2)

80 61 8 16 2 167 (80) 87 ($32.9)

91 0 0 16 1 108 (18) 90 ($26.8)

14 0 0 8 0 22 (18) 4 ($15.0)

244 61 26 63 6 400 (137) 263 ($104.1)

(10) 0 (4) (2) 2 (14) (58) (72) ($2.5)

(28) 0 (12) 0 1 (39) 3 (36) $7.1

(104) 0 (13) (15) 0 (132) (2) (134) $19.8

(156) 0 (18) (17) 1 (190) (56) (246) $23.1

(1) Capital Expenditures include property, plant, and equipment, new rental inventory, and business acquisitions. Figure is adjusted for a Q2 HLYW purchase accounting entry of $26M due to step-up of fixed assets. Excludes the Hollywood acquisition.

31

Financial Overview

Integration Synergies
Headcount EBITDA Related COGS Distribution Consolidation Buying Leverage Store Operating Expense Gift card vendor leverage Utility Program Consolidation & Optimization Operating and G&A Expense Other - Marketing / Internet / Survey Game Crazy Management Consolidation Executive Management Consolidation 2005 2006 2007 n/a n/a n/a n/a 3 3 10 14 5 29 32 $3.9 1.0 4.9 0.3 0.2 0.5 0.3 1.4 2.9 $4.6 $9.9 $11.5 1.0 12.5 0.4 0.5 0.9 0.5 2.3 5.0 $7.8 $21.2 $12.2 1.0 13.2 0.4 0.5 0.9 0.5 2.4 5.0 $7.9 $22.0

EBITDA Impact Balance Sheet Related Real Estate / Construction Consol. (Capitalized) New "Sell-Through" Inventory Optimization

45 n/a 45 77

$5.2 8.0 13.2 $23.1

$7.7 0.0 7.7 $28.9

$8.0 0.0 8.0 $30.0

Total

Additional Opportunities Operational Savings Buying Leverage

tbd n/a

$0.0 0.0 $0.0 $23.1

$13.5 2.0 $15.5 $44.4

$17.8 2.0 $19.8 $49.8

Total

77

32

Financial Overview

Key Forecast Assumptions: 2005 - 2009

2005 Same Store Sales Margins Rental (1) Merch Expense Ratios OPEX G&A Operating Income LIBOR Cash Taxes ($ mil) New Stores Built Acquired Closed Net Total Investment ($ mil) Built Acquired Maint/G&A (2) Total Investment (4.5%) 2006 1.1% MOVI 2007 3.0% 2008 3.2% 2009 3.3% 2005 2006 HLYW 2007 0.2% 2008 2.1% 2009 2.1% 2005 2006 GC 2007 2008 9.7% 2009 2.1% (4.8%) (1.7%) 10.5% 19.7% 22.2%

67.8% 70.1% 70.1% 70.1% 70.1% 27.8% 28.8% 28.8% 28.8% 28.8%

69.8% 69.7% 69.7% 69.7% 69.7% 23.6% 23.8% 23.8% 23.8% 23.8%

na na na na na 26.0% 25.4% 25.8% 25.7% 26.3%

52.9% 53.4% 52.8% 52.3% 51.9% 7.7% 6.9% 6.8% 6.9% 6.9% 4.0% 6.4% 7.1% 7.5% 7.9%

50.6% 51.3% 51.3% 50.0% 49.9% 7.6% 5.1% 5.1% 5.1% 5.0% 8.0% na na 9.6% na na 9.4% 10.7% 10.9% na na na na na na

23.2% 20.9% 18.0% 16.6% 16.4% 4.7% 3.5% 2.9% 2.6% 2.6% (1.9%) na na 1.0% na na 4.9% na na 6.5% na na 7.3% na na

3.56% 4.36% 4.90% 4.90% 4.90% $4.0 $4.0 $0.1 $51.3 $94.0

244 87 (70) 261

150 20 (70) 100

175 20 (70) 125

200 20 (70) 150

200 20 (70) 150

63 (13) 50

25 (25) -

25 (25) -

25 (25) -

25 (25) -

6 (54) (48)

$31.7 19.1 21.7 $72.6

$19.6 4.4 20.3 $44.3

$23.1 4.5 20.3 $47.9

$26.7 4.5 20.3 $51.5

$26.9 4.6 20.3 $51.8

$22.1 0.0 11.2 $33.3

$7.3 0.0 9.4 $16.7

$7.4 0.0 14.4 $21.7

$7.5 0.0 14.2 $21.7

$7.5 0.0 15.7 $23.3

$0.9 0.0 0.4 $1.3

$0.0 0.0 0.9 $0.9

$0.0 0.0 1.0 $1.0

$0.0 0.0 1.1 $1.1

$0.0 0.0 1.2 $1.2

(1) MOVI 2005 rental margin is impacted by a $10.1M VHS valuation adjustment. (2) Adjusted for a HLYW Q2 2005 $26M capital entry due to purchase accounting.

33

Financial Overview

Revised Projections: 2005 - 2009

Q3 P&L Revenues Movi Comp % HLYW Vid Comp % Gross Margin Total Rate Video Only Rate (1) Game Crazy Rate Operating Expense G&A / Synergies Merger Related Other Total Expenses Operating Income (1) Rate EBITDA (2) Operating Income + Depreciation/Amortization + Stock Option Compensation + Other Total Investment New Stores Inc/(Dec) (3) Total Capx (4) $587.7 (7.9%) (8.6%) 365.5 62.2% 66.2% 29.7% 318.3 40.5 358.8 $6.6 1.1% Q4 2005 Full-Year '05 $2,660.9 (4.5%) (4.8%) 1,612.0 60.6% 65.6% 26.0% 1,273.9 170.8 22.6 1,467.4 $144.5 5.4% 2006 B/(W) Model ($115.4) (5.9%) (3.1%) (94.9) (0.9%) (1.0%) (0.0%) (5.8) (3.9) (22.6) 0.3 (32.0) ($126.9) (4.3%) Total $2,759.6 1.1% (1.7%) 1,668.4 60.5% 66.3% 25.4% 1,315.5 151.3 1,466.8 $201.5 7.3% B/(W) Model ($223.9) (0.8%) (0.7%) (162.5) (0.9%) (0.5%) (1.0%) 44.5 0.1 (4.6) 40.0 ($122.5) (3.6%) Total $2,900.7 3.0% 0.2% 1,729.8 59.6% 66.3% 25.8% 1,345.1 154.8 1,499.9 $230.0 7.9% 2007 B/(W) Model ($250.6) 1.3% (0.3%) (207.5) (1.8%) (0.6%) (0.7%) 90.3 (14.0) (6.5) 69.7 ($137.8) (3.7%) Total $3,037.5 3.2% 2.1% 1,802.3 59.3% 66.2% 25.7% 1,370.5 161.2 1,531.6 $270.7 8.9% 2008 B/(W) Model ($260.7) 1.5% 1.1% (231.8) (2.3%) (0.6%) (1.0%) 137.7 (11.8) (7.8) 118.0 ($113.8) (2.7%) 2009 Total $3,143.6 3.3% 2.1% 1,871.0 59.5% 66.2% 26.3% 1,414.9 166.0 1,580.9 $290.1 9.2% B/(W) Model ($279.9) 1.6% 1.1% (244.6) (2.3%) (0.6%) (0.4%) 153.4 (8.6) (9.0) 135.9 ($108.7) (2.4%) $739.5 (3.5%) (3.8%) 429.3 58.1% 66.0% 20.6% 329.5 39.5 369.0 $60.3 8.2%

$6.6 24.2 $30.8

$60.3 24.2 $84.5

$144.5 93.3 0.6 22.6 $261.0

($126.9) (8.9) (1.4) 16.2 ($121.0)

$201.5 98.8 $300.4

($122.5) (8.2) (1.5) ($132.2)

$230.0 95.6 $325.5

($137.8) (13.3) (1.5) ($152.5)

$270.7 80.3 $351.1

($113.8) (30.9) (1.5) ($146.1)

$290.1 83.9 $374.0

($108.7) (28.3) (1.5) ($138.5)

108 $26.8

22 $15.0

400 $104.1

(190) $23.1

195 $61.9

(255) $39.3

220 $70.7

(230) $29.7

245 $74.3

(95) $12.2

245 $75.8

(85) $11.6

(1) 2005 video margin rate is impacted by a $10.1M VHS valuation adjustment. (2) EBITDA definition conforms to acquisition model methodology. (3) Includes acquired stores. (4) Capital Expenditures include property, plant, and equipment, new rental inventory, and business acquisitions. Figure is adjusted for a Q2 HLYW purchase accounting entry of $26M due to step-up of fixed assets. Excludes the Hollywood acquisition.

34

Financial Overview

Need for Financial Covenant Amendment

In active dialogue with Wachovia, and will approach entire bank group in Q3 for an adjustment to leverage covenants Will require 51% vote Secondary trading levels suggest continued support for the Company, with the institutional bank debt and bonds trading at or above par
Leverage Ratio Comparison
4.0x 3.5x 3.0x 2.5x 2.0x 1.5x 1.0x 0.5x 0.0x 2005
Acquisition Model

3.5x 3.1x 2.7x 2.3x 1.9x 1.7x 1.3x 1.0x 1.1x 0.9x

2006

2007

2008

2009

Current Forecast

Existing Covenant Level

35