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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

              [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 1997

                                       OR

            [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                           Commission File No. 1-14146

                       CORT BUSINESS SERVICES CORPORATION
             (Exact name of registrant as specified in its charter)

           Delaware                                          54-1662135
(State or other jurisdiction of                           (I.R.S. Employer
 incorporation or organization)                          Identification No.)

   4401 Fair Lakes Court, Fairfax, VA                            22033
(Address of principal executive offices)                      (Zip Code)

                                 (703) 968-8500
              (Registrant's telephone number, including area code)


           Securities registered pursuant to Section 12(b) of the Act:

        Title of each class        Name of each exchange on which registered
           Common Stock                     New York Stock Exchange

           Securities registered pursuant to Section 12(g) of the Act:
                                      None

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes [X]   No[ ]

         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the best of the  registrants'  knowledge,  in definitive proxy or information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. Yes [X]    No [ ]

         Non-affiliates  of CORT Business  Services  Corporation  held 6,780,760
shares of Common Stock as of March 17, 1998.  The fair market value of the stock
held by non-affiliates is $301,743,820  based on the sale price of the shares on
March 17, 1998.

         As of March 17,  1998,  12,998,546  shares of Common  Stock,  par value
$.01, were outstanding.

                      Documents Incorporated by Reference:

                 Document                                Part of Form 10-K
                 --------                                -----------------
Annual Report to Stockholders for the fiscal year              Part II
       ended December 31, 1997
  Proxy Statement for the Annual Meeting of                    Part III
    Stockholders to be held May 12, 1998

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<PAGE>

                                     PART I

ITEM 1.  Business

Overview

CORT  Business  Services  Corporation  (the  "Company"  or "CORT")  through  its
wholly-owned subsidiary CORT Furniture Rental Corporation ("CFR") is the leading
national provider of rental  furniture,  accessories and related services in the
growing and fragmented  "rent-to-rent" segment of the furniture rental industry.
The  "rent-to-rent"  segment serves both corporate and individual  customers who
desire  flexibility to meet their temporary and transitional  needs. The Company
focuses on corporate customers by offering office and residential  furniture and
related   accessories   through  a  direct  sales  force  of  approximately  700
salespeople  and a network of 109  showrooms  in 32 states and the  District  of
Columbia.  The Company believes that  approximately 80% of its rental revenue is
derived from its corporate customers, while the remainder is derived principally
from  rentals  to  middle-  and  upper-income  level  individuals.  The  Company
maintains the showroom quality  condition of its merchandise  available for rent
by  selling  its  previously  rented   merchandise   through  a  network  of  72
company-operated  clearance  centers,  thereby enabling the Company to regularly
update its  inventory  with new styles and new  merchandise.  Sales of furniture
through clearance centers, at prices which for the last five years have averaged
109% of the  furniture's  original  cost,  allow the  Company  to  maximize  the
residual  value of its rental  merchandise.  Furniture  sales through  clearance
centers and other sales accounted for  approximately  17% of the Company's total
1997 revenue.

As the industry leader and the only "rent-to-rent" furniture rental company with
a national presence, CORT is well-positioned to take advantage of growing demand
for furniture rental services. This demand is believed to be driven by continued
growth in management and professional  employment,  the increasing importance to
American business of flexibility and outsourcing and the impact of a more mobile
and transitory  population.  The Company is called upon to meet furniture rental
needs of a corporate  customer base which includes Fortune 500 companies,  small
businesses and professionals, and owners and operators of apartment communities.

According to industry  estimates,  a significant  portion of the  "rent-to-rent"
furniture  rental  revenues is derived from  single-location  and small regional
rental businesses which present attractive  consolidation  opportunities for the
larger  "rent-to-rent"  furniture  rental  companies  such as  CORT.  Since  the
beginning of 1993,  the Company has acquired  two larger  regional  competitors,
General  Furniture  Leasing and Evans Rents,  and has completed and successfully
integrated 15 small lease portfolio acquisitions.  Management believes that CORT
is  well-positioned  to continue  capitalizing  on the industry's  consolidation
trend due to its national presence, leading market share and financial capacity.

The Company's  total  revenue  increased  22.0% on an annual basis,  from $106.5
million in 1992 to $287.2  million in 1997, as a result of the  acquisitions  of
General Furniture Leasing and Evans Rents,  small lease portfolio  acquisitions,
start-up  operations and new showroom and clearance center openings,  as well as
growth in existing  operations.  Operating earnings increased 27.9% on an annual
basis from $13.5 million (excluding  non-recurring  charges of $10.0 million) in
1992 to $46.3 million in 1997.

Business Strategy

Management believes that CORT's size, national presence, consistently high-level
customer  service,  product  quality  and  broad  product  selection,  depth  of
management and efficient  clearance  centers have been key  contributors  to the
Company's success. The Company's objective is to build on these fundamentals and
increase  further its revenue and  operating  earnings and expand its margins by
continuing to pursue its growth  strategy.  The key  components of this strategy
are (i) making selective acquisitions; (ii) initiating operations in new markets
and adding showrooms and clearance centers in existing markets;  (iii) expanding
its corporate  customer base and (iv) continuing to invest in the development of
various products and services.

Acquisitions

The primary focus of the Company's growth strategy has been and will continue to
be the selective acquisition of small lease portfolios and regional companies in
new and existing markets. Since the beginning of 1993, the Company has completed
15 small lease portfolio  acquisitions  which include entrance into the New York
City,  Salt

                                      -1-
<PAGE>


Lake City,  Pittsburgh  and  Cleveland  markets.  In a typical  lease  portfolio
acquisition,   the  Company  acquires  existing  leases  and  rental  furniture.
Additionally,  the Company  retains sales  personnel  with strong local customer
relationships.  The Company generally does not acquire  showrooms,  distribution
facilities or clearance  centers in existing markets.  However,  in new markets,
the Company may choose to retain such real  estate.  The Company  also  believes
that  there are a select  number of  opportunities  to acquire  larger  regional
companies  in order to enter  new  markets  and  increase  its  market  share in
existing  markets.  For example,  the Company has  acquired two larger  regional
companies: General Furniture Leasing in September 1993, which had total revenues
of  approximately  $41.5 million for fiscal year 1992,  and Evans Rents in April
1996,  which had total revenues of  approximately  $30.5 million for fiscal year
1995. The acquisition of General  Furniture Leasing provided CORT with immediate
access to new  market  areas and  additional  critical  mass in CORT's  existing
markets.  Evans Rents provided CORT with additional critical mass in the greater
Los Angeles and San Francisco areas,  increased the percentage of rental revenue
derived  from  the  rental  of  higher-margin   office  furniture  products  and
contributed  additional expertise in the supply of furniture for trade shows and
conventions.

On March 6,  1997,  the  Company  completed  the  purchase  of three  trade show
services  companies:  Levitt Investment  Company,  McGregor  Corporation and the
assets of ALCO Trade Show Services.  The three companies have been integrated to
create CORT's trade show furnishings  business and will establish CORT as one of
the major players in this segment of the furniture  rental  industry.  The trade
show furnishings  business serves the major trade show contractors and corporate
exhibitors  nationwide  and  provides  specialty  rental  furniture  for  use at
conventions and trade shows. Major locations served include;  Atlanta,  Chicago,
Dallas,  Las Vegas,  Los  Angeles,  New  Orleans,  Orlando,  New York City,  San
Francisco, and Washington, D.C.

New Markets and Additional Facilities

The Company  continues to expand the number of showrooms and  clearance  centers
within  its  existing  markets as well as  initiate  new  operations,  including
showrooms,  distribution  facilities  and clearance  centers,  in  strategically
identified geographic locations where it currently does not conduct business and
where  attractive  acquisition  opportunities  do not exist.  By increasing  the
number of showrooms and clearance centers associated with existing  distribution
facilities,  the Company is able to  distribute  its real estate,  personnel and
other fixed costs over a larger revenue base.  Since the beginning of 1995, CORT
has begun operations in six new  metropolitan  markets:  Birmingham,  AL; Little
Rock, AR; Portland, OR; St. Louis, MO; Las Vegas, NV; and El Paso, TX.

Expanded Corporate Customer Base

The Company seeks to increase its corporate customer base in order to capitalize
on the longer lease  terms,  higher  average  lease  amounts and multiple  lease
transactions  associated  with  corporate  customers.  In  addition,   corporate
customers more frequently enter into higher-margin  office furniture leases. The
Company  intends to grow  revenue by  increasing  its  corporate  customer  base
through expanded  emphasis on national  accounts,  further  development of sales
personnel with business-to-business  sales experience and continued advertising.
In addition, the Company has introduced the high quality brand of office systems
furniture by Herman Miller.  The Company  continues to increase  awareness among
its sales  force of the  benefits  and breadth of its office  product  offerings
through expanded  training  programs and to focus the efforts of its sales force
on these  products  by  increased  incentive  compensation  for  office  product
rentals.

Development of Products and Services

The  Company  continues  to  invest in the  development  of other  products  and
services.  Products and services in various  stages of  development  include the
rental of housewares  amenity packages,  the supply of furniture for trade shows
and  conventions,  and  a  website  that  provides  information  for  relocating
customers. Management believes that the gradual introduction of new products and
services  allows the Company to experiment  with such products and services at a
relatively low initial cost.

The "Rent-to-Rent" Industry

The  "rent-to-rent"  segment  of  the  furniture  rental  industry  serves  both
corporate and individual customers who generally have immediate, temporary needs
for office or residential  merchandise but who typically do not seek to own such
merchandise.  Office product customers range from large  corporations who desire
flexibility to meet their

                                      -2-
<PAGE>


temporary and  transitional  needs, to small  businesses and  professionals  who
require office  furnishings but seek to conserve  capital.  Residential  product
customers  include  corporations  seeking to provide  furnishings  for corporate
employees who have been relocated or who are on temporary assignment,  apartment
community  managers  seeking  to provide  furnished  apartments  and  individual
residents seeking to rent furnishings for their own homes and apartments.

Management  believes the traditional  "rent-to-rent"  furniture  rental industry
generates  approximately  $750 million of annual revenue.  The demand for rental
products  is  believed  to be  driven by  continued  growth  in  management  and
professional employment levels, the changing trends in American business towards
flexibility  and  outsourcing  and the impact of a more  mobile  and  transitory
population.  The  industry is highly  competitive  and  consolidating  with many
participants operating single locations and small regional businesses.

The "rent-to-rent"  business is differentiated  from the "rent-to-own"  business
primarily  by the  terms of the  rental  arrangements  and the type of  customer
served. "Rent-to-rent" customers generally desire high quality furniture to meet
temporary needs, have established credit, and pay on a monthly basis. Typically,
these  customers  do not seek to acquire  the  property  rented.  In the typical
"rent-to-rent" transaction, the customer agrees to rent merchandise for three to
six months,  subject to extension by the customer on a month-to-month  basis. By
contrast,  "rent-to-own"  arrangements  are generally made by customers  without
established  credit  whose  objective is to acquire  ownership of the  property.
"Rent-to-own"  arrangements are typically entered into on a month-to-month basis
and require weekly rental payments.

Products

The Company rents a full line of furniture and accessories throughout the United
States for office and residential purposes. The Company classifies its furniture
leases  based  on the  type of  furniture  leased  and the  expected  use of the
furniture.

Office Products

In order to capitalize on the significant  profit  potential  available from the
longer average  rental  periods and the higher  average  monthly rent for office
products,  the Company's strategy is to emphasize office furniture rentals.  The
Company  offers a full  range of  office,  conference  room and  reception  area
furniture,  including  desks,  chairs,  tables,  credenzas,  panel  systems  and
accessories.  In order to promote longer office lease terms,  the Company leases
furniture to its  corporate  customers at rates that reflect a premium on leases
that are less than six months and a discount on leases of more than six months.

The Company's office furniture  customers  consist  primarily of large companies
that desire flexibility to satisfy temporary and transitional needs and small or
start-up businesses that have immediate and changing furniture  requirements but
seek to minimize capital outlay. The Company emphasizes its ability to outfit an
entire office with high quality  furniture in two business  days, as well as its
ability to provide consistent customer service and product quality nationwide.

Residential Products

The  Company  leases  residential   products  to  corporate  customers  who  are
temporarily  or  permanently  relocating  employees,  to apartment  managers and
owners who are providing furnished apartments and to individual end users of the
furniture.  The Company offers a broad range of household  furniture,  including
dining  room,  living room and  bedroom  pieces,  as well as certain  electronic
products.

A significant portion of the Company's residential furniture rentals are derived
from corporate  relocations  and temporary  assignments,  as new and transferred
employees of the Company's corporate customers enter into leases for residential
furniture.  The  Company's  sales  personnel  maintain  contact  with  corporate
relocation departments and present the possibility of obtaining  fully-furnished
rental apartments as a lower cost alternative to hotel accommodations. Thus, the
Company  offers  its  corporate  rental  customers  a way to reduce the costs of
corporate  relocations  while  developing  residential  business  with  new  and
transferred  employees.  The  Company's  ability to service both  corporate  and
individual  needs  creates a broad  corporate  customer base  accompanied  by an
increasing pool of employees utilizing the Company's residential services.

                                      -3-
<PAGE>


Other Products and Services

CORT offers several other products and services in selected markets. The Company
offers houseware amenity packages (such as linens, towels, dishes,  cookware and
other kitchen,  bedroom and bath  accessories)  for rent to its furniture rental
customers.  The Company had generally  distributed  houseware  amenity  packages
through third-party contractors either under subcontract  arrangements or direct
referrals. The Company continues to expand the distribution of its own houseware
amenity   packages  to  capture  profits   currently   realized  by  third-party
contractors.

The Company has been providing rental specialty  furniture for short term use at
trade  shows and  conventions  through  its  operations  in New  Orleans and the
California  operations  acquired  with Evans Rents.  In March 1997,  the Company
completed its acquisition of three trade show services  businesses that operated
in nine major  markets.  The  combination  of CORT's  national  network with the
experience of these organizations  should provide the Company with a competitive
advantage in the trade show and convention services business.

The Company established  Relocation Central, a website that provides information
about major cities such as apartment finders,  school systems,  movers and local
recreation for relocating  individuals.  Relocation Central provides the Company
with an additional  marketing tool while also providing valuable  information to
potential customers.

Operations

Lease Terms

The Company typically leases furniture to individuals and corporate accounts for
three-,  six- and twelve-month terms, which may be and often are extended by its
customers on a  month-to-month  basis.  Management  believes  that,  on average,
furniture  remains on lease for  approximately  nine months at a time.  Although
rental  contracts  may give the customer the option to purchase the  merchandise
rented,  only a small percentage of the Company's rental leases lead to customer
ownership.

The  Company's  strategy is to price rentals to recover the original cost of the
furniture over a ten-month rental "payout period."  However,  pricing and payout
periods often vary with the length of the leases. The Company frequently charges
a delivery fee and, in the absence of proof of insurance,  a waiver fee.  Within
general  company  guidelines,  each district has  discretion to set prices based
upon local market factors.

The Company may also require a customer  security deposit which will be returned
at the end of the  lease  upon  satisfactory  compliance  with the  terms of the
lease. The Company requires  applications from prospective  rental customers and
performs credit  investigations  before approving such applications.  In each of
the last five years,  the Company's bad debt losses have been limited to 0.7% of
revenue or less.

Customer Services

CORT is dedicated  to  providing  consistently  high  quality  customer  service
nationwide  to its  corporate  and  individual  customers.  Through its national
network,  the  Company  more  efficiently  services  its  corporate  clients  by
providing a single point of contact for  customers who have  furniture  needs in
multiple locations,  offering consistent quality of products and services at all
CORT  locations,  and offering a broad spectrum of products to customers.  Under
its Personal Service  Guaranty,  the Company ensures customers of CORT Furniture
Rental that they will be satisfied  with the furniture  they rent or the Company
will exchange it for similar  furniture within two business days free of charge.
Additionally,  the Company's  employees  assist  customers with space  planning,
interior design and apartment location services.

Furniture Sales

For the last five years,  the Company  has  derived 71% of its  furniture  sales
revenue from clearance  centers sales. The remaining  furniture sales revenue is
derived  primarily from lease  conversions and sales of new furniture.  Sales of

                                      -4-
<PAGE>


rental  furniture  allow the Company to control  inventory  levels and  maintain
showroom quality of rental  inventory.  On average,  furniture is typically sold
through the  clearance  centers  three  years after its initial  purchase by the
Company.  For the  last  five  years,  sales of  rental  furniture  through  the
clearance  centers have had an average  recovery  margin on the original cost of
furniture of  approximately  109%, a price which is usually  considerably  lower
than the price of  comparable  new  merchandise.  Management  believes  that its
ability to recover the  original  cost of its  furniture  through its  clearance
centers is a key contributor to the Company's profitability.

Sales, Marketing and Advertising

The  Company  employs  a sales  force of  approximately  700  people,  including
managers and supervisors,  rental  consultants,  commercial account  executives,
residential  account  executives,  and clearance center  personnel.  In general,
rental consultants  service walk-in showroom  customers,  clearance center sales
personnel are responsible for walk-in  clearance center customers and commercial
and  residential  account  executives  work to develop  office  and  residential
customers  in their  markets.  Utilizing  the  Company's  national  distribution
network to emphasize its ability to serve customers  throughout the country, the
Company employs fifteen national account representatives who are responsible for
customers with business in more than one district.

CORT's sales representatives  receive professional,  business-to-business  sales
training through the Company's CORT University  program,  which was developed as
part of the Company's  continuing  effort to increase rental revenue and improve
customer service.  Management  believes that the program's emphasis on a problem
solving,  value-added approach to clients' needs enhances its relationships with
customers  and  provides  CORT with a  competitive  advantage  in  marketing  to
corporate customers.

The Company markets its services  through  brochures,  newspapers,  periodicals,
yellow pages, radio,  television and direct response media and over the internet
(http://www.cort1.com and http://www.relocationcentral.com). The Company designs
its marketing program both to promote the business and to increase  awareness of
the advantages of renting in the residential and office furniture markets.

Purchasing and Distribution

The Company has a national product line chosen by its merchandising  group. Each
district  manager,  in  consultation  with  his  or her  regional  merchandising
manager, selects from the national product line based on an analysis of customer
demand within such manager's specific market. Each district then places purchase
orders directly with the Company's  vendors and shipment is arranged through the
Company's freight analyst directly to the district warehouse.

The Company acquires  furniture from a large number of manufacturers  and is not
dependent on any  particular  manufacturer  as a source of supply.  In 1997,  no
furniture  manufacturer  accounted for more than 10% of the Company's  furniture
purchases. Management believes that the Company is able to purchase furniture at
lower  prices  than its  competitors  due to the  centralized  selection  of its
product line and large  volume of  purchases.  The Company is generally  able to
obtain prompt  delivery of furniture from its suppliers and has not  experienced
significant  interruptions  in its business  resulting  from delays in acquiring
furniture.

Merchandise is delivered to rental  customers by Company  employees via owned or
leased trucks after a rental agreement has been signed.  At the end of the lease
term,  rental  furniture  is returned to the  Company's  warehouses  where it is
inspected,  cleaned and/or repaired in preparation for future rental or sale. If
it is determined  that the furniture is appropriate  for sale rather than future
rental,  the  furniture  is then  transferred  to a  clearance  center.  Company
warehouses are typically  located next to a clearance  center,  thereby allowing
the Company to reduce shipping expenses and realize efficiency gains.

Competition

The   "rent-to-rent"   segment  of  the  furniture  rental  industry  is  highly
competitive.  Management believes that Aaron Rents, Globe Business Resources and
Brook  Furniture  Rental are the  Company's  most  significant  competitors.  In
addition, there are numerous smaller regional and local "rent-to-rent" furniture
companies  as well as  retailers

                                      -5-
<PAGE>


offering  residential  and  office  furniture.   Management  believes  that  the
principal  competitive  factors in the  furniture  rental  industry  are product
value,  furniture  condition,  extent of  furniture  selection,  terms of rental
agreement,  speed of delivery,  exchange privilege,  option to purchase, deposit
requirements and customer service level.

With respect to sales of furniture  through its clearance  centers,  the Company
competes  with  numerous  used and new  furniture  retailers,  some of which are
larger  than  the  Company  and have  greater  financial  resources.  Management
believes  that  price and value are the  principal  competitive  factors  in its
furniture sales.

Employees

On December 31, 1997, the Company employed  approximately  2,300 people, of whom
approximately  70 were  employed at corporate  headquarters.  Approximately  700
people  were  employed  as  salespersons,  1,100  people  were  employed  in the
warehouse and distribution portion of the business and the remainder in district
and regional administrative positions.

The Company's  warehouse and delivery  employees in Maryland  (approximately  48
persons) are represented by independent  union under a contract which expires in
December  1999.  Additionally,  14  of  the  Company's  warehouse  and  delivery
employees in New York City are represented by the Local 840 of the International
Brotherhood of Teamsters under a contract which expires in June 1999.

The Company believes that its relationships with its employees are good.

Trademarks and Name Recognition

The  Company  engages in  business  primarily  under the CORT  Furniture  Rental
tradename,  which has been used in the  furniture  rental  business  for over 20
years.  The  Company has  established  its  reputation  as a provider of quality
furniture  and  customer  service  using  this  name.  The  Company  feels  that
reputation and name recognition are important to customers. Therefore, following
an  acquisition  in a new market,  the Company may use a combination of the CORT
and acquired  business  name to maintain  customer  recognition  for a period of
time.

Regulatory Matters

Compliance  with  Federal,  state  and  local  laws  and  regulations  governing
pollution and protection of the environment is not expected to have any material
effect upon the financial condition or results of operations of the Company.

ITEM 2.  Properties

As of December 31, 1997, the Company carried out its rental, sales and warehouse
operations  through 165 facilities,  of which 21 were owned and 144 were leased.
The leased  facilities have lease terms with expiration  dates ranging from 1998
to 2014. Upon the expiration of its leases,  the Company generally has been able
to either  extend  its  leases  or obtain  suitable  alternative  facilities  on
satisfactory  terms.  Management seeks to locate properties in new markets where
rental,  clearance and warehouse operations can be combined in one facility.  As
the  Company  expands  in a  particular  district,  the  Company  seeks  to open
free-standing  showrooms  and  clearance  centers  that  can  be  serviced  from
pre-existing  warehouses.  The Company's  showrooms  generally have 4,500 square
feet of  floor  space.  The  Company  regularly  reviews  the  presentation  and
appearance of its furniture  showrooms  and clearance  centers and  periodically
improves or refurbishes them to enhance their attractiveness to customers.

The Company's decision to enter a new market is based upon its review of current
demographic  information,  short-and  long-term  population and business  growth
projections and the level of existing competition.  Once the decision is made to
enter  a  new  market,  management  selects  individual  showroom  locations  by
reviewing demographic information, accessibility,  visibility, customer traffic,
location of competitors and cost.

                                      -6-

<PAGE>


The metropolitan  areas in which the Company operates,  together with the number
of showrooms in each metropolitan area, are set forth in the table below:

            District Locations                       Number of Showrooms
------------------------------------------           -------------------
ALABAMA                         Birmingham                        2
ARIZONA                         Phoenix                           1
ARKANSAS                        Little Rock                       1
CALIFORNIA                      Orange County                     2
                                Los Angeles                       6
                                Sacramento                        1
                                San Diego                         1
                                San Francisco                     5
                                Santa Clara                       2
COLORADO                        Denver                            2
DISTRICT OF COLUMBIA            (1)                               6
FLORIDA                         Ft. Lauderdale                    1
                                Jacksonville                      1
                                Miami                             2
                                Orlando                           3
                                Pensacola                         1
                                Tampa                             2
GEORGIA                         Atlanta                           6
ILLINOIS                        Chicago                           3
INDIANA                         Indianapolis                      1
KANSAS                          Kansas City                       1
KENTUCKY                        Louisville                        2
LOUISIANA                       Baton Rouge                       2
                                New Orleans                       1
MASSACHUSETTS                   Boston                            3
MICHIGAN                        Detroit                           3
MINNESOTA                       Minneapolis                       2
MISSOURI                        St. Louis                         1
NEW JERSEY                      Kearny                            3
NEW MEXICO                      Albuquerque                       1
NEW YORK                        New York                          2
NORTH CAROLINA                  Raleigh                           2
                                Charlotte                         1
OHIO                            Cincinnati                        2
                                Cleveland                         1
                                Columbus                          1
OKLAHOMA                        Oklahoma City                     1
                                Tulsa                             2
OREGON                          Portland                          1
PENNSYLVANIA                    Philadelphia(2)                   4
                                Pittsburgh                        3
TENNESSEE                       Memphis                           1
                                Nashville                         1
TEXAS                           Austin                            1
                                Corpus Christi                    1
                                Dallas                            4
                                El Paso(3)                        -
                                Houston                           4
                                San Antonio                       3
UTAH                            Salt Lake City                    1
VIRGINIA                        Richmond                          1
                                Virginia Beach                    1
WASHINGTON                      Seattle                           3
                                                                 ---
   TOTAL                                                         109

------------
(1)  Includes locations in Washington, D.C., Maryland and Virginia.

(2)  Includes locations in Pennsylvania, New Jersey and Delaware.

(3)  Distribution center in El Paso, Texas but no accompanying  showroom at this
     location.

The Company  distributes its furniture using a fleet of approximately 212 leased
and 48 company-owned delivery trucks. The trucks are usually rented for a period
of five to six  years  under  operating  leases  and  typically  display  CORT's
tradenames.

                                      -7-
<PAGE>

ITEM 3.  Legal Proceedings

At December 31,  1997,  the Company was  involved in certain  legal  proceedings
arising in the normal course of its business.  The Company  believes the outcome
of these matters will not have a material adverse effect on the Company.

ITEM 4.  Submission of Matters to a Vote of Security Holders

None

ITEM 4a.  Directors and Executive Officers of the Registrant

The names of the executive  officers and directors of CORT and their  respective
ages and positions with CORT are set forth in the following table. Directors are
elected at the annual  meeting of  stockholders  to serve  until the next annual
meeting and until their successors are elected and qualify.

<TABLE>
<CAPTION>

Name                                Age     Position
----                                ---     --------
<S>                               <C>     <C>
Paul N. Arnold (3)                  51      President, Chief Executive Officer & Director
Anthony J. Bellerdine               49      Group Vice President
Michael G. Connors                  41      Vice President--Real Estate
Charles M. Egan (3)                 61      Chairman & Director
Kenneth W. Hemm                     43      Group Vice President
Steven D. Jobes                     48      Vice President--Marketing, Merchandising, Sales & National Accounts
Lloyd Lenson                        47      Group Vice President
Frank Martini                       49      Group Vice President
Victoria L. Stiles                  43      Vice President--Human Resources & Corporate Risk Management
Maureen C. Thune                    32      Controller & Assistant Secretary
Frances Ann Ziemniak                47      Vice President--Finance, Chief Financial Officer & Secretary
Keith E. Alessi (2)                 43      Director
Bruce C. Bruckmann (1)(2)           44      Director
Michael A. Delaney(1)               43      Director
Gregory B. Maffei(2)                37      Director
James A. Urry (1)                   44      Director
</TABLE>

-------------

(1)  Member of Compensation Committee

(2)  Member of Audit Committee

(3)  Member of Directors Stock Option Committee

PAUL N. ARNOLD, President,  Chief Executive Officer and Director. Mr. Arnold has
been with CORT and Mohasco Corporation,  its former parent, for 29 years and has
held group management  positions within CORT since 1976. He has held his current
position  since July 1992.  He is also a Director of Town Sports  International,
Inc.

ANTHONY J. BELLERDINE,  Group Vice President.  Mr. Bellerdine has been with CORT
since July 1991.  He was  appointed to Group Vice  President  in December  1994,
having  served as Area Vice  President  and Senior  District  Manager.  Prior to
joining CORT, Mr. Bellerdine was Senior Vice President of Sales and Marketing of
Stern Office Furniture for eight years.

MICHAEL G. CONNORS,  Vice  President--Real  Estate.  Mr.  Connors joined CORT in
February 1986,  after nearly eight years in Real Estate and Marketing with Mobil
Oil Corporation and has served in his current position since March 1991.

CHARLES M. EGAN,  Chairman and  Director.  Mr. Egan has been with CORT since the
acquisition of General  Furniture  Leasing  Company in September  1993. Mr. Egan
joined General  Furniture  Leasing  Company in 1989 and

                                      -8-
<PAGE>


became its President and Chief Executive Officer in 1992. From 1985 to 1989, Mr.
Egan was Executive Vice President of Mohasco Corporation. Mr. Egan was President
of CORT from 1980 to 1985.

KENNETH W. HEMM, Group Vice President. Mr. Hemm has been with CORT for 17 years.
He was  appointed  Group Vice  President  in June 1992,  having  served as Group
Manager since January 1991.

STEVEN D. JOBES, Vice  President--Marketing,  Merchandising,  Sales and National
Accounts.  Mr.  Jobes has been with CORT for 26 years and  served as Group  Vice
President prior to assuming his current position in May 1993.

LLOYD LENSON,  Group Vice President.  Mr. Lenson has been with CORT for 19 years
serving in his current  position  since May 1993. He previously  served as Group
Vice President and as Vice President--Marketing, Sales and Acquisitions.

FRANK MARTINI, Group Vice President. Mr. Martini has been with CORT for 21 years
serving in his current  position  since July 1994. He previously  served as Area
General Manager and District General Manager.

VICTORIA  L.  STILES,  Vice   President--Human   Resources  and  Corporate  Risk
Management. Ms. Stiles joined CORT in November 1987, after nearly eight years in
Personnel  for  the  Hecht  Company,  a  division  of the May  Company.  She was
appointed  to Vice  President in July 1996,  having  served as Director of Human
Resources and Regional Manager of Human Resources.

MAUREEN C. THUNE,  Controller and Assistant Secretary.  Ms. Thune joined CORT in
August 1992 after five years with KPMG Peat  Marwick LLP,  having most  recently
served as a Manager.

FRANCES ANN ZIEMNIAK,  Vice  President--Finance  & Chief  Financial  Officer and
Secretary. Ms. Ziemniak joined the Company in March 1995 after three years as an
independent  consultant  focusing  on  risk-management  and  retail  acquisition
analysis.  Ms.  Ziemniak  was  previously  Vice  President,  Finance  and  Chief
Financial  Officer  for  Federated   Merchandising,   a  division  of  Federated
Department  Stores,  Inc.  from  1987  to 1992  and  Corporate  Vice  President,
Financial  Services for The GAP,  Inc.  from 1982 to 1987.  Before Ms.  Ziemniak
joined The GAP, Inc. in 1979, she was employed by Ernst & Young LLP.

KEITH E. ALESSI,  Director.  Mr. Alessi has been a Director of the Company since
October 1993. Mr. Alessi is President,  Chief Executive  Officer and Chairman of
the Board of Directors of Telespectrum Worldwide,  Inc. Mr. Alessi was President
and Chief Executive  Officer of Jackson Hewitt Inc. from June 1996 through March
1998.  He was  Vice-Chairman  and Chief  Financial  Officer of Farm Fresh,  Inc.
(which filed  voluntary  bankruptcy  as part of a sale of the Company in January
1998 and emerged from  bankruptcy in February  1998) from June 1994 through June
1996.  He had  previously  served in  various  executive  capacities,  including
President,  with Farm Fresh from 1988 to 1992. Mr. Alessi was Chairman and Chief
Executive Officer of Virginia  Supermarkets,  Inc. from 1992 to 1994. Mr. Alessi
is also a Director of Farm Fresh, Inc., Shoppers Food Warehouse,  Inc., and Town
Sports International, Inc.

BRUCE C. BRUCKMANN,  Director.  Mr. Bruckmann has been a Director of the Company
since March 1993.  Mr.  Bruckmann is currently  Managing  Director of Bruckmann,
Rosser,  Sherrill & Co.,  Inc. Mr.  Bruckmann  was a Vice  President of Citicorp
Venture Capital Ltd.,  which is an affiliate of the Company,  through 1993 and a
Managing  Director  from 1993  through  1994.  He is also a  Director  of Mohawk
Industries,  Inc., AmeriSource Health Corporation,  Chromcraft-Revington,  Inc.,
Jitney-Jungle  Stores of America,  Inc.,  Anvil  Knitwear,  Inc. and Town Sports
International, Inc.

MICHAEL A.  DELANEY,  Director.  Mr.  Delaney has been a Director of the Company
since May 1995. Mr. Delaney is a Managing  Director of Citicorp  Venture Capital
Ltd.,  which is an affiliate of the Company.  From 1989 through  1997,  he was a
Vice President of Citicorp  Venture  Capital Ltd. From 1986 through 1989, he was
Vice  President  of Citicorp  Mergers and  Acquisitions.  Mr.  Delaney is also a
Director of Aetna Industries,  Inc., AmeriSource Health Corporation,  Ballentrae
Corporation,  CLARK Material  Handling  Corporation,  Delco Remy  International,
Inc.,  Enterprise  Media Inc.,  GVC  Holdings,  JAC Holdings,  IKS  Corporation,
Palomar Technologies,  Inc., SC Processing,  Inc., MSX International and Triumph
Group, Inc.

GREGORY B. MAFFEI, Director. Mr. Maffei has been a Director of the Company since
November 1995. Mr. Maffei is Chief Financial  Officer of Microsoft  Corporation.
He joined  Microsoft in April 1993,  served as Treasurer

                                      -9-
<PAGE>


from 1994 to 1996, Vice President,  Corporate Development from 1996 to 1997, and
was promoted to Chief Financial Officer in July 1997. Prior thereto,  Mr. Maffei
was a Vice President of Citicorp  Venture Capital Ltd., which is an affiliate of
the  Company.  Mr.  Maffei  is  also a  Director  of  Mobile  Telecommunications
Technologies Corporation.

JAMES A. URRY, Director. Mr. Urry has been a Director of the Company since March
1993.  Mr.  Urry has been with  Citibank,  N.A.  since  1981  serving  as a Vice
President  since 1986. He has been a Vice President of Citicorp  Venture Capital
Ltd., which is an affiliate of the Company, since 1989. He is also a Director of
Airxcel,   Inc.   AmeriSource  Health   Corporation,   CLARK  Material  Handling
Corporation, Hancor Holding Corporation, IKS Corporation, Palomar Products Inc.,
and York International Corporation.

                                      -10-

<PAGE>



                                     PART II

ITEM 5.  Market for Registrant's Common Equity and Related Stockholder Matters

The  information  required for this item is incorporated by reference to page 28
of the Company's 1997 Annual Report to Stockholders.

ITEM 6.  Selected Financial Data

The  information  required for this item is incorporated by reference to page 10
of the Company's 1997 Annual Report to Stockholders.

ITEM 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operations

The information  required for this item is incorporated by reference to pages 11
through 14 of the Company's 1997 Annual Report to Stockholders.

In addition to historic  information,  this Annual  Report on Form 10-K includes
certain forward-looking statements as such term is defined in Section 27A of the
Securities  Act and  Section  21E of the  Exchange  Act.  These  forward-looking
statements  involve  certain risks and  uncertainties,  including but limited to
acquisitions, additional financing requirements, development of new products and
services,  the effect of  competitive  products  and  pricing  and the effect of
general  economic  conditions,   that  could  cause  actual  results  to  differ
materially from those in such forward-looking statements.

ITEM 8.  Financial Statements and Supplementary Data

The  consolidated  balance  sheets of CORT  Business  Services  Corporation  and
subsidiaries  as of  December  31, 1997 and 1996,  and the related  consolidated
statements of operations,  stockholders'  equity, and cash flows for each of the
years in the  three-year  period ended  December 31, 1997,  and the report dated
February 13, 1998 of KPMG Peat Marwick LLP, independent public accountants,  are
incorporated  by reference to pages 15 through 27 of the  Company's  1997 Annual
Report to Stockholders.

ITEM  9.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
Financial Disclosures

No response to this Item is required.

                                      -11-
<PAGE>


                                    PART III

ITEM 10.  Directors and Executive Officers of the Registrant

The information required by Item 401(b) of Regulation S-K is included in Part I,
Item 4a. Directors and Executive Officers of the Registrant.

Compliance With Section 16(a) of the Securities Exchange Act of 1934

The  information  required for this part of Item 10 is incorporated by reference
to  page  11 of  the  Company's  Proxy  Statement  for  the  Annual  Meeting  of
Stockholders to be held May 12, 1998.

ITEM 11.  Executive Compensation

The  information  required for this item is incorporated by reference to pages 8
through  11  of  the  Company's  Proxy  Statement  for  the  Annual  Meeting  of
Stockholders to be held May 12, 1998.

ITEM 12.  Security Ownership of Certain Beneficial Owners and Management

The information required for this item is incorporated by reference to page 4 of
the Company's  Proxy Statement for the Annual Meeting of Stockholders to be held
May 12, 1998.

ITEM 13.  Certain Relationships and Related Transactions

The  information  required for this item is incorporated by reference to page 11
of the Company's  Proxy  Statement for the Annual Meeting of  Stockholders to be
held May 12, 1998.

                                      -12-

<PAGE>



                                     PART IV

ITEM 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a) and (d)   Financial Statements and Schedules (see Index on Page F-1)

(b)           Reports on Form 8-K

              No reports on Form 8-K have been filed  during the last quarter of
              the period covered by this report.

(c)           Exhibits (see Index on Page E-1)

                                      -13-

<PAGE>



               CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES

                                   SIGNATURES




Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.


                                      CORT BUSINESS SERVICES CORPORATION



                                      By: /s/  Frances Ann Ziemniak
                                          --------------------------------------
                                          Frances Ann Ziemniak
                                         (Principal financial and principal
                                           accounting officer)



Date:  March 31, 1998

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  Registrant and
in the capacities and on the dates indicated.

       Signatures                    Title                            Date
       ----------                    -----                            ----

/s/  Paul N. Arnold        President, Chief Executive Officer     March 31, 1998
-------------------------  (principal executive officer)
Paul N. Arnold             and Director


/s/  Charles M. Egan       Chairman and Director                  March 31, 1998
-------------------------
Charles M. Egan


/s/  Frances Ann Ziemniak  Vice President, Finance, Chief         March 31, 1998
-------------------------  Financial Officer and Secretary
Frances Ann Ziemniak


/s/  Keith E. Alessi       Director                               March 31, 1998
-------------------------
Keith E. Alessi


 /s/  Bruce C. Bruckmann   Director                               March 31, 1998
-------------------------
Bruce C. Bruckmann


 /s/  Michael A. Delaney   Director                               March 31, 1998
-------------------------
Michael A. Delaney

 /s/  Gregory B. Maffei
-------------------------
Gregory B. Maffei          Director                               March 31, 1998


/s/  James A. Urry         Director                               March 31, 1998
-------------------------
James A. Urry

                                      -14-

<PAGE>



                          INDEX TO FINANCIAL STATEMENTS

                                                                         Page
                                                                         ----
Financial Statements..................................................    13

Financial Statement Schedules:

Schedule I - Condensed Financial Information of Registrant............   S-1

Schedule II - Valuation and Qualifying Accounts.......................   S-3

                                      F-1

<PAGE>

<TABLE>
<CAPTION>


  Exhibit
   Number         Description                                                                 Page
   ------         -----------                                                                 ----
<S>               <C>                                                                      <C>
      2.1         Stock  Purchase  Agreement,  dated June 22, 1993, by and among
                  the Company,  Interfinancial,  Inc., General Furniture Leasing
                  Company and Fortis, Inc.; incorporated by reference to Exhibit
                  2.1 to CFR's Registration Statement on Form S-1, No. 33-65094,
                  filed on June 25, 1993

      2.2         First  Amendment  to  Stock  Purchase  Agreement,  dated as of
                  August  31,  1993,  by and among the  Company,  Fortis,  Inc.,
                  Interfinancial,  Inc. and General  Furniture  Leasing Company;
                  incorporated  by reference  to Exhibit 2.2 to CFR's  Quarterly
                  Report on Form 10-Q for the fiscal quarter ended September 30,
                  1993

      2.3         Assignment  and Assumption  Agreement,  dated as of August 31,
                  1993,  between CFR and the Company;  incorporated by reference
                  to Exhibit 2.3 to CFR's Quarterly  Report on Form 10-Q for the
                  fiscal quarter ended September 30, 1993

      2.4         Acquisition Agreement,  dated March 15, 1996, by and among the
                  Company,  CE Merger Sub Inc. and Evans Rents;  incorporated by
                  reference  to Exhibit 2.4 to the  Company's  Annual  Report on
                  Form 10-K for the year ended December 31, 1995

      3.1         Restated   Certificate  of   Incorporation   of  the  Company;
                  incorporated by reference to Exhibit 3.1 to Amendment No. 3 to
                  the Company's Registration Statement on Form S-1, No. 33-97568
                  filed on November 13, 1995

      3.2         Amendment   to   Restated    Certificate   of   Incorporation;
                  incorporated  by  reference  to  Appendix  A to the  Company's
                  Definitive  Proxy Statement on Schedule 14A, filed as of March
                  31, 1997

      3.3         By-laws of the Company;  incorporated  by reference to Exhibit
                  3.2 to Amendment No. 3 to the Company's Registration Statement
                  on Form S-1, No. 33-97568 filed on November 13, 1995

      4.1         Form of Indenture  between CFR and United States Trust Company
                  of New York,  as  Trustee,  with  respect  to CFR's 12% Senior
                  Notes due 2000;  incorporated  by  reference to Exhibit 4.1 to
                  Amendment  No. 3 to the  Company's  Registration  Statement on
                  Form S-1, No. 33-65094, filed on August 20, 1993

      4.2         First  Supplemental  Indenture  between CFR and United  States
                  Trust Company of New York, as Trustee,  dated August 25, 1995;
                  incorporated  by  reference  to Exhibit  4.2 to the  Company's
                  Registration  Statement  on Form S-1,  No.  33-97568  filed on
                  September 29, 1995

      4.3         Second  Supplemental  Indenture  between CFR and United States
                  Trust  Company of New York,  as Trustee,  dated  September 29,
                  1995;  incorporated  by  reference to Exhibit 4.9 to Amendment
                  No. 1 to the Company's Registration Statement on Form S-1, No.
                  33-97568 filed on October 23, 1995

      4.4         Warrant  Agreement,  dated  September  1,  1993,  between  the
                  Company  and  United  States  Trust  Company  of New York,  as
                  Warrant Agent; incorporated by reference to Exhibit 4.7 to the
                  Company's Registration Statement on Form S-1, No.
                  33-97568 filed on September 29, 1995

      4.5         Amendment No. 1 to Warrant Agreement,  dated February 1, 1994,
                  between  the Company and United  States  Trust  Company of New
                  York, as Warrant Agent;  incorporated  by reference to Exhibit
                  4.8 to the Company's  Registration  Statement on Form S-1, No.
                  33-97568 filed on September 29, 1995
</TABLE>

                                      E-1
<PAGE>

     10.1         Credit  Agreement  dated as of February  13, 1998 by and among
                  CFR,  the  Company,   the  lenders  identified  therein,   and
                  NationsBank, N.A., as agent

     10.2         Stock Option,  Securities Purchase and Stockholders Agreement,
                  dated as of January 18, 1994,  by and among the Company,  CFR,
                  Citicorp  Venture  Capital  Ltd. and certain  investors  named
                  therein;  incorporated  by  reference  to  Exhibit  4.6 to the
                  Company's  Registration  Statement on Form S-8, No.  33-72724,
                  filed on December 9, 1993

     10.3         Amendment 1 to New Cort Holdings  Corporation and Subsidiaries
                  Employee  Stock Option and Stock  Purchase  Plan as adopted by
                  the Board of  Directors  of the Company on December  21, 1993;
                  incorporated  by  reference  to Exhibit  10.11 to CFR's Annual
                  Report on Form 10-K for the  fiscal  year ended  December  31,
                  1993

     10.4         New Cort Holdings Corporation and Subsidiaries  Employee Stock
                  Option and Stock  Purchase  Plan (1995 Plan  Distribution)  as
                  adopted by the Board of  Directors  of the Company on December
                  16, 1994;  incorporated by reference to Exhibit 10.13 to CFR's
                  Quarterly  Report on Form 10-Q for the  fiscal  quarter  ended
                  June 30, 1995

     10.5         Form of First Amendment to Stockholders Agreement, dated as of
                  November 13, 1995, by and among the Company,  Citicorp Venture
                  Capital   Ltd.,   and   certain   investors   named   therein;
                  incorporated  by reference to Exhibit 10.5 to Amendment  No. 3
                  to the Company's Registration Statement on Form S-1, No.
                  33-97568 filed on November 13, 1995

     10.6         Registration  Rights  Agreement for Common Stock,  dated as of
                  January 18, 1994, by and among the Company,  Citicorp  Venture
                  Capital Ltd. and certain investors named therein; incorporated
                  by reference to Exhibit 10.4 to the Company's Quarterly Report
                  on Form 10-Q for the fiscal quarter ended March 31, 1994

     10.7         CFR's  Supplemental  Executive  Retirement Plan, dated October
                  28,  1992,  as revised  effective  January  1, 1993,  restated
                  through the Second  Amendment;  incorporated  by  reference to
                  Exhibit 10.8 to the  Company's  Annual Report on Form 10-K for
                  the year ended December 31, 1996

     10.8         Agreement for  Irrevocable  Trust Under CORT Furniture  Rental
                  Supplemental  Executive  Retirement  Plan, dated June 1, 1996,
                  between  CFR  and  Mentor  Trust  Company;   incorporated   by
                  reference to Exhibit 10.9 to the  Company's  Annual  Report on
                  Form 10-K for the year ended December 31, 1996

     10.9         Letter Agreement, dated July 24, 1992, between CFR and Paul N.
                  Arnold;  incorporated  by reference to Exhibit  10.16 to CFR's
                  Registration  Statement  on Form S-1, No.  33-65094,  filed on
                  June 25, 1993

    10.10         Letter Agreement,  dated August 18, 1993, between CFR and Paul
                  N.  Arnold;  incorporated  by  reference  to Exhibit  10.26 to
                  Amendment  No. 5 to the  Company's  Registration  Statement on
                  Form S-1, No. 33-65094, filed on August 25, 1993

                                      E-2
<PAGE>


    10.11         Employment Agreement, dated September 1, 1994, between CFR and
                  Charles M. Egan; incorporated by reference to Exhibit 10.10 to
                  CFR's Annual  Report on Form 10-K for the year ended  December
                  31, 1994

    10.12         Amended and Restated CORT Business  Services  Corporation 1995
                  Directors  Stock Option Plan adopted by the Board of Directors
                  October 18, 1995 and  amended  and  restated on May 14,  1997;
                  incorporated  by reference to Exhibit  10.13 to the  Company's
                  Quarterly  Report on Form 10-Q for the  fiscal  quarter  ended
                  June 30, 1997

    10.13         Equity  Share  Agreement,  between CFR and Lloyd and Eileen S.
                  Lenson,  dated April 20,  1994;  incorporated  by reference to
                  Exhibit 10.17 to the Company's  Registration Statement on Form
                  S-1, No. 33-97568 filed on September 29, 1995

    10.14         Form  of  Senior  Notes  Purchase  Agreement  between  CFR and
                  certain  holders  of CFR's 12%  Senior  Notes Due 2000,  dated
                  September 28, 1995; incorporated by reference to Exhibit 10.18
                  to Amendment No. 2 to the Company's  Registration Statement on
                  Form S-1, No. 33-97568 filed on November 1, 1995

    10.15         Private  Exchange  Commitment Letter by and among the Company,
                  Citicorp  Venture  Capital Ltd. and certain  investors,  dated
                  September 28, 1995; incorporated by reference to Exhibit 10.19
                  to Amendment No. 1 to the Company's  Registration Statement on
                  Form S-1, No. 33-97568 filed on October 23, 1995

    10.16         Amended and Restated  CORT Business  Services Corporation 1995
                  Stock  Based  Incentive  Compensation  Plan as  adopted by the
                  Board of  Directors  on July 25, 1995 and amended and restated
                  on May 14, 1997; incorporated by reference to Exhibit 10.17 to
                  the  Company's  Quarterly  Report on Form 10-Q for the  fiscal
                  quarter ended June 30, 1997.

    10.17         CORT Business Services Corporation 1997 Directors Stock Option
                  Plan,  as adopted by the  stockholders  of the  Company at the
                  Annual Meeting of Stockholders  on May 14, 1997;  incorporated
                  by reference to Appendix C to the Company's  Definitive  Proxy
                  Statement on Schedule 14A, filed as of March 31, 1997

     11.1         Statement re computation of per share  earnings;  incorporated
                  by reference to page 26 of the Company's 1997 Annual Report to
                  stockholders.

     13.1         Portions  of the Annual  Report of the  Company for the fiscal
                  year ended December 31, 1997 which are expressly  incorporated
                  by reference herein

     21.1         List of Subsidiaries

     23.1         Consent of KPMG Peat Marwick LLP

       27         Financial Data Schedules

                                      E-3

<PAGE>


               CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES

           SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                                 (in thousands)


Condensed Balance Sheets:
                                                           As of December 31,
                                                         -----------------------
                                                           1996           1997
                                                           ----           ----
Investment in CORT Furniture Rental ..............       $125,152       $149,332
Other assets .....................................             --             --
                                                         --------       --------
    Total assets .................................        125,152        149,332
                                                         ========       ========
Accrued expenses .................................             --             --
Long-term debt ...................................             --             --
                                                         --------       --------
    Total liabilities ............................             --             --
Stockholders' equity .............................        125,152        149,332
                                                         --------       --------
    Total liabilities and equity .................       $125,152       $149,332
                                                         ========       ========


Condensed Statements of Operations:


                                          Year Ended December 31,
                                       ---------------------------
                                         1995     1996      1997
                                         ----     ----      ----
Equity in earnings of
 CORT Furniture
   Rental ..........................   $ 3,705   $15,936   $22,326
Interest expense ...................     2,716        --        --
                                       -------   -------   -------
    Income before income taxes .....       989    15,936    22,326
Income tax benefit .................     1,086        --        --
                                       -------   -------   -------
    Net income .....................   $ 2,075   $15,936   $22,326
                                       =======   =======   =======

                                      S-1

<PAGE>

               CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES

           SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                                   (CONTINUED)
                                 (in thousands)

Condensed Statements of Cash Flows:


<TABLE>
<CAPTION>

                                                           Year Ended December 31,
                                                     --------------------------------
                                                        1995       1996        1997
                                                        ----       ----        ----
<S>                                                  <C>         <C>         <C>
Net income .......................................   $  2,075    $ 15,936    $ 22,326
Adjustments to reconcile net income
 to cash flows from operating activities:
    Equity in earnings of CORT Furniture Rental ..     (3,705)    (15,936)    (22,326)
    Discount on junior subordinated debentures ...         65          --          --
    Interest converted to long-term debt .........      2,636          --          --
    Changes in assets and liabilities, net .......     (1,689)         --          --
                                                     --------    --------    --------
         Cash used in operating activities .......        618          --          --
                                                     --------    --------    --------
Cash flows from investing activities:
    Investment in CORT Furniture Rental ..........    (36,458)    (33,224)       (677)
                                                     --------    --------    --------
         Cash used in investing activities .......    (36,458)    (33,224)       (677)
                                                     --------    --------    --------
Cash flows from financing activities:
    Issuance of common stock .....................     37,045      33,224         677
    Net proceeds from issuance of long-term debt .         31          --          --
                                                     --------    --------    --------
         Cash provided by financing activities ...     37,076      33,224         677
                                                     --------    --------    --------
Net increase in cash and cash equivalents ........         --          --          --
Cash and cash equivalents at beginning of period .         --          --          --
                                                     --------    --------    --------
Cash and cash equivalents at end of period .......   $     --    $     --    $     --
                                                     ========    ========    ========
Supplemental disclosures of cash flow information:
Noncash financing activities:
    Tax benefit from exchange of debt for equity .   $    741    $     --    $     --
    Exchange of debt for equity ..................     20,147          --          --
    Tax benefit from exercise of stock options ...         --         571       1,177
</TABLE>


Note to Condensed Financial Statements of Registrant:

Basis of Presentation

The accompanying  condensed financial  statements represent the accounts of CORT
Business Services Corporation on a stand-alone basis. Substantially all footnote
disclosures are omitted. Reference is made to the audited consolidated financial
statements and footnotes of CORT Business Services  Corporation and subsidiaries
as of December  31, 1997 and 1996,  and for each of the years in the  three-year
period ended December 31, 1997, which appear in the Company's 1997 Annual Report
to stockholders.

                                      S-2
<PAGE>


               CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES

                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                                    Deductions
                                                          Additions                ------------
                                                ---------------------------         Write off of
Allowance for                  Beginning        Charged to                          Uncollectible           Ending
Doubtful Accounts               Balance           Expense          Other(1)           Accounts              Balance
-----------------               -------           -------          --------           --------              -------
<S>                             <C>                <C>             <C>                <C>                    <C>
December 31, 1995                 917                582               --               (561)                  938
December 31, 1996                 938              1,234              334               (600)                1,906
December 31, 1997               1,906              2,107               --             (1,122)                2,891


(1)  Other  additions  represent  the  balance  of Evans  Rents'  allowance  for
     doubtful  accounts,  which was recorded April 24, 1996 in conjunction  with
     the acquisition.
</TABLE>