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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, 1998
                                       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 Identification No.)
 incorporation or organization)

  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 6,904,501 shares
of Common Stock as of March 29, 1999. The fair market value of the stock held by
non-affiliates  is  $159,666,586  based on the sale price of the shares on March
29, 1999.

     As of March 29, 1999,  8,744,174  shares of Common  Stock,  par value $.01,
were outstanding.

     As of March 29, 1999,  4,350,411  shares of Class B 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, 1998
  Proxy Statement for the Annual Meeting of                   Part III
    Stockholders to be held May 11, 1999

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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  900
salespeople  and a network of 119  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  83
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
108% 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
1998 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 19 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.

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
18 small lease portfolio  acquisitions  which include entrance into the New York
City, Salt Lake City, Pittsburgh and Cleveland markets. In addition, the Company
completed  the purchase of the rental  furniture  business of Instant  Interiors
Corporation.   This   acquisition   expands   CORT's  reach  into  the  Midwest,
particularly  in  Michigan,   Illinois,   Indiana,  and  Ohio,  and  provides  a
centralized  distribution  format  that  is  cost  effective  in  serving  large
geographic  areas  containing many smaller cities.  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

                                      -1-

<PAGE>


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.

The Company entered the trade show furnishings  business through  acquisition of
three businesses in 1997. These businesses have been integrated to create CORT's
trade  show  furnishings  segment  and will  establish  CORT as one of the major
players in this segment of the furniture rental industry. To further expand this
segment,  the Company  purchased  certain  assets of the trade show  furnishings
business  of Aaron  Rents,  Inc.  in October  1998.  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  seven  new  metropolitan  markets:  Birmingham,  AL;
Huntsville,  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 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

                                      -2-
<PAGE>


provide   furnished   apartments  and  individual   residents  seeking  to  rent
furnishings for their own homes and apartments.

Management believes the demand for rental products is 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 "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.

Operating Segments

The  Company  has  identified  the  following  operating  segments  based on the
distinct products/services from which each derives revenue:

Furniture Rental  - rental of residential  and office  furniture and accessories
                    to individual and corporate customers.

Furniture Sales   - sale of new or  previously  rented  residential  and  office
                    furniture to the general public.

Trade Show        - short term rental of display and workplace  furnishings  for
 Operations         trade   shows,   conventions,    and  special   events    to
                    corporate customers and trade show associations.

Housewares        - rental of kitchen,  bedroom and bathroom  accessories to the
 Operations         Furniture Rental segment.

Furniture  rental and furniture  sales  segments  represent the  aggregation  of
individual  districts,  all of which have similar economic  characteristics  and
distribution  methods.  Trade Show  Operations  and  Housewares  Operations  are
aggregated with furniture rental and furniture sales for reporting purposes.

The Company reports  separately,  in its Consolidated  Statements of Operations,
the revenue and associated cost of revenue of its reportable segments. Operating
segments are measured on the basis of gross margin; operating expenses, goodwill
amortization,  interest expense,  tax expense,  and extraordinary  items are not
allocated to the individual segments.

Assets and liabilities are not specifically  allocated  between Furniture Rental
and Furniture Sales. All rental furniture is available for rental or sale.

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

                                      -3-
<PAGE>


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.

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  provides  rental  specialty  furniture  for short term use at trade
shows and conventions through its trade show furnishings operation.  The Company
had operations in New Orleans and California.  The trade show services  business
expanded  through the  acquisition of three trade show  businesses in March 1997
and one trade show business in October 1998. 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

                                      -4-
<PAGE>


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
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 108%, at 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  900  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 fourteen  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 1998,  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

                                      -5-
<PAGE>


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  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, 1998, the Company employed  approximately  2,700 people, of whom
approximately  106 were employed at corporate  headquarters.  Approximately  900
people  were  employed  as  salespersons,  1,500  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  49
persons) are represented by an independent  union under a contract which expires
in December  1999.  Additionally,  16 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  environ-ment  is not  expected  to have  any
material  effect upon the  financial  condition or results of  operations of the
Company.

Subsequent Event

On March 25, 1999 the Company entered into an Agreement and Plan of Merger among
the Company,  CBF Holding LLC, a Delaware  limited  liability  company,  and CBF
Mergerco Inc., a Delaware corporation. Pursuant to the Merger

                                      -6-
<PAGE>


Agreement,  an investor group that includes Bruckmann,  Rosser,  Sherrill & Co.,
Inc.  ("BRS")  and members of the  Company's  management  team will  acquire the
Company  for  consideration  of $24.00  per share in cash and $2.50 per share in
liquidation value of a new series of preferred stock.  Citicorp Venture Capital,
Ltd.  ("CVC") will retain a portion of its investment and thereby provide equity
financing to the resulting corporation.

The merger  agreement  requires  approval  by the  holders of a majority  of the
Company's  voting stock and, in addition,  approval by the holders of a majority
of the  outstanding  voting stock who are not affiliated  with BRS, CVC or other
members of the investor group.  The merger is also subject to other  conditions,
including  receipt  of  necessary  financing,  a  limitation  on the  number  of
dissenting  shareholders and certain regulatory approvals.  The merger agreement
will terminate if the investor group has not obtained  customary  commitment and
highly  confident  letters to provide the required debt financing  within thirty
days after the date of the merger agreement.  There can be no assurance that the
merger will be completed, or that the merger will be completed as contemplated.

ITEM 2. Properties

As of December 31, 1998, the Company carried out its rental, sales and warehouse
operations  through 277 facilities,  of which 20 were owned and 257 were leased.
The leased  facilities have lease terms with expiration  dates ranging from 1999
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.

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:

<TABLE>
<CAPTION>

              District Locations                      Number of Showrooms
-----------------------------------------             -------------------
<S>                        <C>                               <C>
ALABAMA                     Birmingham                        1
                            Huntsville                        1
ARIZONA                     Phoenix                           2
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)                               7
FLORIDA                     Ft. Lauderdale                    2
                            Jacksonville                      1
                            Miami                             2
                            Orlando                           3
                            Pensacola                         1
                            Tampa                             2
GEORGIA                     Atlanta                           6
ILLINOIS                    Chicago                           4
INDIANA                     Indianapolis                      3
KANSAS                      Kansas City                       1
KENTUCKY                    Louisville                        2
LOUISIANA                   Baton Rouge                       2
                            New Orleans                       1
MASSACHUSETTS               Boston                            3
MICHIGAN                    Ann Arbor                         1
                            Detroit                           4
                            Grand Rapids                      1
</TABLE>


                                      -7-
<PAGE>


<TABLE>
<CAPTION>

              District Locations                      Number of Showrooms
-----------------------------------------             -------------------
<S>                        <C>                               <C>
                            Kalamazoo                         1
                            Lansing                           1
MINNESOTA                   Minneapolis                       2
MISSOURI                    St. Louis                         1
NEVADA                      Las Vegas                         1
NEW JERSEY                  Kearny                            3
NEW MEXICO                  Albuquerque                       1
NEW YORK                    New York                          1
NORTH CAROLINA              Raleigh                           2
                            Charlotte                         2
OHIO                        Cincinnati                        2
                            Cleveland                         2
                            Columbus                          1
OKLAHOMA                    Oklahoma City                     1
                            Tulsa                             1
OREGON                      Portland                          1
PENNSYLVANIA                Philadelphia(2)                   4
                            Pittsburgh                        1
TENNESSEE                   Memphis                           1
                            Nashville                         1
TEXAS                       Austin                            1
                            Corpus Christi                    1
                            Dallas                            4
                            El Paso                           1
                            Houston                           4
                            San Antonio                       2
UTAH                        Salt Lake City                    1
VIRGINIA                    Richmond                          1
                            Virginia Beach                    1
WASHINGTON                  Seattle                           3
                                                            ---
   TOTAL                                                    119
</TABLE>

------------
(1)  Includes locations in Washington, D.C., Maryland and Virginia.
(2)  Includes locations in Pennsylvania, New Jersey and Delaware.

The Company  distributes its furniture using a fleet of approximately 352 leased
and 47 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.

ITEM 3. Legal Proceedings

At December 31,  1998,  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)            52        President, Chief Executive Officer & Director
Robert Baker                  44        Group Vice President--CORT Instant
Anthony J. Bellerdine         50        Senior Group Vice President
</TABLE>


                                      -8-
<PAGE>


<TABLE>
<CAPTION>

Name                          Age       Position
----                          ---       --------
<S>                          <C>       <C>
Michael G. Connors            42        Vice President--Real Estate
Charles M. Egan (3)           62        Chairman & Director
Kenneth W. Hemm               44        Executive Vice President & Chief Operating Officer - Division II
Steven D. Jobes               49        Executive Vice President & Chief Marketing Officer
Lloyd Lenson                  48        Executive Vice President & Chief Operating Officer - Division I
Victoria L. Stiles            44        Vice President--Human Resources & Corporate Risk Management
William Swets                 44        Vice President--Business Development
Maureen C. Thune              33        Vice President--Controller & Assistant Secretary
Frances Ann Ziemniak          48        Executive Vice President, Chief Financial Officer & Secretary
Keith E. Alessi (2)           44        Director
Bruce C. Bruckmann (1)(2)     45        Director
Michael A. Delaney(1)         44        Director
Gregory B. Maffei(2)          38        Director
James A. Urry (1)             45        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 30 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, Senior 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 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,  Executive Vice President & Chief  Operating  Officer--Division
II.  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,  Executive Vice President & Chief Marketing Officer.  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,  Executive Vice President & Chief Operating  Officer--Division II.
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.

ROBERT BAKER, Group Vice  President--CORT/Instant.  Mr. Baker joined the Company
in August  1998 with the  acquisition  of certain  assets of  Instant  Interiors
Corporation.  Mr. Baker was the Chairman of Instant  Interiors  Corporation from
1978 until the acquisition.

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.

                                      -9-
<PAGE>


WILLIAM  SWETS,  Vice  President--Business  Development.  Mr.  Swets  joined the
Company  in August  1998  with the  acquisition  of  certain  assets of  Instant
Interiors  Corporation.  Mr.  Swets was the  founder  and  president  of Instant
Interiors Corporation from 1978 until the acquisition.

MAUREEN C. THUNE, Vice President--Corporate  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,  Executive Vice  President,  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 is currently 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. He is also a Director of Town Sports International, Inc.

BRUCE C. BRUCKMANN,  Director.  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
AmeriSource  Health  Corporation,  Anvil Knitwear,  Inc.,  Chromcraft-Revington,
Inc.,  Jitney-Jungle  Stores  of  America,  Inc.,  MEDIQ,  Incorporated,  Mohawk
Industries,  Inc., Penhall  International,  Inc. and Town Sports  International,
Inc.

MICHAEL A. DELANEY,  Director.  Mr. Delaney is currently 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. and from
1986 through 1989 he was Vice  President of Citicorp  Mergers and  Acquisitions.
Mr. Delaney is also a Director of Allied Digital Technologies Corporation, Aetna
Industries,  Inc.,  AmeriSource  Health  Corporation,  CLARK  Material  Handling
Corporation, Delco Remy International,  Inc., Enterprise Media Inc., FabriSteel,
Inc., Great Lakes Dredge & Dock Corporation,  GVC Holdings, IKS Corporation, JAC
Holdings,  MSX International,  Inc., Palomar Technologies,  Inc., SC Processing,
Inc., and Triumph Group, Inc.

GREGORY  B.  MAFFEI,  Director.  Mr.  Maffei is the Chief  Financial  Officer of
Microsoft  Corporation.  He joined Microsoft in April 1993,  served as Treasurer
from 1994 to 1996 and Vice President,  Corporate  Development from 1996 to 1997,
and was promoted to Chief  Financial  Officer in July 1997. Mr. Maffei is also a
Director  of  Ragen  MacKenzie  Group  Inc.,  Skytel  Communications,  Inc.  and
Starbucks Corporation.

JAMES A.  URRY,  Director.  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,  Brunner Mond
Holdings, 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 1998 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 1998 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 1998 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
subsidiary  as of  December  31,  1998 and 1997,  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, 1998 are  incorporated  by
reference  to pages  15  through  27 of the  Company's  1998  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 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

Information  appearing  under  "Compliance  with Section 16(a) of the Securities
Exchange Act of 1934" in the Company's  Notice of Annual Meeting of Shareholders
and Proxy Statement for the 1999 annual meeting of stockholders (the "1998 Proxy
Statement") is incorporated herein by reference.  The Company will file the 1998
Proxy  Statement with the Commission  pursuant to Regulation 14A within 120 days
after the close of the fiscal year.

ITEM 11. Executive Compensation

The  information  required  for this item is  incorporated  by  reference to the
Company's 1998 Proxy Statement.

ITEM 12. Security Ownership of Certain Beneficial Owners and Management

The  information  required  for this item is  incorporated  by  reference to the
Company's 1998 Proxy Statement.

ITEM 13. Certain Relationships and Related Transactions

The  information  required  for this item is  incorporated  by  reference to the
Company's 1998 Proxy Statement.


                                      -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 SUBSIDIARY

                                   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 officer)


                                         By: /s/   Maureen C. Thune
                                             -----------------------------------
                                                   Maureen C. Thune
                                                  (Principal accounting officer)



Date:  March 31, 1999

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.

<TABLE>
<CAPTION>

              Signatures                                Title                                  Date
              ----------                                -----                                  ----
<S>                                   <C>                                                 <C> 
/s/  Paul N. Arnold                    President, Chief Executive Officer (principal       March 31, 1998
-------------------------              executive officer) and Director
     Paul N. Arnold

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

/s/  Frances Ann Ziemniak              Executive Vice President, Chief Financial           March 31, 1998
-------------------------              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

</TABLE>


                                      -14-
<PAGE>


<TABLE>
<CAPTION>

              Signatures                                Title                                  Date
              ----------                                -----                                  ----
<S>                                   <C>                                                 <C> 
/s/  Michael A. Delaney                Director                                            March 31, 1998
-------------------------
     Michael A. Delaney

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

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


                                      -15-

<PAGE>


                          INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

                                                                      Page
                                                                      ----
<S>                                                                    <C>
Financial Statements...............................................    13

Financial Statement Schedules:

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

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

</TABLE>






                                       F-1


<PAGE>

<TABLE>
<CAPTION>

       Exhibit
        Number                          Description                                       Page
        ------                          -----------                                       ----
       <S>       <C>                                                                     <C>
         2.1      Agreement  and Plan of  Merger,  dated as of March  25,  1999,
                  among the  Company,  CBF Holding LLC and CBF  Mergerco,  Inc.;
                  incorporated  by reference to Exhibit 2.1 the  Company's  Form
                  8-K, filed on March 29, 1999.

         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

         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;  incorporated  by  reference to
                  Exhibit 10.1 to the  Company's  Annual Report on Form 10-K for
                  the fiscal year ended December 31, 1997

         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  Subsidiary
                  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 Subsidiary  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
</TABLE>


                                      E-1

<PAGE>

<TABLE>
<CAPTION>

       Exhibit
        Number                          Description                                       Page
        ------                          -----------                                       ----
       <S>       <C>                                                                     <C>
         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

         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

         10.16    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 5 of the  Company's  Form  10-Q for the
                  fiscal quarter ended September 30, 1998

         13.1     Portions  of the Annual  Report of the  Company for the fiscal
                  year ended December 31, 1998 which are expressly  incorporated
                  by reference herein

         21.1     List of Subsidiaries

</TABLE>

                                      E-2
<PAGE>


<TABLE>
<CAPTION>

       Exhibit
        Number                          Description                                       Page
        ------                          -----------                                       ----
       <S>       <C>                                                                     <C>
         23.1     Consent of KPMG Peat Marwick LLP


         27       Financial Data Schedules
</TABLE>




                                       E-3

<PAGE>


                CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARY

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


Condensed Balance Sheets:

<TABLE>
<CAPTION>

                                                            As of December 31,
                                                         -----------------------
                                                           1997           1998
                                                           ----           ----
<S>                                                      <C>            <C>     
Investment in CORT Furniture Rental ..............       $149,332       $175,662
Other assets .....................................             --             --
                                                         --------       --------
    Total assets .................................        149,332        175,662
                                                         ========       ========
Accrued expenses .................................             --             --
Long-term debt ...................................             --             --
                                                         --------       --------
    Total liabilities ............................             --             --
Stockholders' equity .............................        149,332        175,662
                                                         --------       --------
    Total liabilities and equity .................       $149,332       $175,662
                                                         ========       ========
</TABLE>


Condensed Statements of Operations:

<TABLE>
<CAPTION>

                                                      Year Ended December 31,
                                                 -------------------------------
                                                   1996       1997         1998
                                                   ----       ----         ----
<S>                                             <C>         <C>         <C>
Equity in earnings of CORT Furniture
   Rental ..................................     $15,936     $22,326     $23,395
Interest expense ...........................          --          --          --
                                                 -------     -------     -------
    Income before income taxes .............      15,936      22,326      23,395
Income tax benefit .........................          --          --          --
                                                 -------     -------     -------
    Net income .............................     $15,936     $22,326     $23,395
                                                 =======     =======     =======
</TABLE>


                                      S-1

<PAGE>


                CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARY

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

Condensed Statements of Cash Flows:

<TABLE>
<CAPTION>

                                                         Year Ended December 31,
                                                     --------------------------------
                                                       1996        1997        1998
                                                       ----        ----        ----
<S>                                                  <C>         <C>         <C>     
Net income .......................................   $ 15,936    $ 22,326    $ 23,395
Adjustments to reconcile net income to cash flows
 from operating activities:
    Equity in earnings of CORT Furniture Rental ..    (15,936)    (22,326)    (23,395)
    Discount on junior subordinated debentures ...         --          --          --
    Interest converted to long-term debt .........         --          --          --
    Changes in assets and liabilities, net .......         --          --          --
                                                     --------    --------    --------
         Cash used in operating activities .......         --          --          --
                                                     --------    --------    --------
Cash flows from investing activities:
    Investment in CORT Furniture Rental ..........    (33,224)       (677)       (826)
                                                     --------    --------    --------
         Cash used in investing activities .......    (33,224)       (677)       (826)
                                                     --------    --------    --------
Cash flows from financing activities:
    Issuance of common stock .....................     33,224         677         826
    Net proceeds from issuance of long-term debt .         --          --          --
                                                     --------    --------    --------
         Cash provided by financing activities ...     33,224         677         826
                                                     --------    --------    --------
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:
    Tax benefit from exercise of stock options ...        571       1,177       2,109
</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 subsidiary as
of  December  31,  1998 and 1997,  and for each of the  years in the  three-year
period ended December 31, 1998, which appear in the Company's 1998 Annual Report
to stockholders.

                                      S-2


<PAGE>


                CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARY

                 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, 1996                 938               1,234              334              (600)                 1,906

December 31, 1997                1,906              2,107              --              (1,122)                2,891

December 31, 1998                2,891              1,710              --              (1,422)                3,179
</TABLE>

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

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



                                      S-3