Thirteen Weeks Ended

October 29, 2011

October 30, 2010

Total revenues

$

522,173,000

$

496,364,000

Net earnings

$

7,011,000

$

5,718,000

Basic earnings per share:

Average shares

52,998,000

52,717,000

Basic earnings per share:

$

0.13

$

0.11

Diluted earnings per share:

Average shares

53,598,000

53,164,000

Diluted earnings per share:

$

0.13

$

0.11

Thirty-nine weeks ended

October 29, 2011

October 30, 2010

Total revenues

$

1,558,308,000

$

1,511,252,000

Net earnings

$

33,322,000

$

28,266,000

Basic earnings per share:

Average shares

52,933,000

52,637,000

Basic earnings per share:

$

0.63

$

0.53

Diluted earnings per share:

Average shares

53,594,000

53,071,000

Diluted earnings per share:

$

0.62

$

0.53

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

(UNAUDITED)

Thirteen Weeks Ended

Thirty-nine weeks ended

October 29, 2011

October 30, 2010

October 29, 2011

October 30, 2010

%

%

%

%

Amount

Sales

Amount

Sales

Amount

Sales

Amount

Sales

Merchandise sales

$

414,530

79.4

$

398,368

80.3

$

1,238,424

79.5

$

1,213,736

80.3

Service revenue

107,643

20.6

97,996

19.7

319,884

20.5

297,516

19.7

Total revenues

522,173

100.0

496,364

100.0

1,558,308

100.0

1,511,252

100.0

Costs of merchandise sales

292,397

70.5

279,690

70.2

865,446

69.9

845,848

69.7

Costs of service revenue

102,855

95.6

90,818

92.7

295,607

92.4

267,452

89.9

Total costs of revenues

395,252

75.7

370,508

74.6

1,161,053

74.5

1,113,300

73.7

Gross profit from merchandise sales

122,133

29.5

118,678

29.8

372,978

30.1

367,888

30.3

Gross profit from service revenue

4,788

4.5

7,178

7.3

24,277

7.6

30,064

10.1

Total gross profit

126,921

24.3

125,856

25.4

397,255

25.5

397,952

26.3

Selling, general and administrative expenses

109,549

21.0

110,840

22.3

331,717

21.3

335,580

22.2

Net (loss) gain from dispositions of assets

(25

)

—

109

—

61

—

2,603

0.2

Operating profit

17,347

3.3

15,125

3.0

65,599

4.2

64,975

4.3

Non-operating income

627

0.1

650

0.1

1,783

0.1

1,855

0.1

Interest expense

6,889

1.3

6,630

1.3

19,831

1.3

19,881

1.3

Earnings from continuing operations before income taxes

11,085

2.1

9,145

1.8

47,551

3.1

46,949

3.1

Income tax expense

4,063

36.7

(1)

3,471

38.0

(1)

14,232

29.9

(1)

18,316

39.0

(1)

Earnings from continuing operations

7,022

1.3

5,674

1.1

33,319

2.1

28,633

1.9

(Loss) income from discontinued operations, net of tax

(11

)

—

44

—

3

—

(367

)

—

Net earnings

7,011

1.3

5,718

1.2

33,322

2.1

28,266

1.9

Retained earnings, beginning of period

424,923

393,245

402,600

374,836

Cash dividends

(1,586

)

(1,581

)

(4,757

)

(4,741

)

Shares issued and other

(413

)

(282

)

(1,230

)

(1,261

)

Retained earnings, end of period

$

429,935

$

397,100

$

429,935

$

397,100

Basic earnings per share:

Earnings from continuing operations

$

0.13

$

0.11

$

0.63

$

0.54

Discontinued operations, net of tax

—

—

—

(0.01

)

Basic earnings per share

$

0.13

$

0.11

$

0.63

$

0.53

Diluted earnings per share:

Earnings from continuing operations

$

0.13

$

0.11

$

0.62

$

0.54

Discontinued operations, net of tax

—

—

—

(0.01

)

Diluted earnings per share

$

0.13

$

0.11

$

0.62

$

0.53

Cash dividends per share

$

0.03

$

0.03

$

0.09

$

0.09

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

(UNAUDITED)

October 29, 2011

January 29, 2011

October 30, 2010

Assets

Current assets:

Cash and cash equivalents

$

80,716

$

90,240

$

107,253

Accounts receivable, less allowance for uncollectible accounts of $1,257; $1,551 and $1,593

23,524

19,540

20,469

Merchandise inventories

606,254

564,402

568,592

Prepaid expenses

15,571

28,542

16,647

Other current assets

47,550

60,812

49,728

Total current assets

773,615

763,536

762,689

Property and equipment - net

693,779

700,981

691,833

Goodwill

46,219

2,549

2,549

Deferred income taxes

66,674

66,019

54,461

Other long-term assets

30,821

23,587

19,468

Total assets

$

1,611,108

$

1,556,672

$

1,531,000

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable

$

238,599

$

210,440

$

207,838

Trade payable program liability

68,320

56,287

57,017

Accrued expenses

221,976

236,028

224,262

Deferred income taxes

58,898

56,335

37,461

Current maturities of long-term debt

1,079

1,079

1,079

Total current liabilities

588,872

560,169

527,657

Long-term debt less current maturities

294,313

295,122

305,392

Other long-term liabilities

72,257

70,046

73,127

Deferred gain from asset sales

143,424

152,875

156,026

Stockholders’ equity:

Common stock, par value $1 per share:

Authorized 500,000,000 shares; issued 68,557,041 shares

68,557

68,557

68,557

Additional paid-in capital

295,813

295,361

294,781

Retained earnings

429,935

402,600

397,100

Accumulated other comprehensive loss

(14,727

)

(17,028

)

(18,720

)

Treasury stock, at cost - 15,835,096 shares and 15,971,910 shares and 16,041,930 shares

(267,336

)

(271,030

)

(272,920

)

Total stockholders’ equity

512,242

478,460

468,798

Total liabilities and stockholders’ equity

$

1,611,108

$

1,556,672

$

1,531,000

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

(UNAUDITED)

Thirty-nine weeks ended

October 29, 2011

October 30, 2010

Cash flows from operating activities:

Net earnings

$

33,322

$

28,266

Adjustments to reconcile net earnings to net cash provided by continuing operations:

(Income) loss from discontinued operations, net of tax

(3

)

367

Depreciation and amortization

59,779

55,260

Amortization of deferred gain from asset sales

(9,451

)

(9,451

)

Stock compensation expense

2,539

2,748

Deferred income taxes

8,021

11,795

Net gain from disposition of assets

(61

)

(2,603

)

Loss from asset impairment

389

970

Other

—

52

Changes in assets and liabilities, net of the effects of acquisitions:

Decrease in accounts receivable, prepaid expenses and other

27,767

29,382

Increase in merchandise inventories

(34,874

)

(9,474

)

Increase in accounts payable

19,758

4,864

Decrease in accrued expenses

(18,693

)

(17,993

)

Decrease in other long-term liabilities

(3,483

)

(2,122

)

Net cash provided by continuing operations

85,010

92,061

Net cash provided by (used in) discontinued operations

40

(1,263

)

Net cash provided by operating activities

85,050

90,798

Cash flows from investing activities:

Capital expenditures

(50,793

)

(42,976

)

Proceeds from dispositions of assets

89

6,713

Acquisitions, net of cash acquired

(42,901

)

(144

)

Collateral investment

(4,763

)

(5,000

)

Other

(837

)

—

Net cash used in continuing operations

(99,205

)

(41,407

)

Net cash provided by discontinued operations

—

569

Net cash used in investing activities

(99,205

)

(40,838

)

Cash flows from financing activities:

Borrowings under line of credit agreements

5,181

20,482

Payments under line of credit agreements

(5,181

)

(20,482

)

Borrowings on trade payable program liability

97,400

89,913

Payments on trade payable program liability

(85,367

)

(66,995

)

Payment for finance issuance cost

(2,441

)

—

Debt payments

(809

)

(809

)

Dividends paid

(4,757

)

(4,741

)

Other

605

599

Net cash provided by financing activities

4,631

17,967

Net (decrease) increase in cash and cash equivalents

(9,524

)

67,927

Cash and cash equivalents at beginning of period

90,240

39,326

Cash and cash equivalents at end of period

$

80,716

$

107,253

Supplemental cash flow information:

Cash paid for income taxes

$

1,015

$

882

Cash paid for interest

$

14,577

$

14,412

Accrued purchases of property and equipment

$

1,486

$

1,280

COMPUTATION OF BASIC AND DILUTED EARNINGS PER SHARE

(in thousands, except per share data)

Thirteen Weeks Ended

Thirty-nine weeks ended

October 29,
2011

October 30,

2010

October 29,

2011

October 30,
2010

(a)

Earnings from continuing operations

$

7,022

$

5,674

$

33,319

$

28,633

(Loss) income from discontinued operations, net of tax

(11

)

44

3

(367

)

Net earnings

$

7,011

$

5,718

$

33,322

$

28,266

(b)

Basic average number of common shares outstanding during period

52,998

52,717

52,933

52,637

Common shares assumed issued upon exercise of dilutive stock options, net of assumed repurchase, at the average market price

600

447

661

434

(c)

Diluted average number of common shares assumed outstanding during period

53,598

53,164

53,594

53,071

Basic earnings per share:

Earnings from continuing operations

(a) / (b)

$

0.13

$

0.11

$

0.63

$

0.54

Discontinued operations, net of tax

—

—

—

(0.01

)

Basic earnings per share

$

0.13

$

0.11

$

0.63

$

0.53

Diluted earnings per share:

Earnings from continuing operations

(a) / (c)

$

0.13

$

0.11

$

0.62

$

0.54

Discontinued operations, net of tax

—

—

—

(0.01

)

Diluted earnings per share

$

0.13

$

0.11

$

0.62

$

0.53

ADDITIONAL INFORMATION

(dollar amounts in thousands)

Thirteen Weeks Ended

Thirty-nine weeks ended

October 29, 2011

October 30, 2010

October 29, 2011

October 30, 2010

Capital expenditures

$

20,157

$

15,152

$

50,793

$

42,976

Depreciation and amortization

$

20,125

$

18,604

$

59,779

$

55,260

Non-operating income:

Net rental revenue

$

575

$

563

$

1,592

$

1,649

Investment income

46

51

168

163

Other income

6

36

23

43

Total

$

627

$

650

$

1,783

$

1,855

Comparable sales percentages:

Service

0.4

%

1.9

%

0.8

%

0.4

%

Merchandise

-0.6

%

3.9

%

-1.4

%

2.7

%

Total

-0.4

%

3.5

%

-1.0

%

2.2

%

Total square feet of retail space (including service centers)

12,597,000

11,812,000

Store count

Supercenter

562

557

Service & Tire Center

159

36

Retail Only

8

9

Total

729

602

Sales and gross profit by line of business (A):

Service center revenue

$

269,726

$

239,502

$

777,891

715,879

Retail sales

252,447

256,862

780,417

795,373

Total revenues

$

522,173

$

496,364

$

1,558,308

$

1,511,252

Gross profit from service center revenue

$

55,400

$

51,902

$

175,033

165,414

Gross profit from retail sales

71,521

73,954

222,222

232,538

Total gross profit

$

126,921

$

125,856

$

397,255

$

397,952

Comparable sales percentages by line of business (A):

Service center revenue

1.3

%

3.0

%

0.3

%

1.3

%

Retail sales

-2.0

%

4.0

%

-2.2

%

3.0

%

Total revenues

-0.4

%

3.5

%

-1.0

%

2.2

%

Gross profit percentage by line of business (A):

Gross profit percentage from service center revenue

20.5

%

21.7

%

22.5

%

23.1

%

Gross profit percentage from retail sales

28.3

%

28.8

%

28.5

%

29.2

%

Total gross profit percentage

24.3

%

25.4

%

25.5

%

26.3

%