THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

(UNAUDITED)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(dollar amounts in thousands, except per share amounts)

April 28, 2012

April 30, 2011

%

%

Thirteen weeks ended

Amount

Sales

Amount

Sales

Merchandise sales

$

412,332

78.6

$

408,627

79.6

Service revenue

112,272

21.4

104,913

20.4

Total revenues

524,604

100.0

513,540

100.0

Costs of merchandise sales

290,856

70.5

285,329

69.8

Costs of service revenue

106,096

94.5

93,089

88.7

Total costs of revenues

396,952

75.7

378,418

73.7

Gross profit from merchandise sales

121,476

29.5

123,298

30.2

Gross profit from service revenue

6,176

5.5

11,824

11.3

Total gross profit

127,652

24.3

135,122

26.3

Selling, general and administrative expenses

119,710

22.8

108,900

21.2

Net (loss) gain from dispositions of assets

(2

)

—

89

—

Operating profit

7,940

1.5

26,311

5.1

Non-operating income

470

0.1

587

0.1

Interest expense

6,516

1.2

6,497

1.3

Earnings from continuing operations before income taxes

1,894

0.4

20,401

4.0

Income tax expense

760

40.1

(1)

7,996

39.2

(1)

Earnings from continuing operations

1,134

0.2

12,405

2.4

Loss from discontinued operations, net of tax

(72

)

—

(37

)

—

Net earnings

1,062

0.2

12,368

2.4

Basic earnings per share:

Earnings from continuing operations

$

0.02

$

0.23

Discontinued operations, net of tax

—

—

Basic earnings per share

$

0.02

$

0.23

Diluted earnings per share:

Earnings from continuing operations

$

0.02

$

0.23

Discontinued operations, net of tax

—

—

Diluted earnings per share

$

0.02

$

0.23

Other comprehensive income:

Defined benefit plan adjustment, net of tax

354

220

Derivative financial instruments adjustment, net of tax

1,020

515

Other comprehensive income

1,374

735

Comprehensive income

2,436

13,103

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

(UNAUDITED)

CONSOLIDATED BALANCE SHEETS

(dollar amounts in thousands)

April 28, 2012

January 28, 2012

April 30, 2011

Assets

Current assets:

Cash and cash equivalents

$

99,439

$

58,244

$

100,374

Accounts receivable, less allowance for uncollectible accounts of $1,289; $1,303 and $1,385

22,542

25,792

19,460

Merchandise inventories

627,314

614,136

578,272

Prepaid expenses

26,077

26,394

26,225

Other current assets

57,197

59,979

56,598

Total current assets

832,569

784,545

780,929

Property and equipment - net

688,909

696,339

696,090

Goodwill

46,917

46,917

2,549

Deferred income taxes

67,745

72,870

62,851

Other long-term assets

32,393

33,108

30,093

Total assets

$

1,668,533

$

1,633,779

$

1,572,512

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable

$

261,834

$

243,712

$

231,663

Trade payable program liability

100,414

85,214

53,060

Accrued expenses

228,675

221,705

225,891

Deferred income taxes

62,627

66,208

58,066

Current maturities of long-term debt

1,079

1,079

1,079

Total current liabilities

654,629

617,918

569,759

Long-term debt less current maturities

293,773

294,043

294,852

Other long-term liabilities

75,391

77,216

67,338

Deferred gain from asset sales

137,110

140,273

149,732

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

295,411

296,462

294,984

Retained earnings

424,083

423,437

412,716

Accumulated other comprehensive loss

(16,275

)

(17,649

)

(16,293

)

Treasury stock, at cost - 15,716,914 shares;

15,803,322 shares and 15,901,648 shares

(264,146

)

(266,478

)

(269,133

)

Total stockholders’ equity

507,630

504,329

490,831

Total liabilities and stockholders’ equity

$

1,668,533

$

1,633,779

$

1,572,512

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

(UNAUDITED)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollar amounts in thousands)

Thirteen weeks ended

April 28, 2012

April 30, 2011

Cash flows from operating activities:

Net earnings

$

1,062

$

12,368

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

Net loss from discontinued operations

72

37

Depreciation and amortization

19,938

19,884

Amortization of deferred gain from asset sales

(3,163

)

(3,143

)

Stock compensation expense

652

638

Deferred income taxes

719

4,458

Net loss (gain) from disposition of assets

2

(89

)

Other

(85

)

(63

)

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

Decrease in accounts receivable, prepaid expenses and other

7,124

7,406

Increase in merchandise inventories

(13,178

)

(13,323

)

Increase in accounts payable

18,122

21,223

Increase (decrease) in accrued expenses

6,385

(8,242

)

Increase (decrease) in other long-term liabilities

466

(2,458

)

Net cash provided by continuing operations

38,116

38,696

Net cash used in discontinued operations

(106

)

(66

)

Net cash provided by operating activities

38,010

38,630

Cash flows from investing activities:

Capital expenditures

(11,940

)

(18,123

)

Proceeds from dispositions of assets

—

89

Premiums paid on life insurance policies

—

(741

)

Collateral investment

—

(4,763

)

Other

—

(144

)

Net cash used in investing activities

(11,940

)

(23,682

)

Cash flows from financing activities:

Borrowings under line of credit agreements

524

1,067

Payments under line of credit agreements

(524

)

(1,067

)

Borrowings on trade payable program liability

42,722

24,589

Payments on trade payable program liability

(27,522

)

(27,816

)

Debt payments

(270

)

(270

)

Dividends paid

—

(1,585

)

Other

195

268

Net cash provided by (used in) financing activities

15,125

(4,814

)

Net increase in cash and cash equivalents

41,195

10,134

Cash and cash equivalents at beginning of period

58,244

90,240

Cash and cash equivalents at end of period

$

99,439

$

100,374

Supplemental cash flow information:

Cash paid for income taxes

$

1,227

$

57

Cash paid for interest

$

2,940

$

2,885

Accrued purchases of property and equipment

$

1,970

$

993

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

COMPUTATION OF BASIC AND DILUTED EARNINGS PER SHARE

(in thousands, except per share data)

Thirteen weeks ended

April 28, 2012

April 30, 2011

(a)

Earnings from continuing operations

$

1,134

$

12,405

Loss from discontinued operations, net of tax

(72

)

(37

)

Net earnings

$

1,062

$

12,368

(b)

Basic average number of common shares outstanding during period

53,071

52,881

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

878

685

(c)

Diluted average number of common shares assumed outstanding during period

53,949

53,566

Basic earnings per share:

Earnings from continuing operations

(a) / (b)

$

0.02

$

0.23

Discontinued operations, net of tax

—

—

Basic earnings per share

$

0.02

$

0.23

Diluted earnings per share:

Earnings from continuing operations

(a) / (c)

$

0.02

$

0.23

Discontinued operations, net of tax

—

—

Diluted earnings per share

$

0.02

$

0.23

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

ADDITIONAL INFORMATION

(dollar amounts in thousands)

Thirteen Weeks Ended

April 28, 2012

April 30, 2011

Capital expenditures

$

11,940

$

18,123

Depreciation and amortization

$

19,938

$

19,884

Non-operating income:

Net rental revenue

$

385

$

494

Investment income

48

82

Other income

37

11

Total

$

470

$

587

Comparable sales percentages:

Service

-1.2

%

1.6

%

Merchandise

-3.2

%

-1.2

%

Total

-2.8

%

-0.6

%

Total square feet of retail space (including service centers)

12,645,000

12,007,220

Store count

Supercenter

562

560

Service & Tire Center

169

62

Retail Only

7

8

Total

738

630

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

Service center revenue

$

271,089

247,330

Retail sales

253,515

266,210

Total revenues

$

524,604

$

513,540

Gross profit from service center revenue

$

53,888

58,962

Gross profit from retail sales

73,764

76,160

Total gross profit

$

127,652

$

135,122

Comparable sales percentages by line of business (A):

Service center revenue

-0.7

%

0.3

%

Retail sales

-4.6

%

-1.5

%

Total revenues

-2.8

%

-0.6

%

Gross profit percentage by line of business (A):

Gross profit percentage from service center revenue

19.9

%

23.8

%

Gross profit percentage from retail sales

29.1

%

28.6

%

Total gross profit percentage

24.3

%

26.3

%