Pep Boys Manny Moe & Jack 8K Pep Boys Reports 2.0% Q3 Comp Sales Decrease | PBY 14 Nov 05

Exhibit 99.2

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

(UNAUDITED)

CONSOLIDATED STATEMENTS OF OPERATIONS											(dollar amounts in thousands, except per share amounts)
	Thirteen weeks ended										Thirty-nine weeks ended

	October 29, 2005					October 30, 2004					October 29, 2005					October 30, 2004

				%					%					%					%
	Amount			Sales		Amount			Sales		Amount			Sales		Amount			Sales
Merchandise Sales	$	451,784		82.9		$	456,220		81.7		$	1,395,045		82.8		$	1,404,594		81.8
Service Revenue	93,422			17.1		102,245			18.3		290,364			17.2		311,940			18.2
Total Revenues	545,206			100.0		558,465			100.0		1,685,409			100.0		1,716,534			100.0
Costs of Merchandise Sales	337,815			74.8		329,059			72.1		1,026,406			73.6		1,000,885			71.3
Costs of Service Revenue	89,055			95.3		79,452			77.7		259,608			89.4		238,513			76.5
Total Costs of Revenues	426,870			78.3		408,511			73.1		1,286,014			76.3		1,239,398			72.2
Gross Profit from Merchandise Sales	113,969			25.2		127,161			27.9		368,639			26.4		403,709			28.7
Gross Profit from Service Revenue	4,367			4.7		22,793			22.3		30,756			10.6		73,427			23.5
Total Gross Profit	118,336			21.7		149,954			26.9		399,395			23.7		477,136			27.8
Selling, General and Administrative Expenses	126,934			23.3		132,402			23.7		395,144			23.4		398,332			23.2
Operating (Loss) Profit	(8,598		)	(1.6	)	17,552			3.1		4,251			0.3		78,804			4.6
Non-operating Income	527			0.1		1,089			0.2		2,748			0.2		2,151			0.1
Interest Expense	9,205			1.7		8,056			1.5		27,354			1.6		25,154			1.4
(Loss) Earnings From Continuing Operations Before Income Taxes	(17,276		)	(3.2	)	10,585			1.9		(20,355		)	(1.2	)	55,801			3.3
Income Tax (Benefit) Expense	(5,866		)	34.0	⁽¹⁾	3,916			37.0	⁽¹⁾	(7,285		)	35.8	⁽¹⁾	20,646			37.0	⁽¹⁾
Net (Loss) Earnings From Continuing Operations	(11,410		)	(2.1	)	6,669			1.2		(13,070		)	(0.8	)	35,155			2.0
Discontinued Operations, Net of Tax	214			0.0		(169		)	(0.0	)	143			0.0		(1,441		)	(0.1	)
Net (Loss) Earnings	(11,196		)	(2.1	)	6,500			1.2		(12,927		)	(0.8	)	33,714			2.0
Retained Earnings, beginning of period	525,703					549,133					536,780					531,933
Cash Dividends	(3,664		)			(3,925		)			(10,984		)			(11,738		)
Effect of Stock Options	(257		)			(389		)			(2,231		)			(2,590		)
Dividend Reinvestment Plan	(54		)			(72		)			(106		)			(72		)
Retained Earnings, end of period	$	510,532				$	551,247				$	510,532				$	551,247
Basic (Loss) Earnings per Share:
Net (Loss) Earnings From Continuing Operations	$	(0.21	)			$	0.12				$	(0.24	)			$	0.62
Discontinued Operations, Net of Tax	0.01					(0.01		)			—					(0.03		)
Basic (Loss) Earnings per Share	$	(0.20	)			$	0.11				$	(0.24	)			$	0.59
Diluted Earnings (Loss) per Share:
Net (Loss) Earnings From Continuing Operations	$	(0.21	)			$	0.11				$	(0.24	)			$	0.59
Discontinued Operations, Net of Tax	0.01					—					—					(0.02		)
Diluted (Loss) Earnings per Share	$	(0.20	)			$	0.11				$	(0.24	)			$	0.57
Cash Dividends per Share	$	0.0675				$	0.0675				$	0.2025				$	0.2025

⁽¹⁾As a percentage of (loss) earnings before income taxes.

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

(UNAUDITED)

CONSOLIDATED BALANCE SHEETS	*(dollar amounts in thousands, except per share amounts)*
	October 29, 2005			January 29, 2005			October 30, 2004
Assets
Current Assets:
Cash and cash equivalents	$	36,534		$	82,758		$	35,185
Accounts receivable, net	34,473			30,994			40,827
Merchandise inventories	648,368			602,760			611,645
Prepaid expenses	26,511			45,349			25,049
Other	63,123			96,065			118,331
Assets held for disposal	652			665			2,185
Total Current Assets	809,661			858,591			833,222
Property and Equipment - at cost:
Land	258,124			261,985			263,201
Buildings and improvements	909,872			916,099			909,752
Furniture, fixtures and equipment	668,960			633,098			606,183
Construction in progress	18,266			40,426			31,101
	1,855,222			1,851,608			1,810,237
Less accumulated depreciation and amortization	908,181			906,577			892,075
Property and Equipment - net	947,041			945,031			918,162
Other	66,125			63,401			51,769
Total Assets	$	1,822,827		$	1,867,023		$	1,803,153

Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	304,120		$	310,981		$	307,921
Trade payable program liability	11,212			—			—
Accrued expenses	265,331			306,671			246,707
Deferred income taxes	19,238			19,406			20,164
Current maturities of long-term debt and obligations under capital leases	144,164			40,882			147,171
Total Current Liabilities	744,065			677,940			721,963

Long-term debt and obligations under capital leases, less current maturities	270,868			352,682			180,253
Convertible long-term debt	119,000			119,000			150,000
Other long-term liabilities	52,895			37,977			38,069
Deferred income taxes	14,096			25,968			40,972
Commitments and Contingencies
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	287,184			284,966			284,660
Retained earnings	510,532			536,780			551,247
Accumulated other comprehensive loss	(3,004		)	(4,852		)	(284		)
	863,269			885,451			904,180
Less cost of shares in treasury -12,210,647 shares 11,305,130 shares and 11,319,985 shares	182,102			172,731			173,020
Less cost of shares in benefits trust - 2,195,270 shares	59,264			59,264			59,264
Total Stockholders’ Equity	621,903			653,456			671,896
Total Liabilities and Stockholders’ Equity	$	1,822,827		$	1,867,023		$	1,803,153

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

(UNAUDITED)

CONSOLIDATED STATEMENTS OF CASH FLOWS	*(dollar amounts in thousands)*

Thirty-nine Weeks Ended	October 29, 2005			October 30, 2004

Cash Flows from Operating Activities:
Net (loss) earnings	$	(12,927	)	$	33,714
Net income (loss) from discontinued operations	143			(1,441		)
Net (loss) earnings from continuing operations	$	(13,070	)	$	35,155
Adjustment to Reconcile Net (Loss) Earnings from Continuing
Operations to Net Cash Provided by Continuing Operations:
Depreciation and amortization	59,283			56,473
Accretion of asset disposal obligation	84			105
Stock compensation expense	2,001			996
Deferred income taxes	(12,337		)	52,572
(Gain) loss from sales of assets	(2,977		)	358
Changes in Operating Assets and Liabilities:
Decrease (increase) in accounts receivable, prepaid expenses and other	48,726			(31,133		)
Increase in merchandise inventories	(45,608		)	(58,083		)
Decrease in accounts payable	(6,861		)	(27,447		)
Decrease in accrued expenses	(44,075		)	(21,347		)
Increase (decrease) in other long-term liabilities	14,918			(1,310		)
Net cash provided by continuing operations	84			6,339
Net cash used in discontinued operations	(119		)	(2,064		)
Net Cash (Used in) Provided by Operating Activities	(35		)	4,275

Cash Flows from Investing Activities:
Capital expenditures	(65,197		)	(52,631		)
Proceeds from sales of assets	1,724			1,472
Proceeds from sales of assets held for disposal	6,913			11,859
Net cash used in continuing operations	(56,560		)	(39,300		)
Net cash provided by discontinued operations	916			—
Net Cash Used in Investing Activities	(55,644		)	(39,300		)

Cash Flows from Financing Activities:
Net borrowings under line of credit agreements	62,163			35,669
Net borrowings (payments) on trade payable program liability	11,212			(7,216		)
Reduction of long-term debt	(40,456		)	(84,431		)
Payments on capital lease obligations	(363		)	(306		)
Dividends paid	(10,984		)	(11,738		)
Repurchase of common stock	(15,562		)	(38,900		)
Proceeds from issuance of common stock	—			108,854
Proceeds from exercise of stock options	2,711			6,385
Proceeds from dividend reinvestment plan	734			909
Net Cash Provided by Financing Activities	9,455			9,226
Net Decrease in Cash	(46,224		)	(25,799		)
Cash and Cash Equivalents at Beginning of Period	82,758			60,984
Cash and Cash Equivalents at End of Period	$	36,534		$	35,185

Cash paid for interest	$	19,491		$	19,500
Cash received from income tax refunds	$	8,605		$	—
Cash paid for income taxes	$	—		$	4,602
Supplemental Disclosure of Cash Flow Information:
Non-cash investing activities:
Accrued purchases of property and equipment	$	2,182		$	49
Non-cash financing activities:
Equipment Capital Lease	$	124		$	1,413

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

(UNAUDITED)

COMPUTATION OF BASIC AND DILUTED EARNINGS PER SHARE							(in thousands, except per share data)

	Thirteen weeks ended						Thirty-nine weeks ended

	October 29, 2005			October 30, 2004			October 29, 2005			October 30, 2004

(a) Net (loss) earnings from continuing operations	$	(11,410	)	$	6,669		$	(13,070	)	$	35,155
Adjustment for interest on convertible senior notes, net of income tax effect	—			—			—			3,004
(b) Adjusted net (loss) earnings from continuing operations	$	(11,410	)	$	6,669		$	(13,070	)	$	38,159
(c) Average number of common shares outstanding during period	54,774			57,574			55,288			56,798
Common shares assumed issued upon conversion of convertible senior notes	—			—			—			6,697
Common shares assumed issued upon exercise of dilutive stock options, net of assumed repurchase, at the average market price	—			752			—			1,482
(d) Average number of common shares assumed outstanding during period	54,774			58,326			55,288			64,977
Basic (Loss) Earnings per Share:
Net (Loss) Earnings From Continuing Operations (a/c)	$	(0.21	)	$	0.12		$	(0.24	)	$	0.62
Discontinued Operations, Net of Tax	0.01			(0.01		)	—			(0.03		)
Basic (Loss) Earnings per Share	$	(0.20	)	$	0.11		$	(0.24	)	$	0.59
Diluted (Loss) Earnings per Share:
Net (Loss) Earnings From Continuing Operations (b/d)	$	(0.21	)	$	0.11		$	(0.24	)	$	0.59
Discontinued Operations, Net of Tax	0.01			—			—			(0.02		)
Diluted (Loss) Earnings per Share	$	(0.20	)	$	0.11		$	(0.24	)	$	0.57

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

(UNAUDITED)

ADDITIONAL INFORMATION										(dollar amounts in thousands)

	Thirteen weeks ended									Thirty-nine weeks ended

	October 29, 2005			October 30, 2004						October 29, 2005				October 30, 2004

Capital expenditures	$	22,771		$			23,801			$		67,382		$		52,631

Depreciation and amortization	$	20,628		$				18,706		$		59,283		$		56,473

Non-operating income:
Net rental revenue	$	355		$	1,007					$		1,069		$		1,855
Investment income	272			127						777				475
Other (expense) income	(100		)	(45					)	902				(179			)
Total	$	527		$	1,089					$		2,748		$		2,151

Comparable sales percentages:
Merchandise	-0.6		%	5.1					%	-0.5			%	8.5			%
Service	-8.2		%	-0.2					%	-6.7			%	1.8			%
Total	-2.0		%	4.1					%	-1.6			%	7.2			%

Total square feet of retail space (including service centers)										12,167,089				12,206,785

Total Store Count										593				595

Sales and Gross Profit by Line of Business (A):

Retail Sales	$	328,194		$	322,909					$	1,022,241			$		1,018,819
Service Center Revenue	217,012			235,556						663,168				697,715
Total Revenues	$	545,206		$		558,465				$	1,685,409			$		1,716,534

Gross Profit from Retail Sales	$	82,347		$		85,707				$	265,443			$	287,830
Gross Profit from Service Center Revenue	35,989			64,247						133,952				189,306
Total Gross Profit	$	118,336		$		149,954				$	399,395			$	477,136

Comparable Sales Percentages (A):

Retail Sales	2.1		%	10.3					%	0.6			%	15.0			%
Service Center Revenue	-7.6		%	-3.4					%	-4.8			%	-2.5			%
Total Revenues	-2.0		%	4.1					%	-1.6			%	7.2			%

Gross Profit Percentage by Line of Business (A):

Gross Profit Percentage from Retail Sales	25.1		%	26.5					%	26.0			%	28.3			%
Gross Profit Percentage from Service Center Revenue	16.6		%	27.3					%	20.2			%	27.1			%
Total Gross Profit Percentage	21.7		%	26.9					%	23.7			%	27.8			%

(A) Retail Sales include DIY and Commercial sales. Service Center Revenue includes revenue from labor and installed parts and tires.

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES		(UNAUDITED)
		(dollar amounts in thousands)

Service Labor Reallocation

Effective January 30, 2005, the Company restructured its field operations into separate retail and service teams. In connection with this restructuring, certain retail personnel, who were previously utilized in merchandising roles supporting the service business, were reassigned to purely service-related responsibilities. The labor and benefit costs related to these associates, which were previously recognized in Selling, General and Administrative Expenses, are now recognized in Costs of Service Revenue. Please see the table below illustrating the pro forma effect of this change on both the thirteen and thirty-nine weeks ended October 30, 2004 (presented in GAAP and line of business formats), assuming that such associates had been reassigned from retail to service during such period.

PRO FORMA STATEMENTS OF OPERATIONS

GAAP Format

	Thirteen weeks ended									Thirteen weeks ended			Thirteen weeks ended
	October 30, 2004				PRO FORMA					October 30, 2004			October 29, 2005
	ACTUAL				ADJUSTMENTS					PRO FORMA			ACTUAL
				%				%				%				%
	Amount			Sales	Amount			Sales		Amount		Sales	Amount			Sales

Gross Profit from Merchandise Sales	$	127,161		27.9	$	—		0.0		$	127,161	27.9	$	113,969		25.2
Gross Profit from Service Revenue	22,793			22.3	(5,376		)	(5.3	)	17,417		17.0	4,367			4.7
Total Gross Profit	149,954			26.9	(5,376		)	(1.0	)	144,578		25.9	118,336			21.7
Selling, General and Administrative Expenses	132,402			23.7	(5,376		)	(1.0	)	127,026		22.7	126,934			23.3
Operating Profit (Loss)	$		17,552	3.1	$	—		0.0		$	17,552	3.1	$	(8,598	)	(1.6	)

	Thirty-nine weeks ended									Thirty-nine weeks ended			Thirty-nine weeks ended
	October 30, 2004				PRO FORMA					October 30, 2004			October 29, 2005
	ACTUAL				ADJUSTMENTS					PRO FORMA			ACTUAL
				%				%				%			%
	Amount			Sales	Amount			Sales		Amount		Sales	Amount		Sales

Gross Profit from Merchandise Sales	$	403,709		28.7	$	—		0.0		$	403,709	28.7	$	368,639	26.4
Gross Profit from Service Revenue	73,427			23.5	(15,260		)	(4.9	)	58,167		18.6	30,756		10.6
Total Gross Profit	477,136			27.8	(15,260		)	(0.9	)	461,876		26.9	399,395		23.7
Selling, General and Administrative Expenses	398,332			23.2	(15,260		)	(0.9	)	383,072		22.3	395,144		23.4
Operating Profit	$		78,804	4.6	$	—		0.0		$	78,804	4.6	$	4,251	0.3

Line of Business Format

	Thirteen weeks ended										Thirteen weeks ended				Thirteen weeks ended
	October 30, 2004				PRO FORMA						October 30, 2004				October 29, 2005
	ACTUAL				ADJUSTMENTS						PRO FORMA				ACTUAL
				%					%					%				%
	Amount			Sales	Amount				Sales		Amount			Sales	Amount			Sales

Gross Profit from Retail Sales	$	85,707		26.5	$	—			0.0		$	85,707		26.5	$	82,347		25.1
Gross Profit from Service Center Revenue	64,247			27.3	(5,376			)	(2.3	)	58,871			25.0	35,989			16.6
Total Gross Profit	149,954			26.9	(5,376			)	(1.0	)	144,578			25.9	118,336			21.7
Selling, General and Administrative Expenses	132,402			23.7	(5,376			)	(1.0	)	127,026			22.7	126,934			23.3
Operating Profit (Loss)	$		17,552	3.1	$		—		0.0		$		17,552	3.1	$	(8,598	)	(1.6	)

	Thirty-nine weeks ended									Thirty-nine weeks ended			Thirty-nine weeks ended
	October 30, 2004				PRO FORMA					October 30, 2004			October 29, 2005
	ACTUAL				ADJUSTMENTS					PRO FORMA			ACTUAL
				%				%				%			%
	Amount			Sales	Amount			Sales		Amount		Sales	Amount		Sales

Gross Profit from Retail Sales	$	287,830		28.3	$	—		0.0		$	287,830	28.3	$	265,443	26.0
Gross Profit from Service Center Revenue	189,306			27.1	(15,260		)	(2.2	)	174,046		24.9	133,952		20.2
Total Gross Profit	477,136			27.8	(15,260		)	(0.9	)	461,876		26.9	399,395		23.7
Selling, General and Administrative Expenses	398,332			23.2	(15,260		)	(0.9	)	383,072		22.3	395,144		23.4
Operating Profit	$		78,804	4.6	$	—		0.0		$	78,804	4.6	$	4,251	0.3

Pep Boys Manny Moe & Jack (PBY) Inactive 8-KPep Boys Reports 2.0% Q3 Comp Sales Decrease