Pep Boys Manny Moe & Jack (PBY) 8-K Results of Operations and Financial Condition

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										Twenty-six weeks ended
	August 4, 2007					July 29, 2006					August 4, 2007					July 29, 2006
				%					%					%					%
	Amount			Sales		Amount			Sales		Amount			Sales		Amount			Sales
Merchandise Sales	$	458,569		82.1		$	481,997		83.3		$	903,604		81.8		939,312			82.7
Service Revenue	100,320			17.9		96,568			16.7		201,298			18.2		195,854			17.3
Total Revenues	558,889			100.0		578,565			100.0		1,104,902			100.0		1,135,166			100.0
Costs of Merchandise Sales	319,800			69.7		342,874			71.1		635,110			70.3		672,422			71.6
Costs of Service Revenue	88,951			88.7		90,589			93.8		177,862			88.4		178,764			91.3
Total Costs of Revenues	408,751			73.1		433,463			74.9		812,972			73.6		851,186			75.0
Gross Profit from Merchandise Sales	138,769			30.3		139,123			28.9		268,494			29.7		266,890			28.4
Gross Profit from Service Revenue	11,369			11.3		5,979			6.2		23,436			11.6		17,090			8.7
Total Gross Profit	150,138			26.9		145,102			25.1		291,930			26.4		283,980			25.0
Selling, General and Administrative Expenses	132,845			23.8		139,544			24.1		260,917			23.6		270,765			23.9
Net Gain (Loss) from Dispositions of Assets	(15		)	—		6,431			1.1		2,344			0.2		6,016			0.5
Operating Profit	17,278			3.1		11,989			2.1		33,357			3.0		19,231			1.7
Non-operating Income	1,766			0.3		2,018			0.3		3,671			0.3		4,277			0.4
Interest Expense	12,331			2.2		11,968			2.1		24,987			2.3		22,305			2.0
Earnings From Continuing Operations Before Income Taxes and  Cumulative Effect of Change in Accounting Principle	6,713			1.2		2,039			0.4		12,041			1.1		1,203			0.1
Income Tax Expense	2,517			37.5	(1)	569			27.9	(1)	4,625			38.4	(1)	600			49.9	(1)
Net Earnings From Continuing Operations Before Cumulative Effect of Change in Accounting Principle	4,196			0.8		1,470			0.3		7,416			0.7		603			0.1
Discontinued Operations, Net of Tax	(17		)	—		(30		)	—		(62		)	—		(133		)	—
Cumulative Effect of Change in Accounting Principle, Net of Tax	—			—		(88		)	—		—			—		179			—
Net Earnings	4,179			0.7		1,352			0.2		7,354			0.7		649			0.1
Retained Earnings, beginning of period	462,757					477,438					463,797					481,926
Cumulative effect adjustment for adoption of FIN 48	—					—					(155		)			—
Cash Dividends	(3,539		)			(3,811		)			(7,120		)			(7,516		)
Effect of Stock Options	(782		)			(10		)			(1,261		)			(76		)
Dividend Reinvestment Plan	—					(111		)			—					(125		)
Retained Earnings, end of period	$	462,615				$	474,858				$	462,615				$	474,858
Basic and Diluted Earnings per Share:
Net Earnings From Continuing Operations Before Cumulative Effect of Change in Accounting Principle	$	0.08				$	0.03				$	0.14				$	0.01
Discontinued Operations, Net of Tax	—					—					—					—
Cumulative Effect of Change in Accounting Principle, Net of Tax	—					—					—					—
Earnings per Share	$	0.08				$	0.03				$	0.14				$	0.01
Cash Dividends per Share	$	0.0675				$	0.0675				$	0.1350				$	0.1350

(1)  As a percentage of earnings from continuing operations before income taxes and cumulative effect of change in accounting principle.

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES		(UNAUDITED)
CONSOLIDATED BALANCE SHEETS	(dollar amounts in thousands, except per share amounts)

	August 4, 2007			February 3, 2007			July 29, 2006
Assets
Current Assets:
Cash and cash equivalents	$	26,575		$	21,884		$	55,295
Accounts receivable, net	26,062			29,582			33,821
Merchandise inventories	615,085			607,042			612,681
Prepaid expenses	31,275			39,264			32,770
Other	55,065			70,368			64,346
Assets held for disposal	—			—			881
Total Current Assets	754,062			768,140			799,794
Property and Equipment - at cost:
Land	251,705			251,705			256,717
Buildings and improvements	932,300			929,225			918,266
Furniture, fixtures and equipment	697,561			684,042			658,765
Construction in progress	4,669			3,464			18,225
	1,886,235			1,868,436			1,851,973
Less accumulated depreciation and amortization	1,002,929			962,189			932,217
Property and Equipment - net	883,306			906,247			919,756
Deferred income taxes	24,604			24,828			4,583
Other	39,128			67,984			45,511
Total Assets	$	1,701,100		$	1,767,199		$	1,769,644
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	243,615		$	265,489		$	295,041
Trade payable program liability	13,016			13,990			7,223
Accrued expenses	265,506			292,280			275,879
Deferred income taxes	31,020			28,931			17,780
Current maturities of long-term debt and obligations under capital leases	3,469			3,490			2,258
Convertible short-term debt	—			—			119,000
Total Current Liabilities	556,626			604,180			717,181
Long-term debt and obligations under capital leases, less current maturities	548,882			535,031			404,884
Other long-term liabilities	66,259			60,233			59,168
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	294,255			289,384			287,583
Retained earnings	462,615			463,797			474,858
Accumulated other comprehensive loss	(7,424		)	(9,380		)	(3,441		)
Less cost of shares in treasury - 14,691,165 shares, 12,427,687 shares and 12,060,582 shares	229,406			185,339			179,882
Less cost of shares in benefits trust - 2,195,270 shares	59,264			59,264			59,264
Total Stockholders’ Equity	529,333			567,755			588,411
Total Liabilities and Stockholders’ Equity	$	1,701,100		$	1,767,199		$	1,769,644

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES	(UNAUDITED)
CONSOLIDATED STATEMENTS OF CASH FLOWS	(dollar amounts in thousands)

Twenty-six weeks ended	August 4, 2007			July 29, 2006
Cash Flows from Operating Activities:
Net Earnings	$	7,354		$	649
Adjustments to reconcile net earnings to net cash provided by continuing operations:
Net loss from discontinued operations	62			133
Depreciation and amortization	41,689			41,419
Cumulative effect of change in accounting principle, net of tax	—			(179		)
Accretion of asset disposal obligation	149			135
Stock compensation expense	6,053			1,718
Deferred income taxes	6,283			(5,252		)
Gain from dispositions of assets	(2,344		)	(6,016		)
Loss from derivative valuation	2,622			—
Loss from asset impairment	—			550
Excess tax benefits from stock based awards	(609		)	(33		)
Increase in cash surrender value of life insurance policies	(846		)	(1,167		)
Changes in Operating Assets and Liabilities:
Decrease in accounts receivable, prepaid expenses and other	28,556			34,084
(Increase) decrease in merchandise inventories	(8,043		)	3,611
(Decrease) increase in accounts payable	(21,874		)	33,101
Decrease in accrued expenses	(17,112		)	(18,136		)
Increase in other long-term liabilities	2,588			1,687
Net cash provided by continuing operations	44,528			86,304
Net cash used in discontinued operations	(124		)	(245		)
Net Cash Provided by Operating Activities	44,404			86,059
Cash Flows from Investing Activities:
Cash paid for property and equipment	(19,960		)	(14,364		)
Proceeds from dispositions of assets	2,376			687
Proceeds from life insurance policies	26,129			—
Proceeds from sales of assets held for disposal	—			6,981
Net Cash Provided by (Used in) Investing Activities	8,545			(6,696		)
Cash Flows from Financing Activities:
Net borrowings (payments) under line of credit agreements	15,587			(60,266		)
Excess tax benefits from stock based awards	609			33
Net payments on trade payable program liability	(974		)	(3,933		)
Reduction of long-term debt	(1,628		)	(1,041		)
Payments on capital lease obligations	(129		)	(131		)
Dividends paid	(7,121		)	(7,516		)
Repurchase of common stock	(58,152		)	—
Proceeds from exercise of stock options	3,155			56
Proceeds from dividend reinvestment plan	395			449
Net Cash Used in Financing Activities	(48,258		)	(72,349		)
Net Increase in Cash	4,691			7,014
Cash and Cash Equivalents at Beginning of Period	21,884			48,281
Cash and Cash Equivalents at End of Period	$	26,575		$	55,295
Supplemental Disclosure of Cash Flow Information:
Non-cash operating activities:
Accrued payment of stock option settlement	$	—		$	1,056
Non-cash investing activities:
Accrued purchases of property and equipment	$	2,346		$	1,759
Non-cash financing activities:
Equipment capital leases	$	—		$	84

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES	(UNAUDITED)
COMPUTATION OF BASIC AND DILUTED EARNINGS (LOSS) PER SHARE	(in thousands, except per share data)

	Thirteen weeks ended						Twenty-six weeks ended
	August 4, 2007			July 29, 2006			August 4, 2007			July 29, 2006
(a)   Net earnings from continuing operations Before Cumulative Effect of Change in Accounting Principle	$	4,196		$	1,470		$	7,416		$	603
Discontinued Operations, Net of Tax	(17		)	(30		)	(62		)	(133		)
Cumulative Effect of Change in Accounting Principle, Net of Tax	—			(88		)	—			179
Net Earnings	$	4,179		$	1,352		$	7,354		$	649
(b)   Average number of common shares outstanding  during period	51,652			54,254			52,387			54,239
Common shares assumed issued upon exercise of dilutive stock options, net of assumed repurchase, at the average market price	612			936			562			967
(c)   Average number of common shares assumed outstanding during period	52,264			55,190			52,949			55,206
Basic Earnings per Share:
Net Earnings From Continuing Operations Before Cumulative Effect of Change in Accounting Principle	$	0.08		$	0.03		$	0.14		$	0.01
Discontinued Operations, Net of Tax	—			—			—			—
Cumulative Effect of Change in Accounting Principle, Net of Tax	—			—			—			—
Basic Earnings per Share	$	0.08		$	0.03		$	0.14		$	0.01
Diluted Earnings per Share:
Net Earnings From Continuing Operations Before Cumulative Effect of Change in Accounting Principle	$	0.08		$	0.03		$	0.14		$	0.01
Discontinued Operations, Net of Tax	—			—			—			—
Cumulative Effect of Change in Accounting Principle, Net of Tax	—			—			—			—
Diluted Earnings per Share	$	0.08		$	0.03		$	0.14		$	0.01

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

	Thirteen weeks ended						Twenty-six weeks ended
	August 4, 2007			July 29, 2006			August 4, 2007			July 29, 2006
Capital expenditures	$	7,892		$	9,823		$	18,345		$	16,123
Depreciation and amortization	$	20,578		$	20,696		$	41,689		$	41,419
Non-operating income:
Net rental revenue	$	327		$	497		$	1,125		$	1,170
Investment income	1,444			1,572			2,577			3,279
Other (expense) income	(5		)	(51		)	(31		)	(172		)
Total	$	1,766		$	2,018		$	3,671		$	4,277
Comparable sales percentages:
Merchandise	-5.1		%	0.4		%	-4.1		%	-0.3		%
Service	3.8		%	0.0		%	2.6		%	-0.3		%
Total	-3.6		%	0.4		%	-3.0		%	-0.3		%
Total square feet of retail space (including service centers)							12,142,100			12,167,089
Total Store Count							592			593
Sales and Gross Profit by Line of Business (A):
Retail Sales	$	322,464		$	353,554		$	637,167		$	681,511
Service Center Revenue	236,425			225,011			467,735			453,655
Total Revenues	$	558,889		$	578,565		$	1,104,902		$	1,135,166
Gross Profit from Retail Sales	$	93,141		$	100,179		$	182,885		$	189,768
Gross Profit from Service Center Revenue	56,997			44,923			109,045			94,212
Total Gross Profit	$	150,138		$	145,102		$	291,930		$	283,980
Comparable Sales Percentages (A):
Retail Sales	-9.0		%	-0.5		%	-6.9		%	-1.7		%
Service Center Revenue	4.9		%	1.7		%	2.9		%	2.0		%
Total Revenues	-3.6		%	0.4		%	-3.0		%	-0.3		%
Gross Profit Percentage by Line of Business (A):
Gross Profit Percentage from Retail Sales	28.9		%	28.3		%	28.7		%	27.8		%
Gross Profit Percentage from Service Center Revenue	24.1		%	20.0		%	23.3		%	20.8		%
Total Gross Profit Percentage	26.9		%	25.1		%	26.4		%	25.0		%

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