Pep Boys Manny Moe & Jack (PBY) 8-K Pep Boys Reports Fourth Quarter and Fiscal 2010 Results

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										Fifty-two weeks ended
	January 29, 2011					January 30, 2010					January 29, 2011					January 30, 2010
				%					%					%					%
	Amount			Sales		Amount			Sales		Amount			Sales		Amount			Sales
Merchandise sales	$	384,432		80.5		$	364,511		80.5		$	1,598,168		80.4		$	1,533,619		80.3
Service revenue	92,957			19.5		88,385			19.5		390,473			19.6		377,319			19.7
Total revenues	477,389			100.0		452,896			100.0		1,988,641			100.0		1,910,938			100.0
Costs of merchandise sales	264,532			68.8		258,375			70.9		1,110,380			69.5		1,084,804			70.7
Costs of service revenue	88,457			95.2		84,474			95.6		355,909			91.1		340,027			90.1
Total costs of revenues	352,989			73.9		342,849			75.7		1,466,289			73.7		1,424,831			74.6
Gross profit from merchandise sales	119,900			31.2		106,136			29.1		487,788			30.5		448,815			29.3
Gross profit from service revenue	4,500			4.8		3,911			4.4		34,564			8.9		37,292			9.9
Total gross profit	124,400			26.1		110,047			24.3		522,352			26.3		486,107			25.4
Selling, general and administrative expenses	106,659			22.3		103,181			22.8		442,239			22.2		430,261			22.5
Net (loss) gain from dispositions of assets	(136		)	—		(106		)	—		2,467			0.1		1,213			0.1
Operating profit	17,605			3.7		6,760			1.5		82,580			4.2		57,059			3.0
Non-operating income	754			0.2		595			0.1		2,609			0.1		2,261			0.1
Interest expense	6,864			1.4		6,380			1.4		26,745			1.3		21,704			1.1
Earnings from continuing operations before income taxes	11,495			2.4		975			0.2		58,444			2.9		37,616			2.0
Income tax expense (benefit)	2,957			25.7	(1)	(1,860		)	(190.8	)(1)	21,273			36.4	(1)	13,503			35.9	(1)
Earnings from continuing operations	8,538			1.8		2,835			0.6		37,171			1.9		24,113			1.3
Loss from discontinued operations, net of tax	(173		)	—		(567		)	(0.1	)	(540		)	—		(1,077		)	(0.1	)
Net earnings	8,365			1.8		2,268			0.5		36,631			1.8		23,036			1.2
Retained earnings, beginning of period	397,100					374,461					374,836					358,670
Cash dividends	(1,582		)			(1,577		)			(6,323		)			(6,286		)
Shares issued and other	(1,283		)			(316		)			(2,544		)			(584		)
Retained earnings, end of period	$	402,600				$	374,836				$	402,600				$	374,836
Basic earnings per share:
Earnings from continuing operations	$	0.16				$	0.05				$	0.71				$	0.46
Discontinued operations, net of tax	—					(0.01		)			(0.01		)			(0.02		)
Basic earnings per share	$	0.16				$	0.04				$	0.70				$	0.44
Diluted earnings per share:
Earnings from continuing operations	$	0.16				$	0.06				$	0.70				$	0.46
Discontinued operations, net of tax	—					(0.02		)			(0.01		)			(0.02		)
Diluted earnings per share	$	0.16				$	0.04				$	0.69				$	0.44
Cash dividends per share	$	0.03				$	0.03				$	0.12				$	0.12

(1) As a percentage of earnings from continuing operations before income taxes

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(dollar amounts in thousands)

	January 29, 2011			January 30, 2010
Assets
Current assets:
Cash and cash equivalents	$	90,240		$	39,326
Accounts receivable, less allowance for uncollectible accounts of $1,551 and $1,488	19,540			22,983
Merchandise inventories	564,402			559,118
Prepaid expenses	28,542			24,784
Other current assets	60,337			65,428
Assets held for disposal	475			4,438
Total current assets	763,536			716,077
Property and equipment - net	700,981			706,450
Deferred income taxes	66,019			58,171
Other long-term assets	26,136			18,388
Total assets	$	1,556,672		$	1,499,086
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	210,440		$	202,974
Trade payable program liability	56,287			34,099
Accrued expenses	236,028			242,416
Deferred income taxes	56,335			29,984
Current maturities of long-term debt	1,079			1,079
Total current liabilities	560,169			510,552
Long-term debt less current maturities	295,122			306,201
Other long-term liabilities	70,046			73,933
Deferred gain from asset sales	152,875			165,105
Stockholders’ equity:
Common stock, par value $1 per share:
Authorized 500,000,000 shares; issued 68,557,041 shares	68,557			68,557
Additional paid-in capital	295,361			293,810
Retained earnings	402,600			374,836
Accumulated other comprehensive loss	(17,028		)	(17,691		)
Treasury stock, at cost - 15,971,910 shares and 16,164,074 shares	(271,030		)	(276,217		)
Total stockholders’ equity	478,460			443,295
Total liabilities and stockholders’ equity	$	1,556,672		$	1,499,086

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES (UNAUDITED)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollar amounts in thousands)

Fifty-two weeks ended	January 29, 2011			January 30, 2010
Cash flows from operating activities:
Net earnings	$	36,631		$	23,036
Adjustments to reconcile net earnings to net cash provided by continuing operations:
Loss from discontinued operations, net of tax	540			1,077
Depreciation and amortization	74,151			70,529
Amortization of deferred gain from asset sales	(12,602		)	(12,325		)
Stock compensation expense	3,497			2,575
Loss (gain) on debt retirement	200			(6,248		)
Deferred income taxes	18,572			13,446
Net gain from disposition of assets	(2,467		)	(1,213		)
Loss from asset impairment	970			2,884
Other	(479		)	345
Changes in operating assets and liabilities:
Decrease in accounts receivable, prepaid expenses and other	7,060			7,175
(Increase) decrease in merchandise inventories	(5,284		)	7,039
Increase (decrease) in accounts payable	7,466			(9,640		)
Decrease in accrued expenses	(8,394		)	(13,238		)
(Decrease) increase in other long-term liabilities	(1,200		)	2,384
Net cash provided by continuing operations	118,661			87,826
Net cash used in discontinued operations	(1,466		)	(603		)
Net cash provided by operating activities	117,195			87,223
Cash flows from investing activities:
Cash paid for property and equipment	(70,252		)	(43,214		)
Proceeds from dispositions of assets	7,515			14,776
Acquisition of Florida Tire, Inc.	(288		)	(2,695		)
Collateral investment and other	(9,638		)	(500		)
Net cash used in continuing operations	(72,663		)	(31,633		)
Net cash provided by discontinued operations	569			1,762
Net cash used in investing activities	(72,094		)	(29,871		)
Cash flows from financing activities:
Borrowings under line of credit agreements	21,795			249,704
Payments under line of credit agreements	(21,795		)	(273,566		)
Borrowings on trade payable program liability	347,068			192,324
Payments on trade payable program liability	(324,880		)	(190,155		)
Debt payments	(11,279		)	(11,990		)
Dividends paid	(6,323		)	(6,286		)
Other	1,227			611
Net cash provided by (used in) financing activities	5,813			(39,358		)
Net increase in cash and cash equivalents	50,914			17,994
Cash and cash equivalents at beginning of period	39,326			21,332
Cash and cash equivalents at end of period	$	90,240		$	39,326
Supplemental cash flow information:
Cash paid for income taxes	$	890		$	4,768
Cash received from income tax refunds	$	195		$	921
Cash paid for interest	$	23,098		$	24,509
Accrued purchases of property and equipment	$	2,926		$	1,738

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						Fifty-two weeks ended
			January 29, 2011			January 30, 2010			January 29, 2011			January 30, 2010
(a)	Earnings from continuing operations		$	8,538		$	2,835		$	37,171		$	24,113
	Loss from discontinued operations, net of tax		(173		)	(567		)	(540		)	(1,077		)
	Net earnings		$	8,365		$	2,268		$	36,631		$	23,036
(b)	Basic average number of common shares outstanding during period		52,778			52,452			52,677			52,397
	Common shares assumed issued upon exercise of dilutive stock options, net of assumed repurchase, at the average market price		638			356			485			270
(c)	Diluted average number of common shares assumed outstanding during period		53,416			52,808			53,162			52,667
	Basic earnings per share:
	Earnings from continuing operations	(a) / (b)	$	0.16		$	0.05		$	0.71		$	0.46
	Discontinued operations, net of tax		—			(0.01		)	(0.01		)	(0.02		)
	Basic earnings per share		$	0.16		$	0.04		$	0.70		$	0.44
	Diluted earnings per share:
	Earnings from continuing operations	(a) / (c)	$	0.16		$	0.06		$	0.70		$	0.46
	Discontinued operations, net of tax		—			(0.02		)	(0.01		)	(0.02		)
	Diluted earnings per share		$	0.16		$	0.04		$	0.69		$	0.44

THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES

ADDITIONAL INFORMATION (dollar amounts in thousands)

	Thirteen weeks ended						Fifty-two weeks ended
	January 29, 2011			January 30, 2010			January 29, 2011			January 30, 2010
Capital expenditures	$	27,276		$	15,439		$	70,252		$	43,214
Depreciation and amortization	$	18,891		$	17,281		$	74,151		$	70,529
Non-operating income:
Net rental revenue	$	569		$	522		$	2,218		$	1,774
Investment income	133			46			296			219
Other income	52			27			95			268
Total	$	754		$	595		$	2,609		$	2,261
Comparable sales percentages:
Merchandise	4.6		%	-4.9		%	3.1		%	-2.6		%
Service	3.4		%	0.7		%	1.1		%	4.7		%
Total	4.3		%	-3.9		%	2.7		%	-1.2		%
Total square feet of retail space (including service centers)							11,932,000			11,687,000
Store count
Supercenter							560			553
Service & Tire Center							53			25
Retail Only							8			9
Total							621			587
Sales and gross profit by line of business (A):
Retail sales	$	251,399		$	243,187		$	1,046,772		1,013,308
Service center revenue	225,990			209,709			941,869			897,630
Total revenues	$	477,389		$	452,896		$	1,988,641		$	1,910,938
Gross profit from retail sales	$	73,638		$	64,904		$	306,176		275,051
Gross profit from service center revenue	50,762			45,143			216,176			211,056
Total gross profit	$	124,400		$	110,047		$	522,352		$	486,107
Comparable sales percentages (A):
Retail sales	3.1		%	-5.1		%	3.0		%	-4.3		%
Service center revenue	5.8		%	-2.4		%	2.4		%	2.5		%
Total revenues	4.3		%	-3.9		%	2.7		%	-1.2		%
Gross profit percentage by line of business (A):
Gross profit percentage from retail sales	29.3		%	26.7		%	29.2		%	27.1		%
Gross profit percentage from service center revenue	22.5		%	21.5		%	23.0		%	23.5		%
Total gross profit percentage	26.1		%	24.3		%	26.3		%	25.4		%

(A) Retail sales include DIY and commercial sales. Service center revenue includes revenue from labor and installed parts and tires.