Pep Boys Manny Moe & Jack (PBY) 8-K Pep Boys Reports Third Quarter 2012 Results

Exhibit 99.2

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

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(dollar amounts in thousands, except per share amounts)

	Thirteen weeks ended										Thirty-nine weeks ended
	October 27, 2012					October 29, 2011					October 27, 2012					October 29, 2011
				%					%					%				%
	Amount			Sales		Amount			Sales		Amount			Sales		Amount		Sales
Merchandise sales	$	401,146		78.7		$	414,530		79.4		$	1,226,858		78.7		$	1,238,424	79.5
Service revenue	108,462			21.3		107,643			20.6		333,025			21.3		319,884		20.5
Total revenues	509,608			100.0		522,173			100.0		1,559,883			100.0		1,558,308		100.0
Costs of merchandise sales	284,626			71.0		292,397			70.5		863,533			70.4		865,446		69.9
Costs of service revenue	108,942			100.4		102,855			95.6		322,057			96.7		295,607		92.4
Total costs of revenues	393,568			77.2		395,252			75.7		1,185,590			76.0		1,161,053		74.5
Gross profit from merchandise sales	116,520			29.0		122,133			29.5		363,325			29.6		372,978		30.1
Gross (loss) profit from service revenue	(480		)	(0.4	)	4,788			4.5		10,968			3.3		24,277		7.6
Total gross profit	116,040			22.8		126,921			24.3		374,293			24.0		397,255		25.5
Selling, general and administrative expenses	112,028			22.0		109,549			21.0		346,015			22.2		331,717		21.3
Net (loss) gain from dispositions of assets	(221		)	—		(25		)	—		(232		)	—		61		—
Operating profit	3,791			0.7		17,347			3.3		28,046			1.8		65,599		4.2
Merger termination fees, net	(139		)	—		—			—		42,816			2.7		—		—
Other income	655			0.1		627			0.1		1,646			0.1		1,783		0.1
Interest expense	17,057			3.3		6,889			1.3		30,000			1.9		19,831		1.3
(Loss) earnings from continuing operations before income taxes and discontinued operations	(12,750		)	(2.5	)	11,085			2.1		42,508			2.7		47,551		3.1
Income tax (benefit) expense	(6,055		)	47.5	(1)	4,063			36.7	(1)	15,035			35.4	(1)	14,232		29.9	(1)
(Loss) earnings from continuing operations before discontinued operations	(6,695		)	(1.3	)	7,022			1.3		27,473			1.8		33,319		2.1
(Loss) income from discontinued operations, net of tax	(64		)	—		(11		)	—		(122		)	—		3		—
Net (loss) earnings	(6,759		)	(1.3	)	7,011			1.3		27,351			1.8		33,322		2.1
Basic earnings per share:
(Loss) earnings from continuing operations before discontinued operations	$	(0.13	)			$	0.13				$	0.51				$	0.63
Discontinued operations, net of tax	—					—					—					—
Basic (loss) earnings per share	$	(0.13	)			$	0.13				$	0.51				$	0.63
Diluted earnings per share:
(Loss) earnings from continuing operations before discontinued operations	$	(0.13	)			$	0.13				$	0.51				$	0.62
Discontinued operations, net of tax	—					—					—					—
Diluted (loss) earnings per share	$	(0.13	)			$	0.13				$	0.51				$	0.62
Other comprehensive income:
Defined benefit plan adjustment, net of tax	354					236					1,062					709
Derivative financial instruments adjustment, net of tax	4,607					907					6,537					1,592
Other comprehensive income	4,961					1,143					7,599					2,301
Comprehensive (loss) income	(1,798		)			8,154					34,950					35,623

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

CONSOLIDATED BALANCE SHEETS

(dollar amounts in thousands)

	October 27, 2012			January 28, 2012			October 29, 2011
Assets
Current assets:
Cash and cash equivalents	$	78,667		$	58,244		$	80,716
Accounts receivable, less allowance for uncollectible accounts of $1,424; $1,303 and $1,257	25,225			25,792			23,524
Merchandise inventories	634,252			614,136			606,254
Prepaid expenses	15,086			26,394			15,571
Other current assets	49,543			59,979			47,550
Total current assets	802,773			784,545			773,615
Property and equipment - net	665,529			696,339			693,779
Goodwill	46,917			46,917			46,219
Deferred income taxes	53,011			72,870			66,674
Other long-term assets	35,547			33,108			30,821
Total assets	$	1,603,777		$	1,633,779		$	1,611,108
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	258,222		$	243,712		$	238,599
Trade payable program liability	125,718			85,214			68,320
Accrued expenses	218,167			221,705			221,976
Deferred income taxes	65,429			66,208			58,898
Current maturities of long-term debt	2,000			1,079			1,079
Total current liabilities	669,536			617,918			588,872
Long-term debt less current maturities	198,000			294,043			294,313
Other long-term liabilities	63,536			77,216			72,257
Deferred gain from asset sales	130,820			140,273			143,424
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	295,086			296,462			295,813
Retained earnings	445,503			423,437			429,935
Accumulated other comprehensive loss	(10,050		)	(17,649		)	(14,727		)
Treasury stock, at cost - 15,460,049 shares;
15,803,322 shares and 15,835,096 shares	(257,211		)	(266,478		)	(267,336		)
Total stockholders’ equity	541,885			504,329			512,242
Total liabilities and stockholders’ equity	$	1,603,777		$	1,633,779		$	1,611,108
Supplemental Balance Sheet Information:
Working capital	$	133,237		$	166,627		$	184,743
Accounts payable to inventory ratio	60.5		%	53.6		%	50.6		%
Total debt as a percent of total capitalization	27.0		%	36.9		%	36.6		%
Net debt as a percent of total capitalization, net	18.3		%	32.0		%	29.5		%

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

Thirty-nine weeks ended	October 27, 2012			October 29, 2011
Cash flows from operating activities:
Net earnings	$	27,351		$	33,322
Adjustments to reconcile net earnings to net cash provided by continuing operations:
Net loss (income) from discontinued operations	122			(3		)
Depreciation and amortization	59,129			59,779
Amortization of deferred gain from asset sales	(9,453		)	(9,451		)
Stock compensation expense	622			2,539
Deferred income taxes	14,521			8,021
Net loss (gain) from disposition of assets	232			(61		)
Loss from asset impairment	8,802			389
Other	88			—
Changes in assets and liabilities, net of the effects of acquisitions:
Decrease in accounts receivable, prepaid expenses and other	26,213			27,767
Increase in merchandise inventories	(20,116		)	(34,874		)
Increase in accounts payable	14,510			19,758
Decrease in accrued expenses	(4,208		)	(18,693		)
Decrease in other long-term liabilities	(1,369		)	(3,483		)
Net cash provided by continuing operations	116,444			85,010
Net cash (used in) provided by discontinued operations	(215		)	40
Net cash provided by operating activities	116,229			85,050
Cash flows from investing activities:
Capital expenditures	(36,760		)	(50,793		)
Proceeds from dispositions of assets	15			89
Premiums paid on life insurance policies	—			(837		)
Acquisitions, net of cash acquired	—			(42,901		)
Collateral investment	—			(4,763		)
Net cash used in investing activities	(36,745		)	(99,205		)
Cash flows from financing activities:
Borrowings under line of credit agreements	1,780			5,181
Payments under line of credit agreements	(1,780		)	(5,181		)
Borrowings on trade payable program liability	123,408			97,400
Payments on trade payable program liability	(82,904		)	(85,367		)
Payment for finance issuance cost	(6,442		)	(2,441		)
Borrowings under new debt	200,000			—
Debt payments	(295,122		)	(809		)
Dividends paid	—			(4,757		)
Proceeds from stock issuance	1,999			605
Net cash (used in) provided by financing activities	(59,061		)	4,631
Net increase (decrease) in cash and cash equivalents	20,423			(9,524		)
Cash and cash equivalents at beginning of period	58,244			90,240
Cash and cash equivalents at end of period	$	78,667		$	80,716
Supplemental cash flow information:
Cash paid for income taxes	$	2,635		$	1,015
Cash paid for interest	$	28,554		$	14,577
Accrued purchases of property and equipment	$	2,008		$	1,486

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						Thirty-nine weeks ended
		October 27, 2012			October 29, 2011			October 27, 2012			October 29, 2011
(a)	(Loss) earnings from continuing operations before discontinued operations	$	(6,695	)	$	7,022		$	27,473		$	33,319
	(Loss) income from discontinued operations, net of tax	(64		)	(11		)	(122		)	3
	Net (loss) earnings	$	(6,759	)	$	7,011		$	27,351		$	33,322
(b)	Basic average number of common shares outstanding during period	53,304			52,998			53,175			52,933
	Common shares assumed issued upon exercise of dilutive stock options, net of assumed repurchase, at the average market price	—			600			768			661
(c)	Diluted average number of common shares assumed outstanding during period	53,304			53,598			53,943			53,594
	Basic earnings per share:
	(Loss) earnings from continuing operations before discontinued operations (a) / (b)	$	(0.13	)	$	0.13		$	0.51		$	0.63
	Discontinued operations, net of tax	—			—			—			—
	Basic (loss) earnings per share	$	(0.13	)	$	0.13		$	0.51		$	0.63
	Diluted earnings per share:
	(Loss) earnings from continuing operations before discontinued operations (a) / (c)	$	(0.13	)	$	0.13		$	0.51		$	0.62
	Discontinued operations, net of tax	—			—			—			—
	Diluted (loss) earnings per share	$	(0.13	)	$	0.13		$	0.51		$	0.62

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

	Thirteen weeks ended						Thirty-nine weeks ended
	October 27, 2012			October 29, 2011			October 27, 2012			October 29, 2011
Capital expenditures	$	10,413		$	20,157		$	36,760		$	50,793
Depreciation and amortization	$	19,841		$	20,125		$	59,129		$	59,779
Non-operating income:
Net rental revenue	$	487		$	575		$	1,302		$	1,592
Investment income	39			46			133			168
Merger termination fees, net	(139		)	—			42,816			—
Other income	129			6			211			23
Total	$	516		$	627		$	44,462		$	1,783
Comparable sales percentages:
Service	0.2		%	0.4		%	0.7		%	0.8		%
Merchandise	-3.5		%	-0.6		%	-2.5		%	-1.4		%
Total	-2.7		%	-0.4		%	-1.8		%	-1.0		%
Total square feet of retail space (including service centers)							12,667,000			12,597,000
Store count
Supercenter							562			562
Service & Tire Center							175			159
Retail Only							7			8
Total							744			729
Sales and gross profit by line of business (A):
Service center revenue	$	271,370		$	269,726		$	816,730		777,891
Retail sales	238,238			252,447			743,153			780,417
Total revenues	$	509,608		$	522,173		$	1,559,883		$	1,558,308
Gross profit from service center revenue, prior to impairment charge	$	56,592		$	55,400		$	166,347		$	175,314
Service center revenue impairment charge	(4,618		)	—			(4,618		)	(281		)
Gross profit from service center revenue	$	51,974		$	55,400		$	161,729		$	175,033
Gross profit from retail sales, prior to impairment charge	$	68,250		$	71,521		$	216,748		$	222,330
Retail sales impairment charge	(4,184		)	—			(4,184		)	(108		)
Gross profit from retail sales	$	64,066		$	71,521		$	212,564		$	222,222
Total gross profit	$	116,040		$	126,921		$	374,293		$	397,255
Comparable sales percentages by line of business (A):
Service center revenue	-0.1		%	1.3		%	1.0		%	0.3		%
Retail sales	-5.4		%	-2.0		%	-4.6		%	-2.2		%
Total revenues	-2.7		%	-0.4		%	-1.8		%	-1.0		%
Gross profit percentage by line of business (A):
Gross profit percentage from service center revenue, prior to impairment charge	20.9		%	20.5		%	20.4		%	22.5		%
Impairment charge	(1.7		)	—			(0.6		)	(0.0		)
Gross profit percentage from service center revenue	19.2		%	20.5		%	19.8		%	22.5		%
Gross profit percentage from retail sales, prior to impairment charge	28.6		%	28.3		%	29.2		%	28.5		%
Impairment charge	(1.8		)	—			(0.6		)	(0.0		)
Gross profit percentage from retail sales	26.8		%	28.3		%	28.6		%	28.5		%
Total gross profit percentage	22.8		%	24.3		%	24.0		%	25.5		%

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