Pep Boys Manny Moe & Jack (PBY) 8-K Pep Boys Reports Third Quarter 2013 Results

Exhibit 99.2

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

CONSOLIDATED BALANCE SHEETS

(dollar amounts in thousands)

	November 2, 2013			February 2, 2013			October 27, 2012
Assets
Current assets:
Cash and cash equivalents	$	55,798		$	59,186		$	78,667
Accounts receivable, less allowance for uncollectible accounts of $1,310; $1,302; and $1,424	24,942			23,897			25,225
Merchandise inventories	664,901			641,208			634,252
Prepaid expenses	16,801			28,908			15,086
Other current assets	52,249			60,438			49,543
Assets held for disposal	500			—			—
Total current assets	815,191			813,637			802,773
Property and equipment, net of accumulated depreciation of $1,214,802; $1,162,909; and $1,158,656	631,639			657,270			665,529
Goodwill	56,841			46,917			46,917
Deferred income taxes	48,311			47,691			53,011
Other long-term assets	37,265			38,434			35,547
Total assets	$	1,589,247		$	1,603,949		$	1,603,777
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	253,818		$	244,696		$	258,222
Trade payable program liability	134,703			149,718			125,718
Accrued expenses	225,249			232,277			218,167
Deferred income taxes	59,455			58,441			65,429
Current maturities of long-term debt	2,000			2,000			2,000
Total current liabilities	675,225			687,132			669,536
Long-term debt less current maturities	196,500			198,000			198,000
Other long-term liabilities	49,618			53,818			63,536
Deferred gain from asset sales	117,974			127,427			130,820
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	296,578			295,679			295,086
Retained earnings	436,933			430,148			445,503
Accumulated other comprehensive income (loss)	339			(980		)	(10,050		)
Treasury stock, at cost - 15,442,779 shares; 15,431,298 shares; and 15,460,049 shares	(252,477		)	(255,832		)	(257,211		)
Total stockholders’ equity	549,930			537,572			541,885
Total liabilities and stockholders’ equity	$	1,589,247		$	1,603,949		$	1,603,777
Supplemental balance sheet information:
Working capital	$	139,966		$	126,505		$	133,237
Current ratio	1.21			1.18			1.20
Accounts payable to inventory ratio	58.4		%	61.5		%	60.5		%
Total debt as a percent of total capitalization	26.5		%	27.1		%	27.0		%
Debt as a percent of total capitalization, net	20.6		%	20.8		%	18.3		%

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

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(dollar amounts in thousands, except per share amounts)

	Thirteen weeks ended										Thirty-nine weeks ended
	November 2, 2013					October 27, 2012					November 2, 2013					October 27, 2012
				%					%					%					%
	Amount			Sales		Amount			Sales		Amount			Sales		Amount			Sales
Merchandise sales	$	394,346		77.8		$	401,146		78.7		$	1,223,813		77.9		$	1,226,858		78.7
Service revenue	112,696			22.2		108,462			21.3		347,022			22.1		333,025			21.3
Total revenues	507,042			100.0		509,608			100.0		1,570,835			100.0		1,559,883			100.0
Costs of merchandise sales	267,489			67.8		284,626			71.0		838,126			68.5		863,533			70.4
Costs of service revenue	116,741			103.6		108,942			100.4		349,348			100.7		322,057			96.7
Total costs of revenues	384,230			75.8		393,568			77.2		1,187,474			75.6		1,185,590			76.0
Gross profit from merchandise sales	126,857			32.2		116,520			29.0		385,687			31.5		363,325			29.6
Gross (loss) profit from service revenue	(4,045		)	(3.6	)	(480		)	(0.3	)	(2,326		)	(0.7	)	10,968			3.3
Total gross profit	122,812			24.2		116,040			22.8		383,361			24.4		374,293			24.0
Selling, general and administrative expenses	115,104			22.7		112,028			22.0		354,236			22.6		346,015			22.2
Net loss from dispositions of assets	(67		)	—		(221		)	—		(213		)	—		(232		)	—
Operating profit	7,641			1.5		3,791			0.7		28,912			1.8		28,046			1.8
Merger termination fees, net	—			—		(139		)	—		—			—		42,816			2.7
Other income	524			0.1		655			0.1		1,367			0.1		1,646			0.1
Interest expense	3,643			0.7		17,057			3.3		10,885			0.7		30,000			1.9
Earnings (loss) from continuing operations before income taxes and discontinued operations	4,522			0.9		(12,750		)	(2.5	)	19,394			1.2		42,508			2.7
Income tax expense (benefit)	3,509			77.6	(1)	(6,055		)	47.5	(1)	9,074			46.8	(1)	15,035			35.4	(1)
Earnings (loss) from continuing operations before discontinued operations	1,013			0.2		(6,695		)	(1.3	)	10,320			0.7		27,473			1.8
Loss from discontinued operations, net of tax	(49		)	—		(64		)	—		(124		)	—		(122		)	—
Net earnings (loss)	964			0.2		(6,759		)	(1.3	)	10,196			0.7		27,351			1.8
Basic earnings (loss) per share:
Earnings (loss) from continuing operations before discontinued operations	$	0.02				$	(0.13	)			$	0.19				$	0.51
Discontinued operations, net of tax	—					—					—					—
Basic earnings (loss) per share	$	0.02				$	(0.13	)			$	0.19				$	0.51
Diluted earnings (loss) per share:
Earnings (loss) from continuing operations before discontinued operations	$	0.02				$	(0.13	)			$	0.19				$	0.51
Discontinued operations, net of tax	—					—					—					—
Diluted earnings (loss) per share	$	0.02				$	(0.13	)			$	0.19				$	0.51
Other comprehensive (loss) income:
Defined benefit plan adjustment, net of tax	—					354					—					1,062
Derivative financial instruments adjustment, net of tax	(372		)			4,607					1,319					6,537
Other comprehensive (loss) income	(372		)			4,961					1,319					7,599
Comprehensive income (loss)	$	592				$	(1,798	)			$	11,515				$	34,950

(1) As a percentage of earnings (loss) from continuing operations before income taxes and discontinued operations.

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

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollar amounts in thousands)

Thirty-nine weeks ended	November 2, 2013			October 27, 2012
Cash flows from operating activities:
Net earnings	$	10,196		$	27,351
Adjustments to reconcile net earnings to net cash provided by continuing operations:
Net loss from discontinued operations	124			122
Depreciation	59,941			59,279
Amortization of deferred gain from asset sales	(9,453		)	(9,453		)
Amortization of deferred financing costs	1,952			3,703
Stock compensation expense	2,451			622
Deferred income taxes	(478		)	14,521
Net loss from disposition of assets	213			232
Loss from asset impairment	4,882			8,802
Other	(322		)	(62		)
Changes in assets and liabilities:
Decrease in accounts receivable, prepaid expenses and other	18,431			22,510
Increase in merchandise inventories	(23,693		)	(20,116		)
Increase in accounts payable	7,746			14,510
Decrease in accrued expenses	(6,589		)	(4,208		)
Decrease in other long-term liabilities	(2,354		)	(1,369		)
Net cash provided by continuing operations	63,047			116,444
Net cash used in discontinued operations	(193		)	(215		)
Net cash provided by operating activities	62,854			116,229
Cash flows from investing activities:
Capital expenditures	(38,334		)	(36,760		)
Proceeds from dispositions of assets	19			15
Acquisitions, net of cash acquired	(10,741		)	—
Release of collateral investment	1,000			—
Net cash used in investing activities	(48,056		)	(36,745		)
Cash flows from financing activities:
Borrowings under line of credit agreements	1,926			1,780
Payments under line of credit agreements	(1,926		)	(1,780		)
Borrowings on trade payable program liability	114,804			123,408
Payments on trade payable program liability	(129,819		)	(82,904		)
Payment for finance issuance cost	—			(6,442		)
Borrowings under new debt	—			200,000
Debt payments	(1,500		)	(295,122		)
Proceeds from stock issuance	1,079			1,999
Repurchase of common stock	(2,750		)	—
Net cash used in financing activities	(18,186		)	(59,061		)
Net (decrease) increase in cash and cash equivalents	(3,388		)	20,423
Cash and cash equivalents at beginning of period	59,186			58,244
Cash and cash equivalents at end of period	$	55,798		$	78,667
Supplemental cash flow information:
Cash paid for income taxes	$	4,322		$	2,635
Cash received from income tax refunds	$	51		$	—
Cash paid for interest	$	9,149		$	28,554
Accrued purchases of property and equipment	$	2,369		$	2,008

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
			November 2, 2013			October 27, 2012			November 2, 2013			October 27, 2012
(a)	Earnings (loss) from continuing operations before discontinued operations		$	1,013		$	(6,695	)	$	10,320		$	27,473
	Loss from discontinued operations, net of tax		(49		)	(64		)	(124		)	(122		)
	Net earnings (loss)		$	964		$	(6,759	)	$	10,196		$	27,351
(b)	Basic average number of common shares outstanding during period		53,315			53,304			53,363			53,175
	Common shares assumed issued upon exercise of dilutive stock options, net of assumed repurchase, at the average market price		615			—			599			768
(c)	Diluted average number of common shares assumed outstanding during period		53,930			53,304			53,962			53,943
	Basic earnings (loss) per share:
	Earnings (loss) from continuing operations before discontinued operations	(a) / (b)	$	0.02		$	(0.13	)	$	0.19		$	0.51
	Discontinued operations, net of tax		—			—			—			—
	Basic earnings (loss) per share		$	0.02		$	(0.13	)	$	0.19		$	0.51
	Diluted earnings (loss) per share:
	Earnings (loss) from continuing operations before discontinued operations	(a) / (c)	$	0.02		$	(0.13	)	$	0.19		$	0.51
	Discontinued operations, net of tax		—			—			—			—
	Diluted earnings (loss) per share		$	0.02		$	(0.13	)	$	0.19		$	0.51

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

	Thirteen weeks ended						Thirty-nine weeks ended
	November 2, 2013			October 27, 2012			November 2, 2013			October 27, 2012
Capital expenditures	$	13,832		$	10,413		$	38,334		$	36,760
Depreciation	$	19,756		$	19,970		$	59,941		$	59,279
Non-operating income:
Net rental revenue	$	432		$	487		$	1,032		$	1,302
Investment income	42			39			132			133
Merger termination fees, net	—			(139		)	—			42,816
Other income	50			129			203			211
Total	$	524		$	516		$	1,367		$	44,462
Comparable sales percentages:
Service	0.5		%	0.2		%	1.6		%	0.7		%
Merchandise	-3.6		%	-3.5		%	-1.7		%	-2.5		%
Total	-2.8		%	-2.7		%	-1.0		%	-1.8		%
Total square feet of retail space (including service centers)							12,924,000			12,667,000
Store count
Supercenter							572			562
Service & Tire Center							215			175
Retail Only							6			7
Total							793			744
Sales and gross profit by line of business (A):
Service center revenue	$	273,944		$	271,370		$	841,827		$	816,730
Retail sales	233,098			238,238			729,008			743,153
Total revenues	$	507,042		$	509,608		$	1,570,835		$	1,559,883
Gross profit from service center revenue, prior to impairment charge	$	55,169		$	56,592		$	171,244		$	166,347
Service center revenue impairment charge	(1,153		)	(4,618		)	(3,493		)	(4,618		)
Gross profit from service center revenue	$	54,016		$	51,974		$	167,751		$	161,729
Gross profit from retail sales, prior to impairment charge	$	69,676		$	68,250		$	217,000		$	216,748
Retail sales impairment charge	(880		)	(4,184		)	(1,390		)	(4,184		)
Gross profit from retail sales	$	68,796		$	64,066		$	215,610		$	212,564
Total gross profit	$	122,812		$	116,040		$	383,361		$	374,293
Comparable sales percentages by line of business (A):
Service center revenue	-2.5		%	-0.1		%	0.4		%	1.0		%
Retail sales	-3.1		%	-5.4		%	-2.6		%	-4.6		%
Total revenues	-2.8		%	-2.7		%	-1.0		%	-1.8		%
Gross profit percentage by line of business (A):
Gross profit percentage from service center revenue, prior to impairment charge	20.1		%	20.9		%	20.3		%	20.4		%
Impairment charge	(0.4		)	(1.7		)	(0.4		)	(0.6		)
Gross profit percentage from service center revenue	19.7		%	19.2		%	19.9		%	19.8		%
Gross profit percentage from retail sales, prior to impairment charge	29.9		%	28.6		%	29.8		%	29.2		%
Impairment charge	(0.4		)	(1.8		)	(0.2		)	(0.6		)
Gross profit percentage from retail sales	29.5		%	26.9		%	29.6		%	28.6		%
Total gross profit percentage	24.2		%	22.8		%	24.4		%	24.0		%

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