SUPPLEMENTAL GUARANTOR INFORMATION

12 Months Ended

Jan. 28, 2012

SUPPLEMENTAL GUARANTOR INFORMATION

SUPPLEMENTAL GUARANTOR INFORMATION

NOTE 20—SUPPLEMENTAL GUARANTOR INFORMATION

        The Company's Notes are fully and unconditionally and joint and severally guaranteed by certain of the Company's direct and indirectly wholly-owned subsidiaries—namely, The Pep Boys Manny Moe & Jack of California, The Pep Boys—Manny Moe & Jack of Delaware, Inc. (the "Pep Boys of Delaware"); Pep Boys—Manny Moe & Jack of Puerto Rico, Inc.; Tire Stores Group Holding Corporation (on and after May 5, 2011); Big 10 Tire Stores, LLC (on and after May 5, 2011) and PBY Corporation (at and prior to January 29, 2011), (collectively, the "Subsidiary Guarantors"). The Notes are not guaranteed by the Company's wholly owned subsidiary, Colchester Insurance Company.

        The following condensed consolidating information presents, in separate columns, the condensed consolidating balance sheets as of January 28, 2012 and January 29, 2011 and the related condensed consolidating statements of operations and condensed consolidating statements of cash flows for fiscal 2011, 2010 and 2009 for (i) the Company ("Pep Boys") on a parent only basis, with its investment in subsidiaries recorded under the equity method, (ii) the Subsidiary Guarantors on a combined basis, (iii) the subsidiary of the Company that does not guarantee the Notes, and (iv) the Company on a consolidated basis. The Company made an immaterial adjustment to the January 29, 2011 amounts reported for cash, intercompany receivables and intercompany liabilities to account for certain intercompany borrowing activity between Pep Boys and a subsidiary guarantor.

        On January 29, 2011, The Pep Boys—Manny, Moe & Jack of Pennsylvania made a capital contribution of $264.0 million to Pep Boys of Delaware consisting of intercompany receivables due from the latter. This contribution resulted in an increase in the Pep Boys' investment in subsidiaries and the Subsidiary Guarantors' stockholders' equity. On January 30, 2011, the Company merged PBY Corporation into Pep Boys of Delaware and accordingly, The Pep Boys Manny Moe & Jack of California became the wholly owned subsidiary of Pep Boys of Delaware. This merger did not affect the presentation of the following condensed consolidating information.

        On May 5, 2011, The Pep Boys—Manny, Moe & Jack acquired Tire Store Group Holdings Corporation and its subsidiary Big 10 Tire Stores, LLC. As a result of this acquisition, The Pep Boys—Manny, Moe & Jack of Pennsylvania increased its investment in subsidiaries by $9.4 million (see Note 2—Acquisitions).

CONDENSED CONSOLIDATING BALANCE SHEET

(dollar amounts in thousands) As of January 28, 2012	Pep Boys		Subsidiary Guarantors		Subsidiary Non-Guarantors		Consolidation/ Elimination			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	22,740	$	27,181	$	8,323	$	—		$	58,244
Accounts receivable, net		14,566		11,226		—		—			25,792
Merchandise inventories		214,584		399,552		—		—			614,136
Prepaid expenses		12,945		16,873		14,996		(18,420	)		26,394
Other current assets		606		—		64,214		(4,841	)		59,979
Total current assets		265,441		454,832		87,533		(23,261	)		784,545
Property and equipment—net		243,108		441,645		30,177		(18,591	)		696,339
Investment in subsidiaries		2,176,992		—		—		(2,176,992	)		—
Intercompany receivable		—		1,389,910		82,206		(1,472,116	)		—
Goodwill		2,549		44,368		—		—			46,917
Deferred income taxes		20,468		52,402		—		—			72,870
Other long-term assets		31,068		2,040		—		—			33,108
Total assets	$	2,739,626	$	2,385,197	$	199,916	$	(3,690,960	)	$	1,633,779
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	243,712	$	—	$	—	$	—		$	243,712
Trade payable program liability		85,214		—		—		—			85,214
Accrued expenses		17,887		55,527		166,711		(18,420	)		221,705
Deferred income taxes		29,383		41,666		—		(4,841	)		66,208
Current maturities of long-term debt		1,079		—		—		—			1,079
Total current liabilities		377,275		97,193		166,711		(23,261	)		617,918
Long-term debt less current maturities		294,043		—		—		—			294,043
Other long-term liability		30,540		46,676		—		—			77,216
Deferred gain from asset sales		61,323		97,541		—		(18,591	)		140,273
Intercompany liabilities		1,472,116		—		—		(1,472,116	)		—
Total stockholders' equity		504,329		2,143,787		33,205		(2,176,992	)		504,329
Total liabilities and stockholders' equity	$	2,739,626	$	2,385,197	$	199,916	$	(3,690,960	)	$	1,633,779

CONDENSED CONSOLIDATING BALANCE SHEET (Continued)

(dollar amounts in thousands) As of January 29, 2011	Pep Boys		Subsidiary Guarantors		Subsidiary Non-Guarantors		Consolidation/ Elimination			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	37,912	$	42,779	$	9,549	$	—		$	90,240
Accounts receivable, net		8,976		10,564		—		—			19,540
Merchandise inventories		198,062		366,340		—		—			564,402
Prepaid expenses		11,839		17,649		16,202		(17,148	)		28,542
Other current assets		2,260		936		62,655		(5,039	)		60,812
Total current assets		259,049		438,268		88,406		(22,187	)		763,536
Property and equipment—net		236,853		452,230		30,862		(18,964	)		700,981
Investment in subsidiaries		2,093,479		—		—		(2,093,479	)		—
Intercompany receivable		—		1,361,656		79,270		(1,440,926	)		—
Goodwill		2,549		—		—		—			2,549
Deferred income taxes		15,749		50,270		—		—			66,019
Other long-term assets		22,392		1,195		—		—			23,587
Total assets	$	2,630,071	$	2,303,619	$	198,538	$	(3,575,556	)	$	1,556,672
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	210,440	$	—	$	—	$	—		$	210,440
Trade payable program liability		56,287		—		—		—			56,287
Accrued expenses		23,341		62,168		167,667		(17,148	)		236,028
Deferred income taxes		23,024		38,350		—		(5,039	)		56,335
Current maturities of long-term debt		1,079		—		—		—			1,079
Total current liabilities		314,171		100,518		167,667		(22,187	)		560,169
Long-term debt less current maturities		295,122		—		—		—			295,122
Other long-term liability		35,870		34,176		—		—			70,046
Deferred gain from asset sales		65,522		106,317		—		(18,964	)		152,875
Intercompany liabilities		1,440,926		—		—		(1,440,926	)		—
Total stockholders' equity		478,460		2,062,608		30,871		(2,093,479	)		478,460
Total liabilities and stockholders' equity	$	2,630,071	$	2,303,619	$	198,538	$	(3,575,556	)	$	1,556,672

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

(dollar amounts in thousands) Year ended January 28, 2012	Pep Boys			Subsidiary Guarantors			Subsidiary Non-Guarantors			Consolidation/ Elimination			Consolidated
Merchandise sales	$	546,420		$	1,096,337		$	—		$	—		$	1,642,757
Service revenue		146,021			274,849			—			—			420,870
Other revenue		—			—			23,355			(23,355	)		—
Total revenues		692,441			1,371,186			23,355			(23,355	)		2,063,627
Costs of merchandise sales		392,065			763,939			—			(1,682	)		1,154,322
Costs of service revenue		132,635			267,302			—			(161	)		399,776
Costs of other revenue		—			—			20,140			(20,140	)		—
Total costs of revenues		524,700			1,031,241			20,140			(21,983	)		1,554,098
Gross profit from merchandise sales		154,355			332,398			—			1,682			488,435
Gross profit from service revenue		13,386			7,547			—			161			21,094
Gross profit from other revenue		—			—			3,215			(3,215	)		—
Total gross profit		167,741			339,945			3,215			(1,372	)		509,529
Selling, general and administrative expenses		156,184			291,372			329			(3,899	)		443,986
Net gain from dispositions of assets		(10	)		37			—			—			27
Operating profit		11,547			48,610			2,886			2,527			65,570
Non-operating (expenses) income		(16,492	)		64,157			2,528			(47,869	)		2,324
Interest expenses (income)		70,685			3,050			(2,087	)		(45,342	)		26,306
(Loss) earnings from continuing operations before income taxes		(75,630	)		109,717			7,501			—			41,588
Income tax (benefit) expense		(27,915	)		37,715			2,660			—			12,460
Equity in earnings of subsidiaries		76,579			—			—			(76,579	)		—
Earnings (loss) from continuing operations		28,864			72,002			4,841			(76,579	)		29,128
Loss from discontinued operations, net of tax		39			(264	)		—			—			(225	)
Net earnings (loss)	$	28,903		$	71,738		$	4,841		$	(76,579	)	$	28,903

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (Continued)

(dollar amounts in thousands) Year ended January 29, 2011	Pep Boys			Subsidiary Guarantors			Subsidiary Non-Guarantors			Consolidation/ Elimination			Consolidated
Merchandise sales	$	550,017		$	1,048,151		$	—		$	—		$	1,598,168
Service revenue		140,716			249,757			—			—			390,473
Other revenue		—			—			22,944			(22,944	)		—
Total revenues		690,733			1,297,908			22,944			(22,944	)		1,988,641
Costs of merchandise sales		387,425			724,586			—			(1,631	)		1,110,380
Costs of service revenue		124,675			231,387			—			(153	)		355,909
Costs of other revenue		—			—			16,709			(16,709	)		—
Total costs of revenues		512,100			955,973			16,709			(18,493	)		1,466,289
Gross profit from merchandise sales		162,592			323,565			—			1,631			487,788
Gross profit from service revenue		16,041			18,370			—			153			34,564
Gross profit from other revenue		—			—			6,235			(6,235	)		—
Total gross profit		178,633			341,935			6,235			(4,451	)		522,352
Selling, general and administrative expenses		158,699			290,111			346			(6,917	)		442,239
Net gain from dispositions of assets		1,873			594			—			—			2,467
Operating profit		21,807			52,418			5,889			2,466			82,580
Non-operating (expenses) income		(16,271	)		81,965			2,468			(65,553	)		2,609
Interest expenses (income)		65,422			26,497			(2,087	)		(63,087	)		26,745
(Loss) earnings from continuing operations before income taxes		(59,886	)		107,886			10,444			—			58,444
Income tax (benefit) expenses		(20,064	)		37,666			3,671			—			21,273
Equity in earnings of subsidiaries		76,519			—			—			(76,519	)		—
Earnings (loss) from continuing operations		36,697			70,220			6,773			(76,519	)		37,171
Loss from discontinued operations, net of tax		(66	)		(474	)		—			—			(540	)
Net earnings (loss)	$	36,631		$	69,746		$	6,773		$	(76,519	)	$	36,631

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (Continued)

(dollar amounts in thousands) Year ended January 30, 2010	Pep Boys			Subsidiary Guarantors			Subsidiary Non-Guarantors			Consolidation/ Elimination			Consolidated
Merchandise sales	$	521,428		$	1,012,191		$	—		$	—		$	1,533,619
Service revenue		133,240			244,079			—			—			377,319
Other revenue		—			—			22,904			(22,904	)		—
Total revenues		654,668			1,256,270			22,904			(22,904	)		1,910,938
Costs of merchandise sales		363,320			723,116			—			(1,632	)		1,084,804
Costs of service revenue		115,123			225,057			—			(153	)		340,027
Costs of other revenue		—			—			19,821			(19,821	)		—
Total costs of revenues		478,443			948,173			19,821			(21,606	)		1,424,831
Gross profit from merchandise sales		158,108			289,075			—			1,632			448,815
Gross profit from service revenue		18,117			19,022			—			153			37,292
Gross profit from other revenue		—			—			3,083			(3,083	)		—
Total gross profit		176,225			308,097			3,083			(1,298	)		486,107
Selling, general and administrative expenses		151,008			282,700			318			(3,765	)		430,261
Net gain from dispositions of assets		886			327			—			—			1,213
Operating profit		26,103			25,724			2,765			2,467			57,059
Non-operating (expenses) income		(15,516	)		86,810			2,473			(71,506	)		2,261
Interest expenses (income)		63,477			29,353			(2,087	)		(69,039	)		21,704
(Loss) earnings from continuing operations before income taxes		(52,890	)		83,181			7,325			—			37,616
Income tax (benefit) expenses		(17,638	)		28,559			2,582			—			13,503
Equity in earnings of subsidiaries		58,325			—			—			(58,325	)		—
Earnings (loss) from continuing operations		23,073			54,622			4,743			(58,325	)		24,113
Loss from discontinued operations, net of tax		(37	)		(1,040	)		—			—			(1,077	)
Net earnings (loss)	$	23,036		$	53,582		$	4,743		$	(58,325	)	$	23,036

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(dollar amounts in thousands) January 28, 2012	Pep Boys			Subsidiary Guarantors			Subsidiary Non- Guarantors			Consolidation Elimination			Consolidated
Cash flows from operating activities:
Net earnings (loss)	$	28,903		$	71,738		$	4,841		$	(76,579	)	$	28,903
Adjustments to reconcile net earnings (loss) to net cash provided by (used in) continuing operations:
Net loss from discontinued operations		(39	)		264			—			—			225
Depreciation and amortization		30,026			49,204			685			(373	)		79,542
Amortization of deferred gain from asset sales		(4,199	)		(8,776	)		—			373			(12,602	)
Stock compensation expense		3,237			—			—			—			3,237
Equity in earnings of subsidiaries		(76,579	)		—			—			76,579			—
Deferred income taxes		2,012			8,091			198			—			10,301
Gain from disposition of assets		10			(37	)		—			—			(27	)
Loss from asset impairments		237			1,382			—			—			1,619
Dividends received from subsidiary		2,507			—			—			(2,507	)		—
Other		(429	)		(144	)		—			—			(573	)
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable, prepaid expenses and other		(2,935	)		4,605			(551	)		1,272			2,391
Increase in merchandise inventories		(16,522	)		(26,234	)		—			—			(42,756	)
Increase (decrease) in accounts payable		33,272			(8,401	)		—			—			24,871
(Decrease) in accrued expenses		(5,528	)		(10,989	)		(956	)		(1,272	)		(18,745	)
(Decrease) increase in other long-term liabilities		(5,963	)		3,500			—			—			(2,463	)
Net cash (used in) provided by continuing operations		(11,990	)		84,203			4,217			(2,507	)		73,923
Net cash provided by (used in) discontinued operations		39			(312	)		—			—			(273	)
Net cash (used in) provided by operating activities		(11,951	)		83,891			4,217			(2,507	)		73,650
Cash flows from investing activities:
Cash paid for property and equipment		(36,168	)		(38,578	)		—			—			(74,746	)
Proceeds from disposition of assets		—			515			—			—			515
Collateral investments		(7,638	)		—			—			—			(7,638	)
Acquisitions, net of cash received.		(288	)		(42,613	)		—			—			(42,901	)
Other		(837	)		—			—			—			(837	)
Net cash used in Investing Activities		(44,931	)		(80,676	)		—			—			(125,607	)
Cash flows from financing activities:
Borrowings under line of credit agreements		2,008			3,713			—			—			5,721
Payments under line of credit agreements		(2,008	)		(3,713	)		—			—			(5,721	)
Borrowings on trade payable program liability		144,180			—			—			—			144,180
Payments on trade payable program liability		(115,253	)		—			—			—			(115,253	)
Payments for finance issuance cost		(2,441	)		—			—			—			(2,441	)
Debt payments		(1,079	)		—			—			—			(1,079	)
Intercompany borrowings (payments)		21,749			(18,813	)		(2,936	)		—			—
Dividends paid		(6,344	)		—			(2,507	)		2,507			(6,344	)
Other		898			—			—			—			898
Net cash provided by (used in) financing activities		41,710			(18,813	)		(5,443	)		2,507			19,961
Net decrease in cash		(15,172	)		(15,598	)		(1,226	)		—			(31,996	)
Cash and cash equivalents at beginning of year		37,912			42,779			9,549			—			90,240
Cash and cash equivalents at end of year	$	22,740		$	27,181		$	8,323		$	—		$	58,244

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (Continued)

(dollar amounts in thousands) January 29, 2011	Pep Boys			Subsidiary Guarantors			Subsidiary Non- Guarantors			Consolidation Elimination			Consolidated
Cash flows from operating activities:
Net earnings (loss)	$	36,631		$	69,746		$	6,773		$	(76,519	)	$	36,631
Adjustments to reconcile net earnings (loss) to net cash provided by (used in) continuing operations:
Net loss from discontinued operations		66			474			—			—			540
Depreciation and amortization		28,143			45,699			682			(373	)		74,151
Amortization of deferred gain from asset sales		(4,202	)		(8,773	)		—			373			(12,602	)
Stock compensation expense		3,497			—			—			—			3,497
Equity in earnings of subsidiaries		(76,519	)		—			—			76,519			—
Loss on debt retirement		200			—			—			—			200
Deferred income taxes		11,918			6,328			326			—			18,572
Gain from disposition of assets		(1,873	)		(594	)		—			—			(2,467	)
Loss from asset impairments		970			—			—			—			970
Dividends received from subsidiary		2,466			—			—			(2,466	)		—
Other		(272	)		(207	)		—			—			(479	)
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable, prepaid expenses and other		6,322			(1,359	)		2,110			(13	)		7,060
Increase in merchandise inventories		(2,748	)		(2,536	)		—			—			(5,284	)
Increase in accounts payable		7,466			—			—			—			7,466
(Decrease) in accrued expenses		(2,210	)		(435	)		(5,762	)		13			(8,394	)
Increase (decrease) in other long-term liabilities		1,694			(2,894	)		—			—			(1,200	)
Net cash provided by (used in) continuing operations		11,549			105,449			4,129			(2,466	)		118,661
Net cash used in discontinued operations		(64	)		(1,402	)		—			—			(1,466	)
Net cash provided by (used in) operating activities		11,485			104,047			4,129			(2,466	)		117,195
Cash flows from investing activities:
Cash paid for property and equipment		(33,182	)		(37,070	)		—			—			(70,252	)
Proceeds from disposition of assets		2,957			4,558			—			—			7,515
Acquisitions, net of cash received.		(288	)		—			—			—			(288	)
Collateral investments		(9,638	)		—			—			—			(9,638	)
Net cash used in continuing operations		(40,151	)		(32,512	)		—			—			(72,663	)
Net cash provided by discontinued operations		—			569			—			—			569
Net cash used in investing activities		(40,151	)		(31,943	)		—			—			(72,094	)
Cash flows from financing activities:
Borrowings under line of credit agreements		7,606			14,189			—			—			21,795
Payments under line of credit agreements		(7,606	)		(14,189	)		—			—			(21,795	)
Borrowings on trade payable program liability		121,824			—			—			—			121,824
Payments on trade payable program liability		(99,636	)		—			—			—			(99,636	)
Debt payments		(11,279	)		—			—			—			(11,279	)
Intercompany borrowings (payments)		34,921			(39,604	)		4,683			—			—
Dividends paid		(6,323	)		—			(2,466	)		2,466			(6,323	)
Other		1,227			—			—			—			1,227
Net cash provided by (used in) financing activities		40,734			(39,604	)		2,217			2,466			5,813
Net increase in cash		12,068			32,500			6,346			—			50,914
Cash and cash equivalents at beginning of year		25,844			10,279			3,203			—			39,326
Cash and cash equivalents at end of year	$	37,912		$	42,779		$	9,549		$	—		$	90,240

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (Continued)

(dollar amounts in thousands) January 30, 2010	Pep Boys			Subsidiary Guarantors			Subsidiary Non- Guarantors			Consolidation Elimination			Consolidated
Cash flows from operating activities:
Net earnings (loss)	$	23,036		$	53,582		$	4,743		$	(58,325	)	$	23,036
Adjustments to reconcile net earnings (loss) to net cash (used in) provided by continuing operations:
Net loss from discontinued operations		37			1,040			—			—			1,077
Depreciation and amortization		25,405			44,815			682			(373	)		70,529
Amortization of deferred gain from asset sales		(4,078	)		(8,620	)		—			373			(12,325	)
Stock compensation expense		2,575			—			—			—			2,575
Equity in earnings of subsidiaries		(58,325	)		—			—			58,325			—
Gain on debt retirement		(6,248	)		—			—			—			(6,248	)
Deferred income taxes		2,919			10,147			380			—			13,446
Gain from disposition of assets		(886	)		(327	)		—			—			(1,213	)
Loss from asset impairments		785			2,099			—			—			2,884
Dividends received from subsidiary		2,467			—			—			(2,467	)		—
Other		204			141			—			—			345
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable, prepaid expenses and other		8,232			520			(957	)		(620	)		7,175
Decrease in merchandise inventories		5,216			1,823			—			—			7,039
Decrease in accounts payable		(9,640	)		—			—			—			(9,640	)
Decrease in accrued expenses		(5,303	)		(5,999	)		(2,556	)		620			(13,238	)
(Decrease) increase in other long-term liabilities		(790	)		3,174			—			—			2,384
Net cash (used in) provided by continuing operations		(14,394	)		102,395			2,292			(2,467	)		87,826
Net cash used in discontinued operations		(37	)		(566	)		—			—			(603	)
Net cash (used in) provided by operating activities		(14,431	)		101,829			2,292			(2,467	)		87,223
Cash flows from investing activities:
Cash paid for property and equipment		(18,132	)		(25,082	)		—			—			(43,214	)
Proceeds from disposition of assets		4,845			9,931			—			—			14,776
Acquisition of Florida Tire, Inc.		(2,695	)		—			—			—			(2,695	)
Other		(500	)		—			—			—			(500	)
Net cash used in continuing operations		(16,482	)		(15,151	)		—			—			(31,633	)
Net cash provided by discontinued operations		—			1,762			—			—			1,762
Net cash used in investing activities		(16,482	)		(13,389	)		—			—			(29,871	)
Cash flows from financing activities:
Borrowings under line of credit agreements		88,237			161,467			—			—			249,704
Payments under line of credit agreements		(96,669	)		(176,897	)		—			—			(273,566	)
Borrowings on trade payable program liability		102,042			—			—			—			102,042
Payments on trade payable program liability		(99,873	)		—			—			—			(99,873	)
Debt payments		(11,930	)		(60	)		—			—			(11,990	)
Intercompany borrowings (payments)		67,872			(69,064	)		1,192			—			—
Dividends paid		(6,286	)		—			(2,467	)		2,467			(6,286	)
Other		611			—			—			—			611
Net cash provided by (used in) financing activities		44,004			(84,554	)		(1,275	)		2,467			(39,358	)
Net increase in cash		13,091			3,886			1,017			—			17,994
Cash and cash equivalents at beginning of year		12,753			6,393			2,186			—			21,332
Cash and cash equivalents at end of year	$	25,844		$	10,279		$	3,203		$	—		$	39,326