Document and Entity Information	3 Months Ended
Document and Entity Information	Apr. 28, 2012	May 25, 2012
Document and Entity Information
Entity Registrant Name	PEP BOYS MANNY MOE & JACK
Entity Central Index Key	0000077449
Document Type	10-Q
Document Period End Date	Apr. 28, 2012
Amendment Flag	false
Current Fiscal Year End Date	--02-02
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		52,851,617
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q1

CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Apr. 28, 2012	Jan. 28, 2012
Current assets:
Cash and cash equivalents	$ 99,439	$ 58,244
Accounts receivable, less allowance for uncollectible accounts of $1,289 and $1,303	22,542	25,792
Merchandise inventories	627,314	614,136
Prepaid expenses	26,077	26,394
Other current assets	57,197	59,979
Total current assets	832,569	784,545
Property and equipment - net	688,909	696,339
Goodwill	46,917	46,917
Deferred income taxes	67,745	72,870
Other long-term assets	32,393	33,108
Total assets	1,668,533	1,633,779
Current liabilities:
Accounts payable	261,834	243,712
Trade payable program liability	100,414	85,214
Accrued expenses	228,675	221,705
Deferred income taxes	62,627	66,208
Current maturities of long-term debt	1,079	1,079
Total current liabilities	654,629	617,918
Long-term debt less current maturities	293,773	294,043
Other long-term liabilities	75,391	77,216
Deferred gain from asset sales	137,110	140,273
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
Additional paid-in capital	295,411	296,462
Retained earnings	424,083	423,437
Accumulated other comprehensive loss	(16,275)	(17,649)
Treasury stock, at cost - 15,716,914 shares and 15,803,322 shares	(264,146)	(266,478)
Total stockholders' equity	507,630	504,329
Total liabilities and stockholders' equity	$ 1,668,533	$ 1,633,779

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Apr. 28, 2012	Jan. 28, 2012
CONSOLIDATED BALANCE SHEETS
Accounts receivable, allowance for uncollectible accounts (in dollars)	$ 1,289	$ 1,303
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, authorized shares	500,000,000	500,000,000
Common stock, issued shares	68,557,041	68,557,041
Treasury stock, shares	15,716,914	15,803,322

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Apr. 28, 2012	Apr. 30, 2011
Merchandise sales	$ 412,332	$ 408,627
Service revenue	112,272	104,913
Total revenues	524,604	513,540
Costs of merchandise sales	290,856	285,329
Costs of service revenue	106,096	93,089
Total costs of revenues	396,952	378,418
Gross profit from merchandise sales	121,476	123,298
Gross profit from service revenue	6,176	11,824
Total gross profit	127,652	135,122
Selling, general and administrative expenses	119,710	108,900
Net (loss) gain from dispositions of assets	(2)	89
Operating profit	7,940	26,311
Non-operating income	470	587
Interest expense	6,516	6,497
Earnings from continuing operations before income taxes and discontinued operations	1,894	20,401
Income tax expense	760	7,996
Earnings from continuing operations before discontinued operations	1,134	12,405
Loss from discontinued operations, net of tax	(72)	(37)
Net earnings	1,062	12,368
Basic earnings per share:
Earnings from continuing operations before discontinued operations (in dollars per share)	$ 0.02	$ 0.23
Loss from discontinued operations, net of tax (in dollars per share)	$ 0.00	$ 0.00
Basic earnings per share (in dollars per share)	$ 0.02	$ 0.23
Diluted earnings per share:
Earnings from continuing operations before discontinued operations (in dollars per share)	$ 0.02	$ 0.23
Loss from discontinued operations, net of tax (in dollars per share)	$ 0.00	$ 0.00
Diluted earnings per share (in dollars per share)	$ 0.02	$ 0.23
Other comprehensive income:
Defined benefit plan adjustment, net of tax	354	220
Derivative financial instruments adjustment, net of tax	1,020	515
Other comprehensive income	1,374	735
Comprehensive income	$ 2,436	$ 13,103

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Apr. 28, 2012	Apr. 30, 2011
Cash flows from operating activities:
Net earnings	$ 1,062	$ 12,368
Adjustments to reconcile net earnings to net cash provided by continuing operations:
Loss from discontinued operations, net of tax	72	37
Depreciation and amortization	19,938	19,884
Amortization of deferred gain from asset sales	(3,163)	(3,143)
Stock compensation expense	652	638
Deferred income taxes	719	4,458
Net loss (gain) from disposition of assets	2	(89)
Other	(85)	(63)
Changes in assets and liabilities, net of the effects of acquisitions:
Decrease in accounts receivable, prepaid expenses and other	7,124	7,406
Increase in merchandise inventories	(13,178)	(13,323)
Increase in accounts payable	18,122	21,223
Increase (decrease) in accrued expenses	6,385	(8,242)
Increase (decrease) in other long-term liabilities	466	(2,458)
Net cash provided by continuing operations	38,116	38,696
Net cash used in discontinued operations	(106)	(66)
Net cash provided by operating activities	38,010	38,630
Cash flows from investing activities:
Capital expenditures	(11,940)	(18,123)
Proceeds from dispositions of assets		89
Premiums paid on life insurance policies		(741)
Collateral investment		(4,763)
Other		(144)
Net cash used in investing activities	(11,940)	(23,682)
Cash flows from financing activities:
Borrowings under line of credit agreements	524	1,067
Payments under line of credit agreements	(524)	(1,067)
Borrowings on trade payable program liability	42,722	24,589
Payments on trade payable program liability	(27,522)	(27,816)
Debt payments	(270)	(270)
Dividends paid		(1,585)
Other	195	268
Net cash provided by (used in) financing activities	15,125	(4,814)
Net increase in cash and cash equivalents	41,195	10,134
Cash and cash equivalents at beginning of period	58,244	90,240
Cash and cash equivalents at end of period	99,439	100,374
Supplemental disclosure of cash flow information:
Cash paid for income taxes	1,227	57
Cash paid for interest	2,940	2,885
Non-cash investing activities:
Accrued purchases of property and equipment	$ 1,970	$ 993

BASIS OF PRESENTATION

3 Months Ended

Apr. 28, 2012

BASIS OF PRESENTATION

BASIS OF PRESENTATION

NOTE 1—BASIS OF PRESENTATION

The Pep Boys — Manny, Moe & Jack and subsidiaries (the “Company”) consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of the Company’s financial statements requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, sales, costs and expenses, as well as the disclosure of contingent assets and liabilities and other related disclosures. The Company bases its estimates on historical experience and on various other assumptions that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of the Company’s assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates, and the Company includes any revisions to its estimates in the results for the period in which the actual amounts become known.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted, as permitted by Rule 10-01 of the Securities and Exchange Commission’s Regulation S-X, “Interim Financial Statements.” It is suggested that these consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 2012. The results of operations for the thirteen weeks ended April 28, 2012 are not necessarily indicative of the operating results for the full fiscal year.

The consolidated financial statements presented herein are unaudited. In the opinion of management, all adjustments necessary to present fairly the financial position, results of operations and cash flows as of April 28, 2012 and for all periods presented have been made.

The Company’s fiscal year ends on the Saturday nearest January 31. Accordingly, references to fiscal years 2012 and 2011 refer to the year ending February 2, 2013 and the year ended January 28, 2012, respectively.

The Company operated 738 store locations at April 28, 2012, of which 232 were owned and 506 were leased.

NEW ACCOUNTING STANDARDS

3 Months Ended

Apr. 28, 2012

NEW ACCOUNTING STANDARDS

NEW ACCOUNTING STANDARDS

NOTE 2—NEW ACCOUNTING STANDARDS

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2011-04, “Fair Value Measurement (Topic 820) — Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs” (“ASU 2011-04”), which is effective for annual reporting periods beginning after December 15, 2011. This guidance amends certain accounting and disclosure requirements related to fair value measurements. The adoption of ASU 2011-04 did not have a material impact on the consolidated financial statements.

In June of 2011, the FASB issued ASU No. 2011-05, “Presentation of Comprehensive Income” (“ASU 2011-05”). ASU 2011-05 was issued to improve the comparability of financial reporting between U.S. GAAP and International Financial Reporting Standards, and eliminates previous U.S. GAAP guidance that allowed an entity to present components of other comprehensive income (“OCI”) as part of its statement of changes in shareholders’ equity. With the issuance of ASU 2011-05, companies are now required to report all components of OCI either in a single continuous statement of total comprehensive income, which includes components of both OCI and net income, or in a separate statement appearing consecutively with the statement of income. ASU 2011-05 does not affect current guidance for the accounting of the components of OCI, or which items are included within total comprehensive income, and is effective for periods beginning after December 15, 2011. On December 23, 2011, the FASB issued ASU 2011-12, which indefinitely defers the provision in ASU 2011-05 that required entities to present reclassification adjustments out of accumulated other comprehensive income by component in both the statements in which net income is presented and the statement in which OCI is presented. The other provisions in ASU 2011-05 are unaffected by the deferral. The adoption of ASU 2011-05 affected presentation only and therefore did not have an impact on the Company’s consolidated financial condition, results of operations or cash flows.

In September 2011, the FASB issued ASU 2011-08, “Intangibles — Goodwill and Other (Topic 350) —Testing Goodwill for Impairment” (“ASU 2011-08”). The new guidance provides entities with the option to perform a qualitative assessment of whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount before applying the quantitative two-step goodwill impairment test. If an entity concludes that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it would not be required to perform the quantitative two-step goodwill impairment test. Entities also have the option to bypass the assessment of qualitative factors for any reporting unit in any period and proceed directly to performing the first step of the quantitative two-step goodwill impairment test, as was required prior to the issuance of this new guidance. The new guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The adoption of ASU 2011-08 will not have a material impact on the consolidated financial statements.

MERCHANDISE INVENTORIES

3 Months Ended

Apr. 28, 2012

MERCHANDISE INVENTORIES

MERCHANDISE INVENTORIES

NOTE 3—MERCHANDISE INVENTORIES

Merchandise inventories are valued at the lower of cost or market. Cost is determined by using the last-in, first-out (“LIFO”) method. An actual valuation of inventory under the LIFO method can be made only at the end of each fiscal year based on inventory and costs at that time. Accordingly, interim LIFO calculations must be based on management’s estimates of expected fiscal year-end inventory levels and costs. If the first-in, first-out (“FIFO”) method of costing inventory had been used by the Company, inventory would have been $554.1 million and $536.4 million as of April 28, 2012 and January 28, 2012, respectively.

The Company’s inventory, consisting primarily of automotive parts and accessories, is used on vehicles. Because of the relatively long lives of vehicles, along with historical experiences of returning most excess inventory to vendors for full credit, the risk of obsolescence is minimal. The Company establishes a reserve for excess inventory for instances where less than full credit will be received for such returns or where the Company anticipates items will be sold at retail prices that are less than recorded costs. The reserve is based on management’s judgment, including estimates and assumptions regarding marketability of products, the market value of inventory to be sold in future periods and on historical experiences where the Company received less than full credit from vendors for product returns. The Company also provides for estimated inventory shrinkage based upon historical levels and the results of its cycle counting program. The Company’s inventory adjustments for these matters were approximately $4.4 million and $4.6 million at April 28, 2012 and January 28, 2012, respectively.

PROPERTY AND EQUIPMENT

3 Months Ended

Apr. 28, 2012

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

NOTE 4—PROPERTY AND EQUIPMENT

The Company’s property and equipment as of April 28, 2012 and January 28, 2012 was as follows:

(dollar amounts in thousands)	April 28, 2012			January 28, 2012

Property and equipment
Land	$	204,023		$	204,023
Buildings and improvements	880,733			875,999
Furniture, fixtures and equipment	730,700			723,938
Construction in progress	3,772			3,279
Accumulated depreciation and amortization	(1,130,319		)	(1,110,900		)
Property and equipment — net	$	688,909		$	696,339

WARRANTY RESERVE

3 Months Ended

Apr. 28, 2012

WARRANTY RESERVE

WARRANTY RESERVE

NOTE 5—WARRANTY RESERVE

The Company provides warranties for both its merchandise sales and service labor. Warranties for merchandise are generally covered by the respective vendors, with the Company covering any costs above the vendor’s stipulated allowance. Service labor is warranted in full by the Company for a limited specific time period. The Company establishes its warranty reserves based on historical experiences. These costs are included in either costs of merchandise sales or costs of service revenues in the consolidated statements of operations.

The reserve for warranty cost activity for the thirteen weeks ended April 28, 2012 and the fifty-two weeks ended January 28, 2012 is as follows:

(dollar amounts in thousands)	April 28, 2012			January 28, 2012
Beginning balance	$	673		$	673

Additions related to current period sales	2,804			12,122

Warranty costs incurred in current period	(2,804		)	(12,122		)

Ending balance	$	673		$	673

DEBT AND FINANCING ARRANGEMENTS

3 Months Ended

Apr. 28, 2012

DEBT AND FINANCING ARRANGEMENTS

DEBT AND FINANCING ARRANGEMENTS

NOTE 6—DEBT AND FINANCING ARRANGEMENTS

The following are the components of debt and financing arrangements:

(dollar amounts in thousands)	April 28, 2012			January 28, 2012
7.50% Senior Subordinated Notes, due December 2014	$	147,565		$	147,565
Senior Secured Term Loan, due October 2013	147,287			147,557
Revolving Credit Agreement, through January 2016	—			—
Long-term debt	294,852			295,122
Current maturities	(1,079		)	(1,079		)
Long-term debt less current maturities	$	293,773		$	294,043

As of April 28, 2012, 126 stores collateralized the Senior Secured Term Loan.

The Company’s ability to borrow under its Revolving Credit Agreement is based on a specific borrowing base consisting of inventory and accounts receivable. The interest rate on this credit line is daily LIBOR plus 2.00% to 2.50% based upon the then current availability under the Agreement. As of April 28, 2012, there were no outstanding borrowings under this agreement and $29.6 million of availability was utilized to support outstanding letters of credit. Taking this into account and the borrowing base requirements, as of April 28, 2012, there was $189.4 million of availability remaining.

Several of the Company’s debt agreements require compliance with covenants. The most restrictive of these covenants, an earnings before interest, taxes, depreciation and amortization (“EBITDA”) requirement, is triggered if the Company’s availability under its Revolving Credit Agreement drops below $50.0 million. As of April 28, 2012, the Company was in compliance with all financial covenants contained in its debt agreements.

Interest rates that are currently available to the Company for issuance of debt with similar terms and remaining maturities are used to estimate fair value for debt issues that are not quoted on an exchange and are considered a level 2 measure under the fair value hierarchy. The estimated fair value of long-term debt including current maturities was $296.1 million and $293.6 million as of April 28, 2012 and January 28, 2012, respectively.

ACCUMULATED OTHER COMPREHENSIVE LOSS

3 Months Ended

Apr. 28, 2012

ACCUMULATED OTHER COMPREHENSIVE LOSS

ACCUMULATED OTHER COMPREHENSIVE LOSS

NOTE 7—ACCUMULATED OTHER COMPREHENSIVE LOSS

The components of accumulated other comprehensive loss are:

(dollar amounts in thousands)	April 28, 2012			January 28, 2012

Defined benefit plan adjustment, net of tax	$	(9,342	)	$	(9,696	)
Derivative financial instrument adjustment, net of tax	(6,933		)	(7,953		)
Accumulated other comprehensive loss	$	(16,275	)	$	(17,649	)

EARNINGS PER SHARE

3 Months Ended

Apr. 28, 2012

EARNINGS PER SHARE

EARNINGS PER SHARE

NOTE 8—EARNINGS PER SHARE

The following table presents the calculation of basic and diluted earnings per share for earnings from continuing operations and net earnings:

	Thirteen Weeks Ended
(dollar amounts in thousands, except per share amounts)	April 28, 2012			April 30, 2011

(a) Earnings from continuing operations	$	1,134		$	12,405

Loss from discontinued operations, net of tax	(72		)	(37		)

Net earnings	$	1,062		$	12,368

(b) Basic average number of common shares outstanding during period	53,071			52,881

Common shares assumed issued upon exercise of dilutive stock options, net of assumed repurchase, at the average market price	878			685

(c) Diluted average number of common shares assumed outstanding during period	53,949			53,566

Basic earnings per share:
Earnings from continuing operations (a/b)	$	0.02		$	0.23
Discontinued operations, net of tax	—			—
Basic earnings per share	$	0.02		$	0.23

Diluted earnings per share:
Earnings from continuing operations (a/c)	$	0.02		$	0.23
Discontinued operations, net of tax	—			—
Diluted earnings per share	$	0.02		$	0.23

At April 28, 2012 and April 30, 2011, respectively, there were 2,654,000 and 2,717,000 outstanding options and restricted stock units. Certain stock options were excluded from the calculation of diluted earnings per share because their exercise prices were greater than the average market price of the common shares for the periods then ended and therefore would be anti-dilutive. The total number of such shares excluded from the diluted earnings per share calculation are 299,000 and 773,000 for the thirteen weeks ended April 28, 2012 and April 30, 2011, respectively.

BENEFIT PLANS

3 Months Ended

Apr. 28, 2012

BENEFIT PLANS

BENEFIT PLANS

NOTE 9—BENEFIT PLANS

The Company has a qualified 401(k) savings plan and a separate plan for employees residing in Puerto Rico, which cover all full-time employees who are at least 21 years of age with one or more years of service. The Company also maintains a non-qualified defined contribution Supplemental Executive Retirement Plan (the “Account Plan”) for key employees designated by the Board of Directors. The Company’s contribution to these plans for fiscal 2012 is contingent upon meeting certain performance metrics. The Company did not record any contribution expense for these plans in the first quarter of 2012 or 2011.

The Company also has a frozen defined benefit pension plan covering the Company’s full-time employees hired on or before February 1, 1992. The Company’s expense for its pension plan follows:

	Thirteen weeks ended
(dollar amounts in thousands)	April 28, 2012			April 30, 2011

Interest cost	$	619		$	651
Expected return on plan assets	(704		)	(651		)
Amortization of net loss	566			351
Net periodic benefit cost	$	481		$	351

The Plan is subject to minimum funding requirements of the Employee Retirement Income Security Act of 1974 as amended. While the Company had no minimum funding requirement during fiscal 2011, it made a $3.0 million discretionary contribution to the defined benefit pension plan on April 28, 2011. There were no discretionary contributions made during the first quarter of 2012.

During the third quarter of fiscal 2011, the Company began the process of terminating the Plan. The termination of the Plan is expected to be completed by the end of fiscal 2012. In order to terminate the Plan, in accordance with Internal Revenue Service and Pension Benefit Guaranty Corporation requirements, the Company is required to fully fund the Plan on a termination basis and will commit to contribute the additional assets necessary to do so. Plan participants will not be adversely affected by the Plan termination, but rather will have their benefits either converted into a lump sum cash payment or an annuity contract placed with an insurance carrier.

FAIR VALUE MEASUREMENTS AND DERIVATIVES

3 Months Ended

Apr. 28, 2012

FAIR VALUE MEASUREMENTS AND DERIVATIVES

FAIR VALUE MEASUREMENTS AND DERIVATIVES

NOTE 10—FAIR VALUE MEASUREMENTS AND DERIVATIVES

The Company’s fair value measurements consist of (a) financial assets and liabilities that are recognized or disclosed at fair value in the Company’s financial statements on a recurring basis (at least annually) and (b) all non-recurring non-financial assets and liabilities.

Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. There is a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances. The hierarchy is broken down into three levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs include quoted prices for similar assets or liabilities in active markets. Level 3 inputs are unobservable inputs for the asset or liability. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The following table provides information by level for assets and liabilities that are measured at fair value, on a recurring basis:

(dollar amounts in thousands)	Fair Value at		Fair Value Measurements Using Inputs Considered as
Description	April 28, 2012		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	99,439	$	99,439	$	—	$	—
Collateral investments (1)	17,276		17,276		—		—
Rabbi trust assets (1)	3,696		—		3,696		—
Liabilities:
Other liabilities
Derivative liability (2)	10,929		—		10,929		—

(dollar amounts in thousands)	Fair Value at		Fair Value Measurements Using Inputs Considered as
Description	January 28, 2012		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	58,244	$	58,244	$	—	$	—
Collateral investments (1)	17,276		17,276		—		—
Rabbi trust assets (1)	3,576		—		3,576		—
Liabilities:
Other liabilities
Derivative liability (2)	12,540		—		12,540		—

(1) included in other long-term assets

(2) included in other long-term liabilities

As of January 28, 2012 the Company invested $17.3 million in restricted accounts as collateral for its retained liabilities included within existing insurance programs in lieu of previously outstanding letters of credit, of which $4.8 million was invested during the first quarter of fiscal year 2011.

The Company has one interest rate swap designated as a cash flow hedge on $145.0 million of the Company’s Senior Secured Term Loan that is due in October 2013. The swap is used to minimize interest rate exposure and overall interest costs by converting the variable component of the total interest rate to a fixed rate of 5.036%. Since February 1, 2008, this swap was deemed to be fully effective and all adjustments in the interest rate swap’s fair value have been recorded to accumulated other comprehensive loss.

The table below shows the effect of the Company’s interest rate swap on the consolidated financial statements for the periods indicated:

(dollar amounts in thousands)	Amount of Gain in Other Comprehensive Income (Effective Portion)		Earnings Statement Classification	Amount of Loss Recognized in Earnings (Effective Portion) (a)
Thirteen weeks ended April 28, 2012	$	1,007	Interest expense	$	(1,654	)
Thirteen weeks ended April 30, 2011	$	498	Interest expense	$	(1,719	)

(a) represents the effective portion of the loss reclassified from accumulated other comprehensive loss

The fair value of the derivative was $10.9 million and $12.5 million payable at April 28, 2012 and January 28, 2012, respectively. Of the $1.6 million decrease in the fair value during the thirteen weeks ended April 28, 2012, $1.0 million net of tax was recorded to accumulated other comprehensive loss on the consolidated balance sheet.

Non-financial assets measured at fair value on a non-recurring basis:

Certain assets are measured at fair value on a non-recurring basis, that is, the assets are subject to fair value adjustments in certain circumstances such as when there is evidence of impairment. These measures of fair value, and related inputs, are considered level 2 or level 3 measures under the fair value hierarchy. There were no remeasurements of non-financial assets in the first quarter of 2012 or 2011.

LEGAL MATTERS

3 Months Ended

Apr. 28, 2012

LEGAL MATTERS

LEGAL MATTERS

NOTE 11—LEGAL MATTERS

The Company is party to various actions and claims arising in the normal course of business. The Company believes that amounts accrued for awards or assessments in connection with all such matters are adequate and that the ultimate resolution of these matters will not have a material adverse effect on the Company’s financial position. However, there exists a reasonable possibility of loss in excess of the amounts accrued, the amount of which cannot currently be estimated. While the Company does not believe that the amount of such excess loss could be material to the Company’s financial position, any such loss could have a material adverse effect on the Company’s results of operations in the period(s) during which the underlying matters are resolved.

MERGER UPDATE

3 Months Ended

Apr. 28, 2012

MERGER UPDATE

MERGER UPDATE

NOTE 12—MERGER UPDATE

On May 29, 2012, the Company, Auto Acquisition Company, LLC, a Delaware limited liability company (“Parent”), Auto Mergersub, Inc., a Delaware corporation (“Merger Sub”), and The Gores Group, LLC, a Delaware limited liability company (“Gores”), entered into a Settlement Agreement (the “Settlement Agreement”) relating to the previously announced Agreement and Plan of Merger, dated as of January 29, 2012, by and among the Company, Parent and Merger Sub (the “Merger Agreement”). The Settlement Agreement provides for, among other things: (i) the termination of the Merger Agreement and the related financing commitments from Gores Capital Partners II, L.P. and Gores Capital Partners III, L.P.; (ii) Parent’s agreement to pay a $50.0 million fee to the Company and reimburse the Company for certain of its merger related expenses; and (iii) mutual releases of the parties. Each of Gores Capital Partners II, L.P. and Gores Capital Partners III, L.P. , investment funds affiliated with Gores, have entered into guarantee agreements in favor of the Company pursuant to which each fund has agreed to guarantee its pro rata portion of amounts payable by Parent under the Settlement Agreement.

SUPPLEMENTAL GUARANTOR INFORMATION

3 Months Ended

Apr. 28, 2012

SUPPLEMENTAL GUARANTOR INFORMATION

SUPPLEMENTAL GUARANTOR INFORMATION

NOTE 13—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), (collectively, the “Subsidiary Guarantors”). The Notes are not guaranteed by the Company’s wholly owned subsidiary, Colchester Insurance Company.

The following consolidating information presents, in separate columns, the condensed consolidating balance sheets as of April 28, 2012 and January 28, 2012 and the related condensed consolidating statements of operations and comprehensive income for the thirteen weeks ended April 28, 2012 and April 30, 2011 and condensed consolidating statements of cash flows for the thirteen weeks ended April 28, 2012 and April 30, 2011 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, which affected net cash provided by (used in) financing activities for the thirteen weeks ended April 30, 2011.

CONDENSED CONSOLIDATING BALANCE SHEET

(dollars in thousands)

(unaudited)

As of April 28, 2012	Pep Boys		Subsidiary Guarantors		Subsidiary Non- Guarantors		Consolidation/ Elimination			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	27,764	$	61,170	$	10,505	$	—		$	99,439
Accounts receivable, net	10,664		11,878		—		—			22,542
Merchandise inventories	221,428		405,886		—		—			627,314
Prepaid expenses	12,806		14,701		10,921		(12,351		)	26,077
Other current assets	1,803		—		60,235		(4,841		)	57,197
Total current assets	274,465		493,635		81,661		(17,192		)	832,569
Property and equipment—net	246,121		431,278		30,006		(18,496		)	688,909
Investment in subsidiaries	2,188,204		—		—		(2,188,204		)	—
Intercompany receivables	—		1,377,856		75,537		(1,453,393		)	—
Goodwill	2,549		44,368		—		—			46,917
Deferred income taxes	16,586		51,159		—		—			67,745
Other long-term assets	30,480		1,913		—		—			32,393
Total assets	$	2,758,405	$	2,400,209	$	187,204	$	(3,677,285	)	$	1,668,533
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	261,834	$	—	$	—	$	—		$	261,834
Trade payable program liability	100,414		—		—		—			100,414
Accrued expenses	24,543		62,227		154,256		(12,351		)	228,675
Deferred income taxes	25,985		41,483		—		(4,841		)	62,627
Current maturities of long-term debt	1,079		—		—		—			1,079
Total current liabilities	413,855		103,710		154,256		(17,192		)	654,629
Long-term debt less current maturities	293,773		—		—		—			293,773
Other long-term liabilities	29,496		45,895		—		—			75,391
Deferred gain from asset sales	60,258		95,348		—		(18,496		)	137,110
Intercompany liabilities	1,453,393		—		—		(1,453,393		)	—
Total stockholders’ equity	507,630		2,155,256		32,948		(2,188,204		)	507,630
Total liabilities and stockholders’ equity	$	2,758,405	$	2,400,209	$	187,204	$	(3,677,285	)	$	1,668,533

CONDENSED CONSOLIDATING BALANCE SHEET

(dollars in thousands)

(unaudited)

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 receivables	—		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 liabilities	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 STATEMENT OF OPERATIONS

AND COMPREHENSIVE INCOME

(dollars in thousands)

(unaudited)

			Subsidiary		Subsidiary Non-		Consolidation /
Thirteen Weeks Ended April 28, 2012	Pep Boys		Guarantors		Guarantors		Elimination			Consolidated

Merchandise sales	$	136,583	$	275,749	$	—	$	—		$	412,332
Service revenue	38,041		74,231		—		—			112,272
Other revenue	—		—		6,159		(6,159		)	—
Total revenues	174,624		349,980		6,159		(6,159		)	524,604
Costs of merchandise sales	97,710		193,606		—		(460		)	290,856
Costs of service revenue	34,286		71,857		—		(47		)	106,096
Costs of other revenue	—		—		6,572		(6,572		)	—
Total costs of revenues	131,996		265,463		6,572		(7,079		)	396,952
Gross profit from merchandise sales	38,873		82,143		—