Pep Boys 2005 Annual Report Download - page 50

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THE PEP BOYS—MANNY, MOE & JACK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Years ended January 28, 2006, January 29, 2005 and January 31, 2004
(dollar amounts in thousands, except share data)
Sales of Stores in Discontinued Operations
During fiscal 2005, the Company sold a closed store for proceeds of $931 resulting in a pre-tax gain of $341, which was
recorded in discontinued operations on the consolidated statement of operations.
During fiscal 2004, the Company sold assets held for disposal for proceeds of $13,327 resulting in a loss of $91, which
was recorded in discontinued operations on the consolidated statement of operations.
Other Store Sales and Transfers
During the third quarter of 2005, the Company reclassified a store from assets held for use to assets held for disposal in
accordance with the provisions of SFAS 144.
During the second quarter of 2005, the Company sold a closed store classified as an asset held for disposal for proceeds
of $6,912 resulting in a pre-tax gain of $5,176, which was recorded in costs of merchandise sales on the consolidated statement
of operations in accordance with the provisions of SFAS 144.
Additionally, during the second quarter of 2005 the Company sold a closed store classified as an asset held for use for
proceeds of $659 resulting in a pre-tax loss of $502, which was recorded in costs of merchandise sales on the consolidated
statement of operations in accordance with the provisions of SFAS 144.
During the second quarter of 2005, the Company reclassified a store in assets held for disposal at April 29, 2005 to assets
held for use in accordance with the provisions of SFAS 144, as the Company concluded that the sale of the store was no longer
expected to occur within one year. This store is valued at its fair value at the date of the subsequent decision to transfer it,
which was lower than its carrying amount before it was classified as held for sale, adjusted for depreciation expense that would
have been recognized had the asset been continuously classified as held and used. The results of operations of this store are
not material for the years ended January 28, 2006 and January 29, 2005, respectively, and therefore have not been reclassified
into continuing operations in the consolidated statements of operations.
NOTE 9—SUPPLEMENTAL GUARANTOR INFORMATION
On December 14, 2004, the Company issued $200,000 aggregate principal amount of 7.50% Senior Subordinated Notes
due December 15, 2014; on May 21, 2002, the Company issued $150,000 aggregate principal amount of 4.25% Convertible
Senior Notes due June 1, 2007; and on January 27, 2006 the Company entered into a $200,000 senior secured term loan facility
bearing interest of LIBOR plus 3.0% due January 27, 2011 (March 1, 2007 if the Company’s $119,000 Convertible Senior
Notes have not been converted, repurchased or refinanced prior to March 1, 2007). All issuances are unsecured and jointly
and severally and fully and unconditionally guaranteed by the Company’s wholly-owned direct and indirect operating
subsidiaries, The Pep Boys Manny, Moe and Jack of California, Pep Boys - Manny, Moe and Jack of Delaware, Inc. and Pep
Boys - Manny, Moe and Jack of Puerto Rico, Inc. PBY Corporation was added as a subsidiary guarantor of both issuances on
January 6, 2005.
The following are consolidating balance sheets of the Company as of January 28, 2006 and January 29, 2005 and the
related condensed consolidating statements of operations and condensed consolidating statements of cash flows for the fiscal
years ended January 28, 2006, January 29, 2005 and January 31, 2004. The condensed consolidating statements of operations
and cash flows for the fiscal year ended January 31, 2004 have been reclassified to show PBY Corporation as a subsidiary
guarantor for comparative purposes.