Pep Boys 2006 Annual Report Download - page 88

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THE PEP BOYS—MANNY, MOE & JACK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Years ended February 3, 2007, January 28, 2006 and January 29, 2005
(dollar amounts in thousands, except share data)
49
The aggregate minimum rental payments for such leases having initial terms of more than one year
are approximately:
Year
Operating
Leases
Capital
Leases
2007 ............................................................. $ 57,670 $290
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53,788 260
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47,114 183
2010 ............................................................. 43,548 —
2011 ............................................................. 41,179 —
Thereafter........................................................ 239,550 —
Aggregate minimum lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $482,849 $733
Less:interestoncapitalleases....................................... (48)
Present Value of Net Minimum Lease Payments. . . . . . . . . . . . . . . . . . . . . . . $685
Rental expenses incurred for operating leases in fiscal years 2006, 2005, and 2004 were $59,953,
$67,601 and $60,941, respectively.
In October 2001, the Company entered into a contractual commitment to purchase media advertising
services with equal annual purchase requirements totaling $39,773 over four years. During the second
quarter of fiscal 2004, it was determined that the Company would be unable to meet its obligation for the
2004 contract year, which ended on November 30, 2004. As a result, the Company recorded a $1,579
charge to selling, general and administrative expenses in the quarter ended July 31, 2004 related to the
anticipated shortfall in this purchase commitment. This agreement expired in October 2005.
Our open purchase orders are based on current inventory or operational needs and are fulfilled by our
vendors within short periods of time. We currently do not have minimum purchase commitments under
our vendor supply agreements and generally our open purchase orders (orders that have not been shipped)
are not binding agreements. Those purchase obligations that are in transit from our vendors at February 3,
2007 are considered to be a contractual obligation.
NOTE 6—STOCKHOLDERS’ EQUITY
SHARE REPURCHASE—TREASURY STOCK On September 7, 2006, the Company renewed its
share repurchase program, which had approximately $45,000 of its original $100,000 authorization
remaining and was set to expire on September 30, 2006. Under the renewed program, the Board reset the
authority back to $100,000 for repurchases to be made from time to time in the open market or in privately
negotiated transactions through September 30, 2007. The Company repurchased approximately 494,800
shares during fiscal 2006 for approximately $7,311.
All of these repurchased shares were placed into the Company’s treasury. A portion of the treasury
shares will be used by the Company to provide benefits to employees under its compensation plans and in
conjunction with the Company’s dividend reinvestment program. As of February 3, 2007, the Company
reflected 12,427,687 shares of its common stock at a cost of $185,339 as “cost of shares in treasury” on the
Company’s consolidated balance sheet.