Pep Boys 2007 Annual Report Download - page 100

THE PEP BOYS—MANNY, MOE & JACK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Years ended February 2, 2008, February 3, 2007 and January 28, 2006
(dollar amounts in thousands, except share data)
The aggregate minimum rental payments for such leases having initial terms of more than one year
are approximately:
Operating Capital Lease Financing
Year Leases Leases Obligations
2008 ........................................ $ 68,240 $263 $ 445
2009 ........................................ 60,572 162 412
2010 ........................................ 57,276 0 414
2011 ........................................ 54,890 0 415
2012 ........................................ 53,625 0 416
Thereafter ................................... 290,362 0 4,137
Aggregate minimum lease payments ................. $584,965 $425 $ 6,239
Less: interest on capital leases ..................... (26) (1,453)
Present Value of Net Minimum Lease Payments ........ $399 $ 4,786
Rental expenses incurred for operating leases in fiscal years 2007, 2006, and 2005 were $69,255,
$59,313 and $67,056, respectively.
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, except for a contract to purchase bulk oil for use in the
Company’s service bays which expires in 2011, 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 2, 2008 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 and 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.
During the first quarter of fiscal 2007, the Company repurchased 2,702,460 shares of Common Stock
for $50,841. The Company also disbursed $7,311 for 494,800 shares of Common Stock repurchased
during the fourth quarter of 2006. This program expired on September 30, 2007.
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 2, 2008, the
Company reflected 14,609,094 shares of its common stock at a cost of $227,291 as ‘‘cost of shares in
treasury’’ on the Company’s consolidated balance sheet.
RIGHTS AGREEMENT On December 31, 1997, the Company distributed as a dividend one
common share purchase right on each of its common shares. The rights will not be exercisable or
transferable apart from the Company’s common stock until a person or group, as defined in the rights
agreement (dated December 5, 1997), without the proper consent of the Company’s Board of
Directors, acquires 15% or more, or makes an offer to acquire 15% or more of the Company’s
outstanding stock. When exercisable, the rights entitle the holder to purchase one share of the
Company’s common stock for $125. Under certain circumstances, including the acquisition of 15% of
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10-K