<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------
FORM 10-Q
(Mark One)
(x) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended May 1, 1999
OR
( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period
from to
----------- ----------
Commission File No. 1-3381
------
The Pep Boys - Manny, Moe & Jack
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 23-0962915
------------------------------- ---------------------------
(State or other jurisdiction of (I.R.S. Employer ID number)
incorporation or organization)
3111 W. Allegheny Ave. Philadelphia, PA 19132
---------------------------------------- ----------
(Address of principal executive offices) (Zip code)
215-430-9000
----------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities and Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports); and (2) has been subject
to such filing requirements for the past 90 days. Yes ( x ) No ( )
As of May 1, 1999 there were 52,607,972 shares of the registrant's Common
Stock outstanding.
1
<PAGE>
- -------------------------------------------------------------------
Index Page
- -------------------------------------------------------------------
PART I - FINANCIAL INFORMATION
- ------------------------------
Item 1. Condensed Consolidated
Financial Statements (Unaudited)
Consolidated Balance Sheets -
May 1, 1999 and January 30, 1999 3
Consolidated Statements of Earnings -
Thirteen weeks ended May 1, 1999
and May 2, 1998 4
Condensed Consolidated Statements of
Cash Flows - Thirteen weeks ended
May 1, 1999 and May 2, 1998 5
Notes to Condensed Consolidated
Financial Statements 6-7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations 8-12
PART II - OTHER INFORMATION 13
- ---------------------------
SIGNATURE 14
2
<PAGE>
<TABLE>
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollar amounts in thousands, except per share amounts)
<CAPTION>
May 1, 1999 Jan. 30, 1999*
------------- -------------
(Unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents.................................. $ 30,395 $ 114,548
Accounts receivable, net................................... 21,165 17,393
Merchandise inventories.................................... 526,434 527,397
Prepaid expenses........................................... 22,560 36,634
Deferred income taxes...................................... 17,073 17,073
Other...................................................... 38,530 41,099
------------- -------------
Total Current Assets.................................... 656,157 754,144
Property and Equipment-at cost:
Land....................................................... 285,826 281,804
Building and improvements.................................. 919,080 907,309
Furniture, fixtures and equipment.......................... 604,086 596,840
Construction in progress................................... 32,396 30,951
------------ -------------
1,841,388 1,816,904
Less accumulated depreciation and amortization............. 509,395 486,648
------------- -------------
Total Property and Equipment............................ 1,331,993 1,330,256
Other........................................................ 12,354 11,712
------------- -------------
Total Assets.................................................. $2,000,504 $2,096,112
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable........................................... $ 230,845 $ 240,391
Accrued expenses........................................... 211,864 199,551
Current maturities of convertible debt..................... 72,294 72,294
Current maturities of long-term debt....................... 173 170
------------- -------------
Total Current Liabilities............................... 515,176 512,406
Long-Term Debt, less current maturities...................... 602,806 526,851
Convertible Debt, less current maturities.................... 166,501 164,863
Deferred Income Taxes........................................ 80,208 80,208
Commitments and Contingencies
Stockholders' Equity:
Common Stock, par value $1 per share:
Authorized 500,000,000 shares - Issued
63,884,670 and 63,847,640................................. 63,885 63,848
Additional paid-in capital................................. 176,397 175,940
Retained earnings.......................................... 642,600 636,475
Accumulated other comprehensive income..................... (4,210) (4,210)
------------- ------------
878,672 872,053
Less:
Cost of shares in treasury - 11,276,698 shares, at cost 183,595 -
Cost of shares in benefits trust - 2,195,270 and
2,232,500 shares, at cost 59,264 60,269
------------- ------------
Total Stockholders' Equity.............................. 635,813 811,784
------------- ------------
Total Liabilities and Stockholders' Equity.................... $2,000,504 $2,096,112
============= ============
See notes to condensed consolidated financial statements.
*Taken from the audited financial statements at Jan. 30, 1999.
</TABLE>
3
<PAGE>
<TABLE>
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(dollar amounts in thousands, except per share amounts)
UNAUDITED
<CAPTION>
Thirteen weeks ended
-------------------------------
May 1, 1999 May 2, 1998
------------- -------------
<S> <C> <C>
Merchandise Sales.................................... $488,698 $483,636
Service Revenue...................................... 109,618 100,588
------------- -------------
Total Revenues....................................... 598,316 584,224
Costs of Merchandise Sales........................... 349,173 349,977
Costs of Service Revenue............................. 87,116 79,865
------------- -------------
Total Costs of Revenues.............................. 436,289 429,842
Gross Profit from Merchandise Sales.................. 139,525 133,659
Gross Profit from Service Revenue.................... 22,502 20,723
------------- -------------
Total Gross Profit................................... 162,027 154,382
Selling, General and Administrative Expenses......... 132,987 126,239
------------- -------------
Operating Profit..................................... 29,040 28,143
Nonoperating Income.................................. 308 84
Interest Expense..................................... 13,578 12,512
------------- -------------
Earnings Before Income Taxes 15,770 15,715
Income Taxes......................................... 5,677 5,657
------------- -------------
Net Earnings......................................... 10,093 10,058
Retained Earnings, beginning of period............... 636,475 647,505
Cash Dividends....................................... 3,558 3,999
Effect of Shares Repurchased from Benefits Trust..... 410 -
------------- -------------
Retained Earnings, end of period..................... $642,600 $653,564
============= =============
Basic Earnings per Share............................. $ .20 $ .16
Diluted Earnings per Share........................... $ .20 $ .16
============= =============
Cash Dividends per Share............................. $ .0675 $ .0650
============= =============
See notes to condensed consolidated financial statements.
</TABLE>
4
<PAGE>
<TABLE>
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollar amounts in thousands)
UNAUDITED
<CAPTION>
Thirteen weeks ended
----------------------------------
May 1, 1999 May 2, 1998
-------------- --------------
<S> <C> <C>
Net Cash Provided by (Used in) Operating Activities............. $ 49,493 $(115,980)
Cash Flows from Investing Activities:
Capital expenditures............................................ (27,706) (52,541)
Proceeds from sales of assets................................... 2,055 450
------------- -------------
Net Cash Used in Investing Activities........................... (25,651) (52,091)
Cash Flows from Financing Activities:
Net borrowings under line of credit agreements.................. - 72,000
Net proceeds from issuance of notes............................. 76,000 99,429
Reduction of long-term debt..................................... (42) (39)
Dividends paid.................................................. (3,558) (3,999)
Purchase of treasury shares..................................... (180,889) -
Proceeds from exercise of stock options
and dividend reinvestment plan................................ 494 2,107
------------- -------------
Net Cash (Used in) Provided by Financing Activities............. (107,995) 169,498
------------- -------------
Net (Decrease) Increase in Cash...................................... (84,153) 1,427
Cash and Cash Equivalents at Beginning of Period..................... 114,548 10,811
------------- -------------
Cash and Cash Equivalents at End of Period........................... $ 30,395 $ 12,238
============= =============
See notes to condensed consolidated financial statements.
</TABLE>
5
<PAGE>
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. Condensed Consolidated Financial Statements
The consolidated balance sheet as of May 1, 1999, the consolidated statements
of earnings for the thirteen week periods ended May 1, 1999 and May 2, 1998
and the condensed consolidated statements of cash flows for the thirteen
week periods ended May 1, 1999 and May 2, 1998 have been prepared by the
Company without audit. In the opinion of management, all adjustments
necessary to present fairly the financial position, results of operations and
cash flows at May 1, 1999 and for all periods presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these
condensed consolidated financial statements be read in conjunction with the
financial statements and notes thereto included in the Company's annual report
to shareholders for the year ended January 30, 1999. The results of operations
for the thirteen week period ended May 1, 1999 are not necessarily indicative
of the operating results for the full year.
Certain reclassifications have been made to the prior year's consolidated
financial statements to conform to the current year's presentation.
NOTE 2. Merchandise Inventories
Merchandise inventories are valued at the lower of cost (last-in, first-out)
or market. If the first-in, first-out method of valuing inventories had been
used by the Company, inventories would have been approximately $0 higher at
both May 1, 1999 and January 30, 1999.
NOTE 3. Comprehensive Income
Comprehensive Income is reported in accordance with Statement of Financial
Accounting Standards (SFAS) No. 130, "Reporting Comprehensive Income."
Accumulated other comprehensive income in the consolidated balance sheets as
of May 1, 1999 and January 30, 1999 consists of a minimum pension liability
adjustment. There were no differences between net earnings and comprehensive
income for the thirteen week periods ended May 1, 1999 and May 2, 1998.
NOTE 4. Accounting for Derivative Instruments and Hedging Activities
In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities."
This statement establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts (collectively referred to as derivatives), and for hedging
activities. It requires that an entity recognize all derivatives as either
assets or liabilities in the statement of financial position and measure those
instruments at fair value. This statement is effective for all fiscal quarters
of fiscal years beginning after June 15, 1999, although early adoption is
encouraged. The Company is still in the process of analyzing the impact of the
adoption of this statement on its consolidated financial position and results
of operations.
NOTE 5. Dutch Auction Self-Tender Stock Repurchase
On February 1, 1999, the Company repurchased 11,276,698 of its common
shares outstanding pursuant to a Dutch Auction self-tender offer at a price of
$16.00 per share. The repurchased shares included 1,276,698 common shares which
were repurchased as a result of the Company exercising its option to purchase
an additional 2% of its outstanding shares. Prior to the repurchase of the
common shares, the Company had 63,847,640 shares outstanding, with 2,232,500
shares in a benefits trust, at January 30, 1999. As a result of the tender
offer share repurchase, the Company had 52,570,942 shares outstanding, with
2,195,270 shares in the benefits trust, at February 1, 1999. Expenses related
to the share repurchase were approximately $3,168,000 and were included as
part of the cost of the shares acquired.
6
<PAGE>
The Company financed the tender offer share repurchase with $110,427,000 in
cash and with the $70,000,000 proceeds received in connection with a private
placement of Senior Notes on February 1, 1999. The Senior Notes were issued in
two series at par, and pay interest semiannually on January 31, and July 31,
commencing July 31, 1999. Series A Senior Notes, with an aggregate principal
balance of $25,000,000, will mature in 2009 and bear interest at 7.80% per
annum. Series B Senior Notes, with an aggregate principal balance of
$45,000,000, will mature in 2011 and bear interest at 7.95% per annum. In
addition, the interest rates on the Senior Notes are subject to a .50%
increase for such time as the credit rating of the Company's long-term
unsecured debt securities decreases below investment grade as rated by both
Moody's and Standard & Poor's.
NOTE 6. Net Earnings Per Share
<TABLE>
<CAPTION>
Thirteen weeks ended
(in thousands, except per share data) ----------------------------------
May 1, 1999 May 2, 1998
-------------- --------------
<S> <C> <C>
(a) Net earnings..................................... $10,093 $10,058
Adjustment for interest on 4% convertible
subordinated notes, net of income tax effect... - -
Adjustment for interest on zero coupon convertible
subordinated notes, net of income tax effect... - -
- -------------------------------------------------------------------------------------------
(b) Adjusted net earnings $10,093 $10,058
- -------------------------------------------------------------------------------------------
(c) Average number of common shares outstanding
during the period.............................. 50,511 61,470
Common shares assumed issued upon conversion of
4% convertible subordinated notes.............. - -
Common shares assumed issued upon conversion of
zero coupon convertible subordinated notes..... - -
Common shares assumed issued upon exercise
of dilutive stock options, net of assumed
repurchase, at the average market price........ 252 306
- -------------------------------------------------------------------------------------------
(d) Average number of common shares assumed
outstanding during the period.................. 50,763 61,776
- -------------------------------------------------------------------------------------------
Basic Earnings per Share (a/c)................... $ .20 $ .16
Diluted Earnings per Share (b/d)................. $ .20 $ .16
- -------------------------------------------------------------------------------------------
</TABLE>
Adjustments for convertible securities were antidilutive during the thirteen
week periods ended May 1, 1999 and May 2, 1998 and therefore excluded from the
computation of diluted EPS; however, these securities could potentially be
dilutive in the future. Options to purchase 3,565,257 and 2,147,042 shares
of common stock were outstanding at May 1, 1999 and May 2, 1998, respectively,
but were not included in the computation of diluted EPS because the options'
exercise prices were greater than the average market price of the shares of
common stock.
7
<PAGE>
<TABLE>
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operation -
The following table presents for the periods indicated certain items in the
consolidated statements of earnings as a percentage of total revenues (except
as otherwise provided) and the percentage change in dollar amounts of such items
compared to the indicated prior period.
<CAPTION>
Percentage of Total Revenues Percentage Change
- ------------------------------------------------------ ---------------------------------- -----------------
Thirteen weeks ended May 1, 1999 May 2, 1998 Fiscal 1999 vs.
(Fiscal 1999) (Fiscal 1998) Fiscal 1998
- ------------------------------------------------------ -------------- -------------- -----------------
<S> <C> <C> <C>
Merchandise Sales..................................... 81.7% 82.8% 1.1%
Service Revenue (1)................................... 18.3 17.2 9.0
------ ------ ------
Total Revenues........................................ 100.0 100.0 2.4
Costs of Merchandise Sales (2)........................ 71.4 (3) 72.4 (3) (.2)
Costs of Service Revenue (2).......................... 79.5 (3) 79.4 (3) 9.1
------ ------ ------
Total Costs of Revenues............................... 72.9 73.6 1.5
Gross Profit from Merchandise Sales................... 28.6 (3) 27.6 (3) 4.4
Gross Profit from Service Revenue..................... 20.5 (3) 20.6 (3) 8.6
------ ------ ------
Total Gross Profit.................................... 27.1 26.4 5.0
Selling, General and Administrative Expenses.......... 22.2 21.6 5.4
------ ------ ------
Operating Profit...................................... 4.9 4.8 3.2
Nonoperating Income................................... .1 - 266.7
Interest Expense...................................... 2.3 2.1 8.5
------ ------ ------
Earnings Before Income Taxes.......................... 2.7 2.7 .4
Income Taxes.......................................... 36.0 (4) 36.0 (4) .4
------ ------ ------
Net Earnings.......................................... 1.7 1.7 .4
====== ====== ======
<FN>
(1) Service revenue consists of the labor charge for installing merchandise or
maintaining or repairing vehicles, excluding the sale of any installed parts or
materials.
(2) Costs of merchandise sales include the cost of products sold, buying,
warehousing and store occupancy costs. Costs of service revenue include service
center payroll and related employee benefits and service center occupancy costs.
Occupancy costs include utilities, rents, real estate and property taxes, repairs
and maintenance and depreciation and amortization expenses.
(3) As a percentage of related sales or revenue, as applicable.
(4) As a percentage of earnings before income taxes.
</FN>
</TABLE>
8
<PAGE>
Thirteen Weeks Ended May 1, 1999 vs. Thirteen Weeks Ended May 2, 1998
- ------------------------------------------------------------------------
Total revenues for the first quarter increased 2.4% despite a lower store count
(645 at May 1, 1999 compared with 709 at May 2, 1998). Comparable store
revenues (revenues generated by stores in operation during the same months of
each period) increased 6.0% in 1999. Comparable store merchandise sales
increased 6.3% while comparable service revenue increased 4.5%.
Gross profit from merchandise sales increased, as a percentage of merchandise
sales, due primarily to slightly higher merchandise margins coupled with
decreases in store occupancy costs and warehousing costs.
Selling, general and administrative expenses increased, as a percentage of
total revenues, due primarily to an increase in store and general office
expenses offset, in part, by a decrease in media costs.
<TABLE>
Nonoperating income consisted of the following:
(in thousands)
<CAPTION>
1999 1998
------ ------
<S> <C> <C>
Net rental revenue $ 176 $ 37
Investment income 132 54
Other income - (7)
------ ------
Total $ 308 $ 84
====== ======
</TABLE>
Net earnings remained relatively stable, as a percentage of total revenues, due
primarily to an increase in gross profit from merchandise sales, as a
percentage of merchandise sales, offset by higher selling, general and
administrative expenses, as a percentage of total revenues.
9
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES - May 1, 1999
- ----------------------------------------------
The Company's cash requirements arise principally from the need to finance
the acquisition, construction and equipping of new stores and to purchase
inventory. During the first quarter of 1999, the Company invested $27,706,000
in property and equipment while net inventory (net inventory includes the
decrease in inventory less the change in accounts payable) increased
$8,583,000. Working capital decreased from $241,738,000 at January 30, 1999
to $140,981,000 at May 1, 1999. At May 1, 1999, the Company had
stockholders' equity of $635,813,000 and long-term debt of $769,307,000. The
Company's long-term debt was 55% of its total capitalization at May 1, 1999
and 46% at January 30, 1999. As of May 1, 1999, the Company had available
lines of credit totaling $270,000,000.
On February 1, 1999, the Company repurchased 11,276,698 of its common
shares outstanding. The Company financed the share repurchase with $110,427,000
in cash and with the $70,000,000 proceeds received in connection with a
private placement of Senior Notes issued on February 1, 1999. The Senior Notes
were issued in two series at par and pay interest semiannually on January 31
and July 31, commencing July 31, 1999. Series A Senior Notes, with an aggregate
principal balance of $25,000,000, will mature in 2009 and bear interest at
7.80% per annum. Series B Senior Notes, with an aggregate principal balance of
$45,000,000, will mature in 2011 and bear interest at 7.95% per annum. In
addition, the interest rates on the Senior Notes are subject to a .50% increase
for such time as the credit rating of the Company's long-term unsecured debt
securities decreases below investment grade as rated by both Moody's and
Standard & Poor's.
The Company plans to open approximately 18 new stores during the balance of
the current fiscal year. Management estimates that the cost of this
expansion, coupled with expenditures in existing stores, warehouses and
offices will be approximately $98,000,000. In addition, the
Company has additional cash requirements to repay its debt maturities
totaling $72,422,000, of which $72,294,000 relates to Convertible
Subordinated Notes due in September 1999. Funds required to finance the store
expansion including related inventory requirements and to repay its debt
maturities are expected to come primarily from operating activities.
The Company was not in compliance with a financial covenant included in certain
of its credit facilities as of May 1, 1999. The Company has obtained waivers
for the event of non-compliance from the lenders.
NEW ACCOUNTING STANDARDS
- ------------------------
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This statement establishes accounting
and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts (collectively referred
to as derivatives), and for hedging activities. It requires that an entity
recognize all derivatives as either assets or liabilities in the statement
of financial position and measure those instruments at fair value. This
statement is effective for all fiscal quarters of fiscal years beginning after
June 15, 1999, although early adoption is encouraged. The Company is still in
the process of analyzing the impact of the adoption of this statement on its
consolidated financial position and results of operations.
10
<PAGE>
INFORMATION SYSTEMS AND THE YEAR 2000
- -------------------------------------
During 1997, the Company initiated a project to assess the impact of
Year 2000 issues on a corporate-wide basis. A Year 2000 Project Director,
reporting directly to the Chief Information Officer, was assigned to lead the
project and, in conjunction with senior management of the Company, has
formulated a project plan to address Year 2000 compliance issues. The Project
Director monitors and coordinates the project plan through regular meetings
with operational managers who execute the specifics of the project plan. The
Project Director regularly updates senior management, including the Company's
Chief Financial Officer. In addition, the Board of Directors is periodically
updated by the Company's senior management.
The project plan is comprehensive and focuses on both information
technology (IT) systems and non-IT systems. Execution of the project plan has
been divided into five key phases: inventory, assessment, remediation, testing,
and implementation. The Company is utilizing both internal and external
resources to complete its Year 2000 project plan initiatives.
IT systems include the Company's application software, both proprietary
and third party, as well as the hardware infrastructure. Specifically, this
includes all software and related hardware for the Company's systems, namely:
mainframe, store, personal computer, local area network, and data
communication. The inventory and assessment phases for the IT systems are
substantially complete. Although the IT systems are currently in various stages
of remediation, testing and implementation, the Company estimates that
approximately 65% of its IT systems are currently Year 2000 compliant. The
Company currently expects to substantially complete these processes with
respect to its IT systems by mid-1999.
The non-IT systems include equipment and systems that contain embedded
computer chips, such as energy management, HVAC, telephone and the Company's
service center equipment, which specifically includes its engine diagnostic,
wheel alignment and emission testing equipment. The inventory and assessment
phases for the non-IT systems are substantially complete. The Company currently
expects to have substantially all of its non-IT systems Year 2000 compliant by
October 1999.
The Company's critical third party vendor relationships (other than
those relating to IT and non-IT systems), such as relationships with critical
merchandise, transportation, utility, financial institutions and other general
service providers, are currently being reviewed for Year 2000 compliance. The
Company will use the information obtained in its review of third party vendor
relationships in its contingency plan development.
The Company is in the process of developing contingency plans. These
plans will identify what actions would need to be taken if a critical system or
third party service provider were not Year 2000 compliant. The Company expects
such plans to be completed by October 1999.
11
<PAGE>
Although the Company is making significant progress to ensure that its
systems and facilities are Year 2000 compliant, the ability of third party
service providers, merchandise vendors and certain other third parties,
including communications and utility companies, to be Year 2000 compliant is
beyond the Company's control. Therefore, the Company can offer no assurances
that the systems of other entities on which the Company's systems may rely will
be modified to be Year 2000 compliant or, if so modified, will be compatible
with the Company's systems. The failure of these entities to achieve Year 2000
compliance on a timely basis could have a material adverse effect on the
Company. At this time, the Company does not expect any Year 2000 issues to
materially affect its operations, merchandise sales, service revenues,
competitive position or financial performance.
The Company estimates that total costs associated with the Year 2000
effort will range from approximately $9,000,000 to $13,000,000, of which
approximately $6,400,000 has been incurred through May 1, 1999. The
Company's Year 2000 costs have been and are expected to be funded out of cash
flows from operating activities.
The foregoing statements as to costs and dates relating to the Year
2000 effort are forward-looking and as a result involve risks and
uncertainties. They are based on the Company's best estimates which may be
updated as additional information becomes available. The Company's
forward-looking statements are also based on assumptions about many important
factors, including the technical skills of employees and independent
contractors, the representations and preparedness of third parties, the failure
of vendors to deliver merchandise or perform services required by the Company
and the collateral effects of Year 2000 issues on the Company's business
partners and customers. While the Company believes its assumptions are
reasonable, it cautions that it is impossible to predict the impact of certain
factors that could cause actual costs or timetables to differ materially from
the expected results.
FORWARD LOOKING STATEMENTS
- --------------------------
Certain statements made herein are forward-looking which involve risks
and uncertainties. The Company's actual results may differ materially from the
results discussed in the forward-looking statements due to factors beyond the
control of the Company, including the strength of the national and regional
economies and consumers' ability to spend, the health of the various sectors of
the market that the Company serves, the weather in geographical regions with a
high concentration of the Company's stores, competitive pricing, location and
number of competitors' stores, product costs, and the ability to enhance the
profitability of the commercial delivery program. Further factors that might
cause such a difference include, but are not limited to, the factors described
in the Company's filings with the Securities and Exchange Commission.
12
<PAGE>
PART II - OTHER INFORMATION
- ---------------------------
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(10.49) Amendments to The Pep Boys Savings Plan
(10.50) Amendments to The Pep Boys Savings Plan - Puerto Rico
(11) Statement Re: Computation of Earnings Per
Share
(27) Financial Data Schedules
(b) Reports on Form 8-K. No reports on Form 8-K have been filed
during the quarter for which this report is filed.
13
<PAGE>
SIGNATURES
- ----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE PEP BOYS - MANNY, MOE & JACK
--------------------------------
(Registrant)
Date: June 14, 1999 By: /s/ Michael J. Holden
----------------------- -------------------------
Michael J. Holden
Executive Vice President &
Chief Financial Officer
14
<PAGE>
INDEX TO EXHIBITS
- -----------------
(10.49) Amendments to The Pep Boys Savings Plan
(10.50) Amendments to The Pep Boys Savings Plan - Puerto Rico
(11) Computations of Earnings Per Share
(27) Financial Data Schedule
Exhibit 10.49
Amendments to The Pep Boys Savings Plan
1. The Introduction to the Plan is hereby amended to read as follows:
The Pep Boys Savings Plan was established by The Pep Boys --
Manny, Moe & Jack, a Pennsylvania corporation, effective
September 1, 1987, for the benefit of certain of its salaried and
hourly employees and its Participating Employers, and their
beneficiaries. It is to be maintained according to the terms of this
instrument. The Committee has the authority to manage the
administration of this Plan. The assets of this Plan are held in trust
by the Trustee in accordance with the terms of the Trust
Agreement, which is considered to be an integral part of this Plan.
The Committee shall direct the Trustee as to the investment of the
assets in the Trust Fund in accordance with the terms of the Plan
and Trust.
The Plan is intended to be a discretionary "profit sharing" plan as
defined in Section 401(a)(27) of the Code.
The Plan is hereby amended effective January 1, 1989 to reflect
various provisions of the Tax Reform Act of 1986, as amended,
and other legislation (or such earlier date as required by law). The
effective date of any other changes to the Plan shall be as noted
herein.
The Plan is further amended effective January 1, 1997 or as of such
later date noted in the Plan to comply with the provisions of The
Small Business Job Protection Act of 1996 and the Tax Payer
Relief Act of 1997.
The rights of those individuals (or their beneficiaries) who
terminated employment prior to the effective date of any changes
to the Plan, are governed by the terms and conditions of the Plan
then in effect.
2. Section 2.1 of the Plan is hereby amended to add the following new
definition of "Administrative Delegate" to read as follows:
Administrative Delegate means one or more persons or institutions
to which the Committee has delegated certain administration
functions pursuant to a written agreement.
1
<PAGE>
3."Section 2.1 of the Plan is further amended to add the following new
definition of "Company Stock Fund" to read as follows and to change all
references in the Plan to "Company Stock fund" to "Company Stock Fund":
Company Stock Fund means a fund established by the Company
for investment purposes which is comprised of Company Stock
and a small amount of cash.
4. Section 2.1 of the Plan is further amended to change the definition of
Highly Compensated Employee, to read as follows:
Highly Compensated Employee, for plan years beginning prior to
January 1, 1997, means the individuals described in (a) through
(e):
(a) Employees who were five percent owners, as defined in
Section 416(i)(1)(iii) of the Code, at any time during the
determination year or the look-back year;
(b) Employees with compensation greater than $75,000 (as
adjusted at the same time and in the same manner as Section
415(d) of the Code) during the look-back year;
(c) Employees with compensation greater than $50,000 (as
adjusted at the same time and in the same manner as Section
415(d) of the Code) during the look-back year and who are in the
top-paid group for the look-back year;
(d) Employees who are officers during the look-back year and
who have compensation in the look-back year greater than 50% of
the dollar limit in Section 415(b)(1)(A) of the Code;
(e) Employees who are both described in paragraph (b), (c), or
(d) above when these paragraphs are modified to substitute the
determination year for the look-back year and one of the 100
Employees who receive the highest compensation from the
Employer during the determination year.
(f) The top-paid group shall consist of the top 20% of active
Employees, ranked on the basis of compensation received from the
Employer during the year excluding Employees with less than 6
months of service, part-time Employees (less than 17 1/2 hours per
week or less than 6 months a year), Employees who are not yet age
21, and nonresident aliens without United States source income.
These Employees shall not be excluded for purposes of identifying
the particular Employees in the top-paid group. If the Plan being
tested covers only non-collective bargaining Employees, and
collective bargaining Employees constitute 90 percent or more of
the Employer's Employees, then such collective bargaining
Employees shall be excluded both from the total number of active
Employees and the identification of particular Employees in the
top-paid group. The top-paid group shall not include Employees
who perform no service during the year.
2
<PAGE>
(g) For purposes of determining whether an Employee is
highly compensated, the determination year is the Plan Year for
which the determination is being made. The look-back year is the
twelve month period preceding the determination year. For Plan
Years beginning prior to January 1, 1997, the Committee shall
have the authority to change the look-back year to be the calendar
year ending with or within the current Plan Year. If the Committee
makes this election, it shall apply to all plans of the Employer and
Affiliates.
(h) The number of officers shall be limited to the lesser of (a)
50, or (b) the greater of 3 individuals or 10 percent of all
Employees. If the Employer does not have at least one officer
whose compensation is in excess of 150% of the limit in Section
415(c) of the Code, then the highest paid officer of the Employer
shall be treated as a Highly Compensated Employee.
(i) For purposes of defining Highly Compensated Employees,
compensation means compensation as defined in Section 415(c)(3)
of the Code, including elective contributions. The dollar limits are
those for the calendar year in which the determination or look-back
year begins.
(j) The Plan shall take into account employees of all
employers aggregated under Sections 414(b), (c), (m) and (o) of
the Code, in determining who is highly compensated. Also, for this
purpose, the term "Employee" shall include Leased Employees
unless such Employees are covered under a safe-harbor plan of the
leasing organization and not covered under a qualified plan of the
employer.
Notwithstanding the foregoing, the Employer, by action of the
Committee, may elect for any Plan Year, to define Highly
Compensated Employee by substituting $50,000 for $75,000 in
Section 414(q)(1)(B) of the Code and by disregarding Section
414(q)(1)(C) of the Code.
Highly Compensated Employees, for Plan Years beginning on or
after January 1, 1997, means any individual described in (a) above
and any Employee who had compensation in excess of $80,000 for
the look-back year as defined in (g). The Company hereby elects to
limit the group of Highly Compensated Employees with
Compensation in excess of $80,000 (as indexed) to those who are
in the top-paid group, as defined in (f), during the look-back year,
as defined in (g) above.
3
<PAGE>
The provisions of subsections (i) and (j) shall continue to apply.
5. Section 2.1 of the Plan is further amended to add the following new
provisions to the end of the definition of "Valuation Date" to read as follows:
Effective October 1, 1998, Valuation Date means any business day
that the New York Stock Exchange is open for business and any
other date chosen by the Committee.
6. Section 3.2 of the Plan is hereby amended to add the following new
paragraph to the end thereof to read as follows:
Effective October 1, 1998, an Eligible Participant who does not elect to
make Pre-Tax Contributions to the Plan as of the first Entry Date that is
coincident with or next following the date he has met the eligibility
requirements of Section 3.1, may elect to commence to make Pre-Tax
Contributions to the Plan, as soon as practicable following any subsequent
payroll period.
7. Section 3.7 of the Plan is hereby amended to change the first paragraph to
read as follows:
Any Employee who transfers to the Employer from an Affiliate or who
becomes an Eligible Employee eligible for participation in the Plan, shall
be eligible to participate in the Plan and to make Pre-Tax Contributions to
the Plan on the later of the first Entry Date coincident with or next
following his satisfaction of the eligibility requirements of Section 3.1 or
as soon as practicable following the next payroll period that he elects to
contribute that is coincident with or next following his change in status.
8. Section 4.1(a)(i) of the Plan is hereby amended to add the following new
sentence immediately following the first sentence to read as follows:
Effective October 1, 1998, the foregoing limitation of twelve
percent (12%) is increased to fifteen percent (15%).
9. Section 4.1(a)(i) of the Plan is further amended to insert "the date the
Participant" immediately before, "elects to make" in the fourth sentence.
10. Section 4.1(b) of the Plan is hereby amended to add the following new
sentence immediately following the first sentence to read as follows:
Effective October 1, 1998, a Participant may change the amount of
Pre-Tax Contributions he has authorized to have contributed to the
Plan on his behalf as of any subsequent payroll period to be
effective as soon as practicable thereafter.
4
<PAGE>
11. Section 4.1(b) of the Plan is further amended to add the following new
sentence to the end thereof to read:
Effective October 1, 1998, a Participant who has ceased making Pre-Tax
Contributions may again authorize Pre-Tax Contributions to be made to
the Plan on his behalf as of any subsequent payroll period to be effective
as soon as practicable thereafter.
12. Section 4.1(c) of the Plan is hereby amended to add the following new
sentence immediately following the first sentence in the second paragraph to
read:
Effective October 1, 1998, the Employer's contribution shall be
equal to the lesser of (i) 50% of the Participant's Pre-Tax
Contributions for the payroll period in which he contributed; or (ii)
three percent (3%) of the Participant's Compensation for the
payroll period.
13. Section 4.1(c) of the Plan is further amended to add the following new
sentence to the end thereof to read:
Effective October 1, 1998, the Matching Contribution shall be allocated
once each Plan Year, but based on the Pre-Tax Contributions that are
made in each payroll period by those Participants eligible to share in the
allocation of the Matching Contribution.
14. Section 4.1(d) of the Plan is hereby amended to add the following new
provision to the end of the last paragraph to read as follows:
Effective October 1, 1998, the additional contribution shall be made in
cash. The amount of the additional contribution to be allocated to each
Eligible Participant's Matching Contribution Account shall be equal to
$500.00 in cash, which amount shall be allocated immediately to the
purchase of units on behalf of each such Eligible Participant in the
Company Stock Fund.
15. Section 4.5 of the Plan is hereby amended and restated in its entirety to
read:
4.5 Limitations on Pre-Tax Contributions. Effective January 1,
1997, the amount of Pre-Tax Contributions made in each Plan Year
on behalf of all Eligible Participants under the Plan shall comply
with either (a) or (b) and (c), if applicable, below.
5
<PAGE>
(a) The average deferral percentage for the Highly
Compensated Eligible Participants for the current Plan Year shall
not exceed the average deferral percentage of all other Eligible
Participants for the immediately preceding Plan Year multiplied by
125%; or
(b) The average deferral percentage for Highly Compensated
Eligible Participants for the current Plan Year shall not be greater
than the average deferral percentage of all other Eligible
Participants for the immediately preceding Plan Year multiplied by
200% and the excess of the average deferral percentage for Highly
Compensated Eligible Participants for the current Plan Year over
all other Eligible Participants for the immediately preceding Plan
Year shall not exceed two percentage points.
Compliance with (a) and (b) above, shall be determined in
accordance with the rules set forth in Section 401(k)(3) of the Code
and Treas. Reg. Section 1.401(k)-1(b), or any successors thereto.
(c) Notwithstanding the foregoing, if this Section 4.5 and
Section 4.7 are both satisfied by use of the limitation set forth in
subsection (b) above, the average deferral percentages for the
Highly Compensated Eligible Participants and the average
contribution percentages for the Highly Compensated Eligible
Participants, as defined in Section 4.7, also must satisfy the
aggregate limit test set forth in Treas. Reg. 1.401(m)-2(b)(3).
Notwithstanding any other provision of this Section 4.5, pursuant
to IRS Notices 97-2 and 98-1, for the Plan Year commencing
January 1, 1997 and for each successive Plan Year thereafter
(unless and until changed by the Committee), the Committee
hereby elects to perform the average deferral percentage test
outlined above for the current Plan Year and not the preceding Plan
Year, based on the average deferral percentage of all Eligible
Participants who are not Highly Compensated Eligible
Participants.
The average deferral percentage shall equal the sum of the
individual deferral percentages for Participants in the applicable
Highly Compensated or Non-Highly Compensated Eligible
Employee category, divided by the total number of Eligible
Employees in such group. The individual deferral percentage shall
be equal to the amount of the Participant's Pre-Tax Contributions
for the Plan Year, divided by his Compensation for such Plan Year.
6
<PAGE>
If the Committee determines, in its sole discretion, with respect to
any Plan Year, that the Plan will (or may) fail (a), (b) or (c) above,
the Committee shall take any action that it deems appropriate,
including imposing a uniform limitation on Pre-Tax Contributions
made by Highly Compensated Eligible Participants, for the Plan to
satisfy (a), (b) or (c) above.
If the amount of Pre-Tax Contributions authorized by Highly
Compensated Eligible Participants in a Plan Year would not
comply with either (a), (b) or (c) above, then by the last day of the
following Plan Year, the Committee may determine that the Excess
Contributions for such Plan Year (including any Income
attributable to such contributions, as determined by the
Committee) shall be distributed to the Highly Compensated
Eligible Participant who authorized the highest dollar amount of
Pre-Tax Contributions. The amount of Excess Contributions to be
reduced shall be reduced by excess deferrals, as defined in Section
4.1(b), previously distributed for the taxable year ending in the
same Plan Year.
The Excess Contributions to be distributed shall equal the amount
necessary so that such highest dollar amount of Pre-Tax
Contributions is reduced to equal the next highest dollar amount of
Pre-Tax Contributions (or a lesser amount if a lesser amount may
be distributed in order to comply with (a) or (b) above) authorized
by the Highly Compensated Eligible Participant with the next
highest dollar amount of Pre-Tax Contributions. The foregoing
steps shall be repeated until the total amount of Excess
Contributions have been distributed. Recalculation of the average
deferral percentage test following the distribution of Excess
Contributions, shall not be required.
Alternatively, the Committee may take such other actions as may
be permissible under the Code to ensure the Plan's compliance
with the requirements of Section 401(k) of the Code, including,
without limitation the allocation of the Employer's contribution to
some or all Eligible Participants who are not Highly Compensated
Eligible Participants in accordance with Section 4.1(c).
16. Section 4.7 of the Plan is hereby amended and restated in its entirety to
read:
4.7 Limitations on Matching Contributions. Effective January 1, 1997,
the amount of Matching Contributions made in each Plan Year on behalf
of all Eligible Participants under the Plan shall comply with either (a) or
(b) and (c), if applicable, below.
7
<PAGE>
(a) The average contribution percentage for the Highly
Compensated Eligible Participants for the current Plan Year shall
not exceed the average contribution percentage of all other Eligible
Participants for the immediately preceding Plan Year multiplied by
125%; or
(b) The average contribution percentage for Highly
Compensated Eligible Participants for the current Plan Year shall
not be greater than the average contribution percentage of all other
Eligible Participants for the immediately preceding Plan Year
multiplied by 200% and the excess of the average contribution
percentage for Highly Compensated Eligible Participants for the
current Plan Year over all other Eligible Participants for the
immediately preceding Plan Year shall not exceed two percentage
points.
Compliance with (a) and (b) above, shall be determined in
accordance with the rules set forth in Section 401(m)(2) of the
Code and Treas. Reg. 1.401(m)-1(b), or any successors thereto.
(c) Notwithstanding the foregoing, if this Section 4.7 and
Section 4.5 are both satisfied by use of the limitation set forth in
subsection (b) above, the average contribution percentages for the
Highly Compensated Eligible Participants and the average deferral
percentages for the Highly Compensated Eligible Participants, as
defined in Section 4.5, also must satisfy the aggregate limit test set
forth in Treas. Reg. 1.401(m)-2(b)(3).
Notwithstanding any other provision of this Section 4.7, pursuant
to IRS Notices 97-2 and 98-1, for the Plan Year commencing
January 1, 1997 and for each successive Plan Year thereafter
(unless and until changed by the Committee), the Committee
hereby elects to perform the average contribution percentage test
outlined above for the current Plan Year and not the preceding Plan
Year, based on the average contribution percentage of all Eligible
Participants who are not Highly Compensated Eligible
Participants.
The average contribution percentage shall equal the sum of the
individual contribution percentages for Participants in the
applicable Highly Compensated or Non-Highly Compensated
Eligible Employee category, divided by the total number of
Eligible Employees in such group. The individual contribution
percentage shall be equal to the amount of the Participant's
Matching Contributions for the Plan Year, divided by his
Compensation for such Plan Year.
8
<PAGE>
If the Committee determines, in its sole discretion, with respect to
any Plan Year, that the Plan will (or may) fail (a), (b) or (c) above,
the Committee shall take any action that it deems appropriate for
the Plan to satisfy (a), (b) or (c) above.
If the amount of Matching Contributions authorized by Highly
Compensated Eligible Participants in a Plan Year would not
comply with either (a), (b) or (c) above, then by the last day of the
following Plan Year, the Committee may determine that the Excess
Aggregate Contributions for such Plan Year (including any Income
attributable to such contributions, as determined by the
Committee) shall be distributed or forfeited (if otherwise not
vested) on behalf of the Highly Compensated Eligible Participant
who received the highest dollar amount of Matching Contributions.
The Excess Aggregate Contributions to be distributed (or forfeited
if otherwise not vested) shall equal the amount necessary so that
such highest dollar amount of Matching Contributions is reduced
to equal the next highest dollar amount of Matching Contributions
(or a lesser amount if a lesser amount may be distributed in order
to comply with (a), (b) or (c) above) authorized by the Highly
Compensated Eligible Participant with the next highest dollar
amount of Matching Contributions. The foregoing steps shall be
repeated until the total amount of Excess Aggregate Contributions
have been distributed. Recalculation of the average contribution
percentage test following the distribution of Excess Aggregate
Contributions, shall not be required.
Alternatively, the Committee may take such other actions as may
be permissible under the Code to ensure the Plan's compliance
with the requirements of Section 401(m) of the Code, including,
without limitation the allocation of the Employer's Discretionary
QNEC to some or all Eligible Participants who are not Highly
Compensated Eligible Participants in accordance with
Section 4.1(d).
17. Section 4.12 of the Plan is hereby amended to read as follows:
4.12 In Writing Requirement. Notwithstanding any provision in
this Plan to the contrary, salary reduction agreements and
cancellations or amendments thereto, investment elections,
changes or transfers, loans, withdrawal decisions, and any other
decision or election by a Participant (or Beneficiary) under this
Plan may be accomplished by electronic or telephonic means
which are not otherwise prohibited by law and which are in
accordance with procedures and/or systems approved or arranged
by the Committee or its delegates.
9
<PAGE>
18. Section 5.2(a) of the Plan is hereby amended to add the following new
provisions to the end thereof to read as follows:
Effective October 1, 1998, the Accounts of Participants, Former
Participants and Beneficiaries shall be adjusted in accordance with the
procedures that are set forth in Appendix C to the Plan, attached hereto.
The Committee may, for administrative purposes, establish unit
values for one or more investment fund(s) (or any portion thereof)
and maintain the accounts setting forth each Participant's interest
in such investment fund(s) (or any portion thereof) in terms of such
units, all in accordance with such rules and procedures as the
Committee shall deem to be fair, equitable and administratively
practicable. In the event that unit accounting is thus established for
any investment fund (or any portion thereof) the value of a
Participant's interest in that investment fund (or any portion
thereof) at any time shall be an amount equal to the then value of a
unit in such investment fund (or any portion thereof) multiplied by
the number of units then credited to the Participant.
19. Section 6.4(c) of the Plan is hereby amended to substitute, "the first day
of the Calendar Quarter" for "the next Valuation Date" in the second sentence.
20. Section 6.4(f) of the Plan is hereby amended to change the last paragraph
to read as follows:
Distribution to a five percent owner, as described in the preceding
sentence, or to a Terminated Participant, must continue to commence no
later than April 1 of the calendar year following the calendar year in which
he attained age 70 1/2.
21. Section 6.4(h) of the Plan is hereby amended to add the following new
sentence to the end thereof to read:
Effective October 1, 1998, the value of Company Stock or the
value of other investment funds shall be determined as of the
Valuation Date that the payment is processed.
22. Section 6.8(a) of the Plan is hereby amended to read as follows:
(1) A Participant or Eligible Employee may elect to withdraw an
amount equal to all or any part of his interest in his Rollover Account,
including earnings, for any reason.
10
<PAGE>
(2) Upon attainment of age 59 1/2, a Participant may elect to withdraw
an amount equal to all or any portion of his interest in his Pre-Tax
Contribution Account including earnings, for any reason, and
(3) Upon attainment of age 70 1/2, a Participant may also elect to
withdraw an amount equal to all or any portion of his interest in his
Matching Contribution Account including earnings, for any reason.
23. Section 6.8(c)(1) of the Plan is hereby amended to add the following new
sentence to the end thereof to read:
Effective October 1, 1998, the amount available shall be
determined as of the Valuation Date that the withdrawal is
processed.
24. Section 6.8(c)(4) of the Plan is hereby amended to insert the following
new sentence immediately following the second sentence to read:
Effective October 1, 1998, a Participant may reenroll in the Plan as soon
as practicable following the suspension period.
25. Section 6.9 of the Plan is hereby amended to change the first full
paragraph to read as follows:
6.9 Loans to Participants. The Committee may direct the
Trustee to lend a Participant or an Eligible Employee an amount
not in excess of the lesser of (i) 50% of his vested Accounts,
determined as of the most recently completed monthly valuation
which as of October 1, 1998 shall be determined as of any
Valuation Date (prior to October 1, 1998, the amount was
determined as of the most recently completed Valuation); or (ii)
$50,000 (reduced by the excess, if any, of the highest outstanding
balances of all other loans from the Plan during the one-year period
ending on the day before the loan was made over the outstanding
balance of loans from the Plan on the date on which such loan was
made). Notwithstanding the preceding sentence, the actual amount
available for the loan to a Participant shall be 95% of the amount
determined in accordance with the preceding sentence as of the
Valuation Date that the Participant applied for the loan. A
Participant may have only one loan outstanding at any time.
Effective October 1, 1998, a Participant may have two loans
outstanding at any time. Subject to the rules of the Committee set
forth below, the Trustee, upon application by a Participant, may
make a loan to such Participant for any reason. In addition to such
rules as the Committee may adopt, all loans shall comply with the
following terms and conditions:
11
<PAGE>
26. Section 6.9(b) of the Plan is hereby amended to add the following new
sentence immediately following the first sentence to read:
Effective October 1, 1998, a Participant may have a loan for up to 30 years
to purchase a dwelling unit which shall be used as the Participant's
principal residence.
27. Section 6.9(b) of the Plan is further amended to add the following new
sentence to the end thereof to read:
Effective October 1, 1998, a Participant may elect to prepay the
balance of his loan at any time regardless of the number of
repayments made.
28. Section 6.9(h) of the Plan is hereby amended to add the following new
sentence to the end thereof to read as follows:
Effective with respect to any Participant who Terminates
employment or defaults on his loan on or after October 1, 1998, the
Participant or Former Participant shall have the option to repay the
loan in full within a reasonable time period determined by the
Committee. A Former Participant shall not have the option to
continue to repay the loan on an ongoing basis. If repayment is not
made in full within the applicable time period, then there shall be
distributed to the Former Participant (i) the promissory note; plus
(ii) the value of his Accounts without regard to the amount of any
outstanding loan (including any accrued interest thereon).
29. Section 6.9(i) of the Plan is hereby amended to add the following new
sentence to the end thereof to read:
Effective October 1, 1998, the amount charged against a Participant's
Accounts shall be determined as of the Valuation Date that the loan is paid
to the Participant.
30. Section 6.9 of the Plan is hereby amended to add the following new
subsections (m) and (n) to the end thereof to read:
(m) Effective October 1, 1998, a loan initiation fee shall be
charged against the loan amount requested by the Participant.
12
<PAGE>
(n) A Participant who takes an approved leave of absence may
discontinue payments on a loan for the period of absence for up to
12 months. Upon return to employment, the Participant must repay
the missed payments within the original loan term.
31. Section 7.2 of the Plan is hereby amended and restated in its entirety to
read as follows:
7.2 Investment Directions by Participants. A Participant or
Former Participant may direct the investment of amounts held
under his Pre-Tax Contribution Account and Rollover Account in
multiples of ten percent (10%) and in accordance with the terms,
conditions and procedures established by the Committee. Effective
October 1, 1998, investments of a Participant's or Former
Participant's Pre-Tax Contribution Account and Rollover Account
may be made in multiples of one percent (1%) or in specific dollar
amounts. Notwithstanding Sections 5.2(a) and 8.4, all earnings and
expenses, including commissions and transfer taxes, realized or
incurred in connection with any investments pursuant to a
Participant's or Former Participant's directions shall be credited or
charged to the Participant's or Former Participant's Account for
which the investment is made. A Participant or Former Participant
who fails to designate an investment option for his Pre-Tax
Contribution Account and Rollover Account shall be deemed to
have elected to have such Accounts invested in the Stable Value
Fund.
If a Participant or Former Participant exercises his option to direct
the investment of his Pre-Tax Contribution Account and Rollover
Account, then to the extent permitted by ERISA no person who is
otherwise a fiduciary under the Plan shall be liable under ERISA
for any loss, or by reason of any breach which results from such
Participant's exercise of such option. The funds available for this
purpose shall include the Company Stock Fund and at least three
other additional funds. A Participant may elect to change the
investment (both future and existing contributions) of his Pre-Tax
Contribution Account and Rollover Account effective as of the
first day of any Calendar Quarter following written notification to
the Committee (using the value of Accounts determined as of the
last business day of the immediately preceding Calendar Quarter).
(Prior to January 1, 1993, investment changes were as of any semi-
annual Valuation Date.) Effective October 1, 1998, a Participant or
Former Participant may elect to change the investment (both future
and existing contributions) of his Pre-Tax Contribution Account
and Rollover Account effective as of any Valuation Date.
32. Section 7.3(d) of the Plan is hereby amended to add the following new
provisions to the end thereof to read:
13
<PAGE>
Effective October 1, 1998, a Participant or Former Participant who
has satisfied the age requirement for Early Retirement Date, may
elect as of any Valuation Date, that all or any portion of the
Participant's or Former Participant's Matching Contribution
Account, allocated to him as of any Valuation Date, that is invested
in Company Stock, be invested in any investment category
available for investment.
33. Section 7.3(e) of the Plan is hereby amended to add the following new
provisions to the end thereof to read:
Pursuant to Section 4.1(c), a Participant must be employed on the
last day of the Plan Year to share in the allocation of the
Company's Matching Contribution for the applicable payroll
period (or meet one of the exceptions noted in Section 4.1(c)).
Effective September 30, 1998, the Company shall make the
Company's Matching Contribution attributable to the first three
Calendar Quarters of 1998 and for each payroll period thereafter, to
the Company Stock Fund in cash. Each Participant shall be
assigned a unit value in the Company Stock Fund as of September
30, 1998 in accordance with Section 5.2 of the Plan. The
Company's Matching Contribution shall no longer be determined
based on a specific number of shares and their corresponding
value. The Company's Matching Contribution shall be applied
immediately to purchase units on behalf of each such eligible
Participant in the Company Stock Fund as of that Valuation Date.
34. Section 8.1 of the Plan is hereby amended to delete the fifth sentence in
its entirety and to insert in lieu thereof the following new sentence:
The Committee shall direct the Trustee as to the investment of the
assets in the Trust Fund in accordance with the terms of the Plan
and Trust.
35. Section 8.7 of the Plan is hereby amended to add the following new
subsection (i) to read as follows:
(i) to engage an Administrative Delegate who shall perform,
without discretionary authority or control, administrative functions
within the framework of policies, interpretations, rules, practices,
and procedures made by the Committee. Any action made or taken
by the Administrative Delegate may be appealed by an affected
Participant to the Committee in accordance with the claims review
procedures provided in Section 8.5. Any decisions which call for
interpretations of Plan provisions not previously made by the
Committee shall be made only by the Committee. The
Administrative Delegate shall not be considered a fiduciary with
respect to the services it provides.
14
<PAGE>
36. Article IX of the Plan is hereby amended to add the following new Section
9.5 to the end thereof to read as follows:
9.5 Lost Participants. If, after reasonable efforts of the
Committee to locate a Participant or Beneficiary, including sending
a registered letter, returned receipt requested to the last known
address, the Committee is unable to locate the Participant or
Beneficiary, then the amounts distributable to such Participant or
Beneficiary shall, pursuant to applicable state or Federal laws,
either (1) be treated as a forfeiture under the Plan and used to
reduce the Company's contribution to the Plan (if a Participant or
Beneficiary is located subsequent to a forfeiture, the benefits shall
be reinstated by the Committee and shall not count as an Annual
Addition under Section 415 of the Code), or (2) if the Plan is
joined as a party to any escheat proceedings involving the
unclaimed benefits, be paid in accordance with the final judgment
as if the final judgment were a claim filed by the Former
Participant or Beneficiary.
37. The Plan is further amended to add the following new Appendix C to the
end thereof to read as follows:
Appendix C
The Trustee shall, following the end of each Valuation Date, value
all assets of the Trust Fund, allocate net gains or losses, and
process additions to and withdrawals from Account balances in the
following manner:
1. The Trustee shall first compute the fair market value of
securities and/or the other assets comprising each investment fund
designated by the Committee for direction of investment by the
Participants and Former Participants of this Plan. Each Account
balance shall be adjusted each business day by applying the closing
market price of the investment fund on the current business day to
the share/unit balance of the investment fund as of the close of
business on the current business day.
15
<PAGE>
2. The Trustee shall then account for any requests for
additions or withdrawals made to or from a specific designated
investment fund by any Participant or Former Participant,
including allocations of contributions and forfeitures. In
completing the valuation procedure described above, such
adjustments in the amounts credited to such Accounts shall be
made on the business day to which the investment activity relates.
Contributions received by the Trustee pursuant to this Plan shall
not be taken into account until the Valuation Date coinciding with
or next following the date such contribution was both actually paid
to the Trustee and allocated among the Accounts of Participants
and Former Participants.
3. Notwithstanding paragraphs 1 and 2 above, in the event a
pooled investment fund is created as a designated fund for
Participant or Former Participant investment election in this Plan,
valuation of the pooled investment fund and allocation of earnings
of the pooled investment fund shall be governed by the
Administrative Services Agreement for such pooled investment
fund.
It is intended that this section operate to distribute among each
Participant Account in the Trust Fund, all income of the Trust
Fund and changes in the value of the assets of the Trust Fund.
16
Exhibit 10.50
Amendments to The Pep Boys Savings Plan -- Puerto Rico
1. The Introduction to the Plan is hereby amended to add the following new
provisions to the end thereof to read as follows:
The Plan is hereby amended effective January 1, 1997 or as of such
later date noted in the Plan to comply with the provisions of The
Small Business Job Protection Act of 1996 and the Tax Payer
Relief Act of 1997.
The rights of those individuals (or their beneficiaries) who
terminated employment prior to the effective date of any changes
to the Plan, are governed by the terms and conditions of the Plan
then in effect.
2. Section 2.1 of the Plan is hereby amended to add the following new
definition of "Administrative Delegate" to read as follows:
Administrative Delegate means one or more persons or institutions
to which the Committee has delegated certain administration
functions pursuant to a written agreement.
3. Section 2.1 of the Plan is further amended to add the following new
definition of "Company Stock Fund" to read as follows and to change all
references in the Plan to "Company Stock fund" to "Company Stock Fund":
Company Stock Fund means a fund established by the Company
for investment purposes which is comprised of Company Stock
and a small amount of cash.
4. Section 2.1 of the Plan is further amended to add the following new
provisions to the end of the definition of "Valuation Date" to read as follows:
Effective October 1, 1998, Valuation Date means any business day
that the New York Stock Exchange is open for business and any
other date chosen by the Committee.
5. Section 3.2 of the Plan is hereby amended to add the following new
paragraph to the end thereof to read as follows:
Effective October 1, 1998, an Eligible Participant who does not elect to
make Pre-Tax Contributions to the Plan as of the first Entry Date that is
coincident with or next following the date he has met the eligibility
requirements of Section 3.1, may elect to commence to make Pre-Tax
Contributions to the Plan, as soon as practicable following any subsequent
payroll period.
6. Section 3.7 of the Plan is hereby amended to change the first paragraph to
read as follows:
1
<PAGE>
Any Employee who transfers to the Employer from an Affiliate including
The Pep Boys -- Manny, Moe & Jack or who becomes an Eligible
Employee eligible for participation in the Plan, shall be eligible to
participate in the Plan and to make Pre-Tax Contributions to the Plan on
the later of the first Entry Date coincident with or next following his
satisfaction of the eligibility requirements of Section 3.1 or as soon as
practicable following the next payroll period that he elects to contribute
that is coincident with or next following his change in status.
7. Section 4.1(a)(i) of the Plan is hereby amended to insert "the date the
Participant" immediately before, "elects to make" in the third sentence.
8. Section 4.1(b) of the Plan is hereby amended to add the following new
sentence immediately following the first sentence to read as follows:
Effective October 1, 1998, a Participant may change the amount of
Pre-Tax Contributions he has authorized to have contributed to the
Plan on his behalf as of any subsequent payroll period to be
effective as soon as practicable thereafter..
9. Section 4.1(b) of the Plan is further amended to add the following new
sentence to the end thereof to read:
Effective October 1, 1998, a Participant who has ceased making Pre-Tax
Contributions may again authorize Pre-Tax Contributions to be made to
the Plan on his behalf as of any subsequent payroll period to be effective
as soon as practicable thereafter.
10. Section 4.1(c) of the Plan is hereby amended to add the following new
sentence immediately following the first sentence in the second paragraph to
read:
Effective October 1, 1998, the Employer's contribution shall be
equal to the lesser of (i) 50% of the Participant's Pre-Tax
Contributions for the payroll period in which he contributed; or (ii)
three percent (3%) of the Participant's Compensation for the
payroll period.
11. Section 4.1(c) of the Plan is further amended to add the following new
sentence to the end thereof to read:
Effective October 1, 1998, the Matching Contribution shall be allocated
once each Plan Year, but based on the Pre-Tax Contributions that are
made in each payroll period by those Participants eligible to share in the
allocation of the Matching Contribution.
12. Section 4.9 of the Plan is hereby amended to read as follows:
2
<PAGE>
4.9 In Writing Requirement. Notwithstanding any provision in
this Plan to the contrary, salary reduction agreements and
cancellations or amendments thereto, investment elections,
changes or transfers, loans, withdrawal decisions, and any other
decision or election by a Participant (or Beneficiary) under this
Plan may be accomplished by electronic or telephonic means
which are not otherwise prohibited by law and which are in
accordance with procedures and/or systems approved or arranged
by the Committee or its delegates.
13. Section 5.2(a) of the Plan is hereby amended to add the following new
provisions to the end thereof to read as follows:
Effective October 1, 1998, the Accounts of Participants, Former
Participants and Beneficiaries shall be adjusted in accordance with the
procedures that are set forth in Appendix A to the Plan, attached hereto.
The Committee may, for administrative purposes, establish unit
values for one or more investment fund(s) (or any portion thereof)
and maintain the accounts setting forth each Participant's interest
in such investment fund(s) (or any portion thereof) in terms of such
units, all in accordance with such rules and procedures as the
Committee shall deem to be fair, equitable and administratively
practicable. In the event that unit accounting is thus established for
any investment fund (or any portion thereof) the value of a
Participant's interest in that investment fund (or any portion
thereof) at any time shall be an amount equal to the then value of a
unit in such investment fund (or any portion thereof) multiplied by
the number of units then credited to the Participant.
14. Section 6.4(c) of the Plan is hereby amended to substitute, "the first day
of the Calendar Quarter" for "the next Valuation Date" in the second sentence.
15. Section 6.4(f) of the Plan is hereby amended to add the following new
paragraph to the end thereof to read as follows:
Distribution to a five percent owner, as described in the preceding
sentence, or to a Terminated Participant, must continue to commence no
later than April 1 of the calendar year following the calendar year in which
he attained age 70 1/2.
16. Section 6.4(h) of the Plan is hereby amended to add the following new
sentence to the end thereof to read:
Effective October 1, 1998, the value of Company Stock or the
value of other investment funds shall be determined as of the
Valuation Date that the payment is processed.
17. Section 6.8(a) of the Plan is hereby amended to read as follows:
(1) A Participant or Eligible Employee may elect to withdraw an
amount equal to all or any part of his interest in his Rollover Account,
including earnings, for any reason.
3
<PAGE>
(2) Upon attainment of age 59 1/2, a Participant may elect to withdraw
an amount equal to all or any portion of his interest in his Pre-Tax
Contribution Account including earnings, for any reason, and
(3) Upon attainment of age 70 1/2, a Participant may also elect to
withdraw an amount equal to all or any portion of his interest in his
Matching Contribution Account including earnings, for any reason.
18. Section 6.8(c)(1) of the Plan is hereby amended to add the following new
sentence to the end thereof to read:
Effective October 1, 1998, the amount available shall be
determined as of the Valuation Date that the withdrawal is
processed.
19. Section 6.8(c)(4) of the Plan is hereby amended to insert the following
new sentence immediately following the second sentence to read:
Effective October 1, 1998, a Participant may reenroll in the Plan as soon
as practicable following the suspension period.
20. Section 6.9 of the Plan is hereby amended to change the first full
paragraph to read as follows:
6.9 Loans to Participants. The Committee may direct the
Trustee to lend a Participant or an Eligible Employee an amount
not in excess of the lesser of (i) 50% of his vested Accounts,
determined as of the most recently completed monthly valuation
which as of October 1, 1998 shall be determined as of any
Valuation Date (prior to October 1, 1998, the amount was
determined as of the most recently completed Valuation); or (ii)
$50,000 (reduced by the excess, if any, of the highest outstanding
balances of all other loans from the Plan during the one-year period
ending on the day before the loan was made over the outstanding
balance of loans from the Plan on the date on which such loan was
made). Notwithstanding the preceding sentence, the actual amount
available for the loan to a Participant shall be 95% of the amount
determined in accordance with the preceding sentence as of the
Valuation Date that the Participant applied for the loan. A
Participant may have only one loan outstanding at any time.
Effective October 1, 1998, a Participant may have two loans
outstanding at any time. Subject to the rules of the Committee set
forth below, the Trustee, upon application by a Participant, may
make a loan to such Participant for any reason. In addition to such
rules as the Committee may adopt, all loans shall comply with the
following terms and conditions:
4
<PAGE>
21. Section 6.9(b) of the Plan is hereby amended to add the following new
sentence immediately following the first sentence to read:
Effective October 1, 1998, a Participant may have a loan for up to 30 years
to purchase a dwelling unit which shall be used as the Participant's
principal residence.
22. Section 6.9(b) of the Plan is further amended to add the following new
sentence to the end thereof to read:
Effective October 1, 1998, a Participant may elect to prepay the
balance of his loan at any time regardless of the number of
repayments made.
23. Section 6.9(h) of the Plan is hereby amended to add the following new
sentence to the end thereof to read as follows:
Effective with respect to any Participant who Terminates
employment or defaults on his loan on or after October 1, 1998, the
Participant or Former Participant shall have the option to repay the
loan in full within a reasonable time period determined by the
Committee. A Former Participant shall not have the option to
continue to repay the loan on an ongoing basis. If repayment is not
made in full within the applicable time period, then there shall be
distributed to the Former Participant (i) the promissory note; plus
(ii) the value of his Accounts without regard to the amount of any
outstanding loan (including any accrued interest thereon).
24. Section 6.9(i) of the Plan is hereby amended to add the following new
sentence to the end thereof to read:
Effective October 1, 1998, the amount charged against a Participant's
Accounts shall be determined as of the Valuation Date that the loan is paid
to the Participant.
25. Section 6.9 of the Plan is hereby amended to add the following new
subsections (m) and (n) to the end thereof to read:
(m) Effective October 1, 1998, a loan initiation fee shall be
charged against the loan amount requested by the Participant.
5
<PAGE>
(n) A Participant who takes an approved leave of absence may
discontinue payments on a loan for the period of absence for up to
12 months. Upon return to employment, the Participant must repay
the missed payments within the original loan term.
26. Section 7.2 of the Plan is hereby amended and restated in its entirety to
read as follows:
7.2 Investment Directions by Participants. A Participant or
Former Participant may direct the investment of amounts held
under his Pre-Tax Contribution Account and Rollover Account in
multiples of ten percent (10%) and in accordance with the terms,
conditions and procedures established by the Committee. Effective
October 1, 1998, investments of a Participant's or Former
Participant's Pre-Tax Contribution Account and Rollover Account
may be made in multiples of one percent (1%) or in specific dollar
amounts. Notwithstanding Sections 5.2(a) and 8.4, all earnings and
expenses, including commissions and transfer taxes, realized or
incurred in connection with any investments pursuant to a
Participant's or Former Participant's directions shall be credited or
charged to the Participant's or Former Participant's Account for
which the investment is made. A Participant or Former Participant
who fails to designate an investment option for his Pre-Tax
Contribution Account and Rollover Account shall be deemed to
have elected to have such Accounts invested in the Stable Value
Fund.
If a Participant or Former Participant exercises his option to direct
the investment of his Pre-Tax Contribution Account and Rollover
Account, then to the extent permitted by ERISA no person who is
otherwise a fiduciary under the Plan shall be liable under ERISA
for any loss, or by reason of any breach which results from such
Participant's exercise of such option. The funds available for this
purpose shall include the Company Stock Fund and at least three
other additional funds. A Participant may elect to change the
investment (both future and existing contributions) of his Pre-Tax
Contribution Account and Rollover Account effective as of the
first day of any Calendar Quarter following written notification to
the Committee (using the value of Accounts determined as of the
last business day of the immediately preceding Calendar Quarter).
Effective October 1, 1998, a Participant or Former Participant may
elect to change the investment (both future and existing
contributions) of his Pre-Tax Contribution Account and Rollover
Account effective as of any Valuation Date.
27. Section 7.3(d) of the Plan is hereby amended to add the following new
provisions to the end thereof to read:
6
<PAGE>
Effective October 1, 1998, a Participant or Former Participant who
has satisfied the age requirement for Early Retirement Date, may
elect as of any Valuation Date, that all or any portion of the
Participant's or Former Participant's Matching Contribution
Account, allocated to him as of any Valuation Date, that is invested
in Company Stock, be invested in any investment category
available for investment.
28. Section 7.3(e) of the Plan is hereby amended to add the following new
provisions to the end thereof to read:
Pursuant to Section 4.1(c), a Participant must be employed on the
last day of the Plan Year to share in the allocation of the
Company's Matching Contribution for the applicable payroll
period (or meet one of the exceptions noted in Section 4.1(c)).
Effective September 30, 1998, the Company shall make the
Company's Matching Contribution attributable to the first three
Calendar Quarters of 1998 and for each payroll period thereafter, to
the Company Stock Fund in cash. Each Participant shall be
assigned a unit value in the Company Stock Fund as of September
30, 1998 in accordance with Section 5.2 of the Plan. The
Company's Matching Contribution shall no longer be determined
based on a specific number of shares and their corresponding
value. The Company's Matching Contribution shall be applied
immediately to purchase units on behalf of each such eligible
Participant in the Company Stock Fund as of that Valuation Date.
29. Section 8.1 of the Plan is hereby amended to delete the fifth sentence in
its entirety and to insert in lieu thereof the following new sentence:
The Committee shall direct the Trustee as to the investment of the
assets in the Trust Fund in accordance with the terms of the Plan
and Trust.
30. Section 8.7 of the Plan is hereby amended to add the following new
subsection (i) to read as follows:
(i) to engage an Administrative Delegate who shall perform,
without discretionary authority or control, administrative functions
within the framework of policies, interpretations, rules, practices,
and procedures made by the Committee. Any action made or taken
by the Administrative Delegate may be appealed by an affected
Participant to the Committee in accordance with the claims review
procedures provided in Section 8.5. Any decisions which call for
interpretations of Plan provisions not previously made by the
Committee shall be made only by the Committee. The
Administrative Delegate shall not be considered a fiduciary with
respect to the services it provides.
31. Article IX of the Plan is hereby amended to add the following new Section
9.5 to the end thereof to read as follows:
7
<PAGE>
9.5 Lost Participants. If, after reasonable efforts of the
Committee to locate a Participant or Beneficiary, including sending
a registered letter, returned receipt requested to the last known
address, the Committee is unable to locate the Participant or
Beneficiary, then the amounts distributable to such Participant or
Beneficiary shall, pursuant to applicable state or Federal laws,
either (1) be treated as a forfeiture under the Plan and used to
reduce the Company's contribution to the Plan, or (2) if the Plan is
joined as a party to any escheat proceedings involving the
unclaimed benefits, be paid in accordance with the final judgment
as if the final judgment were a claim filed by the Former
Participant or Beneficiary.
32. The Plan is further amended to add the following new Appendix A to the
end thereof to read as follows:
Appendix A
The custodian shall, following the end of each Valuation Date,
value all assets of the Trust Fund, allocate net gains or losses, and
process additions to and withdrawals from Account balances in the
following manner:
1. The custodian shall first compute the fair market value of
securities and/or the other assets comprising each investment fund
designated by the Committee for direction of investment by the
Participants and Former Participants of this Plan. Each Account
balance shall be adjusted each business day by applying the closing
market price of the investment fund on the current business day to
the share/unit balance of the investment fund as of the close of
business on the current business day.
2. The custodian shall then account for any requests for
additions or withdrawals made to or from a specific designated
investment fund by any Participant or Former Participant,
including allocations of contributions and forfeitures. In
completing the valuation procedure described above, such
adjustments in the amounts credited to such Accounts shall be
made on the business day to which the investment activity relates.
Contributions received by the custodian pursuant to this Plan shall
not be taken into account until the Valuation Date coinciding with
or next following the date such contribution was both actually paid
to the custodian and allocated among the Accounts of Participants
and Former Participants.
8
<PAGE>
3. Notwithstanding paragraphs 1 and 2 above, in the event a
pooled investment fund is created as a designated fund for
Participant or Former Participant investment election in this Plan,
valuation of the pooled investment fund and allocation of earnings
of the pooled investment fund shall be governed by the
Administrative Services Agreement for such pooled investment
fund.
It is intended that this section operate to distribute among each
Participant Account in the Trust Fund, all income of the Trust
Fund and changes in the value of the assets of the Trust Fund.
For purposes of this Appendix A, custodian shall mean the American
Express Trust Company.
9
<TABLE>
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES Exhibit 11
COMPUTATION OF NET EARNINGS PER SHARE
(in thousands, except per share data)
(UNAUDITED)
<CAPTION>
- ------------------------------------------------------------------------------------------
Thirteen weeks ended
----------------------------------
May 1, 1999 May 2, 1998
-------------- --------------
<S> <C> <C>
(a) Net earnings..................................... $10,093 $10,058
Adjustment for interest on 4% convertible
subordinated notes, net of income tax effect... - -
Adjustment for interest on zero coupon convertible
subordinated notes, net of income tax effect... - -
- -------------------------------------------------------------------------------------------
(b) Adjusted net earnings $10,093 $10,058
- -------------------------------------------------------------------------------------------
(c) Average number of common shares outstanding
during the period.............................. 50,511 61,470
Common shares assumed issued upon conversion of
4% convertible subordinated notes.............. - -
Common shares assumed issued upon conversion of
zero coupon convertible subordinated notes..... - -
Common shares assumed issued upon exercise
of dilutive stock options, net of assumed
repurchase, at the average market price........ 252 306
- -------------------------------------------------------------------------------------------
(d) Average number of common shares assumed
outstanding during the period.................. 50,763 61,776
- -------------------------------------------------------------------------------------------
Basic Earnings per Share (a/c)................... $ .20 $ .16
Diluted Earnings per Share (b/d)................. $ .20 $ .16
- -------------------------------------------------------------------------------------------
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE
SHEET AS OF MAY 1, 1999 AND THE CONSOLIDATED STATEMENT OF EARNINGS FOR THE THIRTEEN WEEK
PERIOD ENDED MAY 1, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-29-2000
<PERIOD-END> MAY-1-1999
<CASH> 30,395
<SECURITIES> 0
<RECEIVABLES> 22,260
<ALLOWANCES> 1,095
<INVENTORY> 526,434
<CURRENT-ASSETS> 656,157
<PP&E> 1,841,388
<DEPRECIATION> 509,395
<TOTAL-ASSETS> 2,000,504
<CURRENT-LIABILITIES> 515,176
<BONDS> 769,307
0
0
<COMMON> 63,885
<OTHER-SE> 571,928
<TOTAL-LIABILITY-AND-EQUITY> 2,000,504
<SALES> 488,698
<TOTAL-REVENUES> 598,316
<CGS> 349,173
<TOTAL-COSTS> 436,289
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,578
<INCOME-PRETAX> 15,770
<INCOME-TAX> 5,677
<INCOME-CONTINUING> 10,093
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,093
<EPS-BASIC> .20
<EPS-DILUTED> .20
