Pep Boys Announces Restatement of its Accounting for Leases and Related Depreciation; No Effect on Future or Historical Cash Flows

PHILADELPHIA--Jan. 3, 20051, 2005--The Pep Boys - Manny, Moe & Jack , the nation's leading full-service automotive aftermarket chain, announced that following a review of its lease-related accounting policies, the Company is correcting its computation of depreciation, straight-line rent expense and the related deferred rent liability. Historically, when accounting for leases with renewal options, the Company has depreciated its buildings, leasehold improvements and other long-lived assets on those properties over a period that included both the initial lease term and all option periods (or the useful life of the assets, if shorter). The Company recorded the rent expense on a straight-line basis over the initial lease term, commencing when actual rent payments began.