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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 10-K



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(Mark One)



|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------

For the fiscal year ended December 30, 2006

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 Number 333-124878



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American Tire
Distributors Holdings, Inc.

(Exact name of registrant as specified in its charter)



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|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Delaware                                                       |  | 59-3796143                             
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification Number)

12200 Herbert Wayne Court, Suite 150

Huntersville, North Carolina 28078

(Address, including zip code, of principal
executive offices)

(704) 992-2000

(Registrants telephone number, including area code)

Securities registered pursuant to
Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

None



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Indicate by check mark if the
registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes ̈No  x

Indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.    Yes ̈No  x

Indicate by a check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities 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 ̈

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.  x

Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ̈Accelerated filer ̈Non-accelerated filer  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).    Yes ̈No  x

The aggregate market value of the voting stock held by non-affiliates of the registrant: None

Number of common shares outstanding at March 15, 2007: 999,527



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TABLE OF CONTENTS



|         |  |                                                                                                |  |     
|-------- |  | ---------------------------------------------------------------------------------------------- |  | ----
|         |  |                                                                                                |  | Page
|         |  |                                                                                               
|         |  | PART I                                                                                         |  |     
|ITEM 1.  |  | Business                                                                                       |  | 2   
|ITEM 1A. |  | Risk Factors                                                                                   |  | 11  
|ITEM 1B. |  | Unresolved Staff Comments                                                                      |  | 15  
|ITEM 2.  |  | Properties                                                                                     |  | 15  
|ITEM 3.  |  | Legal Proceedings                                                                              |  | 16  
|ITEM 4.  |  | Submission of Matters to a Vote of Security Holders                                            |  | 16  
|         |  |                                                                                               
|         |  | PART II                                                                                        |  |     
|ITEM 5.  |  | Market for Registrants Common Equity and Related Stockholder Matters                          |  | 17  
|ITEM 6.  |  | Selected Financial Data                                                                        |  | 18  
|ITEM 7.  |  | Managements Discussion and Analysis of Financial Condition and Results of Operations          |  | 21  
|ITEM 7A. |  | Quantitative and Qualitative Disclosure About Market Risk                                      |  | 35  
|ITEM 8.  |  | Financial Statements and Supplementary Data                                                    |  | 36  
|ITEM 9.  |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure           |  | 77  
|ITEM 9A. |  | Controls and Procedures                                                                        |  | 77  
|ITEM 9B. |  | Other Information                                                                              |  | 77  
|         |  |                                                                                               
|         |  | PART III                                                                                       |  |     
|ITEM 10. |  | Directors, Executive Officers and Corporate Governance                                         |  | 78  
|ITEM 11. |  | Executive Compensation                                                                         |  | 80  
|ITEM 12. |  | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |  | 89  
|ITEM 13. |  | Certain Relationships and Related Transactions, and Director Independence                      |  | 92  
|ITEM 14. |  | Principal Accountant Fees and Services                                                         |  | 92  
|         |  |                                                                                               
|         |  | PART IV                                                                                        |  |     
|ITEM 15. |  | Exhibits and Financial Statement Schedules                                                     |  | 93  
|         |  | Signatures                                                                                     |  | 100 



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Cautionary Statements on Forward-Looking Information

This Annual Report on Form 10-K contains forward-looking statements relating to our business and financial outlook, which are based on our current
expectations, estimates, forecasts and projections. In some cases, you can identify forward-looking statements by terminology such as may, will, should, expects, plans,
anticipates, believes, estimates, predicts, potential, continue or other comparable terminology. These forward-looking statements are not guarantees of future performance and
involve risks, uncertainties, estimates and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from those expressed in these forward-looking statements. You should not place undue reliance on any
of these forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any such statement to reflect new information, the occurrence of future events or
circumstances or otherwise.

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking
statements to encourage companies to provide prospective information about their companies without fear of litigation. We would like to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act in
connection with the forward-looking statements included in this document.

Factors that could cause actual results to differ materially
from those indicated by the forward-looking statements or that could contribute to such differences include, but are not limited to, integration of new systems, unanticipated expenditures, acquisitions and the successful integration of acquisitions
into the business, changing relationships with customers, suppliers and strategic partners, changes to governmental regulation of the tire industry, the impact of competitive products, changes to the competitive environment, the acceptance of new
products in the market, the economy, and world events. See Item 1ARisk Factors for further discussion.



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PART I



|Item 1. | Business.
|------- | ---------

Our Company

American Tire Distributors Holdings, Inc. (also referred to herein as Holdings, the Company, we, us,
our, and Successor) is a Delaware corporation, which owns 100% of the issued and outstanding capital stock of American Tire Distributors, Inc. (ATD or Predecessor), a Delaware corporation. Holdings has
no significant assets or operations other than its ownership of ATD. The operations of ATD and its subsidiaries constitute the operations of Holdings presented under accounting principles generally accepted in the United States.

We are the largest distributor of tires to the replacement tire market in the United States, according to Modern Tire Dealer magazine, and provide a
critical link between tire manufacturers and the highly fragmented retail tire sales channel. Through our 74 distribution centers, we offer approximately 53,000 stock keeping units, or SKUs, to our approximately 38,000 customers, generally on a same
or next day basis. As a result, our customers utilize our broad product offering to offer a comprehensive product lineup that they would be unable to otherwise provide on a stand-alone basis due to working capital, logistics and warehouse
constraints. We believe our position as the leading intermediary between tire manufacturers and a very fragmented customer base makes us an important distribution partner to the tire manufacturers. Our industry leading market share increased from an
estimated 1.7% in 1995 to over 6.0% in 2006 as a result of organic growth and targeted acquisitions. We believe that our size and broad geographic footprint give us a substantial scale advantage over our competitors, all of whom are regionally
focused.

We believe we have the broadest product offering in our industry, supplying our customers with the top 10 leading passenger tire
brands. We carry the flag brands of all four of the largest tire manufacturers: Bridgestone, Continental, Goodyear and Michelin. In addition to flag brands, we also sell associate and private label brand tires, custom wheels and accessories and
related service equipment. We believe our large, diverse product offering allows us to better penetrate markets by being able to provide a wide spectrum of products at multiple price points.

We serve a highly diversified customer base. Our core customers generate over 77.0% of our net sales. In addition to our extensive inventory and same or
next day distribution capabilities, we provide our customers with sales and product support services, including a sophisticated ordering and logistics system, to maximize their ability to sell tires, custom wheels and accessories. These valuable
services, as well as the deep level of commitment we have to the business operations of our customers, have resulted in a strong and stable position for us within the industry.

We were founded in North Carolina as The J.H. Heafner Company, Inc. in 1935. In 1999, we reincorporated in Delaware and changed our name to Heafner Tire
Group, Inc. In 2001, we divested our retail operations in order to concentrate on our core wholesale tire distribution business and in 2002, we changed our name to American Tire Distributors, Inc. The new name was part of our transition from a
collection of companies joined through acquisition, into a single unified company.

Recent Developments

During fiscal 2006 we completed and integrated two acquisitions that extended our distribution network and increased our scale.



| |  |  | On July 28, 2006, we acquired Samaritan Wholesale Tire Company (Samaritan Tire), a tire distributor representing approximately $23 million in
annual net sales. The acquisition of Samaritan Tire expanded our operations across the state of Minnesota and into Western Wisconsin.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | On January 27, 2006, we acquired Silver State Tire Company and Golden State Tire Distributors (collectively Silver State), a tire distributor
representing approximately $27 million in annual net sales. The acquisition of Silver State established a distribution footprint for us across the state of Nevada.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Industry Overview

The U.S. replacement tire market had annual retail sales of approximately $27.2
billion in 2006. Of that amount, passenger car and light truck tires accounted for approximately 60.7% and 15.5% of sales, respectively. Medium truck tires and farm, specialty and other types of tires accounted for approximately 20.6% and 3.2% of
sales, respectively. Pricing among all replacement passenger tires was up 6.6% in 2006, substantially related to multiple price increases by the tire manufacturers.

The U.S. replacement tire market has experienced stable historical growth. The number of new replacement tires shipped in the United States for passenger cars and light trucks increased from 185.4 million tires
in 1995 to 234.1 million tires in 2006, for a compounded annual growth rate of 1.9%. During that period, annual retail tire sales declined only twice, in 2001 when shipments decreased by 4.9% and in 2006 when shipments decreased by 3.3%. We
believe the decline in 2001 was primarily due to a tire recall by Firestone in 2000, where the manufacturer replaced customer tires earlier than customers would have otherwise required. We believe the weakened demand in 2006 was due to concerns from
consumers over rising interest rates, higher minimum credit card payments and increased fuel costs, all of which are contributing to the deferral of tire purchases. We believe the stable historical market growth in the replacement tire market is due
to the:



| |  |  | increase in both the number and average age of passenger cars and light trucks;
| | - |  | -------------------------------------------------------------------------------



| |  |  | rise in the number of miles driven per vehicle;
| | - |  | -----------------------------------------------



| |  |  | expansion of replacement tire SKUs;
| | - |  | -----------------------------------



| |  |  | growth of high performance and larger diameter tires; and
| | - |  | ---------------------------------------------------------



| |  |  | shortening of tire replacement cycles.
| | - |  | --------------------------------------

The replacement tire market for passenger cars and light trucks consists of three primary types of tires: flag brands, which are premium tires sold under recognized brands; associate brands, which are primarily lower priced
tires; and private label brands, which are manufactured exclusively for and marketed by independent tire wholesale distributors and/or retailers. The market share of flag brand tires in the replacement tire market is approximately 78.5% in 2006.

In the United States, consumers purchase replacement tires from several principal sources, including independent tire outlets,
manufacturer owned retail stores, automotive dealerships, mass merchandisers such as Sears and Wal-Mart, auto supply chain stores such as Pep Boys and wholesale clubs and discounters such as Costco and Sams Club. Independent tire outlets, our
largest customer base, include small local tire stores as well as regional and national chains such as Tire Kingdom and Discount Tire. Independent tire outlets are the largest suppliers of new replacement passenger car tires in the United States,
accounting for approximately 59.5% of retail sales of domestic replacement passenger car tires in 2006, up from 54.0% in 1990.

Independent
tire outlets obtain their inventory of new replacement tires through three principal sources: tire manufacturers, independent wholesale distributors like us, and dealer owned warehouses. Other sources include discount or price clubs and other tire
outlet chains. We believe that, in recent years, certain tire manufacturers have reduced the extent to which they supply small independent tire outlets directly due to the inefficiencies of supplying small quantities of product to a large number of
locations. At the same time, manufacturers have increased their supply to independent wholesale distributors who are able to deliver tires to a large number of independent tire outlets with greater efficiency. We believe that there are approximately
41,000 tire outlets that



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are being served either directly by manufacturers or by the approximately 200 wholesale distributors, most of which sell products from only a limited number
of manufacturers and are focused on smaller geographic markets.

Competitive Strengths

We believe our key competitive strengths include:

Leading Market Position.We are the leading replacement tire distributor in the United States with an estimated national market share of greater than 6.0%. We believe that the key benefits of our scale include: an ability to
efficiently carry an extensive inventory; an ability to invest in sales tools and technologies to support our customers; and operating efficiencies from our scalable infrastructure. We believe our leading market position, combined with the fact that
we, unlike our principal competitors, do not own retail businesses that compete with our customers, enhances our ability to increase sales to existing customers, attract new customers and enter into new markets.

Extensive Distribution Network.We have the largest independent aftermarket tire distribution network in the industry with 74 distribution
facilities and over 700 delivery vehicles serving 36 states. Utilizing our sophisticated inventory management and logistics technology, we believe we deliver 88.0% of our orders on a same or next day basis. As a result, we believe that we have an
excellent reputation with our customers for providing a high level of prompt customer service.

Broad Product Offering.We believe
we offer the most comprehensive selection of tires in the industry, with timely access to approximately 53,000 SKUs. We supply the top ten leading passenger tire brands and we carry the flag brands of all four of the largest tire manufacturers:
Bridgestone, Continental, Goodyear and Michelin. We also offer a number of high quality, private label product lines. In addition to branded and private label tires, we also sell associate brand tires, custom wheels and accessories and related
service equipment. We believe that our broad product offering has been a significant factor in attracting and retaining many of our customers.

Diversified Customer Base.We sell our products to approximately 38,000 customers, including both national and regional tire dealer chains, car dealerships and other independent tire outlets. In 2006, no single customer accounted for
more than 1.2% of our net sales while our top 10 customers accounted for less than 6.5% of our net sales.

Superior and Distinctive
Technology.We have invested in sophisticated ordering and logistics technology that provides order processing, warehousing and fulfillment functions, which we believe to be the most efficient in the industry. Our ATDOnline system, previously
named Heafnet, introduced in 1996, offers customers instant online access to our inventory, allowing dealers to check the price and availability of products and place orders on a 24/7 basis. Approximately 51.8% of our tire and wheel orders in 2006
were placed online using ATDOnline, up from 45.8% in 2005. We have also invested in our logistics technology, including routing and global positioning software systems, to capture additional distribution efficiencies.

Strong Working Capital Management and Low Capital Expenditures.We are able to generate cash flows while maintaining sizeable inventory as our
inventory controls and vendor relationships enable us to closely monitor and effectively manage our working capital. Furthermore, our scalable operating platform has allowed us to increase sales volume without significant incremental costs or
capital expenditures. During the period from 2001 to 2006, our annual maintenance capital expenditures have averaged between $2.0 million to $3.0 million. In addition, our bad debt write-offs have historically been less than 0.1% of sales due
to strong credit and collection procedures.

Experienced Senior Management Team.Our senior management team, led by our Chief
Executive Officer, Richard P. Johnson, and our President, William E. Berry, is comprised of seasoned industry professionals and veterans of our company. Our senior management has an average of over 20 years of distribution experience and over 15
years with our predecessor companies or us.



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Business Strategy

We intend to continue to expand our business, enhance our market position and increase our revenues and cash flow by focusing on the following:

Leverage Our Existing Infrastructure to Expand into Underserved Customer Markets.Our distribution infrastructure provides considerable operating
leverage because the cost of adding additional customers that can be served by an existing distribution center, through the addition of truck routes or stops, is low. For example, we successfully rolled out a program with General Motors
(GM) which continues to expand and we believe will continue to grow into fiscal 2007. These GM dealerships can be serviced by our existing distribution centers and are not currently expected to require any additional truck routes. In
addition to our GM program, we are working with other car dealerships to develop and implement similar tire replacement programs that we believe will provide stable revenue growth during fiscal 2007 and beyond. Also, we plan to continue increasing
our fill-in business at national and regional chains and tire manufacturer owned stores. Our technology platform is scalable to accommodate additional distribution centers as necessary to expand efficiently into a new region.

Focus on Higher Profit Products.We plan to continue to focus on increasing the mix of high and ultra high performance tires in our product line
and on shifting customers from private and associate brands to flag brands, which provide us with a higher profit per tire. The shift to larger rim diameter products also enhances our profit per tire. We are also working closely with independent
tire retailers, automobile dealers and specialty shops to increase our sales of high margin custom wheels and tire service equipment, tools and supplies.

Capitalize on Profit Enhancement Opportunities. We remain committed to managing our cost structure to increase profitability. As we have expanded our market presence, we have been able to effectively leverage
our highly scalable distribution infrastructure to achieve higher revenue growth and increased profit. For example, our utilization of logistics technology, including our GPS applications, has improved distribution efficiency and profitability. We
are currently in the process of further enhancing our pricing discipline and expense monitoring through a strategic segmentation of our customer base. This initiative provides incentives for smaller customers to provide us with a larger share of
their business and focuses our sales efforts on larger, more profitable customers.

Selectively Pursue Acquisitions.We believe we
are well suited, due to liquidity resources that we have available, to capitalize on opportunities to acquire smaller companies with key customer relationships. Our acquisition strategy consists of increasing our share in existing markets, adding
distribution centers in new or complementary regions and utilizing our scale to realize cost savings. In addition, we believe acquisitions in our existing geographic markets provide an opportunity for significant cost savings. Over the past three
years, we have successfully acquired and integrated five businesses representing approximately $233 million in annual net sales. We believe that this experience will help us to pursue suitable acquisition opportunities in the future and integrate
them successfully. Consistent with this strategy, we continue to evaluate potential acquisition targets.

Products

We sell a broad selection of flag, associate and private label tires, as well as custom wheels and accessories and related service equipment. Tire sales
accounted for approximately 87.2%, 86.8% and 85.8% of total aggregate net sales in fiscal years 2006, 2005, and 2004, respectively.

Tires

Sales of passenger car and light truck tires accounted for approximately 74.0% of our total aggregate net sales in fiscal 2006. The
remainder of our tire sales were for medium trucks, farm vehicles and other specialty tires.



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Flag brands.Our flag brands have high consumer recognition and generate higher per tire profit
than associate or private label brands. We carry the flag brands from all four of the largest tire manufacturers: Bridgestone, Continental, Goodyear and Michelin. As a part of our flag brand portfolio, we also carry high and ultra high performance
tires, including such brands as Kumho, Nitto and Pirelli.

We believe that our ability to effectively distribute a wide variety of SKUs for
our flag brands is key to our success. The overall replacement tire market is highly fragmented and, according to Modern Tire Dealer magazine, the top ten passenger car tire brands account for approximately 60.5% of total replacement units. We
believe this is the result of two factors. First, automobile manufacturers utilize a wide variety of tire brands and sizes for original equipment. Second, owner loyalty to original equipment is relatively high, as approximately one half of all new
passenger car and light truck owners replace their tires with the same brand. As a result, in order to be competitive, tire dealers, and particularly independent tire outlets, must be able to access a broad range of inventory quickly. Our customers
can use our wide product offering to sell a comprehensive product lineup that they would be unable to provide on a stand-alone basis due to working capital constraints and limited warehouse capacity.

Our ultra high performance tires are our highest profit products and also have relatively shorter replacement cycles. For the same reasons as other flag
brands, but to an even greater degree, we believe working capital and inventory constraints make these tires difficult for dealers to efficiently stock. High and ultra high performance tires have shown significant growth as compared to the overall
market. According to Modern Tire Dealer magazine, the number of units sold in this subcategory increased industry wide by 4.4% from 2005 to 2006.

Associate brands.Associate brands are primarily lower priced tires, manufactured by well-known manufacturers. Our associate brands include Dayton, Republic, Mastercraft and Gillette. These products allow us to offer tires in a wider
price range. In addition, associate brands are attractive to our dealers because they may count towards the various incentive programs offered by manufacturers.

Private label brands. Private label brands are lower priced tires made by tire manufacturers exclusively for and marketed by independent tire wholesale distributors and/or retailers. Our private labels allow us
to sell alternatively branded tires to locally competitive dealers, increasing our overall market penetration.

Custom Wheels and Accessories

We offer over 200 different styles of wheels in 26 different brands, along with installation and service accessories, resulting in
over 9,000 total SKUs. Of these 26 brands, five are proprietary; ICW Racing, Pacer, Drifz, Cruiser Alloys and OE Performance. An additional seven are exclusive to us; CX, Maas, Zora, Gear, Mossa, Martin Brother and Panther. Nationally available flag
brands compliment our offering with such brands as Cragar, Ultra, Lexani, Micky Thompson, Konig and BBS. In addition to being a relatively high margin product, custom wheels are complimentary to our tire products. Many custom wheel consumers
purchase tires when purchasing wheels. Customers can order custom wheels from us along with their regular tire shipments without the added complexity of being serviced by an additional vendor. Sourcing of this product is worldwide through a number
of manufacturers. Our net sales of custom wheels in fiscal 2006 were $110.1 million or approximately 7.0% of net sales.

Equipment, Tools and
Supplies

We supply our customers with tire service equipment, tools and supplies from leading manufacturers. This equipment
includes wheel alignment, tire changer and automotive lift machinery. These products broaden our portfolio and leverage our customer relationships. The manufacturers we represent are the leaders and best in class for the industry, and include Hunter
Engineering, Hennessey Industries, Inc. (a division of the Danaher Corporation), Challenger, Champion, and Shure. Our net sales of equipment and tools, supplies and other items in 2006 were $53.8 million and $38.8 million, respectively for a
combined total of 5.8% of net sales.



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Distribution System

We have designed our distribution system to deliver products from a wide variety of vendors to our highly fragmented customer base. We believe that as tire manufacturers have reduced the number of direct customers
they serve, we have become a more critical link between those two groups.

We utilize a sophisticated inventory and delivery system to
distribute most of our products to our customers on a same or next day basis. In most of our 74 distribution facilities, we have sophisticated bin locator systems, material handling equipment and routing software that tie customer orders, inventory
and delivery routes in a seamless manner. We believe this system, which is integrated with our ATDOnline ordering system, gives us a competitive advantage by allowing us to ship customer orders quickly while reducing labor costs. Our logistics and
routing technology uses UPS software packages and GPS systems to optimize route design and delivery capacity. Coupled with our fleet of over 700 delivery vehicles, this technology enables us to make multiple daily or weekly shipments to customers,
as necessary. With this distribution infrastructure, we believe we fulfill approximately 88.0% of our customers orders on a same or next day basis.

Approximately 80.0% of our products are shipped directly by tire manufacturers to our distribution centers. The remaining 20.0% of our products are shipped by suppliers to our mixing centers in Maiden, North Carolina,
Lincoln, Nebraska and Fresno, California. These mixing centers allow us to warehouse slower moving and foreign manufactured products, which are forwarded to our distribution centers as needed.

Marketing and Customer Service

Our marketing efforts
are focused on driving growth through customer service, additional product placement and market expansion. We market our products and services through a number of methods, including online initiatives and specialized sales teams. We have structured
our sales organization to best service our existing customers and develop new prospective customers. As the manufacturers have reduced their own sales staffs, our sales force has assumed the consultative role manufacturers previously provided.
Additionally, we have established a segmented pricing system that allows us to effectively manage pricing across our customer base.

Sales Force

Our tire sales force consists of sales personnel located at each distribution center and an administrative group located at our
field support center in Huntersville, North Carolina. The sales personnel located at each distribution center consist of outside and inside sales people as well as customer service representatives. This sales team focuses on local independent dealer
customers. The outside sales people visit their targeted customers to advance our business, while the inside sales people remain on site, making client contact by telephone to advance specific products or programs. The customer service
representatives take orders from tire dealers. The administrative tire sales organization handles national accounts, including automobile dealerships, to maximize the benefits of a centralized sales organization. This administrative tire sales
organization also includes brand managers that coordinate the major tire manufacturers programs with our distribution centers sales force. We have also established a call center to handle calls at peak times of the day to minimize
customer wait time.

Our custom wheel sales group has sales and technical support personnel in the field and performance specialists in
each region. The sales forces responsibilities include cultivating new prospective wheel customers and coordinating with tire sales professionals to cover existing accounts. The technical support professionals provide answers to customer
questions regarding style and fitment. We have also established dedicated equipment, tools and supplies sales force that works with the administrative tire sales force specifically to sell related service equipment, tools and supplies.

ATDOnline and Envizio

ATDOnline provides
our customers with web-based online ordering and 24/7 access to our inventory availability and pricing. The orders are automatically processed and printed in the appropriate distribution center



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within minutes of entry. ATDOnline allows customers to track their account balances and participation levels in supplier incentive programs. We are enhancing
its capability so that users can also track expected deliveries. As this system represents a more efficient method of order entry and information access, we have encouraged our customers to use this system. In 2006, approximately 51.8% of our tire
and wheel orders were placed online using ATDOnline, up from 45.8% in 2005.

In addition to providing customer service around our
suppliers incentive programs, we offer ATDOnline Rewards for ATDOnline users. Dealers earn reward points each time an order is placed online with us. Reward points can be redeemed for airline tickets, gifts, vacation packages and other awards,
depending on the point value of the prize chosen.

Envizio is a newly introduced web-based tool that was initially designed to replace
Wheel Wizard as the custom wheel marketing and technical resource for our customers. Envizio utilizes mathematic models that enable users to properly select and display a wide variety of wheel products on the car of their choice in photographic
quality images. We believe the combination of the Envizio website and kiosks in dealer stores provides our customers a unique and easy-to-use tool for selling wheels and, ultimately, other products.

Manufacturer Programs

Individual
manufacturers offer a variety of programs for dealers that sell their products, such as Michelins Alliance, Goodyears Express, Continentals Gold, Kumhos Fuel, and Bridgestones TireStarz. These programs, which are
relatively complex, provide cooperative advertising funds, volume discounts and other incentives. As part of our service to our customers, we manage these programs for the manufacturers and enhance these programs through dedicated staff to assist
dealers in managing their participation. We believe these enhancements, combined with our customer service, provide significant value to our customers.

In 2000, we introduced AutoEdge, a proprietary marketing program through which dealers can offer consumers the convenience of nationwide tire and service warranties (through third party warranty providers) and a
nationally accepted third party credit card.

In 2004, as a result of our acquisition of Target Tire, Inc. (Target Tire), we
acquired membership in the American Car Care organization for several areas we serve which further expanded in 2005 with our acquisition of Wholesale Tire Distributors, Inc., Wholesale Tire Distributors of Wyoming, Inc., and Wholesale Tire
Distributors of Idaho, Inc. (collectively Wholesale Tire). This organization operates programs similar to AutoEdge throughout much of the country.

In 2006, we introduced ATD ServiceBay, which provides a comprehensive suite of benefits for our dealers including nationwide tire and service warranties (through third party warranty providers), a nationally accepted,
third party credit card and training and marketing programs to provide our dealers with the support and service that is critical to succeed in todays increasingly competitive marketplace.

Customers

We
distribute tires and related automotive products principally to independent tire outlets. Our other customers include national and regional retail chains, service stations, general automotive repair facilities, auto parts stores, automobile dealers
and specialty automotive repair facilities. In 2006, our operations served approximately 38,000 customers each month in 36 states. Our customers are principally located in the mid-Atlantic and Southern states as well as California and Arizona. Our
largest customer and its subsidiaries accounted for less than 1.2%, and our top ten customers accounted for less than 6.5%, of net sales.

Car dealerships are focused on growing their service business in an effort to expand profitability and we believe they view having replacement tire capabilities as an important service element. According to Modern



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Tire Dealer magazine, car dealers account for 4.0% of all replacement tire sales, up from 3.5% in 2005. During 2005 and into 2006 we successfully rolled out
programs with several car manufacturers which continue to expand. We are currently in discussions with other car manufacturers to implement similar programs with them and their network of dealerships.

Suppliers

We purchase our tires from several
sources, including the four largest tire manufacturers: Bridgestone, Continental, Goodyear and Michelin. Our supply arrangements with our major suppliers are generally oral or written arrangements, which are renegotiated annually. Although we can
make no assurance that these arrangements will be renewed, or renewed on favorable terms, we have conducted business with our major tire suppliers for many years and we believe that we have good relationships with all of our major suppliers. We
purchased approximately 46.0% of our tire products in 2006 from three tire suppliers and we do not have long term supply agreements with these vendors for purchases of the vendors branded products. Our operating results could be adversely
affected if we were unable to purchase tires from these three suppliers.

There are a number of worldwide manufacturers of wheels and other
automotive products and equipment. Most of the wheels we purchase are private label custom brands, namely Pacer, Cruiser Alloys, Drifz, OE Performance and ICW, and are produced by a variety of manufacturers. We purchase equipment and other
products from multiple sources, including industry leaders such as Hunter Engineering and Hennessey Industries.

Competition

The industry in which we operate is highly competitive and fragmented. Tire manufacturers distribute tires to the retail market by direct shipments to
independent tire outlets, national retail chains and manufacturer owned retail stores, as well as through shipments to independent wholesale distributors like us. There are approximately 200 independent wholesale distributors in the United States.
We compete with a number of tire distributors on a regional basis. Our main competitors include: TCI Tire Centers, TBC Wholesale and Am-Pac Tire, some of whom have retail operations which compete with their distribution customers. We also face some
competition from mail order and smaller regional companies.

We believe that the principal competitive factors in our business are
reputation, breadth of product offering, delivery frequency, price and service. We believe that we compete effectively in all aspects of our business due to our ability to offer a broad selection of flag and private label branded products, our
competitive prices and our ability to provide quality services in a timely manner.

Information Systems

Our legacy computer system consists of programs developed in-house by our programming staff. The main functions of this system include order entry,
invoicing, inventory control, accounts receivable and warehouse management. We are currently implementing the latter stages of a four-year program conversion to Oracle in order to accommodate our integrated operations and increased volume of
business. We have already implemented the general ledger as well as accounts payable, procurement and inventory functions on Oracle. We expect to complete the conversion to Oracle in 2008. If this transition is not successful, our business and
operations could be disrupted and our operating results could be harmed. For more information, see Item 1A, Risk Factors.

Trademarks

The private label brand names under which we market our products are trademarks of our company. Those private label brand names are
considered to be important to our business because they develop brand identification and foster customer loyalty. All of our trademarks are of perpetual duration as long as they are



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periodically renewed. We currently intend to maintain all of them in force. The principal private label brand names under which we market our products are:



| |  |  | DYNATRAC® tires;
| | - |  | ----------------



| |  |  | WYNSTAR® tires;
| | - |  | ---------------



| |  |  | Cruiser Wire® custom wheels;
| | - |  | ----------------------------



| |  |  | DRIFZ® custom wheels;
| | - |  | ---------------------



| |  |  | ICW® custom wheels;
| | - |  | -------------------



| |  |  | PACER® custom wheels; and
| | - |  | -------------------------



| |  |  | MAGNUM® automotive lifts.
| | - |  | -------------------------

Our other trademarks include:



| |  |  | American Tire Distributors®;
| | - |  | ----------------------------



| |  |  | ATDOnline®;
| | - |  | -----------



| |  |  | ATD ServiceBay ®; and
| | - |  | ---------------------



| |  |  | WHEEL WIZARD®.
| | - |  | --------------

Seasonality and Inventory

We typically experience our highest sales levels from March through October of each fiscal year, while sales levels are generally lower during the period
from November through February. Our inventories generally fluctuate with anticipated seasonal sales volumes. We believe that we maintain levels of inventory that are adequate to meet our customers needs on short notice. Since customers look to
us to fulfill their needs on short notice, backlog of orders is not a meaningful statistic for us.

Environmental Matters

Our operations and properties are subject to federal, state and local laws and regulations relating to the use, storage, handling, generation,
transportation, treatment, emission, release, discharge and disposal of hazardous materials, substances and wastes and relating to the investigation and clean up of contaminated properties, including off-site disposal locations. We do not incur
significant costs complying with environmental laws and regulations. However, we could be subject to material environmental costs, liabilities or claims in the future, especially in the event of changes in existing laws and regulations or in their
interpretation.

Employees

As of
March 15, 2007, our operations employed approximately 2,100 people. None of our employees are represented by a union. We believe our employee relations are satisfactory.

Available Information

In accordance with the requirements of the Securities and Exchange Act of
1934, we file reports and other information with the Securities and Exchange Commission (SEC). You may read and, for a fee, copy any document that we file with the SEC at the public reference room maintained by the SEC at 100 F Street,
N.E., Washington, D.C. 20549. You may also obtain information on the operation of the public reference room by calling the SEC at 1-800-SEC-0330. Our SEC filings are also available to the public from commercial document retrieval services and at the
website maintained by the SEC at www.sec.gov.



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You may also request a copy of these filings at no cost, by writing or telephoning us at the following
address:

American Tire Distributors Holdings, Inc.

Attention: Corporate Secretary

12200 Herbert Wayne Court

Suite 150

Huntersville, NC 28078

(704) 992-2000



|Item 1A. | Risk Factors.
|-------- | -------------

We depend on our
relationships with our vendors and a disruption of these relationships or of our vendors operations could have an adverse effect on our business and results of operations.

There are a limited number of tire manufacturers worldwide and, accordingly, we rely on a limited number of tire manufacturers for our products, including
flag and associate brands as well as our private label brands. Our business depends on developing and maintaining productive relationships with these vendors. In particular, we rely on Michelin and Bridgestone/Firestone, our top two suppliers, who
supplied 23.6% and 12.1%, respectively, of the tires we purchased in 2006. Although in most cases we have long term relationships with these manufacturers, our contracts are short term in nature, and there can be no assurance that these suppliers
will continue to supply products to us on favorable terms, or at all. In addition, our growth strategy depends on our ability to make selective acquisitions. Our vendors may not be willing to supply the companies we acquire, which could have a
material adverse effect on our business. Furthermore, in the event that any of our vendors were to experience financial, operational, production, supply, labor or quality assurance difficulties that resulted in a reduction or interruption in our
supply, or if they otherwise failed to meet our manufacturing requirements, we could be materially adversely affected. In addition, our failure to promptly pay or order sufficient quantities from our vendors may result in an increase in the cost of
the products we purchase or a reduction in cooperative advertising and marketing funds or may lead to vendors refusing to sell products to us at all. To the extent that we would be required to find replacements for our manufacturers, a change in
manufacturers could result in cost increases, time delays in deliveries and a loss of customers, any of which could have a material adverse effect on us. Finally, although the majority of tires manufactured by the major tire manufacturers are sold
to the replacement tire market, the manufacturers pay disproportionate attention to automobile companies that purchase tires for use as original equipment on vehicles sold to consumers. Increased demand from the automobile companies could also
result in cost increases and time delays in deliveries from manufacturers to us, any of which could have a material adverse effect on us.

While the independent tire outlet share of the replacement tire market has been relatively stable in the recent past, the share of larger dealers has grown at the expense of smaller tire dealers. Our business would be adversely affected if
the vendors determined that, due to the increasing size of such dealers, they could deal directly with such dealers.

Our business could be adversely
affected by consolidation among customers as it may reduce our importance as a holder of sizable inventory, thereby reducing our revenues and earnings.

Our success has been dependent, in part, on the fragmented customer base in our industry. Because of the small size of most customers, they cannot support substantial inventory positions and thus we fill an important
role as our size permits us to maintain a sizable inventory. We generally do not have long term contracts with our customers and they can cease doing business with us at any time. If a trend towards consolidation among customers develops in the
future, it could reduce our importance and reduce our revenues, margins and earnings. While the independent tire outlet share of the replacement tire market has been relatively stable in the recent past, the share of larger dealers has grown at the
expense of smaller tire dealers. If that trend continues, the number of



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dealers able to handle sizable inventory could increase, reducing the importance of distributors to the independent dealer market.

We would also be adversely affected if other channels in the replacement tire market, including mass merchandisers and wholesale clubs, gain market share
from the independent tire outlet channel. Our market share in those other channels is lower, as these channels are generally sizable enough to deal directly with vendors.

The industry in which we operate is highly competitive and our failure to effectively compete may adversely affect our results of operations and our ability to service our debt obligations.

The industry in which we operate is highly competitive, and some of our competitors have resources greater than ours. Tire manufacturers distribute
tires to the retail market by direct shipments to independent tire outlets, national retail chains and manufacturer owned retail stores as well as through shipments to independent wholesale distributors. A number of independent wholesale tire
distributors also compete in the regions in which we do business. Most of our customers buy products from both our competitors and us. Although we believe that we have been able to compete successfully in our markets to date, there can be no
assurance that we will be able to continue to do so in the future. See Item 1 BusinessCompetition.

The automotive replacement
tire industry is subject to cycles in the general economy. A downturn in the economy could reduce consumer spending on our products which could decrease our net sales and operating margins. Also, absent general economic changes, fluctuations in
interest rates and fuel prices could impact consumer spending, which could decrease our net sales and operating margins.

A downturn
in the economy may delay or reduce consumer purchases of our products and services or lead consumers to purchase more associate or private label brands and reduce spending on higher margin products, which could adversely affect our revenues, cash
flow and profits. Sales in our industry declined in 2006 due to concerns from consumers over rising interest rates, higher minimum credit card payments and increased fuel costs. Sales in our industry declined in 2001 due in part to the recession as
well as the effect of the Firestone recall in 2000, and sales in our industry have declined on an annual basis in prior recessions. A slowdown in economic activity could adversely affect our results. Many factors affect the level of consumer
spending on replacement tires, including, among others, general business conditions, interest rates, gasoline prices, the availability of consumer credit and consumer confidence in future economic conditions. While the number of automobiles
registered in the United States has steadily increased over time, should a reduction in the number of automobiles driven by automobile owners or a reduction in new car purchases occur, it would adversely affect the demand for our products.

Our business is subject to seasonal and other fluctuations that affect our cash flows which could affect our ability to service our debt during
certain periods.

Demand for tires tends to fluctuate from quarter to quarter, with the highest demand generally from March through
October of each calendar year and the lowest demand typically from November through February of each calendar year. In addition, the popularity, supply and demand for particular tire products may change from year to year based on consumer
confidence, the volume of tires reaching the replacement tire market, the level of personal discretionary income and other factors. Local economic, weather, transportation and other conditions also affect the volume of tire sales, on both a
wholesale and retail basis. Such fluctuations may adversely affect our cash flows and our ability to service our debt in certain periods.

We are
currently converting from our legacy software platform to Oracle. If this transition is not successful, our business and operations could be disrupted and our operating results would be harmed.

We are currently in the latter stages of a four-year conversion of our legacy computer system to Oracle. We have already implemented the general ledger as
well as a portion of the accounts payable and inventory functions



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to Oracle but still must transition other key functions. We cannot be sure that the transition will be fully implemented on a timely basis, if at all. If we
do not successfully implement this project, our operations may be disrupted and our operating results could be harmed. Even if the integration is completed on time, the new system may not operate as we expect it to. In addition, we may have to
expend significant resources to find an alternative source for performing these functions and we cannot guarantee this would be accomplished in a timely manner or without significant additional disruption to our business.

If we experience problems with our fleet of trucks or are otherwise unable to make timely deliveries of our products to our customers, our business and reputation
could be harmed.

We use a fleet of trucks to deliver our products to our customers, most of which are leased from third parties. We
are subject to the risks associated with providing trucking services, including inclement weather, disruptions in the transportation infrastructure, disruptions in our lease arrangements, availability and price of fuel, and liabilities arising from
accidents to the extent we are not covered by insurance. Our failure to deliver tires and other products in a timely and accurate manner could harm our reputation and brand, which could have an adverse effect on our business.

Our growth strategy of identifying and consummating acquisitions and expanding our services into new regions entails integration, financing and other risks,
including expenditures associated with developing a distribution infrastructure with new distribution centers and routes.

As part
of our business strategy, we have expanded, and intend to further expand, our operations through selective acquisitions. This growth strategy entails risks inherent in identifying desirable acquisition candidates, in integrating the operations of
acquired businesses into our existing operations and risks relating to potential unknown liabilities associated with acquired businesses. In addition, we may not be able to finance a desirable acquisition or to pay as much as our competitors because
of our leveraged financial condition, restrictions under the instruments governing our debt or general economic conditions.

In connection
with future acquisitions, we may assume the liabilities of the companies we acquire. These liabilities could materially and adversely affect our business. Difficulties that we may encounter in integrating the operations of acquired businesses could
also have a material adverse effect on our results of operations and financial condition. Moreover, we may not realize any of the anticipated benefits of an acquisition and integration costs may exceed anticipated amounts. While our most recent
acquisitions have been successfully integrated to-date, we can not be assured that will be the case with all acquisitions in the future.

The launch of our distribution services into new regions will require expenditures to develop a distribution infrastructure, including new distribution centers and routes, and we generally do not expect to achieve profitability from new
regions for a period of time. We may also face competition from existing distributors in those regions that could reduce the benefits we anticipate from such expansion.

We could be subject to product liability, personal injury or other litigation claims which could have an adverse effect on our business, financial condition and results of operations.

Purchasers of our products, or their employees or customers, could be injured or suffer property damage from exposure to, or defects in, products we sell
or distribute, or have sold or distributed in the past, and we could be subject to claims, including product liability or personal injury claims and claims due to injuries caused by our truck drivers. These claims may not be covered by insurance and
vendors may be unwilling or unable to satisfy their indemnification obligations to us with respect to these claims. As a result, the defense, settlement or successful assertion of any future product liability, personal injury or other litigation
claims could cause us to incur significant costs and could have an adverse effect on our business, financial condition, results of operations or cash flows.



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Our high amount of debt may adversely affect our financial condition, restrict our growth, or place us at a
competitive disadvantage.

We are currently highly leveraged. As of December 30, 2006, our debt (including capital leases) was
$521.0 million. In addition, as of December 30, 2006 ATD was able to borrow up to an additional $122.9 million under its credit facility, subject to customary borrowing conditions. Our high amount of debt could have important consequences,
including:



| |  |  | Making it more difficult to satisfy our obligations;
| | - |  | ----------------------------------------------------



| |  |  | Impairing our ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions and other general corporate requirements;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Increasing our vulnerability to general adverse economic and industry conditions by making it more difficult for us to react quickly to changing conditions;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Requiring a substantial portion of our cash flow from operations for the payment of interest on our debt and reducing our ability to use our cash flow to fund
working capital, capital expenditures, acquisitions and general corporate requirements;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------



| |  |  | Placing us at a competitive disadvantage compared to our competitors that have less debt.
| | - |  | -----------------------------------------------------------------------------------------

We anticipate that any future acquisitions we pursue as part of our growth strategy may be financed through a combination of cash on hand, operating cash
flow and availability under ATDs existing credit facility. If new debt is added to current debt levels, the related risks described above could increase.

Our variable rate debt subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

Certain amounts of our borrowings, primarily borrowings under ATDs credit facility and our Senior Floating Rate Notes, are at variable rates of interest and expose us to interest rate risk. If interest rates
increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same. This would require us to use more of our available cash to service our indebtedness. There can be no assurance
that we will be able to enter into interest rate swap agreements or other hedging arrangements in the future, or that existing or future hedging arrangements will offset increases in interest rates. At December 30, 2006, we had $295.0 million
outstanding under ATDs credit facility and our Senior Floating Rate Notes, of which $210.0 million was not hedged by an interest rate swap agreement and was thus subject to exposure to interest rate changes.

Our business strategy relies increasingly upon online commerce and we may not be able to adapt to rapid technological change.

Customers access to our website directly affects the volume of orders we fulfill and thus affects our revenues. Approximately 51.8% of our tire and
wheel orders in 2006 were placed online using ATDOnline, up from 45.8% in 2005. We expect our internet generated business to continue to grow as a percentage of overall sales. Technology in the online commerce industry changes rapidly. Customer
functionality requirements and preferences also change. Competitors often introduce new products and services with new technologies, all of which could render our existing website and proprietary technology obsolete. To succeed, we must continually
enhance website responsiveness, functionality and features, acquire and license leading technologies, enhance our existing services and respond to technological advances and emerging industry standards and practices on a cost effective and timely
basis. If we do not adapt quickly enough to changing customer requirements and industry standards, there could be a decline in online orders and a decrease in net sales.



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Our business could be adversely affected by increases in the price of fuel.

Both the industry in which we operate and our distribution methods are affected by the availability and price of fuel. Because we use a fleet of trucks to
deliver tires and other products to our customers, the current high price of fuel or any further increases in the price of fuel may cause us to incur increased costs in operating our fleet, which may have an adverse effect on our business, financial
condition, results of operations and cash flows.

Loss of key personnel and/or failure to attract and retain highly qualified personnel could make it
more difficult for us to generate cash flow from operations and service our debt.

We are dependent on the continued services of our
senior management team. We may not be able to retain our existing senior management, fill new positions or vacancies created by expansion or turnover or attract additional senior management personnel. We believe the loss of such key personnel could
adversely affect our financial performance. In addition, our ability to manage our anticipated growth will depend on our ability to identify, hire and retain qualified management personnel. We cannot assure you that we can attract and retain
sufficient qualified personnel to meet our business needs.

If we are not able to adequately implement the requirements of Section 404 of the
Sarbanes-Oxley Act of 2002 and are the subject of sanctions or investigation, our results of operations and our ability to provide timely and reliable financial information may be adversely affected.

Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002 and related
regulations implemented by the Securities and Exchange Commission, or SEC, and the Public Company Accounting Oversight Board, or PCAOB, are creating uncertainty for public companies and other companies subject to the federal securities laws,
increasing legal and financial compliance costs and making some activities more time consuming. We will be evaluating our internal control over financial reporting to allow management to assess and report on our internal control over financial
reporting, which we are required to comply with in our annual report which we will file in 2008 for our 2007 fiscal year. Furthermore, the SEC Advisory on Smaller Public Companies continues to evaluate the requirements of Section 404 of the
Sarbanes-Oxley Act for non-accelerated filers, including debt only issuers, and acknowledges some relief is needed. In the absence of further rulemaking, however, we will continue performing the system and process evaluation and testing (and any
necessary remediation) required to comply with the requirements of Section 404 of the Sarbanes-Oxley Act. As a result, we expect to incur substantial additional expenses and diversion of managements time. While we anticipate being able to
fully implement the requirements relating to internal control over financial reporting and all other aspects of Section 404 by the applicable deadlines, we cannot be certain as to the timing of completion of our evaluation, testing and any
remediation actions or the impact of the same on our operations. If we are not able to implement the requirements of Section 404 in a timely manner or with adequate compliance, we might be subject to sanctions or investigation by regulatory
authorities such as the SEC or the PCAOB. Any such action could adversely affect our financial results or investors confidence in our company and could cause the price of our securities to fall. In addition, if we fail to develop and maintain
effective controls and procedures, we may be unable to provide the financial information in a timely and reliable manner.



|Item 1B. | Unresolved Staff Comments.
|-------- | --------------------------

Not Applicable



|Item 2. | Properties.
|------- | -----------

Our principal properties
are geographically situated to meet sales and operating requirements. All of our properties are considered to be adequate to meet current operating requirements. As of December 30, 2006, we had a total of 74 warehouse distribution centers
located in 27 states, aggregating approximately 5.9 million square feet. Of these centers, two are owned and the remainder are leased.



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We also lease our principal executive office, located in Huntersville, North Carolina. This lease will
expire in 2010.

Several of our leases contain provisions prohibiting a change in control of the lessee or permitting the landlord to
terminate the lease or increase rent upon a change in control of the lessee. Based primarily upon our belief that (i) we maintain good relations with the substantial majority of our landlords, (ii) most of our leases are at market rates
and (iii) we have historically been able to secure suitable leased property at market rates when needed, we believe that these provisions will not have a material adverse effect on our business or financial position.



|Item 3. | Legal Proceedings.
|------- | ------------------

We are involved
from time to time in various lawsuits, including alleged class action lawsuits arising out of the ordinary conduct of our business. Although no assurances can be given, we do not expect that any of these matters will have a material adverse effect
on our business or financial condition. We are also involved in various litigation proceedings incidental to the ordinary course of our business. We believe, based on consultation with legal counsel, that none of these will have a material adverse
effect on our financial condition or results of operations.



|Item 4. | Submission of Matters to a Vote of Security Holders.
|------- | ----------------------------------------------------

None



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PART II



|Item 5. | Market for Registrants Common Equity and Related Stockholder Matters.
|------- | ----------------------------------------------------------------------

As of March 15, 2007, there were 38 holders of record of our common stock. There is no public trading market for our common stock.

As of December 30, 2006, we have not declared or paid dividends on our common stock and have no intention to do so in the foreseeable future. In addition, ATDs revolving credit facility contains certain
covenants, which among other things, restricts our ability to pay dividends. See Item 7, Managements Discussion and Analysis of Financial Condition and Results of Operations for further discussion.

Information regarding securities authorized for issuance under equity compensation plans is set forth in Item 12 of this Form 10-K.



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|Item 6. | Selected Financial Data.
|------- | ------------------------

The
following table sets forth both the Predecessor and Successor selected historical consolidated financial data for the periods indicated. The Predecessors data was restated for the presentation of Winston Tire Company (Winston), its
retail segment that was sold in May 2001, as a discontinued operation. Selected historical financial data as of the end of and for the fiscal years 2002 through 2004 is derived from the Predecessors consolidated financial statements as of and
for those years. Both the Predecessor and Successors fiscal year is based on either a 52 or 53-week period ending on the Saturday closest to each December 31. Therefore, the financial results of certain fiscal years will not be exactly
comparable to the prior or subsequent fiscal years. The 2004 fiscal year (ended January 1, 2005) contains operating results for 53 weeks. The 2003 fiscal year (ended December 27, 2003) and the 2002 fiscal year (ended December 28,
2002) contain operating results for 52 weeks. Selected historical financial data for the fiscal quarter ended April 2, 2005 is derived from the Predecessors consolidated financial statements as of and for that period. Selected historical
financial data for the period of April 2, 2005 through December 31, 2005 and for fiscal year 2006 is derived from the Successor company and reflects the Acquisition and related transactions. The fiscal quarter ended April 2, 2005
contains operating results for 13 weeks, the period of April 2, 2005 through December 31, 2005 contains operating results for 39 weeks and the 2006 fiscal year (ended December 30, 2006) contains operating results for 52 weeks. The
following selected historical consolidated financial information should be read in conjunction with Item 7, Managements Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial
statements and the related notes included under Item 8 in this report.



|                                                                                                          |  |                        |           |   |                  |   |           |                      |  |   |                           |   |  |                                                     |         |   |                      |   |           |   |  |   |           |  
|--------------------------------------------------------------------------------------------------------- |  | ---------------------- | --------- | - | ---------------- | - | --------- | -------------------- |  | - | ------------------------- | - |  | --------------------------------------------------- | ------- | - | -------------------- | - | --------- | - |  | - | --------- | -
|                                                                                                          |  | Predecessor            |           |   | Successor        |  
|                                                                                                          |  | Fiscal Year 2002       |           |   | Fiscal Year 2003 |   |           | Fiscal Year 2004 (3) |  |   | Quarter EndedApril 2,2005 |   |  | Period fromApril 2, 2005throughDecember 31,2005 (2) |         |   | Fiscal Year 2006 (1) |  
|                                                                                                          |  | (dollars in thousands) |           |   |                  |   |           |                      | 
|Statement of Operations Data:                                                                             |  |                        |           |   |                  |   |           |                      |  |   |                           |  
|Net sales                                                                                                 |  | $                      | 1,062,015 |   |                  | $ | 1,114,410 |                      |  | $ | 1,282,069                 |   |  | $                                                   | 354,339 |   |                      | $ | 1,150,944 |   |  | $ | 1,577,973 |  
|Cost of goods sold, excluding depreciation included in selling, general and administrative expenses
below |  |                        | 868,750   |   |                  |   | 910,905   |                      |  |   | 1,043,793                 |   |  |                                                     | 290,488 |   |                      |   | 939,325   |   |  |   | 1,293,594 |  
|                                                                                                          |  |                        |           |   |                  |   |           |                      |  |   |                           |   |  |                                                     |         |   |                      |   |           |   |  |   |           |  
|Gross profit                                                                                              |  |                        | 193,265   |   |                  |   | 203,505   |                      |  |   | 238,276                   |   |  |                                                     | 63,851  |   |                      |   | 211,619   |   |  |   | 284,379   |  
|Selling, general and administrative expense                                                               |  |                        | 161,914   |   |                  |   | 162,351   |                      |  |   | 183,235                   |   |  |                                                     | 52,653  |   |                      |   | 172,605   |   |  |   | 227,399   |  
|Impairment of intangible asset                                                                            |  |                        |          |   |                  |   |          |                      |  |   |                          |   |  |                                                     |        |   |                      |   |          |   |  |   | 2,640     |  
|Transaction expenses                                                                                      |  |                        |          |   |                  |   |          |                      |  |   |                          |   |  |                                                     | 28,211  |   |                      |   | 95        |   |  |   |          |  
|                                                                                                          |  |                        |           |   |                  |   |           |                      |  |   |                           |   |  |                                                     |         |   |                      |   |           |   |  |   |           |  
|Operating income (loss)                                                                                   |  |                        | 31,351    |   |                  |   | 41,154    |                      |  |   | 55,041                    |   |  |                                                     | (17,013 | ) |                      |   | 38,919    |   |  |   | 54,340    |  
|Other income (expense)                                                                                    |  |                        |           |   |                  |   |           |                      |  |   |                           |   |  |                                                     |         |   |                      |   |           |   |  |   |           |  
|Interest expense                                                                                          |  |                        | (18,705   | ) |                  |   | (14,071   | )                    |  |   | (13,371                   | ) |  |                                                     | (3,682  | ) |                      |   | (41,359   | ) |  |   | (60,065   | )
|Gain on repurchase of Series D Senior Notes                                                               |  |                        | 49,759    |   |                  |   |          |                      |  |   |                          |   |  |                                                     |        |   |                      |   |          |   |  |   |          |  
|Other, net                                                                                                |  |                        | 288       |   |                  |   | 93        |                      |  |   | (393                      | ) |  |                                                     | (252    | ) |                      |   | 111       |   |  |   | (364      | )
|                                                                                                          |  |                        |           |   |                  |   |           |                      |  |   |                           |   |  |                                                     |         |   |                      |   |           |   |  |   |           |  
|Income (loss) from operations before income taxes                                                         |  |                        | 62,693    |   |                  |   | 27,176    |                      |  |   | 41,277                    |   |  |                                                     | (20,947 | ) |                      |   | (2,329    | ) |  |   | (6,089    | )
|Income tax provision (benefit)                                                                            |  |                        | 24,783    |   |                  |   | 11,089    |                      |  |   | 16,236                    |   |  |                                                     | (6,620  | ) |                      |   | (728      | ) |  |   | (1,482    | )
|                                                                                                          |  |                        |           |   |                  |   |           |                      |  |   |                           |   |  |                                                     |         |   |                      |   |           |   |  |   |           |  
|Income (loss) from continuing operations                                                                  |  |                        | 37,910    |   |                  |   | 16,087    |                      |  |   | 25,041                    |   |  |                                                     | (14,327 | ) |                      |   | (1,601    | ) |  |   | (4,607    | )
|Loss from discontinued operations, net of income tax benefit                                              |  |                        | (483      | ) |                  |   | (82       | )                    |  |   |                          |   |  |                                                     |        |   |                      |   |          |   |  |   |          |  
|                                                                                                          |  |                        |           |   |                  |   |           |                      |  |   |                           |   |  |                                                     |         |   |                      |   |           |   |  |   |           |  
|Net income (loss)                                                                                         |  | $                      | 37,427    |   |                  | $ | 16,005    |                      |  | $ | 25,041                    |   |  | $                                                   | (14,327 | ) |                      | $ | (1,601    | ) |  | $ | (4,607    | )
|                                                                                                          |  |                        |           |   |                  |   |           |                      |  |   |                           |   |  |                                                     |         |   |                      |   |           |   |  |   |           |  



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|                                       |  |                        |         |   |                  |   |         |                      |  |   |                           |   |  |                                                     |        |   |                      |   |           |   |  |   |           |  
|-------------------------------------- |  | ---------------------- | ------- | - | ---------------- | - | ------- | -------------------- |  | - | ------------------------- | - |  | --------------------------------------------------- | ------ | - | -------------------- | - | --------- | - |  | - | --------- | -
|                                       |  | Predecessor            |         |   | Successor        |  
|                                       |  | Fiscal Year 2002       |         |   | Fiscal Year 2003 |   |         | Fiscal Year 2004 (3) |  |   | Quarter EndedApril 2,2005 |   |  | Period fromApril 2, 2005throughDecember 31,2005 (2) |        |   | Fiscal Year 2006 (1) |  
|                                       |  | (dollars in thousands) |         |   |                  |   |         |                      | 
|Other Financial Data:                  |  |                        |         |   |                  |   |         |                      |  |   |                           |   |  |                                                     |        |   |                      |   |           |   |  |   |           |  
|Cash flows provided by (used in):      |  |                        |         |   |                  |   |         |                      |  |   |                           |   |  |                                                     |        |   |                      |   |           |   |  |   |           |  
|Operating activities                   |  | $                      | 15,265  |   |                  | $ | 17,657  |                      |  | $ | 25,709                    |   |  | $                                                   | 9,871  |   |                      | $ | (34,654   | ) |  | $ | 66,586    |  
|Investing activities                   |  |                        | 13,413  |   |                  |   | (1,929  | )                    |  |   | (63,302                   | ) |  |                                                     | (1,438 | ) |                      |   | (468,815  | ) |  |   | (28,527   | )
|Financing activities                   |  |                        | (30,116 | ) |                  |   | (15,095 | )                    |  |   | 37,601                    |   |  |                                                     | (8,264 | ) |                      |   | 505,511   |   |  |   | (40,004   | )
|Depreciation and amortization          |  |                        | 8,610   |   |                  |   | 6,957   |                      |  |   | 6,781                     |   |  |                                                     | 1,738  |   |                      |   | 16,409    |   |  |   | 25,071    |  
|Capital expenditures (4)               |  |                        | 2,059   |   |                  |   | 2,491   |                      |  |   | 4,379                     |   |  |                                                     | 1,574  |   |                      |   | 6,086     |   |  |   | 9,845     |  
|Indenture EBITDA (5)                   |  |                        | 40,327  |   |                  |   | 48,491  |                      |  |   | 64,194                    |   |  |                                                     | 13,865 |   |                      |   | 64,964    |   |  |   | 83,658    |  
|Ratio of earnings to fixed charges (6) |  |                        | 3.3     | x |                  |   | 2.2     | x                    |  |   | 2.9                       | x |  |                                                     |       |   |                      |   |          |   |  |   |          |  
|Balance Sheet Data:                    |  |                        |         |   |                  |   |         |                      |  |   |                           |   |  |                                                     |        |   |                      |   |           |   |  |   |           |  
|Cash and cash equivalents              |  | $                      | 2,693   |   |                  | $ | 3,326   |                      |  | $ | 3,334                     |   |  |                                                     |        |   |                      | $ | 5,545     |   |  | $ | 3,600     |  
|Working capital (7)                    |  |                        | 83,073  |   |                  |   | 98,997  |                      |  |   | 133,720                   |   |  |                                                     |        |   |                      |   | 201,820   |   |  |   | 172,627   |  
|Total assets                           |  |                        | 406,413 |   |                  |   | 413,970 |                      |  |   | 549,243                   |   |  |                                                     |        |   |                      |   | 1,120,118 |   |  |   | 1,123,506 |  
|Total debt (8)                         |  |                        | 196,400 |   |                  |   | 182,716 |                      |  |   | 233,919                   |   |  |                                                     |        |   |                      |   | 545,245   |   |  |   | 521,007   |  
|Total redeemable preferred stock       |  |                        | 11,035  |   |                  |   | 10,535  |                      |  |   | 9,535                     |   |  |                                                     |        |   |                      |   | 18,559    |   |  |   | 19,822    |  
|Total shareholders equity             |  |                        | 16,489  |   |                  |   | 32,494  |                      |  |   | 57,765                    |   |  |                                                     |        |   |                      |   | 220,806   |   |  |   | 216,758   |  

---

|(1) | In January 2006, we acquired Silver State Tire Company and Golden State Tire Distributors (collectively Silver State) and in July 2006, we acquired Samaritan Wholesale
Tire Company (Samaritan Tire). Each transaction was accounted for using the purchase method of accounting.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | In August 2005, we acquired Wholesale Tire Distributors, Inc., Wholesale Tire Distributors of Wyoming, Inc., and Wholesale Tire Distributors of Idaho, Inc. (collectively
Wholesale Tire). This transaction was accounted for using the purchase method of accounting.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | In July 2004, ATD acquired Texas Market Tire Holdings I, Inc., d/b/a Big State Tire Supply (Big State) and in September 2004, ATD acquired Target Tire, Inc.
(Target Tire). Each transaction was accounted for using the purchase method of accounting.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Excludes capital expenditures financed by debt.
|--- | -----------------------------------------------

|(5) | We evaluate liquidity based on several factors, of which the primary financial measure is Indenture EBITDA. The presentation of Indenture EBITDA, a non-GAAP financial measure, and
ratios based thereon, do not comply with accounting principles generally accepted in the United States because they are adjusted to exclude certain cash expenses, including recurring expenses. We present Indenture EBITDA as it is used to determine
our compliance with covenants contained in the related indentures governing our notes. The covenants are tied to ratios based on Indenture EBITDA, referred to as Consolidated Cash Flows in the indenture agreement, and restrict our ability to incur
additional indebtedness and to issue preferred stock. Indenture EBITDA as used herein represents earnings before interest, taxes, depreciation and amortization and other adjustments permitted in calculating covenant compliance under the indentures.
We believe that the inclusion of this supplementary information is necessary for investors to understand our abilities to comply with the financial covenants and debt service of the notes. Indenture EBITDA should not be considered an alternative to,
or more meaningful than, cash flow as determined in accordance with accounting principles generally accepted in the United States. The following table is a reconciliation of the most directly comparable GAAP measure, net cash provided by (used
in) operating activities, to Indenture EBITDA.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|                                                                     |  |                        |         |   |                            |   |        |                                                  |  |   |                 |   |  |   |         |   |  |   |         |   |  |   |         |  
|-------------------------------------------------------------------- |  | ---------------------- | ------- | - | -------------------------- | - | ------ | ------------------------------------------------ |  | - | --------------- | - |  | - | ------- | - |  | - | ------- | - |  | - | ------- | -
|                                                                     |  | Predecessor            |         |   | Successor                  |  
|                                                                     |  | Fiscal Year            |         |   | QuarterEnded April 2, 2005 |   |        | Period fromApril 2,
2005throughDecember 31, 2005 |  |   | FiscalYear 2006 |  
|                                                                     |  | 2002                   |         |   | 2003                       |   |        | 2004                                             |  |   |                 |  
|                                                                     |  | (dollars in thousands) |         |   |                            |   |        |                                                  | 
|Net cash provided by (used in) operating activities                  |  | $                      | 15,265  |   |                            | $ | 17,657 |                                                  |  | $ | 25,709          |   |  | $ | 9,871   |   |  | $ | (34,654 | ) |  | $ | 66,586  |  
|Changes in assets and liabilities                                    |  |                        | 7,560   |   |                            |   | 14,604 |                                                  |  |   | 9,225           |   |  |   | (12,972 | ) |  |   | 61,985  |   |  |   | (35,646 | )
|(Provision) benefit for deferred income taxes                        |  |                        | (22,570 | ) |                            |   | (6,915 | )                                                |  |   | (1,847          | ) |  |   | (658    | ) |  |   | 2,413   |   |  |   | 1,970   |  
|Interest expense                                                     |  |                        | 18,705  |   |                            |   | 14,071 |                                                  |  |   | 13,371          |   |  |   | 3,682   |   |  |   | 41,359  |   |  |   | 60,065  |  
|Income tax provision (benefit)                                       |  |                        | 24,783  |   |                            |   | 11,089 |                                                  |  |   | 16,236          |   |  |   | (6,620  | ) |  |   | (728    | ) |  |   | (1,482  | )
|Provision for doubtful accounts                                      |  |                        | (2,036  | ) |                            |   | (907   | )                                                |  |   | (320            | ) |  |   | (279    | ) |  |   | (1,091  | ) |  |   | 325     |  
|Amortization of other assets                                         |  |                        | (1,221  | ) |                            |   | (1,208 | )                                                |  |   | (1,156          | ) |  |   | (232    | ) |  |   | (4,091  | ) |  |   | (5,443  | )
|Stock-based compensation expense                                     |  |                        |        |   |                            |   |       |                                                  |  |   |                |   |  |   | (8,584  | ) |  |   |        |   |  |   |        |  
|Transaction expenses                                                 |  |                        |        |   |                            |   |       |                                                  |  |   |                |   |  |   | 28,211  |   |  |   | 95      |   |  |   |        |  
|Accretion of 8% cumulative preferred stock and Senior Discount Notes |  |                        |        |   |                            |   |       |                                                  |  |   |                |   |  |   |        |   |  |   | (4,331  | ) |  |   | (6,347  | )
|Post-retirement benefit plan termination                             |  |                        |        |   |                            |   |       |                                                  |  |   |                |   |  |   |        |   |  |   |        |   |  |   | 1,933   |  
|Other                                                                |  |                        | (159    | ) |                            |   | 100    |                                                  |  |   | 2,976           |   |  |   | 1,446   |   |  |   | 4,007   |   |  |   | 1,697   |  
|                                                                     |  |                        |         |   |                            |   |        |                                                  |  |   |                 |   |  |   |         |   |  |   |         |   |  |   |         |  
|Indenture EBITDA                                                     |  | $                      | 40,327  |   |                            | $ | 48,491 |                                                  |  | $ | 64,194          |   |  | $ | 13,865  |   |  | $ | 64,964  |   |  | $ | 83,658  |  
|                                                                     |  |                        |         |   |                            |   |        |                                                  |  |   |                 |   |  |   |         |   |  |   |         |   |  |   |         |  

Indenture EBITDA for the aggregate twelve-month period of 2005 does not include $1.3 million of
benefit related to a reduction in the liquidation value of our Series B Preferred Stock held by Goodyear that would have been included in Indenture EBITDA during the period except for certain purchase accounting adjustments made as part of the
acquisition of the Predecessor company in March. Historically, previous reductions in such liquidation value would have been included in Indenture EBITDA. A reduction of the liquidation value of $0.9 million was included in Indenture EBITDA in
fiscal 2006 and we believe that there will be future reductions in such liquidation value which, if achieved, will be included in Indenture EBITDA in those future periods up to a maximum of $0.7 million through January 2008, although no
assurances can be given as to the amount or timing of such reductions, if any. Accordingly, we believe the amount of this benefit is meaningful to understand the results for the 2005 period.



|(6) | For purposes of these ratios, (i) earnings have been calculated by adding interest expense and the estimated interest portion of rental expense to earnings before income taxes
and (ii) fixed charges are comprised of interest expense and capitalized interest, if any. In the twelve months ended December 30, 2006, nine months ended December 31, 2005 and quarter ended April 2, 2005, earnings were
insufficient to cover fixed charges by approximately $6.1 million, $2.3 million and $20.9 million, respectively.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | Working capital is defined as current assets less current liabilities.
|--- | ----------------------------------------------------------------------

|(8) | Total debt is the sum of current maturities of long-term debt, non-current portion of long-term debt and capital lease obligations.
|--- | -----------------------------------------------------------------------------------------------------------------------------------



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|Item 7. | Managements Discussion and Analysis of Financial Condition and Results of Operations.
|------- | --------------------------------------------------------------------------------------

As used in this report, the terms Company, Successor, we, us, our, and similar terms refer
to American Tire Distributors Holdings, Inc., and its subsidiaries, unless the context indicates otherwise. The term ATD or Predecessor refers to American Tire Distributors, Inc. and its subsidiaries. The following discussion
and analysis of our results of operations, financial condition and liquidity should be read in conjunction with our consolidated financial statements and the related notes included in Item 8 of this report.

Our fiscal year is based on either a 52 or 53-week period ending on the Saturday closest to each December 31. Therefore, the financial results of
certain fiscal years will not be exactly comparable to the prior or subsequent fiscal years. The 2006 fiscal year (ended December 30, 2006) and the aggregate twelve-month period ended December 31, 2005 contain operating results for 52
weeks. The 2004 fiscal year (ended January 1, 2005) contains operating results for 53 weeks.

Overview

We are the leading distributor of tires to the U.S. replacement tire market, a $27.2 billion industry in 2006 according to Modern Tire Dealer magazine.
The U.S. replacement market is stable and has grown approximately 2% to 3% annually over the past ten years, through 2005. Growth has historically been driven by several positive industry trends such as an increase in the number of vehicles on the
road, an increase in the number of licensed drivers, an increase in the number of miles driven, and an increase in the average age of vehicles. More recently, while price increases resulting from rising raw materials costs, which are passed from the
manufacturer to us and ultimately to the end customer, have provided for overall growth in this market, unit replacement tire demand has softened in 2006, down 3.3% from 2005, as provided by the Rubber Manufacturers Association
(RMA). We believe the weakened demand is due to concerns from consumers over rising interest rates, higher minimum credit card payments and increased fuel costs, all of which are contributing to the deferral of tire purchases.

Dynamics affecting industry growth include an increase in high and ultra-high performance and larger rim diameter tires, proliferation of
larger vehicles such as SUVs, and shorter tire replacement cycles as related to high performance and ultra-high performance tires. Our ultra-high performance tires are our highest profit products and also have relatively shorter replacement cycles.
High and ultra-high performance tires have shown significant sales growth as compared to the overall market. According to Modern Tire Dealer magazine, industry wide, the number of units sold in this subcategory increased by 4.4% from 2005 to 2006.
We expect the trend of selling more high and ultra-high performance tires, as well as larger auto rim diameter tires, to be an ongoing area of strategic focus for us, and the industry as a whole. Due to our breadth and depth of product offering, we
believe that we are well positioned to benefit from this increased demand.

Our revenues are primarily generated from sales of passenger
car and light truck tires, which represent approximately 74.0% of our total net sales in 2006. The remainder of net sales is derived from other tire sales (13.2%), custom wheels (7.0%), automotive service equipment (3.4%), and other products (2.4%).
We sell our products to a variety of customers and geographic markets. We have continued to expand and geographically diversify our operations in the recent years by executing a strategy that includes both organic growth and growth through
acquisitions. Over the past three years, we and the Predecessor have successfully acquired and integrated five businesses representing approximately $233.0 million in annual net sales. The acquisition of Samaritan Tire (as defined below) expanded
our service across the state of Minnesota and into Western Wisconsin. The acquisition of Silver State (as defined below) established our distribution footprint across the state of Nevada. The acquisition of Wholesale Tire (as defined below) expanded
our operations into Utah, Idaho, and Wyoming as well as parts of Nevada, Colorado, Nebraska and South Dakota. The acquisition of Texas Market Tire Holdings I, Inc., d/b/a Big State Tire Supply (Big State) expanded our operations into
Texas, New Mexico and Oklahoma, while the acquisition of Target Tire, Inc. (Target Tire) strengthened our presence with retailers in the Southeast, a region where we already have a strong market presence. As we continue to expand our
market presence, we have been able to effectively leverage our scalable distribution infrastructure to achieve higher growth and increased profits.



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On July 28, 2006, we completed the purchase of all the outstanding stock of Samaritan Wholesale Tire
Company (Samaritan Tire) pursuant to the terms of a Stock Purchase Agreement dated as of July 28, 2006. The aggregate purchase price of this acquisition, subject to adjustment, was approximately $12.6 million, consisting of $12.5
million in cash and $0.1 million in direct acquisition costs. This acquisition expanded our service across the state of Minnesota and into Western Wisconsin.

On January 27, 2006, we completed the purchase of all the outstanding stock of Silver State Tire Company and Golden State Tire Distributors (collectively Silver State) pursuant to the terms of a Stock
Purchase Agreement dated December 23, 2005. The purchase price of this acquisition was $8.4 million, consisting of $8.2 million in cash and $0.2 million in direct acquisition costs. This acquisition established a distribution footprint for
us across the state of Nevada.

On August 23, 2005, we completed the purchase of all the outstanding stock of Wholesale Tire
Distributors, Inc., Wholesale Tire Distributors of Wyoming, Inc., and Wholesale Tire Distributors of Idaho, Inc. (collectively Wholesale Tire) pursuant to the terms of a Stock Purchase Agreement dated August 5, 2005. The purchase
price was $4.5 million, consisting of $4.4 million in cash and $0.1 million in direct acquisition costs. The acquisition expanded our operations into Utah, Idaho, and Wyoming as well as parts of Nevada, Colorado, Nebraska and South Dakota.

The Samaritan Tire, Silver State and Wholesale Tire acquisitions were financed through borrowings under ATDs revolving credit
facility. These acquisitions have been accounted for under the purchase method of accounting and, accordingly, the results of operations for the acquired businesses have been included in the accompanying consolidated statements of operations from
the date of acquisition.

On February 4, 2005, Holdings, an investment vehicle formed by affiliates of Investcorp S.A., entered into a
merger agreement with ATD, which was amended and restated on March 7, 2005. Pursuant to the merger agreement, and in exchange for an aggregate purchase price of $710.0 million in cash, less the amount of ATDs debt (net of cash on hand)
and certain dividends payable to holders of ATDs preferred stock, ATDs incurred transaction expenses and certain payments to ATDs management, ATD MergerSub (MergerSub), a subsidiary of Holdings, merged with and into
ATD. We refer to this transaction throughout this report as the Merger or the Acquisition. The Acquisition of ATD by Holdings was accounted for under the purchase method of accounting and accordingly, the purchase price was
allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values, with the remainder being allocated to goodwill. The increase in the basis of these assets will result in increased
amortization and depreciation charges in future periods. In addition, our interest expense has increased significantly as a result of the Acquisition. As part of the Acquisition, ATD generated substantial tax deductions relating to the exercise of
stock options, which Holdings assumed the benefits of in the Merger.

Results of Operations

Year Ended December 30, 2006 for the Successor Compared to Nine Months Ended December 31, 2005 for the Successor and Three Months Ended April 2, 2005
for the Predecessor

As a result of the Acquisition and related change in control, we are required to present separately our
operating results for the Successor nine-month period ended December 31, 2005 and the Predecessor quarter ended April 2, 2005. In the following discussion, the results of operations for the Successor year ended December 30, 2006 are
compared to the combined results of operations for the Predecessor quarter ended April 2, 2005 and Successor nine-month period ended December 31, 2005. Management believes this is the most practical way to comment on the results of
operations.



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The following table sets forth the period change for each category of the statements of operations, as
well as each category as a percentage of net sales (dollars in thousands):



|                                                                                                          |  |                       |         |   |                           |   |           |                   |  |   |                                                            |   |  |                   |    |  |                   |    |  |       |   
|--------------------------------------------------------------------------------------------------------- |  | --------------------- | ------- | - | ------------------------- | - | --------- | ----------------- |  | - | ---------------------------------------------------------- | - |  | ----------------- | -- |  | ----------------- | -- |  | ----- | --
|                                                                                                          |  | Predecessor           |         |   | Successor                 |   |           | Successor         |  |   | Predecessor                                                |   |  | Successor         |    |  | Successor         |   
|                                                                                                          |  | For the Quarter Ended |         |   | For the Nine Months Ended |   |           | Fiscal Year Ended |  |   | Results as a Percentage of Net Sales for Each Period Ended |  
|                                                                                                          |  | April 2, 2005         |         |   | December 31, 2005         |   |           | December 30, 2006 |  |   | April 2, 2005                                              |   |  | December 31, 2005 |    |  | December 30, 2006 |   
|Net sales                                                                                                 |  | $                     | 354,339 |   |                           | $ | 1,150,944 |                   |  | $ | 1,577,973                                                  |   |  | 100.0             | %  |  | 100.0             | %  |  | 100.0 | % 
|Cost of goods sold, excluding depreciation included in selling, general and administrative expenses below |  |                       | 290,488 |   |                           |   | 939,325   |                   |  |   | 1,293,594                                                  |   |  | 82.0              |    |  | 81.6              |    |  | 82.0  |   
|                                                                                                          |  |                       |         |   |                           |   |           |                   |  |   |                                                            |   |  |                   |    |  |                   |    |  |       |   
|Gross profit                                                                                              |  |                       | 63,851  |   |                           |   | 211,619   |                   |  |   | 284,379                                                    |   |  | 18.0              |    |  | 18.4              |    |  | 18.0  |   
|Selling, general and administrative expenses                                                              |  |                       | 52,653  |   |                           |   | 172,605   |                   |  |   | 227,399                                                    |   |  | 14.8              |    |  | 15.0              |    |  | 14.4  |   
|Impairment of intangible asset                                                                            |  |                       |        |   |                           |   |          |                   |  |   | 2,640                                                      |   |  |                   |    |  |                   |    |  | 0.2   |   
|Transaction expenses                                                                                      |  |                       | 28,211  |   |                           |   | 95        |                   |  |   |                                                           |   |  | 8.0               |    |  | 0.0               |    |  | 0.0   |   
|                                                                                                          |  |                       |         |   |                           |   |           |                   |  |   |                                                            |   |  |                   |    |  |                   |    |  |       |   
|Operating (loss) income                                                                                   |  |                       | (17,013 | ) |                           |   | 38,919    |                   |  |   | 54,340                                                     |   |  | (4.8              | )  |  | 3.4               |    |  | 3.4   |   
|Other income (expense):                                                                                   |  |                       |         |   |                           |   |           |                   |  |   |                                                            |   |  |                   |    |  |                   |    |  |       |   
|Interest expense                                                                                          |  |                       | (3,682  | ) |                           |   | (41,359   | )                 |  |   | (60,065                                                    | ) |  | (1.0              | )  |  | (3.6              | )  |  | (3.8  | ) 
|Other, net                                                                                                |  |                       | (252    | ) |                           |   | 111       |                   |  |   | (364                                                       | ) |  | (0.1              | )  |  | 0.0               |    |  | 0.0   |   
|                                                                                                          |  |                       |         |   |                           |   |           |                   |  |   |                                                            |   |  |                   |    |  |                   |    |  |       |   
|Loss from operations before income taxes                                                                  |  |                       | (20,947 | ) |                           |   | (2,329    | )                 |  |   | (6,089                                                     | ) |  | (5.9              | )  |  | (0.2              | )  |  | (0.4  | ) 
|Income tax benefit                                                                                        |  |                       | (6,620  | ) |                           |   | (728      | )                 |  |   | (1,482                                                     | ) |  | (1.9              | )  |  | (0.1              | )  |  | (0.1  | ) 
|                                                                                                          |  |                       |         |   |                           |   |           |                   |  |   |                                                            |   |  |                   |    |  |                   |    |  |       |   
|Net loss                                                                                                  |  | $                     | (14,327 | ) |                           | $ | (1,601    | )                 |  | $ | (4,607                                                     | ) |  | (4.0              | )% |  | (0.1              | )% |  | (0.3  | )%
|                                                                                                          |  |                       |         |   |                           |   |           |                   |  |   |                                                            |   |  |                   |    |  |                   |    |  |       |   

Net Sales

Net sales for fiscal 2006 increased $72.7 million, or 4.8%, to $1,578.0 million from $1,505.3 million in the aggregate twelve-month period of 2005. The increase in sales for fiscal 2006 over the aggregate twelve-month
period of 2005 is primarily due to increased pricing on tires, net of selective promotional activities (aggregate benefit of approximately $66.3 million over prior year), as we have been able to pass-through manufacturer price increases during 2006
that have resulted due to increased raw material costs. In addition, unit sales derived from the acquisitions of Samaritan Tire in July 2006, Silver State in January 2006, and Wholesale Tire in August 2005, collectively representing a $39.6 million
increase from prior year, and an increase in unit sales of light and medium truck tires (collectively $13.1 million) from prior year. This year-over-year growth was partially offset by softer unit demand for passenger tires (down $38.2 million)
related to lower industry demand in 2006 versus 2005, as reported by the RMA. In addition, our equipment and supply sales were down $5.6 million from the same period of last year.

Gross Profit

Gross profit increased $8.9 million to $284.4 million in fiscal 2006 from $275.5
million in the aggregate twelve-month period of 2005. This increase is primarily due to contributions from our 2006 and August 2005 acquisitions, the benefit from the sale of inventory in 2006 that was purchased prior to manufacturer price increases
(i.e. a favorable inventory cost layer) and the non-recurrence of the inventory fair value step-up charge recorded in the aggregate twelve-month period of 2005 in connection with the Acquisition. Partially offsetting the year-over-year increase were
lower equipment and supply sales and softer passenger tire unit sales.

Gross profit as a percentage of sales decreased 0.3 percentage
points from 18.3% in the aggregate twelve-month period of 2005 to 18.0% in fiscal 2006. The decrease is primarily due to the overall softening in unit



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demand for passenger tires and the related tightening by vendors and customers for profits during a year in which the industry experienced only its second
decline in replacement tire units in the past 10 years.

Selling, General and Administrative Expenses

Total selling, general and administrative expenses for fiscal 2006 increased $2.1 million to $227.4 million from $225.3 million in the aggregate
twelve-month period of 2005. Acquisitions accounted for an increase of $6.3 million, of which approximately $2.8 million was employee related. Depreciation and amortization expense increased $6.2 million primarily due to a customer list intangible
asset that was recorded in connection with the Acquisition and the revaluation of our property and equipment in connection with the Acquisition. Fuel expense increased $0.9 million and continues to have a negative impact on our delivery costs. These
increases were mostly offset by a decline in employee related expenses of $11.3 million which was a result of non-recurring incentive based compensation in first quarter 2005, a $7.9 million reduction in sales-based and other incentive compensation
as well as a benefit from the termination of our retiree medical plan and subsequent reduction to the accumulated post-retirement benefit obligation of $1.9 million.

Impairment of Intangible Asset

In September 2006, we were informed by one of our suppliers that it
was going to cease the manufacturing of one of our tire brands for which we maintained a tradename intangible asset. As a result of this decision and due to our inability to place other sourcing regarding this tire brand, we, in accordance with
Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets, evaluated the fair value of the tradename intangible asset, as computed utilizing a discounted cash flow model, as
compared to its carrying value. Based on this evaluation, we recorded an impairment charge of $2.6 million, for the full carrying amount of the tradename intangible asset. No similar charges were recorded during the aggregate twelve-month period of
2005.

Interest Expense

Total interest
expense increased $15.1 million to $60.1 million in fiscal 2006 from $45.0 million in the aggregate twelve-month period of 2005. The increase in interest expense is due primarily to increased debt levels associated with the issuance of the Senior
Discount Notes, the Senior Notes, and the Senior Floating Rate Notes issued in connection with the Acquisition, which accounted for approximately $14.7 million of the increase.

Interest expense for fiscal 2006 of $60.1 million exceeds cash payments for interest during the same period of $46.3 million principally due to non-cash
amortization of debt issuance costs and accretion of interest on the Senior Discount Notes and the 8% cumulative preferred stock as well as interest accrued but not yet paid.

Income Taxes Benefit

The Successor recognized an income tax benefit of $1.5 million in fiscal 2006
based on a pre-tax loss of $6.1 million. The Successor recognized an income tax benefit of $0.7 million in the nine-month period ended December 31, 2005 based on a pre-tax loss of $2.3 million. The Predecessor recognized an income tax benefit
of $6.6 million in first quarter 2005 due primarily to the transaction expenses incurred in connection with the Merger, which generated a pre-tax loss of $20.9 million. The effective tax rate for fiscal 2006 was approximately 24%, for the nine-month
period ended December 31, 2005 was approximately 31% and for the Predecessors first quarter 2005 was approximately 32%.

Net Loss

Total net loss for fiscal 2006 was $4.6 million, a decline of $11.3 million from a loss of $15.9 million in the aggregate twelve-month
period of 2005. The change is primarily due to non-recurring transaction expenses of



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$28.2 million incurred in connection with the Acquisition in first quarter 2005 combined with lower employee-related expenses (see selling, general and
administrative expenses discussion above) partially offset by higher interest expense due to financing activities surrounding the Acquisition as well as higher depreciation and amortization.

Nine Months Ended December 31, 2005 for the Successor and Three Months Ended April 2, 2005 for the Predecessor Compared to the Year Ended January 1,
2005 for the Predecessor

In the following discussion, the combined results of operations for the Predecessor quarter ended
April 2, 2005 and Successor nine-month period ended December 31, 2005 are compared to the Predecessor year ended January 1, 2005. Management believes this is the most practical way to comment on the results of operations.

The following table sets forth the period change for each category of the statements of operations, as well as each category as a percentage of net
sales (dollars in thousands):



|                                                                                                          |  |                    |           |   |                       |   |         |                           |  |   |                                                           |   |  |               |   |  |                   |    |  |       |   
|--------------------------------------------------------------------------------------------------------- |  | ------------------ | --------- | - | --------------------- | - | ------- | ------------------------- |  | - | --------------------------------------------------------- | - |  | ------------- | - |  | ----------------- | -- |  | ----- | --
|                                                                                                          |  | Predecessor        |           |   | Predecessor           |   |         | Successor                 |  |   | Predecessor                                               |   |  | Predecessor   |   |  | Successor         |   
|                                                                                                          |  | For the Year Ended |           |   | For the Quarter Ended |   |         | For the Nine Months Ended |  |   | Results as a Percentage of Net Sales forEach Period Ended |  
|                                                                                                          |  | January 1, 2005    |           |   | April 2, 2005         |   |         | December 31, 2005         |  |   | January 1, 2005                                           |   |  | April 2, 2005 |   |  | December 31, 2005 |   
|Net sales                                                                                                 |  | $                  | 1,282,069 |   |                       | $ | 354,339 |                           |  | $ | 1,150,944                                                 |   |  | 100.0         | % |  | 100.0             | %  |  | 100.0 | % 
|Cost of goods sold, excluding depreciation included in selling, general and administrative expenses
below |  |                    | 1,043,793 |   |                       |   | 290,488 |                           |  |   | 939,325                                                   |   |  | 81.4          |   |  | 82.0              |    |  | 81.6  |   
|                                                                                                          |  |                    |           |   |                       |   |         |                           |  |   |                                                           |   |  |               |   |  |                   |    |  |       |   
|Gross profit                                                                                              |  |                    | 238,276   |   |                       |   | 63,851  |                           |  |   | 211,619                                                   |   |  | 18.6          |   |  | 18.0              |    |  | 18.4  |   
|Selling, general and administrative expenses                                                              |  |                    | 183,235   |   |                       |   | 52,653  |                           |  |   | 172,605                                                   |   |  | 14.3          |   |  | 14.8              |    |  | 15.0  |   
|Transaction expenses                                                                                      |  |                    |          |   |                       |   | 28,211  |                           |  |   | 95                                                        |   |  | 0.0           |   |  | 8.0               |    |  | 0.0   |   
|                                                                                                          |  |                    |           |   |                       |   |         |                           |  |   |                                                           |   |  |               |   |  |                   |    |  |       |   
|Operating income (loss)                                                                                   |  |                    | 55,041    |   |                       |   | (17,013 | )                         |  |   | 38,919                                                    |   |  | 4.3           |   |  | (4.8              | )  |  | 3.4   |   
|Other income (expense):                                                                                   |  |                    |           |   |                       |   |         |                           |  |   |                                                           |   |  |               |   |  |                   |    |  |       |   
|Interest expense                                                                                          |  |                    | (13,371   | ) |                       |   | (3,682  | )                         |  |   | (41,359                                                   | ) |  | 1.1           |   |  | (1.0              | )  |  | (3.6  | ) 
|Other, net                                                                                                |  |                    | (393      | ) |                       |   | (252    | )                         |  |   | 111                                                       |   |  | 0.0           |   |  | (0.1              | )  |  | 0.0   |   
|                                                                                                          |  |                    |           |   |                       |   |         |                           |  |   |                                                           |   |  |               |   |  |                   |    |  |       |   
|Income (loss) from operations before income taxes                                                         |  |                    | 41,277    |   |                       |   | (20,947 | )                         |  |   | (2,329                                                    | ) |  | 3.2           |   |  | (5.9              | )  |  | (0.2  | ) 
|Income tax provision (benefit)                                                                            |  |                    | 16,236    |   |                       |   | (6,620  | )                         |  |   | (728                                                      | ) |  | 1.2           |   |  | (1.9              | )  |  | (0.1  | ) 
|                                                                                                          |  |                    |           |   |                       |   |         |                           |  |   |                                                           |   |  |               |   |  |                   |    |  |       |   
|Net income (loss)                                                                                         |  | $                  | 25,041    |   |                       | $ | (14,327 | )                         |  | $ | (1,601                                                    | ) |  | 2.0           | % |  | (4.0              | )% |  | (0.01 | )%
|                                                                                                          |  |                    |           |   |                       |   |         |                           |  |   |                                                           |   |  |               |   |  |                   |    |  |       |   

Net Sales

Net sales for the aggregate twelve-month period of 2005 increased $223.2 million, or 17.4%, to $1,505.3 million from $1,282.1 million in fiscal 2004. The increase is primarily attributable to an increase in unit
sales of passenger, light truck and medium truck tires of $119.5 million. The increase in unit sales was aided by the acquisition of Big State and Target Tire, in the latter part of 2004, and Wholesale Tire, in August 2005. The operations acquired
from Big State and Wholesale Tire contributed to a net sales increase of $60.7 million and $6.7 million, respectively. We cannot determine the precise effect on sales of the Target Tire acquisition due to the integration of all but one of their
distribution centers into our existing facilities. Higher average per unit selling prices contributed approximately $87.4 million to the increase in sales. The increase in average per unit selling prices is primarily due to manufacturer price
increases that have been passed through to our customers. The inclusion of an additional week of sales in first quarter 2004 of approximately $19.0 million partially offsets the increases noted above.



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Gross Profit

Gross profit increased $37.2 million to $275.5 million for the aggregate twelve-month period of 2005 from $238.3 million in fiscal 2004. This increase is primarily due to increased sales resulting from higher unit sales volume, the
acquisitions of Wholesale Tire, Big State and Target Tire and from higher average per unit selling prices. The increase in gross profit was partially offset by an increase in cost of goods sold due to $4.7 million of inventory fair value step-up
that was recorded in connection with the Acquisition and charged to cost of goods sold as inventory was sold. (see Note 1 in Notes to Consolidated Financial Statements included in Item 8 of this report for further information).

Gross profit as a percentage of sales decreased 0.3 percentage points from 18.6% in fiscal 2004 to 18.3% in the aggregate twelve-month period of 2005.
The decrease is primarily due to the inventory fair value step-up discussed above.

Selling, General and Administrative Expenses

Total selling, general and administrative expenses for the aggregate twelve-month period of 2005 increased $42.1 million to $225.3 million from $183.2
million in fiscal 2004. The increase is due, in part, to the inclusion of acquired operations. Employee related expenses increased $14.5 million primarily due to the inclusion of Big State and Wholesale Tire (collectively $5.6 million), incentive
based compensation and increased costs associated with an increase in the employee headcount that is a result of the Target Tire acquisition. Increased medical costs are also contributing to the rise in employee related expenses. We cannot determine
the precise effect on selling, general and administrative expenses, other than employee related expenses, for the Target Tire acquisition due to the integration of all but one of their distribution centers into our existing facilities. Amortization
expense increased $8.5 million primarily as a result of a customer list intangible asset that was recorded in connection with the Acquisition. We also experienced an increase in depreciation expense of $2.8 million that was primarily a result
of the revaluation of our property and equipment in connection with the Acquisition. Other operating expenses increased $4.5 million due to the amortization of prepaid management advisory fees that were paid in connection with the Acquisition.
Rising fuel costs negatively impact selling, general and administrative expenses. Fuel costs were up $3.2 million, or approximately 57% over prior year, $0.8 million of which was a result of the recent acquisitions. As noted in the Risk Factors
section Our business could be adversely affected by increases in the price of fuel, because we use a fleet of trucks to deliver our products to our customers, increases in the price of fuel may cause us to incur additional cost in
operating our fleet, which may have an adverse effect on our business, financial condition and results of operations. The inclusion of an additional week in first quarter 2004 partially offsets the increases noted above.

Transaction Expenses

In connection with the
Acquisition, the Predecessor incurred $28.2 million of transaction expenses in the first quarter of 2005 that related to change in control and bonus payments, stock option compensation cost for accelerated vesting, and payment of its direct
acquisition costs. These direct acquisition costs include investment banking, legal, accounting, and other fees for professional services in connection with the Acquisition that cannot be included in purchase accounting.

Interest Expense

Total interest expense for the
aggregate twelve-month period of 2005 increased $31.6 million to $45.0 million from $13.4 million in fiscal 2004. The increase in interest expense is due primarily to increased debt levels associated with the issuance of the Senior Discount
Notes, the Senior Notes, and the Senior Floating Rate Notes issued in connection with the Acquisition, which accounted for approximately $26.5 million of the increase. In addition, the Successor recorded additional interest expense relating to the
change in fair value of the interest rate swap agreement of $0.2 million in the nine-month period ended December 31, 2005 and the Predecessor recorded a net reduction in interest expense of $0.2 million in first quarter 2005 as compared to a
net reduction of $0.5 million in interest expense recorded by the Predecessor in fiscal 2004.



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Interest expense for the aggregate twelve-month period of 2005 of $45.0 million exceeds cash payments for
interest during the same period of $27.9 million principally due to non-cash amortization of debt issuance costs and accretion of interest on the Senior Discount Notes as well as interest accrued but not yet paid.

Income Tax Provision (Benefit)

The Successor
recognized an income tax benefit of $0.7 million in the nine-month period ended December 31, 2005 based on a pre-tax loss of $2.3 million. The Predecessor recognized an income tax benefit of $6.6 million in first quarter 2005 due primarily to
the transaction expenses incurred in connection with the Merger, which generated a pre-tax loss of $20.9 million. During fiscal 2004, the Predecessor recognized an income tax provision of $16.2 million. The effective tax rate for the nine-month
period ended December 31, 2005 was approximately 31% for the Successor, approximately 32% for first quarter 2005 for the Predecessor, and approximately 39% for fiscal 2004 for the Predecessor.

Net Income (loss)

Total aggregate net loss for the
twelve-month period of 2005 was $(15.9) million, a change of $40.9 million from income of $25.0 million in fiscal 2004. The loss is due primarily to transaction expenses of $28.2 million and higher interest expense incurred in connection with the
Merger as well as higher depreciation and amortization and the $4.7 million adjustment in basis of our inventory resulting from the Acquisition. In addition, first quarter 2004 included an additional week of business activity. The decrease in net
income was partially offset by an increase in the income tax benefit.

Liquidity and Capital Resources

At December 30, 2006, our total debt, including capital leases, was $521.0 million compared to $545.2 million at December 31, 2005, a
year-over-year decline of $24.2 million. Partially offsetting this year-over-year decline was $5.9 million of interest accretion on our Senior Discount Notes, $6.0 million related to our Supplier Loan and $2.4 related to other third party loans (see
Note 5 within Notes to Consolidated Financial Statements). Total commitments by the lenders under ATDs credit facility were $300.0 million at December 30, 2006, of which $122.9 million was available for additional borrowings. The amount
available to borrow is limited by the Borrowing Base computation, as defined in the credit facility agreement.

The following table
summarizes the cash flows for fiscal year 2004 and the quarter ended April 2, 2005 for the Predecessor and the period from April 2, 2005 through December 31, 2005 and fiscal year 2006 for the Successor:



|                                                      |  |                        |         |   |                            |   |        |                                                   |  |   |          |   |  |   |         |  
|----------------------------------------------------- |  | ---------------------- | ------- | - | -------------------------- | - | ------ | ------------------------------------------------- |  | - | -------- | - |  | - | ------- | -
|                                                      |  | Predecessor            |         |   | Successor                  |  
|                                                      |  | 2004                   |         |   | QuarterEnded April 2, 2005 |   |        | Period from April 2, 2005through December 31,2005 |  |   | 2006     |  
|                                                      |  | (dollars in thousands) |         |   | (dollars in thousands)     |  
|Cash provided by (used in) operating activities       |  | $                      | 25,709  |   |                            | $ | 9,871  |                                                   |  | $ | (34,654  | ) |  | $ | 66,586  |  
|Cash used in investing activities                     |  |                        | (63,302 | ) |                            |   | (1,438 | )                                                 |  |   | (468,815 | ) |  |   | (28,527 | )
|Cash provided by (used in) financing activities       |  |                        | 37,601  |   |                            |   | (8,264 | )                                                 |  |   | 505,511  |   |  |   | (40,004 | )
|                                                      |  |                        |         |   |                            |   |        |                                                   |  |   |          |   |  |   |         |  
|Net increase (decrease) in cash and cash equivalents  |  |                        | 8       |   |                            |   | 169    |                                                   |  |   | 2,042    |   |  |   | (1,945  | )
|Cash and cash equivalents, beginning of year          |  |                        | 3,326   |   |                            |   | 3,334  |                                                   |  |   | 3,503    |   |  |   | 5,545   |  
|                                                      |  |                        |         |   |                            |   |        |                                                   |  |   |          |   |  |   |         |  
|Cash and cash equivalents, end of year                |  | $                      | 3,334   |   |                            | $ | 3,503  |                                                   |  | $ | 5,545    |   |  | $ | 3,600   |  
|                                                      |  |                        |         |   |                            |   |        |                                                   |  |   |          |   |  |   |         |  
|Cash payments for interest                            |  | $                      | 12,389  |   |                            | $ | 3,944  |                                                   |  | $ | 23,992   |   |  | $ | 46,263  |  
|Cash payments (receipts) for taxes, net               |  | $                      | 17,610  |   |                            | $ | 247    |                                                   |  | $ | (2,340   | ) |  | $ | (13,163 | )
|Capital expenditures financed by debt                 |  | $                      | 5,224   |   |                            | $ | 1,338  |                                                   |  | $ | 4,054    |   |  | $ | 2,360   |  
|Supplier loan                                         |  | $                      |        |   |                            | $ |       |                                                   |  | $ |         |   |  | $ | 6,000   |  
|Payment of Series D Senior Notes with restricted cash |  | $                      |        |   |                            | $ |       |                                                   |  | $ | 30,506   |   |  | $ |        |  



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Operating Activities. Total net cash provided by operating activities for fiscal 2006 increased
$91.4 million to $66.6 million compared to net cash used in operating activities of $24.8 million in the aggregate twelve-month period of 2005. The increase in cash provided by operating activities was primarily due to a decrease in our net working
capital requirements and improvements in our profitability, partially offset by higher interest payments on financing activities surrounding the Acquisition. Net working capital at December 30, 2006 totaled $172.6 million compared to
$201.8 million at December 31, 2005, a decrease of $29.2 million. This decrease primarily relates to an increase in accounts payable and a decrease in the income tax receivable due to the receipt of the federal income tax refund in first
quarter 2006. These were partially offset by an increase in inventory.

Total net cash used in operating activities for the aggregate
twelve-month period of 2005 increased $50.5 million to $24.8 million compared to net cash provided by operating activities of $25.7 million in fiscal 2004. The increase in cash used in operating activities was primarily due to an increase in
our net working capital requirements as a result of increased business activity and the acquisition of Big State and Target Tire in third quarter 2004 and Wholesale Tire in third quarter 2005, partially offset by a decrease in our profitability. Net
working capital at December 31, 2005 totaled $201.8 million compared to $133.7 million at January 1, 2005, an increase of $68.1 million. This increase primarily relates to an increase in inventory and the income tax receivable, prepaid
management advisory fees and seller transaction costs recorded in connection with the Acquisition (see Notes 2 and 8 in Notes to Consolidated Financial Statements included in Item 8 of this report for further details). The increase in inventory
was primarily in response to announced future and expected price increases by the tire manufacturers as well as to protect our supply position from potential supply shortages of raw materials announced by tire manufacturers in the wake of storm
activity. The acquisition of Wholesale Tire resulted in $3.9 million of additional inventory.

Investing Activities. Total net cash
used in investing activities decreased $441.8 million to $28.5 million in fiscal 2006 compared to $470.3 million in the aggregate twelve-month period of 2005. The decrease in cash used in investing activities was due primarily to cash paid for the
Acquisition and the acquisition of Wholesale Tire in 2005 partially offset by cash paid for the acquisitions of Silver State and Samaritan Tire in 2006. Capital expenditures increased $2.1 million to $9.8 million compared to $7.7 million in the
aggregate twelve-month period of 2005. Capital expenditures during 2006 were primarily for information technology upgrades, warehouse racking, and leasehold improvements. During fiscal 2006 we also had total aggregate capital expenditures financed
by debt of $2.4 million relating to information technology.

Total net cash used in investing activities increased $407.0 million to $470.3
million in the aggregate twelve-month period of 2005 compared to $63.3 million in fiscal 2004. The increase in cash used in investing activities was due primarily to cash paid for the Acquisition in first quarter 2005 (See Note 2 in the Notes to
Consolidated Financial Statements included in Item 8 of this report for further details) and the acquisition of Wholesale Tire in third quarter 2005. Total capital expenditures for the aggregate twelve-month period of 2005 increased $3.3
million to $7.7 million compared to $4.4 million in fiscal 2004. Capital expenditures during the period from April 2, 2005 through December 31, 2005 for the Successor and first quarter 2005 for the Predecessor were primarily for
information technology upgrades, warehouse racking, and leasehold improvements. During the aggregate twelve-month period of 2005, we also had total aggregate capital expenditures financed by debt of $5.4 million relating to information technology.

Financing Activities. Total net cash used in financing activities increased $537.2 million to $(40.0) million in fiscal 2006
compared to net cash provided by financing activities of $497.2 million in the aggregate twelve-month period of 2005. The increase in cash used in financing activities for 2006 was primarily due to the inclusion of proceeds received in connection
with the Acquisition, which reduced cash used in the aggregate twelve-month period of 2005.

Total net cash provided by financing
activities for the aggregate twelve-month period of 2005 increased $459.6 million to $497.2 million compared to $37.6 million in fiscal 2004. The increase in cash provided by financing activities was primarily due to proceeds generated from the
issuance of the Senior Discount Notes,



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Senior Notes and Senior Floating Rate Notes of $330.0 million and proceeds of $211.5 million received from the issuance of common stock. These increases were
partially offset by $30.5 million of cash that was restricted for the payment of the Series D senior notes and payments of $35.4 million for deferred financing costs incurred in connection with financing activity surrounding the Acquisition. See
Note 2 and 5 in the Notes to the Consolidated Financial Statements included in Item 8 of this report for further details.

Revolving Credit Facility. In connection with the Merger, on March 31, 2005, ATD entered into the Fourth Amended and Restated Loan and Security Agreement (Revolver). The Borrowers under the Revolver are ATD and its
subsidiaries. The Revolver provides for a five-year senior secured revolving credit facility of up to $300.0 million (of which up to $25.0 million may be utilized in the form of commercial and standby letters of credit), subject to a borrowing
base formula. The Revolver is secured primarily by ATDs inventories and accounts receivable. As of December 30, 2006, the outstanding Revolver balance was $155.0 million and $122.9 million was available for additional borrowings. In
addition, ATD had certain letters of credit outstanding at December 30, 2006 in the aggregate amount of $9.2 million.

Borrowings
under the Revolver bear interest, at ATDs option, at either (i) the Base Rate, as defined, plus the applicable margin (0.25% as of December 30, 2006) or (ii) the Eurodollar Rate, as defined, plus the applicable margin (1.75% as
of December 30, 2006). At December 30, 2006, borrowings under the Revolver were at a weighted average interest rate of 7.4% compared to 6.2% at December 31, 2005. The applicable margin for the loans varies based upon a
performance-based grid, as defined in the agreement.

All obligations under the Revolver are guaranteed by Holdings and each of ATDs
existing and future direct and indirect domestic subsidiaries that are not direct obligors thereunder. Obligations under the Revolver are secured by a pledge of substantially all assets of the obligors, including all shares of ATDs capital
stock and that of ATDs subsidiaries, subject to certain limitations.

The Revolver contains covenants which, among other things,
require ATD to meet a fixed charge coverage ratio if ATD does not have at least $25.0 million available to be drawn under the Revolver (subject to a cure); restricts ATDs ability to incur additional debt; enter into guarantees; make loans and
investments; declare dividends; modify certain material agreements or constitutive documents relating to preferred stock; and change the business we conduct, as well as other customary covenants. As of December 30, 2006 and December 31,
2005, ATD was in compliance with these covenants. The Revolver expires March 31, 2010.



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Indenture EBITDA.We evaluate liquidity based on several factors, of which the primary financial
measure is Indenture EBITDA. The presentation of Indenture EBITDA, a non-GAAP financial measure, and ratios based thereon, do not comply with accounting principles generally accepted in the United States because they are adjusted to exclude certain
cash expenses, including recurring expenses. We present Indenture EBITDA as it is used to determine our compliance with covenants contained in the related indentures governing our notes. The covenants are tied to ratios based on Indenture EBITDA,
referred to as Consolidated Cash Flows in the indenture agreement, and restrict our ability to incur additional indebtedness and to issue preferred stock. Indenture EBITDA as used herein represents earnings before interest, taxes, depreciation and
amortization and other adjustments permitted in calculating covenant compliance under the indentures. We believe that the inclusion of this supplementary information is necessary for investors to understand our ability to comply with the financial
covenants and debt service of the notes. Indenture EBITDA should not be considered an alternative to, or more meaningful than, cash flow as determined in accordance with accounting principles generally accepted in the United States. The following
table is a reconciliation of the most directly comparable GAAP measure, net cash provided by (used in) operating activities, to Indenture EBITDA:



|                                                                     |  |                        |        |   |                           |   |         |                                                 |  |   |                  |   |  |   |         |  
|-------------------------------------------------------------------- |  | ---------------------- | ------ | - | ------------------------- | - | ------- | ----------------------------------------------- |  | - | ---------------- | - |  | - | ------- | -
|                                                                     |  | Predecessor            |        |   | Successor                 |  
|                                                                     |  | Fiscal Year2004        |        |   | QuarterEnded April 2,2005 |   |         | Period fromApril 2, 2005throughDecember 31,2005 |  |   | Fiscal Year 2006 |  
|                                                                     |  | (dollars in thousands) |        |   | (dollars in thousands)    |  
|Net cash provided by (used in) operating activities                  |  | $                      | 25,709 |   |                           | $ | 9,871   |                                                 |  | $ | (34,654          | ) |  | $ | 66,586  |  
|Changes in assets and liabilities                                    |  |                        | 9,225  |   |                           |   | (12,972 | )                                               |  |   | 61,985           |   |  |   | (35,646 | )
|(Provision) benefit for deferred income taxes                        |  |                        | (1,847 | ) |                           |   | (658    | )                                               |  |   | 2,413            |   |  |   | 1,970   |  
|Interest expense                                                     |  |                        | 13,371 |   |                           |   | 3,682   |                                                 |  |   | 41,359           |   |  |   | 60,065  |  
|Income tax provision (benefit)                                       |  |                        | 16,236 |   |                           |   | (6,620  | )                                               |  |   | (728             | ) |  |   | (1,482  | )
|Provision for doubtful accounts                                      |  |                        | (320   | ) |                           |   | (279    | )                                               |  |   | (1,091           | ) |  |   | 325     |  
|Amortization of other assets                                         |  |                        | (1,156 | ) |                           |   | (232    | )                                               |  |   | (4,091           | ) |  |   | (5,443  | )
|Stock-based compensation expense                                     |  |                        |       |   |                           |   | (8,584  | )                                               |  |   |                 |   |  |   |        |  
|Transaction expenses                                                 |  |                        |       |   |                           |   | 28,211  |                                                 |  |   | 95               |   |  |   |        |  
|Accretion of 8% cumulative preferred stock and Senior Discount Notes |  |                        |       |   |                           |   |        |                                                 |  |   | (4,331           | ) |  |   | (6,347  | )
|Post-retirement benefit plan termination                             |  |                        |       |   |                           |   |        |                                                 |  |   |                 |   |  |   | 1,933   |  
|Other                                                                |  |                        | 2,976  |   |                           |   | 1,446   |                                                 |  |   | 4,007            |   |  |   | 1,697   |  
|                                                                     |  |                        |        |   |                           |   |         |                                                 |  |   |                  |   |  |   |         |  
|Indenture EBITDA                                                     |  | $                      | 64,194 |   |                           | $ | 13,865  |                                                 |  | $ | 64,964           |   |  | $ | 83,658  |  
|                                                                     |  |                        |        |   |                           |   |         |                                                 |  |   |                  |   |  |   |         |  

Total Indenture EBITDA for fiscal 2006 increased $4.9 million to $83.7 million from $78.8 million
in the aggregate twelve-month period of 2005. The increase in Indenture EBITDA is primarily due to an increase in gross profit, the benefit from recent acquisitions (collectively contributing $2.2 million) and a decrease in employee-related
expenses, as discussed above.

Total Indenture EBITDA for the aggregate twelve-month period of 2005 increased $14.6 million to
$78.8 million compared to $64.2 million in fiscal 2004. The increase in Indenture EBITDA is due primarily to the increase in sales, partially offset by the increase in selling, general and administrative expenses and the inclusion of an
additional week in the first quarter 2004. We estimate the additional week in 2004 contributed approximately $1.6 million to Indenture EBITDA. The acquisition of Big State in August of 2004 contributed $2.5 million to the increase. The acquired
operations of Wholesale Tire did not have a material impact on Indenture EBITDA.

Indenture EBITDA for the aggregate twelve-month period of
2005 does not include $1.3 million of benefit related to a reduction in the liquidation value of our Series B Preferred Stock held by Goodyear that would have been included in Indenture EBITDA during the period except for certain purchase accounting
adjustments made



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as part of the acquisition of the Predecessor company in March. Historically, previous reductions in such liquidation value would have been included in
Indenture EBITDA. A reduction of the liquidation value of $0.9 million was included in Indenture EBITDA in fiscal 2006 and we believe that there will be future reductions in such liquidation value which, if achieved, will be included in
Indenture EBITDA in those future periods up to a maximum of $0.7 million through January 2008, although no assurances can be given as to the amount or timing of such reductions, if any. Accordingly, we believe the amount of this benefit is
meaningful to an understanding of the results for the 2005 period.

We anticipate that our principal use of cash going forward will be to
meet working capital and debt service requirements, to make capital expenditures, and to fund acquisitions. Based upon current and anticipated levels of operations, we believe that our cash flow from operations, together with amounts available under
ATDs Revolver, will be adequate to meet our anticipated requirements.

Contractual Commitments

As of December 30, 2006, the Successor had certain cash obligations associated with contractual commitments. The amounts due under these commitments
are as follows (dollars in millions):



|                                                     |  |       |         |      |   |      |  |      |      |      |   |      |  |            |       |  |   |      |  |   |      
|---------------------------------------------------- |  | ----- | ------- | ---- | - | ---- |  | ---- | ---- | ---- | - | ---- |  | ---------- | ----- |  | - | ---- |  | - | -----
|                                                     |  | Total |         | 2007 |   | 2008 |  | 2009 |      | 2010 |   | 2011 |  | Thereafter
|Long-term debt (variable rate)                       |  | $     | 295.0   |      | $ |     |  | $    |     |      | $ |     |  | $          | 155.0 |  | $ |     |  | $ | 140.0
|Long-term debt (fixed rate)                          |  |       | 211.6   |      |   | 3.5  |  |      | 1.2  |      |   | 0.6  |  |            | 6.1   |  |   |     |  |   | 200.2
|Estimated interest payments (1)                      |  |       | 303.5   |      |   | 49.2 |  |      | 52.5 |      |   | 52.5 |  |            | 43.8  |  |   | 40.9 |  |   | 64.6 
|Operating leases, net of sublease income             |  |       | 170.9   |      |   | 29.3 |  |      | 27.4 |      |   | 24.4 |  |            | 19.6  |  |   | 15.8 |  |   | 54.4 
|8% cumulative mandatorily redeemable preferred stock |  |       | 45.9    |      |   |     |  |      |     |      |   |     |  |            |      |  |   |     |  |   | 45.9 
|Capital leases                                       |  |       | 0.4     |      |   | 0.4  |  |      |     |      |   |     |  |            |      |  |   |     |  |   |     
|Other long-term liabilities                          |  |       | 3.3     |      |   | 0.1  |  |      | 0.1  |      |   | 0.1  |  |            |      |  |   |     |  |   | 3.0  
|                                                     |  |       |         |      |   |      |  |      |      |      |   |      |  |            |       |  |   |      |  |   |      
|Total contractual cash obligations                   |  | $     | 1,030.6 |      | $ | 82.5 |  | $    | 81.2 |      | $ | 77.6 |  | $          | 224.5 |  | $ | 56.7 |  | $ | 508.1
|                                                     |  |       |         |      |   |      |  |      |      |      |   |      |  |            |       |  |   |      |  |   |      

---

|(1) | Represents the annual interest expense on fixed and variable rate debt. Projections of interest expense on variable rate debt are based on current interest rates.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

In addition, the only significant known remaining liability related to Winston Tire Company (Winston), our
retail business that was sold in 2001, is the exposure related to leases that we have guaranteed. As of December 30, 2006, our total obligations, as guarantor on the Winston leases, are approximately $9.0 million extending over 13 years.
However, we have secured assignments or sublease agreements for the vast majority of these commitments with contractually assigned or subleased rental of approximately $8.5 million. A provision has been made for the net present value of the
estimated shortfall. The accrual for lease liabilities could be materially affected by factors such as the credit worthiness of lessors, assignees and sublessees and our success at negotiating early termination agreements with lessors. These factors
are significantly dependent on general economic conditions. While we believe that our current estimates of these liabilities are adequate, it is possible that future events could require significant adjustments to those estimates.

Critical Accounting Policies and Estimates

The
consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States, which require us to make estimates and assumptions (see Note 1 in the Notes to Consolidated Financial Statements
included under Item 8 of this report). We consider certain accounting policies, as described below, to be critical policies due to the high degree of judgment and complexity involved in each.



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Revenue Recognition and Accounts Receivable  Allowance for Doubtful Accounts

We recognize revenue when title and risk of loss pass to the customer, which is upon delivery under free on board (FOB) destination terms. We
also permit customers from time to time to return certain products but there is no contractual right of return. We continuously monitor and track such returns and record an estimate of such future returns, which is based on historical experience of
actual returns. While such returns have historically been within managements expectations and the provisions established have been adequate, we cannot guarantee that we will continue to experience the same return rates that we have in the
past. If future returns increase significantly, operating results would be adversely affected.

The allowance for doubtful accounts
provides for estimated losses inherent within our accounts receivable balance. Management evaluates both the creditworthiness of specific customers and the overall probability of losses based upon an analysis of the overall aging of receivables,
past collection trends, and general economic conditions. Management believes, based on our review, that the allowance for doubtful accounts is adequate to cover potential losses. Actual results may vary as a result of unforeseen economic events and
the impact those events could have on our customers.

Inventories

Inventories are valued at the lower of cost, determined on the first-in, first-out (FIFO) method, or market. We perform periodic assessments
to determine the existence of obsolete, slow-moving and non-saleable inventories and record necessary provisions to reduce such inventories to net realizable value. If actual market conditions are less favorable than those projected by management,
additional inventory provisions may be required.

Self-Insured Reserves

We are self-insured for automobile liability, workers' compensation and the health care claims of our team members, although we maintain stop-loss
coverage with third-party insurers to limit our total liability exposure. A reserve for liabilities associated with these losses is established for claims filed and claims incurred but not yet reported using actuarial methods followed in the
insurance industry and our historical claims experience. While we do not expect the amounts ultimately paid to differ significantly from our estimates, our self-insurance reserves and corresponding selling, general and administrative expenses could
be affected if future claim experience differs significantly from historical trends and actuarial assumptions.

Valuation of Goodwill and Other
Intangible Assets

Statement of Financial Accounting Standards
(SFAS) No. 142 requires that goodwill and intangible assets with indefinite useful lives are no longer amortized, but are tested for impairment annually and more frequently in the event of an impairment indicator. SFAS No. 142
requires that management compare the reporting units carrying value to its fair value as of an annual assessment date. Management has computed fair value by utilizing a variety of methods including discounted cash flow and market multiple
models. SFAS No. 142 also requires that intangible assets with definite useful lives be amortized over their respective estimated useful lives and reviewed whenever events or circumstances indicate an impairment may exist. In accordance with
SFAS No. 142, we have elected November 30thas our annual impairment assessment date. We completed
our annual impairment assessment as of each November 30th, and concluded that no impairment charge was
required. See Note 4 of Notes to Consolidated Financial Statements for discussion regarding the intangible asset impairment charge recorded in September 2006 (outside of our annual assessment). We will continue to perform goodwill and intangible
asset impairment reviews annually or more frequently if facts or circumstances warrant a review. Future adverse developments in market conditions or our current or projected operating results could cause the fair value of our goodwill to fall below
the carrying value, requiring an impairment charge.



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Long-Lived Assets

Management reviews long-lived assets, which consist of property, leasehold improvements and equipment, for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not
be recovered. Recoverability of long-lived assets to be held and used is evaluated by a comparison of the carrying amount of the asset to future net undiscounted cash flows expected to be generated by the asset group. If the carrying amount of an
asset exceeds its estimated future cash flows, an impairment charge is recognized for the excess of the carrying amount over the fair value of the asset. Assets to be disposed of are reported at the lower of the carrying value or fair value less
cost to sell when we have committed to a disposal plan.

Income Taxes and Valuation Allowances

We account for income taxes in accordance with SFAS No. 109, Accounting for Income Taxes. Under SFAS 109, deferred tax assets or
liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or
settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability from period to period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not
be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance would be included in the provision for deferred income taxes in
the period of change.

Vendor Rebates

We receive rebates from our vendors under a number of different programs. These rebates are recorded in accordance with Emerging Issues Task Force (EITF) Issue No. 02-16, Accounting by a Customer (Including a
Reseller) for Cash Considerations Received from a Vendor. Many of the vendor programs provide for us to receive rebates when any of a number of measures is achieved, generally related to the volume of purchases. These rebates are accounted for
as a reduction to the price of the product, which reduces the carrying value of inventory until the product is sold. Throughout the year, the amount earned for annual rebates is based on purchases management considers probable for the full year.
These estimates are continually revised to reflect rebates earned based on actual purchase levels. Historically, actual rebates have been within the expectations used in the estimates.

If market conditions were to change, vendors may change the terms of some or all of these programs. Although these changes would not affect the amounts
that have been recorded related to product already purchased, it may impact gross margins on products sold or revenues earned in future periods to the extent that the changes are not passed along to the customer.

Customer Rebates

We offer rebates to our
customers under a number of different programs. These rebates are recorded in accordance with EITF Issue No. 01-9,  Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendors Products).
The majority of these programs provide for the customer to receive rebates, generally in the form of a reduction in the related accounts receivable balance, when certain measures are achieved, generally related to the volume of product purchased
from us. These rebates are recorded as a reduction of the related price of the product, which reduces the amount of revenue recorded. Throughout the year, the amount of rebates is estimated based on the expected level of purchases to be made by
customers that participate in the rebate programs. These estimates are periodically revised to reflect rebates earned by customers based on actual purchases made. Historically, actual rebates paid have been within the expectations used in
managements estimates.

Cooperative Advertising and Marketing Programs

We participate in cooperative advertising and marketing programs (co-op) with our vendors. Co-op funds are provided to the Company generally
based on the volume of purchases made with vendors that offer such



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programs. A portion of the funds received must be used for specific advertising and marketing expenditures incurred by the Company or its customers. The
co-op funds received by the Company from its vendors are accounted for in accordance with EITF Issue No. 02-16, which requires that we record the funds received as a reduction of cost of sales or as an offset to specific costs incurred in
selling the vendors products. The co-op funds that are provided to the Companys customers are accounted for in accordance with EITF Issue 01-9, which requires that the Company record the funds paid as a reduction of revenue since no
separate identifiable benefit is received by the Company.

Recently Issued Accounting Pronouncements

In February 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 159, The Fair Value Option for Financial Assets
and Financial Liabilities (SFAS 159). SFAS 159 expands opportunities to use fair value measurement in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value.
This statement is effective for fiscal years beginning after November 15, 2007. We do not expect the adoption of SFAS No. 159 to have a material impact on our consolidated financial position, results of operations or cash flows.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS No. 157 defines fair value,
establishes a framework for measuring fair value in accordance with accounting principles generally accepted in the United States, and expands disclosures about fair value measurements. This statement does not require any new fair value
measurements; rather, it applies under other accounting pronouncements that require or permit fair value measurements. The provisions of SFAS No. 157 are effective for fiscal years beginning after November 15, 2007. We do not expect the
adoption of SFAS No. 157 to have a material impact on our consolidated financial position, results of operations or cash flows

In
September 2006, the FASB issued SFAS No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plansan amendment of FASB Statements No. 87, 88, 106, and 132R. SFAS No. 158 requires
employers to recognize a net liability or asset and an offsetting adjustment to accumulated other comprehensive income to report the funded status of defined benefit pension and other postretirement benefit plans. Additionally, SFAS No.158 requires
companies to measure plan assets and obligations at their year-end balance sheet date. The initial disclosure requirement of SFAS No. 158 is effective for us for our fiscal year ending December 30, 2006. The recognition requirement of a
net liability or asset and an offsetting adjustment to accumulated other comprehensive income (loss) under SFAS No. 158 is effective for us for our fiscal year ending December 27, 2008. We do not expect the adoption of SFAS No. 158 to
have a material impact on our consolidated financial position, results of operations or cash flows.

In September 2006, the Securities and
Exchange Commission (SEC) issued Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements (SAB 108). SAB
108 provides guidance on the consideration of the effects of prior year misstatements in quantifying current year misstatements for the purpose of a materiality assessment. Under SAB 108, companies should evaluate a misstatement based on its impact
on the current year income statement, as well as the cumulative effect of correcting such misstatements that existed in prior years existing in the current years ending balance sheet. SAB 108 is effective for fiscal years ending on or after
November 15, 2006. The adoption of SAB 108 did not have a material impact on our consolidated financial position, results of operations or cash flows.

In June 2006, the FASB issued FASB Interpretation (FIN) No. 48, Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109. This Interpretation provides guidance for
recognizing and measuring uncertain tax positions, as defined in SFAS No. 109, Accounting for Income Taxes. Under FIN No. 48, the financial statements will reflect expected future tax consequences of such positions
presuming the taxing authorities full knowledge of the position and all relevant facts, but without considering time values. FIN 48 also revises disclosure requirements and introduces a prescriptive, annual, tabular roll-forward of the



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unrecognized tax benefits. FIN 48 is effective for fiscal years beginning after December 15, 2006. We have not yet completed our assessment of the
impact that this Interpretation will have on our consolidated financial position, results of operations or cash flows.

In June 2006, the
EITF reached a consensus on EITF Issue No. 06-03 (EITF 06-03), How Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement (That Is, Gross versus Net
Presentation). EITF 06-03 provides that the presentation of taxes assessed by a governmental authority that is directly imposed on a revenue-producing transaction between a seller and a customer on either a gross basis (included in revenues
and costs) or on a net basis (excluded from revenues) is an accounting policy decision that should be disclosed. The provisions of EITF 06-03 become effective as of December 31, 2006. The adoption of EITF 06-03 did not have a material impact on
our consolidated financial position, results of operations or cash flows.



|Item 7A. | Quantitative and Qualitative Disclosure About Market Risk.
|-------- | ----------------------------------------------------------

Our results of operations are exposed to changes in interest rates primarily with respect to ATDs credit facility and our Senior Floating Rate Notes. Interest on the credit facility is tied to the Base Rate, as
defined in the agreement, or LIBOR. Interest on the Senior Floating Rate Notes is tied to the three-month LIBOR. At December 30, 2006, ATD had $295.0 million outstanding under its credit facility and our Senior Floating Rate Notes, of which
$210.0 million was not hedged by an interest rate swap agreement and was thus subject to exposure to interest rate changes. An increase of 1% in such interest rate percentages would increase our annual interest expense by $2.1 million, based on the
outstanding balance of the credit facility and Senior Floating Rate Notes that have not been hedged at December 30, 2006.

On
October 11, 2005, we entered into an interest rate swap agreement (the Swap) to manage exposure to fluctuations in interest rates. The Swap represents a contract to exchange floating rate for fixed interest payments periodically
over the life of the agreement without exchange of the underlying notional amount. The notional amount of the Swap is used to measure interest to be paid or received and does not represent the amount of exposure to credit loss. At December 30,
2006, the Swap in place covers a notional amount of $85.0 million of the $140.0 million Senior Floating Rate Notes at a fixed interest rate of 4.79% and expires on September 30, 2010. This Swap has been designated for hedge accounting
treatment. Accordingly, we recognize the fair value of the Swap in the accompanying consolidated balance sheets and any changes in the fair value are recorded as adjustments to other comprehensive income (loss). The fair value of the Swap is the
estimated amount that we would pay or receive to terminate the agreement at the reporting date. The fair value of the Swap was an asset of $0.7 million at December 30, 2006, and is included in other assets in the accompanying consolidated
balance sheets with the offset included in other comprehensive income (loss), net of tax. At December 31, 2005, the fair value of the Swap was a liability of $0.2 million and is included in other liabilities in the accompanying consolidated
balance sheets with the offset included in other comprehensive income (loss), net of tax.



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|Item 8. | Financial Statements and Supplementary Data.
|------- | --------------------------------------------

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



|                                                                                                                                                                                                                                                                                            |  |     
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                                                                                                                                                                                                            |  | Page
|American Tire Distributors Holdings, Inc.Consolidated Financial Statements                                                                                                                                                                                                                 |  |     
|                                                                                                                                                                                                                                                                                            | 
|Reports of Independent Registered Public Accounting Firm                                                                                                                                                                                                                                    |  | 37  
|                                                                                                                                                                                                                                                                                            | 
|Consolidated Balance Sheets as of December 30, 2006 and December 31, 2005 for the Successor                                                                                                                                                                                                 |  | 39  
|                                                                                                                                                                                                                                                                                            | 
|Consolidated Statements of Operations for fiscal year ended December 30, 2006 and the nine months ended December 31, 2005 for the Successor and for the quarter ended April 2, 2005 and fiscal year ended
January 1, 2005 for the Predecessor                                               |  | 40  
|                                                                                                                                                                                                                                                                                            | 
|Consolidated Statements of Stockholders Equity and Other Comprehensive Income (Loss) for the fiscal year ended December 30, 2006 and the period ended December 31, 2005 for the Successor and for the period ended
April 2, 2005 and fiscal year ended January 1, 2005 for the Predecessor |  | 41  
|                                                                                                                                                                                                                                                                                            | 
|Consolidated Statements of Cash Flows for the fiscal year ended December 30, 2006 and the period from April 2, 2005 through December 31, 2005 for the Successor and for the quarter ended April 2, 2005 and
fiscal year ended January 1, 2005 for the Predecessor                           |  | 42  
|                                                                                                                                                                                                                                                                                            | 
|Notes to Consolidated Financial Statements                                                                                                                                                                                                                                                  |  | 43  



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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of American Tire Distributors Holdings,
Inc. and Subsidiaries:

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations,
of stockholders equity and comprehensive income (loss) and of cash flows present fairly, in all material respects, the financial position of American Tire Distributors Holdings, Inc. and its subsidiaries (the Company) at December
30, 2006 and the results of its operations and its cash flows for the year ended December 30, 2006 and the period from April 2, 2005 through December 31, 2005 in conformity with accounting principles generally accepted in the United States
of America. In addition, in our opinion, the financial statement schedule on page 94 presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These
financial statements and financial statement schedule are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We
conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

Charlotte, North Carolina

March 30, 2007



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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of American Tire Distributors Holdings, Inc. and Subsidiaries:

In our opinion, the accompanying consolidated statements of operations, of stockholders equity and comprehensive income (loss) and of cash flows present fairly, in all material respects, the results of
ATDs operations and its cash flows for the period from January 2, 2005 through April 2, 2005 and the year ended January 1, 2005 in conformity with accounting principles generally accepted in the United States of America. In
addition, in our opinion, the financial statement schedule listed on page 94 presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial
statements and financial statement schedule are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our
audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

Charlotte, North Carolina

March 31, 2006



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AMERICAN TIRE DISTRIBUTORS HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(amounts in thousands, except per share amounts)



|                                                                                                                                   |  |                             |           |   |                             |   |           |  
|---------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------- | --------- | - | --------------------------- | - | --------- | -
|                                                                                                                                   |  | Successor December 30, 2006 |           |   | Successor December 31, 2005 |  
|Assets                                                                                                                             |  |                             |           |   |                             |   |           |  
|Current assets:                                                                                                                    |  |                             |           |   |                             |   |           |  
|Cash and cash equivalents                                                                                                          |  | $                           | 3,600     |   |                             | $ | 5,545     |  
|Accounts receivable, net of allowance for doubtful accounts of $1,051 and $998 in fiscal 2006 and 2005, respectively               |  |                             | 131,104   |   |                             |   | 127,722   |  
|Inventories                                                                                                                        |  |                             | 297,664   |   |                             |   | 281,415   |  
|Assets held for sale                                                                                                               |  |                             | 1,199     |   |                             |   | 1,034     |  
|Deferred income taxes                                                                                                              |  |                             | 10,136    |   |                             |   | 11,190    |  
|Income tax receivable                                                                                                              |  |                             |          |   |                             |   | 12,699    |  
|Other current assets                                                                                                               |  |                             | 6,926     |   |                             |   | 9,704     |  
|                                                                                                                                   |  |                             |           |   |                             |   |           |  
|Total current assets                                                                                                               |  |                             | 450,629   |   |                             |   | 449,309   |  
|                                                                                                                                   |  |                             |           |   |                             |   |           |  
|Property and equipment, net                                                                                                        |  |                             | 44,571    |   |                             |   | 44,596    |  
|Goodwill, net                                                                                                                      |  |                             | 355,743   |   |                             |   | 347,252   |  
|Other intangible assets, net                                                                                                       |  |                             | 238,849   |   |                             |   | 241,128   |  
|Other assets                                                                                                                       |  |                             | 33,714    |   |                             |   | 37,833    |  
|                                                                                                                                   |  |                             |           |   |                             |   |           |  
|Total assets                                                                                                                       |  | $                           | 1,123,506 |   |                             | $ | 1,120,118 |  
|                                                                                                                                   |  |                             |           |   |                             |   |           |  
|Liabilities and Stockholders Equity                                                                                               |  |                             |           |   |                             |   |           |  
|Current liabilities:                                                                                                               |  |                             |           |   |                             |   |           |  
|Accounts payable                                                                                                                   |  | $                           | 245,415   |   |                             | $ | 209,284   |  
|Accrued expenses                                                                                                                   |  |                             | 28,734    |   |                             |   | 33,509    |  
|Current maturities of long-term debt                                                                                               |  |                             | 3,853     |   |                             |   | 4,696     |  
|                                                                                                                                   |  |                             |           |   |                             |   |           |  
|Total current liabilities                                                                                                          |  |                             | 278,002   |   |                             |   | 247,489   |  
|                                                                                                                                   |  |                             |           |   |                             |   |           |  
|Long-term debt                                                                                                                     |  |                             | 517,154   |   |                             |   | 540,549   |  
|Deferred income taxes                                                                                                              |  |                             | 82,963    |   |                             |   | 82,077    |  
|Other liabilities                                                                                                                  |  |                             | 8,807     |   |                             |   | 10,638    |  
|Redeemable preferred stock                                                                                                         |  |                             | 19,822    |   |                             |   | 18,559    |  
|Commitments and contingencies                                                                                                      |  |                             |           |   |                             |   |           |  
|Stockholders equity:                                                                                                              |  |                             |           |   |                             |   |           |  
|Series A Common Stock, par value $.01 per share; 1,500,000 shares authorized; 691,173 shares issued and 690,700 shares
outstanding |  |                             | 7         |   |                             |   | 7         |  
|Series B Common Stock, par value $.01 per share; 315,000 shares authorized; 307,327 shares issued and outstanding                  |  |                             | 3         |   |                             |   | 3         |  
|Series D Common Stock, par value $.01 per share; 1,500 shares authorized, issued and outstanding                                   |  |                             |          |   |                             |   |          |  
|Common Stock, par value $.01 per share; 1,816,500 shares authorized, no shares have been issued                                    |  |                             |          |   |                             |   |          |  
|Additional paid-in capital                                                                                                         |  |                             | 217,990   |   |                             |   | 217,990   |  
|Warrants                                                                                                                           |  |                             | 4,631     |   |                             |   | 4,631     |  
|Accumulated deficit                                                                                                                |  |                             | (6,208    | ) |                             |   | (1,601    | )
|Accumulated other comprehensive income (loss)                                                                                      |  |                             | 435       |   |                             |   | (124      | )
|Treasury stock, at cost, 473 shares of Series A Common Stock                                                                       |  |                             | (100      | ) |                             |   | (100      | )
|                                                                                                                                   |  |                             |           |   |                             |   |           |  
|Total stockholders equity                                                                                                         |  |                             | 216,758   |   |                             |   | 220,806   |  
|                                                                                                                                   |  |                             |           |   |                             |   |           |  
|Total liabilities and stockholders equity                                                                                         |  | $                           | 1,123,506 |   |                             | $ | 1,120,118 |  
|                                                                                                                                   |  |                             |           |   |                             |   |           |  

The accompanying notes are an integral part of these consolidated financial statements.



39



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##### Table of Contents

AMERICAN TIRE DISTRIBUTORS HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands)



|                                                                                                          |  |                                  |           |   |                                  |   |           |                           |  |   |                                |   |  |   |           |  
|--------------------------------------------------------------------------------------------------------- |  | -------------------------------- | --------- | - | -------------------------------- | - | --------- | ------------------------- |  | - | ------------------------------ | - |  | - | --------- | -
|                                                                                                          |  | Successor                        |           |   | Predecessor                      |  
|                                                                                                          |  | Fiscal YearEndedDecember 30,2006 |           |   | Nine MonthsEndedDecember 31,2005 |   |           | Quarter EndedApril 2,2005 |  |   | Fiscal YearEndedJanuary 1,2005 |  
|Net sales                                                                                                 |  | $                                | 1,577,973 |   |                                  | $ | 1,150,944 |                           |  | $ | 354,339                        |   |  | $ | 1,282,069 |  
|Cost of goods sold, excluding depreciation included in selling, general and administrative expenses below |  |                                  | 1,293,594 |   |                                  |   | 939,325   |                           |  |   | 290,488                        |   |  |   | 1,043,793 |  
|                                                                                                          |  |                                  |           |   |                                  |   |           |                           |  |   |                                |   |  |   |           |  
|Gross profit                                                                                              |  |                                  | 284,379   |   |                                  |   | 211,619   |                           |  |   | 63,851                         |   |  |   | 238,276   |  
|Selling, general and administrative expenses                                                              |  |                                  | 227,399   |   |                                  |   | 172,605   |                           |  |   | 52,653                         |   |  |   | 183,235   |  
|Impairment of intangible asset                                                                            |  |                                  | 2,640     |   |                                  |   |          |                           |  |   |                               |   |  |   |          |  
|Transaction expenses                                                                                      |  |                                  |          |   |                                  |   | 95        |                           |  |   | 28,211                         |   |  |   |          |  
|                                                                                                          |  |                                  |           |   |                                  |   |           |                           |  |   |                                |   |  |   |           |  
|Operating income (loss)                                                                                   |  |                                  | 54,340    |   |                                  |   | 38,919    |                           |  |   | (17,013                        | ) |  |   | 55,041    |  
|Other income (expense):                                                                                   |  |                                  |           |   |                                  |   |           |                           |  |   |                                |   |  |   |           |  
|Interest expense                                                                                          |  |                                  | (60,065   | ) |                                  |   | (41,359   | )                         |  |   | (3,682                         | ) |  |   | (13,371   | )
|Other, net                                                                                                |  |                                  | (364      | ) |                                  |   | 111       |                           |  |   | (252                           | ) |  |   | (393      | )
|                                                                                                          |  |                                  |           |   |                                  |   |           |                           |  |   |                                |   |  |   |           |  
|(Loss) income from operations before income taxes                                                         |  |                                  | (6,089    | ) |                                  |   | (2,329    | )                         |  |   | (20,947                        | ) |  |   | 41,277    |  
|Income tax (benefit) provision                                                                            |  |                                  | (1,482    | ) |                                  |   | (728      | )                         |  |   | (6,620                         | ) |  |   | 16,236    |  
|                                                                                                          |  |                                  |           |   |                                  |   |           |                           |  |   |                                |   |  |   |           |  
|Net (loss) income                                                                                         |  | $                                | (4,607    | ) |                                  | $ | (1,601    | )                         |  | $ | (14,327                        | ) |  | $ | 25,041    |  
|                                                                                                          |  |                                  |           |   |                                  |   |           |                           |  |   |                                |   |  |   |           |  

The accompanying notes are an integral part of these consolidated financial statements.



40



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##### Table of Contents

AMERICAN TIRE DISTRIBUTORS HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY AND OTHER
COMPREHENSIVE INCOME (LOSS)

(amounts in thousands, except share amounts)



|                                                                              |  |                 |   |  |              |         |   |                           |            |   |          |   |     |                                   |  |   |                     |   |  |                                            |        |   |                        |   |     |       |  |   |         |   |  |   |      |   |  |   |      |   |  |   |         |  
|----------------------------------------------------------------------------- |  | --------------- | - |  | ------------ | ------- | - | ------------------------- | ---------- | - | -------- | - | --- | --------------------------------- |  | - | ------------------- | - |  | ------------------------------------------ | ------ | - | ---------------------- | - | --- | ----- |  | - | ------- | - |  | - | ---- | - |  | - | ---- | - |  | - | ------- | -
|                                                                              |  | Preferred Stock |   |  | Common Stock |         |   | AdditionalPaid-In Capital |            |   | Warrants |   |     | NoteReceivable From Sale of
Stock |  |   | Accumulated Deficit |   |  | AccumulatedOtherComprehensiveIncome (Loss) |        |   | Treasury Stock at Cost |   |     | Total | 
|                                                                              |  | Shares          |   |  | Amount       |         |   | Shares                    |            |   | Amount   |   |     |                                   |  |   |                     |   | 
|Predecessor balance, December 27, 2003                                        |  | 10,970,926      |   |  | $            | 50,944  |   |                           | 5,086,917  |   |          | $ | 51  |                                   |  | $ | 22,388              |   |  | $                                          | 1,782  |   |                        | $ | (17 | )     |  | $ | (42,654 | ) |  | $ |     |   |  | $ |     |   |  | $ | 32,494  |  
|Net income                                                                    |  |                |   |  |              |        |   |                           |           |   |          |   |    |                                   |  |   |                    |   |  |                                            |       |   |                        |   |    |       |  |   | 25,041  |   |  |   |     |   |  |   |     |   |  |   | 25,041  |  
|Surrender of warrants                                                         |  |                |   |  |              |        |   |                           |           |   |          |   |    |                                   |  |   | 430                 |   |  |                                            | (430   | ) |                        |   |    |       |  |   |        |   |  |   |     |   |  |   |     |   |  |   |        |  
|Issuance of common stock                                                      |  |                |   |  |              |        |   |                           | 75,000     |   |          |   | 1   |                                   |  |   | 212                 |   |  |                                            |       |   |                        |   |    |       |  |   |        |   |  |   |     |   |  |   |     |   |  |   | 213     |  
|Forgiveness of note receivable                                                |  |                |   |  |              |        |   |                           |           |   |          |   |    |                                   |  |   |                    |   |  |                                            |       |   |                        |   | 17  |       |  |   |        |   |  |   |     |   |  |   |     |   |  |   | 17      |  
|Dividends on preferred stock Series C                                         |  |                |   |  |              | 1,440   |   |                           |           |   |          |   |    |                                   |  |   |                    |   |  |                                            |       |   |                        |   |    |       |  |   | (1,440  | ) |  |   |     |   |  |   |     |   |  |   |        |  
|Dividends on preferred stock Series D                                         |  |                |   |  |              | 3,470   |   |                           |           |   |          |   |    |                                   |  |   |                    |   |  |                                            |       |   |                        |   |    |       |  |   | (3,470  | ) |  |   |     |   |  |   |     |   |  |   |        |  
|                                                                              |  |                 |   |  |              |         |   |                           |            |   |          |   |     |                                   |  |   |                     |   |  |                                            |        |   |                        |   |     |       |  |   |         |   |  |   |      |   |  |   |      |   |  |   |         |  
|Predecessor balance, January 1, 2005                                          |  | 10,970,926      |   |  |              | 55,854  |   |                           | 5,161,917  |   |          |   | 52  |                                   |  |   | 23,030              |   |  |                                            | 1,352  |   |                        |   |    |       |  |   | (22,523 | ) |  |   |     |   |  |   |     |   |  |   | 57,765  |  
|                                                                              |  |                 |   |  |              |         |   |                           |            |   |          |   |     |                                   |  |   |                     |   |  |                                            |        |   |                        |   |     |       |  |   |         |   |  |   |      |   |  |   |      |   |  |   |         |  
|Net loss                                                                      |  |                |   |  |              |        |   |                           |           |   |          |   |    |                                   |  |   |                    |   |  |                                            |       |   |                        |   |    |       |  |   | (14,327 | ) |  |   |     |   |  |   |     |   |  |   | (14,327 | )
|Dividends on preferred stock Series C                                         |  |                |   |  |              | 360     |   |                           |           |   |          |   |    |                                   |  |   |                    |   |  |                                            |       |   |                        |   |    |       |  |   | (360    | ) |  |   |     |   |  |   |     |   |  |   |        |  
|Dividends on preferred stock Series D                                         |  |                |   |  |              | 867     |   |                           |           |   |          |   |    |                                   |  |   |                    |   |  |                                            |       |   |                        |   |    |       |  |   | (867    | ) |  |   |     |   |  |   |     |   |  |   |        |  
|                                                                              |  |                 |   |  |              |         |   |                           |            |   |          |   |     |                                   |  |   |                     |   |  |                                            |        |   |                        |   |     |       |  |   |         |   |  |   |      |   |  |   |      |   |  |   |         |  
|Predecessor balance, April 2, 2005                                            |  | 10,970,926      |   |  |              | 57,081  |   |                           | 5,161,917  |   |          |   | 52  |                                   |  |   | 23,030              |   |  |                                            | 1,352  |   |                        |   |    |       |  |   | (38,077 | ) |  |   |     |   |  |   |     |   |  |   | 43,438  |  
|                                                                              |  |                 |   |  |              |         |   |                           |            |   |          |   |     |                                   |  |   |                     |   |  |                                            |        |   |                        |   |     |       |  |   |         |   |  |   |      |   |  |   |      |   |  |   |         |  
|                                                                              | 
|                                                                              |  |                 |   |  |              |         |   |                           |            |   |         
|Purchase accounting adjustments                                               |  | (10,970,926     | ) |  |              | (57,081 | ) |                           | (5,161,917 | ) |          |   | (52 | )                                 |  |   | (23,030             | ) |  |                                            | (1,352 | ) |                        |   |    |       |  |   | 38,077  |   |  |   |     |   |  |   |     |   |  |   | (43,438 | )
|Comprehensive loss:                                                           |  |                 |   |  |              |         |   |                           |            |   |          |   |     |                                   |  |   |                     |   |  |                                            |        |   |                        |   |     |       |  |   |         |   |  |   |      |   |  |   |      |   |  |   |         |  
|Net loss                                                                      |  |                |   |  |              |        |   |                           |           |   |          |   |    |                                   |  |   |                    |   |  |                                            |       |   |                        |   |    |       |  |   | (1,601  | ) |  |   |     |   |  |   |     |   |  |   | (1,601  | )
|Change in value of derivative instrument, net of income taxes of $0.1         |  |                |   |  |              |        |   |                           |           |   |          |   |    |                                   |  |   |                    |   |  |                                            |       |   |                        |   |    |       |  |   |        |   |  |   | (124 | ) |  |   |     |   |  |   | (124    | )
|                                                                              |  |                 |   |  |              |         |   |                           |            |   |          |   |     |                                   |  |   |                     |   |  |                                            |        |   |                        |   |     |       |  |   |         |   |  |   |      |   |  |   |      |   |  |   |         |  
|Total comprehensive loss                                                      |  |                 |   |  |              |         |   |                           |            |   |          |   |     |                                   |  |   |                     |   |  |                                            |        |   |                        |   |     |       |  |   |         |   |  |   |      |   |  |   |      |   |  |   | (1,725  | )
|                                                                              |  |                 |   |  |              |         |   |                           |            |   |          |   |     |                                   |  |   |                     |   |  |                                            |        |   |                        |   |     |       |  |   |         |   |  |   |      |   |  |   |      |   |  |   |         |  
|Issuance of Holdings common stock                                             |  |                |   |  |              |        |   |                           | 1,000,000  |   |          |   | 10  |                                   |  |   | 211,490             |   |  |                                            |       |   |                        |   |    |       |  |   |        |   |  |   |     |   |  |   |     |   |  |   | 211,500 |  
|Issuance of warrants                                                          |  |                |   |  |              |        |   |                           |           |   |          |   |    |                                   |  |   |                    |   |  |                                            | 4,631  |   |                        |   |    |       |  |   |        |   |  |   |     |   |  |   |     |   |  |   | 4,631   |  
|Stock option rollover                                                         |  |                |   |  |              |        |   |                           |           |   |          |   |    |                                   |  |   | 6,500               |   |  |                                            |       |   |                        |   |    |       |  |   |        |   |  |   |     |   |  |   |     |   |  |   | 6,500   |  
|Repurchase of common stock                                                    |  |                |   |  |              |        |   |                           | (473       | ) |          |   |    |                                   |  |   |                    |   |  |                                            |       |   |                        |   |    |       |  |   |        |   |  |   |     |   |  |   | (100 | ) |  |   | (100    | )
|                                                                              |  |                 |   |  |              |         |   |                           |            |   |          |   |     |                                   |  |   |                     |   |  |                                            |        |   |                        |   |     |       |  |   |         |   |  |   |      |   |  |   |      |   |  |   |         |  
|Successor balance, December 31, 2005                                          |  |                |   |  |              |        |   |                           | 999,527    |   |          |   | 10  |                                   |  |   | 217,990             |   |  |                                            | 4,631  |   |                        |   |    |       |  |   | (1,601  | ) |  |   | (124 | ) |  |   | (100 | ) |  |   | 220,806 |  
|                                                                              |  |                 |   |  |              |         |   |                           |            |   |          |   |     |                                   |  |   |                     |   |  |                                            |        |   |                        |   |     |       |  |   |         |   |  |   |      |   |  |   |      |   |  |   |         |  
|Comprehensive loss:                                                           |  |                 |   |  |              |         |   |                           |            |   |          |   |     |                                   |  |   |                     |   |  |                                            |        |   |                        |   |     |       |  |   |         |   |  |   |      |   |  |   |      |   |  |   |         |  
|Net loss                                                                      |  |                |   |  |              |        |   |                           |           |   |          |   |    |                                   |  |   |                    |   |  |                                            |       |   |                        |   |    |       |  |   | (4,607  | ) |  |   |     |   |  |   |     |   |  |   | (4,607  | )
|Change in value of derivative instrument, net of income taxes of $0.3 million |  |                |   |  |              |        |   |                           |           |   |          |   |    |                                   |  |   |                    |   |  |                                            |       |   |                        |   |    |       |  |   |        |   |  |   | 559  |   |  |   |     |   |  |   | 559     |  
|                                                                              |  |                 |   |  |              |         |   |                           |            |   |          |   |     |                                   |  |   |                     |   |  |                                            |        |   |                        |   |     |       |  |   |         |   |  |   |      |   |  |   |      |   |  |   |         |  
|Total comprehensive loss                                                      |  |                 |   |  |              |         |   |                           |            |   |          |   |     |                                   |  |   |                     |   |  |                                            |        |   |                        |   |     |       |  |   |         |   |  |   |      |   |  |   |      |   |  |   | (4,048  | )
|                                                                              |  |                 |   |  |              |         |   |                           |            |   |          |   |     |                                   |  |   |                     |   |  |                                            |        |   |                        |   |     |       |  |   |         |   |  |   |      |   |  |   |      |   |  |   |         |  
|Successor balance, December 30, 2006                                          |  |                |   |  | $            |        |   |                           | 999,527    |   |          | $ | 10  |                                   |  | $ | 217,990             |   |  | $                                          | 4,631  |   |                        | $ |    |       |  | $ | (6,208  | ) |  | $ | 435  |   |  | $ | (100 | ) |  | $ | 216,758 |  
|                                                                              |  |                 |   |  |              |         |   |                           |            |   |          |   |     |                                   |  |   |                     |   |  |                                            |        |   |                        |   |     |       |  |   |         |   |  |   |      |   |  |   |      |   |  |   |         |  

The accompanying notes are an integral part of these consolidated financial statements.



41



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##### Table of Contents

AMERICAN TIRE DISTRIBUTORS HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in thousands)



|                                                                                                   |  |                                   |            |   |                                                  |   |            |                           |  |   |                                 |   |  |   |            |  
|-------------------------------------------------------------------------------------------------- |  | --------------------------------- | ---------- | - | ------------------------------------------------ | - | ---------- | ------------------------- |  | - | ------------------------------- | - |  | - | ---------- | -
|                                                                                                   |  | Successor                         |            |   | Predecessor                                      |  
|                                                                                                   |  | Fiscal Year EndedDecember 30,2006 |            |   | Period from April 2, 2005throughDecember 31,2005 |   |            | Quarter EndedApril 2,2005 |  |   | Fiscal Year EndedJanuary 1,2005 |  
|Cash flows from operating activities:                                                              |  |                                   |            |   |                                                  |   |            |                           |  |   |                                 |   |  |   |            |  
|Net (loss) income                                                                                  |  | $                                 | (4,607     | ) |                                                  | $ | (1,601     | )                         |  | $ | (14,327                         | ) |  | $ | 25,041     |  
|Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: |  |                                   |            |   |                                                  |   |            |                           |  |   |                                 |   |  |   |            |  
|Depreciation and amortization of intangibles                                                       |  |                                   | 25,071     |   |                                                  |   | 16,409     |                           |  |   | 1,738                           |   |  |   | 6,781      |  
|Accretion of 8% cumulative preferred stock and Senior Discount Notes                               |  |                                   | 6,347      |   |                                                  |   | 4,331      |                           |  |   |                                |   |  |   |           |  
|Amortization of other assets                                                                       |  |                                   | 5,443      |   |                                                  |   | 4,091      |                           |  |   | 232                             |   |  |   | 1,156      |  
|Impairment of intangible asset                                                                     |  |                                   | 2,640      |   |                                                  |   |           |                           |  |   |                                |   |  |   |           |  
|(Benefit) provision for deferred income taxes                                                      |  |                                   | (1,970     | ) |                                                  |   | (2,413     | )                         |  |   | 658                             |   |  |   | 1,847      |  
|Recovery of (provision for) doubtful accounts                                                      |  |                                   | (325       | ) |                                                  |   | 1,091      |                           |  |   | 279                             |   |  |   | 320        |  
|Inventory step-up amortization                                                                     |  |                                   |           |   |                                                  |   | 4,692      |                           |  |   |                                |   |  |   |           |  
|Stock-based compensation expense                                                                   |  |                                   |           |   |                                                  |   |           |                           |  |   | 8,584                           |   |  |   |           |  
|Post-retirement benefit plan termination                                                           |  |                                   | (1,933     | ) |                                                  |   |           |                           |  |   |                                |   |  |   |           |  
|Other, net                                                                                         |  |                                   | 274        |   |                                                  |   | 731        |                           |  |   | (265                            | ) |  |   | (211       | )
|Change in assets and liabilities:                                                                  |  |                                   |            |   |                                                  |   |            |                           |  |   |                                 |   |  |   |            |  
|Accounts receivable, net                                                                           |  |                                   | 2,193      |   |                                                  |   | 12,636     |                           |  |   | (8,541                          | ) |  |   | (16,046    | )
|Inventories                                                                                        |  |                                   | (7,895     | ) |                                                  |   | (44,085    | )                         |  |   | (12,652                         | ) |  |   | (20,922    | )
|Other current assets                                                                               |  |                                   | 2,128      |   |                                                  |   | 11,097     |                           |  |   | (8,349                          | ) |  |   | (5,168     | )
|Income tax receivable                                                                              |  |                                   | 13,605     |   |                                                  |   |           |                           |  |   |                                |   |  |   |           |  
|Accounts payable and accrued expenses                                                              |  |                                   | 25,715     |   |                                                  |   | (33,537    | )                         |  |   | 43,991                          |   |  |   | 32,586     |  
|Other                                                                                              |  |                                   | (100       | ) |                                                  |   | (8,096     | )                         |  |   | (1,477                          | ) |  |   | 325        |  
|                                                                                                   |  |                                   |            |   |                                                  |   |            |                           |  |   |                                 |   |  |   |            |  
|Net cash provided by (used in) operating activities                                                |  |                                   | 66,586     |   |                                                  |   | (34,654    | )                         |  |   | 9,871                           |   |  |   | 25,709     |  
|                                                                                                   |  |                                   |            |   |                                                  |   |            |                           |  |   |                                 |   |  |   |            |  
|Cash flows from investing activities:                                                              |  |                                   |            |   |                                                  |   |            |                           |  |   |                                 |   |  |   |            |  
|Other Acquisitions, net of cash acquired                                                           |  |                                   | (20,357    | ) |                                                  |   | (4,266     | )                         |  |   |                                |   |  |   | (59,207    | )
|Purchase of property and equipment                                                                 |  |                                   | (9,845     | ) |                                                  |   | (6,086     | )                         |  |   | (1,574                          | ) |  |   | (4,379     | )
|Proceeds from disposal of assets held for sale                                                     |  |                                   | 1,790      |   |                                                  |   |           |                           |  |   |                                |   |  |   |           |  
|Proceeds from sale of property and equipment                                                       |  |                                   | 421        |   |                                                  |   | 184        |                           |  |   | 236                             |   |  |   | 284        |  
|Acquisition of Predecessor                                                                         |  |                                   |           |   |                                                  |   | (458,347   | )                         |  |   |                                |   |  |   |           |  
|Other, net                                                                                         |  |                                   | (536       | ) |                                                  |   | (300       | )                         |  |   | (100                            | ) |  |   |           |  
|                                                                                                   |  |                                   |            |   |                                                  |   |            |                           |  |   |                                 |   |  |   |            |  
|Net cash used in investing activities                                                              |  |                                   | (28,527    | ) |                                                  |   | (468,815   | )                         |  |   | (1,438                          | ) |  |   | (63,302    | )
|                                                                                                   |  |                                   |            |   |                                                  |   |            |                           |  |   |                                 |   |  |   |            |  
|Cash flows from financing activities:                                                              |  |                                   |            |   |                                                  |   |            |                           |  |   |                                 |   |  |   |            |  
|Borrowings from revolving credit facility                                                          |  |                                   | 1,413,621  |   |                                                  |   | 1,100,320  |                           |  |   | 312,277                         |   |  |   | 1,269,626  |  
|Repayments of revolving credit facility                                                            |  |                                   | (1,448,090 | ) |                                                  |   | (1,088,448 | )                         |  |   | (320,728                        | ) |  |   | (1,212,775 | )
|Payments of other long-term debt                                                                   |  |                                   | (5,301     | ) |                                                  |   | (2,658     | )                         |  |   | (975                            | ) |  |   | (16,336    | )
|Payments of deferred financing costs                                                               |  |                                   | (234       | ) |                                                  |   | (35,386    | )                         |  |   |                                |   |  |   | (2,127     | )
|Proceeds from issuance of long-term debt                                                           |  |                                   |           |   |                                                  |   | 330,003    |                           |  |   |                                |   |  |   |           |  
|Proceeds from issuance of common stock                                                             |  |                                   |           |   |                                                  |   | 211,500    |                           |  |   | 1,862                           |   |  |   | 213        |  
|Change in restricted cash                                                                          |  |                                   |           |   |                                                  |   | (30,506    | )                         |  |   |                                |   |  |   |           |  
|Proceeds from issuance of preferred stock                                                          |  |                                   |           |   |                                                  |   | 15,369     |                           |  |   |                                |   |  |   |           |  
|Proceeds from issuance of warrants                                                                 |  |                                   |           |   |                                                  |   | 4,631      |                           |  |   |                                |   |  |   |           |  
|Series A preferred stock redemption                                                                |  |                                   |           |   |                                                  |   |           |                           |  |   | (700                            | ) |  |   | (1,000     | )
|Other                                                                                              |  |                                   |           |   |                                                  |   | 686        |                           |  |   |                                |   |  |   |           |  
|                                                                                                   |  |                                   |            |   |                                                  |   |            |                           |  |   |                                 |   |  |   |            |  
|Net cash (used in) provided by financing activities                                                |  |                                   | (40,004    | ) |                                                  |   | 505,511    |                           |  |   | (8,264                          | ) |  |   | 37,601     |  
|                                                                                                   |  |                                   |            |   |                                                  |   |            |                           |  |   |                                 |   |  |   |            |  
|Net (decrease) increase in cash and cash equivalents                                               |  |                                   | (1,945     | ) |                                                  |   | 2,042      |                           |  |   | 169                             |   |  |   | 8          |  
|Cash and cash equivalents, beginning of year                                                       |  |                                   | 5,545      |   |                                                  |   | 3,503      |                           |  |   | 3,334                           |   |  |   | 3,326      |  
|                                                                                                   |  |                                   |            |   |                                                  |   |            |                           |  |   |                                 |   |  |   |            |  
|Cash and cash equivalents, end of year                                                             |  | $                                 | 3,600      |   |                                                  | $ | 5,545      |                           |  | $ | 3,503                           |   |  | $ | 3,334      |  
|                                                                                                   |  |                                   |            |   |                                                  |   |            |                           |  |   |                                 |   |  |   |            |  
|Supplemental disclosures of cash flow information:                                                 |  |                                   |            |   |                                                  |   |            |                           |  |   |                                 |   |  |   |            |  
|Cash payments for interest                                                                         |  | $                                 | 46,263     |   |                                                  | $ | 23,992     |                           |  | $ | 3,944                           |   |  | $ | 12,389     |  
|                                                                                                   |  |                                   |            |   |                                                  |   |            |                           |  |   |                                 |   |  |   |            |  
|Cash (receipts) payments for taxes, net                                                            |  | $                                 | (13,163    | ) |                                                  | $ | (2,340     | )                         |  | $ | 247                             |   |  | $ | 17,610     |  
|                                                                                                   |  |                                   |            |   |                                                  |   |            |                           |  |   |                                 |   |  |   |            |  
|Supplemental disclosures of noncash activities:                                                    |  |                                   |            |   |                                                  |   |            |                           |  |   |                                 |   |  |   |            |  
|Capital expenditures financed by debt                                                              |  | $                                 | 2,360      |   |                                                  | $ | 4,054      |                           |  | $ | 1,338                           |   |  | $ | 5,224      |  
|                                                                                                   |  |                                   |            |   |                                                  |   |            |                           |  |   |                                 |   |  |   |            |  
|Supplier loan (see Note 5)                                                                         |  | $                                 | 6,000      |   |                                                  | $ |           |                           |  | $ |                                |   |  | $ |           |  
|                                                                                                   |  |                                   |            |   |                                                  |   |            |                           |  |   |                                 |   |  |   |            |  
|Payment of Series D Senior Notes with restricted cash                                              |  | $                                 |           |   |                                                  | $ | 30,506     |                           |  | $ |                                |   |  | $ |           |  
|                                                                                                   |  |                                   |            |   |                                                  |   |            |                           |  |   |                                 |   |  |   |            |  

The accompanying notes are an integral part of these consolidated financial statements.



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AMERICAN TIRE DISTRIBUTORS HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Nature of Business and Summary of Significant Accounting Policies:

Organization

American Tire Distributors Holdings, Inc. (also referred to herein as Holdings, the
Company or the Successor) is a Delaware corporation which owns 100% of the issued and outstanding capital stock of American Tire Distributors, Inc. a Delaware corporation (ATD). Holdings has no significant assets
or operations other than its ownership of ATD. The operations of ATD and its subsidiaries, or the Predecessor, constitute the operations of Holdings presented under accounting principles generally accepted in the United States.

On March 31, 2005, pursuant to an Agreement and Plan of Merger (the Merger Agreement), dated as of February 4, 2005
and amended and restated on March 7, 2005, among Holdings, ATD MergerSub, Inc., a Delaware corporation (MergerSub), Charlesbank Equity Fund IV, L.P., a Massachusetts limited partnership, Charlesbank Capital Partners, LLC, a
Massachusetts limited liability company and ATD; MergerSub merged with and into ATD with ATD being the surviving corporation (also referred to herein as the Merger or the Acquisition). As a result of the Acquisition, ATD
became a wholly-owned subsidiary of Holdings (see Note 2 for further information). The Acquisition was completed on March 31, 2005.

The Acquisition was accounted for as a purchase, in accordance with the provisions of Statement of Financial Accounting Standards (SFAS) No. 141, Business Combinations. Accordingly, the purchase price of the
Acquisition has been allocated to the Companys assets and liabilities based upon their estimated fair values at the acquisition date. Periods prior to April 2, 2005 reflect the financial position, results of operations, and cash flows of
the Predecessor and periods after April 2, 2005 reflect the financial position, results of operations, and cash flows of Holdings and its subsidiaries. For accounting purposes, the effects of purchase accounting were applied on April 2,
2005. The activity of the Company for the period March 31, 2005 through April 2, 2005 is included in the Predecessors consolidated statement of operations. Cash flow activity for the three-day period from March 31, 2005 through
April 2, 2005 is included in the Predecessors consolidated statement of cash flows except for cash flow activity related to the Merger, which is shown in the Successors consolidated statement of cash flows on April 2, 2005. The
Company believes that the results of operations and cash flows, other than those related to the Merger, are immaterial for the three-day period from March 31, 2005 through April 2, 2005.

Nature of Business

ATD is primarily engaged
in the wholesale distribution of tires, custom wheels, related automotive service equipment and tools and supplies which represent approximately 87.2%, 7.0%, 3.4% and 2.4% of net sales, respectively and has one reportable segment consisting of 74
economically similar distribution centers across the United States. ATDs customer base is comprised primarily of independent tire dealers with other customers representing national retail chains, service stations and other automotive dealer
and repair facilities. ATD serves all or parts of 36 states located in the Southeastern and Mid-Atlantic regions, portions of the Northeast, Midwest, Southwest, and the West Coast of the United States.

Principles of Consolidation

The accompanying
consolidated financial statements include the accounts of Holdings and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial
statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets



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and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Certain amounts in the 2004 and 2005 financial statements have been reclassified to conform with the 2006 presentation.

Fiscal Year

The Companys fiscal year is
based on either a 52 or 53-week period ending on the Saturday closest to each December 31. Therefore, the financial results of certain fiscal years will not be exactly comparable to the prior and subsequent 52-week fiscal years. The period
ended April 2, 2005 for the Predecessor contains operating results for 13 weeks and the nine months ended December 31, 2005 for the Successor contains operating results for 39 weeks. The fiscal year ended December 30, 2006 for the
Successor and the fiscal year ended January 1, 2005 for the Predecessor contain operating results for 52 weeks and 53 weeks, respectively.

Cash
and Cash Equivalents

The Company considers all deposits with an original maturity of three months or less to be cash equivalents in
its consolidated financial statements.

Revenue Recognition and Concentration of Credit Risk

The Company recognizes revenue when title and risk of loss pass to the customer, which is upon delivery under free on board (FOB) destination
terms. In the normal course of business, the Company extends credit, on open accounts, to its customers after performing a credit analysis based on a number of financial and other criteria. The Company performs ongoing credit evaluations of its
customers financial condition and does not normally require collateral; however, letters of credit and other security are occasionally required for certain new and existing customers. Allowances for doubtful accounts are maintained for
estimated potential credit losses.

The Companys top ten customers accounted for approximately 6.4%, 6.9%, and 6.7% of operating
revenues, respectively, for the fiscal years of 2006, 2005 and 2004.

The Company permits customers from time to time to return certain
products but there is no contractual right of return. The Company continuously monitors and tracks such returns and records an estimate of such future returns, which is based on historical experience of actual returns.

Inventories

Inventories consist primarily of automotive tires, custom wheels, automotive service equipment and related products and are valued at the lower of cost, determined on the first-in, first-out (FIFO) method, or market. The Company performs
periodic assessments to determine the existence of obsolete, slow-moving and non-saleable inventories and records necessary provisions to reduce such inventories to net realizable value. Terms with a majority of the Companys tire vendors allow
return of tire products, within limitations, specified in their supply agreements. All of ATDs inventory is held as collateral under the revolving credit facility (Revolver). See Note 5 for further information.

As part of the purchase price allocation, the carrying value of inventory was increased by $4.7 million to adjust to estimated fair value. The effect of
this adjustment increased cost of goods sold and thereby reduced gross profit and gross margins in the second quarter 2005 as that inventory was sold.



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Property and Equipment

Property and equipment are stated at cost or fair value at date of acquisition. For financial reporting purposes, the Company provides for depreciation of fixed assets using the straight-line method at annual rates
sufficient to amortize the cost of the assets less estimated salvage values over the assets estimated useful lives. Maintenance and repair expenditures are charged to expense as incurred, and expenditures for improvements and major renewals
are capitalized. The carrying amounts of assets which are sold or retired and the related accumulated depreciation are removed from the accounts in the year of disposal, and any resulting gain or loss is reflected in the statement of operations.
Depreciation, which includes the amortization of assets recorded under capital lease obligations, is determined by using the straight-line method based on the following estimated useful lives:



|                        |  |            
|----------------------- |  | -----------
|Buildings               |  | 20-30 years
|Machinery and equipment |  | 3-8 years  
|Furniture and fixtures  |  | 3-10 years 
|Internal use software   |  | 3 years    
|Vehicles and other      |  | 3-5 years  

Leasehold improvements are amortized over the lesser of the lease term or the estimated useful
lives of the improvements.

The Company capitalizes costs incurred in the development or acquisition of internal use software. The Company
expenses costs incurred in the preliminary project planning stage. Costs, such as maintenance and training, are also expensed as incurred. Capitalized costs are amortized over their estimated useful lives using the straight-line method. The
Successors amortization expense, which is included in depreciation expense, for internal-use software was $3.4 million for the year ended December 30, 2006 and $1.5 million for the nine-months ended December 31, 2005. The
Predecessors amortization expense for the quarter ended April 2, 2005 and for the fiscal year ended January 1, 2005 was $0.3 million and $0.6 million, respectively.

Impairments of long-lived assets are recognized when events or changes in circumstances indicate that the carrying amount of the asset, or related groups
of assets, may not be recoverable and the Companys estimate of undiscounted cash flows over the assets remaining estimated useful life are less than the assets carrying value. Measurement of the amount of impairment may be based
upon appraisals, market values of similar assets or estimated discounted future cash flows resulting from the use and ultimate disposition of the asset. Throughout fiscal years 2006, 2005, and 2004, the Company has reviewed the carrying value of
long-term fixed assets for impairment when events or circumstances indicate possible impairment, and has concluded that the estimated future cash flows anticipated to be generated during the remaining life of these assets support the current net
carrying value of these assets, thus, no impairment charges have been recorded for such periods.

Assets Held for Sale

In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, assets held for sale are reported at the
lower of the carrying amount or fair value less cost to sell and the recognition of depreciation expense is discontinued. As of December 30, 2006, the Companys Tallahassee, Florida owned distribution center, with an aggregate carrying
value of $0.8 million, has been classified as assets held for sale. The warehouse and distribution operation in this distribution center was relocated to a larger facility that is being leased. The Company is actively marketing this property and
anticipates that the property will be sold within a twelve-month period.

Deferred Financing Costs

Costs associated with financing activities (see Note 5) are included in the accompanying consolidated balance sheets as deferred financing costs (included
within Other Assets) and are being amortized over the terms



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of the loans to which such costs relate. Amortization of deferred financing costs included in operating income for fiscal year 2006 and for the nine month
period ended December 31, 2005 for the Successor were $5.5 million and $4.1 million, respectively. Amortization of deferred financing costs included in operating income (loss) for the three month period ended April 2, 2005 and the twelve
month period ended January 1, 2005 for the Predecessor were $0.2 million and $1.2 million, respectively. These amounts are included in interest expense in the accompanying consolidated statements of operations. As a result of the Acquisition,
$3.1 million of deferred financing costs associated with the old debt structure were written off in purchase accounting. The unamortized balance of deferred financing costs included in the accompanying consolidated balance sheets was $26.1 million
at December 30, 2006 and $31.3 million at December 31, 2005.

Goodwill and Other Intangible Assets

Under SFAS No. 142 Goodwill and Other Intangible Assets, goodwill and intangible assets with indefinite lives are no longer amortized,
but are tested for impairment annually and more frequently in the event of an impairment indicator. SFAS No. 142 also requires that intangible assets with definite useful lives be amortized over their respective estimated useful lives, and
reviewed whenever events or circumstances indicate an impairment may exist.

The provisions of SFAS No. 142 require that a two-step
test be performed to assess goodwill for impairment. First, the fair value of each reporting unit is compared to its carrying value. Fair value was computed by the Company utilizing discounted cash flow and market multiple models. If the fair value
exceeds the carrying value, goodwill is not impaired and no further testing is performed. The second step is performed if the carrying value exceeds the fair value. The implied fair value of the reporting units goodwill must be determined and
compared to the carrying value of the goodwill. If the carrying value of a reporting units goodwill exceeds its implied fair value, an impairment loss equal to the difference will be recorded.

As required by SFAS No. 142, the Company recorded no goodwill amortization during fiscal
years 2006, 2005 or 2004. The Company has one reporting unit representing the enterprise as a whole. At December 30, 2006 and December 31, 2005, the Company had goodwill of $355.7 million and $347.3 million, respectively, which is subject
to the impairment tests prescribed under the statement. In accordance with SFAS No. 142, the Company has elected November 30thas it annual impairment assessment date. The Company has completed its annual impairment assessments as of November 30, 2006, 2005 and 2004, and has concluded that no goodwill or indefinite lived intangible asset
impairment charge was required. See Note 4 for the intangible asset impairment charge recorded in September 2006 (outside of the Companys annual assessment).

Self Insurance

The Company is self-insured with respect to employee health liability claims and
maintains a large deductible program on workers compensation and auto. The Company has stop-loss insurance coverage for individual claims in excess of $0.2 million and up to a maximum benefit of $0.8 million for employee health and deductibles
of $0.3 million on the workers compensation and auto on a per claim basis. Aggregate stop-loss limits for workers compensation and auto are $7.0 million. There is no aggregate stop-loss limit on employee health insurance. A reserve for
liabilities associated with losses is established for claims filed and claims incurred but not yet reported using actuarial methods followed in the insurance industry and the Companys historical claims experience.

Post Retirement Benefits

The Company accounts
for post retirement benefits in accordance with SFAS No. 106, Employers Accounting for Post Retirement Benefits Other than Pensions. SFAS No. 106 requires the Company to accrue the cost of post retirement benefit
obligations based on a number of actuarial assumptions including assumptions about the discount rate and health care cost trend rates.



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Fair Value of Financial Instruments

Carrying value approximates fair value as it relates to cash and cash equivalents, accounts receivable and accounts payable due to the short-term maturity
of those instruments. Carrying value approximates fair value as it relates to the investments held in the Rabbi Trust, related to the Companys deferred compensation plan, and the interest rate swap as they are carried at fair value. The
carrying value of ATDs revolving credit facility approximates fair value due to the variable rate of interest paid. The table below states the estimated fair value of the Companys long-term, senior notes at December 30, 2006 and
December 31, 2005 based upon quoted market prices (in thousands):



|                           |  |                                |         |                                   |   |                                |  |                                   |         |  |   |        
|-------------------------- |  | ------------------------------ | ------- | --------------------------------- | - | ------------------------------ |  | --------------------------------- | ------- |  | - | -------
|                           |  | Fair Value at December 30,2006 |         | CarryingValue at December 30,2006 |   | Fair Value at December 31,2005 |  | CarryingValue at December 31,2005
|10.75% Senior Notes        |  | $                              | 140,625 |                                   | $ | 150,000                        |  | $                                 | 135,188 |  | $ | 150,000
|Senior Floating Rate Notes |  |                                | 131,250 |                                   |   | 140,000                        |  |                                   | 126,175 |  |   | 140,000
|13% Senior Discount Notes  |  |                                | 39,382  |                                   |   | 49,909                         |  |                                   | 44,015  |  |   | 44,003 

Shipping and Handling Costs

Certain company shipping, handling, and other distribution costs are classified as selling, general, and administrative expenses in the accompanying
consolidated statements of operations. For the Successor, such expenses totaled $79.2 million for the fiscal year ended December 30, 2006 and $56.6 million for the nine months ended December 31, 2005. For the Predecessor, such expenses
totaled $17.9 million for the quarter ended April 2, 2005 and $65.0 million for the fiscal year ended January 1, 2005. Shipping revenue is classified in net sales in accordance with Emerging Issues Task Force (EITF) Issue
No. 00-10, Accounting for Shipping and Handling Fees and Costs.

Vendor Rebates

The Company receives rebates from its vendors under a number of different programs. These rebates are recorded in accordance with EITF Issue
No. 02-16, Accounting by a Customer (Including a Reseller) for Cash Consideration Received from a Vendor. Many of the vendor programs provide for the Company to receive rebates when any of a number of measures is achieved, generally
related to the volume of purchases. These rebates are accounted for as a reduction to the price of the product, which reduces the carrying value of inventory until the product is sold. Throughout the year, the amount recognized for annual rebates is
based on purchases management considers probable for the full year. These estimates are continually revised to reflect rebates earned based on actual purchase levels.

Customer Rebates

The Company offers rebates to its customers under a number of different
programs. These rebates are recorded in accordance with EITF Issue No. 01-9, Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendors Products). The majority of these programs provide
for the customer to receive rebates, generally in the form of a reduction in the related accounts receivable balance, when certain measures are achieved, generally related to the volume of product purchased from the Company. These rebates are
recorded as a reduction of the related price of the product, which reduces the amount of revenue recorded. Throughout the year, the amount of rebates is estimated based on the expected level of purchases to be made by customers that participate in
the rebate programs. These estimates are periodically revised to reflect rebates earned by customers based on actual purchases made.



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Cooperative Advertising and Marketing Programs

The Company participates in cooperative advertising and marketing programs (co-op) with its vendors. Co-op funds are provided to the Company
generally based on the volume of purchases made with vendors that offer such programs. A portion of the funds received must be used for specific advertising and marketing expenditures incurred by the Company or its customers. The co-op funds
received by the Company from its vendors are accounted for in accordance with EITF Issue No. 02-16, which requires that the Company record the funds received as a reduction of cost of sales or as an offset to specific costs incurred in selling
the vendors products. The co-op funds that are provided to the Companys customers are accounted for in accordance with EITF Issue No. 01-9, which requires that the Company record the funds paid as a reduction of revenue since no
separate identifiable benefit is received by the Company.

Income Taxes

The Company accounts for its income taxes under the provisions of SFAS No. 109 Accounting for Income Taxes. This statement requires the
use of the asset and liability method of accounting for deferred income taxes. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the
amounts used for income tax reporting purposes, at the applicable enacted tax rates. The Company provides a valuation allowance against its deferred tax assets when the future realizability of the assets is no longer considered to be more likely
than not.

Derivative Instruments and Hedging Activities

For derivative instruments, the Company applies SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended by SFAS No. 137, SFAS No. 138, and SFAS No. 149.
This statement establishes accounting and reporting standards requiring that every derivative instrument (including certain derivative instruments embedded in other contracts) be recorded in the balance sheet as either an asset or liability measured
at its fair value. This statement requires that changes in the derivatives fair value be recognized currently in earnings unless specific hedge accounting criteria are met and that a company must formally document, designate and assess the
effectiveness of transactions that receive hedge accounting treatment.

Stock Options

Effective January 1, 2006, the Company adopted the fair value recognition provisions of SFAS 123R, Share-Based Payments, using the
prospective transition method as required by paragraph 83 of SFAS No. 123R for nonpublic entities that used the minimum value method for measuring stock-based compensation for either recognition or pro forma disclosure purposes under SFAS
No. 123. Under this transition method, stock options outstanding prior to the adoption of SFAS No. 123R will continue to be accounted for under the provisions of Accounting Principles Board Opinion No. 25, Accounting for Stock
Issued to Employees (APB No. 25). Any new awards and awards modified, repurchased, or cancelled after January 1, 2006 will be accounted for in accordance with the provisions of SFAS No. 123R. The Company did not issue any
new awards or modify, repurchase or cancel any existing awards during the fiscal year ending December 30, 2006 and therefore no stock-based compensation expense was recorded as a result of adopting SFAS No. 123R.

Prior to January 1, 2006, the Company accounted for stock-based compensation using the intrinsic value-based method in accordance with APB
No. 25. Under APB No. 25, the Company generally did not recognize stock-based compensation for stock options in its consolidated statements of operations prior to January 1, 2006 because the options granted had an exercise price equal
to the market value of the underlying common stock on the measurement date. As permitted, the Company elected to adopt the disclosure-only provisions of SFAS No.123, Accounting for Stock-Based Compensation. Under those provisions,
the Company disclosed in the notes to its financial statements what the effect would have been on its results of operations had compensation costs for the Companys stock options been determined based on their fair value at the measurement
date. As a result of adopting SFAS No. 123R and as required by paragraph 85 of SFAS No. 123R, the Company will no longer present this pro forma information. See Note 6.



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Recently Issued Accounting Pronouncements

In February 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 159, The Fair Value Option for Financial Assets
and Financial Liabilities. SFAS No. 159 expands opportunities to use fair value measurement in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. This statement
is effective for fiscal years beginning after November 15, 2007. The Company does not expect the adoption of SFAS No. 159 to have a material impact on the Companys consolidated financial position, results of operations or cash flows.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS No. 157 defines fair value,
establishes a framework for measuring fair value in accordance with accounting principles generally accepted in the United States, and expands disclosures about fair value measurements. This statement does not require any new fair value
measurements; rather, it applies under other accounting pronouncements that require or permit fair value measurements. The provisions of SFAS No. 157 are effective for fiscal years beginning after November 15, 2007. The Company does not
expect the adoption of SFAS No. 157 to have a material impact on the Companys consolidated financial position, results of operations or cash flows.

In September 2006, the FASB issued SFAS No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plansan amendment of FASB Statements No. 87, 88, 106, and
132R. SFAS No. 158 requires employers to recognize a net liability or asset and an offsetting adjustment to accumulated other comprehensive income to report the funded status of defined benefit pension and other postretirement benefit
plans. Additionally, SFAS No.158 requires companies to measure plan assets and obligations at their year-end balance sheet date. The initial disclosure requirement of SFAS No. 158 is effective for the Company for its fiscal year ending
December 30, 2006. The recognition requirement of a net liability or asset and an offsetting adjustment to accumulated other comprehensive income (loss) under SFAS No. 158 is effective for the Company for its fiscal year ending
December 27, 2008. The Company does not expect the adoption of SFAS No. 158 to have a material impact on its consolidated financial position, results of operations or cash flows.

In September 2006, the SEC issued Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when Quantifying
Misstatements in Current Year Financial Statements (SAB 108). SAB 108 provides guidance on the consideration of the effects of prior year misstatements in quantifying current year misstatements for the purpose of a materiality
assessment. Under SAB 108, companies should evaluate a misstatement based on its impact on the current year income statement, as well as the cumulative effect of correcting such misstatements that existed in prior years existing in the current
years ending balance sheet. SAB 108 is effective for fiscal years ending on or after November 15, 2006. The adoption of SAB 108 did not have a material impact on the Companys consolidated financial position, results of operations or
cash flows.

In June 2006, the FASB issued FASB Interpretation (FIN) No. 48, Accounting for Uncertainty in Income Taxes-an
interpretation of FASB Statement No. 109. This Interpretation provides guidance for recognizing and measuring uncertain tax positions, as defined in SFAS No. 109, Accounting for Income Taxes. Under FIN No. 48, the
financial statements will reflect expected future tax consequences of such positions presuming the taxing authorities full knowledge of the position and all relevant facts, but without considering time values. FIN 48 also revises disclosure
requirements and introduces a prescriptive, annual, tabular roll-forward of the unrecognized tax benefits. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company has not yet completed its assessment of the impact
that this Interpretation will have on its consolidated financial position, results of operations or cash flows.

In June 2006, the EITF
reached a consensus on EITF Issue No. 06-03 (EITF 06-03), How Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement (That Is, Gross versus Net Presentation).
EITF 06-03 provides that the presentation of taxes assessed by a governmental authority that is directly imposed on a revenue-producing transaction between a seller and a customer on either a gross basis (included in revenues and costs) or on a net
basis (excluded from revenues) is an



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accounting policy decision that should be disclosed. The provisions of EITF 06-03 become effective as of December 31, 2006. The adoption of EITF 06-03
did not have a material impact on the Companys consolidated financial position, results of operations or cash flows.

2. Acquisitions:

Successor Company

On
July 28, 2006, the Company completed the purchase of all the outstanding stock of Samaritan Wholesale Tire Company (Samaritan Tire) pursuant to the terms of a Stock Purchase Agreement dated as of July 28, 2006. The aggregate
purchase price of this acquisition, subject to adjustment, was $12.6 million, consisting of $12.5 million in cash and $0.1 million in direct acquisition costs. This acquisition expanded ATDs service across the state of Minnesota and into
Western Wisconsin. The preliminary purchase price allocation has been recorded in the accompanying consolidated financial statements based on estimated fair values for the assets acquired and liabilities assumed and resulted in goodwill of $3.3
million and a customer relationship intangible asset of $5.9 million. Amortization for both the goodwill and customer relationship intangible asset is deductible for income tax purposes.

On January 27, 2006, the Company completed the purchase of all the outstanding stock of Silver State Tire Company and Golden State Tire Distributors
(collectively Silver State) pursuant to the terms of a Stock Purchase Agreement dated December 23, 2005. The purchase price of this acquisition was $8.4 million, consisting of $8.2 million in cash and $0.2 million in direct
acquisition costs. This acquisition established a distribution footprint for the Company across the state of Nevada. The purchase price allocation has been recorded in the accompanying consolidated financial statements based on estimated fair values
for the assets acquired and liabilities assumed and resulted in goodwill of $5.3 million, a customer relationship intangible asset of $4.6 million and a related deferred tax liability of $1.8 million.

On August 23, 2005, the Company completed the purchase of all the outstanding stock of Wholesale Tire Distributors, Inc., Wholesale Tire
Distributors of Wyoming, Inc., and Wholesale Tire Distributors of Idaho, Inc. (collectively Wholesale Tire) pursuant to the terms of a Stock Purchase Agreement dated August 5, 2005. The acquisition expanded the Companys
operations into Utah, Idaho, and Wyoming, as well as, parts of Nevada, Colorado, Nebraska and South Dakota. The purchase price was $4.5 million, consisting of $4.4 million in cash and $0.1 million in direct acquisition costs. The purchase price
allocation was recorded in the accompanying consolidated financial statements based on estimated fair values for the assets acquired and liabilities assumed and resulted in initial goodwill of $2.0 million. In the first quarter of 2006, the Company
reallocated $2.8 million of the purchase price to an intangible asset related to customer relationships acquired in connection with the acquisition and a related deferred tax liability of $1.1 million that resulted in a net decrease to goodwill of
$1.7 million.

The Samaritan Tire, Silver State and Wholesale Tire acquisitions were financed through borrowings under ATDs
revolving credit facility. These acquisitions have been accounted for under the purchase method of accounting and, accordingly, the results of operations for the acquired businesses have been included in the accompanying consolidated statements of
operations from the date of acquisition.

On March 31, 2005, pursuant to the Merger Agreement, dated as of February 4, 2005 and
amended and restated on March 7, 2005, and in exchange for an aggregate purchase price of $710.0 million in cash, less the amount of ATDs debt (net of cash on hand) and certain dividends payable to holders of its preferred stock, its
transaction expenses and certain payments to its management, MergerSub, a subsidiary of Holdings, merged with and into ATD. In connection with the Merger, all of ATDs existing redeemable preferred stock was either redeemed or exchanged for
redeemable preferred stock of Holdings and each holder of shares of ATDs common stock received a portion of the merger consideration equal to $18.83 per share. To the extent that any existing holder of options or warrants to acquire shares of
ATDs common stock did not exercise such options or warrants prior to the effective time of the Merger, such holder was paid an amount in cash equal to $18.83 per share



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consideration less the exercise price of such option or warrant in complete satisfaction of the option or warrant. ATD continued as the surviving corporation
with Holdings as its sole stockholder.

In connection with the Merger, the following transactions occurred:



| |  |  | Investcorp S.A. (Investcorp) and certain co-investors and co-sponsors contributed $210.0 million through the purchase of Holdings common stock and
certain members of management contributed $1.5 million to the equity of Holdings. In addition, Holdings issued $20.0 million of 8% cumulative mandatorily redeemable preferred stock and warrants to acquire up to 21,895 shares of Holdings common
stock;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Holdings issued Series B preferred stock with a fair value of $2.7 million in exchange for ATDs existing Series B preferred stock, which was subsequently
canceled;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Holdings granted, in exchange for the assignment and transfer of options to purchase ATD common stock under the previously existing ATD stock option plan, options
to purchase 33,199 shares of Series A Common Stock, $0.01 par value per share, of the Company. The fair market value of the options granted was $6.5 million;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | ATD amended and restated its credit facility, which now consists of a $300.0 million revolving credit facility pursuant to which there was $155.5 million of
outstanding loans on the closing date;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | ATD redeemed $4.8 million of its Series A preferred stock (representing all the outstanding Series A preferred stock). Holders of its Series C and D preferred stock
received merger consideration, including accrued dividends, on a common stock equivalent basis of $81.1 million and $191.9 million, respectively;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Holdings issued $51.5 million in aggregate principal amount at maturity of senior discount notes (Senior Discount Notes), which notes were offered at a
substantial discount from their principal amount at maturity and generated gross proceeds of approximately $40.0 million. The Senior Discount Notes mature on October 1, 2013;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | ATD issued $150.0 million in aggregate principal amount of senior notes (Senior Notes), which mature on April 1, 2013;
| | - |  | ------------------------------------------------------------------------------------------------------------------------



| |  |  | ATD issued $140.0 million in aggregate principal amount of senior floating rate notes (Senior Floating Rate Notes), which mature on April 1, 2012;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | ATD sent irrevocable notice of redemption to redeem the $28.6 million outstanding principal amount of its Series D 10% senior notes due 2008 on May 15, 2005 at
a price equal to $29.1 million, reflecting the contractual prepayment penalty of approximately $0.5 million that was paid upon redemption, plus accrued interest through the redemption date;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Fees of $35.4 million were paid in connection with the amended and restated credit facility and the issuance of the senior notes and 8% cumulative mandatorily
redeemable preferred stock. These fees are recorded as debt issuance costs in the Successors balance sheet and are being amortized over the life of the respective debt;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Management advisory fees of $8.0 million were paid to one or more of Investcorp and its co-sponsors (or their respective affiliates) at closing for services to be
rendered over a period of five years following the date of Acquisition. This payment was deferred and is being amortized pursuant to the terms of the Merger Agreement and on a basis consistent with the service provided;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Seller transaction fees of $8.7 million were paid, $8.6 million of which had been accrued by the Predecessor; and
| | - |  | -----------------------------------------------------------------------------------------------------------------



| |  |  | Transaction bonuses and other related change in control payments of $14.4 million were paid, all of which had been accrued by the Predecessor.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------



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The proceeds from the equity contributions, the notes issued, and the borrowings under the amended and
restated credit facility were used to effect the Merger, to repay certain of ATDs existing debt and to pay related fees and expenses and other amounts payable under the Merger Agreement.

The Acquisition was recorded using the purchase method of accounting. The final purchase price allocation is as follows (in millions):



|                                                             |  |   |        |  
|------------------------------------------------------------ |  | - | ------ | -
|Merger consideration (cash and securities)                   |  | $ | 469.4  |  
|Less: Net book value of assets acquired (a)                  |  |   | (43.5  | )
|                                                             |  |   |        |  
|Excess purchase price over net book value of assets acquired |  |   | 512.9  |  
|                                                             | 
|Adjustments to goodwill related to:                          |  |   |        |  
|                                                             | 
|Property and equipment                                       |  |   | (17.0  | )
|Inventory                                                    |  |   | (4.7   | )
|Customer lists                                               |  |   | (204.3 | )
|Trademarks and tradenames                                    |  |   | (45.1  | )
|Software                                                     |  |   | (0.1   | )
|Deferred tax liabilities                                     |  |   | 103.5  |  
|Postretirement benefit obligations                           |  |   | 1.6    |  
|                                                             |  |   |        |  
|Total adjustments                                            |  |   | (166.1 | )
|                                                             |  |   |        |  
|Goodwill                                                     |  | $ | 346.8  |  
|                                                             |  |   |        |  

---

|(a) | Reflects the net book value at the date of acquisition less deferred transaction fees and intangible assets that were written off in purchase accounting.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------

The following unaudited pro forma supplementary data for the fiscal year ended December 31, 2005 gives effect to the Acquisition as if it had
occurred at the beginning of 2005. The pro forma supplementary data is provided for informational purposes only and should not be construed to be indicative of the Companys results of operations had the Acquisition been consummated on the date
assumed and does not project the Companys results of operations for any future date. As the acquisitions noted above for fiscal 2006 do not rise to the level of being a material business combination, individually or in the aggregate, the
Company has not provided similar pro forma supplementary data.



|         |  |                                                 |           |  
|-------- |  | ----------------------------------------------- | --------- | -
|         |  | Fiscal Year Ended December 31, 2005 (unaudited) |          
|         |  | (in thousands)                                  |          
|Sales    |  | $                                               | 1,505,283 |  
|Net loss |  |                                                 | (4,990    | )



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Predecessor Company

Transaction Expenses

The Predecessors consolidated statement of operations for the quarter
ended April 2, 2005 includes the following transaction expenses relating to the Acquisition, some of which are discussed above (in thousands):



|                                                                         |  |   |       
|------------------------------------------------------------------------ |  | - | ------
|Seller transaction fees                                                  |  | $ | 8,079 
|Accrued transaction bonuses and other related change in control payments |  |   | 11,431
|Stock-based compensation expense (a)                                     |  |   | 8,584 
|Other acquisition related expenses                                       |  |   | 117   
|                                                                         |  |   |       
|Total transaction expense                                                |  | $ | 28,211
|                                                                         |  |   |       

---

|(a) | Represents compensation expense recorded due to the acceleration of certain management stock option vesting schedules (see Note 6).
|--- | -----------------------------------------------------------------------------------------------------------------------------------

During fiscal 2004, ATD acquired the entities described below, which were accounted for using the purchase method of accounting. Accordingly, results of
operations for the acquired businesses have been included in the accompanying consolidated statements of operations from the acquisition dates. These acquisitions were financed by ATDs Revolver, as amended (see Note 5).

On July 30, 2004, ATD completed the purchase of all the outstanding stock of Texas Market Tire Holdings I, Inc., d/b/a Big State Tire Supply
(Big State), a tire distributor located in Lubbock, Texas pursuant to the terms of that certain Stock Purchase Agreement dated July 2, 2004. The acquisition expanded the Companys operations into Texas, Oklahoma and New Mexico
and included nine distribution centers that were operated by Big State.

On September 2, 2004, ATD completed the purchase of all the
outstanding stock of Target Tire, Inc. (Target Tire), a tire distributor located in Jacksonville, North Carolina pursuant to the terms of that certain Stock Purchase Agreement dated September 1, 2004. Target Tire operated eleven
distribution centers located in North Carolina, Georgia, South Carolina, Virginia and Tennessee. The acquisition strengthened ATDs presence with retailers in the Southeast, a region where there was already a strong market presence. In
connection with the acquisition, ATD recorded a $4.3 million liability for estimated costs related to facility closures ($3.5 million), employee severance ($0.7 million), and other related exit costs ($0.1 million) in accordance with EITF 95-3
Recognition of Liabilities in Connection with a Purchase Business Combination. The facilities closing expense primarily relates to the closing of all but one Target Tire distribution center due to existing distribution centers being
located in close proximity to the acquired distribution facilities. ATD has completed all facility closings. The severance costs were primarily related to duplicate administrative personnel and personnel at the facilities that were closed. In
connection with the Acquisition, the Company adjusted these reserves to fair value which resulted in an increase of $1.6 million to the liability. As of December 30, 2006, the Company had charged approximately $2.1 million against these
reserves. The remaining liability is primarily related to lease obligations that expire in 2014.

The aggregate purchase price of these
acquisitions, subject to adjustment, was $59.3 million, consisting of $58.2 million in cash, $0.6 million for repayment of debt, and $0.5 million in direct acquisition costs. Allocations of the purchase prices have been recorded in the accompanying
consolidated financial statements based on estimated fair values for the assets acquired and liabilities assumed. The excess of the purchase price over the fair value of the net assets of the acquired entities was allocated to goodwill ($28.0
million) and intangible assets ($12.4 million). Goodwill of $9.8 million and an intangible asset of $10.9 million, recorded in connection with the Big State acquisition, are deductible for income tax purposes. The intangible assets primarily relate
to customer lists which are being amortized on a straight-line basis over an estimated life of fifteen years.

In connection with the
Acquisition, Predecessor goodwill of $122.0 million was written-off.



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3. Property and Equipment:

The following table represents the property and equipment at December 30, 2006 and December 31, 2005 (in thousands):



|                                     |  |                   |         |   |                   |   |        |  
|------------------------------------ |  | ----------------- | ------- | - | ----------------- | - | ------ | -
|                                     |  | December 30, 2006 |         |   | December 31, 2005 |  
|Land                                 |  | $                 | 2,760   |   |                   | $ | 2,989  |  
|Buildings and leasehold improvements |  |                   | 20,605  |   |                   |   | 20,755 |  
|Machinery and equipment              |  |                   | 10,113  |   |                   |   | 7,082  |  
|Furniture and fixtures               |  |                   | 13,228  |   |                   |   | 10,403 |  
|Internally developed software        |  |                   | 14,049  |   |                   |   | 8,515  |  
|Vehicles and other                   |  |                   | 2,415   |   |                   |   | 1,465  |  
|                                     |  |                   |         |   |                   |   |        |  
|Total property and equipment         |  |                   | 63,170  |   |                   |   | 51,209 |  
|LessAccumulated depreciation        |  |                   | (18,599 | ) |                   |   | (6,613 | )
|                                     |  |                   |         |   |                   |   |        |  
|Property and equipment, net          |  | $                 | 44,571  |   |                   | $ | 44,596 |  
|                                     |  |                   |         |   |                   |   |        |  

Depreciation expense for the Successor was $12.2 million for the fiscal year ended
December 30, 2006 and $7.2 million for the nine months ended December 31, 2005. The Predecessors depreciation expense for the quarter ended April 2, 2005 and for the fiscal year ended January 1, 2005 was $1.3 million and
$5.7 million, respectively. Depreciation expense is classified in selling, general, and administrative expense in the accompanying consolidated statements of operations.

Included in the above table within Land and Buildings and leasehold improvements are assets under capital leases related to the sale and leaseback of three of the Companys owned facilities (see Note 5). The net
book value of these assets for the Successor at December 30, 2006 and December 31, 2005 was $12.9 million and $13.6 million, respectively. Accumulated depreciation was $1.2 million and $0.5 million for the respective periods. The
Successors depreciation expense for the fiscal year ended December 30, 2006 was $0.7 million and for the nine months ended December 31, 2005 was $0.5 million. The Predecessors depreciation expense for the quarter ended
April 2, 2005 and for the fiscal year ended January 1, 2005 was $0.1 million and $0.2 million, respectively.

4. Goodwill and Other Intangible
Assets:

Goodwill represents the excess of the purchase price over the fair value of the net assets of the acquired entities. The
Company has recorded, at December 30, 2006, goodwill of $355.7 million consisting of $346.8 million in connection with the Acquisition, $3.3 million in connection with the purchase of Samaritan Tire, $5.3 million in connection with
the purchase of Silver State and $0.3 million in connection with the purchase of Wholesale Tire. Approximately $34.4 million of goodwill is deductible for income tax purposes.

Other intangible assets represent customer lists, tradenames, noncompete agreements, and software. Intangible assets with indefinite lives are not
amortized and are tested for impairment at least annually. All other intangible assets with finite lives are being amortized on a straight-line basis over periods ranging from three to seventeen years. Amortization of other intangibles for the
Successor was $12.9 million in fiscal 2006 and $9.2 million in the nine-month period ended December 31, 2005. The Predecessor recorded amortization expense of $0.4 million for the quarter ended April 2, 2005 and $1.1 million in fiscal
2004. Accumulated amortization at December 30, 2006 and December 31, 2005 was $22.1 million and $9.2 million, respectively.



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The following tables set forth the gross amount and accumulated amortization of the Companys
intangible assets for the fiscal years ended December 30, 2006 and December 31, 2005 (in thousands):

Successor Company



|                                      |  |                              |              |                   |                          |                   |              |        |                          |   |         |  |   |      
|------------------------------------- |  | ---------------------------- | ------------ | ----------------- | ------------------------ | ----------------- | ------------ | ------ | ------------------------ | - | ------- |  | - | -----
|                                      |  | Estimated UsefulLife (years) |              | December 30, 2006 |                          | December 31, 2005
|                                      |  |                              | Gross Amount |                   | Accumulated Amortization |                   | Gross Amount |        | Accumulated Amortization
|Customer lists                        |  | 17                           |              | $                 | 217,518                  |                   | $            | 21,638 |                          | $ | 204,275 |  | $ | 9,012
|Noncompete agreements                 |  | 3-5                          |              |                   | 613                      |                   |              | 453    |                          |   | 613     |  |   | 204  
|Software                              |  | 1                            |              |                   | 77                       |                   |              | 13     |                          |   | 77      |  |   | 6    
|                                      |  |                              |              |                   |                          |                   |              |        |                          |   |         |  |   |      
|Total amortizable intangible assets   |  |                              |              | $                 | 218,208                  |                   | $            | 22,104 |                          | $ | 204,965 |  | $ | 9,222
|                                      |  |                              |              |                   |                          |                   |              |        |                          |   |         |  |   |      
|                                      |  |                              |             
|                                      |  |                              |              | December 30, 2006 |                          | December 31, 2005
|                                      |  |                              | Gross Amount |                   | Accumulated Amortization |                   | Gross Amount |        | Accumulated Amortization
|Tradenames                            |  |                              |              | $                 | 42,745                   |                   | $            |       |                          | $ | 45,385  |  | $ |     
|                                      |  |                              |              |                   |                          |                   |              |        |                          |   |         |  |   |      
|Total unamortizable intangible assets |  |                              |              | $                 | 42,745                   |                   | $            |       |                          | $ | 45,385  |  | $ |     
|                                      |  |                              |              |                   |                          |                   |              |        |                          |   |         |  |   |      

Estimated intangible asset amortization expense for each of the next five fiscal years is expected
to be $12.9 million in 2007 and $12.8 million in years 2008 through 2011.

In September 2006, the Company was informed by one of its
suppliers that it was going to cease the manufacturing of one of its tire brands for which the Company maintained a tradename intangible asset. As a result of this decision and due to the Companys inability to place other sourcing regarding
this tire brand, the Company, in accordance with SFAS No. 142, Goodwill and Other Intangible Assets, evaluated the fair value of the tradename intangible asset, as computed utilizing a discounted cash flow model, as compared to its
carrying value. Based on this evaluation, the Company recorded an impairment charge of $2.6 million, for the full carrying amount of the tradename intangible asset. This charge is recorded within impairment of intangible asset in the accompanying
consolidated statements of operations for the year ended December 30, 2006.

5. Long-term Debt and Other Financing Arrangements:

Long-term Debt

The following table represents
the Companys long-term debt at December 30, 2006 and December 31, 2005 (in thousands):



|                           |  |                   |         |   |                   |   |         |  
|-------------------------- |  | ----------------- | ------- | - | ----------------- | - | ------- | -
|                           |  | Successor         |         |   | Successor         |  
|                           |  | December 30, 2006 |         |   | December 31, 2005 |  
|Revolving credit facility  |  | $                 | 155,016 |   |                   | $ | 189,485 |  
|Senior Notes               |  |                   | 150,000 |   |                   |   | 150,000 |  
|Senior Floating Rate Notes |  |                   | 140,000 |   |                   |   | 140,000 |  
|Senior Discount Notes      |  |                   | 49,909  |   |                   |   | 44,003  |  
|Capital lease obligations  |  |                   | 14,459  |   |                   |   | 14,484  |  
|Other                      |  |                   | 11,623  |   |                   |   | 7,273   |  
|                           |  |                   |         |   |                   |   |         |  
|                           |  |                   | 521,007 |   |                   |   | 545,245 |  
|LessCurrent maturities    |  |                   | (3,853  | ) |                   |   | (4,696  | )
|                           |  |                   |         |   |                   |   |         |  
|                           |  | $                 | 517,154 |   |                   | $ | 540,549 |  
|                           |  |                   |         |   |                   |   |         |  



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Revolving Credit Facility

In connection with the Merger, on March 31, 2005, ATD entered into the Fourth Amended and Restated Loan and Security Agreement (the Revolver). The Borrowers to the Revolver are ATD and its
subsidiaries. The Revolver provides for a five-year senior secured revolving credit facility of up to $300.0 million (of which up to $25.0 million may be utilized in the form of commercial and standby letters of credit), subject to a borrowing base
formula. The Revolver is secured primarily by ATDs inventories and accounts receivable. As of December 30, 2006, the outstanding Revolver balance was $155.0 million and $122.9 million was available for additional borrowings. In addition,
ATD had certain letters of credit outstanding at December 30, 2006 in the aggregate amount of $9.2 million.

Borrowings under the
Revolver bear interest, at ATDs option, at either (i) the Base Rate, as defined, plus the applicable margin (0.25% as of December 30, 2006) or (ii) the Eurodollar Rate, as defined, plus the applicable margin (1.75% as of
December 30, 2006). At December 30, 2006, borrowings under the Revolver were at a weighted average interest rate of 7.4% compared to 6.2% at December 31, 2005. The applicable margin for the loans vary based upon a performance grid, as
defined in the agreement.

All obligations under the Revolver are guaranteed by Holdings and each of ATDs existing and future direct
and indirect domestic subsidiaries that are not direct obligors thereunder. Obligations under the Revolver are secured by a pledge of substantially all assets of the obligors, including all shares of ATDs capital stock and that of ATDs
subsidiaries, subject to certain limitations.

The Revolver contains covenants which, among other things, require ATD to meet a fixed
charge coverage ratio if ATD does not have at least $25.0 million available to be drawn under the Revolver (subject to a cure); restricts ATDs ability to incur additional debt; enter into guaranties; make loans and investments; declare
dividends; modify certain material agreements or constitutive documents relating to preferred stock; and change the business it conducts, as well as other customary covenants. As of December 30, 2006 and December 31, 2005, ATD was in
compliance with these covenants. The Revolver expires March 31, 2010.

Senior Notes

On March 31, 2005, in connection with the Merger, ATD issued Senior Notes in the aggregate principal amount of $150.0 million, resulting in net
proceeds of approximately $144.2 million after debt issuance costs. The Senior Notes have an annual coupon rate of 10.75% and will mature on April 1, 2013. Except as described below, the Senior Notes are not redeemable at the option of ATD
prior to April 1, 2009. Thereafter, the Senior Notes will be subject to redemption at any time at the option of ATD, in whole or in part, upon not less than 30 nor more than 60 days notice, at certain redemption prices plus accrued and unpaid
interest. Interest on the Senior Notes is payable semi-annually in arrears on April 1 and October 1 of each year, commencing on October 1, 2005.

In addition, at any time and from time to time, prior to April 1, 2008, ATD may redeem up to 35% of the original aggregate principal amount of the Senior Notes at a redemption price of 110.75% of the principal
amount thereof, plus accrued and unpaid interest, with the net cash proceeds of a public offering of common stock of ATD or a public offering of common stock of Holdings, the proceeds of which are contributed as common equity capital to ATD;
provided that (1) at least 65% of the sum of (a) the original aggregate principal amount of the Senior Notes issued and (b) the original aggregate principal amount of any additional Senior Notes, if any, issued under the related
indenture, if any, remains outstanding immediately after the occurrence of any such redemption; and (2) such redemption shall occur within 90 days of the date of the closing of such public offering. ATD may also, at any time prior to
April 1, 2009, upon a change of control, redeem all of the Senior Notes at a price equal to 100% of the principal amount plus accrued and unpaid interest plus a make whole premium.



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Senior Floating Rate Notes

On March 31, 2005, in connection with the Merger, ATD issued Senior Floating Rate Notes in the aggregate principal amount of $140.0 million, resulting in net proceeds of approximately $134.5 million after debt
issuance costs. The Senior Floating Rate Notes will mature on April 1, 2012. Interest on the Senior Floating Rate Notes is payable quarterly in arrears at a rate equal to the three-month LIBOR, reset quarterly, plus 6.25%, on
January 1, April 1, July 1 and October 1 of each year, beginning on July 1, 2005. The interest rate on the Senior Floating Rate Notes ranged between 9.34% to 10.26% for the period from March 31, 2005 to
December 31, 2005, and between 10.78% to 11.61% for the fiscal year ended December 30, 2006. The Senior Floating Rate Notes will not be redeemable, except as described below, at the option of ATD prior to April 1, 2007. Thereafter,
the Senior Floating Rate Notes will be subject to redemption at any time at the option of ATD, in whole or in part, upon not less than 30 nor more than 60 days notice, at certain redemption prices plus accrued and unpaid interest.

In addition, at any time and from time to time, prior to April 1, 2007, ATD may redeem up to 35% of the original aggregate principal amount of the
Senior Floating Rate Notes at a redemption price of 100% of the principal amount thereof, plus a premium per $1,000 amount of such notes equal to the then-current interest rate on the Senior Floating Rate Notes (expressed as a percentage) multiplied
by $1,000, plus accrued and unpaid interest, with the net cash proceeds of a public offering of common stock of ATD or a public offering of common stock of Holdings, the proceeds of which are contributed as common equity capital to ATD; provided
that (1) at least 65% of the sum of (a) the original aggregate principal amount of the Senior Floating Rate Notes issued and (b) the original aggregate principal amount of any additional Senior Floating Rate Notes, if any, issued
under the related indenture, if any, remains outstanding immediately after the occurrence of any such redemption; and (2) such redemption shall occur within 90 days of the date of the closing of such public offering. ATD may also, at any time
prior to April 1, 2007, upon a change of control, redeem all of the Senior Floating Rate Notes at a price equal to 100% of the principal amount plus accrued and unpaid interest plus a make whole premium.

Senior Discount Notes

In connection with the
Merger, Holdings issued Senior Discount Notes with a maturity date of October 1, 2013 at an aggregate principal amount at maturity of $51.5 million. The Senior Discount Notes were issued at a substantial discount from their principal amount at
maturity and generated net proceeds of approximately $40.0 million. Prior to April 1, 2007, no interest will accrue on the Senior Discount Notes. Instead, the accreted value of the Senior Discount Notes will accrete at a rate of 13%
compounded semi-annually to an aggregate accreted value of $51.5 million, the full principal amount at maturity, on April 1, 2007. Thereafter, interest on the Senior Discount Notes will accrue at a rate of 13% per annum and will be
payable, in cash, semi-annually in arrears on April 1 and October 1 of each year, commencing on October 1, 2007. Interest on the Senior Discount Notes will accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from April 1, 2007.

Except as described below, the Senior Discount Notes are not redeemable at the option of
Holdings prior to April 1, 2007. Thereafter, the Senior Discount Notes will be subject to redemption at any time at the option of Holdings, in whole or in part, upon not less than 30 nor more than 60 days notice, at certain redemption prices
plus accrued and unpaid interest (if after April 1, 2007). In addition, at any time and from time to time, prior to April 1, 2007, Holdings may redeem up to 35% of the original aggregate principal amount at maturity of the Senior Discount
Notes at a redemption price of 113.0% of the accreted value thereof, plus accrued and unpaid additional interest thereon, if any, to the redemption date (subject to the right of holders on the relevant record date to receive additional interest due
on the relevant interest payment date), with the net cash proceeds of a public offering of common stock of Holdings; provided that (1) at least 65% of the sum of (a) the original aggregate principal amount at maturity of the Senior
Discount Notes issued and (b) the original aggregate principal amount at maturity of any additional Senior Discount Notes, if any, issued under the related indenture, if any, remains outstanding immediately after the occurrence of any such
redemption; and (2) such redemption



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shall occur within 90 days of the date of the closing of such public offering. Holdings may also, at any time prior to April 1, 2007, upon a change of
control of Holdings, redeem all of the Senior Discount Notes at a price equal to 100% of the accreted value of the notes plus accrued additional interest, if any, plus a make whole premium.

On April 1, 2010, if any Senior Discount Notes are outstanding, Holdings will be required to redeem 12.165% of each of the then outstanding Senior
Discount Notes aggregate accreted value at a redemption price of 100% of the accreted value of the portion of the Senior Discount Notes so redeemed.

The indentures governing the Senior Notes, Senior Floating Rate Notes, and the Senior Discount Notes contain specified restrictions with respect to the conduct of the Companys business and specified restrictive
covenants limiting, among other things, the Companys ability to pay dividends on or repurchase capital stock, repurchase or make early payments on subordinated debt, make investments, incur additional indebtedness, incur or assume liens on the
Companys assets to secure debt, merge or consolidate with another company, transfer or sell assets, and enter into transactions with affiliates.

Capital Lease Obligations

As of December 30, 2006, the Company has a capital lease
obligation of $14.1 million relating to a prior sale and leaseback of three of its owned facilities. All cash paid to the lessor is recorded as interest expense and the capital lease obligation will be reduced when the lease has been terminated. The
initial term of the lease is for 20 years, followed by two 10-year renewal options. The annual rent paid under the terms of the lease is $1.6 million (paid quarterly) and is adjusted for Consumer Price Index changes every two years. As of
April 25, 2004, the annual rent increased to $1.7 million. Beginning on April 25, 2006, the annual rent expense increased to $1.8 million. There was no gain or loss recognized as a result of the initial sales transaction. As a part of
the sale and leaseback transaction, the purchaser received warrants to purchase 153,597 shares of the Predecessors common stock. In connection with the Acquisition, the warrant holders were paid an amount in cash equal to $18.83 per share
consideration less the exercise price of the warrants in complete satisfaction of the warrants.

Other

In October 2006, the Company entered into a Loan and Purchase Agreement (the Agreement) with one of the Companys suppliers. Under the
terms of the Agreement, the supplier agreed to loan ATD the aggregate principal amount of $6.0 million (the Supplier Loan). Proceeds from the Supplier Loan were received in the form of a credit against then current amounts due and
payable to the supplier. Interest under the Supplier Loan is payable quarterly, in arrears, at a rate of 9% per year. The Agreement defines certain levels of annual commitments that the Company must meet during each calendar year of fiscal 2006
through 2010. If the Company purchases all the required commitments, then the supplier will refund the interest paid by the Company for that calendar year. If the Company does not meet these purchase commitments, a calculated portion, representing
the percentage shortfall in the Companys committed purchase requirements, of the principal on the Supplier Loan shall be due and payable during the immediately succeeding calendar year. All unpaid principal and interest shall be paid in full
on or before December 20, 2010. For the fiscal year ended December 30, 2006, the Company met the purchase commitment requirements as specified in the Agreement.



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Aggregate Maturities

Aggregate maturities of long-term debt at December 30, 2006 for the Successor, are as follows (in thousands):



|           |  |   |        
|---------- |  | - | -------
|2007       |  | $ | 3,853  
|2008       |  |   | 1,181  
|2009       |  |   | 624    
|2010       |  |   | 161,070
|2011       |  |   | 22     
|Thereafter |  |   | 354,257
|           |  |   |        
|           |  | $ | 521,007
|           |  |   |        

Derivative Instruments

On October 11, 2005, the Company entered into an interest rate swap agreement (the Swap) to manage exposure to fluctuations in interest rates. The Swap represents a contract to exchange floating rate
for fixed interest payments periodically over the life of the agreement without exchange of the underlying notional amount. The notional amount of the Swap is used to measure interest to be paid or received and does not represent the amount of
exposure to credit loss. At December 30, 2006, the Swap in place covers a notional amount of $85.0 million of the $140.0 million of Senior Floating Rate Notes at a fixed interest rate of 4.79% and expires on September 30, 2010. This Swap
has been designated for hedge accounting treatment. Accordingly, the Company recognizes the fair value of the Swap in the accompanying consolidated balance sheets and any changes in the fair value are recorded as adjustments to other comprehensive
income (loss). The fair value of the Swap is the estimated amount that the Company would pay or receive to terminate the agreement at the reporting date. The fair value of the Swap was an asset of $0.7 million at December 30, 2006, and is
included in other assets in the accompanying consolidated balance sheets with the offset included in other comprehensive income (loss), net of tax. At December 31, 2005, the fair value of the Swap was a liability of $0.2 million and is included
in other liabilities in the accompanying consolidated balance sheets with the offset included in other comprehensive income (loss), net of tax.

6.
Employee Benefits:

401(k) Plans

The Company maintains a qualified profit sharing and 401(k) plan for eligible employees. All accounts are funded based on employee contributions to the
plan, with the limits of such contributions determined by the Board of Directors. Effective January 1, 2002, the benefit formulas for all participants was determined to be a match of 50% of participant contributions, up to 6% of their
compensation. The plan also provides for contributions in such amounts as the Board of Directors may annually determine for the profit sharing portion of the plan. Employees vest in the 401(k) match and profit sharing contribution over a 5-year
period. The amount charged to selling, general, and administrative expense for the Successor during the fiscal year ended December 30, 2006 and the nine months ended December 31, 2005 was $1.5 million and $1.1 million, respectively. The
amount charged to selling, general, and administrative expense for the Predecessor during the quarter ended April 2, 2005 and fiscal year ended January 1, 2005 was $0.6 million and $1.3 million, respectively.

Retiree Health Plan

In May 2006, the Company
communicated to employees that it was eliminating eligibility for retiree medical coverage for all current active employees. Additionally, in November 2006, the Company communicated to retired employees that it was terminating the medical coverage
for retired employees effective December 30,



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2006. Both of these changes were accounted for as negative plan amendments in accordance with SFAS No. 106 Employers Accounting for Postretirement
Benefits Other Than Pensions. As a result, during fiscal 2006, the Company has recognized a benefit of $2.6 million, which is included as an offset to selling, general and administrative expenses within the accompanying consolidated statement
of operations for the fiscal year ended December 30, 2006. Additionally, as of December 30, 2006 the Company has no residual post-retirement obligation and no future benefits will be paid under this plan.

The following tables provide information on the Post Retirement Plan status as December 30, 2006 and December 31, 2005 for the Successor and
April 2, 2005 for the Predecessor in accordance with SFAS No. 106, Employers Accounting for Post Retirement Benefits Other than Pensions and SFAS No. 132 (Revised 2003), Employers Disclosures about
Pensions and Other Post Retirement Benefitsan amendment of FASB Statements No. 87, 88, and 106.



|                                          |  |                                                    |        |   |                                                   |   |       |                                            |  |   |       |  
|----------------------------------------- |  | -------------------------------------------------- | ------ | - | ------------------------------------------------- | - | ----- | ------------------------------------------ |  | - | ----- | -
|                                          |  | Successor                                          |        |   | Successor                                         |   |       | Predecessor                                | 
|                                          |  | Fiscal Year Ended December 30, 2006 (in thousands) |        |   | Nine MonthsEnded December 31, 2005 (in thousands) |   |       | Quarter Ended April 2, 2005 (in thousands) | 
|Change in benefit obligations:            |  |                                                    |        |   |                                                   |   |       |                                            |  |   |       |  
|Benefit obligation at beginning of period |  | $                                                  | 2,395  |   |                                                   | $ | 2,002 |                                            |  | $ | 1,891 |  
|Amendments                                |  |                                                    | (2,558 | ) |                                                   |   |      |                                            |  |   |      |  
|Service cost                              |  |                                                    | 139    |   |                                                   |   | 247   |                                            |  |   | 82    |  
|Interest cost                             |  |                                                    | 62     |   |                                                   |   | 100   |                                            |  |   | 32    |  
|Actuarial loss                            |  |                                                    |       |   |                                                   |   | 54    |                                            |  |   |      |  
|Participant contributions                 |  |                                                    | 77     |   |                                                   |   | 21    |                                            |  |   | 7     |  
|Benefits paid                             |  |                                                    | (115   | ) |                                                   |   | (29   | )                                          |  |   | (10   | )
|                                          |  |                                                    |        |   |                                                   |   |       |                                            |  |   |       |  
|Benefit obligation at end of period       |  | $                                                  |       |   |                                                   | $ | 2,395 |                                            |  | $ | 2,002 |  
|                                          |  |                                                    |        |   |                                                   |   |       |                                            |  |   |       |  
|Change in funded status:                  |  |                                                    |        |   |                                                   |   |       |                                            |  |   |       |  
|Unfunded status of the plan               |  | $                                                  |       |   |                                                   | $ | 2,395 |                                            |  | $ | 2,002 |  
|Unrecognized net actuarial loss           |  |                                                    |       |   |                                                   |   | (54   | )                                          |  |   |      |  
|Unrecognized prior service costs          |  |                                                    |       |   |                                                   |   |      |                                            |  |   |      |  
|                                          |  |                                                    |        |   |                                                   |   |       |                                            |  |   |       |  
|Accrued benefit cost                      |  | $                                                  |       |   |                                                   | $ | 2,341 |                                            |  | $ | 2,002 |  
|                                          |  |                                                    |        |   |                                                   |   |       |                                            |  |   |       |  

In connection with the Acquisition, Holdings recorded an obligation of approximately $2.0 million
in the opening balance sheet, which represented the unfunded status of the plan at the date of acquisition. This resulted in the unrecognized prior service costs and unrecognized net actuarial loss being recorded in goodwill.

The components of net periodic postretirement benefit costs were as follows (in thousands):



|                                            |  |                                                  |        |   |                                                 |   |                                           |  |                                                |     |  |   |    
|------------------------------------------- |  | ------------------------------------------------ | ------ | - | ----------------------------------------------- | - | ----------------------------------------- |  | ---------------------------------------------- | --- |  | - | ---
|                                            |  | Successor                                        |        |   | Successor                                       |   | Predecessor                              
|                                            |  | Fiscal Year EndedDecember 30, 2006(in thousands) |        |   | Nine MonthsEndedDecember 31, 2005(in thousands) |   | Quarter Ended April 2, 2005(in thousands) |  | Fiscal YearEnded January 1, 2005(in thousands)
|Components of expense:                      |  |                                                  |        |   |                                                 |   |                                           |  |                                                |     |  |   |    
|Service cost                                |  | $                                                | 139    |   |                                                 | $ | 247                                       |  | $                                              | 82  |  | $ | 124
|Interest cost                               |  |                                                  | 62     |   |                                                 |   | 100                                       |  |                                                | 32  |  |   | 42 
|Effect of plan termination                  |  |                                                  | (1,933 | ) |                                                 |   |                                          |  |                                                |    |  |   |   
|Amortization of prior service (credit) cost |  |                                                  | (625   | ) |                                                 |   |                                          |  |                                                | 42  |  |   | 70 
|Net loss                                    |  |                                                  | 53     |   |                                                 |   |                                          |  |                                                |    |  |   |   
|                                            |  |                                                  |        |   |                                                 |   |                                           |  |                                                |     |  |   |    
|Post retirement (benefit) expense           |  | $                                                | (2,304 | ) |                                                 | $ | 347                                       |  | $                                              | 156 |  | $ | 236
|                                            |  |                                                  |        |   |                                                 |   |                                           |  |                                                |     |  |   |    



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The primary assumptions that previously affected the Companys accounting for post retirement
benefits under SFAS No. 106 as of December 31, 2005 for the Successor and April 2, 2005 and January 1, 2005 for the Predecessor are as follows:



|                   |  |                                                                 |  |                                                                 |  |                                                                
|------------------ |  | --------------------------------------------------------------- |  | --------------------------------------------------------------- |  | ---------------------------------------------------------------
|                   |  | Successor December 31, 2005                                     |  | Predecessor April 2, 2005                                       |  | Predecessor January 1, 2005                                    
|Discount rate      |  | 5.50%                                                           |  | 5.75%                                                           |  | 5.75%                                                          
|Health care trend: |  |                                                                 |  |                                                                 |  |                                                                
|Initial rate       |  | 10.0%                                                           |  | 11.0%                                                           |  | 11.0%                                                          
|Ultimate rate      |  | 5.0% in 2015                                                    |  | 5.0% in 2015                                                    |  | 5.0% in 2015                                                   
|Annual change      |  | 1.0% decrease until 9.0% in 2007; then 0.5% decrease thereafter |  | 1.0% decrease until 9.0% in 2007; then 0.5% decrease thereafter |  | 1.0% decrease until 9.0% in 2007; then 0.5% decrease thereafter

Stock Option Plans

Prior to the Acquisition, the Predecessor had three stock option plans, the Amended and Restated 1997 Stock Option Plan, the 1999 Stock Option Plan and
the 2002 Stock Option Plan, all of which provided for the grant to designated employees, officers, directors and independent contractors of options to purchase shares of Class A common stock.

Stock option activity under the Predecessor plans was as follows:



|                                                         |  |                  |   |  |                                 |     
|-------------------------------------------------------- |  | ---------------- | - |  | ------------------------------- | ----
|                                                         |  | Number of Shares |   |  | Weighted Average Exercise Price
|Outstanding at December 27, 2003 (1,410,428 exercisable) |  | 2,896,534        |   |  |                                 | 1.89
|Granted                                                  |  | 318,226          |   |  |                                 | 4.25
|Exercised                                                |  | (50,000          | ) |  |                                 | 4.25
|Forfeited                                                |  | (6,500           | ) |  |                                 | 7.60
|                                                         |  |                  |   |  |                                 |     
|Outstanding at January 1, 2005 (2,665,773 exercisable)   |  | 3,158,260        |   |  | $                               | 2.08
|Forfeited                                                |  | (2,400           | ) |  |                                 | 9.00
|                                                         |  |                  |   |  |                                 |     
|Outstanding at March 31, 2005 (3,155,860 exercisable)    |  | 3,155,860        |   |  | $                               | 2.07
|                                                         |  |                  |   |  |                                 |     

On March 31, 2005, as a result of the Acquisition, all unvested options outstanding under the
existing option plans and outstanding immediately prior to the Acquisition and related transactions, became vested. Predecessor stock options that were vested (excluding certain management options that were exchanged for Holdings options in
connection with the Acquisition  see below) were settled in exchange for cash consideration for each share of Class A common stock underlying such option equal to the per share merger consideration (approximately $18.83 per share) minus
the exercise price of such option. As a consequence, subsequent to March 31, 2005, the date of the completion of the Acquisition, all options to purchase previously existing ATD common stock were settled or exchanged and ATDs then
existing stock option plans were terminated.

In connection with the Acquisition, the Company adopted the 2005 Management Stock Incentive
Plan (the 2005 Plan) in order to attract, retain and motivate directors, officers, employees and consultants of the Company and its subsidiaries. The 2005 Plan authorizes the issuance of up to 190,857 shares of voting common stock under
terms and conditions to be set by the Companys Board of Directors. A committee appointed by the Companys Board of Directors shall administer the plan. The committee has sole authority to select those individuals to whom options may be
granted and to determine the number of shares of Series A Common Stock that will be issuable upon exercise of the options granted. The purchase price for shares of Series A Common Stock issuable upon exercise of the options granted is fixed by the
committee, but cannot be less than the fair



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market value of the Series A Common Stock, as determined in good faith by the Companys Board of Directors, if the corresponding option is intended to
qualify as an incentive stock option under the Internal Revenue Code.

All options granted under the 2005 Plan are subject to the terms and
conditions of a stock option agreement entered into by each option recipient. The stock option agreement generally requires each recipient to be bound by the terms of a stockholder agreement with the Company in the event the recipient elects to
exercise options. Options granted under the 2005 Plan generally vest based on performance or the occurrence of specified events, such as an initial public offering or company sale. Performance based options vest at the end of each year based on the
achievement of annual or cumulative EBITDA targets for the year. Options that vest on the basis of events such as an initial public offering or company sale do so only to the extent that the initial shareholders have earned a specified return on its
initial investment in the Companys shares. Options granted under the 2005 Plan are generally not transferable by the recipient other than by a will or by the laws of descent and distribution and, during the recipients lifetime, may only
be exercised by the recipient. Under the terms of the 2005 Plan, options expire no later than 30 days after the tenth anniversary of the date of grant for non-qualified options and no later than the tenth anniversary of the date of grant for
incentive stock options. Options are also subject to adjustment to avoid dilution in the event of stock splits, stock dividends, reclassifications or other similar changes in the Companys capital structure. As of December 30, 2006 and
December 31, 2005, options to purchase an aggregate of 176,704 shares of Series A Common Stock, at prices of $15.73 and $211.50 per share, were outstanding under the stock option plans.

In connection with the Merger, on March 31, 2005 the Company granted, in exchange for the assignment and transfer to the Company of 372,888 options
to purchase ATD common stock under the previously existing ATD stock option plan, non-qualified options (the Rollover Options) to purchase 33,199 shares of Series A Common Stock, $0.01 par value per share, of the Company. The fair market
value of the options granted of $6.5 million is recorded in stockholders equity in the accompanying consolidated balance sheet. All Rollover Options granted under the 2005 Plan are fully vested.

The Company did not issue any new stock options during the fiscal year ended December 31, 2006. During the nine-month period ending
December 31, 2005, the Company granted (under the 2005 Plan) options to purchase 149,811 shares of Series A Common Stock with an exercise price of $211.50. These options shall expire no later than 7 years and 30 calendar days from the date of
grant. These options vest based on the Company meeting specified performance goals, the passage of time, or the occurrence of certain events. The fair value of the options granted during the nine-months ended December 31, 2005, estimated on the
date of grant using the Black-Scholes option-pricing model, was $50.75. The fair value of these options granted was determined using the following assumptions: a weighted average risk-free interest rate of 3.87%, no dividend yield, expected life of
7 years and 30 calendar days and no expected volatility. The Company accounts for forfeitures as they occur. As of December 30, 2006, 58,253 options have vested as related to the 2005 Plan and 14,153 options are available for grant.

Stock option activity under the Successor plan is as follows:



|                                                              |  |                  |   |  |                                 |       
|------------------------------------------------------------- |  | ---------------- | - |  | ------------------------------- | ------
|                                                              |  | Number of Shares |   |  | Weighted Average Exercise Price
|Granted on March 31, 2005 (Rollover Options)                  |  | 33,199           |   |  | $                               | 15.73 
|Granted during the nine-month period ending December 31, 2005 |  | 149,811          |   |  |                                 | 211.50
|Forfeited                                                     |  | (6,306           | ) |  |                                 | 211.50
|                                                              |  |                  |   |  |                                 |       
|Outstanding at December 31, 2005 (33,199 exercisable)         |  | 176,704          |   |  |                                 | 174.72
|                                                              |  |                  |   |  |                                 |       
|Granted                                                       |  |                 |   |  |                                 |      
|Forfeited                                                     |  |                 |   |  |                                 |      
|                                                              |  |                  |   |  |                                 |       
|Outstanding at December 30, 2006 (58,253 exercisable)         |  | 176,704          |   |  | $                               | 174.72
|                                                              |  |                  |   |  |                                 |       



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The following is summary information about the Successors stock options outstanding at
December 30, 2006:



|                                 |  |                                        |  |                                 |        |                                  |        |                                 |   |       
|-------------------------------- |  | -------------------------------------- |  | ------------------------------- | ------ | -------------------------------- | ------ | ------------------------------- | - | ------
|Outstanding at December 30, 2006 |  | Weighted Average Remaining Term(years) |  | Weighted Average Exercise Price |        | Exercisable at December 30, 2006 |        | Weighted Average Exercise Price
|33,199                           |  | 5.45                                   |  | $                               | 15.73  |                                  | 33,199 |                                 | $ | 15.73 
|143,505                          |  | 5.51                                   |  |                                 | 211.50 |                                  | 25,054 |                                 |   | 211.50
|                                 |  |                                        |  |                                 |        |                                  |        |                                 |   |       
|176,704                          |  | 5.50                                   |  | $                               | 174.72 |                                  | 58,253 |                                 | $ | 99.93 
|                                 |  |                                        |  |                                 |        |                                  |        |                                 |   |       

Deferred Compensation Plan

The Company has a deferred compensation plan for its top executives and divisional employees covered by the executive bonus plan to encourage each
participant to promote the long-term interests of the Company. Each participant is allowed to defer portions of their annual salary as well as bonuses received into the plan. In addition to employee deferrals, the Company makes contributions on
behalf of its top executives and certain of the divisional employees in varying amounts. The plan provides that an employee who becomes a participant on or before November 23, 1998, shall be fully vested in all amounts credited to such
participants account. The plan provides that an employee who becomes a participant after November 23, 1998 shall be at all times fully vested in elective deferrals into such participants account and, as to contributions made by the
Company, shall vest at a rate of twenty percent (20%) per year as long as such participant is an employee on January 1 of each year. The deferred compensation plan may be altered and amended by the Companys Board of Directors. The
contributions made by the Company on behalf of its employees were not material in fiscal 2006, 2005 and 2004. At December 30, 2006 and December 31, 2005, the Successor has recorded an obligation in other non-current liabilities related to
the plan of $3.0 million and $2.1 million, respectively. The Company has provided for funding of the obligation through a Rabbi Trust, which holds various investments, including mutual funds and money market funds. The amount recorded in the
consolidated balance sheet in other non-current assets related to the Rabbi Trust is $3.0 million at December 30, 2006 and $2.1 million at December 31, 2005.

7. Commitments and Contingencies:

Leases

The Company leases land, buildings, equipment and vehicles under various noncancellable operating leases, which expire between 2007 and 2022. Future
minimum lease commitments, net of sublease income, at December 30, 2006 are as follows (in thousands):



|           |  |   |        
|---------- |  | - | -------
|2007       |  | $ | 29,338 
|2008       |  |   | 27,392 
|2009       |  |   | 24,397 
|2010       |  |   | 19,626 
|2011       |  |   | 15,815 
|Thereafter |  |   | 54,398 
|           |  |   |        
|           |  | $ | 170,966
|           |  |   |        

The Successors rent expense, net of sublease income, under these operating leases was $30.1
million in fiscal year 2006 and $21.1 million for the nine months ended December 31, 2005. The Predecessors rent expense, net of sublease income, under these operating leases was $6.6 million in the quarter ended April 2, 2005 and
$24.9 million in fiscal 2004.

On March 27, 2002, the Company completed an agreement for the sale and leaseback of three of its owned
facilities generating cash proceeds of $13.9 million. The Company reports this transaction as a capital lease using direct financing lease accounting. As such, the Company recorded a $14.1 million capital lease obligation during



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fiscal 2002. See Note 5 for more information on this capital lease. Obligations under the Companys other capital leases are not material.

The Company remains liable as a guarantor on certain leases related to Winston Tire Company, its retail business that was sold in 2001. As of December
30, 2006, the Companys total obligations, as guarantor on these leases, are approximately $9.0 million extending over 13 years. However, The Company has secured assignments or sublease agreements for the vast majority of these commitments with
contractually assigned or subleased rental of approximately $8.5 million. A provision has been made for the net present value of the estimated shortfall.

Legal and Tax Proceedings

The Company is involved from time to time in various lawsuits, including class action
lawsuits as well as various audits and reviews regarding its federal, state and local tax filings, arising out of the ordinary conduct of its business. Although no assurances can be given, management does not expect that any of these matters will
have a material adverse effect on the Companys business, financial position, results of operations or cash flows. As to tax filings, the Company believes that the various tax filings have been made in a timely fashion and in accordance with
applicable federal, state and local tax code requirements. The Company is also involved in various proceedings incidental to the ordinary course of its business. The Company believes, based on consultation with legal counsel, that none of these will
have a material adverse effect on its financial position, results of operations or cash flows.

8. Income Taxes:

The following summarizes the components of the Companys income tax provision (benefit) on income (loss) from operations for fiscal year 2006 and the
nine months ended December 31, 2005 for the Successor and for the quarter ended April 2, 2005 and fiscal year 2004 for the Predecessor (in thousands):



|                             |  |                             |        |   |                                   |   |        |                            |  |   |                           |   |  |   |       
|---------------------------- |  | --------------------------- | ------ | - | --------------------------------- | - | ------ | -------------------------- |  | - | ------------------------- | - |  | - | ------
|                             |  | Successor                   |        |   | Predecessor                      
|                             |  | Year EndedDecember 30, 2006 |        |   | Nine MonthsEndedDecember 31, 2005 |   |        | Quarter EndedApril 2, 2005 |  |   | Year EndedJanuary 1, 2005
|Federal                     |  |                             |        |   |                                   |   |        |                            |  |   |                           |   |  |   |       
|Current provision (benefit)  |  | $                           | 217    |   |                                   | $ | 1,229  |                            |  | $ | (5,877                    | ) |  | $ | 12,307
|Deferred (benefit) provision |  |                             | (1,495 | ) |                                   |   | (1,373 | )                          |  |   | 576                       |   |  |   | 1,585 
|                             |  |                             |        |   |                                   |   |        |                            |  |   |                           |   |  |   |       
|                             |  |                             | (1,278 | ) |                                   |   | (144   | )                          |  |   | (5,301                    | ) |  |   | 13,892
|State                       |  |                             |        |   |                                   |   |        |                            |  |   |                           |   |  |   |       
|Current provision (benefit)  |  |                             | 271    |   |                                   |   | 456    |                            |  |   | (1,401                    | ) |  |   | 2,084 
|Deferred (benefit) provision |  |                             | (475   | ) |                                   |   | (1,040 | )                          |  |   | 82                        |   |  |   | 260   
|                             |  |                             |        |   |                                   |   |        |                            |  |   |                           |   |  |   |       
|                             |  |                             | (204   | ) |                                   |   | (584   | )                          |  |   | (1,319                    | ) |  |   | 2,344 
|                             |  |                             |        |   |                                   |   |        |                            |  |   |                           |   |  |   |       
|Total (benefit) provision    |  | $                           | (1,482 | ) |                                   | $ | (728   | )                          |  | $ | (6,620                    | ) |  | $ | 16,236
|                             |  |                             |        |   |                                   |   |        |                            |  |   |                           |   |  |   |       



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Actual income tax expense (benefit) differs from the amount computed by applying the statutory federal
income tax rate of 35% in fiscal year 2006 and the nine months ended December 31, 2005 for the Successor and in the quarter ended April 2, 2005 and fiscal year 2004 for the Predecessor as a result of the following (in thousands):



|                                                                      |  |                             |        |   |                                    |   |      |                            |  |   |                           |   |  |   |        |  
|--------------------------------------------------------------------- |  | --------------------------- | ------ | - | ---------------------------------- | - | ---- | -------------------------- |  | - | ------------------------- | - |  | - | ------ | -
|                                                                      |  | Successor                   |        |   | Predecessor                        |  
|                                                                      |  | Year EndedDecember 30, 2006 |        |   | Nine Months EndedDecember 31, 2005 |   |      | Quarter EndedApril 2, 2005 |  |   | Year EndedJanuary 1, 2005 |  
|Income tax (benefit) provision computed at the federal statutory rate |  | $                           | (2,131 | ) |                                    | $ | (811 | )                          |  | $ | (7,330                    | ) |  | $ | 14,447 |  
|Non-deductible preferred stock dividends                              |  |                             | 612    |   |                                    |   | 428  |                            |  |   |                          |   |  |   |       |  
|Permanent differences                                                 |  |                             | 170    |   |                                    |   | 159  |                            |  |   |                          |   |  |   | 71     |  
|State income taxes, net of federal income tax benefit                 |  |                             | (133   | ) |                                    |   | (615 | )                          |  |   | (857                      | ) |  |   | 1,688  |  
|Non-deductible transaction cost                                       |  |                             |       |   |                                    |   | 141  |                            |  |   | 1,539                     |   |  |   |       |  
|Decrease in valuation allowance                                       |  |                             |       |   |                                    |   |     |                            |  |   |                          |   |  |   | (474   | )
|Other                                                                 |  |                             |       |   |                                    |   | (30  | )                          |  |   | 28                        |   |  |   | 504    |  
|                                                                      |  |                             |        |   |                                    |   |      |                            |  |   |                           |   |  |   |        |  
|Income tax (benefit) provision                                        |  | $                           | (1,482 | ) |                                    | $ | (728 | )                          |  | $ | (6,620                    | ) |  | $ | 16,236 |  
|                                                                      |  |                             |        |   |                                    |   |      |                            |  |   |                           |   |  |   |        |  

Deferred income taxes reflect the net tax effects of (a) temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting purposes and (b) operating loss and tax credit carry-forwards. The tax effects of the significant temporary differences
which comprise deferred tax assets and liabilities at December 30, 2006 and December 31, 2005, are as follows (in thousands):



|                                          |  |                  |         |   |                  |   |         |  
|----------------------------------------- |  | ---------------- | ------- | - | ---------------- | - | ------- | -
|                                          |  | December 30,2006 |         |   | December 31,2005 |  
|Deferred tax assets                      |  |                  |         |   |                  |   |         |  
|Accrued expenses and liabilities          |  | $                | 5,276   |   |                  | $ | 8,184   |  
|Net operating loss carry-forwards         |  |                  | 3,811   |   |                  |   | 7,072   |  
|Employee benefits                         |  |                  | 3,029   |   |                  |   | 2,309   |  
|Inventory cost capitalization             |  |                  | 3,741   |   |                  |   | 2,928   |  
|Other comprehensive loss                  |  |                  |        |   |                  |   | 77      |  
|Other                                     |  |                  | 3,618   |   |                  |   | 3,345   |  
|                                          |  |                  |         |   |                  |   |         |  
|Gross deferred tax assets                 |  | $                | 19,475  |   |                  | $ | 23,915  |  
|                                          |  |                  |         |   |                  |   |         |  
|Deferred tax liabilities                 |  |                  |         |   |                  |   |         |  
|Depreciation, amortization of intangibles |  |                  | (91,761 | ) |                  |   | (94,380 | )
|Other comprehensive income                |  |                  | (271    | ) |                  |   |        |  
|Other                                     |  |                  | (270    | ) |                  |   | (422    | )
|                                          |  |                  |         |   |                  |   |         |  
|Gross deferred tax liabilities            |  |                  | (92,302 | ) |                  |   | (94,802 | )
|                                          |  |                  |         |   |                  |   |         |  
|Net deferred tax liabilities              |  | $                | (72,827 | ) |                  | $ | (70,887 | )
|                                          |  |                  |         |   |                  |   |         |  

The above amounts have been classified in the accompanying consolidated balance sheets as follows
(in thousands):



|                                   |  |                   |         |   |                   |   |         |  
|---------------------------------- |  | ----------------- | ------- | - | ----------------- | - | ------- | -
|                                   |  | December 30, 2006 |         |   | December 31, 2005 |  
|Deferred tax assets (liabilities) |  |                   |         |   |                   |   |         |  
|Current                            |  | $                 | 10,136  |   |                   | $ | 11,190  |  
|Noncurrent                         |  |                   | (82,963 | ) |                   |   | (82,077 | )
|                                   |  |                   |         |   |                   |   |         |  
|                                   |  | $                 | (72,827 | ) |                   | $ | (70,887 | )
|                                   |  |                   |         |   |                   |   |         |  



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As part of the Merger, the Predecessor generated substantial tax deductions relating to the exercise of
stock options and payments made for transaction bonuses. The Successors consolidated balance sheet as of December 30, 2006 reflects a net non-current deferred tax liability of $83.0 million. As part of the Merger, the Company recorded an
income tax receivable of $12.7 million, which primarily related to deductions that could be carried back two years for federal income tax purposes. The Company received this federal income tax refund during the first quarter of 2006. The remaining
net deferred tax liability primarily relates to the temporary difference between book and tax basis of the Companys intangible assets which are amortized for book purposes but are not deductible for tax purposes.

At December 30, 2006, the Company had $0.0 million net operating losses (NOLs) available for federal tax purposes and NOLs available for
state tax purposes of approximately $70.5 million. The NOLs for state tax purposes will expire between 2011 and 2026. The Company expects to utilize these NOLs prior to their expiration date.

Management has evaluated the Companys deferred tax assets and has concluded that the realizability of the deferred tax assets is more likely than
not. Therefore, the Company has not established a valuation allowance against the deferred tax assets. This evaluation considered the historical and long-term expected profitability of the Company as well as existence of deferred tax liabilities,
which will reverse in future periods. The Companys ability to generate future taxable income is dependent on numerous factors, including general economic conditions, the state of the replacement tire market, and other factors beyond
managements control. Therefore, there can be no assurance that the Company will meet its expectation of future taxable income. Changes in expected future taxable income could lead to the Company recording a valuation allowance against the
deferred tax assets.

9. Warrants:

In
March 2005, in connection with the Merger, Holdings issued warrants to The 1818 Mezzanine Fund II, L.P. (The 1818 Fund) in exchange for $4.6 million in cash less related transaction costs of $0.1 million. The warrants permit the holders
to acquire up to 21,895 shares of Holdings Series A common stock at $.01 per share. The warrants expire on September 30, 2015. The Successor has recorded these warrants at fair value and has presented them as a component of stockholders
equity at December 30, 2006 and December 31, 2005.

10. Redeemable Preferred Stock:

In connection with the Merger, Holdings issued 4,500 shares of Series B preferred stock with a fair value of $2.7 million in exchange for the
Predecessors existing Series B preferred stock, which was subsequently canceled. The stated value of the Successors Series B preferred stock is initially $1,000 per share, to be adjusted based on tire purchase credits as determined by
the number of units purchased under a purchase agreement with a supplier entered into by the Predecessor in May 1997. If the Company does not meet certain tire purchase requirements, holders of the Successors Series B preferred stock are
entitled to receive dividend payments, when and if declared by the Board of Directors, at the prime rate. The remaining value of Series B preferred stock shall be redeemed by the Company on the last business day of January 2008 at a price equal to
the adjusted stated value plus all accrued and unpaid dividends. To date, the Company has met the purchase requirements, thus no dividends have been declared and paid. As of December 30, 2006, the stated redemption value of the Series B
preferred stock was $0.7 million and is included in other liabilities within the accompanying consolidated balance sheet.

In connection
with the Merger, Holdings issued 20,000 shares of 8% cumulative mandatorily redeemable preferred stock to The 1818 Fund in exchange for $15.4 million in cash less related transaction costs of $0.5 million. The cumulative preferred stock has a
stated value of $1,000 per share and holders will be entitled to receive, when and if declared by the Board of Directors, cumulative dividends, payable in cash, at an annual rate of 8.0%. The dividends and accretion of the carrying amount to the
redemption amount is recorded as interest



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expense in the accompanying consolidated statements of operations. Holdings Board of Directors is not obligated to declare dividends and the preferred
stock provides no monetary penalties for a failure to declare dividends. The cumulative preferred stock may be redeemed by Holdings at any time beginning on the first anniversary of the issuance of the stock and will be required to be redeemed upon
a change of control of Holdings and at its maturity in 2015. The 8% cumulative mandatorily redeemable preferred stock is classified as a noncurrent liability in the accompanying consolidated balance sheets in accordance with SFAS No. 150,
Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity.

The following represents the
issued and outstanding redeemable preferred stock at December 30, 2006 and December 31, 2005 (dollars in thousands, except share data):



|                                                                                                              |  |                   |        |                   |   |       
|------------------------------------------------------------------------------------------------------------- |  | ----------------- | ------ | ----------------- | - | ------
|                                                                                                              |  | December 30, 2006 |        | December 31, 2005
|Redeemable preferred stock Series Bvariable rate cumulative; 4,500 shares authorized, issued and outstanding |  | $                 | 707    |                   | $ | 1,634 
|Redeemable preferred stock8% cumulative: 20,000 shares authorized, issued and outstanding                    |  |                   | 19,115 |                   |   | 16,925
|                                                                                                              |  |                   |        |                   |   |       
|Total redeemable preferred stock                                                                              |  | $                 | 19,822 |                   | $ | 18,559
|                                                                                                              |  |                   |        |                   |   |       

11. Common Stock:

Holdings is authorized to issue shares of four series of common stock, each with a par value of $0.01 per share, including Series A Common Stock, Series B Common Stock, Series D Common Stock and Common Stock. Only
holders of Series B Common Stock, Series D Common Stock and Common Stock have the right to vote. Holders of Series A Common Stock do not have any voting rights, except that the holders of such series of common stock will have the right to vote as a
series to the extent required under the laws of the State of Delaware.

Holders of Series D Common Stock are entitled to 468 votes per
share on all matters submitted to the Companys stockholders to be voted upon by the stockholders entitled to vote. Holders of Series B Common Stock are entitled to one vote per share on all matters submitted to the Companys stockholders
to be voted upon by the stockholders entitled to vote.

12. Related Party Transactions:

Redeemable Preferred Stock and Warrants

In connection with the Acquisition, Holdings issued 20,000 shares of 8% cumulative mandatorily redeemable preferred stock and warrants to acquire up to 21,895 shares of Holdings Series A Common Stock at $.01 per share to The 1818 Fund (see
Note 9 and 10 for further information). Joseph P. Donlan, a member of the Companys Board of Directors, is a Managing Director of Brown Brothers Harriman & Co., The 1818 Funds general partner.

Deferred Financing Fees

Advisory fees of $13.9 million were paid to Investcorp and its co-sponsors, Berkshire Partners and Greenbriar Equity Group, in connection with the amended and restated credit facility and the issuance of the senior notes and 8% cumulative
mandatorily redeemable preferred stock. These fees are recorded as debt issuance costs in the Successors balance sheet and are being amortized over the life of the respective debt.

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Management Advisory Fees

Management advisory fees of $8.0 million were paid to one or more of Investcorp and its co-sponsors (or their respective affiliates) at the closing of the
Acquisition for services to be rendered over a period of five years following the date of Acquisition. This payment was deferred and is being amortized pursuant to the terms of the agreement and on a basis consistent with the service provided.
Accordingly, the Company recorded amortization expense of $1.9 million during the fiscal year ended December 30, 2006 and $4.5 million during the nine months ended December 31, 2005.

The Predecessor was paying an advisory and monitoring fee not to exceed $200,000 annually to Charlesbank Capital Partners, LLC, or Charlesbank. Following
the Acquisition, the Company no longer pays this fee to Charlesbank. As of January 1, 2005, the Predecessor had paid $100,000 of the annual monitoring fee to Charlesbank and a liability was recorded for the remaining payment, which was paid in
first quarter 2005.

14. Subsidiary Guarantor Financial Information:

The following condensed consolidating financial statements are presented pursuant to Rule 310 of Regulation SX and reflect the financial position, results of operations, and cash flows of the Predecessor
for periods prior to April 2, 2005 and the financial position, results of operations, and cash flows of the Successor company beginning on April 2, 2005.

The financial information is presented under the following column headings: Parent Company (Holdings), Subsidiary Issuer (ATD), Subsidiary Guarantors (ATDs subsidiaries). The Subsidiary Issuer and all of the
Subsidiary Guarantors are 100% owned subsidiaries of Holdings. The following describes the guarantor relationships of the Companys senior notes:



| |  |  | Senior Discount Notes of $51.5 million in aggregate principal amount at maturity were issued by Holdings. Such notes are not guaranteed by the Subsidiary Issuer or
the Subsidiary Guarantors.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Senior Floating Rate Notes and Senior Notes of $290.0 million in aggregate principal amount were issued by ATD and are unconditionally guaranteed on a joint and
several basis by the Companys non-issuing, 100% owned subsidiaries (Subsidiary Guarantors) on a senior basis and unconditionally guaranteed on a joint and several basis by Holdings on a subordinated basis.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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The condensed consolidating financial information for the Company is as follows (dollars in thousands):

Condensed Consolidating Balance Sheets as of December 30, 2006 for the Successor and December 31, 2005 for the Successor are as follows:



|                                           |  |                                   |         |   |                  |   |           |                       |  |              |         |  |              |          |   |  |   |           |  
|------------------------------------------ |  | --------------------------------- | ------- | - | ---------------- | - | --------- | --------------------- |  | ------------ | ------- |  | ------------ | -------- | - |  | - | --------- | -
|                                           |  | Successor As of December 30, 2006 |        
|                                           |  | Parent Company                    |         |   | SubsidiaryIssuer |   |           | Subsidiary Guarantors |  | Eliminations |         |  | Consolidated |         
|Assets                                     |  |                                   |         |   |                  |   |           |                       |  |              |         |  |              |          |   |  |   |           |  
|Current assets:                            |  |                                   |         |   |                  |   |           |                       |  |              |         |  |              |          |   |  |   |           |  
|Cash and cash equivalents                  |  | $                                 | 73      |   |                  | $ | 3,304     |                       |  | $            | 223     |  | $            |         |   |  | $ | 3,600     |  
|Accounts receivable, net                   |  |                                   |        |   |                  |   | 79,809    |                       |  |              | 51,295  |  |              |         |   |  |   | 131,104   |  
|Inventories                                |  |                                   |        |   |                  |   | 180,131   |                       |  |              | 117,533 |  |              |         |   |  |   | 297,664   |  
|Other current assets                       |  |                                   | 2       |   |                  |   | 17,249    |                       |  |              | 1,010   |  |              |         |   |  |   | 18,261    |  
|                                           |  |                                   |         |   |                  |   |           |                       |  |              |         |  |              |          |   |  |   |           |  
|Total current assets                       |  |                                   | 75      |   |                  |   | 280,493   |                       |  |              | 170,061 |  |              |         |   |  |   | 450,629   |  
|                                           |  |                                   |         |   |                  |   |           |                       |  |              |         |  |              |          |   |  |   |           |  
|Property and equipment, net                |  |                                   |        |   |                  |   | 38,295    |                       |  |              | 6,276   |  |              |         |   |  |   | 44,571    |  
|Goodwill and other intangible assets, net  |  |                                   |        |   |                  |   | 572,859   |                       |  |              | 21,733  |  |              |         |   |  |   | 594,592   |  
|Investment in subsidiaries                 |  |                                   | 285,253 |   |                  |   | 156,814   |                       |  |              |        |  |              | (442,067 | ) |  |   |          |  
|Other assets                               |  |                                   | 2,543   |   |                  |   | 30,542    |                       |  |              | 629     |  |              |         |   |  |   | 33,714    |  
|                                           |  |                                   |         |   |                  |   |           |                       |  |              |         |  |              |          |   |  |   |           |  
|Total assets                               |  | $                                 | 287,871 |   |                  | $ | 1,079,003 |                       |  | $            | 198,699 |  | $            | (442,067 | ) |  | $ | 1,123,506 |  
|                                           |  |                                   |         |   |                  |   |           |                       |  |              |         |  |              |          |   |  |   |           |  
|Liabilities and Stockholders Equity       |  |                                   |         |   |                  |   |           |                       |  |              |         |  |              |          |   |  |   |           |  
|Current liabilities:                       |  |                                   |         |   |                  |   |           |                       |  |              |         |  |              |          |   |  |   |           |  
|Accounts payable                           |  | $                                 |        |   |                  | $ | 245,415   |                       |  | $            |        |  | $            |         |   |  | $ | 245,415   |  
|Accrued expenses                           |  |                                   | 25      |   |                  |   | 26,881    |                       |  |              | 1,828   |  |              |         |   |  |   | 28,734    |  
|Current maturities of long-term debt       |  |                                   |        |   |                  |   | 3,853     |                       |  |              |        |  |              |         |   |  |   | 3,853     |  
|Intercompany payables (receivables)        |  |                                   | 1,357   |   |                  |   | (37,037   | )                     |  |              | 35,680  |  |              |         |   |  |   |          |  
|                                           |  |                                   |         |   |                  |   |           |                       |  |              |         |  |              |          |   |  |   |           |  
|Total current liabilities                  |  |                                   | 1,382   |   |                  |   | 239,112   |                       |  |              | 37,508  |  |              |         |   |  |   | 278,002   |  
|                                           |  |                                   |         |   |                  |   |           |                       |  |              |         |  |              |          |   |  |   |           |  
|Long-term debt                             |  |                                   | 49,909  |   |                  |   | 467,245   |                       |  |              |        |  |              |         |   |  |   | 517,154   |  
|Deferred income taxes                      |  |                                   |        |   |                  |   | 82,963    |                       |  |              |        |  |              |         |   |  |   | 82,963    |  
|Other liabilities                          |  |                                   |        |   |                  |   | 4,430     |                       |  |              | 4,377   |  |              |         |   |  |   | 8,807     |  
|Redeemable preferred stock                 |  |                                   | 19,822  |   |                  |   |          |                       |  |              |        |  |              |         |   |  |   | 19,822    |  
|Stockholders equity:                      |  |                                   |         |   |                  |   |           |                       |  |              |         |  |              |          |   |  |   |           |  
|Intercompany investment                    |  |                                   |        |   |                  |   | 280,622   |                       |  |              | 134,270 |  |              | (414,892 | ) |  |   |          |  
|Common stock                               |  |                                   | 10      |   |                  |   |          |                       |  |              |        |  |              |         |   |  |   | 10        |  
|Additional paid-in capital                 |  |                                   | 217,990 |   |                  |   |          |                       |  |              |        |  |              |         |   |  |   | 217,990   |  
|Warrants                                   |  |                                   | 4,631   |   |                  |   |          |                       |  |              |        |  |              |         |   |  |   | 4,631     |  
|Accumulated (deficit) earnings             |  |                                   | (6,208  | ) |                  |   | 4,196     |                       |  |              | 22,544  |  |              | (26,740  | ) |  |   | (6,208    | )
|Accumulated other comprehensive income     |  |                                   | 435     |   |                  |   | 435       |                       |  |              |        |  |              | (435     | ) |  |   | 435       |  
|Treasury stock, at cost                    |  |                                   | (100    | ) |                  |   |          |                       |  |              |        |  |              |         |   |  |   | (100      | )
|                                           |  |                                   |         |   |                  |   |           |                       |  |              |         |  |              |          |   |  |   |           |  
|Total stockholders equity                 |  |                                   | 216,758 |   |                  |   | 285,253   |                       |  |              | 156,814 |  |              | (442,067 | ) |  |   | 216,758   |  
|                                           |  |                                   |         |   |                  |   |           |                       |  |              |         |  |              |          |   |  |   |           |  
|Total liabilities and stockholders equity |  | $                                 | 287,871 |   |                  | $ | 1,079,003 |                       |  | $            | 198,699 |  | $            | (442,067 | ) |  | $ | 1,123,506 |  
|                                           |  |                                   |         |   |                  |   |           |                       |  |              |         |  |              |          |   |  |   |           |  



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|                                           |  |                                   |         |   |                  |   |           |                       |  |              |         |  |              |          |   |  |   |           |  
|------------------------------------------ |  | --------------------------------- | ------- | - | ---------------- | - | --------- | --------------------- |  | ------------ | ------- |  | ------------ | -------- | - |  | - | --------- | -
|                                           |  | Successor As of December 31, 2005 |        
|                                           |  | Parent Company                    |         |   | SubsidiaryIssuer |   |           | Subsidiary Guarantors |  | Eliminations |         |  | Consolidated |         
|Assets                                     |  |                                   |         |   |                  |   |           |                       |  |              |         |  |              |          |   |  |   |           |  
|Current assets:                            |  |                                   |         |   |                  |   |           |                       |  |              |         |  |              |          |   |  |   |           |  
|Cash and cash equivalents                  |  | $                                 | 73      |   |                  | $ | 3,726     |                       |  | $            | 1,746   |  | $            |         |   |  | $ | 5,545     |  
|Accounts receivable, net                   |  |                                   |        |   |                  |   | 86,259    |                       |  |              | 41,463  |  |              |         |   |  |   | 127,722   |  
|Inventories                                |  |                                   |        |   |                  |   | 173,831   |                       |  |              | 107,584 |  |              |         |   |  |   | 281,415   |  
|Income tax receivable                      |  |                                   |        |   |                  |   | 12,699    |                       |  |              |        |  |              |         |   |  |   | 12,699    |  
|Other current assets                       |  |                                   | 3       |   |                  |   | 20,771    |                       |  |              | 1,154   |  |              |         |   |  |   | 21,928    |  
|                                           |  |                                   |         |   |                  |   |           |                       |  |              |         |  |              |          |   |  |   |           |  
|Total current assets                       |  |                                   | 76      |   |                  |   | 297,286   |                       |  |              | 151,947 |  |              |         |   |  |   | 449,309   |  
|                                           |  |                                   |         |   |                  |   |           |                       |  |              |         |  |              |          |   |  |   |           |  
|Property and equipment, net                |  |                                   |        |   |                  |   | 37,318    |                       |  |              | 7,278   |  |              |         |   |  |   | 44,596    |  
|Goodwill and other intangible assets, net  |  |                                   |        |   |                  |   | 586,005   |                       |  |              | 2,375   |  |              |         |   |  |   | 588,380   |  
|Investment in subsidiaries                 |  |                                   | 282,883 |   |                  |   | 130,870   |                       |  |              |        |  |              | (413,753 | ) |  |   |          |  
|Other assets                               |  |                                   | 2,866   |   |                  |   | 34,303    |                       |  |              | 664     |  |              |         |   |  |   | 37,833    |  
|                                           |  |                                   |         |   |                  |   |           |                       |  |              |         |  |              |          |   |  |   |           |  
|Total assets                               |  | $                                 | 285,825 |   |                  | $ | 1,085,782 |                       |  | $            | 162,264 |  | $            | (413,753 | ) |  | $ | 1,120,118 |  
|                                           |  |                                   |         |   |                  |   |           |                       |  |              |         |  |              |          |   |  |   |           |  
|Liabilities and Stockholders Equity       |  |                                   |         |   |                  |   |           |                       |  |              |         |  |              |          |   |  |   |           |  
|Current liabilities:                       |  |                                   |         |   |                  |   |           |                       |  |              |         |  |              |          |   |  |   |           |  
|Accounts payable                           |  | $                                 |        |   |                  | $ | 207,184   |                       |  | $            | 2,100   |  | $            |         |   |  | $ | 209,284   |  
|Accrued expenses                           |  |                                   |        |   |                  |   | 31,164    |                       |  |              | 2,345   |  |              |         |   |  |   | 33,509    |  
|Current maturities of long-term debt       |  |                                   |        |   |                  |   | 4,671     |                       |  |              | 25      |  |              |         |   |  |   | 4,696     |  
|Intercompany payables (receivables)        |  |                                   | 2,457   |   |                  |   | (25,129   | )                     |  |              | 22,672  |  |              |         |   |  |   |          |  
|                                           |  |                                   |         |   |                  |   |           |                       |  |              |         |  |              |          |   |  |   |           |  
|Total current liabilities                  |  |                                   | 2,457   |   |                  |   | 217,890   |                       |  |              | 27,142  |  |              |         |   |  |   | 247,489   |  
|                                           |  |                                   |         |   |                  |   |           |                       |  |              |         |  |              |          |   |  |   |           |  
|Long-term debt                             |  |                                   | 44,003  |   |                  |   | 496,546   |                       |  |              |        |  |              |         |   |  |   | 540,549   |  
|Deferred income taxes                      |  |                                   |        |   |                  |   | 82,077    |                       |  |              |        |  |              |         |   |  |   | 82,077    |  
|Other liabilities                          |  |                                   |        |   |                  |   | 6,386     |                       |  |              | 4,252   |  |              |         |   |  |   | 10,638    |  
|Redeemable preferred stock                 |  |                                   | 18,559  |   |                  |   |          |                       |  |              |        |  |              |         |   |  |   | 18,559    |  
|Stockholders equity:                      |  |                                   |         |   |                  |   |           |                       |  |              |         |  |              |          |   |  |   |           |  
|Intercompany investment                    |  |                                   |        |   |                  |   | 280,622   |                       |  |              | 113,282 |  |              | (393,904 | ) |  |   |          |  
|Common stock                               |  |                                   | 10      |   |                  |   |          |                       |  |              |        |  |              |         |   |  |   | 10        |  
|Additional paid-in capital                 |  |                                   | 217,990 |   |                  |   |          |                       |  |              |        |  |              |         |   |  |   | 217,990   |  
|Warrants                                   |  |                                   | 4,631   |   |                  |   |          |                       |  |              |        |  |              |         |   |  |   | 4,631     |  
|Accumulated (deficit) earnings             |  |                                   | (1,601  | ) |                  |   | 2,385     |                       |  |              | 17,588  |  |              | (19,973  | ) |  |   | (1,601    | )
|Accumulated other comprehensive loss       |  |                                   | (124    | ) |                  |   | (124      | )                     |  |              |        |  |              | 124      |   |  |   | (124      | )
|Treasury stock, at cost                    |  |                                   | (100    | ) |                  |   |          |                       |  |              |        |  |              |         |   |  |   | (100      | )
|                                           |  |                                   |         |   |                  |   |           |                       |  |              |         |  |              |          |   |  |   |           |  
|Total stockholders equity                 |  |                                   | 220,806 |   |                  |   | 282,883   |                       |  |              | 130,870 |  |              | (413,753 | ) |  |   | 220,806   |  
|                                           |  |                                   |         |   |                  |   |           |                       |  |              |         |  |              |          |   |  |   |           |  
|Total liabilities and stockholders equity |  | $                                 | 285,825 |   |                  | $ | 1,085,782 |                       |  | $            | 162,264 |  | $            | (413,753 | ) |  | $ | 1,120,118 |  
|                                           |  |                                   |         |   |                  |   |           |                       |  |              |         |  |              |          |   |  |   |           |  



70



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##### Table of Contents

Condensed Consolidating Statements of Operations for fiscal year ended December 30, 2006 and the nine months
ended December 31, 2005 for the Successor and quarter ended April 2, 2005 and fiscal year ended January 1, 2005 for the Predecessor are as follows:



|                                                                                                          |  |                                                       |        |   |                  |   |         |                       |  |   |              |   |  |              |         |   |  |   |           |  
|--------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------- | ------ | - | ---------------- | - | ------- | --------------------- |  | - | ------------ | - |  | ------------ | ------- | - |  | - | --------- | -
|                                                                                                          |  | Successor For the Fiscal Year Ended December 30, 2006 |       
|                                                                                                          |  | Parent Company                                        |        |   | SubsidiaryIssuer |   |         | Subsidiary Guarantors |  |   | Eliminations |   |  | Consolidated |        
|Net sales                                                                                                 |  | $                                                     |       |   |                  | $ | 988,420 |                       |  | $ | 589,553      |   |  | $            |        |   |  | $ | 1,577,973 |  
|Cost of goods sold, excluding depreciation included in selling, general and administrative expenses below |  |                                                       |       |   |                  |   | 805,582 |                       |  |   | 488,012      |   |  |              |        |   |  |   | 1,293,594 |  
|                                                                                                          |  |                                                       |        |   |                  |   |         |                       |  |   |              |   |  |              |         |   |  |   |           |  
|Gross profit                                                                                              |  |                                                       |       |   |                  |   | 182,838 |                       |  |   | 101,541      |   |  |              |        |   |  |   | 284,379   |  
|Selling, general and administrative expenses                                                              |  |                                                       | 36     |   |                  |   | 137,897 |                       |  |   | 89,466       |   |  |              |        |   |  |   | 227,399   |  
|Impairment of intangible asset                                                                            |  |                                                       |       |   |                  |   | 2,640   |                       |  |   |             |   |  |              |        |   |  |   | 2,640     |  
|                                                                                                          |  |                                                       |        |   |                  |   |         |                       |  |   |              |   |  |              |         |   |  |   |           |  
|Operating (loss) income                                                                                   |  |                                                       | (36    | ) |                  |   | 42,301  |                       |  |   | 12,075       |   |  |              |        |   |  |   | 54,340    |  
|                                                                                                          |  |                                                       |        |   |                  |   |         |                       |  |   |              |   |  |              |         |   |  |   |           |  
|Other income (expense):                                                                                   |  |                                                       |        |   |                  |   |         |                       |  |   |              |   |  |              |         |   |  |   |           |  
|Interest expense                                                                                          |  |                                                       | (8,446 | ) |                  |   | (46,006 | )                     |  |   | (5,613       | ) |  |              |        |   |  |   | (60,065   | )
|Other, net                                                                                                |  |                                                       |       |   |                  |   | (453    | )                     |  |   | 89           |   |  |              |        |   |  |   | (364      | )
|Equity earnings of subsidiaries                                                                           |  |                                                       | 1,811  |   |                  |   | 4,956   |                       |  |   |             |   |  |              | (6,767  | ) |  |   |          |  
|                                                                                                          |  |                                                       |        |   |                  |   |         |                       |  |   |              |   |  |              |         |   |  |   |           |  
|(Loss) income from operations before income taxes                                                         |  |                                                       | (6,671 | ) |                  |   | 798     |                       |  |   | 6,551        |   |  |              | (6,767  | ) |  |   | (6,089    | )
|Income tax (benefit) provision                                                                            |  |                                                       | (2,064 | ) |                  |   | (1,013  | )                     |  |   | 1,595        |   |  |              |        |   |  |   | (1,482    | )
|                                                                                                          |  |                                                       |        |   |                  |   |         |                       |  |   |              |   |  |              |         |   |  |   |           |  
|Net (loss) income                                                                                         |  | $                                                     | (4,607 | ) |                  | $ | 1,811   |                       |  | $ | 4,956        |   |  | $            | (6,767  | ) |  | $ | (4,607    | )
|                                                                                                          |  |                                                       |        |   |                  |   |         |                       |  |   |              |   |  |              |         |   |  |   |           |  
|                                                                                                          | 
|                                                                                                          |  | Successor For the Nine Months Ended December 31, 2005 |       
|                                                                                                          |  | Parent Company                                        |        |   | SubsidiaryIssuer |   |         | Subsidiary Guarantors |  |   | Eliminations |   |  | Consolidated |        
|Net sales                                                                                                 |  | $                                                     |       |   |                  | $ | 761,819 |                       |  | $ | 389,125      |   |  | $            |        |   |  | $ | 1,150,944 |  
|Cost of goods sold, excluding depreciation included in selling, general and administrative expenses below |  |                                                       |       |   |                  |   | 622,755 |                       |  |   | 316,570      |   |  |              |        |   |  |   | 939,325   |  
|                                                                                                          |  |                                                       |        |   |                  |   |         |                       |  |   |              |   |  |              |         |   |  |   |           |  
|Gross profit                                                                                              |  |                                                       |       |   |                  |   | 139,064 |                       |  |   | 72,555       |   |  |              |        |   |  |   | 211,619   |  
|Selling, general and administrative expenses                                                              |  |                                                       | 7      |   |                  |   | 125,569 |                       |  |   | 47,029       |   |  |              |        |   |  |   | 172,605   |  
|Transaction expenses                                                                                      |  |                                                       |       |   |                  |   | 95      |                       |  |   |             |   |  |              |        |   |  |   | 95        |  
|                                                                                                          |  |                                                       |        |   |                  |   |         |                       |  |   |              |   |  |              |         |   |  |   |           |  
|Operating (loss) income                                                                                   |  |                                                       | (7     | ) |                  |   | 13,400  |                       |  |   | 25,526       |   |  |              |        |   |  |   | 38,919    |  
|                                                                                                          |  |                                                       |        |   |                  |   |         |                       |  |   |              |   |  |              |         |   |  |   |           |  
|Other income (expense):                                                                                   |  |                                                       |        |   |                  |   |         |                       |  |   |              |   |  |              |         |   |  |   |           |  
|Interest (expense) income                                                                                 |  |                                                       | (5,798 | ) |                  |   | (35,584 | )                     |  |   | 23           |   |  |              |        |   |  |   | (41,359   | )
|Other, net                                                                                                |  |                                                       | (2     | ) |                  |   | 41      |                       |  |   | 72           |   |  |              |        |   |  |   | 111       |  
|Equity earnings of subsidiaries                                                                           |  |                                                       | 2,385  |   |                  |   | 17,588  |                       |  |   |             |   |  |              | (19,973 | ) |  |   |          |  
|                                                                                                          |  |                                                       |        |   |                  |   |         |                       |  |   |              |   |  |              |         |   |  |   |           |  
|(Loss) income from operations before income taxes                                                         |  |                                                       | (3,422 | ) |                  |   | (4,555  | )                     |  |   | 25,621       |   |  |              | (19,973 | ) |  |   | (2,329    | )
|Income tax (benefit) provision                                                                            |  |                                                       | (1,821 | ) |                  |   | (6,940  | )                     |  |   | 8,033        |   |  |              |        |   |  |   | (728      | )
|                                                                                                          |  |                                                       |        |   |                  |   |         |                       |  |   |              |   |  |              |         |   |  |   |           |  
|Net (loss) income                                                                                         |  | $                                                     | (1,601 | ) |                  | $ | 2,385   |                       |  | $ | 17,588       |   |  | $            | (19,973 | ) |  | $ | (1,601    | )
|                                                                                                          |  |                                                       |        |   |                  |   |         |                       |  |   |              |   |  |              |         |   |  |   |           |  



71



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##### Table of Contents

|                                                                                                          |  |                                                 |   |                  |   |         |                       |  |              |         |  |              |        |   |  |   |         |  
|--------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------- | - | ---------------- | - | ------- | --------------------- |  | ------------ | ------- |  | ------------ | ------ | - |  | - | ------- | -
|                                                                                                          |  | Predecessor For the Quarter Ended April 2,
2005 |  
|                                                                                                          |  | Parent Company                                  |   | SubsidiaryIssuer |   |         | Subsidiary Guarantors |  | Eliminations |         |  | Consolidated |       
|Net sales                                                                                                 |  | $                                               |  |                  | $ | 245,281 |                       |  | $            | 109,058 |  | $            |       |   |  | $ | 354,339 |  
|Cost of goods sold, excluding depreciation included in selling, general and administrative expenses below |  |                                                 |  |                  |   | 201,210 |                       |  |              | 89,278  |  |              |       |   |  |   | 290,488 |  
|                                                                                                          |  |                                                 |   |                  |   |         |                       |  |              |         |  |              |        |   |  |   |         |  
|Gross profit                                                                                              |  |                                                 |  |                  |   | 44,071  |                       |  |              | 19,780  |  |              |       |   |  |   | 63,851  |  
|Selling, general and administrative expenses                                                              |  |                                                 |  |                  |   | 38,375  |                       |  |              | 14,278  |  |              |       |   |  |   | 52,653  |  
|Transaction expenses                                                                                      |  |                                                 |  |                  |   | 28,211  |                       |  |              |        |  |              |       |   |  |   | 28,211  |  
|                                                                                                          |  |                                                 |   |                  |   |         |                       |  |              |         |  |              |        |   |  |   |         |  
|Operating (loss) income                                                                                   |  |                                                 |  |                  |   | (22,515 | )                     |  |              | 5,502   |  |              |       |   |  |   | (17,013 | )
|                                                                                                          |  |                                                 |   |                  |   |         |                       |  |              |         |  |              |        |   |  |   |         |  
|Other income (expense):                                                                                   |  |                                                 |   |                  |   |         |                       |  |              |         |  |              |        |   |  |   |         |  
|Interest (expense) income                                                                                 |  |                                                 |  |                  |   | (3,685  | )                     |  |              | 3       |  |              |       |   |  |   | (3,682  | )
|Other, net                                                                                                |  |                                                 |  |                  |   | (299    | )                     |  |              | 47      |  |              |       |   |  |   | (252    | )
|Equity earnings of subsidiaries                                                                           |  |                                                 |  |                  |   | 3,796   |                       |  |              |        |  |              | (3,796 | ) |  |   |        |  
|                                                                                                          |  |                                                 |   |                  |   |         |                       |  |              |         |  |              |        |   |  |   |         |  
|(Loss) income from operations before income taxes                                                         |  |                                                 |  |                  |   | (22,703 | )                     |  |              | 5,552   |  |              | (3,796 | ) |  |   | (20,947 | )
|Income tax (benefit) provision                                                                            |  |                                                 |  |                  |   | (8,376  | )                     |  |              | 1,756   |  |              |       |   |  |   | (6,620  | )
|                                                                                                          |  |                                                 |   |                  |   |         |                       |  |              |         |  |              |        |   |  |   |         |  
|Net (loss) income                                                                                         |  | $                                               |  |                  | $ | (14,327 | )                     |  | $            | 3,796   |  | $            | (3,796 | ) |  | $ | (14,327 | )
|                                                                                                          |  |                                                 |   |                  |   |         |                       |  |              |         |  |              |        |   |  |   |         |  



|                                                                                                          |  |                                                       |   |                  |   |         |                       |  |   |              |   |  |              |         |   |  |   |           |  
|--------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------- | - | ---------------- | - | ------- | --------------------- |  | - | ------------ | - |  | ------------ | ------- | - |  | - | --------- | -
|                                                                                                          |  | Predecessor For the Fiscal Year Ended January 1, 2005 |  
|                                                                                                          |  | Parent Company                                        |   | SubsidiaryIssuer |   |         | Subsidiary Guarantors |  |   | Eliminations |   |  | Consolidated |        
|Net sales                                                                                                 |  | $                                                     |  |                  | $ | 877,573 |                       |  | $ | 404,496      |   |  | $            |        |   |  | $ | 1,282,069 |  
|Cost of goods sold, excluding depreciation included in selling, general and administrative expenses below |  |                                                       |  |                  |   | 712,571 |                       |  |   | 331,222      |   |  |              |        |   |  |   | 1,043,793 |  
|                                                                                                          |  |                                                       |   |                  |   |         |                       |  |   |              |   |  |              |         |   |  |   |           |  
|Gross profit                                                                                              |  |                                                       |  |                  |   | 165,002 |                       |  |   | 73,274       |   |  |              |        |   |  |   | 238,276   |  
|Selling, general and administrative expenses                                                              |  |                                                       |  |                  |   | 132,379 |                       |  |   | 50,856       |   |  |              |        |   |  |   | 183,235   |  
|                                                                                                          |  |                                                       |   |                  |   |         |                       |  |   |              |   |  |              |         |   |  |   |           |  
|Operating income                                                                                          |  |                                                       |  |                  |   | 32,623  |                       |  |   | 22,418       |   |  |              |        |   |  |   | 55,041    |  
|                                                                                                          |  |                                                       |   |                  |   |         |                       |  |   |              |   |  |              |         |   |  |   |           |  
|Other income (expense):                                                                                   |  |                                                       |   |                  |   |         |                       |  |   |              |   |  |              |         |   |  |   |           |  
|Interest expense                                                                                          |  |                                                       |  |                  |   | (13,361 | )                     |  |   | (10          | ) |  |              |        |   |  |   | (13,371   | )
|Other, net                                                                                                |  |                                                       |  |                  |   | (729    | )                     |  |   | 336          |   |  |              |        |   |  |   | (393      | )
|Equity earnings of subsidiaries                                                                           |  |                                                       |  |                  |   | 13,798  |                       |  |   |             |   |  |              | (13,798 | ) |  |   |          |  
|                                                                                                          |  |                                                       |   |                  |   |         |                       |  |   |              |   |  |              |         |   |  |   |           |  
|Income from operations before income taxes                                                                |  |                                                       |  |                  |   | 32,331  |                       |  |   | 22,744       |   |  |              | (13,798 | ) |  |   | 41,277    |  
|Income tax provision                                                                                      |  |                                                       |  |                  |   | 7,290   |                       |  |   | 8,946        |   |  |              |        |   |  |   | 16,236    |  
|                                                                                                          |  |                                                       |   |                  |   |         |                       |  |   |              |   |  |              |         |   |  |   |           |  
|Net income                                                                                                |  | $                                                     |  |                  | $ | 25,041  |                       |  | $ | 13,798       |   |  | $            | (13,798 | ) |  | $ | 25,041    |  
|                                                                                                          |  |                                                       |   |                  |   |         |                       |  |   |              |   |  |              |         |   |  |   |           |  



72



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##### Table of Contents

Condensed Consolidating Statements of Cash Flows for the fiscal year ended December 30, 2006 and the period
from April 2, 2005 through December 31, 2005 for the Successor and for the quarter ended April 2, 2005 and fiscal year ended January 1, 2005 for the Predecessor are as follows:



|                                                                                                   |  |                                                       |        |   |                  |   |            |                       |  |   |              |   |  |              |        |   |  |   |            |  
|-------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------- | ------ | - | ---------------- | - | ---------- | --------------------- |  | - | ------------ | - |  | ------------ | ------ | - |  | - | ---------- | -
|                                                                                                   |  | Successor For the Fiscal Year Ended December 30, 2006 |       
|                                                                                                   |  | Parent Company                                        |        |   | SubsidiaryIssuer |   |            | Subsidiary Guarantors |  |   | Eliminations |   |  | Consolidated |       
|Cash flows from operating activities:                                                              |  |                                                       |        |   |                  |   |            |                       |  |   |              |   |  |              |        |   |  |   |            |  
|Net (loss) income                                                                                  |  | $                                                     | (4,607 | ) |                  | $ | 1,811      |                       |  | $ | 4,956        |   |  | $            | (6,767 | ) |  | $ | (4,607     | )
|Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: |  |                                                       |        |   |                  |   |            |                       |  |   |              |   |  |              |        |   |  |   |            |  
|Depreciation and amortization of intangibles and other assets                                      |  |                                                       | 351    |   |                  |   | 26,547     |                       |  |   | 3,616        |   |  |              |       |   |  |   | 30,514     |  
|Impairment of intangible asset                                                                     |  |                                                       |       |   |                  |   | 2,640      |                       |  |   |             |   |  |              |       |   |  |   | 2,640      |  
|Provision for doubtful accounts                                                                    |  |                                                       |       |   |                  |   | 3          |                       |  |   | (328         | ) |  |              |       |   |  |   | (325       | )
|Accretion of 8% cumulative preferred stock and Senior Discount Notes                               |  |                                                       | 6,347  |   |                  |   |           |                       |  |   |             |   |  |              |       |   |  |   | 6,347      |  
|Benefit for deferred income taxes                                                                  |  |                                                       |       |   |                  |   | (1,970     | )                     |  |   |             |   |  |              |       |   |  |   | (1,970     | )
|Post-retirement benefit plan termination                                                           |  |                                                       |        |   |                  |   | (1,933     | )                     |  |   |             |   |  |              |       |   |  |   | (1,933     | )
|Other, net                                                                                         |  |                                                       | 822    |   |                  |   | (89        | )                     |  |   | (459         | ) |  |              |       |   |  |   | 274        |  
|Equity earnings of subsidiaries                                                                    |  |                                                       | (1,811 | ) |                  |   | (4,956     | )                     |  |   |             |   |  |              | 6,767  |   |  |   |           |  
|Change in assets and liabilities:                                                                  |  |                                                       |        |   |                  |   |            |                       |  |   |              |   |  |              |        |   |  |   |            |  
|Accounts receivable, net                                                                           |  |                                                       |       |   |                  |   | 6,447      |                       |  |   | (4,254       | ) |  |              |       |   |  |   | 2,193      |  
|Inventories                                                                                        |  |                                                       |       |   |                  |   | (6,300     | )                     |  |   | (1,595       | ) |  |              |       |   |  |   | (7,895     | )
|Other current assets                                                                               |  |                                                       | 1      |   |                  |   | 2,003      |                       |  |   | 124          |   |  |              |       |   |  |   | 2,128      |  
|Income tax receivable                                                                              |  |                                                       |       |   |                  |   | 13,605     |                       |  |   |             |   |  |              |       |   |  |   | 13,605     |  
|Accounts payable and accrued expenses                                                              |  |                                                       | 25     |   |                  |   | 39,162     |                       |  |   | (13,472      | ) |  |              |       |   |  |   | 25,715     |  
|Other, net                                                                                         |  |                                                       | (25    | ) |                  |   | (288       | )                     |  |   | 213          |   |  |              |       |   |  |   | (100       | )
|                                                                                                   |  |                                                       |        |   |                  |   |            |                       |  |   |              |   |  |              |        |   |  |   |            |  
|Net cash provided by (used in) operating activities                                                |  |                                                       | 1,103  |   |                  |   | 76,682     |                       |  |   | (11,199      | ) |  |              |       |   |  |   | 66,586     |  
|                                                                                                   |  |                                                       |        |   |                  |   |            |                       |  |   |              |   |  |              |        |   |  |   |            |  
|Cash flows from investing activities:                                                              |  |                                                       |        |   |                  |   |            |                       |  |   |              |   |  |              |        |   |  |   |            |  
|Acquisitions, net of cash acquired                                                                 |  |                                                       |       |   |                  |   | (20,989    | )                     |  |   | 632          |   |  |              |       |   |  |   | (20,357    | )
|Purchase of property and equipment                                                                 |  |                                                       |       |   |                  |   | (8,866     | )                     |  |   | (979         | ) |  |              |       |   |  |   | (9,845     | )
|Proceeds from disposal of assets held for sale                                                     |  |                                                       |       |   |                  |   | 1,790      |                       |  |   |             |   |  |              |       |   |  |   | 1,790      |  
|Proceeds from sale of property and equipment                                                       |  |                                                       |       |   |                  |   | 57         |                       |  |   | 364          |   |  |              |       |   |  |   | 421        |  
|Other, net                                                                                         |  |                                                       |       |   |                  |   | (536       | )                     |  |   |             |   |  |              |       |   |  |   | (536       | )
|Intercompany                                                                                       |  |                                                       | (1,100 | ) |                  |   | (9,023     | )                     |  |   | 10,123       |   |  |              |       |   |  |   |           |  
|                                                                                                   |  |                                                       |        |   |                  |   |            |                       |  |   |              |   |  |              |        |   |  |   |            |  
|Net cash (used in) provided by investing activities                                                |  |                                                       | (1,100 | ) |                  |   | (37,567    | )                     |  |   | 10,140       |   |  |              |       |   |  |   | (28,527    | )
|                                                                                                   |  |                                                       |        |   |                  |   |            |                       |  |   |              |   |  |              |        |   |  |   |            |  
|Cash flows from financing activities:                                                              |  |                                                       |        |   |                  |   |            |                       |  |   |              |   |  |              |        |   |  |   |            |  
|Borrowings from revolving credit facility                                                          |  |                                                       |       |   |                  |   | 1,413,621  |                       |  |   |             |   |  |              |       |   |  |   | 1,413,621  |  
|Repayments of revolving credit facility                                                            |  |                                                       |       |   |                  |   | (1,448,090 | )                     |  |   |             |   |  |              |       |   |  |   | (1,448,090 | )
|Payments of other long-term debt                                                                   |  |                                                       |       |   |                  |   | (4,837     | )                     |  |   | (464         | ) |  |              |       |   |  |   | (5,301     | )
|Payments of deferred financing costs                                                               |  |                                                       | (3     | ) |                  |   | (231       | )                     |  |   |             |   |  |              |       |   |  |   | (234       | )
|                                                                                                   |  |                                                       |        |   |                  |   |            |                       |  |   |              |   |  |              |        |   |  |   |            |  
|Net cash used in financing activities                                                              |  |                                                       | (3     | ) |                  |   | (39,537    | )                     |  |   | (464         | ) |  |              |       |   |  |   | (40,004    | )
|                                                                                                   |  |                                                       |        |   |                  |   |            |                       |  |   |              |   |  |              |        |   |  |   |            |  
|Net decrease in cash and cash equivalents                                                          |  |                                                       |       |   |                  |   | (422       | )                     |  |   | (1,523       | ) |  |              |       |   |  |   | (1,945     | )
|Cash and cash equivalents, beginning of year                                                       |  |                                                       | 73     |   |                  |   | 3,726      |                       |  |   | 1,746        |   |  |              |       |   |  |   | 5,545      |  
|                                                                                                   |  |                                                       |        |   |                  |   |            |                       |  |   |              |   |  |              |        |   |  |   |            |  
|Cash and cash equivalents, end of year                                                             |  | $                                                     | 73     |   |                  | $ | 3,304      |                       |  | $ | 223          |   |  | $            |       |   |  | $ | 3,600      |  
|                                                                                                   |  |                                                       |        |   |                  |   |            |                       |  |   |              |   |  |              |        |   |  |   |            |  



73



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|                                                                                                   |  |                                                                       |          |   |                  |   |            |                       |  |   |              |   |  |              |         |   |  |   |            |  
|-------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------- | -------- | - | ---------------- | - | ---------- | --------------------- |  | - | ------------ | - |  | ------------ | ------- | - |  | - | ---------- | -
|                                                                                                   |  | Successor For the period from April 2, 2005 through December 31, 2005 |         
|                                                                                                   |  | Parent Company                                                        |          |   | SubsidiaryIssuer |   |            | Subsidiary Guarantors |  |   | Eliminations |   |  | Consolidated |        
|Cash flows from operating activities:                                                              |  |                                                                       |          |   |                  |   |            |                       |  |   |              |   |  |              |         |   |  |   |            |  
|Net (loss) income                                                                                  |  | $                                                                     | (1,601   | ) |                  | $ | 2,385      |                       |  | $ | 17,588       |   |  | $            | (19,973 | ) |  | $ | (1,601     | )
|Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: |  |                                                                       |          |   |                  |   |            |                       |  |   |              |   |  |              |         |   |  |   |            |  
|Depreciation and amortization of other intangibles and other assets                                |  |                                                                       | 245      |   |                  |   | 18,276     |                       |  |   | 1,979        |   |  |              |        |   |  |   | 20,500     |  
|Provision for doubtful accounts                                                                    |  |                                                                       |         |   |                  |   | 750        |                       |  |   | 341          |   |  |              |        |   |  |   | 1,091      |  
|Inventory step-up amortization                                                                     |  |                                                                       |         |   |                  |   | 4,692      |                       |  |   |             |   |  |              |        |   |  |   | 4,692      |  
|Accretion of 8% cumulative preferred stock and Senior Discount Notes                               |  |                                                                       | 4,331    |   |                  |   |           |                       |  |   |             |   |  |              |        |   |  |   | 4,331      |  
|(Benefit) provision for deferred income taxes                                                      |  |                                                                       |         |   |                  |   | (2,558     | )                     |  |   | 145          |   |  |              |        |   |  |   | (2,413     | )
|Other, net                                                                                         |  |                                                                       | 1,224    |   |                  |   | (543       | )                     |  |   | 50           |   |  |              |        |   |  |   | 731        |  
|Equity earnings of subsidiaries                                                                    |  |                                                                       | (2,385   | ) |                  |   | (17,588    | )                     |  |   |             |   |  |              | 19,973  |   |  |   |           |  
|Change in assets and liabilities:                                                                  |  |                                                                       |          |   |                  |   |            |                       |  |   |              |   |  |              |         |   |  |   |            |  
|Accounts receivable, net                                                                           |  |                                                                       |         |   |                  |   | 11,703     |                       |  |   | 933          |   |  |              |        |   |  |   | 12,636     |  
|Inventories                                                                                        |  |                                                                       |         |   |                  |   | (21,362    | )                     |  |   | (22,723      | ) |  |              |        |   |  |   | (44,085    | )
|Other current assets                                                                               |  |                                                                       | 275      |   |                  |   | 10,956     |                       |  |   | (134         | ) |  |              |        |   |  |   | 11,097     |  
|Accounts payable and accrued expenses                                                              |  |                                                                       |         |   |                  |   | (31,571    | )                     |  |   | (1,966       | ) |  |              |        |   |  |   | (33,537    | )
|Other, net                                                                                         |  |                                                                       | (897     | ) |                  |   | (5,749     | )                     |  |   | (1,450       | ) |  |              |        |   |  |   | (8,096     | )
|                                                                                                   |  |                                                                       |          |   |                  |   |            |                       |  |   |              |   |  |              |         |   |  |   |            |  
|Net cash provided by (used in) operating activities                                                |  |                                                                       | 1,192    |   |                  |   | (30,609    | )                     |  |   | (5,237       | ) |  |              |        |   |  |   | (34,654    | )
|                                                                                                   |  |                                                                       |          |   |                  |   |            |                       |  |   |              |   |  |              |         |   |  |   |            |  
|Cash flows from investing activities:                                                              |  |                                                                       |          |   |                  |   |            |                       |  |   |              |   |  |              |         |   |  |   |            |  
|Acquisition of Predecessor                                                                         |  |                                                                       |         |   |                  |   | (458,347   | )                     |  |   |             |   |  |              |        |   |  |   | (458,347   | )
|Other Acquisitions, net of cash acquired                                                           |  |                                                                       |         |   |                  |   | (4,497     | )                     |  |   | 231          |   |  |              |        |   |  |   | (4,266     | )
|Purchase of property and equipment                                                                 |  |                                                                       |         |   |                  |   | (4,118     | )                     |  |   | (1,968       | ) |  |              |        |   |  |   | (6,086     | )
|Proceeds from sale of property and equipment                                                       |  |                                                                       |         |   |                  |   | 74         |                       |  |   | 110          |   |  |              |        |   |  |   | 184        |  
|Other                                                                                              |  |                                                                       |         |   |                  |   | (300       | )                     |  |   |             |   |  |              |        |   |  |   | (300       | )
|Intercompany                                                                                       |  |                                                                       | (1,085   | ) |                  |   | (7,577     | )                     |  |   | 8,662        |   |  |              |        |   |  |   |           |  
|                                                                                                   |  |                                                                       |          |   |                  |   |            |                       |  |   |              |   |  |              |         |   |  |   |            |  
|Net cash (used in) provided by investing activities                                                |  |                                                                       | (1,085   | ) |                  |   | (474,765   | )                     |  |   | 7,035        |   |  |              |        |   |  |   | (468,815   | )
|                                                                                                   |  |                                                                       |          |   |                  |   |            |                       |  |   |              |   |  |              |         |   |  |   |            |  
|Cash flows from financing activities:                                                              |  |                                                                       |          |   |                  |   |            |                       |  |   |              |   |  |              |         |   |  |   |            |  
|Borrowings from revolving credit facility                                                          |  |                                                                       |         |   |                  |   | 1,100,320  |                       |  |   |             |   |  |              |        |   |  |   | 1,100,320  |  
|Repayments of revolving credit facility                                                            |  |                                                                       |         |   |                  |   | (1,088,448 | )                     |  |   |             |   |  |              |        |   |  |   | (1,088,448 | )
|Payments of other long-term debt                                                                   |  |                                                                       |         |   |                  |   | (2,441     | )                     |  |   | (217         | ) |  |              |        |   |  |   | (2,658     | )
|Payments of deferred financing costs                                                               |  |                                                                       | (1,310   | ) |                  |   | (34,076    | )                     |  |   |             |   |  |              |        |   |  |   | (35,386    | )
|Proceeds from issuance of common stock                                                             |  |                                                                       | 211,500  |   |                  |   |           |                       |  |   |             |   |  |              |        |   |  |   | 211,500    |  
|Proceeds from issuance of preferred stock                                                          |  |                                                                       | 15,369   |   |                  |   |           |                       |  |   |             |   |  |              |        |   |  |   | 15,369     |  
|Proceeds from issuance of long-term debt                                                           |  |                                                                       | 40,003   |   |                  |   | 290,000    |                       |  |   |             |   |  |              |        |   |  |   | 330,003    |  
|Proceeds from issuance of warrants                                                                 |  |                                                                       | 4,631    |   |                  |   |           |                       |  |   |             |   |  |              |        |   |  |   | 4,631      |  
|Change in restricted cash                                                                          |  |                                                                       |         |   |                  |   | (30,506    | )                     |  |   |             |   |  |              |        |   |  |   | (30,506    | )
|Intercompany cash transfers                                                                        |  |                                                                       | (270,127 | ) |                  |   | 270,127    |                       |  |   |             |   |  |              |        |   |  |   |           |  
|Other                                                                                              |  |                                                                       | (100     | ) |                  |   | 786        |                       |  |   |             |   |  |              |        |   |  |   | 686        |  
|                                                                                                   |  |                                                                       |          |   |                  |   |            |                       |  |   |              |   |  |              |         |   |  |   |            |  
|Net cash (used in) provided by financing activities                                                |  |                                                                       | (34      | ) |                  |   | 505,762    |                       |  |   | (217         | ) |  |              |        |   |  |   | 505,511    |  
|                                                                                                   |  |                                                                       |          |   |                  |   |            |                       |  |   |              |   |  |              |         |   |  |   |            |  
|Net increase in cash and cash equivalents                                                          |  |                                                                       | 73       |   |                  |   | 388        |                       |  |   | 1,581        |   |  |              |        |   |  |   | 2,042      |  
|Cash and cash equivalents, beginning of year                                                       |  |                                                                       |         |   |                  |   | 3,338      |                       |  |   | 165          |   |  |              |        |   |  |   | 3,503      |  
|                                                                                                   |  |                                                                       |          |   |                  |   |            |                       |  |   |              |   |  |              |         |   |  |   |            |  
|Cash and cash equivalents, end of year                                                             |  | $                                                                     | 73       |   |                  | $ | 3,726      |                       |  | $ | 1,746        |   |  | $            |        |   |  | $ | 5,545      |  
|                                                                                                   |  |                                                                       |          |   |                  |   |            |                       |  |   |              |   |  |              |         |   |  |   |            |  



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##### Table of Contents

|                                                                                                   |  |                                                      |   |                  |   |          |                       |  |   |              |   |  |              |        |   |  |   |          |  
|-------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------- | - | ---------------- | - | -------- | --------------------- |  | - | ------------ | - |  | ------------ | ------ | - |  | - | -------- | -
|                                                                                                   |  | Predecessor For the Quarter Year Ended April 2, 2005 |  
|                                                                                                   |  | Parent Company                                       |   | SubsidiaryIssuer |   |          | Subsidiary Guarantors |  |   | Eliminations |   |  | Consolidated |       
|Cash flows from operating activities:                                                              |  |                                                      |   |                  |   |          |                       |  |   |              |   |  |              |        |   |  |   |          |  
|Net (loss) income                                                                                  |  | $                                                    |  |                  | $ | (14,327  | )                     |  | $ | 3,796        |   |  | $            | (3,796 | ) |  | $ | (14,327  | )
|Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: |  |                                                      |   |                  |   |          |                       |  |   |              |   |  |              |        |   |  |   |          |  
|Depreciation and amortization of intangibles and other assets                                      |  |                                                      |  |                  |   | 1,218    |                       |  |   | 752          |   |  |              |       |   |  |   | 1,970    |  
|Provision for doubtful accounts                                                                    |  |                                                      |  |                  |   | 182      |                       |  |   | 97           |   |  |              |       |   |  |   | 279      |  
|Stock-based compensation expense                                                                   |  |                                                      |  |                  |   | 8,584    |                       |  |   |             |   |  |              |       |   |  |   | 8,584    |  
|Provision for deferred income taxes                                                                |  |                                                      |  |                  |   | 658      |                       |  |   |             |   |  |              |       |   |  |   | 658      |  
|Other, net                                                                                         |  |                                                      |  |                  |   | (233     | )                     |  |   | (32          | ) |  |              |       |   |  |   | (265     | )
|Equity earnings of subsidiaries                                                                    |  |                                                      |  |                  |   | (3,796   | )                     |  |   |             |   |  |              | 3,796  |   |  |   |         |  
|Change in assets and liabilities:                                                                  |  |                                                      |   |                  |   |          |                       |  |   |              |   |  |              |        |   |  |   |          |  
|Accounts receivable, net                                                                           |  |                                                      |  |                  |   | (6,779   | )                     |  |   | (1,762       | ) |  |              |       |   |  |   | (8,541   | )
|Inventories                                                                                        |  |                                                      |  |                  |   | (9,580   | )                     |  |   | (3,072       | ) |  |              |       |   |  |   | (12,652  | )
|Other current assets                                                                               |  |                                                      |  |                  |   | (8,900   | )                     |  |   | 551          |   |  |              |       |   |  |   | (8,349   | )
|Accounts payable and accrued expenses                                                              |  |                                                      |  |                  |   | 51,164   |                       |  |   | (7,173       | ) |  |              |       |   |  |   | 43,991   |  
|Other, net                                                                                         |  |                                                      |  |                  |   | (1,354   | )                     |  |   | (123         | ) |  |              |       |   |  |   | (1,477   | )
|                                                                                                   |  |                                                      |   |                  |   |          |                       |  |   |              |   |  |              |        |   |  |   |          |  
|Net cash provided by (used in) operating activities                                                |  |                                                      |  |                  |   | 16,837   |                       |  |   | (6,966       | ) |  |              |       |   |  |   | 9,871    |  
|                                                                                                   |  |                                                      |   |                  |   |          |                       |  |   |              |   |  |              |        |   |  |   |          |  
|Cash flows from investing activities:                                                              |  |                                                      |   |                  |   |          |                       |  |   |              |   |  |              |        |   |  |   |          |  
|Purchase of property and equipment                                                                 |  |                                                      |  |                  |   | (681     | )                     |  |   | (893         | ) |  |              |       |   |  |   | (1,574   | )
|Proceeds from sale of property and equipment                                                       |  |                                                      |  |                  |   | 12       |                       |  |   | 224          |   |  |              |       |   |  |   | 236      |  
|Other                                                                                              |  |                                                      |  |                  |   | (100     | )                     |  |   |             |   |  |              |       |   |  |   | (100     | )
|Intercompany                                                                                       |  |                                                      |  |                  |   | (6,975   | )                     |  |   | 6,975        |   |  |              |       |   |  |   |         |  
|                                                                                                   |  |                                                      |   |                  |   |          |                       |  |   |              |   |  |              |        |   |  |   |          |  
|Net cash (used in) provided by investing activities                                                |  |                                                      |  |                  |   | (7,744   | )                     |  |   | 6,306        |   |  |              |       |   |  |   | (1,438   | )
|                                                                                                   |  |                                                      |   |                  |   |          |                       |  |   |              |   |  |              |        |   |  |   |          |  
|Cash flows from financing activities:                                                              |  |                                                      |   |                  |   |          |                       |  |   |              |   |  |              |        |   |  |   |          |  
|Borrowings from revolving credit facility                                                          |  |                                                      |  |                  |   | 312,277  |                       |  |   |             |   |  |              |       |   |  |   | 312,277  |  
|Repayments of revolving credit facility                                                            |  |                                                      |  |                  |   | (320,728 | )                     |  |   |             |   |  |              |       |   |  |   | (320,728 | )
|Payments of other long-term debt                                                                   |  |                                                      |  |                  |   | (975     | )                     |  |   |             |   |  |              |       |   |  |   | (975     | )
|Proceeds from issuance of common stock                                                             |  |                                                      |  |                  |   | 1,862    |                       |  |   |             |   |  |              |       |   |  |   | 1,862    |  
|Series A preferred stock redemption                                                                |  |                                                      |  |                  |   | (700     | )                     |  |   |             |   |  |              |       |   |  |   | (700     | )
|                                                                                                   |  |                                                      |   |                  |   |          |                       |  |   |              |   |  |              |        |   |  |   |          |  
|Net cash used in financing activities                                                              |  |                                                      |  |                  |   | (8,264   | )                     |  |   |             |   |  |              |       |   |  |   | (8,264   | )
|                                                                                                   |  |                                                      |   |                  |   |          |                       |  |   |              |   |  |              |        |   |  |   |          |  
|Net increase (decrease) in cash and cash equivalents                                               |  |                                                      |  |                  |   | 829      |                       |  |   | (660         | ) |  |              |       |   |  |   | 169      |  
|Cash and cash equivalents, beginning of year                                                       |  |                                                      |  |                  |   | 2,509    |                       |  |   | 825          |   |  |              |       |   |  |   | 3,334    |  
|                                                                                                   |  |                                                      |   |                  |   |          |                       |  |   |              |   |  |              |        |   |  |   |          |  
|Cash and cash equivalents, end of year                                                             |  | $                                                    |  |                  | $ | 3,338    |                       |  | $ | 165          |   |  | $            |       |   |  | $ | 3,503    |  
|                                                                                                   |  |                                                      |   |                  |   |          |                       |  |   |              |   |  |              |        |   |  |   |          |  



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|                                                                                  |  |                                                       |   |                  |   |            |                       |  |   |              |   |  |              |         |   |  |   |            |  
|--------------------------------------------------------------------------------- |  | ----------------------------------------------------- | - | ---------------- | - | ---------- | --------------------- |  | - | ------------ | - |  | ------------ | ------- | - |  | - | ---------- | -
|                                                                                  |  | Predecessor For the Fiscal Year Ended January 1, 2005 |  
|                                                                                  |  | Parent Company                                        |   | SubsidiaryIssuer |   |            | Subsidiary Guarantors |  |   | Eliminations |   |  | Consolidated |        
|Cash flows from operating activities:                                             |  |                                                       |   |                  |   |            |                       |  |   |              |   |  |              |         |   |  |   |            |  
|Net income                                                                        |  | $                                                     |  |                  | $ | 25,041     |                       |  | $ | 13,798       |   |  | $            | (13,798 | ) |  | $ | 25,041     |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                                                       |   |                  |   |            |                       |  |   |              |   |  |              |         |   |  |   |            |  
|Depreciation and amortization of intangibles and other assets                     |  |                                                       |  |                  |   | 5,564      |                       |  |   | 2,373        |   |  |              |        |   |  |   | 7,937      |  
|Provision for doubtful accounts                                                   |  |                                                       |  |                  |   | 186        |                       |  |   | 134          |   |  |              |        |   |  |   | 320        |  
|Provision for deferred income taxes                                               |  |                                                       |  |                  |   | 1,847      |                       |  |   |             |   |  |              |        |   |  |   | 1,847      |  
|Other, net                                                                        |  |                                                       |  |                  |   | (218       | )                     |  |   | 7            |   |  |              |        |   |  |   | (211       | )
|Equity earnings of subsidiaries                                                   |  |                                                       |  |                  |   | (13,798    | )                     |  |   |             |   |  |              | 13,798  |   |  |   |           |  
|Change in assets and liabilities:                                                 |  |                                                       |   |                  |   |            |                       |  |   |              |   |  |              |         |   |  |   |            |  
|Accounts receivable, net                                                          |  |                                                       |  |                  |   | (21,017    | )                     |  |   | 4,971        |   |  |              |        |   |  |   | (16,046    | )
|Inventories                                                                       |  |                                                       |  |                  |   | (19,763    | )                     |  |   | (1,159       | ) |  |              |        |   |  |   | (20,922    | )
|Other current assets                                                              |  |                                                       |  |                  |   | (4,766     | )                     |  |   | (402         | ) |  |              |        |   |  |   | (5,168     | )
|Accounts payable and accrued expenses                                             |  |                                                       |  |                  |   | 47,810     |                       |  |   | (15,224      | ) |  |              |        |   |  |   | 32,586     |  
|Other, net                                                                        |  |                                                       |  |                  |   | 414        |                       |  |   | (89          | ) |  |              |        |   |  |   | 325        |  
|                                                                                  |  |                                                       |   |                  |   |            |                       |  |   |              |   |  |              |         |   |  |   |            |  
|Net cash provided by operating activities                                         |  |                                                       |  |                  |   | 21,300     |                       |  |   | 4,409        |   |  |              |        |   |  |   | 25,709     |  
|                                                                                  |  |                                                       |   |                  |   |            |                       |  |   |              |   |  |              |         |   |  |   |            |  
|Cash flows from investing activities:                                             |  |                                                       |   |                  |   |            |                       |  |   |              |   |  |              |         |   |  |   |            |  
|Acquisitions, net of cash acquired                                                |  |                                                       |  |                  |   | (59,331    | )                     |  |   | 124          |   |  |              |        |   |  |   | (59,207    | )
|Purchase of property and equipment                                                |  |                                                       |  |                  |   | (3,173     | )                     |  |   | (1,206       | ) |  |              |        |   |  |   | (4,379     | )
|Proceeds from sale of property and equipment                                      |  |                                                       |  |                  |   | 54         |                       |  |   | 230          |   |  |              |        |   |  |   | 284        |  
|Intercompany                                                                      |  |                                                       |  |                  |   | (2,418     | )                     |  |   | 2,418        |   |  |              |        |   |  |   |           |  
|                                                                                  |  |                                                       |   |                  |   |            |                       |  |   |              |   |  |              |         |   |  |   |            |  
|Net cash (used in) provided by investing activities                               |  |                                                       |  |                  |   | (64,868    | )                     |  |   | 1,566        |   |  |              |        |   |  |   | (63,302    | )
|                                                                                  |  |                                                       |   |                  |   |            |                       |  |   |              |   |  |              |         |   |  |   |            |  
|Cash flows from financing activities:                                             |  |                                                       |   |                  |   |            |                       |  |   |              |   |  |              |         |   |  |   |            |  
|Borrowings from revolving credit facility                                         |  |                                                       |  |                  |   | 1,269,626  |                       |  |   |             |   |  |              |        |   |  |   | 1,269,626  |  
|Repayments of revolving credit facility                                           |  |                                                       |  |                  |   | (1,207,630 | )                     |  |   | (5,145       | ) |  |              |        |   |  |   | (1,212,775 | )
|Payments of other long-term debt                                                  |  |                                                       |  |                  |   | (16,300    | )                     |  |   | (36          | ) |  |              |        |   |  |   | (16,336    | )
|Proceeds from issuance of common stock                                            |  |                                                       |  |                  |   | 213        |                       |  |   |             |   |  |              |        |   |  |   | 213        |  
|Payments for deferred financing costs                                             |  |                                                       |  |                  |   | (2,127     | )                     |  |   |             |   |  |              |        |   |  |   | (2,127     | )
|Series A preferred stock redemption                                               |  |                                                       |  |                  |   | (1,000     | )                     |  |   |             |   |  |              |        |   |  |   | (1,000     | )
|                                                                                  |  |                                                       |   |                  |   |            |                       |  |   |              |   |  |              |         |   |  |   |            |  
|Net cash provided by (used in) financing activities                               |  |                                                       |  |                  |   | 42,782     |                       |  |   | (5,181       | ) |  |              |        |   |  |   | 37,601     |  
|                                                                                  |  |                                                       |   |                  |   |            |                       |  |   |              |   |  |              |         |   |  |   |            |  
|Net (decrease) increase in cash and cash equivalents                              |  |                                                       |  |                  |   | (786       | )                     |  |   | 794          |   |  |              |        |   |  |   | 8          |  
|Cash and cash equivalents, beginning of year                                      |  |                                                       |  |                  |   | 3,295      |                       |  |   | 31           |   |  |              |        |   |  |   | 3,326      |  
|                                                                                  |  |                                                       |   |                  |   |            |                       |  |   |              |   |  |              |         |   |  |   |            |  
|Cash and cash equivalents, end of year                                            |  | $                                                     |  |                  | $ | 2,509      |                       |  | $ | 825          |   |  | $            |        |   |  | $ | 3,334      |  
|                                                                                  |  |                                                       |   |                  |   |            |                       |  |   |              |   |  |              |         |   |  |   |            |  



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|Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
|------- | -------------------------------------------------------------------------------------

None.



|Item 9A. | Controls and Procedures.
|-------- | ------------------------

Evaluation of Disclosure
Controls and Procedures



| | (a) | We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our filings under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to our management, including the principal executive officer
and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Our management, including the Chief Executive Officer and the Chief Financial Officer, recognizes that any set of controls and procedures, no
matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | As of the end of the period covered by this Annual Report on Form 10-K, we have carried out an evaluation, under the supervision and with the participation of our management,
including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer
concluded that our disclosure controls and procedures are effective.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Changes in Internal Controls Over Financial Reporting

During the fiscal year ended December 30, 2006, there was no change in our internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. We are, however, currently implementing a conversion of our computer system to Oracle. We have already implemented the general ledger
as well as the accounts payable and inventory functions on Oracle but still must transition other key functions. We cannot be sure that the transition will be fully implemented on a timely basis, if at all. If we do not successfully implement this
project, our controls over financial reporting may be disrupted and our operations adversely affected.



|Item 9B. | Other Information.
|-------- | ------------------

None.



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PART III



|Item 10. | Directors, Executive Officers and Corporate Governance.
|-------- | -------------------------------------------------------

The following table contains information regarding our directors and executive officers as of December 30, 2006. Directors hold their positions until the annual meeting of the stockholders at which their term
expires or until their respective successors are elected and qualified. Executive officers hold their positions until the annual meeting of the Board of Directors or until their respective successors are elected and qualified.



|                   |  |     |  |                                                                   
|------------------ |  | --- |  | ------------------------------------------------------------------
|Name               |  | Age |  | Position                                                          
|Richard P. Johnson |  | 59  |  | Chairman, Chief Executive Officer and Director                    
|William E. Berry   |  | 52  |  | President and Chief Operating Officer                             
|J. Michael Gaither |  | 54  |  | Executive Vice President, General Counsel and Secretary           
|David L. Dyckman   |  | 42  |  | Executive Vice President and Chief Financial Officer and Treasurer
|Daniel K. Brown    |  | 53  |  | Senior Vice PresidentSales                                       
|Phillip E. Marrett |  | 56  |  | Senior Vice President Procurement and Marketing                  
|David Tayeh        |  | 39  |  | Director                                                          
|Donald Hardie      |  | 39  |  | Director                                                          
|Alain Redheuil     |  | 58  |  | Director                                                          
|Randy Peeler       |  | 42  |  | Director                                                          
|Joel Beckman       |  | 51  |  | Director                                                          
|Joseph P. Donlan   |  | 60  |  | Director                                                          
|James O. Egan      |  | 58  |  | Director                                                          

Richard P. JohnsonChairman, Chief Executive Officer and Director. Mr. Johnson
became Chairman and Chief Executive Officer in May 2003. Mr. Johnson had been our President and Chief Executive Officer since January 2001 and prior to that time, served as President of our Southeast Division. He joined ITCO as President and
Chief Operating Officer in February 1997. He served as Senior Vice President of Albert Fisher Distribution from 1991 to 1994, and as its President and Chief Operating Officer from 1994 to 1996. Prior to that time, Mr. Johnson held a variety of
management positions with Leprino Foods, Sargento Cheese and Kraft Foods. He holds an A.A. from Palm Beach College.

William E.
BerryPresident and Chief Operating Officer. Mr. Berry became President and Chief Operating Officer in May 2003. Prior to that time, Mr. Berry had been our Executive Vice President and Chief Financial Officer since January 2002.
Mr. Berry joined us in May 1998 as a result of the merger with ITCO Tire Company and served as Senior Vice President of Finance for the Southeast Division. Prior to that, he joined ITCO Tire Company as Controller in 1984 and served as its
Senior Vice President of Finance until 1996. From 1996 to the merger with the Company, he served as ITCOs Executive Vice President in charge of business development and sales and marketing. Prior to that, Mr. Berry held a variety of
financial management positions for a subsidiary of the Dr. Pepper Company and also spent three years in a public accounting firm. He holds a B.S. in Business Administration from Virginia Tech.

J. Michael GaitherExecutive Vice President, General Counsel and Secretary.Mr. Gaither became Executive Vice President in May 1999, and
prior to that time served as our Senior Vice President, General Counsel and Secretary since joining us in 1991. He served as Treasurer from February 2001 to June 2003. Prior to 1991, he was a lawyer in private practice for several years. He holds a
B.A. from Duke University and received his J.D. from the University of North Carolina-Chapel Hill.

David L. DyckmanExecutive Vice
President and Chief Financial Officer.Mr. Dyckman joined the Company in January 2006. Prior to that, Mr. Dyckman served as Executive Vice President and Chief Financial Officer of Thermadyne Holdings Corporation from January 2005 to
December 2005. From April 1998 to December 2004, Mr. Dyckman served as Chief Financial Officer and Vice President of Corporate Development for NN, Inc. Mr. Dyckman holds a Masters of Business Administration from Cornell University in
Ithaca, NY.



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Daniel K. BrownSenior Vice PresidentSales. Mr. Brown joined us in 1975 and held
various field sales assignments before becoming Marketing Manager in 1979. He advanced to Director of Marketing and to Vice President of Marketing during the 1980s and was named Vice President of Sales and Marketing in 1991, assuming
responsibility for distribution center operations. In 1997 he was named Senior Vice President of Sales and Marketing with responsibility for vendor relations and program negotiations as well as the sales and marketing activities for the Company.
Mr. Brown holds a B.A. from Western Carolina University.

Phillip E. MarrettSenior Vice PresidentProcurement and
Marketing. Mr. Marrett joined the Company in 1998 as Regional Vice President in the Southeast Division. Prior to joining us, Mr. Marrett worked for ITCO Tire (1997-1998) and Dunlop Tire (1976-1996).

David TayehDirector. Mr. Tayeh became a Director in 2005. He is an executive officer of Investcorp or one or more of its wholly owned
subsidiaries. Mr. Tayeh joined Investcorp in 1999 and in 2003 joined Jostens, a company previously controlled by Investcorp, as Chief Financial Officer. In 2005, Tayeh returned to Investcorp. Prior to joining Investcorp, Mr. Tayeh was a
Vice President of Investment Banking at Donaldson, Lufkin & Jenrette. Mr. Tayeh holds a B.A. from The University of Chicago and an M.B.A. from The Wharton School of the University of Pennsylvania.

Donald HardieDirector. Mr. Hardie became a Director following the Acquisition and related transactions. He is an executive officer of
Investcorp or one or more of its wholly owned subsidiaries. Mr. Hardie joined Investcorp in 2002. Prior to joining Investcorp, Mr. Hardie was a principal with 212 Ventures. Prior to 212 Ventures, Mr. Hardie worked as a Vice President
in the Leveraged Finance and Sponsor Coverage Groups of Deutsche Bank and held a similar position at Credit Suisse First Boston. Prior to that, Mr. Hardie was an Associate with White & Case LLP. Mr. Hardie holds a B.A. in English
Literature and Finance from the University of Virginia and a J.D. from New York University School of Law.

Alain RedheuilDirector.Mr. Redheuil became a Director following the Acquisition and related transactions. He is an executive officer of Investcorp or one or more of its wholly owned subsidiaries. Mr. Redheuil joined Investcorp in 2004. Prior to joining
Investcorp, Mr. Redheuil was chief executive at Rexel SA and prior to Rexel SA, Mr. Redheuil was a member of the executive committee of Pinault-Printemps-Redoute for six years. Mr. Redheuil worked for 12 years at Michelin as COO for
Europe sales marketing and distribution, Vice President and CFO of Michelin Canada and Plant Manager in Nigeria and France.

Randy
PeelerDirector.Mr. Peeler became a Director following the Acquisition and related transactions. He is a Managing Director of Berkshire Partners. Mr. Peeler joined Berkshire Partners in 1996. From 1994 to 1996, Mr. Peeler
was responsible for new business ventures at Health Advances. Prior to that time, Mr. Peeler served as Chief of Staff to the Assistant Secretary for Economic Policy at the U.S. Department of the Treasury. Prior to that, Mr. Peeler was a
consultant with Cannon Associates.

Joel BeckmanDirector.Mr. Beckman became a Director following the Acquisition and
related transactions. He is a founder and Managing Partner of Greenbriar Equity Group LLC. Prior to founding Greenbriar in 2000, Mr. Beckman was a managing Director and Partner of Goldman, Sachs & Co., which he joined in 1981.

Joseph P. DonlanDirector.Mr. Donlan has been our Director since May 1997. He is Managing Director of Brown Brothers
Harriman & Co. and Co-Manager of its 1818 Mezzanine Fund, L.P., and 1818 Mezzanine Fund II, L.P. Mr. Donlan joined Brown Brothers Harriman & Co. in 1970 in the firms Trade Finance Group. Prior to organizing the 1818
Mezzanine Fund, L.P., Mr. Donlan managed Brown Brothers Harriman & Co.s New York commercial banking activities. Previously, Mr. Donlan served as the firms Senior Credit Officer and became a member of the firms
Credit Committee on which he continues to serve. Mr. Donlan holds a B.A. from Georgetown University and received an M.B.A. from Rutgers University.



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James O. EganDirector. Mr. Egan became a Director following the Acquisition and related
transactions. He is an executive of Investcorp or one of its wholly owned subsidiaries. Mr. Egan joined Investcorp in 1998. Prior to joining Investcorp, Mr. Egan was a partner in the accounting firm of KPMG from October 1997 to December
1998. Prior to that, he served as Senior Vice President and Chief Financial Officer of Riverwood International, a paperboard, packaging and machinery company from May 1996 to August 1997. Prior to that, he was a partner in the accounting firm of
Coopers & Lybrand L.L.P. (predecessor firm to PricewaterhouseCoopers LLP).

Code of Conduct

We have adopted a code of conduct that applies to all of our employees, including our principal executive officer and principal financial officer. A copy
of our code of conduct is available, free of charge, upon written request sent to the legal department at our corporate offices located at 12200 Herbert Wayne Court, Suite 150, Huntersville, NC 28078.

Audit Committee Financial Expert

Our Board of
Directors has determined that Donald Hardie, director and member of the audit committee, is an Audit Committee Financial Expert, as defined under Item 401 of Regulation S-K. Although we are not listed on any exchange, Mr. Hardie is
independent pursuant to the NASD listing standards for Audit Committee members.



|Item 11. | Executive Compensation.
|-------- | -----------------------

Compensation
Committee Report

The compensation committee has reviewed and discussed with management the Compensation Discussion and
Analysis section included in this Annual Report on Form 10-K. Based on this review and discussion, the compensation committee recommended to the board of directors that the Compensation Discussion and Analysis section be included
in this Annual Report on Form 10-K.



THE COMPENSATION COMMITTEEDavid TayehDonald Hardie Randy Peeler




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Compensation Discussion and Analysis

This section provides an overview and analysis of our compensation program and policies, the material compensation decisions made under those programs
and policies, and the material factors considered in making those decisions. Later in this Form 10-K, you will find a series of tables containing specific information about the compensation earned in 2006 by the following individuals, referred to as
our named executive officers:



| |  |  | Richard P. Johnson, Chairman and Chief Executive Officer
| | - |  | --------------------------------------------------------



| |  |  | David L. Dyckman, Executive Vice President and Chief Financial Officer
| | - |  | ----------------------------------------------------------------------



| |  |  | William E. Berry, President and Chief Operating Officer
| | - |  | -------------------------------------------------------



| |  |  | J. Michael Gaither, Executive Vice President and General Counsel
| | - |  | ----------------------------------------------------------------



| |  |  | Daniel K. Brown, Senior Vice President of Sales
| | - |  | -----------------------------------------------

The discussion below is intended to help you understand the detailed information provided in those tables and put that information into context within our overall compensation program.

Compensation Philosophy and Objectives

The
Companys compensation committee is charged by the Board of Directors with establishing and reviewing the compensation programs for the named executive officers. Our overall goal in compensating executive officers is to attract, retain and
motivate key executives of superior ability who are critical to our future success. We believe that both short-term and long-term incentive compensation paid to executive officers should be directly aligned with our performance, and that
compensation should be structured to ensure that a significant portion of executives compensation opportunities are directly related to achievement of financial and operational goals and other factors that impact shareholder value.

Our compensation decisions with respect to executive officer salaries, annual incentives, and long-term incentive compensation opportunities are
influenced by (a) the executives level of responsibility and function within the Company, (b) the overall performance and profitability of the Company, and (c) our assessment of the competitive marketplace, including other peer
companies. Our philosophy is to focus on total direct compensation opportunities through a mix of base salary, annual cash bonus, and long-term incentives, including stock-based awards.

We also believe that the best way to directly align the interests of our executives with the interests of our shareholders is to make sure that our
executives acquire and retain an appropriate level of stock ownership throughout their tenure with us. Our compensation program pursues this objective through our equity-based long-term incentive awards.



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Overview of Executive Compensation Components

The Companys executive compensation program consists of several compensation elements, as illustrated in the table below.



|                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |                                                                                                                                                                                                                   
|--------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Pay Element           |  | What the Pay Element Rewards                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  | Purpose of the Pay Element                                                                                                                                                                                        
|Base Salary           |  |    Core competence of the executive relative to skills, experience and contributions to the Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |    Provide fixed compensation based on competitive market practice                                                                                                                                               
|                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Annual Cash Incentive |  |    Contributions toward the Companys achievement of specified Indenture EBITDA(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |    Provides focus on meeting annual goals that lead to our long-term success
    Provides annual performance-based
cash incentive compensation     Motivates achievement of critical annual performance metrics
|                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Long-Term Incentives  |  | Stock Option Program     Vesting program based on achievement of specified Indenture EBITDA targets, thereby aligning
executives interests with those of shareholders     Continued employment with the Company during a 5-year vesting period                                                                                                                                                                                                                                                                                                                                                                      |  |    Executive
focus on Company performance     Executive ownership of Company security     Retention in a challenging business environment and competitive labor market                                         
|                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Retirement Benefits   |  |    Our executive officers are eligible to participate in employee benefit plans
available to our eligible employees, including both tax qualified and nonqualified retirement plans     The Deferred Compensation Plan is both a nonqualified voluntary deferral program that allows the named
executive officers to defer a portion of their annual salary and bonus and a noncontributory plan that provides for certain contributions to be made on behalf of certain executives by the Company according to a Board approved schedule. Both
contributory and non-contributory amounts and earnings are unfunded. |  |    Provides a tax-deferred retirement savings alternative to certain eligible executives                                                                                                                         



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|                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |                                                                                                                                                                                                      
|----------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Pay Element                         |  | What the Pay Element Rewards                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | Purpose of the Pay Element                                                                                                                                                                           
|Welfare Benefits                    |  |    Executives participate in employee benefit plans generally available to our
employees, including medical, health, life insurance and disability plans.     Continuation of welfare benefits may occur as part of severance upon certain terminations of employment.     In addition, we sponsor an executive medical program for our executive officers, which provides for
reimbursement for the executive officer and eligible dependents for medical expenses not covered by the Group Medical Plan |  |    These benefits are part of our broad-based total compensation program     The Company believes it benefits
from these perquisites by encouraging our executive officers to protect their health.
|                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Additional Benefits and Perquisites |  |    Certain Executive Officers: One club membership                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |    Club memberships facilitate the role of certain Executives as a Company representative in the
community                                                                                          
|                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Termination Benefits                |  |    We have employment agreements with certain officers, including our named executive officers. The agreements provide
severance benefits if an officers employment is terminated without cause or the officer leaves for good reason, each defined in the agreements.                                                                                                                                                                                                                                     |  |    Termination benefits are designed to retain executives and provide continuity to management.                                                                                                     

---

|(1) | We evaluate liquidity based on several factors, of which the primary financial measure is Indenture EBITDA. The presentation of Indenture EBITDA, a non-GAAP financial measure, and
ratios based thereon, do not comply with accounting principles generally accepted in the United States because they are adjusted to exclude certain cash expenses, including recurring expenses. We present Indenture EBITDA as it is used to determine
our compliance with covenants contained in the related indentures governing our notes. The covenants are tied to ratios based on Indenture EBITDA, referred to as Consolidated Cash Flows in the indenture agreement, and restrict our ability to incur
additional indebtedness and to issue preferred stock. Indenture EBITDA as used herein represents earnings before interest, taxes, depreciation and amortization and other adjustments permitted in calculating covenant compliance under the indentures.
Indenture EBITDA should not be considered an alternative to, or more meaningful than, cash flow as determined in accordance with accounting principles generally accepted in the United States.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The use of these programs enables the Company to reinforce our pay for performance philosophy, as well as strengthen our ability to attract and retain
highly qualified executives. We believe that this combination of programs provides an appropriate mix of fixed and variable pay, balances short-term operations performance with long-term shareholder value, and encourages executive recruitment and
retention.



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Determination of Appropriate Pay Levels

Pay Philosophy and Competitive Standing

In general, the Company seeks to provide competitive
pay by targeting the 50th percentile relative to a peer group for total direct compensation opportunities, including salary, target annual bonus, and long-term incentives. To achieve the 50th percentile positioning for the annual cash compensation
component, we provide somewhat conservative base salaries and higher-than-average target bonus opportunities, to focus less on fixed pay and more on performance-based opportunities. Targeted annual cash bonus opportunities are based on our budgeted
annual Indenture EBITDA goals, and may fluctuate from year-to-year.

With the assistance of an independent compensation consultant, Mercer
Human Resource Consulting (Mercer), the compensation committee collects and analyzes competitive market data. Data sources include public company proxy statements and published national executive compensation surveys. Compensation paid
to our named executive officers is compared with compensation paid to executive officers in comparable positions at similar companies (our Peer Group). The Peer Group consists of 14 publicly traded companies within the auto parts
wholesale/retail or durable goods wholesale industry categories that are comparable in size to the Company. For the Companys named executive officers, composite market values were developed from a blend of peer group proxy pay data and
published survey data. Targeted revenue scopes for general industry market data were discounted by 50% to account for lower profit margins within the wholesale industry as compared with the broader market. This information is used to determine our
competitive position among similar companies in the marketplace, and to assist the compensation committee in setting targeted pay at the desired range relative to our peers.

2006 Base Salary

Base salary levels reflect a combination of factors, including competitive
pay levels relative to peer groups discussed above, the executives experience and tenure, our overall annual budget for both merit increases and Indenture EBITDA, the executives individual performance, and changes in responsibility. The
compensation committee reviews salary levels annually to recognize these factors. We do not target base salary at any particular percent of total compensation.

As noted above, the Companys compensation philosophy targets base salaries that are somewhat below market for comparable positions. The base salaries of our named executive officers compared to competitive
benchmarking reflect our conservative philosophy. Base salary increases are consistent with marketplace data and practice. There were no base pay increases granted in 2006 for the named executive officers.

2006 Annual Incentive Plan

Our Annual
Incentive Plan (the Annual Incentive Plan) provides our executive officers an opportunity to earn annual cash bonuses based on our achievement of certain pre-established performance goals. As in setting base salaries, we consider a
combination of factors in establishing the annual target bonus opportunities for our named executive officers. Budgeted Indenture EBITDA is a primary factor, as target bonus opportunities are adjusted annually when we set our budget Indenture EBITDA
goals for the year. We do not target annual bonus opportunities at any particular percentage of total compensation.

As mentioned above,
the compensation committee sets higher than average target bonus opportunities so that, when combined with conservative salary levels, the targeted annual cash compensation of our executive officers is at or below the 75th percentile relative to our
peer group based on competitive benchmarking by Mercer. Actual cash compensation levels may exceed the 75th percentile to the extent actual performance exceeds our annual performance goals.



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For the named executives, the compensation committee sets annual bonus opportunities for 2006 based on
achievement of performance goals relating to Indenture EBITDA of the Company, which we believe has a strong correlation with shareholder value. We set the Indenture EBITDA goals for 2006 bonus opportunities at levels that are intended to reflect
improvement in performance over the prior fiscal year, specific market conditions and better than average growth within our competitive industry.

Once our performance goals have been set and approved, the Compensation Committee then sets a bonus pool for all executives covered by the Annual Incentive Plan as a percentage of Indenture EBITDA. The Committee then sets a range of bonus
opportunities for each named executive officer based on the achievement of such goals. Target bonus opportunities for 2006 were set as a percentage of said pool as follows: Mr. Johnson, 11.5%; Mr. Berry, 10.0%; Messrs. Dyckman, Gaither and
Brown, 5.5% each.

Actual bonus amounts for 2006 were determined based on relative achievement of the performance goals. The named
executives were eligible to earn their percentage of the bonus pool if the Company achieved at least 95% of their Indenture EBITDA goal. No bonus is earned if performance falls below 95% of the Indenture EBITDA goal. The pool grows pro-rata for
Indenture EBITDA between the 95% and 100% achievement of the Companys Indenture EBITDA goal. Above 100% of the Companys Indenture EBITDA goal, the pool grows by 40% of each incremental Indenture EBITDA dollar. The Compensation Committee
has the authority to exercise discretion for years in which the Companys performance, while not at budgeted levels, exceed competitive market data and out-performs the industry in general. Given the fact that the industry was down nationwide
in 2006 and the Company outperformed the industry, the compensation committee decided to pay a discretionary bonus for 2006.

Stock Option Plans

The Company has adopted one stock option plan, the 2005 Management Stock Incentive Plan (the 2005 Plan), which is designed
to attract, retain and motivate directors, officers, employees and consultants of the Company and its subsidiaries. The 2005 Plan authorizes the issuance of up to 190,857 shares of common stock under terms and conditions to be set by the
Companys Board of Directors. A committee appointed by the Companys Board of Directors shall administer the plan. The committee has sole authority to select those individuals to whom options may be granted and to determine the number of
shares of Series A Common Stock that will be issuable upon exercise of the options granted. The purchase price for shares of Series A Common Stock issuable upon exercise of the options granted is fixed by the committee, but cannot be less than the
fair market value of the Series A Common Stock, as determined in good faith by the Companys Board of Directors, if the corresponding option is intended to qualify as an incentive stock option under the Internal Revenue Code. As of
December 30, 2006, options to purchase an aggregate of 176,704 shares of Series A Common Stock, at prices of $15.73 and $211.50 per share, were outstanding under the 2005 Plan.

All options granted under the 2005 Plan are subject to the terms and conditions of a stock option agreement entered into by each option recipient. The
stock option agreement generally requires each recipient to be bound by the terms of a stockholder agreement with us in the event the recipient elects to exercise options. Options granted under the 2005 Plan generally vest based on performance or
the occurrence of specified events, such as an initial public offering or company sale. Performance based options vest at the end of each year based on the achievement of annual or cumulative Indenture EBITDA targets for the year. Options that vest
on the basis of events such as an initial public offering or company sale do so only to the extent that the initial shareholders have earned a specified return on its initial investment in our shares. Options granted under the 2005 Plan are
generally not transferable by the recipient other than by a will or by the laws of descent and distribution and, during the recipients lifetime, may only be exercised by the recipient. Under the terms of the 2005 Plan, options expire no later
than 30 days after the tenth anniversary of the date of grant for non-qualified options and no later than the tenth anniversary of the date of grant for incentive stock options. Options are also subject to adjustment to avoid dilution in the event
of stock splits, stock dividends and reclassifications.



85



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Upon the termination of an option holders employment, the stock option agreement typically provides
that all or a portion of the option lapses unless exercised by the option holder or his or her personal representative within a specified period of time after the termination.

In connection with the Merger, on March 31, 2005 we granted, in exchange for the assignment and transfer to the Company of 372,888 options to
purchase ATD common stock under the previously existing ATD stock option plan, non- qualified options (the Rollover Options) to purchase 33,199 shares of Series A Common Stock, $0.01 par value per share, of the Company. All Rollover
Options granted under the 2005 Plan are fully vested.

Fiscal Year 2006 Summary Compensation Table

The following table summarizes fiscal 2006 compensation for our Chief Executive Officer, Chief Financial Officer and each of our other three most highly
compensated executive officers.



|                                                                           |  |            |  |           |         |              |   |                           |  |           |        |  |   |        
|-------------------------------------------------------------------------- |  | ---------- |  | --------- | ------- | ------------ | - | ------------------------- |  | --------- | ------ |  | - | -------
|Name and Principal Position                                                |  | FiscalYear |  | Salary($) |         | Bonus($) (a) |   | All Other Compensation($) |  | Total ($)
|Richard P. Johnson Chairman, Chief Executive Officer                       |  | 2006       |  | $         | 525,000 |              | $ | 115,000                   |  | $         | 15,570 |  | $ | 655,570
|                                                                           |  |            |  |           |        
|David L. Dyckman Executive Vice President and Chief Financial Officer      |  | 2006       |  |           | 250,000 |              |   | 55,000                    |  |           | 14,400 |  |   | 319,400
|                                                                           |  |            |  |           |        
|William E. Berry President and Chief Operating Officer                     |  | 2006       |  |           | 325,000 |              |   | 100,000                   |  |           | 24,317 |  |   | 449,317
|                                                                           |  |            |  |           |        
|J. Michael Gaither Executive Vice President, General Counsel and Secretary |  | 2006       |  |           | 280,000 |              |   | 55,000                    |  |           | 24,317 |  |   | 359,317
|                                                                           |  |            |  |           |        
|Daniel K. Brown Senior Vice PresidentSales                                |  | 2006       |  |           | 250,000 |              |   | 55,000                    |  |           | 21,557 |  |   | 326,557

---

|(a) | Reflects annual bonuses approved by the compensation committee for fiscal year 2006. With the adoption of the new disclosure requirements for Executive Compensation, management has
determined it to be more appropriate to provide bonus amounts for these executive officers based on the year in which the bonus was earned versus the historical presentation of when the bonus amounts were paid (which traditionally fell in the
subsequent year). Management believes this presentation is more informative as these bonus amounts are indicative of the Companys overall performance and related incentive pay structure. Accordingly the bonus for fiscal 2005, paid in 2006, is
not disclosed in the above table. The bonus amounts for fiscal 2005, paid in 2006, for Messrs. Johnson, Dyckman, Berry, Gaither and Brown that would have been disclosed under the historical presentation are $0.9 million, $0.0 million, $0.5 million,
$0.3 million, and $0.3 million, respectively.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

All Other Compensation from Summary Compensation Table

The following table contains a breakdown of the compensation and benefits included under All Other Compensation in the Summary
Compensation Table above.



|                   |  |                  |       |                  |   |        |                      |  |       |     |  |   |       
|------------------ |  | ---------------- | ----- | ---------------- | - | ------ | -------------------- |  | ----- | --- |  | - | ------
|Name               |  | 401KCompanyMatch |       | VehicleAllowance |   |        | Long-term Disability |  | Total
|Richard P. Johnson |  | $                | 6,600 |                  | $ | 8,053  | (1)                  |  | $     | 917 |  | $ | 15,570
|David L. Dyckman   |  |                  |      |                  |   | 14,400 |                      |  |       |    |  |   | 14,400
|William E. Berry   |  |                  | 6,600 |                  |   | 16,800 |                      |  |       | 917 |  |   | 24,317
|J. Michael Gaither |  |                  | 6,600 |                  |   | 16,800 |                      |  |       | 917 |  |   | 24,317
|Daniel K. Brown    |  |                  | 6,240 |                  |   | 14,400 |                      |  |       | 917 |  |   | 21,557

---

|(1) | Represents amounts included in taxable wages with respect to personal use of a Company vehicle.
|--- | -----------------------------------------------------------------------------------------------



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Outstanding Equity Awards at Fiscal Year End

The following table provides information concerning unexercised options for our Chief Executive Officer, Chief Financial Officer and each of our other
three most highly compensated executive officers as of December 30, 2006.



|                   |  |                                                                |     |  |                                                                  |     |  |                           |        |                        |         
|------------------ |  | -------------------------------------------------------------- | --- |  | ---------------------------------------------------------------- | --- |  | ------------------------- | ------ | ---------------------- | --------
|Name               |  | Number ofSecuritiesUnderlyingUnexercisedOptions (#)Exercisable |     |  | Number ofSecuritiesUnderlyingUnexercisedOptions (#)Unexercisable |     |  | Option Exercise Price ($) |        | Option Expiration Date
|Richard P. Johnson |  | 15,323                                                         | (a) |  |                                                                 |     |  | $                         | 15.73  |                        | 06/12/12
|                   |  | 8,257                                                          | (b) |  | 19,267                                                           | (b) |  |                           | 211.50 |                        | 06/22/12
|                   |  |                                                               |     |  | 19,773                                                           | (c) |  |                           | 211.50 |                        | 06/22/12
|                   |  |                                                                |     | 
|David L. Dyckman   |  | 1,101                                                          | (b) |  | 2,569                                                            | (b) |  |                           | 211.50 |                        | 01/03/13
|                   |  |                                                               |     |  | 2,636                                                            | (c) |  |                           | 211.50 |                        | 01/03/13
|                   |  |                                                                |     | 
|William E. Berry   |  | 10,215                                                         | (a) |  |                                                                 |     |  |                           | 15.73  |                        | 06/12/12
|                   |  | 5,505                                                          | (b) |  | 12,844                                                           | (b) |  |                           | 211.50 |                        | 06/22/12
|                   |  |                                                               |     |  | 13,182                                                           | (c) |  |                           | 211.50 |                        | 06/22/12
|                   |  |                                                                |     | 
|J. Michael Gaither |  | 7,661                                                          | (a) |  |                                                                 |     |  |                           | 15.73  |                        | 06/12/12
|                   |  | 1,239                                                          | (b) |  | 2,890                                                            | (b) |  |                           | 211.50 |                        | 06/22/12
|                   |  |                                                               |     |  | 2,966                                                            | (c) |  |                           | 211.50 |                        | 06/22/12
|                   |  |                                                                |     | 
|Daniel K. Brown    |  | 1,101                                                          | (b) |  | 2,569                                                            | (b) |  |                           | 211.50 |                        | 06/22/12
|                   |  |                                                               |     |  | 2,636                                                            | (c) |  |                           | 211.50 |                        | 06/22/12

---

|(a) | Represents non-qualified options (the Rollover Options) that were granted in connection with the Acquisition, in exchange for the assignment and transfer to the Company
of options to purchase ATD common stock under the previously existing ATD stock option plan. All Rollover Options were granted under the 2005 Plan and are fully vested.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | Represents options that were granted under the 2005 Plan which vest based on the Company meeting specified performance goals, the passage of time or upon the occurrence of certain
events.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | Represents options that were granted under the 2005 Plan which vest in connection with the future sale of the Company if the majority shareholders earn at least a twenty-five
percent (25%) annual internal rate of return on the investment in the Company.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Nonqualified Deferred Compensation

The following table sets forth our executive officers information regarding nonqualified deferred compensation plans, including, with respect to
each named executive officer, the aggregate contributions made by such executive officer during the year ended December 30, 2006, the aggregate contributions made by the Company during the year ended December 30, 2006, on behalf of the
executive officer, the aggregate interest or other earnings accrued during the year ended December 30, 2006, the aggregate value of withdrawals and distributions to the executive officer during the year ended December 30, 2006 and balance
of account as of December 30, 2006.



|                   |  |                                       |        |                                    |   |                              |  |                                        |        |                                         |   |   |  |   |        
|------------------ |  | ------------------------------------- | ------ | ---------------------------------- | - | ---------------------------- |  | -------------------------------------- | ------ | --------------------------------------- | - | - |  | - | -------
|Name               |  | ExecutiveContributionsin 2006 ($) (a) |        | RegistrantContributionsin 2006 ($) |   | AggregateEarningsin 2006 ($) |  | AggregateWithdrawals/Distributions ($) |        | AggregateBalance
atDecember 30,2006 ($)
|Richard P. Johnson |  | $                                     | 10,500 |                                    | $ | 27,000                       |  | $                                      | 38,452 |                                         | $ |  |  | $ | 297,634
|David L. Dyckman   |  |                                       |       |                                    |   |                             |  |                                        |       |                                         |   |  |  |   |       
|William E. Berry   |  |                                       | 79,100 |                                    |   | 20,000                       |  |                                        | 26,373 |                                         |   |  |  | $ | 279,668
|J. Michael Gaither |  |                                       | 12,169 |                                    |   | 17,000                       |  |                                        | 37,422 |                                         |   |  |  | $ | 357,614
|Daniel K. Brown    |  |                                       |       |                                    |   | 16,000                       |  |                                        | 56,985 |                                         |   |  |  | $ | 328,511

---

|(d) | Amounts in this column are included in the amounts reported as salary in the Fiscal Year 2006 Summary Compensation Table for each of the named executive officers.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



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In 1999, we established a deferred compensation plan for our top executives and regional employees
covered by the executive bonus plan to encourage each participant to promote our long-term interests. Each participant is allowed to defer portions of their annual salary as well as bonuses received into the plan. In addition to employee deferrals,
we make contributions on behalf of our top executives and certain of the regional employees in varying amounts. The plan provides that an employee who becomes a participant on or before November 23, 1998, shall be fully vested in all amounts
credited to such participants account. The plan provides that an employee who becomes a participant after November 23, 1998 shall be at all times fully vested in elective deferrals into such participants account and as to
contributions made by us, shall vest at a rate of twenty percent (20%) per year as long as such participant is an employee on January 1 of each year. The deferred compensation plan may be altered and amended by our Board of Directors. Upon
consummation of the Acquisition and related transactions, all balances under the 1999 Company Deferred Compensation Plan became vested and payable.

Potential Payments upon Termination

Employment and Severance Agreements

We have entered into employment agreements with each of Messrs. Johnson, Dyckman, Berry, Gaither and Brown providing for the payment of an annual base
salary and bonus opportunities, as well as participation by the employee in the benefit plans and programs generally maintained by us for senior executives from time to time.

We or the employee may terminate the applicable employment agreement at any time. In the event Mr. Johnson is terminated without cause
or resigns for good reason, each as defined in his employment agreement, we will pay him a monthly sum equal to his monthly base salary in effect at such time plus $41,667.67 for a period of three years. In addition, unless
Mr. Johnson is terminated for cause, he and his family are entitled to continued health benefits until he reaches the age of 65. In the event Mr. Dyckman is terminated without cause or resigns for good
reason, each as defined in his employment agreement, we will pay or provide him: (i) a monthly sum equal to his monthly base salary in effect at such time plus $20,833.34 for a period of 12 months and (ii) continuation of health
benefits for a period of 12 months. In the event Mr. Berry is terminated without cause or resigns for good reason, each as defined in his employment agreement, we will pay or provide him: (i) a monthly sum equal to
his monthly base salary in effect at such time plus $25,000 for a period of two years and (ii) continuation of health benefits for a period of two years. In the event Mr. Gaither is terminated without cause or resigns for
good reason, each as defined in his employment agreement, we will pay or provide him: (i) a monthly sum equal to his monthly base salary in effect at such time plus $22,222.22 for a period of 18 months and (ii) continuation of
health benefits for a period of 18 months. The employee or we may terminate the severance agreements at any time. Upon termination of employment for any reason, the employee is entitled to receive a basic termination payment equal to (i) his
base salary earned through the date of termination and (ii) the previous years bonus if the termination is after December 31 and before bonus has been awarded. If we terminate the employee without cause or if the employee leaves for
good reason (each as defined in his severance agreement), he is entitled to an additional severance payment based on a multiple of his base salary and plan bonus. The multiple used for determining the additional severance payment is increased if
termination occurs in connection with a change of control (as defined in his severance agreement).

In the event Messrs. Brown is
terminated without cause, as defined in his employment agreement, we will pay a monthly sum equal to two times his respective monthly base salary in effect at such time for a period of one year. In addition, unless Messrs. Brown is
terminated for cause, he is entitled to continued health benefits for a period of one year.

The severance agreements each
contain confidentiality and noncompete provisions.



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Compensation of Directors

During fiscal year 2006, the following compensation was paid to Alain Redheuil, the one director receiving a fee for service who is otherwise not an employee of the Company or a representative of our shareholders:



|               |  |                                 |       
|-------------- |  | ------------------------------- | ------
|Name           |  | Fees Earned or Paid in Cash ($)
|Alain Redheuil |  | $                               | 50,000

Compensation Committee Interlocks and Insider Participation

During fiscal year 2006, David Tayeh, Donald Hardie and Randy Peeler served on a compensation committee of our Board of Directors, which reviewed and
recommended executive compensation for the Named Executive Officers and our other executives. All compensation recommendations of the executive committee were reviewed by and subject to the approval of our full Board of Directors.

Indemnification of Officers and Directors

Our
articles of incorporation provide for the release of any person serving as our director from liability to us or our stockholders for damages for breach of fiduciary duty and for the indemnification by us of any person serving as a director, officer,
employee or agent or other authorized person to the fullest extent permissible under the Delaware General Corporation Law. In addition, we have purchased a directors and officers insurance policy covering our officers and directors for
liabilities that they may incur as a result of any action, or failure to act, by such officers and directors in their capacity as officers and directors.



|Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|-------- | -----------------------------------------------------------------------------------------------

All of ATDs equity is owned by Holdings. Holdings is authorized to issue shares of four series of common stock, each with a par value of $0.01 per
share, including Series A Common Stock, Series B Common Stock, Series D Common Stock and Common Stock. Only Series B Common Stock, Series D Common Stock and Common Stock have the right to vote. Holders of Series A Common Stock do not have any voting
rights, except that the holders of such series of common stock will have the right to vote as a series to the extent required under the laws of the State of Delaware.

There are 1,500 shares of Series D Common Stock and 307,327 shares of Series B Common Stock outstanding. No shares of Common Stock are outstanding. Holders of Series D Common Stock are entitled to 468 votes per share
on all matters as to which stockholders may be entitled to vote pursuant to the Delaware General Corporation Law. Holders of Series B Common Stock are entitled to one vote per share on all matters as to which stockholders may be entitled to vote
pursuant to the Delaware General Corporation Law.

Investcorp and its co-investors beneficially own all of the outstanding Series D Common
Stock, constituting approximately 69.6% of our outstanding voting power and the co-sponsors beneficially own all of the outstanding Series B Common Stock, constituting approximately 30.4% of our outstanding voting power. Investcorp, its co-investors
and certain members of our management beneficially own outstanding shares of Series A Common Stock, all of which are non-voting stock.

The
following tables set forth certain information regarding the beneficial ownership of the voting stock of Holdings as of March 15, 2007. The tables set forth:



| |  |  | each person that beneficially owns more than 5% of any series of our voting stock,
| | - |  | ----------------------------------------------------------------------------------



| |  |  | each person who was one of our directors or one of our Named Executive Officers who beneficially owns shares of our voting stock, and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------



| |  |  | all of our directors and executive officers as a group.
| | - |  | -------------------------------------------------------



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None of our directors or executive officers own shares of our Series D common stock or Series B common
stock. Unless otherwise indicated, each of the stockholders shown in the tables below have sole voting power, if any, and investment power with respect to the shares beneficially owned.

Series A Common Stock

(Non-Voting Stock)



|                                                                  |  |                                        |     |  |                       |  
|----------------------------------------------------------------- |  | -------------------------------------- | --- |  | --------------------- | -
|Name and Address of Beneficial Owner (1)                          |  | Number of SharesBeneficially Owned (2) |     |  | Percent of Series (3) |  
|Richard P. Johnson                                                |  | 23,580                                 | (5) |  | 3.3                   | %
|1818 Mezzanine Fund                                               |  | 21,895                                 | (4) |  | 3.1                   |  
|William E. Berry                                                  |  | 15,720                                 | (5) |  | 2.2                   |  
|J. Michael Gaither                                                |  | 8,900                                  | (5) |  | 1.3                   |  
|Daniel K. Brown                                                   |  | 3,465                                  | (6) |  | 0.5                   |  
|David L. Dyckman                                                  |  | 1,101                                  | (6) |  | 0.2                   |  
|All of our directors and executive officers as agroup (7 persons) |  | 78,126                                 | (7) |  | 10.2                  |  

Series B Common Stock

(30.4% of Voting Power)



|                                          |  |                                         |  |                       |  
|----------------------------------------- |  | --------------------------------------- |  | --------------------- | -
|Name and Address of Beneficial Owner (1)  |  | Number of Shares Beneficially Owned (2) |  | Percent of Series (3) |  
|Berkshire Fund VI Limited Partnership (8) |  | 221,969                                 |  | 72.2                  | %
|Greenbriar Equity Fund L.P (9)            |  | 81,125                                  |  | 26.4                  |  
|Berkshire Investors LLC (8)               |  | 2,616                                   |  | 0.9                   |  
|Greenbriar Coinvestment Partners, L.P (9) |  | 1,617                                   |  | 0.5                   |  

Series D Common Stock

(69.6% of Voting Power)



|                                          |  |                                         |  |                       |  
|----------------------------------------- |  | --------------------------------------- |  | --------------------- | -
|Name and Address of Beneficial Owner (1)  |  | Number of Shares Beneficially Owned (2) |  | Percent of Series (3) |  
|Investcorp S.A. (10)(11)                  |  | 1,500                                   |  | 100.0                 | %
|Ballet Limited (11)                       |  | 138                                     |  | 9.2                   |  
|Denary Limited (11)                       |  | 138                                     |  | 9.2                   |  
|Gleam Limited (11)                        |  | 138                                     |  | 9.2                   |  
|Highlands Limited (11)                    |  | 138                                     |  | 9.2                   |  
|Nobel Limited (11)                        |  | 138                                     |  | 9.2                   |  
|Outrigger Limited (11)                    |  | 138                                     |  | 9.2                   |  
|Quill Limited (11)                        |  | 138                                     |  | 9.2                   |  
|Radial Limited (11)                       |  | 138                                     |  | 9.2                   |  
|Shoreline Limited (11)                    |  | 138                                     |  | 9.2                   |  
|Zinnia Limited (11)                       |  | 138                                     |  | 9.2                   |  
|Investcorp Investment Equity Limited (11) |  | 120                                     |  | 8.0                   |  

---

|(1) | Unless otherwise indicated, the address for each person listed in the table is in care of American Tire Distributors Holdings, Inc., 12200 Herbert Wayne Court, Suite 150,
Huntersville, North Carolina 28078.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | For purposes of computing the percentage of outstanding shares held by each person or group of persons named in this table, any securities which that person or group of persons has
the right to acquire within 60 days of March 15, 2007 are deemed to be outstanding for purposes of computing the percentage ownership of such person or persons, but are not deemed to be outstanding for the purpose of computing the percentage
ownership of any other person.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|(3) | This number reflects the percentage of the number of outstanding shares of such series of our stock, after giving effect to the exercise of options and/or warrants owned by such
person or persons.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Represents shares issuable upon the exercise of warrants. Mr. Donlan is the co-manager of The 1818 Mezzanine Fund, L.P. and in that capacity will have authority to exercise
investment power over the shares. See Item 13. Certain Relationships and Related Transactions and Director Independence.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Represents shares of Series A common stock issuable upon the exercise of options.
|--- | ---------------------------------------------------------------------------------

|(6) | Includes 1,101 shares of Series A common stock issuable upon the exercise of options.
|--- | -------------------------------------------------------------------------------------

|(7) | Includes 51,503 shares of Series A common stock issuable upon the exercise of options.
|--- | --------------------------------------------------------------------------------------

|(8) | In care of Berkshire Partners LLC, One Boston Place, 33rdFloor, Boston, MA 02108.
|--- | ---------------------------------------------------------------------------------

|(9) | In care of Greenbriar Equity Group LLC, 555 Theodore Fremd Avenue, Suite A-201, Rye, New York 10580.
|--- | ----------------------------------------------------------------------------------------------------

|(10) | Investcorp S.A. does not directly own any of our stock but may be deemed to share beneficial ownership as described below. The number of shares of stock shown as owned by Investcorp
S.A. includes all of the shares owned by Investcorp Investment Equity Limited. Investcorp S.A. owns no stock in Ballet Limited, Denary Limited, Gleam Limited, Highlands Limited, Noble Limited, Outrigger Limited, Quill Limited, Radial Limited,
Shoreline Limited, Zinnia Limited, or in the beneficial owners of these entities. Investcorp may be deemed to share beneficial ownership of the shares of voting stock held by these entities because the entities have entered into revocable management
services or similar agreements with an affiliate of Investcorp, pursuant to which each such entities has granted such affiliate the authority to direct the voting and disposition of our voting stock owned by such entity for so long as such agreement
is in effect. Investcorp is a Luxembourg corporation with its address at 37 rue Notre-Dame, Luxembourg.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(11) | Investcorp Investment Equity Limited is a Cayman Islands corporation, and a wholly-owned subsidiary of Investcorp, with its address at P.O. Box 1111, West Wind Building, George
Town, Grand Cayman, Cayman Islands. SIPCO Limited may be deemed to control Investcorp through its ownership of a majority of a companys stock that indirectly owns a majority of Investcorps shares. SIPCO Limiteds address is P.O. Box
1111, West Wind Building, George Town, Grand Cayman, Cayman Islands. CIP Limited (CIP) owns none of our stock. CIP indirectly owns less than 0.1% of the stock of each of Ballet Limited, Denary Limited, Gleam Limited, Highlands Limited,
Noble Limited, Outrigger Limited, Quill Limited, Radial Limited, Shoreline Limited and Zinnia Limited. CIP may be deemed to share beneficial ownership of our shares of voting stock held by such entities because CIP acts as a director of such
entities and the ultimate beneficial shareholders of each of those entities have granted to CIP revocable proxies in companies that own those entities stock. None of the ultimate beneficial owners of such entities beneficially owns
individually more than 5% of our voting stock. Each of CIP Limited, Ballet Limited, Denary Limited, Gleam Limited, Highlands Limited, Noble Limited, Outrigger Limited, Quill Limited, Radial Limited, Shoreline Limited and Zinnia Limited is a Cayman
Islands corporation with its address at P.O. Box 2197, West Wind Building, GeorgeTown, Grand Cayman, Cayman Islands.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The
following table provides information as of December 30, 2006, with respect to compensation plans under which our equity securities are authorized for issuance.

Equity Compensation Plan Information



|                                                       |  |                                                                                                 |  |                                                                             |        |                                                                                                                                           |       
|------------------------------------------------------ |  | ----------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------- | ------ | ----------------------------------------------------------------------------------------------------------------------------------------- | ------
|Plan category                                          |  | Number of securities tobe issued
upon theexercise of outstandingoptions, warrants andrights (a) |  | Weighted-average exerciseprice
ofoutstandingoptions, warrantsand rights (b) |        | Number of securities remainingavailable for future
issuanceunder equity compensation plansexcluding securities reflected incolumn (a) (c)
|Equity compensation plans approved by shareholders     |  | 176,704                                                                                         |  | $                                                                           | 174.72 |                                                                                                                                           | 14,153
|Equity compensation plans not approved by shareholders |  |                                                                                                |  |                                                                             |       |                                                                                                                                           |      
|                                                       |  |                                                                                                 |  |                                                                             |        |                                                                                                                                           |       
|Total                                                  |  | 176,704                                                                                         |  | $                                                                           | 174.72 |                                                                                                                                           | 14,153
|                                                       |  |                                                                                                 |  |                                                                             |        |                                                                                                                                           |       



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|Item 13. | Certain Relationships and Related Transactions and Director Independence.
|-------- | -------------------------------------------------------------------------

See Notes 9, 10 and 12 of Notes to Consolidated Financial Statements for discussion of our related party transactions. During fiscal 2006 and as of
December 30, 2006, a majority of our Directors do not meet the standard of independence as defined by the Securities and Exchange Commission. Management has evaluated all activities and transactions that have transpired with our Directors and
deem each to be at an arms length and no more favorable then transactions that we would have entered into with an independent third party.



|Item 14. | Principal Accountant Fees and Services.
|-------- | ---------------------------------------

The following table sets forth the fees paid to our independent registered public accounting firm, PricewaterhouseCoopers LLP, during fiscal year 2006 and the aggregate twelve-month period of 2005.



|                       |  |                |       |      |   |      
|---------------------- |  | -------------- | ----- | ---- | - | -----
|                       |  | 2006           |       | 2005
|                       |  | (in thousands)
|Audit Fees (a)         |  | $              | 805   |      | $ | 381  
|Audit-Related Fees (b) |  |                | 146   |      |   | 376  
|Tax Fees (c)           |  |                | 329   |      |   | 325  
|All Other Fees         |  |                |      |      |   |     
|                       |  |                |       |      |   |      
|Total                  |  | $              | 1,280 |      | $ | 1,082
|                       |  |                |       |      |   |      

---

|(a) | Audit fees relate to professional services rendered in connection with the audit of our annual financial statements, quarterly review of financial statements included in our Forms
10-Q, and audit services provided in connection with other statutory and regulatory filings.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | Audit-related fees include payment for services in connection with the Acquisition and various other acquisitions as well as the audit of our employee benefit plans and consultation
on accounting standards or transactions.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | Tax fees include professional services related to tax compliance, tax planning and the preparation of federal and state tax returns.
|--- | ------------------------------------------------------------------------------------------------------------------------------------

Audit Committee Pre-Approval Policies and Procedures

In accordance with policies adopted by our Audit Committee, the Audit Committee has sole authority to approve all audit engagement fees and terms of our independent registered public accounting firm. The Audit Committee may delegate
authority to pre-approve audit and non-audit services to any member of the Audit Committee whose decisions should be reviewed at the next scheduled meeting. The Audit Committee may not delegate pre-approval authority to management.



92



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PART IV



|Item 15. | Exhibits and Financial Statement Schedules.
|-------- | -------------------------------------------



| | (a) | Documents filed as part of this Report:
| | --- | ---------------------------------------



| | 1. | The following items, including our consolidated financial statements, are set forth at Item 8 of this report:
| | -- | -------------------------------------------------------------------------------------------------------------



| |  |  | Reports of Independent Registered Public Accounting Firm
| | - |  | --------------------------------------------------------



| |  |  | Consolidated Balance Sheets as of December 30, 2006 and December 31, 2005 for the Successor
| | - |  | -------------------------------------------------------------------------------------------



| |  |  | Consolidated Statements of Operations for the fiscal year ended December 30, 2006 and the nine months ended December 31, 2005 for the Successor and the
quarter ended April 2, 2005 and fiscal year ended January 1, 2005 for the Predecessor
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Consolidated Statements of Stockholders Equity and Other Comprehensive Income (Loss) for the fiscal year ended December 30, 2006 and the period ended
December 31, 2005 for the Successor and for the period ended April 2, 2005 and fiscal year ended January 1, 2005 for the Predecessor
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Consolidated Statements of Cash Flows for the fiscal year ended December 30, 2006 and the period from April 2, 2005 through December 31, 2005 for the
Successor and for the quarter ended April 2, 2005 and fiscal year ended January 1, 2005 for the Predecessor
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Notes to Consolidated Financial Statements
| | - |  | ------------------------------------------



| | 2. | Financial Statement Schedules
| | -- | -----------------------------



93



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SCHEDULE IIVALUATION AND QUALIFYING ACCOUNTS

For Fiscal Year Ended December 30, 2006 and the Nine Months Ended December 31, 2005 for the Successor and the Quarter Ended April 2,
2005 and Fiscal Year Ended January 1, 2005 for the Predecessor

(in thousands)



|                                              |  |                           |       |                               |   |       |                           |  |       |            |  |   |                     |      |  |   |      
|--------------------------------------------- |  | ------------------------- | ----- | ----------------------------- | - | ----- | ------------------------- |  | ----- | ---------- |  | - | ------------------- | ---- |  | - | -----
|                                              |  |                           |       | Additions                     |   |       |                           |  |       |           
|                                              |  | Balance Beginning of Year |       | Charged to Costs and Expenses |   |       | Charged to Other Accounts |  |       | Deductions |  |   | Balance End of Year
|Successor 2006                                |  |                           |       |                               |   |       |                           |  |       |            |  |   |                     |      |  |   |      
|Allowance for doubtful accounts               |  | $                         | 998   |                               | $ | (325  | )                         |  | 144   | (2)        |  | $ | 234                 | (1)  |  | $ | 1,051
|Acquisition exit cost reserves (3)            |  |                           | 3,617 |                               |   | 1,024 |                           |  | 164   | (4)        |  |   | (1,221              | )    |  |   | 3,584
|Inventory reserves                            |  |                           | 809   |                               |   | 2,832 |                           |  | 92    | (2)        |  |   | (1,881              | )    |  |   | 1,852
|Sales returns and allowances                  |  |                           | 1,755 |                               |   | 2,833 |                           |  | 51    | (2)        |  |   | (2,718              | )    |  |   | 1,921
|Successor Nine months ended December 31, 2005 |  |                           |       |                               |   |       |                           |  |       |            |  |   |                     |      |  |   |      
|Allowance for doubtful accounts               |  | $                         | 1,104 |                               | $ | 1,091 |                           |  | (227  | )(2)       |  | $ | (970                | )(1) |  | $ | 998  
|Acquisition exit cost reserves (3)            |  |                           | 3,232 |                               |   |      |                           |  | 1,755 | (4)        |  |   | (1,370              | )    |  |   | 3,617
|Inventory reserves                            |  |                           | 1,416 |                               |   | 400   |                           |  | 89    | (2)        |  |   | (1,096              | )    |  |   | 809  
|Sales returns and allowances                  |  |                           | 1,664 |                               |   | 2,975 |                           |  |      |            |  |   | (2,884              | )    |  |   | 1,755
|Predecessor Quarter ended April 2, 2005       |  |                           |       |                               |   |       |                           |  |       |            |  |   |                     |      |  |   |      
|Allowance for doubtful accounts               |  | $                         | 1,587 |                               | $ | 279   |                           |  | (335  | )(2)       |  | $ | (427                | )(1) |  | $ | 1,104
|Acquisition exit cost reserves (3)            |  |                           | 3,688 |                               |   |      |                           |  |      |            |  |   | (456                | )    |  |   | 3,232
|Inventory reserves                            |  |                           | 1,084 |                               |   | 431   |                           |  |      |            |  |   | (99                 | )    |  |   | 1,416
|Sales returns and allowances                  |  |                           | 1,737 |                               |   | 318   |                           |  |      |            |  |   | (391                | )    |  |   | 1,664
|Predecessor 2004                              |  |                           |       |                               |   |       |                           |  |       |            |  |   |                     |      |  |   |      
|Allowance for doubtful accounts               |  | $                         | 1,112 |                               | $ | 320   |                           |  | 915   | (2)        |  | $ | (760                | )(1) |  | $ | 1,587
|Acquisition exit cost reserves (3)            |  |                           | 278   |                               |   | 16    |                           |  | 3,566 | (4)        |  |   | (172                | )    |  |   | 3,688
|Valuation allowance on deferred tax assets    |  |                           | 1,044 |                               |   |      |                           |  |      |            |  |   | (1,044              | )    |  |   |     
|Inventory reserves                            |  |                           | 952   |                               |   | 711   |                           |  | 223   | (2)        |  |   | (802                | )    |  |   | 1,084
|Sales returns and allowances                  |  |                           | 1,374 |                               |   | 1,954 |                           |  |      |            |  |   | (1,591              | )    |  |   | 1,737

---

|(1) | Accounts written off during the year, net of recoveries.
|--- | --------------------------------------------------------

|(2) | Opening balances and opening balance sheet adjustments relating to the acquisition of Samaritan Tire, Silver State, Wholesale Tire, Big State, and Target Tire.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Amounts represent facilities closing cost of acquired distribution centers due to existing distribution centers being located in close proximity to the acquired distribution
facilities.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Represents facilities closing cost of acquired Silver State, Wholesale Tire and Target Tire distribution centers due to existing distribution centers being located in close
proximity to the acquired distribution facilities.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Schedules not included herein are omitted because they are not applicable
or the required information appears in the financial statements or notes thereto.



94



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| | 3. | Exhibits:
| | -- | ---------



|     |  |                                                                                                                                                                                                                                                                                                                
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1  |  | Agreement and Plan of Merger, dated February 4, 2005, by and among American Tire Distributors Holdings, Inc., ATD Mergersub, Inc., Charlesbank Equity Fund IV, Limited Partnership,
Charlesbank Capital Partners, LLC, as stockholder representative, and American Tire Distributors, Inc. ++                  
|     | 
|2.2  |  | Amended and Restated Agreement and Plan of Merger, dated March 7, 2005, by and among American Tire Distributors Holdings, Inc., ATD Mergersub, Inc., Charlesbank Equity Fund IV, Limited
Partnership, Charlesbank Capital Partners, LLC, as stockholder representative, and American Tire Distributors, Inc. ++
|     | 
|3.1  |  | Certificate of Incorporation of American Tire Distributors Holdings, Inc. ++                                                                                                                                                                                                                                   
|     | 
|3.2  |  | Amended and Restated Certificate of American Tire Distributors Holdings, Inc. ++                                                                                                                                                                                                                               
|     | 
|3.3  |  | By-laws of American Tire Distributors, Inc. as amended. *                                                                                                                                                                                                                                                      
|     | 
|3.4  |  | Amended and Restated Bylaws of American Tire Distributors Holdings, Inc. ++                                                                                                                                                                                                                                    
|     | 
|3.5  |  | Restated Certificate of Incorporation of Heafner Tire Group, Inc. (the Company)  ̈                                                                                                                                                                                                                            
|     | 
|3.6  |  | Second Restated Certificate of Incorporation of Heanfer Tire Group, Inc. ±                                                                                                                                                                                                                                     
|     | 
|3.7  |  | Certificate of Amendment to the Second Restated Certificate of Incorporation of Heafner Tire Group, Inc., as filed with the Secretary of State of the State of Delaware on May 30, 2002
≠                                                                                                                      
|     | 
|3.8  |  | Third Restated Certificate of Incorporation of American Tire Distributors, Inc. ^                                                                                                                                                                                                                              
|     | 
|3.9  |  | Fourth Restated Certificate of Incorporation of American Tire Distributors, Inc.                                                                                                                                                                                                                              
|     | 
|3.10 |  | Certificate of Correction Filed to Correct a Certain Error in the Certificate of American Tire Distributors, Inc. **                                                                                                                                                                                           
|     | 
|3.11 |  | Fifth Restated Certificate of Incorporation of American Tire Distributors, Inc. ++                                                                                                                                                                                                                             
|     | 
|3.12 |  | Amended and Restated By-laws of the Company. ++                                                                                                                                                                                                                                                                
|     | 
|3.13 |  | Articles of Incorporation of The Speed Merchant, Inc. *                                                                                                                                                                                                                                                        
|     | 
|3.14 |  | By-laws of The Speed Merchant, Inc. *                                                                                                                                                                                                                                                                          
|     | 
|3.15 |  | Articles of Incorporation of Phoenix Racing, Inc. *                                                                                                                                                                                                                                                            
|     | 
|3.16 |  | By-laws of Phoenix Racing, Inc. *                                                                                                                                                                                                                                                                              
|     | 
|3.17 |  | Articles of Incorporation of California Tire Company.                                                                                                                                                                                                                                                        
|     | 
|3.18 |  | By-laws of California Tire Company.                                                                                                                                                                                                                                                                          
|     | 
|3.19 |  | Articles of Incorporation of T.O. Haas Holding Co., Inc.  ̈                                                                                                                                                                                                                                                     
|     | 
|3.20 |  | Amended By-laws of T.O. Haas Holding Co., Inc.  ̈                                                                                                                                                                                                                                                               
|     | 
|3.21 |  | Articles of Incorporation of T.O. Haas Tire Co., Inc.  ̈                                                                                                                                                                                                                                                        
|     | 
|3.22 |  | By-laws of T.O. Haas Tire Co., Inc.  ̈                                                                                                                                                                                                                                                                          
|     | 
|3.23 |  | Articles of Incorporation of Texas Market Tire, Inc. ++                                                                                                                                                                                                                                                        
|     | 
|3.24 |  | By-laws of Texas Market Tire, Inc. ++                                                                                                                                                                                                                                                                          
|     | 
|3.25 |  | Articles of Incorporation of Texas Market Tire Holdings I, Inc. ++                                                                                                                                                                                                                                             
|     | 
|3.26 |  | By-laws of Texas Market Tire Holdings I, Inc. ++                                                                                                                                                                                                                                                               
|     | 
|3.27 |  | Articles of Incorporation of Target Tire, Inc. ++                                                                                                                                                                                                                                                              
|     | 
|3.28 |  | By-laws of Target Tire, Inc. ++                                                                                                                                                                                                                                                                                



95



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|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.29 |  | Articles of Incorporation of Wholesale Tire Distributors, Inc. :                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     | 
|3.30 |  | By-laws of Wholesale Tire Distributors, Inc. :                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|     | 
|3.31 |  | Articles of Incorporation of Wholesale Tire Distributors of Idaho, Inc. :                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|     | 
|3.32 |  | By-laws of Wholesale Tire Distributors of Idaho, Inc. :                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|     | 
|3.33 |  | Articles of Incorporation of Wholesale Tire Distributors of Wyoming, Inc. :                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     | 
|3.34 |  | By-laws of Wholesale Tire Distributors of Wyoming, Inc. :                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|     | 
|3.35 |  | Articles of Incorporation of Farm Tire & Supply Co., Inc. :                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     | 
|3.36 |  | By-laws of Farm Tire & Supply Co., Inc. :                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|     | 
|4.1  |  | Indenture, dated March 31, 2005, among American Tire Distributors Holdings, Inc. and Wachovia Bank, National Association, as Trustee (the Holdings Indenture).
++                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     | 
|4.2  |  | Indenture, dated March 31, 2005, among ATD Mergersub, Inc., American Tire Distributors Holdings, Inc. and Wachovia Bank, National Association, as Trustee (the Floating Rate Note
Indenture). ++                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     | 
|4.3  |  | Indenture, dated March 31, 2005, among ATD Mergersub, Inc., American Tire Distributors Holdings, Inc. and Wachovia Bank, National Association, as Trustee (the Fixed Rate Note
Indenture). ++                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     | 
|4.4  |  | Supplemental Indenture, dated March 31, 2005, among American Tire Distributors, Inc., American Tire Distributors Holdings, Inc., The Speed Merchant, Inc., T.O. Haas Tire Co., Inc., T.O. Haas
Holding Co., Inc., Texas Market Tire, Inc., Texas Market Tire Holdings I, Inc., and Wachovia Bank, National Association, as Trustee. ++                                                                                                                                                                                                                                                                                                              
|     | 
|4.5  |  | Supplemental Indenture dated March 31, 2005, among American Tire Distributors, Inc., American Tire Distributors Holdings, Inc., The Speed Merchant, Inc., T.O. Haas Tire Co., Inc., T.O. Haas
Holding Co., Inc., Texas Market Tire, Inc., Texas Market Tire Holdings I, Inc., and Wachovia Bank, National Association, as Trustee. ++                                                                                                                                                                                                                                                                                                               
|     | 
|4.6  |  | Form of Holdings Senior Discount Note (attached as Exhibit A to the Holdings Indenture). ++                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     | 
|4.7  |  | Form of the Company Floating Rate Note (attached as Exhibit A to the Floating Rate Note Indenture). ++                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     | 
|4.8  |  | Form of the Company Fixed Rate Note (attached as Exhibit A to the Fixed Rate Note Indenture). ++                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     | 
|5.1  |  | Gibson, Dunn and Crutcher, LLP letter as to the legality of the securities being registered, dated May 13, 2005. ++                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     | 
|10.1 |  | Third Amended and Restated Loan and Security Agreement, dated as of March 19, 2004, among the Company, The Speed Merchant, Inc., T.O. Haas Holding Co., Inc. and T.O. Haas Tire Company, Inc.
as Borrowers, and Fleet Capital Corporation as Administrative Agent, Wachovia Bank, National Association as Syndication Agent, The CIT Group/Business Credit, Inc. as Documentation Agent, Fleet Securities, Inc. as Arranger and the financial
institutions party hereto from time to time, as Lenders  ̈ ̈                                                                                                                                            
|     | 
|10.2 |  | First Amendment to Third Amended and Restated Loan and Security Agreement ==                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     | 
|10.3 |  | Second Amendment to Third Amended and Restated Loan and Security Agreement ^^                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     | 
|10.4 |  | Fourth Amended and Restated Loan and Security Agreement, dated as of March 31, 2005, among the Company, The Speed Merchant, Inc., T.O. Haas Tire Co., Inc., T.O. Haas Holding Co., Inc., Texas
Market Tire, Inc., Texas Market Tire Holdings I, Inc., as Borrowers and Banc of America Securities LLC, as Book Running Manager, Wachovia Securities, GECC Capital Markets Group, Inc. and Banc of America Securities LLC, each as Co-Lead Arranger,
Wachovia Bank, National Association and General Electric Capital Corporation as Co-Syndication Agents and Bank of America, N.A. as administrative agent and collateral agent for the Lenders. ++



96



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|      |  |                                                                                                                                                                                                                 
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.5  |  | First Amendment to Fourth Amended and Restated Loan and Security Agreement :                                                                                                                                    
|      | 
|10.6  |  | Second Amendment to Fourth Amended and Restated Loan and Security Agreement :                                                                                                                                   
|      | 
|10.7  |  | Third Amendment to Fourth Amended and Restated Loan and Security Agreement                                                                                                                                    
|      | 
|10.8  |  | Registration Rights Agreement, made as of March 31, 2005, by American Tire Distributors Holdings, Inc for the benefit of the Holders hereto. ++                                                                 
|      | 
|10.9  |  | Termination Agreement dated March 31, 2005, among The 1818 Mezzanine Fund II, L.P., Charlesbank Equity Fund IV, Limited Partnership and American Tire Distributors, Inc. ++                                     
|      | 
|10.10 |  | Purchase Agreement, dated March 25, 2005, between American Tire Distributors Holdings, Inc. and The 1818 Mezzanine Fund II, L.P. ++                                                                             
|      | 
|10.11 |  | Stockholders Agreement, dated as of March 31, 2005, by and between American Tire Distributors Holdings, Inc., and each person listed on the signature pages hereto. ++                                          
|      | 
|10.12 |  | Stock Purchase Agreement dated March 30, 2005, between the parties listed on Schedule A hereto and American Tire Distributors Holdings, Inc. ++                                                                 
|      | 
|10.13 |  | Stock Purchase Agreement dated March 30, 2005, between the parties listed on Schedule A hereto and American Tire Distributors Holdings, Inc. ++                                                                 
|      | 
|10.14 |  | Securities Purchase Agreement, dated as of May 7, 1997, between The J.H. Heafner Company, Inc. and The Kelly-Springfield Tire and Rubber Company *                                                              
|      | 
|10.15 |  | Amendment to Securities Purchase Agreement, dated as of May 21, 1999, between and among the Company and The Kelly-Springfield Tire Company, a division of The Goodyear Tire and Rubber Company
#                
|      | 
|10.16 |  | Commitment Letter, dated March 25, 2005, by and among American Tire Distributors Holdings, Inc. and The Goodyear Tire and Rubber Co. ++                                                                         
|      | 
|10.17 |  | The J.H. Heafner Company Amended and Restated 1997 Stock Option Plan #                                                                                                                                          
|      | 
|10.18 |  | Heafner Tire Group 1999 Stock Option Plan +/-                                                                                                                                                                   
|      | 
|10.19 |  | American Tire Distributors, Inc. 2002 Stock Option Plan n                                                                                                                                                       
|      | 
|10.20 |  | American Tire Distributors Holdings, Inc. 2005 Management Stock Incentive Plan:                                                                                                                                 
|      | 
|10.21 |  | Stock Option Agreements, dated as of June 12, 2002, between the Company and each of Richard P. Johnson, William E. Berry, J. Michael Gaither, Daniel K. Brown and Phillip E. Marrett n                          
|      | 
|10.22 |  | Form of Incentive Option Agreement under the 2005 Management Stock Incentive Plan for the Named Executive Officers :                                                                                            
|      | 
|10.23 |  | Form of Base Option Agreement under the 2005 Management Stock Incentive Plan for the Named Executive Officers :                                                                                                 
|      | 
|10.24 |  | The J.H. Heafner Company 1997 Restricted Stock Plan *                                                                                                                                                           
|      | 
|10.25 |  | Securities Purchase and Stockholders Agreement, dated as of May 28, 1997, among the Company and various management stockholders *                                                                               
|      | 
|10.26 |  | Securities Purchase and Stockholders Agreement, dated as of May 24, 1999, between the Company and each of Donald C. Roof, J. Michael Gaither, Daniel K. Brown and Richard P. Johnson
#                         
|      | 
|10.27 |  | Stock Purchase Agreement dated April 14, 2000, between Heafner Tire Group Inc., T.O. Haas Holding Co., Randall M. Haas and Ricky L. Haas +/-+/-                                                                 
|      | 
|10.28 |  | Stock Purchase Agreement, dated May 4, 2001, by and among Performance Management, Inc., Heafner Tire Group, Inc., as sole shareholder of Winston Tire Company, Winston Tire Company and Charles
Bryant Kountz ##



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|      |  |                                                                                                                                    
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------
|10.29 |  | Executive Employment Agreement, dated March 31, 2005, between American Tire Distributors, Inc. and Richard P. Johnson. ++          
|      | 
|10.30 |  | Executive Employment Agreement, dated March 31, 2005, between American Tire Distributors, Inc. and William Berry. ++               
|      | 
|10.31 |  | Executive Employment Agreement, dated March 31, 2005, between American Tire Distributors, Inc. and J. Michael Gaither. ++          
|      | 
|10.32 |  | Executive Employment Agreement, dated March 31, 2005, between American Tire Distributors, Inc. and Phillip E. Marrett. ++          
|      | 
|10.33 |  | Executive Employment Agreement, dated March 31, 2005, between American Tire Distributors, Inc. and Daniel K. Brown. ++             
|      | 
|10.34 |  | Executive Employment Agreement, dated March 31, 2005, between American Tire Distributors, Inc. and Scott A. Deininger. ++          
|      | 
|10.35 |  | Executive Employment Agreement, dated December 6, 2005, between American Tire Distributors, Inc. and David L. Dyckman. ?           
|      | 
|10.36 |  | Rollover Stock Option Agreement, dated March 31, 2005, between American Tire Distributors Holdings, Inc. and Richard P. Johnson++  
|      | 
|10.37 |  | Rollover Stock Option Agreement, dated March 31, 2005, between American Tire Distributors Holdings, Inc. and William Berry++       
|      | 
|10.38 |  | Rollover Stock Option Agreement, dated March 31, 2005, between American Tire Distributors Holdings, Inc. and J. Michael Gaither. ++
|      | 
|10.39 |  | Stock Purchase Agreement, dated March 31, 2005, between American Tire Distributors Holdings, Inc. and Scott A. Deininger. ++       
|      | 
|10.40 |  | Stock Purchase Agreement, dated March 31, 2005, between American Tire Distributors Holdings, Inc. and Keith Calcagno. ++           
|      | 
|10.41 |  | Stock Purchase Agreement, dated March 31, 2005, between American Tire Distributors Holdings, Inc. and Daniel K. Brown. ++          
|      | 
|10.42 |  | Stock Purchase Agreement, dated March 31, 2005, between American Tire Distributors Holdings, Inc. and Phillip E. Marrett. ++       
|      | 
|10.43 |  | Stock Purchase Agreement, dated March 31, 2005, between American Tire Distributors Holdings, Inc. and Thomas Gibson. ++            
|      | 
|10.44 |  | Stock Purchase Agreement, dated March 31, 2005, between American Tire Distributors Holdings, Inc. and Thomas L. Dawson. ++         
|      | 
|10.45 |  | Stock Purchase Agreement, dated March 31, 2005, between American Tire Distributors Holdings, Inc. and Lawrence B. Stoddard. ++     
|      | 
|10.46 |  | Stock Purchase Agreement, dated March 31, 2005, between American Tire Distributors Holdings, Inc. and Leon J. Sawyer. ++           
|      | 
|10.47 |  | Stock Purchase Agreement, dated March 31, 2005, between American Tire Distributors Holdings, Inc. and George J. Bender. ++         
|      | 
|10.48 |  | Stock Purchase Agreement, dated March 31, 2005, between American Tire Distributors Holdings, Inc. and James Gill. ++               
|      | 
|10.49 |  | Stock Purchase Agreement, dated March 31, 2005, between American Tire Distributors Holdings, Inc. and James D. Matthews. ++        



98



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|      |  |                                                                                                                                                                                                                  
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.50 |  | Purchase Agreement, dated March 23, 2005 between American Tire Distributors Holdings, Inc. and Banc of America Securities, LLC, Credit Suisse First Boston, LLC and Wachovia Capital Markets,
LLC. ++            
|      | 
|10.51 |  | Registration Rights Agreement, dated March 31, 2005, between American Tire Distributors Holdings, Inc. and Banc of America Securities, LLO, Credit Suisse First Boston, LLC and Wachovia
Capital Markets, LLC. ++
|      | 
|10.52 |  | Purchase Agreement, dated March 23, 2005, between American Tire Distributors, Inc. and Banc of America Securities, LLC, Credit Suisse First Boston, LLC, and Wachovia Capital Markets, LLC.
++                   
|      | 
|10.53 |  | Warrant Agreement, dated as of March 31, 2005, between American Tire Distributors Holdings, Inc. and the purchaser named herein. ++                                                                              
|      | 
|12.1  |  | Statement re: Computation of Ratios nn                                                                                                                                                                           
|      | 
|21.1  |  | Chart of Subsidiaries of the Company nn                                                                                                                                                                          
|      | 
|23.1  |  | Consent of PricewaterhouseCoopers LLC, an independent registered public accounting firm nn                                                                                                                       
|      | 
|23.2  |  | Consent of PricewaterhouseCoopers LLC, an independent registered public accounting firm nn                                                                                                                       
|      | 
|25.1  |  | Statement of eligibility of Trustee. ++                                                                                                                                                                          
|      | 
|31.1  |  | Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002 nn        
|      | 
|31.2  |  | Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002 nn        
|      | 
|32.1  |  | Certifications of Principal Executive Officer and Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002. nn             

---

|* | Incorporated by reference to the Companys Registration Statement on Form S-4 filed on August 18, 1998.
|- | -------------------------------------------------------------------------------------------------------

|+ | Incorporated by reference to the Companys Form 8-K filed on December 15, 1998.
|- | -------------------------------------------------------------------------------

| | Incorporated by reference to the Companys Registration Statement on Form S-4 filed on March 31, 1999.
|-- | ------------------------------------------------------------------------------------------------------

|# | Incorporated by reference to the Companys Registration Statement Form S-4 filed on June 9, 1999.
|- | -------------------------------------------------------------------------------------------------

|+/- | Incorporated by reference to the Companys 10-K, filed on March 30, 2000.
|--- | -------------------------------------------------------------------------

|+/-+/- | Incorporated by reference to the Companys 8-K, filed on November 14, 2000.
|------ | ---------------------------------------------------------------------------

| ̈ | Incorporated by reference to the Companys 10-K, filed on April 9, 2001.
|- | ------------------------------------------------------------------------

|## | Incorporated by reference to the Companys 10-Q, filed on May 15, 2001.
|-- | -----------------------------------------------------------------------

|= | Incorporated by reference to the Companys 10-Q, filed on November 13, 2001.
|- | ----------------------------------------------------------------------------

|- | Incorporated by reference to the Companys 10-K, filed on March 26, 2002.
|- | -------------------------------------------------------------------------

|± | Incorporated by reference to the Companys 8-K, filed on April 11, 2002.
|- | ------------------------------------------------------------------------

|±± | Incorporated by reference to the Companys 10-Q, filed on May 14, 2002.
|-- | -----------------------------------------------------------------------

|≠ | Incorporated by reference to the Companys 8-K, filed on June 18, 2002.
|- | -----------------------------------------------------------------------

|^ | Incorporated by reference to the Companys 10-Q, filed on August 12, 2002.
|- | --------------------------------------------------------------------------

|** | Incorporated by reference to the Companys 10-Q, filed on November 12, 2002.
|-- | ----------------------------------------------------------------------------

|n | Incorporated by reference to the Companys 10-K, filed on March 28, 2003.
|- | -------------------------------------------------------------------------

| | Incorporated by reference to the Companys 10-Q, filed on November 12, 2003.
|- | ----------------------------------------------------------------------------

| ̈ ̈ | Incorporated by reference to the Companys 10-K, filed on March 26, 2004.
|-- | -------------------------------------------------------------------------

|== | Incorporated by reference to the Companys 10-Q, filed on May 17, 2004.
|-- | -----------------------------------------------------------------------

|^^ | Incorporated by reference to the Companys 10-Q, filed on November 15, 2004.
|-- | ----------------------------------------------------------------------------

|++ | Incorporated by reference to the Companys Registration Statement on Form S-4 filed on May 13, 2005.
|-- | ----------------------------------------------------------------------------------------------------

|: | Incorporated by reference to the Companys 10-K, filed on March 31, 2006.
|- | -------------------------------------------------------------------------

| | Incorporated by reference to the Companys 10-Q, filed on May 16, 2006
|-- | ----------------------------------------------------------------------

|nn | Filed herewith.
|-- | ---------------



99



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##### Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
as amended, the Registrant has duly caused this report to be signed on our behalf by the undersigned, thereunto duly authorized, on March 30, 2007.



AMERICAN TIRE DISTRIBUTORS HOLDINGS, INC.By:

/s/    RICHARD P.
JOHNSONName:

Richard P. JohnsonTitle:

Chairman and Chief Executive Officer


Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report
has been signed by the following persons on behalf of the Registrant and in the capacities indicated on March 30, 2007.



|                                             |  |                                                                                                   |  |               
|-------------------------------------------- |  | ------------------------------------------------------------------------------------------------- |  | --------------
|Signature                                    |  | Title                                                                                             |  | Date          
|                                             |  |                                                                                                  
|/s/    RICHARD P.
JOHNSON Richard P. Johnson |  | Director, Chairman and Chief Executive Officer (Principal Executive Officer)                      |  | March 30, 2007
|                                             |  |                                                                                                  
|/s/    WILLIAM E.
BERRY William E. Berry     |  | President and Chief Operating Officer                                                             |  | March 30, 2007
|                                             |  |                                                                                                  
|/s/    J. MICHAEL
GAITHER J. Michael Gaither |  | Executive Vice President, General Counsel and Secretary                                           |  | March 30, 2007
|                                             |  |                                                                                                  
|/s/    DAVID L.
DYCKMAN David L. Dyckman     |  | Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) |  | March 30, 2007
|                                             |  |                                                                                                  
|/s/    DAVID
TAYEH David Tayeh               |  | Director                                                                                          |  | March 30, 2007
|                                             |  |                                                                                                  
|/s/    DONALD
HARDIE Donald Hardie           |  | Director                                                                                          |  | March 30, 2007
|                                             |  |                                                                                                  
|/s/    ALAIN
REDHEUIL Alain Redheuil         |  | Director                                                                                          |  | March 30, 2007
|                                             |  |                                                                                                  
|/s/    RANDY
PEELER Randy Peeler             |  | Director                                                                                          |  | March 30, 2007
|                                             |  |                                                                                                  
|/s/    JOEL
BECKMAN Joel Beckman             |  | Director                                                                                          |  | March 30, 2007
|                                             |  |                                                                                                  
|/s/    JOSEPH P.
DONLAN Joseph P. Donlan     |  | Director                                                                                          |  | March 30, 2007
|                                             |  |                                                                                                  
|/s/    JAMES O.
EGAN James O. Egan           |  | Director                                                                                          |  | March 30, 2007



100