##### Table of Contents









SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549




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Form 10-Q

|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|þ          |  | QUARTERLY REPORT PURSUANT TO SECTION 13
    OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|          
|           |  | For the quarterly period ended August 3,
    2003                                           
|          
|or        
|          
|o          |  | 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 001-13927

CSK Auto Corporation

(Exact name of registrant as specified in its
charter)


|                                                                                                     |  |                                         
|---------------------------------------------------------------------------------------------------- |  | ----------------------------------------
|Delaware                                                                                             |  | 86-0765798                              
|(State or other jurisdiction of
    Incorporation or organization)                                   |  | (I.R.S. Employer
    Identification No.)
|                                                                                                    
|645 E. Missouri Ave.
    Suite 400,
    Phoenix, Arizona(Address of principal executive
    offices) |  | 85012(Zip Code)                         

(602) 265-9200

(Registrants telephone number, including
area code)


N/A

(Former name, former address and former fiscal
year,


if changed since last reports)


Indicate by check
mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the
Securities 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 þ          No o.

Indicate by check
mark whether the registrant is an accelerated filer (as defined
in Exchange Act
Rule 12b-2).     Yes þ          No o.

As of
September 11, 2003, CSK Auto Corporation had
45,526,729 shares of common stock outstanding.



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TABLE OF CONTENTS



|                          |                                                                                               |  |  |  |  |  |  | 
|------------------------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I                   
|                          | Item 1. Financial Statements                                                                 
|                          | CONSOLIDATED BALANCE SHEETS                                                                  
|                          | CONSOLIDATED STATEMENTS OF OPERATIONS                                                        
|                          | CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY                                               
|                          | CONSOLIDATED STATEMENTS OF CASH FLOWS                                                        
|                          | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                   
|                          | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                          | Item 3. Quantitative and Qualitative Disclosures about Market Risk                           
|                          | Item 4. Controls and Procedures                                                              
|PART II OTHER INFORMATION
|                          | Item 1. Legal Proceedings                                                                    
|                          | Item 2. Changes in Securities and Use of Proceeds                                            
|                          | Item 3. Defaults upon Senior Securities                                                      
|                          | Item 4. Submission of Matters to a Vote of Security Holders                                  
|                          | Item 5. Other Information                                                                    
|                          | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURE                
|Exhibit Index            
|EXHIBIT 4.06.1           
|EXHIBIT 10.01            
|EXHIBIT 31.01            
|EXHIBIT 31.02            
|EXHIBIT 32.01            



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##### Table of Contents



TABLE OF CONTENTS

|                                   |  |                                                                                           |    |      |    | 
|---------------------------------- |  | ----------------------------------------------------------------------------------------- | -- | ---- | -- | 
|                                   |  |                                                                                           |    | Page
|                                   |  |                                                                                           |    |     
|PART I  Financial
    Information
|Item 1.                            |  | Financial Statements (unaudited)                                                          |    |      |    | 
|                                   |  | Consolidated Balance Sheets                                                               |    |      | 2  | 
|                                   |  | Consolidated Statements of Operations                                                     |    |      | 3  | 
|                                   |  | Consolidated Statement of
    Stockholders Equity                                        |    |      | 4  | 
|                                   |  | Consolidated Statements of Cash Flows                                                     |    |      | 5  | 
|                                   |  | Notes to Consolidated Financial
    Statements                                            |    |      | 6  | 
|Item 2.                            |  | Managements Discussion and Analysis of
    Financial Condition and Results of Operations |    |      | 13 | 
|Item 3.                            |  | Quantitative and Qualitative Disclosures About
    Market Risk                            |    |      | 20 | 
|Item 4.                            |  | Controls and Procedures                                                                   |    |      | 20 | 
|PART II  Other
    Information   
|Item 1.                            |  | Legal Proceedings                                                                         |    |      | 21 | 
|Item 2.                            |  | Changes in Securities and Use of Proceeds                                                 |    |      | 21 | 
|Item 3.                            |  | Defaults Upon Senior Securities                                                           |    |      | 21 | 
|Item 4.                            |  | Submission of Matters to a Vote of Security
    Holders                                   |    |      | 21 | 
|Item 5.                            |  | Other Information                                                                         |    |      | 22 | 
|Item 6.                            |  | Exhibits and Reports on Form 8-K                                                          |    |      | 22 | 
|Signature                          |  |                                                                                           | 24 |     
|Exhibit Index                      |  |                                                                                           | 25 |     

1



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##### Table of Contents






PART I

FINANCIAL INFORMATION




Item 1.     Financial
Statements

CSK AUTO CORPORATION AND
SUBSIDIARIES






CONSOLIDATED BALANCE SHEETS


(In thousands, except share data)


|                                                                      |                                                                                                                                                                                       |                                            |         |             |           |   |         |          |           | 
|--------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------- | ----------- | --------- | - | ------- | -------- | --------- | 
|                                                                      |                                                                                                                                                                                       | August 3,                                  |         | February 2,
|                                                                      |                                                                                                                                                                                       | 2003                                       |         | 2003       
|                                                                      |                                                                                                                                                                                       |                                            |         |            
|                                                                      |                                                                                                                                                                                       | (Unaudited)                                |         |            
|ASSETS                                                               
|Cash and cash equivalents                                             |                                                                                                                                                                                       | $                                          | 36,024  |             |           | $ | 15,519  |         
|Receivables, net of allowances of $5,907 and
    $2,736, respectively |                                                                                                                                                                                       |                                            | 105,014 |             |           |   | 111,639 |         
|Inventories                                                           |                                                                                                                                                                                       |                                            | 684,726 |             |           |   | 650,783 |         
|Prepaid expenses and other current assets                             |                                                                                                                                                                                       |                                            | 17,849  |             |           |   | 14,871  |         
|                                                                      |                                                                                                                                                                                       |                                            |         |             |           |   |         |         
|                                                                      |                                                                                                                                                                                       | Total current assets                       |         |             | 843,613   |   |         |          | 792,812   | 
|                                                                      |                                                                                                                                                                                       |                                            |         |             |           |   |         |         
|Property and equipment, net                                           |                                                                                                                                                                                       |                                            | 124,429 |             |           |   | 130,745 |         
|Leasehold interests, net                                              |                                                                                                                                                                                       |                                            | 13,152  |             |           |   | 14,017  |         
|Goodwill                                                              |                                                                                                                                                                                       |                                            | 127,069 |             |           |   | 127,069 |         
|Other assets, net                                                     |                                                                                                                                                                                       |                                            | 21,203  |             |           |   | 27,379  |         
|                                                                      |                                                                                                                                                                                       |                                            |         |             |           |   |         |         
|                                                                      |                                                                                                                                                                                       | Total assets                               |         | $           | 1,129,466 |   |         | $        | 1,092,022 | 
|                                                                      |                                                                                                                                                                                       |                                            |         |             |           |   |         |         
|LIABILITIES AND STOCKHOLDERS
    EQUITY                             
|Accounts payable                                                      |                                                                                                                                                                                       | $                                          | 183,117 |             |           | $ | 164,430 |         
|Accrued payroll and related expenses                                  |                                                                                                                                                                                       |                                            | 40,327  |             |           |   | 41,421  |         
|Accrued expenses and other current liabilities                        |                                                                                                                                                                                       |                                            | 41,492  |             |           |   | 41,602  |         
|Deferred income taxes                                                 |                                                                                                                                                                                       |                                            | 8,709   |             |           |   | 6,006   |         
|Current maturities of senior credit facility                          |                                                                                                                                                                                       |                                            | 2,000   |             |           |   |        |         
|Current maturities of capital lease obligations                       |                                                                                                                                                                                       |                                            | 12,567  |             |           |   | 10,604  |         
|                                                                      |                                                                                                                                                                                       |                                            |         |             |           |   |         |         
|                                                                      |                                                                                                                                                                                       | Total current liabilities                  |         |             | 288,212   |   |         |          | 264,063   | 
|                                                                      |                                                                                                                                                                                       |                                            |         |             |           |   |         |         
|Long term debt, less current maturities                               |                                                                                                                                                                                       |                                            | 480,441 |             |           |   | 492,607 |         
|Obligations under capital leases                                      |                                                                                                                                                                                       |                                            | 18,881  |             |           |   | 21,756  |         
|Deferred income taxes                                                 |                                                                                                                                                                                       |                                            | 11,384  |             |           |   | 3,464   |         
|Other                                                                 |                                                                                                                                                                                       |                                            | 6,679   |             |           |   | 7,950   |         
|                                                                      |                                                                                                                                                                                       |                                            |         |             |           |   |         |         
|                                                                      |                                                                                                                                                                                       | Total non-current liabilities              |         |             | 517,385   |   |         |          | 525,777   | 
|                                                                      |                                                                                                                                                                                       |                                            |         |             |           |   |         |         
|Commitments and contingencies                                         |                                                                                                                                                                                       |                                            |         |             |           |   |         |         
|Stockholders equity:                                                 |                                                                                                                                                                                       |                                            |         |             |           |   |         |         
|                                                                      | Common stock, $0.01 par value,
    58,000,000 shares authorized, 45,395,847 and
    45,148,230 shares issued and outstanding at August 3,
    2003 and February 2, 2003, respectively |                                            |         | 454         |           |   |         | 452      |          
|                                                                      | Additional paid-in capital                                                                                                                                                            |                                            |         | 451,459     |           |   |         | 448,279  |          
|                                                                      | Stockholder receivable                                                                                                                                                                |                                            |         | (174        | )         |   |         | (342     | )        
|                                                                      | Accumulated deficit                                                                                                                                                                   |                                            |         | (127,870    | )         |   |         | (146,207 | )        
|                                                                      |                                                                                                                                                                                       |                                            |         |             |           |   |         |         
|                                                                      |                                                                                                                                                                                       | Total stockholders equity                 |         |             | 323,869   |   |         |          | 302,182   | 
|                                                                      |                                                                                                                                                                                       |                                            |         |             |           |   |         |         
|                                                                      |                                                                                                                                                                                       | Total liabilities and stockholders equity |         | $           | 1,129,466 |   |         | $        | 1,092,022 | 
|                                                                      |                                                                                                                                                                                       |                                            |         |             |           |   |         |         

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

2



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##### Table of Contents



CSK AUTO CORPORATION AND
SUBSIDIARIES






CONSOLIDATED STATEMENTS OF
OPERATIONS


(In thousands, except share and per share
data)


|                                           |                                |                      |            |                        |  |           |            |           |  |   |            |         |  |   |            |         | 
|------------------------------------------ | ------------------------------ | -------------------- | ---------- | ---------------------- |  | --------- | ---------- | --------- |  | - | ---------- | ------- |  | - | ---------- | ------- | 
|                                           |                                |                      |            |                       
|                                           |                                | Thirteen Weeks Ended |            | Twenty-six Weeks Ended
|                                           |                                |                      |            |                       
|                                           |                                | August 3,            |            | August 4,              |  | August 3, |            | August 4,
|                                           |                                | 2003                 |            | 2002                   |  | 2003      |            | 2002     
|                                           |                                |                      |            |                        |  |           |            |          
|                                           |                                |                     
|                                           |                                | (Unaudited)         
|Net sales                                  |                                | $                    | 418,514    |                        |  | $         | 398,306    |           |  | $ | 795,963    |         |  | $ | 773,856    |        
|Cost of sales                              |                                |                      | 224,812    |                        |  |           | 216,238    |           |  |   | 427,237    |         |  |   | 426,658    |        
|                                           |                                |                      |            |                        |  |           |            |           |  |   |            |         |  |   |            |        
|Gross profit                               |                                |                      | 193,702    |                        |  |           | 182,068    |           |  |   | 368,726    |         |  |   | 347,198    |        
|Other costs and expenses:                  |                                |                      |            |                        |  |           |            |           |  |   |            |         |  |   |            |        
|                                           | Operating and administrative   |                      |            | 158,475                |  |           |            | 152,565   |  |   |            | 307,198 |  |   |            | 294,203 | 
|                                           | Store closing costs            |                      |            | 43                     |  |           |            | 239       |  |   |            | 136     |  |   |            | 539     | 
|                                           | Loss on sale of stores         |                      |            |                       |  |           |            | 847       |  |   |            |        |  |   |            | 847     | 
|                                           | Secondary stock offering costs |                      |            |                       |  |           |            | 265       |  |   |            |        |  |   |            | 265     | 
|                                           |                                |                      |            |                        |  |           |            |           |  |   |            |         |  |   |            |        
|Operating profit                           |                                |                      | 35,184     |                        |  |           | 28,152     |           |  |   | 61,392     |         |  |   | 51,344     |        
|Interest expense                           |                                |                      | 13,251     |                        |  |           | 16,240     |           |  |   | 27,187     |         |  |   | 33,958     |        
|Loss on debt retirement                    |                                |                      | 4,315      |                        |  |           | 6,008      |           |  |   | 4,315      |         |  |   | 6,008      |        
|                                           |                                |                      |            |                        |  |           |            |           |  |   |            |         |  |   |            |        
|Income before income taxes                 |                                |                      | 17,618     |                        |  |           | 5,904      |           |  |   | 29,890     |         |  |   | 11,378     |        
|Income tax expense                         |                                |                      | 6,804      |                        |  |           | 1,817      |           |  |   | 11,553     |         |  |   | 3,911      |        
|                                           |                                |                      |            |                        |  |           |            |           |  |   |            |         |  |   |            |        
|Net income                                 |                                | $                    | 10,814     |                        |  | $         | 4,087      |           |  | $ | 18,337     |         |  | $ | 7,467      |        
|                                           |                                |                      |            |                        |  |           |            |           |  |   |            |         |  |   |            |        
|Basic earnings per share:                  |                                |                      |            |                        |  |           |            |           |  |   |            |         |  |   |            |        
|                                           | Net income                     |                      | $          | 0.24                   |  |           | $          | 0.10      |  |   | $          | 0.41    |  |   | $          | 0.21    | 
|                                           |                                |                      |            |                        |  |           |            |           |  |   |            |         |  |   |            |        
|Shares used in computing per share amounts |                                |                      | 45,216,839 |                        |  |           | 39,826,079 |           |  |   | 45,182,747 |         |  |   | 36,099,845 |        
|                                           |                                |                      |            |                        |  |           |            |           |  |   |            |         |  |   |            |        
|Diluted earnings per share:                |                                |                      |            |                        |  |           |            |           |  |   |            |         |  |   |            |        
|                                           | Net income                     |                      | $          | 0.24                   |  |           | $          | 0.10      |  |   | $          | 0.41    |  |   | $          | 0.21    | 
|                                           |                                |                      |            |                        |  |           |            |           |  |   |            |         |  |   |            |        
|Shares used in computing per share amounts |                                |                      | 45,499,239 |                        |  |           | 40,138,663 |           |  |   | 45,274,127 |         |  |   | 36,178,528 |        
|                                           |                                |                      |            |                        |  |           |            |           |  |   |            |         |  |   |            |        

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

3



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##### Table of Contents



CSK AUTO CORPORATION AND
SUBSIDIARIES






CONSOLIDATED STATEMENT OF STOCKHOLDERS
EQUITY


(In thousands, except share data)


|                                                               |  |              |            |            |  |             |     |             |  |         |         |        |  |   |      |   |  |   |          |   |  |   |         | 
|-------------------------------------------------------------- |  | ------------ | ---------- | ---------- |  | ----------- | --- | ----------- |  | ------- | ------- | ------ |  | - | ---- | - |  | - | -------- | - |  | - | ------- | 
|                                                               |  |              |            |            |  |             |     |             |  |        
|                                                               |  | Common Stock |            | Additional |  |             |     |             |  |        
|                                                               |  |              |            | Paid-in    |  | Stockholder |     | Accumulated |  | Total  
|                                                               |  | Shares       |            | Amount     |  | Capital     |     | Receivable  |  | Deficit |         | Equity
|                                                               |  |              |            |            |  |             |     |             |  |         |         |       
|Balances at February 2, 2003                                   |  |              | 45,148,230 |            |  | $           | 452 |             |  | $       | 448,279 |        |  | $ | (342 | ) |  | $ | (146,207 | ) |  | $ | 302,182 | 
|Exercise of stock options (unaudited)                          |  |              | 246,690    |            |  |             | 2   |             |  |         | 2,865   |        |  |   |     |   |  |   |         |   |  |   | 2,867   | 
|Issuances of restricted stock (unaudited)                      |  |              | 927        |            |  |             |    |             |  |         | 13      |        |  |   |     |   |  |   |         |   |  |   | 13      | 
|Tax benefit relating to stock option exercises
    (unaudited) |  |              |           |            |  |             |    |             |  |         | 302     |        |  |   |     |   |  |   |         |   |  |   | 302     | 
|Repayment of receivable (unaudited)                            |  |              |           |            |  |             |    |             |  |         |        |        |  |   | 168  |   |  |   |         |   |  |   | 168     | 
|Net income (unaudited)                                         |  |              |           |            |  |             |    |             |  |         |        |        |  |   |     |   |  |   | 18,337   |   |  |   | 18,337  | 
|                                                               |  |              |            |            |  |             |     |             |  |         |         |        |  |   |      |   |  |   |          |   |  |   |         | 
|Balances at August 3, 2003 (unaudited)                         |  |              | 45,395,847 |            |  | $           | 454 |             |  | $       | 451,459 |        |  | $ | (174 | ) |  | $ | (127,870 | ) |  | $ | 323,869 | 
|                                                               |  |              |            |            |  |             |     |             |  |         |         |        |  |   |      |   |  |   |          |   |  |   |         | 

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

4



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##### Table of Contents



CSK AUTO CORPORATION AND
SUBSIDIARIES






CONSOLIDATED STATEMENTS OF CASH
FLOWS


(In thousands)


|                                               |                                                                                       |                                                                      |                                                                     |           |         |         |        |          |        |         |  
|---------------------------------------------- | ------------------------------------------------------------------------------------- | -------------------------------------------------------------------- | ------------------------------------------------------------------- | --------- | ------- | ------- | ------ | -------- | ------ | ------- | -
|                                               |                                                                                       |                                                                     
|                                               |                                                                                       | Twenty-six Weeks Ended                                              
|                                               |                                                                                       |                                                                     
|                                               |                                                                                       | August 3,                                                            |                                                                     | August 4,
|                                               |                                                                                       | 2003                                                                 |                                                                     | 2002     
|                                               |                                                                                       |                                                                      |                                                                     |          
|                                               |                                                                                       |                                                                     
|                                               |                                                                                       | (Unaudited)                                                         
|Cash flows from operating activities:          |                                                                                       |                                                                      |                                                                     |           |         |         |        |         
|                                               | Net income                                                                            |                                                                      | $                                                                   | 18,337    |         |         | $      | 7,467    |       
|                                               | Adjustments to reconcile net income to net cash
    provided by operating activities: |                                                                      |                                                                     |           |         |         |        |          |       
|                                               |                                                                                       | Depreciation and amortization of property and
    equipment          |                                                                     |           | 15,437  |         |        |          | 16,122 |        
|                                               |                                                                                       | Amortization of deferred financing costs                             |                                                                     |           | 2,367   |         |        |          | 2,799  |        
|                                               |                                                                                       | Amortization of long term debt fair market value
    adjustment      |                                                                     |           | (307    | )       |        |          |       |        
|                                               |                                                                                       | Amortization of other items                                          |                                                                     |           | 1,900   |         |        |          | 1,836  |        
|                                               |                                                                                       | Accretion of discount                                                |                                                                     |           | 461     |         |        |          | 469    |        
|                                               |                                                                                       | Write downs on disposals of property, equipment
    and other assets |                                                                     |           | 560     |         |        |          | 427    |        
|                                               |                                                                                       | Tax benefit relating to stock options                                |                                                                     |           | 302     |         |        |          |       |        
|                                               |                                                                                       | Write off of debt issuance costs                                     |                                                                     |           | 2,268   |         |        |          | 1,640  |        
|                                               |                                                                                       | Premium paid on early retirement of debt                             |                                                                     |           | (350    | )       |        |          | (4,368 | )      
|                                               |                                                                                       | Loss on sale of stores                                               |                                                                     |           |        |         |        |          | 847    |        
|                                               |                                                                                       | Proceeds from interest rate swap termination                         |                                                                     |           | 6,031   |         |        |          |       |        
|                                               |                                                                                       | Deferred income taxes                                                |                                                                     |           | 10,623  |         |        |          | 3,911  |        
|                                               |                                                                                       | Change in operating assets and liabilities:                          |                                                                     |           |         |         |        |          |        |        
|                                               |                                                                                       |                                                                      | Receivables                                                         |           |         | 6,625   |        |          |        | (4,374  | )
|                                               |                                                                                       |                                                                      | Inventories                                                         |           |         | (33,943 | )      |          |        | (36,854 | )
|                                               |                                                                                       |                                                                      | Prepaid expenses and other current assets                           |           |         | (2,978  | )      |          |        | 2,130   |  
|                                               |                                                                                       |                                                                      | Accounts payable                                                    |           |         | 18,687  |        |          |        | 16,269  |  
|                                               |                                                                                       |                                                                      | Accrued payroll, accrued expenses and other
    current liabilities |           |         | (1,204  | )      |          |        | (5,298  | )
|                                               |                                                                                       |                                                                      | Other operating activities                                          |           |         | 676     |        |          |        | 3,013   |  
|                                               |                                                                                       |                                                                      |                                                                     |           |         |         |        |         
|                                               |                                                                                       | Net cash provided by operating activities                            |                                                                     |           | 45,492  |         |        |          | 6,036  |        
|                                               |                                                                                       |                                                                      |                                                                     |           |         |         |        |         
|Cash flows from investing activities:          |                                                                                       |                                                                      |                                                                     |           |         |         |        |         
|                                               | Capital expenditures                                                                  |                                                                      |                                                                     | (4,802    | )       |         |        | (3,617   | )     
|                                               | Proceeds from sale of property and equipment                                          |                                                                      |                                                                     | 23        |         |         |        | 2,186    |       
|                                               | Proceeds from sale of stores                                                          |                                                                      |                                                                     |          |         |         |        | 4,217    |       
|                                               | Other investing activities                                                            |                                                                      |                                                                     | (1,689    | )       |         |        | (1,936   | )     
|                                               |                                                                                       |                                                                      |                                                                     |           |         |         |        |         
|                                               |                                                                                       | Net cash provided by (used in) investing
    activities              |                                                                     |           | (6,468  | )       |        |          | 850    |        
|                                               |                                                                                       |                                                                      |                                                                     |           |         |         |        |         
|Cash flows from financing activities:          |                                                                                       |                                                                      |                                                                     |           |         |         |        |         
|                                               | Borrowings under Senior Credit Facility                                               |                                                                      |                                                                     | 281,000   |         |         |        | 191,000  |       
|                                               | Payments under Senior Credit Facility                                                 |                                                                      |                                                                     | (283,000  | )       |         |        | (198,000 | )     
|                                               | Issuance of common stock in public offering                                           |                                                                      |                                                                     |          |         |         |        | 82,540   |       
|                                               | Underwriters discount and other financing
    costs                                  |                                                                      |                                                                     |          |         |         |        | (4,398   | )     
|                                               | Retirement of 11% Senior Subordinated Notes                                           |                                                                      |                                                                     | (9,547    | )       |         |        | (71,703  | )     
|                                               | Payment of debt issuance costs                                                        |                                                                      |                                                                     | (4,047    | )       |         |        | (937     | )     
|                                               | Payments on capital lease obligations                                                 |                                                                      |                                                                     | (5,814    | )       |         |        | (5,184   | )     
|                                               | Loan to stockholder                                                                   |                                                                      |                                                                     |          |         |         |        | (125     | )     
|                                               | Recovery of stockholder receivable                                                    |                                                                      |                                                                     | 168       |         |         |        | 274      |       
|                                               | Proceeds from exercise of stock options                                               |                                                                      |                                                                     | 2,867     |         |         |        | 133      |       
|                                               | Other financing activities                                                            |                                                                      |                                                                     | (146      | )       |         |        | (51      | )     
|                                               |                                                                                       |                                                                      |                                                                     |           |         |         |        |         
|                                               |                                                                                       | Net cash used in financing activities                                |                                                                     |           | (18,519 | )       |        |          | (6,451 | )      
|                                               |                                                                                       |                                                                      |                                                                     |           |         |         |        |         
|                                               |                                                                                       | Net increase in cash and cash equivalents                            |                                                                     |           | 20,505  |         |        |          | 435    |        
|Cash and cash equivalents, beginning of period |                                                                                       |                                                                      | 15,519                                                              |           |         |         | 16,084 |         
|                                               |                                                                                       |                                                                      |                                                                     |           |         |         |        |         
|Cash and cash equivalents, end of period       |                                                                                       | $                                                                    | 36,024                                                              |           |         | $       | 16,519 |         
|                                               |                                                                                       |                                                                      |                                                                     |           |         |         |        |         

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

5



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##### Table of Contents



CSK AUTO CORPORATION AND
SUBSIDIARIES






NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS


Thirteen and Twenty-six Weeks Ended
August 3, 2003


CSK Auto Corporation is a holding company. At
August 3, 2003, CSK Auto Corporation had no business
activity other than its investment in CSK Auto, Inc.
(Auto), a wholly owned subsidiary. On a consolidated
basis, CSK Auto Corporation and its subsidiaries are referred to
herein as the Company, we,
us, or our.

Auto is a specialty retailer of automotive
aftermarket parts and accessories. At August 3, 2003, we
operated 1,108 stores in 19 states as a fully
integrated company and single business segment under three brand
names: Checker Auto Parts, founded in 1969 and operating in the
Southwestern, Rocky Mountain and Northern Plains states and
Hawaii; Schucks Auto Supply, founded in 1917 and operating
in the Pacific Northwest and Alaska; and Kragen Auto Parts,
founded in 1947 and operating primarily in California.

Note 1  Basis of
Presentation

We prepared the unaudited consolidated financial
statements included herein pursuant to the rules and regulations
of the Securities and Exchange Commission (SEC), and
accordingly did not include all information and footnotes
required by generally accepted accounting principles. In the
opinion of management, the consolidated financial statements
reflect all adjustments, which are of a normal recurring nature,
necessary for a fair presentation of our financial position and
the results of our operations. The accompanying consolidated
financial statements should be read in conjunction with the
consolidated financial statements and related notes thereto for
the fiscal year ended February 2, 2003, as included in our
Annual Report on Form 10-K filed with the SEC on
May 7, 2003.

Certain amounts in the prior years
financial statements have been reclassified to conform to the
current year presentation. This has no impact on previously
reported financial position, results of operations or cash flows.

Note 2  Change in Accounting
Principle

In March 2003, the Emerging Issues Task Force
(EITF) of the Financial Accounting Standards Board
(FASB) reached consensus on certain matters
discussed in EITF 02-16, Accounting by a Customer
(including a Reseller) for Certain Consideration Received from a
Vendor. EITF 02-16 states that allowances provided by
our vendors are presumed to be a reduction in the costs of
purchasing inventories (to be recognized in inventory and cost
of sales), except for that portion that is a reimbursement for
costs incurred by us to sell the vendors products. In
order to qualify as a reimbursement, the costs must be specific,
identifiable and incremental, to be recognized as a reduction to
operating and administrative expenses. Under previous accounting
guidance, we accounted for all non-performance based vendor
allowances as a reduction of inventory cost and allocated
performance based vendor allowances as a reduction of
advertising expense or cost of goods sold, as appropriate, in
the period the expense was incurred. During the first quarter of
fiscal 2003, we adopted the provisions of EITF 02-16 and
implemented a policy of considering all cooperative advertising
arrangements to be a reduction of product costs, unless we are
specifically required to substantiate advertising costs incurred
to the vendor and do so in the normal course of business.

In the thirteen and twenty-six weeks ended
August 4, 2002, vendor allowances totaling approximately
$2.1 million and $7.8 million were classified as a
reduction to advertising expense (in operating and
administrative expense) rather than as a reduction to cost of
sales as currently required by EITF 02-16. The

6



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##### Table of Contents



CSK AUTO CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

following table adjusts the amounts reported for
cost of sales, gross margin and operating and administrative
expenses from the first half of fiscal 2002 to be comparable
with current requirements of EITF 02-16:

|                                     |                                                            |                      |         |                        |   |             |         |              |   |  |         |      |   |  |         |      |  
|------------------------------------ | ---------------------------------------------------------- | -------------------- | ------- | ---------------------- | - | ----------- | ------- | ------------ | - |  | ------- | ---- | - |  | ------- | ---- | -
|                                     |                                                            |                      |         |                       
|                                     |                                                            | Thirteen Weeks Ended |         | Twenty-six Weeks Ended
|                                     |                                                            | August 4, 2002       |         | August 4, 2002        
|                                     |                                                            |                      |         |                       
|                                     |                                                            |                      |         | Adjusted for           |   |             |         | Adjusted for
|                                     |                                                            | As Reported          |         | EITF 02-16             |   | As Reported |         | EITF 02-16  
|                                     |                                                            |                      |         |                        |   |             |         |             
|                                     |                                                            |                     
|                                     |                                                            | ($ in thousands)    
|Cost of sales                        |                                                            |                      | 216,238 |                        |   |             | 214,173 |              |   |  | 426,658 |      |   |  | 418,825 |     
|                                     | Cost of sales, percent to sales                            |                      |         | 54.3                   | % |             |         | 53.8         | % |  |         | 55.1 | % |  |         | 54.1 | %
|Gross profit                         |                                                            |                      | 182,068 |                        |   |             | 184,133 |              |   |  | 347,198 |      |   |  | 355,031 |     
|                                     | Gross profit, percent to sales                             |                      |         | 45.7                   | % |             |         | 46.2         | % |  |         | 44.9 | % |  |         | 45.9 | %
|Operating and administrative expense |                                                            |                      | 152,565 |                        |   |             | 154,630 |              |   |  | 294,203 |      |   |  | 302,036 |     
|                                     | Operating and administrative expense, percent to
    sales |                      |         | 38.3                   | % |             |         | 38.8         | % |  |         | 38.0 | % |  |         | 39.0 | %

The change in accounting principle had no impact
on cash flow. We do not expect EITF 02-16 to have a
material impact on net income for the remaining quarters of
fiscal 2003.

In April 2002, the FASB issued Statement of
Financial Accounting Standard (SFAS) No. 145,
Rescission of FASB Statements 4, 44, and 64,
Amendment of FASB Statement 13, and Technical
Corrections. SFAS No. 145 addresses, among other
things, the reporting of debt extinguishments. We adopted SFAS
No. 145 on February 3, 2003. Consistent with SFAS
No. 145, any gain or loss on extinguishment of debt that
previously would have been classified as an extraordinary item
and does not meet the criteria in APB Opinion No. 30,
Reporting the Results of Operations  Reporting
the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and
Transactions for classification as an extraordinary item
shall be presented as an ordinary item before the provision for
income taxes. Under SFAS No. 145, prior periods must be
reclassified to be comparable. Accordingly, for the second
quarter and first half of fiscal 2003 and 2002, we presented
losses on debt retirement of $4.3 million and
$6.0 million, respectively, as a separate line in our
consolidated statements of operations as a component of income
before income taxes.

Note 3  Recent Accounting
Pronouncements

In June 2001, the FASB issued SFAS No. 143,
Accounting for Asset Retirement Obligations. SFAS
No. 143 addresses financial accounting and reporting for
obligations associated with the retirement of tangible
long-lived assets and the associated asset retirement costs.
This statement applies to all entities that have legal
obligations associated with the retirement of long-lived assets
that result from the acquisition, construction, development or
normal use of the asset. We adopted SFAS No. 143 on
February 3, 2003. The adoption of this standard did not
have an impact on our financial statements.

In January 2003, the FASB issued FASB
Interpretation (FIN) No. 46,
Consolidation of Variable Interest Entities, an
Interpretation of ARB 51. The primary objectives of
FIN No. 46 are to provide guidance on the identification of
entities for which control is achieved through means other than
through voting rights (Variable Interest Entities) and how to
determine when and which business enterprise should consolidate
the Variable Interest Entity (the primary beneficiary). We do
not have any transactions or relationships with unconsolidated
variable interest entities and, therefore, FIN No. 46 does
not impact our financial statements.

In April 2003, the FASB issued SFAS No. 149,
Amendment of Statement 133 on Derivative Instruments
and Hedging Activities which amends SFAS No. 133.
This Statement amends and clarifies financial accounting and
reporting for derivative instruments, including certain
derivative instruments embedded in other contracts and for
hedging activities under FASB Statement No. 133,
Accounting for

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##### Table of Contents



CSK AUTO CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Derivative Instruments and Hedging
Activities. This statement is effective for contracts
entered into or modified after June 30, 2003. The adoption
of this statement did not have an impact on our financial
statements.

In May 2003, the FASB issued SFAS No. 150,
Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity. The
standard improves the accounting for certain financial
instruments that, under previous guidance, issuers could account
for as equity. The standard requires that those instruments be
classified as liabilities in statements of financial position.
This standard is effective for interim periods beginning after
June 15, 2003. We do not anticipate that the adoption of
this standard will have an impact on our financial statements.

Note 4  Inventories

Inventories are valued at the lower of cost or
market, our cost being determined utilizing the LIFO method. Our
inventory levels have been generally consistent in recent years
and thus, under LIFO, costs of sales reflect the costs of the
most currently purchased inventories. Inventory carrying values
for financial statement purposes, on the other hand, reflect the
costs relating to prices paid in prior years under the LIFO
method. Our costs of acquiring inventories have been decreasing
in recent years as our increased size and cash flows have
enabled us to take advantage of volume discounts and lower
product acquisition costs. Accordingly, it costs us less money
to replace inventory today than the LIFO balances carried for
similar inventory reflected in our financial statements. As a
result of the LIFO method of accounting for inventory and the
ability to obtain product at lower acquisition costs, we
recorded reductions to cost of goods sold of $2.0 million
and $4.0 million for the thirteen weeks ending
August 3, 2003 and August 4, 2002, and
$10.3 million and $11.3 million for the twenty-six
weeks ending August 3, 2003 and August 4, 2002,
respectively.

The replacement cost of inventories approximated
$568.6 million and $545.0 million at August 3,
2003 and February 2, 2003, respectively, as compared to
financial statement carrying values of $684.7 million and
$650.8 million. While carrying balances are higher than
replacement costs, such carrying balances are not higher than
the net realizable value amount (NRV) we expect to
earn by selling the inventory through our retail stores in the
normal course of business. We evaluate the difference between
carrying balances and NRV of our inventories before each balance
sheet reporting date. If our evaluation were to indicate that
carrying values exceed the NRV of the inventories, the carrying
balances of the inventory would be reduced to NRV, with a
corresponding charge to operations.

Note 5  Store Closing
Costs

We provide an allowance for estimated costs and
losses to be incurred in connection with store closures. On an
on-going basis, store locations are reviewed and analyzed based
on several factors including market saturation, store
profitability and cash flow, and store size and format. In
addition, we analyze sales trends and geographical and
competitive factors to determine the viability and future
profitability of our store locations. If a store location does
not meet our required projections, it is designated for closure.
As a result of our acquisitions over the last several years, we
have closed numerous locations primarily as a result of store
overlap with previously existing store locations.

The allowance for store closing costs is included
in accrued expenses and other long term liabilities in the
accompanying financial statements and primarily consists of
three components: (1) future rents to be paid over the
remaining terms of the lease agreements for the stores (net of
estimated probable sublease recoveries); (2) lease
commissions associated with the anticipated store subleases; and
(3) occupancy expenses associated with the closed store
vacancy periods. Prior to the adoption of SFAS No. 146 on
January 1, 2003, such costs were recognized when a store
was specifically identified, costs could be estimated and
closure was planned to be completed within the next twelve
months. No provision was made for employee termination costs.
For stores to be relocated, such costs were recognized when an
agreement for the new

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##### Table of Contents



CSK AUTO CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

location was reached with a landlord and site
plans met preliminary municipal approvals. During the period
that they remained open for business, the rent and other
operating expenses for the stores to be closed continued to be
reflected in normal operating expenses.

In July 2002, the FASB issued SFAS No. 146,
Accounting for Costs Associated with Exit or Disposal
Activities. SFAS No. 146 requires companies to
recognize the present value of costs associated with exit or
disposal activities when they are incurred rather than at the
date of a commitment to an exit or disposal plan. Examples of
costs covered by the standard include lease rental and
termination costs and certain employee severance costs that are
associated with a restructuring, discontinued operation, store
closing, or other exit or disposal activity. SFAS No. 146
is required to be applied prospectively to exit or disposal
activities initiated after December 31, 2002. We did not
incur any new liability related to a store closure during the
first half of fiscal 2003.

As of August 3, 2003, we had a total of 196
store locations included in the allowance for store closing
costs. Of this total, 35 locations were vacant,
160 locations were subleased and one location was
identified for closure but remained open. In addition to these
stores, we had 59 service centers of which 3 were vacant
and 56 were subleased. Future rents will be incurred through the
expiration of the non-cancelable leases, the longest of which
runs through January 2018. As of August 3, 2003, we have
one store accrued during the 2002 fiscal plan year that remained
open and was identified for closure prior to our implementation
of SFAS No. 146.

Activity in the reserve for store closings and
the related store closing costs for the first half of fiscal
2003 is as follows ($ in thousands):

|                             |                                          |                |       |        |        |  
|---------------------------- | ---------------------------------------- | -------------- | ----- | ------ | ------ | -
|Balance, beginning of year   |                                          | $              | 4,422 |       
|Expense:                     |                                          |                |       |       
|                             | Revisions in estimates                   |                |       | 136    |       
|Payments:                    |                                          |                |       |       
|                             | Rent expense, net of sublease recoveries |                |       | (1,826 | )     
|                             | Occupancy and other expenses             |                |       | (478   | )     
|                             | Sublease commissions and buyouts         |                |       | (409   | )     
|                             |                                          |                |       |       
|                             |                                          | Total payments |       |        | (2,713 | )
|                             |                                          |                |       |       
|Balance as of August 3, 2003 |                                          | $              | 1,845 |       
|                             |                                          |                |       |       

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##### Table of Contents



CSK AUTO CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Note 6  Debt

Outstanding debt, excluding capital leases, is
comprised of the following ($ in thousands):

|                                                         |                                                                                                                       |           |         |             |   |   |         |        |  
|-------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------- | --------- | ------- | ----------- | - | - | ------- | ------ | -
|                                                         |                                                                                                                       | August 3, |         | February 2,
|                                                         |                                                                                                                       | 2003      |         | 2003       
|                                                         |                                                                                                                       |           |         |            
|Senior credit facility  term loan                       |                                                                                                                       | $         | 200,000 |             |   | $ | 170,000 |       
|Senior credit facility  revolving
    credit commitment |                                                                                                                       |           |        |             |   |   | 32,000  |       
|12% Senior Notes                                         |                                                                                                                       |           | 280,000 |             |   |   | 280,000 |       
|                                                         | Unamortized discount on 12% Senior Notes                                                                              |           |         | (3,283      | ) |   |         | (3,744 | )
|11% Senior Subordinated Notes                            |                                                                                                                       |           |        |             |   |   | 9,547   |       
|                                                         |                                                                                                                       |           |         |             |   |   |         |       
|                                                         |                                                                                                                       |           | 476,717 |             |   |   | 487,803 |       
|                                                         | Fair market value adjustment on
    $100.0 million of 12% Senior Notes (SFAS No. 133 hedge
    accounting adjustment) |           |         | 5,724       |   |   |         | 4,804  |  
|                                                         |                                                                                                                       |           |         |             |   |   |         |       
|Total debt                                               |                                                                                                                       |           | 482,441 |             |   |   | 492,607 |       
|                                                         | Current maturities                                                                                                    |           |         | (2,000      | ) |   |         |       |  
|                                                         |                                                                                                                       |           |         |             |   |   |         |       
|Total long term debt                                     |                                                                                                                       | $         | 480,441 |             |   | $ | 492,607 |       
|                                                         |                                                                                                                       |           |         |             |   |   |         |       

In June 2003, we replaced our $300.0 million
credit facility with a new $325.0 million senior
collateralized, asset based credit facility consisting of a
$200.0 million term loan and a $125.0 million
revolving credit facility. As of August 3, 2003, there were
no borrowings under the revolving credit facility. The new term
loan is to be repaid in twelve installments consisting of ten
$1.0 million dollar payments made semi-annually beginning
in December 2003. The last two payments are for
$95.0 million each in December 2008 and at maturity, June
2009. The revolving credit facility matures in June 2008. The
maturity dates on our $280.0 million 12% Senior Notes must
be extended by CSK Auto, Inc. prior to February 15, 2006 or
the entire credit facility will be due and payable on
February 15, 2006. Interest accrues under the new credit
facility based on our borrowing decisions at a variable rate,
which is a function of the spread over the Base rate (as defined
in the agreement) or the Eurodollar rate (as defined in the
agreement). The new credit facility carries interest rate
spreads that are 0.50% to 0.75% lower than our prior facility.
As of August 3, 2003, we were in compliance with the
financial covenants and we anticipate meeting all required
covenants under the new credit facility during the remainder of
fiscal 2003.

At the time of the June 2003 refinancing, we
applied the provisions of EITF 98-14 Debtors
Accounting for Changes in Line of Credit or Revolving Debt
Arrangements for the revolving credit portion of the
credit facility and EITF 96-19 Debtors
Accounting for a Modification or Exchange of Debt
Instruments for the term portion of the credit facility.
We expensed $3.8 million of certain unamortized debt
issuance costs and certain direct costs associated with the new
facility. Our carrying value of deferred debt issuance costs of
approximately $4.1 million (as of the transaction date) is
being amortized to interest expense over the corresponding life
of the respective portion of the credit facility.

We used proceeds from our new credit facility to
redeem the remaining $9.5 million in aggregate principal amount
of CSK Auto, Inc.s 11% Senior Subordinated Notes,
including accrued and unpaid interest associated therewith. In
connection with this redemption, we paid $0.3 million of
early redemption premium and expensed $0.2 million of
unamortized deferred debt issuance costs. These costs, along
with the $3.8 million in costs disclosed in the paragraph
above, are reflected as a loss on debt retirement in the
accompanying consolidated statement of operations.

During February 2002, we entered into an interest
rate swap agreement which converted the interest rate payment
obligation on $100.0 million of our 12% Senior Notes to a
floating rate in order to hedge the fair value of such notes
against potential movements in market interest rates. On
June 5, 2003, we terminated the

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CSK AUTO CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

swap agreement and received in consideration
thereof the sum of $6.0 million, which represents the fair
market value of the swap agreement on that date. This fair
market value adjustment is currently reflected on our
consolidated balance sheet as part of our long term debt. This
amount will be amortized as an offset to interest expense
through the maturity date of the 12% Senior Notes (June 15,
2006).

Note 7  Earnings Per
Share

Calculation of the numerator and denominator used
in computing per share amounts is summarized as follows (in
thousands):

|                                                  |                                                   |                                               |   |                        |        |                |   |                |        |  |   |        |        |  |   |        |        | 
|------------------------------------------------- | ------------------------------------------------- | --------------------------------------------- | - | ---------------------- | ------ | -------------- | - | -------------- | ------ |  | - | ------ | ------ |  | - | ------ | ------ | 
|                                                  |                                                   |                                               |   |                       
|                                                  |                                                   | Thirteen Weeks Ended                          |   | Twenty-six Weeks Ended
|                                                  |                                                   |                                               |   |                       
|                                                  |                                                   | August 3, 2003                                |   | August 4, 2002         |        | August 3, 2003 |   | August 4, 2002
|                                                  |                                                   |                                               |   |                        |        |                |   |               
|Numerator for basic EPS:                          |                                                   |                                               |   |                        |        |                |   |                |        |  |   |        |        |  |   |       
|                                                  | Net income                                        |                                               | $ | 10,814                 |        |                | $ | 4,087          |        |  | $ | 18,337 |        |  | $ | 7,467  |       
|                                                  |                                                   |                                               |   |                        |        |                |   |                |        |  |   |        |        |  |   |       
|Denominator for basic EPS:                        |                                                   |                                               |   |                        |        |                |   |                |        |  |   |        |        |  |   |       
|                                                  | Weighted average shares outstanding (basic)       |                                               |   | 45,217                 |        |                |   | 39,826         |        |  |   | 45,183 |        |  |   | 36,100 |       
|                                                  |                                                   |                                               |   |                        |        |                |   |                |        |  |   |        |        |  |   |       
|Numerator for diluted EPS:                        |                                                   |                                               |   |                        |        |                |   |                |        |  |   |        |        |  |   |       
|                                                  | Net income                                        |                                               | $ | 10,814                 |        |                | $ | 4,087          |        |  | $ | 18,337 |        |  | $ | 7,467  |       
|                                                  |                                                   |                                               |   |                        |        |                |   |                |        |  |   |        |        |  |   |       
|Denominator for diluted EPS:                      |                                                   |                                               |   |                        |        |                |   |                |        |  |   |        |        |  |   |       
|                                                  | Weighted average shares outstanding (diluted)     |                                               |   | 45,217                 |        |                |   | 39,826         |        |  |   | 45,183 |        |  |   | 36,100 |       
|                                                  | Effect of dilutive stock options                  |                                               |   | 282                    |        |                |   | 313            |        |  |   | 91     |        |  |   | 79     |       
|                                                  |                                                   |                                               |   |                        |        |                |   |                |        |  |   |        |        |  |   |       
|                                                  |                                                   | Weighted average shares outstanding (diluted) |   |                        | 45,499 |                |   |                | 40,139 |  |   |        | 45,274 |  |   |        | 36,179 | 
|                                                  |                                                   |                                               |   |                        |        |                |   |                |        |  |   |        |        |  |   |       
|Shares excluded as a result of
    anti-dilution: |                                                   |                                               |   |                        |        |                |   |                |        |  |   |        |        |  |   |       
|                                                  | Stock options                                     |                                               |   | 652                    |        |                |   | 695            |        |  |   | 2,056  |        |  |   | 2,156  |       
|                                                  | Conversion of convertible subordinated debentures |                                               |   |                       |        |                |   | 959            |        |  |   |       |        |  |   | 3,370  |       
|                                                  |                                                   |                                               |   |                        |        |                |   |                |        |  |   |        |        |  |   |       
|                                                  |                                                   | Total shares excluded                         |   |                        | 652    |                |   |                | 1,654  |  |   |        | 2,056  |  |   |        | 5,526  | 
|                                                  |                                                   |                                               |   |                        |        |                |   |                |        |  |   |        |        |  |   |       

Note 8  Stock Based
Compensation

We have stock-based employee compensation plans
which are described further in Note 12 of the Notes to
Consolidated Financial Statements in our 2002 Annual Report on
Form 10-K filed with the SEC on May 7, 2003. We
account for our stock-based compensation plans under Accounting
Principles Board Opinion No. 25, (APB 25)
Accounting for Stock Issued to Employees and the
related interpretations, for which no compensation cost is
recorded in the statement of operations for the estimated fair
value of stock options issued with an exercise price equal to
the fair value of the common stock on the date of grant. SFAS
No. 123, Accounting for Stock-based
Compensation, as amended by SFAS No. 148,
Accounting for Stock-Based Compensation 
Transition and Disclosure, requires that companies which
do not elect to account for stock-based compensation as
prescribed by this statement disclose the pro forma effects on
earnings and earnings per share as if SFAS No. 123 had been
adopted.

11



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##### Table of Contents



CSK AUTO CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

If we applied the recognition provisions of SFAS
No. 123 using the Black-Scholes option-pricing model, the
resulting pro forma net income available to common shareholders,
and pro forma net income available to common shareholders per
share would be as follows (in thousands, except per share data):

|                                                                                                                                                   |             |                |        |                  |  |           |       |           |  |   |        |      |  |   |        |      | 
|-------------------------------------------------------------------------------------------------------------------------------------------------- | ----------- | -------------- | ------ | ---------------- |  | --------- | ----- | --------- |  | - | ------ | ---- |  | - | ------ | ---- | 
|                                                                                                                                                   |             |                |        |                 
|                                                                                                                                                   |             | Thirteen Weeks |        | Twenty-six Weeks
|                                                                                                                                                   |             | Ended          |        | Ended           
|                                                                                                                                                   |             |                |        |                 
|                                                                                                                                                   |             | August 3,      |        | August 4,        |  | August 3, |       | August 4,
|                                                                                                                                                   |             | 2003           |        | 2002             |  | 2003      |       | 2002     
|                                                                                                                                                   |             |                |        |                  |  |           |       |          
|Net income  as reported                                                                                                                           |             | $              | 10,814 |                  |  | $         | 4,087 |           |  | $ | 18,337 |      |  | $ | 7,467  |     
|Less: Total stock-based employee compensation
    expense determined under fair value based method for all awards,
    net of related income taxes |             |                | (157   | )                |  |           | (414  | )         |  |   | (402   | )    |  |   | (2,702 | )   
|                                                                                                                                                   |             |                |        |                  |  |           |       |           |  |   |        |      |  |   |        |     
|Net income  pro forma                                                                                                                             |             | $              | 10,657 |                  |  | $         | 3,673 |           |  | $ | 17,935 |      |  | $ | 4,765  |     
|                                                                                                                                                   |             |                |        |                  |  |           |       |           |  |   |        |      |  |   |        |     
|Earnings per share  basic:                                                                                                                        |             |                |        |                  |  |           |       |           |  |   |        |      |  |   |        |     
|                                                                                                                                                   | As reported |                | $      | 0.24             |  |           | $     | 0.10      |  |   | $      | 0.41 |  |   | $      | 0.21 | 
|                                                                                                                                                   | Pro forma   |                | $      | 0.24             |  |           | $     | 0.09      |  |   | $      | 0.40 |  |   | $      | 0.13 | 
|Earnings per share  diluted:                                                                                                                      |             |                |        |                  |  |           |       |           |  |   |        |      |  |   |        |     
|                                                                                                                                                   | As reported |                | $      | 0.24             |  |           | $     | 0.10      |  |   | $      | 0.41 |  |   | $      | 0.21 | 
|                                                                                                                                                   | Pro forma   |                | $      | 0.23             |  |           | $     | 0.09      |  |   | $      | 0.40 |  |   | $      | 0.13 | 

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##### Table of Contents



CSK AUTO CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 2. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations



| |         
| | --------
| | Overview

Our business is somewhat seasonal in nature, with
the highest sales occurring in the months of June through
October (overlapping our second and third fiscal quarters). In
addition, our business is affected by weather conditions. While
unusually severe or inclement weather tends to reduce sales, as
our customers are more likely to defer elective maintenance
during such periods, extremely hot and cold temperatures tend to
increase sales by causing auto parts to fail and sales of
seasonal products to increase.

In March 2003, the Emerging Issues Task Force
(EITF) of the Financial Accounting Standards Board
(FASB) reached consensus on certain matters
discussed in EITF 02-16, Accounting by a Customer
(including a Reseller) for Certain Consideration Received from a
Vendor. EITF 02-16 states that allowances provided by our
vendors are presumed to be a reduction in the costs of
purchasing inventories (to be recognized in inventory and cost
of sales), except for that portion that is a reimbursement for
costs incurred by us to sell the vendors products. In
order to qualify as a reimbursement, the costs must be specific,
identifiable and incremental, to be recognized as a reduction to
operating and administrative expenses. Under previous accounting
guidance, we accounted for all non-performance based vendor
allowances as a reduction of inventory cost and allocated
performance based vendor allowances as a reduction of
advertising expense or cost of goods sold, as appropriate, in
the period the expense was incurred. During the first quarter of
fiscal 2003, we adopted the provisions of EITF 02-16 and
implemented a policy of considering all cooperative advertising
arrangements to be a reduction of product costs, unless we are
specifically required to substantiate advertising costs incurred
to the vendor and do so in the normal course of business.

In the thirteen and twenty-six weeks ended
August 4, 2002, vendor allowances totaling approximately
$2.1 million and $7.8 million were classified as a
reduction to advertising expense (in operating and
administrative expense) rather than as a reduction to cost of
sales as currently required by EITF 02-16. The following table
adjusts the amounts reported for cost of sales, gross margin and
operating and administrative expenses from the first half of
fiscal 2002 to be comparable with current requirements of EITF
02-16:

|                                     |                                                            |                      |         |                        |   |             |         |              |   |  |         |      |   |  |         |      |  
|------------------------------------ | ---------------------------------------------------------- | -------------------- | ------- | ---------------------- | - | ----------- | ------- | ------------ | - |  | ------- | ---- | - |  | ------- | ---- | -
|                                     |                                                            |                      |         |                       
|                                     |                                                            | Thirteen Weeks Ended |         | Twenty-six Weeks Ended
|                                     |                                                            | August 4, 2002       |         | August 4, 2002        
|                                     |                                                            |                      |         |                       
|                                     |                                                            |                      |         | Adjusted for           |   |             |         | Adjusted for
|                                     |                                                            | As Reported          |         | EITF 02-16             |   | As Reported |         | EITF 02-16  
|                                     |                                                            |                      |         |                        |   |             |         |             
|                                     |                                                            |                     
|                                     |                                                            | ($ in thousands)    
|Cost of sales                        |                                                            |                      | 216,238 |                        |   |             | 214,173 |              |   |  | 426,658 |      |   |  | 418,825 |     
|                                     | Cost of sales, percent to sales                            |                      |         | 54.3                   | % |             |         | 53.8         | % |  |         | 55.1 | % |  |         | 54.1 | %
|Gross profit                         |                                                            |                      | 182,068 |                        |   |             | 184,133 |              |   |  | 347,198 |      |   |  | 355,031 |     
|                                     | Gross profit, percent to sales                             |                      |         | 45.7                   | % |             |         | 46.2         | % |  |         | 44.9 | % |  |         | 45.9 | %
|Operating and administrative expense |                                                            |                      | 152,565 |                        |   |             | 154,630 |              |   |  | 294,203 |      |   |  | 302,036 |     
|                                     | Operating and administrative expense, percent to
    sales |                      |         | 38.3                   | % |             |         | 38.8         | % |  |         | 38.0 | % |  |         | 39.0 | %

The change in accounting principle had no impact
on cash flow. We do not expect EITF 02-16 to have a material
impact on net income for the remaining quarters of fiscal 2003.

In April 2002, the FASB issued Statement of
Financial Accounting Standard (SFAS) No. 145,
Rescission of FASB Statements 4, 44, and 64,
Amendment of FASB Statement 13, and Technical
Corrections. SFAS No. 145 addresses, among other
things, the reporting of debt extinguishments. We adopted SFAS
No. 145 on February 3, 2003. Consistent with SFAS
No. 145, any gain or loss on extinguishment of debt that
previously would have been classified as an extraordinary item
and does not meet the criteria in APB Opinion No. 30,
Reporting the Results of Operations  Reporting
the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and
Transactions for classification as an extraordinary item
shall be presented as an ordinary item before the provision for
income taxes. Under SFAS No. 145, prior periods must be
reclassified to be comparable. Accordingly, for the second
quarter and first half of fiscal 2003 and 2002, we presented
losses on debt

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retirement of $4.3 million and
$6.0 million, respectively as a separate line in our
consolidated statements of operations as a component of income
before income taxes.




| |                      
| | ---------------------
| | Results of Operations

The following table expresses the statements of
operations as a percentage of sales for the periods shown:

|                               |  |                      |       |                        |  |           |       |           |  |  |       |   |  |  |       |  
|------------------------------ |  | -------------------- | ----- | ---------------------- |  | --------- | ----- | --------- |  |  | ----- | - |  |  | ----- | -
|                               |  |                      |       |                       
|                               |  | Thirteen Weeks Ended |       | Twenty-six Weeks Ended
|                               |  |                      |       |                       
|                               |  | August 3,            |       | August 4,              |  | August 3, |       | August 4,
|                               |  | 2003                 |       | 2002                   |  | 2003      |       | 2002     
|                               |  |                      |       |                        |  |           |       |          
|Net sales                      |  |                      | 100.0 | %                      |  |           | 100.0 | %         |  |  | 100.0 | % |  |  | 100.0 | %
|Cost of sales                  |  |                      | 53.7  |                        |  |           | 54.3  |           |  |  | 53.7  |   |  |  | 55.1  |  
|                               |  |                      |       |                        |  |           |       |           |  |  |       |   |  |  |       |  
|Gross profit                   |  |                      | 46.3  |                        |  |           | 45.7  |           |  |  | 46.3  |   |  |  | 44.9  |  
|Operating and administrative   |  |                      | 37.9  |                        |  |           | 38.3  |           |  |  | 38.6  |   |  |  | 38.1  |  
|Store closing costs            |  |                      |      |                        |  |           | 0.1   |           |  |  |      |   |  |  | 0.1   |  
|Loss on sale of stores         |  |                      |      |                        |  |           | 0.2   |           |  |  |      |   |  |  | 0.1   |  
|Secondary stock offering costs |  |                      |      |                        |  |           |      |           |  |  |      |   |  |  |      |  
|                               |  |                      |       |                        |  |           |       |           |  |  |       |   |  |  |       |  
|Operating profit               |  |                      | 8.4   |                        |  |           | 7.1   |           |  |  | 7.7   |   |  |  | 6.6   |  
|Interest expense               |  |                      | 3.2   |                        |  |           | 4.1   |           |  |  | 3.4   |   |  |  | 4.4   |  
|Loss on debt retirement        |  |                      | 1.0   |                        |  |           | 1.5   |           |  |  | 0.5   |   |  |  | 0.7   |  
|                               |  |                      |       |                        |  |           |       |           |  |  |       |   |  |  |       |  
|Income before income taxes     |  |                      | 4.2   |                        |  |           | 1.5   |           |  |  | 3.8   |   |  |  | 1.5   |  
|Income tax expense             |  |                      | 1.6   |                        |  |           | 0.5   |           |  |  | 1.5   |   |  |  | 0.5   |  
|                               |  |                      |       |                        |  |           |       |           |  |  |       |   |  |  |       |  
|Net income                     |  |                      | 2.6   | %                      |  |           | 1.0   | %         |  |  | 2.3   | % |  |  | 1.0   | %
|                               |  |                      |       |                        |  |           |       |           |  |  |       |   |  |  |       |  

Thirteen Weeks Ended August 3, 2003
Compared to Thirteen Weeks Ended August 4, 2002

Net sales for the thirteen weeks ended
August 3, 2003 (the second quarter of fiscal
2003) increased 5.1% to $418.5 million from
$398.3 million for the thirteen weeks ended August 4,
2002 (the second quarter of fiscal 2002). Same store
sales increased 6%. The sales growth is driven by the continued
refinement of our inventory mix (including the addition of
performance products, garage maintenance items and specialty
auto related items) and additional promotional activity. In
addition, during the quarter we implemented our Free Automotive
Systems Test (FAST), which allows customers to
utilize diagnostic equipment that reads their vehicles
on-board computer and enables our store associates to provide
the customer with the right part the first time, reducing
returns and improving customer service.

Gross profit was $193.7 million, or 46.3% of
net sales, for the second quarter of fiscal 2003 as compared to
$182.1 million, or 45.7% of net sales, for the second
quarter of fiscal 2002. Gross profit increased during the second
quarter of fiscal 2003 primarily as a result the implementation
of EITF 02-16 as previously discussed.

Operating and administrative expenses were
$158.5 million in the second quarter of fiscal 2003,
compared to $152.6 million in the same quarter of fiscal
2002. The impact of EITF 02-16, as previously discussed,
accounted for approximately $2.1 million of the increase.
As a percentage of sales, operating and administrative expenses
were 37.9% in the 2003 period, which was lower than the 38.3% in
the 2002 period. This reflects our continuing focus on reducing
variable costs and the leveraging of our fixed costs over our
higher sales levels.

Interest expense for the second quarter of fiscal
2003 decreased to $13.3 million from $16.2 million in the
second quarter of fiscal 2002 as a result of our reduced
outstanding debt levels and more favorable terms under our new
credit facility.

Income tax expense for the second quarter of
fiscal 2003 was $6.8 million, compared to $1.8 million
for the comparable period of fiscal 2002. Our effective tax rate
of 38.6% is closer to our statutory rate and higher

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than the 30.8% rate in the prior year. The
effective tax rate for the second quarter of fiscal 2002
benefited from the realization of certain tax credits and the
reversal of reserves no longer considered necessary.


As a result of the above factors, net income
increased to $10.8 million, or $0.24 per diluted common
share, for the second quarter of fiscal 2003, compared to net
income of $4.1 million, or $0.10 per diluted common share,
for the second quarter of fiscal 2002.

Twenty-six Weeks Ended August 3, 2003
Compared to Twenty-six Weeks Ended August 4, 2002

Net sales for the twenty-six weeks ended
August 3, 2003 (the first half of fiscal 2003)
increased 2.9% to $796.0 million from $773.9 million
for the twenty-six weeks ended August 4, 2002 (the
first half of fiscal 2002). Same store sales
increased 4%. The sales growth is driven by the continued
refinement of our inventory mix (including the addition of
performance products, garage maintenance items and specialty
auto related items), the implementation of our FAST program and
additional promotional activity.

Gross profit was $368.7 million, or 46.3% of
net sales, for the first half of fiscal 2003 as compared to
$347.2 million, or 44.9% of net sales, for the first half
of fiscal 2002. Gross profit increased during the first half of
fiscal 2003 as a result of: (1) an increased emphasis on
reducing inventory acquisition costs and increasing our ability
to take advantage of available vendor allowances; (2) the
reduction of cost of sales resulting from the implementation of
EITF 02-16 as previously discussed; and (3) an increased
emphasis on promotional activities and promotional pricing
during the first half of fiscal 2002 to attract new and existing
customers to our stores, which, however, also resulted in
expectedly lower gross profit percentages.

Operating and administrative expenses were higher
in the first half of fiscal 2003, in both dollars and as a
percentage of sales, compared to the same period of fiscal 2002.
Expenses in fiscal 2002 were $7.8 million lower than in
fiscal 2003 due to the impact of EITF 02-16 as previously
discussed. Adjusting for this impact, fiscal 2003 operating and
administrative expenses were 38.6% of net sales versus 39.0% of
net sales in fiscal 2002. This reflects our continuing focus on
reducing variable costs and the leveraging of our fixed costs
over our higher sales levels.

Interest expense for the first half of fiscal
2003 decreased to $27.2 million from $34.0 million in
the first half of fiscal 2002 as a result of our reduced
outstanding debt levels and more favorable terms under our new
credit facility.

Income tax expense for the first half of fiscal
2003 was $11.6 million, compared to $3.9 million for
the comparable period of fiscal 2002. Our effective tax rate of
38.6% is closer to our statutory rate and higher than our 34.4%
rate in the prior year. The effective tax rate for the first
half of fiscal 2002 benefited from the realization of certain
tax credits and the reversal of reserves no longer considered
necessary.

As a result of the above factors, net income
increased to $18.3 million, or $0.41 per diluted common
share, for the first half of fiscal 2003, compared to net income
of $7.5 million, or $0.21 per diluted common share, for the
first half of fiscal 2002.

Liquidity and Capital Resources



| |                    
| | -------------------
| | Recent Transactions

In June 2003, we replaced our $300.0 million
credit facility with a new $325.0 million senior
collateralized, asset based credit facility consisting of a
$200.0 million term loan and a $125.0 million
revolving credit facility. As of August 3, 2003, there were
no borrowings under the revolving credit facility. The new term
loan is to be repaid in twelve installments consisting of ten
$1.0 million dollar payments made semiannually beginning in
December 2003. The last two payments are for $95.0 million
each in December 2008 and at maturity, June 2009. The revolving
credit facility matures in June 2008. The maturity dates on our
existing $280.0 million 12% Senior Notes must be extended
by CSK Auto, Inc. prior to February 15, 2006 or the entire
new $325.0 million credit facility will be due and payable
on February 15, 2006. Interest accrues under the new credit
facility at a variable rate based on our borrowing decisions,
which is a function of the spread over the Base rate (as defined
in the agreement) or the Eurodollar rate (as defined in the
agreement).

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The new credit facility carries interest rate
spreads that are 0.50% to 0.75% lower than our prior facility.
As of August 3, 2003, we were in compliance with the
financial covenants and we anticipate meeting all required
covenants under the new credit facility during the remainder of
fiscal 2003.


At the time of the June 2003 refinancing, we
applied the provisions of EITF 98-14 Debtors
Accounting for Changes in Line of Credit or Revolving Debt
Arrangements for the revolving credit portion of the
credit facility and EITF 96-19 Debtors
Accounting for a Modification or Exchange of Debt
Instruments for the term portion of the credit facility.
We expensed $3.8 million of certain unamortized debt
issuance costs and certain direct costs associated with the new
facility. Our carrying value of deferred debt issuance costs of
approximately $4.1 million (as of the transaction date) is
being amortized to interest expense over the corresponding life
of the respective portion of the credit facility.

We used proceeds from our new credit facility to
redeem the remaining $9.5 million in aggregate principal amount
of CSK Auto, Inc.s 11% Senior Subordinated Notes,
including accrued and unpaid interest associated therewith. In
connection with this redemption, we paid $0.3 million of
early redemption premium and expensed $0.2 million of
unamortized deferred debt issuance costs. These costs, along
with the $3.8 million in costs disclosed in the paragraph
above, are reflected as a loss on debt retirement in the
accompanying consolidated statement of operations.

During February 2002, we entered into an interest
rate swap agreement which converted the interest rate payment
obligation on $100.0 million of our 12% Senior Notes to a
floating rate in order to hedge the fair value of such notes
against potential movements in market interest rates. On
June 5, 2003, we terminated the swap agreement and received
in consideration thereof the sum of $6.0 million, which
represents the fair market value of the swap agreement on that
date. This fair market value adjustment is currently reflected
on our consolidated balance sheet as part of our long term debt.
This amount will be amortized as an offset to interest expense
through the maturity date of the 12% Senior Notes (June 15,
2006). See Note 6 to the Consolidated Financial Statements.

During September 2003, entities associated with
or organized by Investcorp, S.A., one of the Companys
principal stockholders, sold 3.0 million shares of CSK Auto
Corporation common stock. We did not receive any proceeds from
the sale of such stock nor did this transaction result in share
dilution. In addition, the expenses incurred by us related to
this transaction were not significant.



| |                      
| | ---------------------
| | Overview of Liquidity

Our primary cash requirements include working
capital (primarily inventory), interest on our debt and capital
expenditures. We intend to finance our cash requirements with
cash flows from operating activities, borrowings under our new
senior credit facility and short-term trade credit relating to
extended payment terms for inventory purchases.

We lease our office and warehouse facilities, all
but one of our retail stores, and a majority of our equipment.
Substantially all of our store leases are operating leases with
private landlords and provide for monthly rental payments based
on a contractual amount. These leases generally require minimal
initial cash outlay and we anticipate using such leases for new
store locations in the near future. Other than payment
obligations under our new credit facility, there are no material
changes to the financial commitment schedules disclosed in the
Notes to Consolidated Financial Statements in our Annual Report
on Form 10-K for the fiscal year ended February 2,
2003, filed with the SEC on May 7, 2003.

As of August 3, 2003, we had total liquidity
(cash plus availability under our new revolving credit facility)
of approximately $140.0 million, an increase of
$69.8 million compared to February 2, 2003. There was
no outstanding balance on our revolving credit facility as of
August 3, 2003; however, our availability was

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reduced by $21.0 million for outstanding
letters of credit. The following table outlines our liquidity
($ in thousands):


|                                            |  |           |         |             |  |   |        | 
|------------------------------------------- |  | --------- | ------- | ----------- |  | - | ------ | 
|                                            |  | August 3, |         | February 2,
|                                            |  | 2003      |         | 2003       
|                                            |  |           |         |            
|Cash                                        |  | $         | 36,024  |             |  | $ | 15,519 | 
|Availability under revolving line of credit |  |           | 104,014 |             |  |   | 54,698 | 
|                                            |  |           |         |             |  |   |        | 
|Total liquidity                             |  | $         | 140,038 |             |  | $ | 70,217 | 
|                                            |  |           |         |             |  |   |        | 

Our liquidity improved due to: (1) increased
cash ($20.5 million) as a result of higher sales and
profitability associated with our new product mix and
seasonality, as our sales are generally highest in our second
quarter; (2) our pay-down of our revolving credit facility and
corresponding $30 million increase of the term loan under
our new credit facility; and (3) at February 3, 2003
our borrowing capacity was $24.5 million lower due to
borrowing base restrictions under our prior credit facility.

Analysis of Cash Flows

During the first half of fiscal 2003, net cash
provided by operating activities was $45.5 million compared
to $6.0 million of cash provided by operating activities
during the first half of fiscal 2002. The most significant
components of the change relate to: (1) higher net income,
primarily the result of higher gross profits, the reduction of
variable costs and improved product mix; (2) a cash inflow
during the first half of fiscal 2003 of $6.0 million
associated with the termination of our interest rate swap
agreement; (3) a $6.6 million reduction in accounts
receivables during the 2003 period versus a $4.3 million
increase in accounts receivables during the 2002 period; and
(4) a decrease in cash used to support working capital
requirements as extended accounts payable terms provided greater
payable balances relative to inventory level increases in the
first half of fiscal 2003.

Net cash used in investing activities totaled
$6.5 million for the first half of fiscal 2003, compared to
$0.9 million of net cash provided by investing activities
during the first half of fiscal 2002. The use of cash was less
in fiscal 2002 due to $2.2 million in proceeds from certain
fixed asset sales and $4.2 million in cash proceeds from
the sale of certain stores in Texas.

Net cash used in financing activities totaled
$18.5 million for the first half of fiscal 2003 compared to
$6.5 million during the first half of fiscal 2002. During
fiscal 2002, we completed a secondary stock offering and used
proceeds from the offering to retire a significant portion of
our 11% Senior Subordinated Notes. The result of these
transactions was a net cash inflow of $6.4 million. In
connection with our new credit facility, we redeemed the
remaining $9.5 million of our 11% Senior Subordinated
Notes. Also in connection with the replacement of our prior
facility with the new facility, we paid $3.1 million more
in debt issuance costs in fiscal 2003 than in fiscal 2002.

Store Closures

We provide an allowance for estimated costs and
losses to be incurred in connection with store closures. On an
on-going basis, store locations are reviewed and analyzed based
on several factors including market saturation, store
profitability and cash flow, and store size and format. In
addition, we analyze sales trends and geographical and
competitive factors to determine the viability and future
profitability of our store locations. If a store location does
not meet our required projections, it is designated for closure.
As a result of our acquisitions over the last several years, we
have closed numerous locations primarily as a result of store
overlap with previously existing store locations.

The allowance for store closing costs is included
in accrued expenses and other long term liabilities in the
accompanying financial statements and primarily consists of
three components: (1) future rents to be paid over the
remaining terms of the lease agreements for the stores (net of
estimated probable sublease recoveries); (2) lease
commissions associated with the anticipated store subleases; and
(3) occupancy expenses associated with the closed store
vacancy periods. Prior to the adoption of SFAS No. 146 on

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January 1, 2003, such costs were recognized
when a store was specifically identified, costs could be
estimated and closure was planned to be completed within the
next twelve months. No provision was made for employee
termination costs. For stores to be relocated, such costs were
recognized when an agreement for the new location was reached
with a landlord and site plans met preliminary municipal
approvals. During the period that they remained open for
business, the rent and other operating expenses for the stores
to be closed continued to be reflected in normal operating
expenses.


In July 2002, the FASB issued SFAS No. 146,
Accounting for Costs Associated with Exit or Disposal
Activities. SFAS No. 146 requires companies to
recognize the present value of costs associated with exit or
disposal activities when they are incurred rather than at the
date of a commitment to an exit or disposal plan. Examples of
costs covered by the standard include lease rental and
termination costs and certain employee severance costs that are
associated with a restructuring, discontinued operation, store
closing, or other exit or disposal activity. SFAS No. 146
is required to be applied prospectively to exit or disposal
activities initiated after December 31, 2002. We did not
incur any new liability related to a store closure during the
first half of fiscal 2003.

As of August 3, 2003, we had a total of 196
store locations included in the allowance for store closing
costs. Of this total, 35 locations were vacant, 160 locations
were subleased and one location was identified for closure but
remained open. In addition to these stores, we had 59 service
centers of which 3 were vacant and 56 were subleased. Future
rents will be incurred through the expiration of the
non-cancelable leases, the longest of which runs through January
2018. As of August 3, 2003, we have one store accrued
during the 2002 fiscal plan year that remained open and was
identified for closure prior to our implementation of SFAS
No. 146.

Activity in the reserve for store closings and
the related store closing costs for the first half of fiscal
2003 is as follows ($ in thousands):

|                              |                                          |                |       |        |        |  
|----------------------------- | ---------------------------------------- | -------------- | ----- | ------ | ------ | -
|Balance, beginning of year    |                                          | $              | 4,422 |       
|Expense:                      |                                          |                |       |       
|                              | Revisions in estimates                   |                |       | 136    |       
|Payments:                     |                                          |                |       |       
|                              | Rent expense, net of sublease recoveries |                |       | (1,826 | )     
|                              | Occupancy and other expenses             |                |       | (478   | )     
|                              | Sublease commissions and buyouts         |                |       | (409   | )     
|                              |                                          |                |       |       
|                              |                                          | Total payments |       |        | (2,713 | )
|                              |                                          |                |       |       
|Balance as of August 3, 2003. |                                          | $              | 1,845 |       
|                              |                                          |                |       |       

Factors Affecting Liquidity and Capital
Resources



| |             
| | ------------
| | Sales Trends

Our same store sales increased 4% during the
first half of fiscal 2003 and we expect mid-single digit growth
rates to continue for the remainder of fiscal 2003. However, any
unusual weather conditions, competitive pressures, or other
adverse changes to our business or the economy in general could
materially affect our financial position, results of operations,
or cash flows.



| |          
| | ---------
| | Inflation

We do not believe our operations have been
materially affected by inflation. We believe that we will be
able to mitigate the effects of future merchandise cost
increases principally through economies of scale resulting from
increased volumes of purchases, selective forward buying and the
use of alternative suppliers.

18



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##### Table of Contents





| |     
| | ----
| | Debt

Debt is an important part of our overall
capitalization. Although we have significantly reduced our
outstanding debt over recent years, we are still highly
leveraged. The degree to which we are leveraged could have
important consequences on our ability to obtain additional
financing for working capital, capital expenditures,
acquisitions or general corporate purposes. A substantial
portion of our cash flow from operations must be dedicated to
the payment of interest on our indebtedness, thereby reducing
the funds available for other purposes. We are substantially
more leveraged than some of our competitors, which might place
us at a competitive disadvantage to those competitors that have
lower debt service obligations and significantly greater
operating and financial flexibility than we do. We may not be
able to adjust rapidly to changing market conditions and we may
be more vulnerable in the event of a downturn in general
economic conditions or in our business.

Our new credit agreement contains negative
covenants and restrictions on actions by us and our subsidiaries
including, without limitation, restrictions and limitations on
indebtedness, liens, guarantees, mergers, asset dispositions not
in the ordinary course of business, investments, loans, advances
and acquisitions, payment of dividends, transactions with
Affiliates (as defined in the credit agreement), change in
business conducted, and certain prepayments (other than in the
ordinary course of business) and amendments of subordinated
indebtedness. Our credit agreement requires that we meet certain
financial covenants, ratios and tests, including a maximum
leverage ratio, a minimum interest coverage ratio and a minimum
current asset coverage ratio. As of August 3, 2003, we were
in compliance with our financial covenants and we anticipate
meeting all required covenants under our existing credit
facility during the remainder of fiscal 2003.

A breach of the covenants, ratios, or
restrictions contained in our credit agreement could result in
an event of default thereunder. Upon the occurrence of such an
event of default, the lenders under our credit agreement could
elect to declare all amounts outstanding under the credit
agreement, together with accrued interest, to be immediately due
and payable. If we were unable to repay those amounts, the
lenders could proceed against the collateral granted to them to
secure the indebtedness. If the lenders under the credit
agreement accelerate the payment of the indebtedness, we cannot
be assured that our assets would be sufficient to repay in full
that indebtedness, which is secured by substantially all of our
assets.

Moodys Investors Service assigned a Ba3
rating to our new $325.0 million secured bank facilities.



| |               
| | --------------
| | Interest Rates

Financial market risks relating to our operations
result primarily from changes in interest rates. Interest earned
on our cash equivalents as well as interest paid on our variable
rate debt is sensitive to changes in interest rates. Our
variable rate debt relates to borrowings under our senior credit
facility, which is primarily vulnerable to movements in the
LIBOR rate.

At August 3, 2003, 39% of our outstanding
debt (including capital leases and excluding our debt fair
market value adjustment) was at variable interest rates and 61%
of our outstanding debt was at fixed interest rates. With
$200.0 million in variable rate debt outstanding, a 1%
change in the LIBOR rate to which this variable rate debt is
tied would result in a $2.0 million change in our annual
interest expense. This estimate assumes that our debt balance
remains constant for an annual period and the interest rate
change occurs at the beginning of the period.

Critical Accounting Matters

For a discussion of our critical accounting
matters, please refer to our Annual Report on Form 10-K
filed with the Securities and Exchange Commission on May 7,
2003.

Recent Accounting Pronouncements

In June 2001, the FASB issued Statement of
Financial Accounting Standard (SFAS) No. 143,
Accounting for Asset Retirement Obligations. SFAS
No. 143 addresses financial accounting and reporting for
obligations associated with the retirement of tangible
long-lived assets and the associated asset retirement

19



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##### Table of Contents



costs. This statement applies to all entities
that have legal obligations associated with the retirement of
long-lived assets that result from the acquisition,
construction, development or normal use of the asset. We adopted
SFAS No. 143 on February 3, 2003. The adoption of this
standard did not have an impact on our financial statements.


In January 2003, the FASB issued FASB
Interpretation (FIN) No. 46,
Consolidation of Variable Interest Entities, an
Interpretation of ARB 51. The primary objectives of
FIN No. 46 are to provide guidance on the identification of
entities for which control is achieved through means other than
through voting rights (Variable Interest Entities) and how to
determine when and which business enterprise should consolidate
the Variable Interest Entity (the primary beneficiary). We do
not have any transactions or relationships with unconsolidated
variable interest entities and, therefore, FIN No. 46 does
not impact our financial statements.

In April 2003, the FASB issued SFAS No. 149,
Amendment of Statement 133 on Derivative Instruments
and Hedging Activities which amends SFAS No. 133.
This Statement amends and clarifies financial accounting and
reporting for derivative instruments, including certain
derivative instruments embedded in other contracts and for
hedging activities under FASB Statement No. 133,
Accounting for Derivative Instruments and Hedging
Activities. This statement is effective for contracts
entered into or modified after June 30, 2003. The adoption
of this statement did not have an impact on our financial
statements.

In May 2003, the FASB issued SFAS No. 150,
Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity. The
standard improves the accounting for certain financial
instruments that, under previous guidance, issuers could account
for as equity. The standard requires that those instruments be
classified as liabilities in statements of financial position.
This standard is effective for interim periods beginning after
June 15, 2003. We do not anticipate that the adoption of this
standard will have an impact on our financial statements.

Forward-Looking Statements

The foregoing Managements Discussion and
Analysis contains certain forward-looking statements about the
future performance of the Company that are based on
managements assumptions and beliefs in light of the
information currently available. These forward-looking
statements are subject to uncertainties and other factors that
could cause actual results to differ materially from those
statements. Factors that may cause differences are identified in
our Annual Report on Form 10-K, filed with the Securities
and Exchange Commission on May 7, 2003, and are
incorporated herein by reference.




Item 3.     Quantitative
and Qualitative Disclosures about Market Risk

See Factors Affecting Liquidity and Capital
Resources above.




Item 4.     Controls
and Procedures



| |                                                     
| | ----------------------------------------------------
| | Evaluation of Disclosure Controls and
    Procedures

Our management carried out an evaluation, under
the supervision and with the participation of our Chief
Executive Officer (CEO) and Chief Financial Officer
(CFO), of the effectiveness of the design and
operation of our disclosure controls and procedures (as defined
in Rules 13a-14(a) and 15d-14(a) under the Securities
Exchange Act of 1934, as amended (the Exchange
Act)), as of August 3, 2003, the end of the period
covered by this Quarterly Report on Form 10-Q. Based upon
that evaluation, the CEO and CFO concluded that as of the
evaluation date, our disclosure controls and procedures are
effective to ensure that information required to be disclosed by
the company in reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported
within the time periods specified in Securities and Exchange
Commission rules and forms.

20



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##### Table of Contents





| |                                                         
| | --------------------------------------------------------
| | Changes in Internal Control Over Financial
    Reporting

During the fiscal quarter ended August 3,
2003, there has been no change in our internal control over
financial reporting (as defined in Rule 13a-15(f) and
15d-15(f) under the Exchange Act) that has materially affected
or is reasonably likely to materially affect, our internal
control over financial reporting.




PART II

OTHER INFORMATION






|        |                  
|------- | -----------------
|Item 1. | Legal Proceedings

NONE






|        |                                              
|------- | ---------------------------------------------
|Item 2. | Changes in Securities and Use of
    Proceeds

NONE






|        |                                    
|------- | -----------------------------------
|Item 3. | Defaults upon Senior
    Securities

NONE






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

We held our annual meeting of stockholders on
June 11, 2003. The following are the results of certain
matters voted upon at the meeting:



| |                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------
| | I.     Stockholders
    elected eight directors to serve until the 2004 Annual Meeting
    of the Stockholders. The stockholders voted as follows:

|                       |  |          |            |          |  |  |         | 
|---------------------- |  | -------- | ---------- | -------- |  |  | ------- | 
|Directors              |  | Vote for |            | Withheld
|                       |  |          |            |         
|Maynard L. Jenkins Jr. |  |          | 42,724,929 |          |  |  | 135,938 | 
|James G. Bazlen        |  |          | 42,718,805 |          |  |  | 142,062 | 
|James O. Egan          |  |          | 42,715,470 |          |  |  | 145,397 | 
|Morton Godlas          |  |          | 42,714,870 |          |  |  | 145,997 | 
|Terilyn A. Henderson   |  |          | 42,713,470 |          |  |  | 147,397 | 
|Charles K. Marquis     |  |          | 42,725,170 |          |  |  | 135,697 | 
|Simon Moore            |  |          | 42,715,270 |          |  |  | 145,597 | 
|Christopher J. Stadler |  |          | 42,725,170 |          |  |  | 135,697 | 

There were no votes against or broker non-votes
with respect to the election of directors.



| |                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | II.     Stockholders
    ratified the appointment of PricewaterhouseCoopers LLP as
    independent accountants for the fiscal year ending
    February 1, 2004. The stockholders voted as follows:
|
| | For:
    42,774,588     Against:
    60,103     Abstain:
    29,611     Broker non-vote: 0                                                                                                        
|
| | III.     Stockholders
    approved the adoption of the 2003 Executive Incentive Program
    covering certain senior executives. The stockholders voted as
    follows:                            
|
| | For:
    30,504,303     Against:
    591,543     Abstain:
    6,591     Broker non-vote: 11,761,865                                                                                               

21



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##### Table of Contents








|        |                  
|------- | -----------------
|Item 5. | Other Information

NONE






|        |                                     
|------- | ------------------------------------
|Item 6. | Exhibits and Reports on
    Form 8-K

(a) Exhibits:

| |    |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -- | ----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 3  | .01   |  | Restated Certificate of Incorporation of the
    Company, incorporated herein by reference to Exhibit 3.01
    of our Annual Report on Form 10-K, filed on May 4,
    1998 (File No. 001-13927).                                                                                                                                                                                                                       
| | 3  | .02   |  | Certificate of Correction to the Restated
    Certificate of Incorporation of the Company, incorporated herein
    by reference to Exhibit 3.02 of our Annual Report on
    Form 10-K, filed on May 4, 1998 (File
    No. 001-13927).                                                                                                                                                                                  
| | 3  | .02.1 |  | Certificate of Amendment to the Restated
    Certificate of Incorporation of CSK Auto Corporation,
    incorporated herein by reference to Exhibit 3.02.1 of our
    Report on Form 10-Q, filed on September 18, 2002 (File
    No. 001-13927).                                                                                                                                                                        
| | 3  | .03   |  | Amended and Restated By-Laws of the Company,
    incorporated herein by reference to Exhibit 3.03 of our
    Annual Report on Form 10-K, filed on April 28, 1999
    (File No. 001-13927).                                                                                                                                                                                                                             
| | 3  | .03.1 |  | First Amendment to Amended and Restated By-Laws
    of the Company, incorporated herein by reference to
    Exhibit 3.03.1 of our Annual Report on Form 10-K,
    filed on May 1, 2001 (File No. 001-13927).                                                                                                                                                                                                           
| | 4  | .02   |  | Indenture dated as of October 30, 1996, by
    and among CSK Auto, Inc. (Auto), Kragen Auto Supply
    Co., Schucks Distribution Co. and The Bank of New York (as
    successor to Wells Fargo Bank, N.A.), as Trustee, including form
    of Note, incorporated herein by reference to CSK Auto
    Inc.s Registration Statement on Form S-4 (File
    No. 333-22511).                                             
| | 4  | .03   |  | Form of Common Stock certificate, incorporated
    herein by reference to our Registration Statement on
    Form S-1 (File No. 333-43211).                                                                                                                                                                                                                                                                             
| | 4  | .04.2 |  | Purchase Agreement, dated December 7, 2001,
    by and among CSK Auto, Inc; CSK Auto Corporation, Automotive
    Information Systems, Inc. and CSKAUTO.COM, Inc., as Guarantors;
    and Credit Suisse First Boston Corporation, J.P. Morgan
    Securities Inc. and UBS Warburg LLC as Purchasers, incorporated
    herein by reference to Exhibit 99.4 of our Current Report
    on Form 8-K, filed January 18, 2002.
| | 4  | .05   |  | Credit Agreement, dated as of December 21,
    2001, by and among CSK Auto, Inc., the lenders from time to time
    a party thereto, and JP Morgan Chase Bank, Credit Suisse
    First Boston, and UBS AG, Stamford Branch, incorporated herein
    by reference to Exhibit 99.2 of our Current Report on
    Form 8-K, filed January 18, 2002.                                                                        
| | 4  | .05.1 |  | Indenture, dated December 21, 2001, by and
    among CSK Auto, Inc.; CSK Auto Corporation, as guarantor;
    Automotive Information Systems, Inc. and CSKAUTO.COM, Inc., as
    subsidiary guarantors; and the Bank of New York, as Trustee,
    incorporated herein by reference to Exhibit 99.3 of our
    Current Report on Form 8-K, filed January 18, 2002.                                                       
| | 4  | .06   |  | ISDA master agreement executed as of February
    2002 between Lehman Brothers Special Financing Inc. and CSK
    Auto, Inc., incorporated herein by reference to our Annual
    Report on Form 10-K, filed on April 23, 2002 (File
    No. 001-13927).                                                                                                                                                                
| | 4  | .06.1 |  | Termination Agreement executed as of June 5,
    2003 between Lehman Brothers Special Financing Inc. and CSK
    Auto, Inc., which terminates the ISDA master agreement executed
    as of February 2002 between Lehman Brothers Special Financing
    Inc. and CSK Auto, Inc.                                                                                                                                         
| | 4  | .07   |  | Credit Agreement, dated as of June 20, 2003,
    by and among CSK Auto, Inc., the lenders from time to time a
    party thereto, and JP Morgan Chase Bank, Credit Suisse
    First Boston, Bank of America, N.A. and US Bank,
    incorporated herein by reference to Exhibit 99.2 of our
    Current Report on Form 8-K, filed June 25, 2003.                                                                         
| | 4  | .07.1 |  | Guarantee and Collateral Agreement executed as of
    June 20, 2003 made by CSK Auto Corporation, CSK Auto, Inc.,
    and certain of its Subsidiaries and JPMorgan Chase Bank,
    incorporated herein by reference to Exhibit 99.3 of our
    Current Report on Form 8-K, filed June 25, 2003.                                                                                                                        
| | 10 | .01   |  | Amendment to employment agreement between James
    Bazlen and CSK Auto, Inc., dated June 11, 2003.                                                                                                                                                                                                                                                                                                                    

22



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##### Table of Contents



| |    |     |  |                                                                                                                                                                                               
| | -- | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 31 | .01 |  | Certification pursuant to Exchange Act
    Rules 13a-14(a) and 15d-14(a) of the Chief Executive
    Officer.                                                                                  
| | 31 | .02 |  | Certification pursuant to Exchange Act
    Rules 13a-14(a) and 15d-14(a) of the Chief Financial
    Officer.                                                                                  
| | 32 | .01 |  | Certification by the Chief Executive Officer and
    Chief Financial Officer pursuant to 18 U.S.C.
    Section 1350, as adopted pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002.

(b)     Reports on
Form 8-K:

On June 4, 2003 we furnished a press release
on form 8-K to report under item 12 thereof, the
reporting of our operating results for the first quarter of
fiscal 2003.

On June 25, 2003, we furnished a press
release on form 8-K announcing that CSK Auto, Inc., our
wholly owned subsidiary, had entered into a new
$325.0 million credit facility.

23



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##### Table of Contents






SIGNATURE

Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this report
to be signed on its behalf by the undersigned thereunto duly
authorized.



| |                     
| | --------------------
| | CSK AUTO CORPORATION



| |     |                  
| | --- | -----------------
| | By: | /s/ DON W. WATSON

| |                        
| | -----------------------
| |                        
| | Don W. Watson          
| | Chief Financial Officer

Dated: September 16, 2003

24



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##### Table of Contents






Exhibit Index

|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                        
|------- | -- | ----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 3  | .01         |  | Restated Certificate of Incorporation of the
    Company, incorporated herein by reference to Exhibit 3.01
    of our Annual Report on Form 10-K, filed on May 4,
    1998 (File No. 001-13927).                                                                                                                                                                                                                       
|        | 3  | .02         |  | Certificate of Correction to the Restated
    Certificate of Incorporation of the Company, incorporated herein
    by reference to Exhibit 3.02 of our Annual Report on
    Form 10-K, filed on May 4, 1998 (File
    No. 001-13927).                                                                                                                                                                                  
|        | 3  | .02.1       |  | Certificate of Amendment to the Restated
    Certificate of Incorporation of CSK Auto Corporation,
    incorporated herein by reference to Exhibit 3.02.1 of our
    Report on Form 10-Q, filed on September 18, 2002 (File
    No. 001-13927).                                                                                                                                                                        
|        | 3  | .03         |  | Amended and Restated By-Laws of the Company,
    incorporated herein by reference to Exhibit 3.03 of our
    Annual Report on Form 10-K, filed on April 28, 1999
    (File No. 001-13927).                                                                                                                                                                                                                             
|        | 3  | .03.1       |  | First Amendment to Amended and Restated By-Laws
    of the Company, incorporated herein by reference to
    Exhibit 3.03.1 of our Annual Report on Form 10-K,
    filed on May 1, 2001 (File No. 001-13927).                                                                                                                                                                                                           
|        | 4  | .02         |  | Indenture dated as of October 30, 1996, by
    and among CSK Auto, Inc. (Auto), Kragen Auto Supply
    Co., Schucks Distribution Co. and The Bank of New York (as
    successor to Wells Fargo Bank, N.A.), as Trustee, including form
    of Note, incorporated herein by reference to CSK Auto
    Inc.s Registration Statement on Form S-4 (File
    No. 333-22511).                                             
|        | 4  | .03         |  | Form of Common Stock certificate, incorporated
    herein by reference to our Registration Statement on
    Form S-1 (File No. 333-43211).                                                                                                                                                                                                                                                                             
|        | 4  | .04.2       |  | Purchase Agreement, dated December 7, 2001,
    by and among CSK Auto, Inc; CSK Auto Corporation, Automotive
    Information Systems, Inc. and CSKAUTO.COM, Inc., as Guarantors;
    and Credit Suisse First Boston Corporation, J.P. Morgan
    Securities Inc. and UBS Warburg LLC as Purchasers, incorporated
    herein by reference to Exhibit 99.4 of our Current Report
    on Form 8-K, filed January 18, 2002.
|        | 4  | .05         |  | Credit Agreement, dated as of December 21,
    2001, by and among CSK Auto, Inc., the lenders from time to time
    a party thereto, and JP Morgan Chase Bank, Credit Suisse First
    Boston, and UBS AG, Stamford Branch, incorporated herein by
    reference to Exhibit 99.2 of our Current Report on
    Form 8-K, filed January 18, 2002.                                                                        
|        | 4  | .05.1       |  | Indenture, dated December 21, 2001, by and
    among CSK Auto, Inc.; CSK Auto Corporation, as guarantor;
    Automotive Information Systems, Inc. and CSKAUTO.COM, Inc., as
    subsidiary guarantors; and the Bank of New York, as Trustee,
    incorporated herein by reference to Exhibit 99.3 of our
    Current Report on Form 8-K, filed January 18, 2002.                                                       
|        | 4  | .06         |  | ISDA master agreement executed as of March 2002
    between Lehman Brothers Special Financing Inc. and CSK Auto,
    Inc., incorporated herein by reference to our Annual Report on
    Form 10-K, filed on April 23, 2002 (File
    No. 001-13927).                                                                                                                                                                   
|        | 4  | .06.1       |  | Termination Agreement executed as of June 5,
    2003 between Lehman Brothers Special Financing Inc. and CSK
    Auto, Inc., which terminates the ISDA master agreement executed
    as of February 2002 between Lehman Brothers Special Financing
    Inc. and CSK Auto, Inc.                                                                                                                                         
|        | 4  | .07         |  | Credit Agreement, dated as of June 20, 2003,
    by and among CSK Auto, Inc., the lenders from time to time a
    party thereto, and JP Morgan Chase Bank, Credit Suisse First
    Boston, Bank of America, N.A. and US Bank, incorporated
    herein by reference to Exhibit 99.2 of our Current Report
    on Form 8-K, filed June 25, 2003.                                                                         
|        | 4  | .07.1       |  | Guarantee and Collateral Agreement executed as of
    June 20, 2003 made by CSK Auto Corporation, CSK Auto, Inc.,
    and certain of its Subsidiaries and JPMorgan Chase Bank,
    incorporated herein by reference to Exhibit 99.3 of our
    Current Report on Form 8-K, filed June 25, 2003.                                                                                                                        
|        | 10 | .01         |  | Amendment to employment agreement between James
    Bazlen and CSK Auto, Inc., dated June 11, 2003.                                                                                                                                                                                                                                                                                                                    
|        | 31 | .01         |  | Certification pursuant to Exchange Act
    Rules 13a-14(a) and 15d-14(a) of the Chief Executive
    Officer.                                                                                                                                                                                                                                                                                                           
|        | 31 | .02         |  | Certification pursuant to Exchange Act
    Rules 13a-14(a) and 15d-14(a) of the Chief Financial
    Officer.                                                                                                                                                                                                                                                                                                           
|        | 32 | .01         |  | Certification by the Chief Executive Officer and
    Chief Financial Officer pursuant to 18 U.S.C.
    Section 1350, as adopted pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                         

25