##### 









SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549




---

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
	November 4, 2001                                          
|          
|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
	office) |  | 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

As of December 17, 2001, CSK Auto
Corporation had 27,842,853 shares of common stock outstanding.



---






---



##### 



PART I

FINANCIAL INFORMATION



|        |                     
|------- | --------------------
|Item 1. | Financial Statements

CSK AUTO CORPORATION AND
SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)


|                                                                              |                                                                                                                                                                  |                                            |         |             |           |   |         |          |           | 
|----------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------- | ----------- | --------- | - | ------- | -------- | --------- | 
|                                                                              |                                                                                                                                                                  | November 4,                                |         | February 4,
|                                                                              |                                                                                                                                                                  | 2001                                       |         | 2001       
|                                                                              |                                                                                                                                                                  |                                            |         |            
|                                                                              |                                                                                                                                                                  | (Unaudited)                                |         |            
|ASSETS                                                                       
|Cash and cash equivalents                                                     |                                                                                                                                                                  | $                                          | 15,690  |             |           | $ | 11,131  |         
|Receivables, net of allowances of $5,146 and
	$4,236, respectively            |                                                                                                                                                                  |                                            | 102,488 |             |           |   | 79,901  |         
|Inventories                                                                   |                                                                                                                                                                  |                                            | 637,028 |             |           |   | 621,814 |         
|Deferred income taxes                                                         |                                                                                                                                                                  |                                            | 10,349  |             |           |   | 3,133   |         
|Assets held for sale                                                          |                                                                                                                                                                  |                                            | 1,699   |             |           |   | 1,497   |         
|Prepaid expenses and other current assets                                     |                                                                                                                                                                  |                                            | 20,234  |             |           |   | 19,169  |         
|                                                                              |                                                                                                                                                                  |                                            |         |             |           |   |         |         
|                                                                              |                                                                                                                                                                  | Total current assets                       |         |             | 787,488   |   |         |          | 736,645   | 
|                                                                              |                                                                                                                                                                  |                                            |         |             |           |   |         |         
|Property and equipment, net                                                   |                                                                                                                                                                  |                                            | 153,188 |             |           |   | 175,358 |         
|Leasehold interests, net                                                      |                                                                                                                                                                  |                                            | 16,985  |             |           |   | 20,244  |         
|Goodwill, net                                                                 |                                                                                                                                                                  |                                            | 128,041 |             |           |   | 130,544 |         
|Other assets, net                                                             |                                                                                                                                                                  |                                            | 14,988  |             |           |   | 14,190  |         
|                                                                              |                                                                                                                                                                  |                                            |         |             |           |   |         |         
|                                                                              |                                                                                                                                                                  | Total assets                               |         | $           | 1,100,690 |   |         | $        | 1,076,981 | 
|                                                                              |                                                                                                                                                                  |                                            |         |             |           |   |         |         
|LIABILITIES AND STOCKHOLDERS
	EQUITY                                        
|Accounts payable                                                              |                                                                                                                                                                  | $                                          | 226,956 |             |           | $ | 199,483 |         
|Accrued payroll and related expenses                                          |                                                                                                                                                                  |                                            | 27,863  |             |           |   | 27,673  |         
|Accrued expenses and other current liabilities                                |                                                                                                                                                                  |                                            | 52,143  |             |           |   | 42,448  |         
|Current maturities of amounts due under Senior
	Credit Facility (see Note 10) |                                                                                                                                                                  |                                            |        |             |           |   | 54,640  |         
|Current maturities of capital lease obligations                               |                                                                                                                                                                  |                                            | 9,922   |             |           |   | 10,878  |         
|                                                                              |                                                                                                                                                                  |                                            |         |             |           |   |         |         
|                                                                              |                                                                                                                                                                  | Total current liabilities                  |         |             | 316,884   |   |         |          | 335,122   | 
|                                                                              |                                                                                                                                                                  |                                            |         |             |           |   |         |         
|Amounts due under Senior Credit Facility                                      |                                                                                                                                                                  |                                            | 501,160 |             |           |   | 471,840 |         
|Obligations under 11% Senior Subordinated Notes                               |                                                                                                                                                                  |                                            | 81,250  |             |           |   | 81,250  |         
|Convertible subordinated notes                                                |                                                                                                                                                                  |                                            | 30,000  |             |           |   |        |         
|Obligations under capital leases                                              |                                                                                                                                                                  |                                            | 26,736  |             |           |   | 29,273  |         
|Deferred income taxes                                                         |                                                                                                                                                                  |                                            | 7,423   |             |           |   | 10,544  |         
|Other                                                                         |                                                                                                                                                                  |                                            | 13,107  |             |           |   | 9,339   |         
|                                                                              |                                                                                                                                                                  |                                            |         |             |           |   |         |         
|                                                                              |                                                                                                                                                                  | Total non-current liabilities              |         |             | 659,676   |   |         |          | 602,246   | 
|                                                                              |                                                                                                                                                                  |                                            |         |             |           |   |         |         
|Commitments and contingencies                                                 |                                                                                                                                                                  |                                            |         |             |           |   |         |         
|                                                                              | Stockholders equity:                                                                                                                                            |                                            |         |             |           |   |         |          |          
|                                                                              | Common stock, $0.01 par value, 50,000,000 shares
	authorized; 27,842,105 and 27,841,178 shares issued and
	outstanding at November 4, 2001 and February 4, 2001. |                                            |         | 278         |           |   |         | 278      |          
|                                                                              | Additional paid-in capital                                                                                                                                       |                                            |         | 291,063     |           |   |         | 291,063  |          
|                                                                              | Stockholder receivable                                                                                                                                           |                                            |         | (705        | )         |   |         | (745     | )        
|                                                                              | Deferred compensation                                                                                                                                            |                                            |         | (29         | )         |   |         | (156     | )        
|                                                                              | Accumulated deficit                                                                                                                                              |                                            |         | (166,477    | )         |   |         | (150,827 | )        
|                                                                              |                                                                                                                                                                  |                                            |         |             |           |   |         |         
|                                                                              |                                                                                                                                                                  | Total stockholders equity                 |         |             | 124,130   |   |         |          | 139,613   | 
|                                                                              |                                                                                                                                                                  |                                            |         |             |           |   |         |         
|                                                                              |                                                                                                                                                                  | Total liabilities and stockholders equity |         | $           | 1,100,690 |   |         | $        | 1,076,981 | 
|                                                                              |                                                                                                                                                                  |                                            |         |             |           |   |         |         

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

2



---



##### 



CSK AUTO CORPORATION AND
SUBSIDIARIES

CONSOLIDATED STATEMENTS OF
OPERATIONS

(Unaudited)


(In thousands, except share and per share
data)


|                                   |                                             |                      |         |                         |  |             |         |             |  |   |           |            |   |   |           |            | 
|---------------------------------- | ------------------------------------------- | -------------------- | ------- | ----------------------- |  | ----------- | ------- | ----------- |  | - | --------- | ---------- | - | - | --------- | ---------- | 
|                                   |                                             |                      |         |                        
|                                   |                                             | Thirteen Weeks Ended |         | Thirty-nine Weeks Ended
|                                   |                                             |                      |         |                        
|                                   |                                             | November 4,          |         | October 29,             |  | November 4, |         | October 29,
|                                   |                                             | 2001                 |         | 2000                    |  | 2001        |         | 2000       
|                                   |                                             |                      |         |                         |  |             |         |            
|Net sales                          |                                             | $                    | 366,741 |                         |  | $           | 368,898 |             |  | $ | 1,104,584 |            |   | $ | 1,100,054 |           
|Cost of sales                      |                                             |                      | 195,628 |                         |  |             | 196,200 |             |  |   | 617,811   |            |   |   | 580,359   |           
|                                   |                                             |                      |         |                         |  |             |         |             |  |   |           |            |   |   |           |           
|Gross profit                       |                                             |                      | 171,113 |                         |  |             | 172,698 |             |  |   | 486,773   |            |   |   | 519,695   |           
|Other costs and expenses:          |                                             |                      |         |                         |  |             |         |             |  |   |           |            |   |   |           |           
|                                   | Operating and administrative                |                      |         | 146,248                 |  |             |         | 144,440     |  |   |           | 437,241    |   |   |           | 423,193    | 
|                                   | Store closing and other restructuring costs |                      |         | 11                      |  |             |         | 149         |  |   |           | 23,782     |   |   |           | 6,012      | 
|                                   | Legal settlement                            |                      |         |                        |  |             |         |            |  |   |           | 2,000      |   |   |           |           | 
|                                   | Transition and integration expenses         |                      |         |                        |  |             |         | 1,308       |  |   |           | 250        |   |   |           | 23,818     | 
|                                   | Goodwill amortization                       |                      |         | 1,191                   |  |             |         | 1,092       |  |   |           | 3,609      |   |   |           | 3,620      | 
|                                   |                                             |                      |         |                         |  |             |         |             |  |   |           |            |   |   |           |           
|Operating profit                   |                                             |                      | 23,663  |                         |  |             | 25,709  |             |  |   | 19,891    |            |   |   | 63,052    |           
|Interest expense                   |                                             |                      | 14,317  |                         |  |             | 15,457  |             |  |   | 45,727    |            |   |   | 45,278    |           
|Equity in loss of joint venture    |                                             |                      |        |                         |  |             | 1,188   |             |  |   |          |            |   |   | 1,904     |           
|                                   |                                             |                      |         |                         |  |             |         |             |  |   |           |            |   |   |           |           
|Income (loss) before income taxes  |                                             |                      | 9,346   |                         |  |             | 9,064   |             |  |   | (25,836   | )          |   |   | 15,870    |           
|Income tax expense (benefit)       |                                             |                      | 3,412   |                         |  |             | 3,172   |             |  |   | (10,186   | )          |   |   | 5,798     |           
|                                   |                                             |                      |         |                         |  |             |         |             |  |   |           |            |   |   |           |           
|Net income (loss)                  |                                             | $                    | 5,934   |                         |  | $           | 5,892   |             |  | $ | (15,650   | )          |   | $ | 10,072    |           
|                                   |                                             |                      |         |                         |  |             |         |             |  |   |           |            |   |   |           |           
|Basic earnings (loss) per share:   |                                             |                      |         |                         |  |             |         |             |  |   |           |            |   |   |           |           
|                                   | Net income (loss)                           |                      | $       | 0.21                    |  |             | $       | 0.21        |  |   | $         | (0.56      | ) |   | $         | 0.36       | 
|                                   |                                             |                      |         |                         |  |             |         |             |  |   |           |            |   |   |           |           
|                                   | Shares used in computing per share amounts  |                      |         | 27,842,105              |  |             |         | 27,839,484  |  |   |           | 27,842,105 |   |   |           | 27,839,084 | 
|                                   |                                             |                      |         |                         |  |             |         |             |  |   |           |            |   |   |           |           
|Diluted earnings (loss) per share: |                                             |                      |         |                         |  |             |         |             |  |   |           |            |   |   |           |           
|                                   | Net income (loss)                           |                      | $       | 0.19                    |  |             | $       | 0.21        |  |   | $         | (0.56      | ) |   | $         | 0.36       | 
|                                   |                                             |                      |         |                         |  |             |         |             |  |   |           |            |   |   |           |           
|                                   | Shares used in computing per share amounts  |                      |         | 31,939,105              |  |             |         | 27,839,484  |  |   |           | 27,842,105 |   |   |           | 27,839,084 | 
|                                   |                                             |                      |         |                         |  |             |         |             |  |   |           |            |   |   |           |           

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

3



---



##### 



CSK AUTO CORPORATION AND
SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS
EQUITY

(In thousands, except share data)


|                                                  |  |              |            |            |  |             |     |            |  |              |         |         |  |        |      |   |  |   |      |   |  |   |          |   |  |   |         |  
|------------------------------------------------- |  | ------------ | ---------- | ---------- |  | ----------- | --- | ---------- |  | ------------ | ------- | ------- |  | ------ | ---- | - |  | - | ---- | - |  | - | -------- | - |  | - | ------- | -
|                                                  |  |              |            |            |  |             |     |            |  |              |         |        
|                                                  |  | Common Stock |            | Additional |  |             |     |            |  |              |         |        
|                                                  |  |              |            | Paid-in    |  | Stockholder |     | Deferred   |  | Accumulated  |         | Total  
|                                                  |  | Shares       |            | Amount     |  | Capital     |     | Receivable |  | Compensation |         | Deficit |  | Equity
|                                                  |  |              |            |            |  |             |     |            |  |              |         |         |  |       
|Balances at February 4, 2001.                     |  |              | 27,841,178 |            |  | $           | 278 |            |  | $            | 291,063 |         |  | $      | (745 | ) |  | $ | (156 | ) |  | $ | (150,827 | ) |  | $ | 139,613 |  
|Amortization of deferred compensation (unaudited) |  |              |           |            |  |             |    |            |  |              |        |         |  |        |     |   |  |   | 127  |   |  |   |         |   |  |   | 127     |  
|Recovery of stockholder receivable (unaudited)    |  |              |           |            |  |             |    |            |  |              |        |         |  |        | 40   |   |  |   |     |   |  |   |         |   |  |   | 40      |  
|Issuance of restricted stock (unaudited)          |  |              | 927        |            |  |             |    |            |  |              |        |         |  |        |     |   |  |   |     |   |  |   |         |   |  |   |        |  
|Net income (loss) (unaudited)                     |  |              |           |            |  |             |    |            |  |              |        |         |  |        |     |   |  |   |     |   |  |   | (15,650  | ) |  |   | (15,650 | )
|                                                  |  |              |            |            |  |             |     |            |  |              |         |         |  |        |      |   |  |   |      |   |  |   |          |   |  |   |         |  
|Balances at November 4, 2001                      |  |              |            |            |  |             |     |            |  |              |         |         |  |        |      |   |  |   |      |   |  |   |          |   |  |   |         |  
|(unaudited)                                       |  |              | 27,842,105 |            |  | $           | 278 |            |  | $            | 291,063 |         |  | $      | (705 | ) |  | $ | (29  | ) |  | $ | (166,477 | ) |  | $ | 124,130 |  
|                                                  |  |              |            |            |  |             |     |            |  |              |         |         |  |        |      |   |  |   |      |   |  |   |          |   |  |   |         |  

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

4



---



##### 



CSK AUTO CORPORATION AND
SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH
FLOWS

(Unaudited)


(In thousands)


|                                                        |                                                                                              |                                                                              |                                                                  |             |         |         |        |          |         |         |  
|------------------------------------------------------- | -------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------- | ---------------------------------------------------------------- | ----------- | ------- | ------- | ------ | -------- | ------- | ------- | -
|                                                        |                                                                                              |                                                                             
|                                                        |                                                                                              | Thirty-nine Weeks Ended                                                     
|                                                        |                                                                                              |                                                                             
|                                                        |                                                                                              | November 4,                                                                  |                                                                  | October 29,
|                                                        |                                                                                              | 2001                                                                         |                                                                  | 2000       
|                                                        |                                                                                              |                                                                              |                                                                  |            
|Cash flows provided by (used in) operating
	activities: |                                                                                              |                                                                              |                                                                  |             |         |         |        |         
|                                                        | Net income (loss)                                                                            |                                                                              | $                                                                | (15,650     | )       |         | $      | 10,072   |        
|                                                        | Adjustments to reconcile net income to net cash
	provided by (used in) operating activities: |                                                                              |                                                                  |             |         |         |        |          |        
|                                                        |                                                                                              | Depreciation and amortization of property and
	equipment                     |                                                                  |             | 24,219  |         |        |          | 24,235  |        
|                                                        |                                                                                              | Amortization                                                                 |                                                                  |             | 6,196   |         |        |          | 5,678   |        
|                                                        |                                                                                              | Amortization of deferred financing costs                                     |                                                                  |             | 2,658   |         |        |          | 1,585   |        
|                                                        |                                                                                              | Provision for write down of inventory                                        |                                                                  |             | 17,292  |         |        |          |        |        
|                                                        |                                                                                              | Write downs on disposal of fixed and other assets                            |                                                                  |             | 7,675   |         |        |          |        |        
|                                                        |                                                                                              | Equity in loss of joint venture                                              |                                                                  |             |        |         |        |          | 1,904   |        
|                                                        |                                                                                              | Deferred income taxes                                                        |                                                                  |             | (10,337 | )       |        |          | 5,643   |        
|                                                        |                                                                                              | Change in operating assets and liabilities, net
	of effects of acquisitions: |                                                                  |             |         |         |        |          |         |        
|                                                        |                                                                                              |                                                                              | Receivables                                                      |             |         | (22,587 | )      |          |         | (19,427 | )
|                                                        |                                                                                              |                                                                              | Inventories                                                      |             |         | (33,715 | )      |          |         | (7,057  | )
|                                                        |                                                                                              |                                                                              | Prepaid expenses and other current assets                        |             |         | (1,140  | )      |          |         | 1,083   |  
|                                                        |                                                                                              |                                                                              | Accounts payable                                                 |             |         | 27,671  |        |          |         | 31,683  |  
|                                                        |                                                                                              |                                                                              | Accrued payroll, accrued expenses and other
	current liabilities |             |         | 10,602  |        |          |         | (17,818 | )
|                                                        |                                                                                              |                                                                              | Other assets and liabilities                                     |             |         | 4,652   |        |          |         | 5,210   |  
|                                                        |                                                                                              |                                                                              |                                                                  |             |         |         |        |         
|                                                        |                                                                                              | Net cash provided by operating activities                                    |                                                                  |             | 17,536  |         |        |          | 42,791  |        
|                                                        |                                                                                              |                                                                              |                                                                  |             |         |         |        |         
|Cash flows provided by (used in) investing
	activities: |                                                                                              |                                                                              |                                                                  |             |         |         |        |         
|                                                        | Business acquisitions, net of cash acquired                                                  |                                                                              |                                                                  |            |         |         |        | (1,185   | )      
|                                                        | Capital expenditures                                                                         |                                                                              |                                                                  | (10,218     | )       |         |        | (24,477  | )      
|                                                        | Expenditures for assets held for sale                                                        |                                                                              |                                                                  |            |         |         |        | (103     | )      
|                                                        | Proceeds from sale of property and equipment and
	assets held for sale                       |                                                                              |                                                                  | 5,281       |         |         |        | 3,814    |        
|                                                        | Investment in joint venture                                                                  |                                                                              |                                                                  |            |         |         |        | (3,103   | )      
|                                                        | Other investing activities                                                                   |                                                                              |                                                                  | (2,908      | )       |         |        | (1,363   | )      
|                                                        |                                                                                              |                                                                              |                                                                  |             |         |         |        |         
|                                                        |                                                                                              | Net cash used in investing activities                                        |                                                                  |             | (7,845  | )       |        |          | (26,417 | )      
|                                                        |                                                                                              |                                                                              |                                                                  |             |         |         |        |         
|Cash flows provided by (used in) financing
	activities: |                                                                                              |                                                                              |                                                                  |             |         |         |        |         
|                                                        | Borrowings under Senior Credit Facility                                                      |                                                                              |                                                                  | 232,000     |         |         |        | 199,000  |        
|                                                        | Payments under Senior Credit Facility                                                        |                                                                              |                                                                  | (257,320    | )       |         |        | (200,670 | )      
|                                                        | Payment of debt issuance costs                                                               |                                                                              |                                                                  | (2,102      | )       |         |        |         |        
|                                                        | Issuance of convertible subordinated notes                                                   |                                                                              |                                                                  | 30,000      |         |         |        |         |        
|                                                        | Payments on capital lease obligations                                                        |                                                                              |                                                                  | (7,061      | )       |         |        | (10,608  | )      
|                                                        | Advances to stockholders                                                                     |                                                                              |                                                                  |            |         |         |        | (181     | )      
|                                                        | Recovery of stockholder receivable                                                           |                                                                              |                                                                  |            |         |         |        | 28       |        
|                                                        | Exercise of options                                                                          |                                                                              |                                                                  |            |         |         |        | 59       |        
|                                                        | Other financing activities                                                                   |                                                                              |                                                                  | (649        | )       |         |        | (2,906   | )      
|                                                        |                                                                                              |                                                                              |                                                                  |             |         |         |        |         
|                                                        |                                                                                              | Net cash used in financing activities                                        |                                                                  |             | (5,132  | )       |        |          | (15,278 | )      
|                                                        |                                                                                              |                                                                              |                                                                  |             |         |         |        |         
|                                                        |                                                                                              | Net increase in cash and cash equivalents                                    |                                                                  |             | 4,559   |         |        |          | 1,096   |        
|Cash and cash equivalents, beginning of period          |                                                                                              |                                                                              | 11,131                                                           |             |         |         | 11,762 |         
|                                                        |                                                                                              |                                                                              |                                                                  |             |         |         |        |         
|Cash and cash equivalents, end of period                |                                                                                              | $                                                                            | 15,690                                                           |             |         | $       | 12,858 |         
|                                                        |                                                                                              |                                                                              |                                                                  |             |         |         |        |         

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

5



---



##### 



CSK AUTO CORPORATION AND
SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

Thirteen and Thirty-nine Weeks Ended
November 4, 2001


CSK Auto Corporation is a holding company. At
November 4, 2001, CSK Auto Corporation had no business
activity other than its investment in CSK Auto, Inc., a
wholly-owned subsidiary (Auto). On a consolidated
basis, CSK Auto Corporation and Auto are referred to herein as
the Company.

Auto is a specialty retailer of automotive
aftermarket parts and accessories. At November 4, 2001, the
Company operated 1,133 stores in 19 Western and Northern Plains
states as a fully integrated company 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

The unaudited consolidated financial statements
included herein were prepared by the Company pursuant to the
rules and regulations of the Securities and Exchange Commission,
but do 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 the Companys financial position
and the results of its operations. Certain prior year balances
have been reclassified to conform to the current year
presentation. 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 4, 2001, as included in the Companys Annual
Report on Form 10-K filed on May 1, 2001.

Note 2  Inventories

Inventories are valued at the lower of cost or
market, cost being determined utilizing the last-in, first-out
(LIFO) method. An actual valuation of inventory under the
LIFO method can only be calculated at the end of a fiscal year
based upon the inventory levels and costs at that time.
Accordingly, interim LIFO calculations reflected herein are
based upon managements estimates of year-end inventory
levels and costs. The replacement cost of inventories
approximated $553 million and $547 million at
November 4, 2001 and February 4, 2001, respectively.

The carrying value of the inventory exceeds the
current replacement cost primarily as a result of the
application of the LIFO inventory method of accounting. The
Companys costs of acquiring inventories through normal
purchasing activities have been decreasing in recent years as
the Companys increased size and cash flows have enabled it
to take advantage of volume discounts and lower product
acquisition costs.

From time to time, the Company performs an
analysis of the net realizable value of the inventory, after
consideration of expected disposal costs and normal profit
margins, to determine if the LIFO carrying value of the
inventory is impaired. Should an impairment be indicated, the
carrying value of the inventory would be reduced. No such
impairment is indicated based on current market conditions.

Inventories at November 4, 2001 are
presented net of an allowance of approximately
$4.1 million. This allowance results from the
Companys decision during the second quarter of fiscal year
2001 to eliminate certain product lines (resulting in excess
inventories) and to close certain retail stores (resulting in
some excess inventories that are not economical to redistribute
within the retail chain). See Note 7.

6



---



##### 



CSK AUTO CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Note 3  Earnings Per
Share

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

|                                               |                                             |                                                               |                     |                         |        |             |  |             |        |       |  |         |        |         |   |        |        |        | 
|---------------------------------------------- | ------------------------------------------- | ------------------------------------------------------------- | ------------------- | ----------------------- | ------ | ----------- |  | ----------- | ------ | ----- |  | ------- | ------ | ------- | - | ------ | ------ | ------ | 
|                                               |                                             |                                                               |                     |                        
|                                               |                                             | Thirteen Weeks Ended                                          |                     | Thirty-nine Weeks Ended
|                                               |                                             |                                                               |                     |                        
|                                               |                                             | November 4,                                                   |                     | October 29,             |        | November 4, |  | October 29,
|                                               |                                             | 2001                                                          |                     | 2000                    |        | 2001        |  | 2000       
|                                               |                                             |                                                               |                     |                         |        |             |  |            
|Numerator for basic EPS:                       |                                             |                                                               |                     |                         |        |             |  |             |        |       |  |         |        |         |   |       
|                                               | Net income (loss)                           |                                                               |                     | 5,934                   |        |             |  | 5,892       |        |       |  | (15,650 | )      |         |   | 10,072 |       
|                                               |                                             |                                                               |                     |                         |        |             |  |             |        |       |  |         |        |         |   |       
|Denominator for basic EPS:                     |                                             |                                                               |                     |                         |        |             |  |             |        |       |  |         |        |         |   |       
|                                               | Shares outstanding, beginning of period     |                                                               |                     | 27,842                  |        |             |  | 27,839      |        |       |  | 27,841  |        |         |   | 27,835 |       
|                                               | Additional shares issued                    |                                                               |                     |                        |        |             |  |            |        |       |  | 1       |        |         |   | 4      |       
|                                               |                                             |                                                               |                     |                         |        |             |  |             |        |       |  |         |        |         |   |       
|                                               |                                             | Weighted average shares outstanding (basic)                   |                     |                         | 27,842 |             |  |             | 27,839 |       |  |         | 27,842 |         |   |        | 27,839 |       
|                                               |                                             |                                                               |                     |                         |        |             |  |             |        |       |  |         |        |         |   |       
|Numerator for diluted EPS:                     |                                             |                                                               |                     |                         |        |             |  |             |        |       |  |         |        |         |   |       
|                                               | Net income (loss)                           |                                                               |                     | 5,934                   |        |             |  | 5,892       |        |       |  | (15,650 | )      |         |   | 10,072 |       
|                                               |                                             | Interest savings, net of tax, on assumed
	conversion of notes |                     |                         | 294    |             |  |             |       |       |  |         |       |         |   |        |       |       
|                                               |                                             |                                                               |                     |                         |        |             |  |             |        |       |  |         |        |         |   |       
|                                               |                                             |                                                               | Adjusted net income |                         |        | 6,228       |  |             |        | 5,892 |  |         |        | (15,650 | ) |        |        | 10,072 | 
|                                               |                                             |                                                               |                     |                         |        |             |  |             |        |       |  |         |        |         |   |       
|Denominator for diluted EPS:                   |                                             |                                                               |                     |                         |        |             |  |             |        |       |  |         |        |         |   |       
|                                               | Weighted average shares outstanding (basic) |                                                               |                     | 27,842                  |        |             |  | 27,839      |        |       |  | 27,842  |        |         |   | 27,839 |       
|                                               | Effect of dilutive stock options            |                                                               |                     | 25                      |        |             |  |            |        |       |  |        |        |         |   |       |       
|                                               | Assumed conversion of notes                 |                                                               |                     | 4,072                   |        |             |  |            |        |       |  |        |        |         |   |       |       
|                                               |                                             |                                                               |                     |                         |        |             |  |             |        |       |  |         |        |         |   |       
|                                               |                                             | Weighted average shares outstanding (basic)                   |                     |                         | 31,939 |             |  |             | 27,839 |       |  |         | 27,842 |         |   |        | 27,839 |       
|                                               |                                             |                                                               |                     |                         |        |             |  |             |        |       |  |         |        |         |   |       
|Shares excluded as a result of
	anti-dilution: |                                             |                                                               |                     |                         |        |             |  |             |        |       |  |         |        |         |   |       
|                                               | Stock options                               |                                                               |                     | 2,314                   |        |             |  | 3,020       |        |       |  | 2,862   |        |         |   | 3,027  |       
|                                               | Conversion of notes                         |                                                               |                     |                        |        |             |  |            |        |       |  | 1,354   |        |         |   |       |       
|                                               |                                             |                                                               |                     |                         |        |             |  |             |        |       |  |         |        |         |   |       
|                                               |                                             | Total shares excluded                                         |                     |                         | 2,314  |             |  |             | 3,020  |       |  |         | 4,216  |         |   |        | 3,027  |       
|                                               |                                             |                                                               |                     |                         |        |             |  |             |        |       |  |         |        |         |   |       

Note 4  Recent Accounting
Pronouncements

In July 2001, the Financial Accounting Standards
Board (FASB) issued Statement of Financial
Accounting Standards (SFAS) No. 141,
Business Combinations, and SFAS No. 142,
Goodwill and Other Intangible Assets, which are
effective for all purchase business combinations completed after
June 30, 2001. SFAS No. 141 replaces APB Opinion
No. 16, Business Combinations, and eliminates
pooling-of-interests accounting prospectively. It also provides
guidance on purchase accounting related to the recognition of
intangible assets and accounting for negative goodwill. SFAS
No. 142 changes the accounting for goodwill and other
intangible assets with indefinite lives from an amortization
method to an impairment-only approach, whereby such intangible
assets will be evaluated at least annually or sooner if events
or circumstances occur indicating that they might be impaired.
Upon adoption of SFAS No. 142, amortization of goodwill
recorded for business combinations consummated prior to
July 1, 2001 will cease, and intangible assets acquired
prior to July 1, 2001 that do not meet the criteria for
recognition under SFAS No. 141 will be reclassified to
goodwill. The Company is required to adopt SFAS No. 142 on
February 4, 2002, the beginning of fiscal 2002, for
acquisitions consummated prior to July 1, 2001. The Company
is in the process of determining the impact the adoption of SFAS
141 will have on its financial position and results of
operations. The adoption of SFAS 142

7



---



##### 



CSK AUTO CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

will reduce pre-tax amortization expense by
approximately $4.8 million during fiscal year 2002. The
Company is in the process of determining if any impairment under
SFAS 142 exists and the related impact on its financial position
and results of operations that any such impairment might
produce. Neither SFAS 141 nor SFAS 142 will have any impact on
cash flows.

In October 2001, the FASB issued SFAS
No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets. SFAS No. 144 replaces certain
previously issued accounting guidance, develops a single
accounting model for long-lived assets, and broadens the
framework previously established for assets to be disposed of by
sale (whether previously held or newly acquired). The Company is
required to adopt SFAS No. 144 as of the beginning of
fiscal 2002. The Company is in the process of determining the
impact of adoption of this pronouncement.

Note 5  Investment in Joint
Venture

On March 1, 2000, the Company participated
in the formation of a new joint venture, PartsAmerica.com, Inc.
(PA), with Advance Stores Company Incorporated and
Sequoia Capital. PA engaged in the sale of automotive parts and
accessories via e-commerce. During the second quarter of fiscal
2001, PA ceased operations. The Company has no material
financial obligations with respect to PA.

Note 6  Legal Matters

As previously disclosed, on May 4, 1998, a
lawsuit was filed against the Company in the Superior Court in
San Diego, California. The case was brought by two former store
managers and a former senior assistant manager. It purported to
be a class action for all present and former California store
managers and senior assistant managers and sought overtime pay
for a period beginning in May 1995 as well as injunctive relief
requiring overtime pay in the future. The Company was also
served with two other lawsuits purporting to be class actions
filed in California state courts in Orange and Fresno Counties
by thirteen other former and current employees. The Company has
finalized a settlement of all these lawsuits. The final amount
of the settlement was approximately $8.8 million (which includes
plaintiffs attorneys fees and costs and other
miscellaneous expenses). The cost of this settlement was
expensed in the fourth quarter of fiscal year 2000, with
payments of the settlement made during the first quarter of
fiscal 2001.

The Company was served on March 8, 2000 with
a complaint filed in Federal Court in the Eastern District of
New York by the Coalition for a Level Playing Field, O.K. and
250 individual auto parts dealers alleging that the Company and
seven other auto parts dealers (AutoZone, Inc., Wal-Mart Stores,
Inc., Advance Stores Company, Inc., Discount Auto, Inc., The Pep
Boys  Manny, Moe and Jack, Inc., OReilly
Automotive, Inc., and Keystone Automotive Operations, Inc.)
violated the Robinson-Patman Act. Only 14 of the individual
plaintiffs asserted claims against the Company. The complaint
alleges that the Company and other defendants knowingly either
induced or received discriminatory prices from large suppliers,
allegedly in violation of Section 2(a) and 2(f) of the
Robinson-Patman Act, as well as received compensation from large
suppliers for services not performed for those suppliers,
allegedly in violation of Section 2(c) of the
Robinson-Patman Act. The complaint seeks injunctive relief
against all defendants and seeks treble damages on behalf of the
individual auto parts dealers who are plaintiffs, plus
attorneys fees. The complaint alleges that the estimated
average damage amount per plaintiff is $1,000,000 (and more for
those plaintiffs that are wholesale distributors and not simply
jobbers) before trebling. The Company believes the suit is
without merit and plans to vigorously defend it. The Company,
with other defendants, filed a motion to dismiss and certain
other procedural motions. All motions were denied, except the
motion to dismiss one of the Robinson-Patman claims that was
based upon the allegation that defendants were acting as
brokers, which was granted. The Company does not currently
believe that this complaint will result in liabilities material
to its consolidated financial position, results of operations or
cash flows.

8



---



##### 



CSK AUTO CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

During the second quarter of fiscal 2001, the
Company recorded a $2.0 million charge for the settlement of
certain other legal claims.

The Company currently and from time to time is
involved in other litigation incidental to the conduct of its
business. The damages claimed in some of this litigation are
substantial. Although the amount of liability that may result
from these matters cannot be ascertained, the Company does not
currently believe that, in the aggregate, they will result in
liabilities material to its consolidated financial condition,
results of operations or cash flows.



|         |                                                                                                 
|-------- | ------------------------------------------------------------------------------------------------
|Note 7  | Store Closing, Restructuring and Other
	Profitability Enhancement Program Non-Recurring
	Charges

During the second quarter of fiscal 2001, the
Companys management implemented a Profitability
Enhancement Program (PEP) to reduce costs, improve
operating efficiencies and close under-performing stores. As a
result of the PEP, the Company recorded total restructuring and
other charges of $44.6 million during the quarter ended
August 5, 2001. The following paragraphs provide detailed
information relating to the costs that were recorded in
connection with the PEP (in thousands):

|                                                              |                                                                          |   |        |        | 
|------------------------------------------------------------- | ------------------------------------------------------------------------ | - | ------ | ------ | 
|Amounts recorded as store closing and
	restructuring charges: |                                                                          |   |        |       
|                                                              | Reserve for store closing costs                                          |   | $      | 13,698 | 
|                                                              | Write down of store site costs and store-related
	property and equipment |   |        | 6,649  | 
|                                                              | Reserve for workforce reduction                                          |   |        | 400    | 
|                                                              | Other                                                                    |   |        | 729    | 
|                                                              |                                                                          |   |        |       
|                                                              |                                                                          |   | 21,476 |       
|                                                              |                                                                          |   |        |       
|Amounts recorded as charges to cost of
	sales:                |                                                                          |   |        |       
|                                                              | Provision for excess inventories                                         |   |        | 17,292 | 
|                                                              | Actual costs incurred for inventory review and
	disposal                 |   |        | 5,800  | 
|                                                              |                                                                          |   |        |       
|                                                              |                                                                          |   | 23,092 |       
|                                                              |                                                                          |   |        |       
|                                                              |                                                                          | $ | 44,568 |       
|                                                              |                                                                          |   |        |       

Store Closing
Costs

The Company provides an allowance for estimated
costs to be incurred in connection with store closures. Such
costs are recognized when a store is specifically identified,
costs can be estimated and closure is planned to be completed
within the next twelve months. For stores to be relocated, such
costs are recognized when an agreement for the new location has
been reached with a landlord and site plans meet preliminary
municipal approvals. During the period that they remain open for
business, the rent and other operating expenses for the stores
to be closed continue to be reflected in the Companys
normal operating expenses.

The allowance for store closing costs is included
in accrued expenses and other long-term liabilities in the
accompanying financial statements and consists primarily 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) operating expenses associated with the closed store
vacancy periods. Future rents of closed stores will be incurred
through the expiration of the non-cancelable leases.

Under the PEP, the Company increased the store
closing reserve by approximately $13.7 million.
Approximately $6.8 million of this amount relates to the
planned closure of 36 stores based on several factors including
market saturation, store profitability, and store size and
format. In addition, the Company recorded

9



---



##### 



CSK AUTO CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

an increase to the reserve of approximately
$6.9 million relating to existing closed stores that have
longer than anticipated vacancy periods as a result of the
continued economic slowdown and which were evaluated as part of
the PEP. The write-down of leasehold improvements and other
store-related property and equipment has been recorded as a
direct reduction of net property and equipment balances.

Total activity in the provision for store
closings and the related store closing costs for the thirty-nine
weeks ended November 4, 2001, including the impact of the
PEP, is as follows (in thousands):

|                              |                                                                       |                          |        |       |        | 
|----------------------------- | --------------------------------------------------------------------- | ------------------------ | ------ | ----- | ------ | 
|Balance, at February 4, 2001. |                                                                       | $                        | 1,552  |      
|Store closing costs:          |                                                                       |                          |        |      
|                              | Store closing costs, gross ($6,810 relating to
	PEP)                  |                          |        | 7,395 |       
|                              | Revisions in estimates ($6,888 relating to
	extended vacancy periods) |                          |        | 8,638 |       
|                              |                                                                       |                          |        |      
|                              |                                                                       | Store closing costs, net |        |       | 16,033 | 
|Payments                      |                                                                       |                          | (6,846 | )    
|                              |                                                                       |                          |        |      
|Balance, at November 4, 2001. |                                                                       | $                        | 10,739 |      
|                              |                                                                       |                          |        |      

On a store count basis, closure activity and the
remaining number of stores to be closed are summarized as
follows (plan amendments represent stores deleted from a store
closing plan):

|                          |  |                               |    |        |  |            |    |        |  |            |     |   |  |  |     |   |  |  |    | 
|------------------------- |  | ----------------------------- | -- | ------ |  | ---------- | -- | ------ |  | ---------- | --- | - |  |  | --- | - |  |  | -- | 
|                          |  |                              
|                          |  | Number of Stores to be Closed
|                          |  |                              
|                          |  | Beginning                     |    | Stores |  | Plan       |    | Stores |  | Balance to
|Period                    |  | Balance                       |    | Added  |  | Amendments |    | Closed |  | be Closed 
|                          |  |                               |    |        |  |            |    |        |  |           
|Fiscal 1999               |  |                               | 29 |        |  |            | 87 |        |  |            | (11 | ) |  |  | (77 | ) |  |  | 28 | 
|Fiscal 2000               |  |                               | 28 |        |  |            | 24 |        |  |            | (1  | ) |  |  | (42 | ) |  |  | 9  | 
|Fiscal 2001(year to date) |  |                               | 9  |        |  |            | 43 |        |  |            |    |   |  |  | (39 | ) |  |  | 13 | 

At November 4, 2001, there were 13 stores
remaining to be closed under the Companys store closing
plans, comprised of the following:

|            |  |              |    |            |  |        |    |            |  |  |     |   |  |  |    | 
|----------- |  | ------------ | -- | ---------- |  | ------ | -- | ---------- |  |  | --- | - |  |  | -- | 
|            |  | Stores in    |    | Plan       |  | Stores |    | Balance to
|Fiscal Year |  | Closing Plan |    | Amendments |  | Closed |    | be Closed 
|            |  |              |    |            |  |        |    |           
|1999        |  |              | 87 |            |  |        | (2 | )          |  |  | (83 | ) |  |  | 2  | 
|2000        |  |              | 24 |            |  |        |   |            |  |  | (23 | ) |  |  | 1  | 
|2001        |  |              | 43 |            |  |        |   |            |  |  | (33 | ) |  |  | 10 | 
|            |  |              |    |            |  |        |    |            |  |  |     |   |  |  | 13 | 

Workforce
Reduction

As a result of an internal review of general and
administrative functions, the Company terminated
36 employees and eliminated 84 open positions. The
terminated employees worked primarily in human resources,
information technology and real estate. As a result of these
actions, a provision was made for estimated severance and
benefits of approximately $0.4 million.

Other
Restructuring Charges

Other restructuring costs include estimates for
early terminations of equipment operating leases
($0.5 million) and other costs.

10



---



##### 



CSK AUTO CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Provision for
Excess Inventory and Related Charges

In conjunction with the PEP, the Company
completed an inventory review to: (1) increase inventory
turnover; (2) provide an optimal inventory level at each
store and depot location; (3) write down the inventory of
the 36 stores planned for closure; and (4) liquidate
inventory not meeting the Companys new asset return
levels. As a result of the analysis, the Company has established
a reserve for excess inventories resulting from the decision to
eliminate certain products and to liquidate inventory from
closed stores. In conjunction with this decision, a provision of
$17.3 million was recorded to reduce inventory values. In
addition, during the second quarter of 2001 the Company incurred
actual costs of approximately $5.8 million related to
labor, warehouse and distribution, freight and other operating
costs associated with the inventory review and disposal. These
costs are reflected as cost of sales in the accompanying
statement of operations for the thirty-nine weeks ended November
4, 2001.

Note 8  Long Term
Debt

Convertible
Subordinated Notes

During August 2001, the Company issued
$30.0 million aggregate principal amount of 7% convertible
subordinated notes due September 1, 2006 in a private
placement. Interest on these notes is payable semiannually on
March 1 and September 1, commencing March 1, 2002. The
notes are convertible into approximately 4.5 million shares
of common stock at a conversion price of $6.63 per share, which
represents a 10% premium to the average closing prices of the
Companys common stock on the NYSE for the 10 days
preceding the issuance of the notes.

If the Company consummates the Refinancing
described below, then the Company has the right to force
conversion of all of the unpaid principal amount of the notes
into the Companys common stock, at the stated conversion
price. See Note 10.

The note holders have the right to convert all or
any portion of the unpaid principal amount of these notes into
common stock at the conversion price at any time.

Senior Credit
Facility

As a result of increased borrowing and based on
our financial results for the third quarter of fiscal 2001, our
ratio of debt to EBITDA (as defined in our existing senior
credit facility) and our Interest Coverage Ratio (as defined in
our existing senior credit facility) would not have been in
compliance with corresponding covenants under our existing
senior credit facility. Accordingly, we negotiated a waiver of
these covenants effective for the third quarter ending
November 4, 2001 in connection with the planned refinancing
of our debt.

Note 9  Stock
Options

In August 2001, the Company cancelled outstanding
stock options to purchase an aggregate of 495,011 shares of the
Companys common stock that had been granted to certain
Company executives. The options covered by such cancellations
had exercise prices ranging from $17.50 to $32.25 per share,
with a weighted average exercise price of $26.34 per share.
These executives will be awarded new stock options to purchase
an aggregate of 495,011 shares of the Companys common
stock in February 2002, subject to their continued employment
with the Company. The exercise price of the new stock options
will be the greater of: (a) $11.00 per share; and
(b) the fair market value of CSK Auto Corporation common
stock on the date of grant.

11



---



##### 



CSK AUTO CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Note 10  Subsequent
Events

During the fourth quarter of fiscal 2001, the
Company obtained commitments for a refinancing (the
Refinancing) of its capital structure which, when
completed, will result in debt reduction, the elimination of
scheduled bank debt amortization payments prior to the end of
2004, the extension of debt maturities and enhanced liquidity.
The Refinancing is expected to close by the end of December
2001. In connection with the Refinancing, CSK Auto, Inc. expects
to enter into a new three year $300.0 million senior
secured, asset-based credit facility and expects to issue
$280.0 million principal amount of senior notes due 2006.
The new three year $300.0 million senior credit facility is
expected to be comprised of a $150.0 million non-amortizing
term loan and a $150.0 million revolving credit facility
with availability subject to a borrowing base formula. Interest
on the $300.0 million senior credit facility is expected to
be LIBOR plus 3.5%. The coupon interest rate on the
$280.0 million of senior notes will be 12.0% per annum. The
effective rate on the senior notes will be approximately 12.5%
per annum, which includes amortization of the original issue
discount.

In addition, CSK Auto Corporation has entered
into agreements with certain investors, including an affiliate
of Investcorp, one of the Companys principal stockholders,
to purchase $50.0 million principal amount of 7%
convertible subordinated debentures due December 2006. The
debentures will be convertible into approximately
5.8 million shares of CSK Auto Corporation common stock at
a conversion price of $8.69 per share, subject to certain
anti-dilution adjustment provisions and other adjustments that
may result in the issuance of additional shares of such common
stock under certain circumstances. Although the convertible
subordinated debentures are not redeemable other than in the
event of a change of control, the Company expects to require
these investors to convert their convertible subordinated
debentures into CSK Auto Corporation common stock following
satisfaction of certain conditions, including completion of the
Refinancing and the effectiveness of a registration statement
covering the shares of common stock underlying the convertible
debentures. The Company currently expects the conditions to be
satisfied within 150 days of the closing of the
Refinancing. If the conditions to conversion are not satisfied,
then the debentures will remain convertible at the option of the
holders. The convertible subordinated debentures to be held by
the affiliate of Investcorp will not be convertible into common
stock of CSK Auto Corporation until the issuance of the common
stock underlying its debentures has been approved by the
stockholders of CSK Auto Corporation.

On the closing of our new senior credit facility,
CSK Auto Corporation will convert the existing
$30.0 million of 7% convertible subordinated notes due
September 1, 2006 into approximately 4.5 million
shares of its common stock. See Note 8.

In conjunction with the Refinancing, the Company
expects to record in the fourth quarter of fiscal 2001 an
extraordinary loss of approximately $3.1 million, net of income
taxes, relating to the write-off of the unamortized deferred
financing costs associated with the existing senior credit
facility.

The Company has reclassified all current
maturities of the existing senior credit facility as long-term
because the Company has the ability and the intent to refinance
this obligation on a long term basis. This ability and intent is
expressed in the agreements entered into in conjunction with the
proposed Refinancing and the Company has complied with all of
the requirements of the existing accounting literature that
addresses such reclassifications.

12



---



##### 



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 summer months of June through
August (overlapping our second and third fiscal quarters). Our
business is, in addition, affected by weather conditions. While
unusually severe or inclement weather tends to reduce sales, as
our customers tend to defer elective maintenance during such
periods, extremely hot and cold temperatures tend to enhance
sales by causing auto parts to fail and sales of seasonal
products to increase.

Results of Operations

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

|                                            |  |                |       |                   |  |             |       |             |  |  |       |    |  |  |       |  
|------------------------------------------- |  | -------------- | ----- | ----------------- |  | ----------- | ----- | ----------- |  |  | ----- | -- |  |  | ----- | -
|                                            |  |                |       |                  
|                                            |  | Thirteen Weeks |       | Thirty-nine Weeks
|                                            |  | Ended          |       | Ended            
|                                            |  |                |       |                  
|                                            |  | November 4,    |       | October 29,       |  | November 4, |       | October 29,
|                                            |  | 2001           |       | 2000              |  | 2001        |       | 2000       
|                                            |  |                |       |                   |  |             |       |            
|Net sales                                   |  |                | 100.0 | %                 |  |             | 100.0 | %           |  |  | 100.0 | %  |  |  | 100.0 | %
|Cost of sales                               |  |                | 53.3  |                   |  |             | 53.2  |             |  |  | 55.9  |    |  |  | 52.8  |  
|                                            |  |                |       |                   |  |             |       |             |  |  |       |    |  |  |       |  
|Gross profit                                |  |                | 46.7  |                   |  |             | 46.8  |             |  |  | 44.1  |    |  |  | 47.2  |  
|Operating and administrative                |  |                | 39.9  |                   |  |             | 39.2  |             |  |  | 39.6  |    |  |  | 38.5  |  
|Store closing and other restructuring costs |  |                |      |                   |  |             |      |             |  |  | 2.2   |    |  |  | 0.5   |  
|Legal settlement                            |  |                |      |                   |  |             |      |             |  |  | 0.2   |    |  |  |      |  
|Transition and integration expenses         |  |                |      |                   |  |             | 0.4   |             |  |  |      |    |  |  | 2.1   |  
|Goodwill amortization                       |  |                | 0.3   |                   |  |             | 0.3   |             |  |  | 0.3   |    |  |  | 0.3   |  
|                                            |  |                |       |                   |  |             |       |             |  |  |       |    |  |  |       |  
|Operating profit                            |  |                | 6.5   |                   |  |             | 6.9   |             |  |  | 1.8   |    |  |  | 5.8   |  
|Interest expense                            |  |                | 3.9   |                   |  |             | 4.2   |             |  |  | 4.1   |    |  |  | 4.1   |  
|Equity in loss on joint venture             |  |                |      |                   |  |             | 0.3   |             |  |  |      |    |  |  | 0.2   |  
|                                            |  |                |       |                   |  |             |       |             |  |  |       |    |  |  |       |  
|Income (loss) before income taxes           |  |                | 2.6   |                   |  |             | 2.4   |             |  |  | (2.3  | )  |  |  | 1.5   |  
|Income tax expense (benefit)                |  |                | 1.0   |                   |  |             | 0.9   |             |  |  | (0.9  | )  |  |  | 0.5   |  
|                                            |  |                |       |                   |  |             |       |             |  |  |       |    |  |  |       |  
|Net income (loss)                           |  |                | 1.6   | %                 |  |             | 1.5   | %           |  |  | (1.4  | )% |  |  | 1.0   | %
|                                            |  |                |       |                   |  |             |       |             |  |  |       |    |  |  |       |  

Thirteen
Weeks Ended November 4, 2001 Compared to Thirteen Weeks
Ended October 29, 2000

Net sales for the thirteen weeks ended
November 4, 2001 (the third quarter of fiscal
2001) were $366.7 million as compared to net sales of
$367.7 million (excluding $1.1 million of service center sales)
for the thirteen weeks ended October 29, 2000 (the
third quarter of fiscal 2000). We had comparable store
sales growth of 1% which was offset by a reduction in sales due
to the closure of 26 of our stores, the negative sales impact
during the three weeks immediately following the events of
September 11, 2001, and lost sales due to lower than
typical in-stock inventory levels. These lower than typical
in-stock levels were due to our diminished liquidity position,
particularly during the first portion of the third quarter.
In-stock levels and liquidity improved after CSK Auto
Corporation issued $30.0 million of 7% convertible
subordinated notes on August 14, 2001, which has
contributed to comparable store sales growth of approximately 4%
in recent weeks.

During the third quarter of fiscal 2001, we
opened 3 stores, relocated 3 stores and closed 24 stores in
addition to the stores closed due to relocation, 23 of which
were closed in connection with our previously announced
Profitability Enhancement Program (PEP). At
November 4, 2001, we had 1,133 stores in operation compared
to 1,147 at the end of the third quarter of fiscal 2000.

Gross profit was $171.1 million, or 46.7% of
net sales, in the third quarter of fiscal 2001 as compared to
$172.7 million, or 46.8% of net sales, in the third quarter
of fiscal 2000. The lower realized gross profit margin

13



---



##### 



was a result of lower vendor volume purchase
allowances due to lower sales and the result of lower vendor
cash discounts due to our failure to make prompt payment.


Operating and administrative expenses were
$146.2 million, or 39.9% of net sales, for the third
quarter of fiscal 2001 as compared to $144.4 million, or
39.2% of net sales, for the third quarter of fiscal 2000. The
increase in operating and administrative expenses is the result
of higher payroll related costs, increased building rent, taxes
and insurance offset in part by the cost savings achieved due to
the restructuring completed in the second quarter of fiscal 2001.

Operating profit was $23.7 million for the
third quarter of fiscal 2001 compared to a $25.7 million
profit for the third quarter of fiscal 2000. The decrease in
operating profit resulted primarily from lower gross profit
margins and increased expense as discussed above. During the
comparable 2000 period, we incurred $1.3 million in
non-recurring expenses associated with the transition and
integration of store acquisitions.

Net interest expense for the third quarter of
fiscal 2001 decreased to $14.3 million from
$15.5 million for the third quarter of fiscal 2000 due to
lower average interest rates and a slightly lower outstanding
debt balance.

Income tax expense for the third quarter of
fiscal 2001 was $3.4 million, compared to an income tax
expense of $3.2 million for the third quarter of fiscal
2000. Our effective tax rate of approximately 36.5% during the
third quarter of fiscal 2001 was slightly higher than our rate
of 35.0% in the corresponding 2000 period.

As a result of the above factors, we had net
income of $5.9 million, or $0.19 per diluted common share,
for the third quarter of fiscal 2001, compared to net income of
$5.9 million, or $0.21 per diluted common share, for the
third quarter of fiscal 2000. Earnings per share are lower in
the third quarter of fiscal 2001 than in the third quarter of
fiscal 2000 as a result of a higher outstanding share count due
to the assumed conversion of the convertible subordinated notes.

Thirty-nine
Weeks Ended November 4, 2001 Compared to Thirty-nine Weeks
Ended October 29, 2000

Net sales for the thirty-nine weeks ended
November 4, 2001 and October 29, 2000 were
$1.1 billion. Comparable store sales increased 1% for the
thirty-nine weeks ended November 4, 2001. At
November 4, 2001, the Company had 1,133 stores in
operation, compared to 1,147 at the end of the third quarter of
fiscal 2000.

Gross profit for the thirty-nine weeks ended
November 4, 2001 was $486.8 million, or 44.1% of net sales,
compared to $519.7 million or 47.2% of net sales, for the
comparable 2000 period. The lower realized gross profit margin
was a result of lower vendor volume purchase allowances in the
period. We have historically utilized prompt payment and other
cash discount programs offered by vendors. Because of the need
to pay for the class action lawsuit settlement and the term loan
amortization payments, we took efforts to retain cash during
most of the thirty-nine weeks of fiscal 2001 and did not take
full advantage of the contractual vendor allowances. We also
recorded a non-recurring charge of $23.1 million to cost of
sales in the second quarter of fiscal 2001 as part of our PEP.

Operating and administrative expenses increased
by $14.0 million to $437.2 million, or 39.6% of net sales,
for the thirty-nine week period of fiscal 2001 from
$423.2 million, or 38.5% of net sales, for the comparable
2000 period. The increase relates to higher payroll related
costs partially offset by a reduction of expenses related to the
26 stores closed as part of our PEP.

Operating profit decreased to $19.9 million,
or 1.8% of net sales, for the thirty-nine week period of fiscal
2001 from $63.1 million, or 5.8% of net sales, for the
comparable 2000 period, due to the factors cited above,
including the $46.6 million impact of the PEP and legal
settlements. During the comparable 2000 period, we incurred
$23.8 million in non-recurring expenses associated with the
transition and integration of store acquisitions.

14



---



##### 



Net interest expense for the thirty-nine weeks of
fiscal 2001 totaled $45.7 million compared to
$45.3 million for the comparable period of fiscal 2000.
This increase was primarily due to increased costs associated
with financing vendor payables offset by a reduction in interest
rates.

Income tax benefit for the thirty-nine weeks of
fiscal 2001 was $10.2 million compared to income tax expense of
$5.8 million for the comparable 2000 period. Our effective
tax rate was 39.4% during the thirty-nine weeks of fiscal 2001
compared to our tax rate of 36.5% in the corresponding 2000
period.

As a result of the above factors, we incurred a
net loss of $15.7 million,or $0.56 per diluted common
share, for the thirty-nine weeks of fiscal 2001, compared to net
income of $10.1 million, or $0.36 per diluted common share,
for the comparable 2000 period.

Restructuring and Other Non-Recurring
Charges

During the quarter ended August 5, 2001,
(the second quarter of fiscal 2001), we implemented
our PEP to reduce costs, improve operating efficiencies and
close under-performing stores. This program includes the planned
closure of 36 stores (26 of which had been closed as of
November 4, 2001), the reserve for discontinued and excess
inventory, costs incurred associated with the inventory review
and disposal, the write-down of store site costs and
store-related property and equipment, a workforce reduction and
other related charges. As a result, we recorded total charges of
$44.6 million, which includes $21.5 million of store
closing and other restructuring costs and inventory charges of
$23.1 million classified as cost of sales. The following
paragraphs provide detailed information relating to the
restructuring costs that were recorded.

Store
Closing

We provide an allowance for estimated costs to be
incurred in connection with store closures. Such costs are
recognized when a store is specifically identified, costs can be
estimated and closure is planned to be completed within the next
twelve months. For stores to be relocated, such costs are
recognized when an agreement for the new location has been
reached with a landlord and site plans meet preliminary
municipal approvals. During the period that they remain open for
business, the rent and other operating expenses for the stores
to be closed continue to be reflected in our normal operating
expenses.

During the thirty-nine weeks ended
November 4, 2001, we recorded a charge of
$13.7 million for the closure of 36 stores based on several
factors including market saturation, store profitability, and
store size and format. Of this charge, $6.9 million related
to existing closed stores that have longer than anticipated
vacancy periods as a result of the continued economic slowdown.
The charge 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) operating expenses associated with the
closed store vacancy periods. As of November 4, 2001, 26 of
these stores have been closed. The remaining stores are expected
to be closed by the first half of fiscal 2002.

Total activity relating to store closing costs
for the thirty-nine weeks ended November 4, 2001, including
the impact of the PEP, is as follows (in thousands):

|                              |                                                                       |                           |        |       |        | 
|----------------------------- | --------------------------------------------------------------------- | ------------------------- | ------ | ----- | ------ | 
|Balance, at February 4, 2001. |                                                                       | $                         | 1,552  |      
|Store closings costs:         |                                                                       |                           |        |      
|                              | Store closings costs, gross ($6,810 relating to
	PEP)                 |                           |        | 7,395 |       
|                              | Revisions in estimates ($6,888 relating to
	extended vacancy periods) |                           |        | 8,638 |       
|                              |                                                                       |                           |        |      
|                              |                                                                       | Store closings costs, net |        |       | 16,033 | 
|Payments                      |                                                                       |                           | (6,846 | )    
|                              |                                                                       |                           |        |      
|Balance, at November 4, 2001  |                                                                       | $                         | 10,739 |      
|                              |                                                                       |                           |        |      

15



---



##### 



On a store count basis, closure activity and the
remaining number of stores to be closed are summarized as
follows (plan amendments represent stores deleted from a store
closing plan):

|                           |  |                               |    |        |  |            |    |        |  |            |     |   |  |  |     |   |  |  |    | 
|-------------------------- |  | ----------------------------- | -- | ------ |  | ---------- | -- | ------ |  | ---------- | --- | - |  |  | --- | - |  |  | -- | 
|                           |  |                               |    |       
|                           |  | Number of Stores to be Closed |    |       
|                           |  |                               |    |       
|                           |  | Beginning                     |    | Stores |  | Plan       |    | Stores |  | Balance to
|Period                     |  | Balance                       |    | Added  |  | Amendments |    | Closed |  | be Closed 
|                           |  |                               |    |        |  |            |    |        |  |           
|Fiscal 1999                |  |                               | 29 |        |  |            | 87 |        |  |            | (11 | ) |  |  | (77 | ) |  |  | 28 | 
|Fiscal 2000                |  |                               | 28 |        |  |            | 24 |        |  |            | (1  | ) |  |  | (42 | ) |  |  | 9  | 
|Fiscal 2001 (year to date) |  |                               | 9  |        |  |            | 43 |        |  |            |    |   |  |  | (39 | ) |  |  | 13 | 

At November 4, 2001, there were 13 stores
remaining to be closed under the Companys store closing
plans, comprised of the following:

|            |  |              |    |            |  |        |    |            |  |  |     |   |  |  |    | 
|----------- |  | ------------ | -- | ---------- |  | ------ | -- | ---------- |  |  | --- | - |  |  | -- | 
|            |  | Stores in    |    | Plan       |  | Stores |    | Balance to
|Fiscal Year |  | Closing Plan |    | Amendments |  | Closed |    | be Closed 
|            |  |              |    |            |  |        |    |           
|1999        |  |              | 87 |            |  |        | (2 | )          |  |  | (83 | ) |  |  | 2  | 
|2000        |  |              | 24 |            |  |        |   |            |  |  | (23 | ) |  |  | 1  | 
|2001        |  |              | 43 |            |  |        |   |            |  |  | (33 | ) |  |  | 10 | 
|            |  |              |    |            |  |        |    |            |  |  |     |   |  |  | 13 | 

Other
Restructuring Costs

As a result of the consolidation of the regional
operations and general and administrative functions, we
terminated 36 employees and eliminated 84 open positions. The
terminated employees worked primarily in human resources,
information technology and real estate. As a result of these
actions, the restructuring charges included a provision for
severance and benefits of approximately $0.4 million.

We have also accrued other costs and charges
incidental to the restructuring. These costs include early
termination fees for operating lease commitments and other asset
impairments aggregating approximately $0.7 million.

Of the $1.1 million provision for total
workforce reduction and other restructuring costs, the remaining
reserve at November 4, 2001 was approximately
$0.5 million.

Inventory and
Related Charges

As a result of the our plan to increase the
return on assets, we completed an inventory review to:
(1) increase inventory turnover; (2) provide an
optimal inventory level at each store location;
(3) liquidate inventory not meeting the our new asset
return levels; and (4) write down the inventory of the 36
stores planned for closure. As a result of the analysis, we
established a reserve for excess inventories resulting from the
decision to eliminate certain product lines and to liquidate
inventory from closed stores. In conjunction with this decision,
a provision of $17.3 million was recorded to reduce
inventory values. In addition, we incurred actual costs during
the second quarter of approximately $5.8 million related to
labor, warehouse and distribution, freight and other operating
costs associated with the inventory review and disposal. These
costs are reflected as cost of sales in the accompanying
statement of operations for the thirty-nine weeks ended
November 4, 2001.

Liquidity and Capital Resources

Overview

Our primary cash requirements include working
capital (primarily inventory), debt service obligations and
capital expenditures. We intend to finance our cash requirements
with cash flow from operations and borrowings under our new
senior credit facility (see Note 10 to the Consolidated
Financial Statements). At November 4, 2001, we had net
working capital of approximately $470.6 million, total
indebtedness of $649.1 million and total liquidity (cash
plus availability under our existing revolving credit facility)
of approximately $47.7 million.

16



---



##### 



We have obtained commitments for a refinancing
(the Refinancing) of our capital structure which,
when completed, will result in debt reduction, the elimination
of scheduled bank debt amortization payments prior to the end of
2004, the extension of debt maturities and enhanced liquidity.
See Note 10 to the Consolidated Financial Statements. The
Refinancing is expected to be consummated by the end of December
2001. In connection with the Refinancing, we expect to enter
into a new three year $300.0 million senior secured,
asset-based credit facility and have entered into agreements to
issue $280.0 million of senior notes due 2006. The new
three year $300.0 million senior credit facility is
expected to be comprised of a $150.0 million non-amortizing
term loan and a $150.0 million revolving credit facility
with availability subject to a borrowing base formula. Interest
on the $300.0 million senior credit facility is expected to
be LIBOR plus 3.5%. Interest on the $280.0 million senior
notes is expected to be 12.5% per annum, which includes
amortization of the original issue discount. Of the
$300.0 million expected commitment under our new senior
credit facility, we estimate that our borrowing capacity at the
closing of the Refinancing will be approximately
$284 million pursuant to a borrowing base formula, a
portion of which will be borrowed at closing.

During the fourth quarter of fiscal 2001, we
entered into an agreement with certain investors, including an
affiliate of Investcorp (one of our principal stockholders), for
the private placement of $50.0 million in principal amount
of 7% convertible subordinated debentures due December 2006.
This transaction is expected to close during December 2001. The
debentures are convertible into CSK Auto Corporation common
stock at $8.69 per share subject to certain anti-dilution
adjustment provisions and other adjustments that may result in
the issuance of additional shares of common stock of CSK Auto
Corporation under certain circumstances. In connection with the
Refinancing, we plan to force conversion of the entire unpaid
principal amount of the debentures into our common stock, at the
stated conversion price. The conversion of the debentures is
subject to certain conditions, including completion of the
Refinancing and the effectiveness of a registration statement
covering the shares of common stock underlying the debentures,
which are expected to be satisfied within 150 days of the
closing of the refinancing. If the conditions to conversion are
not satisfied, then the debentures will remain convertible at
the option of the holders. The convertible subordinated
debentures to be held by the affiliate of Investcorp will not be
convertible into common stock of CSK Auto Corporation until the
issuance of the common stock underlying its debentures has been
approved by the stockholders of CSK Auto Corporation.

During the third quarter of fiscal 2001, we
issued $30.0 million aggregate principal amount of 7%
convertible subordinated notes due September 1, 2006 in a
private placement. The notes are convertible into common stock
at a conversion price of $6.63 per share. In connection with the
consummation of the Refinancing, we plan to convert the entire
unpaid principal amount of the notes into CSK Auto Corporation
common stock, at the stated conversion price. On a pro forma
basis giving effect to the Refinancing and assuming conversion
of our convertible debt to common stock, on November 4,
2001, we would have had total debt of $589.1 million and
total liquidity (comprised of cash and cash equivalents of
$15.7 million and unborrowed availability under our new
senior credit facility) of $95.8 million. We believe that
cash flow from operations combined with the availability of
funds under the new revolving credit facility will be sufficient
to support our operations and liquidity requirements for the
foreseeable future.

During the second quarter of fiscal 2001, we
negotiated $27.0 million of additional financing under our
existing senior credit facility and negotiated amendments to
that facility to permit the increased borrowing and to amend
certain covenant restrictions relating to outstanding debt
levels. These funds were used to pay the $27.3 million
principal payment that was due on the existing senior credit
facility on June 30, 2001. Another $27.3 million
principal payment is due on the existing senior credit facility
as of December 31, 2001, but upon consummation of the
Refinancing, expected to occur during December 2001, that
payment will no longer be required.

As a result of increased borrowing and based on
our financial results for the third quarter of fiscal 2001, our
ratio of debt to EBITDA (as defined in our existing senior
credit facility) and our Interest Coverage Ratio (as defined in
our existing senior credit facility) would not have been in
compliance with corresponding covenants under our existing
senior credit facility. Accordingly, we negotiated a waiver to
these covenants effective for the third quarter ending
November 4, 2001.

17



---



##### 



In conjunction with the Refinancing, we expect to
record in the fourth quarter of fiscal 2001 an extraordinary
loss of $3.1 million, net of income taxes, relating to the
write-off of the unamortized deferred financing costs associated
with our existing senior credit facility.

We have reclassified all current maturities of
our existing senior credit facility as long-term because we have
the ability and the intent to refinance this obligation on a
long term basis. This ability and intent is expressed in the
agreements entered into in conjunction with the proposed
Refinancing and the Company has complied with all of the
requirements of the existing accounting literature that
addresses such reclassifications.

During fiscal 2000, we finalized an agreement to
settle the class action lawsuits (see Note 6 to the Consolidated
Financial Statements) brought by former and present California
store managers and senior assistant managers seeking overtime
pay under California law. The amount of the settlement was
approximately $8.8 million (which includes plaintiffs
attorneys fees and costs and other miscellaneous expenses)
and was paid during the first quarter of fiscal 2001. The
settlement was funded through our existing revolving credit
facility. During the second quarter of fiscal 2001, we also
reserved $2.0 million for certain other legal claims and
expect to pay such amounts during the remainder of fiscal 2001
and 2002.

For the thirty-nine weeks of fiscal 2001, net
cash provided by operating activities was $17.5 million
compared to $42.8 million during the comparable 2000
period. The largest components of the change in cash flow from
operations relate to: (1) a net loss of $15.7 million
during the 2001 period compared to net income of
$10.1 million during the comparable 2000 period; (2) a
non-cash provision during the 2001 period of $25.0 million
comprised of a $17.3 million provision for write down of
inventory and a $7.7 million write down on disposal of
fixed and other assets primarily as a result of our PEP (see
Note 7); and (3) an increased investment in our
inventories, where $33.7 million was used during the 2001
period compared to $7.1 million used for such purposes
during the 2000 period.

Net cash used in investing activities totaled
$7.8 million for the thirty-nine weeks of fiscal 2001,
compared to $26.4 million used during the thirty-nine weeks
of 2000. The decrease in cash used in investing activities was
primarily the result of $14.3 million less in capital
expenditures, an increase of $1.5 million in proceeds from
the sale of fixed assets and $3.1 million investment in
joint venture during the 2000 fiscal period.

Net cash used in financing activities totaled
$5.1 million for the thirty-nine weeks of fiscal 2001
compared to $15.3 million of net cash used by financing
activities in the comparable period of fiscal 2000. In the
thirty-nine weeks of fiscal 2001, we made net payments of
$25.3 million under the Senior Credit Facility compared to
net payments of $1.7 million for the comparable period in
fiscal 2000. This was offset by the issuance of
$30.0 million in convertible notes during the thirty-nine
weeks of fiscal 2001 and $3.5 million less in capital lease
payments than in the comparable period of fiscal 2000.

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, and are incorporated herein
by reference.

18



---



##### 



PART II

OTHER INFORMATION

Item 1.     Legal
Proceedings

As previously disclosed, on May 4, 1998, a
lawsuit was filed against us in the Superior Court in San Diego,
California. The case was brought by two former store managers
and a former senior assistant manager. It purported to be a
class action for all present and former California store
managers and senior assistant managers and sought overtime pay
for a period beginning in May 1995 as well as injunctive relief
requiring overtime pay in the future. We were also served with
two other lawsuits purporting to be class actions filed in
California state courts in Orange and Fresno Counties by
thirteen other former and current employees. We have finalized a
settlement of all these lawsuits. The final amount of the
settlement was approximately $8.8 million (which includes
plaintiffs attorneys fees and costs and other
miscellaneous expenses). The cost of this settlement was
expensed in the fourth quarter of fiscal year 2000, with
payments of the settlement made during the first quarter of
fiscal 2001.

We were served on March 8, 2000 with a
complaint filed in Federal Court in the Eastern District of New
York by the Coalition for a Level Playing Field, O.K. and 250
individual auto parts dealers alleging that we and seven other
auto parts dealers (AutoZone, Inc., Wal-Mart Stores, Inc.,
Advance Stores Company, Inc., Discount Auto, Inc., The Pep
Boys  Manny, Moe and Jack, Inc., OReilly
Automotive, Inc., and Keystone Automotive Operations, Inc.)
violated the Robinson-Patman Act. Only 14 of the individual
plaintiffs asserted claims against us. The complaint alleges
that we and other defendants knowingly either induced or
received discriminatory prices from large suppliers, allegedly
in violation of Section 2(a) and 2(f) of the
Robinson-Patman Act, as well as received compensation from large
suppliers for services not performed for those suppliers,
allegedly in violation of Section 2(c) of the
Robinson-Patman Act. The complaint seeks injunctive relief
against all defendants and seeks treble damages on behalf of the
individual auto parts dealers who are plaintiffs, plus
attorneys fees. The complaint alleges that the estimated
average damage amount per plaintiff is $1,000,000 (and more for
those plaintiffs that are wholesale distributors and not simply
jobbers) before trebling. We believe the suit is without merit
and plan to vigorously defend it. We, with other defendants,
filed a motion to dismiss and certain other procedural motions.
All motions were denied, except the motion to dismiss one of the
Robinson-Patman claims that was based upon the allegation that
defendants were acting as brokers, which was granted. We do not
currently believe that this complaint will result in liabilities
material to our consolidated financial position, results of
operations or cash flows.

During the second quarter of fiscal 2001, we
recorded a $2.0 million charge for the settlement of
certain other legal claims.

We currently and from time to time are involved
in other litigation incidental to the conduct of our business.
The damages claimed in some of this litigation are substantial.
Although the amount of liability that may result from these
matters cannot be ascertained, we do not currently believe that,
in the aggregate, they will result in liabilities material to
our consolidated financial condition, results of operations or
cash flows.

Item 2.     Changes
in Securities and Use of Proceeds

On August 14, 2001, CSK Auto Corporation
issued $30.0 million aggregate principal amount of 7%
convertible subordinated notes due September 1, 2006 to
Oppenheimer Capital Income Fund. The notes are convertible, at
our option, into common stock of CSK Auto Corporation upon the
successful completion of a refinancing of our existing senior
credit facility, including the Refinancing. On the closing of
our new senior credit facility, we will exercise our right to
convert these convertible subordinated notes into approximately
4.5 million shares of CSK Auto Corporations common
stock.

Item 3.     Defaults
upon Senior Securities

NONE

19



---



##### 



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

NONE

Item 5.  Other
Information

Mr. Charles L. Griffith resigned from the
Companys Board of Directors on December 14, 2001.

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 the Companys 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 the Companys annual
	report on Form 10-K, filed on May 4, 1998 (File
	No. 001-13927).                                                                                                                                                       
| | 3.03   |  |  | Amended and Restated By-Laws of the Company,
	incorporated herein by reference to Exhibit 3.03 of the
	Companys 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 the Companys annual report on
	Form 10-K, filed on May 1, 2001 (File
	No. 001-13927).                                                                                                                                                                            
| | 4.01   |  |  | Third Amended and Restated Credit Agreement,
	dated as of September 30, 1999, among CSK Auto, Inc., The
	Chase Manhattan Bank, DLJ Capital Funding, Inc., Lehman
	Commercial Paper Inc. and the lenders from time to time parties
	thereto, incorporated herein by reference to Exhibit 4.1 of
	the Companys current report on Form 8-K, filed on
	October 15, 1999 (File No. 001-13927).
| | 4.01.1 |  |  | Amendment No. 1 to the Third Amended and
	Restated Credit Agreement, dated as of February 17, 2000,
	incorporated herein by reference to Exhibit 4.01.1 of the
	Companys annual report on Form 10-K, filed on
	May 1, 2001 (File No. 001-13927).                                                                                                                                         
| | 4.01.2 |  |  | Amendment No. 2 to the Third Amended and
	Restated Credit Agreement, dated as of December 4, 2000,
	incorporated herein by reference to Exhibit 4.01.2 of the
	Companys annual report on Form 10-K, filed on
	May 1, 2001 (File No. 001-13927).                                                                                                                                          
| | 4.01.3 |  |  | Amendment No. 3 to the Third Amended and
	Restated Credit Agreement, dated as of June 27, 2001,
	incorporated herein by reference to exhibit 4.01.3 of the
	Companys report on form 10Q, filed on September 19,
	2001 (File No. 001-13927).                                                                                                                                              
| | 4.02   |  |  | Convertible Subordinated Note issued by CSK Auto
	Corporation in favor of Oppenheimer Capital Income Fund, dated
	as of August 14, 2001.                                                                                                                                                                                                                                                  
| | 4.02.1 |  |  | Note Purchase Agreement between CSK Auto
	Corporation and Oppenheimer Capital Income Fund, dated as of
	August 14, 2001.                                                                                                                                                                                                                                                                  
| | 4.02.2 |  |  | Registration Rights Agreement between CSK Auto
	Corporation and Oppenheimer Capital Income Fund, dated as of
	August 14, 2001.                                                                                                                                                                                                                                                            
| | 10.01  |  |  | Severance and Retention Agreement between CSK
	Auto, Inc. and Martin Fraser.                                                                                                                                                                                                                                                                                                              
| | 10.02  |  |  | Severance and Retention Agreement between CSK
	Auto, Inc. and Lon Novatt.                                                                                                                                                                                                                                                                                                                 
| | 10.03  |  |  | Severance and Retention Agreement between CSK
	Auto, Inc. and Don Watson.                                                                                                                                                                                                                                                                                                                 
| | 10.04  |  |  | Severance and Retention Agreement between CSK
	Auto, Inc. and Dale Ward.                                                                                                                                                                                                                                                                                                                  
| | 10.05  |  |  | Severance and Retention Agreement between CSK
	Auto, Inc. and Larry Buresh.                                                                                                                                                                                                                                                                                                               
| | 10.06  |  |  | Severance and Retention Agreement between CSK
	Auto, Inc. and Larry Ellis.                                                                                                                                                                                                                                                                                                                
| | 10.07  |  |  | Severance and Retention Agreement between CSK
	Auto, Inc. and Bill Evans.                                                                                                                                                                                                                                                                                                                 

20



---



##### 



(b)     Reports on
Form 8-K:

On June 29, 2001, the Company filed a
current report on Form 8-K to report, under Item 5
thereof, an amendment to CSK Auto, Inc.s existing senior
credit facility.

On August 23, 2001, the Company filed a
current report on Form 8-K to report, under Item 5
thereof, the initiation of several strategic and financial
initiatives aimed at improving the Companys balance sheet
and enhancing its future profitability.

On December 11, 2001, the Company filed a
current report on Form 8-K to report, under Item 5
thereof, the Companys entry into an agreement concerning
the private placement of convertible subordinated debentures.

21



---



##### 



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: December 19, 2001

22



---



##### 



EXHIBIT INDEX

|        |        |             |  |                                                                                                                                                                                                                                                                                                                                                                                           
|------- | ------ | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |        |            
|Number  |        | Description
|        |        |            
|        | 3.01   |             |  | Restated Certificate of Incorporation of the
	Company, incorporated herein by reference to Exhibit 3.01
	of the Companys 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 the Companys annual
	report on Form 10-K, filed on May 4, 1998 (File
	No. 001-13927).                                                                                                                                                       
|        | 3.03   |             |  | Amended and Restated By-Laws of the Company,
	incorporated herein by reference to Exhibit 3.03 of the
	Companys 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 the Companys annual report on
	Form 10-K, filed on May 1, 2001 (File
	No. 001-13927).                                                                                                                                                                            
|        | 4.01   |             |  | Third Amended and Restated Credit Agreement,
	dated as of September 30, 1999, among CSK Auto, Inc., The
	Chase Manhattan Bank, DLJ Capital Funding, Inc., Lehman
	Commercial Paper Inc. and the lenders from time to time parties
	thereto, incorporated herein by reference to Exhibit 4.1 of
	the Companys current report on Form 8-K, filed on
	October 15, 1999 (File No. 001-13927).
|        | 4.01.1 |             |  | Amendment No. 1 to the Third Amended and
	Restated Credit Agreement, dated as of February 17, 2000,
	incorporated herein by reference to Exhibit 4.01.1 of the
	Companys annual report on Form 10-K, filed on
	May 1, 2001 (File No. 001-13927).                                                                                                                                         
|        | 4.01.2 |             |  | Amendment No. 2 to the Third Amended and
	Restated Credit Agreement, dated as of December 4, 2000,
	incorporated herein by reference to Exhibit 4.01.2 of the
	Companys annual report on Form 10-K, filed on
	May 1, 2001 (File No. 001-13927).                                                                                                                                          
|        | 4.01.3 |             |  | Amendment No. 3 to the Third Amended and
	Restated Credit Agreement, dated as of June 27, 2001,
	incorporated herein by reference to exhibit 4.01.3 of the
	Companys report on form 10Q, filed on
	September 19, 2001 (File No. 001-13927).                                                                                                                                              
|        | 4.02   |             |  | Convertible Subordinated Note issued by CSK Auto
	Corporation in favor of Oppenheimer Capital Income Fund, dated
	as of August 14, 2001.                                                                                                                                                                                                                                                  
|        | 4.02.1 |             |  | Note Purchase Agreement between CSK Auto
	Corporation and Oppenheimer Capital Income Fund, dated as of
	August 14, 2001.                                                                                                                                                                                                                                                                  
|        | 4.02.2 |             |  | Registration Rights Agreement between CSK Auto
	Corporation and Oppenheimer Capital Income Fund, dated as of
	August 14, 2001.                                                                                                                                                                                                                                                            
|        | 10.01  |             |  | Severance and Retention Agreement between CSK
	Auto, Inc. and Martin Fraser.                                                                                                                                                                                                                                                                                                              
|        | 10.02  |             |  | Severance and Retention Agreement between CSK
	Auto, Inc. and Lon Novatt.                                                                                                                                                                                                                                                                                                                 
|        | 10.03  |             |  | Severance and Retention Agreement between CSK
	Auto, Inc. and Don Watson.                                                                                                                                                                                                                                                                                                                 
|        | 10.04  |             |  | Severance and Retention Agreement between CSK
	Auto, Inc. and Dale Ward.                                                                                                                                                                                                                                                                                                                  
|        | 10.05  |             |  | Severance and Retention Agreement between CSK
	Auto, Inc. and Larry Buresh.                                                                                                                                                                                                                                                                                                               
|        | 10.06  |             |  | Severance and Retention Agreement between CSK
	Auto, Inc. and Larry Ellis.                                                                                                                                                                                                                                                                                                                
|        | 10.07  |             |  | Severance and Retention Agreement between CSK
	Auto, Inc. and Bill Evans.